General assembly our Michelle Carew sa cabrera is on the scene to recap what we just heard michelle hey there, carl a fiery speech where he called out specifically north korea, iran, and venezuela and called for the great revival of nations. Used the word sovereign and sovereignty over and over again, reiterated america first, as he did on the campaign trail, and also during his inauguration speech one of the big headlines will most likely be on the headlines in all the newspapers tomorrow is when he said if its forced to defend itself, United States for its allies, we will have no choice but to totally destroy north korea. Rocketman is on a Suicide Mission for himself and for his regime he referred to north korea repeatedly as the scourge of our planet today, the depraved regime, a band of criminals. When it came to iran, he called it masking a corrupt dictatorship behind democratic facade and he said the iran deal was one of the worst onesided transactions, an embarrassment to the United States, and you havent heard the last of it he repeated his oft used phrased radical islamic terrorism. Lets play for you the sound bite where he talked about what he would do with north korea no one has shown more contempt for other nations and for the well being of their own people than the depraved regime in north korea the United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy north korea. He also spoke very derisively about venezuela, saying the problem with venezuela is not that socialism has been poorly implemented, but that it has been faithfully implemented, and then ended on what will likely be described maybe as the trump doctrine, great revival of nations, focusing on countries following their individual desires and goals and pushing away from the multilateralism that we have seen over the last several decades. Guys, back to you. Michelle, lester holt of nightly news has an interview with rouhani one quote is, if the u. S. Leaves the iran deal, no one will trust america again in International Negotiations so how likely is it that we carry some of the rhetoric we heard from the president to an actual pullout of that deal that remains to be seen theres been internal divisions about that weve seen them already, the u. S. Administration renew that agreement, even though the president has been harsh about it, the state department thus far has gone along with it there have been other sanctions not related to the nuclear program, but the missiles program, sponsorship of terrorism. So as weve often seen, carl, the harsh rhetoric from the president doesnt necessarily mean a change in policy. And thats certainly the way the markets are interpreting michelle, for all the intense words the president used today during his address and some may consider it a ramping of the rhetoric, the markets were relatively unchanged, really Holding Steady little change here on the day. So its almost the same old, same old in terms of the markets being so inured to the back and forth between the president and various states yeah, youll recall the day that the president used fire and fury the first time to discuss north korea, the market fell that day, right . Today, not so much i think the market is used to hearing this i guarantee you the people sitting there, 193 representatives, are not used to hearing that and certainly not used to hearing it on the floor of the United Nations michelle, thanks so much for that our Michelle Carusocabrera is outside the u. N. We did get big news in the Telecom Space today, courtesy of david faber. David . Earlier we reported a long time back and forth is once again on, that being the on again off again talks between tmobile and sprint to bring the companies together and what would be enormous cost synergies. As we reported earlier, the two companies are engaged in significant talks that have been going on for some time and have been actively joined on all sides, including, by the way, of course, softbank, which controls sprint and Deutsche Telecom which controls tmobile trying to come to an agreement under which an allstar merger would be affectuated they are very actively speaking at this time, according to people on all sides of the potential transaction. Previously in the last talks they expressed a willingness to sell sprint outright to tmobile not this time, it is a stock to stock merger which softbank would become a significant minority holder and the desire to have some say in the combination, at least, is also part of the negotiations they are at the point now of trying to figure out an exchange ratio, something that might be helped by the fact we have now made public these talks. They can see how the stocks actually react as they get to hammering out a term sheet for that potential exchange ratio. Again, it could be quite a few weeks until they get to the finish line if they, in fact, do and then you also have the larger question, guys, of antitrust, whether, in fact, the department of justice would give its blessing to a deal thats been oft discussed but never actually happened. Well, we have a new s. E. C. And does the fact the talks are on again suggest the players feel this is a more favorable environment . I think there is a sense this is perhaps a more favorable environment. That said, staff at the doj doesnt change as much and whether or not there really would be an allowance for numbers four and three getting together in a market that is vitally important to almost every single American Consumer with the prospect, perhaps, of higher rates look at verizon and at t shares today, they are not down on the news, they are up. Why . Because theres a thought the price competition, perhaps, would slow would abate correct and that would be just because sprint and tmobile are seen as the ones leading no longer have to do that maybe we actually get some inflation as a result, right possible, true, but that, of course, goes to the point that opponents of the deal would say, look, thats not good for American Consumers so theres certainly a lot to be weighed when it comes to the antitrust review, if they get that far can we envision them working together, would that not happen . That would not happen they would run the company, combined company if it were to happen, probably move over to take a senior role at softbank. Whose influence continues to grow grow and grow mobility, wireless. We should point out, and i did earlier, this pursuit of charter that softbank has been on has slowed considerably as a result of the significant engagement thats taking place right now with tmobile, so you do see shares a bit lower on that that also takes the heat off altese, which was vigorously trying to put together financing for a potential bid should softbank make a move, so charter also no longer as sought after given softbanks efforts seem to have come up short only can juggle so many balls at once. Thank you, david faber. When we come back, why buzz feed said theres blood in the water in Silicon Valley. Plus, former wells fargo ceo Dick Kovacevich will join us when squawk alley comes back the governor has declared a Winter Weather emergency. Extreme risk of burst pipes and water damage. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. Hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Big tech is under fire, as you may know, as many call for stronger regulations and antitrust warnings joining us, ben smith, editor and chief at buzzfeed, who recently published an article, theres blood in the water in Silicon Valley, which i think widely thought to have changed the conversation as to how politics are buffeting big tech. Why now, why write this piece now . I think these Tech Companies have really for a decade been seen as these dynamic, positive forces in American Life and theres just this combination of things happening critically a perception they face at google in particular were involved in skrcrewing up e 2016 election. That got a lot of people mad, and the broadening extent of all of their market power, in particular amazon, this sense they are a really outsized role in retail that everyone feels now, that is no longer over there on the internet. I question your premise a little bit you say that tech hasnt had to contend with its government moment yet, but we had microsoft antitrust, which you do mention. Google has been under scrutiny for the past decade for various things, including competition in europe apple had antitrust scrutiny over Digital Rights management on the ipod and itunes and it continues to have scrutiny over various things weve kind of been here for a while, have we not i think the microsoft analogy is right they faced a frontal assault and ultimately that assault they won victory in the end but paved the way in part for googles rise. I guess whats happening now is they are shifting from the kind of not nickel and dime, important regulatory stuff, drm, these are not unimportant issues, but the sense of their place in American Life is changing this is something the oil industry went through. There was a time when wild caters were seen as these romantic cowboy figures, same with wall street now they are seen as established interests whose home state senators fight for loopholes for them, and theres a constant trench warfare, but they are not glamorized when you say blood in the water, do you think theres going to be regulations that will change the way they grow in any way . Is this a grassroots consumer revolt i guess i would think about capitol hill, pressure from both the Bernie Sanders left, which mistrusts Corporate Power and from the steve bannon right that really thinks these guys have progressive values and doesnt like that, to handcuff them in whatever way they can. Its hard to imagine real strong antitrust action i also think theres going to be a lot of pressure on them to prove they are patriotic american companies, which is a real challenge for big global companies. If you are proving in washington how american you are companies are in the business of running a Business Model, making money for shareholders of serving the public tell it to, like, the committee on capitol hill. Its a tough thing to say. I might argue it got easier under the Trump Presidency for them to do that. Back under the obama presidency, this was a president who much of Silicon Valley,which is on the left, seem to agree with arguing for, hey, the level of encryption youre putting on is bad, thats dangerous. Now theyve got trump, they can be against his immigration stance, but also against his encryption stance and say were both american, we just have different ideas. Trump is so unpopular and weak that theres a lot of room for them to navigate, but i think there are these big shifts in both parties that dont play to where they want to be what about the defense that the products themselves are so popular with consumers that its not theres no fuel there for politicians to lever i think thats a really good point. You think its true thats a great strength 90 favorable rated products that everybody uses, everybody loves. If you want a cautionary tale, look at uber a company where essentially a political media storm over them wound up really hitting their core metrics thats no longer a beloved popular company, although its a widely used one. That was alleged bad behavior this is being big, too big maybe. The stuff that did happen on facebook during the 2016 election is in a sort of broad sense probably had a lot more impact on america than the conduct of ubers executives maybe Travis Kalanick should have gone out and milked some cows like zuckerberg did that did seem to be a sign of what they are trying to go for here to that point, how would you characterize the chapter therein where they are lawyering up. Are they in the first three innings of that or is there more to do on the hill . I think its a sort of fire your legal team moment in advance of different kind of big league. Yeah, big league. Isnt existential for them its just going to be a different kind of conversation you dont go so far in your piece to say its going to impact operating income or stock prices thats your business, not mine user growth, would you go that far i think its actually the place youre going to first see it is globally, where if they are under a lot of pressure in washington, show how american they are in every other capital that has repercussions is there safety in numbers perhaps . In the microsoft era, they were the 800pound gorilla that everybody in Silicon Valley was worried about. Now its a world of gorillas youve got a half a dozen at least of them. Yeah, not a world of them, a handful of gorillas. What youre seeing right now is some of the gorillas would prefer not to be in that particular cage and apple would love to be excluded from this narrative but isnt on the same track as the rest. Tim cook this morning making comments how their privacy views are different, but doesnt like Silicon Valley to be painted with a big broad brush i think when you see a company like apple trying to distance itself from that, from the rest of them, that does tell you something. Reaction to your piece from Silicon Valley was what . We love to talk to you more about what were doing you know, the usual. Do a followup. Exactly ben, its a great piece, for those who havent read it, they definitely should. Thank you, guys ben smith of buzzfeed when we come back, a look at intels playbook john caught up with them at tech crunch disrupt yesterday got a lot out of ryan. Dow up 22. Were back after a break hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Intel ceo, intel is going to be providing chips to power waymos level four and five autonomous vehicles. I caught up with him at tech crunch disrupt yesterday and asked about how this collaboration signals a new approach for intel, very different from the pc days when intel just developed the most powerful chip and said here it goes take a listen. These applications, whether its artificial intelligence, autonomous driving, you have to not you cant just provide them the complete solution and rides with a Generic Software like windows or android. Theres a lot of integration between the car, the driving experience, the safety, the functional safety. You have to have a much more open platform, and thats really both with mobile eye on autonomous driving, the Waymo Partnership is a great example, but were doing that in the data center around artificial intelligence, as well. I also asked him about intels complicated relationship with alphabet and google on the one hand collaborating with waymo on the other hand waymo is developing intelligence chips reducing its need for Data Center Resources that could be a danger to intel. Heres what he said about his relationship with google really provides a couple of opportunities. One, it provides, you know, remember, even with dwogoogle we partnering with them, well build that custom silicone for you, so were absolutely partnering with them to go deeper and this waymo announcement is a great example. Were bringing pgas, nirvana, were bringing more scalable zion capability into these other companies to help them compete, as well, so intel is taking its traditional role of saying, look, we need to go work deep with those who want customized, but additionally well bring other solutions that we bring our intellectual property to for those that either dont have the scale, dont have the technical depth, or want a faster time to market and you can look at that across a. I. , you can look at that across autonomous driving. That is always our answer to a market its a very tricky dance for intel. That was always about we have our process, this chip is going to be the best, its going to be the same for everybody what hes been trying to do is figure out how to be flexible and have the old intel advantages at the same time and seems like self driving and a. I. Is going to be the area thats the first big test from an investor standpoint, you have to wonder if hes talking about this to sort of say, hey, were in this, too, because its multiple, right, compared to some of the other quote, unquote, self driving car chip stocks is much, much lower and the performance has been underperforming. I specifically asked him about the analysts call where they say nvidia was the play in this area. That stock is up 3xover the past 12 months. He said thats the wrong bet and laid out his debate for why. Stocks been in this channel for the better part of the year but worked it way to the upper end of that, around 37, 3715 good stuff, john seema mody back at hq, hey, seema. European stocks on a day which data shows Rising Economic sentiment in both germany and overall in the euro zone the ftse is higher getting a lift from upbeat retail news according to Research Firm cantor, sales at supermarkets in the uk are up 3. 6 each saw sales rise more than 2 , but the report also shows privately held german grocers aldi and lidl gaining market share in the uk. In fact, lidl saw the biggest sales increase up more than 18 . Hugo boss among the biggest losers after Morgan Stanley downgraded the retailer saying boss faces pressure thats Market Driven as opposed to brand driven that stock down 3. 5 high again, also lower today after mexico announced it had sold a 5. 25 stake in the dutch brewer valued at 3 billion, this as femsa tries to focus its shift to domestic investments. Heineken down about 3. 7 in todays trade. Melissa, back to you all right, thank you. Still to come, why the former wells fargo ceo says the fed should stop worrying and learn to love low inflation. First, we are watching shares of tesla under pressure after jeffries initiated coverage at an underperform rating saying its Business Model can be scaled not as profitably. Price target right now, 0. 26 squawk alley will be right back stay tuned we cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. This is not a cloud. This is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. This is a financial Transaction Secure from hacks and threats others cant see. This is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. This is not the cloud you know. This is the ibm cloud. The ibm cloud is the cloud for enterprise. Yours. The ibm cloud is the cloud for enterprise. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Good morning, everyone, im sue herrera. Heres your cnbc update at this hour Hurricane Maria smashing into dominika with 160 mile per hour winds, leaving what one official said was catastrophic devastation. The category 5 is moving northwest at 9 miles per hour. Maria is expected to intensify over the next 24 hours the current forecast track would carry it about 22 miles south of st. Croix in the u. S. Virgin islands late today and a direct hit on puerto rico on wednesday. The airport in san juan is scheduled to close at 7 00 p. M. Tonight. Senate Intelligence Committee members cancelling Michael Cohens interview today because they felt he violated an agreement not to speak to the news media they will now subpoena him, thats according to nbc news lawmakers were upset when cohen circulated a statement that included a blanket denial of collusion with russia. And a small earthquake with an epicenter outside of los angeles hitting Southern California overnight the u. S. Geological survey says it was a mag nnitude 3. 6 quake no reports of injuries or damages, however you are up to date, thats the news update this hour. Melissa, ill send it back to you. They look completely calm it actually happens fairly frequently Bill Griffith and i were on air out in los angeles when an earthquake hit you just kind of sit there cool as a cucumber, i bet put something over your head. There you go sue, thank you. You got it. Results of the cnbc fed survey are out Steve Leishman is back at headquarters with the result hi, steve. Thanks so much. I want to look at the fed survey and what our respondents are saying about the outlook for stocks and bonds and rates first you can see were at 2504 on the s p only seeing a modest gain through the rest of the year up to 2515, up half a percentage point. A little more next year, so the idea is they think the markets reasonably valued, fairly fully valued, 2593 is the target for the end of 201 i want to look at the outlook for bonds in a slightly different way, compare it to prior survey results you can see back in january were looking for 343 on the ten year and 3 by the end of 2017 that has come down weve lost about half a point on the outlook for the ten year note you can see 2. 42 is the outlook for this year and 2. 95 so relatively low Interest Rates, but still modest gains in the stock market how about the effect of the Balance Sheet and its only modestly negative. We asked on a scale of minus 5 to plus 5, a modest economic effect, Economic Growth effect, and minus 0. 83 on stocks downward pressure, but not a whole lot. Heres the overall outlook for rates. 100 , see theres 100 right there, see unchanged at the meeting this week, but 76 , more than in the fixed income markets, seeing a third rate hike coming in december. Balance sheet decline expected by october by 68 . All of this, guys, on dot com, carl, if youd like to read all the details of the survey. Back to you. Thank you very much, good stuff. Our next guest says the fed should stop worrying and learn to love low inflation. Joining us this morning, former wells fargo chairman and ceo Dick Kovacevich. Good to have you back, good morning. Morning describe for people the larger point of the oped. What do we mean when we say they should learn to love low inflation . Well, i dont know why anyone would expect, given the excess economic capacity that exists in practically every country in the world, that you would have 2 inflation. Any complier that tries to increase prices to a customer, the customer would go somewhere else, anywhere else in the world to get a lower price, so you just arent seeing price increases because theres excess capacity i also would ask why would anybody want higher inflation or 2 inflation the average worker has had about 2. 2 increases in their wages over the past few years. If the fed had achieved their goal of 2 , almost their entire wage increase would be wiped out by inflation this would be negative for the wage earner, negative for the middle class, negative for the retirees who were on fixed income the only bright spot in our economy, because its not been growing rapidly, is the consumer the consumer has been spending at about a 3 rate, because theres real income, even though wages are low because of low inflation. Its the business side that hasnt kept up with the past growth, because they dont have confidence in the monetary and fiscal policy of our government. So, i think that if the fed had been successful in achieving their 2 inflation, our growth, which has been meager, would be significantly less than its been so its a negative i dont understand why they want it so when you say the fed ought to be focused on reviving the economy and adding jobs, period, youre essentially calling for a single mandate no. What im saying is, that they shouldnt determine their economic policies based upon where inflation is if you listen to whether they are going to raise their Interest Rates or not, its all about what inflation is. No, they should look at is the economy growing as fast as it possibly can and are we able to and continue to have higher employment and if inflation should rise because of the market places happening, not because of fed policy, then thats fine, but why try to artificially increase inflation when there would be a negative to our economy . What happens sorry, go ahead. Dick, you also point out how the feds actions over the past eight years have pushed up asset prices and some peoples concerns about multiple bubbles. At the same time, and we talked to people during this hour very often, they say, well, you know, the stock markets fine, theres reason for this. What is your feeling about the likelihood that we are in a serious asset price bubble that could pop in the near future well, i wouldnt call it serious. I just think its possible let me tell you when i look at the stock market what i worry about that it can be in a bubble if you go back to what happens many times when the economy is improving, the stock market goes down because they are fearful that the fed is going to raise Interest Rates if that isnt a good example of a bubble, i dont know what it is the stock market should like Economic Growth. And if that causes, which it should, Interest Rates to rise, you know, thats fine, because its Economic Growth thats causing it are you concern what were seeing right now is the stock market what were seeing right now is a stock market that is on track right now for its fifth consecutive record close at this point with the assumption that theres going to be rising Interest Rates, with the assumption that the fed is going to be winding down its Balance Sheet starting this month for the foreseeable future why are you concerned about that the market is anticipating and yet it is rising im concerned that they arent moving fast enough on reducing their Balance Sheet, and i hope they announce that today, but remember it was just a couple weeks ago there was only a 25 probability in the market that they were going to raise Interest Rates in december they should absolutely be increasing Interest Rates in december again, assuming the economy continues to grow and assuming that employment continues to increase there should be no concern about it we need to normalize our fed policy so that the market is determining rates, not fed, not the federal reserve. Yeah. It sort of reminds me of i think it was maybe early in the year or late last year, dick, where summers wrote an oped saying we shouldnt hike until we see the whites of inflations eyes i assume youd go along with that well, no, i guess i wouldnt. Again, i dont think inflation should be the determiner of what youre doing on Interest Rates were eight years into the recovery we need to normalize policy. Qe hasnt worked, in my opinion. Remember we were promised if we did qe that we would have 3 plus growth. The feds own forecast it never occurred. I think we will get better growth when people are confident that they know what the market rates are going to be and the fed should get out of the way and let the market determine those rates nine years after a recession. One last point on Balance Sheet, do you honestly believe its going to be like watching paint dry . Unfortunately, i do, unless theres a change in the chairmanship of the fed. I think its fine to start slowly, but if the reaction is muted, which i expect it to be, i think you should speed it up we are way behind in terms of having this enormous Balance Sheet thats 25 of all securities outstanding again, the fed is determining market rates, not the market, and thats not a good idea all right i cant wait to hear what they say tomorrow dick, its a great oped, we appreciate you coming on to share it with us good to see you again. Good to see you, thank you very much. Dick kovacevich joining us from out west. Coming up, reviews are in for iphones 8 and 8 plus. Is it worth upgrading or should you mortgage your house and wait for the 10 a first look right here on post 9 when squawk alley returns. Your muscles look good, but we should be seeing more range of motion. Im fine. Okay, well lets see you get up from the couch. Im sorry, what . Grandpa come. At cognizant, were uniting doctors, insurers and patients on a collaborative care platform, making it easier to do whats best for everyones health, every step of the way. You may need more physical therapy. Ugh. Am i covered for that . Yep. Look. Grandpa catch grandpa duck woah ha there you go grandpa. Keep doing that. Get ready, because were helping leading companies see it and see it throughwith digital. Coming up at the top of the hour is the russells rebound enough to keep the rally going, and can it last . Well debate whether small caps are the place to be. Plus, we answer your questions as the Semiconductor Stocks continue to soar well hit nvidia, micron, intel, and more use the analystsversuspanelists and unusual activity in the retail stock Halftime Report noon eastern. John, well see you in a little more than 15 minutes all right, scott, im not going to touch that dial meanwhile, reviews for apples new iphone 8 and 8 plus officially out this morning and its a mixed bag heres a sampling. This isnt the upgrade youre looking for. Forced to the shadows by the iphone 10. Just the default apples best and most boring phone. Joining us now is Jeffrey Fowler and cnets scott stein scott, lets start with you. Okay, so is this phone worth getting for somebody who is, i dont know, got, say, a 6s i think if you waited a while, sure. Its like that laptop with a new processer. Youre okay with the design, some people dont want to go with the new tech, and that includes members of my family or my wife or other people i know that dont want to experiment with Something Like face i. D. , then this might be the stop to get off on but anyone else with its coming out november 3rd it does cast a shadow you have to wait and see and we dont know how the iphone 10 performs i held it for a few minutes, not enough to judge what it can do, and the processers inside are really similar camera should be similar, maybe a bump up. Youre spending 800 on one of these things or more you want to figure it out. Know which one is the best, you know jeffrey, your take on this, kind of pretty much as expected or is there something unexpected that makes this worth it for some folks i definitely dont think theres anything unexpected that makes it worth it, and, scott, i actually disagree with you on one point. If youre not the kind of person who cares about having the latest and greatest, the person to spend 1,000 on the iphonex, youre not going to want the iphone 8 either. The incremental upgrades it offers versus the iphone 7, which is available for 150 less really just arent worth it. Were talking about things like wireless charging, which is okay, but in my testing really was almost more of an annoyance than a help, and a moderate camera upgrade, which means something to people who love to take pictures on their phone, but if you look at the samples ive got on the journal website, youre going to be hard pressed to tell the difference in the shots between the 7 and the 8. Geoffrey, if you were a wall street analyst id be concerned about apples stock because what youre saying is sounding like people might stick or stay with the 7 than going with the 8 or even the x at this point, that the differences in price make it so you think am i getting whats worth it for that 100 or maybe 300 more at this point, and youre basically saying maybe not. Yeah, i think its a really strange product. I hate it when people do this, but it feels like the kind of product that apple ten years ago would not have come out with it feels like apple made this because they could, right, because they said, well, we have the assembly lines, we know how to make phones in this general shape and form, so lets just do it rather than sticking to its guns and really committing to the iphone x as the future of smartphones, which by the way samsung, lg, all the other major manufacturer of phones have already made that shift to that direction, the Samsung Galaxy s8 already has a full screen, goes edge to edge and is selling not nearly as much as apple wants to sell the iphone x for. Are some reviewers missing the point here because we do have the 8 now slightly hyper than the 7, the x is coming out, but the se is still, what, 350 and then an option at every level on the way up theres now an iphone for everyone you dont have to feel guilty for carrying around a 6 because it looks just like the 8 i mean, have we reached a consumer friendly, not just trendy apple well, i think its maddening. Youre looking at so many different options. You want the one that, wos and youre not going to get screwed on when apps come out and feels slow i think apple is putting so much into the chips and men in reality, a. I. , but its hard to tell what thats going to be right now youre looking at very early stages for that. Do you get onboard, do you wait, very important for apple, perhaps, but for the average person most apps are not built for that yet who do you think the model customer for the x is going to be do you think its going to be you and me like tech geeks, people who spend their daily lives on it . I think its tech geeks, those who want their phone to be a sports car, original iphone mentality where you wanted to show it off, because theres no showoff factor here with the 8 and 8 plus, but thats the thing, they did at least bring up the model upgrades across the entire line. This year apple is making you pay up for the new design and holding it back from the lower end models on the new phones geoffrey, if the x is fantastic, and well have to wait for the reviews from you guys to know, is all forgiven on the 8 . Surely some people dont want the x and want something kind of in between will it all make sense then . If the x is great, then all the people who want to have the latest and greatest will certainly get that were going to have to test that face i. D. To see if it really works, but then for everyone else if youre the kind of person who really just doesnt care, right, you just want a phone that works, again, i think the iphone 7 at 150 less has never looked like a better phone. I mean, again, if you look side by side at the experience youre going to get with an iphone 7 versus an 8, its really hard to tell the difference. I could swap it out in your pocket and not tell you and you probably wouldnt know the difference the other dynamic, too, you can go for a cheaper phone and buy a watch, which is now untethered theres so many different options in terms of how you spend your appledollars. It may not be on the x phone or super high end expensive phone yeah, it gets to be a confusing landscape. Now you have a lot of accessories and things you might add on if you like the idea of your tech company as a taste maker, which i thought in the past apple had a singular product, its not really the case for that anymore you have too many options. Even in the watches, spend up on designs. You know, whos going to be your tech sommelier to do that . Have you tried the watch on ive tried it havent taken it in the dirt yet . Stay tuned. Thats a curiosity, too, are we ready for that, or are phones all about cameras, which you cant put on the wrist whos that for is it niche for fitness, so theres a lot of questions there, too geoffrey, closing thoughts . Yeah, this is tim cooks apple. No longer is apple the taste maker that moves the world forward whether or not its ready. This is optimization of sales curves and something for everyone, and, sure, options are generally good for consumers, but they are confusing so its more important than ever to read the reviews, both with the iphone and i would say also on the apple watch. Think the h port partisans and the people who like touch i. D. Might disagree with you. Thanks good discussion from both of you, jeffrey and scott. Yeah. Straight ahead, an iconic american retailer filing for bankruptcy we go live to ysrto us for the very latest. Squawk alley will be back right after this can we at least analyze can we push the offer online . Legacy technology can handcuff any company. But yes is here. The new app will go live monday . Yeah. With hewlettpackard enterprise, were transforming the way we work. With the right mix of hybrid it, everything computes. Toys r us officially filing for bankruptcy. Our kay rogers is outside with all the details. Hey, kate. Reporter just ahead of the holiday rush toys r us did file for chapter 11 bankruptcy late last night. A Company Spokesperson insisting to us this is a Balance Sheet issue, not a business issue with their overall operations as they seek to restructure more than 5 billion in total debt. Now, toys r us, they do have more than 1,600 stores around the globe. They employ more than 65,000 workers. They told us that could reach more than 100,000 workers during peak Holiday Season and they are not planning to close any stores or have any layoffs during this restructuring process. Well take you through important numbers for the company. In 2005 they were acquired by bain capital, kkr and rinaldo trust for more than 6 billion n. 2010 they began their filing process for an ipo and scrapped the plans in tween and in 2015 they did close their Flagship Retail store now, toys r us says all of its company rewards and Loyalty Programs and its gift cards will continue to operate and be valid as they use more than 3 billion in bankruptcy financing to continue their operations, but despite those assurances, we did run into some customers this morning that were rushed in here to use the gift cards on this news. We basically came here today to finish off using all of our gift cards rumor has it that toys r us is claiming bankruptcy, and once that happens our gift cards go to a zero dollar balance. Reporter so toys r us does join, of course, other big retailers like payless and radio shack in recently filing for bankruptcy of course, the elephant in the room is amazon their overall toy sales grew by 24 last year as opposed to just 5 for the toy industry as a whole. Thats according to Analytics Firm oneclick retail. Carl, back over to you. Interesting to watch hasbro and mattel stock, kate, up 2 , because i assume the dip financing means they can continue to move their goods through toys r us going into the season. Yeah, absolutely. Those are two of their biggest creditors, carl. Again, just to reiterate the point. We did speak to the Company Spokesperson this morning. She said despite the report in the wall street journal they were not yet planning any store closures and that they were going to continue to hire throughout the Holiday Season and reach more than 100,000 employees, so well have to see where that goes. What a story, kate. Thank you for that i saw a piece on the wires yesterday, guys, about retailers that have gone through chapter 11 not once but twice. They call them chapter 22s. Why i think four of the last ten files are repeat which is starting to raise some real discussions within private equity how much of a solution is it just to keep the stores alive for a certain time and even think of the ones that have filed for plain old chapter 11 just once youve got payless and perfumania once in the past 12 months. When youve 1,600 stores and arguably they are the wrongsized stores for the internet era and a lot of the wrong locations. I dont know the last time was i saw a beautiful shiny new looking toys r us. This is an era where its got to be an experience if youre going to get me into a store. Well be back in a moment dow up 36 points dont gowa ay. Dad molly, can you please take out the trash . sigh dad molly trash whoo mom hey, molly . Its time to go bell ringing class, lets turn to page 136, recessive traits skip generations. Who would like to read . molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. a lot of news today means that some stockspecific stories have gone underreported. Apple did get a price target increase from Morgan Stanley going from 183 to 112, largely on a weak dollar and athletic wear and footwear, nike cut at susquehanna and go to 54 target and wells cutting under armour to underperform. They go to 13. As they say, customers have loaded up on these kinds of clothes for years. Along with estimates across the board from the entire space so really under pressure here. Also worth noting, chipotle, their woes continue. They Just Launched queso, a lot of backlash. People thought it was terrible people who liked cheese, hated this thing supposed to be the savior for chipotle down another 2 . But nobody got sick. Silver lining always looking at the bright side of thing. Adobe tonight and fedex which had some rate increases take effect in january. Lets get to the judge and the half. And welcome to the Halftime Report. Im scott wapner our top story, small caps and big gains. Why the russell 2000 has outperformed its bigger brethren this month and whether its comeback is a sign of a more broadening and stronger rally. Lets begin with the smallcap stocks the russell is up 6 , after lagging the dow and nasdaq you know what, steve, small caps lead on the way up and lead on the way down this has to be a great sig