Transcripts For CNBC Squawk Box 20240714

Point. Hang seng was up more and in europe theres active trading taking place with the early hours and youll also see that there are, well, its a bit of a mixed picture. Stocks are slightly weaker across the rest of the continent there. In the treasury yields here in the United States, thats what we continue to watch closely theres questions about what the fed does next and right now the ten year picked up a little bit of steam its 2. 073 . The ten year at 1. 584 so about 1. 5 and then the two year, look at that 1. 558 so no inversion at this point and you are seeing a little bit of gains in the yields. Thats a pretty big move. A quick move back. Right were not following it that closely. And the 30 year is well above 2 i think just psychologically its always like this but we give it to up days not just us but the collective we theres a point we were down 250 but we only ended up down 250. Right. But we did 372 yesterday but its very its the biggest two days of gains you have seen for s p since june. But, you know, i read some of the other financial processes of it, they love this guy, whatever his name is from Merrill Lynch i see another article. I see a different article written by some market watch person almost every day rehashing what this guy is saying. Mike where are we from the highs now . You are saying people are so negative right youre up 5 from the mid august low. People psychologically i think got geared up. Talking about market highs, things are moving out but in stocks to watch this morning, i want to tell you about a blowout quarter. Are you wearing your lulus today . I am. That stock up about 4 . Reported better than expected Second Quarter results in its online and menswear sales jumping 27 . The new ones. I saw the jeans you had yesterday. Its a jeanish material. You wouldnt believe there was a new line because you would have known. He doesnt know what jeggings are. No, i dont. Is that a new line . They look new to me theyre leggings but sure. I dont know what that is. Look up jeggings when you get a chance. Also raising the forecast at the year 195. 75. Take a look at shares. Theyre also soaring this morning. The e Signature Company Second Quarter results beating forecasts at nearly 40 jump in subscription revenue that stock up over 10 and shares are down. They didnt provide as an aggressive outlook as in previous quarters. Still the stock up about 130 since june and a founder of the Worlds Largest hedge fund out with a new call on the u. S. Economy slashing the odds of recession from 40 to 25 last month there was a 40 chance now that risk is about 25 and he recommended that the fed cut rates slowly and by small increments rather than rushing to stimulate the economy. Its jobs friday. Forecasters expecting the economy to add 150,000 nonfarm jobs in august thats the number to beat about now. Down from a gain of 164,000 in july but still above the 100,000 a month needed to keep up with growth in the working age population now the Unemployment Rate is expected to hold steady at 3. 7 and of course President Trump tweeting what was the tweet about the numbers . Referencing jim no, referencing jobs. There is a jobs tweet. I cant look at twitter im joe squawk now. Youre being overwhelmed. But ill say the notifications and responses but theres 2,000 of those but theres 30,000 likes so is there really only one out of ten that are so like the other. Its who is following who. You just cant. I think you should get verified maybe thats the only thing that you should look at because they only have three followers. They do. Dont take too much. But i was trying to circle back to dalio. He said 40 the next two years which is more than just this year or next he said 25 the next year. He said the rest of this year and 2020 thats not a full two years or was he just saying i dont see it in the near term. I thought last time when we jumped all over that story it was why are we doing this . He made some money over the long haul. He has but now he thinks maybe we need a Software Upgrade on capitalism because hes got his 20 billion. Lets talk about jobs numbers today. The u. S. Chief economist at S P Global Rating Services kathie is here good morning what do you think is going to happen were looking at 145,000 job gains for the month. A little under. A couple of reasons one is that its the august season you do see seasonality adjustments meaning the kids that had the summer jobs are gone for the summer. Thats a bit of a cut back were looking at the ism readings and the ism manufacturing reading for example. The employment component was weaker and under 50. Manufacturing is not a big part of the economy then you look at the sub component equipment indicator for the ism Services Reading we have a similar number. 144,000. You guys are really playing price is right you try to go a little under. Thats right. Last time i did quite well last month. But we see a similar story the goods sector is not going to generate a lot of jobs were seeing the spill over from global weakness and that was confirmed by the ism report. And thats in line with the moderation in the overall economy. Does that worry you or no if its dramatic that would worry me but the slow down is in line with the slow down in economic growth. Still resilient. Not recessionary at this point and we only need 120,000 per month. What do you make of this call sd he lowering his expectations . I dont think he would pretend its a science right if you invested through yesterday on the premise that we have a 40 chance of going into recession, you killed it everybody got very defensive and even the currency moves were where you would think that this is what we were headed for i dont think it matters if he goes down by 15 if you go from 30 to 40, thats like the analyst from 185 to 186 on a stock your opinions are like everyones opinions. Thats still 60 in a recession, isnt it sure but thats your typical baseline behavior. Theres an article on the science of economics its nothing like physics, chemistry or biology. Whats the broader point he is making . I dont know. That the market is the Global Economy slowed down enough to where if you got a shock or a push maybe you have it the other thing is the Central Banks arent going to have the same power. Its how the markets are acting as well were going the other way. We raised our risk of recession so were at around 30 to 35 . What was the rational there where were you before its been climbing higher. Yeah. But what is your base rate so youre at 30 or 35 . When you mentioned 30, so we saw historically when you look at the risk of recession you needed at any point in time historically 15 would be a risk of recession so we have been climbing above that line. Are people at zero ever its hard to see something could happen. So youre saying the base rate. Just historically you climb higher and higher now where we are, its been a year ago it was 12 to 15 that was our risk and now its double that. Its a trade dispute going in. Historically when you go into a president ial election year, theres often a slow down in capex spending because people are waiting to find out what happens next does that factor in at all its certainly at play there. Were seeing a slow down in cap ex. If you chart it out over 50 or 80 years, what you see is six months prior to an election it really does slow down. I could argue with that but i think its been if you look at it over the past several years its been steady. Thats capital expenditures. The only time we see some what of a stimulus was that. We never even went that high but our view on the recession risks were about 40 for 2020 and we just revised our estimates we had the new rounds coming in place september and october. Thats going to add another drag in 2020 so all together we see the tariff and the uncertainty dragging growth down by abo about. 6 . Otherwise it would be stronger so 1. 6 from 2020. Thats more conservative than what the fed published yesterday. They said that the tariffs and particul particularly uncertainty has been off of growth its paralyzing businesses right now. The uncertainty of what to do. Well leave this part of the conversation right there thanks guys. When we return, big news out of hong kong overnight the city facing a ratings downgrade as protestors plan the fourth straight weekend of demonstrations well take you there live. Oh, wow. You two are going to have such a great trip. Yeah, have fun thanks to you, we will. Aw, stop. This is why voya helps reach todays goals. All while helping you to and through retirement. Um, you guys are just going for a week, right . Yeah thats right. Can you help with these . Oh. Um, were more of the plan, invest and protect kind of help. Sorry, little paws, so. But have fun send a postcard voya. Helping you to and through retirement. But were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. Go where my baby lives from tb[ growl ]olle srn good boy. Hey. Hey. You must be stevens phone. Know whos on your network and control who shouldnt be with xfinity xfi. Simple. Easy. Awesome. Some news out of hong kong overnight. From aa plus to aa with a negative outlook they cite on going turmoil from the demonstrations months of conflict and violence are testing the perimeters that governs hong kongs relationship with the mainland. Officials are taking a more public stance on Hong Kong Affairs than at any time since the 1997 hand over this m cos ahead of what is likely to be the 14th straight weekend of protests in the city. In the meantime theyre planning to demonstrate again this weekend. Chris is in hong kong with more on the story good morning or good evening. Good morning. Thats right protests continue in hong kong this still after two days ago the emotions battled executive leader of hong kong announced she is with drawing that extremely controversial extradition bill that sparked these protests more than three months ago so you might be asking yourself shouldnt that be the end of it. Think again. Protestors are telling this government we have more demands including we lost faith in you we want you to step down they also lost faith in this local police force they have accused them of Police Brutality throughout this entire movement they also want the police to let their fellow from tess tos, to let them go. More than 1,000 of them have been arrested and they wanted amnesty for anybody thats been charged throughout the movement. Now a big test is this weekend, look at the airport. Tomorrow theres a protest planned there. Its been a major battleground throughout the movement where protests managed to ground traffic. They havent been able to get there to drop off passengers a lot of flights cancelled and a lot of people missing teheir flights. If you have to go through the airport in hong kong expect delays that is brexit and Political Uncertainty in the u. K becky, what markets, what investors, what voters here in the u. K. Are watching are the likelihood of a central election and possibility that still exists of a no deal brexit at the end of october its been a difficult weak for boris johnson. He lost his governing majority in parliament and lost a member of his party to one of his opponents. He fired 21 rebels and lost four votes in 48 hours and lost his brother that resigned yesterday saying he could no longer reconcile family commitments and the national interest. Hes a minister, an mp now leaving front line politics. He says over the course of the weekend well hear opponents trying to discuss an election. He wants to push through with a brexit deal. If he cant he wants to take the u. K. Out of europe at the end of october. Regardless, a lot of people saying that will be economically damaging and legally chaotic and what the opponent wants to do is see that ruled out and as soon as monday we might get a better sense as to when well see a fresh election that will be very divisive and very heavily focused on brexit. Probably not helping in terms of the negotiations hes trying to do with the eu right now. My guess is theyll just sit back and wait. Absolutely right. He said again and again that by no longer having the option of a no deal brexit he cant hold their feet to the fire. His opponents say thats nonsense you were not even engaged since the last five or six weeks since you took office. The counter parties in those talks say they heard nothing new from the new British Administration that would change their mind over the agreement that was negotiated almost a year ago under johnsons predecessor teresa may. Thank you coming up Sports Betting meets sports bars. That sounds awesome. Drink and gamble. Maybe not so great for how you do were going to tell you about a new partnership between mgm and Buffalo Wild Wings that sounds interesting. Well be right back. This is the age of expression. Everyone has something to say. But in a world full of talking, shouldnt somebody be listening . So. Lets talk. We are edward jones. With one Financial Advisor per office, were built for hearing whats important to you. One to one. Edward jones. Its time for investing to feel individual. Thand find inspiration who win new places. Ct. Leading them to discover were woven together by the moments we share. Everything you need, all in one place. Expedia. Can i get some help. Watch his head. Im so happy. Whatever they went through, they went through together. Welcome guys. Life well planned. See what a Raymond James Financial Advisor can do for you. 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. As a principal i can tell you this. When one student gets left behind, we all get left behind. This is a problem that affects each and every one of us. Together with ibm, we created a whole new kind of School Called ptech. Within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. You know whats going up today . My poster. Today, there are more than a hundred thousand ptech students around the world. Its a game changer. Howard schultz is not running for president. My belief in the need to reform our two party system has not waivered but icon colluded that an independent campaign for the white house is not how i can best serve the country at this time well see how that money is going to be used. Hes not going to spend it on sports gambling . Why would he do that . Because its fun. This new jersey thing opened up. Its going to do more than vegas . Let me introduce it. Restaurant chain Buffalo Wild Wings and mgm announcing a deal to bring Sports Betting into restaurants. Joining us the ceo of roar digital. Adam, i dont like going to vegas and doing black jack and stuff but i love watching College Football and if i had 10 on a game, when we do the final four and theres not even money involved. Theres the joint venture between mgm and you have all kinds of smart different ways to take advantage of the new environment that were in. Could you explain that a little . And then well go into Buffalo Wild Wings. Exactly the original intention the coming together of one of the leaders worldwide in Sports Betting and of course mgm resorts which is a premiere Entertainment Company, a leading Entertainment Company in the u. S. Granted access to tens of millions of gamblers and of course the Exceptional Properties we think the combination of those two things is a winning combination to tackle the market opportunity. And Buffalo Wild Wings i guess was you could almost sort of see this coming because you watch their advertising and its a place where theres great wings and ive been there. I like it a lot. Theres the sports that are on. It is and they have new products by the way. But for us its an opportunity to bring out product to many tens of millions of highly engaged. What would it look like id go in and youd go in and have what is already a very entertaining evening with your friends but youll also have access to exclusive offers, special bets, prizes that are brought by raw and bet mgm in venue so were enhancing the in venue experience by increasing the emotional amptitude and creating more of a talking point for a good experience with your buddies. You must need a pretty good digital guide. Theres going to be monitors there to do things online . Were in a world of Second Screen, right . So what we are doing is creating a primary screen and Second Screen experience that actually our Second Screen enhances what youre doing in your first screen as opposed to being a distraction. Second screen being one on the table that i can touch after i eat my Buffalo Wild Wings . And before. At casinos historically, if youre betting on gaming, if you get trashed effectively, youre totally drunk at a casino, they cut you off. Theres people that understand the dynamic. Not just that they dont want you to drive but they dont want you to gamble. How does this work in a much sort of larger context because this would be happening at bars all over the country. So bear in mind, engaging with our product in venue youll have to have gone through your registration process and set up a Payment Method you have to have an account so we know who you are. Right. And we also have very sophisticated digital responsible gaming tools so you can also set timeouts for yourself you can set bet limits for yourself. But you cant identify if theres somebody if you see somebody that seems to be making wild bets, you take the bet . Do you have algorithms that are going to stop people from doing this forgetting about i like that you have tools to stop people but that requires them in advance of drinking or whatever do you know what im saying selfregulatory do you have other things were interested in all of our customers having a positive betting experience. To that end you do what we invest in tools and theres responsible messages. I think were asking do you cut somebody off if you see crazy bets going through. How do we know if its a crazy bet . This is the same as anywhere ultimately unless an individual is behaving in a way which calls attention to themselves in a physical environment obviously intoxicated. We are responsible adults and we have to conduct ourselves in a responsible way and were interested in seeing that play out as well. Theres a tendency in society right now for more freedom for what kind of some of these vices and theres going to be some personal responsibility thats going to be necessary. In colorado theres going to be personal responsibility thats necessary. The gambling cat is out of the bag, dont you think i think it is out of the bag. Thats not going to be the problem. But people doing gambling at home people will be gambling where ever. The james cahn movie the gambler should be mandatory viewing. Thats the michael mann. The one i think is some what good at what he does but anyway. Thank you for coming in. I would like to announce that today that we are launching a new product in new jersey and launching it officially our bet mgm brand which will be our hero brand throughout the u. S so watch out for the Marketing Campaign coming. Coming up when we return, a lot more on squawk well talk about one of the years most controversial ipos its wework and there is adam n newman. Well talk about it after the break. Later much more on lululemon and joes pants. Easy. Down boy. That stock up about 7 right after this through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Open up about 35 points higher right now well get the big jobs numbers and all of this may move around. Its expected to be valued at only 20 billion thats less than half of the 47 billion figure it reached near the latest funding round. Its in between there somewhere. Coming as investors are worried about the companys cash and ability to turn a profit any time soon and this comes as the ceo adam newman poked fun at other money losing ventures including lyft and uber. He criticized them for spending aggressively to fuel growth. Wework is expected to begin its road show as soon as next week but there had been anticipations that it might happen next week and now its not the case. Theres a question of whether this happens at all. We were talking about this probably two or three weeks ago and i said will this ipo even happen at all . There are reports that adam newman went to tokyo to visit to suggest why dont you just give us some more cash and we can delay this ipo for much longer. Than to buy a massive chunk. The biggest problem for softbank is because of the way they wrote this up, the valuation, they wrote it up twice and the reason they even got that valuation is because of the earlier valuation. So its all funny money. None of this is good. But we all see stocks, you can look at any stocks and the high and low for 52 weeks. Its half. And stocks move around and when you bring out an ipo if youre off by a factor of two, we thought it was 40 now. That doesnt instill a lot of confidence on people that want to go into the ipo the next one thats coming up, we think its somewhere between 20 and 40 but were doing 40 it just doesnt now you say no thank you. I think it makes it harder for uber and lyft and those that are public. He was giving grief to uber and lyft about their money burning but understands elon musk more after dealing with the fcc. Do you know who is to blame for this newman you didnt see that coming i didnt. All right when we come back, trade and tech were going to take a look at how Big Technology stocks have been holding up against a slew of recent trade headlines. Right after this the light beer youve been waiting for has arrived. Lower carbs. Lower calories. Higher expectations. Corona premier. Should always be working harder. Thats why, your cash automatically goes into a Money Market Fund when you open a new account. And fidelitys rate is higher than etrades, td ameritrades, even 10 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. A 7th time since early last year the move will free up more than 126 billion for loans in an attempt to slow up chinas slowing economy. So read into that what you will in terms of trade war effects and theyre noticing some pressure on the economy. On both sides. So all the way around. In fact, u. S. China trade talks are set to resume next month but for a look at the impact of trade tensions on the tech sector, lets welcome rebecca. She is the author of the new book called tech titans of china that came out this week. Also were joined by web bush securitys managing director thank you for being here lets start with you because of the book youre basic underlying premise is that if tensions dont reduce soon, you think china is going to out pace the United States when it comes to technology development. Why is that . We are seeing this. Its happening right now and the u. S. Has a major challenger in china. A global challenger. China has come up so rapidly over the past decade innovating fast. Working hard, going global these are all aspects of chinas tech economy that could have never been imagined a decade ago. I know ai is where most people point in terms of Artificial Intelligence china is ahead in most aspects theyre spending a lot of government funding going through universities and they have big databases with lots of people they can work with and run those things too but there have been serious Security Issues that have been raised with huawei and other cooperative efforts. Do you think that those are fallacies . Do you think its not a problem . Well, theres a number of ai start ups and many of them are unicorns already so we see this incredible push that china is making in ai facial recognition is part of a. I. So that is an issue thats become a very controversial issue and when you go to china, you siakam rangers everywhere looking at you and recording everything that you do and monitoring the citizens. Is it hyperbole or overstating to say the innovation youre talking about, if i ask a question did they innovate or steal what we innovated is that oversimilar p oversimplifying or is there something to it . I think its oversimplifying. If y if you look at the history, china came to the u. S. And went to our finest companies and schools and copied but now china is innovating on their own and originating. Is there a problem with ip theft or not there obviously is. There is but its overstated. I think its overstated. Lets just talk a little bit about what we have seen in the last few days as it looks like maybe the talks will resume next month it certainly has been Technology Leading the way higher theyre on the fore frant of any issu forefront of any that we deal with right now. The biggest including semis and apple front and center apple is the poster child for the u. S. China trade war and it comes down to worries about disruption and supply chain. So far the bark is worse than the bite but no doubt if i look at whats in apple theres a 20 to 25 overhang on the stock because of the u. S. China trade situation. Thats right we continue to hand hold through this focus on the longterm but ultimately near term it ultimately does ride on tariffs because if the tariffs kick in december 15th, that could take about 200 off of tech growth. So what would you tell people to do . Right now were buyers. We have been pounding the table on apple we continue to think right now fundamentally and valuation wise these stocks look higher this is a game of high stakes poker. What i continue now is on ip because it really does come down to protection ip and thats why right now everyone is trying to see is there going to be teeth in what do you think that theres a possibility that we could ever reach a deal in which case u. S. Companies that are based in china now or manufacturing using their supply chains are not going to think about leaving. Because right now the issue is theyre going to still think about leaving. Irrespective of what deal gets done or no . Thats what im curious about. Because if youre the Chinese Government you want things to remain the same. What do they have to do on that end . If a deal gets done that u. S. Companies feel comfortable second half for example, best case it can move 5 to 7 of production out of china in 18 months theyre landlocked in terms of in china but when you look at other Tech Companies for them to move to china and have more operations its going to take more ip and more ultimately teeth in terms of what this deal could be. Rebecca, how nervous are people in Silicon Valley because of the trade talks theyre very nervous. Theres been the cross border flows with china and youre not seeing the capital coming in for start ups or coming in to venture funding. Youre seeing a shift from china to other markets were starting to see a parallel universe developing and were seeing east and west continuing to separate. 5g will create even a bigger split. Thank you for coming in and rebeccas book again, tech. Rebeccas book, tech titans of china is available now. When we return, we will look at this mystery chart. Are you ready for this one it is a retailer it is been on quite a run this year it is up even more this the premarket this morngni can you guess what it is we will tell you after the break. At verizon, were building the most powerful 5g experience for america. Thats why the nfl chose verizon. Because they need the massive capacity of 5g with ultra wideband, so more screaming, streaming, posting fans. Can experience 5g all at once. This is happening in 13 stadiums all across the country. Now if verizon 5g can do this for the nfl. Imagine what it can do for you. Welcome back to squawk box. Lululemon, do you remember that chart that we just showed you . Thats what it was surging yesterday. Sales in the online menswear business ceo Calvin Mcdonnell says the Company Plans to double its presence in china by the end of the year compared to 2018. Joining us good morning to you. Good morning. What happen here . How did this happen . They are doing what few other retail remembers doing right now. Innovating and better than anyone. The innovation of mens wear he becomes a zipper on my back pocket where my wallet goes. Thats an innovation. The athletic space is doing well but in this case it is not just updating items, it is also in the fabric and technology. They launched metal tech vent in mens. They are coming out with a wool outer wear collection in the fall they are constantly bringing something thats not in the market place implementing crm, getting to know their customer. Execution, solid management, and delivering. Do you still like it. Still my top pick it has been a top pick for two years. They have a five year plan which on the is your vas looks ambitious, growing mens, growing commerce, growing international. All the metrics, too they are funny. The enovation. These pants are called abc pants. We all know what that means. What . Abc, easy as one, two, three. Yeah. The innovation of making them comfortable so they dont crush anything but there is also being funny enough to say that in a big corporate environment. They have got it going, right . Everything feels like you are wearing denim or jeans, and thats all anybody really wants in life. It is the number one selling pant it is what gets new men to the brand. And bottoms in general are up really strong double delegate gains now for the decade. It is crazy that they do it every year. Can we talk about the growth plan in china . Given the trade war and everything else, how is that going to affect this growth. They saw over 30 growth in china in the Second Quarter. They are doubling the number of stores they are going to open this year over the next five years, thats going to be the largest source of opportunity. So far so good the metric are strong and there is a solid demand and appetite for the brand. There is no anxiety the trade war is going to impact them one way or another at this point, it is a nonissue. 6 of their goods are sourced out of china tariff perspective, airfreighting, thats a small fit. Rocks anne thank you for being here lets look at futures after big gains yesterday and this morning we are up another 54 points on the dow. On the s p how close are we to 3,000 . 2,976. Almost back to the 3,000 level on the s p nasdaq indicated up five we are counting down to the big number of the morning, august jobs thats coming up at 8 30 stay tuned to squawk box on cnbc i can. The two words whispered at the start of every race. Every new job. And attempt to parallel park. electrical current buzzing each new draft of every novel. typing clicks the finishing touch on every masterpiece. newborn cries it is humanitys official twoword war cry. Words that move us all forward. The same two words that Capital Group believes have the power to improve lives. And that, for over 85 years, have inspired us to help people achieve their financial goals. Talk to your advisor or consultant for investment risks and information. Its how we care for our patients like job. His team at ctca treated his cancer and side effects. So job can stay strong for his family. Cancer Treatment Centers of america. Appointments available now. Fun fact 1 in 4 of us millennials have debt we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. And you can get your money right. With sofi. Check your rate in 2 minutes or less. Get a nofee personal loan up to 100k. Countdown to the jobs report is on. Wall street trying to extend the winning streak to three in a row. We will talk markets and your money ahead of the number. Football is back. Rogers in the pocket, throwing into a lot of traffic, and it is caught for the touchdown. Fanatics chairman Michael Ruben joins us to talk about the business of sports and how the tariffs are affecting business. Plus s google stomping on Small Businesses the ceo of privately owned base camp speaking out about googles advertising practices he joins us to discuss as this second hour of squawk box begins right now it is friday i am in love announcer live from the beating heart of business new york this is squawk box. Its friday im in love moouk moouk. Good morning. Welcome back to squawk box here on cnbc u. S. Equity futures, we just checked them a couple of minutes up 56 on the dow nasdaq up 7, and the s p indicated up four. Lets tell you about some of the big headlines on this jobs fryr friday. Investors looking ahead to the jobs report. Economists think the u. S. Economy probablyd aed 150,000 nonfarm jobs last month thats the number to beat with Unemployment Rate unchanged for july at 3. 7 we will have all of that news at 8 30 we will be talking about it ahead of it as well. Just in the last hours, star bucks former ceo howard shults announcing he has officially no decided not to run for president. His campaign had effectively been put on hold before. Shults releasing a willer to supporters saying an independent campaign is not how he thinks he can best serve the country right now. And ray dahl yoes says he sees a 25 chance of a u. S. Recession by the end of 2020 a month ago he told cnbc he saw a 40 chance of recession before the 2020 election. He also says Central Banks are limited in the actions they can take to avoid an economic town turn a little bit of a bullish signal. Is the capital system still broken is he sticking with that. He was at burning man last week i think he might have had an epiphany. Where else. About sort of where the world was going. All right i wonder if he is back to liking capitalism or where he is on that you know, actually, burning man is a capitalistic kind of place. Maybe it is like the stockholm syndrome. You have to bring no money and do everything for each other . Grover in order quist. I read about it he was going to do we are going to host squawk box from burning man. You are going to host the show from there. Wearing wild outfits, micro dosing it will be wild. Im staying here. Wait a minute we are going on tv after bemicro dose. We are going to burning man, we are going to build a crazy set because they have artwork installations, we are going to have fabulous guests it is going to be fabulous. Dont like cluster ampersand, at signs, thing like that i thought you were going to say cluster something else. I did ampersand, and sign. Look up in order quist. I just remembered what he said. Anyway, the jobs report is machines away. What about that what do we call this thing, the most important jobs report ever there is a lot riding on this jobs report. The investors want clues whether the economy is weakening and the feds outlook. Seems the balance in the market between the bulls and bears are ten use and the report to move the market either way. These would be the good numbers. Why can we count on that adp . It may be mark yesterday said the sample for he keeps trashing his own numbers. Right thats true. The sample for august from the government is low, which means in this case and in many cases the adp sample is actually higher anyway, data had an effect yesterday. Strong data, Strong Service numbers rousing the outlet for rate cuts. Look at what happened. We dialed back on the october chance of a rate cut still 100 for september and dialed back december, moved it into january. Thats another thing we will be looking for. We have two opposing forces at play uncertainty over the market versus a tight labor marketing Joe Brusuelas writes writes one thing. Juanita dugan says forget that, their challenge is a lack of workers. It is definitely an inperfect science. You cant write a formula for how employers are going to react to all the situations and how the fed is going the react to all of that. Stay here. How much is riding on this number today i fell like there is less build up than we have seen in past years because we are already thinking about what the feds are going to do next today is less about what the actual number is going to be and more about how the market is going to react to that number. Whats changed this week prior to the last several weeks is that, you know, what we are realizing is that confidencers ma we found that out. We had weak confidence surveys in the last several weeks. Then all of a sudden you had a stronger ism number yesterday back stopped with the restart of china talks. What we are looking for today is ea even if you get a number thats slightly below expectations the bond market still sells off. Actually the bond Market Selling off is a vote of confidence. The most important confidence barometer there is. Are you back over 3,000 on the s p . Are you back over 3,000 on the s p. It is been the number for a year. You are waffling the last couple times you have been on, waffle, waffle, waffle. We will wait to see what happens. Are you back to you were bullish last time. I thought it took nerve. 3,200 possible, right . Is 3,200 possible. Absolutely. On the s p . Yes. Is 3 ,500 possible. No. We dont think so. The economy the ism told you if anybody we are setting up like we set up in the First Quarter of 2016. There is a manufacturing slowdown, clearly. Clearly, it is the result of the trade war. But the consumer is still there. Thats why if you look at the last week the fact that the confidence number slept a bit, the fed knows it, the president knows it, confidence turndown has preceded every recession and they are in the going to allow confidence to slip. Kevin, do you think 2,500 is possible anything is possible. I think from the bond markets perspecti perspective, todays number is more about average hourly earn earnings than the jobs number. It is an inflation story or a lack of inflation story. The fed struggled trying to relate in the economy. They continue to do so this started way back in november of 18 when the democrats took the house, sped through the fed blinking onto the trade, and here we are today with whether it is 150, 170 or 130, it is more about whether average Hourly Earnings are up. 2 or. 3 and what does that mean for inflation. I think we can make economics hard as it is, harder than it needs to be. It is about jobs it is about income and it is a bit about confidence i think confidence is the least important of all of them. Because because at the end of the day what you spend is relative to whats in your paycheck plus a little bit sometimes, of course. Interesting. And how much that income is growing, with something on the back side of that is your confidence in your job uhhuh. Thats why among the things that i think are most important when we did our allamerica survey, when i look at the confidence surveys its peoples confidence in their job, right if you think you are going to lose your job tomorrow and or you see people around you losing your job, that changes your reality. I think the trade thing are important for ceos and important for planners, but less for the american. Thats a big ocean liner to turn around from where you see some of your coworkers losing their jobs you start thinking, wow, could that happen to me . Wow, could that . It is a lagging thing. But i mean it could happen during the crisis we did a poll i cant remember the number, but it was a very large percentage of americans who had either lost their job or knew someone who lost their job that number has come down. From 3. 5, it seems like you might have warning that that might happen. You would. And once you got 4. 5 or 5. All the surveys are selling us the beige book on wednesday. The nib that i quoted today that the issue of finding workers remains the biggest problem. Thats interesting because everybody we talked to is it business thats slowing down or is it just they cant find workers. I want to give the guests a chance to talk but the thing we are looking for is does the incertain from trade related to spending bleed over into hiring . We havent seen that yet. Kevin i talked to a taxi driver about the declining cost of medalions, blame part of it on uber but he said in good Economic Times thosis proos go down the only time they go up are when we are in a recession when people who lost their jobs now want to drive takes. Or if the new regulation in california goes through. Thats like the mcdonalds questions. Good mcdonalds sales because things are bad and people eat cheap or good because they are going out to dinner. Walmart, same thing they do well in good times and they do well in bad times. I am going to bring it back to confidence with apologies. Thats okay whats unique about this cycle is we are looking at a 3. 7 Unemployment Rate and yet the savings rate, the personal savings rate is very elevated and balances in Money Market Funds have been skyrocketing this year that is more sort of like, you know, more of a hunker down than you would expect but there are also people that lived through the great recession. Right what we want to see is the restoration of the confidence that we think ultimately is going to unlock that money and drive the consumer forward and ultimately the stock market higher. Thank you for being here. Bullish now. Okay very consistent. Oh, okay. Coming up, fanatics executive chairman, nikal ruben, better than most, julian. Dont get me wrong to talk about business in sports and the nfls 100th an varies. And the ceo of a Small Private Company called base camp signing off on googles advertising practices. Michael might have something to say about that as well we will hear from both stay tuned you are watching squawk box on cnbc memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. When didwhen i needed ton . Jumpstart sales. Build attendance for an event. Help people find their way. Fastsigns designed new directional signage. And got them back on track. Get started at fastsigns. Com. Were changing whats possible. For instance, we know how your customers shop. And what theyve already purchased. Like this lamp. And we use those insights to show you what they might consider buying next. Midcentury modern, nice. That way, you can keep sending them offers for the perfect products. And that keeps them coming back. Hows that for changing whats possible . My first job is to care for derek. Everything i do is for him. When i moved to this apartment after six months, we need to connect with the world. I use the internet to keep him in the language, because thats the way to connect to my familys traditions. He has to know where he comes from. We need internet essentials. Theres no excuse to not get connected. Welcome back to squawk box, everybody. We have been watching the futures this morning 68 we have been in green for nasdaq is in the green now, too. Dow futures up by 55, nasdaq up by 8. 5, the subpoena up by other four points, this after two days of gapes you are looking at some big gains over the last couple of sessions we are in the green once again shares of beyond meat down over 1 this morning after the company receiving its first underperforming rating from the street d. A. Davidson says its call does not reflect a negative view of the company. Rather it sees a lower Addressable Market than the consensus view. Secondly, kroger announcing plans yesterday to boefl its own line of meatless products. They were among the first to stock beyond meats product. That stock is up by 6 cents. Coming up when we return, the nfl season is ifly under way. And fanatics is ready to profit. Their executive chairman Michael Rubin is going to join us after the break to discuss sales, exposure to china and souc mh more an interview you dont want to miss squawk box returns in just a moment in the pocket. Throwing into a lot of traffic and its caught for the touchdown by jimmy graham. All right i asked for the highlights from the game, and that was it, apparently, michael. I am kidding but that was it was not not a lot going on in that 103. Was that it . Thats what makes sports great, times you have a 4543. That was last nights matchup between the packers and the bears. No respect to defense. The one thing you can always count on is all and chris. Khalil mack he makes an impact nfl kicked off their 100th season w. The new season comes sales. The man behind the Merchandise Sales for professional sports sales, Michael Rubin of the fanatics i know you are partial to hoops. There is no too many too many slow periods in any game of the nba. Nfl, sometimes you might wish thing were going a little bit more exciting i guess. But it is defense. It was a great matchup yesterday. 100year an verse was, definitely exciting times for the nfl. I am a huge basketball fan but those are my two favorite sports nfl is second. Nfl and nba are kind of tied for number one. Are they really yeah. Do you have to be a Patriots Team i have two teams. I have my hometown eagles, and i have the patriots based on how close i am with the krafts. Robert. The only thing i hate is when they play each other like they did in the super bowl. Patriots were my team, and i took abuse for it. As you should well, i always say family first. And the krafts are family to me. Although i will stay i have a lot of friends who play on the eagles as well the only matchup we dont want is the eagles facing the patriots. Walking the line. I am. So if they play each other, what do you want the patriots. I took abuse for it a couple years ago. I will take abuse for it again today. I thought we were here to talk about the business not to get me in hot water. How do the prospects look for fanatics this year fanatics is having a great year i looked this modern last night during the game against last years game we were up 30 those are on big numbers continue to have big increases in the nfl by the way, since august 1st we have been up 25 in the nfl. What does that tell you you are expanding into new places, people are buying more the consumer is feeling flush . Nfl is the biggest business the start with when you see those kinds of gains thats a positive thing. People always talk about media ratings. But you consume media from all sorts of places. It is not a fair barometer looking at a tv rating versus tv ratings. For merchandise they are consuming it through us, through nfl shop, through fanatics thats a better comp in terms of your customer acquisition, what tools given that you are on social media are working best right now i will tell you something it used to be only for us the site that came the traffic that came from the nfl and what came from google today, social media has become really meaningful. We are going the see about half of our Digital Marketing dollars being spent on social media. So instagram, facebook these channels are working really well for us. Is there a breakdown is Facebook Facebook owns instagram is that much more powerful than twitter . Yes, 100 100 is snap even in the game. From a dollars spent today, keeping it real, of your Marketing Budget the ga majority is digital of that is 50 social, all facebook and instagram and 50 fooling. How das Facebook Instagram break down i will tell you it is been primarily facebook but instagram is growing very quickly. Three years ago facebook was not meaningful for us. Now it is really meaningful. And instagram has become really meaningful. Thats where the consumers are, where people are shopping from i think you need to become we spend 100 million in Digital Marketing year at fanatics on top of the hundreds of millions that we spend with the leagues then we got good at how to monetize facebook. And now how to monetize instagram. I think facebook and twitter have huge audiences but they are not monetizible yesterday. We had the guy from wild wings on, you can have a Second Screen to bet on the nfl games while you are having your wing the 30 i am trying to come to grips how this is happening social media is one resepect for fan engagement, no doubt is new jersey and gambling thats got to be part of it. Gambling is great for engage men. People look at the business of gamble lk. But the engagement if you look at your ratings, consumption of media in general, i think gaming and gambling is going to help in a significant way. There is also going to be great businesses built from gambling i have been saying for a decade kind of once per decade you get a great kind of new industry that develops. We have been that of the last decade gambling in sports will be that of the next decade it supraing the bigger benefit, the engage men. You are beating the bushes for thing to invest in i am sure in that arena, are you not for us, we are 100 fanatics is going to be fanatics was 250 million in revenue when we bought it it is going to be over 3 billion next year. Unbelievable. We feel like we are just getting started. We believe that fanatics can be a 10 billion business in licensed sports over the next decade the reason is because of the verticality that we have the ability to get the fan what they want look yesterday i was amazed 85 of our business last night was on mobile from Green Bay Packers fans why . They are not people in green bay. They are from around the country, around the world consuming this merchandise 85 from a mobile perspective. Thats incredible. I have to say i looked back i glanced yesterday going through amazon seeing how many orders i have on line my peak year was 300. 344 i have my own account, and my husband has his. I looked back to 2009 and i had 11 and i am one of the older people what are the younger people doing. On line shopping we have had double digit gabs since i started in 1999. Why is the nfl doing great number ecommerce is doing great. Number two, i think the league is really strong in general we are seeing a Strong Economy we are seeing that with get, shop runner, strength overall. Do you see pockets of the country where there is more weakness than others or places where there is a lot more strength then others for us, because ear growing i mean geographically. For us because we are growing so much, i am always like dont tell me about greater economic facts. If we are growing from 2 billion to 3 billion i want to know how we are going to grow it. No whammies i deent want to hear about macro economics that people can make excuses about hill and kraft got behind the meek band wagon, whatever it was. He performed last night . I didnt he is it. Yeah. It was great instead of what it used to be he was performing he didnt need to get permission from proposition. He performed free for the first time in his life we will talk about google, a gentleman says it is ransom the way they are doing their ad place men. I think google is effective you are okay with it. From my perspective, they are here to make money it is an effective tool for us i wanted to ask him about jayz. Good. It was a huge decision by him, brilliant for the nfl, brilliant for him, and he is taking a lot of shots for doing it as well. Brill yep from the nfls perspective. I think for jays perspective, i have gotten tomy know him well, we fought the meek situation as well without jay meek would still be in prison. Without the two of us, just spending enormous energy working to the to get him out of prison. What i can tell you about jay is he is guy that spends a great amount of time working to fix issues he thinks are wrong he just says this is wrong we need to take it on and there was no economic benefit. For him, i think there was a lot of value he could ad to the nfl and from the inside, i know from the inside, he thinks can he make a difference . If he can, he is all in on something. Thank you for coming. When is your officers when is sixers october 23rd. I am excited celtics. We are not far away. Not far away. Celtics thats you are first home yeah, i am looking forward to it wick is my buddy and gavin has talked sma, for months i am looking forward to exchanging the smack talk. You and hutchins are on the same side . Yes, i put all my bandering toward wicks. The 23rd . Yeah. I think i am around. It is either the 22nd or the 24th it is already in my mind i am ready to start collecting the ws. I guess i could watch on tv. When we come back, an American Airlines mechanic is charged with sabotaging a plane, causing it to abort takeoff. Unbelievable. The details straight ahead. As we head to a break, the a look at equity futures jobs report is coming up in less than one hour. Right now, dow futures up by 56, s p by five, the nasdaq up byi a. Squawk box will be right back. Problems. Nobody likes problems. We apologize for the delays. But why is that . At ibm, problems actually inspire us to fix things, to change things, to push the world forward. Which is why so many people who dare to take on problems, work with ibm every step of the way. An American Airlines mechanic has been charged with sabotaging a plane before takeoff. Phil lebeau joins us right now phil, tell us the details on this, what happened . It is a scary story becky, especially when you consider what might have happened had this plane been able to take off. It did not take off. The federal arrest affidavit was unsealed yesterday this mechanic works for American Airlines at its hub in miami it was a flight in july, july 17th supposed to go from miami to nassau in the bahamas according to a complaint this mechanic altered the height flight data module, the module that controls air speed, direction, and a number of other critical parameters within an aircraft about you the airplane aborted takeoff once an error message came up. It never took off. It was unclear how far into the process of taking off when the error message came up. They returned to the gate, they investigated and determined that the air data module had been altered. According to the arrest affidavit, the mechanics intent was not to cause harm to the aircraft but to cause a delay or have the flight cancelled in anticipation of obtaining overtime work. As you look at shares of American Airlines, remember, these guys are in the midst of a bitter dispute between the mechanics union, which represents about 12,000 workers, and the airline over a new contract and there have been a number of delays, massive delays within the system relative to the rest of the Airline Industry this summer but thats what we know, according to the arrest affidavit as it was unsealed. Do you think this is going to be considered terrorism . It could be i mean, it is a federal crime when you are messing around with commercial aircraft. So i mean there is always that possibility. I think that everybody is going to be really interested to see how this unfolds simply trying to delay an aircraft i mean, there are a lot of ways people could do that aside from altering the air data module, which clearly is a huge safety risk if this plane had been able to take off. I think it raises larger questions about this ongoing issue with the mechanics union, too. I never considered Something Like the as a flyer. What do you think it says, phil . I think it is that is at the heart of this, becky this dispute between the mechanics and american has resulted in hundreds of delays and cancellations this summer. They have gone into mediation. There have been lawsuits filed on both sides as they are trying to work this out and the history in the Airline Industry is not a good one when it comes to these types of labor disputes between certain work groups and airlines. In this case it flared up in just really a story when you first read this, you go are you kidding me it is very carey. What do we know about this mechanic his name is abdul akmed . Not much more than that when you read the arrest affidavit, it makes it clear his intent according to the affidavit was to cause a delay but as i said earlier a lot of other ways you could do that besides sabotaging the air data module. Phil, thank you for getting us up to date. You bet. We will keep our eyes on that story, which continues to develop. Still to come on squawk this morning, private company base camp calling out google on social media for its ad practices. We were talking about it can mr. Rubin. Why he says google is hurting Small Businesses after the break. Then senator mike brown of nypd is going to talk china economy, and trumps agenda. And yes, it is friday. That meansob js numbers. Mark reaction. It is all straight ahead this morning. Back in a moment when did you see the sign . When i needed to create a better visitor experience. Improve our workflow. Attract new customers. Thats when fastsigns recommended fleet graphics. Yeah, and now business is rolling in. Get started at fastsigns. Com. Welcome back to squawk box this morning the ceo of a small private technology sounding off on googles advertising practices base camps ceo jason frooed tweeting on tuesday the modeling says, when google puts four paid ads ahead of the first organic result of your own brand name you are forced to pay up it is ransom in response a google spokesperson said, our trademark policy balances the interest of users, advertisers, and trademark owners and to provide users with relevant ads we dont restrict trade marm marked terms as key words jason frooed joins us this morning from chicago appreciate you being here with us tell us what happened so we understand what was going on base camp advertised on google and yet your ads were not showing up at the top. We werent advertising on google we were just a normal business. It wasnt even yours . Right exactly. If you were doing a search for base camp, it disturbs out we were the fifth result. I am like why are we the fifth result google wants to provide relevant ads that match content but there were four competitors using our trademark brand name against us i said something feels off here. It is incongruent with googles own stated m. O. And doesnt feel right. I got upset and i tweeted something about it. Just to clarify, when you put base camp into google, at least for me, you do come up at the top. It depends on a number of factors, if you are logged in, logged out, if you have an ad blocker the time of day, the ad spends it depends on any given day we might be the fourth result. The forthth organic result . First organic result but the fifth actual result on the page because today google ads look identical to organic results they have a tiny little thing that says ad in front of them. Not advertisement, that would be too obvious. We basically look like the fifth result thats confusing for customers who are looking for us especially when they allow competitors to use our brand name in their web addresses as well. The four ads coming up ahead of yours from what kind of companies . Competing companies, people who also sell advertisement ools too. I am not against advertising they were talking about a base camp of some sort totally these were direct competitors that google would sell our brand name too and let them advertise ahead of us. Subsequently we ended up buying our own bran name. This is the argument i am making google is forcing me to spend money with them so we can show up first ahead of other people using our brand name against us. It didnt seem fair. I heard from ten was thousands on twitter who liked the post and some reached out saying i am going through the same thing, i am spending thousands of dollars a month to make sure we are found it doesnt seem right. What do you think of their answer i was thinking about this before you came on. Lets say i sold nike collectible shoes. Old air jordans. I am a store and i sell old air jordans. Should i be allowed to advertise on google for my air jordan collectibles and use the phrase air jordans in them and should that be able to come up ahead of the true air jordans or nikes website . Whats the answer . Thats where it gets complicated . It does get complicated i agree. What is interesting that google isnt complicated when it comes to using google in your ads. If you put the word google in one of your ads they meetly reject it in their trademark violations they agree me when it comes to their own brand but they dont agree when they are selling my brand to someone else. The air jorns example would be a fair one if it is a direct brand name they shouldnt sell that brand imin a but if you are saying used air jordans or vintage air jordans which is a qualifying word, which says it is not a direct brand match. That would be fair to me. Fair enough what do you think of the ftc and doj investigations going on into google do you think your allegations relate to that in way way . You know, yes, because this is just a matter of concentrated power and you know dominating an industry and basically being the only game in town. This is a small piece of it of course but it all relates to the same thing, Massive Companies that grow and grow and grow and dominate and concentrate power and use their power against people and force you to pay to play floss other way to be found on the internet except for google there are bing and duck duck go, Nice Services but if you look at the traffic, google is the primary and probably the only player in town the fact that they own the platform and weaponize it and sell your trademarked brands against you it feels like it ties into antitrust issues to me. What conversations have you had with the company itself . They tweeted back to me basically what you put up on the screen, a robotic response. Nobody talked to you on the telephone . No, but i got an anonymous email from someone who works at google spain explaining this point of view which i didnt agree with and i didnt know if it was real or in the. But thats the only thing i have heard from them. You would agree to they changed their policy around as long as it has a qualifier on it. That would be fair. And the other thing i would make sure of too, make sure the ads are more obvious they are clearly trying to confuse people before ads used to be on a blue background, used to look different from the organic results. Now it has a tine lee little word, ad, and not only that, the ads can be taller and bigger than the organic search results. It feels like they are trying to trick people especially from one of the Worlds Largest companies and having to shake down companies to pay for their brand lets dial it back, if people are searching for a brand name, show that brand first, show the intent brand first thats fair to me. Thank you for coming on. Thank you. When we return, senator mike braun on the trade war and Holding China accountable. We will hear from him right after this break [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Dont get mad. Here, hello starts with hi mple. How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. The senate preparing to reconvene on monday morning. One of the items at the top of the agenda is the u. S. China trade war. Joining us, senator mike braun, he serves on the Senate Agriculture committee. I know you are seeing this front and center some of the applicati implications where do you stand on our position with china right now . I think President Trump has played the whole china thing about as well as you can you have got to remember it is state capitalism there it is the pull it bureau running the country. What bothered me was when they were about ready to do something several months ago and just due to the fact that we wanted to enforce it to make sure they were going to do what they said they were going to do they back pedal. They are in it for the long game i think they have more paeshs and endurance than we do i am a Firm Believer that if you dont take them on now common sense tells you whenner they are the size of our economy or larger here in a decade or so you think you will be easier to deal with. Their behavior as players in the World Economy set them apart by how bad it is. Stealing intellectual property, forced technology transfers, manipulating your currency, they do everything that no one else does thank goodness we are holding them accountable they are hurting more than we are. They are more dependent on trade. We import about one fourth as much it is just crazy that we dont hold them to account now because down the road it will be really difficult to do. I understand everything you are saying and get your idea of looking at long term. I mean, it is good to look at the long term on these situations as you mentioned you think they are playing for the long term, that they potentially have more a higher threshold for pain, even if it i even if it is hurting them more. They do, but customer economy is more dependent on us than ours is on them. Thats the part you dont hear you dont know if the numbers coming out of the chinese economy are true or not. Again, it is the pull it bureau running their state capitalist economy there. They have done well. But they have done it by shortcutting the process and i think somewhat ostracizing themselves because of their bad behavior it is time to take them on now simply because the we let it did kick it down the road like prior administrations did it will be a harder problem to solve then uhhuh. What do you hear back from your constituency you have a lot of farmers in indiana. I do. They are feeling pain at this point. I am one of the few senators on the ag committee actually involved in recall if aing i have been visiting farmers and the farming industry through the entire break issues in farming go much duper than the trade war with china. Historically hi input costs historically low prices. Other farm remembers bring acres on stream or feed and food you daent hear about that because most media is talking about the fact that chinese are smart. They aimed the target at the one group that supported trump from the getgo most of the farmers i know, i talk to them all the time want President Trump to hold strong it is sad. When the weather has been one of the worst since 2012 when we had the drought. But we need to find other solutions to the things that ile the farm market. It is finding new market acknowledging that we are in a period of overproduction farmers are tough. It is the hardest Small Business in the world out there they will get through it they are already looking at other ways to make money on their farm hemp production is something i think will start in indiana soon. Really . Look at those alternatives. Dont dwell on the tariffs we will get through them. Just in terms of solutions that you come up with, i can understand looking for new markets and looking for new crops along some of those lines but what do you do about overproduction overproduction is something that any business, any markets will have to deal with that means you are going to have to find other things to do that arent going to keep overproducing into a soy bean and corn market. There are other options. In industries that get into a trough of low prices like this, it is not going to be easy to get out of it. Back in 2009 through 13 we had the ethanol factor we had some short crops. And the sad thing was when farmers did have a few good years then the input prices went through the ceiling, increasing increasingly, the businesses that we do business with as farmers are huge corporations that to me ought to step in and maybe try to ease the pain because it is a lot different now than what it was just ten to 15 years ago we had a lot of local suppliers. You had many choices now you have few. Senator, the markets are up the dow is up over 600 points if if you count the futures gains today over the last couple of sessions just on this idea that trade talks are going to reconvene next month markets are hopeful that there will be progress made. What do you anticipate as an end game or a solution when do you think that might come when outside the ag market, the manufacturing sector, its been a yo yo of up and down based on the trade you can at that. I think thats disinjen with us due to the fact that the economy has been so strong because of the dme is the tax cut act of 2017 it kept the market high. The market i think is probably going to overaccentuate any of this stuff like tariffs currently. And my point is, its only affecting the people in the businesses that went there very aggressively moving their supply compla chain. The average business i am one of the few guys in the senate who would know, i am a main street entrepreneur. It affects our bottom line very little if you went aggressive with your supply complain and wanted to capitalize on the big market there you are dealing with the pull it bureau most businesses didnt put all of their eggs in one basket. I think it is a smart thing for businesses to realign their supply chain i think that will really hurt the chinese economy. Coming up, the numbers report the market and the reaction only minutes away full coverage leading up to and after the data is released antures the dow is up 76 and chges p up seven nasdaq up 15 well be right back. The final countdown a better experience. Take your companys app. We can add in all sorts of capabilities, which help your customers manage rewards, offers, and payments on the fly. And now, applying for credit can happen in a flash. That way, more people can start shopping with you on the spot, wherever they are. Hows that for changing whats possible . 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Talk to your advisor or consultant for investment risks and information. The countdown is on. Did you see the memo about this yeah. We are just a half an hour away from the allimportant jobs number the anticipating the data the reaction and the analysis are all straight ahead as wall street gets set for jobs friday right here on squawk box. Dont bring me down no, no, no, no ooh. Announcer live from the most powerful city in the world new york this is squawk box. Good morning, welcome back to squawk box here on cnbc. Live from the Nasdaq Market site in times square. The futures this morning have been in the green all morning long nasdaq was briefly below, but dow and the s p have been here all morning. Dow indicated up by 90 points. The s p indicated 9. And the nasdaq 17, yields firmed up a bit, too. The tenyear right now yielding 1. 6 and the 30year before 2. 08 twoyear, 1. 57 . We have a number of big headlines to tell but this morning. Former starbucks ceo howard shults says he will will not run for president releasing a letter to friends and supporters saying he still thinks the two party system needs reform but that an independent campaign is not how he can best serve the company right now and acknowledged effectively that frankly what we talked about that so Many Democrats were worried whether he would be upset, upsended. Did you get the letter . I now have a copy. It wasnt sent to you. Friend and supporters i dont know if i was on the official list or not yeah, i we have talked a lot. And we dont want to get into politics, but his positions on a lot of things were so much more attractive to me. Right. We were put in strange positions when it happened suddenly i was saying this guy would be a candidate and everybody on the left was saying this s. O. B. Is going to take votes away from our guy and split the votes then them and trump. To me, it makes sense that the two party system is gone and it is going split the votes. And it is going split the votes. No, but i became more right. I was disappointed that you werent more supportive of his candidacy. What are you saying i am saying i think aed how of people abandoned him. They kept urging him to run. And then the minute he did, they said whoa, wait a second. I was in a different camp let me read you, this is what he says, there was considerable concern for that four more years im sorry not enough people are willing to back an independent cht because they fear doing so would result in the election of a dangerous president. And then he said he had back injuries and three back surgeries. The trials didnt go well and people were heckling him at the town hall. There was a heckler the first night out. Someone who was used to kind of being praising him for what he does. I was not anywhere i remember being i remember that night. Right. In advance there was security detail and even as i was walking into the building there were people just young people walking out who were already starting with this, hes going to get trump elected you could feel something was going on. It wasnt going anywhere. Other headlines. Fitch hit hong kong with a downgrade. Fitch moved the financial hubs long term foreign current see issue default rating to double a to aa 34rus. Lam said she agreed disagreed with the fitch downgrade. And hedge fund toy tan dahlio says he sees a 15 chaa 20 chance of recession. Thats good news because months ago he said he saw a 40 chance of recession. It is jobs friday. We are 20 minutes away from the august employment report lets get the our jobs panel for an indepth look in the labor market and economy joining us, jason fuhrman. Michael strain, and with us on set is jill carry hall, bank of americas Merrill Lynchs senior u. S. Equity strategist i will go in the center, jason and just start with you. Does the adp report indicate this could be another surprise in being maybe a better number are there things you are looking at indicating it could be a softer number . Adp doesnt have a whole lot of predictive power. I think you are besting to off of the general trend, subtract a little bit for weather, ad a little bit for census hiring and i dont see any reason to think we are on something radically different than the trend over the last six or so months. You were impressed last time with the strength it couldnt indicate in your view that a recession was right around the corner am i right on that do you think we will get a similar number today the biggest thing we all need to admit is we just dont know we dont know what is going to be in this number. Thats why you have us on half an hour before the show building all the excitement because this will be the first really good glimpse at what happened in the u. S. Economy in the month of august we dont know Going Forward. I think policy makers need to really be aware of that and need to be humble about what they know and what they dont know. One more question and then i will get to jill jason, in your view, is the in real time, no in the what might happen, but in real time is the u. S. Economy being impacted in a great degree by the china trade war at this point . Or is it a confidence thing and something down the road where it would be impacted . Yeah. You know, my best guess had been about half a percent off of gdp. Since then, the United States has raised tariffs and is planning to raise them again so you would have to just take that number up there will be a paper today at the Brookings Panel on Economic Activity where i am in washington that will find a number i think around one percentage point for that effect i dont think anyone could debate that it is a negative you could debate the magnitude of the negative difficu do you agree with what jayson is saying, jill . I think thendr adp number showed upside and we had good day yesterday overall the indicators have been mixed adp was good but the Business Employment surveys have been more negative. We are expecting a below consensus number, we are looking for 130k on the jobs report. One of our internal payroll trackers is suggesting something a little above 100 a lot of mixed signals but certainly the pace of employment is slowing. And obviously if we saw a big downside surprise, that could have implications for the fed. We are expecting they will cut by 25 basis points but certainly 50 basis points could be on the table if we saw a big negative or a surprise. Michael, there were a lot of different groups that are ready to say we are already in a slowdown or a recession. I am sot not saying they are hoping for it. Politics seems to cover everything i am on twitter. There are a lot of people that were counting on a recession seriously. They were like very disappointed that maybe we are not getting one. Does it look to you like something has changed in the last month i mean the market is back up close to its highs and some of the data has come in was that afalse alarm, the inverted yield curve the inverted yield curve predicts recessions with a lag look, i mean there is a difference between slowing and stopped. There is no question i think that the economy is slowing relative to where it was a year ago in 2018. You see that in the gdp statistics n the labor market statistic. I would be surprised if anything that happened in the month of august turned that picture of deceleration around. The country is healthy, we are still seeing growth. Above potential on trend we are still seeing job gains at a pace above what it needs to absorb new labor market entrants we still have a slowing economy but it is a strong but slowing economy. I think jason is right about the month of august and what we will see in 20 minutes how the trade war may be equity if aing other things other than market investments. Will it start to effect a slowdown in hiring that may have happened in the month of august. I think we have to wait to see that will tell us something stereo jason and aei are suddenly in this strange universe where they are on the same side of most of these issues because the side of Market Economics . I have always beenan that side. When you said jason what is the the center i was worried but then i saw on the tv what you meant. I thought you were on the right. Yeah. Nobody is where they are supposed to be anyway, we will be back. Except for me, with more from our jobs panel in just a second. Yeah. No. Im obviously where i am right when we come back, ipos after the rush it has been a tough few months for some of this years freshly minted public companies. The question for investors ttve we found a boom where shares of this years ipo class are headed next. Squawk box well be right back announcer coverage of the jobs report is sponsored by Career Builder so servicenow put your workflows in the cloud, huh . Mmhm. Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Welcome back to squawk box, everybody. Watching the futures this morning. We have been in the green all morning. You will see right now the dow is now indicated to open up another 100 points after big gains of more than 300 points yesterday, more than 230 points the day before s pfutures up by ten and the nasdaq up by 21. We are seeing some interesting moves in the shares of some of the hottest companies to go public this year it seems like what was once down is now up and vice versa deirdre bossa jones us now to explain. Please. A bizarre world in the recent market rally, the underperforming names lyft and uber rebounding. The highest flyers, zoom, and beyond meat and pinterest lowering uber are down 28 and 36 respectively from their ipo prices meanwhile those who saw their ipo prices skyrocket have been seeing pressure. Zoom reporting their slack did not live up to its lofty multiple this week when it roared dipping below its listing price thisseck would pinterest down 10 since the weekend. Even with these recent dips they made significant gains since their ipos, the question is, has anything fundamental changed will the short trend continue . It will could tell us the outperformers have become too pricey and arcer barkons like uber and lyft possibly dont move the needle investors are still looking for paths to profitability. I want to talk about more of this years hottest ipos ubers stock down 27 . Lyft down 35 . Slack is up about 16 , and zoom and crowd strike are up big. They are both more than 130 those final two Companies Just reporting Second Quarter results. Crowd strike raising its full year outlook, beating top and bottom lines shares under pressure after investors expressing concern about elevated valuation talk about the hot stock, an analyst at Piper Jaffray good morning. Good morning. Thank you for having me. What do you think the company is worth you saw what happened to the stock . It is really down it had a tremendous quarter last night. 104 growth in arr it is a unique stock totally subscription model no perpetual licenses, no on premise deals. They may have missed our only beat expectations but raised the outlook by 15 million the valuation has come down a little bit this morning but we still think this is one of your favorite ideas Going Forward. Whats your target now . We have 100 price target on this one, trading 24 times forward calendar sales. How much do you worry i know you dont confer the other but when you look at the vintage of ipos being out and some of them being under pressure that it is going to pressurize Companies Like this do you think they are separate issues thats a separate issue if you look at the Market Dynamic for crowd strike, we had a positive change in their situati situation. Three acquisitions that created a lot of disruption in the marketplace that allows them to continue taking share. Crowd strike has what we think will allow them to ten to grow arr 104 year over year, that continues to accelerate Going Forward with the market disruption if you couldnt by crowd strike who would you buy octa. It is growing. 100 subscription mo growing in the 50 range we think they can grow at a high clip crowd strike and octa are measured on the rule of 40 Revenue Growth plus free cash margin they are similar to crowd strike they have limited competition. The only competition they are seeing is microsoft which has an inferior solution. This is another stock that we really like. 100 subscription model with limited competition trading on a rule of 40, ultimately being profitable in three or four years. Let me ask you about both companies. You are right, they dont seem to have meaningful competition except relative to microsoft out there. What do you think of both of these companies as takeover targets . Why dont you think they have gotten taken over . I think there should be some consolidation in the security space. I think if you look at any of the major legacy vendors none of them have a marketleading Identity Security plate. I think they would all love to own octa, the valuation is a little rich and the revenue doesnt necessarily move the needle for some of the. Laer vendors but this is a very it is a very good space to be in i think this is the next one of the next highest priorities in security is identity. Does octa work if it is owned by one of the big guys the reason i ask, it feels like switzerland. Microsoft is not neutral. Integrating only with Microsoft Applications octa is the switzerland. But palo alto could own octa they could integrate thats what makes them unique is their neutral integration with all allegations. We will leave it there. Thank you, sir coming up, liesman is approaching the set. Big number of the morning, the august employment report is on the way in just a couple of minutes. We will bring that you breaking news when it hits and try not to screw it up. We never do. Stay tuned you are watching squawk box on cnbc trading block is sponsored by columbia thread needle investments. Your success, our priority welcome back to squawk box, everybody. The futures again up across the board. Dow futures indicated up by 90 points s p futures by 8. 5 the nasdaq up by 14. Of course this comes just minutes before that allimportant jobs report for the month of august. Watching that very closely how do we not mention this . We are trying to get the screen made thats what we are doing. The president just tweeting i agree with jim cramer the fed should lower rates they were way too early to raise and way too late to cut. And a big dose of quantitative tightening didnt exactly help either where did i find this guy, jerome oh, well, you cant win them all. Coming up, the final countdown to the jobs report the governments august number is due out in minutes. Final redictions are next. Stay tuned you are watching squk xn bcawbo ocn the time countdown are we supposed to dance . Boy bands without dancing are just ok. Get a better than just ok unlimited plan with spotify premium included on americas best network. Only from at t more for your thing. Thats our thing. All right. Welcome back to squawk box here on cnbc, live from the Nasdaq Market site in times square we are two and a half minutes away from the governments august jobs report lets get input from our panel, jason, whats the number you are shooting for 170,000. Have you got an unemployment number i would say 4. 8. Whoa, okay. 3. 8, 3. 8. I am not predicting a massive recession here not what you wish, what you think it will be, jason. Michael i am going with 140 i dont think forecasting models are accurately in predicting trade war uncertainty in the labor market unemployment. 3. 7. Jill . 130 and 3. 7 on the Unemployment Rate. Steve liesman 136 i dont have a model for the Unemployment Rate but i would like to. Cant you just Say Something . I could Say Something thats the difference between you and me, jason, one difference anyway. Rick, how about you 229,000 whoa. Now, rick, you get that because you looked at adp or because you look at other things what makes you go high. Adp is a distraction to me, i have various ways to calculate some of the numbers have popped better i think we are going to catch a bit of a back wind on this one and gain some jobs and move out some of the averages steve, tell us one other point we should be watching. The average hours average Hours Earnings i am interested in the whole report for the tenor of the job market, whether or not we hit a number and it is weak underneath or stronger underneath i want to see wages and temporary hiring whether or not thats up or down that can be a leading edge or a leading number i am interested in the household bias, are they interested in entering the job market or do they want to leave. Dow futures up by 81, the s p under the circumstances if up by 8, nasdaq up by 12 ahead this report. Lets go to washington with the numbers. 130,000 nonfarm payrolls rose by 130,000 jobs in august, missing expectations the Unemployment Rate, unchanged at 3. 7 . Now the government also reported that average Hourly Earnings increased last monday by 11 cents to 28. 11 thats a. 4 gain over the monday and a 3. 2 gain over the year estimates of job growth from previous mondays were revised down ward. Junes number was 15,000 jobs lower from 193,000 to 178,000. Julys number, just 5,000 lower, 164,000 to 159,000 that puts the threemonth moving average now at 156,000 jobs. A significant part of the job growth in august was due to the census the federal government added 25,000 jobs in august to prepare for the census next year manufacturing hiring slowed down to just 3,000 jobs in august the Retail Sector shed 11,000 jobs marking the seventh straight months of declines. Labor force Participation Rate ticked up from 63 to 63. 2 u six, the broadest measure of employment rose. And unemployment among dropped to its lowest. Jill, kudos to you. You nailed it on both numbers. 10k, 3. 7 . What does it tell you . I think it was in line with what we and our economists were expecting the pace of employment and jobs is slower and decelerating but still supports a healthy consumer backdrop. And we, you know, from an equity market perspective, we are overweight the consume discretionary sector the consumers staples sector the consumer backdrop is an area of strength, obviously the wage data ticked up thats one of the biggest head winds for retailers, restaurants, more labor intensive companies. Just you are seeing that hit to margins from paying higher wages but overall consumers are still strong. Steve give us more color . This is for the graduate students who watch when you run a model whose average error is 50,000 and you come with with 26, it is a win i think jason will understand that, too. I dont like how i got there, though thats why i told you that. You were within 16. I dont like how i got there. The reason is because what i am looking at here is the weakness of the private sector. Total private, just 96,000 i also dont like that we had these revisions to the prior months those are sort of signs of gathering weakness one thing i, temp help came in at 15. Look at what happened to the Retail Sector, minus 12, mean us 5, minus 11. There is two things happening here one is the Retail Sector is beleaguered when it comes to employment but there is some job shift. Right . People who worked on the floor at target may now be working in a warehouse at amazon or Something Like that. Target is maybe a bad example. Rick, if you had been right, the 220 would immediately make you say what are you talking about with Jerome Powell with trump . He would say the 130 allows that case to be made that they need to cut. The margaret is not down on this that was a weak number. Right. But now the fed doesnt look so insane to right . Isnt that part of this . Right . I think if your question do we have a green light on a rate cut for september . I think we have a green light. If your next question is is it a groan light for a possible 50 . I would still say no on that thats a cut too far. In the goal audio locks soup scenario is the soup just right . Too cold or is it too hot. Two things going on mark zandi has sat to your left over a long period of time. His entire life saying job growth is going to slow down. The second part, the broad trend is we have been producing more jobs than we should be producing for a long time given the entrants to the work force the cycle can go part of it, which is interesting is the benchmark revision we had. Rear for the year ending 2019 the b. O. S. Lopped off half a million jobs which told us that the near term run rate on the economy was 41,000 jobs a month lower. So to your question, joe, is this just right . Yeah from both of those secular and cycle collar aspects this is probably where we ought to be in this 10 range. Thats still pretty good. Unless you believe that you cant find people to hire. That would be a constrain on the other side. Austin goldsby tweeted oof. Is that an overreaction to this . Are you concerned too . Lets average this over three months 156,000 jobs a month thats more than we need to keep the Unemployment Rate steady to keep the labor market improving. The five previous months also averaged about 150,000 thats the pace we are on where i would look to judge the job market is number one wages, that was very good news on the wage front,. 4 for the month. 3. 2 year over year. And another statistic here is the labor force Participation Rate that was up. 2 to 63. 2 if you look over the last year, Labor Force Participation is up half a point thats half a point even as people are getting older, people are retiring, and thats because we are continuing to create jobs above the replacement level. I wouldnt obsess over the month to month, 20,000 lower this month, 20,000 higher last month. I would focus onth. Ing these averages over time. Michael, you just want to say you hate those damn tariffs basically is what you want to say . I dont like the tariffs. I dont like the tariffs i know you dont. I am kidding but what about this report look, i think this confirms the basic story that we actually went into the morning with an economy thats still growing, an economy thats still adding jobs if you afternoon out the noise like jason said there is still a healthy upped lying pace here but a pace thats slower than what we had in 2018 if you are looking forward you might look at the manufacturing and retail numbers and say oh, you know, that is problematic. The tariffs are going to hit consumers given the composition of the tariffs that went into effect this week and that will go into effect in december retailers are already showing a willingness to shed jobs what will they do if consumer demand slows down . On the flip side wages looked healthy in the month of august thats going to support Consumer Spending Going Forward i think we are still muddling along if the president would get r rid of this trade war we could accelerate again rick, what is happening in the bond market . It is fascinating to me when i look at this report the last person who spoke i am not sewer who that was participation news is by far the biggest news here. Interest rates, me jerk reaction was lower which meeks me feel good because i think jobs numbers were a bit on the light side so we saw yields dropping several basis points they are trying to recoupe there is a lot of trading going on we are trying to get back to the 160 level in tens, 156 in twos but we cant get there but i thought the bond Market Reaction made sense. The stock Market Reaction remains firm would he know the obvious reason there. We are also seeing continuing pressure on fed fund futures which is amazing you would think it would remain in unchanged or in positive territory when it is selling out the lowest percentage on easing. I think this report would play into the hands of mr. Powell should he want to cut a quarter of a point i think the numbers lately would play into his hand if he did nothing. Steve you have a look i am puzzling over this because math kinds of works more or less, depending if the politicians get ahold of it or not. If we are doing two on gdp,er mo or less just a little bit above the run rate and you accept the idea that the trade war has reduced that number by some amount, call it. 3, call it. 4, call it. 5, it may mean that the run rate of the economy is actually stronger. That we have a stronger underlying economy that if we got rid of it you cant say we are doing two, tlus the trade war and not say that without that you would be doing better i think thats an important point. Who says the run rate is two . Why is that everybodys hypothesis. Better. Many quarters are doing better this quarter in particular is hovering there, last quarter, First Quarter. I think we have a better economy than that. And that hypothesis is just like 2 inflation rate. It is very arbitrary. I dont think this one is arbitrary. Maybe jason wants the take this but you ad productivity it is economists predicting the future they are not very good at that. And bond traders are much better, rick or who is better i never listen, we always get into weird argtsds i am not saying who is better. I am just saying nobody knows that is the real run rate. How about the meteorologists, take our hats off to the National Weather center. They predict a week ahead people ask us a year or two ahead. I am kind of agreeing, maybe the run rate is a little bit higher is my point. I think it is a lot higher but we dont know. We dont know thats where it gets a little bit political but lets keep it to the economic side of things. If we didnt have all of this uncertainty facing businesses we would see stronger Business Investment if we saw stronger Business Investment we would see stronger gdp growth. There you go. I dont think there is any question i dont think there is any question but that the trade war is reducing gdp growth what are we getting out of that . So this gets to a future. A future maybe, how is that . This gets critically to fed policy, right. What are we getting out of it let them rule the world in 20 years. What about your kids your grandkids your neighbors kids maybe they have a stake in this. Jason, if you have a run rate, should be 2. 5, get rid of trade, the fed is going to cut a quarter. People say it should be cut another quarter in october all of a sudden, when the trade thing lifts it is a 2 economy, maybe three. The fed is committed to reducing in september. I dont see anything in today data that calls for more cuts past september you have the pace of job growth, the continued rise in the employment rate and gdp growth is still at or above potential growth i think some of the insurance we have done is warranted when policy makers get their act together on trade no basis whatsoever to cut further. Joe, whats Market Reaction if we get a 25 basis point cut thats our basis i dont think the data argues for anything more than that this month. I think one of the reasons we are neutral is you have offsettingers fosse. You have the fed being supportive, equity sentiment which has been tepid on the other hand you have trade and the slowing Global Growth backdrop still in the negatives we are at 2,900 for the target on the s p 500 pick your spots in the market and focus on yielding stocks trading at a reasonable price, on the consumer oriented sectors. I want to thank all of our panelists today. It is good to see you. Coming up, we will get you up to speed on stocks making some of the biggest moves ahead of the opening bell check out the futures right now. Maybe it was just about right, not too hot, not too cold. Up 100 now some of the best levels we have seen for the dow s p up 11. Nasdaq up 26 when we come back we will talk about Market Street with state streets global chief investment officer. Stay tuned you are watching squawk box on c numbers. Cnbc. Johnson johnson is a baby company. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. From the day youre born ive done all sorts of research, read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. At verizon, were building the most powerful 5g experience for america. Thats why the nfl chose verizon. Because they need the massive capacity of 5g with ultra wideband, so more screaming, streaming, posting fans. Can experience 5g all at once. This is happening in 13 stadiums all across the country. Now if verizon 5g can do this for the nfl. Imagine what it can do for you. Box. The governments august employment report right now showing a gain of 130,000 jobs missed a little bit here the Unemployment Rate staying steady at 3. 7 the futures right now reacting to that news dow up 80 points nasdaq up 17 points. S p 500 up about eight points. Treasury yields at this hour what you are look at there across the board, ten year noted at 1. 581, and no inversion, the two year at 1. 452. Under an hour to go to the opening bell on wall street. Dom chu has a look at some of the biggest nofrs of the morning. We will kick off this morning edition for morning movers with the Airlines Shares lower marginally actually up 1. 3 23,000 shares of volume. Analysts at barrenberg bank kicked off coverage of the four biggest u. S. Airlines includin american they have a buy rating with a 35 price target they cited valuations of multiyear lows. They named it their top pick among u. S. Carriers. Delta starts with a buy rating also watching shares of beyond meat, down 2 or 3 roughly 42,000 shares premarket volume the maker of plant based Market Alternatives gets started with an underperform rating and a 135 price target. They say it is not a economy on the portfolio or management ability to execute but rather that the total market for Meat Alternatives may be smaller than some expected. It is already at a elevated valuation. Shares moving lower there. And bank of america, hovering slightly lower right now, around 237,000 shares premarket analysts downgrading to a market perform to a prior outperform. The price target down to 29 from 36 they cited a Slower Economy and lower Interest Rates which will pressure bacs earnings. I will send things back over to you joe. Dom, thank you lets look at look at the broader markets as we get set to close out the trading week joining us now, lorie heinel of state street Global Advisors i assume not that much is changed from the number we just got for your overall view . There is something for everybody there. The target number was a little bit lower than what we anticipated. But wage growth was stronger, Labor Participation blookd good. There was a lot to like in the number as well. You have seen some thing recently that maybe cause trepidation in your view, whether it is trade or other things from a tactical perspective you were underweight equities but a modest overweight in u. S. Large cap. Thats correct. Underweight equities is because of other parts of the world, emerging markets and asia pacific. Absolutely. Here you are overweight as far as large caps . Right there are lots of things going on in other parts of the world, too. Obviously brexit amazing developments there this week look at the asia pacific region. China growth slowing more each than had been anticipated. There is not a lot else to like in equities around the world. You got more bullish on gold and hedging strategies in becau why . Look, look at august. We had an incredibly volatile period here. If you went away in may and came back at the end of august, you did okay but the choppiness is pretty dramatic staying long, put in place buffers is something we think investors should consider. Were in this weird neither world where rate cuts may make sense, with a 3. 7 Unemployment Rate, and in an economy that is doing pretty well, but with inflation so low, maybe you dont do any damage by cutting rates. I think thats spot on. We think the fed is going to raise rates in september. Cut. Thank you, we think the fed will cut rates in september. It is not just about what the global backdrop is, but also about things like trade, concerns about that feeding into the real economy, and as you note, if you dont have inflation, there is really nothing that stops them. Look, they could hike again. We get into a period where it looks like they have overdone on the downside, they can always raise rates again. We think theyll cut in september. You can argue were in a global easing cycle and even though we have a better economy here, it is still currency factors do make a difference and if the whole world is cutting, and the yield differential is getting higher and higher, dollar gets strong, it is nice to bring assets here, but cash here, but there is a downside. Clearly the fed is in a bit of a precarious position here. On the one hand, if you looked at the fundamentals in the u. S. , you may argue they shouldnt cut. But when they also signaled the longterm trajectory is lower, they are concerned about some of the global developments, so theyre in this kind of situation where there is no downside to cutting, but in a certain way, it is unusual that they would be cutting in this kind of environment. As you say, the dollar will still continue to be a safe haven, dollar will continue to be a good attractive asset and particularly if our markets continue to do better, that will continue to attract capital. We heard steve say the run rate is 2 on the economy and that anything that the trade wars or spats, whatever it is, whatever that is, you lower it from 2 is that about right . Could we be a 2. 5 and you lower it from there . Where do you think we are . It is solid, isnt it . One of the most important things to look at is the differential between manufacturing and consumer and those things are diverging wildly why is that . Manufacturing is 1. 5 and consumer is 3 or something. Right if you think that the consumer can continue to carry the economy, then a lot of this trade spat is just delayed investment but if it comes something more nefario nefarious, youre in a situation where you worry about longer term, lower trajectory for the u. S. One comment going back to ray dalio, i apologize, ive been looking at this while we have been talking, i think we misreported this the entire time. Oh, great he didnt could you have kept that to yourself, maybe . He didnt change his view. I said it at 6 00 a. M. 25 one year and 25 the next year and now we get close to you said instead of a year and a half. 6 00 a. M. , i said, i look what changed here is the time frame youre referencing, not his odds of a recession. I think it hasnt changed at all. Anyway, i want to make that clear he went from the end of 2020 to from the end of 2020 to mid2020. This is now he says 25 per year was 25 chance of a recession per year, which 40 chance by 2020 would be in the same ballpark. What he said was 40 chance by the election. Right. I think hes been in that submarine and hes been coming up too quickly you know what happens when you come up too quickly from really deep, you get like the bends and your nitrogen, oxygen is depleted i dont know lori smart man. Thank you thank you. A lot of billionaires that can disagree with one another. Okay just because youre a billionaire, doesnt mean we need to drop everything were doing when you Say Something President Trump today shot at his own handpicked fed chair earlier this hour. And giving a mention to Cnbcs Jim Cramer in the process, trump tweeted, i agree wit with jimcramer. The fed should lower rates, a big dose of quantitative tightening didnt help either. Where do i find this guy you cant win them all get down to the New York Stock Exchange jim, you know, all publicity is good, but you have said lay off jay powell to some extent. So you probably appreciate the sentiment, but not sure how to feel about the continued bashing of jay powell. You tell me how you feel just tactical, not strategic. I just dont want powell to be intransgent and wrong repeatedly in order to spite the president of the United States okay. He obviously did raise way too quickly. In october, he was calling for an unlimited number of rate hikes. Look, sometimes what you have to do is say youre wrong i said im wrong on certain stocks why cant the fed chief say you know what, i was wrong it turns out there is an opportunity here, once in a life opportunity to be able to make it so that the chinese have to play fair and that means we have got to cooperate with the president in order to be able to make it so employment doesnt go up by the way, i heard someone on the network the other day say, the fed chair should not be bullied by the stock market. Sure but the fed chair should be bullied by the bond market and the bond market is saying, whoa, are you wrong, jay a big guy, the big guy says iv been wrong, i got to make changes, once in a lifetime opportunity. And, by the way, where does it say we have to go to why do we have to go to three you look at unemployment, why cant we get that to 2 wouldnt that be fabulous. I think this is amazing given the fact were trying finally to teach the chinese a lesson after they have taken so many of our jobs so, you know what, i just want to go easy on jay, i dont want him to say, im not im not im not going to do what that guy says. Thats what i care about the sentiment is completely similar to me. And i appreciate look, i appreciate the retweet the president of the United States. You do. President of the United States. I mean, i dont know what you do with the twitter account when you get i look down, ive got 100 Million People weighing in, so ive given up on trying to read any of them thanks, jim. More exciting than the bears, i love the wow, what an offense. True bisque trubisky, im feeling really rugged. Dont miss first on cnbc interview with National Economic Council Director larry kudlow coming up on squawk on the street right after the opening bell at 9 35 eastern stay tuned squawk box will be right back. For farmers here, this is our lifes work. But when a recall happens, perfectly good food goes to waste. Now, weve got away around that. Looks good. Were on target. Blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. Its used by some of the biggest retailers everywhere. A nice lettuce. So more food ends up on your table, is that daddys lettuce . Yeah. And less food goes to waste. What a day what a big friday. We will see where the markets end up later today we will see you on monday. Make sure you have a great weekend, everybody squawk on the street begins right now. Good morning and welcome to squawk on the street. Im david faber with jim cramer. Were live from the New York Stock Exchange carl is on assignment this morning. Lets give you a look at futures. This on the heels of what was a weaker than expected jobs number coming in, what, roughly 20,000 below at least the widely shared views of many of the socalled experts. Moments from now, by the way, were going to get reaction from the white house. National Economic Council director larry kudlow will join us, our former colleague, to talk through the numbers and a number of other subjects couple of things i would love to get to him on as well. Lets get straight to that august jobs report, jim. You know, your thoughts on the