Take a look at what happened overnight in asia. The nikkei up about a third a percentage point hang seng was flat, shanghai composite down red arrows across the board. Ftse flat at this point. Cac in france down by. 4 of a percent. The 10year right now looks like it is yielding 1. 63 those continue to wick up ground 30year 2. 1 the count down is on. Apple holding a launch event expected to launch three new iphones. Fee occurs may include upgraded processors and new camera functionality. We could see a new apple watch an apple watch was not worn bio d Odell Beckham hes in trouble for wearing a hard object. People still wear watches for different reasons. Jewelry anyway. Including streaming and service. I dont know what odell was using it for maybe he said, it is time i Start Playing better apple products working into team it wouldnt be a matter of cheating necessarily unless you clocksomebody in the head with it what was the score . These are the new browns, right. Welltalk more about potential and pricing. All about apple. An apple day dont they have a month of days per year may be. Maybe three weeks. Doesnt take much for us to focus on apple good reason not to mention it is right at the center of what is happening with china trade talks boeing too do you know much about apple . Can you help me im at 86 how much it charges up i was at 89 for a long time. You need a new phone. Do i need a new phone or battery. They have that Battery Replacement program now. I look at it twice and im at like 40 you need a new phone. I do too. Who should i talk to . I think the people here but i think im going to buy my own device and bring it in softbank working saying the conversation happening now is whether softbank will vest more. Now skbekted to be between 15 and 20 billion. Leslie will join us a little later with more on the story in other ipo news, saudi aramco saying the ipo will be very soon. It would then be ready to list outside the kingdom deciding where that listing would take place. It is a kingdom not sure it is a share holder. The kingdom remaining the share holder coming up, new inflation data in china well take you live to beijing to look at the impact. U. S. Equity numbers are off. Nasdaq indicated down about 23 and down 5. 5 a look at the biggest premarket losers and winners in the dow which does not include at t, in case you are wandering. Welcome back. Some Interesting Data out of china. What happened . Thank you so much beijing got two bits of bad news on prices today. China has a pork problem so pork is seen as a basic staple here. Also viewed as a potential social stability here. Looking at any major swings in pork prices. Came in 47 higher beijing announced new measures to fight african swine fever which has ravaged the pork population and releasing emergency pork from reserves one of the state papers had a headline that appeared to be convincing the chinese that they dont need to eat their beloved meat saying your wallet and body will thank you the worst news for policymakers is on the producer side. The ppi has fallen manufacturers are struggling most believe even with the surge in prices. Most expect the government may have to stimulate the economy further and that may include a possible rate cut later this year thank you see if thats going to be enough thank you. Lets get a check on the markets now. Joining us now, our guests good morning to you both let me start with you in terms of the overall market set up the last several days has become clear, the market seemed to have overshot stocks went down 6 . You had defensives winning a lot of those stocks losing ground is this a snap backtype move or more to the rally . I think more of a rally what we saw was extreme pessimism. When you look at Short Interest in terms of a shortage flow. This happened at the same time Traditional Market indicators were improving you also had high yield investment breaking out. Make it round numbers. Through 2950 puts a target around s p short term. That break out is firmly in place. If you can hold that gap around 2960 so 3100 is where we were hitting back in july looking at how we might get there. If it continues that the big Growth Stocks arent really leading the way, is there enough that will get us there yesterday was the start of a rotation you saw offenses versus more cyclical areas it is not the end of the world for technology if people came in very pessimistic on equities, they are bullish on bonds also it was positive when i last check. The market breath indicators could continue to improve. Thats what we are focused on. Well see more broadening out at that level so paul, listening to all of the things about these shifts. The market is reevaluating yields should be higher, there for stocks should be higher. Thats a good thing. If people were trapped in trades and had to exit, how do you see it sentiment towards he can quities equities the highest number we saw since early 2009 we are at record low and people are expecting further declines the surprise index was just leaving one of the broadest streaks. You are seeing expectations reset. You are seeing sentiment extremely off on the side of bonds. It reduces negative headline risk and can take some of the luster off the bonds and move people into equities and increase the flows there from the technical perspective and all of this talk is there a chance for melt up or is that crazy talk at this point . Are we there yet . It seems like we have a similar set up to 2018, 2012 where you rallied sharply. There is a chance that could happen we had a melt up in late 2016 after the election i dont know what the catalyst is this time around. Youve seen significantly higher highs like in 2012, 2013 or late 2016 to 2017 i would say the set up is there. We saw it in 2016. No one ever knows the catalyst for a melt up before hand. You never know this is going to happen when we are seeing these tight ranges and one of the narrowist ranges on record, you see that resolve going higher it turns into a bullish observation. We saw three big legs higher and now in the later stage of the period. When we come back, new data on Small Business confidence later, everything you need to know ahead of apples big Product Launch tick around. I can shine, i can shine, i can shine. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. 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. The he can tiffs of National Federation and out with the latest confidence report kate with the details. Good morning. The index dropping, wiping out the gains we saw err lier this summer this is april we saw things ramp up take a look at this chart. A look at how optimism has been tracking down about five points from a year ago recession talk is taking a toll on the outlook the biggest drops were in expected Better Business conditions and sales expectations gains were in earnings trends. Skilled labor also a new issue the single most important problem followed by a tie in taxes and government red tape regulations. Continuing to attract talent or to train less qualified employees they are looking to hire back to you. Ive told you in the past to make the most of every day today is 91019 pallindrome. Tomorrow is 9 11 all the way to 919, every one of those days it is a palindrome i wasnt realizing. An entire week plus. Are you excited . Not many things get you excited. Youve got to use february as 02 for next year 021120, that doesnt work. It is going to be a while if you dont do that. Not just a week it is all next week too. We also decided jason should be on every day. When we come back this morning, todays biggest movers including an automaker credit down grade and a new player in the crowded breakfast market and weworks latest investor wants to step on the brakes on the latest ipo and a look at yesterdays winners and losers yesterdays winners and losers through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Thats where i feel normal. Having an annuity tells me my retirement is protected. Learn more at retire your risk dot org. 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 wedge. So more food ends up on your table, is that daddys lettuce . Yeah. And less food goes to waste. Welcome back. You are watching squawk box live from the Nasdaq Market site in time square dow futures down about 38 points weve been watching what is happening with the nasdaq down about 20 points right now and s p down by almost five. Marke markets barely budged on either side nasdaq brown by about 15 stocks to watch this morning ford shares are falling after moodys cuts the rating to junk. Ford says its underlying business is strong and shares are down about 3 . Wendys will vest about 20 million ahead of the breakfast launch and hire 20,000 employees. They slashed the forecast for 2019 Earnings Growth to a decline of 3. 5 to 6. 5 wendys currently offers breakfast in about 300 of the 600 u. S. Restaurants plans include the baconator and the frosticino i have a request on the dairy content of those frostys. I dont think much. What if it is not dairy what is it i dont know. Mysteries of the universe. You new legal action over ecigarettes the fda issuing a warning to juul over the companys claims that its products are safe alternatives to cigarettes juul says it is reviewing the letter and will fully cooperate. New york Governor Cuomo steps up the request to ban flavored sales and the use of thickening agents and the use of vitamin e or a thickening agent said to be the cause of the lung disease in young people altria owns a 35 stake of juul that stock down about 25 cents this morning coming up, the latest on the wework ipo the largest investor asking it to shelf its plans thats coming up next on cnbc. Welcome back. U. S. Equity futures improved a little down about 30 points on the dow. 29. 5 four straight up days. Nasdaq indicated about 19 and s p down four and change apple expected to unveil new products joining us now to talk about what investors should expect is daniel flax, Senior Research analyst. Great to have you here thank you for joining us great to be here. Thank you, becky how big a deal is this as the company is changing, does if still have the same level of input. The iphone in terms of the product and the Customer Base is critical for the iphone business, what is important is that the install base continues to grow the Smartphone Market has been soft, i think what is important and what enables the company to integrate they do it in a fun, easy and secure way that delights their customers these phones are not seen as game changers. New phone, a little longer on the water resistant, what does it mean for people looking forward to 5g launch next year the additional camera will be important. Youll have faster speeds, improvements to face i. D. , which is important it can open, even if it is sitting on the table correct i think the new camera is really cool. That is something that would make me potentially get into it. That is key if you think about what is happening in terms of cameras and the 3 d sensing capabilities you have augmented reality, none of us are teens here but in terms of how teens communication, a lot is with various images imposed on themselves we think about the work place, the ability to super impose. If you are repairing an engine, and you can 3 d images and super impose an image. Or if you are shopping and you can super impose items into your room integrating the camera is making the phone more important to you. How much of this do we already know, is there anything they can say today that would be a game changer unlikely anything traumatic they are working on a bunch of things that may not see the light of day today to your point, the 5g device that could come to light next year, it is important that 5g devices are being built. The impact from 5g is more significant than just devices. This is about the internet affecting all sorts of devices but ultimately for apple, the key for this cycle and 5g and beyond, about keeping the customers happy. That will enable them to buy new prices, and consume more Services Just looking at the chart this is about the fourth trip stock has made you see that right there is there anything that holds it back around these levels or as valuation gets full or are investors just waiting for the next. I think it come down to innovation and whether people will get more of a glimpse a much bigger part of the story that isnt getting as much attention are the wearables. We will see a new watch. And air pods people are able to get utility the ecg app on the watch that is happening to save lives. There is a lot that they can do in health care i think there are other areas like monitoring sleep. Well see a glimps into what is coming that gets people excited they have to create value. That ultimately will translate to share holder value. What about the trade war to china, is that factored into everything happening right now it is a risk. We have the risk from the revenue impact there is the risk from the supply chain impact when i think about the investment case, if the company can deliver Innovative Products and services, they can look through some of the sorter term head winds. But for creating share holder value, it will come down to the products, innovation and the ability to execute around that thank you thank you your guy, he always watches us he does wendys is the closest to a milk shake. Now i have a new question. Dont we need beyond milk. We have beyond milk for lactose intel rens. The more fake it is, the better for the planet in terms of cow farts. Not in terms of how much water is needed to grow almond trees. But in the world we live in now, the less natural it is, the better we should boycott wendys for how much dairy they use. Im not going to do that. Im trying to figure out how i can signal the most virtue it is a cashon crisis now. When we come back, a show down over wework looking to postpone or even cancel the ipo in the last year, there were three victims of cybercrime every second. When a criminal has your personal information, they can do all sorts of things in your name. Criminals can use ransomware, spyware, or malware to gain access to information like your name, your birthday, and even your Social Security number. 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More on this story if you were getting 47 and now you are getting 20, i would say wait a while i would say cut your losses softbank is urging weworks Parent Company to abandon the deal softbank is concerned about the valuation wework could get in the market wework is having trouble finding investor demand. That big mark down could spell big trouble at softbanks attempt. Wework does not appear to be giving up easy a separate source said it is still all systems a go in other words, wework is still moving forward with the plan wework needs the cash, the company is burning through more than 150 million a month. An ipo could bring billions to the table and wework could cement a credit ability from the deal one solution softbank could come in with more cap fool the question is whether they want to double down here it soupnds like probably not. They are pushing them to find money elsewhere. Right theyve already put in about 9 billion if you round up a bit. That would be doubling down. That is a lot of money to put into one company the fact that lowering the valuation makes them to take the onpaper loss. Right now, they are invested at this blended evaluation weve seen this in the valley all the time and it is part of the reason we are seeing it these days you do see them come in round after round. We should point out when these initial investors are getting in, it is not apples to apples tie of thing. A lot of these have warrthese evaluations that are what they never said they were going to be. You mention, they have all of these various stipulations to them often times, you see liquidation preferences. If you put money in, you get a greater proportion it almost doesnt matter for a company if they have those preferences so long as they do it is a marketing number . Son senior associate dean of Management Studies at the yale school of management just at face value, i think youre applauding weworks efforts here this is a very positive thing going on why are you laughing is this is youre giving kudos that theyre keeping shareholder value as low as they possibly can by cutting the ipo price. Kudos. Youre not youre almost as good as adam newman. Newman. We were changing the subject but youre not as good. Newman. At newman yes, i know. The same month that mad magazine alfred e. Newman went out of business. You mentioned that. What happened here . This is brutal no, im not going to take that segue, joe. Whats really amazing is, yes, now that you mentioned it. I hadnt planned to mention this its the honesty in the company. Honesty, yes, they dropped the weworks in the name because we doesnt work theyre admitting it theyve gone for the we name they are maybe going to become a we company clearly you take a look at this model and you wonder whats wrong here on a governance level . Whats wrong here on a financial level . Whats wrong here on a strategic level . Whats wrong with the character of the ceo you can open any one of those boxes. On the financial model, 47 billion valuation. Where does that number come from theyve got 12 billion of cash invested in them how do they pump that up to 47 billion . How convenient they have commitments. Only 3. 4 billion. Its a big gap 120,000. Permitted last week. Pretty promising inside dealing leasing back to the company. Buying the name we as the trademarking as our own mon know tore ryization. And lots of things here. And serve core this base in australia. And have i bludgeoned you on this i can understand it in 1998. Everything thats going to fly in the current environment where was the fluff . Uber, didnt come from that. That ipo why they thought theyd get away from it we took a look at institutions you know those muppets that we like to put on the show from time to time theyre the critics. They start out cheerk somethiin something, and then theyre booing now were seeing the feeding frenzy trashing the company. Where were they before there were journalists Andrew Ross Sorkin was asking questions. Thats terrific. You wonder, theres a sucker born every day or every minute as p. T. Barnum said. Who were the suckers here . The same people who fell for charismatic ceos like evers, bernie madoff. The people who fall for those scams are basically all of us. I know some very sophisticated people who followed soft bank into this deal and are sorry they did their investments arent huge. We learned something i would have been happy to teach them something for a lot less than this. Youre asking the question that the beatles ask is i should have known better, 1964 flip side to hard days night. I should have known better than a deal like this. No, i had help. They used to do it that way. To play it on my turntable, you had to put the thing in the remember that, you had to the needle in the no, there was a thing on a 45. A disk that went inside. A disk in the center. Because it was 33. Different size opening. Mine just had a switch. Joe, we shouldnt admit it. Didnt you have one of the ones you had to crank up with the big horn gramophone. Back in your childhood again. Whats going to happen, do you think . This doesnt seem i mean, i would come back in a year, wouldnt you even if i were newman, i think id shelf this no i think the cbre, Cushman Wakefield would take this. This is a huge embarrassment on soft bank on top of uber i dont know how suppressing the ip ipo will erase the headlines about how much of a disaster this was if not a scam its built on the form of a ponzi scheme thats going nowhere good its built on bigger and bigger growth making it up in the volume doesnt seem like a promising investment some of these investors who put a lot of money into this were real estate people, people who know this business somehow suspended. You know, theres a guy named john bennett in the 1980s out of philadelphia who was a hukster he was supposedly a philanthropist if you give me x, ill give you 2 x back to the charities. The people he drew in were john whitehead, john templeton. University of pennsylvania Harvard Medical School all kinds of people who should have known better that the thing was a complete scam. He drove that up only to half a billion in that case it was a nonprofit. Sophisticated people make dumb mistakes all the time. Its the old if youre so smart if you are so rich, why arent you smart right right. Both good questions, jeff. Thank you. Thank you yeah. I dont want to ask those of myself, actually coming up, stockfutures off th lows of the morning. Were going to talk strategy next later the chief legal officer of microsoft brad smith joins us to talk about the antitrust crackdown on big tech and a lot more stay with us at synchrony, 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 . Will wall streets recent rally lose sting well break down what factors could move stocks. Elliott managements activist game why theyre working to shake up at ts board well speak to analysts about the future. A news making interview with microsofts brad smith he joins us to talk about tech regulation, antitryst i shaust s facing tech and u. S. china relations. Live from the beating heart of business, new york. This is squawk box. Good morning, everybody. Welcome back to squawk box here on cnbc im becky quick along with joe kernen and mike santoli. U. S. Equities this hour, things are a little bit weaker this morning. Dow futures down by 43 points. The nasdaq is down by 25 s p down by 6. This comes after a long string of up days i think until yesterday the s p and dow were up for six out of the last seven sessions. Dow was up by 38 points. S p closed down but less than half a point s ps up 5 or 6 from the august lows even though were not yet back to a high. But were only 1. 5 off of the highs. Yes yesterday even though flat, a lot going on bank stocks up more than 3 . Software down two. See if that continues. Here is what is making headlines at this hour apple is set to unveil the latest Iphone Models its product event will take place at apple events in california it will begin at 1 p. M. Eastern time Small Business optimism has fallen to a fivemonth low the monthly index from the National Federation of independent business was down 1. 6 to 103. 1. It was led to a drop in businesses who expect the economy to improve in the months ahead. Restaurant chain wendys is bringing back breakfast. It will spend 20 million to expand hours and hire 20,000 new employees. Wendys already sells breakfast items at about 300 restaurants this effort will involve all of more than the 5800 domestic locations. Talk about what we were talking about off air. I recall analysts talking about wendys going big into breakfast. One of the impediments was mcdonalds tends to have the best real estate in markets. When wendys locations disproportionately required a left turn to the morning rush hour so thats a real draw back if youre trying to sell quick breakfast. Right nobody makes a uturn to go back you have to wait and the whole bit. I dont know if thats changed or if that was a legitimate criticism at the time. Fast food breakfast has been a big thing for a long time. Wendy is making this big push. Stock is down 70 . People are not happy about the revised down guidance and the expense. Lets get a check on a few market hot spots dom chu joins us with those. I didnt turn around a uturn at all to get any breakfast. Just saying. There are some uturns happening in the market. They have gotten some attention because they could foretell a little bit of slowing momentum as weve broken out to newer out of range highs take a look at some of the spots were looking at first of all, mike santoli mentioned software that is one of the hot spots that we are mentioning because they have been an outperformer, very heavily so over the course of the past year and right now in the last maybe couple of months you can see here the Ishares Expanded Tech Software taking igb up 20 on a year to date basis its over here i want to show you on a onemonth basis what it looks like at that point you are seeing a little bit more of that performance move, that gap widen between the s p 500 and the Overall Software index so as that Software Sector showing signs of weakness. Is that foretelling something bad ahead. Also the ipo market. The renaissance ipo etf is one that tracks recent ipos and puts them in a basket you can see over the course of the last year to date basis heavily outperforming the s p 500. If you narrow down into the course of the last month or so or take a look at this etf, that gap has widened out. Its taken a leg lower its widened out that gap with the s p 500 and the ipo etf. To balance it out, technology has been a hot spot, of course, but transportation and small caps have also been real important and over the course of the past, say, year to date basis or so we have seen a movement for many of these kinds much sectors small caps and those transportation stocks have underperformed the overall market, however, they have outperformed over the course of the last week or so. So as we watch hot spots, small caps transportation stocks always important but then that software and ipo side of things, kind of theres that real conflict in the market and thats, joe, probably why youre seeing this kind of churn that weve seen over the course of the past couple of weeks, guys over to you. Dom chu appreciate that. Thank you. The equity market appears optimistic about trade the bond market has high hopes for a rate cut when the fed meets next week. Joining us to discuss the capital markets, matt toms, chief Investment Officer of fixed income at Voya Investment management i mean, stocks are still keying off this we get a lot of jobs numbers we get key insight into the economy. We still worry about jay powell and the next move for the fed. Does that still make sense, matt somewhat. The focus is on the foreign Central Banks and the ecb. Jay powell and the fed very likely to cut in september and very likely to cut again this year but look for thursday for the ecb to actually disappoint in our opinion maybe a ten basis point cut. Expectations are key we are probably too far ahead of ourselves in europe. Maybe some central bank disappointment this week as far as the yield curve goes, what do we need to where you feel comfortable that the fed is on the same page with the yield curve and with central bankers around the world how many basis points . How many rate cuts would we need to get there. Yeah, 30 basis points on the 2s, 10s curve would be comforting for us. That would imply that the market implies some of this rate cut to push through into Economic Growth inverted 2s, 10s is a concern. Unfortunately the market is losing faith that aggressive rate cuts are enough expect fiscal commendation in europe to help to steepen the curve. Thats the comfort zone. When do we start seeing the trade war actually being manifest in the numbers that we get on a weekly basis . Or do we ever . Well, you might the markets fear it dramatically the trade war in china is having an impact in sentiment a trade war with europe would be dramatic and youd see it impact the numbers very quickly the u. S. Has pulled back from that hopefully they dont go back to date we have seen it within the leisure and travel subcomponents and trade subcomponents of jobs. We have not yet seen it in the professional services. Thats the key number to watch we havent seen it yet we dont think a recession is imminent okay. Do you have a basal number of where you are for a recession on any given year where is it now . Its usually, what, 20 . Are we at 20 right now its 15 to 20 you have to believe youre somewhat elevated from there u. S. Consumer looks good the fed will be accommodative. Foreign concerns are unlikely to heat up we think politically to push the u. S. Over the edge. So mildly elevated but not nearly as cause for concern that many would say all right, matt we appreciate it we will well see you again beckys running around because we have some amazing guests that we want to talk about quickly here thank you, tom keep your eye in we have 15 marines, members of the commanders Media Trading company. You actually are going around and talking no, theyre here for a media symposium. Theyre shadowing some media companies. You can learn nothing from us, guys but what i wanted to do, there are 15 of them here today. Theyve all been serving our country for a long time and i just wanted to thank them for that to do it properly i was going to ask them to line up. I gave them six seconds notice so i can properly get everybody thanked. Colonel Vincent Dawson is here bradley magra, colonel michael mccarthy, colonel robert morgan, george fleming, lieutenant julian flores. Lieutenant colonel patrick lindstrom. Lieutenant colonel james thornburg. Lieutenant colonel randall white, Lieutenant Colonel robert schuford john roberts First Lieutenant brad lazroff. Semper fi santoli, we had a soft life, we just did fortunately we didnt there wasnt a war and we werent called when these guys are called, they go by the way, each of them have gone several times they have been deployed when squawk box returns, the man who predicted warren buffets participation in the occidental deal joins us welcome back to squawk box. Futures now looking all morning at very slim losses. Just about the flat line the s p 500 down three points. Dow projected down 11. The nasdaq slightly underperforming down 14 after a good day yesterday. New reaction over ecigarettes. The fda issuing a warning letter to vaping Market Leader juul after it claims the products are a safe alternative to cigarettes juul says its reviewing the letter and will fully cooperate. In the meantime, new York Governor Andrew Cuomo stepping up his criticism trying to ban flavored cigarettes in his state. Hes trying to ban thickening agents that are causing so many problems and that the fda believes may be the cause for all of these lung illnesses. Investors feeling it as well. They downgraded Piper Jaffray. Altria owns a 35 stake in juul. That stock down by over half a percent. Coming up, activist Elliott Management taking a big stake in at t and challenging the company over its strategy and its board. Well break down what it means for the Telecom Giant in a minute our newsmaking interview with microsoft brad smith well talk government regulation of the Tech Industry, antitrust issues and huawei. Well be right back. 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. Hedge fund firm Elliott Management taking a stake in at t sending a letter to its board and calling for a restructuring sending the stock higher in yesterdays trading. Leslie picker joins us more on this activist play elliott more often than not gets its way shareholders seem to hope thats the case at at t shares of the media conglomerate changed as they outlined recommendations to draw the stock price higher the portfolio, cost structure and Capital Allocation and Corporate Governance elliott invested 3. 2 billion into the company and it could boost stock prices by 60 to over 60 by 2021 for its part at t said in a statement that it would review elliotts perspective noting that many of the actions outlined are ones they are already executing today. In its letter elliott stopped short of proposing specific director nominees only to say that it identified several candidates to discuss with at ts board citing sources close to the hedge fund cnbc. Com reporting that elliott thinks ceo randall stevensons exit is on the table. He had been responsible for several ousters. Guys leslie, thank you lets expand this conversation stick around jump in on it too. Were bringing in don bilsen earlier this year dons unconventional research helped him figure out that Berkshire Hathaways inclusion was going to be part of the occidenta occidental anadarko deal don, lets start with you. You say that this was the perfect time for an activist investor to jump in . Absolutely. Its been a lousy stock for basically randall stephensons entire tenure. It looks like hell be leaving the company in the next year this is the 13th year of being a ceo. Thats your life expectancy. They are going through the Succession Process this is the time to jump in. I wonder how much of this was at t said themselves that many of the things that theyre being pushed or asked to do by elliott, theyre already in the process of doing theyve already kind of taken this on and maybe its the perfect time because the stock has started to pick up, the company is at an Inflection Point, its finally able to get on the ground with time warner and bring down some of the debt. It seems like its been on track with many of those issues. Absolutely. Thats what every activist wants is a little bit of tailwind. They want the work to have been done so they can jump in and claim credit. They want a little bit of that and not fighting headwinds. If the model is turning a little bit and you have an opportunity to affect management and put some of your own people on the board, this is the time to do it. Frank, you upgraded the stock earlier this year. Why did you do that . What do you see happening . The thesis was simple the stock was beaten down. There were more things that could go right than with some of its peers. It could see some appreciation one of the things we thought was going to help is deleveraging. Its a big part of what elliott is saying is its selling off assets they have 500 billion of assets. Selling 2 of them i think theyre going to continue to do that for the next several years. Get some of this stuff off the books. It may not be the big ticket items that elliott is asking for, but theyre definitely looking to do that as far as some of the things they want them to sell, its not as simple as it seems. These are complex businesses and you do have a lot of benefit from having these assets across the different platforms. Data generation for one is really important to generate both for content creation and then also to be able to monetize that with advertising over time. Its just going to take some time and elliott incites the time Warner Acquisition they havent had that to look at that until they got through the Justice Department issues earlier this year. I think youll get to see some more details i do think youre right. Elliotts jumping in with a tailwind theyve taken this on. Theyre going to use buy backs and that will get investors. All of these will help shareholders one of the things when leslie was giving me the report she called at t a media conglomerate thats true. Weve called this a telecom company. The company has changed drastically. In terms of what you think they should be holding on to and what they should be changing, whats the right path forward do they need to be bigger as all of the other Companies Comcast and others have gotten bigger thinking scale is the way to win. I thought the time warner deal didnt make sense its too late. I think they should let go of turner you can get a multiple for what you paid for turner or above that, that would be a Good Opportunity to pay down debt with that. At its heart its a wireless company, it is a telecom randall has come up with this concoction to turn it into Something Else and the stock hasnt responded and thats where we are today. Oftentimes with these big moves, elliott is putting 3. 2 billion of capitol to work in this stake they get work have investors do you have the idea that elliott has support from other investors that are already in the at t stock thats the thing. Its so under owned. People dont have big media stakes in at t its largely owned by retirees and workers. 550,000 retirees, 250,000 workers, thats a big part of that stock very similar to Procter Gamble so the votes get tough to handicap. I would somewhat disagree with that. A lot of investors weve talked to have been shifting into at t. Weve seen this as the stock has lifted it was clearly under valued earlier this year. I think elliott will get more attention, but what they really have to do is get some of the big mark fund level managers behind them and with the position were not sure how much is actual stock ownership. It remains to be seen how that will play out. But i do think youve seen more of an institutional shift into the name there is still a pretty sizeable ownership from that community. Frank, aside from deciding what assets get sold and how much of the asset base gets sold, it seems like a Capital Allocation question strategically, right its allocatallocating you mentioned buy back they dont want any additional m a. How is the company thinking about spreading capital across the things in terms of shareholder return and new investment how might that change . I think the shareholder returns are pretty important you made a commitment to paying down the debt. That will make a lot of the bond holders happier to have less outstanding. Once they cross that 2 1 2 times threshold which we think is fairly achievable, sometime they can start doing the buy backs. The company has bought back the stocks and shrinking the equity base part of what theyre discussing. The company has raised the dividend for the entire time its been a Public Company i would expect that to be the case they usually do that towards the end of the year. I dont see any reason from our model, i dont see any reason why they couldnt continue to increase the dividend. Thats an important part of the story. When you look out there for investment with yield, its very difficult to find. You cant get into treasuries. I think a stock like this, that yield investors can count on is going to continue to be a very attractive part of the story i think theyre going to be shoring that up. The yield, 5 1 2 is a crazy yield. When you look across whats happening, some people thought it couldnt continue like that the stock price going up, the changes had a little bit the dividend went up one penny a year do you think the dividend will increase beyond that rate . Its been up 2 a year give or take. Thats the range youre looking at not looking for a massive increase definitely would expect the board would continue to increase it this year and Going Forward i dont see why they couldnt. Frank, thank you for joining us today don, good to see you leslie, well see you again in a little bit. Coming up, our squawk newsmaker in the morning microsoft president bill smith is here. Were going to ask him about big tech regulation, the future of the Silicon Valley and so much more take a look at u. S. Equity futures. Were about 18 well be right back. Still to come on squawk box, microsoft president brad smith joins us to discuss some of the headlines coming out of the Tech Industry and his new book well find out why privacy, cyber crime and social media could pose a threat. That is later. A big day for apple fans the company is going to reveal new products and well preview whats to come well hear from Peter Navarro at 8 a. M. Eastern time. Squawk box will be right back. When a criminal has your personal information, they can do all sorts of things in your name. 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I can shine, i can shine, i can shine. Imma do what im made to do. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. Toerps general from around the country are investigating google of possible antitrust violations ylan mui is joining us. Reporter we knew this was going to be a massive bipartisan effort now we know just how sweeping it is 48 state attorneys general plus d. C. And puerto rico banding together for an historic antitrust investigation into google actually, the ags said their probe is already underway. Theyve requested documents related to the advertising business. All of our everything weve requested so far is related to advertising if there are other facts that demonstrate that we need to go in another direction, we will talk about it and were certainly open to doing that. Other issues the ags brought up were privacy, search bias and whether google is buying up and locking out its competitors. Even the ags who stressed that they support innovation also said that they fear google has simply gone too far. But the question for us today is whether google has strayed from its founding principles to not do evil in its search and relentless drive to be the market dominant player. Reporter the ags were careful to say this remains a preliminary investigation. Texas is leading the effort and there will be weekly status calls in how things are going and the next step but, becky, this is going to be a long game and the ags said they are committed to their own investigation regardless of what happens at the federal level back over to you. Ylan, thank you very much. For more on the changes facing big tech. Lets welcome microsoft president brad smith brads new book is called tools and weapons, the promise and the peril of the digital age. Thank you for being here. Thank you. Great to see you. I want to talk, first of all, about why you wrote this book. I think of super heroes where you say with great power comes great spons sbiresponsibility is that what brought this on thats part of it look at the issues you cover every day. Its increasingly tech everywhere we thought it was important to make these issues more accessible, to bring them to life so people can understand them better and to show there are some paths forward to address them because i think the world wants the tech sector and people in government to address these issues. Do you think this is an Inflection Point in society . I think there is an Inflection Point i think it started last year with Cambridge Analytic a and were seeing it unfold were seeing the next year of the next decade. This will be with us for quite a while. What are the big issues when you look around and say, okay, these are big problems they need focus, attention and solutions . In some ways theres a part about trust. People want to know whether they can trust tech when it comes to the privacy of their data, the security of their data, how Artificial Intelligence is really going to work but theres also a lot of issues that hit people at home and theyre economic issues. What is ai going to do to my job . What is ai going to do to my community . What does it mean for my kids . What skills are they going to need to learn . What does this mean for Rural Communities that dont have broadband today . What does this mean for urban cities where we see tech towers being built but middle income people being displaced in terms of their housing if you actually think about the issues we debate every day, they have these technology roots and we wanted to really capture how technology is impacting all of the other things we talk about every day. Before we solve the problems for the rest of the tech sector and all of society, why dont we start with what youre doing at microsoft. How are you thinking about some of these things in house lets take Artificial Intelligence whats one way to deal with the Artificial Intelligence and fix it at microsoft before it gets out . We started last year. We set forth six Ethical Principles that we said would guide our development in deployment of ai in issues around bias, accountability, privacy, safety and the like weve been advocating ourselves for new laws, laws around facial recognition. We dont want to see a commercial race to the bottom. Thats where you let the genie out of the bottle and we wake up five years from now and we find were not comfortable societally with how Law Enforcement is using facial recognition or shopping malls. Or governments. Exactly. At large. Governments around the world. We recognize there are days when the smartest thing that we can do for the longterm value of our company is turn down a shortterm deal. And weve done that in certain cases where,for example, facia recognition would be used in ways that would either cause bias and discrimination against certain groups of people, women, people of color or governments, especially over seas where we felt that facial recognition could be deployed in ways that could unleash Masur Vail Lance thats not a future we want to create. Can you be more specific or is that as specific as you want to get with those . We shy away from identifying specific customers unless they want to talk as well we have shared there was a Police Department in california and to me the interesting aspect of that episode was when we went to them and we said, we dont think it makes sense for us to provide you with facial recognition to do what you want to do, our first concern was, well, gee, theyre going to go choose from a competitor instead they said, you know what, we are so glad you said o this to us we dont want to make a mistake. Microsoft has set up Ethical Principles and youre in touch with customers you encounter should there be a more central and rule setting function. Does somebody have to set industry standards ultimately, i think the answer is yes. I think there will be industry standards to address a number of these issues ultimately, this is a space where we will need new laws and i think this will be one of the leading policy issues for the next decade. Where do we want rules in place to govern how computers make decisions . Its clear that people want people to remain in charge and if were going to empower computers, we need to know how the computers are going to make decisions. You know, that u. S. Law Enforcement Agency may have turned around and said, thank you very much. We really appreciate you pointing this out. My guess is there are some over seas government that when if you turned them down may turn to somebody else, maybe its huawei, somebody else, sure, no problem, we are willing to fill the void so you can look for someone to set industry standards but there are always going to be people in the industry, companies that play outside the rules unless you have a global set of standards that everybody actually follows and listens to the rules on, youre always going to have somebody else who is taking what youve done and maybe stepping it up or giving it to players you wouldnt like to see it given to. I think youve just hit the nail on the head of one of the global questions for the next decade because even if we can succeed in the United States in developing an approach we are comfortable with, what will europe do . What will china do we want to see us take a high road in terms of creating technology that the world can trust and at the same time we dont want to be undercut by foreign competition. So there is a real global strategy that we are pursuing that the whole industry is going to need to pursue, and i think that connects with many of the other trade issues of the day. I mean, right im thinking about this with china in particular when we say the reason were here in the trade talks with them is because they dont follow in any of the wto standards or rules that they were supposed to be abiding by how can we trust that any global entity would have not just every country but a major country like china with massive populations, second largest economy in the world, how can we trust that somethings going to get done even if we have these ideals and standards . I think theres a way to break it into two parts. The first is what will a country like china do in a country like china. There is facial recognition being deployed there are ways that americans would probably look at and say were not comfortable on in terms of Masur Vail Lance. Ight. Ultimately though theres 1. 4 billion people that live in china. If you add up north america, if you add up western europe, japan, the other democracies of the world we have an even larger group of people. I think in some ways in the race for technology, whose going to pick the winner between american firms and chinese firms . The answer is europe the answer is japan. And i think its in part our case to be made to them that we need to Work Together to preserve values that we really feel are timeless. Were all the excited about technology but we also recognize that Technology Actually needs to serve timeless values and not simply march on over them. We just heard from ylan mui talking about the state attorneys general, 50 of them, who are going after big tech at large. I have to say, all of the times, every day we talk about this issue, we almost never bring up microsoft as part of that. Thats kind of hard to imagine when microsoft used to be the evil empire that regulators were focusing on. You guys have really avoided this how . What happened . What was the transformation at microsoft . Whats it like being there now watching this with other companies . Well, we were the first graduate of the school of hard knocks when it came to technology and antitrust its easy for people to forget today that in the late 1990s, the year 2000 the u. S. Government and 20 state attorneys general were seeking to break up microsoft. We learned a lot of valuable lessons and the first thing we do every day is try to remember them you know, because one of the lessons we learned is you have to really look at your self in the mirror you have to be able to see what other people see and not just what you liketo see in yourself you have to understand the problems that people are raising, which means you have to get out and listen to them, and then you have to be prepared to start solving problems you have to compromise in order to, you know, find a path forward. If you look at the history of antitrust and big tech, which didnt start with microsoft, it actually started with standard oil and the tech of the early 20th century, one of the real lessons is that when these things start, they last a long time the entire microsoft set of issues lasted 29 years, which was less time than it took for ibm or at t and so, you know, i think theres a lot of common sense, frankly, in what we took away, better to figure out how to solve problems than just keep hiring more lawyers to fight them. Bill gates himself has said that he thinks that investigation not only from the states attorney general but from the u. S. Government, that that really caused him to take his eye off the ball in some situations because he had to take his time on so much of that and probably other management. Do you think thats going to repeat itself with other companies today . How difficult is it to lead in your industry and find all the fast changes that are coming even faster today than they were back then but also be dealing with such huge questions coming not only from the u. S. Government, from the states attorney generals, from the e. U. , from all over the place . If theres one thing thats clear to all of us, its sort of the laws of physics. Time is finite every hour you spend doing one thing you cant spend that hour doing Something Else in those years at microsoft bill gates, steve vollmer, all of us, we had to spend a lot of hours focused on antitrust issues, depositions, settlement negotiations the issues of the day. You cant help but wonder what you would have done if you had that time back its the opportunity cost of time, and i still remember when one of the members of our board of directors said that in the board room in the early 2000s. Its a comment that has always stuck with me. Youve got to decide where youre going to spend your time, and when youre in the tech sector, when the world is changing, when the technology is moving so fast, spending it on antitrust issues probably is not where most ceos or Senior Leaders would want to allocate their attention. Once the wheels of the federal and state governments get ramped up and start rolling like this though, is it too late is there anything any of these companies can do to stop the onslaught that was probably coming i think that there is a lot of inertia to these things i think your question points that out the answer i would say is, its never too late and the real question for all of us really is what are the tech problems that we want to see the world solve . And thats really why we wrote this book. You know, you can talk about economic power and the like, but a lot of what really i think weighson peoples minds is wha it means for them personally you know, what does this mean for my data . What does this mean for my security and i think the more we can Work Together across the tech sector to address the root issues that weigh on peoples minds the most, its not going to end every issue for every individual company but it will create a healthier climate and i think its a healthier climate not just for the tech sector but the u. S. Economy the truth is every company is becoming a tech company in part. When we talk about Ethical Principles for Artificial Intelligence, we realize we need to create these not only for ourselves but for our customers. When you put it in that broad perspective, then its like its not a day too late but we better not wait until tomorrow. Its hard to solve the worlds problems if you go out of business so, i mean, you do need to stay profitable. I mean, its nice to want to help everyone, but thats part of it, right lets talk about that in a minute because i know its a really feel good were going to go to break were going to go to break. Brads going to stick around. Were going to continue. I want to talk to you about whether i was really compensated for all of my personal information. I get a lot of free stuff, but these companies have hundreds of billions of dollars in market cap because of me. Not just me but, i mean, did i get my fair share of that . Good topic. Lets talk about it. Youre not answering it well come back after the break. Well continue this conversation with microsofts brad smith hes got a lot of my money including his thoughts on the administrations handling of huawei and u. S. china relations. Squawk box will be right back. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Welcome back microsoft president brad smith is with us his book is tools and weapons. Brad, thanks for joining us for an extended amount of time so two subjects that i wanted to get to before we get to the privacy, lets just get to what a companys mandate really is. Youre lean, hungry, youre new. You want to crush competition. That seems like what you want to do you want to be so good at what you do that youre not worried about competitors, youre worried about your customers youre worried about surviving suddenly you get to a point where youre so good at what you do that people start calling you a monopoly when you havent really employed any monopolies sti monopolistic principles. Should we immediately assume theres something untoward going on because it has a huge market cap or dominant position or is it exactly what you were trying to do right from the beginning i dont think that one should ever equate size in and of itself with a potential tlel threat or harm if you create a technology that changes the world, you bear a responsibility that helps address the world that youve helped create. I think specifically to address your question, you want to move fast but you need some guardrails the guardrails keep you on the road knowing what you stand for, knowing what your principles are, knowing what you want to avoid. I believe in the long run thats what serves companies and the shareholders. I dont see what the companies that are in the cross hairs of the ags, they have nothing in common other than being really successful and so how can all of them how do we suspect all of them of doing things that are unethical or doing things that need guardrails im not here to advocate for antitrust action against others in the tech sector i am here to advocate for work that we all need to do to address the issues that technology is creating for the world and get at the underlying problems. If consumers are not being harmed, in fact theyre benefitting where everything is basically cheaper than it ever has been and its almost free, how do we know when to worry about emerging competitors being blocked out . When its no longer hurting the consumer or the customer, thats who you think of, suddenly youre worried about new entrants arent getting in how do you see side thats a real issue i think you do what you just suggested, you ask, whats the problem here is there a problem that needs to be solved . Are competitors being harmed or blocked by offering their apps on an app store, for example thats an example. Id like to harm most competitors if i was starting a business wouldnt you well, and thats why antitrust law in the United States and around the world says you can do that when youre small but once you have a certain size, a certain position in the marketplace, you dont have that same freedom to maneuver i do think there is this broader dimension to increasingly antitrust law today which looks beyond traditional competitive and economic harm and it does ask what is the impact of this on data . What is the impact of this on democracy . And thats where, you know, the Justice Department is increasingly focusing. And im not sure that theyre out of touch with the American Public when theyre asking the broader questions about the implications of technology do you still you tweeted out some favorable things, youre not part of the Business Roundtable but you were favorable about some of the new, i dont know what they were. I guess they were guidelines it wasnt solely signaling although some of it was. Mission statement. Mission statement was Milton Friedman wrong that enhancing shareholder value kind of trickles down and takes care of a lot of different issues and you may not necessarily have to specifically say im going to be a good person . I mean, you stay within the law. You satisfy customers. You expand your employee base. Shareholders benefit youre doing exactly what youre supposed to do do you need to say you need to think about other things if you dont say that does shareholder value actually end up hurting someone well, i think the Business Roundtable has really defined the issue correctly for the 21st century. Why because what they say is focus on customers first. Right. Take care of your employees be a good steward in your community. All that would happen. But i would argue that the opposite is even a better strategy take care of customers first and in the long term your shareholders are going to do very, very well. And i would almost argue if look at microsoft. Look at what weve done over the last five or six years weve sued the United States government in two different administrations when we thought we needed to to protect customers. You get bloated Tech Companies get bloated world enters a slowdown. You fire nobody. You dont tighten your belt. Youre not profitable anymore. Everybody ends up not having a job. You were thinking only about your employees and youre unable to do some of the really tough things to rationalize a business why wont that happen . Well, i think the point youre making is any good idea taken too far ends up creating problems. And you think shareholder value and chasing that has been taken too far . No. What im saying is, look, of course if you say that were going to take care of our employees but never restructure the company were never going to let anybody go, thats not a sensible path for balance. Someone somewhere else yeah. Lets do the privacy thing. Im not going to add up the market caps of all the companies that have stolen my data. Or that youve freely given it to them. Freely given it to them and im fine dont answer this. Am i a sucker. In many ways i am, but i love google i take everything. I dont have any nothings that interesting for me, i dont think. But should i have demanded more compensation for all this information that advertisers are getting about me well, i think the first thing we need to do is equip people with the knowledge of about how much data there is about them, empower them so they can make more decisions i think interestingly, even ironically, the leader of emp powering people with knowledge about their data is the European Union law from a year and a half ago. Were the one company that said were going to extend the benefits and rights to all of the customers everywhere because we do think people have the right to know what data we have about them regardless of where they live. Well i think benefit if the market goes to work, if there are more opportunities for people to use their data. The eu did something, like the blind kernel corn. How does that work thats good. Anyway, were out of time. That went fast, didnt it . It sure did thank you. Im back. Im thinking i might read your zblook i hope you will. We wrote it so it would be fun to read. The book again is tools and weapons, the promise and the peril of the digital age. Brad smith is the president of microsoft and thank you for your time thank you. We appreciate it. When we come back, another big interview here white house trade advisor Peter Navarro will join us after the break. Well be rightac bk. When you retire will you or will you just be you, without the constraints of a full time job . You can grow your Retirement Savings with pacific life and create the future thats most meaningful to you. Which means you can retire, without retiring from life. Having the flexibility to retire on your terms. Thats the power of pacific. Ask your financial professional about pacific life today. I thats the retirement plan. E, with my annuity, i know there is a guarantee. Its for my family, its for my self, its for my future. Annuities can provide protected income for life. Learn more at retire your risk dot org. Live from the most powerful city in new york this is squawk box. Good morning, welcome back to squawk box live from the Nasdaq Market side in times square im joe kernen along with becky quick and mike santoli andrew is off today. The futures indicated down 23 on the session. Nasdaq actually showing bigger point losses than the dow. Obviously a bigger percentage. Those are down 26 and change s p indicated down 5. 5 treasuries, the ten year was over 1. 6 earlier 1. 65 1. 59 on the 5 year if we close above 2. 09 could mean the yield lift is going to continue. Technical levels to keep an eye on as well. Lets get you caught up on stories investors are going to be talking about soft bank is urging wework to shelf its public offering. Wework at this point is still proceeding with its ipo plans. She said the conversation is whether softbank wants to invest billions more so wework doesn need to go public. The ipos valuation is expected to be between 15 and 20 billion. That is well below the 47 billion valuation it was given after softgbajabiamilas last investment back in january. Ajabt investment back in januaramilat investment back in januarilas t investment back in januarinvestt back in january. They charge a fee for faster service. And apple is set to unveil its latest Iphone Models and other product updates today. The highly anticipated event will take place in california at 1 p. M. Eastern time. Well talk much more about whats expected from apple in a few minutes. It is crunch time for congress to vote on President Trumps signature trade deal thats the new nafta or usmca. Kayla tausche joins us with more on where that stands hi, kayla. Reporter hi. The white house is still deep in negotiations with nancy pelosi to get space on the floor for the vote a spokesperson says the substance will determine the timing meaning, the more democrats requests make it into the deal the sooner it will be put into the vote they have four asks, making sure mexico is implementing new labor reforms, better enforcement of environmental protections that they say nafta overlooked and ensuring changes for Pharma Companies wont raise drug prices house aides say theyre set to meet with ambassador lightheizer next week. Theyre waiting to see what concessions hes going to make mexico is the only three countries to have ratified it. Elections in canada have held up passage. The white house is trying to regain some momentum through a day of action today circulating talking points to surrogates and supporters in ten topic areas. In washington the white house and republicans say they have the votes. Democrats say the deal isnt there yet. Lightheizer has retrained from starting the countdown clock on the deal until hes sure guys, back to you. Kayla, joining us for more on the battle of the usmca lets get to our squawknewsmaker of the morning, white house trade advisor Peter Navarro. Its been a while. Good morning, joe, my friend. How are you . Im good. You are quite a lightning rod for the trade policies of President Trump . Whenever anything really hawkish happens or whenever he sounds a tone that causes the market to go down, its always navarros fault. Do you ever waffle on your resolve to stay strong on this, peter . What im focused on today, joe, is being a lightning rod for usmca. And i think whats important to understand, joe, is that in terms of the volume of sheer volume of trade that we do with canada and mexico, its over a trillion dollars its actually almost twice as much as it is with china and we actually export close to 5 times more product to mexico and canada than we do to china so usmca really is the big deal. Were hoping to get this thing done within the next 30 to 60 days and today is going to be an important day talking to the people of america so that they can encourage their representatives to do the peoples business when they get back to washington. I think that the well sti stick with usmca for a while talking about usmca, its gotten a little bit better in terms of the prospects for the democrats i guess maybe to support this even though it would give President Trump a victory. I dont know as we get close to the election whether better strike while the iron is hot do you think the chances have gone up recently with some of the things the democrats have gotten with the usmca . Joe, this is a deal that does and should transcend politics. Its a unique deal because it benefits both farmers, ranchers and manufacturers. It doesnt pit them against each other. Theres broad appetite around the country for this deal. The big thing, the big obstacle really has been the fact that congress has been in recess and its very hard for ambassador lightheizer to get the kinds of negotiations he needs to get this over the hump, but thats Getting Better the president and the afl cio went down to mexico to get some assurances on the labor reinforce am this is a great deal for america and hopefully thedemocrats wil do the peoples business on this well, youve been in washington for a while now i dont know why youre its dog years. 2 1 2 years is 20. Some of us are leaving a place like this. You left irvine to go to washington i miss my Pacific Ocean out in california there. Can you give me an honest handicap of whether this gets done before the end of the year and you say politics should be set aside. True. Thats not going to happen. True. How would you really handicap that this gets done before i think this has to get done before the end of the year for several reasons. What are the chances . Im going to give it 100 here because its so important for this country, and i cant imagine that nancy pelosi would not put this on the floor to at least have a vote. I mean, as you know, theres some progressive politics going on here. They want to take our cars and our cheeseburgers, private health insurance, raise our taxes and give the money away to Illegal Immigrants for health care thats kind of like the far left, but i dont think thats who nancy pelosi is. I think she is going to do the right thing on this and get the job done and it is unique that all 50 states benefit farmers, ranchers, manufacturers are solidly behind this. Again, i go back to what the concept of this is, joe. The center piece for me as the director is the domestic content rules which push out domestic content to 75 in the usmca zone and then strong labor protections, 16 an hour Standard Plus environment al protections get us a fair share of that manufacturing. So the vision of usmca is to transform north america into the manufacturing hub of the world with the u. S. As the center of that universe. Who cannot like that so lets get it done and i think that the next 30 days are going to be critical to that as Congress Gets back they only have so many days on the calendar though. Its really interesting how little they work, at least back here in swamp land yeah. So, you know, im going to be very optimistic about this okay. Because its so important to the country youve made the comment when talking about china, anything that you dont hear directly from lightheizer is fake news, but if you tell me something right now, can i can i assume that its to the best of your knowledge its not fake news what youre telling me so the heres the two rules. The lightheizer rule is that all negotiations take place behind closed doors and theres no leak to the press. Okay. The navarro rule, ive always wanted to have a rule named after me, is that if you dont hear it from lightheizer, kudlow, mnuchin, ross or myself, its likely to be fake news designed to part a fool from his money. The problem, joe, as you know is its a lot of mischief crepes into the news cycle to move the markets and just so many times as ive seen over the last year and a half its just wrong so lets be cautious here for investors i think, look, play the long game here. See the chess board. Okay. What were trying to get to whats the chess board look like in terms of what was agreed to in april and what where the chinese are right now for when as far as you know, for how it starts going in october have they said, okay, youre right, we did agree to that . Were willing to come back and talk about those things. Or are they still way far apart and not much hope for getting close. Youre asking me to violate the lighthizer rule . Because the navarro rule takes precedence over the lighthizer rule, trumps the lighthizer. Trust in trump, trust in lighthizer i think whats important here, if were going to get to a great result, we really have to let the process take its course. Theyre coming here, leo ha, the top negotiator is coming to washington in october and hell sit down with ambassador lighthizer look we know what the structural issues are its what ive called the seven deadly sins. Its worthwhile to go over them quickly. Its the cyber intrusions into the business networks. Forced technology transfer, the intellectual property theft to the tune of several hundred billion a year the dumping into our markets the massively subsidized stateowned enterprises, the currency manipulation. The last one, the seventh one is very, very important to President Trump. This is the made in china, fentanyl and other opioids that are coming into this country, going to kill over 100 americans today. Theyre going to kill over 1,000 a week and over 50,000 a year. Just a couple weeks ago the mexican navy intercepted 23,000 kilograms of what appears to be fentanyl that was coming from shanghai on its way to toledo and beyond this is the kind of thing thats unacceptable so we know what the structural issues are, joe. We also want Market Access there and well have important, frank discussions about that that will be behind closed doors with ambassador lighthizer who should be optimistic because i think the chinese really do want a deal theyre getting hammered by the trump tariffs. Theyre having to cut their prices, manipulate their currency down into the toilet really and theyre losing their supply chain i think, joe, thats one of the most important things about whats going on here i mean, theyre losing their supply chain faster than you can say trump tariffs. Yeah. I think thats good for the world economy, a more diverse supply chain is more resilient some of that is coming home and thats good for america. What is a more powerful force . I read the same article that maybe youre eluding to. We dont even know the extent of the damage thats being done to chinas economy right now because we dont have the real numbers. So it may give the president more leverage in that regard but we were also told that china can play the long game and we know that president xis not up for election in november of 2020, so what is the more powerful force there that their economy is worse doing worse than ours or that he doesnt have to worry about political concerns like President Trump has to worry so im not going there. Again, the lighthizer rule the way i can best talk to folks in your audience today is to step back a little bit and look at all the things that i think are going to drive the macro economy. Joe, you and i used to have talks all the time about whats going to happen in the economy heres what i see. I see that can be good the passage of the usmca i see the fed cutting rates. I see the European Central bank cutting rates. I think if the germans engage in a fiscal stimulus wed see 500 point jump on the dow in one day. That would be great for europe it would be great for u. S. Exports. It would be great for the world economy. I see china already engaged in significant additional monetary easing but i think theyre going to do a second fiscal stimulus so i see a lot of things around the world that are going to stimulate the global economy, and these are the things i think investors should be looking at in the meantime, we need to be patient with the china negotiations and we need to focus like a laser beam in getting usmca passed because theres a lot of good things happening. I mean, the trump economy, lets be clear about this, lets talk about recession, its silly, the trump economy is solid as a rock we have 157 million americans employed weve got 18 straight months of Unemployment Rate below 4 wages are rising historically low Unemployment Rates for blacks, hispanics, women, the disabled and veterans and my favorite, joe, my favorite statistic in all of this is we have over1. 5 millio prime age workers, off the couches back into the work force. This is what the dream was when i was helping President Trump campaign back in 2016 to restore this country again to its greatness and hes done a great job doing that so lets be optimistic here. Okay. Well be optimistic. But there are people that support President Trump. Theres plenty on social media you can imagine. The president see shs it and some who support him say when navarro is whispering in your ear, President Trump, about tariffs, youve got to realize that if it causes a slowdown it could affect your reelection chances. Do you ever worry since youre a supporter that if youre too hawkish in this regard and try to accomplish too much with china, that we could slow here and it could impact the president s reelection . Well, lets talk about my hawkishness, sir, my alleged hawkishness. As you know, joe, i published a book in 2006 called the coming china wars. Today that reads like a normal government document. Basically the way i described china ten years ago is the way i think america perceives china today. There is a broad bipartisan support on capitol hill to get tough on china and the American Public if you look at the polling understands very clearly that we need to stand up to chinas unfair trade im not understanding this hawkish point of view in terms of the fact that a lot of what ive said is now conventional wisdom in terms of the trump tariffs, i think theyve been working beautifully. Theyre defending our steel and Aluminum Industries against a glut of over capacity. Those industries are doing very well President Trump used the trump tariffs to do something within two weeks that nobody got them to do within 20 years on the border i think that with respect to china, lets be clear about this, joe. People need to understand this the tariffs on china are our best defense against chinas economic aggression and best insurance policy this is important. The best insurance policy that china will continue to negotiate in good faith. So the trump tariffs are working beautifully so thats how we need to move forward. Would there still be tariffs on november of 2020 . Im not going to speculate about that rule one, lighthizer rules, behind closed doors. Lighthizer. I know youre trying to get me there my view is today is a Beautiful Day here in washington to get moving on the usmca. Got it. A lot of great bullish news i remember sitting with you the day after the election telling we were going to get to 25,000 on the dow and you chastised me because you said i was like i should have went to 30 but so lets go to 30 today, joe pass usmca, get a rate cut from the fed, get german fiscal stimulus and this is a global economy. And end the trade war. This is going to who snuck that in there was that becky. Hey, becky. Youve been so restrained. Michael santoli, how are you doing, friend . Peter navarro, thank you. Well be the president s probably watching, too. I want to be an eagle, not a hawk, okay yeah. Yeah dont we all. Eagles. Thank you, Peter Navarro. Programming note, dont miss an interview with Steven Mnuchin, treasury secretary on squawk box. When we come back, it is apples big day. Successors to the current iphones expected to be revealed in the next few hours. We have a preview next. Later, Jeffrey Weigand offers his thoughts on the vaping business as regulators aygin to take a closer look. St tuned, you are watching squawk box on cnbc i like to make my life easy. romo mode. beep bang good luck with that one. Yes thats why i wear skechers slipons. Theyre effortless. Just slip them right on and off. Skechers slipons, with aircooled memory foam. I can shine. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. Trained on kup perfect tino, california, as apple gets set for the next big lawn p. Josh lipton has more. This is apples big event the company is tightlipped. Analysts think youre going to see three new Iphone Models. Among the upgrades, faster processor, improved camera system, maybe stronger waterproofing and shah ter resistance big question for investors, whats going to be the price how much is tim cook going to charge you for these new models. Some analysts think hes going to keep the prices constant, no big change from the current lineup in addition to iphones, there will be a focus on wearables we expect new watches. Washls have been a bright spot for this company even as iphone franchises come under pressure they think apple has sold 80 million watches to date, 50 millionaire pods you can buy washls and services and its approaching the fortune 50 company its been six months since they unveiled new services. Investors would like new details about apple tv plus, the new streaming service. What is the price of that service . Reports indicate apple was considering ten bucks a month. We want price, we want availability as well as apple arcade the new game service as well whats the price and availability for that . Perhaps well find out later today. Back to you. Josh, you say perhaps well find out more about perhaps the video service. Do you have any sense about whether in fact those details are going to be coming today or are we speculating on that i mean, listen, its something traders, investors, we saw interest in that price, availability, the content is mustsee tv when you talk to some analysts they think apple has certain advantages theyll talk about specifically companys install base so the total number of active apple devices in peoples hands. Thats 1. 4 billion and counting. Its possible apple leverages that and hooks people in in the same way they do apple music which has 60 million fans and counting, guys. Good point. Good analogy its interesting how apple music at the beginning didnt seem like people were excited about it very big business. Joining us now for a deeper look into todays apple event and the tech sector, steve milenovich steve, good morning. Great thanks for having me. You heard the setup there in terms of apple lets start with that in terms of how youre thinking about, you know, this particular product generation what it means, if much of anything, for the upgrade cycle for iphone and how it fits into how investors should be viewing apple. Today ive become Technology Strategist my colleague is now the lead but on apple. On apple. Ill back him up look, our view is that this is kind of an incremental announcement, at least on the iphone side. Well have three new models on the triple lens camera pretty flat iphone usage im glad to hear people talking about washls thats been overlooked now with the iphone pretty flat, its a couple of points of Revenue Growth you combine that with services and you could get low single digit growth to move forward. To put a fine point on that, you think its been overlooked because people havent paid enough attention or because we always had bigger drivers than this has washls become a bigger piece of it or is it because Everything Else or because iphones have become a big part the iphone was down 50 of revenue. Clearly the iphone has been a big story. So thats been one reason people have overlooked wearables a bit. I think they under estimate what apple can do here, the other types of things they can potentially put on the body. Clearly smart glasses would be the next best thing. Augmented reality is something tim cook has talked about. One of the things we talk about as tech strategists, its going to be ai, ambient computing, its all on you, around you in stores, in the home, hopefully in a fairly customer friendly way. Thats where apple is so good at creating the positive Customer Experience wearables is a big part of the future. Broadly on tech right now, you know, we were talking before about how a lot of the most popular kind of big software names, cloud names really pull back sharply youve had this rotation going on in the market theyve been leading semis did well yesterday how are you thinking about tech in general right now as an opportunity . So tech in general, were thinking kind of a market waiting. We like tech longer term youve got the pmis under 50 the ism new orders just broke 50 when that happens you see tech pes ontract, earnings come in. We look at analyst estimates for next year, particularly in semis. We think theyre a little bit on the optimistic side. We think there might be a limited near up side we are over weight services, internet, you mentioned software were market weight there. The big change has been software has faded, had been by far the best performing sector you have tough comps semiconductors have taken off. Weve got high inventory levels there. Weve been discounting it. Semis and hardware under weight. Internet, facebook and alphabet, big part of that, i assume so how do the investigations fit into that and just as a, you know, general sentiment headwind or is there general Business Risk here . I think its probably a little more sentiment. We are moderately positive on fang its going to limit the up side to some degree the next five wont be as good as the last five these companies that are successful in tech have good 10 to 20 years. They have time to make some hay. I dont see the next major Disruptive Technology get them reg gu lagts in the case of microsoft is going to get them they missed the coming Technology Disruptions and thats going to be years away. From that perspective i think it limits the up side they wont be able to do as much mna. I think regulation could be years away. Even if management is distract distracted, theyre not likely to be distracted by the next new thing. I dont think so. Whos the leader in ai its microsoft, facebook, so forth, obviously google. Maybe theres something coming one of the things were looking at is the internet was supposedly going to make the little guy powerful, decentralize weve had these platforms, almost the opposite i do think you could see maybe some more decentralization, peer to peer. Thats where blockchain could make a bit of a difference that could be a big threat. Down the road steve, good to see you. Thank you. When we come back, america prepares to mark 18 years since the 9 11 terror attacks. We have a special interview with Howard Lutnick and the chairman of bgc partners. And getting her car towed. All i had to take care of was making sure that my daughter was ok. If i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. Were the gomez family. Were the rivera family. Were the kirby family, and we are usaa members for life. Get your Auto Insurance quote today. 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 wedge. So more food ends up on your table, is that daddys lettuce . Yeah. And less food goes to waste. Coming up, the man who blew the whistle on tobacco weighs in on vaping. Jeffrey weigand talks. Stay tuned youre walking squawk box on cnbc who says our bank isnt tech enough . Everyone, look at your phones. The design thinking, the digital engineering, security, blockchain, and we will be first to market yes. When we do we launch . Unfortunately, in 2 or 3, hours. Why the delay . Cognizant is helping banks use Digital Technologies at scale to advance speed to market. Welcome back to squawk box on cnbc live from the Nasdaq Market site. Were right in times square. Were taking an in depth look at the ecigarette industry today. The popularity of next gen smoking devices has soared, but manufacturers are now facing mounting challenges. Wall street is taking notice aditi roy joins us now good morning reporter good morning to you, joe with all the heightened regulatory scrutiny around ecigarettes, Piper Jaffray downgraded them. Theyre less confident juul will be approved by the fda juul is spending more than 100 million to prepare the application to keep selling its products in the u. S. To win approval the company has three big strategic goals. One, its to fight teen vaping its a big priority for the fda and lawmakers. Another is to battle counterf t counterfeits not sanctioned by the company. To do that it has lawsuits and will work with federal agencies and work in 37 federal raids and 25 state level ones. Finally, its hedging its portfolio. Theres so much noise domestically on the regulatory front that its focusing on international expansion. Since last year juul has launched in 18 different companies. There are a billion smokers worldwide. Keep in mind, 970 million of them live outside the u. S. Still the opportunity in the u. S. Is notable since last year. Ecigarette sales have gone up more than 90 from 2. 3 billion to about 4. 5 billion while traditional cigarette sales have declined 3 . Thats according to nielsen. Back to you guys. Aditi, obviously a huge part of the focus has been how teenagers have picked up with some of these vaping incidents weve spoken with the former commissioner Scott Gottleib about this and how he at the fda was going after trying to curb teen use of this and to go after companies who he thought were reaching out specifically towards those team groups. How much of that kind of resonates back in what youre hearing on this . Reporter its huge obviously theyre being very aggressive, the company juul about the company 21 initiatives. It seems like its hard to tell whether thats going to really convince the fda to approve their products for instance, in the New York Times theres an op ed by Michael Bloomberg and the campaign for tobacco free kids theyre launching a 160 million fund to help about more than 20 cities nationwide pass bans on flavored ecigarettes San Franciscos already banned ecigarettes. Michigan banned flavored ecigarettes. That push is extremely strong. In that piper note they said, again, theyre not sure whether its going to pass fda approval. The teen vaping stuff weighs heavily on lawmakers and regulators. Weve been talking about how new York Governor Andrew Cuomo is banning flavored ecigarettes and watching in the stock market at least how this is having an impact on Companies Like altria which owns 1 3 of juul what do you think happens next in terms of how these companies try to get ahead of the regulatory headwinds that are really following and facing them reporter well, we know that juul has poured a lot of money into lobbying, for instance, and has increased the lobbying spend. Theyre hiring notable people from politics. I know in San Francisco theres a push theyre pushing an initiative in november that will be on the ballot to overturn that ban so theyre also marshaling all of their political influence to fight that. Im watching the papers every day for the next incident. We talked we had dr. Gottleib yesterday once again. Its not, you know, the classic use of these things, i guess, its when you use it with cbd or oil. Its the unregulated ones that are using this. Modified. Oils are used as the is it the solvent to kind of get through instead of water which is what most of these are and thats been the huge thing. As a regulator, how do you you know, you dont want people getting introduced to nicotine because of these or cigarette addiction. How do you regulate that i dont know that you do. Joining us on the squawk news line is the man who blew the whistle on big tobacco years ago. Jeffrey wigand hes the founder of smoke free kids he says this is a gateway situation to have the ecigs and that leads teens and children to work their way to cigarettes thank you for joining us today. Good morning and thank you also just for people who arent familiar with you, i want to remind them that you were somebody who once worked for a Tobacco Company doing research in a research and Development Company but you were the whistleblower who said Tobacco Companies had for years been spiking some of these cigarettes causing and creating higher addiction levels you were the one who blew the whistle on this and helped bring the lawsuits that came against the industry and eventually brought about big change what do you see happening in ecigs right now . Ecigarettes in particular for juul, who commands more than 70 of the market share on what we call ends that turn up nicotine delivery systems, however, juul is marketing a product that is totally unregulated or in better terms, its an unlawful product. And thats been so stated by the court now as well as the fda so they have some issues associated with the continued marketing of their product as well as njoy and the rest of the vaping folks. As a researcher, when you look into whats happening, why do you think this is so destructive and addictive . What do you think is actually happening . First of all, with juul, you have a high dose of nicotine up to 15 milligrams, a little pot which is equal to two cigarette packs. In one pod . In one little pod, okay so youre talking about heavy dosing that you think is at addictive levels yes and so and theyve added mango to it and peppermint and a whole bunch of other flavors susceptible for youth, children. The penetration is themiddle school an High School Kids if you look at the statistics roughly about 60 . That means that children in the school of vaping now and will ultimately change to a cigarette. Its interesting to note that altria or Phillip Morris has taken a Minority Stake in juul. Which means what . Now the ore all all the all the vaping devices and will deliver nicotine not as much as juul and they all add some flavors to it whats unique about whats going on now and the five deaths i mean, when we had light cigarettes, it took 15 years before we had the first Death Associated with smoking light cigarettes we have five deaths already in less than five years thats significant how is that happening . First and foremost, the users are experimenting with adding thc or other drugs into the vaping system. Most notably has been defined has not been verified is the vitamin e acetate, coconut oil and these they volatize and allow the active carrying of the chemical in the vaping phase whats happening is its fat thats going into the lungs thats coating the lungs and incapacitates the lungs. These kids that are coming into the Emergency Rooms are suffocating because what theyve done is theyve been smoking the product, mostly cannabis, thc, thats been using an oil as an excipient so it is called lipoid pneumonia, fat pneumonia and a lot of them are going on external breathing systems because their lungs have flat out failed them. Theres no way to redissolve the fat that has now adhered on the surface of the lungs jeffrey, i want to thank you for your time today. We do appreciate your calling in again, jeffrey wigand. Youre welcome. Coming up, cantore fitzgerald chairman joins us, Howard Lutnick. That special interview is next when squawk box returns. Stay with us it was sophies big day. By the way, shes the next mozart. 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. Tomorrow marks 18 years since the 9 11 terror attacks. Our next guest is known for rebuilding his firm, cantore fitzgerald, after that terrible day. Cantore lost 2 3 of its new york employees on that day, including the ceos brother. Lets welcome Howard LutnickCantor Fitzgeralds ceo. We want to get your take on the markets. We want to talk about the remembrance of the day its a tough part of the year for you. When does it start, about september 1st . Correct right as the summer ends i sort of start getting a little edgier you know, it was an event that couldnt possibly happen someone can get sick someone can die in a car accident but its not possible that everybody you work with i mean, imagine the sets gone, everybody you work with is gone, everybody behind all the cameras, everybody who you love. People dont realize how much you love the people you work with, but you actually love them and what happens when they get taken from you is you cry. Theres just no other way to say it, you just cry. 18 years feels like what, a year and a half, two years it depends. Sometimes it feels like forever ago because my life is completely different and when you get to like now it feels sort of right upon us. You know, so we try to turn that day into something beautiful all of our tomorrow we have a charity day so all of our employees, we ask them sips 2002, right . Yeah. Weve raised over 150 million we hope to raise about 12 million tomorrow so the idea is all the clients h business as possible i invite fun celebrities to make it a cool day so that imagine someone works all day and go home sort of tired and i dont want them to say their family look, i worked all day and it went to a charity thing. They show a picture of eli and Peyton Manning and they say, wow, dad, you have a cool job. President clinton is coming, tony blair, cindy crawford, very popular on the set sean penn, lots of great celebrities, they make it found for our guys and women. And they just make it an upbeat day. We try to raise as much money as we can, do it in a fun way what charity is the money targeted for this time around . So we thipick 150 different charities. Each celebrity picks a charity and we support their charity the relief fund keeps about 5 million and does one big thing so you remember earlier this year we went to puerto rico. And we went down and gave away the 5 million to 5,000 families down in puerto rico. Giving each a thousand dollars so, you know, were ready for next one i hope there is not a next one i hope it lasts a little longer, but were ready for the next big thing and thats what we do, we give 150 different charities and it is really an uplifting day for very difficult day but it is the right way to spend september 11th for us. Business on that day is does it go up for you . Huge. Huge our clients are incredible they come in, you know, prince harry picks up the phone and starts talking so you say, all right, ill buy 500 million of x, y, z one year we had prince harry on one phone and Prince William on one phone and did a 2 billion Foreign Exchange trade because the guys were just so excited to do stuff and they know that Commission Goes to were giving it all away to charity. It is pretty fun people tell you what they want to do. If i remember back when we first reopened after september 11th, we had clients and we said, all right, well do one trade per client we a were not sure the pipes work one of the great compliant clied well give you all our trades for the day. Our board voted, you should do them all, were sending a runner with the tickets, do the best you can. Thats why the company survived. The company survived because our clients stood by us when we were broken and helped us rebuild. And it was really incredible so i have great people who give of themselves and great clients and thats why were able to rebuild the company. We added a couple of thousand employees then almost 14,000 worldwide now. We have come back a long, long way. Good. I hope everyone is watching now. They are and now they now, how do you not know what tomorrow is anyway while we have you here, a minute and a half left or so, has business reflected the overhang of a possible recession in your view or does that not something youre seeing . When we talked last time i was on, it was on the late cycle recession, you know, it is coming, it is coming we were on we were together, now it isaugust, september, still coming, still coming i think we have a weaker economy for sure are we in a recession base yet no i think we still got at least a year to go and maybe longer i would guess toward the end of 2020 it is looking weaker. I think we muddle through low growth, 2 growth. That was good during obama trump goes out and says 4, 4, 4, you feel like were still hanging in there. You on record, saying china could lose a percent of gdp every six months from the trade war. It is hurting china. But i just asked navarro, if they play the long game and dont have elections, even if their economy is worse than ours, does that still give them more staying power or who has they surely have more who has the leverage in your view. What trump has done is hes forced people to reconsider the supply chain they were overinvested in china and maybe i better move some and just that thought of, hey, might be im too one sided, i have to move some, will harm the gdp in the long run. As you said, they dont have elections, we have elections, we can change sides anytime we want every four years, so they clearly have the advantage in the long run because they can stay the course in a way we cannot but overall, i think this trade war is more harmful to them than it is to us and therefore hes likely to get a deal done, i just dont know when my guess is he would like to run for reelection on fighting with china. My guess he would say, do you want me to be fighting with them, or do you want my opponent thats a position i think he like likes. My guess is they dont make it to china until after the election. Thank you for coming on it is not sweet, it is bitter. Maybe bittersweet with what youre doing tomorrow. Good luck tomorrow. Thank you for your support. I appreciate it. Thanks very much down to the New York Stock Exchange jim cramer is here jim, we have been talking about so many things today it is apples big day with the reveal and we have talked this morning with guests about how much the wearables business could be. Thats something you focused on for a long time too. What are you look for today, what do you think about where the stock stands what do you got . If you talk service, if you talk wearables, and it will not give you the numbers of wearables, theyll give you a percentage then i think you got a story to tell you got to see maybe they run through some of the great trailers they have for apple tv. In the end, i think the analysts are anxious to say apple once again has had a big run, shift elsewhere. The market doesnt look that great today. I dont think i think it will be a bit of a nonevent unless they say, look, the Service Revenue has really come on and the credit card, they have got to talk credit card, so far both goldman and apple have been very quiet on credit card, would be terrific to hear about adoption you know you turn your phone on, if you have the credit card, it pops up instantly and those of us who have used the card like to see, wow, look at that, i got money back i like the features. Jim, thank you. It is great to see you by the way, make sure that you dont miss a big interview here on squawk box tomorrow morning. Well be speaking with treasury secretary Steven Mnuchin at 8 00 a. M. Eastern time. Squawk box will be right back. You should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. Final check on the markets not a whole lot of action premarket. Down 40 points august was more volatile than september, so far. Well see. A lot more volatile yesterday below the surface, momentum got pounded, a lot of people talking about that. By a lot of people, we mean mike. Me, people watching, the tick by tick, absolutely. I think before we know what happens today, we need to wait until 4 00 good idea watch every second between now and then. Dont miss any of that. Maybe just for bathroom breaks thats up to you anyway, make sure you join us tomorrow youre back. Santoli . I will. Well all be here for now, squawk on the street is next. I feel like busting loose good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber at the New York Stock Exchange. Four days up for the dow busy day as we await apples iphone event this afternoon. Bunch of downgrades with names like wells fargo and wendys on the list europe is mixed. Oil six week high. Road map begins with apples moment of truth. Set to unveil its latest iphone lineup today, but for a company increasingly focused on services, will it move the needle for