Q were relatively flat up slightly, up about 2. 5 points in europe we saw the active trading taking place all of this ahead of the fed meeting starting today the cac is the biggest gainer of the three major averages its up by q . You see gains of a half percent across the board and then if you want to seee1 whats happening in the treasur market here in the United States o0. 042 theres no way bad news is good Morgan Stanley is soenearish yesterday was the mostx boring day i watched ine the markets seeing the bug here and there at thee1 gym or whatever. I would look up. I have to check. E 46 i have to check. Up 46. Is it dog days yet it may be market breaking news. Facebook officially unveiling its cryptocurrency currency plans. Julia boorstin has more on that. Facebook announcing its new Digital Currency called libra. It will make it easy to send money around the world the currency is set to launch the first half of next year. It will be run by a nonprofit in switzerland up like bitcoin, libra, this Digital Currency will be backed by real money. If you put in a dollar or some other currency into libra, youll get a dollar or the equivalent out the goal is for that reserve of real money to make the whole currency more stable unlike bitcoin, which is very volatile. Now, facebook is partnering with 27 other organizations, companies, nonprofits to start libra as an open source currency the companies range from mastercard and visa which could help mer chchants accept the currency to uber and lyft. By the currencys launch Facebook Says it hopes to have over 100 Different Developers on board. Facebook has a plan to profit from libra it says that it is going to be creating a new digital wallet called calibra this will be run by a subsidiary of facebook. And it will be an app that will be a standalone app as well as operate within whatsapp and messenger. Calibra will allow anyone to store money for free and allow people to send and receive libra instantly around the world with no fees. Facebook plans to add other Financial Services such as loans which it could profit from down the line former pay pal president david marcus, who is running calibra for Facebook Says the digital wallet will be secure and also separate from the rest of facebook so the Financial Data gathered will not be combined facebooks larger goal is to get people to spend more time on its family of apps and make it easy to make purchases from the 90 million business that open rate on its platforms Facebook Says it is working with regulators and it expects the calibra app to be approved you can find more about this announcement on cnbc. Com we will have an interview with david marcus coming up at 7 15 a. M. Back to you. Julia, thank you for that we have so many questions for david. I think the first one i have, it goes to this issue i know theyre trying to separate it and put it as a separate nonprofit, but in an age where people have i think its fair to say a sense of distrust around facebook, how will they trust facebook with their money . Even though i know theyre trying to separate it from facebook, it is still facebook, right . Look, libra is not going to be run by Facebook Libra will be run by this nonprofit theyll have 100 Different Companies that are behind it david marcus has stressed to me they want to make sure the Libra Association is totally separate from facebook. You are right. There is a broader question of whether people are going to trust this app, calibra. Well see whether the convenience. The ease of use, the fact it will be so easy to access it on top of messenger and on top of whatsapp, if that will overcome trepidation people will have because of facebooks history. Marcus did stress theyll have the same level of oversight, the same sort of dual factor authentication to make sure youre secure like a credit card theyre also promising you if someone hacks into your account and steals your calibra dollars that theyll pay you back for that it sounds like a debit card ill give you my money, youll give me the equivalent back. It doesnt sound a lot like bitcoin. Exactly they really want it to be different from Bitcoin Bitcoin is so volatile its not based on any currency this is designed to be based on a basket of currencies there will be small fluctuations, but not massive ones those small fluctuations may be based more on fluctuations we see between the pound and the dollar or the euro and the dollar so its that kind of smaller daytoday fluctuations. David marcus said they want it to be more like a real currency than a cryptocurrency. Its boring its not a real currency two other quick questions at a time when some of the big Silicon ValleyCompanies Including facebook are under threat or under the gun from washington, when it comes it antitrust issues, is there any interesting back story in terms of how they were able to put this deal together its not just took obviously they had to end up, you know, effectively collaborating with what looks like several dozen ov other companies. Right now facebook is one of 28 companies on board for this launch they will have 100 by the time it goes to market by the first half of next year. It goes back to when facebook hired David Marcus David Marcus had been president of paypal. He came to facebook and he ran their messaging business as soon as he was running the messaging business for facebook people started speculating what does this guy who has a background in payments going to do when it comes to Digital Payments for facebook. So theres so much opportunity when people are sending photos, sending video, sending messages back and forth could you just send money as easily as youre sending those other things i think this has been an interest of davids from the beginning. We can talk more with him in the next hour. I think facebook sees opportunity here to profit from the way people are spending money online the way a lot of the asian social networks are. Its not unusual for a company to get people to transact through their social network, which is something we have not really seen here in the u. S. Theyre transacting with yuan or transacting with dollars or real live currency, theyre not transacting with a cryptocurrency so i imagine that the rational for cryptocurrency would be to make it as both frictionless and feeless as possible. Exactly frictionless, feeless and much easier toe spend money across country lines. Someone asked me if this was like venmo venmo is for paying people domestically but also if you link venmo to a credit card you will be paying fees its not easy for venmo to send money between countries as they want to make it easy to do with this its not a cryptocurrency this is not this doesnt excite me at all is it based on blockchain . At least cryptocurrencies, they say theres no inherent value, but theyre creating inherent value from the blockchain that allows you to all those previous transactions. They have an inherent value. This is just based on the dollar is it called a cryptocurrency . Its a Digital Currency apparently any Digital Currency is called a cryptocurrency its not just pegged to the dollar, but whatever currencies are invested into the libra basket of currencies libra reserve as they call it. It does seem a lot more like a traditional currency because of that reserve than it does like what we think of a cryptocurrency which is bitcoin, which is so volatile it seems like its based on the dollar or a basket of currencies which made me laugh because the criticism that crypto is based on something that has no inherent value this is based on a paper currency, though it does have value, because it has the full faith and credit of the u. S. Government you could almost argue that a real bitcoin has more value generated through blockchain than just what european currency do you want the euro draghi, as easy as he is theyre all debasing their currency thats why they will peg it to these commodities there is an open source Bitcoin Technology that will be underlying this. So theyre going to enable anyone to build a wallet like the calibra wallet to access this theyre going to have places that pop up in emerging markets that have people come with cash and turn that cash into libra. But Facebook Says it does not expect its calibra wallet to be the only wallet. There will be many wallets around the world and you can choose any one to access libra, but calibra will be one of many wallets. Are republicans money worth less or do conservatives do they get a discount at facebook is there any type of 70 cents for you. Joe, i think all dollars will be worth the same in libra theyll find a way of continuing their bias against anyone on the right. Julia same exchange rate. I hate to throw one more question at you. I know were figuring out this stuff. You made it clear that calibra and libra will be separated from facebook, even though theyre resting on top of it they want to keep it separate. They dont want people to worry about privacy concerns if its a free app, were giving you something for free were not charging you fees. Well make money some other way. Will my information ever will be sold or will i be marketed to based on how much money i have in an account or if i look like an extremely well think person because im putting a ton of money into it. Will that be used to market to me what david marcus told me is the calibra app will be a wholly owned subsidiary of facebook there will be no crossover facebook does plan to offer Financial Services down the line things like loans. They could offer bill paying, all sorts of Different Things that you would pay a fee for or percentage of a bill for a payment and the like so they are looking at different way ways to profit from this calibra app. It wont be via advertising. We will continue to ask and hopefully get these questions answered when we talk to mr. Marcus in the 7 00 hour. Thank you for bringing us that news now im excited about bitcoin. Its 9,000 today. You could have bought a bit of mastercard, visa or paypal. I like all those more this im bored you guys switched positions again. Now im a bitcoin at least theyre doing this elegant stuff to create something. This is just you put dollars in and switching sides on the arguments. I cant i dont know. Is there a taco bell nearby its taco day its free taco day. The 80 cents is not the issue. Its whether you want to eat it exactly little early. Breakfast burrito free taco doesnt appeal to you until theres one sitting in front of you i want one. But i will not make a special visit for 80 cents so youre openly throwing it out there, if anyone wants to bring you one. I hold off on tacos in general. But if theyre here if theyre here you know who else is coming today . The hershey ceo. Did you see hershey stock . Hershey at 138 shes done a great job lots of food to talk about today. When we come back, well talk about european bonds and currency on the move well show you what mario draghi said that has the euro sinking well get you ready for the twoday fed meeting that kicked off today and a programming note, tomorrow on squawk box, ill be covering the womens leadership summit in minneapolis. A big lineup coming from there including the ceo of kpmgs, targets ceo andcondoleezza rice all of that coming up tomorrow on squawk box. The euro turning negative against the dollar following a speech by mario draghi who said the ecb will need to provide more stimulus through rate cuts or bond purchases if inflation doesnt pick up. Im telling you, i was reading at the top of the show, i said the euro is down on an inflation warning from draghi. That makes no sense unless the inflation warning is its too low. Its an antiinflation warning. Inflation is too low, thats the warning. The german tenyear bund yeel h yield hitting a record low markets are fully pricing in an ecb rate cut by december that is what we were talking about yesterday. I did not see that. Were you watching i was not watching. I was sleeping until 7 00. You were at u. S. Open. How great was that . Kyles hat got signed. Im sure you didnt see it there was a segment they showed i did see it. Was that not unbelievable with gracie . The little girls name giving away a ball. She got up and down out of a bunker did you see that unbelievable sunk the putt. She kept saying i got this Gary Woodland, how psyched was he its the most watched golf video of all time. 22 million views of Gary Woodland with this little down syndrome girl who gets a par so bored with this beautiful little girl. Well talk more about it i teared up watching it. Everybody did he won with nerves of did you see 17 yeah. Todays other big story, the fed. Policymakers kicking off a twoday meeting later today. The Rate Decision comes tomorrow at 2 00 p. M. Eastern time followed by Jerome PowellsNews Conference at 2 30 some are predicting we might see a rate cut this time around. Thats not what most people see, but we have had people come in and said maybe we get a rate cut tomorrow lets get to the broader markets and what to expect joining us is joe zidel and david bunson gentlemen, welcome to both of you. Thank you we were having a conversation earlier this morning or yesterday about whether bad news is really good news. You had some questions about that and some doubts about that. I do. I think the markets will have a hard time charging higher here we are in this goldilocks scenario where the markets are expecting three to four cuts by the fed, number one. And theyre expecting this favorable trade resolution i think those are two risks out there that are not adequately priced in. It seems like the fed will have a hard time living up to expectations of the market before the prospects of tariffs against mexico came up, the market was pricing in one cut for 2019 the tariff threat against mexico emerges, all of a sudden the market goes to three cuts. Now that threat is off the table for now. The markets are still saying we want three or four kits. I dont see that much urgency. Thats one area where the markets could be disappointed. And on trade, not only is mexico still this opaque thing where we dont know what goals are, we have to worry about the second order effects against china. China is now retaliating in ways that the United States had never envisioned i think that raises some risk there. When china put companies on a watch list a couple weeks ago, then they advised tourists against travel in the United States china is the number one spender for tourism dollars in the u. S i think Chinese Tourists spend about 36 billion a year number two is canadians. Its a big spend, that puts a lot of hotels, restaurants at risk we heard that from some hotel owners i dont think those things are priced into the market the markets are saying this will work out well be fine. Were trading at about 17 times or 18 times earnings we dont have the Earnings Growth if we dont have the Earnings Growth, what is driving the markets higher the expectation that these thing also m things will magically work out you can get multiple expansion if you get the fed funds rate lower a lot of that is priced in weve gotten one turn since powells announcement last week thats been priced in. I agree with joe the problem is it depends on the timeline were talking about can you get a tradable rally if the fed throws more stimulus on the party. Perhaps. Thats possible. But an intermediate term, its mystifying what people believe will be the end here at some point in time do they not think well have to normalize and take away the punch bowl i dont think thats priced in at all as you look out 12, 18, 24 months. When you hear what mario draghi is saying today, maybe that punch bowl getting taken away is a longer trip. I think theyre following our dprent precedent and were going to be following theirs theres no exception to this once you go to extraordinary monetary measures to stimulate the economy, which may be what they needed to do postfinancial crisis, when they begin steps towards normalization in 14, 15, and 16, when they chickened out during that spook in january with the markets, the fact of the matter is at some point this has to be normalized. They didnt quite get there. If the economy is slowing, what would you tell the fed to do right now i can answer that but the problem is that when they do cut late cycle versus mid cycle, it doesnt have a stimulative effect so they push on a string i think thats what draghi faces in europe. So unfortunately sometimes what they may need to do is nothing at all joe, what would you tell people to do with stocks over the next six months well see volatility and risks to the down side i would be a buyer in any of that volatility. I dont think this is the end of the cycle. Its not the end of the bull market or the end of the economic expansion this looks like the end of a late cycle pause the two things that will drive a recession in the u. S. Are when businesses overinvest, where they become too confident and deploy too much capital. Thats not happening and secondly when you get wealth destruction, a drop in home values or a significant bear market in equities that causes recessions neither one of those is on the horizon. Any volatility or setbacks in the market, its a viable opportunity. Just that up 17 year to date when Earnings Growth is flat or at risk of turning negative, thats a clear warning sign. We do have an election coming up bernie is up by 9 supposedly you dont think that might cause a problem in the equity markets and the economy in general perhaps in the mid part of next year and beyond but thats not far off. I dont see really an effect there. Bernie sanders being the president of the United States will be terrible for markets he will not drive the market lower because Bernie Sanders wi