Transcripts For CNBC Squawk Alley 20240714

Were getting closer. It moved up a little since we spoke a few minutes ago, so we reindicated the range, 33 to 36. And its about 10 to 15 million shares in that range that are paring off and it narrowed to 3 from 4. So i think its shaping up and we dont as we said before, we dont know how much is actually going to be sold right now, but 10 to 15 is not a shockingly large number. Its a well, it depends on how you look at it in the context of the number of shares that are eligible to sell, its about, you know, in the 10 range. But thats fairly typical, 10 for an ipo, and this is not an ipo, its a direct listing. Whats amazing to me, it doesnt matter, direct listing, ipo, whatever you want to call it, this year ipos are tending to price toward the high end and open above this is happening here if we take 33 to 36, pick a number 34 if it might open, thats 30 over the Reference Price average ipo in my experience, maybe would open 10 higher on a good day weve seen ipos routinely opening 20 higher and here, perhaps, 30 yeah, i think were in a healthy range to potentially open we just need the rest of the interest to firm up before were going to be in a position to open up. Now, what do you right now, is this final process any different than a normal ipo process at this point . When youre really just trying to pare off . We dont have the shares that are underwritten out there, but the process of paring it off is similar. Its very similar its just, maybe, takes a little longer, like we said its coming in over a longer period of time but the process is basically the same one and the outlook is looking very similar to the rest of the ipo. So te coo point here, direct listing, still a way of going public, just like an ipo process. And were still seeing similar firstday pops this hasnt happened yet, but its moving in that direction. Its getting there quickly. Well keep an eye on all of this here and i think were getting a little bit closer and maybe well open a little bit before spotify, 12 45 maybe a little experience helps. Well keep an eye on this and be here all throughout the morning. Back to you. Bob, we can only hope thanks sticking with slack, lets bring in business insiders henry blodgett, an early investor in slack, and our own leslie picker here at post nine. Henry, it sounds like youre impressed with the recurring revenue model. This is a great business. And watching it take over our company was amazing. We had a newsroom where everyone talked to each other suddenly the newsroom got totally silent and i was noticing that my emails took a lot longer to get responses to nobody was checking. Whered everybody go . like, dude, youre an old man. Join slack everybodys on it. So it has just taken over all the metrics look great its an incredibly highmargin business ultimately. Like atlasian, like salesforce. Com and others, just an incredible business glenn, what is the market here d. A. Davidson put out a note that says that the market is 1. 5 billion users. They said messaging is viral whatsapp taught us that. Is that what slack could eventually come, from 10 million to Something Like 1. 5 billion is that realistic . Well, i think if you look at whats driving slacks growth today, if youre a large company, you really need to drive innovation in your business, become more responsive to customers and slack is really a tool that helps you do that, just as henry mentioned. You can communicate one to one across work groups, across teams, across functions or even across whole companies very simply and easily within slack and the platform itself is also very powerful, because it brings in data from lots of other Business Applications in a very rich and integrated way. So i think the market for slack is huge as a result, because Large Companies are really driving towards innovation and slack is a real big, important piece of that puzzle what do we think glenn, are we talking existential threat to email as we know it . I do think from an internal email standpoint, as stewart said earlier on your show, Stewart Butterfield, the ceo, you know, email is reducing in volume as slack is increasing in volume so that is definitely play number one for slack its the drive into internal email. Over time, if slack is truly even more successful, theyll Cross Company boundaries and start to attack, you know, external email, as well. But for now, internal email is definitely under assault with slack. But henry, the company thats under assault from that is microsoft. So whats stopping microsoft from introducing a slack killer and putting it in its stack and having all microsoft users start using it theyre late. Its Network Effect business once a Company Adopts it to pull it out and switch to Something Else is very difficult i would say its ultimately going to be complimentary to email. We still use email we use it a little bit differently. People still talk on the phone, believe it or not. All of these different communication mechanisms just sort of layer in, they find a niche. We need all of them. But it is certainly taking over a lot of what we used to do with email. Certainly the relationship they have with consumers is feeding their awareness, which is why were having this direct listing in the first place, right exactly if you didnt know that slack existed, it would be hard to be on the buy side of todays direct listing, because you dont use it you dont know anything about it thats why only certain companies, Companies Like slack and spotify, that have Ample Capital raised currently on the balance sheet, slack has 800 million in cash right now, so as Stewart Butterfield said this morning on squawk box, they didnt need to do a capital raise. The listing was more just to allow it was a liquidity event for employees and previous investors to just have an opportunity to sell their shares so leslie, what does a textbook performance for a director listing its a good question we dont have that many data points normally you would take a traditional ipo and say, if it was priced well, it would rise 15 to 20 , stable trading throughout the day, no major glitches, no major drops or pops but what is a perfect day for slack . I think thats a really good question, because youre right, we cant do the money left on the table question were not really looking at performance. I mean, were looking at it relative to the Reference Price. Were looking at it relative to where the shares were trading on the secondary markets. And so far, at 36 a share, it would be up about 35 from both the Reference Price and the average price they were trading at in may. But i would say success would be, you know, relatively low volatility, no major technical glitches we should look at this more from a technical standpoint, as opposed to a performance standpoint because, really, where they close today is going to be the first major data point in the Public Markets, because the shares werent sold at an ipo price. Glenn, as an earlier investor, im sure your returns are going to be handsome, but does it matter to you how you get your exit, whether its through a direct list organize an ipo you know, ultimately, the performance of slack and its stock price over time is going to be a result of how they do financially. And so, you know, the direct listing is certainly an interesting feature to the slack debut, as was mentioned, they have a bunch of cash on their balance sheet, so they didnt really need to raise money in this event and because people know the product, the marketing that comes along with an ipo wasnt that important to them so im really more focused on how does the Company Perform over the next ensuing quarter twob quarters, three quarters and years out. I think the opportunity is vast, as i mentioned earlier and thats what the big story is here about slack so, glenn, a company saying, we dont need the money, how close does that tell you that they are to profitability . Well, look, theyve got over 800 million of cash on the balance sheet. And you can look at their quarterly results, as henry mentioned earlier, Gross Margins in this business are very significant. And from a gotomarket standpoint, the company is quite efficient. So there really is reason to believe that slack will be a very profitable company. Just like other Cloud Software businesses that have proceeded it, you know, gen one companies. Two quarters, two years, two decades . I dont think its decades away, by any stretch i think they will be profitable on this cash if they had any doubt about that, im sure stewart would have considered raising money in this event and this is a business where its actually smart for them to use huge marketing spending, get out there, get into companies, build the base, over time, many years down the road, you can begin to dial back and suddenly youre wildly profitable this is what salesforce did, what amazon has done, many others this is a case where if youre on the board, its like, keep going for it get into these companies now its worth it. Youll get the return on the cash sorry, i was going to add to that point i think its a really good point. Remember, slacks reported net dollar retention, or think of that as sort of samestore sales growth of over 130 per quarter for the last couple of quarters. So they just need to turn the lights on and the business has been growing more than 130 . So get market share now, because it will be worth a lot in the future dont they have giants to worry about, facebook, workplace or anything like that . Sure, but theyre a point product. This is all they do. They have a huge lead, they have a huge brand lead. Its just a tough sell to create this from scratch and go in, what are the advantages. And also, the other big trend here that theyre taking full advantage of is what you would describe as consumerization of the enterprise individual employee groups suddenly adopt this. Then they spread virally within the company. Completely different model than lobbying the cto for years to install some megaclie Client Software server program. And theyre already in these organizations. Look at thenumber of free user versus paid users, thats their future pipeline. And Stewart Butterfields story is truly remarkable, which im sure well talk about more later in the hour. Henry, leslie, glenn, talk to you soon great to be here. The big earnings mover this morning, oracle leading much of the tech sector to the upside. Josh lipton joining us from San Francisco with more on whats moving that. Josh so, kayla, heading into this report, remember, some analysts had actually been a bit nervous about oracles results, highlighting potential currency challenges but Larry Ellisons company here managing to beat expectations on the top and the bottom the stock now up more than 25 on the year. Revenue increasing 1 . The company saying sales will grow more than 2 in the current period mark hurd is competing hard with big rivals like amazon and that has led to some interesting strategy shifts, for example, just recently, announcing that new Cloud Partnership with microsoft. Remember, there are two big segments for oracle. Revenue from Cloud Services and license support. Thats the companys Largest Division it was unchanged at 6. 8 billion. That includes cloud revenue, but also includes maintenance fees and Traditional Software its other onpremise license sales that dropped 12 hardware dropping 11 . Here is ellison on the call. Some of our businesses that are not hot, but the good news is the hot businesses are now bigger than the notsohot businesses and thats determining our future so boston line here, what does this report tell us about oracles quest to become a true cloud powerhouse i checked in with evercores kirk matenner this morning there is clear evidence that some of its Cloud Business is gaining traction, especially on the Application Side on the infrastructure side, though, where hurd is competing with jeff bezos and satya nadella, theres still a big question about whether the growth we saw this quarter is indeed a sustainable trend but investors you see voting this morning and moving that stock sharply higher kayla, back to you nearly 9 thank you, josh. See you a little bit later this hour a big show on squawk alley, still ahead, Sherrod Brown is with us to tell us why hes critical of facebooks new crypto offering. And still a lot more to come on slack as we await for the first trade. Citadel telling cnbc 12 45 is the upper bound for that trade well see if it happens this hour squawk alley will be right back dow and the s p have now wiped out their losses from may. The s p set an alltime high earlier this morning, up 10 and 13 and oil is up big on this news that a meeting on iran is about to take place at the white house. Art cashin is here at post nine. Its good to see you thank you our friend from rbc says if it werent for the permian, we would be above 100. I think thats probably right, but the permian has made a world of difference. Were a major, not just swing producer, but were a major producer now i think youve got something strange going on over there. Obviously, in an allout military conflict, iran couldnt supplant the United States, but i think theyre playing a different kind of game the president has said over and over again, he does not want to put u. S. Troops at war in the middle east. So i think iran thinks theyve got a little wiggle room there, they can push a little harder and push a little further to see if he will be restrained from doing anything so it will be interesting to see what kind of response it is. The good news, obviously, is that it was a drone, there was no loss of life. So that would have changed the odds greatly but the bounce in oil is modified, because of the fact that were producing so much do equities respond to this whole situation out there or not . It depends on what kind of response you see you know, for now, the geopolitical shift is mainly toward the trade talks, again. President xi deciding suddenly to visit north korea, tells me hes looking to pick up a chip there that trump wont be able to refuse, so when he walks in, it will be less about trade goods and more about, i can do this for you in north korea. So do you want to back off on some of your demands or perhaps theres going to be some movement on north korea with President Trump visiting south korea, tagged on to the g20 next week do you think investors are misplacing their expectations for volatility because the focus has been on china. And its been on trade and now we see these tensions ratcheting up in the middle east, the president tweeting, iran made a big mistake. So how do you think theyre pricing this in . Well, as i said, it depends on what the response will be so far, theyre just calling a meeting. As i said, i think most traders see it the way i do, that the president is reluctant to do anything militarily, at least massive militarily in the middle east so he will remain restrained so the concentration will remain on things like the trade talks and where we go from there but we cant afford to let it drag on too long first of all, the president cant afford it, because youve got the election coming up but if you looked at some of the great reports and other things that weve seen, the slowdown in the Global Economy is reaching this shore and if you continued to slow down at the rate weve slowed down in the last two months, by the fourth quarter, you could be border line recession. Obviously, if youre running for office, you dont want that. It leads me to the last question here. We see bad news as being good news, in light of the fed, that all makes sense. When does bad news become bad news again well, first of all, its something large scale militarily would happen that would clearly be bad news but i think youre probably getting to that, again, the Central Banks around the globe are all collectively moving preemptively talking about lowering rates theyre not going to wait for a slowdown theyre going to try to cut rates ahead of time. Now, the bank of japan staid pat, but coroda said theyd be willing to cut again theyre already at negative rates. The eu is already at negative rates when you had dry heat come out. So at some point, trying to get lower on negative rates is going to have a counterproductive effect art, well talk to you soon thank you. Art cashin is made in america still an option thats a question that many u. S. Business owners with significant overseas exposure are now offering and in washington, hundreds of companies testifying against a new round of potential tariffs joining us now to discuss that is the president of new yorkbased textile company, scott goldstein. Thank you for being here thank you for having me so first, tell us about where you stand in the trade war as it is right now are your products currently subject to tariffs right now, were not. We are on list four, which would be the list of everything going to 25 tariffs right now, we have not been trif tariffed which is what secretary mnuchin by design will have the biggest impact on consumers. Thats the unfortunate thing about this whole circumstance. Were a business that has been around for 86 years. And we used to run a sewing operation in the United States, but unfortunately, thats been gone for 20 years now. Theres no more weaving, dying, or any way to buy fabric to make a curtain in the United States thats been long gone. Our only source of product is china. If you look at the hts code for where our goods come from, readymade curtains, 95 of them come from china. So passing this tariff on will only be a tax on the consumer. So if the president says, companies who dont like these tariffs should just move back to the u. S. , thats not an option for you . Its really not an option like we said, we cant even buy the Raw Materials here anymore i dont even know where we can buy thread we used to run a sewing operation, so we would probably be able to start this up, but i dont even know if we can find skilled sewing operators anymore, if they even exist in this country, and its the raw material that is not available for us to get. But you would argue, the inventory is the more critical question the labor, maybe you could find a way, steal some workers from somebody the labor is maybe a possibility. Its the Raw Materials so if we wanted to make it here, we would so to buy the peace goods from china which would be tariffs and counterproductive. So thats why the tariffs have been such a hindrance to us, our customer, and really to the american consumer. How about supply chains, exchina, but in asia. Ive been to vietnam, we buy a little bit out of pakistan a little bit out of india but theres a reason that 95 of our product comes to china, its because theyve invested over the last 20 years in all of the weaving and dyeing equipment that used to be in the United States, theyve done it and built up the supply chain that enables us to buy this product at a great price that we pass on if theres no breakthrough next week and the president moves forward with these new tariffs, what actions would you then have to take . We would have to go work with our customers to the best of our ability. So target, walmart, kohls. Big lots, family dollar, wayfair, amazon. Were a Large Supplier to every major retailer in the United States and we would have to do our best to work with them on price, but we would have to pass some of the cost on, because its too big, and they would have to pass it on to the consumer yesterday, ambassador lighthizer told members of the house ways and Means Committee that economists have a hide bound notion that this will be passed on to consumers and that they will foot the bill. He said, i dont buy it at all what would you say to that i would have to disagree with the ambassador its just not possible textiles is a very lowmargin business theres no way for us as a supplier or the retailer to absorb totally these type of increases and not pass it on wed all have no margins and be out of business. It is going to pass to the consumer theres no other way around that well see what outcome we get in the next few weeks. Scott goldstein from li lichtinberg. And the s p setting an alltime high earlier. We told you about oracle earlier. Hollyfrontier, mobile energy, and tech really reading the rally. An autonomousthinking vehicle protecting those inside and out. And its the mercedesbenz of today that will help us get there. The 2019 eclass, with innovations that will change the way we drive from this day forward. Visit your local mercedesbenz dealer for exceptional lease and financing offers. Mercedesbenz. The best or nothing. The flexible class schedules d me tremendously. Allowed me to go to work full time, run my catering business and be a mom and parent. When i reached this accomplishment, it was like, its here, its happening, its now. We at Southern New Hampshire university are the ones who succeed. We are the ones who break through. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Got a new indication for slack. A bit of a tighter range bobs inside the post. So were talking joe mccain, 35. 50 to 36. 50. Weve tightened a dollar. Its moved up a little bit theres, you know, about 20 million shares that are pared off in that range, but were still seeing a lot of interest come in, so well let it stabilize here for a few minutes and see where the price moves. So i heard pete say, all right, lets everybody breathe a little bit that means, lets take a pause and but were within a dollar yeah, were definitely getting closer a lot of people are watching this as a sign of what does it mean here. So we had a 26 indicative price, were talking 35. 50. Lets say 36. Were talking 35, 40 higher here is this because the ipo market is astonishingly hot or direct listing has been very successful is this a good sign for ipo business is it a good sign for the direct listing concept . I think its a good sign for everything its obviously, people are taking a strong interest in slack, as a company, which is good i think its a good sign for the Public Markets you know, so were excited to be associated with it a lot of people have noted that, fairly tight concentration of ownership here. Six holders essentially control about 60 of the company some of them are restricted like the ceo, but a lot of people could potentially sell or not sell they could simply withhold and say, this is doing great, im not going to sell my shares right now. We still dont know. This all looks pretty quiet, but we dont know how volatile the stock will be. This is why it takes as long as it does part of it is taking that extra time for letting sellers decide whether they want to participate or not and once it opens, well really know where people decide to participate. Were getting closer, kayla, calm before the storm. But like i said, we still dont know how much people actually want to sell out there well keep an eye on all of that getting close. Kayla . Were now 4 above where slack ever traded on the private market so certainly a good indication there. Meanwhile, european markets set to close shortly seema mody has that at corporate. The Federal Reserves announcement sending Global Markets higher were looking at european stocks, up about half a percent, even though the bank of england, unlike the fed and ecb is sticking to its view that further rate hikes are likely, albeit at a gradual pace the pound getting a lift today its touching 127 i believe against the u. S. Dollar, and the yields 126, there we go and with yields continuing to move lower, its worth noting that the value of yielding bonds just hit a record high of 12. 5 trillion, surpassing the peak hit back in 2016 turning to sectors, travel and transportation stocks in focus, hsbc warning that other European Airlines could follow lufthansas footsteps by reducing its guidance saying that airlines have been able to discount ticket prices carnival cutting its fullyear company outlook. The company ceo specifically citing a deterioration in the Business Environment in italy and pricing pressures in germany, adding that the confluence of events in europe have, quote, overwhelmed the u. S. And shares of carnival are down in todays trade by 10 carl, sending it back to you seema, thank you very much. Lets get to sue herrera as well get a news update on a busy news day. It sure is. Heres whats happening at this hour, everyone russian president putin says he is ready for a meeting with President Trump, but does not expect a quick improvement of russia u. S. Ties speaking during a live callin show, putin says the two countries need to talk about arms control syrian rescuers known as the White Helmets say Government Air strikes killed 16 people in the northwest. Thats the last rebel stronghold in that country. That includes two ambulance workers and several children the attorney for the man accused who has accused Actor Kevin Spacey of groping him says the mans cell phone, ordered to be turned over to the defense, cannot be located. The judge is giving the accuser until july 8th to produce the phone or explain what he knows about its whereabouts. And working long hours may be bad for your Health French researchers examined data from 143,000 people aged 18 to 69 and found those who worked more than ten hours a day more at least 50 days a year were more likely to have a stroke the risk increased if they worked those hours for at least ten years. I dont like that survey i dont like that research carl, back to you. Sue, occupational hazard. Thank you. When we come back, senator Sherrod Brown joins us on facebooks new krcrypto offerin. In the meantime, watching slack. Were a hundred points off the session high and the vix is green. This will be interesting to watch. Back in a minute Digital Currencies are in their fantasy. Essentially, not too concerned about, you know, the Central Banks no longer being able to carry out monetary policies because of cryptocurrencies or Digital Currencies facebook, i believe, has made quite broad rounds in around the world, really, with regulators, survivors, and lots of people to discuss their plans. And that certainly includes us feel that . Thats the beat of Global Markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. Facebooks libra cryptocurrencies picking up steam. Regulators from the uk and india among those pushing back while those in the United States, the Senate Banking committee scheduling a hearing next month to talk about it joining us first in a cnbc interview is the Ranking Member of that committee, senator Sherrod Brown of ohio. Senator, good to have you. Good morning to you. Good to be back, thank you. Really all we have to work with right now is this white paper. What kind of questions do you have well, we start with you know in the country feels increasingly that way that facebook is too powerful we are skeptical when we hear of facebook running what we think and i think i speak for senators in both parties and for most of my constituents in ohio, that running a risky cryptocurrency operation out of a Swiss Bank Account, and essentially, its unregulated. So there are no rules. Facebook, we know theyve earned the skepticism, perhaps the cynicism that people have about them and their operation we will have a lot of questions, we want to know how theyre going to do this we want to know what kind of we want to figure out what kind of rules we can put in place the world currency system has taken decades, maybe centuries to build and somebody like facebook with the power of the market that they have is a concern to us senator, you mentioned that facebook that has earned skepticism how much of this pushback is the nuts and bolts of this specific product . And how much of it is just the fact that congress doesnt believe that facebook has its existing products under control . Well, its all that its the newness to the public of the whole idea of cryptocurrency, the fact that its unregulated, by and large, and the u. S. Has moved slowly. The fact that we have a white house that looks like a retreat for wall street executives i mean, this white house always comes down on the side of wall street and the largest corporations in the world and has shown no real interest in reigning in these Big Tech Companies as they get more voracious and hungrier, and more profitable and more willing to do things that are not in the public interests, but are in their personal interests and so, weve thats why the Senate Banking committee has got to take this up. Youve got a white house standing on the sidelines and a huge increasing, fastgrowing company like facebook coming to play this way. Well, the Federal Reserve is an independent regulator and fed chair jay powell said yet that it met with facebook if the fed didnt see reason to stop facebook from announcing this and gave it the green light to go ahead, why should Congress Take issue well, congress should take issue because we represent the American Public and the American Public is increasingly concerned about the power of facebook and increasingly unaware of what can happen with these risky cryptocurrencies coming out of a Swiss Bank Account that sentence alone strikes enough fear, more than concern in the minds of a whole lot of people in this country that saw what happened ten years ago, when our Financial System went when wall street malfeasance and overreach and greed brought our economy almost to its knees we dont want to an unregulated, huge, fastgrowing facebook with its cryptocurrency out of a Swiss Bank Account coming in and wreaking the kind of havoc it could. We dont know those answers yet. We dont know their plans yet, but theyre moving a year from now, so weve got to be ready. Does the Partnership Structure with Companies Like uber and mastercard and square make it anymore palatable to you, at least in the early going, to have a first conversation well, im always willing to have the first conversation. It doesnt allay my concerns, nor does it allay the concerns, with i think, of large numbers of senators in both parties on the Banking Committee here and off the Banking Committee. Nor the concerns of 12 Million People in ohio whom i represent. So and you know, i dont necessarily trust the i mean, the credit card companies, wall street, i dont want to cast too wide a brush, but again, back to the collective amnesia that far too many on this committee behind me seem to be experiencing to deregulate much of the Financial Sector, when it was the Financial Sector that almost brought the economy to its knees ten years ago. So this is all related and facebook forming alliances with some of the players that helped the hurt the economy a decade ago doesnt at all allay my concerns so whats your desired outcome here, senator . Is this a fact finding mission, do you hope to introduce legislation for these type of instruments or do you want to stop facebook from being able to roll this out . I dont know the answer to that i want to know more i think you start i think the public needs to know more. The point of congressional hearings is certainly to inform members of congress, but its also to inform the public. We know this will get wide play on cnbc and elsewhere. And thats important we need, we want to bring in the regulators to figure out what theyre going to do. I am generally skeptical of Trump Administration regulators, because they have almost always been in the pockets of wall street and the big players in the Financial System i dont know their relationships with Big Tech Companies, but the public has been unrepresented in all of this, frankly so often when it comes to wall street and now with these Big Tech Companies, and thats my job to make sure the public has a seat at the table, that my 12 million constituents in ohio and 300 million plus across the country have are more aware of what this is and more prepared for what might happen finally, has the Committee Established a framework for how they think Digital Payments will evolve were not going to use cash and credit cards forever and we have a whole generation of americans who are still unbanked and might look to this as a solution. Well, youre going to hear facebook talk about their empathy for all the unbanked in this country, im sure theyre going to do that im a bit mistrustful of the everyone thmpathy that they pred i know facebookfinds a new opportunity here and theyre a private company and more power to them but just like us and how i fight every day to make sure the polluters stop polluting lake erie, i understand maybe its in their economic interest to do that, just like its in the economic interest of facebook to find new ways of making money, but i represent the public and in the facebook and i want them to thrive as i Want Companies to thrive, but i want consumers and i want a safe economic and a safe banking system, a better economy thats good for everyone, not just a few billionaires in the Silicon Valley senator, well be watching those hearings youre absolutely right well probably take it live. Appreciate your time all right thanks senator Sherrod Brown good to be with you, thanks now to another target for congressional democrats, International Taxes with democrats proposing to raise rates on foreign earnings. Our ylan mui has that story from washington ylan, good morning reporter good morning, kayla. Well, democrats are out with a new proposal today that would raise taxes on Companies Foreign profits. This idea comes from senators ron wyden, who is the top democrat on the finance committee, and chris van hollen, who sits on the Banking Committee. And theyre arguing that the new tax system actually encourages companies to build their factories overseas instead of here in the u. S. As a way to lower their foreign tax rate and to fix that problem, they propose closing those loopholes or perhaps creating a new acrosstheboard minimum tax on foreign profits. They said that a similar proposal under president obama would have raised 300 billion over the course of a decade. Now, what would they do with all of that money . Van hollen and wyden are proposing creating new federal subsidies that would help provide jobs for the longterm unemployed so youre starting to see this idea of going after foreign profits as a new piggy bank gaining traction on the left we saw it in senator Amy Klobuchars first 100 days agenda that she put out this week that was part of that plan we also know that joe biden obviously supported this when he was Vice President under obama so, guys, i would not be surprised if you hear a lot more about this idea on the campaign trail. Back to you. All right ylan mui in washington, thanks for that meanwhile, lets get a check in on slack. We are looking at a 37 to 38 indication for that stock. Well see when it opens. Could be happening momentarily rick santelli, im sure youre watching slack, but im sure youre also watching Something Else in chicago today. Whats on your mind . Absolutely Interest Rates continue to be soft wonder 2 in tenyear and philly fed Manufacturing Index seems to back the notion that were weakening. But does it really i dont think so tu iafr e ea driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. Im scott wapner heres whats coming up at the Halftime Report at the top of the hour how far can the stock really go with the fed ready to cut rates . Plus, former dallas fed president , richard fisher, rick reeder are with us on what is really likely to happen next and a big list of moves from our panel today. We reveal them at noon when we see you on the half. Carl, were about ten or so away well send it back to you. Quite a day, scott. Thanks while we wait for slack here at the nyse, over at the nasdaq, Grocery Outlet makes its debut and surges after its first trade a few moments ago, up 40 . Socalled extreme value grocer trades under the symbol go has more than 3 hurricane independently operated stores in six states lets get to Santelli Exchange morning again, rick. Good morning, carl. You know, all these ipos, all the unicorn, the way the stock markets pricing, one would never guess that one of the main issues is whether our central bank needs to ease and its almost not van isseven issue. Markets are really building a lot in markets are never wrong. When a trades cans mate onsumms almost always right, but to take that and project it into future, it gets dicier and dicier. The fed chairman yesterday was very clear its just not soup yet he needs to see more well, i know one thing he could see that might be quite enlightening on the philly fed today, the headline number was up 0. 3 it was the second weakest number going back to may of 2016. And the other two comps are negative numbers but lets look a little deeper if you look at future outlet, it moved from 19. 7 to 21. 4. And theres this category called special questions. And therein lies some golden nuggets. On q2 versus q1 production, the special question was, do you see it better or worse do you see it growing or shrinking . And i consolidated it into a much more simple form. Anywhere from 2 to 10 plus , expansion and production almost 45 saw that 0 to 2 , and i picked 2 , because i figured if the fed could be arbitrary about 2 , so could i, was only 13. 8 . No change was a huge chunk which leaves that less than 1 with regard to q2 production versus q1, was 25. 7. Im telling you, very optimistic now, for you option traders out there and mathematicians, lets go to the next derivative. The rate of change the acceleration or deceleration of that dynamic. And that was the Second Special question the growth pace, q3 versus q2. Those that saw acceleration, 49 , no change also a big camp, 24 which leaves the deceleration camp at 26. 4 this exactly backs up the issue underpinning why jay powell wants to stay pat. While other Central Banks think theyre getting ahead of something, i say theyre Digging Deeper into something they dont understand our fed, the norway, the norway titan and i understand, they have much more in pricing pressures over 2 . But at the end of the day, let it breathe a bit, because many of thebit. Many things impacting us now might not be long term kayla, back to you rick santelli, putting that red marker to good use up next we head back inside postfive as we await slacks a but. Lot more squawk alley coming up driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. Alphabet, softbank and a host of others are sought to be big winners in slacks big debut this morning josh lipman joins us from San Francisco with more including some individual names. Reporter thats right. Who is set to rake in the big bucks from slacks stock market debut. Some of the winners are tech heavyweights in their own right. We have linkedin ceo, and cofounder dave moran. Forbes says at 25,000 a check each could be sitting on shares now worth about 40 million. They invested in the earlier rounds close to a decade ago stripes, patrick and john carlson, they could see returns of more than 70 times their money or 1. 8 million for each 25,000 they put to work. They join in slacks series c. Then venture firms excel is the biggest investor in slack. 26, its shares are worth 3. 1 billion. Big shareholder in crowd stripe so thats two big venture outcomes for that firm and only about a week ek sell considered a Top Tier Firm out here. They saw one of the greatest venture outcome of all time leading the series a in facebook and horowitz owns it were used to seeing softbank writing big checks for capital intensive companies. Finally, social capital has a 10 stake with 1. 3 billion its on slacks board. One good thing about the direct listing for all of those names josh just mentioned, no dilution for any of them thank you, josh. Good to see you. Priceless were up 184 here coming just off the session lows off the session lows were back in three minutes. Higher expectations. The light beer youve been waiting for has arrived. Corona premier. Man stand up if you are a First Generation College student. Stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. The world in which we live equally distributes talent. But it doesnt equally distribute opportunity, and paths are not always the same. Im so proud of you, dad man i will tell you this, Southern New Hampshire university can change the whole trajectory of your life. I felt completely helpless. Trashed online. Southern New Hampshire university my entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyl find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. But were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. Another check of slack, bob. Are we getting close yes it keeps creeping hire 37. 50 to 38. 50 i want to remind everyone the Reference Price was 26 and our first indication which seems a long time ago was 30 to 34 its moved up quickly again we keep seeing interest come in which is part of why this continues were up around 40 million shares at this point which is Pretty Healthy amount. Just a reference, 215 million is roughly what were 200 million shares eligible for sale were at 20 if you can float 10 at the open of an ipo thats pretty good were dealing now with 20 thats right. Very strong interest the big issue always has been with these is we dont know how much will be sold because theres no underwriting. Its been a search for liquidity. Is there enough to open it to have a fair price and the answer is 20 if you open, thats liquidity. Definitely enough liquidity now just more making sure everyone who wants to participate is in and making sure its stable its been very orderly. Its quiet and theres a lot of back and forth, obviously Morgan Stanley is involved, Goldman Sachs is involved. Talking to the big people who are providing assistance to this, but its been a slow steady creep up. Thats right. What is this saying about the ipo market in general. I know its not an ipo or were at a history jake high today in the s p 500 its all of those things. People expressing their interest in the company and deciding what their strategy will be at these different price levels well be back and this is going to price very, very soon it will happen i can see. Five minutes well be back as soon as we get really close guys, back to you. No one knows this process better than you. What a treat to be here meantime, settling into this range here of 170 lets get to the judge and the half well keep our eye on slack as well and get down to miss as soon as it does open front and center for us a new record for the s p 500 after Federal Reserve signals rate cuts are coming. This is your Halftime Report announcer record breaker the s p pops through hitting an all time high. The dow less than a percent from breaking its record high the nasdaq less than 1. 5 . And the russell is out of correction territory i want to play offense he made that call two weeks ago. Is he ng