Nikkei up. European equities right now as well a bit of a mixed picture ftse up slightly the tenyear note is trading at 2. 053. Now to the big story of the morning. Details on the hack capital one disclosing a massive data breach that affects 100 million u. S. Customers and 6 million in canada. The company says 140,000 social numbers and 80,000 Bank Accounts and 1 million Canadian Social insurance numbers were compromised. It says the largest category of data that was exposed was from credit card applications including names, addresses, phone numbers, dates of birth and self reported income the hacker also accessed customer status status such as payment history, Credit Scores and credit limits. The breach occurred in late march. The hacker accessed information through a vulnerability of the servers in an unnamed cloud company. The fbi arrested a suspect, Paige Thompson shes a former engineer at Amazon Web Services. Authorities allege thompson posted some data on gethub and a private chat page. Capital one says the breach will cost it up to 150 million this year can we talk about this for a second theres multiple issues going on here the one company you mentioned it in passing, is aws in all of this yes amazon. You saw a statement come out from capital one where is amazon in this . What does this mean at a time when everybody is moving to the cloud. Capital one has been very aggressive moving to the cloud when we talk about a firewall that was misconfigured on whose end, assuming from from the reporting it suggests this information was sitting on an amazon server, on an aws server does this become a larger story about aws . I think thats an interesting question to pose she is a former aws employee shes a former aws employee the data was sitting on an aws server unless i lost my mind, i would say, okay, does she know something about the way these servers are configured with clients that others dont . It was on an aws server she they didnt look to see whether i had done this, i can tell you that much you need some serious expertise to be able to do this, right shes got years spent working at aws. Even though shes, you know, fatherly young fairly young, 33. I read they put up a flimsy firewall im trying to understand is that a flimsy firewall on the side of aws, capital one or aws just has the place where it is, right i dont know whether culpable is that correct . Were focused on the capital one stock. My larger question is on a day like today saws goi ashgshg is sending out notes to be cautious or everybody has access to using aws. Including the government. Once you have access to it, its your responsibility for security and hire one of our cnbc 50 disruptors dont all of our disrupters do this part of the entire argument of using a service like aws, google cloud or azure is that the security component for the most part is being taken care of by the Cloud Service the idea is for so many years people said we dont want to have our security guys she accessed through capital one, which is what the report seems to indicate. She had accessed the firewall maintained by Capital One Financial and not by Amazon Web Services he id like to see the actual dots connected between whats happened and someone who said my god, look whats happened to me. Did we ever at marriott see a person that said look what happened to me because of this do we ever hear that or is it just they have it, nothing happens what happens to the data may not happen forever but if it does happen, do you link it back whats in your wallet everybody is in the wallet. On the dark web you can buy Social Security numbers, you can buy fingerprints did you know about this . Yes are people selling fingerprints you can buy anything. Five years from now, if you could amass a database of finger prints, Social Security numbers, we had clear in here yesterday who did a deal with united, theyre taking biometric data. I know theyre kau shucautious y privacy is the issue, but if you collect enough of this stuff, but if its if you can triangulate and gather various points of data from various places on one person Andrew Ross Sorkin dont give anybody ideas. You can buy it with Digital Currency of course from. All anonymously we will talk about that all your buddies are on today. We will talk to them. People werent saying you dont have to pay taxes on bitcoin. Nobody thought that, did they . Why is that a big deal that the irs is has sent out these letters . For views who dont know, the irs septembnt out different lets based on customers of coinbase, and certain lerts were mosercer aggressive than others around tacks and taxing on bitcoin. A couple other things going on now stocks to watch. Beyond meat reported sales that nearly quadrupled in the Second Quarter. However the stock is sinking this morning because they announced plans to sell 3. 5 million more shares in a secondary offering the stock is still up more than 650 since the ipo in may if you were there at the begin, youre happy this has been the issue. People doing ipos, going for the secondary. Big issue in the direct listing world is whether those companies that had direct listings may need to do a secondary, too they didnt raise money for themselves in the first place. For beyond meat, the issue for investors is you think the lockup is going on until the fall then you have the Company Coming out selling 3. 5 million shares 3 million shares are being sold by insiders. A quarter million is being sold by the company to raise more funds beyond the ipo its a shock beyond the ipo and beyond meat well have azar on today, the secretary. The Trump Administration is proposing a rule that would require hospitals to publish the prices they negotiate with insurers it rule would apply to hospitals that accept medicarement tho mmt those that dont comply would get fined per day. Kidney dialysis reimbursements, all kinds of stuff at this point that are in this black box youre not sure what youre paying theyre trying to open that up in the hopes of keeping prices down well talk more about this proposal with alex azar. He joins us at 8 00 a. M. I think they should be listing all these prices but i thought there was a suite about it, not on this, but separately that the administration lost. This is different its medicare. I guess its the governments right to ask for this. I need pricing. Hospitals dont you want to know . I would want to know. But would i change where i get my care or where i have a procedure . Depending on that they might be embarrassed if they were charging 1,600 out of shame they would lower prices i told you about by mri experience i walked in, they said they wanted to charge 4,500. The woman told me when i walked in if i went down the street i would have gotten it for under 1,000 that was not a guy on the street, was it no, the 4,500 place is a bigtime place there are medical procedures that are 20,000 you can go to a country in south america and get the same surgery, but where are you going to do . I dont want to say an mri is not different than any others, because they are, reading the radiology and everything is a talent are you going down south for 1,400 or going somewhere up here for 15,000 south of 14th street or north of 14th street south of the rio down in central or south america would you do that . Depends im told theres certain surgeries that they do very well south of the border. Up in canada theres other ones. Okay. Coming up i might try to save up. I dont know well have a full breakdown of the big Market Drivers including the fed meeting that kicks off today. Plus well get you ready for some big corporate report cards. This still gives me the creeps as we head to break, a look at the biggest premarket winners and losers well talk specifically about the dow. Walgreens is in the dow . Well be right back. 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. The fed expected to cut rates for the first time in more than a decade. Here to talk the markets and the fed iskevin divney and brian levitt interesting piece in the wall street journal today sort of questioning exactly what the fed is thinking here everything is so political, you cant help but think they got brow beat into this. But then again maybe the yield curve is doing the brow beating, right . The fed used to focus on employment and inflation, those two things, but to keep the employment numbers where they are, and were seeing a slowdown in manufacturing, the global slowdown, thats why i believe they believe they need to intervene. The other thing which i dont think people are focused on, if the fed cuts here, that has effects in other global markets. The u. S. Has the highest yields of all the markets i dont know if were behind the curve or ahead of the curve. The effects of our stimulative actions could be felt worldwide. I dont view it as being politically pressured into this, though it could appear that way from the outside looking in. The Federal Reserve raised Interest Rates multiple times last year in what is still a slow growth world. The Interest Rate hikes last year led to a tightening of financial conditions a flattening of the yield curve and Inflation Expectations which were doming down rapidly in the United States. I would say this rate cut is unwinding what we did at the end of last year rather than view it as this is Jerome Powell succumbing to pressure you dont think the december stock Market Reaction got these guys saying look what we did i think that was a byproduct of the tighter financial conditions its a 2 growth world its a 2 inflation world, at least in the United States every time policymakers try to tighten conditions we when youre doing qe and you are take rates to zero, the entire time you should be thinking about am i ever going to be able to get out of this . When i take the punch bowl away r people so used to this that theres a bad reaction this is playing out like the people who were worried. Normal numbers that we used to think would show a strong economy, like sub 4 Unemployment Rate or solid gdp or any of these things that are positive, suddenly were saying, no, those are not numbers this is different this is inflation. Youre calling it a cycle. Nine rate increases is a cycle thats like a mini cycle that doesnt even count as a tightening cycle that could be maybe theyre right, member theyre not. We have gone from zero Interest Rates to above 2 weve been unwinding the Balance Sheet. The fed is concerned about growth in the rest of the world is relatively weak they tightened into that that led to capital coming to the u. S. That led to a stronger dollar. That decreased Inflation Expectations, and now theyre unwinding that modestly. Are you 100 sure this is the right move and that the fed is not sort of succumbing to the wrong signals and almost sort of saying okay, crying uncle to the markets, to the politicians, to President Trump and Everything Else . Are you sure this is the right move i think its more to the markets. The other underlying thing here is the notion of full employment has been challenged. Powell said that himself or something. Are people working fewer hours . Theres people on the sidelines, coming back into the labor force. The notion of are we at full employment, thats the tension here maybe employment could go lower. Aside from the trade war, the number one comment from ceos is wages are going up, im having trouble competing for good labor in the companies that seems to then then we are at full employment if theyre having so much trouble getting people they have to youre making almost another execution like all of a sudden 3. 7 is not 3. 6 is that what youre saying yes i think we can go lower. I know. But that seems like a pretty solid backdrop for the u. S. Economy that just seems a little weird to be raising rates when you have only raised how many point cuts do you have for the next recession nine dont think of it in terms of nine rate hikes. If we kept going on the path we were go in 2018, we would head into a recession there was too much money flowing to the United States, the yield curve was inverting. The dollar was strong. So the fed is responding to that things were so good we would go into a recession . That doesnt make sense. You mean the strong dollar was going to choke things off . Yeah. The strong dollar would choke things off we were going into a recession in the beginning of 2016 when the fed raised rates once, tenyear went to 1. 35, dollar rallied 30 . We would have gone into a recession if janet yellen did not back off so we were arguing the end of last year and in may is that the fed needs to back off. All the fed did was communicate a rate decrease and financial conditions eased considerably and the markets continued their ascent i dont think the fed needs to be aggressive in easing, they just needed to back off the tightening stance. When youre in 2 growth world, do not harm. Youre the global strategist north america. Which is it . Global view for our north american clients this is invesco now . Yes did they say the board heardt go the beard has been gone this isnt the new york yankees or the Cincinnati Reds kevin you always looked clean cut and professional thanks. Thank you both. Coming up, a big funding round Just Announced for Real Estate Company compass now valued at 6 billion remember when this company was valued at next to nothing when he walked in here several years ago . The founder and ceo will join us next compass announced 3 370 million in new funding this morning bringing the total Capital Raise to 1 1. 5 billion with its valuation hitting more than 6 billion joining us now is the ceo of compass. Thanks for joining us. This latest capital comes from pension funds, from basically bigtime investors what does this allow you to do with this 3 307 million well accelerate growth in product engineering. We hired joseph srosh, we launched a seattle tech campus, a peck camptech campus in d. C and well double down on Core Products like Compass Concierge for sellers, where we frontload painting, roofing, staging, with no hidden fees what did you think when you heard of amazon entering a partnership with realigy and their Concierge Services were more focussed on a Value Creation play for advisers, sellers and buyers we want agents to come to compass, double their business buyers, we want them to find the best inventory i have one question which is when you first came in here, this is an amazing story i love a great startup story. He came in in 2018 and raised 8 million. When you came in here originally, this was a tech play this was being sold almost straight up as a tech story. Yes and i dont know if theres a pivot along the way, but almost at the same time that youve been investing in the tech side, theres been like a rollup strategy on the real estate side of all these small and large real estate companies. In terms of the growth and revenue growth, im assuming its come more on that end than the underlying tech platform yeah. Amazon are they a retailer or a tech company i think in the future you have to be both the future of this industry will be the first where theres a place where you can search and do the transaction on one platform amazon and uber you can do that there. In real estate there is no place where you can search and do the transaction in one platform. For all of white house are constantly looking for homes i dont know if we are really, but a lot of window dressing going on whats going on in the Real Estate Market here and across the country . It does feel like its softening. I think it is softening in certain markets. It is a good time to buy Interest Rates are low you have rising income across the country. Markets are still hot in san francisco, in seattle, nashville, in texas. And even in parts of new york, like queens. What markets are really soft . I would say markets that are soft are also great buying opportunities. Maybe greenwich, connecticut, as well as the hamptons in terms of the tristate area, are we seeing the impact yet of losing the deduction . I was talking to the governor of new jersey a couple weeks back and asked him if its showing up in the data. But it looks like homes are sticking around on the market for longer whether its the mansion tax, the transfer taxes, the greatest impacted is is on perceptions when buyers see things rising, they will pause. Keep us posted. Please keep us posted he will be here ringing the ipo one day. When will that happen whats the longterm strategy well likely have an ipo, but fortunately given our capital base, we have the flexibility and timing with our capital we may you might want to go public now. Theres some serious journalist envy going on here. Thats what were witnessing you see it every six months in the new york times. Theres no envy here. No envy for him im almost proud of him you are like writing down, 6 million back then, its 1 billion i have not done that math congratulations im happy for you. I dont care i like what i do i know ill never have you dont care that you make much less money. I dont care if my equity will never be what yours is. He has the envy eli lilly congratulations. Eli lilly reporting, the drugmaker earning 1. 50 a share for the Second Quarter revenue came in above estimates. Lilly raised its fullyear earnings forecast. The stock is just loving this number its up a penny.