Hour look at these large megacap Communication Services and tech stocks for where Shopping List items might be for any buys on the dips with that well send things out to see j man thats going to be a harder objective to achieve, if anything a stronger dollar will become a bigger pain for multinationals sectors like technology, industrials and Consumer Staples that derive in some cases 40 to 50 of their sales overseas. If the dollar continues to strengthen it will make American Products less attractive to customers outside the u. S. , especially in emerging markets where the consumer tends to be more price sensitive it also impacts profitability for these companies when they convert foreign sales back to dollars. Now, a handful of companies in the Consumer Staples space that make everything from shampoo to cereal have outperformed the Broader Market because of the dividend yield they offer. Kimberlyclark with a yield of 3 , General Mills at 3. 6 , but with Central Banks around the world becoming very accommodative, invesco say it makes higher yield much more attractive which could overshadow concerns about the stronger dollar for now. The question is if that will continue it is now time for squawk alley, let me send it back to the gang at the new york stock exchange. Good morning, it is just after 8 00 a. M. At visa headquarters in San Francisco just after 11 00 a. M. Here on wall street. Squawk alley is live sheee that stranger coming on the hill, i dont recognize him i know your preacher will, go a voice like sugar, and he could sing a song now good wednesday morning, welcome to squawk alley. I am jon fortt with Morgan Brennan and sara eisen, carl has the morning off. Sarah loves that song. I just think you could be a little more upbeat everyones so down anyway about the markets. The major indices are feeling more upbeat than they were at the open were going to start with the selloff for the dow. It started off falling nearly 600 points at its low this morning. Its well off that now, cut that in half. Its now down about 300 points big tech names like apple and intel have been hit especially hard this week joining us now, Elevation Partners cofounder, early facebook and google investors Roger Mcnamee. How are you pretty good. I cant figure out what to feel about this tech selloff is it really a selloff microsofts market cap is still over a trillion dollars. Yes, apples off 10 from the high, but its got all this china exposure, so is it really that bad no, jon, i dont think it is. I think the market is showing you it wants to buy stocks, and its being hit repeatedly with political issues and Foreign Policy issues that really justify deep concerns, but the reality is theres a huge amount of cash on the sideline. Earnings remain good, and in this particular situation, i think the market is being rationale. You know, it recognizes that the deal with china is a real thing, but it also recognizes that china has interests in trying to prevent this from going off a cliff, and the real uncertainty is in washington less than in beijing, and so from my perspective, i think the market is being total rational in looking to go pack back up here i think thats how investors should look at it. If were going to get nailed, its going to come from somewhere unexpected. So do you wait for that unexpected thing to happen do you trim certain positions . I mean its interesting you look at iac and match match had this amazing quarter, particularly with tinder people are dating out there. Its up 20 last time i looked. Jon, were ten years into the bull market cycle. Were not looking at this as a tenyear opportunity from here were in the final stages of this thing, you know were as likely to have a, you know, a melt up as a melt down, and so as a consequence, i think were really in a trading situation where right now the fundamentals of equities are unbalanced really good for being long were very late in the economic cycle, and we have this incredibly unpredictable, i guess you could call it a policy, coming out of washington, which is really almost, you know, its very emotional and very almost like child like in terms of the way its about reacting and provoking, and the market is right every once in a while to let some air of the balloon, but at the end of the day were playing the last stages of a market cycle, and i think youre supposed to remain long as long as you have confidence that you can get yourself out roger, where specifically within equities do you see buying opportunities right now well, i mean, everythings lower, and in my mind i think apples strategy is going to work out, that over time youre going to see the move, the iphone from a thing that costs a thousand dollars to something that you get in a subscription for 30, 50, 75 a month. I think netflix, you know, having gotten banged around here is worth taking a very serious look at. At the end of the day, they have a Better Technology base than any of the other streaming companies, more competition is obviously not a good thing, but i do think theyre a winner at the back end of this thing and that the market for streaming is going to go up at the expense of cable, and so i think thats a very good thing to look at i think theres smaller names that i find really interesting, you know, Companies Like docusign that have built really a unique position in the marketplace and that, you know, really are worth taking serious looks at they arent cheap on conventional measures but nonetheless i think its a really big winner in the long run, and to me thats the kind of place to look at. Where do you think the privacy debate, the regulatory and antitrust scrutiny debate goes from here when the president is occupied with escalating a trade war with china . Is there a connection there or not . I have absolutely no idea, and you know, i spend seven days a week on the issues of dealing with internet platforms, and the thing that is really clear to me is that both republicans and democrats have spun up on antitrust. I think they feel it is time to encourage alternative Business Models to come to the marketplace, and that will be fantastic for investors because there are a lot of things that you can do with the next generation of ai and the current generation of add tech that are not being done today because they dont fit perfectly into the model of google or microsoft or facebook. And in my mind more antitrust, investors should embrace that. Thats going to be a really good thing, but its going to take a long time. To me dealing with the actual underlying issues of, you know, peoples Public Health and their the elections and arrive psy privacy is going to take a different kind of government intervention, and were super early on that, so i think the bet that google and facebook are making is that well lose energy or forget it is probably right now sadly, i feel that thats probably the more likely thing, although i think that would be a tragedy. Tends to be a decent bet. I want your take on a couple of different trends i see in tech, which you think will end up being maybe more profitable in the medium term. One is this cloud and digital migration that i think docusign which you mentioned fits into. You know, you got microsoft, amazon, others trying to pursue this hybrid Cloud Strategy and get a bunch of big customers on board there, and the other is this ecosystems play where i think apple pay fits in, and i think, you know, facebooks, you know, crypto currency play fits in theyre not going right after money, but theyre looking to fold Digital Currency into their ecosystem and use that to drive loyalty and attention. Which one do you think is going to be more profitable . I think its a great question, jon, and i dont want to pretend to know what i do know is there are big opportunities both ways. I think that the version of cloud currently being run by facebook and google is deeply harmful. Its just its too invasive, and its not its not in the interests of the people using the product. Its treating them as fuel rather than treating them as either the customer or the product. Whereas Companies Like docusign, what theyre doing is that theyre taking a brutally inefficient, really unproductive part of the economy, which is just getting documents moved around the world and simplifying the process, so its less about a Cloud Service than it is simply about automating the end nodes of getting signatures done i think that is a brilliant, brilliant idea, and i think that has more in common with the architecture that apple is using, which is basically saying im going to use centralized technology to empower the consumers at the end, i think that model is jgigantic i think weve seen very little investment in it frankly because i think the strept ngth of googe and facebook and amazon has largely scared away investors from dealing with people who have different models and thats why i want antitrust to be successful i think that is a gigantic opportunity and apple and docusign and others like that are going to wind up being the leaders of the next wave. All right Roger Mcnamee with the dow now down just 1 thanks for being with us. Were getting a news alert here on huawei ylan mui with the latest. The white house will release a new rule at 1 00 p. M. Today that prevents Government Agencies from doing business with huawei, and thats according to a Senior Administration official. Now, this rule will prohibit agencies from purchasing telecom, Video Surveillance equipment or services from huawei and it will go into effect on august the 13th. This is just the first part of a broader ban thats been mandated by congress. Next year Government Agencies will be prohibited from hiring contractors that do business with huawei. This is in tandem with the white houses own efforts to block u. S. Exports to huawei and eventually Ban Companies from working with the tell con giant altogether the white house now blocking Government Agencies from doing business with huawei back to you. Thank you very much. Continuing to follow this market, stocks well off session lows recent volatility closely tied to heightened trade rhetoric between the u. S. And china heres the president this morning. Our country is doing incredibly well. China is not doing well if you look at the trade situation, china just admitted yesterday that theyve been a currency manipulator, first time theyve ever been called out companies are moving out of china by the thousands, and our country is doing very well were going to see how it all works out. Somebody had to do this with china because they were taking hundreds of billions of dollars a year out of the United States and somebody had to make a stand. Joining us now former ceo of the institute for International Finance charles delara, now an advisory partner with the Partners Group ive been dying to speak with you. You know this topic better than most you were at the treasury during the 1980s when everybody got together to weaken the dollar. Is that something were heading into again well, its possible, sara first, its good to be with you. Im here in germany, but ive been following developments closely. I doubt were heading towards a new plaza accord i to think this whole episode points to the need for more dialogue and coordination between the Major Economies on currency and macro issues. Were seeing an environment where the currency issues are now injecting a new element of instability into Global Markets which are already very nervous, sara so where does that go because it doesnt look like theres a g20 coming up anytime soon, and it doesnt look like theres a lot of sort of multilateral deals and talking amongst allies happening either. No, youre right, sara. First of all, if we step back from the currency manipulation issue and by the way, there have only been three instances in which the u. S. Has leveled this charge, and i initiated two of those back in 1988, one against korea and one against taiwan we study the issues very carefully. The third was against china in the early 1990s. I know theres a lot of dispute about whether this decision by the president was legitimate i think it reflects a growing sense of frustration, but i also think that this a world where currency issues and trade problems need to be kept somewhat apart because i think when they get too tangled, they generate new levels of market anxiety, and that Undermines Global investment, and that Undermines Global growth i dont think thats in anyones interests. As steve and others had pointed out on your show in the last day or two, were in a world where Interest Rates are sharply changing in front of our very eyes, tons, billions now of funds are invested in negative Interest Rate structures in europe, and japan is following a very complicated path of quantitative easing. I think we need to have a serious dialogue involving the u. S. , europe, japan and china on these issues of currency stability and try to pull it a bit away from the heat of the trade talks because if not, then im afraid we are going to risk ending up in a more virulent currency war than we see already today. Charles, this is morgan we seem to be in very uncharted territory right now, and you just mentioned those negative Interest Rates, the fact that youre in germany right now where those rates continue to slip further and further into negative territory, and we had art cashin on here in the past hour whos noting never in the history of the world have we ever seen negative Interest Rates until, you know, relatively recently. How does that play out, and how do countries and the world more broadly shift away from that well, i think Central Banks have to really step back and ask themselves, and i would put the ecb and the bank of japan at the front of this, but i also think the fed has to ask themselves can they really solve all of the economic problems of the world through Interest Rate reductions i am quite skeptical about that. I see the ecb leaning into another phase of quantitative easing as the leadership changes, and i question the legitimacy and effectiveness of that to be honest with you, i think these negative Interest Rate structures, which are now spreading around europe have a very perverse risk on savings, but i also think they distort Financial Markets considerably as has the whole property of quantitative easing. It was essential at a certain point to get the Global Economy going again, but it is not a substitute for fundamental change or fiscal discipline, and we need to return to a broader discussion of what are the ingredients of sensible balanced macro policy the plaza accord in 1985 was not just about decreasing the value of the dollar. I helped negotiate that with secretary bake, and it was also about stimulating the german and japanese economies to rebalance the fwloeGlobal Economy i think we need to have a serious discussion about what will underpin Global Economic stability and growth as we moou closer and closer potentially to the end of this long run of an expanding market charles, i want to go back and talk about the u. S. And china specifically it seems like we want a good deal, but its not exactly clear whats good, so what do you think is the minimum necessary concession that the u. S. To try to get from china just to get, at least the beginnings of a deal down . Its hard to know, what i think might make sense at this stage given how many issues are at play with the u. S. And china is both sides have too many different issues swirling in the bucket of these negotiations i would try to faphase these negotiations so we dont try to solve every problem at once. In 1989, we launched talks with japan strictly about structural issues we put aside particulars about automobiles. We put aside particulars about trade, and we actually made some progress by folks on deep seeded structural issues in both economies. I think it might make a lot of sense if the u. S. And china were to say, okay, in the first phase of this were going to concentrate on some basic objectives and some initial steps on both sides. Purchases by china, broad understandings regarding exchange rates, but also some initial and reaffirmed commitments on intellectual property, and the second phase theres going to have to be a serious and extended debate about issues related to technology transfer, global security, and issues of data privacy. You know, a year ago around this time, the u. S. Tightened its Foreign Investment laws to intensify the monitoring of those last two issues, security issues, and privacy. I think if the u. S. Were to extend consultations with canada, europe, australia, new zealand, japan on those sets of issues, and then try to have a more multilateral debate on those issues as the second phase, it could actually be a basis for progress finally, i think china will have to engage in a discussion on the deeper issues relating to the connections between government and private business in china today, both the Large Private Companies and the state enterprises are receiving the kind of support that does raise questions i think in Global Markets everywhere i think by phasing these talks, both sides might have a better chance not only of stabilizing markets and avoiding further undermining investment in the kbloe Global Economy, but i think they might have a better chance of making meaningful progress step by step. Financials are getting pounded right now, down more than 2 . Im not surprised to hear you question whether negative Interest Rates works coming from the iff, which represents global banks. Systems crushed in europe by negative rates, crushed in japan. What would you tell a shareholder of a u. S. Bank a jp mor began or a Goldman Sachs right now that is looking at these near record low bond yields for the 30 . I think the fortunately the u. S. Banks are reasonably wellpositioned on the whole not everyone, but theyre largely wellpositioned to weather this period of low and trending now in many parts of the world into negative Interest Rates. Unfortunately, i dont think the european banks are as wellpositioned but my views on this with all respect dont come out of the iff my views are that were in a world where increasingly we look time and again to the Central Banks to solve so many of our economic problems. We should have learned from the backlash against globalization that the solutions to reenergizing Global Economic growth have to go in many different directions, fiscal, mo monetary, deregulatory, and i think the Trump Administration is making progress on that, as well as i think on a more structural plane, and i think this the negative Interest Rates are distorting market values that is making it difficult for all of us. Were private equity were private market investor. We need to value assets on the basis of fundamentals, cash flow, net earnings its very difficult to do that in a world of negative Interest Rates, i can tell you, it goes well beyond the banks. Its a little distorted charles, thank you, great to have your perspective today. Great to be with you. Were getting some more news out of washington right now, breaking news, and eamon javers has those headlines from the white house. Thats right, the white house tells me they have invited technology and social Media Companies to come to the white house on friday to talk about violent extremism and specifically hate speech that leads to violence, not just hate speech itself but the triggers for violence. They say theyve invited all the major social media and Technology Companies well see who ends up coming to this meeting on friday the president himself not expected to attend hell be in the hamptons for a series of fundraisers on friday. The white house says their message to these technology and social Media Companies that are coming here on friday is we know that violent extremism is a problem, you know that violent extremism is a problem ho can we Work Together . Its essentially as its being described to me a brainstorming session between white house officials, Top Administration officials and those Technology Companies. No names yet of which companies are expected to attend that meeting here on friday, but on a day in which the president is addressing the fallout from violent shootings over the weekend in different parts of the country, the white house is saying now theyre going to be hosting technology and social Media Companies on friday to discuss violent extremism online eamon javers, thank you you bet. Shares of disney are leading the dow lower this morning after posting the biggest earnings miss in a decade for that company. Julia boorstin sat down with bob iger last night and joins us now with more from that conversation. Reporter bog ieber telling me this quarters results reflect the costs of the companys transformation as it integrates fox and prepares to launch disney plus with cord cutting continuing to weigh on disneys Media Networks business as well as the paid tv providers such as at t, i asked iger how concerned he is about projections that cord cutting will only accelerate are we concerned about cord cutting, yes, thats been an important business for us, but its the reason why were going into this other space, why were pivoting strategically to give us an opportunity now to contend with the transformation thats going on in the traditional space, but to thrive in basically complete different Market Police under different marketplace conditions. With disney plus entering a very crowded market with apple tv launching this fall, then hbo max and nbc universals streaming services launching next year, i asked iger if he sees the need for more acquisitions either in content or in more International Assets . No. Thats a no to both. I think weve you know, weve had a tremendous hand from a content perspective, with the fox acquisition comes not only library ip, but great production, development, creative capabilities and oversight, and we dont really need anything more right now, either internationally or on the content side and as iger focuses on integrating the 81 billion acquisition of fox amidst growing competition, especially in the streaming sphere, iger says he has the right team in place, but it will take until the year 2021 before disney can influence the movies that come out of fox, those fox movies did weigh on disneys results in this quarter back over to you julia boorstin, thank you. Still to come here on squawk alley, visa ceo al kelly sits down with us in an exclusive interview. That is just a few minutes away. Meantime, we are counting down to the european close, with stocks abroad giving up their gains, dont go anywhere were back after this quick break. But perhaps this year, a more exhilarating endeavor awaits. Defy the laws of human nature,at the summer of audi sales event. Get exceptional offers now. Fun fact 1 in 4 of us millennials have debt we might die with. And most of that debt is actually from credit cards. Its just not right. But with sofi, you can get your credit cards right by consolidating your Credit Card Debt into one monthly payment. You can get your Interest Rate right by locking in a fixed low rate today. And you can get your money right. With sofi. Check your rate in 2 minutes or less. Get a nofee personal loan up to 100k. European markets set to close in just a moment, and for a change, theyre actually looking better than ours seema mody joining us with a breakdown of todays actions. Thats exactly right. Were getting close to closing in the green for most of the european markets led by germany up about 6 10 of 1 . The bigger story still continuincontinue to be the global bond market, 15 trillion in global debt with negative Interest Rates. Thats three times the amount we saw in october, and whats really leading the surge is german sovereign debt. Every german bond now has a negative yield op heightened concerns about Global Growth slowdown but also these expectations of further easing from the European CentralBank Next Month and then you brought it out to other notable 10year Government Debt yields, switzerland, france, ireland all negative, spain is also close to that as well thats going to pose challenges for the big banks. On top of that, more signs of worsening manufacturing slump in germany now down 5. 2 in june. Thats the worst percentage drop since 2009, and one of the reasons weve seen some of the bigger heavy weights from daimler to continental cutting their profit outlook and hundreds of jobs over the course of the past year another big story today that were following in europe is of course more central bank easing, three rate cuts overnight, new zealand, thailand and india. With india that was its fourth rate cut this year in total nearly 20 major countries around the world have lowered rates since april as we await what the ecb does in september. Its got a lot of people talking. Now lets get to sue herera for a news update. Good morning, everyone heres whats happening at this hour defense secretary mark esper meeting japanese Prime Minister abe in tokyo its his first asia trip since assuming his position last month. I must point out that china chooses to act contrary to these values, prefrg to coerce its neighbors into activities designed for beijings benefit this destabilize our region and i welcome your thoughts on steps we can take to persuade china to give due respect to its neighbors. Protests continued in indias capital where hundreds gathered to oppose the indian parliaments move to ratify a bill which strips cashmere of special privileges pakistan downgrading its diplomatic ties with india in response to that move. Here at home, san toy ya brown who was serving a life sentence for killing a man when she was 16 walked free from prison in tennessee. She spent 15 years behind bars she was convicted of murdering a man who hired her for sex and forced her into prostitution, leaving celebrities, such as rihanna and Kim Kardashian to advocate on her behalf thats the news update back downtown to squawk alley. Up next, the ceo of visa and an exclusive interview on the other side of this break were going to ask him what apples entry into the credit card market means for existing players. Stocks continue to get hammered right now with the dow down 329 points, off the lows of the morning. The latest on todays selloff is next squawk alley returns in less than threeran, 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. uplifting music welcome back to squawk alley. Lets head back out to one market now and deirdre bosa whos sitting down with visas ceo al kelly in a cnbc exclusive. Thanks morgan and al thank you very much for being with us. Great to be with you. Its been a volatile week for markets. As someone who has your pulse on the Global Economy, we were just talking about it, youre traveling all the time, how optimistic are you for the rest of the year . I have to tell you we just reported ten days ago or so, and the numbers around the world look very, very good 22 growth in Central Europe and the middle east and africa, 16 growth throughout latin america. U. S. Grew 9 , and its a pretty mature and developing market we were up over 10 in europe x excludeing the u. K. And asia was up 10 really as you look around the world, its really the u. K. That is not performing as well as the rest of the economies around the world, but i look at the data, and i really dont see any evidence of slowdown. Do the last few weeks particularly how trade talks have gone and the threat of tariffs change anything for you . Do you worry about Business Sentiment or Consumer Sentiment . You always worry about Consumer Sentiment back in december when the markets werent very good, the government shut down, you had the trade talk uncertainty, the brexit uncertainty clearly we saw some falloff. We havent really seen that falloff. I remain cautiously optimistic. Larry summers says theres a 50 chance of recession. Do you agree im not an economist. Thats what larry spends his time doing i think that we certainly have gone through a very long positive cycle, and at some point cycles are cycles, and well see a reversal im not in the predicting business i dont know whether well see a slowdown or something that qualifies the technical definition of recession, but again, right now based on the data i see, things are Still Holding up quite well. Now, i want to talk a little bit more about the trade talks because its front and center for us china still close to american credit cards and payment processors at one point earlier this year, it looked like visa and mastercard might be part of some deal i havent heard much on that now, where does it stand and watching the most recent headlines, does it make it harder for visa to move into china . First of all, weve been in china for almost four decades. We have offices in beijing and shanghai, and we have relationships with 55 different banks in china, and its a very important market for us on an Outbound Travel perspective. Outbound im talking more about credit cards and payment processors. We are continuing to pursue one, i think that you can imagine that the current trade talks impact those types of decisions, so i think wed be safe to say that we remain patient but i think the trade talks are going to have to work their way out before we see something happen. Do you think that visa, mastercard could be part of a trade deal if we ever get one . I think that both sides, the chinese government, the u. S. Government recognize that this is an issue thats been hanging out there for a number of years, so it certainly is our hope that if a good comprehensive trade bill gets passed in some way, shape or form its a positive for us. How does the current market volatility impact your deal flow you guys have been incredibly active this year on the m a front. What do you see looking towards the rest of the year well, weve got an aspiration to be in the middle of any funds that move around the world, we want to be in the middle of it and well partner, build, or buy to get there we have not made a more concerted effort to be in the buying mode, but we have had we did have a busy quarter in this particular case, when we see opportunities to increase our reach, which we did with earth port, or increase our capabilitie capabilities, which we did with the acquisitions of verify and payworks, we, in fact, go after it but i think that we feel good about the fact that weve increased our reach, and weve increased our capabilities and when we see those opportunities well continue to pursue them. My colleague jon fortt has a question for you good to see you, i want to ask, apple started rolling out apple card yesterday its linked to its apple pay service. Theyre touting lower fees and fast cash back how big a deal is that is it a dig deal has apple pay been a big deal for the Digital Payment space . First of all, good to see you, thank you look, the reality is were apples a great partner of visa. Weve been working with them for quite some time on apple cash and apple pay. Theyve got a great brand. Theyve got a retail footprint, and its certainly no surprise that a company like theirs with a great brand will want to eventually do a cobrand theyve done that. The little ive seen of it, its quite cool theyve got a good following, loyal following of customers, so ultimately those customers will vote by getting the card and using the card over time, so i think its a little too early to tell, jon, just how successful it will be, but apples a good brand and a good marketer. If it is setuccessful there 1. 4 billion active apple devices and mastercard is going to be the rails for this credit card did visa miss an opportunity here what do you think . Cobrands come up all the time. This one in particular is different. This is apple and like i said 1. 4 million devices. Again, the reality is that most people around the world have credit cards, so a new proposition has to be powerful to unearth the inertia that sits in peoples minds and wallets. Its not easy to take somebodys front of card, front of wallet, front of purse card and displace it i think were going to have to see over time. We look at every single cobrand deal, some we win and some we lose, but we have a pretty darn good track record. This is part of big techs move into Financial Services, am l, amazon, facebook and labor which im going to get to in just a moment. Theyve traditionally been partners to visa, are they becoming more and more threats to you guys as they go into further into Financial Services . The great thing, a couple of interesting things about the payment ecosystem. One is it grows every day. Its very unusual, its hard to find a lot of industries where you can come up with examples of people coming in every day to figure out how to grow the pie, which is what we do, and its also a multiplayer ecosystem, and the reality is that there are friends and frenemies and w compete with companies that we also partner with, and i think thats going to continue to be the case Going Forward again, well talk to anybody anytime, and we want to be in the middle of every possible transaction that happens. You dont see them as a threat so far . No, i think that theyre theyre going to do what they do, but if we continue to be a good partner and help them as much as we can, i think theres plenty of room for all of us to cooperate. Saras got a question for you in new york. Just wanted to follow up on the libra question since you are a charter member of the Libra Association with some of your competitors and facebook, because you legitimate companies with a lot of scale and facebook with a lot of users are in it, i think its made Central Banks around the world really question how big this can get and whether ultimately it can be a threat to Monetary Policy and financial stability. How do you answer them, and when are you going to have answers for them because i understand its a little early in the process to have everything figured out. So its super early in the process. Were not a member of anything, nor is anybody else a member of anything 27 companies have signed a nonbinding letter of intent its an intriguing concept, thats whats intrigued us, so weve signed a nonbinding letter of intent theres tremendous amounts of work that has to be done on governance and making sure that we are able to meet or exceed the expectations and the rules and the laws of regulators around the world, and we will not ultimately join the association if, in fact, were not satisfied that thats the case, and theres just a lot of work to continue to be done, but i think its an intriguing concept, and if it actually happened, it wouldnt be a facebook initiative. It would be it would be a separate association of which facebook would be one of the players at the table, but our standards as it relates to regulation are super high, and we will not do anything that we think doesnt meet our own personal standards as well as the standards of regulators that we respect around the world. Al, i want to ask you about realtime payments. The fed has jumped into this space with fed now, though its going to take a while for that to get implemented the talk is it should allow for payments to instantly show up, for example, in workers Bank Accounts it could save the poor 60 billion by some estimates. You made some comments in the past that suggested that perhaps realtime payments arent that big a deal i wonder if you could put some nuance on that and how quickly you hope that realtime payments become a reality in the u. S. Sure, jon, so realtime payments are happening around the world as governments around the world and countries around the world look to modernize age and ach systems, people are putting realtime Payment Systems in place theres 35 to 40 countries that already have them in place theres another 30 or 40 countries that are building them right now, so the feds announcement yesterday or the day before was not a surprise, and usually these realtime Payment Systems are backed and initiated either by the government or by a set of banks. So what it looks like is going to ultimately happen in the United States is that well actually have two realtime Payment Systems, one that will be backed by the banks, and one that will be backed by the fed as it relates to how successful they are, i think the reality is it will depend on each market will be different, and these networks are open to everybody, so theyre open to these, so to the degree that we need to use a network in another country like we are with earth port, our recent acquisition where we can now reach the Bank Accounts of virtually everybody in the world in the top 50 markets and move money, well continue to take advantage of that. Al, morgan here i want to shift gears a little bit. A lot of focus on Interest Rates given the dramatic moves weve seen not only in treasury rates in the u. S. But around the world as more Central Banks continue to ease and ease more dramatically what does it mean for visa, especially if we see lower or longer you know, it doesnt really impact us very much at all you know, we personally as a company have very little debt, and as you know, were not the actual credit card issuer, so we dont hold any of that credit debt so i think that more important to us is the sentiment of consumers, the geopolitical environment around the world, and if people feel confident, they have jobs, theyre seeing growth in real wage real wages that they bring home, those are the factors that more impact our business. One last question for you, in the wake of the latest mass shootings, the conversation is being had once again about the role of corporations in gun control. You had co tim cook of apple speak out against it has your stance as ceo of a payment processor for many gun purchases, has that changed at all over the last year so it really hasnt to be clear, this is horrific, and its terrible. Nobody should have to be in fear of going to a bar, of going to shop at any kind of store, or going to school. You have young children. I was talking about my daughter, it is incredible to imagine that something could happen that said, we are guided by the federal laws in a country, and our job is to create and facilitate fair and secure commerce, and the reality is that legislators need to do their job. We will we will follow the laws of the land and legislators need to do their job to deal with this horrific issue. Even as you see some of the other payment processors in your space make that decision, your stance hasnt changed at all make what decision . To control their policies as it relates to gun control like square and paypal. Well, the reality is its very hard for us to do it, number one, but i believe that there are some very common sense things that legislators need to do, and if we start to get in the mode of being legislators, its a very slippery slope we shouldnt be determining whats right or wrong in terms of peoples purchases. We shouldnt tell people that they cant purchase a 32 ounce soda we shouldnt tell people they cant buy reproductive drugs the reality is that we are in the business of facilitating commerce legislators are in the business of deciding what the laws of the land are, and they ought to get busy on some common sense changes to deal with the horrific problems that weve seen in the United States, not just this weekend, but for years and years, and its time to start looking at mental health, the size of these magazines, the type of weapons, theyve got to do something al, thank you very much for being with us today, we appreciate your time. Thank you. Guys, back over to you at the stock exchange. And thank you deirdre, now lets get to the cme, Rick Santelli has got the santelli exchange. Good morning, thank you, jon. Listen, stock markets tried to come back a bit, and depending on which index there was definitely some success there considering some of the earlier levels, but it certainly doesnt seem to have held, and equilibrium is a tough thing to get, especially when the feedback loop emanates from the Interest Rate side of course stocks and the Foreign Exchange market all contribute i made a list of things to Pay Attention to all of this emanates from china and trade talks and the global effects and the supply chains and all the inherent structures and the inner sections, but you know, many believe that the president s goal is a good one, okay we need to address china and we need to think about the longterm. The problem is that along with that package, we get a lot of things we really dont want, and truly, truly the president with regard to what he thinks he wants with regard to Interest Rates or the Foreign Exchange markets, i dont think really think that hes going to get what he wants, which means better left left unsaid concentrate on this because what its doing is its adding into all the issues we have to deal with negative rates is the top of the list i think the last estimate is 15 trillion but it doesnt really matter the fact of the matter is its growing. Global growth is slowing and the race to the bottom is going to make that bigger if you dont believe me how this turns out. Many Central Banks, including ours are blinded to the examples all around them. Look at some of the banking indexes and what theyre trading and how many decade lows outside the u. S. Another thing, of course, is supply nobody is talking about it remember when supply and debt didnt matter . New Monetary Policy. Its starting to matter. Why . Because the new budget deal is triggering what i call fill the fountain with water. Theyre trying to fill it up because theyre running pretty close. Remember when they said money would run out . Well get a boat load of tbills and treasuries why would that make a different . All of this is happening so fast at a time where stability in the dollar is waning dollar funding is a huge issue until that settles down, nothing is going to settle down. The ty vix today for a while was at 649 if it would have closed there, the highest volatility since 2016 now quickly im going to show you why 30year bonds, if you look at 2016, they had a 2. 099 low. Alltime low about plus 5 basis points away you really want to watch that as a trigger for more to come 10year note yields also in 2016 had the second leg of a twoleg double bottom, just above 135. If this goes, most likely this is going to join it quickly. Finally, the dollar index. This chart starts in early 17 several days ago at the highest level since may of 2017. We havent given back much that is your tell. Dollar funding is a huge issue the race to the bottom in the end, if the president thinks he wants a lower dollar and lower rates, maybe larry kudlow ought to put him in a room somewhere and tell him whats really happening. Morgan, back to you. Rick santelli, thank you. Halftime only a few moments away a big market day scott, whats coming up . Everybody is getting seated for the big show at the top of the hour well look at the stunning drop in yields today. The volatility in the market our Investment Committee giving their best ways to play this current environment. Plus Central Banks in a race to the bottom. How will the fed react to calls for even more cuts and the stocks and sectors to look at in the selloff today. Well do it at noon. A little more than five minutes away morgan, see you in just a little bit. Sounds good, scott. Thanks watching the rush to safety with the twoyear 10year at the lowest level since 2007. This is flashing big warning si signs. This increases the possibility of recession to over the next 12 months to 50 . Moodys chief economist mark zandy joins us along with former wells fargo chairman and ceo richard kovasovich mark, why . Why do you think this increases the risk to 50 of a recession over 50 . I think the economy is struggling with the trade war, with the tariffs a tax increase on american businesses and consumers if the president follows through on his recent threat its a 100 billion per annum tax increase on consumers and businesses. Its spooking companies crossing the globe. Business investment has flat lined and its starting to affect jobs. Job growth is slowing here in the u. S. And i think these recent moves are going to slow it even further. And if it slows much further, unemployment is going to start notching higher. Recession becomes more likely than not yeah, mark, just to dig into it a little bit further, right, were in unchartered territory in many different respects right now. If you look at economic modeling, historically, it hasnt also been the best in terms of calling a recession right now. So given the fact theres so much uncertainty, how do you navigate how does an investor, somebody who is worried about the economy right now navigate all of these different pieces of the puzzle i mean, for most people, i mean, if they are invested in the stock market, they should be invested long run and look through all of this. Their horizon should be sufficiently long this doesnt matter for professional investors, they should be much more cautious because the economy, you know, i think we can stay with its hard to say recession. To pinpoint that with high confidence is difficult. But what we can say with a high degree of confidence is this economy is slowing and its going to slow sharply further. And thats the message were seeing throughout global Financial Markets, and it conforms with everything we know about how the economy works, struggle with higher tariffs so for professional investors, they should be much more cautious going into the next six, 12 months because recession odds are pretty high what do you do with the banks . Worst performing sector right now. Tenyear yield in the 1. 60s. Pimco is out saying we could see negative rates in this country what does that mean for the banks here i think if you have a slowing worldwide economy, which we do and the likelihood of lower rates, thats obviously not good for banks. I believe that that is all trade related. And its really the president s. I call this another trump slump. Just like it happened at the end of last year and he seems to want china to surrender to him its not going to happen president xi is not going to let it happen. I think the president should be listening to his advisers, and if he wouldnt have done what he did in terms of the tariffs, i dont think wed be here today so this could change very, very quickly. And theres other issues, obviously, in worldwide economy, but thats trade related, too. So its the focus should simply be on President Trump and, you know, who can predict that one mark, i wonder when you do look at whats going on around the world, more Central Banks, three more overnight, right, that are cutting rates right now. You have areas of the world like germany, for example, where, you know, the bunds are falling further into negative Interest Rate territory right now is the fed behind the curve . Well, i mean, its hard to blame the fed for anything here, right . I mean, to dicks point im not im just wondering were following what the president is doing and no one can figure that out hes lurchi ining from one posi to another and the poor fed is in the position of trying to respond to that. So i think the fed is doing all it can to try to keep up here. And by the way, ill say the president isnt making it any easier for the fed to make decisions because hes hammering them and trying to stack the fed with his own political partisans. And that undermines the credibility of the fed and makes it much more difficult for them to do their job to really figure out how to respond to this bad trade policy so its fed behind the curve. Wheres the curve . Nobody knows well, dick, you were talking about what the president has been doing, trying to get china to fold. And weve got this political season heating up. So how do you think this resolves, if at all, heading into 2020. Do you bet that this actually we find an off ramp somewhere . Well, i think it has to be resolved if he wants to get reelected hes said the stock market is an indicator of the success the economy is again the biggest indicator of his success and the reason the worlds economic situation, let alone the United States, is because of the president s tactics on trade. Theres nothing wrong with his objectives but the tactics that he is using are counterproductive. And he will wake up one day, i think, because it will be in his political interest to do so. But, dick, just to play devils advocate here right now, i mean, how much do we how much credence can you put in the state of chinas economy weve known for years that they fudged some of their gdp numbers and other data theres a lot of questions raised about some of the reserve numbers. Quite a number of Companies Holding dollar debt which is in focus right now given the currency moves weve seen. Theres talk out there that xi is potentially under pressure. Youve got this ratcheting protest situation in hong kong what if china does roll over and nobody is expecting it right now . Well, they may, but this is the point. China wants to do a deal but all they want is to save some face if trump really wants to do the right thing, all he has to do is make sure that he gets whats important to get, but not make it look like he was the winner and xi is the loser. That is not hard to do all right, gentlemen, thank you for joining us mark zandi and dan take a look at the major averages off the lows but struggling to maintain momentum to the upside. The dow is off by about close to 1. 3 about 1. 25 . Nasdaq doing best of all s p just shy of 1 down. I mentioned it earlier looking at tech stocks match, tinder, people are swiping right, at least on that. Dating and something about dating and easing financial conditions go hand in hand Consumer Staples are the only pocket of strength within the overall market look to dividend paying safety stocks that do well no matter what the economy is doing. With that, well send it to scott wapner and the half. Im scott wapner. The stunning drop in yields weighing heavily on stocks this hour the tenyear note hitting a threeyear low welcome to the halftime report. Investment committee today, steve weiss, jim lebenthal, Pete Najarian megan shoe is here, Senior Investment strategist at Wilmington Trust also tom lee, fund strats head of research. Lets start with the latest on the selloff the focus, of course, is on the bond market. Pete, i come to you. 1. 595 was the low on the