Overnight that washington could be delaying easing up restrictions on huawei as part of the trade war deepening tensions potentiallimentpotentially ment and we have the s p 500 and the dow coming off some highs yesterday. Overnight in asia, we had some interesting news out of japan. Theyre changing the way theyre buying maturities across the yield curve. We have the nikkei higher by 0. 4 we have red arrows on the hang seng and shanghai. New china data overnight that showed food prices surging 9 , largely in part due to a surge in vegetable and pork prices european equities, down arrows across the board the dax is down by 0. 9 . Treasury yields, this has been the focus all week, yesterday the intraday on the tenyear yield was 1. 793 we are seeing extraordinary moves on a daytoday basis. Getting close to the twoyear feeling it feeling it feeling it little resecessionary feeling i. We have one other piece of Corporate News to bring you. Uber shears undehears unde s uber shears undhares under a lof pressure the Company Reported a loss of 5 5. 2 billion in the Second Quarter. Thats compared to 878 million a year ago the bulk of the related costs or the costs are related to the ipo and compensation im not its real costs, but the way the headlines are coming out its not just the loss, its the commentary excluding that, uber losses were still about 30 worse than in the First Quarter. Revenue growth slowed to 14 to 3. 2 billion that also missed forecasts ubers Ceo Dara Khosrowshahi telli telli telli telli telling cnbc that 2019 will be the peak investment year and losses should come down over the next two years. He says theres no doubt that uber will eventually be a breakeven an profitable business bookings from the ride hailing business topped estimates, but bookings from uber eats fell short of forecasts khosrowshahi says uber eats still has room for Significant Growth but he doesnt expect the business to be profitable any time soon. Ubers report catching a number of investors off guard after lyft, a different business posted a smaller loss and raised its revenue outlook. The companys 0 q2 loss was larger than the q2 losses for all but three others, craft hei kraft heinz was one of those, maybe ge only three wow what do you do . With lyft, theres a pathway to some profitability. The main concern i had with lyft, we talked about it on the great show at 5 00 called fast money, that lock up has to give people pause but short of that, i think lyft looks good here. Uber at a price makes sense. You said it. 5 billion is not 5 billion lets say its 1 1. 5 billion thats still 1 1. 5 billion too much if you listened to that call, which i know you did last night, theres a lot of ifs, maybes, i dont know, i think. Particularly surrounding the commentary on the path to profitability, khosrowshahi was tentative on how that would come about. And if you look at latin america, which was a growth driver for uber internationally, revenues down there 24 on year because of didi, the chinese Ride Hailing Service entering the market thats providing competition for him to say on the Conference Call the biggest source of competition is owning autos, thats a little i dont know. I think invest want to hear the truth of the matter. You wanted him to say the biggest competition was what im not sure. It sounded like they dont have their arms around it to mels point, latin america is the second biggest revenue, down 24 . Thats a significant drop. Granted its still four times the size of north america, but if your Growth Engine is not growing, you have issues do you think this is a broken model . The one thing i wondered about these services is whether the model unto itself works. I think the model works i think as you pointed out, a big chunk of the loss was related to the ipo i think uber still represents whats scarce in the market, and that is growth yields are pricing in major policy mistakes, recessions. If you have an idiosyncratic growth stock, i think you want to stick with it here. When you spiyou speak about model, they have said they might never be profitability tim seymour will say they have to say that, but you have to take some pause there. I guess a lot of companies have done extraordinarily well in terms of the stock with the same model, but at a certain point, you have to ask yourself, to your point, how sustainable is this i dont know but my view in the 90s, a lot of people thought amazons model didnt work. People said how does it become profitable does lift show you that there is a path to profitability so therefore you question uber more the move in uber premarket, yesterday we had uber climb along with lyft. Down 8 here, its not much in the context of two days. Fair enough. People out there say at a 36 entry point, it may make sense but over the course of the last 48 hours, which Company Makes more sense in terms of the stock . My pushback is lyft. Quick programming note. Dara khosrowshahi will be joining the gang on squawk on the street, that is at 9 00 a. M. Eastern time. We have a developing story out of hong kong hundreds of protesters are rallying in the Central Terminal at Hong Kong International airport trying to redraw attention of the National Audience and restate a full withdrawal of the extradition bill the airport connects the city to more than 220 global destinations and serves 74. 7 million passengers organizers say this will be a threeday event. New data from china overnight showing that surging food prices are taking place lets get over to eunice yoon. Good morning to you. Traders are talking about how sevrve7 is the new normal. The Chinese Central Bank set the yuan at 7. 0136 to the dollar still stronger than what the market had expected, this afternoon the bank posted on its social media account a fresh interview with one of its officials, and in this state tv interview the officials played down the yuans movement saying the fluctuations are Market Driven and repeated that chinas economic fundamentals are strong so the yuan would remain stable. So there are signs that policymakers may have to do more to sure up the economy the inflation data was out deflation fears have returned here the Producer Prices contracted for the first time in three years. The cpi was pushed higher. A lot of that is because of food prices, vegetables and pork. So china has been battling a bout of african swine fever and chinese manufacturers have been cutting prices in order to try to gain market share and fend off weakening demand theyre seeing falling prices when it comes to oil and other raw materials. Policymakers here are in a bind. On the up with hand, there is the option of easing Monetary Policy to lift prices, but theres concern if there is more stimulus here, it could push prices at the consumer level higher that is a big headache for the chinese. Though from a lot of analysts here, they think the policymakers will lean more towards trying to lift Producer Prices because theyre getting more concerned about deflation eunice, thank you coming up, well talk about the rate shock that spooked the markets this week and the potential for a yield curve inversion that predicteded ten of the last five recessions. As we head to break, a look at the biggest premarket winners and losers in the dow. Were changing whats possible every single day. , and if you run a business, that means a lot. We create Financing Options for your customers. To help them get the things they love instantly. Our data provides insights into what your shoppers have already bought. So you can offer them what they might consider buying next. Our financial and Tech Solutions are changing whats possible in all sorts of ways. So, how can we change whats possible for you . The warning lights flashing that the u. S. Economy could be heading towards recession. Lets get to our guest hosts savita, do you put stock in the yield curve forecasting recessions frnlg the forei think its net watch the yield curve. Either the fed is not dovish enough or trade risks will roil the economy. I still think the consumer is a bright spot. The winners on the dow were all consumer stocks. Mortgage rates are the lowest theyve been i thought i was getting a low rate two years ago i still think theres room for the economy to run it is a little bit nerveracking right now. We are very late into the cycle. The economy is running pretty hot. The fed and policymakers dont have that many bullets left. So theres reasons to worry. Does that picture that savita paints match up to what the equity markets are painting with the s p 500 3 off record highs . Ill ask the following question, what causes a recession . Does the market selloff cause the recession or does the recession cause the market selloff . I would say the market selloff causes it. 73 of the u. S. Economy is driven by the consumer in my opinion consumer confidence, all it is is an overlay of the s p 500 not suggesting that everybody owns stocks, but suggesting people look at the market and say hey, the stock market is going higher things must be good. If things are good, i can buy that starbucks coffee, i can go on vacation. Go back and look at october and november and how quickly spending grinded to a halt why . The market went to so no recession in your view . Its all contingent upon what the market does. We are sort of hanging by a thread ill say this, and then i will let savita talk. The biggest villains of the 21st century will be Central Banks globally we had three mini bear markets over the last ten years. Consumer confidence remained relatively healthy i think its jobs, prices that are more important than the market how many of your average americans are really levered to the s p 500 . Not many im not suggesting people own stocks its just a its a barometer. When the evening news leads with this, stock market down, stock market down, people take notice and they say whats going on maybe we shouldnt go on that trip its the jan kniffen test the retail guy. For 20 years he would go out, talk to people and ask two questions. If you lost your job today, could you get a new job . How quickly . And would you get a job for more money . If the answer is yes to both, this would happen quickly, everything is great. I think thats pretty much where were at now with the tight labor market the answers would be yes the problem is the new round of tariffs are targeting consumer goods so thats where i worry about consumer confidence. Its not so much the market but the idea that prices could go up and consumers will feel it in their wallets. Thats whats more worrisome the consumer has been the bright spot over this entire bull market they might not be able to keep it together. All right well hear more from this dynamic duo this is a dynamic duo on a friday morning. Coming up, new details about apples new credit card and what it takes to get approved a new report about to go live on cnbc. Com its an exclusive. Weve got it ahead of time you have to hear this. Thats after the break you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Welcome back cnbc is reporting a new story this morning that you have to hear about Goldman Sachs and a new credit card from apple we have the story before the story. We have the author of the story right here you want to tell us about this sure. It rolled out tuesday. People in an early preview, if you signed up for it, you go to the wallet app, you press a plus signal, you can get the card you get a decision in two minutes. What we found from early reports is that theyre actually accepting people with fairly low credit scores, which is a surprise i didnt introduce you, by the way. This is hugh son you should have said that the beginning. Its important he says it this is on the record its on the record. One of the best banking reporters here i knew that i wanted to make sure everyone is aware you have figured out that apples now taking on customers that historically they would not be or Goldman Sachs wouldnt otherwise take on. Yeah. Some people i talked to are saying im shocked i got this card going into it they said Goldman Sachs, this is a tony new York Investment bank. This is not something that somebody in reading, pennsylvania, who has a 620 fico score will qualify for thats what happened most people think of this as the apple card, they dont realize its a goldman card, do they well, weve had a couple stories about this apple card is the brand that leads. They own the relationship, to be clear. The question i have for you is if theyre taking on lower fico score customers s that pressure that goldman is getting from apple because apple wants to have this mass audience on this is that goldman wanting to build this large platform . Is apple and goldman on the same page about this . My understanding is that theyre aligned. From the beginning, before goldman won this deal a year ago, it was very clear from apple that they wanted as many of their 100 million plus u. S. Iphone users on this card. When you think about that, 100 million u. S. Iphone users, how many of them will be prime some op them, right . When you say some of these folks are not prime is that because theyre lowering their standard or because theyre using Additional Information theres a number of credit players out there. Im thinking of affirm and others who almost created their own fico score what looks like someone who may not be a prime credit to an affirm may be a prime credit the question i put to people, are they using data that we dont see . As far as i can tell theyre using transunion one of the big three Credit Unions theyve using that, using what i would think of as prudent underwriting the person i talked to from reading, pennsylvania, is getti getting a 750 credit line. Not a lot of money the Interest Rate is at 23. 99 oh. For him, thats the lowest Interest Rate plastic in his wallet this is the best deal for him. This is the only reward card he can get. This is a story of goldman willing to take on subprime. You make the argument in the article that 13 of loans in the market are already subprime. So were talking about fico scores sub 660 yes why does Goldman Sachs want to do this if you drink the koolaide, the new bank wants to help americans lead healthier financial lives. Thats certainly the stated goal of the apple card. I think that, you know, if you decide that you cant deal with a certain segment of american borrowers, youre cutting yourself out of a lot of scale of the business. Ultimately thats what they decided. This tells me that goldmans valuation should reflect an increase in risk on its books. Thats the only risk theyre taking if you look, fixed income currency and commodities are not doing it theyre not taking risks i said this with andrew before, i wont make friends at the bank, but Goldman Sachs is Goldman Sachs in name only now i was there in 96, there were 6,000 people there theres 40,000 now you cant have the same culture. And i think 65 or 70 of the firm is 35 and under, thats a good thing, but it speaks to what youre saying, theyre trying to play to this millennial audience. Theyll probably do well with it but to your original question, whats the right valuation they just reported tangible book at 203, book value 214, the stock trades within that range and it probably should i have a different question for you. Are you sure everybody thinks this card will take over the world or well all be signing up for it were talking about it today, right . I know were still in beta of some sort. How will it show up on my screen for the first time how will i be advertised this card beyond what ill see out on the billboards you go to your wallet theres a plus signal in the upper righthand side, you hit it if youre preselected, within two minutes a lot of people dont go to the wallet often, do they . I go there when im at the airport. I recently became aware of the existence of the wallet to be honest now im using it the reason i ask, apple launched like the news plus product earlier this year or late last year and, you know, i wanted it, so i knew to go and press the plus and do the thing, pay the money. But it wasnt like they were telling me get the card, get the news product so Something Like 49 of everybody who are geny are aware of the card. Im too old. The penetration of this card is sort of insane. Hugh, thank you thanks for having me. Our prompter is working again, which is exciting are you going to share that with the audience . Im excited the full story is available on cnbc. Com right now coming up, stocks on the move including one luxury retailer that is getting crushed in early trading and huawei news breaking overnight on just how ready that company is for a tougher crackdown by the United States details coming up. As we head to break, look at yesterdays s p 500 winners and losers can i get some help. Watch his head. Im so happy. Whatever they went through, they went through together. Welcome guys. Life well planned. See what a Raymond JamesFinancial Advisor can do for you. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. Good friday morning to you were about three hours before the market will open lets show you the u. S. Equity futures at this hour if we opened up now, you will see red arrows across the board. The dow would open off 131 points nasdaq down close to 60 points s p 500 off about 16 points. Look at the tenyear yield dipping below 1. 7 weve been talking just now about how close the ten and the t