Transcripts For CNBC Squawk Box 20240714

Flat that really does obscure a lot of drama up at least 2 s that has been pretty dramatic. Also why the nasdaq has been down so a lot of those profits are coming out of there. The hang seng up by 1 3 4 mentioning those tariffs that china will be taking off those goods. We have more on that front in a moment also an American Chamber of commercesaut u. S. Chamber services have been getting hurt and many of them are moving away more quickly than anticipated redirecting businesses there in the meantime, lets look at what has been happening. For the most part, green arrows. The ftse is up the dax up about. 75 . And cac is up. The trezy market and yields, they have firmed up. The 30year trading almost 2. 2 . 10year at 1. 714 . Twoyear note at 1. 67 breaking deal news, Hong Kong Exchange proposing a 36. 6 billion cash and stock offer for the London Stock Exchange saying it approached the lse with a bid last year, they agreed to buy refinative in a deal peloton says it plans to price shares between 26 to 29 each the road show could start as soon as today. The company has been a member of the cnbc disruptor 50 list for the past two years today, going through and grading each of these ipos and how clear they are saying peloton is a little different. Being clear with facts its a much better situation well talk to him. It is a relatively clean Business Model you could have a lot of disagreement of how big it could get. They give actual numbers versus so many of these other ipos or potential ipos in the meantime, related ipo news, it may be full speed ahead now for wework the company is president ising ad with plans and the road show could kick off as soon as monday softbank wants to halt or cancel the ipo. The backer of a company which really does need more capital. And will softbank be the one that gives them more capital right. Some trade news out overnight. Beijing out with a list of products that will be exempt to additional tariffs is this something of a peace offering yeah. First of all with the list it includes 16 types of u. S. Imports. The counter tariffs are going to be suspended for more than a year products are around feed and drugs. The Foreign Ministry said today that it was hopeful in the u. S. That the chinese would create favorable conditions for the chinese. Just an hour ago, the state radio gave a little hint why they decided to do this saying the exemptions are meant to impact the trade dispute on companies in china so similar to how the Trump Administration decided to delay some tariffs to december in order to not disrupt christmas which was seen as more of a concession to business and consumers, it likes like the chinese are being more practical to ensure they dont affect some of the more serious issues one is the african swine fever that has been killing off a large part then there is the fall army worm, which is a bug which has been invading the crops and has been a serious issue here. It looks as though the chinese are going to be much more practical when it comes to these tariffs. I had seen another report that said the American Chamber of commerce with u. S. Companies and operations in china. Many of them are moving operations out at a more rapid clip than expected 26 of companies surveyed said they are redirecting to other countries. I think that was really a high light because that number of 26. 5 was higher than last year that really showed that American Companies are being affected by these tariffs. One of the motivations was that the tariffs were affecting their revenue. The combination hasnt been good for the business more of them are redirecting investments meant for china outside this country looking forward, they werent really optimistic about a trade deal and said if there isnt a deal in 2020, the situation will get a lot worse. Those are longterm Strategic Investments and it is hard to change a flow once they start moving out of the country. Does that resonate or is it a concern or, look, the price of trying to get something done in terms of the chinese perspective on this . I think it is a very, very difficult situation now for a lot of the u. S. Companies. When i talk to manufacturers, a lot of them told me that they are stuck. They might want to move some of the business aside a lot of people have been sending teams to other countries to assess how practical it is to move their businesses out and diversify more the infrastructure is so strong and the skill set is so strong they are being hit by the pressure so pretty much everybody i have ever talked to is at least thinking about, if not already redirecting investments. That was the crux of what was coming out of that survey. Thank you an expert about all things happening there. Eunice, thank you. Apple hosted the annual fall Product Launch yesterday a quick run through on what was announced. First three new Iphone Models. The 11, the 11 pro and the 11 pro max with improved cameras and Battery Point and a lower price point. The newest ipad also has a lower price point starting at 300 the new watch has an always on display and you get up to 18 hours of battery life. The new model starts at a lower price point. Tim cook also announced the new streaming service. We are excited to tell you the new shows will be available november 1 well be adding more apple originals every month. Apple tv plus will be available in over 100 countries at launch. It is just 4. 99 per month for your whole family. That price point undercuts disneys new streaming service which starts at 6. 99 a month. Some of the stocks were underpressure yesterday. That will seem to restrain likely people thought it would be double that, perhaps we are okay with just very increment al introductions now it seems like it. One more thing and then you get blown away in this case, the watch stays on this company has been transforming it has. They also introduced the gaming platform. Subscription services foretell vision and gaming. Revenue from services has become a much bigger issue. For a while, we went back on the notion that cable and other companies were going to get their lunch eaten by streaming then eventually we said streaming would cost as much as cable. The phones are bigger. I like this. I can carry it around. You have a small one the bigger ones. You like the small one . You can still get those the battery for this, i think is 50. That appealed for me just get a new one, a smaller one. Can i get everything, the pictures moved over. Arent they on the cloud . I think they are. How much better can the cameras get . I want a new camera im a couple of versions behind. Can you add more dog ears and noses . Just a clearer picture. The phones after my phone, they do take better pictures. Maybe for us i dont know. Im not on instagram pictures are a big deal. How people communicate. Work with me and bring me along. I havent brought myself along. Santoli seems to be clicking on not really on instagram im on to monitor my children more than anything else. I dont really post. You dont but you are able to look in . Sure. Consumer ive posted there maybe 20 times. A likth much bigger than twitter for teens, yeah why it is a cool factor they think so closely about posting the right picture at the right time. A popularity pool every time you post and they are talking about deemphasizing likes or getting rid of them . Im glad i have no danger of being a teenager. Coming up, Central Banks decision starting with the ecb well show you what jamie dimon said a look at the winners and losers in the dow, in this case it was sophies big day. By the way, shes the next mozart. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Go where my baby lives b[ growl ]olle s good boy. Hey. Hey. You must be stevens phone. Know whos on your network and control who shouldnt be with xfinity xfi. Simple. Easy. Awesome. President trump apparently watching and just tweeted. China suspends tariffs on u. S. Products being hit very hard supply chains breaking up as Companies Look to move to other countries. Much more expensive to china than originally thought. I think those are quotes from you and eunice we were just discussing this matter and giving insight to what is happening. It was hurting china badly in terms of the pesticides and other issues this is a limited number of items putting put on this list it is targeted to bring less pain to the chinese public like pesticides and cancer drugs. You know what this means . I wont be able to look at my twitter feed again for about four days without seeing, literally a thousand notifications. I look and none of them are directed at me at all. I dont know. Exactly. But it is insane twister followers, hes got like 60 million then he added it all up ands it over 100 i dont know he has his, the real donald trump account and the potus account for the two. All right, in other news, jp morgan Ceo Jamie Dimon says he does not expect rates to hit zero but is preparing for it either way back in august last year, he was saying he wouldnt be surprised to see the 10year at 5 hes been leaning in that direction a while. A lot of folks havent been able to get 5 0ly mated to these rates. If you run jp morgan, you got to by ready. It is a busy month for central bankers with a closely watched ecb decision and the Federal Reserve meeting next week joining us now to talk about what that means for the markets. For the folio manager and head of fixed income industries at s p down jones good to have you here. Chris, we were just talking two days almost dead flat s p 500, a lot of movement at the surface this crowded growth momentum stocks, cheaper value stocks how does that affect you a real shift or mechanical adjustment here . It is real. We are benefitting from it more of a value vesting firm the momentum growth for people were crowded over the summer looking to buy growth. We are seeing that pull back for us, it is working well do i think it is going to continue into the long term, probably not it will be some good buying opportunities. We are not in the camp of a recession. We think as 2020, as people want to get reelected, that growth will come back we are going through an air pocket and are still pretty bullish on the out look. If growth will come back, doesnt that mean value stocks would be out performers. Value is seeing inflows out there. Certainly outperforming the last few days. There is legs to it. I wouldnt count out some of the growth stock, the software names. There will be great opportunities there to put the money to work. Dealing with that opportunity, we are seeing a pronounced rise in treasury deals, how does it all speak to you now . We are seeing a rise in the tenyear over double what we were seeing. Jam ji dimon was calling for rates to be hire up 8. 7 compared to s p 500 at 3. 7 a little more than double. Looking at the treasury index over 14 Investment Grade bonds 13 everything is green. Looking across the world in terms of our fixed income basis. We are getting some volatility now in the market. People that say bonds have gotten too overloved, theyll start with those numbers the returns have been so good and a lot of money has chased those and maybe they have to swing away from there. Right they have to see what level of yield are they attracted to. Not necessarily chasing 10 returns. I think of the bond index yielding about 1. 6 . After tax basis up about 1. 2 . Would you take that over the italian 10year or the greek 10year. These are yielding higher than those. Someone will say ill take the s p at 2 and take my chances. We view the steeping of the old curve as a bullish indicator. A steeping of that yield curve is really good and broadens out the participation in the marketplace. Your value names continue as well pattern has been in that meeting in terms of the market i would say they are sure theres going to be a cut here coming up. Longer term, i think the fed actions are not as significant we want to see resolution to the trade. We are hearing some of that today. Look, the supply chains we talk to, he is right. They are moving out making the right decisions. Thats what capital works. Well leave it there. When we come back, a potential set back for the gig economy. A bill in california possesses a threat to the Business Model of Companies Like uber and lyft well also tell what you it means for investors. Squawk box will be right back. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. Were changing whats possible every single day. With technology that helps you offer shoppers a better experience. Take your companys app. We can add in all sorts of capabilities, which help your customers manage rewards, offers, and payments on the fly. And now, applying for credit can happen in a flash. That way, more people can start shopping with you on the spot, wherever they are. Hows that for changing whats possible . Theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Classical Music playing throughout a bill that would give new workers protections. In california, it could spell big trouble for Companies Like lyft and uber who rely on thousands of socalled gig workers making it harder to classify workers as contractors. Both companies have proposed a referendum theyve also asked to be able to pay some sort of fee to get out of having to do this in other words, well pay the state so we dont have to pay the workers. This is a threat the question is will it spread to other states and municipalities what does it mean for those stocks the companies have said they dont expect to get any profit anytime soon the companies have mostly succeeded by going between the cracks regulatory cracks yes because it is a different employment style. You could call yourself a Technology Company for all the states who need uber and lyft, california is the one traffic is already so horrific in places where it has gone into effect, they have raised prices and consumers have been willing. If you are raising prices to pay workers more im saying transit in california is not effected if youve got to go from pasadena to santa monica, it is healthish. They say they should be earning a minimum wage and treated as workers not as contractors some of them are not making minimum wage because they are not employees. When you look at the cost of running the car. If it was a terrible situation, you wouldnt have any drivers. Are the Taxi Companies involved with the lobbying like this maintaining insurance or the cars to a higher extent. The weather is nice there but the traffic. It is a close call you are right the traffic here is awesome. Not like out there. Once you get out of manhattan. There are six lanes that arent moving it might be different with google maps. Apparently waze has destroyed. Anything is better than sitting on the santa monica freeway for an hour and a half to go three minutes or the san diego freeway. Brutal horrific out there when we come back, peloton preparing for its public debut out with a price range for the ipo. Leslie picker joins us with more based on those numbers right now, lets look at yesterdays s p 500 winners and losers losers through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. I can shine. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. Great riches will find you rewhen Liberty Mutual customizes your Car Insurance, so you only pay for what you need. Wow. Thanks, zoltar. How can i ever repay you . Maybe you could free zoltar . Thanks, lady. Taxi only pay for what you need. Liberty. Liberty. Liberty. Liberty. Welcome back. You are watching squawk box live from times square good morning, u. S. Equity futures continue to be around the flat line more or less especially the s p up. 01. The dow indicated up 15 or so. The nasdaq weak again this morning down around 3 points ipo news out. Peloton has a price range for the public offering. Leslie picker is here with more on that front. Peloton preparing plans for the 1 billion offering. The company is selling 40 million shares between 26 to 29 each the terms officially kick off the road show where the inhome Fitness Company valued as high as 8 billion. It makes spin bikes and treadmills and charges for subscriptions. Investors need to decide whether they see them more as a hard wear or Software Company comcast is an investor smile direct club is expected to price in its startup allowing them to sell at a fraction of the cost of traditional work if both of these Companies Price as the high end of range, they would be the fifth and sixth largest ipo of the year and both are listed here on the nasdaq, guys. Higher than i would have anticipated. Weve had so many ipos coming down the pipe. This is the size of pintrest. Relative to sales, the peloton valuation is about nine times sales. They have about 915 million for the fiscal year through june 30, 2019 smile direct is about half of that they are looking at double the multiple peloton is cheap if you think it is a Software Company and expensive if it is a stationary bike seller. A Software Company, look at zoom communications that is trading at 55 times the sales now. It is really nice well have a bunch of really fit thin people with nice smiles yeah. A bit of optimism. And new iphones to post their pictures and better instagram posts to make everybody jealous of their figures and from teeth this is a good day for humanity. Or vanity we have to remember what day it is. It is 18 years kids are 18 years old now born after that i cant believe that in the back of all of our minds. 20 years coming up, that will be interesting. All the normal things. Moment of silence at the Stock Exchange and the trade center, pentagon and other places thank you, leslie coming up, the buzz of on line dating, facebook venturing into social media romance with the launch of the facebook dating platform too many dating sites, arent there . Is it good you cant keep up is that it lets say it is a good thing. Well, well talk with the ceo of one of its competitors to see what it means for the world of match making no one should be alone Richard Fisher coming up, former dallas fed. Facebook dating is the latest addition the company has joined the likes of tinder, hinge, grind. Com and match. The founder of one of those competitors joins us now the ceo of bumbell the app that matches romance and friends and business partners. You are comfortable with this this is your business . Yes i could see how you think you are doing something about for a lot of these people. Loneliness is one of the worst things in the world. Thats right. Loneliness is an epidemic. One in three marriages are starting on dating platforms now. We have friendship finding and professional networking. This is really not just a dating platform anymore, it is a connection platform. In one and three marriages are starting from a dating app, think about all the other connections. What about the idea of facebook jumping in . Has high lie vally val datin. It val dates our tam, total Addressable Market around the world and valuation opportunity. The fact that a giant like facebook is finally owning a word like dating is incredible to us. That is at the core of what we all do already mainstream, whens it facebook, it is mainstream with no stigma attached to it at all. It doesnt seem like much of a stretch from the amount of relationships developed on these sites to start with. What makes us so different is that everything weve done is rooted at safety and stability and putting women at the front of this. Platforms are responsible. When they put the power in the hands of women on bumbell, women make the first move it is a great barrier. Instead of being inundated by unwanted contact, the women is in control of who she engages with if i wanted pictures even with the women being in control, it is on every social media network. People sending nude pictures how big of a problem is that this is a huge issue. This is happening via air drop on the subway, direct messages and email. It is a huge issue that people are sending inappropriate, unsolicited content. Naked pictures . Yes this is an issue that is indecent expose your if you exposure self in the streets, you are held accountable. I never thought about that. Now think about the second world we are all living in which is the Digital Space we spent so much time on the phones children there is this whole society taking place and no laws to protect us when we identified that there is a huge issue, we surveyed our users. One in three of our women users said they received one of these somewhere on the internet and they felt violated by it we rallied together a Lobbyist Group and we introduced it in texas with the help of incredible partners on both sides of the table a smaun partisan issue we just signed this into law with Governor Abbott weeks ago. This absolutely needs federal regulation it does that is on the radar thats where we are going next we hope to make this a law federally and bumbel hopes to get more involved with this. From everything we do from branding, the way we speak, we never sold user data and we will never do that. This is bumbell we have a producer, i believe hes on bumbele. Oh, you are on bumbell i dont think there is a bumbler. He loves your site great im always happy to hear that. Still to come, the Biggest Surprises and most important take aways from the apple release and the price that surprised everybody. Well talk about what it means for investors, next. 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. 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. Doprevagen is the number oneild mempharmacistrecommendeding . From the day youre born memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. The Biggest Surprise at apples product event was the pricing for the companys new streaming service. It came in at 4. 99 a month. Apple shares ended the day at their best levels of the year. Joining us right now for more on big product announcements is james wang hes an analyst at arc and vest. Roger chang who is c nets executive editor roger, why dont we start with you for the landscape. Last year minor upgrades, i think the Biggest Surprise as you said, the price for disney plus im sorry, apple tv plus as well as the lower priced iphone 11, price cut from last years iphone 10r, the fact that pricing went down is kind of different. A different idea from what weve been thinking of with apple. The pricing coming down, is that important because they need to bring product line down i think its a little bit of both its doubling down on that success. Its acknowledgment that they need to bring in more customers because if they want subscription paying customers, theyre going to need that larger base. James, whats the big deal . This company has been on an evolution of sorts going from the Hardware Company to a Consumer Company where they had this ecosystem, they lock everybody in how do you think theyre doing on that front . Where do you think the street is in terms of reflecting i founded a 13year franchise and people are looking for them to come out with a new iphone. It is okay apple has done built this wonderful franchise over 13 years. They are in the process of monetizing the franchise theyre selling bits of hardware theyll still sell Great Hardware now they can sell to an install base, things that cost 10, 15, 20 a month. It seems like all of that means the stakes are somewhat lower. Expectations were not very high as most people have commented on and the way you can buy a phone. Focus on the price the fact that theyve essentially got this automated upgrade cycle, what does that mean in terms of the valuation of stock i thought it was so hit driven restrained the valuation i think the valuation has gone more and more towards a subscription perspective people raising this many, many years ago and now were seeing just in terms of services, thats taking up over 20 of revenue now. Thats quite an achievement for a hit product like the iphone. I thought the pricing was interesting. 5 is interesting apple tv . Apple tv plus one is that they have a realistic sense of what theyve built and how good their content is, which is not that great. Thats what its communicating to me. Thats good to me because thats signaling that the company hasnt been consumed by ubris. 5 a month, it shows how difficult it is to achieve the scale and quality that netflix has achieved people say it is easy. It is not easy netflix were down, roku were down are those appropriate concerns in your view the only possible concern is how competitive disney plus is i dont think anyone is weighing apple tv plus in their Monthly Budget of spend. I mean, people who buy apple products are generally pretty wealthy. Theyre probably the top 10 of wealth on earth. This is not going to be a weighing occasion. Its going to come for free. Its kind of a no brainer. Roger, what do you think about how this plays out just in those battles for, you know, what takes over what used to be the paper . In terms of this being a metrics killer, its definitely not that netflix is going to remain a dominant player. It will serve as a default apple tv plus is definitely much more of a question mark. 5 at first blush seems like its a great deal. Its launching with nine shows disney tv plus or disney plus launching with a much larger catalog. Backlog of movies that your kids love its a no brainer purchase despite the fact that its 5 a month, still going to be a question mark working your time and investment. Roger, james, thank you for coming in. Coming up, our guest host for the rest of the show is former dallas fed president richa Richard Fisher hearing from him on all things fed, including what President Trump tweeted about taking Interest Rates to zero and even bendyo. Xfinity and beyond. Yes, buzz will it feel like the end of a journey . Or the beginning of something even better . When you prepare for retirement with pacific life, you can create a lifelong income. 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Wall street in a Holding Pattern as investors look for the first of several Key Central Bank Holding Patterns. Lkstill a market what investors can expect is straight ahead. Apples big event sending the stock higher. And it is just 4. 99 per month for the whole family. What investors should take away from the news as apple looks to challenge netflix, disney and others in the streaming wars. Plus, Elizabeth Warrens wealth tax could cost the richest billions the numbers of what it could mean for the top 1 is straight ahead as the second hour of squawk box begins right now. Live from the beating heart of business, new york. This is squawk box. Good morning and welcome back to squawk box here on cnbc im joe kernen along with becky quick and mike santoli u. S. Equity futures, can we just skip no the nasdaqs actually down thats what well focus on the dow and s p are basically flat lets get to this, what happened this hour. President trump tweeting the Federal Reserve should get our Interest Rates down to zero or less, or less and we should then thats Richard Fisher, former dallas fed president. We should start and then start to refinance our debt. Interest costs could be brought way down while at the same time substantially lengthening the term we have the great currency, power and balance sheet. The u. S. A. Should always be paying the lowest rate no inflation it is only wow. I know how to say naivete. You need to take a shot of the prompter to see how we nayveta. Is it the new guy again jay powell and the Federal Reserve that doesnt allow us to do what were doing. A once in a lifetime opportunity that we are missing because of boneheads. Well get to richard in a second because youve probably called them boneheads but probably for not raising quick enough years ago. Being called a bonehead by the president of the United States is quite an honor. Not back then this is the current exactly. But he probably would have. You still think that we dont necessarily need a cut yeah. Well get to you in a second. The president tweeted something earlier. China suspects tariffs on some u. S. Products. Its being hit very hard supply chains breaking up many companies. The country is much more expensive, china, than they thought. The reason ive given up on twitter is because my name is there. No comments to me. Millions and millions have followed you laugh at that and i dont think youre laughing necessarily because its so ridiculous. Raised the tariff yes how much sovereign debt is below zero right now 17, 18 trillion. 17, 18 trillion yeah. If you were a real estate guy who wanted as many jobs in this country as you could possibly get and didnt think there was inflation and he was talking his own book, you can see where it comes from, why he would say that no, i understand how a real estate guy looks at things but were going to have to wait and see what damage has been done by negative Interest Rates. It hasnt done a thing. Not yet. Hasnt worked yet not yet you keep piling it on. Well see what draghi does at the end. Remember jerry lee lewiss great song great balls of fire. Made milwaukee famous, made a fool out of me hes talking about schlitz beer, of course. We may find what made the ecb with negative Interest Rates made a fool out of trump. We may not see negative Interest Rates what its doing for europe at the moment, but i think what we do see is the impact that it means for us in the Foreign Exchange markets because theyve gone to these crazy policies of negative Interest Rates the impacts are definitely being felt here. What should we do to moderate that or should we ignore it . Were a beneficiary capital flows into america. Positive markets. Phenomenal rates. That is under pinning, rather than the fed in my view, is underpinning these markets because were the forgive the phrase, were the best looking horse in the global glue factory. Our equity markets have been the beneficiary of all of these. And our businesses. They can refinance themselves. Corporate bond markets. Yeah. Were going to pick it up in a second lets get to some headlines. General electric is seeking to raise up to 3 billion by selling shares of baker hughes ge is a Majority Shareholder the majority sale would cut it below 50 . Peloton plans to sell 1. 5 billion in stock in ipo news cnbc parent Nbc Universal owns a stake in the exercise bike maker. Smile direct club is expected to price its own ipo sometime tonight. That offering could raise as much as 1. 3 billion the government is out with the august Producer Price index in 90 minutes economists headlining inflation 1 10 of 1 wholesale inflation is seen rising by. 2. Lets take a look at whats been moving this morning dom chu joins us from cnbc headquarters dom, what do you have . As we take this conversation that you guys were having with Richard Fisher about rates and what it does to the market, we have seen interesting reversals by this rotation, some are calling it, in the markets overall. One of the places that we are looking kwoes closely is not wi banks but in europe given the ecb and Everything Else. The spdr s p is up fractionally. Since the lows that we saw over the course of the last couple of weeks, this particular etf that tracks arguably the more Interest Rate sensitive parts of the banking industry, that is traditional lenders at the midscale size for regional banks, its up about 11 in the last week and a half or so span there. So a lot of this movement here in regional banks is a key focus. One other place to kind of take a look at as well in terms of some of the other movements were seeing in the marketplace have to do with whats happening right now with the oil industry and Oil Services Sector specifically the oil services etf ticker is up half a percent premarket. Over the course of the past few weeks weve seen a bottoming out in terms of this etf and maybe arguably etf prices and a move higher by, get this, 22 in just that time span as well so energy a key focus there. One of the places, not just balances, weve seen some money come out in a precipitous way out of certain consensus trades over the course of the past year specifically some of the Real Estate Investment trusts focused on technology and telecommunications services. Three companies, sba communications, you can see there have been a trend higher pretty much all year look at these moves recently in the past four or five days, down between 7 and 10 . Income producers that capitalized on growing optimism over technology and wireless infrastructure, those stocks taking the big hit those are some of the trades well be watching for to see if the trends continue in trading today, becky back over to you. Dom, thank you very much. Joining us to talk more about all of this is barry knapp. Managing partner and director of research at ironsides macro economics. And Christian Imani and Richard Fisher hes a cnbc contributor. Gentleman, welcome to all of you. Richard did a great job of just setting this up. What the negative impact would be or what the positive of lower Interest Rates other places has been for us, and thats the Corporate Bond market and the u. S. Equities market barry, if the fed did what President Trump is pushing for and pushed Interest Rates down to zero or below, would that mean that our stock market would either correct, collapse, collapse, what do you think would happen oh, no i dont think it would cause the stock market to collapse necessarily its pretty clear that our bond markets a major beneficiary of the diminishing supply of safe assets globally, right so this is far more true this cycle than it was even prior cycle. It was probably the best paper that was presented at jackson hole this year was from a guy named Christian Murphy about the supply of safe assets. So that was a major contributor through the risk off event we had in august to pushing rates higher i dont think that the stock market would collapse at all id like to add a point with respect to the dollar. I think whats commonly misunderstood about what happened in 2014 to 16 is theres two effects when the dollar rises the trade weighted dollar went up 25 in the course of 18 months theres a translation effect when you translate the revenues and earnings back to u. S. Dollars that if, you know, clearly slowed and contributed to the earnings recession we had during that time period, but then theres a competitiveness effect whats clear is even with that 25 increase in trade weighted dollar, there was no loss of competitiveness for u. S. Technology companies or Industrial Companies because as soon as the dollar stabilized, it didnt need to reverse, just stabilize. The margins, earnings, revenues came back. U. S. Companies do not compete in price sensitive commoditized products the dollar going up is not a negative, i would argue its a positive its completely wrong to think otherwise. I think the impact of the dollar is a little bit more than that i think competitiveness is certainly an issue, but i think dollar certainly gives you an indication as to which way the wind is blowing in terms of flows. When you have the dollar going up, whether that is calling a draw down in the markets or not, it doesnt really matter what that is telling you is that a lot of times the flows are coming in into safe assets where the nominal yield is quite good. I think its definitely the best weathervane that you can find in the market its coming back to negative rates. Thats an interesting topic to explore because ecb will be doing something. I think while we may not like it and we may have or we mayo pine for other things like fiscal measures people take, nobodys doing anything on that front, especially germany. They can do a lot but they are not inclined to do anything. In light of that, i think the only game in town we have is the ecb. As far as im concerned, picking between trosche and draghi, im picking draghi he saved it. Beckys friend warren buffet likes to say when the tide goes out you there we go dont want to embarrass you. We had a segment on this before no, but heres the point. What ugly credits have been hidden by the sea of liquidity and what happens when it recedes . Is it ever going to recede . We know there are ugly bodies the banks have been hammered its pretty hard for me to argue its beneficial. You could say the positive part, it could have been worse. Exactly, but thats a thats double negative we cannot ignore. Think about it, when the fed was tightening policy in 2018, what were we talking about . The fact that tightening of policy is having a meaningful impact and when you have a 10 draw down in the equity market, that really hurts people and that certainly helps hurt the Economic Outlook and what people do from an investment standpoint so this is real. The fact that we havent had a significant draw down in my mind is a positive as opposed to a big negative again, trische, that was a liquidationist whether that is correct in this day and age i think we can debate until the cows come home. Trische had better hair talk to me about it in terms of going 2 fed funds rate to 0 is obscuring what the actual issue is at the moment what are they going to do in november 1 4 point cut. Is that going to be it is that going to be enough i wouldnt answer the question about whether its going to be enough because in my view its completely unnecessary. Unnecessary. The real issue here is were impairing creative destruction, impairing credit creation, ultimately making weakening productivity growth. Look at banks returns on growth relative to u. S. , its half. Look at bank return, its half of the u. S. Isnt that kind of a straw man. If you go down 1 4 point were not automatically europe of course of course. I think the quarter may be it and the reason i think it may be it is because the mix of growth has shifted decidedly. What i was so bullish this year though weve shifted back to more consumption driven economically about in 2018 was growth and now if you look over that the tax cuts and jobs act the last three months, core cpi, boosted investment, particularly intellectual prope 2019. Core pced are picking up wage growth looks like it might be driven higher by a tight labor market more so than labor market fluidity. Thats turnover and dynamism if that inflation impulse does start to accelerate, the fed is going to find themselves the boneheads will find themselves between a rock and a hard place. Ive been questioning or had the view that it would be quiscient for quite some times housing is a very big deal because those shelter costs are starting to go up. Thats the one sector exhibiting a phillips curve this entire Business Cycle that could get them or take these off the table. I think when we frame things as do we need that, whether it is necessary today or not, thats kind of approaching it slightly differently one way to think about it, did they have to tighten 2018 . And if they didnt have to tighten, unwinding that, is that such a bad thing right i agree our assertion would be that we probably do one in september and if the market and the economy remains where it is, where Business Investment is really not picking up after its sugar high, they do one more in october and one more in december if you think of it as an unwind of 2018 tightening coming off of tax cuts sugar high, it may not be such a bad thing. Can i ask one quick question of both of you can you name a business that can say i dont have access to Funding Capital . Cheap capital . Name one thats not distressed. Wework. Yeah, but still even that valuation. Thats easy. Every operating company in america, if you asked every operating company in america ceo or cfo you used to worry about the small banks. Small banks, regional banks do you think any one of them will say we cant we need to cut rates . Or any operating business, we dont have access to cheap capital . Can you name one no. I dont think thats the issue. The fed manages the real economy. Thats the real economy. Were talking about markets here of course. But the fact of the matter is, if you are going to make substantial investment decisions, whether you work off of 1 or 1. 25 really doesnt make that much of a difference having said that, in terms of a signaling mechanism, what that does tell the real economy is the fact that financial conditions are going to remain easy for an extended period of time and in that environment if you go out and make investments, that probably will have good outcomes for you i think from that signaling mechanism, that communication mechanism, cutting rates makes a great deal of sense even if it doesnt have any direct impact on the Real Investment today. All right 3100 on the s p is where youve been and youre still there . Yes. Okay. Solidly. Thats higher than where we are. We are and we will probably get there in not too distant the future. Thank you for coming in richard will be here. Barry is a former barclays guy. Lehman, barclays. Got to have full disclosure. Coming up, Health Care Stocks have been on a roller coaster ride this year the global trade war, politics and decisions by the fda have all taken a toll well find out how you can make money in the sector next stay tuned, youre watching squawk box on cnbc were carvana, the company who invented car vending machines and buying a car 100 online. Now weve created a brand new way for you to sell your car. Whether its a year old or a few years old, we want to buy your car. So go to carvana and enter your license plate, answer a few questions, and our technowizardry calculates your cars value and gives you a real offer in seconds. When youre ready, well come to you, pay you on the spot, and pick up your car. Thats it. So ditch the old way of selling your car, and say hello to the new way at carvana. Coming up, what would happen to the richest millionaires if Elizabeth Warrens wealth tax was put into effect. Well debate when anything can happen to the ones that need the help. Thats what i want to know as we head to break, heres todays aflac trivia question. Which band knocked taylor swift out of the number one spot on the top billboard 200 last week . That answer after the break. I dont know squawk box will be right back. The stones no, maybe not. Coach saban we have Health Insurance. Did Health Insurance pay for everything . No, we still have bills. Aflac gives you money directly to help with those. Aflac and your deductibles, knee brace, whatever you choose. Aflac sounds like a winner. Umhum. Umhum. We try. Get help with expenses Health Insurance doesnt cover. Get to know us at. Duck aflac dot com when i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. Welcome back to squawk box. Here to answer todays trivia quiz question. Which band we keep going back to these things. Tool. Tool. Again. Back to our previous segment the bands first album in 13 years fear innoculum came in it was not the rolling stones, i was wrong. No, thats not a new band i know a couple of the songs from there time now for squawk picks. Health care is up and its up over 18 is there room to run anna glick, health care analyst. Before we get to your picks and things like that, can we just overall, big piece in the journal editorial about first time in many years that the number of insured number of uninsured americans rose certain segments of the political spectrum, talk about this in ways that sound very very alarmed about things, blaming the Current Administration for undercutting obamacare. Is that what happened . I read that it has to dor medicaid because wages are rising and not as many people are qualifying for medicaid because theyre above making more money than allows them to qualify. What happened . Is it a negative for the United States for society . Still above 20 Million People that received insurance, right, through obamacare. I think people focus on the negatives rather than the positive of what happened. Yeah, there was a modest increase in the uninsured rate but i dont think its a cause for alarm bells at this point. Clearly the partisan differences on obamacare in exchanges are the greatest and the Trump Administration is trying very different solutions, more free market solutions, deregulating and so on. You know, the biden fixes are much more about adding subsidies, getting some of the states that didnt expand medicaid to expand medicaid, but i dont think that this modest increase is causing alarm right now. It still is expensive to join the exchanges for certain people. Yes if theyre now out of the medicaid population into where they need to get it and theres no mandate, then theyre not getting it because they dont want to pay the premiums that are so high. Exactly that happened too. There is a bit of that. Right now obamacare only offers subsidies for people that have about 200 of federal Poverty Level on income. Yes they should certainly shore up. The subsidies stop. Theyre weak for folks that are 50,000 and above some of your picks have to do with if theres a Medicare Advantage for all . If medicare goes and covers everyone, theyre going to want Medicare Advantage theres a company that can satisfy that that . Which one . Humana is my pick on that theme. Theres been such talk around medicare for all its going to end up being Medicare Advantage for all if they even expand it, and i think they will, for people between 55 and 65, the Broader Market will expand and only 1 3 of the american senior population is in Medicare Advantage. Its growing three times as fast as governmentrun medicare this is a pure play or closest to a pure play humana on this, theyre gaining share. Theyre the leaders in this market theyve got built by and partner strategies across home health, retail clinics, telemedicine and they save money. Is it profitable for humana its profitable its 4 to 5 on pretax margins, but i think what i always see in the news flows, its not saving money. Well, american seniors who go into ma dont have to buy supplemental policy. Thats huge really its 2500 a year for a fixed income senior. Thats a huge amount of pressure. What else the second picky have is cvs. Its a value name. Sentiment is improving ive been bullish on it now for three to six months. Second quarter earnings were very strong. Theyre building out retail clinics and health hubs in pharmacy and i think thats going to transform health care theyre building out home d dialysis and doing a Clinical Trial so more americans can age at home and there is a lot of synergy potential with aetna there should be up side going into the Third Quarter and as they guide for 2020 getting into, you know, the 2020 plan here so thats my second pick so youve got Contingency Planning just wondering, depending what happens a year from november, would a Biden Health Care plan be completely different from a warren Health Care Plan or from somebody else . What are you preparing for and not to say that i dont know which sides going to win at this point so early, but is there a big difference between biden and warren when push comes to shove and dealing with congress and Everything Else wouldnt it be sort of the same, i think . Its getting to be more of, you know, the same i think the only one thats off the reservation still is Bernie Sanders whos on the single payer, if you will, medicare proposal i think the last time i was on with you harris hadnt come out with her plan, but shes moving to Public Private partnerships as well. I think bidens is only 750 billion. So its, you know, much more contained effort for a small sliver of under 65s to get medicare they can opt into Medicare Advantage or not then they are also proposing a additional subsidies sanders getting it done. You can do something with the super delegates . What was the price tag on that 32 you know, if hes trillion if he blows up employer sponsored insurance. We go to 0 Interest Rates. Youre the worst democrat in the history i know. When you were a Texas Democrat i was a conservative democrat i got 1,653,000 votes. Because i was a nsvavecoerti democrat, no one voted for me. Rightly so. Squawk box will be right back well talk apple Johnson Johnson is a baby company. 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. That could allow hackers devices into your home. Ys and like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Still to come on squawk box, how Elizabeth Warrens wealth tax would hit millionaires what it would mean for the economy. Squawk box will be right back. I wish i could shake your hand. Granted. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. Liberty mutual customizes your Car Insurance, hmm. Exactly. So you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty a new paper by two french economists who helped Elizabeth Warren device her proposed tax plan on the wealthiest americans shows billionaires could have collectively lost billions of dollars in worth over decades if they hadnt had a wealth tax robert frank joins us. The 15 richest americans were worth just under 1 trillion as of last year if the warren wealth tax had been in effect since the 1980s, their wealth would be cut in half the new paper by the economists who helped create it it shows how the 400 richest billionaires would be affected if that annual tax had been in place since 1982 lets look at the individuals. Jeff bezos worth 160 would be at 87 bill gates would lose 2 3 of his fortune down to 36 billion and warren buffet would lose close to 70 of his net worth down to 30 billion. Mark zuckerberg would fare better his tech wealth is more recent losing only 1 4 of his wealth. Economists said the tax would, quote, restore fairness to a system wherein come is taxed but wealth often remains untouched by the irs now the wealth tax has largely failed in europe where 12 countries used to have a wealth tax, now its 4. Europe made it too easy for rich people to move to a neighboring country with no wealth tax european banks allowed widespread off shoring and they say governments relied on selfreporting by rich people rather than the government to value their assets the u. S. , these economists say, could provide better enforcement and they propose a 40 exit tax on those wealthy americans who want to leave. Lets get to it for more on stay with us. I would have talked to you, robert yeah. For more on im just glad to see you today. Yeah. Reports of my death are exaggerated. Senator warrens wealth tax, Grover Norquist, americans for reform and seth hamlin number one, i think its funny that, seth, i think you made this point that, you know, for us to leave here, wed actually have to leave the United States. Over there, its what the hell, one european country is the same so people that live in sweden really dont like sweden, theyll just move to norway, just, ah i mean, it really makes no difference which european country theyre in, thats why it didnt work over there . Theyll just pull up stakes and move but we cant do that here i think thats right. Really . That sounds either move or pretend to move within europe, right . Whereas, in the United States we have a citizenship based tax system where you cant just move to another country youre still an american citizen. Youd still be subject to the taxes. I dont know, im a proud italian that loved waiting in italy. I can move to some other european country its all the same. The other thing, seth, that really got me was i read that these gentleman that have done so well and many of whom have signed the giving pledge, they have billions of dollars, they do i would when i read it it was like, wow, theyd only have half of what they were able to accrue if this had been in place in 1982 and then i saw that that was celebrated by the authors. With no studies done its up to me. There are a lot of millionaires. How do we stop that, seth . Quickly. Grover . The wealth tax makes certain. The commonwealth tax. Thats the way the income tax was solved its only going to hit were only going to hit the ri rich thats 4,000 and theyre paying that tax you will be paying it and your children will be paying it and advertise it to start with. Its a tax on savings. Its hard to steal it. Its taking half of the capital inside its in person and theyre capital. Its at the highest level now it does go to fi philanthro philanthropy under the warren plan they do tax foundations. The bill and Melinda Foundation would pass it. Wealth can never get taxed through a lifetime is there a fair way to do that well, what youve got, of course, is that this is savings over time. This is your lifetime savings. The government has to know everything about you they have to know whats in your basement they have to know what gold is in your teeth. They have to know your total wealth this is why all of the European Countries are giving up on it. The British Labor party decided they couldnt 80 of the wealth by the wealthy is Financial Assets reported on 1099s or publicly traded stocks. Theres a small amount thats collectibles that are harder to value like inside your house the vast majority is already reported to the irs. And thats called savings and investment this is a tax to destroy investment in the United States and hand it over to the federal government to spend on stuff but youd be its a massive tax on lifetime savings of individuals and handing it over to the government and taking it out of the economy, out of the stock market. They dont have the same thats the weird thing is that theyre going to be treated differently. They paid taxes the first time if you dont Index Capital gains to inflation, who knows how much that theyve actually made 15 of wealth is inherited. The rest of it is stuff people earn so the idea that it hasnt been taxed is silly we just saw the new report out from the census guys, the genie coefficient. We have to let seth in. Richard will let seth in. Seth, markets go up and down. If you are going to do it on trading assets, if most people have their stuff invested, how do you account for that on this plan secondly, how do you counter the signal youre sending to the American People that this is just the beginning of becoming totally intrusive and taking away what theyve earned through their hard work . Two questions. Sure. I think on the first point, i mean, obviously volatility of assets is an issue and you can do something you can allow, you know, refunds for past years or do averaging over certain years. There are ways to easily address that easily . Interesting. Okay go ahead you know, obviouslyany tax rules are going to be intricate, you know, but we have ways to deal with things like that, business losses, for example, and the tax system its not rocket science. But then on the second point, i think theres a reason why 60 of the American People support senator warrens proposal and only 20 oppose it people understand that wealth among the top echelon of americans has grown to historic proportions and then i think one thing we havent talked about is, you know, were not going to light this money on fire its going to be reinvested. Senator warrens plan would reinvest it into universal child care, universal prek and relieving Student Loans for 95 of people who have Student Loan Debt i mean, i think we need to think about the effect on the future effect on entrepreneurship, on savings. Seth, we got your point there. Yeah. So there are things about raising up the people instead of penal liedsing the rich people. Right i guess our own jim cramer, the great jim cramer mentioned that wall street executives have told him that Elizabeth Warren would not be great for the country or for whatever if she was and at this point she actually tweeted that out that if wall street hates her, thats the greatest thing you can get and you said the same thing, that youre doing the right thing to foster do you really have the idea that wall street is mostly greedy people that dont have the best interests of the company or the economy at heart . Do you think that providing capital for startups and raising money for wall street, thats all a bad thing or are you polite sizing it because of the crisis and people still blame wall street because of the crisis senator warren calls herself a capitalist, a proud capitalist. I call myself fair and balanced to get the Financial Sector back to its original purpose, which is to pool savings and invest and be an intermediary for real street is wall street a bad thing for the country, seth . Do you want to get rid of wall street no, of course not we want to hold it in check it. In check all right she should absolutely run under it. Good luck saving money in new york, california, omaha. Were going to hear this between november of 2020. Only 20 months. A lot tomorrow night. Thank you, seth thank you, super grover. Coming up, we will break down apples event and tell you what it means for the stock and streaming wars squawk box will be right back. When it comes to your customers expectations, theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Cool. Here, hello starts with hi mple. How can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Apple kicking off its annual fall launch event involving a series of new iphone wearables and a refreshed ipad its anticipated apple tv plus. Anything . So i was on the phone for a second, joe. I thought they delivered and youve got the faster processor, the longer lasting battery, the better camera. I did think the feature on the watch. Its going to be pretty huge for us i think todds going to mention, the prices were pretty surprising too but lets get a little bit more into the details here. Heres what the tech company unveiled you had three more Iphone Models iphone 11, it priced 50 cheaper at 699 that price drop did surprise some that is apple trying harder to drive unit sales ahead of that 5g launch. Then you had the two highend phones so the iphone 11 and the 11 pro max starting at 999 and 1099 so the same prices as the iphone 10s and 10s max as last year all going on sale september 20th i did check up with gene muenster he said the question for investors comes down to this is apples focus on speed, battery life and camera quality going to be enough to keep the iphone franchise stable, and by that he means flat to slightly up until the expected arrival of 5g phones in 2020. Munst st muenster thinks it will. Back to you. Lets continue this discussion on apple bringing will power, Senior Analyst at robert w. Baird. Todd, lets start with you right there from what josh was describing this new generation of products that was introduced. Obviously expectations relatively low do you think they were met they were exceeded fell short do you think the products get traction i think what josh just said i dont know that they fellow. I think pretty flat on expectations we saw though longer battery life on the pro models, 4 hours and 5 hours depending on the size you buy and thats huge because everybody i talk to is saying they want two things out of their smartphone, right they want battery life, they want a better camera apple addressed those hers here. And then on the iphone 11, apple dropped the price by 50 bucks to 699 it only just doesnt have the zoom camera but it does still have a nice display, not as good as the other ones, but it does focus on camera and battery lifes an hour longer than last year last years iphone 10r was the longest lasting iphone ever. They did a good job by dropping the price 50 bucks with tariffs coming in. A lot of the people i talked to had an iphone 6, 6s. If you have Something Like an iphone 10 from a couple of years ago, even last years model, this is more of a tick upgrade, not the big one that im looking for next year when apple is probably going to have 5g and other features. Apple shares did finish the day stronger after the event by a bit. What do you think this all means for the business i mean, essentially now that you have this sort of video streaming product as an addon, theyre in incremental improvement mode. I think todd nailed it in terms of some of the key specs in terms of improvements the improvements battery life in iphone 11 pro and pro max is a really nice enhancement. I think there were low expectations going into it i think they met those on the hardware side. The real story out of the event was the services it was apple tv plus it was the pricing there i think candidly the real trojan horse there is their push to offer that for free with the purchase of a new device for the first year that could really help accelerate subscriber growth which is a key for them longer term on the services side. You say its key longer term. If they took all of netflix tomorrow its less than 10 . How big of an opportunity is this, will a lot of it is just so solidifying the ecosystem thats one of the keys. Its putting the pieces together its not one of the services pieces its apple arcade, plus the tv plus, app store, icloud. All of the things bringing it in apple music. Its more about the ecosystem. We do a semiannual survey i think we all know the smartphone demand has been muted. Many of us are waiting for the 5g iphone and 5g generally within that environment apple remains resilient. More than 60 of people are going to stick with iphone and part of that is that ecosystem. Will, todd, thanks a lot. Well have to leave it there appreciate it. When we come back, senator marco rubio talks u. S. China tensions, the hong kong protest and much more. Take a look at the futures they hover around the flat line. Dow set to opeupn 34 points s p up 4, nasdaq up 18 you spend days researching bed sheets. And weeks picking a dog bed. So why would you settle for just any bank . Just do what you do with Everything Else. Ask the internet ask your friends. Ask your co workers. Were pretty sure theyll send you over to us. Because were not just a bank. Were an ally. Ally, this is pamela how can i help you . I can shine. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. 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. Pedal to the metal on the way to a highly anticipated ipo. Apple disrupts the content wars a low price point. Should netflix, disney and amazon be worried. Our squawk newsmaker this morning, florida senator marco rubio will join us to talk tariffs, trade and President Trumps tweet about the, quote, boneheads at the fed. The final hour of squawk box begins right now live from the most powerful city in the world, new york. This is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square. Im joe kernen along with becky quick and mike santoli our guest host on this september 11th, 18 years after that horrific day we have former fed president Richard Fisher, cnbc contributor. We never forget. Its useful to think about all of the people we lost. On wall street, a lot of people and how grateful we are for the First Responders very important. I read an article the other day, did you see that . How many sons of the First Responders are now on the Fire Department and the Police Department and all of that thats what makes america great. It is i think thats true. One of the many things take a quick look at the futures this morning which have improved a little bit since last time we looked were in the green about 26 and change. The nasdaq up about 16 or so and the s p up about 3 points or so. Weve got some treasuries now. Treasury yields at about 2. 2 on the 30 year. Richard, just real quickly, youre an at t board member. We saw the statement from at t do you have anything that you can add, any insight that you can add given that were now seeing an activist in Elliott Management try to shake things up at the company . Can you tell us anything about what the board discussed or any insight into the feelings . No. Zero . Let me just no. I never comment on the business of the boards i have the privilege of serving on. At t, pepsico, Tenant Health care i just dont talk about it. Ill tell you what struck me. It was three years in the making of trying to do this acquisition and the government held it up. It didnt happen until february so in the statement did you make the point that it would have been hard perhaps to try to do all the things we were planning to do when we didnt even know if it was going to happen until february completely . Doesnt that isnt there something to that or not well, i think the statement speaks for itself. Which was were in the process of ill just leave it at that. Thats what weve said as a company and, again, joe, i just cant comment. Thanks for trying. All right i like your perspective we cannot not comment. Of course. Youre sitting here okay all right. So that thats good enough, mike thanks for that. Good try. Here are the other stories investors already talking about today. President trump taking to twitter this morning to call for lower Interest Rates and to once again blast his handpicked Federal Reserve chief. They should get it down to zero or less and we should then start to refinance our debt. Interest costs can be brought way down while substantially lengthening the great term we have the great currency, power and balance sheet. It is only the naivete of jay powell for us to do what other countries are doing because of boneheads that is currently in a quiet period ahead of the next meeting and Interest Rate decision which is next week. Many are expecting that to be a small cut. Not down to zero some deal news this morning, the Hong Kong Exchange is proposing a 36. 6 billion bid for the London Stock Exchange. You see the London Stock Exchange shares up about 5 right there. Amazon shares, meanwhile, under pressure this morning. This follows reports ftc investigators have been interviewing Small Businesses that sell products on the companys marketplace. Fitness Equipment Company peloton getting set to kick off the ipo road show. Leslie picker joins us she has more on the story. Leslie reporter hey, becky. Were here outside of Goldman Sachs which is the lead ipo underwriter. A few hours from now pell lleytons executives will be here with the firms sales force with how to hone in on how to market the deal to investors this is effectively the start of the road show where the executives will travel the country over the next two weeks seeking to sell more than a billion dollars worth of stock to investors in this ipo they set a price range last night that values peloton at about 8 billion their pitch will focus on a few key areas. High retention of users. The stickiness of their product. What they call essentially addictive fitness. Also they say their model is vertically integrated. They control the endtoend supply chain whether its the media, software, delivery of bikes to homes and so forth. Also, they say for investor purposes theyve got a very predictable revenue stream as well as Margin Expansion that should be somewhat easy for investors to model out now its worth noting, guys, that comcast, the parent of cnbc, is an investor in peloton and as one road show begins, another one is coming to an end. E direct club finalizing the pricing for ito to date. Theyre currently seeking 1 billion in its offering. They published a note this morning saying Investor Sentiment is bullish they expected to price at the high end of the range they had been marketing guys leslie, thank you very much for more on this and the rest of this weeks ipo news, lets brett in Rhett Wallace also steve jhang who is founder and managing partner at kindred ventures why dont we start with you, steve. Ask what you think of pelotons pricing . What do you think of the overall ipo . I think peloton is sort of the first of many connected Fitness Companies but by far the biggest one today. I think health and wellness overall across Consumer Sectors is a strong trend so this is a highly watched ipo not only in Silicon Valley but broadly across the globe as people think more and more about health and wellness theyre spending it across things like beyond meat looking at peloton, even invisalines parent are in that space the consumer mind set is getting smarter and smarter about the products. What did you consider this company . Is it a fitness bike company is it a health and Wellness Company . Is it a Technology Company as a result what sort of valuation do you think it deserves i think its hard to put companies these days in one bucket i think these are old categories any Hardware Company, we were just talking about apple in the prior show, is it a Hardware Company or is it more than that . And it is more than that its hardware, its software, its services, its media content. And thats true of peloton peloton, if you look at the founders, they actually come from software and media, and i think the hardware is essentially a vessel or vehicle for many of the great things that theyre doing with content in classes and trainers and so really you have to have a Multidisciplinary Company and team at this point to sell hardware now if you look at the subscription model, that tells you right off the bat that this is more than a Hardware Company, that there is software and services here and content that is very key to reducing churn and to keeping people engaged as customers. Rhett, im very glad you hr here today because youve been here for all of the ipos grading them you say peloton is really a better example than what weve seen in many of the recent ipos because they get more numbers. Its a shining example of what you should do if you want investors to model out your business peloton did something shocking in their prospectus. They gave us the lifetime values of their customers which is just something that we almost never see and its really sharp contrast to Something Like wework where we cant see what it costs them to build a new location, we cant see them to fill up the dust in those locations so against 550 locations we have no idea if its profitable to build a new unit or not where peloton they roughly break even on the hardware they acquire the software set for free and they make the Software Margin or subscription margin on that person. To your point about categorization, we see comparables. Peloton looks like fitbit that meets go proand yeti and canada goose for fashion apparel in there. One of the things with a go pro and fitbit, they were similarly sized and similarly growing but they were profitable they were making a margin on the hardware alone they didnt have the subscription up side that a peloton has, bun one of the things thats really interesting about polo ton is most of the revenue is coming from hardware. What does it make overall when you measure all of them 6. 58. One of the things that hurt it is its expensive. At 8 billion on a, you know, basic valuation, 11 billion on a fully diluted. Fit by the and go pro were more like 3 billion when they came out. What does 6. 58 mean in your scale . Sorry about that, better than average. Sort of way better than like an uber, for example, but its not coming in where some of the sass names like the cloud players, like data dogs are coming. Let me ask you a broader question about all of the ipos were seeing, specifically with we work which seems to have so many issues coming out is this the emperor has no clothes for the ipo market where youve got to put up or shut up . I mean, its a risk weve been asked what do we think about wework we were pretty vocal here and elsewhere about the total lack of transparency into a business that loses 2 billion is a problem because theres only so many billions of dollars right now i think wework has presented with a great opportunity. The market has spoken to them about what they dont like, both about the transparency and the governance, conflicts and so forth. I think as far as favorability from a valuation standpoint, its going to be hard for them to find a better market. If they push back and wave, that would be risky the market has spoken to them about sort of adult governance of the company and transparency into the business. Like tell us the economics if this is good, this is a favorable climate. Fantastic opportunity, wouldnt that be my idea of a fantastic opportunity . You have to think about it the right way. You have to get a good nights sleep to rethink about this opportunity. People are really struggling with this thing. We heard rumors this deal might struggle to go at all which even as bad as lyft was, even all the problems with uber, never heard maybe were going to pull this deal with so much riding on it, since they have the debt contingent on the equity getting done, the markets been clear with them about what it doesnt like these are all fixable things does the founder need 20 to 1 volti ing voting power its too late to undo some of the issues having the founder take out 700 plus million before going public. Too late. A personality transplant is not an option for this thing, but as far as the company is concerned, most of its built, right . They have a couple billion of revenue. The template is built. What you need to do is make the Unit Economics much more transparent and make the governance something they can live with given how much capital is yet to go into the company because theyre still sort of towards the bottom of the pay curve. A lot more money going into the company before we see the other side investors have made it clear what theyd like to see before they hand it over. They can listen or not they can give investors what they want or wait and see but, again, seeing cloud fare up its price range, we have one more example of how good this ipo market is for companies that investors can understand wework could make it more understandable. Brett, steve, want to thank you both for your time good to see you. Thank you. Coming up, florida republican, senator marco rubio will join us hes criticizing a Government Investment decision thats supposed to benefit federal employees but rubio says at the same time its helping china undermine the United States. That interview is next when squawk box returns when i lost my sight, my biggest fear was losing my independence. Mmm. Good. So ive spent my life developing technology to help the visually impaired. We are so good. We built a guide that uses ibm watson. To help the blind. It is already working in cities like tokyo. My dream is to help millions more people like me. It is already working in cities like tokyo. The light beer youve been waiting for has arrived. Lower carbs. Lower calories. Higher expectations. Corona premier. China was out today with a list of u. S. Products it plans to exempt from tariffs, including items like animal feed ingredients and lubricants and some cancer drugs. The question now on whether this could provide an opening for goodwill or progress as negotiators get ready for trade talks. Joining us for the take on where this stands and the tensions in hong kong and more, senator marco rubio of florida great to have you. Thank you. Been a while, senator good to see you. Good to see you the thing i think we need well Start Talking about something that you had an interest in, and that is that you need, i guess, to look closely at investments from time to time to see exactly where things are headed and the msc index, msci index contains a lot of companies shanghai companies. And if our retirees government retirees are investing in that it seems like theres two aspects to that. There is really no such thing as private companies in china compared to what we have in the west and certainly in the United States theyre all to some extent instruments of state power the first question is whether u. S. Investment dollars should be propping up these companies that are actively seeking to undermine u. S. Economic and National Interests but the second point is the Transparency Part of it when you sell securities on u. S. Markets and exchanges, there are transparency requirements. You have to go see the audits. You want shareholders to be protected. There are Disclosure Requirements and things you want people to know, the risks theyre running, what theyre making and how theyre being managed. We dont have those insights the chinese require all of these records to be kept on the mainland and they block, they block our ability our regulators ability to go in and see whats going on truly behind the scenes so you have american investors, including federal employees through the retirement program, the tsp program, investing their hardearned dollars for their future retirement into companies which we have no oversight into comparison of virtually every Company Selling securities on our exchanges and in our markets. Seems like you could get some bipartisan support for this to stop it . Yeah. Is that in the works . Our bill is bipartisan and its a new issue a lot of people arent aware of this i learned about this a year and a half ago and its an extraordinary risk moving forward. You can imagine what a how much leverage that is against the United States and against china. Irrespective of Everything Else, i think the question the fundamental question on this and on various topics regards china is how come their companies, their firms and in this case those companies thatre american meet or other companies have to meet in this case in terms of transparency and the ability of regulators to go in and see whats going on and provide that information to shareholders and those who are trading, including at the retail level . Can i ask a question, senator . Last week general mattis made an interesting comment which was you cant expect authoritarian control freak, he didnt use that term, but communist intrusive government at home, china, to be a force for liberalization and capitalism abroad isnt and you cant square that circle. Yeah. I assume you agree with that. This is the this is the disconnect that we have in trying to deal with china in financial terms. Yeah. Well, thats exactly right frankly, their political culture is not one that they dont view things the same way that we do these are not government leaders that somehow understand our system and decide to go in a different direction. They have a very fundamental different view of everything from human rights to what real democracy means. Heres what happens with china they are and are going to continue to develop into a great power. This is not about containment. This is not about stopping the rise this is about having a proper balance in our relationship with them which is growing increasingly unbalanced frankly because we have made the mistake as policy makers in this city for a long time of ascribing to the Chinese Government and the chinese system attributes of our own system we see a Chinese Company and we say, theyre a Corporation Like one of ours. No, theyre not. American corpses dont have dedicated seats on the board and dont have employees representing the governing party of the country they do in china, and to prove that, how theyre used as an instrument of power, you look at the business and investment deals they make around the world. Most of them make no economic sense in terms of profit and loss they are subsidized by the government because they are used for policy its how theyre getting their foothold on telecommunications and various different industries. Senator, over the years youve been a big proponent of exporting a lot of our values. Human rights values especially of the United States can we talk about hong kong . Do you think that President Trump should have been tougher on president xi or tougher on more in support of the protestors in hong kong . What do you think we should be doing there . Yeah. Do you think it is a fine line that we need to you know, to be careful not to make things worse where something, you know, really horrific could happen i dont know, where are you on that clearly, someone at the president s level and so forth, i mean, they have to deal with china holistically, the whole of the relationship, and that includes trade and so forth. I believe, however, that the defense of democracy and human rights is in our National Interests. One thing is promoting it. Another thing is defending it and thats what were talking about in the case of hong kong theres a bigger point to make and that is china made a series of international assurances about awe known my in hong kong when the handover occurred and they are violating those the extradition bill was the latest in an ongoing effort to slowly by but surely erode all of the assurances to the international community. Number one, they cant have it both ways. They cant enjoy the benefits of hong kongs special status that we accord an economic and commerce and trade with hong kong versus the main land, they cant enjoy the benefits of it and yet also enjoy the benefits of violating that aunomy the second thing thats insightful, and that is comments made by some chinese authorities. The agreements are nothing but a piece of paper we need to keep that in mind on any agreements that we reach with china on trade, on security, on you name it because they have shown that they have they dont believe that they have any sort of longterm duty to keep their commitments so its relevant on two points, and what we can do, i think my hong kong bill is bipartisan the house version as well. What it would do is require a systemic annual review by the state department to certify that in fact hong kong remains autonomous given the conditions in that given year and, therefore, still eligible and worthy of the special treatment that it receives. You dont want to set the hurdle rate too high, i dont think, to get some type of agreement. Youve mentioned using huawei as a bargaining chip isnt a good idea if we were to get more ag buys, you cant all of a sudden ease up on huawei if you said all Human Rights Violations for the precedence of arriving at a trade deal, were never going to get here. Yeah, theres a role for pragmatism that doesnt mean we cant speak out and do what we can to defend human rights because the chinese are doing everything they can to erode the principles there has to be a counter balance. Thank you. I appreciate it when we return, were going to bring you an update on some Health Care News the fda looking into a drug to help people with peanut allergies. The stock impact from this cld big squawk box will be right back. You have your snorkel . Got it. Janet, i hope youre not afraid of heights. Whats going on in here . My it staff is planning to overthrow me. 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Apple out with details on its new phones, its watches and its streaming Service Apple tv plus at a flashy event at the california headquarters. They showed off new iphone 11 models showing off improved cameras, longer battery time they said apple tv plus will cost 5 a month when it lawn muches. Coming up, we have breaking economic data. The latest read on Producer Prices is t touathe bottom of the hour we have that number when squawk box returns we know how your customers shop. And what theyve already purchased. Like this lamp. And we use those insights to show you what they might consider buying next. Midcentury modern, nice. That way, you can keep sending them offers for the perfect products. And that keeps them coming back. Hows that for changing whats possible . Nows the really fun part. M car. Choosing the color, the wheels, the interior. Everything exactly how i want it. Heres the thing, just because i configured this car online doesnt mean it really exists at a dealership. But with truecar, i get real pricing on actual cars in my area. I see what others paid for them, and they show me the ones that match the car i want. So, i know i can go to a truecar certified dealer and itll be right there waiting for me, today, right now. This is truecar. Lets get into the bigger reads now. On the trade month over month up. 4. Twice what we were expecting if you look at yearoveryear final demand up 1. 8. Year over year x food and energy, up 2. 3 sequentially follows 2. 1 if we look at yearoveryear trade on the core side, 1. 9. These are all at least 1 to 2 tenths warmer than expected. Consumer price indexes a little bit closer to home this is a little further into the pipeline but nonetheless we do see that yields have ticked up a bit were just approaching 175 on tenyear note yield. Remember, we havent violated the double bottoms of 12 and 14 under 140. So this bounce is significant. Mike, back to you. Rick, thank you very much and stick around lets add another voice to this conversation right now we have of course former dallas fed Richard Fisher is with us and jay bryson is with us from wells fargo. You were looking for a 0. 1 increase we got that on the headline but the core number a little bit hotter as rick was saying. How does that fit into the view of what the economy is doing and what the fed might do . As rick noted, its a little bit hotter than expected the yearoveryear rates are still down that makes sense weve seen a deceleration in the industrial side of the economy, not only in the u. S. But globally as well you would expect to see the Producer Price inflation soften here a little bit. So, therefore, as we wait for cpi tomorrow, do you think its not generally trending in a direction that the fed has to pay much attention well, we do think that the cpi inflation rate is going to trend up a little bit higher from here. Weve seen that in the recent moment momentum that said i dont think youre looking at a cpi inflation rate on a yearoveryear inflation basis well over 12 . This is the least of the feds worry is higher inflation. Frankly, i think the fed would welcome a little bit higher inflation. I think they want to have Inflation Expectations come a little bit higher. In general, we look at inflation in the Economy Today and there just really isnt much of it at all. Does that sound right, richard . First of all, the ppi is never market moving. I wouldnt pay a whole lot of attention to it. Theyre talking more and more, and im proud about this, about the dallas trim mean and the cleveland trim mean on the cpi. Yes. And the new york fed series as well. I think they sense things are running a little bit above 2 but its not out of control. I dont disagree with wells fargo. Alternative, get rid of some of the outliers. They trim away the extremes i was the only person at the table when i was there that talked about the trim mean now chairman powell does and all the other Bank President s as well. Youre the bonehead whats that this was the favor of stan fischer. He may have spelled his name wrong but he was right on that. Rick, you mentioned this bounce in yields, if were going to call it that, has some significance i guess this number, you know, gives it an extra little push. Where do you think were headed at least as a first stop for some of the treasury yield well, mike, i do think its very significant the way the long end has been responding i would say that approaching 190, 195, just under 2 for a tenyear note is highly likely that would just be sort of a retracement of the major drop that we had in august that will correlate with a trade above 2 1 4 on 30year bonds i do ultimately think there is a chance that the bottoms we experienced about a week, week and a half ago may last for quite a while. I really dont think were going to see any sub 150 return in ten year any time soon so i would think the real way to look at this, mike, isnt necessarily how high yields can go but the fact that we most likely i would say 60, 70 probability at least based on what i look at, that we locked in the low yields for the year. Jay, that would sort of have some pressure taken off the yield curves to the degree that people were concerned. Project ahead to the fed decision next week theres going to be a lot of talk about whether this is still a mid cycle adjustment, whether they call it that or not or whether we have to really play defense against an oncoming recession. What do you think, jay i would think chairman powell wont talk about a mid cycle adjustment the market reacted negatively to that the last time around. Hes going to say we remain ready to do whatever we need to do to keep the expansion going, stop there, end of sentence, and not talk about the mid cycle adjustment. Do you agree, richard yeah, and hes been saying this speech in did your rick azurichn i think hes learned our lessons and our friend from wells fargo nailed. Hes learned the lesson that youre not supposed to characterize this auto pilot was a comment that he made, et cetera i think its just best to say we will continue to do the job that were paid to do, which is to support the economy, keep inflation, deflation at bay and sustain employment growth. Question, do you need to have a rate cut to do that . We can talk about that right now. Do you need to have a rate cut to do that obviously were so close to the meeting. It would be unlike the committee im talking about going further than september, say on the. You know, powell has mentioned this indirectly. All the angst that businesses have about where you locate your factories and your supply chains and so on derive from this trade policy of the president. Theres i cant think of a single argument if you cut rates it will offset that angst. Lets say they cut 100 basis points, which they wont, theyll do 25. Do you think that will solve that problem it wont. Do you think theyll do 50 . They wont. It will send a signal that were worried things are getting out of control i dont think its just not in their nature despite our friend from st. Louis, mr. Bullard. Jay, that sounds a lot like cut by 1 4 point next week and then youre data dependent again with the prospects for a trade deal being one of those data items that youre dependent on. Yeah, thats right. And so obviously like everybody else, were looking for 25 next week i can see the fmoc sitting out the october meeting and waiting to see how the economy evolves, how the trade talks evolve, et cetera if we get into the Fourth Quarter and if our forecast is correct and the economy is tracking less than 2 at that point, i think a rate cut at the end of the year, particularly if inflation remains low, is a very open possibility. I think the boneheads will be contemplatetive, how is that less boneheadish. Something and, rick, is the market more or less priced for, you know, we get 1 4 point next week and wait and see at this point . You know, i think that the market has gotten so spoiled that monitoring the snapshot of fed fund futures is getting to the point where its very counter productive im not sure if we can say that any of the recent fed speak has pushed back or not on the notion of the quarter point to the extent that the previous meeting we knew there wasnt push back and we were going to get a rate cut. The reality here is i think that jay powell needs to confront the market, confront this whole notion o and how the world interprets these percentages, but i do think this close to a meeting where the percentages sit, its very difficult to historically for me to say that theyre not going to deliver. I rarely agree with the long term percentages of those contracts, but this close to a meeting theyre usually pretty much going to guarantee that theres a delivery process by the Federal Reserve. Richard, is that a conversation that you think is going to happen in terms of confronting the market, trying to send a message that the market comes closer to the fed outlook . We had these conversations when i was there all the time. Yeah. Then the question is, who do you work for the fed remember curley in the movie three stooges city slickers. The cowboy theres only one thing they manage which is the real economy. You have to figure out how the markets might affect the real economy. If you look at the real economy, that is businesses of america, employment, consumption, investment, et cetera, its hard to argue for continued rate cuts despite the president s attempt to get them to go to zero because of his real estate. Seems like not the dial to turn at this point. Well see thats what theyre focused on more than anything. Richard, jay, rick. Thanks very much Richard Fisher will stay around. We have developing news on what could be the first peanut alg learning gi drug meg terrell joins us the fda is convening a meeting this friday to evaluate what would be the first fda approved drug to treat peanut allergy. The documents ahead of that meeting came out this morning. They can often have a huge impact on stock prices the company is amune therapeutics the documents just coming out looking essentially in line for what people were expecting the fda thinks this treatment is effective. You can see this is the results of the trial that support this application. Patients had a reaction to 1 3 of a peanut when they started this after a year 67 on the trial could tolerate 2 peanuts compared to 4 who didnt get the treatment. What the fda is focusing on is the safety in the treatment you are getting peanut protein trying to build up your tolerance overtime the obvious side effects is the allergic reactions to peanuts. This is a huge problem in the United States and a growing one. Anybody with kids in day care or school have dealt with this problem with their own children or kids in their class this will be closely watched on friday the first drug for aimmune therapeutic. The stock is rising. Meg, is this a drug or a therapy . Is it taking peanuts along the way to build up your allergy. It is peanut protein. It is very highly regulated so they know exactly how much of the peanut protein patients are getting and its going through the drug approval process. I refer to it as a treatment or therapy probably rather than a drug meg, is there any estimate of the sort of total market for this potential treatment at this point . I mean, obviously its a pervasive issue, but how much do people think this will be in use . It depends on how parents really want to kind of approach this with their kids the idea with this treatment isnt that youd be able to eat a Peanut Butter and jelly sandwich, its to be protected if you got exposure. Some might want to continue avoiding it at all costs and others might want it for prevention it could be potentially quite large. Meg, thank you very much. Coming up, stocks making the biggest moves ahead of the opening bell on wall street and dont miss an interview tomorrow right here on squawk box with treasury secretary Steven Mnuchin at 8 a. M. Eastern time stay tuned, squawk box will be right back it is just after 8 45 in the morning here on the east coast and we are approaching the first of several moments of silence that will be observed today in remembrance of the 9 11 terror attacks. Youre looking at a shot of the white house. President trump is at the pentagon the first moment of silence i think is going to be there is the pentagon live. It will be in about 15 seconds and at that point, as we always do, well just stop talking and fade to black and remember what still seems so fresh in all of our minds. [ playing taps ] i got that vibe, got that vibe got that vibe, yeah, i aint petty, looking fly, looking fly, looking fly, yeah, they aint ready. I can shine, i can shine, i can shine. Imma do what im made to do. Imma do what im made to do. Built for excellence. You start from the foundation up. The excellence is reaching dreams and chasing them at the same time. Chasing them at the same time. Kevin, meet yourkeviner. Kevin Kevin Kevin Kevin Kevin Kevin Kevin kevin kevin trusted advice for life. Kevin, hows your mom . Life well planned. See what a Raymond James Financial Advisor can do for you. New phones, new services, do investors welcome back to squawk box. A little more than half an hour to go until the opening bell on wall street. Dom chu is here with a look at the biggest stock movers what can you tell us now shares of apple, up half a percent on 270,000 shares. Theyre getting a lot of analyst commentary out this morning, no surprise after that big Product Launch yesterday among the feedback so far, analysts of bank of america upping their target price to 250 from 240 they cited among other things that are price spectrum for all kind of Iphone Models and more compelling prices. Those shares the benefit of some positive analysts, some neutral commentary shares of costco, down fractionally on just around 5,000 shares premarket, big box wholesale retailer was downgraded by analysts at oppenheimer to market perform. They look for pullbacks to add to positions there and then well end on shares of micron, which are up about a percent and a half or so on roughly a quarter million shares premarket. The computer chipmaker getting upgraded to a buy rating 66 is the price target there. Their channel checks show upside shipments and better fundamentals for key memory chip products and as a result, they think that cycle is bottoming out, joe, for memory chips back over to you. Dom, thank you. Lets get to theor exchange, jim cramer joins us now. So much for the little more decorum about talking about the fed. We got bone heads today, jim, i dont know if you were able to no, i used things like chowder head and call people chief and i call them sparky and sunshine but i never used bone head and i am going to have to incorporate it into my repertoire it does stand out as being something that is lets say jarring. Jarring. Thats it. Jarring. The negative rates, that was the crux of the the crux of the tweet was from the president. The fed still needs to go down to zero and maybe further. You couldnt be more right. Why cant we have an economy that grows 3 , 4 . Why do we have to say were 3. 7 unemployment lets get more people from outside the workforce who arent in, who are unattached, to be in lets do all these things. Could be a nirvana moment. The bond market is begging them to take rates. Not just the president he should respond to the bond market is he bone headed . I dont know i know him personally. I would probably not say, hey, youre like a bone head. I know his wife too. I cant get into that. He should move he should cut rates. Bone head, i dont know. We had Grover Norquist and a gentleman from i did think centers for American Progress and i brought up your comments you once again how many times have you been shot as the messenger instead of as just the your message was that wall street guys think that Elizabeth Warren might be a problem. People get mad at you. Thank you if you parse what i said, and ill do it again today, i said the bankers offline say you got to stop Elizabeth Warren no them im trying to talk about what happens behind the scenes. Thats i la lot of what our shoi about, so thank you. People who have a hard time with theyre challenged at listening and challenged at watching would think i said stop i talked to the banks, i have yet to meet a bank ceo who says, wow, i cant wait for the Warren Administration they want to stop the Warren Administration from happening. Your coanchor, q, did send out getting more somber here, did send out some of the programming from that day when mark haines was in the anchor chair. 18 years ago it seems very familiar, but the when you watch it again, it shows how great he was and it brings us back to the just the horrifying events that day were crew down at tyou down at. I was at 14 wall and watching like everybody else. Mark was a tremendous news pro and we remember him as being someone who had a haines bottom. I thisnk we should remember that he could cover anything but he covered business he had a great curiosity and great bearing and his bearing shows that. David and i were there. We may have participated a little bit that was mark haines that was his and i you know, we had the breath taken just out of us it was pretty amazing, hewas a true pro we remember that day, jim. And thank you. Well talk to you later. Thank you our guest host today former dallas fed president and cnbc contributor Richard Fisher and, richard, we have been talking off camera about all of the events of the day. And how it seems so long ago and yet so recent. So my chief economist Harry Rosenbloom just wrapped up a speech to a Small Business group, got in the elevator, went down, walked outside of the building, building was hit truly wonderful man was saved. So i get a little emotional like this. I think we all do everyone remembers where they were all of us had friends who were there. I love jim. I watch him, highest regard, i completely disagree on negative Interest Rates i want to make that clear. I understand, look, if you go that route, youre almost saying we love monetary theory, right government keeps pumping the stuff out. The government wants lower rates. There is no inflation either, or very little. Thats fine not out of control one way or the other. I think what it does, it leads to further misallocation of capital. You cover up lousy credit that shouldnt be covered up. You dont let the system clear so but, lets wait and see whether it is successful in europe and so far you cannot argue the stock markets response to that december what would you say that that was okay, we should have just said thank you, sir, may i have another or not a mistake to go higher doesnt make there were concerns about how tight markets are becoming, pretty tough argument to make today rates have come down significantly since then so i think it is they just gave back what they took away. I think they just need to be cautious Going Forward and we have an advantage, by the way, we have a strong dollar, 4 1 2 years now, but it is nice where people want to come here it validates america as opposed it all of the rest richard, thank you. Thats my view and im sticking with it. Good. And well see you again soon hopefully. Thanks for having me on. Very welcome. We will be back again tomorrow and as for now, time for squawk on the street. 18 years today sets the september 11th attacks wall street this morning marks this solemn anniversary with a moment of silence at the new york Stock Exchange. Good wednesday morning withing to squawk on the street. Im Carl Quintanilla with jim cramer, david faber at the new york Stock Exchange. Dow up five days in a row. Nasdaq down three. Europe is green. Got yields backing up, though, as core wholesale inflation runs hot. Up 23 year on year road map with apple, upping the ante in the streaming wars bi