Week price premier will lead negotiations for china is telling dignitaries his offer to the u. S. Will not include commitments on reforming chinas industrial policy. These are some of the big demands the Trump Administration has been making in the trade talks. Update now on the crisis in hong kong. The city is struggling to recover after a night of violent clashes. Protesters defied government threats with Wearing Masks and were met with tear gas they were threatened with a year in prison for hiding their faces. Police arrested dozens of protesters and bussed them away under new emergency laws chinas military threatened to arrest protesters who aimed laser lights more protests planned for tonight. Some grocery stores, other businesses have reopened after closing early yesterday. The metro is only partially functioni ining hooch of serious and in the just dont tweet about anything anymore section of our news today, also making news the general manager of the Houston Rockets of the nba had to apologize over a nowdeleted tweet that spoke in support of hong kong protesters would seem to be something that you could do, i guess, maybe we all stand for freedom, right . Freedom of speech in particular. But in this case the nba has big interests in china the tweet from darrell mori said fight for freedom, stand with wng hong kong and then it was attacked by the Chinese Ambassador in hoouts they urged the rockets to correct the error. Spelling or what fwhu an apology he said he appreciated the support of houston chinese fans and sponsors and has had a lot of opportunity since his tweet to hear and consider other perspectives nonfreedom of perspective. The nba is now chinas most popular sports league. Politicians criticized the rockets and the nba for apologizing. Including senator ted cruz and president ial candidate beto orourke. I dont know if you watched this all out joe si of the alibaba of the nets criticizing him for the comment. You had the nba originally come out and say the comment was regrettable. But dont apologize regrettable i actually went to look regrettable and understood it deeply offended other people but didnt say that they were defending him. Then later came out on a chinese website the nba later and took it even further and said that this was extremely that they were, extremely disappointed it played out over time in this very remarkable way. Clearly whatever phone calls were being made from chinese officials to people by the way not just i imagine adam silver but people like joe sigh to say you have to do something here. The nba wants to expand in china. Yeah. Cctv said were not going to broadcast games. The sports retailer said were going to cut ties. So the fallout was immediate when it cams to these tweets. The nba had long been seen as handling some of the issues in the United States on the court better, for example, than the nfl. The kneeling controversy. And the whole view that somehow the nfl was making it was not allowing players to express their own views. This is and they were not allowed to express theyre own views for commercial purposes to some degree. This is is some ways a geopolitical version of that. Yes what youre shaking your head. Yeah. Dont bury the league. Its like the quest for freedom and everything that we have here can wait hooch we have some big dough to earn over in china right now as the nba thats what this is all act. Theyre not the only ones who are doing this there are plenty of other global businesses on this. This is like when netflix, by the way, was having problems in saudi arabia hooch hassan minaj did a show and they didnt like and they were going to try to shut them off. What does it mean china will not include any industrial policy changes industrial policy is i. P. Is intellectual property theft part of its industrial policy its all connected. Theyre saying what are we talking about soy beans now . Theyre willing to do nothing. President xi is watching all is this, with his popcorn out and is going to do nothing hes going to do nothing. You dont know that for a fact that he likes popcorn. Hes saying meet the press yesterday and going, this is amazing. Theater you can get five, six, seven different popcorns. All freshly popped. You can get a card where you wait in a separate line. Have you been to that one . Sounds very fancy, joe. I think you can view this whole nba story very cynically it seemed to me that that was some sort of support for the protesters in hong kong that we understand what youre doing and you cant even say that now hooch you have money interests in mainland china. Yes. If youre okay im not okay with that. As a social Justice Warrior the reason i raised the nfl f youre not okay with that, you shouldnt have been okay with what was happening at the nfl a year ago. There could be boycotts of the nba for people who believe no. If that was if the view was there was business interests around the nfls position a year or two ago around kneeling on the field, and there were people who thought it was inappropriate but there was a view that it was a commercial problem for them and if you believe that was inappropriate, or then you should have a different view on this, too. I disagree with that completely. I know you do. See, on one hand youre pushing back against a resupprer repressive regime. On the other hand, people are disparaging to the United States flag if you kneel where we have a different system that might be a little better overall in terms of human rights and freedom. The United States flag represents the freedom of speech so this is where it becomes very complicated. By the way, has the u. S. Taken a definitive stand on hong kong with china . Weve got interests there as well. Exactly exactly. So do you expect the nba to take a higher road than the United States government . In the United States its somewhat money driven but its also you have to tread lightly in diplomatic circles. Sure. Its not purely we want to have a good basketball game. We havent taken a definitive stand yet, can you expect the nba to take a definitive stand. We said we hope things work out okay for both sides. Im sure the nba would be willing to concede that point. Meantime, amid all that we have an update this morning on the talks between the United Auto Workers union and General Motors here is whats happening the Union Vice President sending a letter to members yesterday saying talks have now taken a turn for the worse, folks. That marked a change in tone from friday when negotiators expressed hope that an agreement to end that threeweek standoff could be reached over the weekend. The walkout is now the longest for gm since 1970 when workers picketed for 67 days stock up just a little bit there. Shares of gm more broadly we should say down 10 since the strike began you can look at what that stock looked like there this morning its up marginally coming up, new Inflation Numbers due this week. Well get you ready for the data here is the a look at the biggest premarket winners and losers this case in the dow welcome back to squawk box. On the calendar this week, fed chairman jay powell is set to give a speech tomorrow in denver well also get minutes from the Central Banks latest meeting and some new inflation data. Yippee okay, u. S. Equity futures at this hour as you can see down about 128 points, 127 points almost 400 points of gains on friday tough start to the quarter, though, as we have pointed out joining us now Kevin Cummings senior u. S. Economist and mark grant. Kevin, let me start with you, big piece in the wall street journal, now theres worries that earnings which were right on the cusp of when were going to be swamped, in the swamp, which is a loaded term now, but thats coming. Is that where we need to focus our attention in terms of worrying about whether theres a recession signal there or no i think thats right. I think the u. S. , theres very much real concern here that the economy is moderating and last weeks ism surveys indicated that there could be some more Downside Risk to the outlook in the very near term fridays jobs report was decent enough that i think at least it doesnt show that the labor market is collapsing, but its slowing right now. But the broader economy seems to be slowing down perhaps quicker than people think. Mark, we havent spoken in a while. I wonder where you think we are on the big picture, still quite a bit of negative Interest Rates around the world we have repo issues happening here i was wondering whether you consider that to be some type of canary in the coal mine or whats happening yeah, joe i think we have 17 trillion dollars in negative Interest Rates in the world right now its almost incredible nobody ten years ago would have ever thought its possible here we are. While the big story, of course, has been china, whats going on is that the nations in europe by raising taxes or selling assets the normal ways and historically they would be able to pay for their budgets and social programs cant afford them so they have the ecb to print pixsy dust money, money from nothing, and then they bought sovereign debt and corporate debt and theyve lowered Interest Rates either to very close to zero for some of the southern european nations and far less than zero for a number of other nations. And so the fed in my opinion has to respond to this they are americas central bank. Theyve got to stand up and in my opinion lower rates i encouraged them to lower rates not less than zero but slightly over zero to deal with this game of thrones issue with the european union. Does that make sense to you, kevin . Well, i think the big concern from the u. S. Standpoint is the uncertainty with regard to trade. I think theres a lot of Downside Risk. I think that its not something that we thinks will be resumed any time soon. I think if you going into an election year, even just removing the uncertainty with regard to trade, theres possibly two very different policy outcome approaches depending upon who wins the democratic nominee, whether its Elizabeth Warren or if trump is reelected so i think going into that, business Decision Makers are very unlikely to feel very inspired to reengage in activity next year that i think the Global Economy is already starting to show pretty clear evidence that the trade uncertainty is really starting to spill over to the u. S mark, did you do you think that i read an article this morning about zero hedge on repos. Im not sure i buy it, but theres something where theres smoke theres fire does this turn into anything what do you think . No no, i dont think so, joe i think this has to do with the demand for the dollar for a variety of reasons that i think the fed is more than capable of dealing with by it repo activity no, i dont think theres going to be any fire, joe. We should learn a little bit more about it this week, as you mentioned, at the top. Well get the minutes from the september meeting and i think the fed is going to be pretty clear in that theyre trying to address any sort of stress and funding levels, but that its very much a technical aspect of their Balance Sheet unwind theyre kind of going in the dark here with this new ample reserve regime that theyre following. And theyre kind of feeling their way along, trying to hit the right level of reserves. But i think that theyll make pretty clear and powell has kind of emphasized this at the september meeting, the press conference, that it is certainly something theyre going to try to address, but its clearly not a Monetary Policy issue that theyre going to try to engage in qe any time soon, that they are very much focussed on this being a technical issue and not something related to Monetary Policy but i do think theres a lot of concern in last weeks ism reports i think highlight Downside Risks to the economy that the fed is going to keep their foot on the pedal. I think theyre in this for the longer term than even they are leading on to, that they have to ease rates later on again this month. Theyll probably have to kwont that sort of policy approach further than what they think i think up until now they categorized this as a mid cycle adjustment in taking out some insurance. Clearly economy is not collapsing witnessed at least by the labor market data, but there are Downside Risks we think the economy is going to continue to struggle here. Kevin, thanks mark, thanks we have nobel prize for medicine. We do you know whats tomorrow, physics. Wednesday is chemistry. And then thursday is literature 2018 and 2019. Did you know that . Did you know that . You know you know everything. I dont. Last year the literature prize was suspended. And they couldnt find something. Hooch of the scandal. Somebody from 18 gets one. Theres two. Coming up when we return, well talk about that perhaps but also high valuations and slumping stocks from some recent Ipo Companies and one potential factor that could make startups worth your investment dollars. Its coming up right after the break. At synchrony, were changing whats possible. For instance, 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 . Seeing what people left behind in the attic. Well, saving on Homeowners Insurance with geicos help was pretty fun too. Ahhhh, its a tiny dancer. They left a ton of stuff up here. Welp, enjoy your house. Nope. No thank you. Geico could help you save on homeowners and renters insurance. Geico could help you save on homeowners each day our planet awakens but with opportunity comes risk. And to manage this risk, the world turns to cme group. We help farmers lock in future prices, banks manage Interest Rate changes and airlines hedge fuel costs. All so they can manage their risks and move forward. Its simply a matter of following the signs. They all lead here. Cme group how the world advances. Welcome back to squawk box this morning a number of Companies Going public in 2019 with hybrid definitions of and high valuations in the private markets, peleton, uber, lyft all down you can look at that screen right there. Theyre down double digits since going public slack, software specific, down only 4 since its public listing. Thats a little better joining us is andrew mcphee, the Principle Research scientist at m. I. T. , the author of more from less is surprising story how we learned to prosper using fewer resources and what happens next which is out tomorrow. Nice to see you. Thanks for having me within. Youve written a number of books and we loved all of them particularly whats going to happen to the work force and society. This is a little different, i think. Yeah. It really relates to software in terms of this specific issue on how these ipos traded and how people think about these kinds of companies, why do you think that is it a valuation story thats taking place in the market or revaluation story thats taking place in the market or is it Something Else i think the valuation story points to something that might be pretty fundamental which is that were moving from an economy where atoms are central to an economy that bits are central. These companies that you highlight, theyre sitting in the middle of them and the Unit Economics can be really difficult. You have pure play Software Company, i think slack is a really, really Solid Company we have seen zoom, zoom. The margins can be really, really attractive. This whole idea, though, that were going to graft Software Companies effectively on to more Traditional Companies was supposed to give a lot of these companies both higher valuation, a better bismodel, you think not so much. Im still longterm really positive on call it the sharing economy, on Transportation Network companies on air brbnaib the average Passenger Car is 95 of the time. Thats ridiculous. Lets put software on top and increase the utilization of those things. Whats the appropriate way to think about the value of them . You have to make it upward of the economics. They can demonstrate theyre doing well on a per transaction basis theyre doing well, then things look rosy. Was wework every a Software Company, Technology Company at all . No. Thats the other question at what point is it a hybrid company. Im a huge fan of netflix we use computers. Thats right. Really its a Media Company. Youre a Media Company and im a customer of both netflix and peleton. Of course they use technology, but it is in the background for their streaming and peletons case, a really good piece of hardware. Why is wework different from a wework if a wework is using lets say its using lets say it isnt that the same thing, youre helping assets be utilized more efficiently. Felt like a shortterm rental company with a whole lot of dressing on top of it thats falling away but there are these assets all over the economy that are underutilized. Thats bad news in some cases for the asset holders. Efficiently only comes to the owner of the asset if you have an uber who dont own the assets can they reap those benefits we see they dont make any money even though they are util