End, for clues about the feds move. Yie oil is relatively flat. Apple shares higher in the premarket after the company says new i phone preorders are on pace to beat last years record. The final countdown to the fed and mixed data out of china investors bracing for another week of opportunity. And alibaba firing back after barrons says the stock could fall another 50 from here. Apple is one of the stories of the morning. They come out with not hard numbers, but a characterization of how Opening Weekend went. Very strong, in their words, globally and on pace to outdo last years preOpening Weekend. These are preorders, not in stores yet. Not yet. A lot of Industry Data we have is based on inventory. I cant remember what happened last time when you had the 6 and the 6s launched if those were i ventory challenged or not. Apple said, listen, we know some customers have noticed how long the preorder window is its three to four weeks at this point in some countries. Were trying hard to match that demand. That suggest that. What they said today met what tim cook told jim cramer. That was an important hurdle for the stock. Tim cook will be on colbert tuesday. Well get more this week. Josh lipton has been covering this story for the past 30 minutes after the statement broke. He joins us from out west. Hey, josh. Carl, this morning apple, as you guyses weuys were mentionin us indication to customer response to 6 and 6s plus. They say customer response to iphone 6s and 6s plus have been extremely positive and preorders this weekend were very strong around the world. We are on pace to beat last years 10 million unit first Weekend Record when the new iphones go on sale. Last year apple said they received more than 4 million orders for the 6 and 6 plus in the first 24 hours. Apple is saying what preorders indicate for the first weekend of sales, but clearly the tech giant sounding a bullish note and looking for a new record. Its the real question for investors, will these new iphones be faster, camera, better camera pressure sensitive display, shooting 4k video . Will that grow units going ahead . Bulls think they can. The price cuts to the older models they think will give iphones a lift in the emerging markets. Speaking of which, chinas 27 of sales, a story over the weekend suggesting that theyre selling out over there. Any clarity specifically on china . No clarity specifically on china in the release this morning. Youre right to point that out. When i talked to bulls like gene munster, he was saying he was looking for a strong preorder this year in part because it involved more launch countries. Two more specifically, one new zealand and one china. That was a big part of the bull thesis. Well see what happens. Thank you, josh. Well hear from you later. Stock had a nice week last week, up 4 . One of the best components on the dow after we came out of the event in San Francisco. A lot of us were sitting on the beach you were sitting on the beach last week. But i was reading about apple that trades 11 times earning, 9 times earning if you strip out the cash. That argument if you can prove you have decent growth in there backs a valuation story. Josh raises the point here that the original 6 and 6 plus are not 100 cheaper. For an awful lot of people in the market, that will push volume, if not margin. What i found interesting is that we focus so much on the new products. We love the new products. A lot of us are early adopters. But the pricing scheme, the ability to rent and get a new phone every year, you know, when you look at the analysis of what apple can resell that used phone for which is still pretty new. Theres estimates they can sell that phone for 175 bucks, which is a very high price for a used phone. Yeah. Your margins can go up dramatically. The bull case on this stock often has to do in this case has do a lot with the new pricing model. Not just the new phone itself. Lets talk about the market overall. Futures are off their highs. Obviously the fed meeting later this week. That looms large for virtually everybody around world. The watch is on to see if fed chair yellen and policymakers will start hiking rates for the First Time Since 2006. In china, the shanghai had its biggest deficit in three weeks. What is interesting to where your trading live in europe and what you see on the futures here, we seem relatively immune from the china story. Which is so unlike which is not where we were three, four weeks ago. Its hard to say why on one day when china gets, you know, sneezes, the whole world catches a cold, on other days it doesnt. Part of it is increasingly im not sure anybody believes the numbers out of china. There was a wall street journal poll where they looked at analyst expectations about chinese growth, the vast majority say we dont believe what china says. Yet you still have that central defense from where we were three, four weeks ago as to why the markets fell so violently, across so many sectors. I guess it comes down to that argument about trading algorithms, and a point in time of trading. Maybe the markets have grown comfortable with the idea that china is not growing as fast as everybody thought. We repriced. Hard to say at this point. We have to see the ripple effects. For more on the markets, joining us now is ward mccarthy and brian jacobson. Ward, let me start with you. What do you think about simons question . Why today do we get these terrible numbers out of china terrible is overstating it, but weak. Yet u. S. Markets seem to be shrugging it off. I think you have to look at three different types of reactions to china. The first is the effect on the u. S. Economy, which is pretty minimal. In the longterm, you know, if china continues to struggle, the u. S. Economy will continue to do well. The very shortterm china does clearly have links to the volatility in the u. S. Markets. Because the longer term implications are not so severe the u. S. Stock market is shaking that off. The last effect is on the inflation side. China has a very strong impact on Commodity Prices. And of course Commodity Prices have been falling which makes it difficult for the u. S. To generate any type of inflation, which is a headache for the fed. Brian, are you as sanguine about the impact of china on the u. S. . Im not sure if i would describe myself as sanguine about it, but im not that worried, mainly because i dont think a lot of people believe the numbers coming out of china for a long time. But they are of symbolic significance if suddenly the leadership allows some of the Economic Data points to come in below target for a sustained period of time, that might signal a shift of longer term policy. I think most investors who are looking at getting into china should do it more on the basis of the longterm outlook, and not the shortterm. If in october, if they announce they will be backtracking on some market reforms, i would say now its time to get out of china. What about the u. S. . Im talking about the United States. When china is acting the way its been acting what do you tell the u. S. Based investor about what how they should be reacting within the portfolio . Thats a good point. Most people dont have a lot of china exposure. Whether directly or indirectly. You can see some rather dramatic moves in the u. S. Markets on the basis of shortterm news coming out of china. Over the longterm, if you look at exports from the United States to china, it maybe amounts to 2 of Gross Domestic Product or 1 . Thats not to say its not incredibly important for some companies. As you were pointing out before at top of the show, the discussion about apple as far as the growth in sales to that market that could be important to some companies. But for the broadly diversififi u. S. Exposure, its not that significant. Lets talk about the major event of the week, what the fed will do. Will they start raising rates for the first time in 11 years. It seems to be we reached a stage where were kind of at its a coin toss. If you look at what everybody is saying. Its a coin toss as to whether or not they move. Are you able to judge if they were to move and communicate clearly that theyre not going to raise rates fast, what the effect would be on the market . Are we positioned for it now or as some people suggest could we fall out of bed in emerging markets . Others say well rise what do you think . As far as the u. S. Is concerned, theres really just mass confusion as far as what the fed will do. In the shortterm, it could add to the volatility that weve already seen. Though i think in the longer term, again, because the u. S. Economy is on solid footing, that the u. S. Stock market will be able to shrug it off and continue to perform pretty well. But i think that, you know, i tend to look at the feds dual mandate as an indication as what theyll do the u. S. Economy does not require emergency rates any longer but the inflation picture is muddled and the volatility is a concern. Brian, just finally before we leave, what was an interesting comment out of london from jpmorgan, they were suggesting this could be positive for the stock market because they we will have a clearer idea if the fed is in favor of risk assets, either because theyll delay or raise and make it so clear they wont raise so soon that people will say the fed has got this. The fed is on the side of risk assets. Could you go along with that . I think thats part of. Its one piece of the puzzle. Brian, if you would. I would say if the fed hikes we could see the market move down to around 1840. I dont think thats positive for risk assets. Fed policy is like a double edged knife it cuts both ways. I think if the fed signals theyll have a press conference after every meeting going forward, that way it puts october into play, it would give them the possibility of postponing the rate hike. That would be positive for risk assets. If they decide to hike, im not convinced the markets are properly positioned for that. All right. So sanguine or sanguine. Thank you, brian. Ward and brian, thank you. We wait this big fed meeting later this week. When we come bashck, alibab shares in the red after barrons says the stock could plummet 50 . Alibaba fighting back. And Mohamed Elerian coming up. More squawk on the street coming up. At mfs Investment Management, we believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Alibaba shares falling after barrons said over the weekend that the stock could fall 50 from current levels, citing the china slow down, ecommerce competition and scrutiny over the companys culture governance. Alibaba released a letter saying the story contains factual inaccuracies and selective use of information and the conclusions he draws are misleading. We are talking about basic disagreements on what year a multiple applies to, whether or not a survey of market share is statistically relevant. So a letter to the editor understates is. Its five pages, detailed. Alibaba had to come back with a strong response. When you read this article, the journalist never uses the f word, fraud. But, boy, he sniffs around it a lot. He doesnt call jack ma a liar, but he gets awfully close. The response is flimsy. Seeming improbability of the growth numbers. Financial reports that have broken free of verifiable reality and reached a velocity that doesnt comport. They get close to saying some things. But they dont say it. They dont. Thats very important. Im not sure theres a huge amount that is substantially new in what theyre saying here that we didnt discuss and everybody discussed, all the investors at the ipo knew about and we discussed with jack ma. David traveled to china to talk to jack ma, a lot of that interview was about trust. In the article he talks about jack mas undeniable magnetism and salesmanship and beguiling vision of the future. This is jack mas response. People challenge us. Alibaba bigger than amazon . Alibaba bigger than ebay . Trust the young people. They are making things changing, innovation every day. All the consumers are the same. They want new things. They want cheap things. They want good things. They want unique things. If we can create this thing for consumers, they will come. That is not to say, of course that barrons may have caught the mood of the market or tipped the mood of the market in publishing an article like that. In hindsight, down the line, people may say, ah, it was the barrons article that turned the tide. Im not sure its hugely news. When you finish it, youre left uncomfortable about the company. Thats why they had to come back so strong. The central argument is that because of the competition, fundamental valuation should not be where it is, it should be changed to where a valuation of ebay is in this country, they say, no. They also suggest that the numbers that they claim that the chinese are spending cant necessarily be true. Right . They say, okay, this is the gdp of the u. S. This is the gdp per capita of china. This is what they claim the average chinese person is spending versus the u. S. Person. It just doesnt it strains alibaba says the data youre using is not correct. The surveys youre using are not correct. Its always a black box. You are buying a black box here. Sure. A lot has been written about the Corporate Structure and Corporate Governance and the various ties between Business Units and managers who run them. That part didnt seem new. I sat next to the reporter who did the story for six years when i was at the journal, he is no he knows his way around a Balance Sheet and an income statement. But i would argue that barrons job is to provoke and take a point of view. Certainly what theyve done here. For sure. And alibaba is taking it seriously with not just the response but the conversations they seem to be having. Have we gotten an early indication on the stock and whether or not this will push it lower . Well see when the open happens. Speaking of the open, coming up, art cashin on what to expect from todays trading session. First one of the week. Clearly a big week with the fed as we count you down to the opening bell. Look at the futures. A flattish open despite the fact that china sold off this morning. Here at Td Ameritrade, they work hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. Just about seven minutes to the opening bell. Lets get to art cashin at post nine, director of floor operations with ubs. Good morning. Good morning. People are saying let the pregame begin. Weve been waiting for this showdown for so long. Your expectations, i imagine, are unchanged for thursday . And i have new company. The International Settlements came out and suggested they not hike. Thats the world bank, imf, former treasury secretary, a big crowd on my side. Hsbcs point this morning is dont be surprised if they dont move, as you say. But that they add a press conference in october or something people havent thought about much. Possible . Anything is possible. They they also did say that a press conference was not necessary to a rate change. So though you would argue it helps. I think theyd have to explain to people where things are going. More importantly isnt the central thought you have to tell people, yes, were hiking rates but we may not hike for a long time. Thats the deal they get out. They need a News Conference to say that, dont they . Yes. But we may, rather than we will. They want commit on hiking rates if some things change, they are supposed to be data dependent. So they may have to change. You have people saying not only should they not hike rates, they should begin another qe here. On that note, what what happens if they do . Volatility . Can the markets handle it . What happens . I dont know. I would look to the emerging markets. They look to be particularly vulnerable. Well see what would happen there. The bank of International Settlements focussed squarely on that and raised concerns about whats already happened saying this is just the beginning of the tremors. Are you worried about some spillover effect in the emerging markets and what it could do to the u. S. Markets . Think back to the late 90s. Thats what we saw then. Whether it was the russian ru e ruble, that led to longterm capital management. There are spillovers here that are potential. While you can argue that our recovery is moving along, thats not true in europe. Thats not true in other places. But you do speak as a person focused on risk assets, wanting to protect that asset base. The economists, though theyre less in favor of a rate hike those purely focussed on what it good for this economy. I agree with you, but the fed has to look at whats going on in europe with the refugee situation coming in. That could turn things upside down. Really . The feds wont hike for refugees in europe . If they think europe will become destabilized. Now even germany is closing the border. They realize the high cost that theyre going to be facing. If they cant actually seal these borders and not every nation can, i dont think the refugees are stopping. You start the forecast looking at 1 million migrants letting them in led to more. The more you let n the more will come. I just got a note from my cousin, hes doing well. Im going after him. Its that kind of thing. Art, well see you later today. The opening bell, 3 1 2 minutes away. Its more than the cloud. Its security and flexibility. Its where great ideas and vital data are stored. With centurylink you get advanced Technology Solutions from a trusted it partner. Including cloud and hosting services all backed by an industry leading Broadband Network and people committed to helping you grow your business. 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