up by 3 and 1/2. the tenure is yielding 1.5 nine%, oil prices have been higher. >> joseph, thank you. make sure you join us tomorrow. >> yep. >> "squawk on the street" begins right now. ♪ good tuesday morning, welcome to "squawk on the street," i'm carl quintanilla, with david faber, and all back together for almost a month and a half. summer's over, we get back to business, plenty of ama, apple's launch tomorrow, futures are steady. europe's mixed, asia mostly higher, oil coming off the its worst week in two months. summer's over, the jobs report is out and the feds' highly anticipated september meeting 14 days away, even trump is speaking out about rates again. >> it's not a merger monday,

it's a take over tuesday. we've got a lot of deals to tell you about, and we're going to break them all down for you. >> finally this morning, apple's big event is tomorrow. we're looking ahead to what infectors should expect, but stocks are set to open higher after the u.s. added 151,000 jobs in august, investors still aer watching the fed, in anticipation of the september meeting and donald trump speaking out on rates in ohio yesterday and sounding quite different from an interview he did on "squawk box" back in may. here's those comments what he said a couple months ago. >> i've always been a low-interest rate person. if inflation comes in and we don't see any signs of that, but inflation starts coming in, that's a different story, then you have to go up and slow things down. but right now, i'm if for low interest rates and i think we keep them low and we have to compete. >> they're keeping the rates

artificially low so the economy doesn't go down so obama can say he did a good job. we have a false economy. we have a bad economy, everyone understands that, but it's a false economy. the only reason the rates are low, so he could leave office and say, see, i told you. at some point, the rates will have to change. >> a comment largely about what the next few months are going to be about, increasingly political. >> if we're a also economy, the other guys are more false. europe is completely false, i'm seeing good data out of europe. car registrations are good, some earnings are good. japan is -- i don't know, they're buying etf's. they're buying every stock. everything is kind of in the end, relative. and while i respect any candidate to talk about this, i don't know if you're calling for lower rates or higher rates. lower rates of inflation -- could you help me here, david? >> i can't. i can't and i won't. >> i need you for help. >> i will tell you we did a jobs

number on friday that was 151,000 below the expectations but most economists stuck to their forecast, whatever they may have been in terms of those rates we are talking about, whether the fed of hike in september or as soon as i guess a couple weeks from now. >> nobody changed. it was really interesting because the bank stocks stalled a little bit, but it was almost if this was in the cards and we're still going to move september. i think the stanley fischer interview was rather amazing. he's the heavy and he puts out there could be two hikes with steve and after that i think people just said there's got to be one, so let's just get it -- that's what really changed the dynamic. it was fisher saying it could be two. it's hard to take that back and have none. >> you buy the argument that whether it's september, december, whatever, the fed is more hawkish now than they were several months ago? >> absolutely. >> and -- >> absolutely. >> and that keeps the lid on stocks? >> i think they've been saying data dependent, but if there's

any sort of exogous event overseas we're not going to take action, and right now, the g20 meeting, seems okay, japan's propping is up perfectly, and europe and brexit. >> you do have the respect for political change, in terms of populous parties winning larger and larger followings. >> that's true. >> in germany, for example, some recent elections there. >> merkel delved defeat, but i think things are fine. if we added 40,000 jobs i think we'd all be saying this is maybe september, december, but retails are strong, auto sales have been okay, housing is strong. not a lot of inflation but i think they feel that rates are too low, and that this didn't change it. >> we're going to talk more about that over the next couple weeks, and the other thing is david told you a lot of news in

deals. embridge, to buy spectra, worth $28 billion, and danaher buying sefid, and buyer monsenaanto. >> these are real deals we're talking about and i want to get the take on embridge, but this has been going on since the spring if you recall when buyer came with a $122 million bid. the latest is 127, 50. we would not have learned for it if not for the jerp man publication, and the uk, namely when a publication or media outlet comes out with something you need the companies to confirm it publicly if it is in fact correct, and so they did, and that's why we're hearing about this. what i can tell you is it does appear monsanto and buyer are

moving closer to a deal and we could see that within the next week or two, according to people familiar with the situation. $127.50, monsanto made it clear they're close on price so the expectations it's going to be $130 perhaps will normal be met and be see deals as low as $12,850, but they're getting close on things that'll go along with any deal including deal protections given the antitrust scrutiny that would be undertaken and primarily, the eu, they've been doing a lot of scrutiny of all sorts of things. they've got an agreement or close to it what the overlaps are in the business and this is kind of color that i can give you, as well. a lot of due diligence has been done by bayer and there have

been multiple drafts of merger agreements. none of this is to say a deal will happen. monsanto tells in their statements -- and i've reported on them, as well, other proposals and other parties and other strategic alternatives, but we don't know what those are and i've gone on a number of roads and had various things denied so i can't tell you what they are. but specific to bayer and monsanto that began in the pursuit in the spring and now we're entering the fall, it appears a deal could be quite close, perhaps a little as a week or two away. they seem to be coming close on price. some people may be disappointed, jim, but monsanto's business has not performed well. >> it has not. >> when you're talking about trading 18 times ebitda, who started at 122, that's not going up very much.

perhaps some disappointment, we'll see. >> dupont, two c companies in the world, forget about it. i mean, the eu doesn't even want to see these two companies talking. i mean, this is -- again, a bunch of lawyers who don't worry about it. can i just say, having gone to law school, that you can call me for $1,000, i will tell them this deal doesn't -- just pick a bet -- for charity, of course. but this is another one. do you think of those hurting in the country to begin with. >> and it's going to be closely reviewed with dow and dupont. >> you have your doubts, and we'll have to see what kind included in any deal when and if we get it from these two. >> the spread is because the likelihood of this deal happening is fansful. it it's fanciful.

>> you're talking at least a year, likely. >> it's seed and these -- the farmers in europe and the farmers in the united states protected classes. they're protected classes. and you can't do anything that makes it so they suffer, because they're very powerful. we forget, the ag lobby, very bent on that. >> we have some other deals this morning, too. >> yes, let's get to those. >> being you are a pipeline guy, who can name pipelines. >> i know where they go. >> embridge is buying spectrum, in which the two shareholder bases will end up with -- 43% will be owned by spector shareholders. it's about 11 and 1/2%, creating what is going to be the premier liquids and gas company when it comes to transporting this stuff. embridge is liquids andspe spec

is gas. >> spectra, already have 50% for the year and yield nice 4% plus. i'm shocked at this deal. shocked because if there were two companies that were doing well, as opposed to putting together these drunken sailors, it were these two companies. spectra is the pipeline from south to north. we don't know if we need that anymore. they the pipelines to the northeast and maybe to new england. it's very hard -- there is -- the environmentalists have really coelesced -- >> and they will continue to be a big part of this combined company. >> and i don't know if they need all of this canadian pipe. i don't know if they need it. i'm saying this is a great deal for spectra, but they were doing great without them. i was very surprised. the people in the industry said, are you kidding me?

these were the two that didn't need to do a deal. monaco and eagle, are really protected at enbridge, and spectra, unlike a lot of jokers who went nuts in the absolute high. >> and the third-largest companies in canada. >> and biggest infrastructure n north america. >> enbridge is pretty much everywhere. i just gave them credit. i like the deal from the point of view of enbridge being able to combine and become a nationwide company, but make no mistake about it, spectra's real value, up from the gulf, what they've been able to do in new jersey and new york, and new england, which by the way is still oil from overseas, venezuela. >> finally, we're getting some reporting on the folks, gretchen carlson lawsuit, who had sued former fox chief, roger ails,

and saying roger ales will settle for carlson sfor $20 million. what's curious is her case was against ales personally, and now fox appears to be acting what vanity fair says as insurer to a ales. >> the new york magazine piece on friday, 20 million, got off pretty light. >> did i read that piece? >> i read every word of it. every word of it. this is sara ellison, who we've had on a number of times and her reporting is usually spot on. we'll see if we get anything from fox but that would settle that. the question is the actual network, and what james murder do and himself decides what to do. >> they are threatening to sue

sherman of new york smmagazine d issues what the company is calling apology, so we'll see what this ushers in for fox. >> a level of repudiation, rather remarkable. the new york magazine piece -- it's like this thing unraveled in days -- well, his career. >> it -- it came to conclusion quickly after what would appear to have been many, many, many years. >> often when you have tapes, things change. roger ales e-- i know know sher to ales -- they explain why they can go after gabe sherman all they want, but that guy's money in terms of his sources, gees. >> they've been out in front.

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wore watching apple ahead of the big product event tomorrow, the companywidely expected to unveil the next generation of the iphone 7, and could announce new versions of the apple watch, ipad, mack. t the biggest headline should be the elimination of the head phone jack but it's unclear if other major additions are coming. one of the great parlor games, jim is figuring out what they're going to say before they say it. >> the press ahead of this is kind of like unless you've cracked your screen, you're not going to buy it. this is the least amount of hype i've ever -- this is like the one that no one wants -- we haven't seen it but boy do we know not want it. >> right. >> and typically, you want to know what china's thinking and looks like china's kind of not much going on there. but india and brazil, if you go back to that last conference call, i think it matters how the

phone does in the other places where there are emerging markets. not just the united states, but there's not always a lot of excitement. >> always important to point out, it's not sure how many of a cap this keeps on growth or replacements, but the quick installment plans that are the rule for the wireless carriers, you get to the end of your plan and then your bill goes down and you can keep your phone, and if you don't feel you need to upgrade, you're finding yourself with another $30 in your pocket that can have an impact on people's willingness to trade up if there's reason to do it. >> apple as a no-growth stock, apple has a game it plays whether it goes up or down. it is the service-revenue stream and maybe it's something surprising about the watch that could matter because this phone, which is obviously the biggest driver by far of earnings, is just going to be okay and everyone's kind of just eh. now the stock has had a big move

from '93. i think people just said, look, it got too cheap, but i -- i wish there was some excitement about it. are you going to get one? >> unlikely. >> really? >> this time around. but if we're talking about the head pope benedict xhone jack, something is amiss. the expectations are solo, easy to pass. >> i guess so. i was working out yesterday watching strike back on my phone while i was working out and realizing i'm just one step away from being choked by my headphones. you know, it's like look at that, i can just go like that. so maybe i'm a candidate just because i use -- i watch -- >> yes, do you. >> now, if i had been watching narcos, i would not have risked that. >> gotta go wireless. thursday, broncos/thanner thipa >> you can imagine that game? gees, who has that? >> i'm not sure.

i think we might. >> i gotta get wireless. >> go wireless. >> we'll get cramer's mad dash and we'll count down to the opening bell. take one more look at the futures on this tuesday. welcome back from summer. more "squawk on the street" from nyc straight ahead.

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about seven and a half minutes before the opening bell here. it is a tuesday for this mad dash. you want to go to eog? >> yes, eog is the largest producer in the lower 48 of oil. but they're not done. they've just bought the yates field, but their yates acreage

is largely personalien, new mexic mexi mexico. every time there's been one of these deals -- and here they issued 126 million shares. every time they've done one of these deals, the acquirer stock has gone up and you you say to yourself, all right, where are the majors? you know, simirex has all been in there buying and buying. pioneer -- and permien is the cheapest. >> cheapest in the lower 48. >> it's a real company. that was mark papa that built this company and retired. one of the things that's amazing is eog shifted away from eagle ford. it's all permien. sheffield at pioneer said had the equivalent of $2 oil at personal i don't. the new mexico stuff, i've never trusted as much, but eog, these guys use reservoir technology

from corps laps so maybe this new mexico is much better than i thought, certainly drillings's much cheaper, so any way, this is a big deal and the stock's going to go higher, not lower. >> all right. we'll be watching that and get you to some other deals, danirer, and volkswagen and n navastar. certainly an interesting deal. we've got the opening bell, six minutes from now. you're here touy a car.

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you're watching cnbc "squawk on the street" live from the financial capital of the world, the opening bell in just under three minutes as we all get back to business with a lot of news on tap. we've been through some of the deals today but we'll get services -- ism at the top of the hour, after that contraction in manufacturing which gave some people a scare. >> yeah, that was not -- look at the individual regions when they did the reports. i didn't see that coming at all and i still can't get grasp where that is. we have residential

construction, non-residential construction, we've got very good auto build. i just couldn't figure it. sometimes these numbers are a mystery. >> relatively light macro week. we'll get williamsburg tonight, but nothing like the last couple weeks. >> we've been bombarded. today are individual stocks and people taking action to help themselves. david mentioned this navistar. and comings was not going up, it was going up for a turn in orders in china but that stock is down far more than i ever thought would happen. navistar is i guess here to stay. >> vw taking a couple seats on the board. they bet on the u.s. class eight and media truck market. >> and the u.s. class eight has been horrible. comings has a clean air engine.

>> navistar had a number of mistests, not the likes of the scandal of volkswagen, but they've watched their market share go down. navistar, to go to this investment is from volkswagen. >> and at a premium. it's trading even above where they're investing. it's having a very positive impact, because it will, as you say, takes them from -- >> navistar was -- you used to meet hedge fund members -- navistar. >> congratulations, hey, that's great. speaking of investments, ge buying two european 3d printing companies for a total of about $1.4 billion. we got stratus hired on that. >> stratus does some -- >> they print metal for these things? >> and alcoa has just spent a fortune on 3 d, al, c oa isa aerospace, too. if you buy ge off the this,

you're nuts. it's a huge company but ge continues to be digitized, but should not be moved on that. now, i want to go back to the enbridge/spect radeal, that's a fabulous deal for both. the acquirers are doing well. >> there's the opening bell. snp at the bottom of your screen, it's rains brands celeb ra celebrating the tenth victory, and apranga, from the baltick states. jeffrey's adding urban to the franchise list. >> the urban comforensinferences probably the best. urban outfitters, free people, they talked about how this is a non-promotional fall and fashion's back.

i thought urban got down -- and really just kind of crushed the stock. this is the first good quarter from hitting all cylinders. i thought it was all cylinders squared. that and foot locker were the two best. >> it's interesting the raihane brand. that stock's been low. >> one deal we do not mention was the danaher deal. we don't focus as much on them as perhaps we should, given how successful that company has been. sefi did is a global, melee cular diagnostics company. they're paying a big premium for the company, all cash, $53 a share, of course it needs shareholder approvals and see the deal closing around the end of this year, and there's not seen much of any trust or

anything like that and of course shares are up 52% trading nearly the $53 all-cash bid deal. >> they do a lot of work in hospitals and the independent reference. what i like about this, is danaher, when they spun off their heavy machine said they were going to go all in life sciences, life sciences is something that is a very exciting, fast-growth world, so this made a lot of sense. this is danaher doing what's right to be able to bulk up on life science, which may be the fastest growing of healthcare. they are doing the right thing going higher and not lower on this. >> when i covered them, they were really -- >> the wells brothers. >> i said wow, this stock should danaher's been a winner. there are a couple companies that are really kind of great technology companies that are

industrials. ge is trying to do the same thing and has a division that's life sciences, that has to get involved more and has to do some more acquisitions. >> a lot of discussion about inin intel today, and inquiring movidius, which make chips for drones. we at any time to watch their information. >> intel continued with a not-great outlook and the stock has been on fire. marvel tech reported a good quarter, but i think they could get acquired, but i'm amazed at intel amg. they've been a rocket. a lot of that is this chip shortage, fernand and -- for dram. intel, we've been waiting for them to sell that security division, mcfafee. >> how about piper on net flicks, some of the parts 1r, 1?

>> they've been trying to get that thing rolling now. amazon up 14, google up 2, neck fli netflix has been down. >> i saw the piece about some of the parts. this is the piece about u.s. subscriptions and they were weak two quarters in a row so people don't want to give them the benefit of the doubt. i think there's a lot of belief that competition has gotten very tough in this area from amazon. >> we do have confirmation of something we were reporting earlier from vanity fair, 21st century fox has put out a press release, guys, saying it has settled a lawsuit with gretchen carlson during her tenure at fox news, she maintained the highest level of journalism, and they are paying ms. carlson

$20 million and the settlement has been confirmed by 21st century fox this ongoing story that of course the main part of was the very quick dismissal of roger rog roger ales, who created folks, chairman. >> fox stock has been particularly bad. people feel that was a billion dollar operation that could be in trouble? who knows. >> it's one of the prime generators of cash flow at the company is fox news and there have been questions given the change in leadership, whether over time there will be a change in programming at all. that remains unclear. but certainly it's got to be something investors keep in mind and say the growth profile of this company, which has suffered on a number of fronts over the last year, the stock is down almost 10% every day. >> the rest of the group is kind of treading water.

sounds like it's been red hot. >> also, twitter has a board meeting. rico has written a piece about that. >> i did something when you were o w away on thursday. >> these comments were by eb williams. >> the comments got a lot of attention. that board meeting will be important and the stock had been moving up which we pointed out. nothing new that recode did the same thing. >> bob peck's story was difficult today, twitter not in play, the first year, i think there are a the love initiatives. >> i would be curious to see what comes out of that meeting, that he may be correct, mr. peck, but it's not clear to me, which is the reason i did the story on thursday, because i think there are going to be some important things discussed there, particularly, again, to come back to the idea that this board knows that there is the potential at least for some

activist investors to make their life more difficult. the nominating window for directors does not come up until, but they're aware of that, they're aware that you cannot put up the top line growth they have in the past and expect to go on your way and have a long leash, so i believe it will be some discussion of that meeting on thursday and you've got to wonder as part of that discussion they say, is it time to at least consider other options. >> wow, so you're throwing cold water on peck's cold water? >> yeah, i'm just reiterating what i reported on friday -- on thursday, which you were sitting right here for. you remember. we had a conversation. >> i remember like it was yesterday. >> it almost was. >> yes, it was. >> although we've waited so long for the pay off on this tfl deadea nfl deal, it seems as we're going to see what the season brings.

>> did you see mcdonalds? they need salesmen. mcdonalds moving in a way that hasn't in' long time. that's kind of interesting. >> on twitter i want to correct myself. the nominating window is not until the end of january for directo directors. >> i remember that from thursday. >> you did which is yeah. i've been back and forth. >> he's a very good analyst, with a good read on things, no doubt. >> maybe talk to more board members, i don't know. >> are you saying they may have been contacted? >> you do? you think so? >> do you remember what i said? >> i remember every word you've always said. i can go way back into the way back machine. >> i just thought a certain point, i thought the sales force might be interested. they should be but we've got dream force coming up and nothing happy announced. dream force in october, the first week. you may want to be there. >> there's way back, who is mr.

peabod and who is sherman? >> i'm natasha. >> i'm boris. >> i knew . you communist. >> he got the scariest e-mails. now i'm going to mess with you selections, hahaha. >> you are so good. >> i miss that show. let's get over to dominick chu and see what's going on. >> i can't look at david or jim this morning. any way, we're talking about wall street getting back to work and if you are a commuter in the tri-state area you kind of got the feel of that, a lot more people on those commuter trains in the area and it's the same thi thing. what we have is the beginnings of the volume pick up as people get back to work, as kids are still going back to school, maybe some people still out of the office, but we have a positively moderate day, as for

the early sectors winners and losers, if there really are losers, generally speaking, the market's higher. materials are kind of up there, as well, the consumer dis discretionari discretionaries, also the financialspector spid financial spector signs and a big part of the bull story over the last couple weeks we'll see if it goes higher. lower volumes then we'll see volumes pick up now. for the over assume picture for the mack i donro side of thingsa look at gold. we have seen i nice uptick, and a steep collapse that would takedown a lot of those miners and the mining stocks were among the hottest trades to start off in 2016 so we'll see if that happens and bond etfs, remember high yield bond efts have been doing relatively well to the

market. we'll see if that picks up with some more volume, back over to you. >> thank you, don. let's check in with rick santelli from the cme group in chicago, rick? >> reporter: good morning welcome back, gang, looking at your day of tens, it's nothing we haven't seen before, but it is on the much-extend the range as we hover near the 160 level, you talk about a tight compressed range, this is it. if we cold look at boone deals we could see they are on the move, as well, but maybe a bit of a different direction and the one chart that's very fascinating is when we chart ten year japanese government bonds. they are very close to touching zero. it's been a long time since the negative jgb 10s, about the middle part of february of this year as you see on the next

chart, but finally, maybe the most fascinating path were so wrong in predicting but many foreign exchange traders have talked about it, the pound versus the dollar. the pound has a double-bottom, a rather sug standpoibstantial on is the chart you want to pay attention to. whether it's you know the dollar improving against the yen, or japanese rates moving up or what's going on with the pound it's illlod it' it's illogical. they're rather counter intuit e intuitive, as well. carl, back to you. >> all right, rick, thank you very much. rick santelli. when we come back, the cover of vanity fair has a deep dive on faranos and elizabeth holies; plus, morgan freeman on the legacy and the title of one of his most famous films, when "squawk on the street" continues.

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a new. a new episode of binge is out. this one's morgan freeman and his long time producing partner, lori mccreery. this is freeman in the "shawshank redemption." >> you know, word of mouth is the marketing tool. i don't care what you spend. if word of mouth doesn't catch you, you ain't going anywhere, right? so imagine going to see a movie and then going to your friends and say i just saw one of the most tarierrific movies called chip, sha chi chip, shang. >> reduction. >> never mind. >> you must have been like i did

this thing years ago and i'm suddenly hearing about family, friends on the street? >> anyone that saw it, really held it in very high esteem, that's just they couldn't sell it because they couldn't say it. >> you have said the title -- they got the title wrong? >> yes. i said that, that's what. you -- they said the full title won't fit on the marquee. i said so what, don't put the full title. you've got a one-sheet. put the title on the one sheet. everybody can say rita hayworth. >> classy gentleman and a great producer. they produce madam secretary on cbs. we talk a lot more about the future of video creation, digital streaming, distribution, and the one stock that he is so obsessed with, that he checks prices when he's not shooting onset. not going to tell you now. >> gees. >> but it's a good one. >> one of my eras.

>> a lot of ceos are obtuse like the warden. >> it's a classic. >> i watch today on a airplane and i pilot said listen we're not finished with the movie and there's people who want to finish the end of the movie. i realized what a classic. >> on an airplane. >> any way, you can watch more of season two of binge on apple tv, hulu, and cnbc.com/binge. we'll get to stock trading in a moment. dow is up about 36 points, be right back. a great school, butt the right the one for her? is this really any better than the one you got last year? if we consolidate suppliers what's the savings there? so should we go with the 467 horsepower? or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund.

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capacity, gilead, but they haven't done the deal. >> i can't believe they haven't. a lot of companies are being bought and sold in that area. i put this up because david mentioned it. cities texas instruments was interested in linear, which analog devices bought. people are going to say zylinds is -- i still think marvel, but not really texas instruments. this is the one that refuses to day, they're not that comparable to linear, by the way, but people feel texas instruments was going to gear up -- >> six months ago there was a lot of rumors texas was going to do something, never got to the bottom what they were thinking about. >> texas instruments bought national semi. it was maybe the most brilliant acquisition, now obviously arm holdings, they hope that'll happen. i don't know, that's your men. >> mr. matason softbank.

>> i think when i look at the deals in semis, do not give up, or sell your semis. these are all in play. >> on broad market stuff, vix was below 12 on friday. it's a little bit above there now. does anything change? are all the players on the field? >> i would like the vix to be higher. i think there's a lot of wild cards. we don't want a lot of preannouncements today. companies came in for july and august and feel like they can't make their numbers. that's a hopeful sign. i was watching alibaba go up there throughout the show. so yahoo, even though that's a holding verizon deal had nothi to do with it. >> we'll change the legacy. it wasn't her deal originally, although she did do things to

unlock the value of baba. >> doesn't get talked about much. >> not really. >> what's on mad tonight? >> i'm looking at apple because i think people have basically said this is a ho-hum. i like ho-hum, but the chart, not so hot. i play one on tv. >> we've got a lot to look forward to this week. >> yeah, exciting day today. >> we do have -- nwe do have broken cos. >> congratulations, harry roseman, he got a first round pick for a guy who was going to be gone at the end of the year any way, referring to the eag s eagles. >> the bradford trade. >> roseman, one of the great deal makes. i'll be there against cleveland, but not as significant as the broncos game. broncos got rid of sanchez. >>ef we've got our own issues in denver. i'm a little worried.

>> no one has ever repeated the number of count downs. thank you in fantasy world. >> we're going to see in the next few months whether sports are immune to time shifting, right? >> they are. >> to cord cutting. >> i think thursday's going to be a huge game and everything's going to stop in my house. i haven't told my wife yet. she doesn't know about my draft wednesday. me said the ladies have to get together. >> it's like a cone of silence. >> it's just -- she didn't. wanted to know on friday. she goes, do you have a show? i said -- belt atter just to sa "mad money," of p.m. eastern. comi coming up, a look at what to except for apple, a look at some new products and what it means for the spot, and aaron levie after that stock with his company, more on "squawk" in a minute.

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♪ good tuesday morning welcome to "squawk on the street," i'm carla quintanilla, live at post

nine of the new york stock exchange. we get back to work after the labor day weekend, holiday shortened week obviously on this tuesday, the dow off about a tenth of a%, s&p 500, 2, 181. in the meantime, coming back to a fair amount of news flow, david we talked a lot about deals of varying sizes the top of the nine. >> and we've got quite a few of them, carl, and whether they be investments in the case of navistar, and volkswagen. ge doing a deal, danaher doing a deal of some size, and more from monsanto and bayer. >> and the big apple event tomorrow, we're going to keep our eye on that and later in the week you'll get a steady diet of jolts, beige book claims on thursday and a very small amount of feds speak, williams tonight, speaking in it reno, nevada, and erik rosengrand, coming on

friday. the ism services coming up, after manufacturing showed the constratraction in august, here rick santeli in the cme. >> reporter: reed wrong is expecting a number in the mid-50s, around 55. labor market conditions index, here we go, 51.4, 51.4 is our non-manufacturing ism august read. as i pointed out that is definitely under the 55 we were looking for, and if you want to know the last time we had a 51.4, it's been a while, actually. we have to go back quite a ways to find a lower number ciphering, i have to go back to february of 2010 to find a number that low. and let's look at some components shall we? new orders dropped dramatically from 60.3 to 51.4 and the

employment index, considering the employment report slipped to 50.7. we don't normally cover august labor market conditions index, fed favorite, but i have to for one reason, it's minus .07, that means the only number that isn't negative is the july read, which was upgraded from 1 to 1.3. every other read, so this is the eight, seven out of eight, are negative. this is rather significant, and we want to continue to highlight various aspects of the question in some of the off-beat indicators the fed looks at, especially looking at friday's number trying to assess whether it was good, bad, or ugly. carl and the gang, back to you. >> wow, rick santelli in chicago, thank you. that and the cooling august jobs number, dimming chances the federal raise interest rates in september at least. our mike santoli has been watching that.

good morning. >> hi, carl. the jobs report on friday did appropriately cool the idea september was going to be a time the fed was going to move but i'm arguing today in a piece, the markets because they've been so revilsilient and strong are daring the fed to look for an opportunity to go. if we look where we were today than december, you have stock prices than about 9% higher, credit markets much more compressed than in december, also by the way in september of last year when a lot of people thought the fed should move and v volatility, the fed is very much looking for when the markets and the data cooperate to allow them to move. on the other hand what's pushing against this idea? for one thing, the markets don't expect a september move. the fed is probably going to want the market expectations to rise in the advance off the fed hike, and would take a lot of aggressive spin to get that done before the september meeting. it has been flat because of global influences largely and

that industrial is sputtering. you have don flikticonflicting the early or late cycle. we have the catch 22 almost here where the markets might be strong because they don't think the fed is going to be anything eminently and the fed wants to see the markets in a robust state before they feel as if they have clearance to act. this is why it's pretty much delega delegate in a narrow window the fed is looking to work its way through for year-end. >> there are a lot of people parsing this gold man note talking about the fact it raised its chances for a september hike to 55%, sort of parsing that fed speak on -- in light of recent data, sort of saying in the face of relatively weak data, we'll feel the need to go any way, what do you make of that? >> that's interesting, kayla. putting a lot of weight on janet yellence ye yellen's comments, essentially saying they're trying to signal a little bit of urgency to move as long as the economic trend more or less remains in place

and that's why i think friday's jobs number was almost perfectly suited to not change anybody's mind. it was too weak to say the fed's hand is going to be forced but stanley fischer says more than 100,000 jobs a month is perfectly sufficient to ratify the trend. i think that's why we have a little bit of suspense out there and you have some forecasters like those at goldman saying you cannot rule out september. >> all right, mike we're going to see. thank you very much, mike santo lirk li, from the nyc. and companies from a page ofspectors are announcing deals. where should you focus your attention? guys, good morning to both of you. >> good morning. >> sterling, $1.34, two-month high, what do you make of this? >> i think the catch 22, which mr. santoli referred to is the

one is done, i think in terms of optics, the fed is less desirous to move, that's somewhat obvious, but the data doesn't force the fed's hand and they need to assess where they are and you need to put this in a global context. you've got germany and japan negative, so that limits options. data doesn't look recessionrece, but it is nice we're getting back to jobs numbers equivalent to a 0% rate. i think the fed's going to, probably in the last of convincing data will probably take a little bit more time rather than a little bit less. >> it's the kind of thing if you were to move your year-end target, it would be higher, not lower? >> the u.s., equities based? we've been you looking where we would sell the rallies. the economic race cycle, we don't know if it's changed since last september, but i think the valuation argument in the united states becomes increasingly stretched inch by inch, or yard

by yard, so a valuation perspective is dominating a lot of the announcements we're doing. >> jack, you go along with that? >> yeah, for the most part. i like mike's comment. he said the market is challenging the fed to raise interest rates. i think probably one and done is the best scenario for stocks and you know as -- i've mentioned to clients as long as the central banks don't think we're in a bubblel, i suppose we're not in a bubble for right now and given we've got so much stimulus abroad, it's the ten-year rate that s&p and other valuation metrics care about, and my sense is the fed can go one and done here and the tenure rate probably stays where it is. >> jack, are we at the point where stocks and bonds are going to begin to diverge because they've been moving in tandem for so long, despite the fact that economic fundamentals have been choppy, at best? >> you know, you've got central banks all over the world flapping their arms, hoping to use interest rates to try to stimulate the economy, and it

doesn't seem to be working. now there's talk that ecb may take that next step and that's starting to buy equities, perhaps that's another move, but again, that's more of a wealth-effect scenario and it's really the next step and we're probably going to see it in japan first and that's this helicopter money. we believe we're going to see it in japan. japan may get some favorable result out of it, and that could influence the fed to try something like that here at home. >> although i did see a headline this morning, an advisor to abe, saying that the doj should wait a little bit. >> wait a minute. >> a little game of chicken going on there. >> you bring up a good point. we need to look at multiassets and needs to be global. what we're looking at in the valuation argument is rather significant. the european central bank is a good point. the bank of japan are beginning these cycles and you realize how thing european and japanese markets are relative to the united states, how deep and

healthy, there's not a lot to be purchased in europe, relative to the u.s. they're going to have to get creative, for an extended period of time to many investors could be the good news you can get out of the bad headlines. >> is it easy your for them to buy equities or corporate bonds? >> in europe that might be 6 and 1/2 of the other of the they've got to create marketings and securities that can be stimulated from a monetary standpoint. the beginning of this process, creates an opportunity for investors. >> do you think brexit will end up beingrecessionary? >> i don't. what we're seeing now as you mentioned earlier, the pound is rallying back a little bit. we're seeing that this isn't the toilets swirl that a lot of pundits talked about, so now germany is rebuffing their establishment, france certainly,

so we'll -- i think we're going to see more of this nationalist movement in europe and that's probably why we're not going to be able to see helicopter money in that part of the world. >> i think toilet swirl wins though in terms of financial jargon. >> that's jay marioti. he was talking about the cubs, from the "sun times." >> thank you very much, guys, good to see you. >> thank you. a good deal of m and a news, a lot of mergers, acquisitions, and continued advancement between monsanto and bayer as they get closer to a deal, this began last spring when bayer made its interest in monsanto known with a $122 bid rejected, moved to 125, the latest, 12750, made public there, and confirmed

by both companies as is the desire of german reg laulators, early its of the uk in statements they've not otherwise made. the two companies are moving closer to a potential deal that could come as soon as let's call it the next week or two. monsanto has apparently told bayer it is getting close on price. 127,50 may not be there, but it appears they are not far. they are also working on so-called deal protections, given the anti-trust scrutiny that such a transaction would bring on and the concern perhaps that it would be blocked by regulators either here or even perhaps more so in the eu, unclear whether that will be the case but both companies are set to be fairly close in terms of the overlaps and the dive divestitures of what needs to be done and the other protections would be. at this point, people tell me a lot of due diligence has been conducted by bayer and that

numerous drafts of merger agreements have actually passed between the two parties, that is typical when you are nearing a deal. nothing says however they are going to get done with certainty, but they are making progress, guys, towards that potential linkup of 65-plus billion dollar transaction bringing pebrin bringing pesticides with all of those seeds at monsanto, and that deal with china buying sengenta, and theli linkup betwn dow and dupont, bringing those two companies eventually splitting off into its own company once that has concluded. >> it's been a busier industry than expected this year. thank you, david faber. donald trump weighing in on the interest rate debate, we'll hear from dallas fed president, richard fisher straight ahead. you're watching "squawk on the street."

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for the first time since 1964, when goldwater was the standard bearer, the "dallas morning news" will not endorse donald trump for president, saying donald trump is no republican adding he's quote not qualified to serve as president and does not deserve your vote. we're joined by trump supporter and chief strategist, and michael barns who served as a

political advisor in the george w. bush administration. good morning to you both. >> good morning. >> all that said, this cnn poll essentially calls a dead heat this morning regarding likely voters. how will this final stretch going to shape up? >> i think it's shaping up very well for mr. trump, just a lot of the fundamentals lineup for him. we're seeing a struggling economy, people that really want to shake things up, we're seeing anti-insider sentiment across the country and we're seeing some real key issues breaking his way in swing states like ohio. the war on coal will swing southeast for trump in ohio in a big way. trust supporters need to be very optimist optimistic. >> what does it say some of these polls have tightened in the last two weeks? >> two things really, trump is flip-flopping on his issues, saying what every it takes to meet the mainstreams like myself and the independents and hillary clinton has abandoned the

messaging to the convention, which did appeal in a very pro-american way. this reflects trump is not effectively espousing any values that reflect our core principles of economic strength, as well as the rule of law. he's proposed he's going to change his position on interest rates and messing the fact that we do not have full employentme that we need to balance the budget and reduce the national debt. none of this is coming out and he's saying whatever to appeal to the group that otherwise has been opposed to him and he's not reflecting any core principles of americans at large. >> perhaps that -- michael, that's why we've seen in some battleground states like pennsylvania, wisconsin, michigan, trump has a slight lead whereas in republican strong holds like georgia and arizona, that vote is more or less up for grabs now. wouldn't you say there's been a fair evening out throughout the parties? >> there has been and it's because of trump's flip-flops, that he's trying to say things appealing to that far-right

nativist base that really has been his strong supporters from the primary season, but now he's starting to flip-flop on those issues and appealing to more main street moderate republicans and independents who hear what they want to hear because as we heard from jesse, this is a strong desire for change and some people are willing to risk the change of donald trump rather than vote for hillary clinton, but the fact of the matter is, hillary clinton did a great job in the convention and at discussing and showcasing her ability to bring about change, but has abandoned that. the reality is we can't risk the change that trump brings to the united states by his desire only to pursue his own wealth, as well as perhaps his power grabs. >> and that's coming from a gop strategist even, so jesse, do you think the net effect of that flip-flopping will be neutral? do you think there's enough of a vote that is still undecided that this home stretch willing meaningful? >> i just don't see these flip-flops everybody keeps

talking about. the fundamental at the end of the day, donald trump is always run a strong national defense, strong borders and strong economics and that hasn't changed and won't change. >> our trade partners is strong national defense or strong on economics, they threaten our economic security, as well as our national security, that's just one of the many areas in which he does not espouse the values of republicans or americans. >> enough americans out there are fed up with the way the foreign affairs are going and they think we need a little better crack in the world. enough senseless wars and bad trade deals. trump's going to shake some deals up. >> it's too big of a risk to take. these going to shake things up it destabilizes the united states and our core institutions and values. >> the current policy's doing a real good job keeping things stable in the middle east. >> certainly those policies will solidifiy into some of these debates. we'll talk as we head into the final stretch of the political season. >> congress is getting back to

work after a seven-week recess. we're joined with a look at what is on the agenda, amen. >> hi, david. start with some numbers for contest. we've got this survey, monkey pole out that gives you a sense of the overall drama that's going to shape the congressional session. it's clinton, 48%, trump, 42%. that's the context for the congressional session. congress is back in session today. a couple other numbers for you, 43 and 33, those are the numbers the house and senate will have for the rest of the year in session. even those days you've got to divide that into prea and post election laying-duck session. almost nothing will happen given the overhang of that presidential campaign, the tightness of the race we're starting to see. if you look on the agenda, there's one really big must-do item between now and october 1st

and that's pass appropriations bills or continuing regulations the government doesn't shut down. look at the things they could do if they decide to do them, some hearings on mylan pharmaceuticals is a possibility. we've seen a number of congress, both parties expressing interest in the epipen price hikes, that's one we could see in the fall. zika funding is a fight that's going on it start today. that's been held up over a side battle over plan plan, but that is one we could see worked in to this overall spending battle and a couple other points. the merit garland nomination, that's something to watch for as a possibility in the laying-duck session if hillary clinton were to win, there might be a scenario, whereby republicans and folks on capitol hill conclude it's the time to do that supreme court nomination, and tpp, the president will make a push for the transpacific partnership deal because both

parties are campaigning against it, that makes it very tough for capitol hill do anything, even though this president still in office for the next couple months supports it, guys. >> yeah, few more months until january, eamon thank you, from washington. donald trump speaking of the presidential election, taking a swipe at the federal reserve and the obama administration, acuting the fed of creating a false economy and saying interest rates should change but that is quite a different tact from what he told our colleges on "squawk box" back in may, take a listen. >> if we start raising rates ---ive a always been a low-interest rate person. if inflation starts coming in and we don't see any signs of that, but inflation starts coming in, that's a different story, then you have to go up and slow things down, but right now, i'm for low interest rates and i think we keep them low and we have to compete. >> they're keeping the rates artificially low so the economy

doesn't go down so obama can say he did a good job. we have a false economy, everyone understands that, but it's a false economy. the only reason rates are low so he can leave office and say, see, i told you, but at some point, the rates will have to change. >> joining us on the phone is former dallas fed, richard fisher, but has talked about the need to raise rates a few more times. what's your take on trump's comments? >> i think he's right in that we've -- have an artificial stock market and as a real estate operator, cap rates are generally speaking, motivated by free and cheap money and is politically shrewd. i was part of that hated body for a long period of time. i don't think he is spot on at all in terms of accusing janet yellen of being politically orrien oriented or trying to help the

obama administration. one of them gave money to the clinton campaign. i've not seen that in my tenure at the fed and i think that's fed a lot of suspicion, but his general principle, if you listen to that interview carefully, to be fair to him even though i'm not a supporter, he answered the questions fairly. the question is doing fairly well, but markets have been distorted by low interest rates in cap rates and the real estate market. >> and you've been -- frankly you've been talking about this for sometime -- i remember interviews in the past where you've talked specifically about stock markets not just here, but around the world. what about a false economy. >> yep? >> in a -- i don't know what that means, but the one thing -- >> i don't either. >> the one thing that is true when you have low interest rate, it hurts consumers because they have to save more and exacerbates the disparity between the wealthy and the middle-income groups, so savers

have been penalized. this was a decision we made overtly at the fed which was to create a wealth effect, by turning the markets like we did in 2009, and the savers have been hammered and the fed is not very popular. i hope he doesn't pick up on it again. i think we'd need to keep it independent much that as he himself has said in the early spring but we'll see. >> what would a september rate hike do to change his stance? would he have to then argue -- >> i don't think it -- >> -- the economy strengthening? >> if anything, i would dig in my heels just because of his comments, but i happen to feel that the economy is strong enough to withstand a rate hike, it will be good if it doesn't happen now, at least happen in december. it won't happen november 1st or 2nd, that's too close to the election itself, but we have to restore the ability to favors to make money on their savings and make money on angst, on commercial banks to restore

interest markets and refer to interest companies and the obligation they've made to people. these are institutions middle-income groups have been dependent on. >> who are you supporting or you have discussed that yet? >> i am supporting -- i don't know, alfred e. newman. i don't think i have much of a choice here. i think it's a choice between quick sand and a bullet to the head. >> which is what? >> i'm not going to tell you. you guess for yourself. >> careful, we'll drive you further into that corner all morning long. richard, thank you very much, though, for the candid comments about the economy and certainly how it's going to relate to the race. >> okay, god bless you, thank you. all right. as we head to break, take a look at where stocks are trading at this hour. fractionally negative across the board for the major averages. "squawk on the street" will be right back. ghby our customers. who's with me? i'm in. i'm in. i'm in. i'm in.

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take a look at shares of amazon, this is an all-time high this morning, 778, back to may of 1997, one of about 30 or so

52-week highs but some of the all-time highs include amazon, tyson foods and aon barnes and noble up 8% this morning. >> getting a mention by baron saying amazon is going to kill barnes and noble is unfounded, coupled by a stud we pew saying 65% of americans have read a printed book in the last year. when we return -- alarmingly low. >> 65%? >> yeah. >> i think that's still pretty high, all things considered. when we come back, apple's big e gent, the tech giant getting ready to unveil its newest products tomorrow, and a look at where stocks are trading after the long weekend, fractionally lower, "squawk on the street" comes right back. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me?

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hey how's it going, hotcakes? hotcakes. this place has hotcakes. so why aren't they selling like hotcakes? with comcast business internet and wifi pro, they could be. just add a customized message to your wifi pro splash page and you'll reach your customers where their eyes are already - on their devices. order up. it's more than just wifi, it can help grow your business. you don't see that every day. introducing wifi pro, wifi that helps grow your business. comcast business. built for business. good morning, everyone, i'm sue herera, here's your cnbc news update at this hour. president obama meeting with his

luation counterpart, the first sitting president to visit the southeast asian nation and vowed to work with the united nations to tighten sanctions against north korea after their latest missile launch. >> we're going to work diligently together with the most recent un sanctions that are already placing north korea under the most intense sanctions ever. we're going to work together to make sure that we're closing loopholes and making them even more effective. >> this after north korean released a video showing allegedly firing a missile off the coast that traveling about 620 miles into the exclusive economic zone in the sea of japan. fox news reached a $ $20 million settlement against the roger ales and is expected

to make a public apology. and after an unspecified problems hindered the check in system, in san francisco, passengers waited more than two hours. that is the news update this hour, kayla, i'll send it back downtown to you. >> thank you so much, sue herera. meanwhile, apple is planning introduce new versions of its flag ship smart phone tomorrow. there are a lot of rumors around the event, the most controversial, apple removing the head phone jack. will all of these be enough to spur new iphone sales? let's bring in senior technology analyst, is this going to be lucky number seven for apple? >> we sure hope so. i do think the best thing apple has in its favor right now is the extremely tempered expectations people have on the iphone 7. everybody's talking about the 7 s already, so given the tempered expectation, to the expect you have great evolution, waterproof

features, we do think you get a better upgrade than what people are apprehensive about. should be a positive from the stock from here. >> andy, you call yourself the world's most anticipated dongle, referring to customers if they want to use their head phones with these new iphones is that going to be a deterrent, or will they be glad to have an updated product? >> well, to some extent, i think they'll be glad to have an updated product, a pretty good amount of volume these days comes from replacements and those are effectively phones that don't work or people that just want the new thing and those people will continue to want to get a new phone regardless of whether or not they're old headphones plug directly in. >> andy, there's some sense those replacement customers have been waiting a couple of years and that's why the 6s wasn't as block buster a product as the streets had expected. any proof those customers will

be upgrading to the iphone 7? they're not going to keep waiting? >> we don't have proof. we just have a long history that's what should happen, certainly we and a lot of other people expect the holding periods to begin to extend, but through this coming cycle you're going to have a whole lot of people that bought iphone 6s, that'll have phones 2 and a half plus years old and those people, you know, are more likely than not to upgrade. something wait, but certainly more will upgrade than what we saw in the 6s side. >> amit, looking at the expectations for the new iphone 7, you have a new color, you have a dual camera, increased entry-level storage. which do you think will be the biggest selling point to people looking for a new phone? >> you know, i think the biggest thing you're going to get out of this personally is a better battery life. it's been the biggest feature everyone wants out of the iphones. it's better battery life and you get that with this one. more memory is always a

positive, the fact you get more for less, would be a nice positive, as well. i think those two levers, better memory, better battery life, are two the biggest, or more attractive features of the iphone 7. >> so amit, you talked about the lower expectations for this product, but then we're getting reports that apple has actually increased by 10% what it needs from suppliers to meet expected demand. is that a positive sign? >> on the face, yes, it is. apple always likes to supply chain to jump as high as they can. you have a lot of yield issues if you remember with the 6 plus and the 6s plus. maybe they want a big supply in case demand shows up. our take, you're looking at flattish iphone numbers. and apple has an extra week which will be a help for them, as well. >> andand theprodu andy, this p

coming slightly earlier than product events in years' past. will that help the third quarter numbers? >> yeah, there's that extra week in september and probabdecember quarter. we'll have ten days of selling rather than just a few days and that certainly should help the numbers. >> andy are we not going to be talking about this tax ruling from europe in do you think that's largely on hold? >> i think so. on an absolute scale, the numbers aren't that big for apple and it's going to be tied up most likely in court for knight a long time through the appeals process. so, i think for investors we're focused on the things that generate a multiple, and that's mostly the iphone. >> and of course the bulk of those repeatable earnings comes from the iphone so we'll see what we get tomorrow. andy hardcrest, and ami

amit dahryana, thing. as we take a break, look at navistar, and volkswagen, after announcing it's buying nearly 17% in the truck maker for $256 million and will take two board seats. we'll talk about that and a lot more from "squawk on the street" continues. elping people everywhere do what they do... better. i work with startups like alpha modus to predict markets five times more accurately. i am helping tv networks use social data to predict what people want to watch. and i worked with marchesa to turn fan feeds into a dress that thinks. hello, my name is watson. working together, we can outthink anything.

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after badly under performing most of the market, beck shire hathaway, is it time to trade on buffet again? more "squawk on the street" coming up.

[phone buzzing] some things are simply impossible to ignore. the strikingly designed lexus nx turbo and hybrid. the suv that dares to go beyond utility. this is the pursuit of perfection. welcome back. let's get to the cme group with rick santelli and the santelli exchange. rick. >> good morning and thank you. i'd like to welcome my special, always says it straight, yra harris. first of all, lowest level in what, six and a half years for ism, service, nonmanufacturing. you said you hit the buy button

for twos. look like they hit the buy button for just about everything. especially for the twos because the twos are being priced off the live board, which is being priced as the circle goes round and round, and priced off the reregs, so nobody knows -- >> so it obviously has fed implications, 78 at 74, and also close to 160, and tens were 155, so it's part the fed and part what says it about the economy, the new normal has a range, manipulate the top of the range is 2% economy, and maybe the bottom of the range is 1 1/2. >> the batdata points are so confusing. they're murky. we got the services number, which was weak. for everybody who didn't worry about the manufacturing number, we're a service economy. now what are we today? the fed has painted themselves -- and more important than i would argue -- >> they're paying themselves in the corner and their feature super glued to the floor. >> janet yellen, that's her most

important -- >> down! you know what amnesia is, right? why is it everybody who discusses the market gets amnesia? we can argue about who's qualified off the rails and who isn't. he said it's a false economy, my god, everybody said that. everybody's been talking about it for years. i think a false economy is when the stock market is virtually making new highs and the rest of the economy isn't. what's so hard to snurunder? >> the fed has broken the signaling mechanism uof the bon market. you can say okay. but they're continuing. >> there are no signaling mechanisms. capitalism needs the signaling mechanisms to be able -- >> those are the feds by the very nature. look at every speeds, the economy's humming along but by reading the tea leaves of what

they say, it's living proof that it's a false economy, because if things were nearly as good as most of the things they write about, we would have had a rate much closer to 1.25, 1.50% already. >> what's false with donald trump, certainly not going to put words in his mouth, i'll get arrested, but what he's talking about is that the valuation of the stock market is false. that's what he -- i think he means. he must have had a drink over the weekend to come out with that and that's the other thing, too -- >> and the other thing, how many times in 2011, 2012, the fed needs to be discussed in the political arena, they have to be above the radar screen and do you know what, whether you like donald trump or you don't like trump, i think it's very important to discuss what is probably the most powerfulentity in our government right now. >> it's not just the fed. it's all the central banks. we had a g20 meeting this weekend. that was a joke. i've seen better weddings with better photo opportunities.

they discussed there were stresses and in fact i would argue the chinese, excuse me, [ bleep ] snapped the united states. they jointly agreed with the united states not to be a currency manipulator, therefore they put themselves on the same level as the united states, that was a big defeat for the united states politically. >> no matter how you slice it, i would continue to monitor what the market's saying today and that is no fed in the foreseeable future, final comment? >> they would -- i think they'd be -- the only thing that -- and they picked up, i want to see how stanley fischer votes. if this is nine to one, i say stanley fischer resigned yesterday. >> how i can say anything beyond that. thank you. david, back to you. . >> thank you very much, mr. santelli. cnbc's annual delivering alpha conference, kate kelly

joins us for the report of august hedge fund winners and losers. >> hedge fund performance showed a big diskrecrepancy, and up 15 after a good august, trion partners up 6.5%, and david and einhorn up respectively, through the markets so at least they're in line with that. citadel, which just turned into the black mid-month in august, and of course pershing square, who's last holding in valiant gave it a beating all year and certainly continuing although august was a i bbit better for them. against the back drop, constitutional investors have pulled tens of billions with the second quarter marking the third consecutive one of outflows. cio of new mexico's hedge fund, which reduced its exposure by about a billion dollars, says

the multi-induststrat hedge fun problematic. >> some have referred those as alternatives. we tend to call them liquid strategies, and multistrategy hedge funds in many cases help you leg into or build an exposure to what may be a different type of asset category and in term you delegate much of the the asid allocation decision, the apportionment to a money manager. >> and rebol actually remanaged his strategy, so equity hedge funds overall, which david is a more measurable way to pay it, because you're looking at indices or corporate bonds and

putting it against a hedge fund that does multiple things. >> yeah, interesting to look at that august performance, kate, the stock picker's at least coming back a bit, but renaissance, the machines still rule the day don't they? >> they're killing it, absolutely. they've had a really good year, i believe they had a really good last year. i don't have those numbers in front of me but they've had a really nice run and obviously it's doing well for owners and participates who have been politically active, as well, so a lot of interesting details out of renaissance these days. >> the mercers on one one side. >> and brown, ceo, don't forget about him. >> kate kelly, and catch the sixth annual delivering of the alpha conference next tuesday. details, tickets, you want them? good, head over to deliveringalpha.com. when we come back on "squawk on the street," her mean puttmi a dent in holiday travel straight ahead and our new episode of "beninge" is streami

nought with his long time partner. binge is where you can find it on our site, hulu, and apple tv, you're watching "squawk on the street."

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and many beach closures over the labor day weekend. how did the airlines fare? and how is the rest of 2016 looking? joins us is a travel industry veteran. henry, great to have you. thank you. >> what are the metrics you would use to measure the disruption. >> i looked at cancellation and delays. there weren't too many of them. there were only a handful of cancellation and delays. so i think from that standpoint not many were disrupted. >> a lot of the airlines had been -- ahead of time. so that may be because a lot of passengers took advantage of that? >> we won't know that until the airlines report it, but in talking to the airlines

yesterday, they were giving me the sense things were pretty good. the industry group air loons for america forecast that the u.s. carriers would carry 3.8% more passengers. they'll probably come close to it, maybe a slight miss over labor day. >> the storm got downgraded early on. but it stuck around for longer. >> the hotels will probably feel the pinch more, but hotels especially beach resorts in new jersey will feel it, and some felt it like the carolinas. >> fares are down about 6% because of the growth of the ultra-low-cost airlines like spirit and frontier. >> there more to run on this one, do you think? >> what i'm looking at is not just the faerz, but the optional

products the airlines sell us. the bag fees, seat assignment fees, that's where the airlines are making their money. they have profit margins anywhere from 50% to 80%, so very high margin product for them to sell. >> are you getting the sensist easier for small operations to go to the desert, lease a few planes and start to disrupt profitable routes? >> they're aquick for the news part new airbus airplanes. 4. holiday travel, and a lot of people star thinking about capitalizing on the best price.

>> so you're going to start to see the airlines put on the sales. they already have to stimulate trouble and in the next couple weeks we'll get a sense of how they'll do. right now we're in the peak period, so i think business travel will be at or slightly below -- >> where are the promotions taking place. >> there is some great deals going and controlling the north atlantaic. but fran is a great deal, italy has good values and the uk. domestically you're starting to see really good prices almost everywhere, because budget airlines have spread nationally. they're the ones setting the

prices, and the big guys follow suit. >> any of the airlines you think are poised to benefit the most? >> they tend to late the big three in pricing, so watch delta, and american and united will follow. >> henry, we appreciate your time. >> my pleasure. >> henryhartfelt. fox settles the suit with gretchen carlson for $20 million. sarah ellison broke that story. she will join us at 11:30 eastern. we have a lot more ahead.

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good morning. "squawk alley" is live.

♪ welcome to "squawk alley" for a tuesday. i hope you had a great summer and long weekend. i'm carl quintanilla along with kayla tausche and jon fortt. guys, good morning. apple is set to lift the curtain on its latest lineups. this as the company's reportedly boosting part orders for the newest iphone 7 in anticipation of higher than expected demand. jon, let's start with you on this one. can we read this tea leaf accurately? >> i think we can. i'm worried, carl. if the headphone port is removed as we expect, this is apple's most controversial design change ever, and i say that because yes, they have removed floppy drives. yes, they have re