good morning it's 11:00 p.m. in beijing 11:00 a.m. here on wall street squawk alley is live ♪ ♪ ♪ ♪ good friday morning, welcome to squawk alley.

a lot to get to this morning we start in beijing. after the trump administration's tariffs on $34 billion worth of chinese goods went into effect earlier this morning eunice >> reporter: china has retaliated with its own tariffs. immediately after it said the u.s.'s move, officials are collecting duties for 545 items worth $34 billion. matching the amount subject to u.s. tariffs the targeted products are cash crops like soybeans and cars the commerce department lodged a complaint about the tariffs to the wto. many fear it could become a protracted trade war president xi has shown no signs

of wavering. president trump threatened it could include all goods imported from china anxiety is running very high among american companies in china. regulatory issues like inconsistent interpretation of the rules and unclear laws have been the top challenge for u.s. companies here for the past three years. members fear the barriers will only get worse companies are scrambling to come up with contingency plans, reassessing supply chains, asking if they could pass the cost on to the consumer and when and questioning investment plans. he said already 23% of his members plan to move manufacturing out of china because of costs and that this could just accelerate the process cnbc business news, beijing. all right. and joining us now with more from beijing, the managing

partner of msa capital always with us is the chief investment officer and cnbc contributor john rutledge. good morning to both of you. good evening i guess, ben. let me start with you on how this is playing over in china. you're under the impression, you feel strongly that this is not a good move by the trump administration in that it will not be effective why do you say that and do you allow any room for the possibility that this pressure could result in a breakthrough we haven't had before? >> listen, the challenges of forced technology transfer, ip protection, these are legitimate issues the u.s. government has with china when china wants to speak with the u.s. about these issues, they have been rebuffed by

extreme pressure the net result is that they don't have anyone to negotiate with there's no set of clear policies and standards to bring to the table. it's really just ships passing in the night right now >> so, john, what does get us from -- to a different place because the types of negotiations we've had in the past have been ineffective the wto, it hasn't managed to get done through those channels. you also argue this is not the way to get this done but how do we get to a better point, if not these tariffs? >> look, what we need is more open trade we need to have more open markets. intellectual property protected is a good thing. i don't buy the idea that we start out that somehow all of history has failed so we have to do something radically different. trade is extraordinarily complicated. and supply chains are complex. if you're not careful and you trip up a supply chain, a single part in a single factory missing

at the wrong time will shut the whole thing down so we've got to be more careful about what we're doing here. obviously, we would like to have more open financial markets. but tariffs aren't always the way to do that and if you always respond to the other guy by doubling down, you're putting him in a spot where he's got a lose/lose back home xi cannot afford to look like a weakling in the face of this kind of public pressure. these things ought to be done in private, not in the press. >> that's how i believe we've done it in the past. i'm very interested in your -- you reject the premise that the methods we have tried before have failed. why do you reject that when they ascended to the wto. we expected less bureaucracy and more democracy and that hasn't happened and it seems to have gone backwards under xi.

you really think the process we were using for the past 30 years has worked >> absolutely it's worked compared to where we started it just takes time to do it. xi is a different cat. that's absolutely sure but he's a different cat in a much less democratic and more autocratt autocratt autocr autocratic way he's virtually the emperor of china. he's not going to be easy to deal with if you embarrass him it's incorrect to say that because we have a trade deficit in physical goods that that somehow implies that there's a terrible thing happening we sell goods. we sell services and we sell assets, investments. all three of those things always balance. so the question is what do you sell and this manufacturing focus of trading goods, leaves out all

the other components of trade. it just doesn't make any sense >> ben, your company invests in u.s. and chinese technology companies. how good is the quality of chinese technology innovation these days i ask the question because whatever attempt to rebalance that the president is doing, is it too little too late is chinese technology already as good as the u.s. >> certainly there are flaws in the chinese technology base. i think the zte moment for many of us, we would call it a sputnik moment it exposed a lot of the investment here has gone into later stage consumer internet, relatively low technical barrier entry businesses it exposed the need for china to development its smart manufacturing robotics, a.i., core technologies. the kind of things that are being emphasized in china 2025

the view locally is that actions like these kind of tariffs will only spur greater incentives and accelerate the process of building out those types of centers of excellence, financing businesses in those sectors and growing a local base of chips and technologies that will ultimately enable it to reduce its dependence on the united states so we view this moment as quite pivotal, and we think that ultimately it's only going to damage the dependence of china on these u.s. technology inputs down the road. >> you know, it's interesting we had a woman on yesterday, hard core free marketeer. she said get over worrying about china controlling the chip industry since when do you think has it ever been proven that when a government picks winners and losers that they actually get it right? like, just stop stressing about it just because they politically direct capital to that area doesn't mean they're actually going to be very good at it.

what do you think? can they actually create a chip sector that would rival ours >> listen, i think, you know, this miracle that's occurred in china in a couple of decades, going from an agrarian society to a technology leader has proven that they capable of things beyond our realm of expectation. in may of this year, chinese investing in the venture capital space exceeded $20 billion way outpacing the united states. we've got a steady stream of chinese entrepreneurs and engineers heading back to china. it's the top talent that's coming to china now, given the amount of capital and the market whitespace that exists here. i think it's only a matter of time before the chinese, through capital, human endeavor, and a huge amount of government support will be able to develop its own local industry, particularly in chips. >> all right

thank you. thanks for staying up late for us in beijing, ben appreciate it. john rutledge, thank you to you too. the u.s. company adding 213,000 jobs in the month of june the unemployment rate ticking up to 4%. steve leishman is back at hq >> you can dive deep into this report or you can dive shallow it looks good from almost every perspective. the rising unemployment rate is seen as a positive 213,000, we were expecting 195,000. got the april/may revisions adding 40,000 jobs to the prior months average hourly wages up .2%. it's good but not really in line with the strong jobs market. then the unemployment rate ticks up to 4% more people in the workforce labor force participation of 62.9%. previous rises since 2010 shows

every time it's ticked up, it's come back down there's an unmistakable downward trend with a bit of flattening of late. people say they're available to work in a single month, but you don't have a job so they're counted as unemployed. jp morgan says overall the report is good news. the economy still has some capacity to grow without generating much inflationary pressure fed funds futures, pricing 80% probability and a 48% chance of a second rate hike in december with strong job growth, but wage gains muted, they'll likely to see that as confirming rate hikes. any effect would be swamped by the strong u.s. economy. we'll see, michelle, if it stays that way >> we sure will. thank you, steve.

when we return, uncool beans. the price of the largest export to china are plummeting. the chairman of the american soybean association joins us next stay with us this wi-fi is fast.

i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. welcome back soybean prices at their lowest level in a decade as tariffs went into effect this morning. we're in san francisco where soybean farmers are anxiously awaiting china's response.

>> reporter: of all the u.s. agricultural products affected by the chinese tariffs, the 25% duty on soybeans appears to be the one that carries the most weight because the u.s. exports about $14 billion worth of soybeans to china. which makes it the largest agricultural export to china nearly one third of total u.s. soybean production in 2017 with the tariffs in place, china is expected to cancel most shipments from the u.s as trade tensions have heightened, soybean prices have declined soybeans fell more than 13% in the month of june. its worth monthly performance in four years we talked to an illinois farmer brian duncan he says about a quarter of his soybeans end up in china he believes these tariffs could be a pivotal moment for u.s. farmers. >> this could have generational implications as far as the economic damage and the economic opportunity for rural america. so certainly it's something we

worry about. we hope to see a quick resolution to it agriculture is export ependent we need these markets. >> reporter: a rare moment of levity among all this serious trade talk china's social media was rooting for a ship carrying soybeans from the u.s. to china it was trying to beat the deadline before the chinese tariffs took effect. the peak pegasus was scheduled to land hours before the deadline instead it missed it by 30 minutes. it was one of the top trending topics of china's version of twitter. it even beat out the world cup in that talk >> there we go thank you very much for that let's discuss this further ron moore, chairman of the american soybean association joins us now on the phone. ron, thanks very much for joining us gauge for us how fearful you are. clearly we've seen the price fall in soybeans during the month of june. do you expect a volume fall in

terms of sales for u.s. soybean farmers as well? >> well, i think it's very devastating to the value of soybeans here in the united states we hopefully will get a resolution and an end to these tariffs. we're hoping that both the chinese government and the u.s. government rescind the tariffs they have put on it will resume the ability of u.s. soybean farmers to provide food for people all around the world. >> where would you expect china to bring up the shortfall if they don't continue to buy american who are the rivals >> obviously there are other countries around the world that raise soybeans south america, brazil, argentina. typically we don't export soybeans into the market this time of year it's dominated by the brazilians and argentine crops. we hope the tariffs can be

resolved in time for the new crop of soybeans that we're raising right now that will be shipped in october, november, december hopefully we'll get this behind us and have a little bit more certainty in the marketplace >> ron, i see here you've got, i believe, 850 acres of soybeans yourself that are set to lose more than $100,000 in value at the current rate how long can so many of the u.s.'s soybean farmers survive, hold out with all of that profit evaporating? >> well, it's -- you're going to have to have a very good lender to help you operate, be sustained through this it's very detectivastating to sn farmers. our operation has lost $100,000 in value that's just one crop that doesn't include the value

of the corn that's dropped in the same period of time or the value of the beef animals that we produce here on this farm, too. it's really just one aspect of farming operations that are in jeopardy because of all the untimely trade tariff negotiations >> mr. moore, thanks so much for calling in it's michelle here are you mad at the president >> no, not really. i think mostly rural america supported the president. president trump in the last election these trade tariffs issues are still yet to be -- the final outcome is yet to be determined. we understand the president's goals to make sure that china becomes a better and more fair trading partner. we understand that they've not treated the american businesses and their american trading partners very well over the last several decades. we admire the president for

trying to make sure that that is corrected. we just think there's an alternative choice to go about trying to bring china to trade fairly than going into the tariff wars, so to speak we think that wto resolutions process is an alternative that needs to be explored before we go ahead and keep these tariffs on >> really? there's a lot of people who think the wto process doesn't work and that's why we've gotten to this point. >> well, i don't think we've determined that yet. i know that's a lot of people's opinion. we think there's a process in place to -- that should have gone that route instead of putting the trade tariffs on immediately. >> okay, ron, we'll leave it there. thank you for calling in today ron moore joining us there and coming up, can fang stocks stay sharp? we'll have the second half

outlook for tech more squawk alley after a quick break. duncan just protected his family with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually,duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutes, a selectquote agent will comparison shop nearly a dozen highly-rated life insurance companies, and give you a choice of your five best rates.

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tech has been continuing to outperform, despite these trade tensions, posting its best day yesterday in over a month. the s&p technology sector leading the s&p sector basket. it's outperforming the index with gains of nearly 12% will this story continue into the second half? joining us now is rbc's lead internet analyst mark, thanks for being with us so i'm looking at amazon, facebook, netflix, stocks you cover. first of all, you were right on facebook you said in the midst of that cambridge analytica stuff you were sticking by it. netflix, though, where does it go from here you had an outperform on it. it's trading at $400 now has that run too far >> yeah, it's rare that i'll

have that kind of discrepancy between a rating and a price target i'm going to try to be open minded about it. because we can find our way to $25 in gap earnings by 2022. i think the market would discount that back but put a hefty premium on that, so i think there's a pathway to a $600 to $700 stock long term no doubt that expectations are super high this is the inflection point story in the group this year accelerating revenue growth and expanding margins because they got successfully through a price increase because the content is becoming compelling for users across the world i think the fundamental story remains intact it's a small bye, given the current valuation. we wouldn't downgrade. back half of the year, what netflix has told people the spending is going to be back half weighted. if you had an acceleration in the first half of the year it could acceleration even more

because that's what drives the subbase. >> any tariff risk among these stocks amazon, perhaps, there's a lot of goods coming into the u.s. from china via amazon, right >> you're right. that's the one that has the most tariff exposer my guess is you're talking about single digit percent it's not something we've been able to quantify to date that's the one where i would worry the most about tariff issues. >> i got a whacky idea, mark it's friday, i'm feeling whacky. netflix has had this tremendous run so far this year i get the subscriber growth and blah blah blah however, i also think one of the reasons netflix has been able to run so much is because long-term interest rates haven't gone up nearly as much as everybody predicted they would and that's one reason why it's still safe to be in that stock

because the massive multiple like that you be got to hope interest rates stay low. >> there's something specific to that company, they're raising a fair amount of debt to finance this content spend, this marketing spend. so a rapid escalation in interest rates would reduce their ability to get debt, procured debt as inexpensively as they have in the past there's kind of a double sided -- there's a potential two knocks on netflix's stock. it's further down our hit list frankly. the two that are at the top of the list are facebook and google both of them have very interesting back half cat lists. we're seeing successful attempts to monetize these two messaging applications they have those are both billion plus user platforms that have generated zero in revenue for the company. as they start to monetize that, that could have a material impact on the p&l. not immediately, but the mul multiple rate would go up higher

in anticipation that estimates would go up. with google, back half of the year, wamo goes commercial this is is one of the bigger cat lists you can find if that launch initially is successful, google has gotten zero value from the market that won't continue to be the case if that launches successful. >> yesterday we were talking about the possibility of a cristiano ronaldo reality tv show that facebook was possibly thinking about whether or not that is true, it raised the discussion point that he has 120 million followers on his facebook page. is there an opportunity for facebook to monetize the extraordinary number of followers and users it has in a subscription premium video type way that netflix uses? is that a potential kicker for them down the line >> i wonder about that i don't think so but i think there's two other pivots here they're trying this facebook watch tab. that's where the cristiano

ronaldo, that's where his show would be there is something else under the hood that's coming out of the hood, actually, and that's instagram. it's called ig tv. and if there is a disrupter to youtube over the next five years, this is it. it's something we're watching very carefully, both senses of that word. it's very interesting. mobile only viewing experience with great curated content just the user experience is something i think is better than what i've seen to date from anybody else, really so the idea of video content, long short medium long form video content coming to facebook and instagram, that's a new growth engine for the company. it's another reason why it's our top pick in the group. >> i want to ask you about sonos. it's filed for an ipo looking to raise around $100 million. it's hardware, but all of these streamers, the pandora, spotify, apple, google, amazon, are

compatible with it has the consumer, you think, shown enough of an appetite for a neutral hardware platform that sonos can succeed in the streaming environment? >> i don't know about sonos. i'll punt on that one. we have done numerous surveys on alexa. within a year, 12 months of having 100 million installed units out there. i think homes are definitely looking to -- households are looking for that kind of functionality in the home. alexa is integrated with some sonos devices. i think that's a killer product out there for both people who are interested in the music and the functionality that alexa gives. it raises the question is that good or bad for streaming companies. spotify is one of -- we have an outperform on spotify. one of the reasons we like it is because it's a neutral streaming platform people stream on android, apple,

amazon devices, alexa, it's the streaming app that works across all platforms. that, to me, is a little bit of deriv tative play >> thanks. let's get the european close. >> european stocks off session highs as investors digest the u.s./china trade fight the euro spiking upon release of the u.s. jobs report automakers pulling back after yesterday's rally which was spoked that the u.s. and e.u. could strike a deal to suspend auto tariffs the financial times is reporting that the e.u. is prepping an additional $21 billion in tariffs on u.s. products at the top of the list, american ketchup. it's a move that would further hurt kraft heinz and target pennsylvania and ohio.

we finish with two stock stories. germa germany's thyssenkrupp deutsche bank is interested in a stake. thank you very much for that now we'll switch over to sue herrera for a news update. >> thank you so much here's what's happening at this hour, everyone mazda is recalling 270,000 vehicles with takata air bags that have the potential to explode. they can be found on certain 2003 to 2008 models. over the last several years, about 50 million air bag inflaters have been recalled in the u.s., with 22 deaths and more than 180 injuries linked to the defect. iraq releasing footage showing soldiers firing on positions of the islamic state

group near kirkuk. iraqi forces are advancing on isis militants in an attempt to wipe out the last potential isis threat in that country pope francis thanking aid groups that rescue and care for migrants, while denouncing those who turn a blind eye to them the pope celebrating a special mass for migrants at st. peters basilica. queen elizabeth and prince william attending an order of the thistle service in edinburgh, scaotland you're up to date, that's the news update this hour. back downtown to you guys. john, i'll send it to you. so nice just to see some of my own wardrobe on display there. >> i knew you wore that stuff. i knew it. >> absolutely. >> thistle >> yeah. they're borrowing my clothes. >> you're so generous tolend them. >> i know. i know

and for free, because they're a little short on cash i just let them borrow it >> they don't have a lot of liquid assets. it's tied up in art and things like that. >> there we go sue, thank you >> you got it. and coming up, toyota making a big change to its nascar playbook kyle busch joins us live a quick pitstop and squawk alley we'll be right back. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

with a $500,000 life insurance policy. how much do you think it cost him? $100 a month? $75? $50? actually,duncan got his $500,000 for under $28 a month. less than a dollar a day. his secret? selectquote. in just minutes, a selectquote agent will comparison shop nearly a dozen highly-rated life insurance companies, and give you a choice of your five best rates. duncans wife cassie got a $750,000 policy for under $22 a month. give your family the security it needs at a price you can afford.

welcome back let's take a look at what to expect from the financials in the second half of the year. so far the most recent news, the fed approved a 16% increase in aggregate capital levels for the banks. this means banks now have an average dividend yield of 2.7% and a total cashback yield of 9% this is more than double the level of the broader s&p 500 it takes the cashback yield higher than the precrisis levels and is 6% higher the average capital return was 16%. wells fargo topped the list in terms of regionals morgan stanley and goldman sachs managed to increase returns by 10% and 1% respectively. all of this should act to support share prices banks have performed poorly in 2018 for two reasons, a flattening yield curve and outperformance in the prior 18

months the other outstanding performance has been small cap outperformance over large cap. as for the agenda for the rest of the yield, first up is the yield curve, second is earnings. third is miscellaneous questions. guys, in the short term, earnings start next friday it could be tricky for the banks. some of the tailwinds they had behind them in q1, the first effects of the tax reform, but also the volatility we saw in february, not quite continued throughout into q2 albeit, pretty positive. >> the share price performance, large caps, i agree you. flat yield curve, et cetera. then you highlight how well the smaller banks have done, relatively i wonder when we went through the financial crisis, these guys are going to be regulated like utilities. are big banks utilities and they're going to trade like utilities and that's it?

>> i think a couple things the smaller banks hadn't performed quite as well in the prior 18 months. they played catch up on that the other is a trade aspect. the russell 2000 has outperformed on negative trade news because they're seen as more domestic. that's also true we also particularly in the second quarter as opposed to first quarter did get regulatory relief for smaller banks president trump is pursuing a deregulation agenda with the banks. it hasn't applied to the big caps yet there's reasons why the big caps underperform >> talking about interest rates. let's get over to the cme now with rick for the santelli exchange >> i'd like to welcome dr. ken rogoff thanks for taking the time. >> thanks for having me. >> let's play some market pepper let's go back and forth on some issues i really would like your schooled opinion on. first of all, when i look at all

the data we've had the last several years, especially the low unemployment with wage growth just not moving in an appropriate fashion from an economy that's supposedly at maximum or near maximum or near full unemployment. i think there's only one obvious answer that our measurement isn't right. and u-3 down 3% just doesn't add up just because you stop counting people that are truly unemployed doesn't mean that not counting them doesn't work its way into giving you different answers like not pushing up wages. your thoughts. >> i don't think there's any question that after this financial crisis the standard unemployment rate is not capturing the real unemployment. i think you're right, counting marginalized workers, people who are part-time who would like a fulltime job makes a lot of sense. and our measures are probably

not capturing it that's why people pouring into the labor market, one of the reasons we're not seeing wage pressures. >> it's not a bad thing. i don't think it's a bad thing i'm not complaining. i'm just saying that investors want to know what's going on so they make prudent investments. another area, okay, now, would it be a correct statement to say that pretty much every central bank on the planet of the big economies is just baiting inflation? they want more inflation, is that roughly a true statement? >> i think it is roughly a true statement. i mean, i think by and large for sure the acb, the bank of japan, they would like higher inflation than they have the fed, you know, a little ambiguous about it because inflation is it haddihitting 2% maybe they're more on the fence. >> all right trade policies and tariffs what will they do to prices? >> they're going to go up. i mean, it's hard to see -- i

didn't think it would go this far. i'll really tell you. >> no, but forget about the trade policies ultimately most economists would say it would push prices up. my question is a simple one. an average american would say if you're baiting inflation and this gives you some inflation, is that outcome just a different kind of inflation? >> no, it's like a bad kind of inflation. you're just paying more for stuff you're importing it's not driving your real incomes up proportionately americans lose maybe -- >> so when i go to buy a car or washing machine that's higher priced, if it's the result of the trade, i'm going to notice the difference >> well, it's not -- it depends on how far it goes and how many things it's on if it's just on a few things, yeah, the washing machines seem to be going up a lot you won't notice it so much. if you do this over many years and i see this as like a popular

policy, unfortunately, that may continue, it's going to have a pretty noticeable effect on your standard of living i don't want to say it's -- >> so we're almost out of time i love having you in my grasp here so let's continue this line of thinking so i'm a cost benefit analysis guy. to me, any policy that's done should have a cost benefit analysis if we think about the things the central bank has done since the credit crisis, now they're trying to normalize. would you say that the costs of tightening -- there is a cost. if you monitor gdp and you go into a snuggy mode and go beyond the neutral rate, there's going to be cost to the economy, right? >> yeah, they try to slow down inflation. there's temporary costs out, but for sure. >> with trade, can't we apply the same logic in the near term

it might cost us money, but there might be a benefit at the end? what i'm getting at is we can pick and choose. in many instances there's policies we like and policies we don't like and the outcomes might be the same? >> i think less so on trade. i don't have a good feeling about this it will raise prices, monopoly power. i don't think it's going to be a good end game for the american people. >> it's always a pleasure. thank you for playing along with my game of sorts i really appreciate it squawk alley, back to you. thanks so much there's going to be more squawk alley right after this thanks, rick to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

coming up next, toyota p.anging up its nascar lineu kyle busch is with us next, on squawk alley

nascar, it's the all american sport, right? with tariffs in focus today, it's worth noting that toyota

has been a dominant competitor on the racing circuit now for nearly two decades today, the automaker is announcing the relaunch of its popular super model for both the racetrack and the retail market. joining us now from the nascar champion and winningest nascar xfinity series driver, kyle wush, grebusch. great to have you here and toyota senior american executive, ed louse. guy, great to have you here. >> thank you >> so exciting to have a race car driver on. let me ask you this. we talk so much about american brands president trump openly says nascar support eers are in his base he said nascar fans would never kneel during the anthem. goes on and on and on. how do you feel b about driving what's a japanese car? >> well, you know, the name plate of toyota obviously was

born in japan. no denying that, but with the amount of resources and the development and the people and everything else that toyota has brought to the united states and the amount of they employ in the united states is well over 100,000 people we built cars here there's the georgetown plant and they sell over 200,000 camries a year out of. also the tundra plant in texas there's a lot of names for them here in the united states. >> ed, i want the ask you about the impact on that u.s. manufacturing of toyotas toyota b i believe has said these tariffs are going to increase the cost of the cars produced in the u.s. as well how big of a concern is that for production inside the u.s. right now? >> so, it's always a concern anytime you starlet talking about any type of tariffs on

anything we're not a supporter of any tariffs. we love the fact that we should be able to as a united states government, be able to go out and be able to work with the other countries and we're a free trading organization we do build a large percentage of our vehicles here in the united states as kyle mentioned. the camry plant in georgetown that builds camry, avalon and the lexus es is the largest manufacturing plant in the entire world for toyota. so we have a massive presence here, but we also are free tr e traders. >> do you think that therefore toyota, toyota north america group as it's, as you are head of, should not be caught up in in of this and what is at the moment the price likely to be on the camry that is made here and sold here? >> so i think that's really going to be determined what the price impact would be depending on how things look with regard to materials, labor, et set

rachl the tough to make a call, but we believe that we should be involved and we should be participating in everything that's happening within our government you know, we have a huge presence here. a lot of people that are employeded we have a massive vest m we're building a new plant, another plant, in northern alabama outside of huntsville. so we think we should be participating many everything that's regarding it. >> tell me about drive iing the supra. you going to win. >> that's the most important thing, obviously is getting a victory lane with that car so i'm excited about the new supra. obviousand having tundra and ca there, those two names have won a ton of races in arenasr car i want to be the first one to get into victory lane, so i can't wait to get my colors on it and get it out there next year >> i got to ask you a question from twitter, which is always dangerous, but one guy wants to know if you think ford has an advantage on the larger tracks

because some kind of length of the cars >> all the cars length's are the same >> i knew it was a bad question. >> overall, you know, we've gotten a great relationship with toyota, obviously. i drive for them of course, too, we've won championships. you know with the amount of races we've won this year. i've won five. kevin harvick, he's won five it's back and forth every week there are tracks that are better suited for those guys. tracks that are better suited for us so i think that's what makes racing fun can't just have one brand going to every racetrack being the dominant force you know for the both of us, we know which tracks wie've got to bet get ter at, but we're ready for the rest of the year and the playoffs when it comes down to homestead it's all about the championship.

>> it is exciting. good luck with the new car, kyle and ed >> when we return, "squawk alley" from 100 billion to 54. while they're pricing last night a company's ralluation almost off. back after the short break

chinese supermarket phone marker xiaomi pricing its ipo overnight coming up way short of where it used to be valued josh >> john, xiaomi was one of the most talked about ishs pos of the year, but the company just priced at the bottom end $2.17 per share, but it appears they did get more interest at that lower price up iping the deal size by about 15%. now raising closer to $5.4 billion and that would appear to imply a valuation of as much as $62 billion. still that is well below $100 billion that insiders had suggested this year. now, xaomi could be a victim of trends between washington and beijing

beijing. they're down since january they also called itself an internet company, but had services as a share of revenue remained under 10% its smart phones accounted for 70% of sales this is a big valuation and form er board member says its strategy is the right one. selling quality phones at low prices then using those as a gateway to higher margin services like video streaming. the fourth large smart phone vendor in the world. and some folks here in san francisco say they'd be interested in a xiaomi phone >> i'm on a budget, so i'd be breast interested in that >> i would consider switch tog a chinese phone. i don't possess any particular concerns and hacking or safety i'd feel very, some things would

have to happen for me to make a switch >> they start trading in hong kong on monday back to you. >> thank you that guy had no concerns about hacking or safety. >> wow >> a lair. >> in 2018 in san francisco. other ip oos coming up, but thas for being with us this week. >> my pleasure >> over to scott wapner for the half >> welcome to the halftime report the great debate over where stocks are likely heading in the months ahead and whether earnings can save the day or if this trade war is going to upset the summer rally here at post nine, joe, jim, pete, our friend aaron brown. investors digesting the firs