good morning it is 8:00 a.m. at microsoft headquarters in redmond, washington 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ ♪ good friday morning, i am carl quintanilla with morgan brennan and jon fortt. busy friday morning.

j here's the president talking about the state of the u.s. economy. >> currently things are -- the economy is running pretty hot. hopefully not too hot. >> i think it is maybe as good as it has ever been ever companies, what i really am happy about is a lot of cash is coming back in through billions and trillions that was overseas where companies were locked and they couldn't get it back, now it is coming back. hundreds of millions of dollars at a clip, and also companies are coming back to our country we have record numbers of companies coming back in they're pouring back in. they're going to michigan and they're going to ohio and pennsylvania and so many different states, and people can't believe what's happening >> wage gains. do you worry, is it time for the fed to be doing what it is doing, just to get a policy question in, should they be raising rates on the trajectory that's indicated >> i put a very good man in the

fed. i don't necessarily agree with it because he is raising interest rates i'm not saying that i agree with it, i don't necessarily agree with it, i must tell you, i don't. i'm not thrilled because we go up and every time you go up, they want to raise rates again i'm not happy about it, but at the same time i'm letting them do what they feel is best. but i don't like all of this work that goes into doing what we're doing. you look at the euro, look at what's going on with the eu, and they're not doing what we're doing, and we already have somewhat of a disadvantage, although i am turning it into an advantage. last year and for years we were losing $150 billion with the eu nations, with the european union, and they're making money easy and their currency is falling. china, their currency is dropping like a rock, and our currency is going up, and i have to tell you it puts us at a disadvantage now, i'm just saying the same

thing i would have said as a private citizen. somebody would say maybe you shouldn't say that as the president. i couldn't carele less what the say. my views haven't changed i don't like all this work we put into the economy, i see rates going up, i see china, look at what's happening with their currency, it is dropping like a rock. >> because of some of the trade problems. >> i think i'm helping, you want to know the truth, because i'm doing something we're going to level out the playing field. >> let's bring in jason furman, former chairman of the white house advisers, and former director of the congressional budget office to react to that gentlemen, thanks for joining us today. >> my pleasure >> doug, i want to start with you on comments from president trump. people's bank of china had weakened the juan by .4%, single largest move in two years. when you hear comments like that

from the president, what's your reaction >> there's been a lot of discussion whether the president should or should not express views on monetary policy, how damaging it might be to have the president do this. i would ask the question what good does it do, how does that help the american consumer, the average family, and in the end i think that becomes the central question about the way the president formulates both the trade issue and monetary policy issue. he is focused on these bilateral trade deficits the focus should be on the welfare of the american family the economy is growing rapidly monetary policy has zero interest rates at the lower end. it is not inappropriately high, and you want to have the fed doing things that are best over the long term, so i think he should have stayed out of it i am old school. the president shouldn't talk about the fed. but i think people are framing

it wrong saying he hasn't done that much damage how is he helping? >> jason, to that point it seems like with the president breaking from tradition, making comments on monetary tightening and the fed chairman that it is almost a darnd darned if you do, darned if you don't policy, in terms of the policy they implement this year and beyond >> i agree with everything doug said i don't think this is going to move the fed at all. the markets don't think this is going to move the fed at all fed fund futures were basically unchanged on this. that's a building that they don't have every latest tweet on their screen, they're looking at the data they're a bunch of nonpartisan technical experts so i think they're going to do the right thing. maybe they'll need to prove to him by doing an extra hike, but i don't think they'll do that. i think they'll tune it out as

they should. >> what's the right thing? >> i think, i'm sorry to interrupt. in the interview in the past couple days there were two things they've done. the president singled out the fed and i think it makes them more likely to move in september, not less, and they singled out president xi as the problem with china and i think it makes him less likely to change course, too i think he is hurting his objectives by making these comments >> china has its politics, too, and none of these leaders can be seen to just massively caving to the united states, especially when our demand is the wrong demand it shouldn't be about the trade policy. >> doug, multinationals might applaud the relief they're getting in the dollar, if it is sustained, that would be one thing. the other, doesn't it show at least some tip of the hat to the deficits that are admittedly

result of the tax cuts but at least he has his eye on that >> i don't think he's got anything like an eye on the deficit to be honest >> literally says debt is coming due. >> but he is not doing anything about the deficit. there's nothing in the administration's near or long term economic policies that suggest they care about the deficit. so i find this one off picking up of currency today, interest rates the next day, you know, that's not a coherent economic policy these tariffs don't fit into anything like a coherent economic policy. if he goes on $500 billion of chinese imports, that's $100 billion. if you said let's have a $100 billion tax increase, it would be rejected out of hand. if it is tariff increase, somehow it is good policy? none of this hangs together for me in any deep way.

>> jason, i want to superdelegate aboask you about that when it comes to tariffs on chinese imports, the question maybe isn't who this hurts more but whether this is going to make things better what reason do we have to believe this strategy versus china is going to get us to a better place is there a historical precedent you can point to particularly when it comes to dealing with somebody like china? >> look, i think if we succeeded in the correct objective with china of dealing with issues like intellectual property and how our companies are treated there, it would be a positive for the u.s. economy i think it is worth trying to do that, but i think it would be a relatively small positive. it is not going to make a huge difference to our jobs, wages, and growth if we do the wrong thing and mess up a trade war, could make a huge difference.

could make a huge dirchfference the negative we are playing with fire here. there's a small up side, big down side. i would rather not see us try to go down this path at this point with this administration and this strategy. >> just to wrap this up, doug, in light of that, i mean we have seen it with markets, bob pisani reported on this a lot, the fact that we can even sit here and essentially level a trade war, level tariffs, have this fight is because the u.s. economy is growing as strong as it is you have tax reform, deregulation, and that is from a market standpoint net positive versus what we see play out with trade. is that not the case >> i think that's absolutely the case i think the regulatory moves, the tax reforms are all incredibly powerful. they were the right thing to do. i am firmly supportive of that the real question on the trade issue is when will the administration demonstrate a

win? when will they use tariffs in a way that cause other countries to lower tariffs and end up net better off for the trading regime that's always been the stated case there's just no evidence it will work so far. >> gentlemen, we will leave it there. thank you for joining us jason, doug. coming up, shares of ge are sliding. down there, 4.5% after earnings. the latest from the executives on the call. plus former ge vice chairman bob wright with his take on the path rwd r the company. more "squawk alley" after this break. ahoy-hoy. alexander graham bell here... no, no, my number is one, you must want two! two, i say!! like my father before... [telephone ring] like my father before... ahoy-hoy! as long as people talk too loudly on the phone, you can count on geico saving folks money. fifteen minutes could save you

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shares of ge are sliding with better than expected quarterly results, down 5% the company posted profit decline, not as bad as wall street feared. results were helped by strength in aviation and health care businesses it also surprised the street, reiterating the guidance to 1.07 a share. on the call, the ceo said he expected that to be at the lower end of that guidance also that free cash flow from industrial operations for the year would be about $6 billion i spoke with the gecfo a short while ago. she said we're seeing strength in all businesses except power there's softness that continued in power on trade she said china is very important to us. we are watching tariffs closely, that it is concerning, given the fact it is a global country

built on free trade that they wouldn't move production out of the u.s. they have a global supply chain that's very flexible, so depending how it plays out, they could shift some of that i asked about pension and pension obligations ge said is funding that $6 billion this year but there's a lot of focus on 30 billion plus shortfall there she said she doesn't anticipate freezing the pension plan and that interest rates, rising interest rates have been very positive for the deficit there she said all things are on the table in terms of ge capital they haven't made more decisions about insurance liabilities and how they derisk out of that. i asked about the aviation leasing business, the plane leasing business within ge capital, considered something of a crown jewel, whether that could be on the table to be sold she said not right now that's part of the portfolio but again, everything is on the table in terms of oil prices and results we saw on baker hughes,

rising prices is net not good. baker hughes is well positioned in that oil and gas recovery, but again saying that reiterating they're seeing strength across their businesses, except power, and that they are laser focused on turning that specific unit around >> for more on all that, we are joined by former ge vice chairman, former nbc ceo bob wright thanks for joining us today. always good to get your take. >> thank you, thanks for having me it was a very interesting call i participated in the call and you know, the good news is there were no surprises. they're trying very hard to be transparent and it is almost impossible, but they're trying very hard. every quarter they give more information. i thought the summary i just heard was certainly what i saw

flannery has a very difficult hand, no question about it and he's upright about it and he's got some -- aviation is a great business, the health care business is looking very good, and it will do very well out there on its own renewable energy is kind of a little bit of a surprise that that's having such a difficulty at this moment but they get 85% improvement, they're back in the game that's going to be helpful when he wants to exit power is difficult but the world needs power, power growth is there, and they just have to get their share of it, have to get back in the game probably two or three years for that one i wanted to take the time -- >> bob, when you say he has a very tough hand, the challenges in front of him, whether

portfolio management, obviously power, this trade discussion that we're getting deeper into every day, or the long term obligations, what's most addressable first? >> i don't think the trade issue is a big deal, and he explained it well. they can buy things from china, buy parts from china and pay the tariff, but when they include the parts and items they ship out, they get credit in most cases because they're equipment, a lot of equipment goes around the world, they're not going to have that much impact because many of the parts go right back outside the united states that's what he was trying to say. >> he does say though in the call we're a company built for fair and open trade. >> right. >> hopes we reach a sensible negotiated conclusion. if that doesn't happen soon, does it matter >> well, i'm saying it doesn't matter as much as you might

think, that's what i'm trying to say because of the fact that the equipment that would be subject to it, it was generally included and goes somewhere outside the united states. you get a credit for that. i think that's the least of his problems one of the things that i have to mention to you, though, goes back a number of years, and it is just so -- the tough hand he has. he's got revenue, to compare to microsoft, microsoft's revenue is 103 billion, maybe a little more than that and ge's is 120, the same. microsoft has increased value 44% this year, and ge down 49% the cap of microsoft is $825 billion and ge 114

and it's just absolutely, the -- these two companies, microsoft was a much smaller company than ge for that period of time. >> of course >> and just the cloud has turned them into a monster. flannery, he had to park that industrial program that ml put 4 or 5 million into, maybe that can be resurrected, moved from being in equipment that ge sells to other people, but he needs some spark in there, in that power area maybe it is a piece of design, i don't know but just so sad to see the scale flipped around there

>> yeah, and bob certainly earlier this week we did actually see news that ge and microsoft are deepening their relationship around the cloud and digital industrial internet. i want to get your thoughts -- >> ironically they didn't emphasize that in the call, nor did anybody ask a question about it >> yes i wanted to get your thoughts, there's a lot of focus on pain in power, seems to me in terms of turning this company around, the other key area is ge capital. how would you envision that being unwound? >> they're trying to put ge capital in a runoff, and trying to runoff the assets hope to get it to break even because they're not taking on business that's not ge business much at this time. so they're going to run it down. it is going to be an in-house

support system, more or less that's very attractive, that works. but you know it is not ge capital any more it is part of ge, it is a division of ge it was a separate company until a couple of years ago. >> bob, finally can i ask if you're buying any here, selling, holding? what are you doing >> well, i sold a lot of ge at about 20 and that was the 50%, down from 30 i still have it. i have ge out of my ears in all kinds of things in plans i'm honest i want to cheer them on here it's just very difficult work. he's going to have to get a couple of breaks in there with some product, maybe an acquisition that really fits, but there's something that has to happen to get it moving along. >> you know so many of the

corners inside and out of the company, bob hopefully next time we can talk media, too thanks >> thank you very much by the way, the people in that call handled themself very well. this was a very good, you know, meeting with not a lot of drama, no drama, no surprises. >> right thanks, bob. see you later. >> thank you >> definitely key for that stock given what we've seen recently. when we return, microsoft i am pressing the street after beating expectations, seeing huge growth in the cloud business shares up. we break that down after the break. but the market was up nearly twice as much. that's a tough pill to swallow. exactly. so i started trading. but with everything out there, how do you know what to buy? well, i think my friend victor has just the thing for you. check this out, td ameritrade makes it easier to find the investments that might be right for you. like our etf comparison tool it lets you see how etfs measure up to one another. analyst ratings and past performance... nice.

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microsoft touching all-time highs this morning, at this time up roughly 3% on strong earnings and revenue. actually after hours, believe it or not, at first investors weren't sure how to take this. the stock dipped a little bit

until the guidance came out, and that pushed the stock higher saw that reflected in how it opened incredibly important here, microsoft doesn't seem to be running into the same cloud growth head winds we saw from oracle earlier, either because they chose to report cloud in the first place in a different way, that didn't cause them to run into trouble with their legacy business, or just because the business fundamentally is rolling along better also interesting to contrast this with netflix which also saw some subscriber issues whether you look at it from the enterprise side or consumer side, microsoft continues to have momentum. and that's not just when it comes to azure and office 365. the pc business did well microsoft's pc business did even better than the pc market overall because of premium segment, gaming doing well for them also. interesting stat that key bank

pointed out. the cloud and internet services business for them, revenues rose 42% year over year to a $40 billion annual run rate. that's just over a third of total sales. it was almost nothing three years ago. >> you know, it is interesting, they're growing their cloud business, we're certainly seeing that reflected in the stock today. there seems to be focus on the fact that amazon has a head start or such a lead what would it take to close that >> when you are talking about microsoft and amazon cloud business, it is almost apples and oranges because microsoft had office and now a big part of the cloud story is office 365. google was supposed to stop them from getting there with google docs microsoft successfully blunted that amazon was more of an infrastructure and storage as a service story starting out microsoft, a little more diverse in the cloud space, but

microsoft is making a lot of money. amazon is still much better from an infrastructure as service perspective, but it remains to be seen where the momentum and value really is. microsoft is well positioned either way very much in the fight >> one year chart of microsoft versus oracle is pretty interesting. oracle down for 12 months. let's get to the european close. >> moves have been significant in europe. european markets mostly in the red led by germany after president trump indicated to cnbc that he is ready to slap tariffs on $500 billion of chinese goods. take a look at the currency reaction the euro spiking on the u.s. dollar weakness after this morning's tweet from the president, accusing the eu and china of currency manipulation trump telling cnbc that the u.s. is at a currency disadvantage. >> you look at the euro, you

look at what's going on with the eu, and they're not doing what we're doing, and we already have somewhat of a disadvantage, although i'm turning that into an advantage you know last year and for years we have been losing $150 billion with the eu nations, with the european union, and they're making money easy and their currency is falling, and china, their currency is dropping like a rock our currency is going up >> sticking with trade, hours agate her annual summer news conference, angela merkel urging the u.s. and eu to resolve what she calls a serious trade dispute. she added maintaining a trade alliance was in her words key. today we're seeing german au automakers fall. volkswagon, bmw, daimler among the biggest losers on the dax.

now over to michelle caruso-cabrera for a news update. >> here is what's happening at this hour. russia's defense ministry broadcasting video showing what it says is a successful testing of modernized ballistic missile defense system the test a day after showed a series of videos showing a new generation of nuclear and conventional weapons. russia's ambassador to the u.s. says the meeting between president trump and russian president putin was a pivotal event. also said there was concern among nato countries ahead of the meeting. he spoke at a round table discussion in moscow. the wildfire known as ferguson fire has grown to 33 square miles most evacuations are lifted near the city of corona and tense moments as a semi truck dangled from a bridge in florida. crews rushed to the scene, managing toget it back on the bridge in 90 minutes the driver made it safely out of the cab. cause of the accident is not

known. back to "squawk alley. >> thank you, michelle. coming up, a tale of two ceos mark zuckerberg raising eyebrows this week with comments that he made about how facebook looks at free speech in a lengthy interview with rico, while elon musk continues to puzzle investors with comments on twitter. roger mcnamee joins us next with his take on both ceos, what he thinks needs to change back in a moment

facebook's mark zuckerberg under fire after the interview this week, including some controversial comments surrounding the role of conspiracy theorists on the platform this is as the social network faces questions over how to deal what is and is not allowed in terms of content bring in early facebook investor, roger mcnamee. good to see you. happy friday. >> happy friday, carl. >> for all of the hand ringing about the interview and debate of what should go on and be taken off, stock at an all-time high earlier in the week, stock was valuing it with a perceived business model that management is not responsible for what is said. >> i think that's right. i think investors are looking at this and saying in the march quarter with all of the

controversy, i think the market is expecting more of the same. the issue for facebook and mark, the country is trusting them with the 2018 mid term elections, and if something goes wrong here it is going to be hard to give them a pass and we know there's a lot of interference going on because it is already being reported, and that's a huge challenge. i think from mark's point of view, i think one of the great issues he is facing is in that interview with kara swisher, he tried to frame the problem as either everything goes or we have to sensocensor and the reality is there's a much better third option, try to engage with people and inform them you don't want to censor things, you want to engage with haters, explain to them what's going on. facebook is a good platform for doing that >> are you okay in which the way

they will deprioritize content they think is wrong but maybe well intended? >> i honestly think what they're doing right now is far too little and not nearly well enough thought out i think they're in a public relations mode, they're trying to make the pain go away and they need to step back and really look at the systemic causes of these problems and try to tackle them systematically rather than treating each one like it is an individual isolated event and the problem is that the culture has moved fast and they're now in the mode of moving slowly, trying to re-assemble humpty dumpty, and that's a hard way to go about these things. >> i think zuckerberg tried to explain what he really meant by move faster, break things, and how he hopes the culture has changed. the one holocaust denier example in the interview getting a lot of attention, but there was a lot more to it

part of what came across to me is facebook views itself as this sort of parallel digital dimension, like the upside down in "stranger things" where it controls so much of the commerce and interaction and the idea that there are going to be negative, or bad, or regrettable things, ideas people have, things that are said it would be bad to police those. it is a matter of how much juice and promotion facebook puts behind it. as he was describing that, i was thinking is this an existential question for facebook? if it comes down to the idea people aren't allowed to say false things, is there any ai that could be conceived that would be able to prevent that from happening would you have to shut facebook down if that became the standard >> john, that's an important question and i don't want to pretend to know what the answer is the problem is that facebook approaches every problem as though there is a code or ai based solution

and some of the problems they've created, filter bubbles would be a perfect example, have gone beyond the reach of technology if we think about this, approximately one person in three in the united states now identifies with an issue that's demonstratively false, and this could be something like the anti-vax people or flat earth people, but also people who deny that climate change is a man-made issue and if you think about that, there's no technology solution for that that requires human engagement and interaction. so in my mind facebook's in the situation where it created problems it's not in position to solve. yet what we want to do is think about the future and recognize that unless we do changes facebook's approach to its business, there are going to be a lot more problems and they're going to be harder to solve. with the internet, you're going to be capturing data a lot of

places you haven't captured it before, essentially surveilling people in places you never surveilled. >> before we move to the next topic with you to dig into that a little bit further and this idea of maybe counter hate speech with correct information or opportunity to educate, what exactly would that look like would that be something facebook is doing or -- >> morgan, that's a really great question i think obviously it has to take place inside facebook. and facebook has done a little bit of this now. one of the ways they're going after disinformation is they're trying to put more authoritative sources attaching that information directly to each post, and i think that is a path i'm not smart enough about user interface design to know what the optimal thing will be in the long run, but the notion if somebody posts something and the system knows that thing is false, there should be a way of

accompanying that with a statement of okay, this person posted this, but you ought to understand, this is what it really is or this is what scientists say is correct or whatever is the appropriate response >> that's sticky stuff there, man. >> i agree i don't think these problems are easy at all. that's what we get for embracing technology before we understand its full implication. >> roger, let's talk to you on tesla. elon musk, face on the cover of drudge with headline musk meltdown fear. interesting behavior over the week on twitter ranging from deleted derogatory posts on one of the thai cave rescuers and sparring with journalists. jp morgan referring they're underweight, target is 180, more discussion of cancel agency rates which analysts say are going to increase competition, lower credit revenue could you build a bookcase on it if you had to? >> i always believed, we talked about this in the past, the

brand associated with tesla is really extraordinary, right? it's apple but more so you meet people that own a tesla or think about getting one, they feel about that product differently than people feel about other cars in my mind if what's going on now harms that in a material way, then this thing is over if the people who like the cars like the cars as much today as last week and like it as much next week, there's going to be recovery in the stock i suspect simply because the brand is a differentiated thing i think competing with them on brand is tricky if the brand is based on the car rather than elon if he is the brand, the brand will get hurt. >> roger, i worry sometimes we get too wrapped up in these personalities, big and bold and strong as they are in the news, but there's fundamental news

issues underneath it you compare it to apple, it reminds me of apple before again tim cook had the role in the company he did of making sure the trains ran on time and things got produced the way they need to. is that the marker for tesla that investors should be concerned with you look at how he tried to overautomate model three and had to roll it back and the other things he is trying to do. should we look for a coo type to emerge as being a point where you can trust longer term prospects of the company >> you know, i'm not a pro on car manufacturing. what i am told by people that understand it is that tesla, their whole approach to this has been naive and has lead them to a series of failures that didn't have to happen, that they have not approached this in the way that was most likely to produce a happy ending i don't know how you get to a happy ending from where you are now. what i know is that as long as

the quality of the cars remains as high as it has been historically, the brand should be fine. i don't know how many they can make obviously that's going to determine what the numbers are what he did to get to 5,000 units, jon, i think we talked about this before, is not a sustainable think. you're not getting to 10,000 a week doing those same techniques you have to solve real manufacturing problems i think that's the challenge for the stock if earnings are what matters. if brand is what matters, it is a different animal they have to get from 5,000 to 10,000 to 20,000, they're going to need a different approach i don't know if that's about a coo or simply about just changing the fundamental culture of the company because obviously manufacturing is really hard and they haven't approached it with the sense of gravity you might >> journal had a good review of the three yesterday. >> everyone i know who has one

loves it, but -- >> they called it magnificent. >> that's kind of where if people love the product the way they loved it historically, that's a defensible situation. i don't know whether they're going to be a small boutique car manufacturer making a few thousand a week or mainstream large volume guy, but as long as the quality of the cars is high, their designs are amazing. >> i would just make the case going back to jon's point, spacex has a coo, and they're turning a profit, and is a company taking a lot of market share. >> jon's point about people is key, morgan. i don't think you can add one person and fix a thing like this, but one person may be the start toward fixing a thing like this. >> roger, see you soon >> take care have a great weekend.

>> you too coming up, the impact of a trade war. why soybean farmers are scrambling i am looking at the board, see 288, 289 that's crazy, why? the yield curve is almost 30 basis points 10s to 2s that's what we're going to talk about after the break.

let's get over to rick santelli for the santelli exchange hey, rick. >> good morning. thank you. you know, i had a chance to talk to senator pat toomey this morning and there was a couple of areas we didn't have time to cover. one of the areas was his interaction with jay powell on tuesday on the senate side regarding the yield curve and the shape of the yield curve indeed, everybody is preoccupied with it, and there's no other way this could possibly end up of course, all traders and strategists, economists, analysts, people on tv are going to be talking about it because some of the issues that it may be the signals that may be sending seem counter intuitive to everything we can see and touch regarding the economy right now. pretty much everywhere you look, things seem pretty solid granted, interest rates seem to

be changing a bit today. as a matter of fact, if you're looking at the screen, you should see a one week chart of tens minus twos. instead of a beeline closer to 20, all of a sudden we're almost at 30 basis points granted, that isn't very aggressive, considering how much it flattened since the beginning of the year. the salient question is is the shape of the yield curve an indicator of something coming down the road or just a result of policy, or it could be a little combination of both but i think that when you drive a car and you sit down and most cars have a gearshift on the column or gearshift on the floor, i think we can learn a lot. they have forward, neutral, and reverse. when jay powell answered senator toomey's question about do you look at the yield curve and does it flatten, change any of your

policy decision making, here's what his answer was. i think what really matters is what the neutral rate of interest is. okay it sounds like a good answer, but what does it mean? to me that is a terrific answe because when you have overstimulative policy or quantitative easing that caused all the distortions, you're definitely in forward, and your foot is on the gas, okay when you inhibit the economy, you definitely put it in reverse. what is between expansion and restraint? neutral. i think what jay powell communicated to us is large. because to me, what he's saying is, i'm going to keep doing what i think is right if the yield curve starts to act crazy, most likely, that will be his neutral rate then he'll monitor it going forward to see if he can slip more rate increases in that's my take i think it is the take jay powell might agree with. back to you. >> rick, a lot to talk about as

the week comes to a close here this afternoon rick santelli in chicago dow is up 43 qup up almost 3.5. "sawk alley" is back in a couple of minutes. you always pay your insurance on time. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance. call for a free quote today.

liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ is it time for the fed to be doing what hst doiit is doing? >> i'm not thrilled. every time it goes up, they want to raise rates again i'm not happy about it at the same time, i'm letting them do what they feel is best. >> because the president said it and criticized the federal reserve, he's made it political. >> white house putting out a statement within the past couple of minutes about the president's interview earlier with

welcome back china cancelling its soybean contracts with north dakota, leaving farmers scrambling to find new markets contessa brewer is in portland with the latest on this story.

contessa >> reporter: morgan, this is the plant that produces those non-gmo food grade soybeans. china cancelled all of its north dakota contracts for this product since the tariffs have been slapped on it from china. now, we know that these contracts are getting locked down in august just as that happens, richland ifc, which sends 23% of its global exports to china specifically, a contract was yanked a few weeks ago though president brandenburger found replacement buyers, he had to sell at a big discount. the processors and the farmers on the ground told me, they agree with the president, they were on an uneven playing field, but the farmers don't have the cash flow or the savings to ride out a long-term trade war. here's the response when i explained to them what the administration says is happening on the trade talk front. last week, the administration admitted that there are no high-level trade talks going on right now with china

>> you're serious? i was not aware of that. wow. seriously? that's interesting we're just going to close the door and walk away interesting. that's not good. i don't think tariffs are ever a good thing, for either side. i've got to believe that there's methods to work out differences outside of taking the hammer out. >> reporter: guys, meanwhile, in china, the trade groups that were supposed to come here in august have already cancelled. the trade groups that were supposed to come in september ay at this point, are the buyers going to turn to brazil or canada, which has quality soybeans and the weather north dakota does, and they'd lose their buyers permanently guys >> thank you, contessa brewer. up next, my fort knox interview with pandora ceo and

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i sat down with pandora ceo roger lynch. also the former ceo of sling tv. and a ft. knox exclusive interview earlier this morning, talking about bundles. what they mean for music take a listen. >> my former business. >> yes. >> sling tv. that's what we were doing, is breaking apart the big bundles really, the whole idea there was that people would reassemble their own bundles. in the case of sling tv, we saw a growth in netflix, a growth in digital antennas, old-fashioned, over the air networks. sling fit in between people would create their own bundles, rather than being forced to buy a big bundle i think you're seeing that go into music and other things, where people are creating bundles together with different services >> that makes pandora potenti potentially more valuable to at&t and verizon, going up against the tech power you can watch the conversation

this weekend on ft. knox.com, pandora tv, amazon tv, the podcast version will be out. >> another strong podcast from you. he says that in light of hulu and spotify. >> interesting indeed. backiuckle up for next week let's go to post nine at the half welcome to the "halftime report." post nine. the top trade, the market's moment of truth. several big names reporter next week are investors about to get the boost in the market they've been waiting for? here to debate that is josh brown, jana, kate moore, michael, as well the president of farr, miller, and washington cnbc contributor, as well. i want to begin with the markets. setting up for a huge week