good morning, it is 10:00 a.m. at target headquarters in minneapolis, minnesota 11:00 a.m. here on wall street and "squawk alley" is live ♪

good wednesday morning welcome to "squawk alley." with me this morning is sara eisen. we are talking about paul manafort and his guilty plea and the latest on michael cohen. eamon javers is live with more for us >> reporter: the staff here is buttoned up about this they are referring to everything to outside counsel the president unincumbered on twitter. responding differently to each man. walk with me through the tweets to see what i mean first of all, in the tongue and cheek tweet this morning, if anyone is looking for a good lawyer, i would strongly suggest that you don't retain the

services of michael cohen. then the president going on to talk about paul manafort saying i feel very badly for paul manafort and his wonderful family justice applied tremendous pressure on him. and unlike michael cohen, he refused to break, make up stories in order to get a deal such respect for a brave man there the president is talking about his former campaign chief who as of yesterday is a convicted felon and praising him for not cooperating with enforcement agents and the jury deadlocked on a number of charges saying a large number of counts, ten, couldn't be decided in the paul manafort case, witch hunt and then michael cohen pled guilty to two campaign finance violations that are not a crime. the president is asserting the crime to which michael cohen pled guilty yesterday and faces jail time for is not actually a crime. also, the president's correct that the obama administration

did face a large fine. the president is making a distinction on whether people are with him or against him in the president's eyes >> based on the facts we have right now and the knowledge we have right that's currently public, because i think there's been a lot of analysis, a lot of speculation around all of this, it seems to me the big thing is michael cohen and specifically the fact that he implicated the president in campaign finance violences, that this could be potentially a federal crime. is this something, even if there was no collusion with russia which it doesn't seem clear to me other than some suggestive comments from lanny davis, cohen's attorney, that we have based on the facts in front of us would this be enough for

lawmakers if they were so inclined to potentially impeach the president? >> the last part of your question is the key, if they were so inclined the question here is, this is a weird process, impeachment i covered the bill clinton impeachment. maybe we'll see another one on the horizon here, but ultimately impeachment is a political process. what you see here is a legal process moving through the court system you've got prosecutors, defense attorneys, judges, all the things that we're familiar with. and in the case of the president of the united states, it moves to capitol hill for potential impeachment. and the threshold there is called high crimes and misdemeanors that can be, more or less, up to the members of congress at the time that the impeachment is being considered, whether anything reaches that threshold. i don't think with the republican congress or the set of facts here that the president faces an impeachment threat any time soon in the house of representatives. if the election results change the makeup ofcongress in november, no, it could be a very different picture. because then those members of congress may be differently inclined than these members of

congress are >> eamon, thank you. eamon javers in d.c. the key question for us, what is the market impact? slipping a bit following news of the legal concerns facing the president, though it is slightly higher up two points we are joined by jpmorgan strategist and wells fargo's strategist gentlemen, thank you for joining us today david, i'll start with you, the fundamentals in the market we have the strong labor market, strong consumer spending, we've got a lot of strength here in the u.s. it's had investors piling into the u.s. equities. has that changed based on what we have coming out of d.c. right now? >> i don't think the fundamental story has changed. the 4% could be tough to top over the coming quarters 3% growth is more reasonable, but profitability continues to look solid the wage growth remains

contained, which is obviously a good sign on corporate margins and there continues to be a lot of political noise but for the better part of this year and starting near the middle part of last year was to separate the key threat from the noise. there's a lot of rhetoric coming out of washington. i think there are parts of the political situation where we have made progress, perhaps it's a little under the radar, it feels like we are moving forward in a positive direction on nafta. so focusing on what is actually happening versus what is clouding the landscape is really the most important thing. >> do you think this is just noise? >> i think it is just noise until we see a reason it would be more than noise, we'll take the approach of the signal, the fundamental economic story wouldn't change. >> samir, do you agree >> we have come a long ways. if you think about the intraday low for the year, it was 25.40 and now it is 28.60. so the market has gone up quite a bit. you are heading into a seasonally weak period you have the midterm elections coming up. and the cohen/manafort thing

doesn't help, it just ratchets up the uncertainty even further. so this is probably a pretty good time to pull back on equities just a little bit and kind of recenter yourself ahead of all these different things that can cause more povolatilit >> sameer, we are also heading into q4 with a strong report from target. and a pretty strong report from walmart two days ago what do you do with that when you think about the holiday season and the implications for those who are not amazon >> sure. i mean, retail sales and what the consumer have shown is they are very resilient whether that is due to wage gains, all the different macro impacts that are going on with tax cuts, the consumer is very strong and the death of retail was probably overly exaggerated. and we have been overweight in consumer decisiiscretionary for time and it is not just amazon.

>> if the cohen news is just noise for the markets, what does worry you? >> you need to watch what happens with the price of oil, what happens with china and watch the situation we merging markets quite closely. the biggest fundamental risk is the element of contagen beginning to take hold of the financial markets and leaving credit growth to begin to slow so watching outside of the u.s. is really the most important thing to focus on at the current juncture. >> when you use the contagen word, are you referring to everything we have seen play out over the last few weeks? >> turkey, venezuela, not just one country. we worry sentiment takes over and ends up having the ad verse impact on the performance of the, ma. >> sameer, we have had bumps along the way and some corrections. and the theme has been resilience from what david is talking about, whether it is the emerging market square or european debt crisis or concerns about u.s. growth, what turns the tide at this point as we all wonder how much there is left in this bull market

>> sure, so probably the biggest factor that's led to a lot of what we're calling resilience has been cheap money you think of quantitative easing here and in europe and japan and the u.k., really, that's what has led to a lot of the resilience is time and again investors have refocused on the fact that central banks are put underneath the markets what is changing now is the fed is raising interest rates, they are also rolling up the balance sheet, you have the ecb, the bank of japan, the bank of england all rethinking the strategies so we do think the resilience will kind of be traced back a little bit to monetary policy. and as that shifts, it may find itself, it being the market, a little less resilient in the remainder of the year. >> david, tech has led the overall market how important is remainder of the year? >> i think it is very difficult to see the market rally if tech is underperforming as long as tech can keep pace with what is happening in the more cyclicly sectors, the materials, the industrials,

bonds pick up and the financials, i think we could see a new high by the end of the year. >> gentlemen, thank you for joining us and putting it in perspective. david and sameer target and lowes are surging off the back of big earnings beats. former target vice chairman is joining us right now post nine when we come back with the dow down 31 points the digital divide is splitting this country. we have parents who are trying to get their kids off of too much social media and computers, and then we have parents who would only hope their children have access. middle school is a really key transition point, right. the stakes start changing. students begin to really start thinking about their futures. what i like about verizon's approach is that it's not limited to just giving kids new tools, it's really about empowering educators to teach in different ways, and exposing kids to more active forms of learning.

giving technology is not a total solution. teaching technology, now that is.

we are watching shares of target hit an all-time high after the retailer posted the strongest sales growth in 13 years. the ceo brian cornell joined "squawk box" this morning talking about the quarter and taking on the competition, namely amazon. >> we compete with everyone. so we have to be on the top of our game. >> come on, it is walmart and amazon, right? >> those are two big players and i think about them every single day. and we measure ourselves against their performance. so we're fighting for those trips, we're fighting for those footsteps, we're fighting for the clicks and right now, i think we're starting to build momentum >> joining us at post nine, former target vice chairman gerald storch. welcome back good to see you. >> good to see you >> we're all trying to figure

out how much of it is that that is boosting all the retailers and the better taxes and the better weather and the macro tail winds and how much is it the measures that cornell and others put in place to turn things arounded? >> well, the consumer is very, very hot and most retailers are doing well, rising tide until it shifts the only ones who don't are trying to figure out whether to sell products in a poor environment. you do see that with department stores, for example. >> jcpenney. >> don't be too harsh about, but sears and penneys are one step away from distinction. 6.5% same store sales that target reported are very much in line with the consumer numbers we saw released just a few weeks ago for july at 6.4% in retail sales. so the economy is very robust and growing rapidly, particularly consumer sentiment. there's a few sectors of retail that aren't keeping up. >> how does target look against the competition, becky brought

up walmart and amazon, in particular in terms of market share >> each one is different walmart is the king, they dwarf everyone in total sales. on the internet, amazon is the king target is far, far smaller than either one of them and has always been, but target is very effective in following the own strategy so walmart follows a value-based low-cost strategy. target has always followed a differentiated upscale strategy and does very, very well with that but if you take a look at relative scale, target is just a lot smaller animal one thing that's also true here that you're starting to see happen here, it used to always be true, remember brian said it's been 13 years since the numbers were this good, during the period 13 years ago they were good a lot. and during that period, you saw during good economic times, target outperforms walmart why? because people splurge a little more and target is more upscale. bad economic times, walmart does better even though it is a at a lower level than everyone because people are saving more.

>> the question for me is, are we beyond this era when the traditional retailers look like the gang that can't shoot straight i mean, the they are in line, in a way, maybe they are figuring out mobile, omnichannel, maybe they don't look like they are trounced by walmart as much. >> as someone dealing with this for 30 years, the most frustrating thing is like there's a different set of rules. amazon has been investing for quite a while now, which means not making money in their retailing, whereas bricks and mortar are proving improvement year after year, quarter after quarter. now bricks and mortar are starting to invest people didn't like it so much in the beginning. now they are bearing results and people are cheering for them now the standards are lining up so the bricks and mortar stores can make the investments needed to perform better many the future and those investments mean profits won't grow quite as much in the short-term for the long-term benefit. then so be it and it is fantastic. those investments also mean that

long-term operating margins are shrinking across retailers so one of these that didn't get attention today, target's operating margins are down 20 basis points. >> is that walmart, too? >> same thing everywhere that's a long-term phenomenon, folks. the operating margins will shrink the winners have to grow faster than the market, like target grew 7%, only about a half of that translated to profit increase so target's earnings gain, you will notice a third of it was operating. two-thirds was the tax benefit for the new tax law. and it should have been more, but it couldn't be because margins are under pressure by the internet and they are doing just the right thing, which is fighting back. >> that's such a key point you make, because it is not just the long-term investments and how the companies look to reininvest themselves in the age of amazon, but e commerce has lower margins to begin with. >> and prevent retailing from turning into a pure wholesale business with even lower margins, you have to differentiate in the product and experience, which target is

doing great with their own label of product. >> bottom line, is this kind of quarter where you have so many beats on traffic, comstore sales, is this repeatable? >> it is repeatable as long as the economy stays so high. the question is how long will consumer spending go are we borrowing from the future or is this a trend self-sustainable >> and what happens with the tariffs on china the $200 billion in imports includes key -- >> i don't worry about that. >> why is this. >> i think if costs rise a little bit, unfortunately or fortunately, they will be passed on to the consumer and retailers are making more money because inflation is good for retail. >> you think target and walmart has the pricing power? >> absolutely. because the prices will go up across the board and that will provide leverage in the fixed structure of the rents, of the payrolls sticking upwards, they don't go up as fast as prices do and will do better as the economy adjusts. so as long as it is not crazy, it will be fine. >> jerry, before i let you go, i

would be remiss in fact when toys' r us closed its doors, are you looking to build that brand back up? >> whether true or not true, i couldn't possibly comment on that >> thank you for commenting on everything else. gerald storch, the former vp of toys' r us and chairman at target and xiaomi is publishing their first earnings report as a valued company you can see they are up 1.5% more on their quarter later. but first, let's get out to kate rodgers with a look at what is coming up after the break kate >> reporter: hey, john we are here in pottstown, pennsylvania, we'll show you hoe this small business has been hard-hit by the president's tariff policies coming up next

in case you didn't know, it is funk week here at "squawk alley" with the music selection. hope you enjoy it. the only producer of steel kegs in the country is talking about how metal matters for beer kate >> reporter: the beer company has been unexpectedly hit by tariffs on imported steel. at first they were hopeful they may benefit because all the kegs you see here are made out of domestically produced steel. but as demand for that steel increased, so, too, did their prices and now it turns out that kegs that are imported from china are actually about $20 less than the ones they're making here in america. that's because there are tariffs on imported steel but not on the imported kegs. >> there's still zero dollar import tariff on finished import

kegs coming into the country so it was just widening the gap between our price and theirs >> reporter: the company says its lost 20% of the business to cut production and lay off about one-third of its staff >> we used to run three shifts this place used to be packed all the time people had decent jobs people had an income that they could count on and, you know, one day you're giving somebody a chance at employment and the next day you're telling them they don't have a job anymore >> reporter: so the company's ceo is in washington, d.c. today to testify before the u.s. trade representative in support of that additional $200 billion worth of tariffs on certain imported products. because on the list of products, there will be an import tariff on that finished keg coming in from china eating up so much of their business so they are hopeful that if the tariff comes back into place,

they will ramp up production and the playing field will be level one against for this company back over to you. >> kate, great reporting what stands out to me so much about this story and about this facility that your standing in right now is the fact that they have already had to lay off workers. we've heard a lot of examples of companies that say, if this continues, if prices get worse, if tariffs get worse, that they may have to lay off. but we have not heard very many examples of jobs already been lost >> reporter: yeah, morgan, that's right they had about 30 people and they were running about three shifts a day now they are down to around 20 running about 1 1/2. they were making 275 kegs a day. now they are at 175. so they are hopeful if the tariff is leveed on the specific product that some of the business will come back, but obviously this hits home for the workers here and they are hopeful and understand why the tariffs were put in place and understand what the administration was hoping and trying to do, but obviously this is just one of the ripple effects that we see when big policies are put into place like

that >> kate, so the tariffs raised the demand for domestic steel, which increased their price and then made chinese kegs more affordable interesting that their reaction to that is to be -- raise the price of chinese kegs. are they at all seeing a nuance between doing things on a lower the price of domestic steel as well or are they focused on the chinese competition only >> reporter: well, john, so the chinese competition is obviously what is eating away at a lot of their business they said specifically the steel they make these kegs out of went up about 21% in price in bulk. so that just really ate up a lot of their cost here domestically. so they are hoping, like i said, once the tariff is put in place on the chinese product, that it will be a level playing field once again but as i mentioned on "squawk box," they used to import the boxes from china and decided to

shift to making them domestically so it is interesting to see the criss-cross of the impact here because had they continued to shift to overseas, this shift would have benefitted them more. >> that wasn't supposed to happen thank you, kate. and italian officials have opened an investigation into the floods that killed numerous people firefighters are searching for survivors in a narrow gorge in italy after the devastating flash flooding swept away dozens of people. ten people were killed when the 8 feet of water swept through the gorge. 23 have been rescued so far. country music star gretchen wilson was arrested yesterday after an incident on a commercial flight. she became belligerent and caused a commotion to bradley state airport. she was arrested on the tarmac after the plane landed she's due in court today

israel outlined the sale of juule-cigarettes over the concern of the nicotine content. this france formed the market -- transformed the market since launching in 2013 and nearly accounts for 20% of the u.s. e-cigarette sales. juul will appeal the sentence. and kraft-heinz announced a new pizza venture with oprah winfrey. they currently make refrigerated soups and side dishes. and oprah is a major shareholder in weight watchers i think the tagline is, o that's good that's the news at this hour back downtown to "squawk allall" >> my cyst who are -- sister who is gluten-free will be excited

about this >> i didn't get the pizza box. it wasn't in stores yet. sorry. >> kraft-heinz has been one of the worst performing packaged foods in this business which is not showing sales growth and it's not giving them a boost today. >> you would think it would. >> oprah makes money when you are on your diet with weight watchers and then when you hit the pizza and fall off the wagon, she makes money, too. >> heshe's hedged completely. >> she's diversified. >> she knows what she's doing. sue herrera, thank you now to don chu with the latest >> the markets are closing relatively mixed as investors monitor the trade talks kicking off between the u.s. and china in the coming days and weeks here the carmakers are taking a bigger hit in today's trade. shares of bmw, volkswagen, all lagging after president trump said the u.s. would slap a 25% tax on, quote, every car that comes into the united states

from the european union. you can see there, those shares are all in the red auto part suppliers are moving lower after germany's continental cut the 2018 sales outlook citing lower revenues and higher costs for the hybrid technology costs and the warranty you can see the shares are down there 2% that's dragging down michelin, other automakers in other news, fiat-christler is trying to find a new home. they are looking for a deal around $300 billion. and argenics is soaring that they will commercialize one of the experiment drugs they are posting the best day in three months and finally, eu anti-trust regulators are supposed to clear

apple's bid for the music discovery of shazam without concessions. apple shares are higher in today's trading. back over to you guy. >> don chu at hq thank you. when we return, we decide if we have reached the peak of social with the founder of aol ventures but first, the dow is pairing losses from earlier in the morning, now down only two points "squawk alley" is back after a quick break. you could save energy

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♪ major indices mixed today as political risks weigh on stocks this morning, but the markets are still in the middle of the longest bull market ever counting back to the low in march of 2009, joining us on set, our own bob pisani. as we all weigh how much longer this bull market has to run, how do you weigh it? >> march 2009, the s&p was 660 660. we are up 320% since then. most of the tech names are up a lot more so it's been a remarkable run. but wall street traders are not that nostalgic and try to figure

out, what is the next crisis and the issue is, not so much what could result in a garden variety correction as what could create a bear market, a drop of 20% to get the s&p to 2300 so you could have a slower gdp growth, slower job growth, and maybe you get a garden variety in the next five to six months none of the big strategies are going to come out to say, sell everything they are going to say, stay put and ride through it. but if something moresevere happens and we are down 20%, you get a much bigger call to sort of shift out of stocks what could induce that and fortunately, this is a very well-studied phenomenon. what induces bear markets? what kills bull markets? >> recession >> recession is far and away number one the stock market invariably declines prior to recession. this is 100% and then sometimes there's instances where the fed is aggressively raising interest rates. so, for example, you raise the above the fed fund target. you say, what is the fed fund

target 1%, 2%, suddenly it's above the two-year if that were above 6%, then you would get concerned that the market would respond negatively. but none of that is happening. we are not near the recession. the fed is quietly raising rates. they are not aggressively hiking and the market seems to be going along with them. so right now i don't see any sharp chances of a bear market developing, but i see the lop-sided trades maybe reversing. look with the dollar strength. sara, you have been watching this carefully, the dollar has been weaker in several days. several of the trades that have resulted from the china deal have been reversing. metals are suddenly a lot stronger the china trade is a little bit less problematic all of a sudden, chinese internet stocks are going up after disastrous couple months some of these trades can start unwinding a little bit, but i don't think that's going to necessarily result in any imminent decline in the u.s. stock market right now so right now, garden variety correction, who the heck knows,

could be four to five months from now, i don't know but i don't see any bear markets developing and that's what traders are worried about. >> i'm going to ask you the same question i asked you off camera earlier today, are you surprised to see the markets shrug off this news out of d.c.? >> no, because look what matters. what is driving the markets right now? what really matters? you have stable inflation, you have a neutral fed, no credit stress that is out there, you have fabulous earnings growth over all ramping investment with buy-backs, with m&a activity look, here's the kind of stuff that really matters to the markets right now. the question is, is anything happening in washington that eminently threatens that i don't see anything to threaten that but we do know the china trade issues they have felt was a threat to this in some of these. and we have seen the markets move as a result of that that's why the dollarrallied s much on the china threat that we saw partly and that did move things

we know for 100% china moves the markets. those kind of debates. but right now the politics in washington are not showing up on that list. >> how much should investors pay attention to, care about this bull market, bear market stop and the length of the bull market we know the phrase that past performance is no indicator of the future results what should people care about? because people might think, oh, if it has gone on this long, it could go on longer >> well, the most obvious thing to state is past performance does not indicate future performance. a lot of people think the future is going to act like the past and it doesn't it's one of the great fallacies. unfortunately, that's the way humans think 20% -- i don't get terribly excited about all the 20% talk because it's an arbitrary number this is created by technoanalysis to explain severe declines and this is arbitrary -- allen shaw who was a legendary

technoanalyst, 10% is a correction, 20% is a bear market there are plenty of times where the market drops 19% in the last several years. and believe it or not, if we would see 19%, we would see the bull market would not have been continuous so don't -- the most important thing is that on average bull markets last three times longer than bear markets. the average bull market has lasted north of 900 days since the 1920s. the arverage bear market lasted about 300 days that's why the stock market is going up on the average day, the chances are greater that the market will go up than it will go down that's the single most important thing. all of us can go crazy, 19%, 20%, it doesn't matter long-term, the stock market tends to rise, thank heavens, because earnings and the u.s. economy, the great u.s. economy always tends to outperform in the long-term. >> so bob, i'm going to put you on the spot. who deserves the most credit for the longest bull market ever is it president obama?

president trump? ben bernanke janet yellen >> no, look, i'm not going to get trapped into that game there's no way but first of all, the resilient u.s. economy and the way our economy is structured still is the envy of the world. partly there's lower amounts of regulation, we see the stock market tend to constrict a little bit when there's more regulation, do better with less regulation, i won't get into that too much. but the nature of the economy is the primary issue. yes, a tax cut could matter in the short-term, but in the long-term, with the way the u.s. mindset and u.s. businesses are set up -- go to italy and talk to the italians about opening a cappuccino shop versus here in new york city. you'll get an earful i have, i have talked to isleal ans who can't open a cappuccino

shop in italy. why are the regulations so difficult? if the italians would change the way they do, their economy would be much better here's an editorial about the economy that you did not ask for, but u.s. structure is really the key >> i think maybe a lot of people contributed. bob pisani, thank you. coming up, more on the running of this bull market. but first, rick santelli, what are you watching today you know, i'm looking at the boards and yields that are far lower than they started out the month of august. why? economic fundamentals seem strong 'lta autheeans after the break. you always pay your insurance on time.

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liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ i'm mitchechelle caruso-cab. are stocks about to make a big move out of what we have seen in washington over the last 24 hours? and the u.s. market is no longer the best place to be. see where the firm says is the best place to invest instead and what target's big earnings say about the rest of the market "halftime report" starts at noon that's just about 15 minutes now over to you, jon fortt thank you, michelle. and facebook lagging behind other stocks this year as the company looks to regain trust with users by rolling out a new trustworthy indicator this week. the tech giant joining other platforms like twitter and

google in announcing the removal of hundreds of accounts pushing this information but have we reached peak social? joining us is john broad also joining us is the angel investor, former twitter vp of corporate strategy and author of the high growth handbook scaling start-ups from so to 10,000. -- 10 to 10,000. welcome to both of you john, facebook's results disappointed some people, but in the peak social thing, you've also got to factor in instagram and what's app especially instagram growth kind of explosive there but overall, there doesn't seem to be that much gas in the tank for social writ large. what does it mean? >> so, i don't think we have reached peak social. these are very powerful platforms both on the lean back consumption of information as well as the lean forward and publishing of information. i do think we have identified an

ex ex exostential amount of information that could result in a plateau. and we are starting to see that. we have seen twitter increase costs to handle this and it's affecting their stock price. we are seeing effect on active users across the board but i do think if this can be addressed efficiently and effectively over time, we haven't scene teen the peak. >> it seems in some ways like the battlefield is set as far as who the social players are and those who are at the second or third tier aren't making that much progress. in a way, does that mean that things have entered at least a different stage? >> i think we're definitely entering a more mature and consolidation-focused age. facebook bought instagram and what's app, a number of the emerging properties that are challengers to them. i do think in a couple years we'll see the next wave of social products, simply because you see younger people, defect

to newer platforms over time but for now, we are definitely in an era of maturity and consolidation into the market. >> i want to dig into that point a little more, jon because you have folks threatening to get off some of the platforms, maybe they are frustrated with what is going on on facebook or trolled on twitter, but how many are actually going to get off? where else are they going to go? if you are going to see what the president directly says about michael cohen or paul manafort, you have to be on twitter. >> on the publishing side, they have dmak democratized informat. we can publish information to potentially billions of people without a game keeper. and that's incredibly powerful and i don't think that's going away any time soon. >> jon, you said in order not to peak, they have to address the problem of misinformation quickly and efficiently. are any of them doing that

>> so, we did see in the last 48 hours, we have 652 pages that facebook has taken down. we have 284 twitter has taken down microsoft is taking down pages that are going after republican think-tanks. i think what this means is that misinformation on social media is no longer a localized op episodic program but rather a global problem this is not simply about russia or the midterm elections, it's about everything all day all over the world >> eli, you talked about the social maturing, so i wonder where do you see the investing opportunity now? in the past, whetherit was the pc, the smartphone, once that platform matured, there was an ecosystem around it that provided a lot of value. think about the ipod, all kinds of things with the smartphone. where do you see it now with the social >> yeah, i think it's a great open question.

i think ultimately a lot of people are investing in completely different areas like machine learning or other companies. on the consumer side, there's a big gap, so there's a lot of investors exploring new areas like ar or br or other new platforms, but they have not emerged as platforms quite yet so we are in a wait-and-see period in terms of what will be the next great consumer application. so a lot of investors are sort of sitting on the sidelines to see what will really emerge. >> yeah, there was a lot of money going into bitcoin and blockchain we'll see if there's any money left to go into other things >> yeah, absolutely. obviously, crypto currency is a massive wave right now and there's enormous attention obviously, it's a bit of a speculative bubble coupled to value creation, and that is something to what happened in the internet in the late '90s where you had a series of world-changing companies like amazon and paypal and others and then a lot of stuff that kind of went to zero

and i think crypto currencies will see a similar trend. >> we'll see where we go from here jon, eli, thanks we'll check out shares of zynga, the video game maker, surging after developing a new "star wars" mobile game. the stocks are up 8% and later, why slack's valuation is now up over 7 billion. we've got a lot more "sqwk le sllo meua welcome to the xfinity store.

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good morning thank you. i look up at the board we're under 60 in a two-year rath err eer big drop for august i'd like to look at charts while i speak to the topics of why rates aren't higher. they were down 20 basis points from their high 301 yield close in august. and it isn't only unique to us yields may have a completely different structure. they're much lower in yield than we are by many factors, but the similarity in pat ernst and breadth of move is similar indeed even though it represents a significant portion of an entire

value in basis points. even canada's ten-year are experiencing the same issues take canada. point iing know something so interesting f. you look at the yield cur kickoff in kiwanuka, it's much flatter than ours. did they do qe no they had fewer crisis era pol y policies that rhymed with any larng degree to what the u.s. and europe and japan and bank of england have did or subsequently hung on to as a matter of fact, many of the fundamentals of the economy just aren't nearly as good as the u.s. think about energy how important it is to them and how the nafta issues are confusing the outlook for canada not even mentioning the price of energy in general and many commodities. even though they've had recent bounces. i had mark olsen on today and h said it's because of fed's

fighting inflation it doesn't seem like enough. i look at the u.s., growth, the numbers of our economy the consumer area, consumer staples. retail numbers they're powerful i consider what's going on post tax cuts and that's kind of the gift in many ways that keeps on giving then i look at supply. national debt. budget deficit debt. t incongruent that this should be lined up this way the possible answers there can only be two that inflation and the general calibration we have it wrong it isn't coming. or the second global investors have diversified to a point where they are going to support these markets. sarah, back to you >> thank you let's get a check on the markets. stocks mostly brushing off early

jitters. s&p positive nasdaq up .4 and dow bare will in the red, 19 points. russell to 00 in record territories. "squawk alley" continues next.

enterprise messaging company

slack closing up $427 million. series h round of funding this week slack has raised $1.26 billion from investors it counts nasa, air b and b, oracle and target in its large base this puts the company's valuation at over $7 billion >> nasa. just put that in con tek in term of security and how much it's really liked. you know today, it's also big news day in term of the market longest running bull market ever so of course we've had a look at tech stocks. if you had invested on march 9th, 2009 in netflix, your returns would be almost 615,000. amazon, more than 310. apple, more than 204,000 and ala alphab alphabet, 204,000. facebook is missing. on a $10,000 investment. >> not bad

>> i think there are four stocks that are lower from the march 9th lows, which makes sense. >> not knowing what the buy, but when to sell a lot of people would have sold that before then send it over welcome to the halftime report i'm michelle caruso-cabrera and we are on washington watch today. no politics. instead, the traders are weighing in on the likely manafoimpact of the manafort verdict, the cohen plea deal. here today, jon and pete, erin brown at ubs mr. pete, what do you think? the markets not reacting to what happened yesterday all