it is 5:00 a.m here are your top five china retaliating. a new round of u.s. tariffs kicks in. saudi arabia slamming a report saying that it is cancelling the world's biggest ipo. hawaii on high alert a category 4 hurricane bearing down. apple booting a facebook security app over privacy issues and we continue counting down to our week-long series beat the street. today another fund manager is up 28% just this year he'll tell you what's driving

the big-time returns and give you some ideas on this thursday, august 23, as "worldwide exchange" begins right now ♪ good morning welcome from wherever in the world you may be watching. i'm brian sullivan despite that new round of tariffs kicking in, despite the trump news, cohen news, paul manafort news, the markets are not reacting too negatively. dow futures are mildly higher right now. call them flat or up 4 points. s&p and nasdaq about the same situation. bond yields follow that trend as well they are unchanged by no means do we think it will be a dull 48 hours not only do we have trade talks under way, new tariffs kicking n but the jackson hole fed conference is tomorrow we have a huge lineup of fed eds

for you on cnbc, their comments can move markets japan rising overnight domestic chinese stocks rose stocks in hong kong, the hang seng index did fall. slight moves in europe no clear trend today here's a look at commodities and currencies oil slightly lower keep an eye on bitcoin the s.e.c. again rejecting applications for bitcoin etfs. there were nine of them. that injection over concern about fraud and manipulation in the crypto markets many investors say that until we get the approval of an etf for cryptos, it may be hard for bitcoin and others to take a leg higher your one big number to watch today, it's something different. it's the australian dollar the aussie dollar tumbling pressure mounts on the australian prime minister to step down after three of malcolm turnbull's top cabinet members

resigned and threw their support behind his main rival. you care because australia is also a huge trading partner with china. even as talks are under way in washington with china to make a new deal, a new round of tariffs kicks in eunice yoon has more live from shenzhen. >> thank you very much well, if the tariffs are going to hurt the chinese economy this is where the pain will start both the u.s. and china imposed tariffs on $16 billion worth of goods on each other. in a statement the chinese commerce ministry said that china resolutely opposes the u.s. tar ref iffs and will conte to take necessary counter measures talks in washington are heading into day two and they have so far yielded nothing. president trump believes the

u.s. has the upper hand because of the impact of the tariffs on places like this this part of klechina, the sout is home to some of the most well-known international brands. foxconn makes a lot of iphones here for apple there are a lot of other companies as well. consumer electronics as well as toys, clothing, all of it is made in this part of china the fear is that as the tariffs sink in and if they stay for a while that could be disruptive for international supply chains. that the factories here would become less competitive. the concern is there, but it's still an open question as to whether or not that pressure is going to be felt at the talks in washington if the chinese would feel that pressure to do a deal. let's put the numbers in

context. we're talking tariffs on 16 billion in goods not 16 billion in tariffs. so 25% of 16 billion, 4 billion. that's under half a day's spending for the u.s. federal government, or about the value of the dallas cowboys. the numbers are not huge yet you have to start somewhere. sometimes we see you in beijing, sometimes shenzhen you travel all over. are you seeing evidence on the ground, just the folks you talk to every day that this is hurting them yet >> well, you were talking about all of those numbers the one that was sticking in my mind was 200 billion in the conversations that i've been having here in the manufacturing south everyone is talking about whether or not the u.s. will impose more tariffs. they're looking at that 200 billion and wondering who will be able to escape the tariffs if that number is so large. so the numbers are very important. >> eunice yoon in shenzhen, thank you.

staying with the topic of trade, wilbur ross says he is optimistic about striking a new deal with mexico on nafta. here's what he told us on cnbc late yesterday >> we're trying to get to a deal we're making progress. we don't have a deal just yet. but i think a deal is very likely within reach in the very, very near future >> the commerce secretary speaking about the ongoing trade dispute with china saying he thinks the united states is way ahead of the game. let's turn back to your money as the bull market continues its record run joining us now is guy adami from d.c. he's either getting up early or just rolling in from st. elmo's fire whatever you do down there why do you think the market is not reacting more negatively to all the news in the town where

you sit now? >> two words, i think passive investing. i think the passive investing fund, the situation that sets up there, that is impervious to headline risk. money flows if regardless. that's a big part of it. there's no other explanation you couple that with the fact that the volatility index continues to grind lower, and you say to yourself that the market is not looking at anything that is potentially detrimental, it continues to grind higher the question becomes when does the bad news kick in i go back to august of 2015 when we saw the big chinese devalue of the currency. by february of 2016 the s&p had cratered down to 1810. i'm not suggesting we're there, but eunice talked about what's going on over there, you talked about tariffs.

one way they can retaliate is to do the same thing again. that would be extraordinarily deleterious for our markets. >> january 2016 was a miserable beginning to the year. do you think the market will react and it will just take some time >> it has to think about what's going on. forgot about just tariffs, you can say we'll figure it out. the president's strategy is to lead strong and then back off and things get done. i get that point then you look at what's going on in europe. there's some tremendous headwinds there. europe pian banks are under pressure the headwinds are significant. you said it on our show months ago. i think when jay powell first took office. you said markets always test a new fed chair. you were right then. i think you'll be right again. people seem to discount the fact that the fed is sort of changing

course i think that's a huge deal despite what the president says. i think the fed is in play i think at a certain point the market realizes that >> thank you very much i think i also called the federal a super tanker, it's not sexy or fast, but when it moves interest rates tend to shift everything in their wake all the headlines will be on the things like trump, like cohen, like trade, like tariffs it sounds like you're saying that interest rates and the fed, an untested fed, new fed chair, about half the voting members are also relatively new, that's the biggest risk, not the other stuff despite it being sort of the bigger point font on the newspaper. >> i believe so. yes. i think that's exactly right not that the fed is doing anything wrong i they they're doing things exactly right. the fact the economy is strong is why the fed needs to move don't think it doesn't have

market impact at a certain point. i'm of the belief that most of the rises have been because we have had the most ridiculously accommodative federal reserve in the history of the country when they change, it doesn't happen in a vacuum things have to happen. and what a lot of market bears are saying why isn't it happening yet. you have to wait and see it plays out i think it plays out into the fall i don't think it's particularly market friendly. >> it's amazing, when you were a freshman 36 years ago at harbin hall, did you ever imagine d.c. would become the economic capital of america >> i couldn't spell economic capital 36 years ago >> appreciate it go back to bed we're also following a developing story out of the middle east. saudi arabia denying published reports yesterday that the kingdom scrapped plans to list

shares of saudi aramco sources tell cnbc it tell plans to take saudi aramco public at some point in the future joining us is the oil and gas correspondent from "the financial times," anuli raval. they said the bankers have been called off, your reporting there suggests that that may not be the case >> the government statement follows months of signs by the kingdom that they were unwilling to forge ahead with the planned privatization. we have been told riyadh has postponed that privatization indefinitely but the government says they still plan on an ipo in some time to go, but maybe this was the inevitable conclusion after months of delays we had a report in october that the kingdom was considering shelving the ipo they faced issues, whether it's

concerns about legal exposure, regulatory exposure, also about disclosures, of course the inability to reach that 2 trillion dollar valuation, which is all hampered by the ipo process. the story says they have proposed calling off the domestic and international stock listing. the whole process, which we have been reporting on as well, is another iteration of the same story. >> maybe delayed as you reported it, but not called off still waiting on saudi aramco. thank you very much. apple removing facebook's onovo app from its store saying it no longer complies with security rules it's a free security app that lets users access vpns to browse

and download other apps with a greater degree of privacy. facebook saying we've always been clear about the information that is collected and how it is used as a developer on apple's platform we follow the rules they've put in place l brands is cutting its profit outlook for the year, overshadowing second quarter results that topped forecast last month victoria secret warned weak sales during its semiannual event forcing it to extend the offer l brands off 3%. shares of williams-sonoma is up about 7% today. earnings and revenue topping estimates. strength in online sales and broad growth across brands the company also raising its full-year guidance. nordstrom up 2%.

the upscale department store launching a 1$1.5 billion stock buyback program. last week nordstrom reported better than expected earnings and raised its outlook for the year let's stick with retail. the sector has been red hot. walmart, target, loezwe's, urba outfitters courtney reagan, you were at apple store last night where does sleep go into that? >> i'll sleep when i'm dead one day. >> we like you alive thank you. we know you've been working your tail off appreciate it. yesterday brian cornell telling cnbc on "squawk box" that it was the greatest consumer retail environment he's seen, yet there's a few stores like l brands that are not getting it right. >> i think brian is right. i'm glad that a retail ceo came out and said yes, our strategy is working, it's not just that >> the overall weather is good

>> the economy is helping things out, and the literal weather is good, too. i agree with what brian is saying i think the consumer economic back drop is strong. balance sheets are good. people are willing to spend again. i also think fashion and merchandise cycles are in a better place than in the past. it's sort of everything clicking in place at the same time. it's a continuation of what we began to see in the holiday quarter. >> have retailers gotten smarter in the sense that retail and inventory management has finally come into the 21st century you go into a lot of stores, there's so much junk it looked bad. when you have too much stuff you have to discount it deeply, which not only hurts the profit but devalues the brand have retailers gotten smarter on that front >> i think they have gotten smarter, almost everyone jcpenney did say last quarter they ran into that problem they had the wrong merchandise and they had to discount it in a bigger way than planned. >> also lost a ceo

>> that's right. >> marvin ellison going to lowe's i think inventory management is a part of this we watch it carefully especially with what's going on with the uncertainty surrounding tariffs and trade. we were wondering if retailers would show big jumps in inventories. we have not seen that so much. some elevated inventories, but when we ask specific retailers about it, they say that was planned because we're getting rid of this department and resetting it >> we'll see you in a bit. you have just enough time for a cup of coffee. we have a big wall coming up on how hot retail has been. >> i cannot wait we are just getting started on "worldwide exchange." up next, hawaii is on high alert. residents bearing down as a category 4 storm barrels towards the islands. you'll hear from a small business owner on how they are

preparing for hurricane lane "worldwide exchange" live from hawaii next. with tough food, your dentures may slip and fall. new fixodent ultra-max hold gives you the strongest hold ever to lock your dentures. so now you can eat tough food without worry. fixodent and forget it. that's confident. but it's not kayak confident. kayak searches hundreds of travel and airline sites to find the best flight for me.

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the latest >> good thursday morning to you. the situation in hawaii over the next 72 to 96 hours will be catastrophic the rainfall predictions with lane are epic and with the topography and the terrain you know we'll have serious concerns still a powerful category 4 storm. looks very impressive with that eye. 145-mile-per-hour winds. about 200 miles south of the big island over the next two, three days it will head northwards and then turn to the northwest. we do not expect a direct hit to landfall, the problem is the right side of the storm is the rainier side and that will move over the siisland of maui and oahu 10 to 20 inches of rain. some isolated totals may get

three to four feet each and every island is going to have its own flash flooding concerns, mud slides, rock slides, landslides it will be a lot of trouble from all the heavy rain in hawaii we wish them the best. it will be a dangerous 7 2 hours. back to you. >> bill rar kkarins, thank you y much jimmy chan joins us on the line from honolulu. we know it's late there. thank you for taking some time with us. people don't realize you're not the caribbean. hurricanes are rare. you had two big ones in the last 100 years, 1959 and 1992 what are you doing to stay safe and be prepared? >> yeah. this is really rare for us i don't -- we have had them pass by, but i don't think i've seen anything this serious in terms of having the schools shut down for the next two days.

nonessential government shut down for thursday and friday even in the business community a lot of us have decided to close doors. even though we're on owe wthe id and not expecting to see impact until friday or saturday a lot of business community decided to shut down so families can get home, get homes prepared and hunker down. >> you are such a unique economy. not only do you rely on tourism but you rely on inter-waterway traffic to get supplies for your company, and i'm sure others do barges between the islands what are you hearing about the economic side, about barge traffic, trucks, airplanes, being able to get the supplies that not only you need for business but just to have water and stay safe? >> that's a huge concern our geographic isolation, our

stores have been wiped out you go to costco or the sam's club, target, shelves are empty right now. there's big concern. hopefully the ports stay healthy and they can receive stuff hopefully the airports will be in good condition. >> for your business, where do you get the majority of your supplies are they where you are located or on other islands or the mainland >> i get a lot of raw materials, packaging, that stuff from the mainland, from california. and then just this week my supply of sweet potatoes got disrupted because they shut down inter-island barge service and i get a lot of sweet potatoes from the big island which is experiencing flooding and heavy rain now not just because of the shipping, it will probably take a week or two for the seals to

dry. i'm not too certain on where we will be as far as raw materials. >> jimmy chan, we wish you, your family, your employees, the your cu customers the best be well. thank you very much. >> thank you still to come, red hot returns. we talked about it the one part of the market seeing big gains we'll bring you the winners. and our week-long beat the street series continues today. a fund manager up 28% this year. the strategy and some picks as "worldwide exchange" rolls on.

all right. good morning 5:26 in new york city. still ahead on "worldwide exchange," you can ignore all the d.c. drama for now that's what one market pro says. the worst-case scenario for the president is not the worst-case scenario for your money. we'll find out why ahead. and coffee lovers, one technology giant brewing up a new idea for a new way to deliver your morning jolt rely to you. all that and more as "worldwide exchange" continues.

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our special series on america's top money managers with a fund that's up 28% this year lane takes aim hawaii on high alert, a category 4 storm bearing down on the islands. and whale watchers in alaska getting the surprise of a lifetime and completely drenched along the way. more of that video as "worldwide exchange" rolls on right now you have to see that video we'll show it to you the audio perfectly defines the

term nervous laughter. ha, we almost got crushed by a giant mammal thanks for being with us on cnbc i'm brian sullivan we have a lot to get to this morning, first a check on the top headlines. courtney reagan has those. good morning here's what's leading cnbc.com, hawaii on high alert as residents there brace for a category 4 storm hurricane lane could slam into the islands as soon as today with winds exceeding 100 miles per hour this could be the strongest hurricane to hit hawaii in a quarter century. the united states latest round of tariffs on chinese goods kicking in overnight drawing immediate retaliation from beijing the u.s. imposing 25% tariffs on another $16billion worth of chinese goods. china responding with 25% of tariffs on an equal amount of american goods and saudi arabia denying reports that the kingdom is scrapping plans to list shares of the state-owned energy giant

aramco sources tell cnbc they still plan to take aramco public at some point in the future back over to you courtney, thank you. let's check the other top headlines including a new leader on the list of the world's highest paid actors, but it has nothing to do with the box office and everything to do with booze. phillip mena has that. good morning we start in ohio state where they are suspending the head football coach urban meyer without pay for the first three games of the season. he will be docked six weeks of pay. this in response to his mishandling of abuse allegations against his assistant coach. the board also decided that athletic director gene smith will serve an unpaid suspension. the democratic national committee said it thwarted a

hack attack. hackers created a fake log-in page to try to collect users log-in details no information was compromised, the culprit is unknown thousands of dnc e-mails were hacked and released during the 2016 campaign, though that crime was traced back to russia. and george clooney topping forbes list of the world's highest paid actors with the help with the sale of his tequila company. with that he earned an estimated 2$239 million, followed by the rock bringing in 124 million, that followed up by robert downey jr. who pocketed 81 million. george clooney out there with his tequila company living his best life. >> can you say that again? >> george clooney out there -- >> george clooney's tequila.

thank you very much. what's going on with phillip mena today you can see the dow implied open is down 6 points right now. a lot of time left let's bring in michael purves. the futures this time of day, this time of year, this time of month won't move much generally. let's go macro picture a lot of questions yesterday were my gosh, michael cohen rolled over. we had manafort getting found guilty on these charges. this could become a political, constitutional crisis, the market didn't seem to care why not? >> the vix is here at 12 >> the fear gauge is showing no fear >> right look, i think the -- when you step back for a second, you try to figure out why is the vix at 12, the spx pushing up against another fresh high against this vortex of tremendous political news out of d.c., what does it

mean from a corporate earnings point of view and economic point of view? if you scroll forwards what does this do in the midterms? it reinforces the case that the democrats get the house, probably not the senate, but you never know so what happens in that scenario you have gridlock. so for a year and a half of trump you have the tax policy that is sort of done hard to see that unwound and you have the deregulatory trajectory if there is a new phase of gridlock, and some brakes but on the trump policy machine, the trump policy machine lately has not been about tax, it's been about tariffs, that's something that perhaps if there were brakes applied to that, that's probably not a market friendly thing.

>> in no way are we minimizing the trade fight or the impact of tariffs? good men and women as we have shown time and again are being hit locally in their business. it is not -- and i heard people say it incorrectly it's not 16 billion in tariffs, it's 25% tariffs on 16 billion in goods, or about $4 billion the u.s. government spends 10 billion a day to operate the federal government so the value is very, very small, is it not so far >> so far. it's really about the second order, third order impacts it's hard to price that stuff. we don't know what that will be. if google gets slapped with another $5 billion fine as a retort from a foreign country or foreign entity again, it's very hard to price it if the market were to price it, if the market were to suddenly sell off violently against the

backdrop of the dollar not surging, and obviously rates srt of behaving themselves -- >> i guess the fear out there, no one is making a political statement on this. we don't know what will happen they pointed out when bill clinton was impeached, it was 1999 we had a different economy the market rose at the same time so if the worst-case politically were to happen, you know, from a constitutional perspective -- >> meaning impeachment >> many people would say that's not worst case i'm saying from a national political crisis type perspective, that even necessarily historically would not doom us automatically from an equity perspective, would it? it could i'm not saying it won't. you have to hedge everything, but markets powered through bad

situations before. >> exactly if pence becomes potus, that may be a more market friendly, economic friendly scenario than trump who will more likely continue this somewhat unconventional fiscal conservative point of view, that sort of policy trajectory is now getting into more untraditional arguably less market and economic friendly environment. >> it's weird. if you look at the "new york times" this morning, all the first eight or nine stories have trump's name in them right now this is the news cycle. the markets have shrugged it off. >> i think there is one thing to consider in all this stuff we talked about this benign risk environment. if the news flow gets to the point where it looks like the far left can take the white house in 2020 that will be a major market risk. >> we're a long way from that.

let's get through november first. >> yeah. time for the top trending stories including a whale of a video. >> this is so cool we'll get to it. first robots and coffee. ibm is brewing up a new idea for coffee delivery, using drones. the tech giant filing a patent to have drones deliver your java jolt, but they would be outfitted with sensors and cameras allowing them to tell when someone is in need of a caffeine fix without that person needing to place an order. this reminds me of "the hunger games" don't know if you watched those where katness gets the delivery from the drone, she gets the medicine she needs. imagine being at your desk, feeling you need a caffeine jolt >> that's us now hello? >> where are those drones. >> hello not yet. >> that's a good one also -- i think you'll like this

one. you're a golfer, right >> terrible. >> i stink, too, but it's a joy to play the game >> i like to take the restrictor plate off the golf cart. >> you can do that a pair of golfers that we do follow are taking a page out of boxing's playbook. tiger woods and phil mickelson will face off in a pay-per-view golf match this thanksgiving the two men will play for $9 million purse and a winner take all golf duel in vegas the match will be available through directv and be live. still no word how much viewers have to pay to see it. tiger is coming back >> does it smack of desperation at all to you? why can't they just be in the finals of a tournament tiger has been playing hot >> he has. i thought about that, too. do we have to go there i was like how much will it cost can i watch this >> the best video of the day whale watchers in alaska had the

surprise of a lifetime watch this video a massive humpback whale leaps from the water and nearly lands inside the boat. the landing soaking the tourists >> let's rerun it. you and i not talk i want to hear the laughter. listen [ laughter ] >> oh! >> that is the definition of nervous terrified laughter ha, ha, we almost got crushed. >> have you ever been whale watching before. >> i've seen whales. >> i did in seattle, when i was about 12 one of the coolest things i've ever done. to see the orcas in their natural habitat. >> like the flesch eating giantu devourers? >> the killer whales, they're not all going after seals. some of them are just salmon

eaters they're not all killers. >> different pods are different. that's awesome >> they're on like a pontoon boat like a party barge ha >> you have to be. it's dangerous to get around the whales in a big boat i think it's awesome >> it's amazing. >> what's the temperature of that water. >> real cold. still to come, chew on this. investors have been feasting on food stocks lately we'll show you some big-time returns coming up. g> and later on tim cook about toet a whole lot richer today. it's your rbi. and everything into the cloud. it's all so... smart. but how do you work with it? ask this farmer. he's using satellite data to help increase crop yields. that's smart for the food we eat. at this port, supply chains are becoming more transparent with blockchain. that's smart for millions of shipments.

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febreze one. you probably know many consumer stocks have been on a red hot run, but did you know how broad based that run has come in the last -- these are 90-day returns. wayfair, up 49%. kohl's, 37%. nordstrom, 30% american eagle, 28%. consumer protects, trex, clorox, arm & hammer, baking soda up 20%. mccormick spices, up 20% it's also food the consumer is shopping and they are hungry. habit burger, sonic, darden and

chipotle, that stock has soared. the consumer is red hot. let's drill down on some of those restaurant stocks as well. joining us now is steven anderson from maxim group. my question is this. i love it tchlit it is good, but really can everybody win? >> the indicators we track from a macro economic level, we look at jobless claims, real income, both are tlerending higher those are the building blocks of any consumer recovery. that's why we have a broad-based rebound, not just in restaurant stocks, but all across the consumer spectrum. >> yeah. is there one that sticks out to you in your space that's particularly doing it right? habit burger up 80%? what stocks in your portfolio are doing well >> we cover them

>> does it deserve an 80% gain >> we do have a hold on the name, but it's a name we tracked higher when we did have a buy rating on the stock. i think from habit burger and some others we've seen a recovery and california has been particularly strong, which is where habit has its base three quarters of the restaurants are there. the california economy has done well i would say companies like that, you look at cheese steak factory, they have done fairly well but i think some of the areas of the country, texas has done well also so the oil recovery there, that's done particularly well also >> so you're saying geography makes a difference with restaurants as well. we get that then so you have a held on habit because the stock has done so well what stocks then still look like good values? what stocks with viewers feast

on now >> our top three names are del taco, they have a base in california the other two names are dime brands global, they're the parent of applebee's and i-hop that company was left for dead, but they had some new management come in and that stock has done well recovery at applebee's and i-hop. and dave & buster's, they have seen an interesting move more than half the sales come from the amusements, arcade machines over the summer they installed a virtual reality take on jurassic world. we understand that that is doing well also. the important thing is that's the thing that brings customers into the restaurants and enjoying their food as well. >> if you have not done it, we'll coin that as your 3-d

investing strategy you get an a-plus, thank you for joining us >> thank you. on deck, a fund up 28% this year, then your morning i.rb stick around we're drowning in information. where in all of this is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you partner with a firm that combines trusted, personal advice with the cutting edge tools and insights to help you not only see your potential, but live it too. morgan stanley.

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2000 the manager of that firm is joel schulman as an optimistic small cap, did you expect your fund or small caps to do so well this year >> no. this has been a big surprise if you said to me at beginning of the year 15%, i would have taken it in a heartbeat. >> most people would >> we had a second quarter up almost 20% it was highly unusual. we have to remember there's been a lot going on in the markets. a lot of job growth. a lot of r & d growth. they've been growing 30% per year for the last three years. 25% for the last five years. these are companies that have profits up close to 30% with revenue growth around 15%. u.s. small cap growth is generally up overall but it's the entrepreneurial stocks with high job growth,

high profit growth that seem to be doing better. >> i know you won't talk about individual names necessarily, but give us a name in public information that you have invested in that you maybe have been surprised by, that fit that entrepreneurial mantra >> we have a number of small caps that are up over 100%, 200% in some cases. in the second quarter we had 82 stocks -- so this is not like ten stocks that we happened to get lucky with we had 82 stocks that did well 30 or 40 of them have returns over 40% quite a few stocks are way up this year. >> does that -- i don't want to say make you nervous does that make you step back and go, okay, that's a big gain. >> yeah. >> what now? >> absolutely. a lot of this has been international flows coming over here early in the year a lot of flows were going into international

markets. in the second quarter we had international markets peeling off. so we had billions of dollars, 12 billion in one month that came pouring in. that benefited u.s. treasuries and equities the equities were small cap. to your point, i think we've had a good run i think we see continued growth. it is not across everything. so people have to be careful it's a stock picker's market it's primarily healthcare, tech, and consumer disrememberary. >> has the death of acting investing been greatly exaggerated? >> this year, this has been a stock picker's market. for your listeners, this is their market >> the good news about buying a broad market etf is that you won't underperform the index because you are the index. have we gotten too chicken in our investing?

>> absolutely. >> i'm struggling for words. >> that's a good word. particularly for the large cap space. i don't know how many institutional investors i talk to, they talk to the consultants, the consultants won't get them out of the basket >> every advertiser is like don't try to beat the market don't try it that seems un-american don't try, you won't win >> it's interesting, our biggest alpha has been u.s. large cap because it's easier to pick out the handful of entrepreneurial companies. they stand out like red dots in a sea of white dots. there's only 30, 40 of them. >> also local names. some small cap biotechs. technology has done well for you, has it not?

>> yes >> everybody thinks big cap, amazon but small caps are good. >> i think we'll continue to see benefits as long as the risk from international flowing in. by year-end i think some of the flows will go back non-u.s. because they've been so beaten up people in the u.s. forget that the rest of the world is suffering in terms of performance. there's only a handful of markets in the world that have been positive for 2018 u.s. has been the biggest beneficiary. >> joel schulman, pleasure thank you. wrap it up, your rbi today it's very interesting to tim cook, because the apple ceo is about to get richer at midnight tonight he will be awarded another 560,000 shares of apple because of a clause he insisted go into his contract about outperforming the majority of the s&p 500, something apple has done those 560,000 shares are worth a

cool 1$120 million $120 million bonus congratulations tim cook, you'll have a great weekend random but interesting see you tomorrow are you taking the tissue test? yep, and my teeth are yellow. time for whitestrips. crest glamorous white whitestrips are the only ada-accepted whitening strips proven to be safe and effective. and they whiten 25x better than a leading whitening toothpaste. crest. healthy, beautiful smiles for life.

good morning trade war escalating new tariffs between the u.s. and china kicked in overnight. a live report from washington. and reports of the death of that aramco ipo apparently are greatly exaggerated. that's according to a statement from aramco's chairman and hawaii is bracing for a category 4 hurricane we'll bring you the latest on the storm's path ahead it's thursday, august 23rd only three days now until national dog day "squawk box" begins now.

♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and mike santoli. a mixed day for the markets yesterday. the dow was down by 88 points. s&p off by 1 point the nasdaq up by close to 30 points this morning modest declines s&p down by a point. nasdaq off by a point. dow futures down by 7 points we'll continue to watch as we are in earnings season, a few stragglers reporting in asia, the nikkei up by 48 points the hang seng ende