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♪ ♪ good tuesday morning, welcome to "squawk alley." joining us today legendary venture capitalist alan patrick, co-founder and managing partner at graycroft partners. a lot to watch as everybody gets back to work after the summer. the nasdaq is coming off its best month since january apple, microsoft, amazon all leading the charge speaking of amazon, another all-time high and now just about $7 from tracking that $1 trillion at 2050 and change. apple, nvidia had fresh records

but one fang name severely underperforming is facebook. the stock was downgraded saying slowing growth growing regulatory scrutiny is a toxic brew sheryl sandberg heads to the hill tomorrow along with twitter's jack dorsey. john, morgan, start with you guys it's going to be an interesting take how they answer a number of concerns, privacy, election meddling, all of the things they'll hear from lawmakers tomorrow. >> i can't help but feel that the bullet is already dodged here mark zuckerberg was under intense pressure a couple of months ago as was facebook stock. right now washington has so many more concerns, whether it is supreme court justices, midterms it doesn't feel like the moment when a real big crackdown is going to happen, but of course if there's some stumble, that could be a problem but sheryl sandberg doesn't tend to stumble. >> i think it's going to be interesting to see if and when google actually moves forward

with their ceo or someone else that is of higher ranking than their previous person that they suggested. i also think it's going to be interesting to see how much the lines get blurred. because you have one hearing in one part of congress focused on election meddling and russian interference, et cetera. on the other side it's really sort of the focus on twitter and biases around politics so i wonder how much that is going to blur and the conversations will become one and the same >> how is this going to go, alan >> you know, i think it's an old story. let's face it, facebook, google, now amazon, they're all going to be under scrutiny. privacy is a big concern how people are using with cookies, how they're tacking on other services i honestly, it sounds strange, i really think they're trying their best to do their best. i don't think these are devious companies. i think this is a huge

challenge. i mean i just saw, i'm sure you saw the same, facebook has 20,000 -- they had 10,000 and were going to put on 20,000 people just to try to deal with this issue it's mind boggling the enormity of it. and let's face it, twitter is a place where everybody wants to go to have something to say, me included i get angry on something that someone we know says, and i immediately -- not nedly, but oftentimes will just tweet it. that's the only i can get it out without having to sit down and write a long blog. >> do you think these companies are doing enough in terms of transparency and communicating how they're making these decisions? >> yeah, i do. i think they're really trying hard to solve a problem that is a very, very difficult one you've got key words, you've got ideas, and they're trying to refine this and yet at the same time not to disturb free speech, which is -- i mean that's a big

dilemma. >> alan, give us your take on this moment in time. apple, over a trillion dollar market cap we expect to see a new line of iphones out from them next week. amazon is on the cusp of it. we're getting ready to head into a holiday season where it's amazon's primetime two companies that in so many ways affect not just the tech space but anybody who's selling anything, certainly in the western world and arguably globally what do they mean for innovation, good or bad? what do they mean for the american economy >> i think they're positive. i've been kind of put in a box recently because i made some comments about amazon which was really a different issue it's about the social fabric of our life, community. >> we were here that day. >> yeah, you were. but it's being consumed as anti-amazon. amazon is a manifestation, the most easy one, of what's

happening to our whole life not just in buying and selling, but in our communicating, in our information -- excuse me, not just amazon, information is more related to google. but, you know, we've gotten away from experiences i mean i have been following recently what's happening in retailing and i saw there was -- obviously we all saw big recovery in several retailers last quarter maybe that's catching on, which is more services i think it's more experiences that are needed that are going to get people. at the end of the day the only thing that in-store retailing has that online doesn't have is it has the ability to touch, smell, feel, and experience. up until now, people have been satisfied with just the visual of seeing something online and that was enough. but i think at the end of the day that's the way retailers or

new retailers are going to win or at least compete. >> so when it comes to media or publishing or tech, i mean are there areas that you think are bargains here? all we do is talk about valuations at these levels. >> no, i think every area, whether it's tv or -- everyone is under a little bit of siege we've been privately invested, as you know, as axios which we think we are navigating this mine field successly so far. >> skim just did so today. >> they're going to be much more in politics. >> so everybody is trying to figure their way out and there are going to be media opportunities. the big question is how is print going to survive in all this i hate to see print going. >> how does it survive >> i don't know, it's tough. i think it survives in an online world. but i can't envision a world

without "the new york times" being delivered, physical. it's hard to accept it but i guess i have to go with the crowd. >> back to apple briefly is next week's iphone launch the most important tech event of the year because of ios's eco-system, the app store, the features that apple releases that influence every type of startup's features and offerings to the buying consumer >> in the context you just said, i don't think so we read about the recent samsung introduction, and it was important. and every time apple comes out with a new something, it's going to be the most important event of the year. i think apple just seems to keep coming out with innovation that just works, and i think that it will be another in a long line of introduction. i don't think there's going to be anything revolutionary.

maybe you know something i don't, but nothing i've read suggests it's going to change the dynamic. people will -- you know, i went into -- honestly, to get an update, i have a 7 to get an 8 in the apple store, the guy said i wouldn't do it. you're phone is working great. you can wait -- wait for the x >> don't get that guy in trouble, whoever he is. >> i don't know who he is. >> that's a fascinating story. >> but he was honest he did sell me a new ipad. >> there you go. >> at my own initiation. so are we going to talk about some of my companies >> that's good stuff the 12th is going to be a big deal tomorrow on the hill will be a big deal with the social media execs. come back soon. >> talk about some of my companies. >> skim and axios. what else have you got >> today we're releasing an investment in a company called palmetto, a new marketplace for

energy saving, which is going to be not producing a product, but a service. it will be if not the first marketplace where it will promote all kinds of energy savings for the home, which has been very difficult, leading off with solar solar seems to be emerging finally and it's because they figured out a way to deliver the service economically and not burden installers and people who had to give promotions about how they're introducing it i think they found a way to do it cost efficient to the consumer and produce the savings. so that's been our most recent investment right off the press. >> it's interesting to hear you say that when we have seen some of the tax incentives eroded around clean energy. >> well, the time is here. these guys are really knocking the ball out of the park. >> that's a good one. >> palmetto energy. >> you're welcome. we'll see you later, thanks.

alan patricof. straight ahead, what to expect in sheryl sandberg and jack dorsey's testimony. we'll speak with jack wheeler. plus trade talks between the u.s. and canada are set to resume this week we'll speak with former canadian prime minister kim campbell. later, nike taking a turn for the worse after unveiling its latest "just do it" ad campaign featuring colin kaepernick we'll discuss that when "squawk alley" returns the dow is down 45

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we are watching shares of amazon just a couple of bucks away from cracking that $1 trillion market cap threshold, which would be quite a milestone. we saw apple do it just weeks ago. questions about what company would do it first. it was apple, but amazon entirely different playing field for them they're not making thousand dollar iphones their valuation is in a whole different stratosphere but they have been doing what apple has not been doing, buying big companies, whole foods, expanding far outside of that core product, whereas apple has mostly stuck to their knitting, but these two companies broadly influencing the tech ecosystem at large, including advertising now for amazon. >> absolutely. we're $4 away from that trillion dollar market cap. facebook ceo sheryl sandberg

and twitter ceo jack dorsey heading to capitol hill tomorrow julia boorstin is in los angeles and she has a preview. >> that's right. sheryl sandberg and jack dorsey will be in the spotlight tomorrow morning they'll testify before the senate intelligence committee about their work to prevent election interference. we can expect sandberg to focus on the platform taking accountability and responsibility around preventing election interference, detailing investment in a combination of technological improvements as well as new hires and facebook's collaborations with government agencies, companies and experts. jack dorsey tweeting out friday afternoon that he's heading east to these hearings. he wrote, quote, we acknowledge our responsibility and commit to greater accountability i plan to share our learnings and the proactive measures we're taking we'll listen, learn and engage in any practical ideas we hear on how to improve together looking forward to the conversation the senate intel committee also invited alphabet ceo larry page

but as of now he's not scheduled to attend. the committee rejected google's offer to send its svp jen walker this came after orrin hatch asked the ftc to probe google's anti-competitive conduct and president trump tweeted that google search is biased against conservatives. he also said the influence of the likes of amazon, facebook and google raises antitrust concerns following this hearing, jack dorsey will head to a second hearing for the house energy and commerce committee that one will address whether there's bias in twitter's monitoring of content. dorsey tweeting about that, that he will show the company's quote, commitment to impartiality, and impartiality. joining us now former fcc chairman tom wheeler, now a visiting fellow at the brookings center for technology innovat n innovation tom, always great to have you.

>> great to be here, thank you. >> so tell me about this backdrop that we're seeing to jack dorsey, sheryl sandberg taking the hill. it seems like we got through a lot of this with mark zuckerberg on the hill a few weeks ago, but there's a sort of gap, isn't there, in government oversight over this type of technology in social media what do you think should come of these hearings and conversations? do we need new laws? >> well, you know, if the motto of silicon valley was move fast and break things, they certainly have succeeded and what we're facing today is the challenge of the evolution from industrial capitalism to internet capitalism. and they're both based on different kinds of assumptions hard products such as automobiles versus soft products that come out of computer

algorithms and how do we make sure that we protect the core component of capitalism, that is competition and consumer protection, in this kind of evolving environment and i think those are the questions that congress is trying to come up to speed on. >> but it's squishy. so -- >> it's squishy. >> how would you propose attacking this because you don't want to come out so strongly that you damage innovation in trying to dictate the types of content that people can put out. you don't want to run afoul of the first amendment, but at the same time you want to protect democratic institutions. you know, the sanctity of the vote what's the process you would propose? >> one of the challenges of washington is that we always discuss 21st century technology in 20th century terms and then propose 19th century solutions

and that's what we have to avoid at this point in time. i think there are two key things that we have to focus on one is privacy because all of these companies are engaged in harvesting your personal information anding agating it to create a bottleneck to the free flow of information, and that leads to the second issue, which is openness we've always talked about the openness of networks and networks need to be fast, fair and open, but we also have this issue where there needs to be openness to the access of information which is the asset of the 21st century. and how we get our arms around those two issues will determine what the future of internet

capitalism is. >> although i mean it's hard to have -- these organizations, tom, are interested in engaging you and making sure you stay engaged, and that involves tailoring the information that gets you to do that. it's hard to imagine their model is going to change for the good of society. >> well, i think that we have to think about how is society going to raise its hand and say, excuse me, there are some bigger issues here. and that's what i think congress is beginning to dabble in and to begin to look for how do we redefine what is going on right now. >> so, tom, bottom line, does that mean congress should write some laws and increase its regulation of these companies and of this sector if so, who should oversee that should it be lawmakers or should it be, say, the fcc or ftc >> well, if you go back to the beginning of the 20th century

and the industrial revolution, society stepped up and said to their representatives, hey, we need to have some rules that govern how industrialization and industrial capitalism works. i think here early in the 21st century, we're in the same kind of situation certainly when we were at the fcc, we were trying to use the existing authority of the fcc to address some of those issues but eventually it's going to come down to the people's representatives in congress saying what are the four corners of expectations for how we make sure that internet capitalism works to protect competition and protect consumers? >> tom, we've got two companies, apple already over a trillion dollar market cap, amazon almost there. amazon reaching into media, not only with amazon prime video but

also working with various networks trying to get over-the-top streaming going is that a sign of internet capitalism working or is it a sign that they're crowding out competition? what do you think? >> i think clearly it is a sign that there is a dynamism and a growth and a huge opportunity there. the question then becomes, okay, those capabilities that have brought you to this point, is there going to be anyone that takes a look at those, or are the companies going to make the rules? and again, we go back to what happened in the early industrial era. the companies were making the rules, and the people stepped up and said, no, wait a minute, we need to have somebody else make the rules. the question is who is going to make the rules in the internet

age? >> finally, tom, the president tweeted a few moments ago on our parent, nbc, says nbc fake news, which is under intense scrutiny over their killing the harvey weinstein story is now fumbling around making excuses for their probably highly unethical conduct. i have long criticized nbc and their journalistic standards, worse than even cnn. look at their license? not the first time he's broached the subject of a network license, but how does this work? >> there is this basic concept called the first amendment of the constitution the founders made it a first amendment for a reason, it's primacy. there is an editorial right that all americans have to be protected from the government coming in and trying to determine what is said the fact the president would

threaten to use the responsibility of government to allocate the people's air waves, to bludgeon somebody into or a company into something that he likes better, is an abrogation of the first amendment and something that i hope that the current chairman of the fcc will quickly stand up and say that is not the appropriate role of government or the appropriate role of this agency. >> all right tom wheeler, former chairman of the fcc, thanks so much for joining us. >> thank you by the way, tomorrow's hearing on the hill begins at 9:30 a.m. eastern time cnbc will be there with live coverage all day long. we continue now to be mesmerized by amazon's market cap awfully close to a trillion dollars. just a couple bucks away from the milestone that apple set

about a month ago. and trade talks resume between the u.s. and canada as the president says there is no political necessity to keep canada in a new nafta deal we'll talk to former canadian prime nier kmistim campbell when "squawk alley" comes back.

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all right. we haven't checked amazon this many times since cyber monday, but take a look at the stock it's near session highs and been up at least as much as 1.8%. the magic number is just north of 2050. that's 2050.27, that is where that price per share is where amazon will hit that magic trillion dollar market cap and everybody gets a free -- no, everybody doesn't get a free anything it just means that jeff bezos will be that much richer here we are close to session highs. less than a dollar away from that trillion dollar market cap.

>> the stock is up 75% this year it has more than doubled over the past 12 months it is a nearly trillion dollar market cap company that is a huge gain for this company that we have seen in recent months. really quite notable. >> and apple crossed that threshold, i'm told by the control room, exactly a month ago. yeah, we talk about round numbers because it's fun, but if you also look at other stock, microsoft is over $850 billion in market cap. alphabet right near that mark as well so a trillion dollars, it's a milestone but there are a number of stocks, tech stocks knocking on that door right now as we head into q4. >> just a reminder if you went back, let's say you invested $1,000 in amazon's ipo, it's about $1.3 million today this is all split adjusted, and it varies.

returns from facebook, from its ipo, from google's ipo, netflix, apple, amazon just buries it with the return of about 135,000% it also comes on a day today where "the times" looks at the way they have taught regular retailers about how to get goods to consumers and big accounts like geico and hershey and general mills start shifting their ad dollars to amazon. >> which has been one of the keys it's what we've heard from so many analystsand experts that have come on this show part of what is making amazon so valuable to investors is that it is shifting from lower margin business into higher margin businesses like advertising and its cloud business some of these newer businesses that it is drumming up revenue from. >> keep your eyes on that. let's get back to seema.

>> ongoing trade concerns is putting a lid on european stocks although the ftse 100 is -- wpp shares falling in its first earnings report under mark reed. wpp did profitability would decline this year due to weakness in north america as it faces increased competition from google and facebook. let's switch to financials deutsche bank is set to drop out of the euro stocks 50 index starting september 24th. this is the latest blow to germany's largest lender, which has seen its stock fall about 30% in 2018. in italy, we're watching bond yields fall for the second day in a row after credit rating agency fitch affirmed its bbb rating on the country's debt but weakness continues in the emerging market space with the turkish lira under pressure once again. its latest inflation read shows

inflation has spiked to 17.9% from a july reading of 16% the central bank in turkey is now expected to take action at its next meeting on september 13th if not before, but some economists this morning saying that a single rate hike will not be enough to stem. lira's decline which is down about 40% so far this year jon, sending it back to you. >> thank you, seema. still to come, we are still watching amazon closing in on a $1 trillion market cap less than a couple of bucks away we'll be right back.

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welcome back to "squawk alley. we're watching shares of amazon right now just a couple of dollars away from that trillion dollar market cap valuation. on the cnbc news line we've got mark mahaney who joins us now to talk about this stock as it inches closer to that milestone mark right now mark, thanks for joining us today. you have an outperform rating on the stock, $2100 price target. are you sticking with that from here >> long time i think there's the grindhigher in the stock if we go out a couple of years, you have to do this in order to buy the stock now, you can find your way to $100 in earnings

power five years out so there's a reason to think this could still work on the long side if you're willing to go out three years or something like that i don't think this is in any way an easy pick here, but fundamentally this is probably the single best story across the internet sector because of its strength in retail, because of its strength in cloud computing, because of its strength now in advertising and in the potential for this platform to tap into new areas. if you're going to own one large asset in internet, it's hard for that stock not to be amazon. >> you laid out a lot of positives for owning the stock, but what are the risks >> there are three of them first has to be regulation i don't think that there's an easy ground upon which to regulate amazon now, but obviously something of this size, of this magnitude, it should have regulators looking at it more closely over time, so that's one second is competition.

in each of those segments i mentioned, there are viable competitors. there's facebook and google and cloud, there's a much of players, microsoft is in there google as well there are some national assets are competing. and core retail, there's walmart so there's competitive risk. the third risk that we think about is that maturity the one advantage you have looking at amazon today is that it's a single-digit percentage and it's a so single-digits percentage of their end markets. so the penetration growth story here is probably arguably much stronger than it is long-term penetration growth is much stronger than it would be for, say, a google. >> mark, we are looking at a stock in amazon that has moved a half a trillion dollars in market cap in ten months how do you -- how do you buy a stock like that? what do investors have to be prepared for with that kind of a

move >> well, just keep in mind we're hitting an inflection point here in amazon. the reason we're hitting an inflection point is that we're seeing profit levels that we have never seen before so there is something new about amazon this year this company is showing because of the increasing mix shift between cloud computing and advertising, they're able to reach profit levels that investors did not think were ever attainable by this company. you go back 20 years and that was always the question mark over amazon. yes, they can generate revenue, but can they generate reasonable profits? the last couple of years, yes, they can generate revenue and profits but how high can these margins go now you can see a double-digit operating margin that was impossible until they rolled out cloud, until they rolled out advertising and they started to gain a lot of momentum in retail so this is a different animal than we've seen in the past. on free cash flow this trades at almost 40 times free cash flow but you've got growth here

that's almost akin to that you'll have 30% revenue growth with margin expansion, free cash flow margin expansion so you're almost buying it at free cash flow growth. that doesn't mean it's a great by but you have to think long term, i think this is still one you want to own. >> mark, it's amazing, you look back over the last year or two, the stock has given you so few entries. our chances to get in hasn't come off the most recent high very much -- very often. at this point do you think investors are hungry for them to demonstrate more earnings growth or do they want it to be plowed back in? >> i think largely they want it to be plowed back in the investor sentiment on amazon has changed over the years you can recall the investment cycles the company has gone through before when the stock has gotten trashed in 2003, '04, '05, '06 and 2010. >> and the time program.

now investors have seen them come out with new products, new revenue streams, new profit pools and are willing to give them the benefit the doubt so investors want to see how many more segments that they can disrupt and go into and put logistics at the top of that list. >> mark, blink and you might have missed it, but amazon stock did cross that magic price, $2050.27, which means it crossed that trillion dollar market cap. we will see where it ends the day. that will be another landmark, if it ends -- closes trading at a trillion dollar market cap it seems to me, mark, that there's an argument to be made amazon in the past year has gained a facebook worth of market cap so one of the two stocks, one might argue, is mispriced, either facebook or amazon. facebook, plenty profitable, it's also huge lots of growth prospects ahead

of it. you can make similar arguments of amazon. is amazon worth a facebook more than a year ago? >> i'm not sure about that since you raised facebook, i think actually the more compelling entry point right now as a stock is clearly facebook i think the risk/reward is much more attractive on that stock. the reason that that's not just a coincidence, by the way, the surprise out of amazon and they only started really disclosing this and giving you the numbers earlier this year is how big their advertising revenue business is. it looks like they're on track to do $8 billion in ad revenue, growing at 50% at least year over year. that's the best growth story in global internet advertising to date that's why the market has said wait a second, we want to add in advertising revenue and market cap to it's already a cloud market cap and retail market cap. >> gene munster joins us as well gene, a month ago apple crossed

this trillion dollar valuation at the time the argument was it's going to be a cap on sentiment, cap on valuation, be prepared for it to flatten out it's added 10% since then. is this going to be a repeat >> i don't think so. part of the reason is that in the case of apple in crossing that threshold, i think that there was some very solid valuation base a big part of the topic today is it's overvalued. i don't think that that was as clear or was as broad of a sentiment regarding apple, which continued to propel it higher. so i don't see these two -- if you ask me to make my bet which between apple or amazon outperforms, i clearly think apple is going to outperform amazon, despite its recent surge and all the good things that amazon is doing to try to capture new markets. i still think that this is going to be relatively short-lived, if you will >> so, gene, does that mean that

amazon is overvalued >> i think it depends on what your time horizon is i think if you take a three to five-year approach, i don't think it's overvalued. i think if you take a one-year approach here, i think that it is overvalued. and i think that, again, it's all about the timing of it in other words, i think that the risk/reward here is just more favorable in some other names despite all the great things amazon is doing. >> gene, how solid do you think the footing is underneath so many of these large tech stocks? we're talking apple and amazon because they both touched that trillion dollar market cap threshold. but microsoft, alphabet over $800 million they have all had really big moves. we tend after a while when stocks at at a point to compare them and say this one is a good buy versus that one. maybe none of them are good buys maybe they're all too high

where do you come down on not relative to each other but just in general are these stocks too expensive? >> i think you've got to look at them on a case-by-case basis i think in the case of something like apple or google, i think that they have such massive opportunities that they could go after, whether it's the future of driving and autonomy around that that can really change the world. i think that those type of scenarios are not overvalued on the other end when you think about the near term around amazon and some of these other names, the simple question to ask yourself is are they getting into new markets that could fundamentally change the business model i want to take a quick sidebar here and say i can't say enough good things about mark i competed head-to-head with him for many years and respect his work immensely, but i'm in a different position in terms of where he's at with facebook, for example. and i think that that's an example of a great story but

doesn't have these massive markets that they can capture in the future that can change the world. >> gene, we're sort of more broadly looking at the market. we seen to be living in this age of deconglomeratization, whether in the industrials or consumer stocks where they're looking to pare down, streamline and realize greater value. on the flip side you have amazon crossing that thrill 81 dollar market cap threshold and they have so many octopus arms in so many different businesses. does it make sense for them to continue to build out all of these different revenue streams right now or will the time come where they decide to spin some of them off? >> i think it makes sense to them to keep doing it. that's the reason why we're at this trillion dollar point with amazon is the fact that they have given investors confidence that they can go and disrupt markets just like they have done around retail. and so i'm still a believer that

they should keep doing these kind of one-off projects, if you will, and see where they go. we're going to be gone on buying amazon at target 2,018 but i think we'll be right about some of the things they will do more broadly i think they will eventually buy target and take a bite of what is a huge part of offline. so ike it think it's important that could potentially change how we do our brick and mortar and think of it in the future. it's still going to be a huge piece, almost 50% of what's going to be bought. >> mark mahaney, ten years from now how will we look at this moment of amazon and apple both touching a trillion market cap, as a little overexuberance in the markets that perhaps we recovered from or just one more step in a march higher

>> my guess is it's going to be the latter just to echo one point gene made, it's all about whether these are becoming platform companies. yes, amazon did really well in online retail but the stock gapped up when they showed they could be successful in cloud it's like the kicker changed now they roll out advertising and there's another ticker that they're adding to the stock. it's become a platform company it's almost three for three in terms of the three different businesses they have gone into and the success that they have had. i'm sure they'll blow up somewhere, but i think it's a march higher >> amazing story, guys you helped us put it in some historical perspective as we watch it back off a little bit from those levels. amazon now the second u.s. company to hit a trillion dollar valuation, albeit briefly today. thanks, guys markahey man and gene munster. "squawk alley" is back in a moment then cdw orchestrated a collaboration solution for us.

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trusted choice independent insurance agents offer special protection that could help replace or repair damaged equipment and provide lost business income. they represent multiple insurance companies and customize coverage to help businesses get back to work. announcer: to find an agent, visit trustedchoice.com. welcome back amazon touched that $1 trillion market cap and then backed off about a half a percent it's now trading about $10 per share less than that, but a milestone moment in time the second stock after apple a month ago to touch that trillion dollar market cap. it's something i suspect scott wapner and the grew might be talking about coming up. >> that's right. we'll get stephanie link's take

when we begin. also coming up today, stocks had a lot of momentum coming into this month, so what will september hold for investors will the historically worst month hold true to form? plus, we've asked our panelists to put together their ultimate portfolios, and today josh and stephanie reveal their picks. our call of the day, you guys talked about it earlier, big one on facebook. we'll debate whether the influential analyst behind it is on the money or not. we'll do all of that top of the hour we're less than ten away see you then. >> looking forward to it, scott, thank you. u.s./canada trade talks are set to resume tomorrow the president weighing in this weekend saying there is no political necessity to keep canada in the new nafta deal if we don't make a fair deal for the u.s. after decades of abuse, canada will be out congress should not interfere with these negotiations or i will simply terminate nafta entirely and we will be far better off joining us now, former canadian prime minister kim campbell.

prime minister campbell, thanks for joining us today. >> thank you. >> your reaction to that tweet >> well, except i don't think that he can do that. i think congress has everything to say about whether nafta is cancelled and what's in a new agreement. but, you know, i was -- the election that brought me to national politics is a referendum on the canada/u.s. free trade agreement so political rhetoric around trade agreements is something i'm very familiar with it's really a perfect storm of politics you have your midterm elections. and remember, 35 states for whom canada is the largest trading partner, they have got members of congress, they have got local state legislatures, governors all up for election so there's going to be a lot of political pressure to make that deal work. canada has an election in 2019 but quebec is the most fervent supporter of supply management has an election next month the mexican president is going to be out so we have to accommodate him so lots of political stuff in the mix

i was more heartened to the statement friday when the president referred to the mexican/american part of it to congress and with the thought canada would join in when we first made the date to talk today, i thought we would have something more concrete i know how important the agreement is so they're negotiating in good faith. they'll start tomorrow i believe that there will be a tri-party to nafta. >> one of the sticking points is a sticking point in the original agreement. >> there's a debate in canada and i've seen commentators say both it was important the first 15 years of the agreement so i think it's not necessarily a disaster i think canada and the belt and suspenders theory of protection

against trade disputes would like to still have it so they'll be pushing for it but it may be a bargaining chip that could be traded away for something else so i don't think that's a do-or-die. we prefer to keep it but i don't think it's the end of the world if it's not there. >> if it does get blown up, what do auto tariffs do to canada >> yeah, it's terrible for us. >> is the country ready for it >> is any country ever ready for it first of all, because if nafta is cancelled, and remember congress has to do it, it takes some time for that to go in. but it's interesting people make these threats and then they discover later that they're shooting themselves in the foot even the auto agreement between the united states and mexico is going to increase auto prices in the united states. it's not at all clear it's going to have the effect -- we don't care we're a high wage country. and we have a good integrated industry so i think you have to follow the dots you guys do this with your

analyses and don't just look at the superficial. >> we've seen what's happened to lumber over the past few months. doesn't seem to have altered the trajectory of trade strategy. >> and what happens is when the united states goes after us on lumber, the american housing industry suffers housing starts to go down. so all of these things have consequences and the thing that i learned when i was running to defend the canada/u.s. agreement is a lot of stuff about trade is counterintuitive we think we know it's obvious like a trade surplus is good or bad, it's actually more complicated than that and you really have to follow the steps that are going to happen when you introduce certain provisions sometimes you find out that it's not what you think. >> how closely are canadian politicians and trade negotiators watching u.s. midterms you mentioned the local and state impacts. >> very closely. and it's interesting, we have very good cross-border relationships not just between the national level but between our provincial governments and

state governments. and so there's a lot of conversation so they're very, you know, connected and very concerned because the great thing is that nafta, even going back to the canada/u.s. agreement has been really positive. what it does is enable us to rationalize production on both sides of the border to make products more competitive outside north america. so there's a lot of conversation they're following it very closely. you know, you never know, but i'm optimistic that cool heads will prevail and interest will prevail because it's in nobody's interest to blow this up. >> prime minister campbell, we appreciate you joining us here unfortunately we had breaking news with amazon crossing the one trillion valuation we do hope you'll return and visit us soon. >> i'd love to, thank you. >> thanks for joining us kim campbell, former prime minister of canada. nike shares down 3% this

morning as the company rolls out a new campaign featuring colin kaepernick who famously took a knee to protest police brutality. patrick rich joins us today and matt powell. it's good to see you both, thank you for your time today. patrick, down 3% the stock has been a good winner all year long, but how much of this do you think is actual consumer revolt? >> well, there's no question there's some visual evidence online with people burning nike merchandise that there are obviously some people out there that are disturbed by this but at the end of the day, guys, i salute what nike is doing from the stand point that they have always stood for freedom of expression that's not just physical expression, but also expression of opinions. so i don't think at $34 billion despite their relationship with the nfl now, i don't think they're going to lose too much sleep over what some folks are doing with the apparel >> matt, some are theorizing

today that they have at least done some preliminary focus work on this and that they are in a position to understand the consumers' reaction, maybe not exactly but directionally. do you think that's true >> yeah, i think today's consumer, particularly the younger consumer, really want brands to take visible stands on social issues. they want to know where brands stand. and brands can no longer stay neutral on issues like this. in many ways i think their core consumer will respond positively to this campaign. >> matt, just to play devil's advocate for a minute, don't you also run the risk of alienating potential consumers when you take a stand, a political stand or social stand like this? >> absolutely. i think you always run that risk i think it's important to remember, though, that our data shows that two-thirds of the people who wear nike shoes in the u.s. are under 35. so, again, this younger consumer has i think a different political take than, say, baby

boomers do so if baby boomers stop buying nike, i don't think they'd ever notice it. >> patrick, i guess it's kind of a on this hand, on the other hand question, but is there the chance that nike increases incremental sales from a certain core group, african-americans, younger people, more than the people who don't like colin kaepernick and are going to stop buying maybe they weren't buying that much nike to begin with. >> i think the other guest hit it right on the head you have to look at the demographics and look at the research of who's consuming nike products it's a younger generation. you have more african-american consumers of nike products than some of the other brands so you're catering to this target demographic. studies have shown that people make these purchasing decisions based on emotion so this is going to fuel those and make people that are already consuming nike products feel that much better about the brand that they're affiliated with so again, you're always weighing the different sides of the coin, but in this particular case i think they feel that the positive that's going to come

from this far outweighs any negative backlash. >> fascinating to look at some of these huge multi national companies trying to basically arbitrage that exact process guys, thank you. patrick and matt, appreciate it. nike is an absolutely huge story today, along with amazon and trade and everything else we covered today. let's get to the half. i'm scott wapner we begin with breaking news, our continuing coverage of amazon becoming only the second company after apple to reach $1 trillion in market cap. it comes as stocks enter a historically rough month with a slight sell-off today. here to debate that and the other big stories, joe, stephanie, josh and jim. let's begin with what is now the big story of the day and that is that amazon milestone. steph, i said becoming the second company ever to hit a trillion dollars in market cap a stock that you have owned for quite a while. >> yeah, i have, and it's worked