that the dow futures are indicated up by over 100 points. s&p futures up by 8.5. the markets have been streng strengthening through the morning. >> make sure you join us tomorrow. squawk on the street is next. ♪ good thursday morning. welcome to "squawk on the street." david faber is at day two of the conference in new york city. futures indicate a triple pop of the open. it does ease some fed jitters. plenty else to watch including china trade. we will begin with trump versus

dimon. apple's most valuable product gets a price hike. first up, the president is striking back at jamie dimon a day after the ceo said he thinks he could beat trump in a presidential race. the president tweets the problem is that he doesn't have the aptitude or smarts and is a poor public speaker and nervous mess. i have made a lot of bankers look much smarter than they are with my great economic policy. how much of this is important? >> it was clearly ill-advised. some things come out really differently in print than they are said. obviously, jamie is jamie.

jamie is a guy who has fight. he is not a typical banker. he says things with ease. he made the comment about th father and the money. that came off as very personal. all the other stuff -- if i ran i could beat him. that's fun. when you say silver spoon, people hate that. i'm sure that jamie did not want a new enemy. nobody really wants to wake up and say i'm so bad i made trump my enemy. that's where he is. >> david, we talked about this yesterday on the air. there is a relationship there between the president and the financial sector that is important to watch and maintain. >> without a doubt.

i'm in full agreement. those comments were the thing that would have hit hardest. frankly, i'm surprised the president was as tame as he was given how he often will come back at some of his critics. it could have been a lot worse than just a nervous mess. to the larger issue of this administration of the president's personal attacks on certain business leaders or focussed on certain businesses. we spent a lot of time detailing his tweets involving amazon, jeff bezos and the "washington post." i think you have made this point, as well, many of the stocks of the companies that had been targeted have actually ended up doing better than those conceivably that were the beneficiaries of certain policies of the administration. when it comes to the stock market don't read too much into it even though there is certainly a lot of oversight of the financial community coming from the executive branch along

with the regulatory functions. >> when it comes to the comments, the last part is like otherwise he is wonderful, that shows that this one is a little more light hearted. i don't think he is saying that jamie dimon is a bad guy. at the same time, this is a man who can be very spiteful. what can a regulator do, though? the president cannot call the federal reserve of new york city and say i want jp morgan's fortress balance sheet to be revealed as not one. >> he can call. he can do anything he wants. i'm not sure the call is going to be well received or that anybody is going to do anything. it wouldn't seem to be much on a practical level but conceivably can be done. that said, you spent a lot of

time talking about tony west and the litigation that was undertaken by the department of justice. when it came to the likes of jp morgan -- there are certainly levers that can be pulled. i'm not saying that any of them will be. i'm just thinking of that as one example. >> you are so right. tony west is one tough guy. if you did say the wrong things and you didn't -- and you asked for more documentation about why the penalties should be 14 billion versus 17 billion, it wasn't like that. the traditional due process, the bankers would say, was an avail. this, david, is certainly not that which was actually pretty punitive when you think about it. >> there is a difference between reading a quote in print and listening to it said. we have sound of dimon saying this to rebecca jarvis. >> i said this before trump was elected. you are not going to get a

wealthy new yorker elected president. i was dead wrong. this wealthy new yorker actually won his money. i grew up in a poorer part of queens than he did. i am a banker. i am part of the elite. i don't think the american public look at trump as an elite. i would be fine. he can punch me all he wants. it wouldn't work with me. >> i shouldn't have said it. it is more out of frustration, i should have said it. it proves i wouldn't be a good politician. >> you are done with politic snz. >> yes. >> no running for president for you? >> ever? >> i never say never to anything, but no. >> if it does sound different given the mood of the room -- we are in this goldilocks economy. you said this government does something every day to help people make money and the

nation's top banker says he is frustrated. >> you couldn't have a more pro banking really regime. it's not like every day he comes in and says let's tighten regulation. he says let's loosen regulation. it was possible that there shouldn't be any -- the president says we should have the banks do whatever they want. i don't think he will do that. yesterday we spent a lot of time talking about ten year anniversary. i'm sure you would like to return more capital to share shlders and -- shareholders. maybe that is an issue. people are talking about the idea that maybe banks can't make as much money with the yield curve. >> maybe he is talking about stresses in other areas. the president's got a new tweet this morning questioning the death toll in puerto rico saying

it was the tool of democrats to make him look back. >> he does create -- remember the erratic tweets with elon musk what is the president's average? >> we need a sell side analyst to work those numbers. when we come back, david with have an exclusive with tom rutologru rutledge. i'm ken jacobus, i'm the owner of good start packaging. we distribute environmentally-friendly packaging for restaurants. and we've grown substantially. so i switched to the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. that's right, $36,000. which i used to offer health insurance to my employees. my unlimited 2% cash back is more than just a perk,

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welcome back to "squawk on the street." there is a plethora of guests involved in the communications and media companies including my next guest. tom rutledge is the ceo of charter. every year we sit down at the liberty annual festival, if you want to call it that. i want to talk to you about target. you and i have spoken through the years when you were in the midst of and completing the huge

deal. you put targets out for adjusted revenues in 2018 and 2019. i took a look. you are not hitting them. 45.6 billion in revenues was expected this year. 17.8 billion in adjusted ebita. why did you not reach the targets you put out? >> the proxy wasn't a target. it was our business plan for why we did the acquisition. it was actually in a different timeframe than the actual completion of the deal -- it was in a different timeframe. we are actually on our plan in terms of the timing of the investments we are making, creation of customers that we expected. the marketplace has changed. remember, we were in a two-year chase. comcast was involved at one

point. that deal was denied. so it took more than a year to close the deal even after we got a new deal because of the regulatory process. so we didn't actually close that deal in the timeframe that the proxy statements were -- >> to be fair, your stock did run up to a certain extent that it has not seen again based on investors' belief that those were forecasts that conceivably would be met. >> i'm not sure why the stock price ran up. i think there were other factors besides our actual operating performance. you know, that is really the issue. we have an operating plan. we have a great set of assets and an opportunity to create value on those assets. yes, there was speculation in our stock and there was m&a

rumor in our stock which came to fruition. and the reality is we have a great set of assets and a great operating plan. we are achieving customer growth. we are growing nicely. we have had a very complex integration which we anticipated. we essentially had 11 companies from an operating perspective. we put them into one. at the end of this year we will have a single platform across the entire country where we can operate and execute, innovate and create products, a platform that other companies can develop their services on. >> so the integration will be complete and a very difficult one given all the different entities. you mentioned m&a. many people are familiar with the fact that the stock did go up whether it was verizon or soft bank. do you think back on that as a lost opportunity perhaps that

might have been better pursued in some way? many people believe it was your resistance to doing a deal that prevented it. >> as i said, we have a great set of assets. we have an opportunity to create a lot of value. we think that what we are doing creates the most value for shareholders which was my objective. when we closed this deal two years ago it was closed at about $190 a share. so we are at $310 or so today. it's not open yet, but -- in that range. we are up over 50% in a two-year period which is a pretty good result. it's the kind of result we had expectations for. we expect the company to perform. we expect it to perform well. all of our decisions with regard to who we talk to and what we do for m&a whether we are the

acquirer is to the benefit of the shareholder. we think that what we are doing is the most creative thing you can do for the shareholders. >> and will result in a stock price that might exceed anything discussed during that period of time. >> all value is ultimately future value. we have a tremendous asset with lots of potential and with the potential of making proper investments, doing proper integration, getting the scale economics that we are getting and then using that to create that value. so when we look at all of the opportunities out there for us, we can't see anything greater than our own customer creation machine. >> yet you seem to be fighting something of an uphill battle. i say this having followed the industry lately which is the focus on video sublosses that investors seem to have as

opposed to looking at the whole. your last quarter was very strong. is that going to change at some point? do you sense or have a feeling for what it will take to have investors look here instead of here >> i think it is happening. most people realize that we are really a connectivity company. we are also a mobile company. we are also a fixed broadband company. we are also a fixed wireless company. we are the connectivity company. we are the best connectivity company in terms of having a platform that can do more things than any other platform out there. >> why is that >> the capacity of our network, our fiber-based coax network is tremendous. we are at one gig everywhere in the united states by the end of this year. every customer passing that we serve can buy a gig of service from us. it was done with very little capital investment. we have a pathway to get the ten

gig symmetrical. it is hard to imagine what you can use it for. >> we always seem to figure it out. >> i think there is a whole new set of products, entertainment products, virtual reality products. it will be the new forms of information, education that people use five years from now, ten years from now. our networks are capable of carrying those products. i think we have a great situation from a connectivity perspective. so what is happening is the video marketplace is changing. it became fully priced and fully distributed. and the prices got very high and they are pushing consumers out of the market just through price. there is very little ability on our part to constrain that price. >> we have talked about that a lot through the years. it's been an enduring frustration for you. now the bundle is some falling apart. you doing what you can to offer

skinnier opportunities to consumers. >> we are offering a range of opportunities for consumers. we are completely ag nostic or uncaring i guess is a better word about what companies are using our networks to get video to their customers. we think we can aggregate content from netflix. we are selling netflix to consumers who don't have it. it is in our interest to make the consumer experience with us be good no matter who the video provider is. >> these days you hear about the threat to cable from 5 g. everybody now is saying hans vestburg just was on stage here -- that 5 g represents a real threat to you by bringing in these huge capacities in a wireless fashion. is it a threat to the cable industry >> 5 g is a technology. we have a better platform to

deploy that technology, i think, than the cellular industry does because we are fully distributed from a high capacity wire line perspective. if you think about what 5 g is, it is small cells. small cells mean you need lots of wired line connectivity to make the small cells work. we think we are actually in a better position to do that than traditional cellular companies. yes, 5 g can be used to compete against us. it is very capital intensive. it requires essentially a wire line network like a fios to support the small cells. if you look at their forecast, they will build 30 million homes over a ten-year period. ten years from now there will be 140 million homes in the united states. they will have 20% of the homes. our foot print would represent eight percent of the homes. we think it is something to be thoughtful about. we think generally we have a better network. we can have better products.

ten years from now we will be 10 gig symmetrical. >> we mentioned m&a. the regional sports networks that will be sold by disney, a lot of them out there. you own a few. >> we only are in l.a. sort of by default. we have not been a buyer of content. lots of content has been presented to us recently. we haven't purchased any. there is not a lot of scale advantages for us being in the content businesses. if we were to be in that business it would have to be priced right. >> tom, as always, very much appreciate you taking some time. tom rutledge, ceo of charter. >> good stuff. we will get cramer's mad dash in a moment. lots to get to that we have not yet talked about including kroger, apple, neo, tobacco,

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futures showing about 117 point climb in the open for the dow in large part because of cpi coming in cooler than expected. opening bell is a few moments away. my name is chris hughes

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♪ ♪ ♪ the difference between possible and impossible? it's a person who believes they can, surrounded and supported by others - by us - who believe it, too u.s. bank - the power of possible. a few minutes before the opening bell. let's get cramer's mad dash and

reaction to the apple event. >> stock goes down for the next 30 days. i found this one to be break through because i feel like a lot of people said i have to get this. i didn't feel that way about the x and the watch was really -- if there was anything, the watch is so exciting. for those of us who have friends with a fib, for people who fall. pop, this is for you. sorry, it didn't happen in time. i thought the watch was amazing. kenny talked about how there is a sim card that allows you to have two phone numbers. this is monumental. the stock went down. people cannot resist buying it high and selling it low. what do i do with this i just bought this watch in

june. >> we will talk to rod loll of goldman. goldman does say a couple of things. this 500 gigabyte model of the x, does it change in the i-cloud? >> you mean to not have the backup >> it is waterproof. one of the reasons why i backup is because my wife put the iphone in the spin cycle. i thought it was worth it to pay the price. if it is waterproof, the we reason why we don't have to backup. it is one of the great bargains. >> as buffet said we'll listen to that sound in a couple of

minutes. >> look, we are waiting for t mobile. he says we want to do 600. this is one of the things. if you have an upgrade at the 7 or 6 or 5, this is your jam. >> the opening bell at the bottom of your screen. at the nasdaq it is 111 inc. apple made a lot of news today. it sort of rhymes with the 5 g news that you have gotten today and yesterday. >> you know, it does. it's interesting. even talking to tom rutledge, there is still this question given average selling prices are so high of how long people will hold on to their phones.

i don't know the answer. a number of investors believe with the equipment installment plans, once you are done paying off the phone and the bill goes down by $30 a month that you are less likely to re-up right away. it didn't seem to really be the case. you will still hear a lot of that particularly as we sort of move into the next generation where people hold off until the next phone is available that can do more in terms of dealing with the new networks that are being put in place. >> s&p here awfully close to 2,900. dow is up 121. jim, i just get your quick temperature on what this inflation picture is saying. we have cooling cpi year on year. >> we have the employment claims. we had a great unemployment number just last friday. it's very clear that we have

growth. i can tell you that this is one of the moments where it is very hard to fight the tape. we talked about it yesterday. if you have any sort of positive news on trade, could you go up ten percent? arguably, yes. >> ten percent. >> you would lose your principle objection to the market. that was the number that scott -- still a lot of people are out. stephanie talked about the notion of the multiple. it would expand if you have boeing. there is a lot of companies that just -- where does united technologies go?

it is on the verge of splitting up. i just find that it's one of the moments where it is really hard until something happens. if the president tweets that he thinks that there is no reason to talk to the chinese then you feel like a total dope if you went -- >> canada/u.s., there is more work that needs to happen before talks can resume. kudlow did tell reuters that this invitation to have a new round of chinese talks is a positive thing. he said i guarantee nothing. then he goes on to say most of us agree it is better to talk than to not talk. the journal suggests that maybe the camp thinks this shows weakness. >> that is what i feel is the back channel. mnuchin can have the talks all he wants. this is the moment where you go for the jugular.

the market is down a lot. there is a lot of stress within your system, they need us a lot more than we need them. it's time if they can get one other country to go with them, one country to go with them and say we are tired of china, china folds like a k mart corduroy suit. >> we have heard that story, actually. jim, what we are asking for of china is such a fundamental restructuring to a certain extent of the economy. i don't know whether they are capable of delivering what is going to satisfy us. you can say they fold like a cheap suit all you want. when i talked to people who at least seemed to have some sense as to what would be required of the chinese they really believe the hurdles will be fairly high given the ask.

>> david, i think that if you announce today that you're switching orders from air bus to boeing, if you announce that american express is free to have its own franchise, we welcome mastercard and visa and we think that jp morgan, it is time for jp morgan to be an important force, there are ways to say things that i know don't necessarily comply with the 2025. david, there are ways to say that joint ventures are out. we will let the united states come in and do what it wants. it is a strong way to say we are different. >> if they show up and say we will try to buy more stuff that is not going to cut it. i think we all know that. they have to make the fundamental changes that we are talking about and stick to them. we'll see whether they can make

any progress on that front. >> we should mention really quick amd, micron helping to lead the s&p. that is a reversal of what we have seen in the past few days. >> look, they are things going on in the semi conductor world that are very, very hard to understand right now. >> does that chart worry you at all? >> there is a belief that this company will earn two bucks next year and deserves to sell at 20 times earnings. that takes it right to 40. stocks have to go at intervals.

in the old days you used to have balance 38 and 40. that is what the stock wants to do. it can't get to 40 without going to 33. i was told in an interview we have the right chips. intel doesn't. she didn't blast intel personally. lisa is going to be the ceo of the year. >> who else is even in contention >> jamie dimon. >> jim, i may give you the call of the year on amd. it's always important when he is telling us the cuorduroy suit. he has been early on this one and dead right. well done on that. here is a name we also haven't

talked about that much -- just like the president and jamie. quaalcomm. have you taken a look at that? >> it's so funny, david. they had bought they would be into the auto business and wouldn't be able to use that balance sheet to buy back stock. he spoke softly but carried a big treasure chest. that man never showed up in a corduroy suit. >> buying back a lot of stock. keep in mind the apple litigation is still ongoing and just something to keep an eye on in terms of getting a settlement there. we talk a lot about apple. that is a nasty lawsuit still going on. >> no worries, david. good discussion. snap is another story. it lost seven percent yesterday. today announcing a new feature.

for that we will go to julia boorstin. >> snap announcing it is partnering with 20 media companies to create their own stories from publically shared snaps. the company announcing that over 79 million people looked at the our stories feature which are snaps that the team cureates. the partners include cnn, nbc news sports and "today" show. cnn could curate stories about the storm. this comes as snap shares have plummeted in the wake of disappointing user growth and guidance and concerns about competition from facebook's instagram which has a billion monthly users. the stories drew 400 million

daily active users compared to snap chat's 188 million total daily users. instagram continues to follow snap's lead. we'll have to see how this ongoing rivalry plays out. carl, back over to you. >> thank you. back above nine. we talked about the downgrade yesterday losing everything from cfos to heads of engineering in sales. >> if this company only had one class of stock i think that there would be people in there right now. you have to sell this thing. it has become the joke. it has become zynga. >> you think the stock ownership sector keeps takeover -- >> it is immunity.

frankly, this is one of the biggest disappointments of the ipo era. i don't know what changes the story line here. david, is anyone talking about this being a good acquisition for someone? >> he controls the company. we get back to the point of the vote. even if you had some vote as shareholders and you make your voice known. you tell me, does he want to sell the company other twz is not going to get sold. there is not going to be an activist who comes in here. you have absolutely no ability whatsoever other than to make a lot of noise. you have no ability to replace any directors or do anything that you typically would if you want to see the company move in a different direction.

>> what a great lesson here for the kind of stock that you shouldn't buy. not a lot of shame is being demonstrated so far. say no and just don't let it happen. we need some democracy. >> kroger quickly maybe before we go to bob pisani, biggest decliner on the s&p. comps are up and margins are down. >> the stock just went up ten points. they are doing a lot of things right. let it come in a little. i think that kroger is transforming. there are other companies competing. kroger has made big changes. if it comes down a little more i think the people can rally

behind it a few days from now. >> guys, last point from me. not to toot our own horn, but discovery ceo on with us yesterday. they shared news about getting added to hulu. during our interview they indicated they got a deal with sling, as well. the stock yesterday up over eight percent. we are talking about a more than 11% jump in shares of discovery. it has been a very good year for the stock. you can go back and see that it was higher in 2015. answering a lot of investors ' fears. the answer apparently is yes. that is giving them some real momentum. >> wow. >> what a great call that was. that interview was spectacular. it showed you we are killing it. >> dow is up 154. let's get to bob pisani.

>> happy thursday. great start. two things matter here. turkish government raising rates calming emerging market fears. cpi a little bit light, yields down, stocks up on that. take a look at sectors. i always put up the trade, emerging market jitters. the emerging market mix. capital equipment stocks got hit. banks kind of flattish again. consumer staples are weak. they were fine. revenues were a little light. it's getting slammed. some of the other consumer staples are a little bit weak here. we had a call on sun trust bank here today. that was downgraded to neutral. you can see some of the other stocks are modestly up here. i think this call from piper would have been much more impactful had we seen real

performance on regional banks but we haven't. sun trust has been the outliar this year. most of the other banks are under performing. the s&p 500 had been all year. i can go right down the list. the big money center banks and investment banks have been even worse. i don't think this call is as impactful as it could have been. they did it very specifically on that particular stock and the nis run up that it has had. we have been talking about the financial crisis all week and where the next one might happen. i think we had hank paulson on yesterday. we tend to fight the last war meaning the next crisis probably will come from where the old one came from. we have had regulators on talking about weakening rules. we had credit guys saying it would be excessive debt that

will cause the next crisis. we have had guys from markets on who were saying passive investing could be the problem. the most interesting report i saw yesterday came out of the depository trust and clearing corporation. they provide clearing and settlement for the financial markets in the united states. they think it is cyber security threats that will potentially be the next big issue. they say the cyber threats may have become the most important near term threat to financial instability. they are talking about a systemically important financial institution being attacked and shut down, the data destroyed or stolen. then the ripple effects -- the financial stability oversight counsel was set up to advise the government on threats to the financial system. the annual report says large scale cyber attacks could threaten. my point is paulson is right, look for other potential sources of the next financial crisis.

great start to the day. we are up 161 points. >> rick santelli is at the cme. good morning, rick. >> good morning, carl. you pretty much see what is going on with regard to the fixed income markets. on tens it came close to three percent. the trigger? cpi. bob is right. in the context of yesterday's ppi and today's cpi after last friday's wage issues it really did take some of the pressure off. add in other central banks and the foreign exchange markets are having a good day. mario draghi laid out a bit of slowing. he still seems to be hinting they will continue to cut how many purchases are made with regard to quantitative easing. whether he follows through or

not, you can see the dollar really got hit pretty hard. that might have been because of interest rates. look at the euro versus the dollar. if you open it up to july we haven't taken out recent august highs yet. the pound versus the dollar is a very aggressive move. you are trying to deal with brexit potentially in the spring. pound responded nicely. unlike the euro, if you open that chart up, you can see we are hovering at some of the best levels since the end of august. finally, real quickly, the dollar index if it closed would be the lowest closing level since the end of july. call it almost seven weeks. back to you. >> still to come, the exclusive with vans vestburg. they will talk from 5 g to apple. back above 2,900. the dow is up 151. (guard) i've seen things i shouldn't have.

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hurricane florence is a category 2 storm continuing to barrel towards the east coast. contessa brewer is in myrtle beach where they are bracing for perhaps the worst of the hurricane. hi, contessa. >> hey, there, carl. when you arrive at the myrtle beach international airport the doors still open for you but what greets you inside is a row of empty ticket counters from side to side the place is a ghost town. this is likely to be a similar scenario up and down the carolina coastlines as these beach cities have seen major flight cancellations the good news is no major hubs affected here. the bad news is for people who have been arriving to the airport expecting to see their flight, it's a no-go look at this the tsa checkpoint locked up there is law enforcement here. the airport officially is still open, runways will be up and operating if the military needs them at the height of the storm but no way to get out. we met a couple from pittsburgh vacationing here, first time

they have flown in 35 years, they thought they were preparing for the storm, guys, and they get here, said we changed our flights from saturday to thursday spirit canceled all the flights last night they didn't know that and put their keys into the lock box so devastating for them. they felt like they were out of options. hotels are largely closed at this point no rental cars guys, law enforcement has just taken them to a nearby hotel where they snatched up one last remaining room. >> that will be a very long weekend as this storm is so slow moving contessa. we'll rely on you to help us understand it. contessa brewer. dow is up 170. we'll get stock trading with jim in just a minute.

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there. >> what's on "mad" tonight >> we have a couple good ones. looks like we're going be able to show how a drone works and barstool remember barstool? wow. they said new england was going to win 50-3 on the eagles. they may have been wrong on that. >> we'll find out soon enough, jim. >> make them wear the corduroy suit. >> "mad money," 6:00 p.m. eastern time when we come back, faber will have an interview with the ceo of venezuela the vix below 13 29 s&p

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welcome back to "squawk on the street." i'll carl quintinilla and sara eisen at post nine david neighborer will join us shortly with the ceo of verizon, hans vesper. the s&p is back up above 29 03 s&p is on the best quarter since 2013. >> our road map will begin with

bracing for hurricane florence forecasts warning of life-threatening surges, record rainfall and flooding. we will take you live to the carolina coast next. kroger getting hammered. mechanic's largest grocery store chain reporting a miss on sales. we'll tell you what executives have to say. >> hurricane florence is barrelling toward the carolina coast. it's been downgraded to a cat 2 but is posing a huge threat, including record rainfall and historic flooding. more than a million people are fleeing the area of expected impact we have full of the raj. meteorologist kayla mcgrath is tracking the path. jackie deangelis on the ground in north carolina. let's get right to kaitlyn

florence is now over 600 miles wide in diameter that will continue through the day today and approach landfall overnight into tomorrow. the national hurricane center bringing florence to the carolina coast and making landfall as a category 2 storm overnight. there is the chance it could linger longer but once it moves on shore in into north carolina it will weaken into a tropical storm. that's good news in terms of wind but doesn't change the fact that this is going to be a life threatening flooding situation from the surge and rainfall so check out the storm surge through landfall nine to 13 feet, that's the bull's-eye through the strongest storm surge through wellington and north carolina that's where we have an incredibly high storm surge threat the closer you get to myrtle

beach, the further south into charleston it won't be as high we are talking about a very serious flood thread through the next few days and this storm surge will coincide with high tide what we call storm tide and we could see multiple cycles through your friday forecast so let's break down the impacts the bull's-eye of rain the highest amount of rain, we are not talking about inches we are talking about feet. three to four feet is possible as florence moves on shore the surge in its peak, nine to 13 feet. and we're still talking about hurricane-force winds. wind isn't the biggest part of this story but a major concerns once flarns moves on shore it will weaken wind speeds.orene it will weaken wind speeds we'll have much more on florence in just a few minutes but for now guys back to you. >> that inland flooding looks exceptionally dangerous. let's get to jackie deangelis

live on the ground in carolina beach, north carolina. jackie, good morning to you. >> good morning, carl. we've moved south to curry beach. we're at the pier, you can see behind me the water coming up and crashing over this wooden pier here. the waves getting bigger when they break they're watching up 75% of the way on shore and kaitlin mentioned this was downgraded to category 2 but don't be fooled on the ground. those winds can be strong still, over 100 miles an hour in fact, the wind is picking up right now and the potential for rain accumulation and flooding can cause massive amounts of damage what can that hurricane category 2 do well, ten years ago today hurricane ike barrelled down and hit texas. that was a category two storm that caused $40 billion in damages. massive power outages and problems for the communities down there so this storm is not

in any way less of a threat than yesterday or the day before. on the ground, a lot of people are concerned about serious power outages when you have this triple threat along the way and duke energy is saying one to three million of its four million customers could be left without power and they won't get their 20,000 personnel out to help you until conditions are safe enough. and here along the coastal areas that have been evacuated the governor saying we won't send first responders to help you, you had an opportunity to get out. we can't risk lives to save lives. switching gears to politics, president trump going after jamie dimon after the ceo of j.p. morgan said he could beat president trump in an election eamon javers joins us for the latest on ththeiff.

>> an unusual war of words between the president of 2 united states and jamie dimon speaking yesterday at an event in new york that aired on abc said this. >> i said this before trump was elected. you won't get a wealthy new yorker elected president boy, i was dead wrong. [ laughter ] and this wealthy new yorker actually earned his money. it wasn't a gift from daddy. and i grew up in a poor part of queens, but i am a banker. i am part of the elite i don't think the american public looks at him as part of the elite. they look at him as the upstart that punch americans in thenos everyday i'm tough as he is, i'm smart as he is. he can punch me as much as he wants it wouldn't work with me. >> shortly after that, jamie dimon walked back his statement. he said i should not have said it i'm not running for president, proves i wouldn't make a good politician i get frustrated because i want

all sides to come together to help solve big problems. that walk back, though, not enough to protect jamie dimon from the retaliatory tweet from the president of the united states who put out this this morning and said the problem with banker jamie dimon running for president is he doesn't have the aptitude or smarts and is a poor public speaker and nervous mess otherwise he's wonderful i've made a lot of bankers and others look smarter than they are with my great economic policies so the president firing back unable to resist the temptation to fire back after jamie dimon insulted him yesterday the president doesn't have any public events on his schedule so we will see whether this tiff continues to escalate. >> before this eamon, didn't he have a good relationship with jamie dimon? >> jamie dimon is a savvy guy, he knows a lot of people in the area he's been here at the white

house a number of times but my sense is -- and i'm asking the white house for data -- he hasn't been here or spoken to the president in a while so maybe i want's a deteriorating relationship. >> maybe it was better under when gary cohn was in that white house. >> that might have made a difference. >> eamon javers. meanwhile, goldman sachs cutting profit forecast for apple after they unveiled their high-priced iphone lineup. here's how tim cook described the new iphone xs. >> we showed you the new iphone xs the most advanced smoeb artphon the world with a superretina display, advanced face i.d., a break through dual camera system and the smartest most powerful chip ever in a smartphone. >> joining us at post nine goldman sachs senior analyst rod hall, welcome.

most analysts are applauding the higher price. >> the iphone xr, i call it the extra reduced price iphone. >> what does the r stand for >> not quite sure. but the price point on that was lower than we expected and that brings our revenue forecast down pretty substantially most people anticipated a price of around $700, maybe more we thought it would be higher because at this price it starts to cannibalize the iphone 8 skus. >> you suggested it may be trying to migrate users into longer term plays. >> the face i.d. is a much more secure method of authentication of people and so as they migrate people, we think they're trying to accelerate that migration, maybe that foreshadows some changes in apple pay coming next year. >> what could that look like

>> they could move to providing credit to people they don't provide credit today. they could insert themselves in that payment process they take very little of payment transaction so we think they want to take more payment transaction value for apple as profit as opposed to giving it to the rest of the industry. >> so the xr you weren't impressed with so much that people were talking about is they raised the base price to $1099 and they kept the x at $999. >> we thought the average selling price there was going to be higher so we believe they had done better on the summer on the x than we thought they would so we thought they'd price the xr higher as a result and they didn't so that is the reason our

overall asp comes down we think the xr is a good product it's just pricing lower than we thought. >> some tech press thought the watch stole the show >> you may see more insurance subsidies coming out for that watch. >> i remember when the watch was a brand new product and we wondered if they'd ever get an fda okay it took a while. >> you'll see grew coast monitoring down the road, those kinds of things are possible so it isn't a big number in the earnings model but it's interesting from a health and gadget point of view. >> the question is does it have potential to be -- if it becomes a must have health high team >> if you had insurance

companies subsidizing across the board and everybody wore one because of that, yes, it could crypt to earnings, we haven't seen that. >> and more regulation potentially as well. >> i love your line about the 512 gigabyte model and whether or not that connotes a change in icloud strategy. if you have enough on here do you need to subscribe to icloud? >> we think the penetration of icloud storage is below 10% so that penetration i don't think has gone the way they would have hoped so we were surprised by the fact that they'd be willing to roll out such a large memory option in the phone. we heard that last year and they didn't do it we thought it was because of icloud storage so here they've come with it. >> where do you stand on this idea that apple inherently deserve asas l deserve asas deserve asas higher multiple because they're getting revenue from recurring services business >> that is yet to be proven so there is an opportunity there but the icloud storage

penetration we think below 10% so they need to get that penetration up, how they might do that, we're not sure. we think they could come out with services packages that would be more attractive to people. >> you don't think they're doing that showing double digit growth? >> a lot of services growth is attached to the app store. a lot of that is app store growth apple care plus, i didn't mention that they increased prices this time around by a hundred bucks if you have theft and loss prevention in the apple care plus plan so that will mix up that services line a bit so they're doing a lot of things but the growth rate isn't deviating from street expectations it's about an expectations game when you talk about stock prices. >> how are you modeling in binary outcomes on trade >> it's difficult to predict that you see apple's trade letter last week. it's highlighting products that don't have earnings impacts so

models are not impacted by that. if the trade situation escalates we have to keep a close watch. that could have more of an impact but it doesn't look like it will impact apple too much. >> you're not sounding enthusiastic but your 12-month target is still 240, right almost 10% upside? >> we believe stocks should do well we expect them to do well on unit volume. the question we have is next year i think the story moves more to a services story and we're unsure of what the growth rate might be. if they could get that line growing the stock could do well but we don't feel that confident they can do that next year. >> not there yet rod hall, thank you from goldman sachs. when we come back, ten years since the crisis we'll talk to a member of that form eer lasard chair gary para.

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amazing to watch the market respond to presidential tweets the president writes "the "wall street journal" has it wrong, we are under no pressure to make a deal with china, they are under pressure to make a deal with us. our markets are surging, theirs are collapsing we will soon be taking in billions in tariffs and making

products at home if we meet, we meet. the "journal" did a piece looking at larry kudlow's comment which is is a kwoes mqut of us believe, it is better to talk than not talk and perhaps there is a camp, navarro, lighthizer, who thinks reaching out for talks shows weakness. >> it's posturing. we've seen this game before. he's not wrong about the two markets in going in opposite direction directions china's market has fallen out of bed. whoever comes to the talks, wall street looks like it just cares that there are talks on the agenda just a hint there may be talks yesterday helped lift the market plus we're still waiting on official confirmation of the next round of tariffs going through on $200 billion of chinese imports and then more than $200 billion coming to include all chinese imports,

something president trump said he's ready to do. >> let's go back to the historic week on post nine is gary para, instrumental until the restructuring of lehman, had a hand in the sale of bear stearns and the u.s. treasury led restructuring of fannie mae, currently m lly managing direct apollo global management let's not do this every ten years. when you think about the lehman anniversary, what comes to mind first? >> i would say everyone collectively, those of us in the financial arena, think about finance as numbers and what we all underestimated was fear and how dramatic fear can be and what it can cause in markets then we can come back to the financial analysis of too much leverage and lack of liquidity

no one was able to fully contemplate the second and tertiary consequences of lehman going bankrupt and it was fear rolled into the money market funds, for example. >> are you done gaming out in your mind what would have happened if it had not been allowed to fail. >> no. never. it's one of those curiousing to tail party conversations, could have, would have, should have. i would say that the fear was so prevalent in the marketplace, even post-bear stearns that it was accelerating, picking up speed. you can go back to when the financial guarantors got in trouble in late 2007 it was accelerating so i don't think any one company's incident would be enough. so i think we are going to end up with a major government program some time. >> you mean some time going forward? >> no, at some point -- it was inevidentable? >> as it was accelerating and

fear was seeping into all sectors of financials, as henry paulson said, the bazooka, something big was needed and we've seen that in other countries and this country in other panics it takes something major to step in and stem the fear. >> how much has the system improved since then and where do fragilities still lie? >> there's more capital, the banks are delevered. the two things to look to are capital and liquidity. both are meaningfully improved in the banks and banking system so i'm more relaxed about banking system in and of itself. for a panic, there will be a downturn, there will be a recession and banks are adversely affected but it's one thing to lose money. it's another to have a panic so the places where i'd look, try to watch for, are connectivity, where is there interconnectivity? i've got an interesting example. during the last financial crisis

and subsequent, in countries it was an issue so greece, we spent a lot of time about greece. turkey is four timeslarger tha greece but it's not interconnected into a euro so it's of less consequence so one thing to always look for is where the issues are, is it interconnected another speculative bubble, bitcoin. other cryptocurrencies are down 70% to 90% if that was interconnected we would be having a serious conversation. >> do you think european banks are in enough danger and connected enough >> i'm not as concerned about -- i can see a single european bank in onecountry or another but most banks in europe have cut their exposure cross border and into secondary markets so they're more concentrated so a bank in a country can go with its country but i don't see as much interconnectivity there. >> what about the morality of banks and ethics of banks which

was on full display during the financial crisis has there been enough improvement there? >> no. no i would say in a sense it is human behavior everyone in america at every level has greed and fear and they try to let ethics guide their behavior there will always be bad apples. there be always be people that take that too far so there are rules that limit and constrain but i actually will take a view there will always be people that are attracted to money and are attracted to -- >> it breeds a culture of risk taking >> it can so institutions are much more cautious, of course, but a lot of what occurred last time was not unethical and it wasn't illegal, it was greedy, so you could say well they were really greedy and overly aggressive but that is not -- there's a whole other topic of -- >> but you're talking comp

>> yeah, people incentives, how much money can they make for a one-sided proposition. so that was a real flaw in the system, many people at investment banks could make money if it went well and if it didn't they isn't suffer that's changed so there are some things in place, clawbacks and otherwise that are helpful. >> were you prided yesterday, bernanke at brookings were asked about his darkest moment and he pointed to aig and his discussion with the president at that time and the president coming back and saying nothing we've discussed here implies congressional approval did that strike you as interesting? >> it did. i'm sure everyone up with of us had -- and i've heard henry paulson at a different point in time we each had time where it seemed it might be overwhelming. my recollection was after we had been through lehman we had to sell the u.s. business in short order to barclay's so that was something that was a really intense time because if nothing

else there were 10,000 jobs at stake. there was a lot about the financial system but you will remember the pictures and i was there at lehman working on trying to solve it. >> and people were packing boxes. >> people were packing their personal goods, going home unemployed not knowing what the future held. that for me just was tearing as to okay, this was bigger than -- it's affecting less individuals. >> so andrew ross sorkin did ask henry paulson and geithner and bernanke to grade themselves on how they did how would you grade them >> it's too easy to be the monday morning quarterback i grade them highly particularly for the fact they acted decisively, they made decisions quickly rather than studying too long time was no one's friend

again, fear, you have to move quickly even if it means imperfection i could look back and say a lot was done to stabilize the system, that was the right thing to do. the secondary, though, should there have been followon to do more to homeowners should there have been more to target that would be a good discussion but that wasn't necessarily those yes wren that was a broader discussion is what else do we do to help across a broader swath of america. >> ray i dadally is out with a book about debt crises he suggested the next one, which will happen eventually, will be harder to handle because of societal pressures, cultural pressures that you can't tarp. there is no public response for it do you agree >> it's a risk i'm not as concerned but it guess to fear and crowd behavior there was a great brook written in the late 1800s by gustav le bonn about crowds and crowd behavior and that's what he's

referring to this notion of when it becomes 10 bad you get a movement of the crowd or of the populous that's a fear. but i'm -- that's a serious -- you have to first have a serious financial consequence and crisis we will have a downturn. i don't see the characteristics of a crisis in the making. >> i think one way to see how far this country has come since the financial crisis is to see the story of the day which is jamie dimon whether serious or joking about whether he could beat donald trump in an election because of his level of smarts, could a banker be elected president? >> there are a lot of people that can't be elected president

>> if you did miss it, you can catch a rerun of our cnbc special, "crisis on wall street, the week that shook the world. it airs monday, 7:00 p.m. eastern on cnbc. >> when we come back, kroger getting crushed. shares falling after disappointing results. stock down 9%. we'll look at what kroger's slumping sales say about the industry and what was behind them getting another look at the major averages this hour dow still up triple digits, s&p up 0%..4 nasdaq the winner, up more than half a percent "squawk on the street" will be right back

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good morning, i'm sue herera hurricane florence barrelling closer to the carolina coast where it is expected to make landfall tomorrow morning. top wind speeds are dropping to 110 miles an hour, reducing the storm from a category 4 to a category 2 but authorities warn this storm will be a dangerous one. >> just because the intensity of

this storm came down to a category 2, don't let your guard down, the storm surge forecast associated with this storm has not changed. it's remained the same this is a dangerous storm. >> tropical storm olivia rolling through hawaii on wednesday bringing heavy winds, rain, and significant flooding it knocked down trees, washing away homes and triggering widespread power outages more rain is expected today. six people are dead, including the alleged shooter following a string of shootings in southern california there are five crime scenes spread out throughout bakersfield. the first shots were fired at a trucking business where a man shot his wife and another man. the shooter killed three more people before then killing himself. you are up to date that's the news update at this hour i'll send it back downtown to you. >> sue herera, thank you. welcome back to "squawk on the street." watching shares of kroger getting hammered america's largest grossry store chain reporting earnings that

beat sales missed wall street expectations, though the grocery delivery wars continue to heat up. walmart's jet.com rolling out three-hour grocery delivery starting in new york carl, about the quarter, i just got off a long conversation with the cfo, he says they don't give quarterly guidance, they outline their annual forecast and they didn't lower it. so the fact they missed the numbers they don't see as a big deal he said actually we told wall street we were making changes in the store, prince optimizing space. what does that mean? expanding the aisles they're making more space for bottled water. trying to make more moves to be more operationally efficient and that led to a sales decline but he did tell me going into next quarter it's a neutral impact and it's going to start to be a tail wind at the end of this next quarter so the message that

the executives which are, by the way, on the call right now are delivering to wall street is we knew this was coming, we see it, we see a come back and we're not worried. he said if we saw a substantial miss, we know we would have guided down. the other thing is they say we've made these moves, but there's a long-term strategic thinking and the moves include buying a male home kit delivery service i must say this is a volatile stock since amazon got into the space. it used to be steady and stable cincinnati grocery store just slowly expanding the stock has bottomed september last year it was in the 20s and it's come off a long

way from that but clearly getting hit hard. >> what about this leverage ratio? they're going to bring it back into a target range. >> they have a new increased sense of urgency since amazon has gotten if walmart has a good quarter, it cost us this is a big enough industry, an $800 billion industry for all three to do well as far as target is concerned, which i think they're feeling they're getting pressure from wall street, their grocery business is about the size of kroger's general merchandise business so they don't see that as a big particular threat and this is still a thing. >> target largely unchanged though they're hiring more

seasonal workers our etf spotlight. mike santoli looking at the diverge jens between low and high volatility stocks >> it's been one of the more historic themes. here you have an s&p 500 that made a new record and yet it's the more defensive lower volatility stocks that have been leading. if you look at the s&p low volatility etf and the s&p high beta etf, this is the 100 stocks having the least volatility relative to the market that's about 8.5 point spread in performance. what's behind that that's the big question. slightly more defensive tone to the market treasury yields have been tame since mid-june when we hit 298 on the ten-year. semiconductors have been a big down side mover so those trends are in order but more broadly some folks think look, maybe this is a late-cycle dynamic

where you have cyclical sectors that look toward declining growth rate so this today you see a reversal, you have to more aggressive high beta stocks outperforming. >> that is true. if you look at the s&p leaders when we come back, threats and deception. pulitzer prize winning columnist jim stewart is here to talk about his "new york times" piece. why he says the cbs board turned against les moonves.

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the east coast is bracing for hurricane florence the storm is threatening rofrd rains and historic flooding. contessa brewer is in myrtle beach, south carolina, with the latest >> the wind is picking up just as the window for evacuating is

closing. we're at myrtle beach international airport. there are no more flights in or out so you think i'll get a rental car and drive out of dodge. look at this the rental car facility at the airport is locked. and yet we continue to see passengers arrive at the airport, shocked to find their flights have been canceled and in fact we met one couple, carl that is from pittsburgh, first time they have flown in 35 years, they thought they were doing the right thing by moving their flight from saturday to today but didn't know spirit canceled all flights beginning last night they've come in and they throw their keys in the rental car lock box and knew they're out of options. >> we had no idea this flight was canceled. >> reporter: now what? >> i don't have a vehicle, nothing 1 open, i can't check in

anywhere whatever >> reporter: law enforcement gave them a lift to a local hotel where they snatched up one remaining room but gas stations are largely closed down, home depot's are closed anybody who has not stocked up on supplies has one last remaining option. >> it sounds like businesses are closing and they're taking the precautions. >> reporter: i've met residents that are saying they'll be safe but businesses have closed up. but people say this is different. i showed a waffle house on "squawk box. when waffle house boards up the one does and locks the doors you know this is a serious threat.

>> yeah, catastrophic threat as the forecasters are warning, contessa thank you. the exit of leslie moonves and the details leading to his departure, including how some on the board continued to defend the embattled ceo even after the allegations became public. it's quite a read. joining us now, the author, pulitzer prize winning "new york times" columnist jim stewart, thank you. >> thank you. >> this is produced by cbs drama. so it answers the question -- it answers 34 questions but one is what took so long? maybe you can walk us throw what happened since this ronan pharaoh piece first dropped? >> i've been a reporter for many years and my jaw doesn't drop

that often but a couple times my jaw was on the floor but what took so long? from the beginning you see from the coats i got that there were some members of the board. we have a former defense secretary saying we won't leave this meeting until after midnight if that is what it takes to get a statement of 100% support for les moonves. this was after the "new yorker" detailed multiple allegations. another director says i don't care if 30 more women come forward, i don't care, that won't change my view so they were locked down solidly behind him how six weeks later did they fire him well, you know, to put in the a nutshell, this isn't the legal sense of this word but in layman's terms, he was being blackmailed by one of the alleged victims, he was looking for as job in cbs for her. obviously to keep her quiet. he never told the board about this, he was at risk

if he was at risk, the company was at risk. he didn't tell anyone and when the outside lawyers they hired to investigate found this out and told the board even the most die-hard supporters were stunned and agreed he had to go. another shocker 1 a day or two before the announcement they were still going to pay him $90 million to go away and it was only when it's being clear that more will become public they that they said you can't have anything. >> david is with us. >> your reporting helped me understand something i had an endue enduring question about which was when the board made decision to support moonings have granted it was before the "new yorker" article but there were plenty of rumors for anybody to

have heard if you were the least bit interested in terms of the possibility of that and to go to war in that way when there was -- first of all, moonves had to know and if you were a board member awake and alive you had to know that this is a real threat to him and to the compan company. >> i think you used the right word, which is blind i am confident none of the directors other than moonves himself knew how serious the situation was the new yorker was pushing ahead with the article, that he was vulnerable and in danger from the me too movement. i do not believe they knew that. they heard the rumors and hired an outside lawyer, he denied it. he claims someone had gone to the l.a. police but none of that was conveyed to the board. they love this guy

they had known him for in some cases decades. they were at dinners with him. he was a gentleman everybody except his victims thought he was a great guy and they closed they'res and eyes to everything flying out there. and some told me his willingness to do this proved he had nothing to hide. why would you do this if you had skeletons in your closet so an enduring mystery is what the lawyer did know, what he did say, who he was telling, who he was protecting there are some major questions that lawyer will have to answer. >> so there's more there >> there's still more but i'm confident the board members did not know should they have been more course they did look into it. i can't fault them on that and they trusted him and they -- and

that's one reason why i think when the truth came out belatedly and moonves should have told them from the get-go and i'm sure if he had to do it over again he would have but they didn't know and that's why it was all the more shocking can you imagine how those directors felt when they heard not only that somebody -- i mean the problem with paying somebody off is, a, you're conceding there's merit to the charge and, b, you're then try to hide it and, c, you don't tell about it, you cover it up. that compounds it. that's an unforgivable conduct in a ceo. >> some interesting parallel which is we'll talk about next time i guess between tesla board, cbs board which you have been writing about jim stewart, thank you another good one must read in the "new york times" today. let's head over to scott wapner joining us from carnegie mellon in pittsburgh with a look at what's coming up on a special edition of "the half."

>> thanks so much. we have a very special program today. we'll be live from here inside the brand new tepper quad. david tepper quad, that is, that's the home of his business school, his namesake business school it's really a brand new sparkling center of campus here at carnegie mellon university. $200 million more than 300,000 square feet. what is now the largest building on this campus, the center of campus in what the school and i think mr. tepper both hope is even more than that. a bridge to the business community, to entrepreneurs in the pittsburgh areas we'll spend a lot of time with david tepper remember, it was the call he made back in 2010 where we call the tepper rally because the s&p 500 is up more than 160% since

david tepper came on cnbc and said the fed was likely going to get involved and that in his words everything was going to go up which as we all know it mostly has over the last eight years or so. we'll talk to him about that and we'll talk to him about football adds well. that record purchase of the carolina panthers. nfl ownership, the anthem controversy, all of that as well, we'll see you at noon. looking forward to spending that extended time with david tepper today. >> looking forward to it goods to see you in pittsburgh scott wapner coming up. coming up, an interview you won't want to miss verizon's new ceo hans vestberg joining david from the communacopia conference. quk t see wl be right back dove's gains have been cut in half, still up 90% don't go away. today.

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welcome back to street -- sidewa "squawk on the street. we had two banks meet. any observations >> i think this went along schedule bank of england didn't do anything ecb didn't change rates but are reducing asset purchases widely expected as they moved into -- trying to move more to normalization phase. >> i got you mr. carney has to deal with brexit issues as we move to 2019 my big question is i think divergence is a big issue for 2018 do you think the fact the two central banks and bank of japan

are behind on normalization compared to the u.s. that it will underscore more divergence of our economies >> i think it will i think the fed is getting near a tipping point. at this point the fed is removing excess accommodation, not tightening going into 2019, there will be 2.5% i would expect. and that would be a significant divergence this starts problem with asset classes when you look at fx and fx hedging nondollar investors to invest in the u.s., the fx hedging cost could take 3% from potential returns, that's pretty significant. i think the fed needs to be careful, probably think about using the balance sheet for accommodation as opposed to hiking rates forever >> jim, i'm in complete agreement with you some of the older fed people that i talk to, whether

mr. olson, mark olson or bob heller, they believe the same thing. they believe the balance sheet needs to be tinkered with when we reach a certain level of rates. certainly seems as though there's no indication the fed wants to challenge its moderate runoff long term strategy. your final thoughts. >> the tipping point for them might be when yield curve inverts. i think it sends a signal to the market, might be weaker than the past, but then restore premium by tinkering with the balance sheet, as you say. >> excellent thank you for your thoughts, jim. always fascinating with a day with central banking activity. >> a trio of central banks. let's send it to jon fortt with what's next on "squawk alley. good morning, jon. >> good morning. ten years after lehman's

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welcome back to "squawk on the street." markets off the highs of the session, we are seeing consumer

staples as a stand out today technology is leading the way higher couple of examples of the consumer staples trade today kroger by far, one of the worst performers after the super market giant reported earnings better than expected, same store sales below estimates there. two other stocks to watch, guys, the tobacco ones, philip morris. yesterday, the fda targeting e cigarette makers that popped tobacco stocks to the up side from a competitive standpoint, they're giving back big gains from yesterday carl, kroger and tobacco stocks, three of the ones to watch in today's trade. it is 8:00 a.m. at apple headquarters in cupertino, 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪

good thursday morning. welcome to "squawk alley." i am carl quintanilla with morgan brennan and jon fortt the big story of the day, apple shares up 2% after yesterday's product launch investors wonder about the new iphone and watch will we see a slowing of replacement cycle. joining us, david wolf, apple shareholder, and ceo and editor in chief henry blodget we'll talk about the phone in a second the question is whether the watch was the most impressive part. >> seems like they'r