doctor made it clear that it's a tech company that it has a portfolio of ip and i thought that was interest, too. it's tech that's driving this. >> very interesting stuff. >> all right thank you for watching "power lunch." >> "closing bell" will be begin in about six seconds if not before that. we'll see you tomorrow >> it's time for "closing bell." i'm wilfred frost at the new york stock exchange. hot stocks flying high once again but we've got at cannabis investor who says they are due for a correction he'll explain why. >> i'm seema mody inny in person, north carolina president trump touring the devastation accused by hurricane florence as crews and residents begin the massive cleanup and recovery effort. the latest on the ground coming up. >> i'm aditi roy in san francisco. just weeks after cross the $1 trillion mark, amazon has hit another milestone, and it all has to do with its advertising business the news that could leave facebook and google execs looking over their shoulder.

>> and i'm morgan brennan in for kelly evans. jeff bezos life. the amazon ceo and blue origin founder will be giving the keynote at an air force conferenceches we'll take you there as soon as it begins "closing bell" against right now. ♪ rocket man >> good after, and a very good afternoon, everyone with elton john in the background. >> yes, appropriate music. >> appropriate music. >> he's always appropriate in my eyes. >> i agree. >> particularly today, the song and good afternoon and welcome to "closing bell." welcome to morgan brennan as well great to have you back with us particularly ahead of those comments that we're expecting from jeff bezos. we're going to touch on that more coming from that event and all the other stories. first a check on the markets and where we are with an hour left of trade the dow up 0.6%, s&p up 0.1 and the nasdaq is lagging down 0.2%. kind of been that story this week as well the nasdaq lagging, and the dow outperforming.

>> that's right. we've got the dow up for its sixth time in seven sessions, touching the highest level since late january the s&p is up for its seventh time in eight sessions, but let's begin today with troy and ylan mui joins us now. >> reporter: canada's foreign minister christina free lapd told reporters that today's nafta talks have been constructive and more work needs to be done. >> we're a country that's good at finding compromises, and that's a talent or something that our negotiators demonstrate. at the same time, our core objective today and this has been the case from the very beginning, is to defend the national interest, and that is what we are going to continue to do >> reporter: negotiators are facing a deadline of october 1st to produce the written text of a

formal deal. up clear if they will have enough time to pull that together if they don't reach an agreement in principle by the end of this week, the deadline is designed to give congress enough time to review the deal and lawmakers are getting antsy. congress must vote to accept any trade agreement and gop congressman steve ask a lease, a membership of republican leadership, said we'll not short circuit the open, transparent and accountable process. guys, free lapd's response to this pressure from capitol hill is i'm paid in canadian dollars. back over to you >> ylan, fascinating latest comments what's the level of pressure back in canada at the moment on her and on the trudeau administration to make a deal? >> reporter: well, trudeau has said that no deal is better than a bad deal for canada, but he's starting to feel some political pressure here to come to some sort of agreement because business groups are really worried about what had a no nota economic environment might look like, and also remember that

canada's legislature also has to approve any agreement, so no matter what the negotiators come to decide, legislatures and politicians in all three countries will have the final say on whether this goes forward. >> ylan, thanks very much. good to have with us as always. president trump touring some of the hardest hit areas from hurricane florence today eamon javers is at the nation's capital with the latest on his trip. >> reporter: the president has seen some of the real extensive damage in the carolinas over the past couple of hours he's been touring north and south carolina he started the day at a marine air station. there you see some of the folks who have been traveling with him and meeting with some of the people in the neighborhoods that have been hard hit he was offering some hugs to some people, handshakes, some words of condolence, wordsch o encouragement and the president laying out what he saw her in congratulations to first responders here's what he said. >> half was one of the most

powerful storms ever to hit the carolina, one of the most powerful and devastating storms ever to hit our country. to the families who have lost loved ones, america grieves with you, and our hearts break for you. god bless you. we will never forgot your loss we will never leave your side. >> reporter: the president pulling aside one couple at a devastated home, and he said we're with you we're with you, and we're going to stay with you so that's the message from the president today reminding people in the carolinas that the federal government has their back in essence and is going to be with them throughout this recovery process which could be long indeed. >> eamon, thanks very much for that just wanted to get a quick comment in on tilray as folks on "power lunch" mentioned it was suspended because of volatility. it's now trading again, as you can see. 265 bucks a share. briefly earlier today it was above 300 which represented,

morgan, 1,600% up from its ipo in mid-july. it's still up sharply today but has pared some back of the games above 300 briefly. 266 back trading once again. we'll be talking about them in more detail later in the show including an owner of cannabis stocks who feels it's a little bit overbought and let's broaden things back out to the trade fairs. the markets have hit their highest level since january. joining to discuss this today our guests and rick santelli at the cme in chicago oliver, if i start with you, is it kind of encouraging to see the markets picking up again when we've had all the negative trade news over the last week or so >> it's encouraging and sentiment, consumer sentiment which continues to be at an all-time high.

business sentiment is at an all-time high, and as a result the markets are ignoring the downside risk of a potential trade war. there's three plausible outlooks, things deteriorate and impact the economic performance which would be bad, things kind of teeter along and nothing really happens and economic performance is strong enough to offset impact of trade, or reason wins out and economic performance is strong and the trade war ends two out of three scenarios are fairly positive for stocks, and i think that's what the market is reflecting right now. >> going to mention that tilray suspended again having started trading briefly. once again suspended and still, up, of course, sharply huge volatility in this number today. the ceo was on "mad money" last night driving a lot of interest in the stock today as indeed the appearance on "closing bell" did a couple months ago. dan, back to the trade discussions. interesting notes, you say interesting that people are talking so much about it meaning it's priced in already.

>> yeah. i think up thing that's been very prevalent throughout this entire cycle is whatever the worry du jour is people are laser focused on the risk and concerned that we'll return back to the 2008 scenario that's ongoing and very pervasive. i think when it comes to trade, everybody is very focused on what the downside impact of the tariffs are and there's a real cost, but there's very little focus on the positive offsets. if you think about it from a china perspective, you know, the actual number that you're talking about is less than half a percent of gdp and that's the absolute number. if you factor in the yuan has divided its currency by 8%, 9% since the peak, you're really taking away and cutting a big chunk of the negative impact on the economy. the other part is we're really talking about 20% of the chinese export market. the other 80% is not impacted by tavaras and chinese currency devalued relative to the other 80% as well. the other elephant in the room is china has just started town leash a massive amount of

stimulus which has legs but is likely to start to impact the economy. i don't want to be dismissive of the negative impacts of the tariffs, by think people are forgetting there's positive offsets. >> rick santelli, in addition to the latest in terms of trade headlines we've got our eyes on the fed. you've got the ten-year yields back above 3% today. a fed decision next week how closely are you watching that >> you know, to me the fed should be a positive force the fed needs to follow the economy, the strength in the economy. it needs to follow the strength in the jobs market it needs to follow the strength in the stock indices, and it needs to raise rates the issue is will j. powell and company know that magic point to slow down or stop, and nobody knows the answer to that, but i would say this, that we've had 50 basis points of tightening for 2018 25 more are on the way we've up 66 basis points on 10s for the year and 48 basis points for 30s. i think that really puts a

better face on it. obviously, we've had curve flattening obviously the maturities are going to try to make room to fit in the tightening coming and maybe the one in december, and how exactly the yield curve moves to allow the fed to insert those increases should be something that j. powell and company pay very close attention to >> and, oliver, if trade isn't necessarily that big of a risk to the market or at least u.s. market right now in terms of scaling this wall of worry, where would you put the fed in that occasion? >> pretty low. i mean, i think the fed has done a very good job at telegraphing. we know they will raise next week it's very likely that they will raise again in december, and they have kind of telegraphed a two to three interest rate move for 2019 which still puts us somewhat below historical averages for fed fund rates so as long as the economy continues to grow nicely and unemployment stays low that's real goal the canary in the coal mine would be a jump in yields or a compression in high yield

spreads versus treasuries or a sharp pickup in volatility at the end of the day, with the exception of late january, early february this year, we've had virtually no volatility in markets, and that's something to keep in mind and that's something that's keeping investor sentiment very high. >> dan, just wanted to ask about the kind of performance we've seeing amongst the big indices years to date nasdaq up 17% and s&p up 8%, we're seeing a change in direction what happens by the end of the year do you think the gap between the two indices will have widened again or narrowed? >> it's likely to see that gap narrow a bit both nazdaq and the s&p 500 look pretty positive to us for the end of the year. i think the way you want to think about it is you want to position in cyclical sectors, in particular late cyclical, late cycle type of cyclical sectors that benefit from not only improving growth but improving nominal growth i think that's the one thing that really investors are not focused on is the fact that inflation is real picking up, and it's showing up in the

ten-year and showing up in the fed commentary, and that's the real worry, right, because you're talking about the fed going to derail growth or derail the markets? you know, the one thing that's offsetting the fed right now is banks. people need to be looking at what the banks are doing because although the fed is tightening, banks are actually easing lending standards right now and that's the sort of positive offset when that starts to reverse and the ned is tightening, that's a lot more concerning, but i think the bigger risk out there for financial markets in general is generally a risk to the fixed income markets and not the equity markets it's shocking you've had 30 consecutive flows and you have this elephant in the room kind of worry out there. >> definitely going to be one to watch. gentlemen, thank you for joining us coming up on "closing bell," amazon's jeff bezos getting ready to stake the tage at the air force's air, space and cyber conference and the latest

details on president trump's space force. >> and up next, marijuana stocks seeing another big jump today with cannabis tilray leading the pack, halting twice and now reopened again tilray and other pot names, are they get to go high too fast for the average investor that's coming up after the break. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

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welcome back to the "closing bell. here's a look at the air force association air, space and cyber conference outside of washington, d.c. where blue origin founder jeff bezos will be taking the stage to give a keynote address. it will be a discussion later this hour. we're going to bring you there live when it begins. >> we certainly will. >> don't get to hear from him very often. shares of tilray have resumed trading after being halted twice for volatility. the pot stock was on pace for its best day ever since its ipo in july. trading was first halted when the stock slipped from a 90% intraday gain to a 70% intraday climb. as you can see today alone, it's up 62% it's at 250 bucks of the high of the day was at 300 bucks the ceo brendan kennedy was on

"mad money" last night talking about his company's capital needs. >> you've got far less cash than canopy and they have 5 billion isn't this the time to strike and raise capital, which, by the way, there would be nothing wrong if you said yes, obviously we need more capital. >> we obviously need more capital, yes, which we said in our prospectus the intent is to build a global company. we're in 12 countries today on five continents. it's very clear that we'll add additional countries in the coming years so that requires us to increase our capacity substantially as we introduce products such as these and other products around the world. >> joining us now is a manager of a global cannabis portfolio thanks for joining us. >> thanks for having me. >> you're invested in marijuana stocks >> we are. >> what do you think of a name

like tilray when you say it up 70% after halting several times today? >> we think it's a little silly. cannabis with a great global theme where people end up voting with their dollars and just buying stocks because they are cannabis related valuations have gotten ahead of themselves and retail investors are buying air here a little bit. >> you launched a cannabis-focused investment firm in 2014. >> in 2017. >> okay. 2017, either way, you've got ahad of some of the moves so performance over the last year or two were pretty strong. >> we were very good, as of last august we were up 46. >> as we were discussing in the break, you've been short tilray already so talk us through when you placed that trade and i guess you've been squeezed a little bit on the move today and stuff. >> yeah. we were short right after the ipo because we actually felt that tilray in our opinion is one of the weaker stocks relative to the kind of -- over

$1 billion market caps in canada after the ipo popped actually played it because at $17 it was a good value but at 30 we short it had down to 20 and now with the euphoria that's taking place post-constellation you're seeing a retail dynamic monstrosity taking place in all of the nasdaq-listed stocks and last week we bought a punch of puts. >> one of the reasons the stocks have taken off is the prospect of being taken out, whether it's by a tobacco company or a drinks company of some form, alcohol company. do you believe in that idea, and do you think though that the valuations have made those types of takesovers less likely? >> i think absolutely you'll get alcohol, tobacco, pharma involved in the sector however, you have to decide what they are doing cpg companies are selling end products canadians are sell you an active ingredient and in that world there's no brands right now in canada there's a bit of a medical brand

which is why which like cantrust because they have such a dominant position but if you think about rec and day one of rec in caad is october 17, all that is out there is flour and low concentrate oil. there's no branding so the idea that someone will pay 5 billion, 10 billion, 0 billion is silly there's much better assets and i pye outside of canada and in the u.s. and trillion, et cetera you're spending a lot for air. constellation was a different position because it they had a multi-billion win on paper when they actually doubled down. >> interesting to hear you say that because so many stocks that are pubically traded are canadian and you hear so much from different investors that maybe perhaps the u.s. s behind the ball in terms of growing out its own cannabis industry, but it sounds like you have your eye on certain companies here. >> the u.s. it is extremely interesting. california is the most competitive and biggest marijuana marks in the world and we think the brands that emanate from california will be the most dominant in europe there's literally a

wall of cali weed so we think brands will emanate from the u.s. and distribution could eventually emanate from canada but at these prices you're not getting much bang for your buck. >> you're long short across this space, soat the moment when yo think about the sector as a whole are you net short or long? is the sector as a whole overvalued >> the sector as a whole, too hard to say. we think canada is overvalued. u.s. is great opportunity, multi-state operators and the brands, they offer tremendous value and likewise as new countries come online, israel, there's some that make a tremendous amount of sense but you're buying effectively a commodity producer which is what canada is today for 10 billion plus just doesn't make a lot of sense. >> want to go back to one of the points you made in the middle saying there's a lack of branding in terms of people's minds in canada. maybe that's not the case here if a coca-cola or a diageo or whoever bought one of these companies, whether they have a

brand behind them or not, do you think they would lend their own brand name from drinks products or alcohol products to it and that that could make it a tilray valuable without its brand yet >> they could lend their name absolutely, but why do you need to spend 5 billion, 10 billion or 20 billion for that all you need is the licensing and manufacturing and raw ingredients. not a tremendous amount of r & d with the exception of canopy and can-trust that operates up there versus the plethora of $100 million or less companies out in california. >> thanks for joining us that was fascinating tilray has been halted again, as we said. we've got a market flash on amazon courtney has the details. >> a number of retail names moving lower gug walmart, cvs and kroger on a headline that amazon is planning to open up to 3,000 cashierless stores by 2021

currently we know there are four, three in seattle the fourth just opened in chicago. so, again, a number of retail names moving lower on a report that amazon is set to open 3,000 of its cashierless stores by the year 2021. back over to you. >> court, just remind us, i think you said there were four already. >> yeah. >> what are those four focused on at things stand still kind of mainly food-related in terms of the cashierless stores. >> think convenience stores, a mix between what you might find in a grab and go section of a drug store or a quick supermarket. that's what they have been focused on so far. the first three in seattle, of course, amazon's home base, and then the fourth was just opened in chicago, so the first one outside of seattle >> okey-doke thanks very much for that. courtney, of course, morgan seeing amazon stock down today, but it was down already so i'm not sure how much reacted to that story but fascinating nonetheless. still to come, goldman sachs

one of the worst performing dow stocks this year and banks are lining up to invest in one of its products details coming up. later, someone taking a page from nintendo's playbook with its latest hardware announcement we'll take about playstation's move to tap into player nostalgia. stay with us

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with 23 minutes before the bell, the dow is higher up triple digits. 174 points, though off the highs of the day the s&p is also up 4 points but the nasdaq is a lagard in negative territory right now coming up, watch out, facebook and google a new report says amazon is making serious inroads in the digital ad business. we'll tell you which two major companies amazon has already leapfrogged. that's next, >> and later we'll head to new bern, north carolina, where more than 2,000 homes and businesses were damaged or destroyed by florence a look at how the residents and crews are undertaking the costly process of cleaning up we're back in a couple of minutes. you know, i used to be good at this. then you turn 40 and everything goes.

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what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future. welcome back here's a look at the air force association air, space and cyber conference where amazon founder and ceo jeff bezos will be taking the stage for a keynote

discussion he'll be talking about stage, defense, likely much more. we'll bring you there live when it begins. meantime, taking a look at the markets. the s&p is higher. it's about four points higher. in terms of what's working and what's leading today financial, materials and energy. in terms of the laggards the more defensive sectors. >> the ten-year pushing up to 3.1. that's benefited the financial having their best day for two months the banks in particular up over 2% for the kpw banks index and that move up in rates is hurting utilities in the opposite direction. time now for a cnbc news update and sue herera has it for us. >> i do. here's what's happening at this hour the shooter who targeted a commercial build in wisconsin has died according to the local chief of police. three victims were shot by the attacker but none fatally. they are being treated at a university hospital. the editor of "the new york review of books" ian barouma has

left the company following the publication of an essay who spoke of sexual assaults rahm emanuel telling cnbc that he thinks president trump may order military action in venezuela. the current mayor of chicago believes the president may do so in order to distract from legal problems and secure a political victory. and finally the pop band maroon 5 is going to perform during the 2019 super bowl halftime show. that's according to "variety." super bowl airs february 3rd, 2019, at the mercedes-benz stadium in atlanta that should be a great show. >> it should be, but are they as big an artist as some of the people we've seen in recent years? >> absolutely. they spent time on "the voice. >> they have been together for a long time so they are really a tight band as well and have a huge following so that will help the ratings.

>> i like them, but i didn't think they were a taylor or a rihanna or beyonce. >> right. >> that caliber. sue, thank you very much. >> you got it. >> see you next hour. amazon is now the third largest digital ad platform in the u.s. closing in on facebook and google aditi roy has the details. aditi? >> reporter: hi, morgan. amazon ranking third behind facebook and google. e-marketers are forecasting amazon will generate $4.6 billion in u.s. ad. >> referee: knew in 2018 giving the company more than a 4% share of the market. that's still pretty small compared to google which has a 37% share and facebook which owns 20% of digital ad space, but the move is notable. the google facebook duopoly is lose its dominance slipping a couple of percent.

the e-commerce giant is basically signature on a gold mine of data on consumer purchases behavior amon is reportedly looking at new ways to bring in ad dollars, and the next wave may come from voice. alexa devices are already disrupting search which is a core source of revenue for google's ad product and amazon is announcing it's testing on a shopping site which recommends products to consumers based on their likes and it is likes which could help with more targeted ads from consumers. >> back to you guys. >> you mentioned a duopoly slipping a little bit there, but their lead is still unbelievable, and i guess that that those the opportunity amazon has if they are still down in the 4% and the data that they have, they should be able to close the gap very quickly it's a question of whether that's the right tactic, whether paid subscribers want to see more adverts. >> reporter: 40% compared to the

27% that the two other companies have, that's pretty formidable the lead but even a couple percentage points does make a big difference martin sorel has been talking about that for a couple of months how amazon has a built-in advantage. they are really sitting on such a treasure trove they know what you're buying and know your likes and it is likes and they could leverage that information off for advertisers, just really important information on consumers likes and it is likes. >> another story relating to amazon the eu looking into possible antitrust violations what's the latest on that story. >> the eu competition commissioner started to question merchant about amazon's use of their data she says the issue hinges on amazon's dual roles and they are looking into whether it uses the data it hosts on its sites and uses the data in selling the

products against the same retailers. >> they are both hosts and do the are merchant business themselves, and the question here is about the data because if you as amazon get the data from the smaller merchants that you host, which can be, of course, completely legitimate because you can improve your service to these smaller merchants, well, do you then also use the data to do your owner calculations >> reporter: she adds they are in the very early days of the investigation and gathering issues and sending out questions. meantime, amazon has come up as a potential target for antitrust scrutiny other in the u.s. and u.s. attorney general jeff sessions was set to meet with state officials to talk about antitrust issues in silicon valley guys, back to you. >> aditi, thank you very much for that, a busy day for amazon in terms of the news flow with courtney regan's story as well on the topic of the final

question, next week on "closing bell" we'll talk more with the eu commissioner for competition. she will join us thursday at 4:00 p.m. eastern time that's next thursday here on "closing bell. >> check our shares of tilray. briefly reopened moments ago before being halted again. i think that's the fourth time now. i'm losing count. >> starting to lose count, too. >> it's been halted. it's lost a lot of ground in the past few minutes it had been up as much as 94% at session highs today. it was $300 per share. as you can see, it's now only up 8% on the day, and it's at $168, so it has really soared. almost doubled on the back and pared back to almost flat on the day so pretty extraordinary volatility, and the stock paused for the fourth time now. >> absolutely. well, still to come, jeff bezos will take the stage at the air force association air, space and cyber conference we'll bring you there live that's coming up (guard) i've seen things i shouldn't have.

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conference morgan, you've been monitoring this event throughout the day. what kind of things can we expect >> we'll have to see when he takes the stage, and i think what we can expect for the founder of amazon to discuss the other company blue origin when he sits down with a fireside general with retired general larry spencer, the air force association president and ceo, bezos has called blue origin the most important work he's doing, and it's worth noting he's had a vision for space travel and colonization since high school when he delivered his valedictorian speech on this very topic in terms what have we could see, we'll see. plus origin has been very busy, the company historically secretive, has been stepping into the heim light increasingly lately it's got a number of projects under way for super sub orbital space for tourists to the edge of space and rockets that would carry payloads into space. two other companies like united launch alliance, the key takeaway here, space is taking

on an increasingly important role in the defense department you've got the creation of the space force as a potential sixth branch of the military just last hour we spoke to the defense secretary patrick shanahan who discussed the importance of space not only to the military and the broad u.s. economy and nearer term you've got the air force fielding a number of potential contracts right now, including a next generation rocket which i think blue origin would love to have its name in the ringor >> a fascinating topic, and let's listen in. >> thank you i'm really delighted to be here. >> so, i have a wife that spends a lot of money [ laughter ] and i live in the d.c. area, and i could be looking for a job soon so any announcements you want to make about your headquarters

>> thank you, larry. we'll make a decision before the end of the year. that's all i can say on that topic. excited to have that topic, and i hope your wife is spending some that have money on amazon. >> absolutely, absolutely. >> good. >> one of the reasons we're happy to have you is you're right in the wheelhouse of everything that's been going on here the last few days, especially as we talk about inowe varks and i think if anyone epitomizes innovation it's you and your companies. so a lot of things, a lot of questions that have come up the last few days is how do you encourage employees to be innovative you know, there's -- we've talked a lot about the frozen middle hand how the floeks have ideas and how they can't get them through a lot of folks worry about the risk and what happens when you make the mistakes. how do you encourage your employees to be innovative

>> well, this is a fantastic and important question to be innovative you have to experiment if you want to have more invention, you need to do more experiments per week, per month, per year, per decade it's that simple you cannot invent without experimenting, and here's the other thing about experiments. lots of them fail. if you know it's going to work in advance, it is not an experiment and what happens in big organizations, amazon is a big organization now, too. the air force is a big organization, is that we start to confuse experimentation with operational excellence so, you know, operational excellence is one of our four key principles at amazon. we're building a fulfillment center

we've built over 150 large fulfillment centers around the world now. we know now do that. that's not an experiment if we build the 151st fulfillment center and screw it up, that's just a failure. that's not the kind of failure we're seeking. we want failures where we're trying to do something new, untested, never proven, that's a real experiment, and they come in all scale sizes so you need to teach people that those two kinds of failure are different, and you need to have -- you said something about the hard middle where ideas don't go up. >> sure. >> i think this is such an important thing. at amazon one of the things we try to do is have multiple paths to yes, and so here's a little thought experiment for you if you are a junior executive at amazon, and if amazon did this in the typical kind of corporate hierarchy way, you had an idea

you need to get your boss to green light that idea, and then your boss' boss needs to green light that idea, and then your boss' boss' boss needs to green light that idea. there are probably five levels or more before that idea gets the go-ahead assume instead that you're an entrepreneur with a startup company idea, and you need venture capital. you go to sand hill road and you go to the first venture capitalist and they tell you no. you go to the second one, and they tell you no maybe your 20th one tells you yes. you've got 19 nos and one yes, and you're still good to go. so that -- that venture capital model is -- there's multiple paths to yes there were 20 people who could give you a yes and it didn't matter how many give you a no, so if you want innovative thinking you have to think about how can we get -- you want a

large number of high judgment people empowered to green light things you want multiple paths to yes you want a system where as a junior air force officer with a good idea the first five people tell me no and somehow i can still go pursue that idea. that's an organizational challenge that big organizations have to figure out a way to do by the way, i get -- you know, this happens all the time. i'll say i don't think that's a good idea, but somebody else will green light it, and i'm fine with that, because usually the cost of the experiments is pretty small things will get expensive when they work. once something works, you're like, whoa, we need to double down on that, and then the spending can get heavy and those become big, consequential decisions and that's where the hierarchy and using the judgment most senior people really helps. >> sure you. >> also have to select people who like to invent that's the other -- when you're

hiring and you're in a promotions process, you need to say does this person like to be innovative and have a bit of a pioneering spirit and maybe they are also a little bit annoying because they might be, you know, a little bit radical or a bit of ash you know, they are not always the easiest people to get along with, but you want them in your organization. they may be mavericks. >> let me follow up on that. >> they are a spice. i wouldn't recommend having 90% mavericks. >> let me follow up on that because what i found, at least in my military career, is that oftentimes mavericks, as you mentioned, are not welcomed. >> yes. >> and one of the phrases i really didn't like when i came up as i was in the air force, you know, if it ain't broke, don't fix it. >> right. >> that doesn't mean you shouldn't make it better >> by the way, your adversaries may be making it better. >> exactly, exactly. so how do you handle the mavericks? how do you protect them from the

institutions that are destroying them >> i think that has to be culture and teach the value that people bring push hard on the mavericks saying you also have to be organized. you can't just be a crazy person it's fine to be a maverick but write your ideas down. >> true. >> sell your ideas and persuade. create the conditions where the ideas can blossom. you can't get anything done if you're not, you know -- if you're just purely a creative person with zero organizational skills you're probably not going to get much done. >> sure. >> so i would push back on the organization and say, look, these poem have an important role to play by the way, all of us are a little bit maverick so this is not -- it's not like there were people that were born mavericks. if you look at kid, all inventive and doing crazy things i actually saw one of my kids one time put a square peg in a round hole and as he was doing it that's never going to work

and then it fit, and i'm like, gosh, that's amazing, and so little kids try things and we all doll that when we're little and some of us lose it one of the great paradoxes of inventing at a high level is that you need to be expert in your domain area and you need to have a beginner's mind about you absolutely need both of those things. the world is just too complex to be just a beginner no matter how inventive i am, i can't go and invent a new kind of brain surgery you have to be a neurosurgeon. you have to already know all there is to know about brain surgery and then take it to the next level the problem is for many people, by the time they become true experts, they have lost that ability to see things in a fresh way. they have lost the beginner's mind, and that's another thing you need always step back and say if i'm

an expert, i'm an expert in launch vehicles or whatever it is i need to step back and say, okay, if i were looking at this for the first time, what would i be seeing and noticeing? some of the things you need to to to be innovator >> for roughly 80% of my career in the air norse, we would launch satellites and not think twice about it space was considered a sanctuary. obviously that changed so what do you see as the biggest challenges or risk in operating into the space domain? well, let's start with the fundamental principle. you never want a fair fight. that's for a boxing ring outside of a boxing ring, a fair fight is just bad strategy and

it means you didn't prepare properly and as you pointed out this nation has enjoyed incredible space dominance for so long, and it's changing because other -- other sorts of our potential adversaries are getting very sophisticated, and so how -- what for me, or if i were in your shoes, the way i would think about this is in this new era, how are we going to maintain space dominance? what does it really mean and you're really going to need some fundamental capabilities? >> you have to be able to go to space more frequently with less lead time. if you said -- layer, if you said, jeff, i have a mission for you. i need you to control this piece of terrain over here, but there

are some constraints need you to control that piece of terrain but you can only visit it once a month with a lead time of two years, i've just been given an impossible mission. by the way, when you translate that to says i'm being very generous with the once a month and two-year lead time reality is worse than that, so it's not surprising that it's difficult to do that up of blue origin's missions is to make access to space more frequent, ready to go, on a moment's notice, low cost, usability, all of those things will be required in moy view to move into a new era of u.s. space dominance, and believe me. i don't have to tell you guys. do you not want to see that era end. that's a big deal.

>> sure. now we have a a lot of industry people here in the audience, the largest numbers we've had somebody attend afa so what are someves things you're partnering with the commercial injury >> you have got to -- this is a really important general point it's so important for the dod, for the air force, for every government institution when they can to use commercial solutions, and what i find is that when the requirements get written they are not written necessarily taking that into account in all cases, and so you get something -- you end up getting a custom built system which meets the requirements when a commercial system would have met

those requirements or actually made a different set of requirements but in a much better way for the capability already being acquired, and that's a big problem it's very costly and slows you down you want to reserve your customer requirements for things that you really need special sauce, something where there really isn't and shouldn't be a commercial avenue. you know, on writing requirements, i tell our engineers at blue origin, good engineers build to requirements. great engineers push back on requirements and that's what you need to do you need to say, is this requirement really needed because if we can waive this requirement, then we can use this commercial system, and if you look at the -- i'll give an example from my own world which is amazon web services, we're now seeing fantastic growth from both companies and government institutions and the cia and the

dod using our amazon -- using our compute cloud instead of building their own sis tells, and the reason these companies are doing that and sort of building their own data institutions and so on because the capability they get -- there are several reasons but one of them is that the capability that they get keep kind of improving auto magically without any effort, and part of what's going on there is in a system like that you want co-customers because the co-customers drive the product forward. if you're the only customer of a software system. you're the only one driving it forward. if thousands of customers share that system, then the other 999 that are not you are also driving that forward and you get that as a tailwind. >> is it the analogy i'll give you is that of a physician.

>> the last thing you want is a personal physician who only services you. >> right. >> because that person that -- that are should they be available, you know, they would show up and do house calls, they would be there any time, but they wouldn't be -- you want a doctor who is seeing hundreds of sick people so that when you have a people that doctor has a bunch of data points how could a personal private physician ever diagnose something? it so challenging you? don't want a private doctor. you want a doctor -- you want a bunch of co-patients because those patients are teaching that doctor every day, and that's what happens if you can use a commercial system. you have -- you effectively have a doctor who has lots of patients teaching. >> right. >> one of the great things about this session is i see a lot of folks taking notes so let's get specific with the air force. how would you recommend

fostering innovations specifically with an innovation like the air force and with velocity >> oh, okay. i could talk about this a long time i'm going to give you the short version of this. velocity is so important, and in large organizations it is about decision-making, and -- and one of the problems -- let me back up just one more piece what you really want is scale and nimbleness. >> right. >> so if you take the u.s. air force, one way to make it nimbler would be to make it much smaller but that's a bad solution because scale brings so many advantages. i see the same thing with amazon amazon because of our scale we could do things that we couldn't have ever done as a garage startup. there are some things only big organizations can do

i love garage startups i was a garage startups, but you can't build a boeing 787 in your garage you need a big organization like boeing to do that. so we want scale we love scale and would you never trail the scale of the u.s. air force for anything. but the question becomes how do you keep the advantages of scale and still have the advantages of a nimble startup how do i get the nimbleness, too? i want to be able to absorb a punch because of my scale and i want to be able to dodge a punch because of my nimbleness at a 0 it-person startup company the decision-making speed is so quick and that's why they are so nimble, and then in a big company or in a big

organization like the air force, that decision making has a sendity to speed you get high quality decisions i think sometimes people think the decisions are low quality. i don't think so i think you usually get high quality decisions. you just get them slowly which is be a problem so the way to fix that in a large organization, this is what we do at amazon is we acknowledge that there are two types of decisions. there are decisions that are -- we call them two-way doors they are decisions where if you mick a decision, you walk through the door and it turns out that you made the wrong decision, you turn around, come back and the consequence of that misstep is small that's a type two decision, a two-way door decision. there's a type one decision where it's really hard to reverse. when you walk through that door, you have walked through that

door, and it's going to be expensive or impossible and time concerning to reverse that decision so you have to get that right. that's a high consequence decision those decisions should be made deliberately, carefully, slowly. at amazon i find myself on those -- i'm the chief slowdown officer. i slow those decisions down. no, i want to see this one more way. the teams working on it roll their eyes i've already seen it 18 ways and i've thought of a 19th way and i want to see it that's correct for a high consequence irreversible decision you owe it to your teammates to make those decisions the problem comes in, in large organizations, is that junior executives or i'll switch it to officers, junior officers role model senior officers, so they are looking around around watches, and it turns out

rightly senior officers are mostly making high consequence type one decisions that require a slow deliberate decision-making process and so then the junior officers are like well, then, that's should be how we'll make all the decisions. we'll make all the decisions with the heavyweight process and now even trivial decisions end up going through a lot of extra, unnecessary process to be made when really many of those decisions should be made by very small teams or by even single individuals with good judgment knowing full well that they could be reversed. and so -- and the standard in leadership can set the tone on this this decision, why are so many people involved in this decision i want jill to make this decision. >> whatever jill decides is fine, and guess what, jill, if you get it wrong, we'll just back up and do it again. i don't want you to talk to

anybody about it just go make it. >> so i've been -- >> well, that is amazon ceo and blue origin founder jeff bezos spaik speaking at the air force association's annual air, space and cyber conference in a keynote discussion there with the afa ceo and president retired general larry spencer covering quite a range of topics right off the bat getting asked the question about the decision for amazon's hq2 he said all he's going to say about that that the decision will happen before the end of the year also talking about, you know, amazon from a management and innovation standpoint, noting that amazon web services, that part of the reason for the success and the growth there is that the capabilities keep improving all the maltically and that they want co-customers. that is notable given the audience here at this conference, the defense and security audience and the fact that amazon is competing right now for a major pentagon cloud

comfort. also talking about the need for scale and that at amazon they are able to do many of the things that they do do because of the scale that wouldn't be possible as as garage startup and also talking a little bit about blue origin and how he sees the new era of space and u.s. dominance within if. >> and that need for sort of freedom of innovation that he feels he does now have and we'll continue to monitor that and bring you any of the key headlines and sound bites as he's expected to be on stage for another ten minutes or so much welcome to the "closing bell" again, everyone, and welcome to morgan again for kelly here's how we finished the day on wall street the bell went just four minutes ago. the dow up 0.6%, continuing its outperformance of the other indices this week. s&p just about flat. nasdaq just below flat russell down 0.5%. in terms of sector performance, utilities, telecos down and financials top of the pile interest rates rose today, therefore having the effect as it does on those sectors

banks performing very well indeed, their best day for over two months. joining us on the panel today we have cnbc senior markets commentator mike santoli and also rebecca patterson, managing director and chief executive officer at bessemer trust. welcome to both of you mike, i'll start with you. how would you characterize the action that we saw >> the the overall rally in the index lost a bit of steam throughout the day mostly it was an intense rotation and shift across the markets which actually shows relief that the trade war was priced in or this stapling of the escalation is easily be a sored because what we saw was the bond markets selling things higher it started in asia over night. some of the big reasoners got is, and domestic stocks losing on the small caps and, of

course, big-cap tech once again ended up slipping. in a way they were are a defensive trade, and i think that's losing a little bit of that altitude. it's hard to say if this is an enduring shift or if we're just seeing a little bit of a retracement of some of the stretch trades. >> really interesting move in some of the banks, mike. >> totally. >> the increase in yield justifies a decent day for banks and a significant bounce in a sector that's underperformed and individual names that have really underperformed. >> what has surprised me about this is that it took a very clear, obvious breakout of yields across the entire curve to have the bank stocks that almost everybody liked coming into the year and almost everybody said were cheap, and we were trying to explain why they were underperforming. yields seem to have to get to the next level, and then automatically the bank stocks got repriced by a group by 2%. hard to know if that's not just a reflex or if it's the start of something bigger maybe the bond market will determine if that's the kate or

not. >> what you do i about the sector per forceance do you think it's justified? >> i do, and i would echo what mike said on yields, but i would also add on we co-opt know how high they could go up. the i'm looking at the stimulus above the that should raise things at the margin but going into next year and the fed continues to tighten, will the long-term yields continue to rise further, or are they going to find themselves capped? so i -- i think the upside for yeeltsdsled yields as we head into 2019 -- yields as we head to 2019 is probably more limited. heading to mid-october and earnings season, that will tell us a lot more about how they are doing. >> rebecca, some of the other names that have rallied, not just today but yesterday as well, some of the large multi-nationals, names like caterpillar, boeing, 3-m how should we think about this i mean, they have tended to,

until this point, traded lower on trade headlines >> yeah. it's -- it is interesting to me, and i guess there has to be a bit of this trade war priced in which has helped -- this this bit of relief effort, a 10% tariff thoughnot a 25% tariff. we're still not out of the woods. right now it locks like we still have a step run in the tariffs at the beginning of next year. i can't tell whether this has legs or not. i fear going into the mid terms the trade "star wars" something that may be beneficial for the administration so the rhetoric may stay i don't know if we'll get a resolution that quick. >> mike, we talked about a bounceback in the areas that have underperformed. week to date the nasdaq is down nearly 1% and the dow up nearly 1% so that's clearly a reversal of the year-to-date trend. is that a moment in terms of

performance? do you think the gap can -- it's hard to say. >> if so we've had a lot of these head fakes where it seemed like the nasdaq 500 was going to actually start flagging and we would get a value of whether it's cyclical stocks it's hard to draw a scenario that says the final three months year the stuff that worked in the first nine months will even out. >> there's not enough market cap in the market to ease up and make it do that. microsoft led to the downside. no real news it was just the one that held up the best. >> right. >> so for now it does seem that they are crowded names and that they have to come off a little bit more perhaps, but i don't think it's an enduring shift. >> data has individual stock stories and tirlia and the broader pot sector as well tilray ended up finishing higher

by 38%, but even that was well off the session highs which was $300 per share at that point the stock was up around 90% on the day. the stock was halted and reopening five separate times this afternoon it ended the day, as we said up 14% today's gains were built on yesterday's rally after reporting they will -- stocks continue to be volatile in the after hours. it's now down 13%. if we do look at that chart, mike, you can see the big drop-off happened in the final however trade. it was recovered a bit, and part of that perhaps because of our guest earlier him spring he was short. >> a bowl in can in a sis in condition opportunities but maybe the cojept point that this

particular stock has been taken to a market value that is based on what they have in terms of brands but even future opportunity. it's also taken this company to a market value that arguably gets beyond what any strategic buyer would be willing to pay for it almost like that's trapped at this high market value and just the angle of the increase in stock was pure adrenaline and emotion and nothing tethered to the business it seems. extreme scarcity of opportunities of these units. >> you almost need a neck brace looking that the stock is that right today, but it's not just tilray we've seen all the pot stocks really move pretty dramatically to the upside in rows ent days and weeks, eliciting comments like the crypto craze from last year what are your thought? >> a bit of rhyming between bitcoin and the tilray chart we just looked at i feel like the wellness trend,

some of these are enduring we're drinking almond milk today and we were drinking it five years ago. a lot of fitness trends come and go very, very quickly. i'm going to get in trouble because there are some doing better than i would suggest. you think about pom grap it juice and chia seeds, we don't know if this is going to be a big thing. consolation brands and coca-cola locking at products that are encouraging and interesting, but i think the jury is still out on whether this is an infliction point and we'll see a mainstream acceptance of this or if this is another chia seed moment. >> to what extent today and the day remind you of it in the second half. you can argue there's a fundamental basis. >> but the charts and leg you

will it's absolute kind of small time traders, not investors that invest in all kinds of areas it's pressing the buy button, and the way that the prices have accelerated higher, you know, as opposed to found somebody out there to kind of sell something every step of the way. the scares try, only a couple of names in play. bitcoin by definition is scarce. only let so many out there at once yeah, there's similarities in terms of the constituency and how the prices have behaved. >> turning now to chairman alibaba founder and chairman jack ma who will no longer create 1 million jobs in the u.s. due to the ongoing trade negotiations going on between the u.s. and china the promise was made on the prime minister of a friendly u.s.-china partnership and rational trade relations that premise no longer exists today so our promise cannot be fulfilled. ma first announced his job creation plans in january 2017

after meeting with president trump at president trump tower we're showing you that video right there. shares of alibaba finishing higher today, but these comments certainly adding more fuel to the trade fire what do you think? >> for sure. i guess you have to start by saying i don't know if anybody took it necessarily on face value there would be a million jobs we didn't know how we would count those and coming after ma's statements earlier this twheek this could be-- this wees could be a multi-decade standoff a bit of a remind there's going to be heightened tensions on the corporate front. i don't know if it means anything in terms of true dollars and jobs flowing through the economy. >> rebecca, you surprised by these companies by jack ma, and are they a big blow to the u.s. company? >> no. i'm not surprised at all i think alibaba is very friendly with the chinese government so they want to do what they can to help the chinese government.

i think it's a reminder to the u.s. that china does have some leverage as we go through this trade war. i would agree with mike that we don't know what kind of jocks, how many jobs will be treated if this had movedforward so who knows. i think in the weeks and months to come we'll see other ways that china can get back at the u.s. beyond placing tariffs. we could use local shops and services there's a lot of qualitative things they can do as well as just tariff and tariff levels to show the u.s. that they are not giving up without a fight. >> although, rebecca, doesn't sound like an all-out terrifying trade war, so do you think the markets have already kind of priced in the bad news >> certainly this woke it feels like some of that bad news was priced in just based on the reaction we got from confirmation of the latest step forward in trade to me the big risk to watch is how long it lasts. it is about the size of the tariffs but the duration of

uncertainty for businesses means that companies that might have otherwise done an m & a transaction and invested in a company, hired more, might be postponing or diluting those decisions because they are not sure what the landscape is going to look like the longer that goes on the more the risk it feeds to the underlying economy so far we're not seeing many signs of it. the uss doing great. we're starting to see business confidence surveys and in beige book results, that this angst i'll is out there and getting bigger i worry the longer that this goes out and the risk goes there, that is this becomes a real deal for the economy. >> okay. rebecca, great stuff thanks for joining us today. rebecca patterson. still to come, we'll dive back into the broader markets performance. stocks, of course, extended their gains and shrugged off the latest trade war worries as we were just discussing, mohamed el-erian will join us. >> and sony is following nintendo back into the past.

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well, the dow and s&p extended yesterday's gains both indices less than 1% from all-time highs. >> with stocks near record levels, are there factors that could stop the rally and joining us is mohamed el-erian good afternoon to you. thanks for joining us. >> thank you, wilfred. >> clearly trade has been a big factor so far this week, but you're one that's not too concerned about there being a full-blown damaging trade war, is that right? >> that's right. i think all this rhetoric that you hear from both sides and you've heard from alibaba, it's about the journey. it's not about the destination the destination will not be in my opinion a global trade war. >> so between the u.s. and china which is clearly what everyone is focused on, what gets us to catalyze the end of the journey and get to the defamation? will it get worse before it get better, or are we close to that

point now? >> it will get worse before it gets better. it's part of the process if you use game theory, the u.s. has decided to play a cooperative game uncooperatively, why because it didn't get what it wanted playing it cooperatively. so when you play an uncooperative game in that way, you need time for the other side to realize the most important thing which is that the u.s. will win this war. as long as the u.s. is willing to incur damage, which it is, then ultimately it makes sense for others to provide concession we've seen this with mexico. we've see this with korea and we'll see it with canada and china we'll see it down the road. >> mohamed, is trade is not a concern, what concerns you about the market >> the two things we hear most about the concerns with the ones that concern me the least, trade war and the fed making a policy mistake. i don't think that that's the

major thing in the next six to nine months. the major risk will be come from growing divergence in u.s. economic performance versus the rest world and growing divergence in monetary policies, and i think that that divergence will put pressure on interest rate differentials, on the exchange rates and we'll be talking about the risks spillovers and spillbacks. and there's a divergent process that i think will still condition for a while. >> moment, isn't that divergence at least to some degree an effect of those things that you say we talk too much about, perhaps, the trade pressures on the rest world and then our federal reserve very much intent on raising rates further when the rest of the central banks are not? >> i don't think that's the main -- the main reason. i think the divergence comes because simply put, and whether you agree with are they sustainable or not sustainable,

everybody agrees that the steps taken on the tax cuts and on deregulation are going to promote economic growth for at least two to three years, so the u.s. has a tailwind, a policy-driven tailwind of growth japan and europe it's the other way arm. their tailwind is during into a headwind so i think it's all about policies, and it's all about the u.s. outpacing others in terms of pro-growth policies. >> mohamed, when we talk about some of the emerging markets that have struggled over the summer whether it's turkey or argentina, do you think the worst is behind them, and if it is, is the worst behind all of the sort of individual markets, or are there some others due to face the fate of turkey and argentina? >> so i were hope so, but i wouldn't plan on it, and, in fact, i would caution the consensus growing that this is the time to fade the convergence trade. this is the time to reallocate money out of the u.s. in favor

of emerging markets, and for two reasons, wilfred, one is if you look at the history of crises, they take time to develop. the first disruption is in the markets, and then with time that leads to economic and financial disruptions, so we haven't seen the second shoe to drop yet, so be careful on that, and the second reason is that we haven't had an effective circuit break, and what is happening is simply technical repositioning. these things are never linear so i would be a lot more careful than the -- than what is becoming conventional wisdom now which is fade the divergence trade between the u.s. and the rest of the world. >> mohamed, great stuff. lovely to see you as well. we have an earnings alert and courtney has it for us. >> red hat's second quarter earnings are out it's a beat for earnings at 85 cents adjusted analysts were looking for 82

cents. however, their revenue is a miss at 823 million that's below what analysts had forecasted at 830 million. if you look at guidance for the third quarter, both the ref new and earnings guidance, is weak shares are down about 4.3% after hours on that, and we do want to know that the ceo says the number of deals that were made in the second quarter over $5 million did double from the year prior, so at least some color on what happened in that quarter. morgan, back over to you >> thanks, courtney, courtney reagan, back at hq. >> even at last report, it seems like there's been a huge two-year assessment of what the order flow can justify what the stock is at. >> elon musk made another surprising move on twitter today, re-tweeting a link to our interview yesterday with former gm executive bob lutz. in that interview lutz said, quote, tesla san automobile

company that is headed for the graveyard. lutz also said in that, in another year or two, we'll see a movie called "who killed tesla," conspiracy movie starring leonardo di capio. i guess this is tongue in cheek for elon musk because bob lutz has said this before and it's a similar argument and he's highlighting to his followers, oh, look, another comment, probably on cnbc, but also maybe he liked the idea of leo playing him. >> who wouldn't for one thing, but also, yeah, i think the first observation is, you know, the more old, retired detroit car company ceos come out and say this guy can't do it, he probably wears it as a badge because that's the entire brand and personal image there you know, a little bit of a cheeky response. >> but, again, all focus, perhaps more than ever on their earnings as we approach the next quarter. >> yeah, the production numbers and the earnings >> yeah. >> they have said last time that we don't need to raise capital

in the near term they have not done so. seems like they probably won't be able to do so for various reasons the next few months so it's all about the production numbers. >> tesla up 5% today. >> everything old is new again sony isn't playing games when is it comes to boosting sales for its gaming division. coming up, how they are taking a page out of its old playstation playbook and seeing smoke, legal marijuana, e-cigarettes and vaporing are red hot come up, we'll take a look at thgrthe ow of lighting up. "closing bell" will be right back ♪

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sony taking a page from nintendo and relaunching its original playstation pre-loaded with 20 games just in time for the holiday season courtney reagan is back. she joins us with the details on this court? >> hey, morgan who doesn't like a little nostalgia during the holidays. sony announcing what is being called a playstation classic a mini version of the console that was originally released 25 years ago. i can't believe it's been that long the classic will have a price tag of just $100 that comes pre-loaded with 20 games such as final fantasy. sony says it will be 45% smaller than the original and will launch on december 3rd that's not going to be available in time for the black friday holiday. sony is hoping the nostalgia factor will help bring back some of the consumers which bought the original which became the first console to ship 100

million units worldwide. the release of the playstation classic highlights video game companies efforts to revive the retro consoles nintendo was the first to do it bringing back replicas of the original console and super nintendo really popular during the holiday season atari also has a retro console due out next year, and it's it a good time to be selling the new hardware because according to the new green ndp, hardware sales through august have already reach $21 billion and that's 22% higher and as for the plug-and-play conceals with pre-loaded contempt, those devices have shown 400% growth this year, so there's certainly a market for it. npd expects a really strong holiday season on top of what's already been a pretty good year. back over to you guys. >> court, thank you very much for that it's called techen. >> i didn't know that one. >> i didn't play that one much, but i was always a playstation

man, not a nintendo man so seeing the image of the original one, actually the playstation 2 and 3. >> so that's a little bit later. >> yeah. >> yeah. >> i had the original playstation. >> 25 years ago, i was already too old for this stuff. >> the playstation 2 and pro revolution soccer, glory days. >> i completely understand where this is coming from. i have an 11-year-old nephew who is into the old consoles and old games. there's a novelty effect about it even if you didn't play if as a young kid, i think the younger ones like it. >> even going back to elon musk, he has basically put out there and tweeted it in terms of tesla that he would like to see some gaming potentially come into the console of the new volks he's manufacturing, maybe some atari games. there's a retro vibe. >> not just the nostalgia. it's also that you can physically play them they are so complicated the games play now

acism i '90s, early 2000 soccer game, pass, tackle, shoot, simple now it's like god knows how many different options but good to see the nostalgic pictures. let's have a look at how we finished the day on wall street. the dow outperforming the other major indices up.06% and the s&p up and nasdaq and russell 2,000 the laggards >> time now for a cnbc news update with sue herera sue? >> hello, guys here's what's happening at this hour, everyone u.s. secretary of state mike pompeo announcing in a statement that the united states has invited north korea's foreign minister to meet with pompeo in new york city. the statement went on to say that the u.s. is prepared to engage immediately in negotiations to transform its relations with north korea

mavericks owner mark could you bean appearing on espn's "the jump" earlier today to address the results of an independent investigation into workplace misconduct at the mavericks. cuban has agreed to donate $10 million to organizations that work against domestic violence and promote women in leadership. >> first, just an apology to the women involved i'm just sorry i didn't see it i i'm sorry i didn't recognize it >> and the man accused of killing university of iowa student mollie tibbetts appeared in court today the 24-year-old riff afterpleaded not guilty to first-degree murder. in iowa, first-degree murder carries a penalty of life without the possibility of parole you are up to date that's the news update this hour guys, i'll send it back downtown to you. >> sue, thanks very much still to come, between legal marijuana and vaporing, lighting up is a hot trending topic for investors and con-of-consumers

we'll be discussing that coming up. >> and breakfast serial kingpin general mills seeing a bit of an uptick today after msiisng sales tagets and could a kardashian be part of a surge? we'll explain that one straight ahead. first network that would eventually become verizon's. back then, the idea of a nationwide wireless network was completely unreasonable. but think about how important that first call was to our lives. it opened the door to the billions of mobile calls that we've all made in the last 34 years. sometimes being first means being unreasonable. i'm proud i was part of that first call, and i'm proud that i'm here now as we build america's first and only 5g ultra wideband network with unprecedented wireless capacity that will not only allow for phones to be connected, but almost everything--

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. pot stocks on a tear with tilray finish, the day higher by 33% and lower more than 5% in the after hours trade. up as much as 94% in the session, hitting $300 before being halted multiple times and paring gains not just marijuana bromg according to bds analytics the e-cigarette market grew by 40% last year and could do the same in 2018. >> is there a correlation? joining us to discuss is mary smith, cand thanks for joining us. >> should both of these be a concern for the stocks or is it a huge opportunity for them? >> it's an opportunity you see both of these companies being invested in the marijuana space.

you see a lot of people of big investments in the recreational beverage space like coca-cola and pepsico talking about investing in the cbd world just within the last couple of days you also see a number of alcohol companies taking large stakes in pubically traded marijuana companies or companies that have interests in the marijuana/cannabis space i think there's a lot of opportunity here, but there's also opportunity in the medical side of things, and what we're talking about today in the vaporing world is the trend of moving from flour and other product to vaporable product. >> mary, you mentioned the fact that alcohol companies have been taking stakes in some of these marijuana companies. we haven't seen the tobacco companies do the same. why do you think that is >> well, i think we've seen a lot of poking around. >> okay. >> i don't know that we've seen any kind of public acquisitions or anything like that yet.

i think it's really just a matter of time certainly the -- there is a pattern that's very similar, but i think they are also being careful about creating an environment where they are not -- they are not competing with themselves and that they are really looking at it as a product extension mechanism as opposed to something that -- that would somehow cannibalize their own space. >> you know, there's been so much excitement on the investor side that sort of built slowly and has now exploded about the potential for all the different applications of cannabis-based products i wondered if kind of the market enthusiasm seems like it's outstripped the ability of the industry itself to -- to kind of make good on some of these promises where are we as a lot of companies look for businesses maybe to buy or invest are there enough of them out there? >> i think there's a lot of them out there and there's a lot of opportunity. you see states like new jersey that are expanding their reach into the medical applications

for marijuana products you see other states that have significant growth over the last year, you know you've seen california's growth explode since recreational marijuana has legalized, and you see each of the states, even here in colorado, you see colorado's growth continue to steadily green up as people really understand and adopt the product. you know, consumers are getting more comfortable with this what was a very stigma bound product is now something that's very usual here in colorado and is recognized by people as a valid and important way to add to their -- their consumer products i think, you know, we really have the opportunity to look at colorado as a baseline and to be able to continue to find that kind of growth in our states as states come online and are able to follow the same pattern

with the same regulatory market as colorado and oregon and california have really seen success with what we do have to be very careful about, of course, is keeping it out of the hands of teens, keeping it out of the hands of children and being smart about how we bring products to market you know, there are a lot of consumers that can really utilize this, not in place of other products but really in addition to. consumers have a wide range of choices in the cannabis industry now, and those choices get broader and broader all the time as we see more in adoption, we also see the trends in how people are choosing to utilize it and what they are graph stating to. >> mary, thank you very much for joining us mary smith from green croft strategies. >> it's my strategies. >> my pleasure have a great day.

>> thousands of people are still being told to stay away from their homes as rivers are still rising after hurricane florence. we'll head to north carolina for the latest on the cleanup efforts there. but, first, square making a move with its cash app that could disrupt the banking industry those details next but how do you work with it? ask this farmer. he's using satellite data to help increase crop yields. that's smart for the food we eat. at this port, supply chains are becoming more transparent with blockchain. that's smart for millions of shipments. in this lab, researchers are working with watson to help them find new treatments. that's smart for medicine. at this bank, the world's most encrypted mainframe is helping prevent cybercrime. that's smart for everyone. and in africa, iot sensors and the ibm cloud are protecting endangered animals. that's smart for rhinos. yeah. rhinos.

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square may be looking to disrupt the banking sector yesterday at its conference they revealed future plans for the app saying, quote, anything you

do with a bank account you should look to the cash app to begin to emulate more and more of that. >> our cnbc.com banking reporter joins us with more now hugh, what are the details >> square cash app, if you don't know it, you don't have t.7 million users, if i want to make a peer-to-peer payment we can do it if we both have the app remember the dongle they used to have for square, a jack dorsey company. clearly this is the future this is where we're headed which are the little fin-tech firms want to blossom into full service financial firms and the way i look at it is like converging evolution you have fin-tech firms who want to offer things like checking accounts, investments, savings, starting to sound like a bank, right? >> yeah. >> banks who want to look like fin-tech firms who want to offer digital everything so they are coming at it from differentage many, but they will end up in the same place. >> and that's the key question as it relates to the big bank

stocks is this threat coming a little bit too late you know, when we saw the threat to retailers from online. >> sure. >> they weren't ready for it and they saw huge market gains for the challenges i guess the banks are already rolling out similar services, that the likes of square will try and offer. so i guess the market share gains and challenges will be much harder to come by compared to other industries. >> it's a tough nut to crack you had the cfo talking about square, talking about 2 million in deposits with an "m." how much does jpmorgan have, wells, together they must have 3.5 to 4 trillion. it's a rounding error which is effectively meaningless for them today. you hear investors ask about this, what happens in five years? >> yeah. >> does the threat start to, you know, metastasize over a longer time so basically you have jpmorgan coming out with a fin coming out with a mobile payment banking app and they are inoculating themselves against

the threat so i think they will be okay. >> does square really want to be the front end? they are the kind of consumer fin-forecast interface do they want capital requirements, and do they want to do all the mortgage paperwork that the bank does >> want the headaches of being a super regulated entity and they have a tin tiny little, you know, bank and institution that does that, so they are the front end. by the way, the front end is the profitable end with less headaches and you have speculation that amazon wants to own the front end as well. clearly they are much scarier in that prospect. >> i guess the other big question that, again, protects the big banks is if you're considering where you're going to put your hard-earned life savings, do you want it in a very regulated bank with a massive balance sheet with capital at record levels for a generation, or do you want to put it with a fin-tech company a february-tech company might be a fabulous place to lower your cost of transactions and venmo

and company. there's still a long way to go. >> for my age people, yes. >> bingo. >> especially given the software. >> given that they grew up on the heels of the great recession and what many of them saw as a bailout for the big bad banks. >> we shall see. hugh, thanks so much for joining us check out his full story on cnbc.com now the hurricane, hurricane florence, cleanup efforts are still under way and seema mody is in new bern, north carolina with the latest. seema? >> reporter: hey, wil, devastating storm ripping through the carolinas. coming up, we'll take you through the recovery efforts, the major players and the e ci ole challenges that they arfangn the ground that's coming up on "closing bell."

residents and businesses are working to clean up after hurricane florence seema mody is in newbern, north carolina with the latest on the efforts. seema. >> and morgan, president trump hours ago visited newbern where he tour the damage and assessed the response from federal workers to hurricane florence. he spent time at a baptist church which has been converted into a disaster relief center. we touched down yesterday in north carolina we spoke to a number of residents who said they incurred damage at home due to persistent flooding and they welcome any type of support from the president. >> the damage is moderate at home, thank god. i got -- i say moderate to what other people had some people lost homes completely >> reporter: now, across the region around 37 deaths. that did increase from 33

yesterday. and in north carolina transportation continues to be a challenge because, again, of the high water levels and persistent flooding nearly 800 roads have been closed and people are still in shelters around 10,000 in the state of north carolina power continues to be an issue limited power available right now due to a lot of debris that -- and trees that have fallen on the power cables once the power comes back that's when the recovery effort can truly get under way. but until then it's a long way to come. back to you. >> and seema, from an economic standpoint, the state of north carolina also gets a lot of its -- a lot of revenue from the agricultural industry. i realize the flood waters are high in some areas but in terms of the impact on things like hogs, poultry, tobacco, et cetera, could we have an idea what the losses could be >> reporter: no, you are exactly

right. the flooding is not only keeping residents away from homes. but it's also provided a lot of challenges for farmers across north carolina in fact, the agricultural industry is a revenue generator, around $8 billion. we have been speaking to number of farmers we hope to go life with them on friday. but they are experiencing a lot of pain. and sweet potatoes is a big export that plant grows underneath the ground they won't be able to assess the damage of the flooding on that plant until the next couple of weeks when the harvest initiates. >> seema in newbern north carolina >> kiley general making a cull near discovery yesterday and it could have a big impact on general mills the story next. coming up on "fast money," one technician has a warning for tvestors jumping into pot stksheells us what has him worried.

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than ticking closing up 0.3% >> that's not a huge move today in terms where it ened the youngest member of the kardashian clan moved stocks in the past back in december tweeting so does anyone else not open snapchat anymore so sad shares of snap closing down 6% the following trading day. >> most recently on august 31, kiley announcing she is launching her beauty products in beauty stores that sent alter shares to 52 week highs that day, closing up more than 6% clearly she's got power. the first ever time she had cereal with milk what >> i'm waiting for her to say she just tried ketchup on fries or something i wonder if it's just an experiment to see who people believe. >> this has my -- i adore cereal and i miss some of the favorite british ones growing you have

shreddies. >> shreddies. >> she haddies is different. >> you're on a wheat kick with the cereals. >> raisin wheat -- i agree i loved the other ones but you have them here frosties we called them, you a call enemy frosted flakes. and cocoa puffs. >> cocoa puffs. >> cocoa crispies. >> sold on those fantastic. >> it's hard not not to be cynical about whether she has a branning deal here i mean is she sort of in with the companies? it's fascinating to me that. >> general mills doesn't scream millennial. >> but they would love to if they had the opportunity. >> it's the best thing for kids to have, healthy. >> and it almost speaks to the fact that millennials are no so big on the cereal and we have seen that play play out in the earnings in some of the companies. >> the one difference between u.s. and uk cereals, the level is sugar is so high here every similar brand, you try it here same with cooling

everything has more sugar. >> brpt. >> not when i you first have it and you get used to it and can't go back. right that does it we finished two minutes on that. >> i'm hungry now. >> we meant to summarize markets bus we don't need to because "fast money" takes over soon thank you for joining us morgan. thank you for watching closing money? close "closing bell" "fast money" starts now. >> "fast money" that's the name of the show and starts right now. live from the nasdaq markets overlooking new york city's time square i'm melissa lee. pete najarian. tim i sold my tilray seymour tonight tech stocks under pressure despite the broader rally and one small company predicting the rally for the space. plus a stock that has wall street, pizza man, mom and dad talking. tilray practically broke the ticker halted not once,