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tv   Squawk Box  CNBC  September 21, 2018 6:00am-9:00am EDT

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a retailer and a chipmaker warning about the impact of chinese tariffs. and it's finally open. let's open up the bud light or whatever it was. baker mayfield helping cleveland end a 635 day doubt who is the loser here who else the beer fridges are open. it's friday, september 21, 2018. "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and mike santoli. andrew is off today. ek futures are up once again. you saw the s&p 500 at a record
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close yesterday. that was the 12th this year for the s&p 500. how many record closes do you think we've seen since the election in 2016 >> 100 >> 100 for the s&p >> i was going to bring that up with whiting he says there's a glimmer of hope now it's a glimmer under new highs. >> we've been long u.s. stocks for five years >> there's a glimmer of hope >> big performances yesterday for the dow and the s&p. if you look year-to-date, nasdaq up more than 16% the s&p up 9.5%. the dow closing close to 84 points up. the nikkei ended up. the hang seng up by 1.7% the shanghai up by 2.5%.
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in europe with the early trading taking place, green arrows across the board biggest gains are coming in london with the ftse 100 up by 1% look at treasury yields in the united states. those yields have been closely watched. we see the ten-year sticking above 3% trading at 3.03%. apple's new phones are on sale today this was the scene in hong kong and beijing overnight. customers lined up to by the iphone xs series we'll get a live report later this hour. amazon debuting a number of new products and device updates. the company unveiling a new design for its echo products it's also selling an alexa microwave and wall clock >> alexa, pop my popcorn
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>> that's it you know how microwave keypads are so complicated now now it may know the weight of it >> right >> i guess you can talk to it on the amazon versions. amazon shares were up yesterday. still down about 5% from the intraday all-time high when it touched a trillion dollars >> since january 28th for the dow. the dow has not had 100 -- >> i don't know if it's had 100 or not >> 26 -- >> has it had 100 since election day. >> wouldn't surprise me if there's more last year >> 100 since election day. >> but the s&p yesterday with the new record high was 100. >> 100 since election day? >> yeah. >> january 28th, it's been a
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while. this is the first for the dow since then nasdaq is up more than a lot more than those averages >> uber is in talks to buy deliveroo. >> 89 for the dow. >> he did that quick deliveroo is a london-based startup valued at $2 billion talks could fall apart because deliv rue has been reluctant to give up its independence. walmart sent a letter to robert lighthizer two weeks ago saying it may hike prices on certain products if the trump administration imposes tariffs on china the white house has since announced more tariffs food products, def raj beverage
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personal care items could see higher prices. >> we get a lot of beverages from china that's weird another trade warning comes from micron. the chipmaker says gross margins will be hurt by the latest round of tariffs on china. those comments overshadowing a solid quarter for the company. micron beating on the top and bottom line. the stock was up 4% after hours until it started talking about how the tariff also crimp its gross margins. >> a ton of sensitivity about where margins are in the cycle for micron the stock trades at four times forecast earnings. i nthink any commentary that sas the best is behind us for margins is not taken well. >> the company's ceo will be on live on cnbc today at 11:00 a.m.
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eastern time on "squawk alley. he will talk much more about what's happening. adobe shares moving higher on deal news adobe is buying marketo. they sell marketing software shares of steel case surging they expect better than expected results for the fourth quarter that stock up 14%. shares of steel case surging they expect better than expected results for the fourth quarter that stock up 14%. this is shaping up to a better year than people thought >> the s&p is pushing a year-to-date high. with yesterday's high people say the chart looks like last year around this time so if you look at a one-year chart of the dow t had that acceleration in the fourth quarter of last year into january.
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then you have had this long correction period. when you go seven or eight months within a bull market below all-time highs, it's a long base that gets built. i think that's why you have some bullishness. that's why i don't think you can say the rally is too hot yet >> because of that long time sitting around >> exactly >> this is in the last week or so, a global risk asset rally. if you look at emerging markets, china bounced hard the dollar has come in a lot that was allowing the u.s. market to get a lift you were able to poke holes in this rally and the s&p by saying that's not broad not a lot of momentum behind it. but honestly yesterday's rally was inclusive and looked okay. you can check that box off sentiment is not overheated. people are involved and willing to play the market the question is last year in the
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fourth quarter you were rushing the price in the tax cut that seems like what the market has in mind. what are you rushing in to price now? a relaxation of some psychological overhangs about the trade stuff. also keep in mine that earnings have outperformed the market it would be a weird year if you had a flat performance when earnings were up 20% i think it looks okay for now. so i'm not going to say don't chase it >> the idea that the key focal point for the markets for the last two months has been every nuance of the trade dispute i think has been wrong >> i agree with you. >> we watched analysts try to fit the pattern of what the market is doing based on the fundamental developments in the trade war. it hasn't correlated at all. when it doesn't correlate, for a while it was okay, lessening trade tensions, market goes up and more recently as we were announcing, 200 billion at 10%,
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it's they're looking past the new tariffs. >> we had a few people in here who have said it's already priced in. >> whether it's priced in or not -- >> i thought it was much more of a side show for the market's purposes than it was treated as. >> it's also -- mark grant will be on. i get a lot of my atlanta fed updates from mark grant. they went from 4.5 to 4.55 i think -- i don't know what gp will be th gdp will be this quarter, 4.2 last quarter we have to see the china stuff start impacting the gdp before we decide that it's going to be a damper >> the real risk to the market is not would it hurt the u.s. economy or directly earnings in a near-term way, but that it would make the global markets
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fall apart if you had this china hard landing, capital flight, the dollar soar, that would hurt the markets. not what we're paying for imports. >> so will rising deficits as interest rates go up there also have been a huge contingent of market watchers that missed the initial rally on the election, then tried to figure it out, and then they were hanging their hopes on a pullback on him screwing up the tra trade. they had we had 80-point down days, they were shaking their head going this guy knows nothing about free trade we have to have free trade some people working here, waiting for every time the market went down hoping it would be because of a trade war blowing up it hasn't happened steve thinks there's a glimmer of hope. i have to read some of your stuff, steven. joining us now with more is steven whiting, global chief
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investment strategist at citi private banking and randy gurtzman you're up 30% this year, aren't you? >> yes >> i read your annualized return that can't be right. >> it is right >> no, it's not. >> it's been pretty good, 25%, 26%. >> for how long? >> last three years. >> are you amortizing? >> it's been a good market in small caps >> we'll get some names. here's the one that got me, whiting. >> okay. >> you said that the market, there's a glimmer of hope now that maybe there could be a favorable outcome -- in fact, it's not that. with new tariffs set to began, rallying financial markets priced a glimmer of hope into the u.s.'s approach then you say at this point it might be that it's a bargaining
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campaign to strike a deal rather than permanent tariffs and reduced economic ties with china. you ever think we were looking for permanent tariffs? >> absolutely. there's a point of view out there that u.s./china economic relationship will not be working for the longer run this is very different from trying to get down auto tariffs in europe, for example this is really about two different economic styles, two different models that are not going to work together the idea that we'll solve this with an idea quickly -- >> you say this suggests a pressure campaign to strike a deal rather than acclimation to permanent tariffs. i did see jack ma say this could be a 20-year fight >> from the chinese side the idea that this is going back to
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external pressure to take over the economy, change their business model, there's a strong point of view out there that this is about holding back china more permanently >> stopping the 2025 plans >> but it goes beyond 2025 it's dominating a technology, changing a business model. on their side there's a lot of concern this is more than just trying to rebalance trade. the economic relationship between the two is more than about trade balance. we're not even talking about lending. we're talking about foreign biz ns -- businesses inside china. >> the whole note was about china, but do you think that's the right approach when you try to analyze what's happened in the equity markets and what is likely to happen, is that really what we should be focused on or
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is it 10% of what we should be looking at >> going back to the united states markets to have high earnings, low enemploymee unemployment, high pe takes a lot of things. >> how high is the pe right now? >> it's 16 times, but nine years after a recovery -- >> 16 is not a high pe it's average >> getting all of these things, low inflation, low unemployment, high markets, all of these things means a lot of -- >> to mike's point we have been treading water, earnings have continued to improve >> we've been over 20% for eps all year long. in january we were saying that would be enough to overcome interest rate pressures, again with the tightening fed and we're about to get out of the weak est part of the year this is not about gdp impact
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these tariffs, if they cost lost sales from one country to the other -- >> it's about picking losers and winners, right >> it's going to be about profits. >> randy, i want to get through these. andrew always has sinus problems i immediately thought about him. interce intercept, steroid-coated stents that go into your sinuses -- >> ugh >> so you don't need follow-up surgery. there's not -- it cuts down on costs. it works $3 billion market opportunity? >> yeah. >> stents in your sinuses. >> the idea is people with severe sinus problems they get surgery called fess. and they literally peel out your sinuses. >> oh. what about that thing our sponsor shows us, that binge thing you stick up your nose have you seen that
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>> no. >> you're not watching enough cnbc >> i have to watch it. >> i don't want to put a sponsor out of business. >> post-surgery you want some medication to ensure the healing process works. so these stents keep the sinuses open they're biodegradable. after a few months they disappear, but they keep the steroid at the point where you need it. this product has been on the market for a few years >> sinuva. >> this is a new one $1 billion market opportunity. a lot of sinus suffers >> i hear you. >> this product can be put in the doctor's office. if you had a sinus surgery and you get recurrence of sinus problems, the doctor -- it's a quick couple-minute procedure, they put this in it lasts for a few months, and after six months you can replace it.
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>> coherent i've heard of. >> coherent is interesting this is a company, general industrial agents are 60% of the business, 40% is leveraged to the oled market. when iphone x was a dud last year, i love the phone and the screen was amazing, coherent is putting other producers and businesses in business the stock is trading at 8 times cash flow. >> two more. therapeutics keeping it uncomfortable here. therapy for hot flashes. >> he likes to see me squirm >> you get into the medical stocks, there's some uncomfortable things >> hormone related therapy, multibillion dollar market >> and this is a small cap we're ending with. icorp. >> they're a semicap equipment
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supplier, gas and chemical sub components only two guys do it at this level, ultra clean is the other one. the stock is trading five times earnings organically it can grow 10%, but the industry is consolidating. we think they can grow much faster >> thank you you see whiting over there he's furiously writing down these stocks >> it's great. >> will you go back and say i've been looking at some things -- >> buy the funds we're really excited >> pays to be a guest on this show >> constantly putting these funds on the platform. >> thank you, steven whiting from citi bank randy gortzman you know we're on?
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>> sure. what does he think about tesla. >> you have to ask him >> might take more time than we have >> it's 100 closes for the dow, 89 for the s&p >> i thought i heard that yesterday. >> the s&p has been more consistent >> but 89 for the s&p. >> i could have sworn i heard that you have me questioning myself a lot. >> it was corrected. i was reading that, then the correction was issued after that >> i was thinking, wow >> i went back and triple checked it >> he said there's a glimmer of hope, i said 100 records in the dow. what's the opposite of a glimmerment. >> what does clinton have? a thousand just wondering get the guys working on that >> some of that was dotcom, wasn't it? >> yeah.
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>> don't you view bill clinton kind of as a republican at this point? >> given where you guys moved? >> okay. thank you very much. the uk auction for sky will be settled this weekend we are joined live from london by julianna tatelbaum. >> this weekend is poised to be one of excitement for sky as we head into the uk takeover panel's auction phase. in terms of what to expect from this auction t will commence this evening at 5:00 p.m. and run for 24 hours we will hear the results tomorrow evening the auction will consist of up to three rounds of bidding and all offers must be in cash in terms of the rounds themselves, the first round kicks off with fox, they are backed by disney they are the underdog going into the auction. the second round is when comcast will have an opportunity to come in with a counter bid.
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in the third round both sides will have an opportunity to come in with their best and final offers this is set to conclude tomorrow evening. we will have news very shortly as we head into the auction, let's look at where things stand. comcast in the lead with an offer of 14.75 pounds. fox in there with an offer of 14 pounds this offer is for the 61% of sky that fox doesn't already own in terms of sky shares, they have been trading well above the high offer for quite some time suggesting that investors firmly believe that higher bids are in the pipeline back to you. >> julianna, thank you very much coming up, checking bags at the airport is about to cost you more that story and the day's other big water cooler poppics are next. and we'll talk about apple's new gadgets.
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they go on sale today. this is a live shot of the line outside of the line outside the apple store in midtown manhattan. here's a look at premarket winners and losers talking about the dow here i think that she's a very nice girl... ...you never got the brakes looked at? oh yeah. no.
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baggage fees are big business for domestic airlines generating 2.4$2.4 billion. my problem with this, it incentivizes people to drag too much crap in the lines check this out mexico's president-elect may be regretting a campaign promise anti-inflammatory was stuck on the tarmac after several hours because of bad weather closed the capital's airport. he vowed to sell the presidential jet and take commercial after winning power passengers spent about three hours on the delayed flight. >> well done >> you can't be the president of a country and fly commercial you can make the argument that even ceos who need to be in different places, it makes no sense. >> from security perspective for a head of state.
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>> time. >> i heard some weird thing he wants to use the 737 as a taxi i read that yesterday it was bizarre. the unbelievable that happened cleveland has looked better this year they won their first game in 635 days they were trailing at halftime, tied it up in the third quarter and took the lead in the fourth. victory was a long time coming for the browns fans. they got even more than the satisfaction of the win. the victory fridges that bud light put in bars were finally unlocked >> you know the control room's take >> we should have known it would have been the jets >> joe kernen finally starts rooting for the jets, and they lose to the browns >> i'm not rooting for the jets
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yet. >> they're thankful to hear that. >> i'm trying to get back to this clinton thing -- do you know how many? >> no. >> you realize this was like a year and a half, and bill clinton was in for eight years >> i do. i was joking >> i'm not good at math. clinton had 16% annualized -- what is the annualized return on -- how far is the dow up? since november 9th >> close to 20 probably more than that. >> so it's above >> yeah. >> just trying to keep you honest i need to do that around here. i don't know >> i was going to send you spinning for that one. when we come back, apple's newest phones and watch are on sale in the uk we'll get a live report from london next. and market watcher mark grant is here. he has a look at interest rates, the u.s. markets and investing in europe. as we head to break, a look at yesterday's s&p 500 winners and
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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back to "squawk box. let's look at the u.s. equity futures. things are in the green once again even after the big gains yesterday with new closing highs for the dow and the s&p 500.
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this morning dow futures indicated up by 80 points. s&p by 4 1/2 the nasdaq up by 15 points walmart out with a big warning on trade the retailer says it may have to raise prices on certain products if the trump administration slaps tariffs on china the white house since announced more tariffs to be imposed on china. micron out raising the red flag the chipmaker saying gross margins could be hurt by the latest round of tariffs. those comments overshadowing what many may find to be a positive quarter for the company. the stock was up by about 4% in the immediate news release, then once the company started talking on the conference call, the stock down by 5.5% >> 37 now, isn't it? 37%. >> i'll look at it. >> now you're messing with your
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mat math >> 36.97. >> annualized -- >> total 37 nasdaq is the one to look at that's at 6 0? close. over 50. is the dow better or worse than the s&p? >> i'll get it >> it had been lagging >> outperformed last year, i think for a while. >> but what is the total return? >> year-to-date? >> since the election. >> 42. >> say that louder >> 42. >> okay. apple's newest iphones and watch hitting the stores today let's get to arjun kharpal standing by in london this morning. good morning >> good morning, guys. we've been here all morning talking to people lining up since last night and they're excited about this, the iphone xs max, starting at $1,099
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they're excited but of the new features, oled screen, improved battery and improved processes many people we spoke to are upgrayiu upgrading from the iphone 8 or 7, and they missed out on the x last year. so those are the people apple is targeting. if people are buying these higher priced iphones, that will be positive for apple. wall street is looking at that key average selling price figure which they hope will get a bump from these devices the question is how many people will be buying the xs and xs max versus the xr which comes out next month if more people are buying the higher priced xs and xs max, that will help apple's profits, but that remains to be seen an what apple will be watching over
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the next couple of quarters. >> thank you, arjun kharpal. i haven't looked at the treasuries today >> steady. >> treasury yields are on the rise we checked it earlier. our next guest says this should come as little surprise to investors. joining us to talk about this and much more is mark grant from b. riley fbr great to see you >> great to see you, becky and joe. >> thanks, mark. >> we've been watching the ten-year push above 3% this week you think that march will climb steady >> i think we'll continue to go up i think it's playing for a variety of reasons one is the tremendous amount of cash that is still in the market that's created by the central banks of the world they created about $21 trillion in cash, that equates to the
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entire gdp of the united states. that money is still out there, even though the fed has cut back a little two, i think the issue is there's some looming dangers, my opinion, in europe so we're seeing money shift out of europe and also come to the united states. the other issue i think is the trade skirmish, if you want to call it that, with china the issue there is that, yes, china is the second largest economy in the world, our economy is 21 trillion, their economy is 13 trillion if this continues, in my view, china will take the hit. it won't be the united states. >> so, based on that assessment, if trade is the one issue that's been impacting peoples minds when it comes to where stocks are headed, based on that assessment do you think stocks are undervalued, fairly priced,
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or overpriced? >> i think they're slightly undervalued at this point. i think the emphases on the trade, people call it trade war i call it trade skirmish, it was overdone yes, we had some days where the market was moving, the press was saying this is causing the movements, but on any kind of medium term much less longer term basis the united states is able to deal with this in a relatively calm way, while china could get significantly hurt by this if it continues i do think the trump administration is negotiating and this is the way they negotiate. and they ask for more than they want, then they have a fall back position this all gets eventually resolved >> you think treasury yields are headed higher. stocks should be headed higher you do have concerns when it comes to europe. i saw a note you put out where
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you said nobody is paying enough attention to italy >> that's correct. the italians, it's a coalition between the five-star league ana if they keep to their promises they made when elected, they will far exceed the budgetary rule of 3% if they don't keep their word, i think they'll find themselves in trouble with their own citizens, all of this comes out, there's a timeline here. they're supposed to be out with the budget by september 27th, next week. the eu is supposed to approve it by october 5th so we have a short timeline. we could see some real upheavals depending on what the italian government does. >> what does that mean for investors? >> i have been advising people
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and institutions to stay out of italy and frankly to stay out of investing in europe at moment until we get more clarity. the other issue i would like to address is what you raised, interest rates i find it very difficult to comprehend why the fed is behaving the way they are. the u.s. government, congress, the senate, everybody is trying to grow the economy as much as possible, they're being successful in doing that, which is great and the fed keeps wanting interest rates to go back to some sort of normality that hasn't existed in a decade i think it's the wrong move on the part of the fed. >> why if you're not going to raise rates now in a great economy, when will you do it? >> well, you don't need to do it necessarily at all there's no -- you have to raise in a great economy, why do we need to raise rates at all
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why can't we increase the economy further with lower interest rates, lower mortgage costs, lower borrowings. >> could be inflation, or asset inflation. i want to ask you something else so it's -- you know what started today, mark? >> say that again? >> you know what started today what began >> what. >> early voting on the midterms. do you want to wait to make your prediction i listen to the "new york times. i went to bed. i was 99% sure hillary was going to win i think 99.6% or 99.7% sure. i didn't, but you were on the other side of that trade, where are you on the midterms for the house and senate >> i do not think there's going to be a blue wave. i think there's a lot of stuff, a lot of commentary on both sides of the aisle
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frankly as a guy wloez beho's bn wall street -- >> that's kind of punting. who will be speaker? >> i think the republicans will maintain control i'm not punting. there you go >> both houses >> right >> okay. i don't know the one thing i remember that you pointed out, i remember trump filling stadiums then putting dividers in gyms for hillary to have a couple seats taken. now the same thing happened in vegas again. you couldn't get close to see him. >> right >> i don't know. who knows. there's motivated voters on both sides, i think, right? >> that's right. >> there's some motivation out there this time. >> i gave you an absolute answer you can call me on it after the election >> i'm glad it was you, not me >> thank you >> mark grant from b. riley an associates. coming up, marijuana stocks are flying high but some major
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regulatory risks for investors leslie picker has that story next. at the top of the hour we'll talk about investing in sports and technology our guest host will be former captain of the brown football team, george pyne. ivy league, but still captain. he's bringing some friends big ten is their conference. that's where rutgers is. commissioner james delaney and pga commissioner jay monahan
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time for today's executive edge we are tackling one of the hottest topics, the rapid rise of cannabis stocks there are some hurdles, and leslie picker has a closer look. everyone is looking at this space saying why are there not more deals to satiate the demand >> there are some coming down the pike, but we thought it would be important to look for the smoke signals within the regulatory filing. each cannabis stock has a common
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disclosure, the risks related to regulation regulatory approvals and disapprovals will likely be the life blood of cannabis stock momentum to the upside and down side take tilray. shares are up nearly 62% so far this week. largely thanks to the dea's approval to import medical marijuana for clinical trial in california but the first risk factor in its filing from july's ipo involves the company's dependence on approvals to grow, process, package, store, sell and export medical cannabis and this is all in canada where pot has been legal for medicinal purposes for years and will soon be decriminalized for recreational purposes. the first five risk factors focus on approvals, legalization, compliance in canada and other countries it's a similar stories with other haven't ipos there was a company called mtech which raised $58 million for
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what it describes as a cannabis acquisition. they include risks being cannabis illegal under federal law, assets related to cannabis may be forfeited imagine reading these risk factors in any other type of investment or any other type of company. what gets me is when we have the ceos on, none of them will admit to using their products for recreational purposes. if you have a product you don't want to admit to using, you might be concerned about investing. >> right you want a ceo who is behind the product, who can use it and sayy comfortably in front of an audience that they use it without backlash >> we have canopy growth on. i've been trying to figure out this company when you put it in drinks, do
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you take out the stuff that gets you high >> yeah. there's supposed to be other things that are good in there. bringing down inflammation >> medical things. >> is anyone talking about putting it into drinks and leaving it >> i don't know. >> they don't take it out of brownies >> no, they leave it in. >> i wouldn't know >> of course not or any of the ceos wouldn't know. up next, we'll talk about some hot ipos outside of the cannabis business. find out why 2019 could be the year of the unicorn. that's after the break at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey.
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2019 shaping up to be the year of the unicorn according to recent findings from ey. among the trends to watch, technology, industry disruption, and deal volumes for insight, let's bring in jackie kelly america's ipo leader at ey the numbers even so far -- even though i know how great the economy's doing and how great the stock market is doing, but the numbers are unbelievable for 2008 v 2008 versus last year.
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>> 60% on capitol raised >> 60% of capital raised 2017 was no slouch year. >> it was an okay year nobody would complain. but we really are ramping up there's a big backlog of backed companies right now. they're pushing to get out >> is it because of the tax reform changes >> i think tax reform helped the bottom line for a number of companies, but i think the number one reason is valuations are so high right now. how can you miss this opportunity? and i think a lot of companies are concerned that economic growth that we've experienced, that this isn't going to go on forever. so i think -- >> you say valuations are so high, how can you miss this opportunity. you mean to sell your stock? >> to sell >> you mean across the board >> look at equity markets. right? and when you're going public, you're going to get comped against your public peers for valuation. wow. it is great times right now. >> and you ain't seen nothing yet. the rest of this year is going to even be more probably more of
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an outlier than the first. >> typically our fourth quarters and second quarters are really big for us i think this year the only hurdle we're dealing with is the midterm elections. i think companies are going to push through and we're seeing a lot, a lot of those unicorns lining up for 2019 >> for next year is it possible next year could be even better than 2018 >> yes >> really? >> yes, i really think so. the volume of activity we're doing especially in health care out of the bay area and also out of the east coast boston, significant. >> all right santoli, let's get one foot out of the do for. >> it's interesting. because it's like it's been so slow in coming that, you know, i once went back and looked at 1999 there were, like, 500 ipos that doubled on day one it's not like that at all. >> you were just bragging and clinton. now you're saying it was all about -- >> at the end, things got a little silly >> but there was a boom and a bust that's the issue we don't have this quite yet
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>> really? >> companies are farther along, most of them >> so there's a little froth couple of bubbles? >> you know, i think we've got a great window i think we've got a lot of companies coming what's great news is in addition to health care and technology, we see fin tech, real estate, all the sectors hitting it off right now. >> business confidence and consumer confidence, it makes sense. if you're confident, you become public all those unicorns are finally going to come. >> i don't know if it's all of them but i think we're going to see bigger volume this year. >> all right jackie kelley of ey, thank you when we come back, our guest host for the next hour is george pyne he's bringing some friends with him as well. big 10 conference commissioner james delaney and jay monahan. "squawk box" will be right back.
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the rally rolls on futures pointing to a higher open building on yesterday's record close that's coming up the big business of sports george pyne of bruins sport capital is here to talk sports, sports media, and tech he's also brought some teammates. the commissioner of the big ten and the pga commissioner those interviews are straight ahead. and break out the beer the browns are winners the second hour of "squawk box" begins right now ♪ live from the beating heart
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of new york, this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. it's friday. i'm becky quick along with joe kernen and mike santoli. they've been in the green even through the week including the new highs that the dow and s&p 500 set at the close right now looks like the dow futures are up another 65 points and the nasdaq up by ten more point ifs we were to open here here's what's in our headlines this hour. today is the day the new apple iphones go on sale with consumers around the world waiting to get into apple stores to buy them. analysts are interested to see just how popular apple's most expensive ever will be the iphone xr which is a less expensive new model will go on sale next month. dow component mcdonald's has
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announced a dividend hike. to $1.16 a share from $1.01. this is the 42nd consecutive year the chain has increased its dividend that stock right now, dow component, up about 70 cents and wells fargo is going to cut 5% to 10% of its workforce in the next three years. it's the way to reduce costs by $4 billion by 2020 it would amount to 26,000 jobs this is -- i'm looking at a chart right here because remember july, it started. it was like -- it looked like -- i think you did your policy -- >> early june. went down 3% and then june 29th. >> july was a great month. august looked like it wasn't going to be great. seasonally it's not supposed to be then it turned into a great month. then this week, what the hell happened it went up triple digits in the face of new tariffs. what's happening today didn't it start -- what are we up 80 now? >> 65. but we had been up 88.
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>> underperforming in the chinese market this week though. >> yes which is also weird. >> down 20%. >> that's what happened. the rest of the world bottomed >> all right yeah, okay i got dom chu here we were talking another big rally pushing the s&p to highs nasdaq back over 8,000 you know just the offhand november 9th in the nasdaq to here do you know what the number is >> i can look it up. >> probably 50% or 60% >> it's pretty big my 401(k) is great >> your 401(k) is great? >> yeah. i love it. my retirement is on track. it just needs to stay that way >> what about all the individual stocks you're trading? >> i don't because i can't trade. but there's one individual stock i can own. >> i'm talking about -- >> comcast >> your cayman islands accounts. >> that was a secret between you and i. >> i shouldn't have said that. we're kidding. we don't invest. >> i do not invest in stocks
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i only own one stock and that's comcast. >> that's all you need to own. as you look at the markets set up right now, the last time the dow saw a record high was back in january and the s&p earlier this summer. but as we talk about the biggest performers in the dow, no surprise it's the usual suspects you've got apple, nike, microsoft, and visa. the best performers all up by around 19%, 20% or more in that span since the january 26th high in the s&p 500, it's also computer chips although that's the one we maybe have to look at a little bit more closely amd up a whopping 24% just since august zblooinchts august the thing i guess that is probably the most intriguing is going to happen at the end of the close today when we will bet probably the most significant reracking of the s&p 500 in the
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better part of 10 or 20 years. and the reason why is dow jones will create a new sector called communication services it's going to replace telecom which only has three or four stocks in it right now but the big thing you need to know is tech and consumer discretionary giants are going to move from their sectors into this new communication services sector the highlights are facebook, no longer a tech stock. alphabet, parent company of google no longer tech twitter no longer tech netflix no longer consumer discretiona discretionary. they're all going into this massive com services sector. for some of those benchmarks the indices, it may just change a little bit about the way things are going to be worked out with how you invest and benchmark your performance >> stay right here we're going to talk more about that and what's driving the rally today. joining us is richard bernstein.
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also a contributor here at cnbc. and jody, let's start with that. why this sector shift and what do you think's really happening? >> there's an index committee between s&p dow jones indices that go through the sector classifications every year and it's based on where companies are generating revenues from, earnings from, what the market perception is. that's done by consultation. and what we found is with the evolution of the ways that people communicate, that a lot of the stocks that are in the technology and consumer discretionary that use the internet are places where people are forming communities and they're really communicating that way so it's been time now where we're going to do the migration, and it's pretty well known while it's big news, it's not really new news.
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and for composite investors, it doesn't matter. >> why are you really doing this i can think of a million reasons it doesn't make sense for this company to be in this sector or that sector. is it because these stocks were having a huge outsize influence on the tech sector where they were trading >> it's not so much weight there's still a huge weight in technology it's still over 20% of the s&p 500. only 5% is moving out. so the sector is dropping about 5%, but what is happening is that, for example, this quarter you have apple as the best performer in the 500 and facebook's the worst there's this divergence. the revenues aren't coming from the same place selling iphones is different than getting advertising revenues >> so the changes roll into effect do you think most investors know about it, but if you're an etf investor who hasn't been paying attention, what would you tell people >> if you're an etf investor that invests in sectors like
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technology, then you should pay attention because there are stocks that are coming out of the tech sector, stocks coming out of consumer discretionary which is also really popular we've got disney and comcast coming out into the telecom so you need a combination of technology, communication services, and consumer discretionary in order to get a similar exposure to what you might have had before. >> i would say this. going back to this summer, for those people who like to look at sector spdrs, there has been an xlc. that's the ticker of the etf which is kind of giving people a bit of runway to your point of being able to invest in it or feeling it out >> how's it done >> it's done pretty well with the exception of obviously facebook and whatnot but the idea is investment vehicles have been put into place to let people kind of make that easy transition from just straight tech or straight discretionary. >> and the new sector, it's
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going to be 40% facebook and alphabet >> all right rich, let's just talk about the markets overall. s&p 500 and the dow closing at new highs yesterday. mike did a report earlier where he said this is shaping up to look like this time last year. which if that's the case, things could heat up in the fourth quarter. >> you know, becky, again, i think profits not politics ultimately move the market and, you know, corporate profits have been strong people just don't want to believe that that could possibly be the case. and i think that's what's moving the markets here a good corporate profit corporate environment and why wouldn't the stock market take part in that >> okay. but it's based somewhat on the economy. okay and something's going right with the economy. it may or may not be based on policy i want to focus o u you on something.
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so the atlanta fed went to four. we had a 22 and a 42 and what is -- do you have a view on what it'll be this quarter? >> no. let's say it's above four. so it's 10.4 right? will we do 3% this year? >> we could. >> not we could. i just got you to 12%. or to 10%. so unless we go in the fourth quarter below 2% it's going to be -- okay so that's good for you, right? that's helping the stock market? >> of course >> what about next year? just guf me next year. what do you think next year is going to be? >> the key thing is that nothing is different about this cycle. what did we do we just cut taxes. >> fine. >> let me finish let me finish. >> will it be a long lasting higher level of growth or is it a front end loaded -- >> so is it a sugar high, that's what you're asking >> yes i want to hear from you so next
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year i can talk to you and say you said it wouldn't last or would last which? >> you know how people are wo y worried it's a sugar high, people are talking about tax 2.0. >> that's just talking about making it permanent. >> you're not answering me what's going to happen -- you conceded 3% this year. what about next year >> i personally don't believe we're doing anything different than before. you cut taxes, you spend, market goes up. >> nothing from deregulation you don't see consumer confidence >> there's no credible evidence that less deregulation -- >> less regulation >> less regulation causes -- >> really? >> look at singapore they're the most regulated economy in the world >> that's not apples to apples so a so deregulation didn't work? >> who's the guest >> it's not been a positive for the market >> yes, it's been a positive. >> for the market?
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>> but that's not the market has been up. it's very standard stuff you are spending and cutting taxes. that's called stimulating the economy. why wouldn't the stock market be up it's that simple >> i'm talking about the economy. we didn't have a single year of 3% for -- >> i don't care about the economy. that's not my job. i care about making money in the stock market >> that's why i ask you because it does matter -- it helps corporate profits. it has to go into your thinking. >> of course it does i'm saying many things -- >> so what do we do next year? >> 2019 could be a troubling year for the markets why? because -- >> you're not talking about gdp. i want to know whether we stay at 3%. >> you're going have very hard comparisons on the corporate side you've got strong growth this year you're going to have to keep that up next year. that's called hard comparisons that's going to be tougher for the stock market
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>> how about gdp next year will it go down or up where it is this year >> you mean growth >> yeah. gdp growth >> i don't think we change the trend in growth. why? >> these are things i want you to actually say. >> i will say. >> did you think we were going to do 3% this year >> yeah, that was entirely possible when you're cutting taxes, you're spending. of course you can do 3%. the question is -- >> we did for eight years and tried -- >> joe, the weight on the economy is debt. we still have debt >> but they also said we wouldn't get production growth -- i'm just wondering whether we'll see. because time will pass and we will be able to compare predictions to -- >> i get paid on the stock market, not on gdp >> i think that's good good for you anyway. >> rich, thank you for coming in jody, thank you, too coming up, tech and sports collide on the squawk set. bruins sports capital founder george pyne is going to find us.
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i'm going to talk him into doing more than just hockey. he's bringing some guests with him including big ten conference commissioner james delaney i'm just kidding about that. he gets mad. when we return ♪ the lexus ls 500 & ls 500 h. take advantage of great offers on the 2018 ls 500. experience amazing at your lexus dealer.
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i decided that i wanted to go for electrical engineering and you need to go to college for that. if i didn't have internet in the home
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i would have to give up more time with my kids. which is the main reason i left the military. everybody wants more for their kids, but i feel like with my kids, they measurably get more than i ever got. and i get to do that. i get to provide that for them.
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♪ in the sports world, the unbelievable has happened. we're taking our ep shot because he's a big fan he went to rutgers which was in the big ten now. you were dying to get into the big ten. kansas beat you by 80 points >> it wasn't 80. >> might as well have been the cleveland browns, i love rutgers. i'm afraid to say anything >> thank you. >> awesome love the big ten love everybody love every city. love cleveland love buffalo love everything. i love everybody the browns won their first game in 635 days. the browns too k the lead in the fourth the surprise comeback was led by none other than the number one draft pick baker mayfield. is he tall enough?
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>> absolutely. >> all right you don't think darnold, 6'4" -- >> well, darnold had a couple of interceptions. and was 17 for 23. they dropped a few balls on him. >> all right that victory was a long time coming for the long-suffering browns fans. and fans got even more than the satisfaction of a win. the victory fridges, those are what they're called. bud light placed in the area bars they were finally unlocked we've been waiting for that. can you believe it they missed, like, six field goals and tied a game. >> they're 1-1-1 now >> two ties this year already which is weird can't you figure out something for that can't there be a sudden death or something? >> i think so. they got to follow college sports there's no ties in college sports >> we're using you already we've got a lot of fun things. it's friday, you realize that. >> and tiger's on the
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leaderboard. >> tiger's eagled 18 to be even with rickie. then you have koepka, day. it's great we are a day away from the start of fall. but football in all its forms is back that leads us into our guest for the hour it's the brown bruins. >> playing harvard tonight >> everybody -- >> harvard rah rah rah ivy league, baby >> bruins concentrates in high growth and tech and experience and jim delany, commissioner of the big ten conference also joins us no way you've been there 29 years. is that a mistake or something >> i think that is a mistake it's gone by quickly, but it's true i'm in my 30th year at the big
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ten. >> i love the big ten. love it. how many teams it doesn't -- it's not really, ten is it? >> no. we're a little bit challenged. that's our historic name we have 14 institutions. >> you got 14. you're from south orange, so we're neighbors. but you know he was a basketball player at unc? >> played for dean smith what was it like playing for dean smith >> that's unbelievable >> hall of fame guy, hall of fame coach terrific experience. you wouldn't think that you would take away lessons, life long, but his preparations, attention to detail, innovation, strategic tactical, everything you would expect would be included in a dean smith practice and so i think all of us who played for him in the '60s, '70s, '80s, and '90s took away from that not only a tremendous competitive experience, but an
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incredible experience in terms of preparation for the next stages in our lives. >> great guy played golf with him one time on lake tahoe really nice man. so i'm not sure unc was the best choice for you if you take the top how many players from nc, where do you fall in there? top, what number would that be it's a big number. >> well, michael jordan was 23, i was 22 so i was another player. it was a great opportunity probably some place in the lower quartile >> okay. >> jim, tell the viewers you've got a deal with cbs, fox, espn your ratings were sensational last year. your ratings this year with ohio state and the michigan games were high. your attendance was better than every other conference last year what are you doing in the big ten that makes it so special why have you been so successful? >> well, we're a historic
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conference we were founded just down the street from here in 1896 and, you know, we benefitted by tremendous population, immigration, manufacture iing. we're the bread basket of the united states. these are world class universities that sponsor athletics for 10,000 students. so quality education, quality competitive environment. but i think really what we have is this alumni following that is generation after generation after generation and the experience of intercollegiate athletics both playing and watching it i think stays with people for a lifetime so when you look around the country, we're close to 6 million living alums they're all married to somebody, they all have a couple kids. so that immediately gets you to 25 million american who is have some connection. we've tried to do it right it used to be a male situation
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and for white people today it's global. it's black it's white it's male. it's female. i'm very proud we've gone from 70/30 male/female to almost 50/50. most of our games are available nationally or internationally. so, you know, there's been a lot of commitment by the institutions, a lot of history, a lot of tradition and you're right we've got a bunch of new partners and they've worked seamlessly to promote the big ten. and there's great product out there. >> $51 million per school being paid out by the big ten through tv partners. one last question from me. the college football playoff was probably the most innovative change in the last five years. it increased viewership interesting with made every game more important tell the viewers, what are the pros and cons of adding another four teams i personally think less is more. but what's the tension point there on this -- something that's been great for college
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sports give us the pros and cons of expansion. >> yeah. the pros are that there would be more opportunities there probably are eight teams capable of winning a national championship the other side of it is it takes another week into the second semester, probably very hard to have a playoff game before christmas because of exams. it probably dilutes the connection to the rose bowl, the sugar bowl, some of the historic connections in college football. there's going to be discussions about it we have a contract that runs, i guess, another eight years but i think for now there's a great deal of anticipation there's tension. actually, sometimes less is more we haven't had a champion the last two years
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but the ratings, the followership, whether it's on legacy platforms or new technology, the water cooler discussion is off the charts it's really invigorated the regular season >> here we are we still don't know what to do about paying athletes. but you just said $51 million per -- schools do so well. i mean, and then the athletes get to benefit from the education and i think they love to play, you know. it's the love of the sports that does it. but is it ever going to change because you think about the money that's made. and i'm glad it comes back to the schools, butthis is -- i look forward to college football more than the nfl. and we know that what the franchise value of all those teams are. now, this is based solely on the players that don't make anything that's the only thing. it just seems like it's incongruous that -- so i don't know how you finally solve that.
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>> yeah. i think you make your point. you love college sports. there's a reason you love college sports college sports is not pro sports lite it's connected to the universities, the brands, and the educational opportunities. and wlihile, you know, the business of sports is good in certain ways, our business is provide i providing lots of opportunities. not just men, but men and women. and so we do a great job of providesing the opportunities. and the big ten and some other conferences have done quite well i can tell you athletics at brown and colorado are equally important to those young eople >> wow you got george's school and my school and yours >> i've done my research okay i'm sure you all have done your research but the fact of it is, arty duncan, the former secretary of
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education once said and i agree with him on this, other than the united states army, no one does a better job than intercollegiate athletics preparing young people for the next portions of their lives so i think there is a special differentiator between the sports it is these are students first we have done more, we've done better, and we can be more creative in how we make their experience a stronger one. but essentially ours is a series of educational opportunities we want to keep it going in that direction. >> which is an argument for what you said before, not extending the season or encroaching on any of those holiday exams >> that's right. >> what else did i want? i guess i'd ask you about what the hell does alabama do and do you have envy? it's weird they're just players, aren't they how does that work how does that happen >> you know, that's a great question when i was in school, ucla dominated the basketball landscape. >> i remember that
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>> and we played in a couple final fours and we couldn't get over that hump but alabama and saban, you have to tip your hat. they're playing by the rules they're playing with the same number of scholarships but there's great talent there's great talent in that part of the country. he's a coach who came out of, i think, west virginia, but was also trained in ohio and at michigan state and in the nfl so he brings an awful lot to the table. but clemson has won one. ohio state has won one and obviously he's won a couple. hat's off to what he's been able to accomplish. >> we got to go. they were already playing the music. i think i might be in trouble. anyway, jim delany, thank you. commissioner of the big ten. and we'll get to hockey eventually >> okay. when we come back, the former ecb board member will join us to talk bank regulations, the state of the economy, brexit and much more. "squawk box" will be right back.
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good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square among the stories front and center, shares of micron technology the company executives say tariffs on imported chinese goods could negatively impact its results for up to a year at this point american airlines is the latest carrier to raise baggage fees the price of the first checked bag goes up by $5. it's now $30 a second bag will cost you $40 and that matches price hikes previously put in place by delta, united, and jetblue another tesla executive has reportedly departed.
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tesla's vice president of global supply management liam o'connor has left that would make him the fifth senior exec thutive to leave ov the past few weeks coming up, we'll be joined after the break to discuss global markets, the rally on wall street, and much more as we head to break, take a look at u.s. equity futures let's see where we are this morning. we're up 55 on the dow 5 on the nasdaq, a little over 2 on the s&p stay with us
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. welcome back, everybody. let's talk global markets, the ecb, and brexit. joining us now is lorenzo drenni let's talk about what you're seeing in europe a little more broadly. when it comes to the bank, we've talked an awful lot to u.s. banks ten years after the crisis, where they stand general perception is they're in much better position than a lot of the european banks. you would say that they have a head start, right? >> well, i think the u.s.
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authorities dealt with a crisis much sooner than the european ones at the beginning of the crisis, each had their own supervisor. i think since then things are improving. now the capitalization of the banking system in europe has improved there's still some cleaning up that i will say grench bafrenche in a good place right now. >> there are concerns about contagion. we had mark grant on earlier who said he's very worried about italy right now. we'll see some sort of a hint as what's to come next in the future politically what sort of contagion is there? >> well, actually the italian spread has gone up to 300 basis points early june. then they have come down but during this movement, the contagion has been very limited. i think mario draghi has also mentioned he's there and ecb is
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there to react >> meaning what? the italians will eventually go with reforms that are being pushed? >> well, i think first if there is a problem in italy, companies will be limited compared to the past now, the government will do next week i think eventually the number wills not be that scary from the point of view. i'm more concerned about growth. the problem of italy is low groes over the last 20 years and the risk is, you know, coming back on the reforms, you know, back tracking on the reforms that have been implemented by the previous government which would mean slow growth also for the next couple of years. that's the big challenge >> i think the bigger challenge politically is we're not dealing with those >> i think the eu has no way to oblige italy to the reforms. it is is it to have a ratio with
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no growth? you know, sooner or later, some of the two has to give so either they continue which is not good nor the economy, or they implement reforms >> you do worry about the dollar appreciating further, though, right? that's something you are concerned will put additional stress on emerging markets >> we are not concerned. actually, we're happy that the dollar is going up i think that's -- it heps the ecb. i think it helps european economy which is in a soft patch, i would say some emerging markets economy have had problems. but i think, you know, the markets is discriminating. there is no contagion there also so in the end i think it's norm normal the u.s. economy is ahead. the dollar has to appreciate the fed is tightening right now while the ecb has more time, so i think it's a normal reaction of a different cycle, a
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differentiation in the cycle i wouldn't be surprised. >> you mention the ecb has more time how much more time before you think there really is a little more momentum toward any kind of a tightening campaign? >> i think ecb wants to have a clear indication that inflation is closer 2% the indications now show it's approaching. over the next two years. i think over the -- as draghi said, until next summer, probably there won't be any tightening they will stop qe at the end of this year. and then i think ecb is in a relatively tough spot. they have to wait for the fed to tighten further and then maybe they will follow with some delay. >> lorenzo, what sort of a threat does brexit pose to a french bank? >> actually, for continental banks, we're in london and paris. so we kp move things relatively easily it's more complicated for, say,
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u.s. banks in london or uk banks. they have to make a decision whether they shift people in continental europe or not. and more time goes and we don't have an agreement, the more pressure there will be to move people in the continent. i think what happened yesterday is not very good, actually no clear deal. >> we talk an awful lot about trade and tariffs and what the impact might be here or in asia. what are any potential impacts and how do you sit back and watch what's happening here? >> well, i mean, i don't think a trade war is very good but we need to put pressure on china to liberalize. so it's a question of tactics. and it gets into really something really worse for everybody. right now markets are not looking at that. if it gets worse, the whole world economy is going to slow down and the brexit, i think we're all underestimating the impact of a hard brexit on the trade
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between europe and the uk. the uk is the first partner. uk for continental europe is much more important than the u.s. we're sbre gar they're integrated it may create a shock that we are all, i think, underestimating. >> lorenzo, we want to thank you for your time today. appreciate it. >> thank you >> got any good tickets to the ryder cup this year? >> it's in paris, no >> it is and we have jay monahan coming in you got one of those tents or something? vip tent you guys talk? >> tour de france, i might want that >> oh. >> are you afraid for the u.s. team >> oh! now he's talking >> no, not afraid. >> okay, okay. so we welcome you. >> that's big of you thank you. can you do that horrible chant that euro chant that drives me crazy. i hate it.
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>> it's always the last holes we share as the most important. >> honestly, the two teams -- i mean, the euro team has such talent and we've never had a better team here. it's going to be really good how's that course? is it nice >> i haven't played on it. >> it's not that long, but i think it's different it's demanding, i think. >> yes >> and it doesn't have to be, because it's head-to-head competition. we'll talk more about that >> let's not put tariffs on golf >> we'll agree on that. >> no tariffs on golf. but you guys can bring down some tariffs. really you're always blaming up but anyway, thanks to lorenzo bini smaghi. coming up, pga tour commissioner jay monahan joining us we'll talk about the points system in the fedex cup. also tiger and rickie tied at the top for the tour championship much more. futures at this hour, up 66 on
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but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies lead with digital. tiger woods catapulting himself into first after one
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round in atlanta drained a 28 eagle putt on the 18th hole. finds himself atop the leaderboard tied with rickie fowler joining us now, pga tour commissioner jay monahan guest of george. thanks for being here. >> thank you. >> you didn't care if tiger came back this year, did you? it's unbelievable. >> it is unbelievable. and it's been -- i think what you've seen is you've seen in his return a continuation of the story lines that developed over the last couple years. >> which were unbelievable, too. these young ones, the list goes on and on. and we've watched this all unfold tiger returns, phil wins in mexico city, bubba wins three times. i think with tiger's return, everybody wants to see how does he compete against them, how do they compete against him and it's been phenomenal you see it in every single part of our business. everything that you can measure is up. and it was up last year and it's
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been up more significantly this year there's just tremendous energy behind his return. >> you saw him on the back nine he had some very short birdie putts finally on the back. you know where he was hitting from the fairway. which is the biggest thing for him. >> and i heard his caddie make some comments after the round that not only was he hits the fairways, but had control of his ball >> from under that tree, he couldn't take a full swing and cut it right in. he's doing amazing things again. in the back, some of those swings, couldn't be doing it if there was any question about the injuries >> a year ago he couldn't twist. now he's on top of the leaderboard with rickie. one point i want to make is we tend to talk about con semgs and the energy he brings to our sport from a tour standpoint and just participation standpoint the other thing you've got to look at is there's been a lot of discussion over this past year on the great things that other athletes have done for charity
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and philanthropy whether it's j.j. watt, lebron james. tiger for the last year has changed $150 million for his foundation he's got a permanent facility in anaheim. and he -- his return ultimately and his ability to continue to play on a long-term basis and be a huge part of our platform, it does wonders for young people. >> ask any of those young guy, who was your idol. and he is now competing with a tiger woods that was almost at the same skill level when he became their idol. and he's back there and compete against him. it must be unbelievable. >> unifny story. wednesday morning we had a breakfast with ten players up on stage. about 150 people asking questions. the question was dream foursome.
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jason day said my dream foursome would be tiger, and then he started with his second one. he said, that's really awkward that's right here. and i'm competing against him this week. but i'd think every player up there was shaking their head. >> and then the leaderboard, justin rose who's been on the show such an awesome guy. and that swing -- i felt bad for him a couple weeks ago >> yeah. but you know what? when you feel bad for guys in this sport, they have the tendency to make it right. here he is one shot off the lead it's a gold medalist, number one in the world and he's got a shot. >> i can't -- can you swing like that the way with -- >> i can't swing like anybody out there. >> and he uses the same -- do you know the shaft on his irons is almost the same on -- a normal person wedge is like this and the 3 iron would be like this
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they're like, the same length, right? >> they are. every single club. >> how does that work? >> it works when you come to new york and you win the northern trust, you go to boston, you win the dell it's working for him he has certainly found a comfortable place and there's no stopping him. >> how did you -- >> you're the ceo of the pga tour following two great ceos or commissioners. you're putting your own stamp on the tour talk about the changes you've made with the championship weekend, the schedule. and your vision for growth of golf globally. >> i think when you look at the schedule post-this year. one of the things, we look at everything from a fan-first standpoint you you have to look at your sport relative to other sports and form of entertainment. the fedex cup has been a great introduction with four playoff events our final two are up against the start of college football and the nfl. so we felt like if we could end
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our season prior to that start and compete to own the month of august, a month where there's a real opportunity, that would be a great result for the pga tour as we look to grow our tour and sport. so it's been a three-year exercise we announced earlier this week that it's complete we had announced the pga championship is moving to may. players will move back to march. we go from four to three playoff events when you come to atlanta next year, again, listening to the fans we've addressed the fact that there are two simultaneous tournaments and the points system to our core fans and those fans we want to bring in is confusing we'll go to a simple leaderboard with the same probabilities of winning that exist in the same system so we think it'll be more intuitive. we're doing it because we have these unbelievable athletes we just talked about.
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and now is the time to compete and bring more people into the tour and into our great sport. and we're really excited about it >> the players have been good. they reach out to the kids who are around like, you said northern trust in new york that was in new jersey because we saw it. it was great >> that's one of the things. the energy at our tournaments every week, there's a lot of money raise ed for charity. but seeing what each take -- they were all on the other side of the ropes and they do a wonderful job spending the time and trying to pull people into our sport. >> what is gambling going to mean for golf if at all? >> i think it's all about fan engagement you think about when you play golf if you're gambling on golf with your friends, you get a little more engaged in your round of golf we are -- if you look at a pga
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tour, you've got 78 balls in the air at one time. most other sports, you have one. so there's a complexity, a richness to our data we play over four days we play virtual every week and we have great athletes i think win the right way and it'll be done the right way. it has an opportunity to pull more people into our sport and that's why we've been pretty vocal on our support that's why we're spending a lot of time figuring out how to go forward. >> suddenly spieth emerges and mcilroy emerges. and we've got justin thomas. all these guys come in, and we don't need tiger anymore then tiger comes back after he takes over then you've got all the new guys -- >> and then the ticket sales go up >> then the full tiger comes back you're a genius. >> it's been a strong year >> it has. >> and us not in the sport, changing that calendar and changing the rules for the championship is no small feat because all sports are resistant to change. hat's off to you on that change.
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>> wow is this on -- no way this is on nbc are you kidding me >> nope. >> i was watching this and then ryder cup is nbc. >> it is the following week, yeah so nbc just to the conversation we're having, we were in a production meeting with the team the other day. 59 unique rounds of golf 56 rounds those ratings were up year over year >> that's incredible >> i'm not going to be a homer about nbc, but don't you like dan and john i guess nance is okay. what about fox have you gotten used to that yet? >> we've been doing nbc for longer than i've been alive. >> they're doing the open now though are you used to the coverage yet? do you think it's up to speed? >> listen, i think it's great that more and more media companies want to be involved in our sport. >> oh, you're good see, that's why. that's why okay i'm getting used to them >> to your point, we're very proud of our partnership
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he's a good player >> all right nance. and johnny thank you, mr. commissioner. >> great to be with you. >> you're doing a hell of a job. and i can't wait for the ryder cup. do you like that -- the more they do that, the more -- i hate it >> the one thing i love as much as anything else is passion and that's what that's all about when you see that noise and energy at any tournament, i love it >> we like to give it to the euros, don't we, when they're here we're going to go. all right. thanks to george pyne. coming up -- you're leaving? >> i'm leaving go browns. beat harvard >> good luck >> the uk auction for sky will be settled this weekend. what you can expect and check it out. lines in new york are already there for new iphones. people need a life
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we'll ta th dianthlkecmea d e markets when we return
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trade war. walmart warns new tariffs could mean higher prices for consumers. sky going to auction the epic battle between comcast
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and fox will be settled this weekend. what investors need to know about the unusual uk deal making process straight ahead plus pot stocks flying high. cannabis shares soaring high in the last year. the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and mike santoli andrew ross sorkin is off today. among our top stories, apple lease laapple's latest iphone models are in stored today here's a picture of the company's flagship new york city store. customers lining up to buy the
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new iphone sx series the did doors just opening there at 8:00 a.m. you've got to love it if you're tim cook just watching -- look at these people anyway saying thank you futures right now are indicated higher up 61 on the dow. the s&p up 280 and the nasdaq up just under nine treasury yields which have been a little of -- the yields have been in an up turn micr o ron's big story today overshadowing a car quarter for the chip maker it beat the street on both the top and bottom line. their ceo will be live on cnbc today at 11:00 a.m. on "squawk alley. walmart out with a big warning on trade courtney reagan joins us live from the newsroom with the details. courtney, tell us about it
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>> yeah. what many thought would be inevitable looks at least now closer to reality. higher prices as a result of new tariffs. many retailers, brands, consumer lobby groups, they're urging the administration against the new tariffs including the world's largest retailer so i can confirm walmart has sent a letter to robert lighthizer for the most recent round of tariffs warning that walmart may raise prices on goods. calling out higher price os things like food, bicycles, grills starting september 24th, a new 10% tariff will go into effect on thousands of items imported from china then tariff then goes up to 25% in january the good news is, most of the goods for the holiday season are already here so it's likely that those prices shouldn't be impacted. now, the list of predicts is 194 pages. it took me several hours to go through. many items subject to the tariffs are complicated. they're components to finished
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products like chemicals, metals, wood, leather. others are more straightforward. things like shampoos, deodorants, toilet and tissue paper, furniture, mat rests, christmas tree lights, batting gloves, dog leashes and collars, suitcases, canoes, and many, many more. several hundred items were excluded from the final list including many baby items like highchairs and car seats those are some that target called out in its letter to the u.s. trade rep mike, back over to you. >> thank you very much interesting angle on this story. we got some stocks to watch this morning mcdonald's raising its quarterly dividend it's now going to be $1.16 per share. restaurant chain has now increased its dividend for 42 straight years at&t upgraded to buy at ubs. at a wide discount to rival verizon. they believe at&t will return to earnings growth for the second
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half of this year. and wells fargo cutting up to 10% of its workforce in the next three years. it would mean a loss of about 13,000 -- between 13,000 and 26,000 jobs. right now to the intersection of wall street and washington, a new report from fitch takes a look at the widening u.s. deficit and the global risks joining us is charles seville. thanks for being here today. >> thank you for having me >> this is a report that came out earlier this week. it took a look at the widening u.s. deficit based on policy trying to take an idea of what all this is. the takeaway, the broad view from this is not necessarily that the aaa rating in threat, but you're digging into what's happening. >> that's right. we took a look at the numbers coming out we're getting to the end of the fiscal year. what we find is the corporate tax revenues have fallen sharply by 30% year on year. so far this fiscal year. overall revenues are only up 1%.
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that's with growth of 3% while spending, on the other hand is up 5%. what that points to is a wider deficit. the deficit is going to expand to around 4 p.2% this year. >> we're looking at numbers because i've spent a lot of time going through these too. we're looking at numbers that end on the fiscal year we only have 11 months of that information and it's a combination of the pre-tax cuts and post-tax cuts. where do you break down to see where the trend is headed? obviously it'll take a year before we get clean numbers on this what do you think? >> sure. it's difficult to extrapolate from justone year of data, but i think the trend is pretty clear. that we are going to see slow revenue growth this continues really in 2019 because the big two years this effects is 2018 and 2019 personal tax receipts are growing strongly the overall picture and this is partly driven by that side is
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you have mandatory spending continuing to rise it shows that mandatory smependn costs are going to rise. as the debt rises, then interest payments are going to rise as well by another 1.5% of gdp. so it means that the deficit is going to widen and the debt is rising >> how do you view the u.s. overall? because of all the aaa ratings you have for sovereigns. it has the highest debt to gdp ratios but you say it's okay in this scenario >> that's right. general government debt is 101% of gdp that's higher than all the other aaas there are 11 aaa countries we have i think the issue is, though, the u.s. is exceptionexceptional it does have strong financing flexibility. the u.s. government bond market is the u.s. safe haven and that gives the u.s. sort of
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higher debt tolerance that we think it can support higher debt. >> to that point, i was going to ask you about this new theoretic ktheoreti theoretical framework. especially with a reserve currency, credit worthiness essentially is a non-issue right? there's almost no realistic limit to how big deficits could be or how much the country could spend. i know it's getting a lot of buzz, but how would you actually think about those issues >> well, it's true that, you know, a country that prints its own money does have an advantage. you know, it can set monetary policy to its own currency i think where i have a problem is the governments don't have to repay all their debt but they have to maintain credibility that people continue to lend to them. and i think if you -- if policy testings are such that the deficit just expands and expands and expands, then particularly people abroad will start to
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think, you know, is this -- where's this headed? i think in the short-term, you know, you're right >> i know people say tax cuts never -- some people try to say they pay for themselves. other people say they never pay for themselves i listen to you now. so down 30% on corporate revenue, but up 1% overall which doesn't seem great if the economy's growing at 3%. >> nomly it's growing at 5%. >> but suddenly it's growing at 3% maybe only 1% accrues to the government but accrues to the private sector in terms of stock markets going up, in terms of people getting wage increases it seems to me that if you can generate 3% on a sustained basis and still have revenue going up overall, it doesn't need to match the gdp. it just needs to stay stable or go up because the private sector is reaping so many benefits from the growth you're getting. and then i think about -- the only problem is that the deficit has gone up as you said.
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but then i think about when the deficit doubled with 1. % growth we didn't get anything for the doubling of the deficit for eight years. >> i think we're in a different point now. this u.s. has reached a point where they're operating above potential. >> they said that two years ago though >> i think if you -- the working age population is growing 0.2% even if productivity accelerates to maybe 1.5%, then long run you're looking at potential growth of sort of below 2% and that's with -- you know, unemployment is already as low as it's been >> wait a minute so you're assuming it goes back to down to 2%? >> yes long run >> we'll see people didn't think we could do it even this year. >> yes i mean, i think -- you know, we saw growth being strong this year because of the fiscal boost. >> 3 prs%? >> after that you gradually trend down to 2 pr%. >> that hypothesis is going to
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be tested. we'll see. there was a time we did grow much faster. >> a lot of that was down to different demographics they're younger -- >> taxi drivers, if you ask them can we grow faster they tell you no that's the most hacknied -- >> it's math >> okay. then what's happening? it's either a front end boost that's going to be a shug dar high -- >> the trend is 2% that's what happens for a long-term. >> we will see >> we will i'm not saying it's expiring any time soon, even. >> i hope we can -- >> you realize the recession's happened too then it's negative long-term is 2% and that's with the negative times >> with productivity offsetting maybe the demographics of it and you've also got a lot of 25 to 54-year-olds that -- >> and the boomers don't live too long >> part of the people that aren't in the workforce are 25
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to 54. >> it's 15% for men there. we can't figure out why that is. >> and it's already people that said it couldn't happen. they've come up with something new. but, you know, it's happening so far and maybe it doesn't last. >> i want to line them up against the wall, people that said we couldn't do it for a little while >> you want to line them up? >> i'm just curious. you seem to know these people who -- >> you're going to be saying that too. >> i don't know why it's like a rooting interest kind of thing >> because rooting against it happening seems more screwed up to me. >> you're right. >> i see a lot of it >> i'm saying for both sides, rooting is weird >> i don't think it's root that it goes up to 4%, i don't. that logic doesn't make sense to me >> growth would fix a lot of problems charles, thank you for coming in it's interesting to look through these numbers. keep us updated. coming up, media watchers and investors are in for a big weekend. the battle for sky is set to be decided at auction details on the somewhat confusing process is nt.ex
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thanks, janet. it's welcomemy happy place. store. you can learn how to switch to xfinity mobile, a new wireless network that saves you cash. and you can get 5 lines of talk and text included with your internet. and over here i'm having my birthday party. dj fluffernutter, hit it! ♪ dj fluffernutter simple. easy. awesome. ask how to get $300 back when you sign up for xfinity mobile, and purchase a new samsung phone. visit your local xfinity store today. all right. welcome back to "squawk box,"
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everybody. we've been watching the futures this morning we're back on air. we've been watching the futures this morning which are sharply in positive territory. still after the big gains we've seen the last several days both the dow and s&p 500 closed at a record high the dow indicated up 57 points this morning and smz &p by two points and naa ten. wti is up to $70.86. it was last week the president tweeted about those higher oil prices and not appreciating what the opec countries may or may not be doing to help that. also let's talk about adobe systems. it's buyed marketo from vista equity partners for $4.8 billion. and united natural foods missing the mark in its latest quarter earnings of revenue falling short. that stock is down by 11%.
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comcast and fox are bidding for sky in an auction over the weekend. the action begins today at noon and by saturday night we could know which media giant has won joining us now with more, ed lee, "new york times" reporting, cnbc contributor why didn't anything happen in the last three months with this? why has it come to this? >> so, you know, what was -- where did we last leave off? fox via disney had offered basically 14 pounds a share. that's about $32.5 billion u.s they're not considered best and final. if you're bob iger, you've already won the fox bid, the fox deal it actually benefits you to just be radio silent on the sky thing. because then, you know,if you're comcast you're like do i need to raise my bid before anything else happens? i think sort of the uncertainty needs to play into it.
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whatever deal that comcast ultimately tries to make the deal play out, they could -- disney could cash out nicely >> you don't believe that there was ever any unspoken sort of understanding that comcast didn't make disney overpay for all the other -- >> so that's the other side of it >> that's not going to happen? >> there was no sort of -- the relationship between disney and comcast between bob iger and brian roberts hasn't been best so in a normal business environment, there might be let's just calm this down a little bit doing the reporting, right we want to make sure people know what's potentially going on. also the fact that the comcast bid, you know, forced diz z knee to go up by an extra $19 billion
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t to get fox so just pure balance sheetwise, you're saying why would they pay that much now? so comcast is more dry powdered to go after this >> you think disney views comcast made them pay more and they don't like that -- >> that is a factor you cannot ignore >> and they'll make comcast pay more >> radio silence could mean comcast could bid against themselves in the auction. >> how does the auction work do you know? >> i actually looked pretty deep into it. it's kind of odd it's three rounds of bidding first round, fox goes first. disney fox goes first because they're the lower bid. what's interesting is in the first round, fox doesn't have to improve on its 14 pound id they could just bid 14 pounds. it's blind so comcast would not know. >> they would just know a bid was placed >> comcast could end up bidding against itself and saying i
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don't know if they went higher >> in that scenario if you put in a bid that's lower, is it done >> most likely it'd be done after two rounds in round two, comcast gets a chance to bid. now, they could think, you know what maybe they're just frying to play me a little bit so if they stayed at 14, i could stay at 14.75 and win. they could still win at 14.75 and still win. that is a less likely scenario i think both sides will increase somewhat you still have to market it to the shareholders ultimately you have to tender these -- get them to tender their shares it's not high enough, you might not get enough buyers. >> what would be too high for this >> look. sky was at 10 pounds start of this year. it's gone up 15%. it's incredibly high given where its margins are. it's a healthy business and the presumption is in the uk and across europe there's more head
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room for growth in the ecosystem unlike in the u.s. where everyone who wants to pay for television already pays for it there's an argument that there's potential more growth. that's why comcast wants it. that's why disney wants it at the same time it's like it might be a long time before you sort of recoup that investment >> it's not a huge, huge number even if the bids go up from here relative to the size of either of these companies to your point about how disney's interested in being quiet, if comcast puts in a rich bid, that essentially marks disney's 39% stake and sky up to that level and you're benefitting that. >> they could still win that way. so i think again, the radio science benefits them on either side of that outcome again, i think the personal animous is something you can't ignore >> we watch comcast obviously. it's our parent company. but it got down to under $31 at
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one point. it was the usual worries about cord cutting but also overpaying for, i don't know, for maybe some of the fox assets now it's back. the market's been strong, obviously, stock market. but suddenly it's back to $38. is that telling you anything you think it's telling you anything, santoli? >> i think the market cease relatively comfortable with comcast being the owner of sky >> what about recent anecdotal evidence that some streaming stuff is going up in price it's not even that much better -- why cut my cord when it costs so much >> it will have to go up netflix is the standard. right now they're still burning through their cash flow like crazy to make up for all this content cost coming in $10 billion this year. and at some point, netflix will have to raise prices just to make it economically feasible
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because they can't continue on that path. hulu has 20 million, 22 million paid subscribers and it lost a billion dollars last year and about $700 million in the first half of this year. >> why would i ever cut my cord? >> if you're a consumer? oh, because the value is great you know, $9, $10 -- >> but i work for comcast. >> for you and me, maybe, it doesn't make sense >> no. i'm very happy with my 1400 channels if i want, i hit app and netflix and hulu is there. i have everything. on a 75 inch screen. >> i love all the same stuff you do, joe. >> with speakers >> you know, my 14-year-old she's on instagram and buzz feed and netflix and hulu that's it. we're old school we like the big entertainment. >> you're old school too >> of course i'm with you >> i thought you were millennial school >> not even close. >> i pin that on everybody
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for some reason, it's a majority i'd rate to be part of a generation where you're called -- >> you're a baby boomer. you are part of one of those >> i am. i'm one of the last baby boomers. >> still >> i'm not one of the first ones anyway, ed lee thank you. you're all excited about this. >> oh, yeah. suspense saturday waiting to see what it's all about. sure >> refreshing the screen >> yeah. all right. let's get a quick market alert and tell you about the pound take a look at the british currency extending losses ahead of a statement by prime minister theresa may on brexit. the bbc reports she will promise not to change the path on brexit may's statement is expected at 8:45 a.m. this morning that's about 22 minutes away the pound sitting at 1.3145
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coming up, we talk about teen vaping. and a look at the biggest premarket winners and losers premarket winners and losers disney leading the way up 1.8% i think that she's a very nice girl... ...you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies lead with digital.
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coming up, former cea chairman krueger on deals that could be hurting low wage workers. he will join us in studio next futures right now up about 50 points or so those weren't the best levels o the session, but we were high yesterday. nasdaq up 9.5, s&p up 2.3.
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thanks, janet. it's welcomemy happy place. store. you can learn how to switch to xfinity mobile, a new wireless network that saves you cash. and you can get 5 lines of talk and text included with your internet. and over here i'm having my birthday party. dj fluffernutter, hit it! ♪ dj fluffernutter simple. easy. awesome. ask how to get $300 back when you sign up for xfinity mobile, and purchase a new samsung phone.
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visit your local xfinity store today. ♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square let's look at some stocks on the move this morning. food distributing united natural foods is much lighter than expected missed on top and bottom lines with the results hurt by higher transportation costs down about 10% in the premarket. steel case moving higher this morning. the office furniture maker beat street forecasts and gave an upbeat forecast. under armour upgraded to neutral
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from under weight at jpmorgan. firm now believes under armour could meet forecasts for this year and next. all right. new research on teen vaping shows about 20% of high school students have used e-cigarettes in the last 30 days. the number has soared 75% from a year ago great. that is according to a "wall street journal" story citing unpublished federal data scott gottlieb is considering a fast track review process for e-cigarettes and include features that discourage use by kids the fda announced a historic crackdown on them last week threatening to pan products like flavored nicotine that appeals more to kids like cucumber. >> i saw peach, mango, cherry. >> there is something to be said about the oral fixation. >> it's one thing. if you're selling to try and help smokers kick an addiction,
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you don't need all these candy flavors. >> but a delivery system to generate new nicotine addictions just doesn't -- >> and you don't know what it does to their lungs. delivery system through the lungs is not a way that he would ever suggest you get your intake of anything. >> you're right, liesman now i want to outlaw vaping. i'm turning into a government regulation person. we're switching -- >> that and the tariffs and all that stuff >> i know. it's upside down >> you've become a hard core dr big time government -- >> i'm elizabeth warren. >> exactly. >> space time continuum. all right. fda reviews would slow down innovation, but the fda now says it will help companies get new products to market quickly if they discourage use by kids. among the possible solutions that has been proposed, making the devices bluetooth compatible so they can be disabled near
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schools. >> because that's where the kids are doing all the vaping in the school zones. >> plus, you know, it's all converging marijuana vape too you use the oil. is that good or bad? because it gets rid of -- if we're going to legalize marijuana, you might as well try and do it without the tar and the carcinogens. >> lots of ifs strange world. like you were saying earlier, i mean, it's -- legalizing marijuana you can understand the reasons behind it. but you could make those same arguments for legalizing cocaine. >> or heroin and i definitely don't think that's a great idea. >> i don't know where to draw the line this is a decision we'll have to put off for another day. meantime, fast food companies are ending their no poaching clauses tho provisions prohibited a worker at mcdonald's franchises going to work at another mcdonald's franchise professor krueger said this no poach provision caused wage depression in the process.
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joining us now to talk about that and the tightening labor market is former white house counsel of economics adviser chairman and princeton professor alan krueger, also steve liesman. alan, thank you for being here and welcome. >> thanks for having me. >> so your study makes a lot of sense. if you've got anti-poaching clauses, if it impacts a big part of the consumer fast food chains, it means that workers are not going to be able to be mobile or get pay hikes from anywhere this was picked up by a lot of ags. what happened? >> it's amazing. a year ago my colleague and i wrote an article exposing this practice it's not only fast food chains also car repairs, hotels, other franchises have this kind of practice it would be clearly illegal if they were completely separate firms. firms are not allowed to get together and collude to agree not to hire each other's workers or to collude on pay this falls in a gray area.
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the fast food chains say that the franchisees are independent businesses they say they're not a joint employer yet they have this collusion practice we wrote about this and it was in "the new york times" and several attorney generals from states contacted us. the attorney general washington state has been the most effective. and he worked together with mcdonald's he i think probably using washington state law as well as federal law argued the practice was illegal. mcdonald's is being sue bid some of their employees who tried to move from one job to another and were denied the opportunity. and the workers are not even aware about these clauses. it's not as if this is a non-compete agreement where they were a party to the agreement. this happens behind the scenes anyhow, bob ferguson the attorney general in washington state managed to get about 16 fast food franchises to drop the practice nationwide. >> they may drop it, but will that actually end the practice
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you may say this no longer exists at the corporate level, but does that mean a manager wouldn't say i'm not going to hire you because you came from another. >> they've got the training to do the job i think this is emblematic on what is going on more broadly in the economy. the job market has been improving. unemployment down below 4% i had been predicting faster wage growth. it's inching up. that's good it's improving but i think we should be seeing faster wage growth historically we would see faster wage growth in the conditions we face. >> so you think it's artificial things >> and i think theiss anti-competitive practices and the fact workers have less bargaining power >> people should look at the speech you gave in jackson hole this week -- last month which lists all the reasons out there that are perhaps keeping wages from going up relative to where how tight the job market is. i think what we should do is
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take something that's unprecedented which is take an off the record jackson hole conversation and put it on the record i walked up to you at jackson hole with my diet coke and walked up to you saying you were wrong. they're coming back to the workforce. and you said >> i said the workforce has been stable if you look at labor participation rate as a whole, it's perfectly flat over the last four years. now, prime age workers have been raising the labor force participation rate that's been offset by an aging workforce. so we're not getting enough of a return to the workforce to offset the forces that are going to be in play for the next two decades. >> so there's the who's in the labor force. you can see that tick up there and that's mostly men coming back, alan or is it women >> first it was women. now it's men as well as women. there's been a little bit more recovery of men. by the way, there's another thing underlying that picture. we talk about it as coming back. if we look at people in the labor force, there's not been an increase of people in the labor
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force coming back. it's mostly people staying longer >> so not into the labor force to into the labor force, that's not a big deal >> well, it's actually declined. >> with fewer people coming back >> with fewer people leaving >> those guys who were out, the 15% of men those age who were out, they're not going to get another skill set or another chance they're just going to age out of the system and move down like you would a pig through a snake? >> it's i think a very difficult challenge. >> what a metaphor, becky. >> that's like the lost generation of guys who -- >> that's a big snake. >> labor force participation for men has been trending down for the last 30, 40 years. and it's about 11%, 12% of men out of the labor force one of my studies i found, almost half of them are taking pain medication every day. >> opioid crisis >> that's part of the crisis we're facing i think they face many
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challenges when it comes to c e coming back to the labor force >> more strongly, could they come back in i think people are at home and a little bit exasperated what's it going to take? a 3.9% unemployment rate you have decent wage growth, more decent than it's been what will it take to get folks back to work who are not part of the labor force now? >> i think you've got different groups that you have to focus on so for women, employers have to offer more flexible work many women are taking care of families they have household responsibilities and they report that they're content with their lives that's not all m women if you look where the u.s. lags behind other countries, labor force participation of women is relatively low for men i think it's a different set of issues. i think it's the change of skills in demand >> anything to do with some of the entitlements just being a little bit too generous and
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making it easier to stay home. easier to get up in the morning and get child care and transportation and put on a suit and everything else. i mean, maybe that -- is there anything to that i'm so with you on the poaching. that's horrible. it's bad enough that you can't get entry level positions above eight bucks an hour. now they're not letting you go -- >> joe, it's -- >> and that makes people want a minimum wage when there shouldn't have to be a minimum wage because there ought to be competition for people to go wherever they want >> this gets to an issue i've been pounding the table about. we can talk about federal relation and that's important. but so many of the things that inhibit people and business formation and job formation is at the state level and that has to be addressed in some states, you need more hours of training to be a cosmetologist than a registered nurse. those are the sort of things
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it's terrible. >> let me get to joe's point i think it's a good one. >> oh, come on, alan >> thanks, alan. >> it's a legitimate point maybe half of the men out in the labor force are on some type of a support program. they're usually not very generous disability insurance is the largest one. i think we need to look at how to make disability insurance interact more with work. >> does that overlap, though, with the same half who are using pain medication? >> it does overlap and it also overlaps with the problem we've had with wages in general. because they're not living great lives when they're on government support. >> right >> so the fact that wages have fallen so much for less skilled workers -- >> alan, we're out of time 15 seconds are we running out of workers? >> no, i think we're getting to a point where the job market is very tight i don't think we're ever going to run out of workers. the population is still growing. i think we're going to see more
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pressure in the job market >> i've got ten more seconds could you say that about me again? >> i didn't say it was correct i said it was worth discussing >> okay, never mind. >> alan, great to see you. coming up, stick around, steve. no gwtanof cannabis compy capyroh will join us >> i get it. >> stay tuned.e cloud that proay protects your business from threats, instead of just reacting to them. that lets you modernize and move more of your apps without re-writing. that unlocks insights from all you and puts it to work with ai. get a faster, more secure journey to the cloud. the ibm cloud. the cloud for smarter business. ♪ ♪
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canada will legalize recreational marijuana next week this week the stocks were on the move kate rogers joins us now with some of the high expectations for this booming industry. hi, kate >> reporter: hi, mike. that's right producers like this one here are gearing up for the legalization of recreational marijuana. the implications of this are major as canada will be the first g7 nation to legalize the drug for recreational use. of course it is still illegal at the federal level in the united states we interviewed the ceo of oxly they're creating a consumer packaged goods service that does everything from growth to research to retail his biggest concern about legalization for recreational use is there may not be enough cannabis to start. >> it's certainly exciting we're going to have legalization
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different provinces across the country, have different levels of preparedness. i think we'll see empty store shelves. we've seen it in every other place that had legalization. there will be a lack of products over the first year. many are ramping up production, but there's still a bit of a lag for that to catch up >> reporter: market size has been hard to pin down. there's been estimated from $4 billion to $10 billion over the first two years. one thing everyone agrees on is sales in year one will be especially limited because the product is more limits it's just flour, oils, and seeds. those won't be on shelves until 2019 back over to you >> yes all right. wow. that's -- there you are. really with all that -- be careful. be careful short breaths. short breaths, kate. >> reporter: thanks, joe >> joins us now canopy growth
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ceo. what a week. comments on what we've seen in your space, so to speak? >> well, it's been kind of what a week for about five or six years for canopy we were kind of the first really substantial company in the space. and, you know, you take each week, but it's been a fairly long build to get to the point where i think we have about 30% market share medical and it looks like we are allocated almost 40% of the different states or provinces inventory when october 17th happens. so weeks add up and you end up in a good spot >> with what we've seen this week, there's a lot of publicity, obviously but then again, i don't know what -- when we've seen moves in a stock like that, it's not always an early cycle move and it's not always necessarily a positive thing you think this is the beginning
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of something really good or are we starting to see some of the speculation that becomes detrimental to an industry >> yeah. i think, you know, the -- you know, we trade on the new york stock exchange i think with that one, if you actually look at what happened, i'm not sure it's the topic or the structure. what i mean there is i think there's a very limited trade available in total number of shares in the float for tillray. i think there were a bunch of people trying to play a game if you trade 20 million a day, that's like ten handoffs a day on the same stock. that can get pretty weird. and i think it did i bet it blew up in a few people's faces that were trying to get structured. i suspect you'll see return to normal they're a nice business. they have a nice start i would say their production assets might be in the neighborhood of 5% of what we grow and produce and the market share is probably about the
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same so i don't think it was about the merits of that company i think it got technically weird. >> we tiptoe around a lot of the issues with pot. and i think a lot of ceos from companies as well. we haven't had any ceos ever admit to using pot not for medicinal use. >> you should get elon on your show >> yeah. i don't know, did he really inhale i don't know so with the drinks, will -- and i know a lot of -- you know, there's a lot of interest from the big players in alcoholic beverages. would it be medicinal drinks will you take out the whatever causes the pleasurable high? or will there be drinks that are like pot brownies where you're actually drinking them to get high >> that's actually a good question you're going to find that there are drinks which will cause you to feel euphoric
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thc causes that outcome you describe and there will be drinks that i expect there will be there's no certainty in anything that those drinks will be permitted for sale and that they will be what you might buy instead of an alcoholic beverage then on the medical side, you're going beverages. on the medical side, you will see a great milestone that'll be tracked from the pharmaceutical space. how do we reduce anxiety if you can reduce anxiety in a medical world, you can see it becomes apart of the recreati recreational world cannabis is the platform where you can create ip and run medical trials and file patents without any hesitation including the u.s. if you are following the rules. there are an opportunity to create things that don't exist now. when i come back each quarter, there are new things to talking about. >> the horses are not going back
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into the barn at this point. i wonder if we head the point that you can have a couple of drinks and feel sort of a little bit happy but you know -- >> a little bit happy. >> with today's strength marijuana, one hit of some marijuana, you don't want to get into a car i don't know if we thought of the implications of how this is going to work. >> yeah, there are about 30 countries around the world looking to regulate at a federal level and not the u.s. there are $250 billion of cannabis being purchased and consumed >> but same coke but you don't want to legalize them. >> cannabis is probably when you look at the profile of addiction and the danger of coke >> maybe it is a gateway drug. >> you are preaching -- i am
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familiar with all this stuff that was years ago i don't know -- >> it is a nuance. >> it could be called gateway if you buy it from the guy in a puffy coat, he may be selling other stuff, too >> bruce, we got more out of you than we normally got from ceos we like to have you again and talk to you more appreciate it. when we come back, jim cramer will join us live from the new york stock exchange. stay tuned, you are watching "squawk box" right here on cnbc. banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.
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get down to the new york stock exchange jim cramer is joining us now we were just talking about pot and i had a lot of different questions. i know you thought about all these things have you got it all figured out? are we moving too quickly or it is all right happening anyway and we may as well tax it and regulate >> october 17th is going to be a very sobering moment for these stocks i think they run up in anticipation and canada is going to flick a switch. i think it is going to be the opposite i think people that buy the stocks are making a mistake and they're going to sell off.
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i think there is a big short squeeze as bruise indicace indid there are so many of these have come to the market it is ov october 17th is not going to produce the highs so to speak. i don't want people to get hurt, y'all. i think there is way too much money coming in and price is going to crater. >> are we at 100 or 92 again 250 yesterday, crazy in terms of the face of what everyone is telling us is going to be negative markets continue to hit higher based on good reasoning, is it i took a lot of heat yesterday because consumers are not going to be hurt that bad by the tariffs. i got all the e-mails and twitter saying you don't know what you are talking abiliout. i am a huge believer that you
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got tax cuts and you have to pay up china a lot of these cuts are out of china. i can't believe how many people believe how much powerful we are. >> jim, we got to go >> you can't dent it >> we'll look forward to hear a lot more in a couple of minutes, jim. ♪
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the room that she was in issuing the statement in has no power. we'll pick it up on "squawk on the street," they'll let you know what happens. have a great weekend see you next week. good friday morning, welcome to "squawk on the street," i am carl quintanilla with jim cramer and david faber. big friday on tab. huge s&p rebalance as much as fang and media going into a new sector index dow and futures up 81. europe wrapping up nearly 2% gains for the week and 10-yr close to 308 stocks continue this rally

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