boardroom was we do with men in the boardroom, you'll see snowball effect with more women. >> real quickly. that pays off in how many years? >> in the next couple years. the push can be to get the 15% parity over the next three to five years. >> thank you for being here. hope to see you soon. join us tomorrow "squawk on the street" begins right now. > ♪ ♪ >> good thursday morning welcome to "squawk on the street." i'm carl king can cramer continuing his -- futures point to a gain after four days down for the s&p. a drop today would be the longest stretch in two years kavanaugh, bullish calls on -- italian bonds. durables up 4.5.

we dpin with the vetoed nafta meeting. chinese election interference and oil prices on the rise ahead of iranian sanctions trump, trade and the geopolitical risk for stocks. >> apple shares are rising in the free market predicting growth jpmorgan initiates coverage now given the iphone maker an overweight rating. >> it's a very smegs spepecial r "squawk on the street. we're going to celebrate. >> this is something of a surprise, actually very nice surprise quarter century is longer than i would have ever thought. >> we'll talk more about that. >> stocks are looking open higher after yesterday's declines data out shows second quarter gdp reading 4.2. a day after the fed raised rates this year. hours after the decision, the president held that news conference in new york city and said he was displeased with the rate hike.

>> unfortunately, they just raised interest rates a little bit because we are doing so well i'm not happy about that i know it's going to be a question i am not happy about that. i'd rather pay down debt or do other things create more jobs so i'm worried about the fact that they seem to like raising interest rates we can do other things with the money. but they raised them and they're raising them because we're doing so well. >> of course, jim, powell was asked about political pressure and says we're focused on our core mission the press conference gave the market a lot to chew in. he'd prefer to keep rosenstein, apparently refusing this meeting. although canada disputed that. yesterday during the day accusing china work to go interfere in the midterms. >> yeah. the press conference itself

went -- any time anything that was economic, it was worrisome i felt that even though the futures did not trade down when it was going on. canadian, let's say that things are going -- 36 states, dan is our largest trading partner. canada can impact things it was a bit of a throw away the usual hyperbole about the great friends that he is with president -- thrown out the window all of a sudden when -- in just the q and a. my total view on this is that trade relations got a setback in yesterday's press conference >> yeah. take a listen to what the president said about canada negotiations as we're, of course, approaching the tpa negotiating deadline quickly take a listen. >> we're thinking about just taxing cars coming in from canada that's the mother lode that's the big one we're unhappy with the negotiations and the negotiating style of canada. we don't like their

representative very much they've taken -- i love canada, by the way i have so many friends, so many friends there. that has nothing to do with this i'm representing the united states >> yep speculation that the president really does not like krista free land as far as calling canadian car tariffs the mother lode, i know gm was at a 52-week low yesterday, hackett from ford saying that tariffs cost them a billion dollars in metal and they buy mostly domestically. >> there's also a problem with mexico different parts come back and forth and back and forth and the idea of unwinding -- really, i don't know even how you go about it. i think one of the things that's happened that we forget is that it is totally seamless how parts go back and forth and some parts are made there and here. it's not practical it does say, you can't on the auto stocks. all they do is get hurt no

matter what. >> yeah. today, s&p, jim, global ratings has a report that says that the risk from u.s. china tariffs devolving into an all out trade war outweighs the threats by monetary policy normalization. you go along with that >> no. i think that's too extreme i think that you can -- there are a lot of different ways that those costs could be passed on there is just a -- from all the companies i talked to, everyone is trying to figure out how to not make it in china you'll be able to get in at a good price and take share from those who stay in china. i think that negative view has been with us for some time and it's why a lot of stocks are where they are not about where they're going to >> david, there's an incredible piece in the journal today by bob davis about how the chinese method i cannily tried to extract technology they have stories about the dupont office in shanghai, anti-trust guys will come in,

follow employees not bathroom, intimidate, take papers. >> and seem to know what it is they want prior to come in i agree. the story is worth reading it gives a lot of evidence to those charges that have been out there for a long time in terms of the forced technology transfers or the leverage that the chinese can have over these companies. to the overall point as well, though, it's not as though you don't know that going in if you're a u.s. cap. in many ways, you decide to take the tradeoff, putting at risk intellectual property for the opportunity to operate in a country of 1.3 billion people, that's the way it seems to have gone for some time for the findings what i continue to wonder about when we think about the back and forth, i think of one area, mergers and acquisitions jim, you well know or still waiting for the chinese approval for utx, the acquisition of collins. and don't forget, disney and

fox. now, in both cases, there seems to be great confidence on the part of management, they're going to get them done when you think of disney and shanghai disney and that joint venture and how important it is to the chinese, but you do have to wonder as this continues to worsen and as the tension gets ratcheted up to the point of the president saying they're meddling in our election in some way, whether you're going to see a symmetric responses from those i just mentioned. >> that's september's business it would really be a very unexpected if this continues to drag on. i felt that the level of confidence that greg hayes has had in this closing and even if the board says the splitting the company, the three different pieces was a given for the fall. i have no idea if that time frame is going to work >> jim, as far as -- we talked about the automakers when do baskets of homebuilders,

automakers, retailers who might fall vic tiff to tariffs, when do those get interesting >> if this was something discussed in the call, karl, the gross margins went up really, really large i mean, it was something i didn't expect. meaning, literally, they're making more money and costs are going down but other stocks are react to go every fed rate hike, no matter what the companies say it doesn't seem to matter. i don't know what to do with the auto stocks. they've been in bear market territory for a long time. i would not recommend people touch them i'm concerned about the -- that's more supply and demand. housing, it hasn't been -- the costs hasn't been a factor but the owners of the stocks flee every time that jay powell opens his mouth. i think he's been considerate about what he has to say. >> meantime, we got trade worries and then oil, today, jim, oil prices near a four-year

high on the prospects of a supply shortfall once these u.s. sanctions against iran take effect in a few weeks. extra supply may soon come on the market for source that is confirmed to cnbc that saudi arabia is ready to increase. become to 72.25 in west texas, jim. >> look, i know the saudis, rumored, 550,000 barrels you're talking about -- you need about a million and a half barrels. because what's happened is demand has picked up and obviously, as the president talked about with venezuela not as much as a failed state, they were -- they have the ability to form a million barrels they can drop to he, it could be a million barrels. i don't know oil is going higher, carl. oil is going higher because the saudis don't have as much spare capacity as they say they do. >> you asked united ceo oscar munoz about this last night.

take a quick listen to that. >> marching towards being able to recapture a lot of the fuel costs we've increased. as you mentioning the burr johning economy. the products they want and efficiency. >> it will be interesting to see, jim, how the legacy carriers manage it, if in fact the cycle goes that way. >> yeah. look, the president of the owe o united continental, scott kirby, had given a talk a couple weeks ago where he talked about how oil going up is the same as a downturn in the economy. i mean, literally for an airline, oil going up is the gdp going down we saw some gdp numbers, final revisions plus four. he seemed sanguine and the numbers in terms of the gross margins, that that stock keeps

going up and pulling back shares more shares than any company on the new york stock exchange. >> really? >> yeah. i was shocked to see, it dave. >> shocked >> way more than you would expect it's amazing okay it's a big part of the story right now. >> it has been for quite some time. >> he doesn't sound so good. are you getting any sleep at all, jim >> no. >> none, right >> no. >> just making sure. keep it up you don't need any sleep. >> it's almost friday, jim when we come back, guys, we'll talk about this bullish note on apple. got a new street high price on amazon and a special treat a look back at 25 years of david faber on cnbc if he ever gets off the phone. >> we're going to end the story. a faber report today

that's what i was doing there at the top of the show. looking at the pre-markets s&p trying to hang on to the green for the month. we're back in a minute ♪ ♪ i don't care where we go ♪ and i don't care what we do ♪ just take me with you there are roadside attractions. and then there's our world-famous on-road attraction.

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as we said before the break, a special day on cnbc. david faber is celebrating 25 years here 25 take a look back at some of the earliest days. >> finally doing street talk from the street. this will be our one and only time this year. >> those of you at home joining us for the first time tuning in to business news for the first time saying i want to be a part of this huge strend in american life. >> bets here for a quick pop in the stock due to the sale of another division at what could be an attractive price. >> some people think it will get acquired. >> hasbro delivering the blows they were scorched earth basically. >> the weather today, i figured i would do a weather forecast. i wore shoes with -- >> do it, just do it >> we started the show an hour and a half ago where have you been? >> i'm a doctor, not a stock

picker. >> hi, mark. i have to get better about arranging my desk here. >> sure are. it's a mess. >> it will end badly you've been a proponent of many internet stocks. >> a lot of people are -- >> viacom, cbs >> 5:36, 36, what is it? >> wait, wait. >> it was run out of your back pocket is what he said >> let's all try to be positive. you, me -- >> see ya later, thanks a lot. nice doing business with you >> oh, my god. they found new stuff from the -- >> that stuffy forget. the bernie ever stuff, that was great. >> you could have been in a boy band. >> that picture with the glasses is holy cow. >> you haven't aged that much. >> the first question is always, did you sell your soul do you have a fountain of youth?

how have you not changed at all in terms of your looks >> i appreciate that you well know if you keep your hair, no offense to anybody and it doesn't change color that much you don't age that much at some point in may catch up with me. you exercise regularly all those things i can say about you, carl. >> jim >> thanks, dave. really good in -- >> maybe you should go make a call >> by the way, you look -- cramer and i go -- i don't know. 20 years back now, right >> you actually -- this is the show in a nutshell jim and me trying to keep the train in motion while david steps off to make a call like it was just a moment ago. >> it was a moment ago trying to put something together for a faber report here. hopefully we'll have something. >> i've been very lucky. thank you, jim

thanks to everybody for being here today samantha wright who came down today. brian steel. so nice, very touching been an incredible journey quarter century is hard to imagine. you can never imagine that you're that old. there they are. >> nico owe. >> my wife and sons are here. >> and my daughter >> emily oh, my god >> not going to cry. >> this is what happens, see yes. >> do me a favor >> a lot happened in 25 years. >> a lot larger than i am. >> hi. >> not going to school >> soon. >> oh, my god. this is so sweet i'm really touched david, you may not cry, but i'm about to >> by the way, he gave me a hard time recently that i don't work

that hard and sam is here. we were talking. tell him later how hardy used to work man, i used to work hard i still do don't get me wrong not to the level we did in, let's call it, the early 2000s >> wow >> hello everybody >> i don't usually see them when i leave in the morning they've grown up a little. >> that's my wife. >> is your son taller than you are? >> taller? are you kidding me by a lot. >> taller? you know how often i get, father, really >> but it's good it's good. looking for scholarships now for various sports that's great. >> jim, don't you wish you were here for this? >> i love d.c. i worked with david for so many years. but never see his kids i see his wife, but i don't see your guys.

i cannot believe, what, i have not seen your kid in two years david, he was not taller than you last time i saw him. >> i know. now he is far, far bigger. i know 16, too. that's its own challenge this one is 13 we're getting there. soon enough, we'll be empty n t nesters. i'm so overwhelmed and sweet we got to go to a break or something? >> we're enjoying this moment. >> as proud as they are to have you as their husband and dad, that's how proud we are to work with you every day >> thank you, carl. >> it means so much. we're so proud of you. >> this is really, i'm so touched. i really am. thank you guys so much. >> look at them. i see them every day, obviously. >> the nice part is i get home for dinner almost every night, too. thank you, cnbc for 25 years >> thank you, jonathan, emily, jenny, thanks for coming in. we'll take a break what a morning 25 years for faber on cnbc back in a minute

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♪ ♪ let's get back to business here on "squawk on the street. time time for a mad dash come home already, for god's sake but this get -- >> david, the hair thing that you raised >> yes. >> is it possible that you got shorter and jonathan didn't get taller >> that happens, it's going to

be even -- i mean, he is 6'1" or more at this point still, it's going to be embarrassing >> it's so proud to see your family nothing like it. there's nothing like that. >> david, salesforce i'm out here for among many things benioff's has an analyst deal -- this is the most bullish he's been in terms of getting annual quote for as far as the eye can see. no one expected that the last integration, doing incredibly well. david, do you remember when this meeting included you should have bought twitter that's certainly off the table what i'm hearing is that marc put together a suite of products to make sure that he and other partners stave off any challenge from the adobe microsoft alliance that everybody is buzzing about. >> jim, there have been few companies who have been closer to and man, you picked a good

one. i mean, it just never seems to stop in terms of their ability to continue momentum at an innovative scale in their own business. >> he came on when the stock was at $8. we're going to be the first to get to a billion it's running north of 20 now the companies -- when you come out to the skyline here, salesforce tower, every time that someone says, you know what, this guy has peaked, they don't have the momentum, they continue to gain momentum. i've never seen anything like it, david, in terms of a vision of software that has really has tentacles everywhere you get these major fortune 100 companies singing the company's praises. anyway -- >> $120 billion market value we got an opening bell in about 4:30 minutes from now. stay with us on "squawk on the street." as a supervisor at pg&e,

it's my job to protect public safety, keeping the powerlines clear while also protecting the environment. the natural world is a beautiful thing. the work that we do helps protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the powerlines. we want to keep the power on for our customers. we want to keep our communities safe. this is our community. this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california.

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reaction to the fed decision and powell's press conference, of course, yesterday. the president's press conference in new york city watching u.s. and canada, jim, as trudeau continues to give us the line that a fair nafta deal is still possible even as time gets minimum >> if this is the art of the deal it's being taken to an extreme i think that there was a level of insult involved with the president and canada obviously, no love lost. it is interesting to -- just in terms of the discourse the discourse with china and president trump is far, let's say, more nuanced than in canada a lot of us are not used to seeing what is basically becoming a genuine antipathy between these two countries. i never thought i'd see it in my life go back to the french and indian war. >> we'll get the s&p opening

here at the bottom of your screen look at the big board. the big board today, it is likes. a provider of mobile english educational services in china over the nasdaq celebrating the ipo. a bio-pharma company jim, we mentioned some of these bullish analyst notes this morning. one of them is amazon. goes to 2525 we're going to see courtney reagan later on this morning at the brick and mortar store they're opening in soho. >> that, plus a devastating piece. a fantastically well thought out piece by morgan stanley. it's almost as if these analysts have been saying, amazon is at war with everyone and they're going to win i've been talking to the chief operating officer of the m ware and i know david is not -- talk about the m ware, i'm talking about the --

>> right. >> they do a lot of on boarding for companies to amazon and i know microsoft doesn't want to hear this and google certainly not. i think amazon web services is pulling away here. everybody thought that -- there was a microsoft, thought azure was on the verge of catching up. no, the web services business is worth more than people realize it's the price cutting coming in the food retail business that is going to shock people. >> jim, when you talk to people about cloud services, they talk about it being as much as a trillion dollar revenue business eventually this is just the earliest days and while aws may have a substantial leeld, itad, it's n though the others lose they may have market share, but they'll be part of an enormous growth industry. >> oh, absolutely. it was an aggressive path for azure. their cloud and he's far exceeded it every time i think what's most chilling is when you deal with customers,

they tell you, especially retail, they would rather not deal with amazon because they're a competitor they'd rather deal with azure. azure is very, very strong there's just something about companies wanting to be on that amazon web services cloud even if it means some pain and some giveaway of some gross margin because in the end, it just works better to me, a cloud is a cloud. but that is not what customers say to me out here they're saying amazon web services is well ahead of everyone. >> amazon up to 1991, jim. apple, jpmorgan initiates coverage they're looking for 272 in december of next year. they say faster than expected transformation to services they talk about the buyback, m and a optionality. >> i read that it's low on -- i wish that they had initiated

coverage back at say, 170. not to denigrate them, but there was nothing new other than the fact that it was a new time to be able to talk end to end, pound the table. really, carl, you get these reports and you say, wow, that analyst didn't have a chance to get in when things were great. if you're buying apple off that call, you're buying it for all the reasons that many people have bought it at 200, at 150, at 100 >> yeah. you know, you often wonder you they got to get on the board at some point, some of these analysts, jim, and be there to cover the company and have an overweight why anybody would actually listen is not something i fully understand >> i am thinking about your 25th anniversary and how proud i am to be able to work with you during this part of your career. david, you used to talk about how analysts were penguins and they didn't really have anything new they were all together

this piece read like a compendium of -- it's like a highlight sizzle reel of everything everyone else has said about apple what else was there to say you could have said that maybe they're going to put a man on the moon i defer to jeff bezos on that. it is a moment where everybody universally loves apple except a couple of holes. because of the service stream. when i read it, i said, well, it is rip van winkle here wakes up, recognizes service stream important not as much value added as i like to see in a new research report. >> no. to be fair, there is good research out there and the period you're referencing, of course, the mid to late '90s when it got incredibly be silly and eliot spitzer, before he came along and changed things to some extent. we all remember that you and i go back to that time when the research was nothing more than a calling card for the banking business that is not the case now but you still -- it's worth

mentioning where it really is not worth anything. >> do you know that there are many companies that have ties with g.e. in one form or another and i have never seen high quality work by this fellow steve tucson who is respectful you know how much business jpmorgan could stand to gain if they had a different posture that's not why analysts do what they're saying it is incredible for one man to take on the largest industrial and literally do homework as if he was a sleuth. i mean, he's ant thetical to everything in the '90s if they gave -- g.e. the ceo, gave a lot of business to jpmorgan, we know things are very different for the 1990s >> true. it would be. listen, as you say, companies will penalize, they will prevent

access, do a number of things and that all figures in to how analysts go about doing things not to mention, the pay package is not what it once was. the compensation, not always the best and brightest in some areas, the compensation started to come back up in significant meaningful ways, in part when there's a lot of ipo activities because you need analysts to cover these companies if you're taking them public >> you know what, if you look at bed, bath and beyond, they desperately need an analyst conflict that was one of the worst of the year they talked about the early annex of trying to take on amazon early innings of amazon, i don't know -- some -- i don't think he would regard that fight as really any fight. >> that's amazing. 36 cents misses 50 revenue shy comps worse -- margins have gone from 15 to 4 as this fight with amazon has

gone on. i was going to ask you, because they warn today, micron guided below the consensus on revenue, bmw this week. philip morris this morning what's going on with at least a percentage of negative pre-announcements versus positive >> philip morris a jewel confirming what we thought, i'm going to be out to hp later today. if you want to talk about a buyback gone wry, bed, bath an beyond has spent literally billions of dollars buying back stock. this is the worst buyback in history. >> guys. worth also mentioning. that performance is really staggering today for bed, bath it's also down after reporting a number that missed the street near the low end of guidance range as well. weaker top line, unfavorable tax. jim, operating profit, gross

margins were in line but generally, you have a negative reception to a number that was not quite what investors were hoping for. >> that's a big change i mean, literally, i had thought that they were going to do the bid. the bid would be an acceleration of what was always one of the best tracks of any of the food companies that are left. that is just -- i've got to tell you, met with that company several times in the last several months i thought they had it together everything is called into question in the supermarket. it is so hard to make money. look at general mills. everyone thought they were coming back as a yield play and they made this blue buffalo pet food being, it's on my mind because my dog had to be put to sleep and i'm kind of thrown by that as any pet lover would know. but the blue buffalo, they paid too much i really look at this group and say once again, sell, sell, sell sell, sell, sell the margins that they have are going to be crushed.

>> jim, we're thinking about you and lisa it's always hard always hard. >> look, the humanization of pets, my dog bug did sleep with us every night the people recognize that dogs have evolved from being in the basement to the living room to the bedroom to the bed i'm kind of thrown maybe that's -- >> it's one of the cruellest parts. >> i hear you. i would have liked to see the dog here to celebrate, too he's a part of the family. >> that's absolutely true. >> unlike this guy that talks endlessly about the humanization of pets, little did i realize they've been humanized here today, gone tomorrow. bug was a rescue dog i don't want to take too much show time on this. if you feel like the pictures i posted on twitter didn't move you at all, it's rescues, it's

shelters they put them down there that's it. that's my commercial for charity. >> we got it we understand. >> by the way, almost 36 now, a lan coe after going public dow is up 22 let's get to seema mody on the floor. >> economic data in focus. second quarter gdp is celebrating at its fastest pace in nearly four years about 26 points. energy continues to be a bright spot oil prices trading near a four-year high fueled by the prospect of a shortfall in dm global supply once u.s. sanctions against iran come into play. the sudden rise in oil prices will not delay saudi's diversification away from oil. he says that the country is committed to reducing the reliance on energy, worth noting that devon energy is up this morning nearly 1%. tech getting a bid on the heels of that jpmorgan upgrade on

apple citing the iphone makers quicker than expected move and stronger than expected price increase shares of apple up 2% in early trade. also keeping an eye on emerging markets. the imf losing the finances package, $57 billion reducing the risk of a default the agreement says argentina central bank can only intervene to stabilize currency if the pay sews -- it's around 39 speaking of emerging markets, philip morris says view to the currency headwinds and dron to the turkish lira is cutting the forecast that's not the only headwinds. conagra reported, citing an inflationary environment, mccormick talked about currency volatility fuller mentioned raw material costs. there's a number of risks heading into the earnings season

currencies being top carnival, earnings and revenue, but the fourth quarter guidance was soft that stock is down more than 7%. david faber, back to you >> seema mody, thank you let's do a faber report. why not? >> let's talk about a fin a health you may rrl, recall, there was various reporting that athena had done to sell itself. if you want to go back to the spring, mid-may when eliot, 9% shareholder would like to buy you for 160 bucks a share. that did have the purpose of putting the company. -- what can we tell you right now? bids were due last night they came in bids did come in don't get too excited. they did not come in at a level that necessarily points to

anything like 160 bucks a share. that's what i'm hearing from people familiar with the situation. at least three bids were received at least two from private equity one from an unknown strategic still not able to find it. i don't think it's amongst the different rumored names. it may be an unexpected name frankly, i don't know. there is countenance at this points that the process will lead to a successful conclusion and that the board is poise today sell this company. the question, of course, is at what price the presence of three potential bidders would seem to auger for an ability to get a price higher than the market. although, at this point, from what i'm told, many of the bids may not have come in too far above where we are why? it's interesting of course you would note eliot says 160 due diligence and obviously no longer at 160 with the bid they had made don't know what the numbers are there. where we are now is the

beginning of what will be a fairly short process here as they sort through three bids at least from one strategic, to p.e. firms that's the best i can tell you right now. the hope, of course, is to receive a number at the end that will be significant premium to where we are now, though it's from the indications i've received from people familiar with the situation, it doesn't appear the bids are particularly or a lot higher than the current rough market value, which by the way, has come down on expectations that the company would not receive near the 160 originally indicated by eliot. if jim were here, we'd talk about it i don't know if he's over there still. otherwise -- >> yes. >> we can leave it. >> there he is he's still there >> where would i go? >> i don't know. >> i'm usually used to turning to you after i do a faber report i'm turning to you now. >> i was going to ask you something that's typical what you would ask me david, the only real exec behind

is it the chairman who might be -- jeff imel. i'm not kidding around here, david. jeff i am elt didn't do enough to promote a good story. it's a story about databases that could change the way we pay doctors. the government needs their data to be able to decide how much is -- literally, a heart transplant in one place versus another, how much is the standard care for an elbow, shoulder i find this shocking it's a company with huge information flow to some degree could -- give united health a run. nobody wants it now? the bids are terrible. this is shocking i'd like jeff to come on and talk about it. >> i don't think that's going to happen as you know the bids are there i think there have been a lot of people who doubted, in fact,

whether they'd get any the fact that they have three bids coming in is a positive as what appears to be the board's willingness to work through them and get to a conclusion result not guilty the sale a lot of people don't believe the company properly executed for quite some time. it is going to be a turn around if they stayed independent more likely for whoever is the potential buyer of this asset. >> i'm shocked here. i felt it was a great asset being run into the ground by jonathan bush. now, i'm questioning the asset because while you said absolutely there are some buyers, the idea, i felt, that eliot was opening bid from what can be an amazing company for a lot of different hmos needed look at -- the mergers that are in the health care field have been at premiums what's going on at this company? i've got to find out

a lot of people felt this was the only thing wrong with the company was jonathan bush. obviously, that's no longer the case >> yeah. we'll be watching it in the days ahead and try to bring people more details as we get them. for now, let's head to the bond pits and rick santelli he's in chicago at the cme group. >> good morning, david you can see that we came down a bit. actually, two-year note yield came down. it's still up two basis points the fed decision, initially, after a slight pause, front rates down you can see it on the one week of tens even though they popped up as well maybe that's the point double tops and double bottoms are a biggie in the fixed income markets. if you look at the chart starting in may, you could srg at this point, it's a double top. it's still awfully close to 311. traders have to make a tough

decision does this back away and become a double top you trade much under 295, that's how it would be perceived. the next couple of sessions are really important we always like to talk about the yield curve. indeed, it did flatten a bit after the fed yesterday in removal of accommodation as the stock market was receiving the accommodation. they seem to have righted themselves the one-week chart shows it was a big beneficiary of the fed meeting. if you open to early july, it had a nice bounce off 94 right around 95.5 is the big pivot. many traders think we can float a bit higher, especially now that the fed meeting is over david, carl, jim, back to you. but david, i have to say congratulations. i fondly remember the lava lamp and the greenspan doll >> oh, man, those were fun day on the old "squawk box" and the brief case indicator, rick

i remember you back then as well. >> absolutely. >> thank you, rick still here not going anywhere when we come back, richard spencer on corporate and private sector partnerships to build national security. got amazon at 2,000 for the first time in a couple of weeks and the dow is up 34 supported largely by apple back in a minute alerts -- wouldn't you like one from the market

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got amazon above 2000 on a price target hike. they now expand their brick and mortar strategy. courtney rag zban courtney rag zban eagan is at t store in soho. >> reporter: that's right. we'll give you a look around coming up soon on "squawk on the street." >> we'll get stop adg thtrinwi jim in just a moment szhau up 24. somewher

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monetization of instagram which they founded and that their departure gives zuckerberg a freer hand to make money in this acquisition or make more money and this is a shocking development because, of course, a lot of people felt that if it leaves the creativity goes away. now the new storyline is now that he's left zuckerberg is able to be even more of a rapacious capitalist with your storylines it's incredible. this is what got the stock going. and i'm in shock everybody hates facebook, by the way. i'm not saying doesn't like. i'm saying hates of all the companies i've talked to jim, what have you got tonight >> it's incredible okay, we've got cisco which is doing incredibly well. that stock creeps up all the time that's chuck robbins dion

de di on weisler. box is no longer an opportunity. i love it out here i just love it >> you have to come back, congratulations. >> no staying. >> i need you guys out here. they're all here you find out who is hated and loved. we're all scared of amazon i feel like i'm walking around scared of them. >> jim, we'll see you tomorrow "mad money" 6:00 p.m. eastern time when we come back, more on amazon'sewri n bck and mortar store in new york. dow is up 32 great question. is next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service and low costs, backed by a satisfaction guarantee.

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is. welcome back to "squawk on the street." pending home sales down 1.2% for the month in august according to the national association of realtors, down 2.3% year over year that was the fourth monthly decline in the past five months and the slowest sales pace since january. sales have been hampered all year by a severe shortage of listings supply rose slightly in august for a first time in a few years but not so much at the entry level where demand is. a huge sales decline in the west, down 5.9% for the month and 11.3% compared with august of last year prices are highest in the west and are still higher than a year

ago, but the gains are shrinking. sales fell 1.3% in the northeast monthly, down 1.6% annually. in the midwest sales fell half a percent monthly, 1.1% annually in the south sales down 0.7% monthly but were 1.3% higher than a year ago. all these numbers up right now on cnbc.com. back to you guys. >> diane, that thank you very much good thursday morning, welcome back to "squawk on the street," i'm carl quintinillaain dow is up 64, s&p up 11 as we keep an eye on trade, on kavanaugh. our red map for the hours starts with president trump starting with china, nafta saying no to a meeting with canada's trudeau and the federal reserv

reserve. and amazon is opening a new store not far from here in downtown new york city coming up next, christine blasey ford has accused brett kavanaugh of sexual assault when they were teenagers. we'll monitor that hearing closely, try to bring you updates every few moments. to watch the hearing in full, we are streaming it live. chuck grassley is in the room along with ranking member dianne feinstein but an historic moment in politics after what's been a difficult day. 12 days of accusations going back and forth stocks edging higher dow is up 75 government data out today showed second quarter gdp final read of 4-2 unchanged comes a day after the fed raises rates for the

third time so the word accommodated you seem to disagree. >> i do disagree it's important if you use words that they have some meaning and accommodative in this sense meant helpful, that the policy was helpful to the economy the fact that you take helpful out doesn't mean it's harmful, it just means it goes back to neutral so they've pulled a goldilocks and said it's not too hot, not too cold, just about right. that's where we'll keep our policy and that's when you saw the market think it through. it was also helped by some market on closed selling. >> as far as the future path for interest rates, has anything changed in investors' view

>> well, i think first of all you heard from powell what many people in the fed have been sayin saying the future outlook from the fed is virtually useless because they want to be responsive to whatever economic incoming data they get so you'll see people move further and further away from the celebrated dot plots and stay closer. >> there is christine blasey ford, as you know by now, professor of psychology at palo alto university alleges that brett kavanaugh assaulted her when they were teenagers about 36 years ago as they that testimony is going to draw a lot of attention we'll try to keep our eye on the markets and bring you updates as we see fit powell made some comments about political pressure and hours later the president comes out and says i'm not happy about

these rate hikes what matters on that front >> well, i think powell is going to be right. unless the -- let's not forget, the president has made several appointments here and he had every capability of appointing absolute doves if he needed them i think he got advice from somewhere else he put some of the new people have a practice background in bank safety and the variety of other things and they're not particularly dovish continually psyched to strengthen is is economy is the reason behind them so you take a bow on one side and get cautionary on the other. >> in terms of the move on the ten year, the fact that we haven't broken above 310 in any meaningful way, which levels are you watching as we wonder if rates continue to climb whether that could be a head wind for

stocks >> it could well be. but, again, they don't tend to shoot up like a rocket they get to around 311 if they broke up through that everybody would begin to focus on 3.25. that's kind of a key area. at 3.25 and above it might begin to have a negative impact on stocks but so far i think it's grounded in things like moving averages and whatever and that's kept it contained. i wrote in my morning comment this is morning, i cited barry habib who's had an outstanding record as the mortgage and interest rate follower and he thinks you might stay around here for a bit now. >> what happened to emerging market concerns? argentina is going to -- imf is raising the bailout to a record 52 you got italy with this budget

showdo showdown. >> that fear has subsided slightly they're having non-bank financial problems in india. they've had it leak into southeast asia, could see a problem here so now it's a temporary respite. i wouldn't put the umbrella away quite yet. >> first week for the communications services sector in the s&p 500 and it's having a banner week. it's the best performing sector, up almost 2% thanks to strength this disney, netflix, tripadvisor, a number of these names. >> well, they've been on the front page, things like content

are always important, particularly as the entire entertainment sector is changing even as we speak. >> thank you talk to you in a bit. >> david, congratulations. >> thank you, art. thank you. amazon is opening a new physical store this morning right here in new york city. our courtney reagan is there and she joins with us more courtn courtney, good morning >> reporter: good morning, sarah, here we are in soho standing outside amazon's brand new four-star store. it literally just opened so let's go inside. andy will walk carefully as we come inside. as you can see, it looks very much like a normal physical retail store we'll take a step down and show you around a little bit. the first thing you see when you come in, it's the most wished for on amazon. so these are products that individuals are adding to wish lists and so this will change based on how those patterns change over time if you can see here, there are

digital price tags on everything in this example, there is only one price, but it shows you that this is a 4.4 star item with 556 reviews. if you can move with me, andy to the right you'll see this product, code names, has two prices, one is the price for non-prime members, and the second is the prime price. in this case it's a $4 difference so all of the products in this store, which, again, is called four star, are either four stars or higher. they're trending or they're top sellers or they're brand new items. over here is a big gift area now, a lot of folks will criticize amazon for being difficult to browse because there are millions and millions of items easy to buy, harder to browse. this is part of the answer to that to cure rate selections, particularly things like gifts for pets, gifts for grown-ups, $25 and under.

there are about 1800 products total in this location it is meant to be a permanent store. amazon isn't saying what the long-term plans are as far as how many of these type of stores they're going to open. this is the very first one and it's just minutes into the open. right here is a table of amazon basics this is the first time these products have been displayed in a physical location for amazon so amazon basics, remember, these are products that amazon itself manufacturers they're amazon branded products, if you will. now everything in this store is a first party product, meaning these are not marketplace items. and remember, about half to more than half of what sold on amazon.com are marketplace items. if andy can follow along with me here, we're going to swing over and take a look at amazon devices. you know this is a very important category for amazon, the fire devices, the echo, the alexa devices. these are key to get customers

into the echo sphere and to keep them there especially when they start using them to order products from amazon.com we're going to walk around here and look at the amazon books this, of course, is how amazon started. it was a bookstore they always want to remain true to those roots, that's what the vice president of physical retail told me today folks still associate amazon with books, they want to make sure they have selections like that now, of course, there are amazon bookstores, there are pop-ups, but this store is the only one with this type of general merchandise. here's a table with special deals that you can only get at this store, for instance this blanket is $50 in store only why do you need a store, though, amazon is awesome at digital we asked the vice president of amazon physical retail that very question >> one of the things we've heard from customers on a regular basis is they want a that they want to test drive devices before they can buy them

so with our echo products you can talk to an echo show, see how it can automatically open and close a door lock, turn on the light so we can really -- customers can experience the products in real life. >> all right, let's try, the products in real life. echo, unlock the door. >> what is the code for the door >> it's a little loud in here, i don't think it can hear me, but before this was actually unlocking and locking this right here so something shoppers can actually see in real life. but for now, back over to you guys >> courtney, real quickly, you know, we all know and you've referenced it, the data that amazon has and uses, of course, to further their sales is so important to the business. what is the data here that is going to be most important to them in terms of how customers shop and move around the store >> exactly i think that's an important point david and it has to do

with what shoppers are graph tating to when it's precure@ed for. how good were they at identifying those sellers in a physical environment we also know everything amazon does is adding to the prime family so i think it's good for folks to see the price deferentials but some criticize perhaps the u.s. market is saturated to almost saturate sod that's a hill to climb. >> how would target view an amazon store is this a threat or is it an affirmation that physical stores still matter >> i think you hit the nail on the head with part two every time question is a retailer whether it's an

e-commerce retailer or a traditional store based retailer everybody says you need both that's basically i think what amazon has admitted to us over time that really they need to serve consumers wherever it is that consumers go, whether that's a whole foods store, whether it's a bookstore, whether it's a pop-up or something like this so if you're target target would say look, what we're doing matters and amazon sees that, too. courtney, thank you very much. especially for giving us a hand's on tour of the new amazon tour speaking of amazon, eu antitrust chief margarethe vestager will talk about her probe into that probe. that's something she is looking into. >> she is a formidable presence when it comes to all of those things in terms of competitiveness in europe. >> and tends to focus on u.s. technology companies which she gets criticism for about being

anti-american but she says we have to look into their anti-competitive behavior. >> indeed. the bt president rejecting meeting with canada's trudeau. we'll talk to the president and ceo of institute for international finance in a moment plus, one retailer plunging this morning you probably know what it is but we'll keep you guessing. chairman grassley making some open statements, apologizing to both ford and kavanaugh, calling for senators to exercise civili or e xttyvethne couple hours. we're back in a minute this isn't just any moving day.

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click, call or visit a store today. trade concerns and geo political risks after the president's trade conference last night president trump accusing china of interfering in the elections and accusing chrystia freeland, canada's trade representative. with us now at post nine, the president and ceo of the institute for international finance, former treasury undersecretary for international affairs tim adams. welcome, tim. >> thank you, thank you for having me. >> your group represents banks and financial institutions all over the world what would you say is the level of worry right now about the trade issue? >> well, the economy is good globally and in the u.s. you saw the news out this morning. the u.s. economy continues to roar ahead that helps ameliorate a lot of concerns about trade i was in toronto last week talking with our canadian bankers, trade issues seemed to dominate every conversation i have from shanghai to singapore

to stockholm. >> do they think it will get done on the canada front after the harsh comments from the president last night >> well, the business community in canada wants to see it get done i think it will. i think without canada as part of the deal there won't be a deal i don't think you can get just a mexico bilateral deal to the united states congress canada is our number one trading partner. it's important to 36 states so without them at the table it's pretty hard. >> sara mentioned the president's comments referencing freeland, we think i don't think he named her by name. >> he said we don't like their representative. >> right there's that whether or not he's a friend with xi. is it becoming too personal? >> well, this president makes it personal that's his style of business but i think there is a bureaucracy out there everyday trying to find ways to make it work, whether it's the u.s. trade representative or the u.s. treasury so there is an effort to try to keep the relations going in tense times and the president du does personalize. >> it how do you construct something to present language wise, ustr, that ties it to

mexico, leaves it over for canada tbd, can you do that >> it's hard the message coming out of capitol hill is don't send us a bill that canada isn't a part of canadians know that. i think we're at the final stages of getting a deal. >> most of the business executives we seem to bring on during the course of the day with many caveats will say i'm optimistic it will work out. is that what you're getting as well in the dialogue you've been having >> people are hopeful. as i said, the real economy is good animal spirits are back, we've been talking about it all morning, corporate board rooms are the best environment we've seen in eight or nine years. consumer confidence is the best in decades so business is hopeful. but the trade issues, the trade challenges are a nagging problem and if we don't solve them it's a trip wire. >> but you could make an argument that will embolden the administration to continue to be as tough as they can be because the economy has their back. >> indeed, i think there's a feedback loop that just encourage this is brinksmanship

on both sides. i think the chinese and the u.s. will have a protracted trade war for as long as we can see. as long as the economy is good if the economy turns south. >> what do you hear from chinese bankers because their markets are suffering worse than ours and there's some questions about the economy as well. >> no doubt the economy is softening. it's not as bad as people made it out to be the markets are disconnected from the average chinese we'll see fiscal and monitor support in 2019. i think chinese will dig in so the idea that we'll find a resolution to u.s./china challenges in the near term isn't going to happen. >> you mentioned sentiment numbers in the u.s. have been great. small business, business round table. eurozone sentiment is it a read that we have this leverage >> well, the european economy is better than it has been in past years but it seems the paying

around 2%, banks are more profitable, doing more lending but it doesn't have the vibrancy we see in the u.s. we don't see the vibrancy anywhere globally that we see in the u.s. the u.s. is leaving the rest of the world behind and we see in the dollar, we see in the the equity markets and with respect to the federal reserve yesterday. >> who comes closest japan? >> it's funny, after all these years japan is producing, abenomics is trying to make a bit of a difference. the oil producers are seeing better times, $80 barrel of oil helps but the u.s. is standing head and shoulders above everyone else. >> but people wonder if that divergence can continue or will be either met in the middle or by them coming up. do you agree or can we continue to sustain this outperformance. >> cycles don't end because of political rates. they end because they're killed. >> why have your financials been

such lousy performers in the market today, yesterday they got hammered off the fed meeting pretty much all year long. >> we need an upward sloping yield curve but the conditions are good banks are lending, the demand for credit is hie. they're incredibly efficient operations business is good in the u.s. >> so you don't think it's foreshadowing anything darker? some people look and wonder what the signal is from the weak performance. >> i think the yield curve is a false signal i think it's a host of things going on with demand and supply. >> dimon was on our air earlier with jim and talked about softness in middle market lending. we know what pending homes did today, we know what mortgage rates are doing. are rates starting to bite >> they will

households can't borrow forever. the global economy has levered up in this cycle. >> in dollars? >> in dollars. but if you look at percent of gdp, we're at 320% of gdp, up $70 trillion in this cycle globally emerging markets have levered up from 145%. we're taking a lot of debt in this cycle. >> maybe that's the final question you have such a good global view will we see a broader emerging markets crisis or will the weak spots fix themselves >> some will, some won't. >> some will, some won't the argentinians have good leadership the imf is trying to help. the politics in turkey is challenging but i think it will be it owe sing krati >> not contagious? >> i don't think so. not at this point. >> tim adams, good to see you. when we come back, closing in on 82 brent crude, you can see it it's

climbing as supply fears continue to pressure the market. take a look at shares of conagra. the food producer missed in terms of what it delivered in earnings and revenue they say they're pleased with the start of the 2009 fiscal year despite what it calls a challenging inflationary environment. "squawk on the street" will be right back my friends call me "hack daddy." [ evil laugh ] but then cdw orchestrated a network transformation using cisco digital network architecture. allowing scalability and providing fast, comprehensive security from intruders like me. luckily i found a new calling. faster. security transformation by cisco. just run. run like you know how to run. it orchestration by cdw. ♪ (john foley) i was there in chicago when bob barnett made the first commercial wireless phone call in 1983.

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welcome back to sweet,time for our etf spotlight. we send it to mike santoli with a look at the smaller cap etfs, mike >> david seems like we spent all summer talking about how small caps were outperforming the major averages seemed as if the market was hiding in the domestic small cap plays as those trade war fears flared on. but that's been a different story this month if you look at the iwm at the russell 2000 etf compared to the s&p 500, this is month to date so you see russell is underperforming. this is the one month. underperforming by just about 2 percentage points. the big caps on a year to day basis, the small caps still do hold a bit of an advantage but

so they built up enough of a lead toward the middle of the year than the s&p 500 and i guess it raises the question as to whether investors are hiding in the domestic names as they worried about the trade war. if you look at the uup, that peaked in mid-august so it seemed to be a macro trade small caps are giving back their gains so people are watching to see if it will formulate trends for the remained over the years. >> that's been an interesting proxy, mike. >> we're watching crude but brent closed in on 82 as supply fears continue to hit the market jackie deangelis is watching that. >> good morning, carl, that's

right. while both wti and brent are up, you are rightly focussed on brent crude. international tension fears about sanctions on iran are jolting the price higher it's not as if the market didn't know november was coming, the deadline for iran sanctions. this has been supported for several months in anticipation but with time leading up to t t that, there is a thought that something would happen opec can't fill the barrels as high as the u.s. would like them to, the u.s. can't either. and we need the infrastructure to move that supply around so the market always gets tense before an eventlike this but there's the possibility that in reality the barrels don't come off quickly and those people that were not part of the iran

deal will still take iranian oil. but this time of the year you expect to see seasonal declines so this is shocking and that's why we're seeing an opposite effect here, guys. >> higher geopolitical risks this season. jackie, thank you. now let's send it over to sue herera for a news update. >> good morning, sara, good morning, everyone. here's what's happening at this hour. at a foreign ministers' briefing in beijing, china urging the u.s. to stop making what it called unwarranted accusations and slanders a spokesperson responding to president trump's accusation that china is trying to interfere in the upcoming u.s. midterm elections because it has opposed his tough trade polic s policies. >> turkish president erdogan arriving in germany to reduce tensions between the two nato allies, the trip is erdogan's first state visit to germany syrian government forces continuing their offensive against the islamic state group in the countryside near damas s

damascus the group has been defeated in the southern and central areas but still holds small pockets near the syrian capital. a skyscraper under construction caught fire sending workers fleeing the flames there were no reports of injuries or what might have caused the fire. pretty dramatic stuff, though. that's the news update for this hour sarah, back downtown to you. >> sue herera. sue, thank you. when we come back, a vetoed nafta meeting, accusations of chinese election interference and trade war warnings what it all is going to mean for stocks right now the dow is up almost 100 points quk t see wl be right back as a supervisor at pg&e,

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the street," i'm sara eisen with carl quintinilla and david faber. nice rally on our hands post federal reserve which saw a selloff in the final hour of trade yesterday. dow is up 90 points, s&p 500 is up 14 points strength across the board. communications services, the newest member industry group of the s&p is leading the charge but off 1% gain in utilities and technologies having a good day as well. nasdaq up three quarters of a percent, outperforming. keeping a close eye on washington as this hearing over supreme court nominee brett kavanaugh. ylan mui is monitoring that. i think we'll get a swearing in here soon? >> that's right, christine ford has been sworn in. she has just begun giving her public statement in those prepared remarks, what she said was that she does not want to be here in fact, she is

terrified to testify but she feels it's her public duty she says the details of the night in high school when she says brett kavanaugh assaulted her have been seared into her memory and have haunted her periodically as an adult during his opening statements, chairman chuck grassley said he wanted today's hearing to be respectful, dignified. we see her getting sworn in as she begins her opening statement. chuck grassley saying this is a hearing on the accusations from dr. ford they have tried to look into the accusations by two other women who have since gone public but that he accused those women's attorneys of stonewalling the process. meanwhile, senator dianne feinstein, the ranking democratic member, saying that the institutions that have grown up since the era of the anita hill proceedings, those have not

been opened up to women who have comingforward with these allegations. she also said this is not a question of whether or not christine ford is telling the truth, this is a question of whether or not brett kavanaugh is qualified to serve on the supreme court. this is going to be a very powerful, very controversial hearing as it goes forward today. we'll keep an eye on it for you. >> ylan, thank you eyes and earh that if you want to watch the full hearing, we have it on cnbc.com. >> canada has treated us very badly. they've treated our farmers in wisconsin and new york city state and a lot of other states very badly. >> dairy products, 300%. how do you sell a dairy product

at 300%? you don't. what it is is a barrier. it's basically saying we don't have barriers. by the way it's 300% so you don't send in the so you can't compete. canada has a long way to go. i must be honest with you, we're not getting along with their negotiators. we think their negotiators have taken advantage of our country far long time. >> canadian prime minister trudeau firing back on these claims by the president that he turned down this one on one meeting with a deal difficult to reach. what can we expect next? sara paying the ban is with us former white house political director under george w. bush and a cnbc contributor we have the economic policy analyst with the american policy institute and a cnbc contributor. good to see you both to the degree this is still bluster even at this late stage 52-week lows include gm, ford,

lennar, whirlpool. all of these names are trade related. how late can this go >> well, it can go -- it can expire trump has said effectively he is comfortable letting nafta expire if it comes to that. he holds his hat on the mexican deal which is largely done, but what's interesting to me about the way donald trump negotiates is that in addition to pointing out some of the real issues between our countries, it comes down in part to we don't like the negotiators for the canadians. we don't think they're treating us with respect. and it's interesting to me that canada hasn't taken a page out of the mexican play book and figured out how to -- even in private meetings how to kind of cut through the ice and figure out how to get a deal done. >> it sounds like it's personal, jimmy. what do you make of the lack of market reaction?

dow is up 11 points. there's no indication that they're not expecting a deal between the u.s. and canada. >> the markets would be doing better if there was a deal i think that's also the case with china the u.s. is a big economy that grew 4.2%. that smooths over a lot of problem and that plays into the president's attitude where he feels like he has a fantastic hand with a growing economy, trade is far more important to canada than and the u.s. i heard nothing in that press conference i heard nothing that led me to believe that there is an easy agreement any time soon with canada or china even in the case of canada, this issue is completely ridiculous and not a thing you want to sacrifice. it's been a very successful trade deal for the united

states. >> right. >> meanwhile, sara, there's a story about airbus officials sending a high powered delegation to beijing trying to sell $18 billion in planes that would not be made by boeing. the longer these negotiations go on we hear people say it's in our best interest. >> president trump has been saying this for 25 years nothing in the press conference yesterday that suggests that this is going to get resolved. it's what president trump believes so he deserves credit for that it's amazing as an iowan to hear

people say trump is the only person can figure this out his base including many in the ag community, they're with him on this issue. >> if they grow soy, not corn. if you're getting a penny a bushel versus a dollar a bushel. that's picking winners and losers >> it's a fair point and the ag insiders and farmers, some of them, aren't happy they're happy he's coming to agreement with mexico which is a huge part of their market but soy and pork, guys we'll see what happens when prices hit consumers it's taking a toll on them but overall with consumers confidence the way it is, the small business indexes at near record highs president trump

feels he has a hand to play and even though i think it's wrong economically for our country, he has a hand to play and he's playing it and he won't back down >> it's so interesting to see the politics and the economics play out, jimmy, and there's a big debate about whether the trade war will help or hurt the republicans in the midterms. >> well, listen, i think it is popular politically because there doesn't seem to be any huge obvious impact. obviously the market is still going up but these stories whether it's ford or whether it's this factory in the midwest, i think that has a huge impact locally but i kept thinking as i was watching this press conference, if you're beijing watching it, what does a deal to end this look like? i think the president gave no clue what that would look like is it china buying more stuff? the bt seems to have ignored the whole technological transfer of that issue which seems to be big

with some members of his staff that is one big reason for pessimism so i keep asking administration officials that gave me no idea what that would look like. >> it's a great point because i've had the same conversation for some time. not necessarily that it's the wrong thing to do to pressure china, but how do you actually execute the end game and the conclusion that is beneficial to the u.s. and something the chinese will accept. i don't get answers. >> is if i'm right, the goal isn't to like punish china and hurt their economy, hurt their markets. we're supposed to be getting something out of this. but is it a smaller bilateral deficit? is it them to stop subsidizing their companies? these are different goals. some of which would be extraordinarily long-term and would require tariffs on on there for a decade others are short term. i don't know. >> i think corporate america is

looking at this issue where some number of weeks and months ago they thought they could figure this out, that they would come to an agreement on it and they now look at this and say you know what? this is going to drag on for potentially years and they're starting to adjust their strategies around that. >> there was the steve mnuchin deal earlier this year but that disappeared. >> although the vast majority of people we bring on here are still optimistic, it bears saying maybe they don't say that privately but they do publicly. >> i think that's a lack of imagination. >> because there's so much at stake. >> jack ma not so much. >> that's true jack ma has a different view. >> the long war. >> sarah, jimmy, see you soon. when we come back, two volatile retail stocks to touch, h&m and bed bath & beyond moving quk t seee directions "sawonhetrt" will be right back dow is up 117 points

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welcome back to "squawk on the street," jim bianco, my guest today. fed meeting yesterday. thoughts >> the biggest question we have about the fed is when are they going to stop? history has showed over the last 100 years the biggest cause of a recession is the fed hikes too much, key inflation is coming back, it doesn't, the yield curve inverts we go into a recession. is hi kind of stammered around with a non-answer and i think that's because they don't know yet. they'll keep hiking, they're not sure when they'll stop, be careful because this is the tool that causes recession if you go too far. >> i walked into this business, jim, in 1979 i understand the '70s and '80s, i understand high interest rates, high inflation, i was trading t-bills that had an 84 handle, but my question to you is this -- why do they think they're going to get it right

when they're still afraid of a boogieman that in the giant zmeem the history of interest rates might be the anomaly >> that's a good question. i don't know they're always afraid th fear that inflation is coming. if it comes and they hike, they're right. but too often they hike in anticipation of returning inflation, it sort of calms but not as much as the hike and it hurts. >> back in the '70s and you had this type of inflation, you didn't have computers, social media, the speed at which adjustment and information moved. i think that would make a big difference i'm not saying the fed shouldn't be worried about inflation there's a lot of seeds we planted that should auger for some in the day and age we live in, erring on the side not squashing the economy at a time they're generating money to pay for previous sins and try to offset this debt financing,wouldn't that be a good idea?

>> that i think is a good idea i think the fed is trying that when they talk about long term neutral rate, short term neutral rate the neutral rate is not only inflation, what is the real funds rate more done, it goes to the financing question, to the borrowing question if they're not careful and they raise rates too much to fight off the boogie man of inflation and they go too far, they choke lending and choke the amount of business that goes on in the economy, and that's why it becomes a problem. so yeah. one more rate hike, is that a problem, no. >> and the only signal that could have kept them from not maximizing the mistakes of overdoing the tightening cycle would be watching the curve which is now in many ways permanently distorted. >> not only distorted, they're coming out and saying it doesn't have any signal. the fed should know the yield curve -- >> they better be afraid see, everything beyond the fed actually moves because of

aggregate personalities of traders instead of basically a group of people. we're out of time. jim, the rest of the curves, automatic adjustment we have to remember that "squawk on the street," sara, back to you. >> rick, thank you let's send it to jon fortt with what's coming up in the next hour on "squawk alley." good morning, jon. >> good morning. you think global trade, you've got to think shipping lay men. how has movement of goods been effected by trade tension around the world. we have the navy secretary to talk authaanmo cin up on "squawk alley. the closing. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, with td ameritrade. ♪

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welcome back to "squawk on the street." a day after late day losses in the wake of the federal reserve decision to raise interest rates, health care among the best performers in early trading. among the names leading the group to the up side, regeneron. and finally, look at shares of well care, up 4%, after agreeing to require aetna part d prescription business. that's a big deal. those shares up 3.5% as a result of that deal

now back downtown to you guys, sara, at the new york stock exchange >> thank you. coming up later, see you on "closing bell. eu top anti-trust cop, the one everyone is afraid of, talking about her probe into amazon and more another congratulations to the old man, david >> old man >> never looks old hasn't aged a day in 25 years. >> that's better >> let's not talk about it don't say it don't say it >> look at that. >> i ditched the glasses i didn't actually need them. not sure what happened there >> some of the ties. >> you need a split screen, a screen shot of that. >> some of the haircuts. >> that was the guy on 41st street before they started cutting our hair here. oh my god. that one still gets me all right. >> it has been fun

last five years have been the best for you. >> without a doubt i wonder why >> you'll be back tomorrow. >> very lucky. i feel extremely lucky, in all seriousness. >> front row seat to this. >> thanks, sara. >> david, we'll see you in the morning. "squawk alley" is up in a couple of minutes. don't go away.

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good thursday morning. welcome to "squawk alley." i am carl quintanilla with morgan brennan, jon fortt at post 9 of the new york stock exchange we keep our eyes on the kavanaugh hearing, trade, rosenstein, the white house. we begin with facebook a good place for startups on shaky ground what brian acton's criticism of mark zuckerberg is