good morning, it is 8:00 a.m. at disney headquarters in burbank, california, 11:00 a.m. on wall street and "squawk alley" is live.

♪ ♪ good friday morning. i am carl quintanilla with morgan brennan and jon fortt at the new york stock exchange post 9. plenty of movers to get to yelp getting slammed after earnings, dropbox is surging after strong results alibaba is taking a dip lower this morning today's session so far is the worst day for stocks in the early month of november. let's bring in jeff richards, managing partner at ggb capital, mark mahaney mark, i am going to ask you the first question we're starting to get used to massive cults in market cap when it comes to yelp an activision >> you may have lost me with the question what we had here is yelp, the surprise out of yelp and the reason they lost a third of market cap in a couple of hours

is that they added no new advertisers in the quarter this is the first time i've seen this with the company since they started to disclose this metric. we have a change in the type of contracts they're selling to advertisers. it is one of the reasons we were bullish on the stock, did intraquarter survey work that looked constructive so we were surprised by results and so was the market if you can't grow the advertiser business, that means sooner or later you can't grow revenue and the stock should rightfully be cut. we will stick with the buy, but there's no question, it is fundamentally challenged >> jeff, does that speak to when you look at a company like yelp andadvertiser situation there, does that speak to the fact that google and facebook continue to dominate advertising and it is hard for smaller companies to pick up some of that share >> that's the issue that nobody is talking about you have companies like yelp and others trying to compete in a world dominated by google. amazon a advertising revenue is

growing as people navigate to amazon for product searches. it is challenging for small cap to the ad space. facebook commands a huge percentage as well go on to your mobile device or browser and do a google search all the top results are google or amazon, and increasingly google pulls in its own results from their content site. it is a tough space that yelp is competing in i point to e-commerce, shopify and etsy are doing welcome peting against amazon in a large cap world. we think it is more on the e-commerce side than the advertising side. >> mark, coming back on this yelp issue, for them it is around advertisers, but seems like there are a number of companies in the internet space that failed in one metric or another to meet the growth metric that the street was looking for, whether it is streaming, social media company, et cetera. is there any larger narrative to be concerned about, about how

quickly these companies might take over their respective sections of the world, whether it has to do with advertising or users themselves >> yeah. you set up the question right, jon. jeff has the larger correct point here this is a sector, maybe across tech as a whole, but across consumer internet it is a sector of consolidation, and there are very few exceptions to this rule in retail, revenue is going at least in north america and western europe, going to one company, amazon, it is taking the life blood out of things like ebay. i think it is also happening on china. on the advertising side, two platforms. the surprise is amazon is emerging as an advertising platform they're going after different ad budgets for now, but that leaves little room for anyone else. that's probably the oxygen being taken out of yelp. there's maybe one interesting play in small, midcap internet that can still grow nicely in

advertising dollars, and that's the trade desk, a name we like that's almost the exception to the rule consolidation, concentration leaves very little room for small, midcap names unless they're really unique and execu execute extremely well and that's not what yelp is doing. >> a lot of questions on china, alibaba singles day. the degree to which they're being squeezed on the trade front, what are people saying in your circles >> i came back two weeks from beijing, i have some real time data you mention large cap companies, ten cents lost market cap over concerns about macro in china and gaming business. but if you think about longer term in five to ten years, where i see opportunity and we see opportunity as investors, you talk about china where roughly 80% of the market in e-commerce is still off line, that's going

to come to alibaba and to the economy on we chat, and you talk about southeast asia, latin america, brazil, india, other markets where the bulk of the economy is offline, consumers still bank offline, but now have a mobile at the advice -- device in their hands my bet is chinese companies will do well in those markets they're way out ahead of amazon, facebook, google in those markets in terms of monetizing users and building a banking and commerce relationship with them. i think there are concerns on china, but you have to look to the long term to be bullish on these names. >> when you have the ceo of alibaba saying that in the future he envisions the main business to be cloud, should we be talking more about this company in terms of larger cloud wars that we focus so much on? >> if you look at amazon, aws today is a $32 billion business for amazon it was single digits billions a

few years ago. alibaba cloud platform is $2 billion rate run business. if you assume there's a similar market opportunity in china and around the rest of the world, then there's reason to be bullish on that business we all know and as mark pointed out previously, the net profit on aws eclipses the net profit for amazon as well it is profitable to be in. alibaba is the dominant player in cloud computing i think it is a bright opportunity for ali. and singles day this weekend is the largest e-commerce day in the world. 25 billion last year, roughly twice the size of black friday in our online shopping day on cyber monday, it is a huge event for alibaba, we probably provide a shot in the arm for people looking to understand the economy in china and how healthy it is. >> tried to get michael evans to give us the number in advance that they expect, but no dice. have a good weekend, guys.

see you soon >> thank you. after the break, what disney ceo bob iger told cnbc after the company's big quarter. and later, are walkouts at google a watershed moment in tech we discuss the implications next the dow is nearing session lows, down 207 points. a lot more "squa aeystl ead.wkll" il [ phone rings ] what?!

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julia boorstin sitting down with bob iger. she joins us with san francisco with more from the interview >> good morning, jon disney better than expected results driven by a record year for its movie studio bob iger is now focusing on digital direct to consumer services he announced disney plus is the name of the app launching next year, and said for hulu, he would be interested in buying hulu from nbc universal and is looking to grow it internationally. >> our plan is invest in all three services, espn, disney, and hulu so we achieve goals in terms of not just going into the direct to consumer space but transforming the company by being in that space. that will require investment and those investments will be made

across those three brands. >> as for espn plus, iger says it is doing extremely well. >> espn had the best quarter in a while in terms of sub losses what we are seeing there is continued erosion in terms of traditional subs, but growth in the digital mvpd has continued through not only the year but the quarter. so the sub losses were abated substantially. >> and disney parks and resorts division benefitting from higher attendance and visitor spending. iger telling me booking trends are positive, thanks to new ticketing strategies as well as a strong economy disney shares up 2.5% now. jon, back to you. >> good stuff, thanks, julia for more on disney and their streaming strategy, let's bring in walter isaacson and "new york

times" columnist good morning walter, you first on disney. it seemed clearer in last night's earnings how disney is planning to segment the direct to consumer strategy you have espn, you have disney plus, more positioned as a family streaming option, i take that to mean pg-13 and lower, and then hulu which is more general interest different from netflix's approach how do you expect the market to react to that or what sign post do we have to look at to see how disney is doing? >> well, the market is already reacting well, will continue to react well i think bob iger is not only smart and innovative, he is also very wise. he understands the fundamental thing about digital economy is you can go direct to consumer. he is not burdened by having a

cable operator but he has espn and he is shifting that away so it can go direct to consumer now he is doing disney plus. for more than 90 years, the disney corporation has known how to create brands brands like "star wars," disney, all of the brands they have. that differentiates it from netflix. all these things make the disney offering very smart. >> and it seems like we are encountering a world where content creators like disney, comcast, our parent and others are creating content bundles but there's a question who are the dominant distributors. will it be the comcast of the world or the apple, amazon google youtubes of the world how do you expect this segment to move by disney to influence

that >> i think disney sort of stands alone. it has a lot of content that people want and can go directly to consumers, probably get a lot of people. the espn service seems to be doing really well. the disney plus service will probably do well also, just knowing my own history with disney with my two kids, we sort of spend all the money on the disney stuff i feel we will continue to do that but i think one problem is the competitors, especially netflix, are kind of entrenched you'll get additional sign-ups for disney, but it will still be like a thing where you subscribe to many services i think, and if you kind of want one service, netflix is kind of offering this all you can eat system that has content for a wider variety of people, especially around the world.

i don't think this does much to hurt netflix i don't think that's disney's point, but i think we see a world where many of these can survive and thrive probably. >> walter, to that point do you think disney could take subscribers away from netflix or given the fact there's strong branding power for both companies, what it does is make it harder for future offerings that maybe haven't hit the market to be able to bring on subscribers? >> i think it will make it harder with things like at&t and hbo franchise to now come into the market because you have a huge library with disney you even have the fox library. you have great brand franchises like we discussed. and i think they could do even more innovative things for example, they're not burdened with a cable news network but they have an incredibly good news gathering operation, so part of their bundles could actually be a high

class premium news offering. likewise, they could even go up against youtube, which to me is so deeply polluted because disney is not totally dependent on advertising dollars which is not the way to go in the future. so you could make types of social networks and news networks that depend not purely on advertising dollars, which is shown as a way to really both harm consumers' data and get you polluted products. >> really quick, people are going to want to try to game out how much progress disney plus is making against netflix is the number to watch going to be subs or cash flow or some other metric we can't see as easily like views, ad dollars, something like that? >> at first it probably will be subs that's the most straightforward thing. what walter is saying i think is

right. what's important here is not exactly the services but more like the cultural change at disney to allow for this kind of innovation i don't know if disney plus will be the thing that works but the idea of having this experimentation, innovation in how you deliver content, how you bundle it in different ways, i think that's the thing whether or not disney by itself in the early incarnation works, i think that's an important question what's more important in the long run is the fact that a big company like disney is kind of forced to because of the competition, but it is taking the market seriously and doing a lot to signal it is willing to experiment here. >> yeah, potentially blowing up the way it used to get content out to consumers another story to get to this morning, is going, your column addressed the walkouts, asking if this is indeed a watershed

moment for tech and silicon valley a lot had to do with the way google, alphabet handles sexual harassment complaints, minority employees. it wasn't the traditional labor issues like pay and benefits, but in what way might this influence the way workers handle, tech workers handle these issues going forward >> i mean, i think what we're seeing is this huge cultural shift in silicon valley about work and about organizing. there was this sort of very individual like marketplace sort of sense toward labor here for a long time, people were out for themselves i think the big watershed is people are collectively bargaining in silicon valley you may not be doing so under the traditional way we think of collective bargaining. but they're coming up with new

ways i think they morph we're seeing not labor unions but something toward that. i think that's what's important. they didn't get their initial, all their initial demands met by google, but from what i can tell from talking to organizers, they're committed and are going to keep pushing. i think it will lead to big change in how tech companies operate. >> walter, how dangerous is this for big tech there's a myth of mif you are good, make the money, you'll get the benefits life is tough for people because cost of living is really, really high is there a risk if google and others don't respond to issues in the right way, they could help a new labor movement that's a thorn in their side going forward? >> i think there's a risk that's even broader and larger than that jared lanier has an interview

with nick thompson in "wired" magazine this week which gets to it, it is idealism why they want to google and other social networks google famously in the ipo and original manifesto said don't be evil that was put there by people that wanted to make sure it stayed in the dna, but it has been pushed down in later company statements i think what you're seeing, whether it is twitter, facebook, and google, they're just doing things that are destructive to our social discourse, allow bullying, false things to go online it is not something that can be government regulated, but people at these companies went there for idealistic reasons and some of them have to be waking up every morning and saying am i still doing a good thing

>> indeed. thank you. issues we'll continue to wrestle with for awhile. >> thanks. major averages in the red. dow down almost 200 points, close to session lows, led lower by cat, apple, boeing. crude is obviously a story managing to hold above 60, but fell below it first time since march 8th, wiping out gains for the year we will watch that and at the top of the hour, a special veteran's day edition of the half with scott walker >> we are at joint mays mcguire for -- joint base mcguire, honoring heroes today. a huge show coming up and it starts at noon there are chefs, bakers and food order takers. doctors and surgeons and all the life savers. the world is alive as you can see, this time of the year is so much more than a bow and a tree. (morgan vo) those who give their best, deserve the best. get up to a $1,000 credit on select models now

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stocks are moving lower in reaction to the u.s. fed saying it expects further gradual rate hikes. the broader market hanging onto gains for the week german steel company is experiencing the biggest drop

since 2016, after cutting guidance for the second time this year. bp, shell, total also. european stocks on track for the worst quarter since 2015 up next, why the next guest is saying that apple is the most important stock in the market, and why that role used to belong to ge. tom mcclellan joins us after the break. is about doing things right. and there's no shortcut to the right way. so when we roll out the nation's first 5g network, it'll be because we were the first to install millions of miles of fiber optics. and we'll be the first to upgrade the towers and put up the small cells that will power the smart cities of the future. when i started at verizon, i knew i was joining a team that was pushing the industry forward. now, with the launch of the only 5g ultra wideband network, we're doing it again.

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hello, i am contessa brewer. here's your cnbc news update one person dead, more than 100 sick from a salmonella outbreak linked to raw turkey the cdc says the strain of salmonella has been found in a variety of turkey products it says cooking meat thoroughly destroys the bacteria. north carolina officials say calls at a school were a faulty water heater it sounded like gunfire. officials searched the building, found no evidence of active shooter. on good morning america, former first lady michelle obama says she felt lost and alone after a miscarriage 20 years ago, she had in vitro to conceive her two daughters

her memoir comes out tuesday >> irealized as i was 34, 35, we had to do ivf i think it is the worst thing we do to each other as women, not share the truth about our bodies and how they work. >> i do, too i agree with her that's the cnbc news update this hour back to "squawk alley. carl >> thank you so much, contessa. stocks having the worst day in november, our next guest is encouraged by the brief post midterm rally saying a big run may be around the corner tom mcclellan joins us, good to have you back. good morning >> thanks for having me. >> you bring in three good charts, looking at how stocks behave in 12 months following a midterm. >> right our presidential pattern is derived from taking stock market data, chopping it in four year chunks, averaging them together to see what normal looks like. you never get the market

replicating it identically, but you know what normal should be, and you can see how it is behaving relative to that. normally before the midterm, you get a bottom this time the stock market waited until the last minute we had a sharp decline in october and rather than normal slow decline, it got the bottom in on schedule now we start the third year of presidential term which i say starts in november, and that's typically always an up year, a bullish year very strong pattern. we are no longer worried about midterms and what might happen, and can get back to business, let liquidity flow >> here's the second chart that does show really a pause following the election, going into the middle of the month >> right that's the same comparison zoomed in on local data now. there's a little soft spot after the midterm, bottoming the middle of november, then the up trend starts and continues to

next year. so far we are following dance steps closely. >> tom, is there any reason to believe maybe you could see a deviation in the chart this year i bring it up because yesterday, mark mobley, he said maybe with the dems taking the house would not be good for markets. first two years of trump administration was deregulation, tax reform, more business favorable policies that allowed stocks to rally as much as they did. any reason to think it could be different this time? >> anytime the market is doing anything, whether it is supposed to or not, you can get a wild event like the ebola panic or brexit that can come and knock it off track usually when that happens, the market steers hard to get back on track two fundamentals that matter for overall stock market are how much money is there, and number two, how much does that money want to be invested. wanting to be invested part is what we are struggling with,

with everybody's angst about the midterm election now that that's gone by, they don't have to worry about the unknown risk how it turns out and get back to putting money that exists back to work unknown effects quantitative tightening, $50 billion a month sunks enou sucks out enough to make it irrelevant, there may not be liquidity enough to go around. so far we're seeing strong indications from numbers and it says strong initiation of the up stretrend and that's gooo the bullish case. >> we are showing viewers a mystery chart of what the most important stock to the market is as a whole you want to unveil the curtain on that? >> the issue is apple and how it behaves relative to the other

stocks in the stock market, and relative to the indexes. the price of apple is what i think you're talking about it didn't make a lower low in october like the nasdaq composite and nasdaq 100 did when you see divergence, when there's disagreement, apple is right about where both are headed ge used to do that, when you compare it to the dow-jones industrial average, if the two disagreed, you wanted to listen to ge. that stopped working early 2017 when ge started a plunge that's still going on, and now in single digits. it is no longer performing that role apple seems to have taken it over it is a trillion dollar market cap, bigger than all but 8 of the countries in the world in total market cap, so it is a big thing. right now it is disagreeing with the lower low in october that we saw, and that's a bullish setup that confirms what we are expecting going into the third year of the presidential term.

>> i understand how it works in retrospect it is very good, interesting work, but extrapolating it out, does that mean the iphone is the most important product in the world as goes the iphone, so goes the entire market >> don't confuse the company with the stock people want -- >> larger majority of the profit. >> yes, but you're focusing on the company. it is what investors do with the stock that determines the path of the stock price, and if you see apple starting to head lower in ways that the mbx or the nasdaq or dow aren't doing, and they're the leader to the down side, that's when you worry about the prospect for the overall stock market we're not seeing that. we're instead seeing bullish divergence, apple is acting stronger, it has positive things to say about prospects for the

stock market going into 2019 >> good stuff, tom always love when you bring some of your chart work see you soon tom mcclellan. speaking of general electric, check out shares of ge now. they're trading down about 9%. $8.28 a share. a fresh low going back to march, 2009 jpmorgan analyst cutting the price target again from $6 to 10 he says the latest earnings report was worse than expected on, quote, almost all fronts, arguing it is not about liquidity, that it is run rate differentials. he believes 6 of 8 segments will show zero. even after 95% dividend cut. the company's response ge is a fundamentally strong company with a sound liquidity position we're taking aggressive action to strengthen our balance sheet

through accelerated -- they call the analysis overblown, saying ge is taking strong action, $20 billion of dispositions, $10 billion in cash proceeds, seven deals announced, and the dividend cut, ceo change, that the company has substantial sources to delever the company, pointing to baker hughes, options on how health care is separated, that could sell more than 20% transportation closing first quarter, and given that he was focused on ge capital, talking about capital there, saying they're reducing and they have liabilities in ge capital and assets with substantial value. the other thing i would just note in all of this, and based on my conversation with that source at ge, a lot of focus on liquidity. they said liquidity is solid, 40 billion funding facility,

pointing to stable ratings, and leverage position, $18 billion debt reduction through health care transaction, 9 billion additional reduction, including 3 billion in paper reduction, so the company i think begs to differ with the research and analysis, but when he comes out with a note like this as you talked about in the last hour, the market does pay attention given the fact he has had some correct calls in the past. >> did you think it was odd they bring in liquidity when he writes liquidity is debatable, we believe this is not really about liquidity? >> i don't think it is odd because there has been a bigger debate, especially after earnings last week around liquidity, and i just think there's a lot of discussion and sort of question marks hanging over this company, especially given that we have another kitchen sink quarter >> not from him today. i think that was more a comment

on the broader discussion happening around the stock as it has continued to fall. >> this is what happens when you bruise your credibility. they say all clear a bit too soon we'll see where it goes. thanks, morgan. what ron barron is saying about elon musk. but first, rick santelli, what are you watching >> watching the markets post fed meeting. everybody is asking the same question should the fed take their foot off the break? have they gone too far is the fed a big risk for the economy. we're going toisss dcu should we have more confidence in the fed after the break.

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your screen. the call is free. and licensed humana sales agents are standing by. so call now. a special halftime report honoring our veterans and heroes we are live in new jersey for a special half time veteran's day program with a live studio audience, we are visiting with a graduate of west point, anthony noto, and four star general ray odierno, now an adviser to jpmorgan, one ofthe companies trying to do so much to help our veterans can't wait to see you top of the hour we also got to ride earlier today in an army black hawk helicopter incredible experience. there's jim levinthal, veteran of the navy and others with us

today. went over the coastline in new jersey, saw where some of the worst damage was done in the recent hurricanes in the past several years. it was an incredible experience. we thank the folks here, good servicem servicemen and women >> i am jealous that you got to ride in the helicopter going to be showing off other hardware while you're there? >> reporter: we are surrounded by cool stuff. show you at the top of the hour. it was an incredible experience. not many civilians get to go up there. we're thankful they let us do that those things go like 200 miles per hour, by the way, and there were i think a dozen of us, 11 or 12 of us up there it was neat, i have to say one of the coolest experiences i've had for sure. >> fantastic, scott. see you in a few. for now, let's get to the cme in chicago, rick santelli

has the santelli exchange. >> thanks, jon i couldn't help but think i saw a judge by that cool helicopter, remind me of ben bernanke, helicopter ben, dropping money into the economy that's what my topic is today. many are looking towards the fed as one of the big risks in the economy. it makes perfect sense and that's what investors do it doesn't mean that worry always effects or investing is the high priority concern, but it is always lingering what's interesting today is post fed day where there really weren't any surprises, but as many have pointed out, maybe there was a surprise, by acting so bland in the face of volatility of a major order recently in the rearview mirror not being mentioned. maybe that is important. i can tell you there's always rhythm to the markets with regard to certain big data

points, like employment reports and fed meetings, and we saw that to some extent. sometimes there are conflicting signals, but for the most part rates roast, the curve flat end. now twos, threes, fives are all still up although they had give back from historic comps, but the long end slipped on a weekly and daily basis to lesser levels part of that is taking a breath, part of it is post fed there's also a bit of worry. i'm going to show you three charts first chart starts in 1952 university of michigan sentiment. granted, we had the preliminary look for november. it is not at the highs anybody that looks at the chart going back that far can truly see we are at lofty levels versus history second chart conference board this goes back to 1967 this one really looks aggressive and finally maybe the most aggressive of them all, national

federation of independent business, small business optimism index this goes back to 1974 stellar. maybe we make it too complicated. we are in a consumption economy that does two things one, it mitigates many factors we're all worried about in the trade war. if we're in a trade war, we're signature in the best seat because we consume the most to generate the most. but the other issue is would all of these be at lofty levels? the spongy numbers if investors and small business was worried about the fed? i don't think so keep it simple keep monetary confidence to have more confidence in fed policy. morgan, back to you. >> rick santelli, thank you. when we return, a virgin hyper loop 1, the new ceo joins us onset exclusively for his first television interview in the role here at post 9.

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i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. welcome back virgin hyper loop 1 naming a new chairman, looking to expand operations beyond the test track and build the first hyper loop in india the company hopes to have three fully operational systems built by 2021. joining us in a cnbc exclusive at post 9, jay walter.

no stranger to major transportation projects. thanks for joining us. >> my pleasure >> you are looking to build the first hyper loop 1 in india, why india, not the u.s.? >> we're looking at both that's one of the things i should clarify we have four studies under way in the u.s. now in the now in t, in texas, colorado and in missouri we completed the first from st. louis. tremendously exciting. if you take the st. louis project, for example, that's a trip that takes about 3 1/2 hours right now and it would be done in under 30 minutes >> which sounds really great how much will it cost? when will we see these in place? >> there's a number of steps this is not just putting on a new bus line or doing something like that. >> of course >> there's been a tremendous amount of technology development that's been done when i started to look at this,

that just blew me away they took me to las vegas and you begin to get the sense this is real and it could happen and it's doing it. what needs to happen right now is to really move from the first stage of testing to really the development of real projects the four projects i mentioned in the u.s., a project we're working on in spain. and then in india where i think there's a very exciting project from mumbai. a trip today that's about four hours apart and we have been designated as the original proponent for this right now which means we are starting the work on this project with the government cooperatively we have more work to do. i believe we could be in construction on the first loop, the first 11 kilometer test loop in 2019. >> jay, the controversy around this company is immense from the

co-founder, no longer involved with the company, rob lloyd, recently the ceo now not there anymore, richard branson stepping back as chairman. there was an early deal with russia that now looks more controversial than it did at the time maybe you can clarify that and then there are reports of massive layoffs. saudi first and then cash. >> what i say more generally it's a region important for hyperloop. >> are they in or out? can you say? >> not sure. the middle east in general is a great area and has had a lot of support. we're thrilled they're one of our main investors and our current investors are leading this round of funding.

and i'm excited about that in terms of being able to do it >> look, there's history, no question about that. but it is history. i think what you're really seeing today is the evolution of the company, the maturity of the company. we're an incredible tech company but we have to set these up as real projects and we're starting to tick off the things that say what makes this happen >> it sounds like the potential is richer overseas than at home. >> we have a number of projects. >> tuesday is my first day one of my phone calls will be to the u.s. secretary of transportation i know they're really excited about what we're doing and i want to reach out and have a

conversation right away and say we want to be here this is a country we have build everything on the idea we take technology and don't look to catch up we look to leap frop >> you have deep roots in transportation are we going to get an infrastructure spending bill >> i think so. it's totally bipartisan. i think this is bipartisan the idea of investing in technology that can create productivity, jobs, redefine our landscape in terms of being able to do it, that cuts across every line >> would it matter if it's a

bank >> i think it's too soon to tell and we should be flexible in the way we're looking at all these things what i really like about this you can make it happen and we can get behind it in different ways and maybe, frankly, the model in the u.s. may be different than what we use in another country. why does it have to be one size fits snaul. >> jay walder, thank you for joining us here. if you're turning 65, you're probably learning about medicare and supplemental insurance. medicare is great, but it doesn't cover everything -

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getting some headlines from peter navarro. ylan, he has some words for those on wall street >> reporter: quite incendiary saying that wall street bankers and hedge fund managers are trying to pressure the president into making a deal with china but that ultimately any deal would be on president trump's terms. he also goes on to say that hedge fund managers are like unpaid foreign agents and called on them to stand down because there would be a stench around any deal that included any concessions or influence from goldman sachs and from wall street so some quite sharp rhetoric

from the president's top trade adviser. all of this before the meeting between president trump and president xi at the g20. still a divide within the administration over the best stance to take towards china back to you. >> ylan, sounds like his overarching narrative was that economic security is national security is that right? >> that is right and that is the stance peter navarro has taken to justify the sort of hard line toward china so far we had seen a somewhat thawing of relations, a lot of question over whether or not that relationship would change after the midterms we'll see if whether the president adopts this type of rhetoric that navarro is now moving forward with. >> all right we'll continue taking some q&e right now. we'll come back to you as navarro hits the tape. >> also worth noting this is happening defense secretary

mattis meets with his chinese counterpart over military and security cooperation and also tensions between the two countries. >> he did add a deal would happen on the president's terms not wall street's terms. the market didn't react sharply to that. we're at session lows down 242 a special edition of "the halftime." first some breaking news steve liesman has that carl, thanks the federal reserve unveiling for the first time a report on the health of the banking system in which they say the safety and soundness is improving and risk management exists. they're revealing new data about the number of banks that have satisfactory ratings and those that have less than satisfactory ratings. 43% of bank holding firms get a, quote, less than satisfactory rating those are ratings three, four and five being the lowest and

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