curve inversion, we are still in a dramatic move to the up side that's reflecting secular issues with treasury, that is excess of demand, lack of foreign buying, cost of hedging out is getting expensive, and nongrowth, noninflationary factors. >> excellent peter, always fascinating talking to you carl, back to you. >> rick, thank you very much good morning, it is 8:00 a.m. at sales force headquarters in san francisco, 11:00 a.m. on wall street. "squawk alley" is live ♪

i am carl quintanilla with morgan brennan, jon fortt with us live from san francisco major averages giving back some of yesterday's ganins. new doubts over a permanent trade truce between the u.s. and china. we heard from the president this morning saying he is a tariff man, but negotiations have begun. commerce secretary ross on air telling "squawk box" saying they hope to pin down new principles. tech is lining the broader market an hsbc downgrade which we'll talk about in a minute good morning, guys this apple downgrade, 96 pages to tell us that the core growth of the hardware unit, biggest days of growth are over.

>> i don't buy that. i had a couple of experiences the last couple of weeks, carl i am a believer like peter lynch in using your eyes i wanted to buy new apple product. two stores i wanted to buy them in were demolished they're building bigger stores to service more people and the reality is that continuing revenues of apple are going to be extraordinarily good biggest threat to the stock is the 30% fee on the app store it is clear that apple wants to spend money increasing its facing with the consumer, and that sells more hardware, but more importantly sells more recurring revenue. that's the multiples, the saturday and sunday cash flows. >> you say the 30% fee, talking about the supreme court case being heard now?

>> yeah. >> why is that the biggest threat >> that's a high number. some people, morgan, might think that signals monopoly profits. apple controls 100% of the mashlg market you can't have an app without going to the store it has been a marvelous way to collect revenue. ten years ago, you couldn't possibly forecast the app store was going to exist it is all cash flow. cost of the app store once established is virtually nil each incremental dollar probably has 90% morning narginal profit. to me, that's the risk i think i can live with it the company does too good a job for the consumer i think it is recommended now or recognized as the leading consumer brand in the world. the multiple is not excessive. it trades at a consumer product

multiple like general mills, kellogg, procter & gamble. and a better business model. return on capital in apple is mind boggling. >> how is tech fitting in your market basis when i say tech, we should parse it down. there's a big difference between semis and other elements of tech now. >> i think we need to be cautious about how much we pay for these technology companies going forward. there are great companies with strong structural growth in areas like e-commerce payments that we can pay still good multiples for. premium valued technology companies where they're willing to pay high multiples in the past, don't think that's the case going forwards. we are probably in a trading range for the time being and need to be sensitive how much we pay for strong structural growth companies. >> can you be specific on those examples what names >> paypal, visa, master card, these are technology companies with a lot of tail winds not

trading at expensive valuations. some faang stocks you need to be careful how much you pay, whether growth is sustainable over a number of years and at what level >> sarah, going further into that, we talk of faang stocks as growth overall, but apple has a very different profile valuation wise than amazon are you thinking that this is moving away from revenue and growth multiples to focus more on profit and how that's being delivered or cash flow how should we parse that when you start to set up differences between hot growth stocks and fundamentals of some others? >> i mean, something like apple, we look at apple and think it will have a hard time proving it is the strong growth company it was of the past. product cycles aren't as clear our view is investors are willing to pay for a strong product cycle from apple, and that's what's going to be important. we think apple may struggle. when it comes to technology

companies, how strong are industry growth rates, what earnings can they generate, will revenue growth be strong are margins sustainable. those of what we are looking for when it comes to technology. >> larry, with that having been said, the iphone itself has been such a driver for apple. that's where a lot of questions are. i think it is important to get to a point of being able to calculate a lifetime value of the customer in apple versus looking at the iphone. isn't it possible that stock has turbulence ahead as we figure what metrics to follow going forward? >> i don't think so, jon i think each quarter the services, hardware component of the company will grow. the think investors have to do is look down from 40,000 feet,

look at the marginal profitability. as apple collects incremental dollars in those areas, marginal profitability is extraordinarily high they join the apple infrastructure, ecosystem, don't leave. apple locks them in. their services once you have the machines are unparalleled versus microsoft. they collect huge rents on service contracts. recurring revenue is growing, and i look at the company versus procter & gamble and it is no contest. it is not terribly expensive and free cash flow components are absolutely enormous. i can live with the hardware slowdown what i couldn't live with is if the company ran into trouble on the app store issue as i said before, and apple basically has to succeed in china.

that's another area there can be reasonable doubts about the future but so far so good on china. i'm encouraged i especially like the idea that yesterday the mccow stocks performed well and they're 100% tied to china the decision makers there think the red light has stopped flashing for the time being. >> you sound very cautious we are coming to end of the years. how should investors be positioned more broadly? >> we think santa came early and the santa rally likely already happened a lot of head winds going forwards, you have to worry about tariffs, path of interest rates, yield curve inverting but the good news is earnings growth remains strong. that will be what drives the bull market going forward. expect that to continue. it will be positive but more compressed for turns

you need to look for companies with strong structural growth rates that can grow in any kind of environment. >> a lot to chew on this week especially thank you. >> thank you right now, looking at live pictures there's sully. president george herbert walker bush's service dog made famous from photos that have gone viral since his passing. that's the capitol rotunda this is tom ridge, former homeland security secretary. various members of the bush white house and white house's since go through to pay respects we have special coverage of the funeral tomorrow, beginning 9:00 a.m. eastern time live in washington please join us for that. >> absolutely. and when we return, bank of america ceo brian moynihan sits down with wilfred frost in a

cnbc exclusive. and another exclusive. my interview with keith block, sales force ceo. all coming up after the break. we're voya. we stay with you to and through retirement. so you'll still be here to help me make smart choices? well, with your finances that is. we had nothing to do with that tie. voya. helping you to and through retirement.

unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. welcome back to "squawk alley. the goldman, sachs conference is kicking off, bringing together the best names in banking. wilfred frost is in new york city now in a cnbc exclusive wilfred? >> thank you very much

i am joined by the ceo of bank of america you may hear background noises of protests about immigration against jamie dimon downstairs ignore that. apologies. great to have you with us. >> great to be with you. >> i want to start where i started with tim sloan an hour or so ago. clearly there's more bearishness. when you talk to customers, does it match up with that or are they positive? >> it doesn't match up what you're seeing, i think you have to back up. as we came into '18, there was a view of synchronized growth, and as you get to the end of '18 and think of '19, the basic predictions, ours go from 3% to 2.7 growth the world is basically flat. not only are economies slowing,

but there's a half full, half empty view. >> let's get into what the consumers are doing. over the holiday, consumers of bank of america, debit, credit cards spent 6% more than last year, up 7 or 8% from the year before seeing strong continued growth spending cash, year to date through end of november, up 9% in terms of cash spending on goods and services inside that, you're seeing retail is growing. but seeing travel, entertainment, dining out, which is good for employment in the sense that those take people to make happen. we feel good about the economy predictions are slow underneath that is a strong growth rate we feel strong about. unemployment, wage growth, all of the factors are strong, including small business enthusiasm >> you were in buenos aires last

week was it better or worse than you hoped for in terms of a trade truce? >> i think expectation was building as i was there that you would hear announcement that the two largest economies in the world will work it out at the end of the day, you know there's a trade debate going on, argument about what's right. large economies ought to be resip pr reciprocal ought to be able to be competitive, see who wins. that's the debate that's going on how you do that, it is a lot of work you see ebbs and flows that's on people's minds the belief was you would hear a calming down, and last few days heard both sides of that that was the main theme in terms of global was trade and impacts of trade war on the economies, even though it might be a couple of economies involved. >> is that the biggest risk to 2019 or interest rates what level rate hike would you be fine with >> at the end of the day i

wouldn't -- there's not -- the question isn't why are the feds raising rates, it is why are they taking accommodation out. that's a constructive environment for every business in the u.s. and the world because of the amount of consumption. two-thirds is consumer that's an economy the size of china's economy and multiples of any other economy. it is key that the u.s. economy grow if the reason rates are going up because the economy is growing, that's a good thing. expectation, a few rate rises next year, great debate how fast or slow. watch the fed, they're data dependent. they told you that the reality is the underlying economy is growing risk for inflation is not high, inflation is growing wage growth is stronger, unemployment you expect normalize the rate path, normally move it up three, three and a quarter. >> you're relaxed about rate rises. so is tim sloan earlier.

yet we see the yield curve inverted stock prices are 3.4%. largely because of the yield curve. what are investors missing when you see a big one day sell off that you're relaxed about? >> last five days, the stock price is flat. pick which day you're happy or not. >> in general. there's no argument people don't like this. >> because they think it is recession. some people say yield curve predicted last recessions. consistent with what goes on is the economic transition is potential-year-old curve as the fed tightens loan rates stay down the question of causation or outcome. what you're seeing is prediction that next year's economy will grow it is very different in a lot of ways if you look back historically, our experts tell you, you have

to remember the environment around the world is different. nominal rate environment is different. treasury 3%, versus germany of the same duration. 40 basis points. if it is inverting, if recession is coming, that's not good for anybody. if it is inverting because of technical aspects, that's not bad. the question will be we believe it is because the economy is strong >> want to ask about brexit. you have the necessary approvals to operate from the dublin headquarters in ireland earlier this week and you moved 125 employees there this monday. total head count there is 6500 or thereabouts if we head to a no deal, disorderly hard brexit, of that 6500, now that dublin offices

are ready, how many more move to dublin >> we don't know because we don't know ultimately what the rules will be. >> if there are no rules. >> we will be prepared to operate day one. there will be a modest group of people to staff. the real question is for the next five years, what happens. if there's hard border, financial border between the uk and eu without accommodation of how it operates, you have to settle to even it out. three pieces of business, eu business, and the rest of the world business and uk business uk business stays in the uk. the question is how does the rest of the world business fall for us and competitors even if there's a hard in march, what goes on beyond will be interesting. it isn't that we're going to do something in dublin. we are done. we have a european bank, it is up and operating uk bank is no longer merged and

in that won't go back the broker deal will come in paris and we'll staff it up. said 100 some people in terms of numbers. >> the big four u.s. banks investing $40 billion in total $10 billion each next biggest spend only 2.5 billion. 4 x difference from rivals above it does this have similar effect as digitalization has in other consumer facing businesses in that it is a big boone for incumbents but smaller companies are behind >> it is a boom for everybody, you can provide better service and take the cost structure down and pass through to the customer the way to think about the work on the economy side, 26 million mobile customers this is not something that's coming this is something that already exists 20 odd% of sales are on digital.

all is important to how you run the franchise. it has given the customer better services on their time, the way they want to do it, 24 by 7, and reduced operating costs, that changes the operating structure. that mix is good we help small banks, zell is made available to drive payments volumes are growing 100% a year on that. the goal is to bring that banking system into the digital age and make it more efficient for customers. on the commercial side, it goes on everybody talks about consumer on the commercial side, the same impacts. mobile cash pro. the cash product is operating very efficiently you think a treasurer of a company would sit at their desk and interface. they want the mobile interface

you go on there, tells you you have three payments to approve it is good for all the companies. the fact that the competitive edge we are pushing for large company is not versus small companies, it is for the industry as a whole. >> thank you for joining us. we much appreciate it. back to you. >> thank you great stuff, especially on a day where banks and other financial stocks are leading the broader market lower. more from the goldman, sachs u.s. financial services conference coming up throughout the day, including sitting down with president and ceo john waldron. a lot more "squawk alley." don't go anywhere.

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welcome back leslie picker is live in half moon bay, jpmorgan's revolution conference where she sat down

with t rowe price on equity growth. >> we sat down with the man that runs the horizons fund that invests in small caps. he is known as a pioneer of private and public companies we have his thoughts on the market, especially the tech sector where he say he is being more selective >> we believe the dominant platform internet companies, microsoft, google, facebook, amazon, netflix, apple, are still very dominant and significant innovation is still happening in those companies it is hard to compete with them head on in what they do. as someone that invests in emerging growth, that limits things the areas of the market where we had strong growth like corporate

technology, we have seen significant multiple inflation, so we're being more selective in that area of the portfolio >> in terms of specific companies that he likes, he names spotify, twilio, toast and spoke about recent volatility in the public markets, when he expects that to spill over into the private markets. he knows there's typically a six month lag. he hasn't really seen much volatility or chaos strike the private markets just yet, but he did say that when the downturn comes, assuming it comes, he plans to get more companies he likes. >> coming into 2018, we were concerned where we were in the market cycle we put together a shopping list. there's a number of companies we like a great deal, we would like to up more or buy more that's one of the things from an offensive standpoint from a defensive standpoint, what we think about when we invest in a private company,

we're basically making a forward commitment to basically being able to stand by that company if they achieve a plan, but the capital market dried up on them. >> his new horizons fund up 17% in the last year, beating major small cap indexes. back to you. >> thank you for bringing us that european markets are closing in a few moments seema mody joins us with the action. >> lower today the traders say they're cautious about a longer term deal playing out between the u.s. and china on the topic of trade, we're awaiting further clarity on a meeting taking place in washington, d.c. between germany's three largest car makers and u.s. representatives on companies investing in the u.s. look at the longer term chart. bmw and daimler are under pressure on prospect of new

tariffs being introduced so far, daimler and bmw are down double digits in 2018. talk about the uk, adviser to the eu top court says the uk could reverse it and avoid brexit it comes as theresa may is trying to get parliament to pass her brexit deal. that vote coming on december 11. the pounld is rallying against -- pound is rallying against the dollar the central bank said it may lower rates after the latest showed consumer prices are falling more than expected this is a country with a benchmark rate of 24%. one of the highest in the world. any signs the country will lower rates being welcomed by investors. >> thank you let's get a news update and get back to sue herera >> good morning, carl. thank you. good morning, everyone

here is what's happening at this hour white house economic adviser larry kudlow telling reporters the 90 day truce in the trade war with china is a huge first step and he is opt missiimistic a del get done. >> i heard many times president trump says they have a real friendship there was real chemistry between them as his tweets indicate, only they can get this done i think that's correct i think we're going to make great progress. nato foreign ministers and secretary of state mike pompeo meeting in brussels as the crimea crisis takes center stage. they will discuss base to keep moscow -- tunnels stretched from lebanon to northern israel they're not operational, according to the military and add it worked fine

it is taking place inside israeli territory. carl, back downtown to you >> thank you very much look at the major averages as we head to break. dow down 205 s&p down 22. getting headlines on federal reserve williams making comments on interest rates and inversion of the yield curve don't miss keith block, what he tems jon fortt about silicon ris.ey's view on trade and at's next.

live picture of the u.s. capitol and the rotunda as people are coming through to pay respects to former president b george herbert walker bush we expect to see neil bush, one of the six children of the former president >> carl, he is leading a group of people associated with the points of light foundation which was started by president bush. remember his celebration of volunteerism and promotion of volunteerism was referred to as encouraging a thousand points of light rather than government neil bush is now heavily involved in that foundation so people connected with it are going to be one of a series of groups that come by. we've already seen people associated with the americans

for disabilities act, a piece of legislation that george h.w. bush signed into law, former cia directors. a series of other special groups that will come by as units, extended family, secret service agents they revere president bush we have seen tributes on social media from them. we'll also have sports figures, jim nance, broadcaster, that became close to george h.w. bush, other sports dignitaries it will be a somber day, people are going to enjoy and share memories and pay their respects. >> somber, but i am struck, the jim nance group, alumni from texas a&m. we have seen some secretaries of state and former cia directors it makes vivid the many chapters the president had, and passions that ran through his life. >> carl, think about the

american life that george h.w. bush led son of a united states senator, raised in connecticut. enlisted in the navy as he graduated high school at age 18, became a decorated aviator, shot down at sea. we've even got video of that, remarkable to see him pulled back on the ship he goes to yale, varsity athlete at yale. moves to texas, starts out in the oil business enters politics. served in almost every senior position you can imagine, head of the cia, head of the republican party, u.n. ambassador, envoy to china, vice president, president so the associations of the long life, married 73 years to barbara bush another thing that's stunning, how many marriages endure that long and produce the kind of legacy that george and barbara

bush produced, and we're seeing all facets of that reflected in this ceremony. >> it is essentially 36 hours for the public to pay tribute, honor, and respect the 41st president. what's also interesting, the importance of the room and location itself, the 12th u.s. president to lie in state in the capitol rotunda. the first was abraham lincoln in 1865. >> it is the place where he began his career in public service. people often forget this chapter of his life but george h.w. bush having lost for the united states senate in 1964 ran for a house seat in houston in 1966, won, was reelected to that seat. he didn't continue to serve in the house because he ran again unsuccessfully for the senate, but he began his career in the people's house, in the united states capitol that's where he is lying in

state today, and every junior member of congress can identify with the career arch that george h.w. bush mapped out a lot of them have that thing on their mind themselves. >> john harwood, thank you we look at the lines of people waiting to pay their respects. apple receiving another downgrade this morning from hsbc, taking the stock down to holdfrom buy dom chu has more >> that's right. we're talking about apple, it is one of the most influential stocks in the marketplace. the hsbc downgrade weighing down the shares one of the price targets is that 200 level. that's where hsbc is seeing that they say it is too levered to the iphone and maybe phone sales are slowing. as we talk about apple, we have been talking about market values

at apple, amazon and microsoft are showing the past few days because each of these stocks is trying to vie to be the biggest publicly traded in the world microsoft, biggest company out there, $858 billion, 857 at apple. amazon, 853. watching that play up closely as well also, with regard to the yield curve and flattening, the difference on two year and ten year bonds, you can see here, lowest level since back to 2007. we're just at 12 or 13 basis points as yield curves play out in the marketplace, the place we see it play out very well is in regional banking stocks. those stocks have been holding up relatively well, given that yield curve dynamic. today, sharp move lower, off by 4%

as you watch what's happening, it is something to watch whether banks hold up in this kind of environment. now, back to san francisco and jon fortt. >> thank you, dom. shares of sales force up 40%, amid demand for cloud based services i sat down with co-ceo keith block yesterday to talk about sales force's rise, u.s. china trade tensions and more. we began with emergence of cloud and where we are with migration to that platform take a listen. >> i believe we're in early days sales force will be celebrating its 20th anniversary very quickly. we had a meet -- meteoric rise cloud adoption is just in very early days what we're seeing is this

incredible wave, global phenomenon of digital transformation this takes many, many forms. over the last few years when you think about the conversion, perfect storm of cloud, mobile, data science, artificial intelligence, amazing technologies that have come together, it has given companies opportunity to re-invent themselves and their business models think of a company that's a b to b company and wants to be b to c. that's where sales force plays beautifully in terms of getting close to that customer >> directly engaging and having data about the customer, nike a good example of that >> a great example is having the holy grail of the 360 degree view of the customer you have information on the customer, personalize that experience, where the customer feels they're personally engaged with companies they do business with mulesoft completes the wave of

digital transformation for our customers in the sense that it is allowing you to unlock data from any source. think about decades of legacy debt that's been built up, built up, built up ceos want to know how to access that data in a quick fashion to serve it up to systems of engagement that's why the marriage is compelling for ceos all over the world. at the end of the day, what the cloud brings you is the ability to be agile, nimble, flexible and bring something we refer to as beginner's mind taking a step back, how do we re-invent, innovate, build quickly. you can move because of technology available today, you can move far more quickly than you could in the age of legacy systems. it starts with that. it starts with bringing a point of view, speaking a language of industry talking to a bank is different than a telecommunications company and technologies apply different ways

i think those are very, very fundamental than what you see with legacy technology companies using the same notion. the second, it is all about trust, making sure you have a trust base relationship with customers. third thing i would tell you, and this is very important, we live in a world today where because of that con ver je generals, we have digital transformation the most important aspect is the commitment from the ceo. the ceo has become and must become the chief transformation officer. >> talk about trade and this temporary thing between the u.s. and china. how does it need to play out. >> it is interesting times we live in. every day there's something new in the press everybody has a different opinion. everybody has a view on certainty and stability. i think at the end of the day, let's hope that reasonable people prevail and that we are

doing good things for the country and world. i don't think that we can be short sighted in terms of focusing on a particular country or area. we live in a global world. so many things are in at ttegrad anything has to be thought fully looked after. >> u.s. and china, as we enter to 5g which will drive a lot of cloud usage, data flowing through systems like sales force's, so i think there's a question around intellectual property, a question around access to markets, whether it is in 2019 or beyond, where is the place the u.s. and china need to get to >> i hope we're finding ourselves in a situation where we believe in a free trade system, free markets, and organizations and governments are cooperating and working well together so people aren't hurt, so economies aren't hurt

great news about technology, it removes barriers it gives people opportunity to access relevant information. gives people opportunity to educate themselves all of that is good for quality, for the economy. and again, let's hope that cooler heads prevail and we figure this out with china >> very clear sense this isn't figured out yet, but stakes are high for tech. >> great interview interesting when you look at shares of sales force up 40% year to date, despite the coverage and focus on the tech more on what randall stephenson saysft t aerhe break as well the dow down 205 stay with us

a few moments ago at the rotunda, neil bush, one of his sons, paying respects along with a group from an organization called points of light of which neil bush is the chair it is a nonprofit that works to increase volunteerism in the world. what a legacy that was of the former president, the idea of not only volunteering but serving the public good as much as you can. >> absolutely. the organization does a daily point of light award to

acknowledge someone or some people on a daily basis in terms of good works, good acts it was started in 1990 after president bush's 1989 inaugural address in which he referred to points of light, hence the name. a very emotional moment here, i'm sure for his son >> we'll be looking for more to come through the rotunda, including special agents who were in charge of his personal detail as well as his personal aides later this morning let's get over to the cme group and rick santelli for the santelli exchange. good morning thank you, carl. channel check, something important at cnbc, try to monitor in various space what the most important events are for investors to pay attention to but how do you know if you're monitoring treasuries with the yield curve inversion process

that you are tuned to the correct channel. consider, buyers on the yield curve are a huge factor moving yields around. why take yield curve risk. a lot of buying is in the short, that should the short end. inflation, we're not done with inflation but are we peaking for this cycle many believe we are. when you add in what's going on with china and a breakthrough, at least restraint on tariffs pushing it down the road to get a more comprehensive plan, many believe could be disinflationary. as far as the global and domestic economies, our economy seems to be doing well many look at this inverse and say, aha it's because growth is slowing if it was that obvious would the fed be playing this game of neutral? it would be right there in front of them if it were that obvious. on the global front it makes sense. for many economies that are developed is the banking system. how could a banking system be efficient and productive with negative interest rates?

it can't be. finally the big two final reasons, one of those reasons, of course, is logistics. a short buy on the end of the year so that could be a big deal my opinion, even though it's last, the number one answer, the balancesheets of central banks and their policy have made trying to interpret which channel is correct nearly impossible real quickly i tried to look for some easy things if we look at where the maturities are based on where they closed last year we see the five year, the intermediate part of the curve is a little screwy, that inverted the curve. on the net change it's not so obvious that there's something wrong but only up 66 compared to the shorter maturities when you view how far off the highs they are. the five year is equal to the three year that really raises suspicions. and on the long maturities, remember, institutional, funds, pensions, insurance. whether domestic or global have a huge appetite.

that can help account for it very quickly, where do you think ten-year note yields will close? i always like to play this game. the last significant time over 3%, we're going to put that down as a potential close here is the other interesting thing. if you take the average for the year, that was the last low before the highs 282 is your low one. but by far the most convincing place 3.11, the first high for the year those are my three choices if you look where it's going to close. i think the smart money is at 3.03 jon fortt, back to you meanwhile, netflix up nearly a percent after beginning the day lower off the back of some comments from at&t ceo randall stevenson who criticized the streaming service's strategy at the ubs media and communications conference julia boorstin is with me here at one market for more what's the takeaway here >> i think randall stevenson said netflix is more like

walmart, it's a place that's a mass aggregator of content but not necessarily premium. they will launch in about a year they're not going head-to-head with netflix take a listen to what he had to say. >> the goal of warner media and steinke is not to create another netflix or a direct to consumer product that rivals netflix in terms of being a warehouse >> and he did specifically say that netflix was like walmart. >> now, okay, this reminds me of the albanian army comment. when i think of what's driving netflix from their messaging, the data we've seen it's not being a warehouse of everything.

it's more the original content and the ability to share everything that netflix is doing pretty much globally it looks like at&t and maybe some of the other traditional players have ties. >> it's true that at&t can't go global right out at the start. the fact that hbo does have a separate international service if you look at the fact that warner brothers, which is now part of at&t has massive production capabilities. randall stephenson points out they make 70 series a year what he's doing is saying a lot of that content is either licensed to netflix or sold to netflix as originals and they have the opportunity to pull back what would happen with "friends." pandemonium because people were afraid "friends" on netflix would go away. randall stephenson said we

licensed it to them for another year but it's nonexclusive for now. we can put that on our service, too. >> are we going to see the likes of warner, though, have that kind of guts to pull some of these averages and not allow them on netflix now that they have do have that opportunity. that's a real hit not to take the money and use it as an investment especially when they're not global >> we'll see what happens. for now it's just not going to be exclusive to netflix. down the line you can see using in a as a way to lure people over from netflix. >> new news from the front good talking to you about that morgan, back to you. >> thanks, jon german automakers meeting at the white house. over to ylan mui

>> reporter: they are here to make their pitch to the administration as the white house weighs additional tariffs on autos we saw one ceo arrive. i asked him how he thought the meeting would go >> we are very positive to have a chance to talk to the organization and let's wait and see. real positive. >> reporter: do you think they'll move forward on tariffs? >> we hope so. >> reporter: that they will move ahead? >> no, that we can stop tariffs. >> reporter: in addition to volkswagen, daimler is expected to attend. president trump is not expected to be there. however, secretary wilbur ross, robert lighthauser and larry kudlow are expected to attend. some of the keys you can expect them to make they're likely to say they invest $48 billion in the united

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right now, watching the s&p down as well. the markets are closed tomorrow. the traders have to keep that in mind at the close today. >> transports, worst performers today on that u.p.s./fedex note, the impact of amazon from morgan stanley n. general just a down day. >> thanks to jon let's get over to "the half. carl, thanks i'm scott wapner stocks are falling for the first time in three days did enough really happenat the g20 to keep this rally going it is 12:00, noon. this is "the halftime report." is today's drop a sign the market's goodwill from the china talks has run out of steam or should investors keep gearing up for an end of the year bull run? plus, a big call on the tech giant. "the halftime report" starts right now. welcome. good to have you with us on this tuesday. here to debate and trade the big stories of the day