♪ >> announcer: live from new york, where business never sleeps, this is "squawk box. ♪ good morning, everybody welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square i'm becky quick along with joe kernen and andrew ross sorkin. if you look at the u.s. equity futures at this hour, joe said it, we're looking to open up by 260 points for the dow s&p futures up by 27 the nasdaq up by 75. if you looked at last week, even with the massive declines you saw on wednesday, by the end of the week, the dow was only down by 1.5%. the s&p was down by 1% the nasdaq was down by about .8%. right now the dow is down by 400 points from where we were. it would need 400 points to make up the ground lost on wednesday, it's already more than half of the way there if it gains this 254 points we're showing in the premarket. if you want to look at what happened over night in asharks you'll see the nikkei ended up

by .7% the hang sang was up by 2.1% the shanghai composite up by 2.1% in europe right now where there is active trading taking place, green arrows across the board. the biggest gainer is the footsy up by .8%. quick check on treasury yields which was so closely watched last week when you saw the temporary inversion in the middle of the day between the 10s and the 2s this morning, 1.618% the two year is 1.15% so showing more room than we have seen over the last several sessions. we have a huge week ahead for wall street. kicking off today, big tech executives testifying at ustr hearings then tomorrow, quarterry lults from home depot, kohl's and t.j. maxx wednesday, fed reports on existing home sales plus reports from lowe's target and l. brands and thursday jackson hole symposium kicks off where, of

course, steve liesman will be. all leading up to fed chair jay powell's big speech which will take place on friday but meanwhile, we want to pivot right now to an update on the big story over the weekend, demonstrators in hong kong, tens of thousands of protesters hitting the streets yesterday. janice mackie friar joins us more with more good morning >> reporter: good morning. it was a show of strength and really being regarded as a measure of the wider popular support for the protests here that have now continued over two months organizers figure there were 1.7 million people, that's 20% of the population of hong kong, the police estimate a little more conservative around 130,000 people regardless, this was a huge crowd defying a police ban to march as well as heavy rain, and the police for the most part were hands off, weren't even seen in the streets. there was this sense that both

sides were wanting to take a step back and push reset on this movement after the violence that we saw at hong kong airport last week meanwhile, on the mainland and on chinese social media, the propaganda offensive continues now seeming to focus on multinational corporations and businesses, threatening in particular the big four accounts firms, suggesting that if their employees or executives show any sort of support for this protest movement, that they will be punished alluding to what happened with cathay pacific last week showing video of chinese pro military forces have been conducting massive security drills less than 20 miles from here so beijing telegraphing all of the options it says it has before it in order to end these protests, but among them, compromise is not one of them.

>> janice, appreciate it very much i was curious about what you think the future of the cathay pacific situation will be but becky may have a had a question. >> go ahead first. >> on cathay pacific, obviously it is going to take on a world of hurt, but in terms of who is running that company now and whether the chinese government has real influence over it, what happens? >> reporter: well, there was the sense that cathay pacific and river hog was being pressured by beijing. either directly or through a major share hoemder after the commotion at hong kong airport, the cancelled flights, the allegations that some employees were heavily involved, beijing at first had banned some of the flight crews from even landing on the mainland because of their

suggested involvement. what this has done unofficially is sent a very strong message to a lot of the multinationals here, although so many of them won't go on the record to say so, they are feeling some pressure, this sense that beijing is keeping is close eye and a close ear on this situation, that targeting the big four accounting firms was the direct result of an ad that appeared in a local hong kong newspaper last week from employees of some of these firms voicing their support for the protests so beijing over the weekend and particularly on social media came out swinging. >> just to add to what's been happening with china, you saw that stocks were up there despite what we've seen with some of these protests and beyond that's because china's central bank on saturday unveiled a new key interest rate reform that's going to be steering borrowing costs lower for companies. people are looking at this as a stealth rate cut if you're watching what's been

happening with the markets there today, that's why you see these big gains for both the china markets. president trump and apple ceo tim cook sat down for dinner friday the president's golf club in bed minister, new jersey, about ten minutes from my house. i'm sure that could have pulled up another chair i was around if the phone had rang. literally ten minutes. any way, president told reporters yesterday that cook made a good case about how a new round of tariffs set to go into effect in september could hit apple products and set the company behind in competition with samsung which is a south korean rival >> it's tough for apple to pay tariffs if they're competing with a very good company that's not. i said, how good a competitor? he said they are a very good competitor so samsung is not paying tariffs because they're based in a different location, mostly south korea, but they're based in south korea, and i thought he

made a very compelling argument, so i'm thinking about it. >> and south korea and the u.s. struck a trade deal last year that kept tariffs off electronics. apple relies heavily on production and sales in china. stock has been on a bit of a roller coaster since the latest tariff announcement on august 1st. sam sunk captures 23% of global market share trailed by huawei and apple according to the latest data. >> what does he mean when he says he'll keep an eye on it either lower the tariffs for china or throw more tariffs to south korea? >> i don't think you want to -- we have a trade deal >> carve out apple in some way that it's individualized and special. then every other worker will come rushing to bed minister to ask the question. >> right >> how do you correct that >> so tim he didn't check with

me either obviously. you think he came back just for this >> i guess probably. if you can get 00 meeting with the president right now and this is your issue, you make the flight, you take the flight. >> morris town probably for tim. they can take pretty big jets in morris -- they can take the president's jet. up next, much more from president trump as his advisers rejected the notion that the economy is in trouble. you think the yield curve could know about some kpoj nis event >> no. >> i don't see anything -- probably not, but what if it does in that's what scares me. >> how could it possibly know that. >> i don't know. >> wisdom of the crowds. >> i don't know how it knows that how does when everyone bet on georgetown, how do you know it's going to be villanova or something. it happens we'll talk about the odds of a

u.s. equity futures right now. as we head to break, a look at the biggest premarkets winners and losers in the dow. ♪

>> welcome back to "squawk box." take a look at u.s. equity futures this morning because they are surging let's show you what's going on right now. you're looking right now at the dow up triple digitdigits, 273 s right now. nasdaq looking to open close to 80 points higher s&p 500 looking to open higher as well. close to 29 points higher. the economy taking center stage this morning president trump and his economic advisers pushing back on the idea of a looming u.s. recession, a threat that sent shock waves across wall street last week and pushed the 30-year treasury yield to its lowest level ever >> i don't think we're having a recession. we're doing tremendously well. our consumers are rich i gave a tremendous tax cut, and they're loaded up with money they're buying -- i saw the walmart numbers they were through the roof. >> i sure don't see a recession. we had some block buster retail sales consumer numbers towards the back end of last week. >> we have the strongest economy in the world money is coming here for our

stock market, it's also coming here to chase yield in our bond market >> joining us now, alec young, managing director of global markets research at ftsc russell and kevin yaman. very popular in jamaica "cool running. i'll start with you, kevin >> yes. >> that was the story last week. and i was just positing whether there's something we don't know. 18 months is a long time given the current economic forecast, a recession looks really unlikely. >> yeah. >> i'm just wondering is there any way a yield curve could actually know something that we just don't know? you never know what you don't know or could we say it's different this time and probably not likely to be correct >> i don't think you can entirely ignore the yield curve inversion but record low

unemployment numbers, moderately rising wages, confident consumer that continues to spend, the fact that the tax cuts will stay through the end of last year, more relaxed regulatory environment that should bode well with the stocks and more dovish leaning federal reserve, there are opportunities there. i think the bond market is telling us they would like to see rates lower. i don't know if they necessarily need to be. >> you can think of so many -- and i use the term exoj nis events oil shock or something in hong kong 1.7 million people that's hard to put the things back in -- what's starting to happen there >> yep. >> i don't think it could be that smart, but then it just makes me wonder, we have 18 months is such a long time, especially with the news cycles we have now, i don't know how you can say that we know there won't be. >> there's a lot of risk still throughout. >> there are things that are pushing the yields down and flattening the yield curve. >> that have nothing to do with the economy. >> with our economy. global savings glut. it's weird

you hate to say this time is different, but there are some pretty unprecedented things going on people are talking about negative rates here eventually that seems like a stretch because of the strength of our consumer we're in this weird world where we have ultra low rates. rates are collapsing but our economy is healthy. >> brian moynihan spoke last week and said that he didn't see anything out there, bank of america has one out of every two households in t united states and usually banks can see it out by about 18 months. >> from an equity perspective, there's a couple things you can take from that number one, it's encouraging it means the market doesn't fall at a bad, dips get bought. until trade gets resolved. >> you're not that bullish. >> no. we're bouncing around. i'm glad that the strong consumer keeps us out of a major draw down, but right now earnings growth as you know is low single digit the street is at 11% for 20 over

19 my side people look at that number and say we'll be lucky if that's five. until trade, until you get rid of the current tariffs and agree not to slap new ones on left and right. >> even with what walmart said >> the markets doesn't make new highs. we'll bounce around. >> i was surprised that walmart would really go out -- >> the market is differentiates -- the consumer games are rocking and rolling. the globally hurt names are in the tank there's huge swaths of the market that are a train wreck energy and probably value there but financials, most pharma, it's very by fur indicated. >> do you think it's tough to do double digit earnings return it's a very positive environment for u.s. companies, maybe globally not so much, but in terms of unemployment and gdp. >> back to 2018, joe, we had two consecutive quarters of corporate growth more than 20% we're not going to get back to those levels we're slowing but growing

environment. we have a lot of geopolitical risks. boris johnson having to navigate a tough brexit merkel is not going to re-run. >> stood in front of those tanks or something. >> other thing that's interesting is that obviously we'll hear from the ecb this week but the market is betting a lot on the fed and easy money and you have to wonder the cost of capital is record low, so is the fed cutting rates really going to stimulate cap x and business investment which is the weak spot of the economy i kind of question that a little bit. >> why are stocks moving up so sharply today? peter shack says he thinks it's because yields are firming up. that makes as much sense as anything else to me. >> i think it's a reminder of how strong the underlying economy is at this point and moving eight bases points from a yield inversion is a lot of

confidence. >> in hong kong there was no violence the market here is taking its cue from over there but a big relief rally at least it wasn't -- >> china's central bank, too, the rally in chinese stocks. >> yeah. i think that tweak they're making to their -- >> lending. >> yeah. >> helpful. >> so, you think 5% year over year is good as we're going to do for earnings? >> i think that's -- i think that's constructive as well. i think we're going to have a strong third quarter i think holiday shopping sales will be strong i think the online commerce segment of retail spending will continue to grow. >> what will 18 months of no recession, that will put the life of this expansion -- everyday is a record, right? >> i wouldn't be surprised to see us hit all time highs again. >> the only problem with the expansion is long in the tooth that's why it's not so fun. >> what happens is people keep second guessing it people bet on meaner versions. i think there's a good chance it lasts a lot longer, but people i think will continue to second

guess it the problem i have with stocks here is just if we're in a 5% earnings growth environment, we're fully valued at 17 times you're not going to get a 20 multiple on the russell at least 8, 9, 10%. >> if i was a worrywart, i would say we're long in the tooth, got the yield curve and start talking about iran, north korea, china, hong kong i can give you -- i'm so worried about so many things that in 18 months i have no idea, we never know -- >> forgot about afghanistan. >> over in russia they have these stations that measure radio activity they like turn them off. >> yeah. >> when that happens. >> right what oh, no, we're not registering anything you turned your stations -- i just anything can happen right? >> we have a pretty big election next fall as well. >> that might be it. biden/warren that's my new pick sorkin. >> i think it's a little -- that

will be big but it's a little early for the market to be trading too much on that because we don't know enough about it. trump wasn't expected to be anywhere near the victory -- taking a victory lap at this point before. >> but historically six months, eight months prior to an election, cap x, think cap x isn't going in the right direction already, it goes down materially. >> because you wait to see what happens. >> i can't do anything. >> biden/warren -- >> the closer biden and warren get to if white house. >> think about it for the economy, that's like add all those things i said together that's the sum of all fears if those two get in seriously. >> think if warren got closer, you would have a different situation. >> she would take veep and then he goes one term right? >> i have no -- under your scenario, maybe. i don't know >> one thing that's interesting -- i have seen a lot of polling investors overwhelmingly see

trump re-elected. >> as of today they do. >> it's 53-40 with -- i like where they come out and say, 50% didn't like his response to the shootings. >> he said investors. >> i know. oh, investors. 50% hate him no matter what 50%. >> i'm talking about portfolio managers. >> those greedy, all they think about is their pocketbook. we don't want -- i don't want to give them credit for that. any way, thank you when we come back, the biggest water cooler stories of the world of business. we'll talk about tesla's new solar power push and bourbon backlash both those stories right after this ♪

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♪ welcome back to "squawk box. we are in the chairs this morning, tesla relaunching its solar panel business by letting customers rent, can you believe this, rent rooftop systems. >> what? >> homeowners in california, arizona, connecticut, massachusetts, new jersey and new mexico, that's the list, will be able to rent the solar power systems for between 50 and $65 per month. but if you decide against keeping the system, it costs $1,500 to remove the panels and

restore your roof. >> that's a total rip-off. >> it's a beautiful roof it's unlike the sort of solar panel roofs. >> why are they letting you rent them are they having trouble selling them to people we'll rent them to you because we have this stuff sitting around and we need more customers? >> you pay monthly for everything, wework, solar, it's supposed to be cheaper eventually than electricity. >> it's like rent-a-center you pay off your couch 20 years later. >> i know they struggled to get the technology right on all of these roofs because remember about year and a half ago they showed these beautiful, beautiful videos when elon musk was demonstrating this stuff and they have not hit the market. >> this may be it. >> just so you can have -- >> the burbs. >> so you can have a roof, so

you can solar power it and feel really good and feel virtue s. >> i have a generac. >> with climate change, you need one. >> can the roof also power a generac? >> i would worry about any time you need -- i don't know she's got a wind powered car >> no, i don't. >> you dream of one still. the leaders, this is a good one, leaders of some of america's biggest companies are changing their view of the purpose of a corporation in a letter published this morning, the writing is on the wall, business round table no longer base decision solely on whether it would yield a higher profit for shareholders. take into account all shareholders

writ large i don't know how to use that the group says corporations should commit to in their words delivering value to customers, investing in employees, check, check, that will happen normally, dealing fairly and ethically. well, if you want to compete that will happen normally. and supporting the communities in which they work and protecting the environment yeah, the round table's old statement of purpose, espoused milton freeman, he's so yesterday. any way, his decades old theory the only obligation is to maximize value for shareholders. >> the two go hand in hand trying to maximize value for shareholders -- >> why not put out a statement to virtue signal for everybody good idea. >> the two go hand in hand, you would be protecting all those different constituencies. >> creating jobs, creating -- generates taxes for things to happen, all the good things.

giving people a stepladder to a career giving your customers great services competing with others. competing globally all these things are great >> you can do tasht things to the environment. >> not anymore i think that used to be the case >> it comes back -- >> expectations have changed this is acknowledgment that expectations have changed. >> that's my point fine, then you have to do all these things why shouldn't you articulate them >> fine, articulate them then go back to everything that these horrible, greedy ceos do after writing their little statement. >> i think it's an acknowledgment of how society has changed. >> yes. >> probably can merge the two statements. >> move in the positive direction. >> you look at what we talk about on a daily basis and where, you know, democrats are right now in terms of what's important, yeah, i would say that this is not too much to write considering where we are

right now. >> i don't think it's about democrats or republicans i think republicans feel this way about the environment. >> have you looked at what the big issues are for people on the fringe of your party do you read what's happening everyday >> as a political issue. i think around the entire globe by the way -- take the united states out of it globally these are big issues in europe you may say that's a political statement. >> if i were europe, i would have other more pressing issues right now, like growing an economy, which would be a whole new con cement for most of those places. can i tell you about squawk booze news we teased this tariff backlash is hurting the u.s. whiskey business. shipments to europe plummeted. the eu currently levies 25% tariffs on u.s. whiskey. here is the problem. good bourbon needs to be aged typically between 4 to 10 years.

distillers have been scaling up operation to meet a surge in global demand. 2018, production of kentucky bourbon reached the highest level since 1992 but distillers were counting on demand from europe to soak up inventory and that demand is drying up because of the tariffs jack daniels said it lost $125 million because of the european tariffs and escalation could be on the way the u.s. is preparing to slap tariffs on 100% of 1.8 billion european wine and spirits. that will lead to more retaliatory tariffs on u.s. tariffs again, you're looking a a back and forth. >> there are no absolute truths in economics there are none but the closest things we have to a principle that you would see in physics or chemistry are milton freedman, adam snit, you

don't suddenly find a new system that somehow supplants milton freedman, andrew hopefully they have a doorman at their building when the mobs are coming that's all i will say. >> i will argue what they're doing is to avoid the mobs. >> exactly. >> to try to make the sim fairer and less unequal that's the whole point of this, joe. >> i think it's changing a statement. >> you're all about fairness it works so well when the government tries to legislate fairness such a good system how about legislating freedom and let everything else take care of itself. we'll talk about a couple other big topics when we return. a work/life balance adjustment may be coming for traders in europe jack walsh used to say there is no workplace balance a programming note, deliverying alpha investor summit is back for its ninth year in new york

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let's see 250 plus 100 plus 300 is about 750, right? >> it was down by 400 before this 257 so if it were to gain another 140 points from here, it would have made up all the ground we lost last week. >> okay. and the nasdaq is strong, up 75 the s&p up 28. yeah the yields, it wasn't just our guests that were talking, cramer was saying earlier futures are up a lot he gets uncomfortable with that. he says he wonders whether yields need to hold up, which is weird to say yields need to rise but the environment we're in right now. >> it's a big move between the 10 and the 2s right now. >> that's nice beautiful. not even close to being -- i mean, we got ten bases points to play with. we're golden. >> 5s and 2s are invertsed. universal comedy "good boys requestboys

taking in 21 million in ticket sales. the first r-rated comedy to debut at number one in three years. universal "hobbs&shaw" came in second "fast and furious spinoff" brought in $13 million time now for the executive edge want to tell you we teased this right before the break, traders in europe might be in for a bit of a shorter weekday, bank lobby group in the uk investment association are now leading talks to negotiate shorter trading hours across europe. the plan would open equity markets an hour later and close them an hour earlier all this in an attempt to improve quality of life for traders. the london stock exchange opens at 8:00 a.m., closes at 4:30 a.m. the paris exchange opens at 9:00 a.m. and closes at 5:30 p.m. the talks are still in the early stages and the decision rests with the exchange operators, but we could get a little closer to the u.s. schedule of 9:30 until

4. so we will see whether they do it they are legitimately longer. >> yeah. >> life/work balance how do you feel about that >> by the way, 24-hour trading day with futures and everything else, maybe this is all irrelevant. when we come back, with uncertainty in markets across the world, where should you be putting your cash to work. market watcher mark grant has some ideas and he will join us next we will talk to draftkings ceo jason robins about the latest trends in sports better stay tuned you're watching "squawk box. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory...

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welcome back, everybody. u.s. equity futures are indicated sharply higher this morning. dow futures indicated up by about 262 points s&p futures up by 28 the nasdaq up by 75. big losses that we saw last wednesday where the dow was down by 800 points, you saw positive days on thursday and friday. if these were to hang on this morning, these gains we're seeing, you're talking about the dow only down by 140 points from where we were before that 800 point loss joining us right now is a guest

who has been sounding the alarm on cheap money for some time now, mark grant is the chief market strategist of fixed income at b. riley fbr mark, i think you've probably been talking to us about your concerns and have stayed on message with that for longer than anybody i can think about last week we saw $17 trillion is now the number of negative interest rates, sovereign debt around the world that skyrocketed pretty quickly. you're still pretty worried about what this means. >> becky, the high previously was in 2016 it was 12.2 trillion and it kind of flat lined. in the last three to four weeks it went to 13 trillion, 15 trillion, 16 trillion and now as of friday we're at 17 trillion in negative yielding bonds while everybody focuses on china, because it's a news event, in my opinion the far greater problem, far dwarves what's happening with china, is this negative yielding debt.

>> why is that >> well, it make it a great time for borrowers and it's going to be a two-step process as interest rates go down, which i think they're going to do regardless of what the fed does because you may recall famous comment that the one-eyed man and his king in the land of the blind, there is no other positive interest rates virtually across europe, in asia, japan. so we're getting a steady stream of foreign money coming in to buy our bonds because we're the last man standing with positive interest rates eventually, in my opinion, we're going to get down to 1%, .5 of 1% then it's going to be -- create a lot of difficulties especially for savers, retirees, pension funds, any person or institution that depends on fixed income, yields and cash flow to have a

decent life. >> the equities futures that wooe looking at this morning are stronger it's probably because it looks like interest rates are firming up this morning. you just don't think that that's a realistic situation that that can last >> becky, i this i that regardless of what the fed does, as i said, we're going to have lower interest rates i do think the fed, which is the central bank of the united states it's part of the u.s. government, founded by the federal reserve act of 1913, has to lower rates so we're competitive with the rest of the world, but this is creating a talk about never before for thousands of years we never had negative rates where the lender is paying the borrower for the privilege. it's just ridiculous. >> i don't know where this ends, but i do know if you're looking at where to put your money right now, equities look like a better place because you're not going to get any return if you're putting the money in bonds

couldn't that help fuel the rally for equis? >> yeah, i think you're spot on. lower interest rates, mortgage rates, more refinancing, i think you're spot on at the first blush it's going to help all the riskier assets such as real estate or the equity market. at the second blush, the second stage, when american interest rates get close to 0 like the rest of the world, then you're going to see reversal of that because lower rates at that point aren't going to stimulate risk assets anymore. you're going to reach a point where it's going to flat line and then i think we're going to see the opposite reaction? >> right now with people and individuals, i deal mostly as you know big institutions, but i've had a program of corporate bonds, investment grade. i can still get carefully around 4% and then the other space i

really like where you can get yield or closed in funds but they're complicated. i mean complicated but you can get still double digit yields, so i put those two together and ended up with a nice return i think in a very conservative way and that's what i've been doing for the individuals that i do business with. >> mark, i understand what you're saying in terms of that risk assets become harder to move the needle. it's like pushing on a string. let's say you buy pfizer or at&t with 5.5, 6% yield, how does that suddenly become an investment where the stock goes down and it goes to 8% yield if the economic conditions become so bad that the stocks are sold or the dividends become more difficult to pay because economic conditions are so bad i just don't see if rates continue to go down how can blue

chips with yields end up being a bad investment >> joe, they're not a bad investment i'm saying at the moment in the first half it's going to be positive. >> in the second stage, how do they become a bad invest snmt. >> they become a more difficult investment because lower borrowing costs aren't going to drive equities or real estate or anything else as you approach zero yes, i think so, you're right, that stocks with good dividends that are solid companies will continue to have some value. >> either the businesses go south, mark, and they're not able to pay their dividends or their dividends are at risk or their businesses, they don't, their earnings go down or the yield is going up and you're back to saying whether -- i don't know it just seems if you got a solid company it's going to be able to

cover its dividend >> joe, i think that's one decent option. i think you're making a very good point decent option. >> i would buy that glasses company that you wear. is therewear. >> i wore my glasses just for you, joe. >> is there a dividend -- does that company pay a dividend? it must. pays the dividend to the wearer of its products, that's for sure one hell of a dividend. >> i paid the dividend i sent you a pair of the same glasses. you have a big dividend. >> i'm going to go open a casino in vegas like de niro, i think what was his name in that? jack >> we're going to talk about joe's other favorite topic bitcoin. breaking below 10,000. bouncing back a little bit this morning. we're going to talk about the wild ride encrypto and use the bitcoin as a safe haven. some say it's safe some say it's dangerous.

we'll debate it when we return you guys played your hearts out. you played your hearts out all season. uh... unfortunately we've gotten a bit of bad news. >>to whom it may concern, due to budget shortfalls, the panther's baseball program >>ballard softball >>vikings basketball >>we regret to inform you that due to budget shortfalls, the tigers basketball program ...is indefinitely suspended. ♪ wait, what're you saying? all the work that we put in? ♪ i wish it wasn't so to whom it may concern to whom it may concern to whom it may concern to whom it may concern to whom it may concern to whom it may concern to whom it may concern

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welcome back to ""squawk box"," bitcoin dipping briefly, that happened friday it's bounced back a bit. now at 10,702. to discuss the crypto currency mark market, i think the big question mark about bitcoin broadly, and we use it as our base case we could talk so many about the other coins and tokens and other thing out there right now. it's the correlation between it and everything else. and the stock market and how correlated you think they are.

we saw, obviously, bitcoin really jumped more, i think, on the news out of -- or at least the perception of the news out of hong kong with these protests, capital flight and somehow the money was moving there. what is your explanation for what's happened over the past two weeks? >> yeah. i mean i think there are quite a few things going on. i think first, you know, clearly, you know, a nonsovereign digital asset like bitcoin to people who are interested in, you know, moving capital into a place where they can control it themselves, that underscores a lot of the interest that's been there overtime, digital gold thesis and both institutional accumulators of bitcoin, individuals and then very specifically individuals in jurisdictions or environments where, you know, the intense

concern about capital controls are there. that's like an underlying thesis and i think that has had an impact on it for the last, you know, eight years. >> on that thesis, jeremy, is it appropriate to think that actually money did move out of china into bitcoin or that bitcoin moved -- the price of bitcoin moved higher on the perception or speculation that this is an example of how it could, in the future, but maybe didn't in reality? >> yeah. i think it's likely a mixture of both and it's obviously not something you can clearly measure at any given time but it does seem like a mixture of both. i think one other piece to note, though, and this gets to the correlation discussion, which is last week was a significant kind of risk-off week for equities and you saw, obviously, there are a lot of holders of digital assets, who i'm sure their broader portfolios are taking a hit. if they had gains bitcoin is up 100%, 200% over the last nine months or so that's a place to take some

gains as well. so depending on the type of holder, so to speak, you're going to see slightly different behaviors. >> gold at 1500, some people might have thought, you know, because that's a measure of fiat, and whether you're a believer there you would have thought maybe bitcoin would have done better but it's been holding basically above 10,000 most people are talking about the g7, 24th through the 26th. it's on the docket, is it not? >> yeah. crypto as an agenda item is absolutely on the docket it's becoming, obviously, a major topic. not just because of the continued growth of things like bitcoin but also the growth in stable coins like u.s. dollar coin. >> they could do something this week there could be a negative event or not it could be taken either way depending on what's discussed? >> yeah. i mean, i don't know that we'll see specific policy but certainly we'll hear some perspective out of there. >> jeremy, thank you nice to see you. >> thank you. >> appreciate it. coming up, is global risk

rising from hong kong and the middle east and recession fears at he?om how those risks impact your money. that's next. pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.

market bounceback as markets try to recover from three straight weeks of losses. >> president trump and his advisers are pushing back on talk of a slowdown straight from them ahead

and play ball. the start of the nfl season we'll huddle with the ceo of draftkings as the second hour of "squa "squawk box" begins right now. >> announcer: live from the beating heart of business, new york, this is "squawk box." >> good morning. welcome to "squawk box" here on cnbc i'm andrew ross sorkin along with becky quick and joe nasdaq looking to open about 89 points higher and s&p higher as well s&p 500 up about 30 points treasury yields, as everybody always looks at the two-year and ten-year note. 1.611. two-year, by the way, 1.517. >> all the major u.s. indices on

three-week losing streaks. biggest question from investors right now, is the economy at risk of recession? here is what president trump and some of his top economic advisers say. >> i don't think we're having a recession. we're doing tremendously well. our consumers are rich i gave a tremendous tax cut and they're loaded up with money they're buying i saw the walmart numbers. they were through the roof. >> i don't see a recession we had some blockbuster retail sales, consumer numbers toward the back end of last week. >> we have the strongest economy in the world money is coming herefor our stock market it's also coming here to chase yield and our bond market. >> the economy, obviously, will be front and center this week. annual jackson hole symposium kicks off thursday chairman powell set to speak there friday morning investors have been focusing on falling treasury yields, with

the key yield inverting. peter navarro disputed this, disputed calling it an inversion. >> technically, we did not have a yield curve inversion. an inverted yield curve requires a big spread. >> this was a smaller one. >> correct, all we had was a flat yield. >> that's inverted for a little bit. >> technically that's not an inversion. it was a flat curve, a weak signal of any possibility n this case, the flat curve is the result of any strong trump economy. >> technically, the yield curve didn't close with an inversion, which is something that rick santelli pointed out in his reports last week. here is what president trump said last night. >> when you go in and analyze the curve, the curve always means that about two years later, maybe you'll go that's a long time, two years. but i don't think so interest rates are low i think i could be helped out by the fed. but the fed doesn't like helping me too much.

>> the mark grant segment, if you were watching, you're seeing what is it that a yield curve could see? it does seem pretty smart at times. it has been smart in the past and we were pausing whether -- there's a lot of ways that we could move into recession. >> yes. >> horrible things black swan things. it would be hard to imagine that the yield curve could forecast something that none of us know is going to happen the yield curve could do what mark -- if you believe we get to europe, pushing on a string or you believe that the days of easy money come back to haunt us, all the qe and all the staying low for too long and investment from low interest rates, that's one way the yield curve -- you wouldn't know in 18 months. >> part of mark's philosophy on this, but part of what he has written about, at that point, government also start spending a lot more money because it's cheap to borrow and do much

things and that eventually comes back to bite you the question is, how long does it take to get to that point between now and then you'll see stocks go higher. >> i wish we could think of something that happened 18 months ago it is a long time. with this as quickly as -- and with trump as president and the news cycles, how long is 18 months think about that every day is a new news cycle. we have no idea what the world is going to look like in 18 months you have the longest expansion in history i'm raising my -- >> for the united states not for australia. >> that's right. they got all those natural -- i'm raising my -- i'm going to be like dalio. >> raise your what >> possibility of a recession in the next 18 months. >> dalio said it could be 40% the next two years. >> i'm going from 30 to 32 how is that? >> we'll mark it down. >> 30 to 32. >> in the next two years or 15 months >> i'm not saying anything

it's just blabber. >> as opposed to -- >> i may go up next week we didn't have the underwear discussion with you. >> you know, we could do that, but let's try later. >> are you going to think of some good answers? i told becky it's easy if you number your underwear so every day you know -- right? you number your underwear. she said one to seven? i said no, mine are one to 12. get it >> january, february. >> i didn't but now with the explanation, i get it. let's say what's going on. trade say huge part of the market story here is president trump last night defending his strategy for dealing with china. >> if you look at china, china is doing very, very poorly they had, i just saw a report. they've had the worst year they've had in 27 years because of what i've done. and they want to come to the negotiating table. you know, they're having companies lose -- i mean, they're leaving. the companies are leaving. and they're laying off millions

of people because they don't want to pay 25%. and that's why they want to come to the table i don't think there's another reason, other than president xi, i'm sure, likes me very much but they're losing millions and millions of jobs in china. and we're not paying for the tariffs. china is paying for the tariffs for the 100th time. >> china stocks are rising more than 2% overnight. it's their best session early july after china central bank lowering borrowing costs for companies in support of its economy, which has been hit by a trade war. eunice yun is in beijing, on the ground, and get her thoughts about what's happening in hong kong as well good morning. >> good morning, andrew. tonight, your time, watch for a quasi interest rate cut out of china. the central bank will be publishing what is described as the new loan prime rate at 9:30

p.m. eastern standard time they'll hold a press conference at 10:00 and this new rate replaces the traditional benchmark lending rate as a reference point by which banks will be able to price their loans. so the whole point of the move is meant to try to get the policy rates -- the bank rates more in line with policy rates since the central bank has made it one of its stated goals to try to lower the borrowing costs here, most people here are expecting the central bank to put in sort of like a pseudo rate cut eventhough most analysts still don't agree as to how big that cut is going to be. it's something to watch for. separately, people here are waiting to hear what comes out of the white house when it comes to the policy toward the chinese tech giant, huawei as you know, the u.s. commerce department had black listed huawei and not allowing the company to work with u.s. tech suppliers, but then it granted

it a 90-day reprieve from what the national economic adviser larry kudlow says it looks as though commerce is going to grant another grace period of 90 days. so, people are waiting to see whether or not that's going to happen because the policy towards huawei has been very unclear out of the white house, ever since this black list was announced back in may. president trump himself at the g20 had said he believed that u.s. companies should be able to work with huawei this is what he said on sunday. >> i'm talking to my people. ultimately, we don't want to do business with huawei for national security reasons. >> not even a temporary extension? >> we'll see what happens. i'm making a decision tomorrow it could be temporary. and maybe not. but we'll make a decision tomorro tomorrow. >> and the foreign ministry reacted to president trump's comments just a couple of minutes ago, saying that we hope the u.s. will do what it said at the g20 on huawei.

i spoke with the company and they said right now it's business as usual. they are still waiting to see what comes out of the white house, but in terms of the broader signal that it's sending here in china, this comes after the delay, partial delay of the tariffs from september to december and in the state media, a lot of the rhetoric has been pointing out that perhaps this is just more evidence that the chinese should continue to wait things out and take their time with the trade deal so, for example, the global times, communist party paper said u.s. maximum pressure tactics are losing their bite. people's daily acres state paper, said the u.s. is feeling the composure of china in the face of extreme pressure so, there's been this feeling, when i'm talking to people here, that the chinese are gambling that over the next six to 12 months, they should continue to wait because president trump would likely feel more heat

because of the u.s. economy and the impact of the trade war on u.s. business. guys >> eunice, thank you very much eunice yoon. scott wren, senior global equity strategist atwells fargo and matt slaughter, dean and international business professor at dartmouth scott, let me ask you today, since we're looking at the futures up so sharply, are you feeling calmer about things, better or do you think this volatility will be here to stay? >> becky, from our perspective it will be here to stay at least for the intermediate term. clearly we're susceptible to any trade headlines, upside or downside year-end target for the s&p 500 say touch over 3,000 we're not that far away from fair value what we've been trying to do is lighten up a little bit on st k

stocks in march and april. we're looking for an opportunity here at the -- on the downside but we touched overnight that 200-day moving average somewhere between 2740, the june low, 2790, 200-day moving average approximately, that's probably a pretty good buy for right now i think if stocks run up, we'll probably lighten up a little bit. if they fall down, we'll put cash to work that we raised a couple of months ago. >> matt, we could think we control our own destinies here your international business focus and what's happening around the globe is determining what's happening here, not only with what's happening with economies there but central banks. everybody kind of on this race to get the easiest, the fastest. china doing that today what kind of pressure does that put on our federal reserve >> it puts pressure to think about the impact of those policy moves in terms of prices in american output. the point to go back to first principles on that important question the fed's job is to try to

maintain full employment and price stability in america what exactly that entails isn't exactly written down in the legislation. our colleagues at the federal reserve today look at a 3.7% unemployment rate, a lot of measures of a job market which are quite strong by historic standards. the biggest thing is that price inflation isn't as higher as people would have expected looking at what the ecb does, bank of china might do tonight, what the bank of england is going to do, as they think about brexit all those forces as the economy has become more global all those policy choices and economic developments in the rest of the world to have to factor in to what the fed does. >> would you expect to see interest rates heading down? they firmed up a little bit today. would you expect longer term that we'll continue to see pressure on our interest rates as a result of all of that >> low inflation in america tends to make the fed more likely to ease what we've seen in recent times with the speeches coming out from chairman jay powell and

other key fed officials is they're realizing the data are pretty mixed they're realizing that the policy statements coming from leaders in the rest of the world are changing by the day. they're trying to process all that that feeds into what they think about forward changes in interest rates. >> specifically in terms of the sectors you're watching, are there some that you think are discounts or bargains at these levels if you look at financials and others or do you think you would be steering clear and trying to stick to the consumer names that have done better to this point >> for us, consumer discretionary technology, we continue to like those what we don't want our clients doing, becky, is getting overly defensive. when you've seen some moves, back in december or what you've seen in the last couple of weeks, retail investors get very nervous and they sit on their hands. really, they tend to not sell, not buy. when the market trades lower, these more cyclical sectors like tech and consumer discretion are going to lead their way down, no doubt about it

that looks like an opportunity to us. we don't think this expansion is over the risks have certainly increased over the last couple of weeks but we think we're going to be okay and 12 months from now we're looking for the s&p 500 to be a bit higher than where it is now. >> matt, what's your biggest concern? what do you think is the most likely boogie man, if you're looking for any of these things? what concerns you the most about what could bring back to our economy and our markets? >> yeah. i think it's uncertainty over the trade war t continues to worsen as scott pointed out, sort of day-to-day, there's different statements about what might happen with huawei what tariffs go up when. that leads into uncertainty for leaders and businesses, small and large in the united states, you look for confidence and outlook. small businesses as well they're less certain about what's going to happen in the future that tends to feed into more

reluctance to hire if we look historically, think about what causes recessions what tends to drive recessions is downturn in capital investment it's really what businesses do often times that's most volatile in terms of driving downturns in recessions when we think about the next 12, 18 months, it's just not clear hopefully, negotiators in beijing and washington are getting back to first principles to see where there are areas of agreement of changes that would happen in china that would benefit the chinese economy as well as the united states. hopefully that's happening to resolve the trade war. i think that's the biggest concern. >> matt, scott, thanks for your time today. >> thank you. softbank is lending its unr fodeand employees billions of dollars

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and like all doors, they're safer when locked. that's why you need xfinity xfi. with the xfi gateway, devices connected to your homes wifi are protected. which helps keep people outside from accessing your passwords, credit cards and cameras. and people inside from accidentally visiting sites that aren't secure. and if someone trys we'll let you know. xfi advanced security. if it's connected, it's protected. call, click, or visit a store today. welcome back to "squawk box. up 289 on the dow. nasdaq indicated up almost 89 points s&p 30 oil prices this morning are flat, at right around $55 a barrel. couple of headlines. i don't know what to think of

this softbank plans to lend up to $20 billion to its employees to let them buy stakes in its new venture capital fund wall street journal reporting the founder may get as much as $15 billion. last month, softbank said it lined up $100 billion for its second vision fund the firm could make up more than half the money raised and the journal notes this would be unusual for a fund sponsor good news is that the fund is going to effectively lend employees money to participate. >> the bad news is -- >> because they might otherwise need to participate. >> right the bad news is -- >> creating a billion dollar fund. >> because they're running out of places to find the money. >> yes. >> after the recent uber and lyft. >> and the idea that the market may be closing all of this is kind of wrapped up in this. >> they won't let us in, but no money down, 5% on the loan if it doesn't work out -- >> which means you think it's going to make more than 5% if it

doesn't work out >> your buddy, if it doesn't work out, his shares in his ownership of softbank could be used to cover the $15 billion they lend him. >> margin calls and things like that it's funny we look at the big companies that have underperformed thus far in that fund i'm told total returns -- because there's a whole other number of companies we rarely talk about. >> right. >> have done remarkably well the other piece is some of the stuff has been marked up over time but may not be a real return just yet. there's a lot more math to be done in terms of where the current softbank fund stands. >> they have a lot of commitments that aren't firm commitments apparently from different places as well. >> it's a lot of money. >> based on artificial intelligence, too. >> the investments are going to be in the world of artificial intelligence. >> exactly. >> and his idea has been if you

can corner the market on everything, some of the things are going to fail and some will succeed and that's the idea. >> it puts the firm -- you're sort of doubly involved in the success of the venture. >> now, that's -- what we just said was the cynical view on things. >> right. >> the positive view. >> the optimistic view would be look, you're giving your employees a chance to participate. the journal definitely took -- >> if it doesn't work out, do the employees go broke because they owe their company all the money that they're never going to have? >> indentured servants. >> you don't see people doing this that often. i don't know i mean, but by the way, everything about softbank and this fund have been unusual from the get-go. >> that's true and as an employee don't you want to have skin in the games >> why isn't it just part of your income?

>> granted to you? >> they could grant it to you. >> like shares >> exactly interesting. when we come back, football season is about to kick off. that means big business for our next guest draftkings ceo jason robbins is making his way to the "squawk" playing field. stay tuned more in just a moment. what about him? let's do it. ♪ come on. this summer, add a new member to the family. hurry in and lease the glc 300 suv for just $419 a month with credit toward your first month's payment at the mercedes-benz summer event. going on now.

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welcome back, everybody. the dow looks like it would open, the nasdaq up by 94. part of this is bouncing back from last week a lot of it has to do with what's happening with treasuries this morning the ten-year is now yielding above 1.61%. it's really pushed well above with the two-year yielding at 1.523% people are pointed at that for the reason you see the big gains today. nfl regular season kicks off with packers versus the bears in about two weeks. 11 states -- 11 now feature full-scalelegalized betting. here to discuss the latest in gambling trends is jason robbins, ceo and co-founder at

draftkings those are regular season games in two weeks >> yeah. >> when was the super bowl >> february. >> with brady, right am i remembering -- that just happened, though, didn't it? >> it happens faster the older you get. >> like it was yesterday. >> your business right now, and i don't know, how did you know in 2012? is that when you launched this >> we started in 2012. >> you were in college or something, weren't you >> i wish i were that young. >> you started developing things and ways to do this long ago, right? and then you launched it in 2012 you didn't know it was going to be legalized then, did you >> we had fantasy sports back th then, a pretty good business for us it will do about $2 billion in prizes across the country in business this year. >> what will you do now that -- and i asked you when you sat down can i just bet on college? i could bet on college football games, live in new jersey. can i put $10,000 on notre dame or something >> i don't know about $10,000. it depends on -- >> i'm saying, i'm wondering

if -- people could really get in trouble. >> if you live in jersey or located in jersey. you don't have to be a resident. >> i'm wondering if you can get into real trouble with this. what's my limit? >> we have sophisticated algorithms and we wouldn't let you just come in and bet $10,000. >> i would have to go into the stock market to do that where they don't look at anything. >> there's aml >> there is, but it's just responsible gaming >> you don't have to show your credit history or anything, do you? >> you don't have to show your credit history but there are things we would want to ask you. >> know your customer? >> yeah. one thing we ought to be careful of, this is a fun activity and for a small number, small percentage of people, it can be too much and if we let that go unchecked, then -- >> i can see how it critical conditionk become not so fun really quickly. >> for most people it's not an

issue. the last thing we want at this exciting stage when everyone is talking about the great things happening is have negative experiences for people this is something we made a priority at the company. responsible gaming is in our mission statement. it's something front and center for us. >> so, how much of the business is still -- explain how it works. i told you that i probably need to be a much bigger fan to be able to do your bread and butter and that is drafting different players. do i do it every sunday or -- >> you can do it any day most people around the country draft kings faventcy sports is still a product they can access. thursday to kick off the season, which is two weeks from last thursday, we're going to have a million dollar top prize contest, 2.5 million total, $10 to enter if you win you get $1 million. sunday we have another one, $5 million total. $20 to enter. >> how do i win? pick the team? >> pick the right players. the statistics of those players in the games gets translated into fantasy points and you go

up against other players, competitors. whoever picks the best team gets first place, second best gets second you don't have to win first in that game on sunday. second place is several hundred thousand dollars still. >> we looked at the last quarter. it wasn't a huge quarter compared to nfl or things like that, but you can bet on the british open or -- >> yeah. golf is very popular for us, especially with tiger winning the masters. that caused a huge -- >> what would i do >> if you want to play fantasy, go anywhere. >> pick my player. >> pick your six golfer. >> pick six? >> just six, yeah. pretty simple. you have a salary cap that's based on the players' salaries are based on how likely we think they are to do well. you assemble a team. if you're in jersey and soon to be other states you can bet who you think will win, what you think the first round score for somebody will be there are a number of thing. >> sorkin, solar panels on your roof, unlimited betting on

sports if you move to jersey what the hell are you waiting -- the chinese food down on the corner >> chinese food in new york city. >> the met your dinners, your business dinners? >> it's a beautiful city look at all the things you can do. >> new jersey is the loosest when it comes to betting on these things >> jersey is the first they're strict in how they regulate in a good way it's tightly regulated there they were the first. they've had online casino games for many years now they just started sports betting a little over a year ago. >> i think a lot of that -- some people in new jersey, you know, some good fellows may not be so happy all of this is happening, right? >> you know, i think that over time -- >> be careful. >> -- you're going to see the black market get disrupted what most people don't realize is that the black market has mostly moved offshore. >> really? >> yeah. >> in the caymans. >> it's in different islands

you have websites, mobile sites. it's hard to get your money on and off. people are running money back and forth. there's a whole operation on t it's mostly online, mostly on the islands now. >> 11 states by the time we're at 50 states, you're going to be retired. >> i don't know about that we've got a long way to go, but it's definitely exciting new jersey is a huge percentage of our revenue now. >> what gets bet in new jersey now? >> almost a third of our revenue now. a third of the population of the country. can you believe that there's lots of different sports year round there's march madness, obviously football is the big one for us. >> vegas is okay, though atlantic city is even better because the borgata can do all kinds of stuff now, right? >> everybody has been growing. at some point there will be a fight for share. right now as you said, the black market is getting disrupted. there's a lot of transfer happening from the black market into the legal market. >> we should be happy that this

device is legal now and growing gangbusters. >> it's really transferring from the black market, you can tax it. >> sounds like fun. >> it's a win for everybody. the same people doing it don't have to break the law anymore, feel like they're not going to be able to get their money off places that are located offshore it's just a much safer activity. >> guess some day all vices will be legal. >> or we'll all live in the islands. >> jason robins, thank you and congrats on 2012 you're a genius. >> thank you. coming up when we return, a very big week for retail results, estee lauder among the first to report. we'll bring you those and market reaction first take a look at u.s. equity futures at this hour, up triple digits with the dow looking to open 312, 13, 14, 15 points higher it's all moving as we speak. back in a minute

down 27% lyft, before that could this mean a flood of

selling? we'll talk about that. first, though, the number of the day, 2,672%. that's how much alphabet then known simply as google has returned since its public debut in 2004. the search giant celebrating its 15th ip ocho anniversary today. stay tuned you're watching "squawk box" on cnbc you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

welcome back, everybody. lyft's ipo expires today how these stocks have performed so far and start us out. what do you see? >> becky, so far what we see, throughout the course of this year to date period, the labd esca landscape has been really positive look at the renaissance ipo that tracks index of recent ipos, that's up about 32%. the s&p 500 meanwhile is up about 17%. a pretty big 15% difference in terms of performance between recent ipos and the overall s&p 500. now if you take a look at the star performers this year, look at names like, of course, beyond meat 479% to the upside since its ipo price. not everybody got that price we measure on that basis crowd strike up 183% zoom up near the notables at 157% and pinterest 70%.

block of expirations coming up soon here as well. two ones we want to watch are today. lyft, big ipo expiration lockup today. uber gets theirs in early november they're down 27% and 22% two of the more high profile ipos this year andrew, if you want to take a look at other ones to watch coming up, pinterest and zoom media have ipos coming up in mid november beyond meat has their in late october. beyond meat has theirs the later part of october and uber in early november those lock-ups will be ones to watch as investors have more concern about shares coming to market, perhaps depressing prices we'll watch those. >> thank you we want to bring in wallace, ceo of -- you know what i want to say? i want to see trinitron. the old sony tv.

>> i'll take that. >> mike santoli is here as well. when these lock-ups come off what's really going to happen? >> when the lock-up comes off is something else when it comes to lyft tiny piece of carve-out language that lets them go early when it conflicts with the blackout period we have a 150-day lock-up. lyft has $500 billion privately invested money into it we'll see if that has more conviction than the public market investors that bought it at 72 and now, 53, 54 bucks. the high end of that is $47 on the private side the low end is 23 cents. there's a huge amount of independent-up gains let's see if they come looking for liquidity. >> what is your take, broadly speaking we were talking about we work last week and this ipo coming. >> monday morning.

let's keep it positive. >> we'll try to keep it positive but the appetite among investors, given the ipo line e lineage, let's say, or vintage, where does we work fit into that >> clear bifurcation lyft was the first of the weird ones that didn't confirm uber went right there. a bucket that has lyft and uber in it and we work goes into that bucket it's been ovunderfunded, over valued >> over valued >> don't you think >> you don't really know if it's on a path to sustainably be very profitable i think all those things. >> we work is a little bit like the ride-sharing companies, you can focus on the growth or profitability. if you focus on the growth you might relax. if you focus on the profitability, you might have a heart attack the long-term investment catalyst hasn't revealed itself

for uber, which is why you don't know what the right price is for this. >> given the volatile of the market broadly speaking, how ipos -- and others will come this september say we work out of that. you have postmates you've got -- >> peloton. >> the whole list. what happens >> the market has done a pretty decent job of being discerning about what seems to work, what businesses they want to own and reward anything that seems closer to pure software has worked well. crowd sharing, even ptrchlt using software to do really hard real-world stuff like ride sharing, delivery, even the boxed consumer goods stuff hasn't necessarily worked that well. >> because it's so competitive. >> you might see the same separati separation we're not clear that it really has those network effects and all the magic of software scaling that goes into a pure tech business. you're probably going to see that same separation two concerns six months ago.

one was it's going to be a bubble everyone is going to go crazy. the market is going to fly to unsustainable levels also hasn't really happened though at the margins that's what we're seeing. >> in tech land one thing that's interest, there have been 18 deals if you include slack everything has worked except nonu.s. companies, chinese companies and ride share everything else basically works. revolve even kinds of work traded below its ipo price in the recent sell-off but in general, we work may do what uber didn't do, which is close the market but maybe not because you have the bifurcation. >> close the market, meaning what this is the end? >> it wasn't clear as if the ipo window would stay as open. making hay while the sun shines. now you have we work on the one hand, which probably won't work, but at least you have a

narrative for why that doesn't matter and cloud. >> we work won't work? that's a good headline. >> might not work. >> while we have you, the vision fund, employees getting loans to take stakes in this next vision fund, what's your take on that >> it's a big fund you have to get money where you can. >> a reasonable thing to do, ridiculous thing to do, a high sign of the market >> i think people are used to seeing -- investors are used to seeing the gp have real skin in the game. >> right. >> the guys doing the work now on these deals have real skin in the game one thing we joke about with we work, 400 pages of disclosure. you can't make head or tail of it it's difficult to tell if the company makes sense based off that with more skin in the game it will get them focused on the downside when you borrow money as opposed to having paper upside, get your

mind focused. >> taking the positive view of that thank you. >> early in the week. >> mike stantoli thank you. when we come back, ge ceo is calling a short seller's report pure market manipulation is he right? we'll talk to two former regulators next. meantime take a look at the futures this morning already forgetting about what happened last week you'll see some strong gains all the way across the board dow futures indicated up by 313 points, highest level we've seen this morning nasdaq up abylmost 100. "squawk box" will be right back. and we have zero account fees for brokerage accounts. at fidelity those zeros really add up. ♪ maybe i'll win ♪ saved by zero

futures up right now after a bombshell accusation from harry marcopoulos, defending the struggling company, calling it stockman ipgs as they start to look at the report, could this be a case of market manipulation or what if he was actually right? dickinson wright partner, former securities and exchange commission and enforcement lawyer also ceo harvey pitt, former exchange commissions chairman. gentlemen, welcome to both of

you. what did you think at first blush about all of this? harv harvey, we'll start with you. >> i think this is pretty much a grandstand play by marcopoulos he has gone public with very loaded allegations that were designed to have an impact on the market on the other hand, of course, there is a fundamental question about whether or not his allegations are correct. and until that's known, i think it's hard to categorize him as having been a manipulator. >> do you think to look not only into markopolos' actions but the accounting underneath? >> absolutely. i agree with harvey and to your poi point, becky with respect to ge, the impression is the s.e.c. is looking at that already but also whether markopolos' activities

were, in fact, manipulative. often the s.e.c. will give -- i don't want to say a pass but may not look as seriously at people who have actually assisted the s.e.c. in the past here is a real opportunity there is an issue in the markets called short and distort, where people actually use materially false information in connection with shorting the stock. we've not seen that many s.e.c. enforcement cases in that area it is a problem. and this is an opportunity to pursue it. >> i was going to ask you about that you look at something like this. how is this different from what bill ackman has done or some of the guys at the conference have done, come out and give you their best short my position has always been they've lined up their positions ahead of that. while you call it market manipulation, it may be a situation of them putting their money where their mouth is how is that different from somebody who is long in stock

and saying this is a great buy >> you can have manipulation on both sides, long side and short side the short side we tend to not see the level of enforcement initiative that there probably should be. there are accurate shorts. i don't want in any way want to disparage the short market if markopolos really believed everything he was writing, why go public? why not let the s.e.c. and doj do their jobs? >> i'll make the argument on his behalf look, i don't know which side i come down on they may be right on both of these. last time he tried that when it came to madoff, nobody listened. it wasn't until he went public. >> but you didn't have an s.e.c. whist whist whistleblower program that's as active as it is now. looking at the corporation itself, in this case, ge, there's a tendency not to look as closely at the short side

publicly d lly disseminating information that could affect the stock. look at the price of the stock clearly was material the real question is, what was the intent behind, you know, issuing the information publicly and is he accurate he stepped up the risk to himself and to others by going public as opposed to letting the s.e.c. run its process. >> harvey this is a complicated one. it's going to take a while, i would guess, got s.e.c. to wade through both sides of this. >> the s.e.c. has an important task ahead of it, which is first to find out if the market was deprived of necessary information. one of the way you can test his bona fides, however, is that the s.e.c. has a whistleblower provision. if he had brought all of his information to the s.e.c., he

would reap up to 30% of the potential recovery that the s.e.c. might obtain in connection with this case. instead, what he did was go public, blast the company without giving the company a chance even to address his concerns those are factors that make this look suspicious. on the other hand, this is a company that is under investigation. and where there are serious questions, and until the s.e.c. and the doj unravel the fundamental question of whether general electric's accounting was appropriate, i think markopolos becomes, to some extent, the secondary issue. >> right do either of you have a view on the merits of what he actually said meaning have you read the report and said to yourself, mmm, there's a problem here or mmm, there's not a problem here >> i have read the report. but i will first say i've read

it cursorily there are impressive people on ge's board its ceo and its board are relatively new we're dealing with events that, in large measure, preceded their tenure one of the members of the board, leslie sideman, used to work for fasby, which you know sets the accounting standards these are not people ignorant of the critical facts and it strikes me that it will take some doing to suggest that they somehow either were not smart enough to figure out these problems that markopolos has said exist or that they were willingly blinded and refused to see the issues that they knew about. >> leslie has only been on the board since last year. she did say they were in the process of the review of looking at all that.

wooem hear more on the third quarter. gentlemen, thank you for your time we appreciate it. coming up, when we return, the driving force behind the global rally, futures trading near the highs of the session. dow looks like it will open up 319 points higher.

treasury yields. tell you what to watch in the trading day ahead. >> president trump speaking out about the u.s. economy. >> i don't think we're having a recession. we're doing extremely well. >> what he said about fears of a coming slowdown. >> and google it search giant celebrates a big anniversary today. the final hour of "squawk box" begins right now. good morning and welcome back to "squawk box. i'm joe kernan along with becky quick and andrew ross sorkin continuing the rebound thursday and friday from last week after the route on wednesday, 306 now

on the dow, 33 on the s&p. just under 100 on the nasdaq treasuries, part of the reason in this case, the yield backing up a little. more so earlier. 1.60 now on the ten-year two-year at 1.51 good we're showing all of them because that was what happened last week when we saw the two-year yield rise above the ten-year by a couple of basis points and temporarily that caused all that consternation wednesday. president trump defending his trade negotiations strategy with china, returning to washington from his golf club last night, brushing off concerns of a recession and indicated that china is eager to negotiate with the united states. >> if you look at china, china is doing very, very poorly i just saw a report, they've had the worst report they've had in 27 years because of what i've done and they want to come to the

negotiating table. you know, they're having companies lose -- i mean, they're leaving. the companies are leaving. and they're laying off millions of people because they don't want to pay 25%. and that's why they want to come to the table i don't think there's another reason other than president xi, i'm sure, likes me very much but they're losing millions and millions of jobs in china. and we're not paying for the tariffs. china is paying for the tariffs, for the 100th time. >> on another hot topic in the trade war, the president also said he didn't want the u.s. to do business with chinese telecom giant huawei, citing national security concerns for that stance wilbur ross confirmed earlier reports that the white house would temporarily extend a license that would allow huawei to continue buying supplies from u.s. companies a bit of back and forth there. federal officials are headed to jackson hole, wyoming, later this week, listening to any clues about the direction of interest rates more for what we can expect out

west and on wall street after last week's wild ride is pimco's executive vice president, portfolio manager and investment committee and our very own rick santelli is here this morning, too. i want to start with you, to explain what's happening with interest rates right now, what's happening with those yields. >> well, i think there was a lot of talk in consternation, as was pointed out earlier, about the inversion of the yield curve wednesday last week. i would like to point out, it was an intra-day inversion we never closed negative we have a very flat curve. now it's moived out almost ten basis points if i had to pick one thing to make this easy it would be 30-year bond yields. prior to the action last week, the closing yield was around 2.10 we're now hovering there from a common sense standpoint, the route that happened in interest rates was largely a global event and should our 30-year bond on its first

attempt start to consolidate and trade above that level on a closing basis, i think that would almost rubber stamp the notion that at least for the moment some of those low yields we saw last week will probably be holding. >> tony, what do you think the signals we've seen from the inversion and these low rates, flat rates we're watching, is that signaling a recession or is this time really different because of what's happening around the globe >> the inversion hasn't been deep enough to suggest recession. especially against forward rates. it's a little technical. where the market thinks the fed is going, ten-year yields are above that the market is thinking the fed will put up a policy rate of 1%. if the markets thought there was going to be a recession, they would probably think the funds rate would move to zero. pimco's forecast over the next five years is to keep its policy rate at zero or less the next five years or never get above

that level at any time same for the bank of japan these two central banks are having major impact onrates here. >> what does that mean for snus can we stay at zero? >> yes cost of money matters a lot. primary deal as the intermediaries on wall street, having to hold their bonds at a certain cost, set by the federal reserve. they'll do that if they think the cost of money will decline but only for a period of time. money flows everywhere we know at pimco we have offices throughout the world in japan, for example, where we have $100 billion plus of assets invested with us, investors are looking for a place to go, trying to escape so-called financial recession. they sense, as we do, that the policy rate will stay at zero for a long time. this will push money outward, seeking better returns. >> i can't believe the two or the ten -- i'm sorry i can't believe the 30-year

yield isn't going down what's the german bund, s santelli it's negative, right >> oh, absolutely. >> that's amazing that it's not going down to 1.9. >> there's a hedging cost. >> there's a lot of reasons, joe. >> there must be. >> consider this would you invest in -- would you lend uncle sam your money for 30 years? >> no. >> or go into a t bill >> no. if i had to pick. >> logic does prevail. ov overseas markets have a lot of issues, currency issues they need to worry about. forward rates, there's definitely a cost to owning u.s. assets and that is the strong dollar, which seems to be the odd man out. i don't look for it to weaken. and also consider this many of the institutions in europe that continue to buy into negative yields, there are a lot of reasons one reason may not be often

talked about is that you're going to get your money back minused whatever discounts you have for the negative rate versus other areas it's almost a self insurance form. >> knowing how things always, you know, seem to even out and knowing who is the best credit risk on the planet, it's not germany. you have the best credit risk and 2%, 2.25% spread. >> money is flowing to the you stays. >> obviously. >> treasury department showed tens of billions of dollars flowed in one month alone. there is substantial money flowing into the united states. >> there has to be big countries are net sellers. capital flows. i'm not dismissing that investors aren't coming here there's a lot of turnstiles that lead into. and most of them are counterintuitive to history. >> i was making the point as the

devil's advocate, that you can't believe every dime in the whole planet ought to be here. >> a good opportunity for the united states and other nations to invest in themselves. because when we say nations are growing at a weak pace it's because the fiscal authorities are failing, not monetary authorities. here in new york we wish we had a second tunnel to link to penn station, so-called -- what's it called, gateway? >> for jersey? >> yeah. >> would that do it? >> 5%. >> we're trying to get andrew out there. solar power on your roof what was the other thing we just -- oh, gambling legalized gambling. >> i hear they're coming to new york, though. >> that's not a big long-term investment, necessarily. we should consider, fiscal authorities should. >> tony, one question. >> and it may be -- rick, would you be for an infrastructure bill if we just floated half a trillion dollars for

infrastructure for these rates >> i would be a bad guy if i said no. my problem is that the only time we get these politicians to agree is to spend money, whether it's a bloated budget or infrastructure i would like to see an actual process going on had money appropriated all along the road but it ends up in a general fund. >> right that's right. >> tony, a quick question. don't you find it awfully weird that the curve inversions we should fear is what central banks create the dynamic that creates the inversion. this time they're replacing the punch bowl with twice as big a size punch bowl. isn't that alone something -- jay powell and company ought to try to communicate during these press conferences. >> in fact, they should describe why it's happening the reason it's happening particularly is not only the global stories investors these days say i don't need as much compensation for

risks of inflation they're not worried about inflation. central banks have to start to shape things up. they don't worry about policymakers raising their interest rates in europe and japan. so they demand -- >> when was the last time we had a deflationary problem aren't we fighting a boogie man? are we not making inflation the linchpin across the globe where we imaginarily now all the central banks have picked 2% it seems crazy to waste all this ammunition on this enemy i don't see has shown its head or been a huge risk. i think it's like cost of living increase for most of the globe. >> right. >> central banks don't welcome tariffs but they want to welcome inflation. it's all counter intuitive. >> it's because they know they're battling fiscal authorities. that's what ultimately produces growth and enables nations to get out of their debt problems i mean, lock at italy. it has a giant debt problem. so does japan.

inflation is the way out in the central banker's eyes. >> are you back here now >> eight of the last ten years newport beach. >> now it's east coast what did you do with the boat? >> i can't swim. i have swimmer's ear i can barely hear in this ear. >> what finally did it traffic out there is brutal. >> family. >> family did it >> i'm italian. >> pizza is here. >> are you back -- >> mostly new york, new jersey wherever it depends every day is a different place. >> grass is greener in newport beach. >> i'll be there in a couple of weeks. i love newport beach, california. >> or venice beach. >> i don't like that one. >> we'll see a lot more of you, hopefully. >> thank you. >> thanks, rick. special look at the american consumer big-time retail sales numbers showed strength but there is no denying the industry is in flux. what the changes are under way and what they mean for the future of shopping and the stocks in your portfolio we'll do it all when "squawk"

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welcome back to "squawk box. futures are sharply higher dow gain of 297. nasdaq up by 94 in part because of what we've been seeing in the treasury complex 1.6% yield right now. >> whatever questions you have about the economy by most accounts, consumer spending is holding up throughout all of this, spending more than double expectations last month, accounts for two-thirds of spending in the united states. all day today we are focused on the great american consumer, the pillar of the economy thus far courtney reagan is kicking it off. live in herald square. good morning to you, courtney. >> reporter: hi. good morning to you, andrew. many signs that economic activity in the country may be slowing, the u.s. consumer remains very strong. the most recent retail sales report posted the strongest five-month growth streak since 2005, 2006 the consumer may very well be holding up this economy.

70% of economic activity is tied to consumer spending but where we shop and what we buy, that has changed. more than a quarter of the country's malls have closed since the peak and occupancy averages around 87%. since 2006, 160 nonfood retailers have filed for bankruptcy with 65 liquidations. in less than three years, netting out openings, 9400 stores have closed, including 500 department stores just last year last year, spending at department stores was about 3.5% of total retail sales. that was down from 5.9% in 2010. now, many store closings are due to overleveraged retailers filing for bankruptcy, but also more of a shift to online spending and consumers spending less on stuff and more on experiences. put it all together and the u.s. simply needs less retail space three-quarters of all retail

growth is coming onien and over half of everything bought online is bought on amazon.com. though as a category, specialty apparel has gained share online, moving from 15% in 2010 to about 40% in 2018. and when u.s. consumers aren't sitting at home, waiting for those online orders to be delivered, they're spending on experiences. in the 1960s, less than half of our spending went to services, which means more than half went to goods now, two-thirds of our consumption dollars are spent on services with the remaining one-third on physical goods. back over to you. >> so, less retail space in the retail space, have i got that right? seems very confusing. >> right. >> we have to come up with a new word for that. again, it's been a problem thank you, courtney. for more on this big week for retail, let's welcome national retail federation president and ceo matt shay.

matt, thanks for joining us. you got a little bit of a reprieve when it wasn't 300 billion. some still left on it. you probably embrace that, but you wish it was no more additional tariffs at this point? >> yeah, joe good morning i think that's right we certainly were pleased to see the administration decide not to go forward with the proposal to impose tariffs on that full range of that fourth launch of goods and delay some of those until december 15th. that was a plus. you saw the analysts and the market respond positively as well as retailers welcome it there's still a substantial number of goods impacted by the tariffs that go into effect in september, a little less than two weeks. 110 billion worth of goods in the electronics and apparel categories, among others we're not out of the woods we've had this conversation off and on the last couple of years about the impact of tariffs

generally. up until now we've been able to minimize the impact on consumers. if the administration goes forward there's nowhere to put the tariffs really. >> you're sure we're there now you've been saying that for a while. we're at the point now then we got all those great numbers friday how do you know we're at the point now? aren't you guys in retail willing to take one, you know, at least help the president deal with china, help the long-term plans for the country? i'm sort of just taking that viewpoint for a second, that maybe we need to deal with this ip theft and some of the other inequities in our dealings with china. can you hold on a little -- the farmers are still behind it for the most part. you're not -- you just want everything good for retail and you don't care the torpedos if they take over

by 2025? you want them everywhere or don't want them anywhere >> most economists would agree it doesn't make sense and hasn't produced much of in the way of a bre breakthrough with china. we don't see themrunning to th table because we're putting tariffs on their goods the bigger issue over the long term is how we address some of those issues we all agree that china's trading practices need to be addressed in terms of i.t. theft and transfer access to markets those are all good things to be talking to the chinese about we would rather not pursue it the go-it-alone approach let's get back to sitting down with our partners around the world and putting pressure on china. >> oh, boy. >> we have a strong consumer right now, as courtney alluded to, and as you have been talking about this morning we're pleased that through conversations like those our members have had -- you referenced tim cook's visit with the president.

i think the administration recognizes the danger on going forward with these tariffs consumers are in a very good place. >> pretty amazing that macy's, $16 a share, had a scary forecast in terms of what people were expecting then you get walmart who just had a great day when it reported so the people that you try to help in terms of being a spokesperson for the natural retail federation, it certainly is not a monolith at this point. some people it's the best of times, worst of times. >> yeah. i think that's very true courtney alluded to that in the piece, talking about how the way in which the american consumer shops has evolved pretty dramatically over the last few years and the rapid rise of e-commerce walmart posted incredible numbers in terms of the growth on their e-commerce site

i think you'll see other retailers post interesting number this is week. there's lots of activity on that side of the business the we we all shop as consumers is converged in the way that we don't make that same distinction anymore and the companies operating in certain segments with certain real estate and capital has to make that change very quickly and that's why we're experiencing some of those changes out of the marketplace you're talking about the amount of retail space in the retail space, i think that's an issue that we'll continue to see play out over the next few years. >> i didn't know the nrf had an office up in nantucket do you have an office up there >> no. i wish we did. >> is that where you're -- nice. you're up there, sort of chilling >> the kids have to go back to school eventually. they insisted they get a little beach time. >> andrew, that's a great place, nantucket. >> it is it's a beautiful place.

>> beautiful place why not the vineyard, matt what causes one person to pick nantucket versus the vineyard? >> good question we don't know that much about this part of the world we may check that out, take the ferry over. >> what about the sharks, becky, that you were worried about? >> cape cod. >> see any great whites around, matt >> not yet. >> good. >> i hope we don't. >> keep it that way. >> we're going to try to avoid them. >> good idea. >> good plan. >> matt shay, thank you. >> nice to be with you. >> you're welcome. cnbc's special series focused on the great american consumer continues on squa"squan the street." one place we're spending more than ever is personal care maybe not underwear. you go three a day sometimes. >> no. i wear one pair. after the gym i might get a second pair. >> you said you've gone as many as three

i don't think we want to know what happened. >> he was being facetious. >> you were being facetious? i guess there's that certain situation that could be warranted. >> not for those reasons. >> at least one? >> at least one. >> we've been up for hours. >> you're still on your first pair today >> so far. >> tommy john, as you know i'm going to promote it. >> i think that's what started the whole thing. >> that's what started the conversation. >> started the whole conversation. >> what's the other one? there's a couple of -- >> peter mallard that feel like, i'm telling you, it's like silk. it's like a party. it's like a party down there. >> tmi tmi. party in your pants? >> party in the pants. and you're invited you're all invited. >> oh, geez. >> consumer run-up -- that's the old joke anyway, run-up to cnbc's fed coverage live from jackson hole thursday and friday, steve leasemleas

liesman will give us was there a gag order on the other guys >> that's false. that is not true. >> thank god we love having him on. >> we do. goolg as a public company on the 15th anniversary of the search giant's ipo, how the company has saved our lives and investments in the tech sector stay tuned you're watching "squawk box" on cnbc

welcome back to "squawk box. dow looking like it will open 279 points higher. nasdaq up about 90 points, s&p 500, up about 30 point. >> coming up, can google catch lightning in a bottle again? the search giant celebrates a big milestone. we'll look at which of its acquisitions have provedru tly transform active a transformative and which could never happen again thanks to amped up

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welcome back to "squawk box" on cnbc. we are live at the market set in times square air bnb $9.4 billion in total bookings during the first quarter according to a source who spoke to reuters and could attract investors as the company looks toward an eventual ipo. pg & e has won a key court

victory. two groups of creditors had sought to push their own chapter 11 exit plans. pg & e filed for bankruptcy as it faced an estimated $30 billion in damages from wildfires linked to its equipment. estee lauder, 64 cents a share profit, 11 cents above expectations better-than-expected full-year forecast it did mention that the u.s./china trade tensions could be a potential source of risk. estee lauder shares are up by about 6% this morning. "squawk box" follow-up right now. 15 years ago a small internet company named google went public josh lipman joins us with more of this little start-up that could. >> priced at 85 a share, market cap of 25 billion. the stock has since surged more

than 2600%, some of the company's growth has been fueled by its acquisitions like youtube, which the company bought for $1.7 billion in 2006, generating an estimated $20 billion in ad rv new per year and double click, which it agreed to pay $3 billion for in 2007, helping to power google's ad business. its biggest acquisition, $12.5 billion for motorolo then it sold it to lenovo. but google got to keep a lot of motorola's valuable patent portfolio. 40% more than amazon on acquisiti acquisitions, 500% more than apple. ceo has told me recently she's open to more acquisitions, specifically when it comes to her company's cloud business

nutanix allows companies to run so-called private clouds, meaning keep their data in-house, outsource other pieces to the cloud patrick moorhead said that's sought-after technology, which he thinks could help google attract more cloud customers back to you. >> thank you for that report let's talk about what the next 15 years could mean for google and big tech, "new york times" reporter, cnbc contributor ed lee good morning to both of you. let's sort of map this out 15 years from now, do you think we will be talking about google in the same breath that we are all these other companies, or is this going to be like ibm 15 years ago? brent? >> i don't think it will be the same company we've seen but they're on the right track with the different initiatives, even

the health care business there's a lot of promise in these emerge businesses, wemo adding $200 to $250 billion to the market over time as the technology is way above others in autonomous right now. today those are lower margin businesses that's been dragging town the stock on these new initiatives we've got an air pocket, if you will the ad business is doing great the new tissinitiatives aren't really ready investors are waiting for these new initiatives to go online it may take a couple of years. >> you look at the old tech companies, which we don't talk about. they aren't the fangs anymore. >> right they're the established. they're not the upstarts anymore. >> by the way, google is now the establishment, too. >> they absolutely are the establishment. what's interesting about google to answer your question, what they look like 15 years from now, google has this interesting

dichotomy or skichizophrenischi. they started literally in a garage but their business is driven by advertising, something that eric schmidt put in place larry didn't know how to create a business until eric schmidt came along we sell advertising. how do you do that the double click acquisition was one of the best things they could have done as a business. it's a traditional business even though they figured out new models for it. larry page, the ceo, he likes to tinker with what's the next big tech thing if it's not going to be ibm in the future, yeah, they should keep that mentality going. same time they're really going to grow. it's like where are these big ad dollars going to come from in the next few years as the traditional ad sources are shrinking, there's an opportunity for them they don't get sort of all the big -- >> what about these other bets

they've made more bets than any other company out there. >> drones, all these other things who knows what it's going to be? that's their play, too they don't know either they just think they need to be playing in that space and get as many people online to fuel their ad business. that's their mentality. >> what's the chance, though this is microsoft? good new sthas microsoft today is remarkably robust company the bad news is that they went through what might be described as a very torturous period with the u.s. government. >> they went through a decade of really stock doing nothing and really saved the company along with amy hood. we think google is going through the same situation they're looking for the next thing. investors are paying a higher multiple for walmart now than google and higher multiple for others we think they're going through that right now and we're going through this digestion period,

if you will. that's definitely been a hangover, stocks underperformed over the market in some of the peer group that's happening with other stories like amazon and facebook doing as well as they are, improving margins at amazon, investors' focus is in other places right now. >> i want to switch gears for a second and talk apple right now. president trump telling reporters last night he recently spoke with apple ceo tim cook. the two discussed tariffs and competition that apple faces from samsung and cook made a good case that upcoming tariffs could hurt his company listen to this. >> it's tough for apple to pay tariffs if they're competing with a very good company that's not. i said how good a competitor he said they are a very good competitor so, samsung is not paying tariffs, because they're based in a different location, mostly south korea. but they're based in south korea. and i thought he made a very compelling argument. so i'm thinking about it.

>> how do you see this playing out? you hear that and does that mean that the president could try to create a carve out of some sort for apple and apple specifically then what does it do to all the other companies? >> i don't cover apple i don't think there's a carve out. you look at the demand i was in an apple store getting two new phones for my family members. it's packed. there's no -- i don't think there's a big overhang in terms of the demand and what consumers want from our perspective. so, we think this is probably more noise personally. >> ed, noise or reality? >> i think it's more noise you get the sense that he wants to do a carve out, which is how he tends to negotiate these things you can't do that. >> you could he has done it before. >> but that's not -- >> in this realm. >> that creates more confusion in the marketplace ultimately. i don't think that helps other suppliers, other tech companies to understand how to manage your

business for the next 90 days. >> if he doesn't, though, what if the true implication is come christmas, he doesn't want to hurt christmas remember that. >> pushing back the tariffs on whatever the next trench of that is in terms of this whole trade imbalance thing, there's no more visibility. >> how much more expensive does the next iphone become >> i think it gets more expensive regardless whether or not it's because of these tariffs or the question around that, who knows >> brent, ed, thank you guys appreciate it. >> thank you. key stocks making moves ahead of the opening bell. we'll get you ready for the start of what could be another wild week on wall street futures pointing to a sharp open 300 points now on the dow. stay tuned "squawk box" will be right back. e every single day. but what does "changing what's possible" mean anyway? ♪ well... if you run a business, it means a lot.

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welcome back to "squawk box," everybody. the future this is morning, if you haven't seen it already, have been up sharply this morning. dow futures indicated up 312 points above fair value. s&p futures are up 34. nasdaq is up by 104. >> okay. we are now in under an hour away from the opening bell on wall street dom chu joins us, with a look at the biggest movers this morning. dom? >> a lot of them, andrew, have to do with the continuation of the surge from the lows of last week on china trade, economic concerns and whatnot

we'll highlight, first of all, what's happening with shares of casino operator wynn resorts, up 3.5% on 11, 12 shares premarket volume one of those with outside exposure to chien wna and the economy over there semi conductor trade key focus for investors, nvidia shares up about 3.5 percent, 150,000 shares of premarket volume as well semi conductors, another indicator or battleground for that u.s./china trade relief there. we'll finish with regions financial, among some of the banks in focus as the yield curve, that difference between long-term and short-term rates expands more, moving out of that recession indicator zone those shares up 2.5% on over 3,000 shares of premarket volume as well. and call your attention to what's happening on the other side as risk haven type assets start to come off in value we're watching gold prices off about a percent or so. year-to-date basis they've still

surged second straight day of declines for gold futures as folks start to take a look, a little bit, at these haven assets, treasuriy i falling in price yields rising, gold falls in price as well. >> recession among the words. cnbc markets commentator, mike santoli. might as well get your latest forecast since you were one of the few people a year and a half, even longer than that, calling for sub-2% yields. are you calling for sub-1% ten-year yields? >> joe, yes i am i think we're headed to 1% for the ten-year and lower when it starts to move, it's going to move very fast. we went 2.2, came to 1.50 as you

know very quickly. i think the same thing is going to happen going to the 1% mark it is just amazing how many people expected the yield to go the other way. i recall jamie dimon telling becky last december that he expected a full percent for the ten-year and i was on a few minutes later on cnbc to say that it was going to hit 2% before it hit 4% now, i think before it hits 2% again, i think we'll hit 1%. so, it is signifying a recession to me. i see the 30-year, today at 2.10 going to 1.75. what's happening is that worldwiworl worldwide the yields are going down ten-year german bund, i see that going down to minus 1%, a full 100 basis points, in which case the u.s. treasury yield looks

wonderful at these very high levels of 160. that is what is going to drag the yield down as well. >> since you're forecast iing a recession, i assume that you don't think that this is a good thing, that global yields are as low as they are. so, you don't think that this disinflation that we have is actually a positive. there's no way of looking at these low yields as a positive, sri. is it because of policy mistakes all across europe? whether the eu is, i don't know, a system that could last forever and a single currency with differing fiscal authorities what is it that causes the globe, outside the u.s., to be growing so slowly? >> what is helping elsewhere, in europe in particular, joe, which is where most of the negative yields and the low and further

expectation of easing is focused, the problem there is labor market inflexibility you have issues where fiscal issues completely closed just as we were in the united states, in the previous eight years of the obama administration with very little fiscal stimulus, everything focused on monetary and so you have the situation when monetary policy alone bears the brunt. and i have an expression, saying the ecb were to lower interest rates further, they cannot suddenly give a job to an unemployed italian and the plummer doesn't become a nuclear physicist because the monetary easing has taken place you need education you need training. you need structural changes. and that is what we learned from the german experience, starting in 2003. you need a work program. you can't do it just based on lowering interest rates.

>> mike, you're following this. >> yeah. >> sri, i don't know if you follow his calls. >> sure. >> but he's been right about this. >> without a doubt sri says once it starts, it's going to start moving fast it has moved fast. the moves have been dramatic the acceleration in treasury yields, i think, has been breathtaking and arguably is over shot in the very short term, which is what you're seeing today by the way, sri talking about structural differences the whisper that germany might consider some kind of fiscal response, that they might not perhaps run a balanced budget, which is insanity at this point, got yields bouncing. in this zone for stocks, we're still choppy within a range 7% pullback. we didn't get deeper than that at the lows or even the august 5th intra-day lows, i don't think. you're trying to adjust to this idea where low yields definitely support equity prices while also creating this sense that we have challenges to growth i think there's a lot of room

between a 3% u.s. growth economy that is over heating and you have this huge fiscal response and an outright recession. you can be in this 2% growth trend and it looks a lot like d the stock market had to kind of go sideways and re-adjust and chop lower for a while but it wasn't the end of anything. >> mike, i would say that the big difference from 2016 to today is that you did not have the two to ten being so low, so flat we had it at over 100 basis points spread in june of 2016 which was the last time we had this kind of recession scare take place we also had positive interest rates, only germany, the negative yield, was very, very low, like about minus ten basis points now we are much worse. the way to prevent that, if you think, is for germany to have ten year bund at minus one or

minus 2% yes, perhaps you can postpone recession by another three to six months, but you're talking about a much deeper recession, much worse than 2008 in that case. >> there is an idea that the united states is -- has such a strong domestic economy that we don't necessarily go the route of europe. why do you think the united states is headed for a slowdown? is it because we're going to import recessions from europe or something about low interest rates here will cause business to slow? >> joe, i think that's a very good question. i said on your program in the past that the reason i expect yields to go down is because the sugar fix that we got from the tax cut that year in 2017 was going to fade. and that has just faded. so you cannot keep repeating a fiscal deficit again and increasing it at a time when the

deficit is running at $1 trillion a year. >> it is the deficit that is going to cause it because we're not that worried, we have no trouble issuing debt and if you would think you would see higher yields if we're having trouble financing the deficit. so i'm wondering what you see that -- with low interest rates and full employment and innovation and all these good things, why are we headed for a recession? it has been a long expansion, but is there anything inherently wrong with the u.s. economy now that -- not withstanding that the sugar high wears off, but the basic economy seems to be pretty good, the consumer seems to be good unless we import a slowdown from the rest of the world. >> let's count the ways, joe, if you look for a strong economy, yes, consumer spending was strong but last week we learned the consumer sentiment index had several weak points. that is one. second, the labor market is set to be tight. but you haven't had the labor force participation rate go back

to the pregrade recession highs, we still have low labor force participation rate, which means we are leaving a good part of the labor force behind without giving them jobs third, in july, the number of people who are holding multiple jobs was $8.3 million, which san all time record for the united states you're holding multiple jobs because no job gives you enough of an income for you to just keep one job the labor market is not tight. it actually is -- has lots of weaknesses on the other one, just to finish this off, joe, there was a great story in the wall street journal yesterday, which talked about how the real disposable household income in the united states today is at 1999 level. go figure. and that doesn't say to me that it has been a strong economy

>> i mean, you know, it seems, first of all, demographic effects have a lot to do with the labor force participation. and honestly, again, a lot of it is consistent with a slower economy that we're trying to figure out exactly how slow the u.s. is basically a service-based consumer economy and the edge has been taken off the growth from industrial, the industrial part of the economy, and i think we have to wait and see. the fed will cut rates again most likely. the market is pricing that in. it has a great effect necessarily in terms of stimulating activity, but can forestall the concerns that the yield curve is telling us some secret scary message >> all right, mike, thank you. sri, we'll see you again >> thank you very much, joe. >> next time we'll see you i guess will be -- i don't know, somewhere. i won't say. you might be right, you might be wrong. sounds like billy joel. >> always good to be with you, joe. >> good to be with you, sri. ♪ i just might be a lunatic you're looking for ♪ jim cramer joins us now. you were tweeting earlier this

morning you were concerned about the big pop in the futures this morning. we're looking at the dow up by 320 points if we open here what worries you about that bounceback >> i think that the idea that we uninverted the yield curve is something that lasts for, who knows, like an hour. everything seems look a trap now. and it was a trap to sell off the inverted, now they got to go buyback on the uninverted. what happens if you get inverted again? i don't think the bond market is a bad place to be if you're in germany. and unless there really is stimulus over there. i know a lot of people think there is going to be this so-called black zero where they're going to start really ratcheting up. but your previous guest was right, doesn't create a job for a plumber in italy i think a lot of problems over there are just because the euro is such a terrible thing >> we have -- we had a guest on earlier this morning who said he's worried about what happens to the market because he thinks expectations for earnings are just too high. i think he was mentioning that 11% is the earnings growth that is anticipated for the third

quarter. he doesn't think we'll get there. do you >> i think international companies know any company involved with the dollar know. domestic, yes. i just think domestic is still good i think we are day side programming of the consumer is going to reveal that the consumer is very robust, yes, the consumer could be last, yes, we know that unemployment that is this strong, these numbers just think about we had it in 2007, 1969, we went into recession. i understand why people would be suspicious i also just feel that, you know, things aren't that bad and i listen all day and i do feel like things are worse when i listen to people talk in reality. >> jim -- >> go ahead. >> go ahead. >> i was going to ask about apple. i think we're going to run out of time. a nice tease to hear what you have to say in the next show. >> we don't know what the president is going to say. we don't we know what he said i've been telling them over and over again, samsung, samsung, samsung. today is the first day it seems to get through their heads that samsung is the winner.

that's not necessarily what we want anyone who is -- i've been saying that every night on the show they don't care. now they care? >> jim, thank you. we'll see you in just a couple more minutes and hear more about it then. >> okay. ♪♪ ♪♪ ♪♪ people know aflac. aflac! but not when to use it. do i use aflac when the kids get slime in the plumbing? no. that's home owner's insurance. slime in my motorcycle. no. that's motorcycle insurance. slime everywhere? ughhh nooo, there's no insurance for that.

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good final check on markets. dow opens up 311 points higher right about now, a rally on its way. the nasdaq looking to open 300 points higher. make sure you join us tomorrow "squawk on the street" begins right now. ♪ ♪ three is the magic number good monday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber back at the new york stock exchange. poised for the biggest opening bell bounce since july big week as we set the table for powell's jackson hole speech on friday morning europe is green amid more reports of germany planning some fiscal stimulus measures ten year gets back to 162 and you see gold selling off today road map begins with the president sounding off on everything from the trade war to recession fears to his dinner