inc >> 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 with joe and andrew let's take a look at the u.s. equity futures because breaking news out of hong kong similar pacting things today the futured indicated up s&p futures up by 22 and the nasdaq up by 88 points also the treasury market, you'll see that yields at this point, it looks like the ten year is yielding below 1.5% at 1.498%. 30 year is sitting at 2% exactly, the 2 year is at 1.464%

and then in europe you're going to see equity futures there also to the upside this morning, gains across the board of better than 1%. it's up a third of a percent and stocks in italy up by 1.5% >> breaking news happening moments ago, hong kong leader has now announced the official withdrawal of the extradition bill that sparked months of mass protests there it's one of five demands including universal suffrage in the city's elections it sparked a late night rally in hong kong with stocks closing higher by nearly 4% you're looking at the stock chart right there. a loif report from hong kong in a couple of minutes. >> the other big global story is a political crisis brewing in the u.k. he joins us to explain the situation to app american audience that isn't necessarily

familiar with the parliamentary procedure. this is not for me this is not for me this is for certain individuals that may not understand what is going on there but go slowly just in case i want to pick up a few of the nuisances and what's happening. >> okay. so for two years teresa may's government tried to find a deal so the u.k. could leave in march. she did find a deal but parliament rejected the deal and extended the deadline from march through to the end of october. teresa may eventually re-signed and boris johnson took over as prime minister yesterday, parliament came back from its summer break and because he's trying to suspend parliament next week for five weeks getting closer and closer to the october deadline, parliament rushed through a emergency debate to take control of its own schedule. today the schedule normally controlled by the government

today they'll introduce legislation that will seek to block the possibility of a no deal brexit. boris johnson wants to have that possibility because he thinks that will force the european union to make concessions because of the economic damage from a no deal brexit but now he wants an election. the problem is he lost his governing majority in the house of commons because one of the party members defected to the opposition now he has the majority and he's in power and not in control which means he can't hold the election unless they allow him to they won't allow that to happen until this passes through parliament successfully. >> i got it. the whole notion is interesting. he doesn't want a no deal brexit he just wants to be able to

negotiate the terms of the no deal brexit but when you tell people in the eu, i'm going to pretend we're going to have a no deal but i'm trying to put pressure on you to give me some things that you want, i don't know, the whole thing seems like a dance and i'm not sure what finally happened but thank you for the explainer. i was taking notes >> as i always said, all of our friends in the u.k. are going to love this but we have copies of the constitution, do you know what i mean? we have xerox them although that's an old term. >> send it over. >> i don't think we would charge that much if they'd like to see how things should be done and adopt our form of government over there and we could all be on the same page tell me italy wouldn't do a little bit better instead of having 16 leaders in 14 months.

>> pasta is so good. >> you're right. you're right and france. who cares about all of that other stuff with those rich creamy sauces. right? >> get your priorities straight. >> you got to get your priorities straight. the wine, everything else. how many pages is the constitution i mean in current -- >> bring it in and give it to boris. >> another big driver for the markets. >> a long weekend over the labor day weekend in which we saw escalation by the u.s. side and retaliation by the chinese side. the president tweeting out this yesterday saying that we're doing very well in our negotiations from china. he's sure that china would love to weight him out and deal with

another administration and if they do, he said if he wins the deal would get much tougher for the chinese. meanwhile, china's supply chain will crumble and businesses, jobs and money will be gone. later in the day yesterday we got the ism manufacturing number sinking to 49.1 signaling a contraction in the manufacturing sector may be underway we saw a response to that from jay timmons. he's the head of the national association of manufacturers manufacturers have also warned the trade uncertainty would effect our industry. here's what manufacturers need the trade deal, turn the trade war with china into a trade deal with china and reauthorize the export-import bank so the manufacturers there suggesting there's global slowing going on but also saying they want to turn this trade war with china into a trade deal with china as they watch what's happening in the manufacturing sector, guys the political challenge now for the president based on that ism

number from president is that the president has said the entire purpose of this trade war is to defend american manufacturing. if that's contracting anyway, the president has to now explain to voters and to investors around the world why that is happening even though he's taking the steps that he's taking right now to defend american manufacturing. >> it's short-term-long-term although we don't know what the long-term is going to be. >> the president said again and again in the long-term, american manufacturing will be better for this in the short-term he acknowledges there may be pain for americans although he says there's going to be more for the chinese. but he seems to be willing to tolerate that pain for now. >> that's tail on the dog, chicken and egg. i got a lot of them. we can't necessarily be blamed for all the economic weakness in the rest of the globe, or can we the rest of the economies were pretty slow. they had negative interest

rates. maybe you can point it back as well. >> this ism number, the manufacturing, it's really due to just global slowing. >> right. >> and then the critics said well look the global slowing is due to the trade war. >> right. >> so which came first >> i go back to nixon when all of this started if you really want to know nixon re-signed and sort of disgrace. >> sort of disgrace. >> well, in hindsight, seriously. i've seen worse. so nixon is -- >> what? >> maybe we have. >> nixon went to china, you know, speaking of china. >> he did. did a lot of good things he had a cute dog, checkers. so then you go to jimmy carter and jimmy carter is oh my god, what happened and then you bring in reagan. let's not go through all of this stuff. you weren't around for half of it i don't think even though you

have that wising gray hair. >> i'm dying the gray in. >> some people would say that president obama benefitted from some of the mistakes george bush and then how do you explain trump getting elected? seriously. >> that's a really good question, joe. >> do you know what, every once in awhile, i like that >> here's the thing and what the president says about this is that he's dealing with all the legacy of all of those presidents that you just mentioned. they got us into this hole in terms of manufacturing and the industrial base and china's ascension and didn't do anything about it for decades and decades. he says he's the president that finally has to deal with it. >> he joked, right he looked up to heaven and said i'm the chosen one i have to deal with this but he's serious what he means is generationally this has fallen in his lap it's a problem he has to deal with. >> well, it's amazing that there's still support. i think there's a majority of support for dealing with china.

>> it's amazing. >> anyway, all right joining us now they're not all distinct appearances and the last three or four times you have been on have you evolved in your view of what investors should be doing now. >> we came into this year with a strong risk on bias and globally large, small, u.s. and nonu.s. em commodity credits and in reaction to what we thought was the market going too far in the sell off in the fourth quarter that we were not expecting recession. we're expecting soft landing cat liez the fed moving to much more dovish monetary policy and strong stimulus in china

we have been dialing back that risk exposure as the year has gone on as markets are rallied and by the end of june coming into the third quarter we went to neutral at the overall market beta or market exposure level focussing on areas where we saw good value but not wanting to take significant directional risk the s&p was up about 20% over 17 times forward earnings we felt valuations fully and probably more than reflected good news that could come out. we wanted to see earnings and resolutions of the tail risks that were coming up. trade, brexit, et cetera. >> where does that leave us then >> we're still neutral at the overall directional level. there's more of the same to come in terms of volatility we're not going to get clarity on corporate earnings on the path of economic growth. our base case is still the soft landing but we need to see more evidence of it and we need to see the resolution of the

geopolitical tail risks. we got good news overnight >> it takes an external stressor off of the talks i don't think they wanted to tie in issues around hong kong and impressive response. >> take a harder line. >> then we'd have to take a harder line. it reduces our freedom of negotiation. so this opens the door for continued discussions. some opportunity for compromise and the same time as the president continues to be very aggressive on the trade front which is why we think there's more volatility to come before we get greater clarity >> is that really what people are in the streets for at this point?

>> i know. they have their five. >> yeah. >> deep down it's overall -- >> that's the point. >> overall arab spring-type freedom. apparently there's some people from mainland china joining in and hong kong and if that spreads, who knows. >> from the chinese perspective, i understand from the american perspective it doesn't put us in a difficult position where we have to take hard lines that we may not want to take from the chinese perspective maybe they'll be less willing to give on certain fronts because they feel like we don't have anything. >> one of them is direct democracy. that's unlikely to be realized or satisfied looking for an opportunity to return to normal the thinking here is that this gives the chinese government a card to say look we're trying to get things back to normal. protestors go back to school. >> it's what the business

community wants around the globe. >> indeed. >> the soft landing, so that's in the bag >> we're still confident but there's still risk to it our view is that the u.s. was going to go to trend line growth that's 2%ish per year and that's where we appear to be for the third quarter. that's where we have been first or second quarter of this year the manufacturing sector, we saw it overnight and you just talk about them and at the same time, the consumer is extremely strong employment levels where they are. that's 70% of this economy as long as the consumer is employed wages are ticking up it's hard

for the u.s. economy to go into recession. the most important statics are the jobs and employment statistics and we're get more information on friday. >> next time, bring in some milk or ice cream that's not you >> it's cheese and ice cream from wisconsin, minnesota, that's my homeland not in my family though. >> my son is lactose intolerant. >> really? >> the pain, right >> we figured it out. >> what do you do? soy? >> we do soy and almond milk and sorbet rather than ice cream we do a little pizza >> what can happen do you grow out of that eventually >> we're hoping he -- he's hoping he grows out of it but i don't know a lot of people don't. >> and twins.

>> and only one. >> and not you. >> not you. >> i'm surprised quite frankly. >> with all my other problems. we're watching shares of google this morning take a look right now because the company is the target of a new u.s. anti-trust probe by more than 30 state attorneys general. now that investigation will be formally announced next week this coming according to reuters. the probe is focused on privacy and anti-trust issues. google said it is cooperating with that investigation. >> still to come this morning, tracking dorian, the new -- the now category 2 hurricane is beginning to lash the florida coast with winds and heavy rain. we'll get you up to speed on the storm, next. and later, guest host sam zell sounds off on interest rates, the markets, the biggest hot button issues on business. right now let's take a look at the biggest premarket winners and losers in the dow.

wcau meteorologist is zwr n

joining us now with more. >> good morning. what we're looking at is a powerful storm along the east coast parallel to the florida coastline. the latest satellite imagery no longer looking nearly as impressive as yesterday but still packing a punch. 105 for the current wind speeds within this storm and it's now starting to move a bit more than we saw 24 hours ago. instead of stationary we're talking about 8 miles per hour to the north northwest will which will keep it running parallel to the florida coastline and look at our radar. you will see that it's racking that east coast against daytona and jacksonville pockets of the stronger storm activity this will continue to ride the east coast through today and thursday and even friday so let's talk about the track as we move through the next several days and you'll see it's looking to make the sharp right turn before making a landfall near charleston but the cone of

concern does keep areas charleston up to the outer banks in it's bounds it will be very dangerously close, possibly only 15 to 20 miles outside of the areas let's talk about the carolinas we're talking hurricane force winds above 74 miles per hour. storm surge of 4 to 7 feet and rain totals of 5 to 10 inches. isolated areas up to 15 inches especially right up against the closest coastlines which would be closest to the eye wall of hurricane dorian that's the latest. >> the developing story in the debate over gun safety and regulation taking action to curve sales of ammunition with walmart taking the lead in that yesterday we'll take a quick look at u.s. equity futures at this hour. the dow looking like it will

open up 196 points higher and the nasdaq looking to open about 85 points higher we're back in just a moment. when did you see the sign?

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yesterday. the largest retailer in america will now discontinue all sales of ammunition for short barrel rifles and handguns. walmart is eliminating handguns from stores in alaska. retailer also asking customers to no longer openly carry firearms in stores where open carry is legal the move coming five years into his tenure as ceo. he had been reluctant to speak publicly against gun violence. he has entered the debate. in a memo to employees on tuesday he called the status quo unacceptable he said walmart believes the reauthorization should be debated in washington to determine it's effectiveness and also encouraged lawmakers in washington to strengthen background checks as well as fund research into gun violence. something the government has been prohibited from doing this could prove to be a watershed moment in large part i

would argue because it can give license to other business leaders to enter the conversation kroger the largest u.s. super market chain followed walmart's move in asking customers to stop openly carrying guns in stores so a big move yesterday in the business community i think we'll see more of this with the -- i don't know if you saw the washington post out today with a full page editorial saying do something mr. mcconnell. so a lot of this is about what business can do but the separate element of this is what of course lawmakers will do and the role that business is now going to play in advocating for certain laws and i think that's actually another dimension of this but i know that we're going to have a larger debate about this in the 7:00 hour. >> obviously mcconnell is waiting for trump and trump is trying to figure out what he wants to do in terms of -- >> and business is not waiting. >> business isn't waiting but you need to change -- the --

business can bring pressure to change laws eventually usually you need a grass roots change in public sentiment to elect the people that will enact the laws that you want i harken back, president obama had the house and the senate and he had the pen ready to go for two full years and nothing happened now a lot has happened since then, obvious. for walmart, given what happened twice at its stores, this is not a surprise, probably he feels responsible to his employees and customers and everybody else and he's a good guy. but we know what we want to do we want the phil murphy, ten round maximum on magazines. >> but i'll tell you the other things that are important about this that are not being talked enough about they probably have the best practices in terms of gun sales

in america right now in terms of how they do the background checks and what their approach is. by the way, it goes far beyond what the law is. they actually film every single sale on camera so that they have it they have a computer system that's actually very sophisticated that goes through -- >> the bad news is they'll be less rigorously followed their market share of ammunition is 20% it's expected to drop to 8 to 9%. >> it's going to put a lot of pressure on the gun makers but the other issue is that they're going to provide that service for free to other retailers across the country so in terms of stepping up the sort of best practices approach, i think that actually could be remarkable the other thing is he's he lighting the issue of ammunition that doesn't get talked enough about. >> this is all nuisance and i know that you don't like to hear

it and i will concede that if even one round that was purchased atw walmart is used i a mass shooting that maybe you can help in that regard but if you were to look at the percentage of ammunition that was sold atwalmart that was subsequently used in a mass shooting or a crime -- >> it's going to be small. >> so if you're okay saying, all right, you other 99.9%, your rights -- you're not allowed, you can't come in here and buy anymore because the .001%. if you're fine -- he said nobody deserves to own these types of guns if that's okay with you -- >> look, no. the larger point is that the business decided for better or worse -- >> there's going to be push back. >> you can push back. >> not from me but from certain people, some of the guys in the middle of the country are going to be mad. >> and people were mad at dick's when they made their decision.

>> they made it twice so they could be on morning shows. >> i think that that's unfair to ed stack who tried to play a meaningful role in this discussion but the point that i'm trying to make in this is there are -- i think you can look at the law as it stands today and it's very hard i think for anyone with any common sense to say it's working because if it was working we wouldn't be having this. >> obviously the law did not work on the most recent shooting in texas because the guy was not allowed to own a gun. >> something is not working and lawmakers have been unwilling to take a step. if you understand the money, how money flows, the nra has been much better funded and nobody with real funds on the other side business is looking at this and the same way they looked at immigration. so many important issues in this country and are now saying we're fog to get thr-- going to try tt

involved in this. >> you could essentially get rid of the second amendment down the road if you wanted to and if enough people -- >> that has never been my stance. >> i'm not saying it is. but that's the way we do things here we do pass laws. >> there was a time when slavery was legal. >> i understand that. >> and people with more common sense -- >> we fought a war but we do legislate. the elitest do not decide who wins the culture war. >> i don't think this is about culture war anymore. >> what about pro life that's about people's lives. >> we can have that discussion. >> i'm sure you have an answer for who is right in that too i'm just saying you're not in a position to make the decisions for the rest -- what really amazed me about walmart was that think about where we live here no longer you're going to be

allowed to carry a gun around in a walmart. the concept of seeing someone in walmart as you're going down the aisle. >> it's created panics. >> i'm sure that it has. it's just amazing -- but that shows you how different certain parts of the country are versus back here where people are walking through there with a holster. it's pretty staggering when you read okay no more -- i didn't know you could walk around with one anyway in a walmart. so saying that you no longer can come in here carrying a gun. >> by this way, this happened at starbucks and mcdonald's it's a big issue across the country. >> that's true. >> we're going to continue this conversation. >> we certainly are. the vanity fair guy, the yale academic and sorkin. i've got something going on at 7:15 can i step out you don't need me. do you need me here? >> stick around. >> i'm not a huge gun rights guy. i'm really not but anyway, coming up, much more

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well, we're down on china trade tension and the next day we say we're bouncing back on a lessoning of china trade tensions we're not far from all time highs in any of the averages but we know how quickly that could be let's get to the breaking news overnight to move stocks in hong kong the government there withdrawn the controversial extra bigs bill that sparked months of

protests chris joins us with more hello, chris >> hey, joe. that's right moments ago the leader of hong kong making the formal announcement that she is with drawing the extremely controversial extradition bill the same one that sparked three months of protests that brought tens of thousands, even close to over a million people according to some estimates throughout these last three months because people here have been terrified that with this extradition bill were to go forward that would give china license to pluck suspected criminals from hong kong and bring them back to the mainland for questions and as you know, the judicial system in mainland china is much more opaque than it is here in hong kong it's unclear if it will be enough to satisfy demands of protestors this isn't the only grievance

that they have they also wanted lam to re-sign. they wanted the more than 1,000 protestors that have been arrested throughout the movement to be given an amnesty so it's very uncertain what this is going to mean for the rest of the movement, joe. >> yes, we'll see. to be continued, chris and we'll check back with you from time to time. we appreciate your reporting thank you. >> coming up, when we return, lincoln announcing it's top u.s. start up of 2019 we're going to read the list of the best new companies next. tomorrow, slack ceo stewart butterfield is going to join us to dig through the companies first quarterly report since going public stay tuned you're watching squawk box on cnbc

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in particular is i don't know if you recall this is the audience now, we reported that adam newman, the company ceo had sold the rights to the trademark we to the company he owned the rights and he apparently now has gone back and said, actually, you don't have to pay me for that. >> it raises all of these questions about corporate governance he is giving it back the damage is done by what they already set off with the issues. there's more we'll discuss it later. >> separately, linkedin is out with it's list of the top u.s. start ups of 2019. with us now to reveal the big names on the topic is the senior editor at large at linked in good morning. >> good morning. >> let's talk about these names. i have to admit, i don't know all of these companies we're on the edge of the edge now. >> that's the point, andrew. so we have been doing this list

for three years and this list, what it measures is where people want to work on linked in right now so these are the companies that are going that maybe you haven't heard of that three years from now you will. >> let's go snow flake that's like a divisive term in this day and time on twitter i have been called a snow flake before. >> do not look over at me. >> i'm just saying if you were working a snowflake you would not. >> this is one of your favorite -- this is your cocktail conversation company, with the cloud company. >> yeah. >> he talks about the cloud at cocktail parties. >> unfortunately it's like a ten second conversation because if they need any details or color i get stuck. >> you just say growing. >> the cloud is just very important. >> number two on the list is

dousist. >> i'm surprised that you don't know this. it's a cannabis company. >> how come you don't know that, andrew i'm surprised. >> first time that we had a cannabis on the list of top startups tells us a lot about what will be a fast growing industry. >> how do you measure it and rank it? >> how do we rank it so we're looking at the interactions that people on linkedin are taking and we figuring out where they most want to work what is that that is first of all, head count, who is applying to these companies jobs how many applications they get for these jobs we're looking at how people are connecting to people on the site how many people are visiting these companies pages and the reason i like this list is its a reflection of what people are doing. this is not a bunch of editors sitting in a room wondering if this company cooler than that. this is what job seekers are

telling us that they're doing. peleton. >> that's going public. >> people like stuff they do, right? >> well, exactly have you been talking about brex it's trying to be the next american express and that's big language but it is run by a couple of 23 years from brazil and this is their second big start up they raised more than $300 million in capital and it's two years old. it surprises me for its ambition and the interest in it. >> we saw compass and we had the ceo of compass on a hand full of times including when he first started the company and we didn't know what would happen to it and it's grown to this crazy size are most of those people looking

for real estate jobs to be real estate brokers >> it's a lot of brokers with compass it's a ton of brokers but not sboentirely if the company falls in a full time position we're interested in it. >> others on the list, robin hood not robin hood the charity. >> not robin hood the charity. >> but the finance company. >> so that is another sweet story maybe in silicon valley, a company that people are very excited about. it's hiring fast. >> how much of this is about trying to get in early before an ipo? because i would have thought there might be some more companies that are trying to get in so early. >> this is early-early so if you look at say the 2017 top start ups list of the top 5, maybe 3 have gone public this past year. so -- >> what happened to the other two? are they still around? >> the other two, it's possible, right? >> so maybe this is a good

investment list. >> i wonder. >> like if you could look at it two years later. >> you can look at this list for a lot of different purposes. first of all, it's possible that you'll lose talent if you compete with these companies first of all if you're doing things they're doing you may want to position yourself the way they're positioning themselves to the talent market and yeah, you should certainly be looking at them for that reason. >> nice to see you thank you for joining us this morning. >> thank you. >> you bet. >> when we come back, markets on the move this morning. our next guest is going to tell us what the technicals are telling him during the recent volatility and why it's a good time to buy apple. right now a quick check of what's happening in the european markets right now. up across the board but off the high we had seen a little bit earlier this morning still the cac and the dax up by 1% we'll be right back.

welcome back to "squawk box," everybody. we have been watching the u.s. equity futures this morning and we're getting back a lot of ground we lost yesterday it looks like it will open up by about 200 points nasdaq up by 80 points and the s&p futures are indicated up by about 21 joining us right now to talk about some hidden gems amid nervous market sentiment is the head of technical analysis i can't believe i'm calling these hidden gems when your first pick is apple. that's one of the last stocks i would put as a hidden gem. explain yourself. >> apple has the fewest number of buys from the sell side today at any point over the last ten years. so the street has abandoned it as a long. we like it here.

the bear market in apple already happened it was last year the stock was down 35 from the highs i have been impressed with how resilient it has been here, despite being in the center of the storm. i think the next move is up, not down. >> how much is going to be tied to what happens with the china trade talks? >> what i'm curious here is to what extent are all of these well known risks well known. whether it's china, whether it's brexit, pmis under 50. these have been talked about and articulated for the better part of the last year yet, here we are still in the trading range. >> so you think all of that is baked in in terms of potential worst case scenarios this moves on the trade talks -- >> i think you had $19 billion worth of outflows and equity etfs since august. so i think you have to ask the question, what is already discounted at these levels even yesterday, on a bad headline the market actually acted pretty well.

declining stocks only beat advancing stocks 2-1 very modest under the surface so i have to wonder what is already known here the way the market behaves i think the mistake is getting too bearish. >> u.p.s. which is your second pick u.p.s. has had some pressure on it over about three years now. >> yeah, the stock peaked about three years ago. down 40% from the highs. i think it's a curious time for the u.p.s. to be turning up but that's what it is doing. bottomed a couple of months ago. off the lows, 50 day has crossed above the 200 so we are seeing the technical signs. even on bad news, the stock has gone up. so perhaps the sellers have moved on from this one and it's a very curious name just given where people presume we are in the cycle. so maybe something is getting better here. all the bad news on the economy is already priced in >> your third pick is sonos,

why? >> well, it is one of the better acting names in the ipo space. they cut the stock in half from 20 to 10 over the last year. quietly bouncing around the bottom over the last couple weeks in a tough market actually better i think it's one to take a shot in this neglected ipo space. >> another, you know, quality of life advance that is under estimated. outdoor speakers, apple music. piped through sonos, in the house. anything - >> he knows. >> anything that's ever been -- that i have ever wanted to listen to. i can play at the tip -- what is that worth you add that to google maps. what is that worth amazon >> willing to pay more >> i'm saying our lives. you worry about the death of the american dream we live better than the carnegies, andrew. >> because of sonos? >> right. >> because of sonos.

everything i'm listening to is like 50 years old. i have some -- >> a shock. >> yeah. >> led zeppelin, i can't believe the drummer -- i listened to it yesterday. i guess i never appreciated jimmy page and the drummer. >> didn't have it on the right speakers >> yeah. it was on my walkman which is another unbelievable advance. >> chris, thank you. >> my pleasure. >> great to see you. coming up real estate legend sam zell will join us. he'll share his thoughts on interest rates, wework and a lot more wee mi bk.'rcongac squawk picks is sponsored by wisdomtree the modern alpha pioneer

breaking news out of hong kong carrie lam withdraws the extradition bill after months. to china to real estate guest host and billionaire investor sam zell is here. his reaction to news out of hong kong and much here is come. walmart announced a major change to the gun and ammunition sales. other retailers considering the same we're going to discuss the move as the second hour of "squawk box" begins right now. >> live from the beating heart

of business, new york, this is "squawk box. good morning, everybody. welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. with us is sam zell and great to have you here today. >> a pleasure. >> thank you for joining us. >> watching the markets very closely, i take it >> reasonably. >> reasonably. we're going to show you quickly the u.s. equities. yesterday, big down day with the dow off by just over 230 oints this morning though you see things swinging back and a lot is because of breaking news we are seeing out of china. it is official hong kong leader carrie lam says the controversial extradition bill has been fully withdrawn. sam, obviously you're watching so many things around the globe. so many things that impact your holdings how did hong kong play into anything that you have seen on this issue >> well, i think that hong kong

represents a problem i mean, i think, you know, china can't ignore it. china is kind of, you know, reached over and taken a very strong position with reference to hong kong i think they're finding out that may not be the best methodology. i think it's -- i think there's a big risk here that this thing could get out of hand. >> obviously, this comes as a big surprise to be watching this today. and probably great news for the protesters there in the streets. i wonder though what kind of impact this has on the china trade talks here in the united states because that put us in a tougher position where we would have to take a hard-line no matter what happened if china pulls back, what does that mean potentially? >> i just -- i don't know. i mean, i would find it hard to believe that the chinese would invade hong kong and put

soldiers on the ground i think that would be, you know, worse than tiananmen square. so we'll see what happens, but i think they have to find some medium -- you know, medium methodology to both give the people in hong kong the freedom that they were promised and then still preserve the chinese control. >> apparently, remember last week's troop rotation. >> right. >> so the troop rotation and people -- i was watching this last night people are waiting -- a rotation means that the troops that were there are ready that are getting replaced they're supposed to leave and as of this point nobody has left. >> yes. >> so that's -- that's sending in more. that's not rotating. >> but keeping everybody there. >> when you put troops across the border, i think that's called intimidation. >> right what do you make of recession fears?

sam, i mean, probably hoping for one as the grave dancer. >> yeah. >> i don't mean that you're hoping for one, but there are opportunities that are created by people like you but do you think it's -- do you have a percentage? is it 30%, 40%, 10%? >> i think that i have been looking for a recession for some time and every time i get a signal that it's likely, i get a reversal which i never had that experience - >> what kind of signals does a guy like you look for? >> well, we have a company an $8 billion distributor of wire and cable and i have owned the company for 30 years it's always been a sign when customers start delaying orders that we're about to head into a recession. six months ago, they started delaying orders.

and i said, well, here we go. >> right. >> then three months ago they reversed it. >> picked back up again? >> yeah. i think -- >> it wasn't the yield curve how many brothers were there only two >> actually one, two -- i think just two. >> there were two. >> the brothers. >> that's who i bought the company from. >> they must be loaded anyway, so what else other interesting recession signals that you can share with us >> i mean, you know, prior to the great recession was the first time since world war ii that we went in to a recession when real estate was not in oversupply we are now in another situation where real estate is not in oversupply. >> now it's not even with rates there. >> if real estate is not in oversupply, then you have a recession.

>> so where are you now? that we're not having a recession? >> i don't think so. i think we're going to get through the election despite, you know, the headlines. you know, without dealing with a recession. >> why do you -- how would you explain some of these reversals and the signals you have seen, what happened? >> well, i think that we spent eight years focusing on redistribution and not focusing on growth i think that produced an historically low growth rate which our country frankly is not accustomed to and equipped to deal with. i think that the change in the administration, the change from redistribution to growth has had a pretty positive impact, much more so than anybody would like to admit and so i think that the overall

economy is in better shape than conventional wisdom. >> you're a life long democrat too, sam although lately -- >> i have been accused of a lot of things but never a life long democrat. >> but you were a democrat. >> i was i grew up as a roosevelt democrat. >> but you're not a hard core -- you're not a big -- like i don't think -- i think you're a free market guy at this point. >> absolutely. >> do you recognize the -- if you were a democrat at one point, do you recognize where the democratic party is right now and what would that do in 2020 if bernie or liz -- >> i said over and over again that, you know, he who fails to learn from history is condemned to repeat it. >> yeah. >> to me, this is '68 and '72 all over again '68 humphrey was supposed to win and everybody was stunned that

nixon won. >> right the second time we brought up tricky dickey today. >> then in '72, the democrats went to mcgovern, that was completely unconnected to where the rest of the country was. >> and he was right of where mccarthy was which is amazing. >> and we lost in a land slide. >> you won like two states, andrew >> it looks to me like the democratic party is going way left and i think that they go that far left, i think we're going to see president trump elected. >> the latest poll has biden up 12, one of the polls it's early do you think biden could be -- >> i think biden is a very strong potential candidate for the democrats, but i think that the whole democratic party has gone so far to the left that i don't think that biden either can win it or if he does he will have been pushed so far over

that i think he will be the 19 -- or the 2020 version of mcgovern. >> are you supporting the president for re-election? >> um, i am certainly supporting the senate and i have been very active in supporting people running for the senate. >> but not the president >> i have not been a supporter of the president. >> you worked in his industry. >> i do. i have had - >> you have had dealings with him. >> i have had dealings with him, i know him >> you don't feel comfortable supporting him >> no, i didn't say that you did. >> okay. >> you have deja vu, because you had to answer these questions before because he knows that you're on record he knows you're on record that you had bad business dealings with trump i don't need to explain that to you. >> all right. >> i thought i was - >> we know each other very well. >> i thought i dvr'd this from your last -- okay. >> i wanted to understand.

>> okay. >> you just -- >> i got it. >> i have supported no one for president. >> okay. >> no one. i am likely going to support somebody and at least at the moment if i were to bet, i would end up supporting the president because i think the democrats are giving me no alternative just like they did in '16. >> okay. okay excellent. we may replay the crock of shih tzu comment you said the last time you didn't say the dog you didn't -- i said the dog. >> the most amazing thing about that comment was - >> that was the most - >> that no one one complained. i mean, i mean, i said oh, my god -- >> because what you were describing was so absolutely a crock of shih tzu that no one is going to argue with you. >> you were sitting there and you couldn't -- you were dying

i was dying. this guy kept talking and talking and talking and saying nothing. >> sam, you called it like you see it and no one disagreed with you. >> something today gets to that point are you ready to pull it out again or you're -- >> nobody has ever accused me of ever being too civil. >> i get email from people here who say they love it when you're on. >> i know. >> i know that i know he's going to be here for two hours. i'm going -- i don't know if i can talk to -- i'm going to horn my way in there. >> i bet you will. when we come back, the ongoing debate over gun safety and regulation a number of retailers now taking action to curb sales of both guns and ammunition including walmart. we'll talk about that decision in just a bit. in the meantime check out the futures. up sharply the dow is up by almost 200

points the nasdaq up by 78 ngonowing stocks higher in hg ko up by almost 4% after the moves we have seen there we'll be right back. this cnbc program is sponsored by ibm let's put smart to work. but when a recall happens, perfectly good food goes to waste. now, we've got away around that. looks good. we're on target. blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. it's used by some of the biggest retailers everywhere. a nice lettuce. so more food ends up on your table, is that daddy's lettuce? yeah. and less food goes to waste. ♪ ♪ you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated.

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you must be steven's phone. know who's on your network and control who shouldn't be with xfinity xfi. simple. easy. awesome. breaking news just hitting the wires on mortgage rates. diana olick joins us with more did you know this is happening >> look, after holding steady mortgage interest rates resumed their retreat last week. but that did not boost mortgage demand total mortgage application volume decreased 3.1% for the week according to the mortgage banker association's seasonably adjusted index it was 60% higher when interest rates were substantially higher and refinance activity was extremely low.

the average year with conforming loan balances decreased to 2.8% that's with a 20% down payment that rate was 93 basis points higher this same week one year ago. now, surprisingly refis which have been very strong fell for the second straight week, down 7% they were still 152% higher than a year ago but the annual comparison has been shrinking for several weeks despite the substantially lower rates. now mortgage applications to purchase a home bumped up 4% for the week and 5% annually, but the home buying market today is less about lower interest rates and more about high prices in a severe shortage of homes for sale pack to you guys. >> thank you for that report couple of big headlines to bring you at this hour shares of navistar are jumping this morning the earnings and sales beating both estimates and market share increasing the fed is out with the latest beige book the region by region assessment of the u.s. economy comes out at

2:00 p.m and tapestry has a new ceo, victor lewis is leaving after 13 years on the job. coming up, walmart is going to stop ammunition for handguns and some assault rifles in the u.s. stores. we'll discuss the move after the break. > uatonhera of hurricane dorian, after living the bahamas in ruins "squawk box" will return for i, we know how your customers shop. and what they've already purchased. like this lamp. and we use those insights to show you what they might consider buying next. mid-century modern, nice. that way, you can keep sending them offers for the perfect products. and that keeps them coming back. how's that for changing what's possible?

welcome back to "squawk box" this morning walmart ceo doug mcmillon said that the stores will no longer sell short barrel ammunition and eliminating handguns from stores in alaska, the only remaining state where they still carry them as of the second quarter report in august, they held a 2% market of firearms and a 20% market share of ammunition in the united states. in a statement, walmart expressed confidence that the actions would cut down the market share of ammunition from 20% down to 9% joining us right now to discuss doug mcmillon's strategy, two contributors the associate dean for leadership studies at the yale school of management and a "vanity fair" special correspond jeffrey, i'll start with you

how you think this changes in the dynamic in the debate in the term of the role that walmart is playing and whether other ceo's will step out as well. >> this is a giant watershed moment and good for you, andrew, in your open letter to doug mcmillon as a call to action like the memo in the call to davos a few months ago this was a watershed moment. in the last hour, i heard joe talk about how nixon was hounded out by a hostile press president nixon. this is akinto the summer of '74 when johnny carson representing mainstream america said it was time for nixon to step down. that was -- he was very nonpolitical doug mcmillon, he's not, joe is referring to the elitists from "vanity fair" and yale i guess he must be referring to stephen roche or bob shiller. >> don't sell yourself short,

jeff. >> this is mainstream america. you know, doug mcmillon is a 52-year-old who spent 35 years inside walmart and the university of arkansas graduate we are looking at similar moves at kroger's with the fred meyers stores that they have done the same thing these are not elitists by any stretch of the imagination and we have seen a huge reaction across the face of other retailers who have already been moving in from the directions from chile's to chipotle to walgreens and walmart. we have seen guns are being banned from stores amc theaters to regal theaters this is -- there are more people in the country who believe that we need to have uniform background checks than believe we landed on the moon. >> bill, let me ask you though in terms of what kind of pushback you think will exist and also how far you think this takes the debate and whether it really does change it. >> well, andrew, first of all,

again, congrats to you for your outspokenness on this subject. it is much needed and thank you for using your platform for doing it among other people. this will be a very sad chapter in american history when it gets written, mass shootings. and while i do applaud the walmart ceo for taking this step and i think it's a meaningful step that has to come from the marketplace, where is congress where are our political leaders? their inability to act on this for so long is a true blemish on the american political landscape. and until congress acts, we're sort of left with these bits and pieces of action by the marketplace which i applaud. once upon a time, it wasn't that long ago in our lifetime we had an assault weapons ban from 1994 to 2004. what's it going to take to at least do that again at the congressional level? that is obvious -- >> but here's my question, i'll

ask it to jeff as well in terms of how this debate plays itself out. the companies are making business decisions and making business decisions ahead of what the law may ultimately be. the question is whether they either should or can advocate for these positions in washington they have advocated for positions around immigration before they have advocated on lots of other issues is this still a third rail >> no. this is definitely something that business looking at two weeks the business roundtable statement, many of us are wondering and hoping it would not be empty of rhetoric i think that was the steaming hot bowl of oatmeal that sam zell was referring to when we had a speaker on earlier when he talked about the cliches here they're putting it into action, not empty words and walmart is a 1.6 million employees. that's about 10% of the working population of the country. this is a very big statement but he's gone further. doug mcmillon has called on

congress to act at the federal and the state level just as he did on the earlier issue having to do with the religious freedom acts, the bathroom bills he and the ceo of at&t and u.p.s. who said we don't want this kind of divisiveness. we have seen people call for action from congress before and in this generation we have the gen-x-ers in charge and by the way, the nra was for the 1934 crime act and the national crime act. and they were in favor of the very effective regulations that sadly subsided. >> hey, sam zell, you're square in the middle of the business community. is this the right decision what you see walmart doing? do you want people entering this debate and dialogue? >> i think what walmart has done is very commendable. i think that the most important

issue in this whole arena is to separate guns from guns. it's - >> guns from guns, what do you mean >> i can't understand why anyone needs an automatic weapon, period there's just -- you know, you want to shoot deer that's fine. you want to hunt, that's fine. but automatic weapons -- >> semiautomatics. >> yeah. they don't make any sense. >> semiautomatics, they're different. >> if you need legislation, the legislation should say if you want to fight an automatic or a semiautomatic weapon you can only do at this a range, period. >> is that consistent with sam's point -- sam's own senator dick durbin said if you need a semiautomatic to hunt deer you hough to take up fishing it's dangerous and not in support of what the 96% of the

country says they want and that's -- it is time to pay attention. but andrew, you raised the question about this, this response -- larger response of the american business community. joe saying pass a law. maybe we don't need laws on this one we do. but not on everything. cornelius vanderbilt said who cares about the law -- infamously said this i've got the power the business community has the power to act and we're seeing just last week roll backs by the epa where the natural gas and oil companies are saying you know what, we don't want those rollbacks the auto industry is saying we don't want those rollbacks to the epa. they're going ahead and setting their open industry standards. that is an impressive rebuke we have never seen that before. >> jeff, what if the business community acts on something that you disagree with? and the university of kansas right now, they don't want chick-fil-a on their campus. let's say -- i'm not saying this is about chick-fil-a but let's

say there's a ceo who's very religious and anti-lgbt. you call, you know, doug mcmillon cowardly when he doesn't act and courageous when he does. if this man's own personal viewpoint is that he wants to discriminate against a whole group of the population, would you call him courageous by taking that tack or let's say someone is pro life, jeff. let's say someone is rapidly pro-life and decides that everything he does in his corporation is against -- suddenly you're on the wrong side of the elitists' take on all of these issues, jeff, and, you know, suddenly you probably wouldn't call those ceos that courageous. >> no, i have served chick-fil-a in my classes and i get reaction when we have a late class. >> but okay, answer my point though my point is that as long as they come down on the right side, the politically correct side that you decide on -- >> no no this is not that at all, joe. >> you're deciding which side the culture wars are correct and

deciding which are not correct you're self-anointed i didn't anoint you. >> what the american public wants. now an issue of store hours like chick-fil-a or hobby lobby as private companies they can do what they want but as public companies they need to look at what their constituents wants and not what the owners want which is what a private company has the luxury of doing. hobby lobby and chick-fil-a they can do what they want, because they own their company. >> i don't know if i'd argue for it you wouldn't argue for it if it wasn't something you disagreed with or something that people at yale or -- >> it's not a question of personal habits. it's what their constituents are saying you know - >> well, constituents change even - >> 150,000 employees at walmart -- >> public opinion changes. >> -- signed a petition last week 150,000. that's a big statement you're hearing this from customers and employees they don't feel safe. this is the reaction we're getting is because the ceo of a

public company has to recognize they have a duty to a broader set of constituents and this is -- by the way, the dick's sporting goods with the guns those stores are doing better without the guns and looking at getting rid of guns completely at dick's. >> the company can do whatever they want. that's true. public companies and there will be some pushback against walmart but that's fine. but the bottom line is you do need to -- if you need grass roots efforts to actually change the law that's how we do things here eventually, if you're two-thirds of the states -- if you had two-thirds of the states you could get the second amendment overturned if you wanted to. you have to elect the people that will vote for, you know, bill doesn't like congress is doing, elect the people in congress to do what you you want them to do you had president obama and the house and the senate could have reinstituted the assault weapons ban in 2008 easily because they had both houses of congress they had the pen to sign it.

so - >> but the fact they didn't do it is a mistake. >> right, okay but that's what you're going -- you need to actually eventually change the laws and if the public is at 70 or 80 or 90% that will be possible to do it that's how we change things in this country. >> sometimes we do miss the moment and it does take the ceos who have a powerful platform and the general public to speak out and keep congress on track and the administration to do the right thing. sometimes we miss the moment sometimes you get caught up in the -- some people believe that john wayne and sylvester stallone or clint eastwood were macho warriors that's mythology. they never went to battle. i think clint eastwood was a lifeguard during the korean war. >> all right, jeff, let's say that you have a ceo that fully embraces the green new deal as seen by some is of the far left, like aoc, $3 trillion green new

deal. >> you're taking it to the extreme. >> no. should they only stop kroger with beyond meat should he take a courageous step >> he thinks it's good for his business, sure. >> right but you're going to get pushback from customers >> sure. but if he thinks he -- if he believes it will be better for his business - >> what -- >> more responsible to the community. >> rather than -- than he should sell - >> should you at 7-eleven decide not to sell gasoline to any suvs because you should get at least 30 miles per gallon? a ceo is taking a courageous stand on climate change. is that okay >> joe - >> i understand that. >> but the point is that the law itself is not -- you can say it's the ultimate arbiter of this but business can make their own decisions. common sense - >> we saw four major automakers say that the administration and epa is wrong we'll work with california to set higher efficiency standards

to have 50 miles per gallon we can do by 2026 the administration says go for 36 no, we want to sell not just to california and 19 other states who care, but the rest, europe and the rest of the world. and we as automakers to heck with you we'll continue to advance our standards. the same with the power industry it's already invested the $9.6 billion to clean out the emissions that they were worried about, the mercury the government says stop doing it, no, we want to reap the benefits of it it another great for industry to speak back in terms of this situation, joe, the minority, we care about is suddenly in congress we care about the diminishing strength of the nra. they were originally a gun safety organization themselves and the legislation that bill talked about in 1934 and 1994 they were in favor of it so whatever tortured political dynamics there are inside the diminishing nra instead of paying attention to that, business leaders should be concerned about the backlash of all the constituents as a business person what's good for the business, what's the

customers -- what do they want >> i know that bill has been waiting patiently. sam? >> i mean, what -- >> what i would say -- go ahead, sam. >> i was going to say, you know, you have to be really careful that you all of a sudden pile on responsibilities and moral positions on ceos who are basically in the middle of a market world if they have to compete -- that they have to compete with i think you have to be real careful you don't get too high on your hog advocating issues. >> too late. >> i just think it's -- i think it's dangerous and i don't think ceos are protected enough to take those kinds of positions. >> okay. final word to bill. >> well, what i would say is last time i checked we're still a free country and, you know, if the ceo wants to take a strategic position on something that's relatively

controversial, that might upset a lot of his customers or shareholders and he wants to take that position and if consumers don't like that they'll vote with their feet if they want meat they'll shop at a grocery store that sells meat it will get all figured out but we need real leadership in congress mitch mcconnell needs to get off his butt and pass this legislation because it's a blemish on american society at this point. >> thanks, guys, for the conversation. > quk x"onnu with a check on the markets and a live report from hong kong we'll be right back. but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses.

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breaking news out of china it's official, hong kong leader carrie lam says that the controversial extradition bill has been fully withdrawn we have been watching through some of this seeing what happens with all of these situations we have a report on the situation on the ground there. chris, good morning. >> good morning. that's right just a short time ago the embattled leader of hong kong carrie lam announced she's withdrawing this controversial extradition bill that started this government crisis to begin with remember the throngs of people, by the tens of thousands, even over a million people at times marching the streets demanding that this bill be withdrawn.

because they have been afraid that this would give the central government in china the authority to pluck suspects from hong kong and bring them back to the main land for questioning. as you know, the government in hong kong, the judicial system -- excuse me the judicial system in the main land is much more opaque than in hong kong which has a much more transparent society. however, this is not the only demand of protesters they have been calling for carrie lam to resign from the very beginning they have been calling for an independent investigation into alleged police brutality at these protests and they have also been calling for an amnesty for the more than 1,000 protesters who have been arrested since the very beginning. now, it's hard to know exactly how the protesters will respond because this is after all a leaderless movement, but if you look at the forums and the chat rooms where they exchange information, it doesn't appear like they're ready to give an

inch in fact, the word on these chat forums we will not give in it's all or nothing. this measure right know to withdraw the extradition bill is too little, too late back to you. >> chris, thank you very much. chris livesay. an update on the hurricane dorian, it's moving northwest after virtually stalling over the bahamas where it's caused devastation. it was blamed for at least five deaths the storm surge warning was extended northward from florida to about midway up south carolina's coast it's also now under a hurricane warning and thousands along the coastline have evacuated of course we are monitoring the storm's movements. we'll bring you updates as you come. when we return, your morning market movers. "squawk box" returns after this.

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time for a look at the movers dom chu is joining us from cnbc. the markets rebounding, are there some individual names that are interesting on their open -- in their own right >> there are some interesting names. we have to get back 285 points on the dow to get back everything we lost yesterday and we're doing wit heavy lifting from certain stocks. you can see the solid gains, 285 is our number to get back

yesterday's losses the names that could help are some of the ones that got sold off more yesterday within the dow jones industrial average we look to names like boeing goldman sachs and caterpillar. you can see here boeing actually the underperformer today, only up 0.75. and apple and caterpillar up as well those could be helping the cause as we head towards the start of regular trading. a couple of pieces to look at with regard to the macro markets. just take a look at this first of all wti crude. you can see here up about 1.3% it's staging a comeback late yesterday as well that could have been a nice sign for the bulls looking for a bit of a move and one other place we'll watch, check out what happened with the energy sector spdr yesterday. between the bottom and top yesterday we probably gained 1.5% despite the fact it was

down 285 points to close the day. if you're looking for certain signs, becky, oil prices and energy stocks could be places to look for today for any clues about the direction for the market. >> thank you global market uncertainty is pushing markets lower to kick off september's trading. joining us right now is mandy zoo, chief equity derivative strategist at credit suisse and mike santoli mike, why do you think the futures are up this morning? is this hong kong, a bounce back from yesterday >> i think it's both of those things and also it reflects the fact that we have really just been bouncing around in this range. yesterday it never got a lot of downside even after the 10:00 a.m. release of the ism number which is weaker than expected. but it was telling that you have bond yields making a slight new low and the stock market didn't get a lot of headway on the down side to me the markets aren't kind of showing the hand right here.

>> right. >> you have been in this range for about a month. sentiment has gotten very, very negative at least on balance it's pretty negative, so that's what's being fought out we're in a recession countdown camp and then the cost of debt has gone down a lot. we have credit markets that are still in decent shape and profits haven't fallen off a cliff and the picture of that is a range bound stock market. >> mandy, you don't think we're headed for a recession. >> no. we're not headed to a recession because of the resilient u.s. consumer but the point that we make is that you don't need a recession to get a significant equity correction. the macro factor is global industrial production. we have seen weakness there. for example, in 2015, 2016 we had resilient u.s. data, but weak global manufacturing data what happened we had extended periods of high volatility and equity market weakness here. >> the one difference, sam, is that this time around you're looking at such low interest

rates that it's hard to find other places to put your money at this point. >> well, that reinforces what i said before which is that it's very hard to have a recession when interest rates are zero >> for anybody who missed the top of the show, you keep waiting for a recession but every time you see signs it turns out to be a head fake. >> the fact that i'm waiting for one is probably a positive sign because complacency is usually the major factor that leads to big surprises. >> so mandy, you hear something like that, could this time be different? could this time even if we're looking at weak global industrial production, could this be different at least for the u.s. markets >> i would agree there's not a ton of complacency in the market given that it's still near all-time highs but we are seeing a repricing higher of volatility and more importantly in terms of the flows, people are hedging. they're not chasing the upside as much as they were in previous

periods of market sell-off if you look at hedge fund positioning they're cutting their net long exposure to multiyear lows as well i think from the range of factors i would agree we're not seeing the complacency in the market right now >> mike, what are you watching >> you could have an unsatisfying economy and profits that are hit or miss based on the sector and not have a recession. i think that's what the market is trying to deal with you have to have -- keep two separate thoughts in your mind at one time. at some point, yes, it will technically dip into the recession. but we have had two of the periods this cycle that it seemed like we're almost there in 2011, '12 and then you had the profits recession, not an actual economiwide one both of those times you had the market go nowhere for a year, a year and a half and released after that i think credit markets were a key part of that. >> isn't the real problem that pundits like you and me and her

haven't been right >> about what? >> about anything. you know - >> is that new this cycle though >> we sit here and we predict it's going to be this and that we're worried about this and we're worried about that and meanwhile the game keeps going. >> sam, what are you doing in the meantime investing in anything? are you hoarding cash, waiting for this recession to show up? >> certainly never had a cash position like we have now. i think we're very reticent about, you know, the opportunity. we think there's going to be some significant opportunities but what we don't see is the urgency. what we don't see is the movement that's pushing it one way or the other and i don't see any dramatic -- i mean, you know, in the great recession the whole scenario was compounded by the fact that we were -- we had mark to market --

in the middle of a recession i mean, it was insane what was done but that took a difficult situation and made it impossible we don't have anything like that today. we have full employment and we have an environment that's semi-positive. not wildly positive, but certainly not negative >> when you say you have never had a cash position like you have today, can you put that in context or put numbers on it or give us any sort of -- >> well, you know, a lot more. >> a lot more because you're just waiting. >> yeah. and a lot -- and, you know, anybody who's been in business for a long time knows that the vulnerability that occurs when things change rapidly translates into liquidity and liquidity equals value so you're sitting here and saying when is the

liquidity going to disappear i mean we're already seeing changes. i mean, right now in the oil patch despite the fact that there's unbelievable liquidity, there's no money in the oil patch. none i mean, the deals that are being done right now are so much better than they were a year ago for the investor it's not even -- it's not even comparable so the answer is that there's fear and particularly in the oil patch where they haven't used the capital very appropriately you know, they're basically withdrawing the money. even though everybody else has too much. >> sam is our guest host he'll be with us for the rest of the program. mike, mandy, thank you both for being here. coming up we'll talk about this wework getting ready to go public the questions swirling about the business models and we'll ask sam zell about office space business and much more out of

hong kong this morning that extradition bill fully being withdrawn after months of violent protests trehe what does it all mean and where are we going next? "squawk box" returns after this. it was sophie's big day.

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all right. welcome back, everybody. news just out this morning on wework the company has added harvard business school professor frances frei to the board of directors. cnbc had reported in mid august that the company had an all-male board at a time when every

single s&p 500 had at least one female director. she also served as the senior vice president at uber reports say wework is is planning to kick off the road show as soon as next week. other reports also saying that the ceo is giving back the $5.9 million fee that it got from the company for giving them the we trademark, that he had trademarked itself. >> does that include the $700 million in stock he sold? >> no, it did not. our guest host this morning is sam zell you red through the s-1. there are all kind of things that pop out as red flags. what do you think about it, sam? >> you know, first of all, i want to distinguish my comments between this particular situation and the overall what i'll call sharing mentality in our world today. i'm -- i'm not in a position to say that sharing is going to be wonderful. maybe we'll share cars

maybe we'll share a lot of stuff but i think that's a new movement in our society. corporate governance is an old issue in our society i'm the chairman of five new york stock exchange companies. every one of my companies has no separation between my vote and anybody else's vote. the idea that these companies should have multiple votes or -- forever or not being accountable just doesn't make any sense to me the idea that, you know, i get 20-1 votes but it goes down to 10-1 if i give away $1 billion it's just preposterous. >> wework is not alone in having a situation like that. there are a lot of companies that do that. >> i don't think any one of the other ones are better than wework in that respect wework is just taking it to an

extreme that nobody has ever seen before. you know, you give somebody 20-1 and if he dies, you give it to his wife and, you know, find me another example of that. find me another example of creating a company that, you know, loses 50 cents out of every dollar of revenue and explain to me how that works. >> so you wouldn't be investing in this company is that what you're trying to ay? >> i had the privilege of investing in this kind of company once before. >> okay. >> as a matter of fact, this company -- or this kind of company began in 1956 with a guy named feejen who went to the floor and then subdivided it every single company in this space has gone broke >> when you say in this space, you mean taking long term leases and then offering short term rental agreements? >> yeah. the savings and loan that's what

you're talking about creating long term liabilities and short term assets. when they create that, the results are predictable. why is this any different? >> meaning they're the first ones to go in a recession when things turn down >> i mean, i used to be the largest owner of container leases -- containers in the world. i was the marginal container provider so every shipping company owned half the containers they needed. the other half were leased from seven international companies. so those seven companies provided the marginal when business was good, everybody did terrific when business was bad, the marginal player lost and the companies did fine do we think they'll never be -- there will never be another is recession, another oversupply of office stuff this is marginal stuff and it is

being described as some holy grail. and it's very hard for me to understand the fact that the real estate industry as a whole has committed suicide by allowing give or take 20% of the office space to be in effect noncredit makes no sense to me whatsoever either so - >> do you think the industry is committing suicide by even working with them? >> to the extent they did. it's okay if you have a weworks space or a coworking space we are talking about 20 -- the largest landlord in new york, in london, et cetera. what happens >> so what is the chance they become too big to fail >> well, that's a different story. because the -- >> right they own so much space when the true downturn happens. >> but if you're too big to fail, what happens you can't make your payments.

>> right. >> you therefore go back to the landlord who says, gee, i'm sorry i can't make my payments, change the rent. that doesn't do a lot for the equity holder. it may protect the bond holder maybe. >> sam has a lot of lessons he's learned over a lifetime of doing these things we'll talk to him more when we come back. sam zell is our guest host. global markets are reacting to news out of hong kong, that the extradition bill has been withdrawn. we'll discuss what this means for future trade negotiation and markets around the wldor this is the age of expression. everyone has something to say. but in a world full of talking, shouldn't somebody be listening? so. let's talk. we are edward jones. with one financial advisor per office, we're built for hearing what's important to you. one to one.

edward jones. it's time for investing to feel individual.

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and less food goes to waste. ♪ ♪ breaking news from hong kong the city's leader axing a controversial extradition bill that sparked months of unrest in the financial hub. political crisis in the uk as a revolt spark us in questions about brexit what do investors need to know but we have green arrows here in the u.s. futures are pointing much higher as we approach the opening bell and the final hour of "squawk box" begins right now. ♪ >> live from the most powerful city in the world, new york. this is "squawk box." >> good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site

in times square. i'm joe kernen with becky quick and andrew ross sorkin our guest is sam zell. the futures are up more than 200 points, 213, getting back a lot of yesterday's losses. the s&p indicated up 24. nasdaq indicated up 83 treasuries have been in this range now. no longer inverted with the two year which is at 1.46. here are some of the stories that investors are going to be talking about today. hong kong's leader has announced the official withdrawal of the extradition bill that sparked months of massive protests it is one of five demands that the protesters have been fighting for, including universal suffrage in the city's elections we'll hear more later on this hour. uk prime minister boris johnson said that the company is making substantial progress on brexit negotiations. johnson will likely try to call a snap election today, seeking

greater political strength as he attempts to pull the uk out of the european union on october 31st yesterday, there was a defeat on the law that would extend the deadline for brexit by three months around a big announce -- and a big announcement on gun sales. walmart announcing that the stores will no longer sell short barrel rifle ammunition that can be used for military style guns and the company is eliminating handguns from the stores in alaska which is the only remaining state to still carry them the moves come after a spate of mass shootings this summer including one at a walmart in el paso, texas, that left 22 people dead. new scrutiny on google this morning in the eu. "the financial times" reported that google is saying that google is using hidden webpages that feed personal data to the advertisers. this is according to new evidence given to the ireland's data regulator which notes it was submitted by a small google rival called brave

if true, the practice would undermine google's own policy and sir cup vent regulations that requires transparency the company is now a target of a new u.s. antitrust probe this one by more than 30 states attorney general and that will be formally announced next week. this according to reuters. the probe focused on privacy and the anti-trust issues. google thus far has said it is cooperating with all investigations president trump is sounding off on the trade war in the last 24 hours saying members of the past u.s. administrations have been quote taken to the cleaners by china and he does not want to be one of them eamon javers joins us with the very latest. >> that's right. the president redoubling the commitment to a go it alone approach in terms of the china war with china here's the tweet you're talking about in the past 24 hours the president saying for all of the geniuses out there, many who have been in other administrations and taken to the cleaners by china, they want me to get together with the eu and

others to go after china trade practices. remember the eu and all treated us very unfairly on fair will change so the president is suggesting he'll continue to go it alone just as the united states in terms of negotiating with china will see whether that bears fruit. we saw this ism manufacturing number tick down to 49.1 yesterday. we saw a response then from the national association of manufacturers who cited the trade war as one of the factors that's leading to the global slowdown jay timmons tweeted yesterday manufacturers have also warned that trade uncertainty would affect our industry. here's what manufacturers need one, pass the usmca, the trade deal two, turn the trade war with china into the trade deal with china. and three, reauthorize the export/import ban. they're saying in washington what they want, a trade deal with china and the president

signaling he's not ready to do that just yet. there's some question if there's a face-to-face negotiation between the u.s. and chinese sides that had been expected in september. we are in september now. no word on a date. or an official sitdown between both sides but the u.s. side is expecting this month to sit down and negotiate face-to-face and we'll see whether that bears any of the fruit they're looking for, guys. >> thanks. for more we're joined by the president of the national foreign trade council. it's good to see you, once again, been a while, rufus you like baseball, what inning do you figure we're in here? and is it -- is it -- is it a drop dead date some time before november 2020? >> well, good morning. i think you know it's probably the -- it's past the seventh inning stretch now i think we are with recent

actions on tariffs at the beginning of this month we're probably in the last couple of innings. but it isn't clear to me that anything significant is going to happen for the next several months i think both sides are hunkering down for a longer battle i think the chinese obviously are going to wait and see what is the impact domestically in the u.s. of the most recent tariffs which as you know have started to hit on a lot more consumer products than in the past and i think the trump administration is still convinced that going it alone against china is going to bear fruit. >> the october 1st date, there's -- in terms of president xi in china, very nationalistic date coming up is nothing happening before then do you buy into that or could we all be surprised when they agree to either, you know, take half measures and come back to the table later or is anything possible before then or are -- because seventh inning unless we

go into extra innings we're getting close to the end, right? >> yeah, probably. although, you know, they could be long innings as you know. can be a lot of runs scored. so i think that the question becomes does trump stick to this plan of accelerating tariffs even further on october 1st and again on december 15th how the chinese react. look, the chinese have look at the kind of -- have looked at the kind of reaction going on in the vacillation in the administration on what to do i think they're pretty much convinced that they have to -- they have to continue to hang tough for a while. whether they're busy trying to put something together behind the scenes and if the two sides are doing it, let's put it this way. they're doing it pretty quietly and surreptitiously. nobody knows about meetings taking place. >> i wonder if that's -- i wonder if that's really possible do you think at this point that

public opinion or how do you explain that suddenly public opinion has turned decidedly negative against china and if you had talked about this two or three years ago, asked the average person do you want to put on a trade war and tariffs against china, are they a big problem, i don't think -- is it a big problem? i don't think you would have heard a majority of people say yes. so someone has done a sales job on the american public that what we're doing is at least something that needs to be done and may not like the way we're doing it, but a lot of people are behind this anti-china sort of story or narrative. >> yeah. i think that's true. but the way you do it is very, very important because if you do it in a way which actually makes it more difficult for you to achieve results i'm not sure that the battle is worth it. the fact he's taking on china while also not getting along

with most of the rest of the trading partners and not going forward with a strategy based on tpp and things like that has made a big difference. the chinese look at it and say, you know, the u.s. is an important market to us obviously but it's more -- it's not as big as one would think we take about 8% of china's total industrial output. and, you know, they're busy figuring out how to diversify to other markets meanwhile we're figuring out how to get supply chains out of china and elsewhere. so there is going to be a certain amount of decoupling of the two economies. i don't think it's going to be massive decoupling but this fight ultimately will get resolved maybe by some deals but i don't think the chinese will go as far as the trump administration was hoping. i do wonder whether they ramped up the rhetoric a little too quickly on china

we all know china has a lot of practices and policies that need to change. but, you know, it may be that both sides just ramped up this economic nationalism a little -- too quickly and too harsh for maintaining global stability >> i can think of scenarios in both countries that would bring both parties back to the table quickly. you know, when push comes to shove, i think we'll see whether -- we'll see what that actually happens, it's in the best interest -- like it was in the best interest for both to take a hard line, there could come a time when it comes a time to claim victory with half measures or whatever. >> i think you're absolutely right. i think that the chinese are going to have to move and do some things. i think the trump administration was right to cite the problems there. i think the tactics they have used and the fact that they did it simultaneously with beginning

spats with most of our other trading partners is something this hindsight they will regret. but we'll see if they get it on a better path in the next several months >> all right, rufus, thank you we'll be touching base again down the road and i don't know who knows where we'll be by then but we appreciate your time today. >> sure. thank you. >> i think it's interesting that in this extraordinarily difficult period where everybody is beating up everybody else, one exception is have you seen any democrats criticizing our chinese policy >> no. >> no. they criticize everything else except one thing and that tells you that the country recognizes that china has taken advantage of the

united states and that we have weakly responded over a 20-year period and we're moving. but we have to move. >> very good okay, sam. when we return, does the rapid growth of the cannabis industry means other drugs are next we'll get a special preview of the new in depth look siinde the pop business and ask if this is just the tip of the iceberg. stay tuned you're watching "squawk box" on cnbc thanks to you, we will. aw, stop. this is why voya helps reach today's goals... ...all while helping you to and through retirement. um, you guys are just going for a week, right? yeah! that's right. can you help with these? oh... um, we're more of the plan, invest and protect kind of help... sorry, little paws, so. but have fun! send a postcard! voya. helping you to and through retirement. but we're also a cancer fighting, hiv controlling, joint replacing,

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welcome back to "squawk box. >> i don't - >> i don't know what's going on this morning but let me show you the futures. i'm going to do this in the most professional manner. it would be a first. the dow looking to open up higher by 220 points higher. the s&p 500 about 25 points higher the nasdaq up about 85 points. sam zell and i have having a little conversation on the side. >> hey, the truth is the truth, man. >> the truth is the truth. >> melissa lee is here what's doing on? >> she's investing in the booming cannabis industry, expected to hit $85 billion by 2025 thanks in part to

marijuana's new reputation as an all natural cure for illness, boredom or just about everything in between her special high risk, high reward, cannabis inc. premieres at 6:00. >> i feel like when i'm here, sam is all curses. that's the takeaway. all right. the cannabis industry is growing at a rapid pace and -- it seems like psychedelic drugs can be next even big-time investors like peter thiel have started to invest in the space. here's a look at why psychedelics can follow cannabis all the way to wall street. >> it might be the new cannabis. ♪ psychedelic drugs synonymous with the '60s. >> how often have you taken lsd? >> about four times. >> not to mention alarming side effects. >> people are said to have died by falling out of windows after

thinking they can fly. >> are now making a comeback in 2019, plant based psychedelics like magic mushrooms were decriminalized in oakland, california, and denver, colorado oregon is now considering a similar measure. >> free the spores >> all this as advocates echoed the same arguments that worked so well for the marijuana industry >> smoke some weed and smoke some more. >> including the most powerful of all there's more research on the medical efficacy of certain psychedelics than for cannabis just as it was for pot, investors are taking notice including billionaire peter thiel. the biggest and earliest backer of cannabis company tilray, he's now quietly investing in the medical psychedelic space as well which makes you wonder -- could psychedelic eventually follow marijuana all the way to wall street

psychedelics may be the future but cannabis say pot stocks are the best pet right now you'll hear why they think another cannabis boom is around the corner around the factor -- and the factors that can separate the winners from the losers >> this -- this has been done before i mean, you remember timothy leary and all of the -- you know, the electric kool-aid acid test and all that. from there therapeutic - >> yes, there's anecstasy based -- it was approved for ptsd there's purported health ben fits they have, compared to marijuana and cbd. this is the tip of the iceberg marijuana in the truest sense could be the gateway drug for legalization - >> are you talking about the lsd 25 or what -- all of those

different things there's mescaline. >> depends on what the treatment is for what disorder. >> amazing >> but opioids, ptsd. >> is this a conversation around a bunch of people who never tried any of this stuff? >> well, yes >> i tried one 40 years ago. and it blottoed me and i don't understand how anybody could possibly compare lsd or quaaludes to pot. i mean, it's just completely different risk and different impact. >> sure. >> it seems like it would be used for some type of intervention or a mental illness. you wouldn't want to go out and work - >> no, you're not just taking lsd. it's an open secret in silicon valley, they microdose because they think it unlocks

creativity. >> a whole new world. >> it's an old world too >> yeah. >> this was done i remember very well that, you know, all the beatles. everybody experimented and sort of had the -- see if you would -- i don't know. get closer to the metaphysical back then. i'm not convinced -- >> harry stiles said he was doing it to write music and he bit a piece of his tongue off. >> yuck. wow. >> shivers. >> that smarts all right. you're not taking -- are you going back to doing any of the other -- you have had some great specials over the years. you have had some great specials >> you're speaking about one in particular. >> well, you delve into the dark side there, melissa, with some of the stuff a lot of vices. >> i delve into what people are interested in. >> yes, you do in some cases they do involve certain vices. that's my only point. >> there's bitcoin >> great right. all right. we'll leave it there

i won't go further on this anyway, i thought you -- becky, i thought you were here to sit in. >> i'll stay over here. >> she's here for sam. >> here for sam. trying to get another one of those moments. coming up, a fresh look at the trade deficit. updated numbers are just a few minutes away we're one trading day now into the september, markets are seeing heightened volatility that can that mean for the fed d hebig decisions this month? we'll debate that when "squawk box" returns

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welcome back we have been watching the futures this morning and after a down day yesterday for the markets you are seeing a big resurgence today dow futures right now indicated up by about 228 points after losing over 280 points yesterday. s&p up by about 25 points and the nasdaq indicated up by about 80 points. okay coming up when we return, breaking economic data the latest trade deficit numbers. they are out after a quick break. don't go anywhere. "squawk box" returns right after this hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪

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welcome back to "squawk box. live from the nasdaq market site in times square. we're seconds away from the latest trade deficit data. let's look at the futures quickly. 226 now on the dow some of the best levels we have seen the s&p up 25 the dow is almost getting back

yesterday's losses got a little more to go. could have been much worse yesterday. down over 400 at one point the nasdaq is indicated up over 80 and the ten year is now -- wow. almost up to 1.5 which is above where the two year is. so it's not inverted rick santelli standing by at the cme in chicago he'll bring us the numbers the numbers. >> absolutely. our trade balance which most likely will be a deficit and indeed is it for the month of july minus $54 billion 5-4 billion. of course that negative is about $1 billion heavier than we were expecting. we're expecting the number a little lighter than that rearview mirror, slight recision minus 55.2 stands at 55.5. so we have lost 1.5 billion at least with reference to history. of course all eyes are continuing to focus on what's doing on with interest rates around the globe whether it's italy's dropping

rates or the uk or the u.s. of course new cycle low for ten year notes they went from over 147 to under 147 in terms of their closing yields that's all i really look at. intraday are exciting but what goes into the history books are closing and that was the lowest close since may -- actually since 2016 excuse me, from july of 2016 and also remember july of 2016 is no noteworthy for something else. that was the second of two double bottoms july of 2012, july of 2016 right around 137 so of course we're all going to focus in on that it does seem as though there will be a test it's just a matter of when andrew, back to you. >> thank you for that. steve liesman is here. he is looking very studiously at his -- >> i mean, do you guys remember when we ever spent any time within the international trade

data now very, very important economic and political data. i went to with the trade balance with china before that, i want to give you quickly the overall which is that exports were up 0.6%. imports down a little bit. and it may be that the reason why we have a little bit higher trade deficit is because of people trying to jump in ahead of the tariffs let me tell you what happened here exports to china fell 2.3%s and imports from china rose 6.4% so that kind of spike depending upon where -- whether or not those are potentially tariff affected goods maybe people are trying to get in ahead of these tariffs. i mean, we had the jumpiness in the trade data what i did is i looked at trade year to date very quickly i want to show you one way of looking at this shows the u.s. winning the trade war and what i looked at was the first half of 2019 versus first

half of 2018 okay, year to date through june. this is not today's data it shows that imports from china have fallen by $30 billion whereas exports to china have only falling by $12 billion. looks like a win, not when you look at it in percentage terms because the chinese imports are so much larger chinese imports are only down 12% versus u.s. exports down 19%. this is the problem of economics we'll talk about in a second on the one hand we're winning in dollars on the other hand we're losing as a percentage let's look at where the winners and losers are computers and electronics are down agriculture down 20% machinery -- i'm sorry, u.s. exports to china transportation equipment i think that's boeing and by the way the one thing to think about in the manufacturing data from yesterday and plus the export data i don't know how what's happening with the 737 max

figures into the data. a lot of the data boeing has a big influence on so we just don't know how to do that however -- >> they have their own problems. >> that's another issue so that's why transportation equipment may be down. but very important, agriculture and machinery is down. a lot of people say everybody is losing well, you can make your own determination from the data right there. >> all right, steve stay right here joining us to talk more about the economy and the fed's big month ahead is bin ya appelbaum. he has a new book called "the economists' hour." well come. >> joe, you would love this book. >> i don't think i need to read it. >> no, you should read it. >> you would love the book. >> this is your -- i'm living it. >> but economics is a science. right here. >> i saw it -- it's dismal, but it's not a science. >> the idea is there was this

revolution, a quiet and important revolution starting in the early 1970s where economists become a lot more influential in policy making. they really reshape the way that the government is managing the economy. and that has an effect on all of us it reshapes all of our lives >> for the better or the worse >> i think both in some respects there are ways in which economists have improved significant policy making but on the whole, one of the big consequences is that economists told us we should focus on growing the economy as much as possible not pay as much attention to distribution and that's been a big driver of the growth of inequality i think that has been really bad for us. >> can that be undone? >> i think it can be undone slowly when your problem is inequality, the solution is to start focusing on inequality and to make policies that are aimed at reducing inequality that's something we haven't been doing for the last generation an something to start doing. >> let's look at what's happening today and front of mind is this month of september.

it can be a scary time do you think this is a september to remember or one we kind of forget about >> i hope it's one we forget about. there's a lot of risk out there. but we have a lot of uncertainty about trade and it's putting a lot of pressure on the global economy. central banks are really wrestling with how much capacity they have to help. they're trying but it doesn't seem to be making a big difference and they don't have that much ammunition right now so i think there's a lot of reason to worry. >> mark grant has this very interesting theory that things are going to get crazier from here he kind of says all of the other central banks are really direct arms to the government they do what they're told to do by the governments in power there. that's why we're looking at zero and negative interest rates all over the globe, i guess $17 trillion in negative interest rates do you think that's why? >> i don't know if i'd describe the ecb as the arm of the government i think it has a mind of its own. but it's clear that policymakers are putting tremendous pressure on monetary policy

to be the solution and to really the only part of government that appears to be able and willing to address our economic problems i think there's far too much focus on monetary policy right now. and the problems are in trade and in fiscal policy and everybody keeps talking about monetary. >> when you say the problem is just inequality and not growth, it sounds like what you're saying is that the problem is not enough redistribution. not enough taxes -- taxes are too low and government programs and social safety net and those sort of things are not enough. so it sounds like what you're saying is because the economists urged or motivated politicians to keep taxes low and grow the economy that -- not keep taxes high and redistribute that that's the problem. >> i think they argued that inequality would not get in the way of growth and it turns out that inequality actually impedes economic growth. those with high levels of high

inequality experience slow economic growth over time. >> what do you think the role of the fed should be relative to the politics of the moment i'm thinking of phil dudley writing the controversial op-ed that the fed should be pushing back or at least not enacting policies that help the trump administration he then sort of backpedaled and the other op-ed -- there's been a back and forth on this what do you think the official policy of the fed should be in these type of instances? >> i read dudley's remarks as a cry of pain because the fed is in this difficult position right now. but i think the obligation has to be and the best way to demonstrate the independence has to do to do what is best for the economy. it is limited but it's real and trying to sort of play game strategy and figure out what trump is going to do in reaction it's not going to work over the long term. what they need to do is stay focused on here's the economy in front of us. if it needs lower rates it needs lower rates. if that gives the president more

room to go off and exasperate his trade war, you need to deal with that when it comes too. your job is monetary policy. >> do you think jay powell recognizes that as well? >> i think he does i think he's struggling with the optics of it it's hard to say that independence consists of doing what trump wants but that's where we are right now in order to demonstrate the independence, the fed needs to do what the president wants. >> what do you think the fed's reaction was to dudley's column? >> i have heard from many people that it made them really up comfortable to be -- uncomfortable to be cast in that light. even paving the possibility of paving politically was uncomfortable for them there. >> what is the right way to talk and get it right >> i think the economics has moved in the positive direction over the last generation we have more empirical research and trying to construct more accurate models of the way that people behave in the economy we have seen a recognition that

psychological factors play a big role i think economists are doing a better job to some extent. particularly in the academy of offering constructive advice i don't think that's migrated into the policies yet. i think they have a job to do educating the policymakers about the inequality and the need to address it. >> who are the false prophets that you're referring to >> milton friedman who dominates any room he's in even though he's the shortest person in the room one of the opponents once said you only want to debate him when he's not in the room because that's the only way to win the argument so he's this tremendously important figure in mid century america. i think the economists do have the greatest influence on modern american life and his message is simple he wants government out of the way and that's the solution to any problem. he's remarkably successful in convincing the government to adopt his proscriptions from getting rid of the fixed

exchange rates, ending military conscription his influence is vast and still underachieved. >> so stiglets and others they're true prophets? >> well, i think it's hard to say how accurate -- >> other places have tried their ideas. >> there are countries that you know have pursued different economic streams one of the favorite statistics look at france and the united states economy, everyone knows the u.s. has grown more quickly than france, but if you take out the top 1% and look at income growth for the 99% it's actually been much faster in france not just aggregate growth that matters. you have to think of distribution too. >> thank you very much for joining us great to have you here today mean time some news while we were just talking here, check out the shares of starbucks, they're falling right now. it's down 3%

they said it sees fiscal 2020 earnings quote below the ongoing growth model of 10% and the next starbucks earnings release is scheduled for october 30th this surprised the investors this morning coming up we'll go live to london for the latest developments on brexit and the uk's precarious political situation. then we'll head to hong kong for an update after the city's leader there withdrew the extradition bill that caused street protests. stay tuned "squawk box" will return

pressures to find returns and finding hidden risks this is solve it from jpmorgan asset management i'm here at the nasdaq market site with a global market strategist at jpmorgan asset management more companies are staying private longer but are there unintended consequences? >> it's because there's more private what capital and more and more money as in flowed inwho private markets because there's been a return premium there. >> what is driving that though >> i think it comes back tothe fact that when you look at public market returns over the next ten to 15 years, they're not doing to be sufficient to general rate the type --

generate the type of income that investors need if they're tapped out you're forced to play on the private side of the equation. >> also a concern though nontraditional lending which is growing more than half the market. >> we are seeing a lot of synergies between private credit and private equity which makes us a bit nervous you are seeing late cycle behavior in the fact of ebitda adjustments being a regular thing. the lending strategies oftentimes entail more risk and more caution is warranted going forward. >> thanks, david. >> thanks for having me. >> for more, search jpmorgan solve it online.

welcome back to "squawk box" this morning take a look at futures right now. ahead of the open, we are about 45 minutes away. looks like we have green arrows with the dow looking to open about 228 points higher. nasdaq up about 81 points and s&p 500 up about 25 points we're watching two big global developments closely. chris livesay is in hong kong where the city's leader has withdrawn the extradition bill that touched off the months of the street protests. first though, let's get to willem marx in london and the latest brexit developments i saw a lot of flashes coming out of parliament and the prime minister today i mean, new things since the last time we spoke update us. >> essentially, joe, what's happened over the last couple of hours, boris johnson is facing a barrage of criticism during his weekly prime minister's questions inside the lower

chamber of the parliament here earlier today and essentially what he was facing in terms of that criticism was this demand that he allow a no deal brexit to be ruled out. and that he answer questions about what a no deal brexit would mean for the public because his government has refused to publish some of the details internly in terms of the criticism of the opponent he's pushing for an election after he last night and looks likely to lose a another vote tonight they're seeking to block the no deal as a possibility because they think it's so economically damaging he says he needs it as a negotiating tool with the european union to try and wrest some fresh concessions out of them to get a deal through parliament after his predecessor theresa may failed to do it three times in terms of the possibility of a fresh election, that's very much out there but the opposition here in the uk is saying they won't allow fresh elections until no deal is ruled out. and because he needs a majority

to call for those elections and has lost that majority yesterday he's now relying on the opponents to allow him to go back to the polls nationally >> all right, willem, thank you. let's get over to chris livesay in hong kong on the latest on the withdrawal of that extradition bill chris? >> hi, joe, yeah, just a short time ago, the embattled leader of hong kong carrie lam announced she would withdraw the controversial extradition law that sparked off the three months of protests, protests in which we have seen hundreds of thousands, sometimes more than a million people turning out to the streets. terrified that this law would give china the ability to pluck them from hong kong and bring them to the mainland for extradition and for trial where they face a much more opaque judicial system. joe, back to you. >> very good, chris. thank you. andrew

we want to get back to our guest host this morning. sam zell, chairman of the equity group investments. you know, given that we have been talking internationally and about china, the one thing i wanted to pick up from the earlier conversation we had about sort of pushing on this and the point that you made the democrats have not really come out against the policies of the trump administration, maybe the approach my question is about the approach do you think the approach is right? and what do you do >> you know, i can't help but think about the army mule, you know they tell a story about the army mule, you know, how do you get an army mule's attention you whisper in his ear, but first you hit him over the head with a 2 x 4 i think that's what we're dealing with in other words, you know, the chinese are very adept at not -- you know, not accepting anything and so you have to hit them over the head and i think that's what trump is doing. >> how long do you think this plays itself out for i know you've been waiting

for -- >> i don't know the answer to that i mean, there's so much here in my opinion that's in china's interests to correct and there's so much interest in the u.s. to do something that i think that sooner rather than later people will come up and face reality i think we'll end up with -- end up with a solution that's dramatically better than where we are today. >> you know, people who are -- who spent time over in china say that the chinese get their back up, you know, they have pride on the line in this too how do you find a solution as somebody who's a made a lot of deals over time, who do you find a solution and make it look like face saving all around >> i have been involved in an awful lot of transactions and i have been involved in a lot of, you know, face saving scenarios. and the answer is if people decide that they don't want to be embarrassed, quote, and then

they won't be. and if they decide that they won't lose face they won't and i think that the issues are much broader and much bigger and the impact of what trump is doing to china is not lost you you know, among the most protectionist policies forever is sitting there saying, gee, are we next? maybe you are. you have to basically change the rules. the united states can't -- just like we can't defend the world and pay for it, we can't run a system where we run an entire economy for the benefit of other countries. >> people forget that, sam, that if trump said, all right, everybody over there remove your tariffs, we'll remove all of ours, we would do it. >> sure, in a minute >> so it is not the way it happened >> the american people today probably think that all these other countries don't have --

>> i know. i wonder why. >> because we had a philosophy -- >> keep ducking the reality. keep not acknowledging the fact that the u.s. has been subject to tariff, you know, terrorism for, you know, 50 years. the post world war ii reorganization was nothing more than a reorganization in which the united states took responsibility for the defense and the economics of the world >> let me ask you this to the extent the tariffs are considered by some a tax on the american public, how long can that go on if a deal gets done, is it a real deal? does it have teeth does anybody care? what happens in the markets? >> well, i think that, yes, i think it can be done number one number two i think people won't care because it will upset precedent as to what people are going to

scream about or not scream about. so i think it is doable. but it requires everybody in -- everybody on the same page everybody pulling on the same direction. and we have created an environment over the last -- since the end of world war ii where the united states took all the responsibility and the result has been relatively disastrous. >> given all the uncertainty around here now, what is the zell family doing with its money? >> i think the zell family is very conservative, very diversified, very liquid and it is very concerned. >> waiting for what? >> i think waiting is the wrong word i think preparing for what you think -- what i think are very volatile times, where flexibility is going to be the primary asset everybody has. >> even though you don't see a recession coming between now and the election, you think it will be a lot of volatility and the market will be chaotic.

>> without question. down 285 yesterday, up 220 today, down 300 tomorrow it has been going on now for, what, months. >> you're not somebody who is waiting for it to drop one or two or 3%, you're waiting for that moment it drop 10, 15, 20%, right? >> i'm not waiting for the market to do anything. >> okay. >> i'm waiting for the economy to, you know, use supply and demand to modify the demand. and modification of the demand leads to a slower growth and therefore opportunities to invest against the grain >> back in real estate or in other places >> i think -- i wouldn't make a distinction just on real estate. matter of fact, i think real estate is less likely to be benefited because it just is not having an oversupply scenario which is what ultimately makes real estate attractive

>> if you had to buy real estate now, is there a place you would buy? >> i think the answer is that we don't buy places, we buy buildings. >> right >> and so there is always a building worth buying. there is always a building worth selling. >> you say to yourself, right now, given the trends going on in the country, i like atlanta, for example, a lot of people think that's a hot market or -- >> i don't think atlanta is a hot market i don't think -- they may be hot markets in terms of activity, but both of those markets are markets with an enormous amount of supply that is going to basically dramatically impact the performance of that real estate >> what is a market that five or ten years from now we'll be sitting here thinking, man, we missed it. >> that assumes that the u.s. real estate market loses its ability to build when money is

available. and the reality is that money, when money is available, we will build and we have a lot more capability to build than we have capability to absorb >> sam's our guest host. stay with us we're going to be right back >> fencing with the fencing master. >> when we come back, we'll get you caught up on all of this morning's market action. and don't miss melissa lee's investigation into the booming cannabis industry. high risk, high reward, cannabis inc. it premieres at 6:00 p.m. eastern time here on cnbc. we'll be rhtac every day, visionaries are creating the future. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country. e-commerce deliveries to homes by the way, she's the it wasnext mozart.g day. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut.

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welcome back to "squawk box. at&t has named media boss john steinke to a number two role this sets him up to the successor to randall stephenson. he will serve as president and chief operating officer of the company, continue to run warner media, that houses hbo, warner bros. studio and the company's cable channels he's been ceo for 12 years and hasn't indicated when he plans to retire. >> he's a baby. >> he's still in his 50s. >> still a lot of time. >> a baby. a lot of things to, you know, put together a totally different at&t and need to see the fruits

of -- being born out look where we are on interest rates. might have been the time, pretty smart, at this point if the dividend is safe, at&t is trading at new highs, isn't it checked it out lately. >> any -- in the tea leaves, any reason to think that randall won't be there for another five, six, ten years. >> i have nothing which would suggest he's going anywhere anytime soon >> i don't either. i know that -- i know john stankey. he's a tall man. very tall man. very large hands when he shakes your hand, swallows it up which i think that is good for a ceo, right? right? firm handshake, big guy. but no time frame as far as you can tell >> no, not one i know about. >> has he played golf? >> that's a whole other issue. >> okay, all right >> how much time we got?

i can't find the clock up here. >> 20 seconds, joe. >> 20 seconds now. sam, thank you thank you for keeping it clean today. as far as everyone knows as far as people at home know. >> thank you, guys, for restraining me appreciate it. >> that was a restrain -- we'll all be back again tomorrow i have no idea what kind of show it is going to be tomorrow we can only guess. make sure you join us. "squawk on the street" is next ♪ ♪ yes, so crazy right now most incredibly your girl b ♪ ♪ your boy >> good wednesday morning. welcome to "squawk on the street." futures bounce, dow looks to open up 200 as hong kong withdraws that extradition bill. that prompted months of protests tons of corporate news from starbucks to wework, american eagle, alphabet. europe up about a percent. bunds selling off. ten year below 15. we get