>> 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. indicated quite a bit higher after the news that looks like the trade talks are back on for october with china dow futures now indicated up by 250 points this comes after a big day of gains yesterday for the market, with the dow up more than 230 points and the s&p 500 and the nasdaq erasing their losses from tuesday. so we'll see where things head as we get closer to the open the s&p indicated up another 26 points and already closed at the highest level since august 8th yesterday. the nasdaq up by 93 points, that's the indication if we open here the treasury market, let's see where the ten year yield is at this point looks like 1.52%, back above

1.5% two year just below that at 1.478% overnight in china, look at those stocks and you're going to see the nikkei was up by 2%, 2.1% in shanghai, market there up by a percent and hang seng closed flat and then if you're looking at what has been happening in europe with the early trading taking place this morning, you will see mostly green arrows there. the cac up by .9%. so is the dax. the ftse down by half a percent. >> cnbc has you covered for all of the big global stories that are moving markets today we're going to take you to hong kong for the latest comments from carrie lam. an update on the political crisis in the uk over brexit exclusive update on the tariff fallout for small retailers. let's start in washington now, with the news that the -- the big news that is moving the markets now, trade talks with china, set to resume next month. what do you got here >> the news breaking last night

out of beijing, the foreign ministry issuing a statement, here is the cnbc translation of the foreign ministry statement from china last night saying that they confirmed a phone call between leaders that took place this week and they say that officials have now agreed to hold the next round of talks in early october. that's expected to be in washington, d.c. now, look at the difference here between this statement where they say they have agreed to work together and take practical actions. and the u.s. statement that i got from a spokesperson for the ustr, a slightly different statement. they're saying the ustr saying lighthizer and mnuchin spoke with liu he. they agreed to hold meetings at the ministerial level in washington in the coming weeks in advance of the discussions deputy level meetings will take place in mid-september to lay the ground work for meaningful progress the u.s. statement more nuanced

than the chinese statement saying there is going to be two tiers of meetings, the deputy level is going to be the first tier that will happen in the coming weeks, and then if that lays the ground work for what they call meaningful progress, then they'll go forward with the ministerial level meetings, that could be in october the u.s. statement not committing to a specific data or a specific month the chinese statement saying that the meeting will be in october. so it seems like the u.s., if you read this, the u.s. side, mnuchin, lighthizer, a little bit more cautious here than liu he he's been leading the negotiations on the chinese side the u.s. side looks more reticent to commit to anything here. >> explain this, the motivation for being more cautious on the u.s. side? what is that about or to the extend you believe the chinese are being more aggressive. >> that's where you're into reading the tea leaves and beyond reading the tea leaves and speculation, we don't know why the difference is.

but i think it is striking you get chinese side saying october and the u.s. side not committing to october i pushed an official on that last night right after this news broke, and the official not going beyond at all what was in the four corners of the statement issued by -- >> i can tell you that the president thinks that china wants a deal very badly he'll tell you that. and in this respect, i think they're kind of like saying, all right, but remember april, and you had all these things you're going to did and you didn't do any of them. now you say you want to talk, fine, we'll talk, but it is -- if you're back to where you were in may, it is not going to be -- >> you think statement was as much about -- >> i think he's saying -- he's -- in his mind, he's turning screws, hey, that puts us past that october data, i think it is all coming true. that xi with the nationalistic feelings that will be around at early october in china, it

wasn't going to happen before that that gets us past that point where as eunice pointed out they're unlikely to look like they're, you know, changing or compromising or giving trump anything prior to that october -- >> notice neither side is giving us a specific date here. we're getting a month from the chinese side from the u.s. side, not even a month necessarily. there is wiggle room here for this to be a little swishy we were told that the meetings would take place in september and u.s. officials until yesterday were saying that they were still focused on meetings in september now we find out those meetings are going to be at a lower level in september and if that works, they'll follow up with a ministerial level meeting at some point there after both sides seem to be leaving a little wiggle room on the timing not clear what the u.s. side means by meaningful progress and laying the ground work for that meaningful progress.

what are the tiers that they have to achieve in those lower level negotiations we don't know at this point. >> they say lower level negotiations, on our side, who is involved in that. the last quote, lower level -- >> sounded like -- >> mnuchin, they let that meeting in china, what was it, a month or two ago. >> that would be a ministerial level. the ministers would be mnuchin, liu he and lighthizer. below that is staff. >> even if the ministerial level, you can't assume that any of these people are speaking for the two primaries. there are two people who are going to have to make this decision. >> and no mention anywhere of that the principle sitting down. >> right >> the trade war has been very tumultuous for everyone. and hopefully something good comes out of it. but in some ways i'll miss where the lightest comment can send us

up 300 points. it is like nothing happened and just -- oh, well, we -- but on the flip side, you can send us down 800 there are days where it is, like, wow, that doesn't seem like a lot we're up -- >> we spent a lot of time trying to figure out what is going on inside the negotiations. remember we were in france last week, spent a lot of time trying to figure out what the president was talking about in terms of two phone calls from china the president suggested those happened, white house didn't offer any details on who called who or what happened there that was enough to move markets too. >> letter of the law and the spirit of the law. maybe some overtures going on somewhere. and who knows what this -- how knows how positive this is. >> the interesting thing that happened yesterday, i thought, was this -- the big question around all this is could this trade war expand from just tariffs into a broader economic confrontation between the two sides. the president was asked yesterday if he was concerned at all about the chinese going after u.s. debt.

that is the treasury market. of their vast holdings of treasuries and selling those the president gave a long answer and which was interesting, but i think the important thing out of his answer was the president doesn't believe the chinese have the power to do that paubecausee believes there is enormous global demand for u.s. debt and the chinese wouldn't be able to sell treasuries. so the president is pretty confident here from his wording yesterday there is some guardrails on this it is not going to spill over into a wider confrontation that gives you an interesting insight into his mind set as you go into these -- >> we were worrying they were going to dump debt on 100 basis points higher across the whole yield curve. what are they going to do? rates go up. >> right >> it is a move by the chinese >> they could dump it into this demand >> i don't think they -- japan surpassed them already

>> appreciate it we're going to continue this conversation right now joining us to talk about the reaction in the markets, terry spat at cra investment management try to read the tea leaves, the market piece, and, by the way, the market gyrations, in board rooms across america, in big corporations and also small businesses, they're looking at -- they're trying to read the tea leaves in a dfrn wifferent if they have business in china, what am i doing? >> the same thing is going on in board rooms in china this is affecting both and i think both leaders are coming to the conclusion that it is best to get this behind us. you're right, it has got to -- for there to be progress there has to be give on both sides we have to get past the anniversary in september of the chinese government

so you need to get past that point so everyone can kind of begin to come together and give a little bit on both sides. >> terry, how are you playing this to the extent you are. >> to the extent that we are as joe pointed out, can have a 300 point move from any small piece of information and that volatility that has come into the market is creating such a state of confusion, between what the stock market is saying, touching new highs and the bond market sending a different message with the inversion of the yield curve. i think there is going to continue to be a lot of volatility not pushing chips on the table we're fully invested looking at that risk very, very closely. >> you're on a different side though >> i mean, i actually think things in the u.s. still look good i think -- >> from what i've been reading, you've been more skeptical. >> more skeptical on -- >> not just -- just broadly on what happens on markets this year. >> yeah. i just think that we're in a period where people are focused on the risks and not the fundamentals whenever that is the case, you

can have a long period where people just are not, you know, are not responding to the good news or responding to the negative news and it could be a decent period of time where we go through a process where everything that is -- >> you can get a china deal that will be -- you think that would be positive news >> china deal is positive, depends what the deal looks like this is a case where everyone gets excited and comes back and turns out it is some low level meeting that doesn't accomplish anything and everyone gets disappointed again you need to see a resolution of some of the risks. it doesn't matter what the resolution necessarily is. just needs to get to be finished >> if you think this will be as much volatility as you plan, why be fully invested. why not sit with something ready to go on the down days and -- >> i think a healthy dose of skepticism always makes a lot of sense. we're in a situation now where the bond market is shouting very loudly that they're expecting something very bad and i think it is a mistake to ignore that

so what i think is an interesting period of time, we're seeing people own bon bonds, own stocks for the income on that. with that type of environment, we don't want to be too risk on, but at the same time, you know, the trends are still positive, still a lot of uncertainty we're comfortable being invested. >> are bond investors smarter than equity investors? >> i think the difference in messages is something to pay attention to it is pretty -- they're pretty different right now. and they have been for a couple of months. >> we'll leave the conversation there. thank you, guys. >> thank you >> when we return, global flash point, we'll take you to hong kong where we have new comments from leader carrie lam new plans for weekend protests and we have a live report from london where the political crisis over brexit is escalating look at shares of slack. we'll talk more about the company's disappointing quarterly report that stock down by almost 13%. we'll bring you the first on

cnbc interview with the company's ceo. right now as we head to break, let's look at the biggest premarket winners and losers on the dow. looks like cisco is leading the way up 1.5%.

welcome back, everybody. cnbc's reporters are spanning the globe this morning to bring you the latest on the trade war on the global flashpoints. we're going to go to hong kong where new protests are being

planned for the weekend. straight over to our reporter chris who is standing by thank you, chris >> reporter: a dramatic u-turn for carrie lam, the embattled hong kong leit leader, announcig she's withdrawing the extradition bill that sparked three months of protests sending at times more than a million people to the streets here in hong kong. however, it is too soon to say if this will be enough to nullify protesters the news yesterday buoyed markets here in hong kong. the hang seng up nearly four points investors might be a little too optimistic just hours after lam made the announcement, protesters were back on the streets, saying, hey, we got more demands specifically they went in front of a police station and said, you've got our cohorts who are locked up inside of here, other protesters, more than 1,000 since the beginning of this protest movement, we want an

amnesty for all of them. that's not all we want you to step down, carrie lam. so this thing seems to be far from over. there are more scheduled protests coming up ahead in the next few days, next few weekends ra right now this is not enough to satisfy this protest movement. becky? >> chris, thank you very much. again, chris livesay. flashpoint in the uk new developments in the political crisis over brexit willem marx joins us with more good morning >> reporter: hi, becky boris johnson is zero for four this week when it comes to parliamentary votes. last night, not only defeated on the idea of blocking a no deal brexit for late october, something that opposition lawmakers wanted to see happen, he also then in response to that called for a fresh election and once again could not get the required number of votes to push that through that leaves him painted slightly into a corner. the opposition leader jeremy

corbyn saying he's not prepared to grant boris johnson a fresh election until this legislation that is currently working its way through the parliament behind me to block a no deal brexit in november is finalized and given the queen's approval we could see an election date being set, but unlikely to be until at least the back end of october, perhaps even after that, following, of course, that very, very crucial october 31st deadline that still remains in place and has frankly some currency traders nervous when you look at the pound over the last 48 hours, we have seen it strengthen significantly as that threat of no deal has slightly receded. but a lot of people i'm talking to saying it is not entirely off the table, not in the long-term. >> one of many things to keep watching willem marx, thank you. coming up, next, we're going to talk about the trade war fallout. an exclusive report on the impact of the tariffs on some small american businesses.

mark mobius will join us to cover the volatility in the markets. he has interesting thoughts about low interest rates and equity prices. i think it may be a keep it simple stupid idea, right. stocks may -- that helps for us. "squawk box" will be right back. when it comes to your customers' expectations, there's one thing you can be sure of. they're changing by the nanosecond. that's why cognizant created a unique engineering approach

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>> reporter: that's right. believe it or not, more than 98% of u.s. retailers employ 50 people or less, which means about 40% of the country's retail employees work for what is considered a small business this year this is united leg wear this company does have a thousand people employed directly, 200 people employed indirectly around the world. annual revenue of 500 million. it designs, manufactures and licenses leg wear and accessories for brands including puma, champion and sketchiers. it manufactures in other countries, china is the biggest. >> we see that the tariffs are going to inevitably drive inflationary effects in the u.s. consumer base as well as price increases at retail. and it is going to end up slowing down capacity needs, retail needs, retail selling and in turn will decrease our ability to build our employment base and continue to grow our

employment base in the u.s >> reporter: gold metal international is an accessories wholesaler, 50 employees, manufacturing in ten countries china also a significant portion of its sourcing. >> this is a family business, third generation, my son is actually overseas in southeast asia at the moment and he has been here five years. he got married three years ago he's having their -- they're expecting their first child in december and the government is trying to put us out of business. >> reporter: both united leg wear and gold medal international testify in washington, d.c., hoping the government would reconsider the tariff policies. back over to you. >> thank you, courtney reagan. sometimes we forget we think walmart already put everyone out of business, but they haven't. we need to take this into account. thank you for that report. >> okay, coming up, more on

"squawk box" this morning. big story on wall street when we return trimming the fat at goldman sachs, a new report out saying that bank the culling its upper ranks. the partnership, we'll tell you what is behind that move right after the break. and we'll head to a break, quick look at the s&p 500 winners and losers through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats...

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♪ if you close your eyes does it almost feel like nothing changed at all ♪ welcome back you're watching "squawk box," live from the nasdaq market site in times square. >> good morning, everybody watching the u.s. equity futures at this hour they jumped on word that the u.s. and china are expected to hold trade talks next month. check it out dow futures indicated up by 264 points, that comes after a gain of more than 230 points yesterday. so you are look at the markets being up for the week, potentially, if we were to close at the levels we're looking at

right now or even open at them s&p 500 up by 27 points. the nasdaq up by 94. >> a new report from wall street journal says that goldman sachs' partnership may be shrinking according to the article, a dozen goldman partners may be announcing departures in the coming weeks joining us to talk about what this means, bethany mcclean, host of the podcast making a killing. also a cnbc contributor. i guess i should still -- when i hear goldman partners, i should still think, whoa, you know, wow. but ever since they -- the change from a partnership to publicly traded, i really haven't the same -- i haven't felt the same way about what it would mean to be a partner. >> there is that and then there is the financial crisis, right and the transition to being a bank it is just not the same for them anymore. if you think of the story goldman sachs, it was a trading powerhouse and that business has never come back since the financial crisis and now goldman is trying to

remake itself is a consumer and midtier corporate lender, sounds like everybody else, right nothing sexy about it. >> used to mean if you were there before, then the converter -- you had $100 million, did it not? that's why i still think, we go, goldman partner -- >> i think by culling the partnership ranks, they're trying to bring back mystique to the partnership ranks. >> you think it is a culture or we trim the expensive older people. >> it is a culture thing, an attempt to spin it as a culture thing, looking like this is something you can aspire to. it is not the same firm. those days are done. >> that's the big question >> your take is that david solomon came in and went, wow, i can make a lot more money if i don't have all this -- >> a margin issue. you have a lot of -- i think

there is probably like an age discrimination suit waiting to happen here because -- >> are all these guys leaving, really, high paid or -- >> no, used to be that you would retire -- you would leave goldman sachs when you're 45 years old, 50 years old. >> work really hard and have -- >> that's the problem, you make less money and you want to stick around because there isn't any place else to go anymore they were the house. as in the casino the new businesses they're pushing into, they're one of many with no real advantages so just think about that and what a drastic transformation that is for the -- >> it creates more stability a big power trading house and have a bad quarter or bad year or the market goes bad and you're not on the right side of things, there is a lot of volatility. >> there is another great piece recently on how in debted the middle class is and as you look at firms like goldman pushing into lending, to people, you

just wonder without a credit culture of managing the losses, without a small culture of lending to people, right >> what do you think -- the folks that are leaving goldman sachs currently in this new round, are we going to see this goldman diaspora of vintage group that all of a sudden spreads out to all sorts of other industries and places, are these people hirable and now the most attractive people in town, not hirable and goldman brand around them. >> i think people are still hirable. what is interesting is you are seeing at goldma other banks. that never used to happen. that's a mark of a change. but you're seeing people leaving for private equity and for hedge funds. i don't think there will ever be any negativity associated with being a goldman partner. >> this goes to the culture piece, you have young people bumping up against this partnership where nobody can really get into it, and nobody

can even move up the ranks because everyone is just sitting there. they have been sitting there for the last decade. post financial crisis. >> goldman expanded the partnership, made it bigger. some part of that was an effort to make compliance functions as important as the trading functions. there is a sense that the partnership got bloated. so i don't know that -- i think this is an effort to bring the cache back to it. >> what does everyone else see this thinking now, morgan stanley, are they thinking, wow, our profitability isn't what we like it to be either >> i don't think anybody figured out what they want to be in the years since the financial crisis, you have firms trying desperately, everybody is doing wealth management, everybody trying to move into lending. the investment banks of old are gone >> you think lloyd is glad eds out on geffen's yacht, hanging out. >> i think lloyd timed his exit well, yes. >> hanging out with katy perry. >> yes >> instagram now.

>> i saw that, it is everyone where. >> that made it on to twitter. >> it is everywhere. he's got a -- i don't think he can wipe grin off his face with him -- >> kind of weird. >> the muckity mucks giant squid. >> i think he's got a tough job. >> all right thank you. bethany. coming up, investment guru mark mobius joins us to talk the global economy and where he sees the opportunities for money to work that's next. as we head to break, a check on the dollar still worth 100 cents. when did you see the sign?

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welcome back our top story this morning, negotiators from china and the u.s. are reportedly set to resume talks as soon as next week u.s. futures jumping on the news up 263 points again this morning. solid gain yesterday as well and we have the s&p indicated up 27 and the nasdaq up 95 joining us to talk the state of the global economy and eamericaeamericamerging markets is mark mobius you've been on a couple of times, recently, on different shows, different places i've seen you, i'm harkening back to some comments i saw you make about just where global yields are and the global bond market is and you were making these comments at the same time that it was, i guess we had just inverted and the recession talk was running fast and furious at

that point and we were looking for -- looking into the abyss and really looking to see what is going on that is causing so much angst and trepidation and you just were simply saying, i think the equity market is going to do well because interest rates are so low and it was, like, wow, almost seems too simple do you still feel that way >> i still do. in fact, i feel more strongly about it now because people are talking about treasuries going to zero interest rates so if that's the case, where do you hide and what i think is people will start looking for yield, companies that have dividends that pay a yield that's one thing other thing they look for, for safety, given what is happening between the u.s. and china, they're going to be looking for gold so i think those are the two places where you have to hide so to speak from the current situation. >> okay. let me just tell you how i would worry about that

the zero interest rates are forecasting some type of global slowdown so all the big yield stocks, businesses are going to go in the tank, not going to be able to cover the dividend and whatever you made in yield you're going to lose in principle when the stocks go down to recession lows so that doesn't make sense why won't that happen? >> that's right. i think most of the stocks will be in the scenario you just described. but there will be stocks that will continue to make money. i'm not saying that growth is going to be huge, but continue to struggle along and pay dividends. there won't be many, but there will be stocks you got to identify which is what we're doing now, we're looking very closely at which companies can survive this kind of global slowdown. and, by the way, i don't think it will be universally global slowdown i think some companies will continue to do well and some

countries will continue to do well and those are the ones you got to identify. that's why it is kind of a free for all now. we're looking everywhere where we can find these kinds of companies, it is not going to be easy. >> anything we're doing is with the backdrop of trade tensions with china and really around the other countries as well for the united states. but you've done a lot of traveling to china, a lot of business there do you -- the latest news today, that -- back to the negotiating table, do you think there is ground to be given on both sides of this? will china give ground we will give some ground, come to something that is mutually beneficial at some point >> i don't think anything will happen anytime soon. you've got a number of factors at play here don't forget hong kong hong kong is very, very important. and you can see that some of the congressmen in washington are really concerned about what is happening in hong kong

if this gets worse and for some reason the chinese move into% hoppi hong kong, you can see the u.s. breaking the tie with hong kong, which sounds like enormous gamble, but this could happen and that means that you have a -- one big market going into the doldrums i think we have to watch that situation very carefully, very complex, but it is very, very important to understand the strategic battle that is taking place between the u.s. and china. >> i'm sorry, can you just go back and say that again. you can see the u.s. breaking ranks with hong kong, meaning what we would say never mind, hong kong, forget about it, we're more concerned about trade >> no, because what happened -- you must remember the u.s. has an act which gives hong kong certain trade and investment benefits if the u.s. congress decides, by

the way, that act is dependent upon hong kong being independent and not governed by china. if that is broken, then the congress might pull back on that act, which could be very, very significant in terms of what happens to hong kong so the whole picture of china/u.s. relations is tied up not only with trade, not only with international property theft and all the rest of that, but also with hong kong. hong kong is the epitome of what the u.s. wants china to be and if they move in another direction, then a lot of congressmen in the u.s. will be quite unhappy. we have to watch that very carefully. >> mark, why would the bond market and gold be positively correlated is it usually sort of the opposite, you look for inflation

or, i don't know, i guess currencies are somewhat questionable it is not implicit that you would think that zero interest rates would cause you to buy something with no yield. >> the situation now is that with the interest rates going down to close to zero, even minus, then where do you put your money if you look at your economic, political environment globally, so you rush into gold. the other fact, of course, is money supply what is the money supply globally who knows? nobody knows what it really is simply because you have the cryptocurrencies, you have all the countries printing like crazy in order to bring the interest rates down. so i believe a lot of people will think, wait a minute, i'll not getting anything in the bank anyway, why don't i go into gold as a safe haven, and then look for stocks that are paying some good yields, or some reasonable

yield. i think that's the direction that we're heading. >> do you think that there are cryptocurrencies that have been valued like digital gold, do you think bitcoin has inherent value? >> if there is a cryptocurrency that is really backed by gold, and that is -- there is a meaningful agreement and some kind of modern thing of this connection, then this could be quite interesting. >> that would be -- that would be a no then is what you're telling me there are people that think that blockchain itself imbues the asset with inherent value, why they call it digital gold, but i mean we seem to be okay with a lot of fiat currencies not backed by gold i don't know i guess it is the full faith and credit of the government but nothing is backed by gold

anymore. etfs, i don't know why would -- >> that's right. >> if you needed something backed by gold, why would you have any faith in any fiat currency then? >> the bottom line is there is a whole generation of people that have faith in the internet they have faith in these cryptocurrencies that's all it takes. the reason why people believe in the u.s. dollar is because they have faith that with dollars in their hands, they can buy something. you can buy something and you believe that to be the case, it is fine. but i think people are going to begin to realize these are very, very risky situations and, by the way, i believe blockchain is a very high risk situation a lot of people say, blockchain can't be broken into no, it can be. anything that is created by man can be broken into and it could create a big crisis so i think we have to be very careful with blockchain. >> and, mark, very quickly, you said look for stocks you think have a reasonable dividend

what is a reasonable dividend? any names you throw out? >> now i would say, you know, if we can get 2%, 3% yield, that's great. number of stocks that do better than that, but that would be a reasonable yield to have >> thank you for your time it is great to see you when we return, slack posting some mixed results yesterday that stock dropping after the company's first public report. we'll talk to two analysts next about where it goes from here, including one major bear on the stock. later, the ceo himself, stewart butterfield, his first interview since the direct listing back in june you don't want to miss it.

welcome back, everybody. slack recently broke below it's $26 listing price in after hours trading after the company posted weak bottom line guidance.

joining us from the company and dave romanoff an analyst at morningstar, gentleman, welcome to both of you ricci i know you have been neutral on this stock before what do you think after hearing the comments last night? >> thank you for having me i'm neutral on the stock i thought the results were solid. there the a lot to like out of it we saw growing momentum with large customers. i think we are talk about the revenue deceleration, once you had just for one-time factors, it wasn't that much of a deceleration at all. and we're starting to see kind of early evidence of traction outside of technology companies, which had been a concern of mine that this is a mitniche market d commerce you would assume would

not be slack customers all the met rirics are pointingn the right direction. there is no reason it should be trading down >> dan, you have a bear, have you 2675 for the stock maybe some of the biggest surprises that the company didn't beat the expectations it set when it was first launching as an ipo, what did you think about that >> i think it's difficult when are you newly listed to come out of the gate and maybe disappoint investors a little bit if are you not beating and raising in a clean manner, i think investors will have a tough time with that, especially when are you one of the most highly hyped up ipos or direct listings in this case in the last few years so i just think that's a tough setup for them. >> it's a tough setup, maybe it means they're not used to playing the silly game they can play to step over. >> i think actually the ceo

stumbled a bit when asked about the service outages. i think they're doing a fine job. i think it's more of a learning exercise for them. i think that they'll turn it around and address the little issues that they had. >> rishi the biggest question is what microsoft is doing, they're the biggest competitor they show they have strong pickup maybe that's a bigger competitor than people anticipated. what did you think from that perspective, what would you like to mary from slack to clear any questions on that? >> my take on it is microsoft put out some numbers that are impressive let's take a step back and remember microsoft teams is given away you get the cheapest version of it you get teams for free what they've started doing is having it start any time you boot up your computer with microsoft lows when they put out the daily active users, when you say they're bigger than slack's 10 million, i think the more

important metric is the slack you see more than an hour-and-a-half of active usage on slack every work day. i would be very shocked if microsoft teams comes close to that they have a huge advantage ahead of teams. >> what do you think of slaing >> i think the big question that behind that is the traction outside of tech. if we see more big deployment itself like we saw at the fortune 100 finishes serve, then i think this has the potential to be the next billion dollar plus or multi-billion dollar status company then the stock is a lot more than today >> that is a big if. there has been five $1 billion companies in history >> hey, dan, are you not as bearish sounding when you are talking as your $14 price target s. do you think this company is in a position to really make something of itself? just explain $14 price target what didn't sound like a truly pessimistic take on the company? you know i think that's a fair

assessment at morningstar, we call that a fair value estimate. the problem we run into is we're an roic model, so, you know, i'm looking at what we're calling an economic mode. this is a newly listed company, so i'm not sure there is a giant moat here yet. there are definitely signs of positive momentum and strong adoption, the metrics while decelerating, we are generally good so to say i'm bearish is maybe a little misleading. i think i was probably among the highest estimates for the quarter, which we don't emphasize so much. it was a good quarter by them. i would say though that we do have a little concern that yeah microsoft is giving teams away for 43 that's tough sledding. so, for example, last night when the ceo was saying we're not as concerned about monetizing and converting our free users to pin users, i think that is a little

stumble. i think investors don't necessarily want to hear that. if you are concerned about your 5,000 free users, microsoft is on 250 million desk tops, so that's a pretty big funnel you have to overcome. >> by the way, folks, don't miss our interview with slack ceo stewart butterfield coming up at 8:00 a.m. eastern time much more to come, presidential candidate tom sdeyer will -- steyer. a fascinating conversation former house majority leader eric cantor on his way to the set. two big hours ahead on "squawk box" in a in a moment. rush shy every day, visionaries are creating the future.

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>> announcer: live from the beating heart of business. new york this is "squawk box." good morning welcome back to "squawk box" here on cnbc i'm here with beck question quick and andrew ross sorkin in studio, eric cantor, a former congressman from virginia formerly vice chair. you were a majority leader weren't you? >> a long time ago >> there was a majority back then. >> right >> there is now too. >> there is now, too >> a different kind of a majority >> yeah, nice work nice work with your majority, no what can you say these are interesting times? >> you know there is an election coming up again? >> interesting times are i spent a few days in london, majorities come and go, that was something to behold. >> do you think this majority will come and go, too?

>> the -- in washington or - >> new york in london. >> boris johnson, how is that honeymoon going? how long was trump's honeymoon >> there was no is up thing. >> it was like negative interest rates. the negative, the night of the election his negative honeymoon started. >> before le got there. >> before the votes were actually n.bojo, i thought he had a lot of power, support, i thought, he's got the tame fate as teresa may so far or joe biden would say margaret thatcher. >> lit come to an elex right. and i -- election. right. and in that country they have a thought to sort out. they don't have a constitution >> i said that yesterday, we are willing to license out our constitution, aren't we, for a fee? why doesn't everyone use our i mean you can get it on microsoft docs, send it up to italy for

starters i mean, c'mon. what happened to the futures there they are 260 points nasdaq up 90 what, andrew i'm going to bring you the headlines as we speak right now. >> nobody else can do it. >> nobody else can do it some key economic reports coming out this morning as investors try to figure out what the fed is going to do next, of course in just over an hour, we will get the august adp report to show the u.s. economy added 140,000 jobs at last month shortly after that we get reports on jobless claims and productivity we should tell you the shares this morning of slack are under pressure they didn't report a smaller than expected loss for the second quarter its projected loss for the current quarter is lork longer than wall street is anticipating the wall street ceo will join us live, stewart butterfield. you don't want to miss that, the a headline that probably caused

a few double takes, it said, brexit, johnson resigns. but it was not british prime minister boris johnson who resigned, it was his brother, a member of apartment, joe johnson is stepping down for junior minister from parliament as well he says he is torn between family loyalty and the national interest pretty interesting >> how about that for a brother? >> joe johnson has been if favor of a second referendum on britain's exit from the eu so i don't know what happened at the family dinner table in that family at the moment. united states and coin have agreed to return to the negotiating table in washington. this time face-to-face eamon javers joins with us more. this is the reason we are looking alt futures up by 250 points this morning. what happened and how do you read the tea leaves? >> good morning, becky, you need to pay attention to the nuance between these two statements we got last night from beijing and washington slightly different statements. first the chinese side >> that came in around 10:00 last fight east coast time

they confirmed there was a phone call between trade negotiators and the u.s. a and the chinese side they said officials have agreed to hold the next round of talks in washington. in early october and the chinese said the two sides agreed to work together and take quote practical action. but now look at the u.s. statement this coming from the ustr spokesman to me late last night saying investor lighthizer and secretary mnuchin spoken with vice pre people liu he. they agreed to hold meetings in washington in the coming weeks, deputy level discussions will take place in mid-september to lay the groundwork for meaningful progress the nuance there, becky, that the u.s. side is not exiting to that month of okay time frame, they're saying there will be two tiers of meetings, deputy level first and if those quote lay the groundwork for meaningful progress, then you get to the

progress, these folks would be meeting face-to-face to hammer out any deal what's the pressure to get to those ministerial talks? maik maybe both sides are leaving it deliberately vague here to side if they have enough to move forward or not it's a hereto approach. >> that makes sense when you consider the last time around mnuchin and lighthizer found out nobody had budged on anything. >> right. >> i guess fool me once, shame on you, fool me twice, shame on me >> right of course the first tier, the principles, itself, at some point in order to finish this, you got to get the leaders to hammer out something and sign it so we're a long way away from that but i think the markets saw this overnight as a positive. just the fact the formal talks

are ongoing, there is discussion all that seems to be encouraging to the mark. even though we don't know exactly where all this is headed at this point. >> eamon, great to see you >> for more on u.s.-china trade tensions, let's get to our trade host, eric contar and a public u public strategist. let me start with you eric in terms of the business at mobius and the overhang of the trade wars >> i know there is a lot of talk and market sentiment out there with the market volatility caused by the trade talks collapse and start and restart but i tell you in our business, we do see maybe there is an elongation of time that it takes from deal announcement to closure on the larger cap deals. but you know we play very heavy in the mid-cap market, sponsor-related activity

right now the things that have been in place for mna in that arena are still in place him you think about it right now, you got technology driving disruption and you've got now boards thinking about are there companies well positioned you've got a situation in the sponsor community where maybe before there were so many private equity and all turning to managers. you have family businesses that may have sold every 30 or 40 years. you now got time tables at three-to-five areas where these businesses are turning over. you add on to that the access and availability of capital and we also see actually the issue of activism. mna has become a big component when it comes to activism. listen, the year started out probably slower than we would have liked but really we are seeing an uptick in activity now and hoping for a strong -- >> you look at a volatile market >> but again, it just depending

on where are you looking but i think that such a key driver to this the large caps are not as rate sensitive. we know that again in the mid-market, the strength is about the availability and access to capital. it's about this constant churn, if you will and so -- >> you mean the private equity, it became a hot potato >> listen, think about it. like i said before, these used to be family businesses that were built up over decades and now you know these are businesses that are bought and sold they are made more efficient they produce more to the bottom line, so right now, we feel and our activity is indicating that still there is a lot of confidence around the mid-market, while you got these macro-trade issues that are distracting the public equity. >> specifically with the china deal, your comments on it, when time passes, maybe their some opportunity for something to happen, but i'm not sure you see

any real change since that blowup in late april at this point, is there any reason for optimism that we're further along? >> well, i think that's fair so with the headline overnight, for example, that's relatively low quality information. because what we've seen since may 5th, which is when the deal really broke down along some real meaningful key issues is that there have been plenty of talks and plenty of escalation so it's impossible for us to know exactly what's being talked about. but the pattern of evidence is both sides are talking both sides are escalating which suggest the key issues when tariffs come off, how to enforce intellectual property protections, over what time frame? there hasn't been a meaningful progress there i think what we want to see to take the headline overnight, it's a high quality piece of information that makes you bullish is some type of progress at least on their action that would tell you that that's

happening behind the scene. >> who is going to want to make a deal more? >> i think it really depends on how this plays out so for example in our view i think the frame right now both sides can see the payoffs to escalating as cooperating. that's why i think this is going to escalate to the point that the announced tariffs we have so far are going to go on until the payoff is changed if, for example, the economy shows material weakness, financial market. >> who's economy >> i mean. >> so which one in your view, which economy is going to take it on the chin >> they both r. they both are. no, so their short of a short term and the long term and the short term, because the u.s. doesn't change with china. it's acute there first it's felt in great deal. it takes time to travel to the u.s. i think the conduit is corporate confidence lower capex lower. >> michael stocking is -- there

you are. oh boy, i think honestly someone fell asleep in the control room. >> you talk about the payoff, though i think that that calculus made change as we round the corner to the election it really, and that's where i think you know at some point now we've got a much stronger economy than most because of our consumer but at some point, are we robust enough to be able hand testimony acceleration that you talk about? that's my question >> yeah. >> if we just kept and steady where we are, maybe we can handle this, the question is, are the consumers going to start to react negatively if that acceleration occurs is. >> that's a function of the labor mark we seen in the data, capex is starting to come down. we started to see growth in labor hours, work starting to come down. we haven't actually seen layoffs yet. that's the obviously trigger for how the consumer behaves differently. our economists view, we're kind of close to the press this year.

a couple more escalations. i think that puts us clearly into global growth recession territory and flirting with u.s. recession territory for 2020. >> thank you, michael. eric, you will be with us for the rest of the hour i want to see where you stand. you are a big time wall streeter now. so now you got a horse in the game for business. so you probably -- >> that was a part of my issue i always had a horse in the game >> then when you were a republican, you were a classic republican who hates tariff and loves free trade so you have a lot of reasons to fought like what's going on. i wonder if you think it's something that needed to be done are you patient with what president trump is trying to do? or do you think we need to get out of it? it's ill conceived and we need to get out as soon as possible in a nut shell >> i have said before right in this table that we should be taking on china and he deserves credit for stepping that fight out. >> i hear a but coming >> but i don't think all the other trade spats that are

attractive to someone and people at the white house. >> canada, mexico. >> right. >> let's get usmca done. i think speaking to michael and the issue of acceleration on the trade front with china, if at least you go and put that usmca to bed and say, hey. >> it's not the administration >> right but the administration can go in and say look i know lighthizer from what i know is doing a good job and pelosi straight up on getting this done. >> no bes coming you can do oncoming, it depends, but it's impossible to really hear won u one coming, isn't it? >> coming up, when we return, techs under fire, over 30 attorney generals behavior and potential anti-trust violations. wl scthnd so much more after the break who's dog is this? it's my special friend, antonio.

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youtube's private settlement with the trade commission and other 30 attorneys general with different states tony, it's great to see you. >> thanks for having many e. >> let's talk first about the settlement with the ftc. that's a big deal it went directly to youtube and the relationship with advertisers. what happened? >> yeah, the federal trade commission finally acted on years of complaints that youtube was improperly checking data about children under age 13. remember under federal laws, kids under 18 have special protections. you have to have special permission for serving them with targeted ads and the feds found out they were fully aware and used that fact that is a way to entice advertisers and entice brands but didn't check the right boxes with respect to kids' privacy laws so we saw a $117 million fine and penalties there. >> will that change the way they are reaching out to kids the way

they are dealing with advertisers tant is that anything that will potentially hurt their bottom line is this a one-time deal you pay the fine and move on >> the thing is how they change their business, google shouldn't be collecting this information. >> in a way that hurts the bottom line? >> i don't think it suffered from a $170 million hit. that's two days worth of revenue for a company like google. the final loan wasn't a whole lot. it will be interesting to see what this means for google given the fact that so many toy brands and telephones use it to audiences and targeted ads are more lucrative than texttual ads alongside children's content >> the states attorney general that's a different situation these are 30 states attorney general, bipartisan, both sides of the aisle who sound like they are coming together to not only target google but many other big technology companies too they don't like what they see in

terms of a monopoly and they don't like what they perceive to be as bias what is this going to mean what is happening behind the scenes >> yeah, right, the states are concerned about the tech space it's not just the tech space the feds are doing the same. we're expecting to see an announcement from more than 30 ags, democrats and republicans alike, targeting big tech with anti-trust concern and opening an investigation into google so what this means for the company in the long term remains to be seen when have you both the states and the philadelphias and bipartisan interests if anti-trust and an investigation into a company, it doesn't nicely mean a good thing i think the challenges are just beginning. >> eric cantor, the former majority leader. eric, we talk about how nothing ever seems to have gotten done in washington. it's a situation which seems to me is bipartisan. >> i think this the an issue

that bipartisan, there are different incentives for different sides to sort of go after big tech on the one hand, it is on the static side the motivation is they believe big tech allowed the russians to come in and mess with the election. on my side of the aisle there is a live allegation that there is some type of curateing if you will or excluding conservative voices so again >> and that's enough of a nuance there that maybe the two sides don't come together. then you have issues like privacy. >> that's my points. those two issues are i think are mismatched there are issues of privacy. i keep coming back to the point on the privacy fact is that most people will go click through the ice even if you now are getting the european regulatory face on your apps if you travel abroad people just click away and say, fine, go take whatever information you got. they don't quite sort of think

that the trouadeoff is a bad thn for them people get access to a search engine or an app >> fear of missing out. >> we haven't gotten to the point people say, hey, i want to own my data, i think the point where you c'mon advertise your data is a point where maybe you can see balance reintroduced into this equation. >> what should we watch for next week with the state attorney general? what itself the next shoe you think is waiting to drop >> i think the first thing is to watch exactly what the states point their fire at first. because as eric cantor and others have pointed out here, there are a lot of issues, whether it's bias, privacy some are explicitly anti-trust the states do have a lot of power in consumer protection to go very big on a company like google i think the second thing to watch is to watch the justice department and the federal trade commission, which have opened their own broad reviews of big tech it will be interesting to see if they partier with the states or go out alone and how that

evolves in the coming months. >> i want to ask you, ags, all of whom have different motetations, some are strictly political, they want to say they're going for the jugular, there are others that actually want specific things from a google, meaning they want to be able to show they've settled for x either dollars or something else, you have the doj and everybody in washington. that's almost a different issue. there is a political element to that, of course. but i would like to think there is actually maybe a more merit-based version of what's going on there, maybe. how do you think about that whole stew >> right i think they're complimentary. the states are going to probe potentially a bunch of issues. by the way, there are some states that have been looking at google quite some time now google one of them before josh hawley became a senator. he was leading an indiana trust within the state of missouri so those pieces are certainly slim folding. the fed versus taken a much different approach

the justice department, for instance, had announced this broad review of big tech it said it was going to look into. search eexaminers and advertising and social >> that pretty much matches one facebook, google, amazon and so forth. even though they didn't mention those companies by fame. so i this i the feds will tell you they will go where the facts lead them, whether it's in the direction of visual advertising or something else so there is a lot of activity now. all of this rhetoric is finally leading to something among regular states and general >> thanks for having you. when we come back arc venture with martha stewart wart a future of cannabis infused products and much more. jay wells is in montana this morning where fake meat is no laughing matter for the ranchers jane. >> reporter: hey, becky, yeah, beyond meat, that improbable momentum and the beef industry is taking notice up next from montana, ranchers

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front lines. really we have an actual front line for that battle. jane. >> reporter: for some it's the back line. it's sort of a david and goliath picture here because beyond meat is going to have what maybe $240 million in revenues this year as the beef the cattle industry the usd estimates a market value of $67 billion beyond meat, and impossible burger have so much momentum and ranchers are taking notice they have several beefs. beef number one, they told me land use, he uses less than tenth of the land to provide the same amount of protein that cattle use wyoming rancher says all land is not created equal. >> 90% of the land that is grazed by cattle is, has no other, no other productive use >> reporter: have you tried a plant-based meat

>> i've tried them all yes. i have ro. so what do you think >> so i will say lost is the science of truths. those products are getting better. >> reporter: but california cattle rancher kevin kissner has a second beef, it's regulated the plant based products are regulated by the fda if you have to cook a beyond meat burger. you can't eat it raw shouldn't it be regulated by the usda >> you want to make sure that the usda has oversight of that bus they do a really good job in safety inspections and we want a level playing field for all products, regardless of where they come from. >> reporter: okay. finally the third beef, when you call meat "meat" especially the stuff coming out of the lab on a cellular level is meat. who needs an an male

half the nation introduced laws and resolutions labeling things saying you can't call it meat unless it comes off an animal. of that 35, 13 have passed that resolution, including missouri where it's challenged in court by the makers of tofurky back to you. >> be careful with that one. i haven't had that i've had a turduckin. >> that doesn't count. >> all right jane, keep doing you going to go do some follow-ups on this, keep us updated on this, i can't get enough of this story here, i really can't, you know what i mean >> reporter: wait until the sun rises, guys, we are in some of the most beautiful country in america. we'll be up in the mountains later for "squawk alley" i think. >> jane, great to see you. >> i don't know what we will eat during the break coming up, when we return, trimming the fat at goldman

sacks. a new report out saying the bunk is culling it's uper ranks we will tell you why after the break. and are you ready for some football tonight the nfl is back on nbc catch the packers and the bears as the football season kicks off. "squawk box" returns right after this

welcome back to "squawk box" this morning goldman sax reportedly looking to call its partnership class under david sol mon. it's the focus of a new story, liz hoffman joins us, a lot of people buzzing down to 200 west there, broad street more broadly. what does this mean? it's positioned in a couple different ways one is this sort of cull figure you will to -- culling if you will to change the culture, it's expensive people. >> it's a little bit of both they have put the team in place. >> that comes with turnover, partners are expensive the pie is only so big it's smaller than it used to be. >> what kind of adjectives is this creating?

talking about the culture, in the immediate term, i assume there are happy people because there have been people post-financial crisis sitting in those seats much more historical than they're used to. >> goldman was in the job 12 years. his senior team was very stable. that was seen as an asset and it helped the firm get through a stressful time post-crisis fairly steady, what that means is nothing moves around underneath you have that pent up energy and when stuff moves it moves quickly, which is what are you seeing now. >> the flip on that spin is this is going to help recreate the partnership, the old mystique, i think we used to read these articles, in the '90s, in large part the company was about to go public or if you were a partner, that was something then those ranks expanded. how do you think that changed the dynamic right now? >> there is something do that.

they are largely symbolic. really it's this cultural token so really if have you it at all it has to mean a lot it used to mean when you made partner your life changed i don't have night that true from a financial perspective, a cultural perspective. >> what do you think happens to this vintage class of partners that's going to be leaving are we going to see this sort of goldman diaskpra are you going to hire these guys or do they go go -- they us aed to go into politics, where do they go. >> >> asset manage. is under a lot of pressure this happened ten years ago when david solomon was running investment banking, there was this crew of investments that left goldman was we're golden, we'll be fine and those guys popped up in a lot of boutiques and did a lot of deals you will see it move around, in

general, i think there are fewer options for goodman because of the state of washington these days >> who is the big winner from this >> david solomon. >> are there younger names with ehaven't heard about yet all of a sudden will come on the scene and wait for this moment >> i think that's the hope there is two things here one way is the new sheriff in thoun kind of putting his people in the seats he wants, trusts, consolidated bpower. there are people looking at the firm, going against money management that's not something that everyone wants to stick around for. it's pretty uncertain. so there is a little bit of push, a little bit of pull the idea certainly is you have these young people for whom this can actually be a very transformational opportunity they haven't had the chance to get into. >> final word, eric cantor, are you head hunting this morning based open this story? >> i think if you have ken molletz are we hiring?

we are hireing >> they're expensive people. >> if you seen with way we hire we hire smartly and paying attention to the bottom line as you said, the boutiques and advisory firms have been the beneficiary from a market share. i think it's been post-crisis. post-crisis is when things did change on wall street. >> thank you you are supposed to say, hey, part inny. call me. okay thanks >> you deep like my butt joke. all right, coming up, the ceo of canopy growth joins us after i think they understand all too well, really, taking on the president trump economy american founder tom steyer from next gen joins with us his exec plan for america. "squawk box" will be right back. so servicenow put your workflows in the cloud, huh?

mm-hm. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you. zblmpbls [leaf blower]

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and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today. congress returning from august recess with little progress on cannabis legislation joining us to discuss the marijuana market is mark zekulin, he's the ceo of canopy

growth it's good to see you, mark congratulation on this new role, we want to see since george lyndon recently joined us of what it's like i want to start with washington when it comes to legislation on marijuana. where are we where do you think it's going this fall? >> yeah. i think i'm always hesitant to comment on politics, particularly american politics from canada. but what we clearly see are that there are no major groups who are in opposition to some sort of state's rights legislation. so i think that can only be viewed as a very positive sign right now. >> you know, we recently had scott got a leatlieb on the prom he said he thinks they are illegal, the cbd products, what do you make of that? >> i think the farm bill has clearly said otherwise today we're in a position where we're waiting for further

comment from the dea but in terms of legality as far as any expert i can talk to says cbd is open for business and we as a company have major contracts with american farmers that produce cbd heavmp we have production in new york and ill noticed and building an american supply chain to ensure we can have cbd sales in many earthquake this fiscal year. >> how much influence these days does constellation have on your business and sense you've taken over, i mentioned this, they're a major investor in the company. it says it expects a record loss of more than $50 billion in the first quarter because of the investment in the company? >> so constellation as you have said has a major investment in our company, invested over $4 billion to give us that am nation to continue what we're doing. so we have a great relationship.

one good example if we look at our cannabis 2.0 beverages we are building, that's cannabis intellectual property to have a good tasting formulated drink that is akin to before annual alcohol experience with no hangover, no calories, but the knowledge of how to actually take that ip and put it into a bottling plant and conduct market segmentation comes from the expertise of constellation this is a great example of what great companies working together. >> but in terms of the loss and in terms of the pressure on you now, i mean, how involved in the sort of day-to-day basis or in terms of influencing the day-to-day operations? >> so, constellation has a number of people on our board, but that is the extent of it from a management perspective, you know, we're continuing to do what we have always been doing this is a moment where we have never been in a better position as canopy. if you think about it, for the

last five years, we have been investing if intellectual property, major scales capacity in canada and a team to execute on those things, what excites me most in canada, we are on believe it or not month 70 of a construction program and the exciting part is we have four months left in that program, which means we can start to shift in canada from being builders to really being oerltors, focus on asset utilization, efficiency and while we have an operating mentality in canada, we can now take all of the knowledge we've built as builders and deploy it into the u.s., which we are doing right now. >> mark, i don't know if you can see it on the streerngs we show last -- owe on the screen, we show last year's stock price, it was close to $60 a share, now, obviously, $25 a share do you think investors are missing something here what do you think is going on? >> yeah, i think, firstly, the entire cannabis center is down,

i think what is happening is there is a set of investors who are not seeing the canadian market develop as quickly or as anticipated. then on top of it as you mentioned when you started, there is a lot of uncertainty in the united states and globally so you have that happening, but from a long-term investor perspective, those have been through this before, the cannabis stocks are not for the faint of heart they go up they go down the question is, which company do you want to be invested if that has an eye on the prize that prize is a multi-hundred billion dollar global market for cannabis in my view, they're as best position as anyone to see that >> eric cantor this year, i have a political question for you, how quickly or not do you think will you see federal legalization of marijuana right now? >> i think right now the issue of lack of bipartisanship is going to flow over into this i think the comment that there is some kind of agreement open state's rights, i'm not so sure

i know on my side of the kwafl there would be that sort of directional trend, but i'm not so sure there is enough unity even on this issue. >> right. >> and also given the, you mentioned scott gottlieb's position and given the just opposition to cannabis in general. i'm not so sure this is an easy lift for congress at all. >> mark, final word? >> yeah, i think you know what gives me a lot of hope on that legalization point is just that, you know, we are really getting into the details of social justice and american farmers and i think that has passed the basic principle of, hey, should cannabis be something that states have the right to legalize so i think it's a great things, at canopy, we are excited to be in the united states working with american farmers, working on production. >> mark, great to see you, next time are you in new york, stop

by the set i'd love to see you. >> thank you zplp are you kidding, is that it >> you think there is a delivery >> i don't know. >> no comment. >> i'm waiting for the seek delichs. >> that's next >> where are we -- >> that explains a lot. >> i watched that town hall meeting last night, i thought i dropped some acid. i did. i'm not kidding. >> it was long when we come back, what the bond market is signaling for the month of september in the fed meeting then a note for viewers, vice president mike pence will be sitting down with joe on stage at this year's delivering alpha, produced by cnbc and iesnvtor you can register at deliveringalpha.com. "squawk box" will be right back.

back on "squawk box" this morning, investors straulging game out amid fed speak steve liesman joins us to game it out for us >> thanks, andrew. members of the fed speaking their mind, not necessarily of the same mind. i will divide out the fed speak in three buckets one saying the economy doesn't warrant a cut yet. others are saying they're monitoring the data, they're ready to act here and those saying need easing now i could say with an exclamation point.

the fed president rosingreen says if growth is near 2%, he doesn't see much of a need for taking immediate policy action john williams, says he is carefully mop toreing this nuanced picture and remaining vigilant to act appropriate that is code for i'm going to act bullard, jim, st. louis fed president he says i would respect the market signal better in my mind to go ahead and get realigned right now, calling for 50 which is a very minor probability right now in the markets. powell has the votes to cut if he wants to a quarter point if december probably with 2% a lot with the jobs number we get the adp at 8:15 powell in the afternoon -- >> we have all that going for us which is nice. >> as opposed to what, joe you got something else going on? what do you have going on?

nothing is as good as the feds. >> i got giant adp, productive, claims what do you got? you got nothing? >> subpoena it unemployment friday >> it's employment friday. >> currently. >> that was administration >> that would have been the other administration here now with more, tom finke. >> lose the e. chairman ceo global asset manager that invests across public markets tom runs a high yield private debt in the industry and did you ever think you'd wake up every morning and globally see this situation we have and were you prepared for it? were you set up right for this in time in. >> i think we were set up right over the years because we've really never been one that's on rates makes that move of sort of a top down investor. we're more a fundamental bottoms

up credit investor so we're always looking at companies and finding value in the bottoms up, aware of these issues like where we are in rate but you know it's extraordinary times. >> is it >> well. >> maybe the other things were extraordinary. >> they were all extraordinary. >> but what's the norm what is norm maybe we were too high a while leaseman >> we might have been. you can say relative to other countries. >> maybe the '70s put us in this-year-old 19.5% interest rate we thought was normal we thought 7 was always high. >> maybe rosengren said yesterday the lack of low spreads and high yields is an indication that the economy is not as bad as peel e people think >> that is one interpretation. >> right >> the other interpretation is rates are so low people are reaching for yield itself, they'll talk own 10 or 2030

basis points they can get. what itself the answer for why the spread on high yield, which should be so much higher >> they're not mutually exclusive. >> they're no i think what -- is it reaching for yield or is it an assessment that the credit is good and the economy is not in bad shape? >> it's a little in the middle what i say by that is, there is definitely a lot of capital in the system or a lot of liquidity to the markets these days. certainly when the spread widens out, you see a philosophy come in, in terms buyers like ourselves, that said, we think there is still overall a strong tone to the economy moderately strong, but we're very worried about certain sectors. i think the default rate being so low, that's going to move up more when you see certain sectors, like retail, which we've seen recently continue to have issues because of the

competition from ecommerce and so it's a mixed, it's sort of the middle of the road it's not pre -- it's not '06, where things were so, so tight, the system wad levered it's a lot more moderate. >> i know your bottom's up, can we do, do you have a recession call have you moved it from 35 to 36? or over the next plus eight units? >> our view is a recession is eventually likely in the next couple years, if we see things kind of continue to pan out. >> you do have a number like some first >> no. >> they go from 30 to 40 >> no, i don't do sa number. >> 70% we won't, now 60% said they won't they all like to do that. >> that's why the economists go in there and say how am i going to run my business >> what about your book, does it send a signal if you look at the high yield, if you were saying i'm looking alt my book for a

signal for recession, what happens to the high market before inversion >> you are really not if you look at high yield, you look at theweakness in industries first. if you start seeing a lot of industries stack up, you start seeing the traditional cyclical slow down, certainly if business investment continues to slow, you got an issue. >> tom, thank you. some people don't pronounce the k in the names have you thought about that? >> okay. >> forget it forget it. thank you. >> we'll be right back when did you see the sign? when i needed to create a better visitor experience. improve our workflow. attract new customers. that's when fastsigns recommended fleet graphics. yeah, and now business is rolling in. get started at fastsigns.com.

a glimmer of hope on the trade front. china and the u.s. agree to a face-to-face sitdown. >> investors are cheering the news. slack taking a beating after the first public report. ceo stewart butterfield will join us first on cnbc. running against the trump economy, businessman tom steyer will join us live as the final hour of "squawk box" begins right now. ♪ >> announcer: 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 max market site time's square, i'm with becky quick and andrew ross soing. futureing are up 235 points, the dow s&p indicating up 25, nasdaq up 83 and change treasure yields, a quick look, one-and-a-half now surging yields are surging in the ten year actually the 30 year is back above two and we're not invertd, the two year, we got to go over all these now, 1.466. >> all clear for the moment, five minutes. >> things are great. we're going to do a deal with china. >> in fact, that is our top story. >> maybe, some day >> let's get you caught up on this chosen and the united states have agreed to hold high level trade talks early next month in washington in a statement, china's commerce

ministry says the plan came together in a fooen phone call between u.s. trade secretary steven mnuchin and robert lighthizer, they are scheduled to take place this month if those go well, the united states is adding we will see the ministerial that happen the next month. a final one has to take place between the heads of both china sand the united states the government of british prime minister boris johnson has given up on trying to block a law in the upper house of parliament that aims to stop the kingdom from crashing out of the eu without a deal. we may have for a three-month extension if he can't get a deal later this month we are away from important jobs news, we will be getting the private sector payroll for august 8:15 eastern time economists think the united states added 140,000 private sector jobs next month >> that will be down from 150

thousand in july slack is reporting its first set of quarterly results in june it beat expectations and reported a larger than expected loss for the current quarter >> that is putting pressure on stock, down 12%. slack ceo stewart butterfield, first interview after being a publicly traded company. what are investors getting or not getting about what's happened here? >> well, investors will make decisions over the long run. this is a very strong quarter. but whether it's up or down yesterday up 8% and the regular market down after, it's not going to make a whole bunch of difference to the long-term holder or the business. >> this is a strong quarter, 145 million revenue versus 92 million the year prior, we'r happy with that. >> let me ask you about this, this is mkm partners, the analysts said as a private company, you can grow at all costs. a as public company you have to

grow at reasonable costs. >> yes >> how do you define reasonable costs? >> we're in a cash position. it's close to 800 million on the balance sheet. full year we're looking at my 100 in free cash flow. >> that seems prudent and responsible. one of the things in the first place is because of the strong cash position so when you see opportunities, growth is the priority i don't mean growth at all costs. >> in terms of monetizing certain customers, that's another analyst and investors had been looking at. which is a lot of small businesses get your services effectively for free it's the larger enterprises. how much focus are you planning on putting on trying to monetize the smaller folks? >> that may be a little% merception there are 500 companies in the fortune 500. 9 99500 couldn't possibly be there. we talk about organization and

100,000 paid commerce. among those paid customers are organizations that have hundreds of thousands of people, tens of thousands of people and among the people using it for free are people working on home renovation projects, or working or soccer who are a grate spread for us, we introduce them to new companies and people become familiar with it. >> it's fun becoming a popular company? >> on tv. >> i want to watch swings like this my guess you guys were being up front and hoppest when you were talking about the honest that you gave right before you went public your message is slightly the industry is like, wow, what happened >> we beat the guidance and the consensus estimate so we raised for the year. there are nested expectations. >> that's the crazy thing about wall street, trying to figure out how to help analysts get this guidance, it's a crazy game, a lot of people get into the habit of spoon feeding the analysts so they don't end up

with big swings like this, what is it like to absorb these things and realize they're crazy swings based on small revenue or earning shifts that you know you get punished so greatly when are you doing your best to be up front and honest where you see this i think so? >> it's fun. it's an interesting debate we had before, like how much, where do you want to guide to, how close is that to what we think is going to happen when you go at the rate we are, adjusting for 66% year on year, that's a hard thing to model you know, there is a lot of one big deal with make a difference for us, one postponement can make a difference so we try to be as you said as up front as possible and not get into a dynamic where people have an expectation of what ever we say will be 8% higher. >> speak to the concerns and the extent that there is one about the competition with the team service that macrosoft has in

terms of the number of people supposedly using teams vs. slack. >> i would be happy to when you look at this quarter, one of the things that was exciting for us was win of win enterprise, when you get into large enterprise customers, almost all of them, i don't know the exact are office 365 almost all have teams available for free a couple years ago, they chose slack when they had teams, this year they chose slack, many going wall to wall so whether it's free or not isn't really so much the issue as to whether it provides value to people in addition to da, one of the things is a feature we have in beta for a while 20,0 of our companies opted into this data, that can be consultants or contractors collaborating with the examiner or it can be companies providing the service or customer success over peer channels the density of that network has

increased. the intensity of usage increased. later this quarter we will make that available to the general public. >> he says he wants to make sure this is not just niche, that is not just tech, that it's something that's pleading over how would you respond to a concern an analyst raised today about that >> i think you can look at the customers. one of my xhalgs as a ceo is remembering which customers we're allowed to talk about and which ones we're not we're in financial services, we're in healthcare. queer in retail. w -- we're if retan retail nec, those are giants organizations and there is huge adoptions, i'm going back to tokyo. a week and a half, it's a part of the business that has outperformed i think what is interesting there is there is this big push from the federal government what

they call workplace reforms or work style reforms part of that is ageing demographic, best blue col ar productivity, so there is a lot of reforms they want to make that increase organizational performance and slack just slides right in there. because it's one of the few tools they think leaders of the organization and end users, the employees can rely on to increase the degree of alignment, agree of agility in the organization and increase performance overall. >> any lesson last quarter given the service disruption as you build the scale issue. i'm starting to think as you become an international company what you have to do there? >> so what are you talking act is the service credits that affected our top line numbers. the lesson was when we were six months out, young commerce i said, hey, we'll give people 20 times their money back i also said the standard is

threet 9s owe three 9s some of the contractual terms that have that outsize effect are maybe not a good idea as a public company or even as a prior company, but the thing i want to make clear is if we had microsoft our salesforce or work day, we cleared 99.9%. we just didn't hold ourselves to that 99.99%. i think we had more of time than many competitive service officer to same period. >> final question, always on the minds of people, what do you think? >> i think the priority for us so free cash flow break even if we can put a dollar in the bank every month but we're investing in growth, that would be the ideal scenario. we're a single digit penetrated into a market of hundreds of millions of people we're scratching the surface today. >> thank you for being here. >> okay. >> come on back.

we'll make this a quarterly thing. appreciate it. >> when we return, jobs data, the adp report for august is out in minutes >> that comes ahead of tomorrow's closely watched ept.rnment ror the number and the instant analysis when "squawk box" it was sophie's big day. by the way, she's the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. doprevagen is the number oneild mempharmacist-recommendeding? memory support brand. you can find it in the vitamin aisle in stores everywhere.

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. welcome back to "squawk box. the futures are strong again today. three straight days. all right. what's today >> yes, it would be, no, no, tuesday we were down sharply yesterday we made up for most of it. >> that's right. >> today we were looking -- >> last week we were strong after the previous week we were down 600 yeah, right. it's like who's our guest host >> today >> who was it? >> eric cantor >> all right i knew that all right. there are 85 on the nasdaq the

s&p up -- he was sitting where liesman is, i knew it. let's look at treasuries, quickly, treasuries you sea indicated right now are trading 30-year at 2%. greenspan says 30 year remember he says 10 year before. he was on yesterday, god, he was sharp. he's just the same guy it's amazing all right. becky. >> right now, it's time for adp, steve leisman is here. >> 180,000 payroll estimate. last week, they tell us the job numbers tomorrow estimating 195,000. that's against a forecast of 140 and if you look to the bottom of the screen which is up on your television right now, it's 150 is the payroll estimate for tomorrow for government and private sector this suggests you know if people were all things being equal they might upgrade some of their estimates tomorrow payroll july revised down. the good sector doing quite well

11,000, i was interested in the manufacturing number inside that, which was up 8,000 because we had the manufacturing, ism service always does well strong around 184. where were the jobs by industry size pretty good distribution with medium size businesses, 50 to 500 or 499, up 77,000. so thank you, you middle sizeer or small, medium size owners hiring that many people. small and large. now i want to look at by industry education, health up 58,000. we have mark zandty, i will ask him in is that second if there were seasonal as specs trade/transport. the manufacturing and construction at 8,000. becky we have an issue we ned to discuss. >> yes. >> it's a little on the nerdy wonky side, as we reported the bls has downgraded its estimate

of the level of employment by 500,000 jobs through the year ending in march 2019 these will be put out in the individual months in january when they put the benchmarks back into the bls numbers. but what that means is the run rate of the economy in terms of jobs was 41,000 less by month in that period. >> how does that -- why did they figure this out now in. >> it's a great question i'll tell you why, it will lead to my biggest complaint of all in the history of covering this data they get to true it up with the actual state unemployment claim data about once a year which means the data is out there. if they can get the computer in the states to communicate with the federal government, we could have more accurate jobs numbers. as it is now, they can't all communicate together to the federal government so we have to wait every year for the bench revisions. >> half a million, how much does that compare to yearsee seen in the past sflits a larger revision, a 0.3%

revision the prior years they brought it down quite a bit, investments have been better to 0.1. on asterisk you might put on this discussion is that at sometimes at turning points is when they get these larger revisions in the economy so it could suggest a slowing. it could as easily suggest we're running out of workers, the beige book full of complaints we can't find workers the thing is wall street's estimate of what a good number is needs to come down so this 195 in adp if it follows along tomorrow is actual lay better, stronger number given what might be the new runway than it otherwise would have been. right? and we got a guy who really knows his stuff. >> mark zandty is here, chief economist at moodies that's what it is a slow down or we can't find the bodies and we have to lower our expectation of

the number is? >> both. i think the underlining extracting from the data, revisions being one of them is probably half the adp number probably closer to 100k. we're producing 100k per month if you consider the data which is consistent with gdp growth which is consistent one employment that hasn't changed aappreciate yaebl in a year. stable unemployment and this highlights why the economy is at risk because if job growth slows any further that means unemployment will start to rise. >> that will be the fodder for recession. >> it's a weird world, where i had a lot of talk with the national strategic manufacturers, they have a smart chief economist over there i said, why is manufacturing slowing? he gave me four reasons, he said global uncertainty, the trade war. he said, worker limitation >> ye. >> so it's a weird world where you have a slowing economic activity but you also can't find

people so i mean i don't quite know what to do with that usually you can't find people because business is so good. >> well, it go es to the record number, well, the previous record of number of open job positions. it go es to why extracting to this gain in small businesses in the previous three months, it actually declined. >> right. >> that likely goes to the inability of small companies to fill the open positions. >> they're in the worst position, right? >> they're competing against moody's. they can't compete >> how is the economy? are we going into recession? is everything all right? >> i this -- it depending on the president f. he spur sues the threatened tariff, the likelihood of recession next year is greater than even. i think we're right on the cusp. manufacturing -- >> a 50% chance next year? >> if he follows through, i my manufacturing is in recession. the ag sector is in recession.

they're on the front lines, they're feeling the effects first. the rest to go is the rest of the economy f. underlying job growth slows further, unemployment rises, undermines consumer confidence, we get into a vicious cycle called recession. he's got to end this thing sweet, pretty quickly, otherwise, we will be in recession. >> almost. >> all right, mark, thank you for being here. >> sure. >> blahing to the adp numbers. the 195, the biggest strength that that's reflecting is what >> that number job gains pretty much across the board. so we saw it particularly in education healthcare i don't think it's seasonally correct for the seasonality. >> i didn't know if you were counting teachers coming pack. >> it's always squirrely here's the thing about august, it's something you should consider for tomorrow's number, the response rate from companies to the bls survey is low in august, because people are on

vacation >> that means you generally get a low number a month. >> mark, thank you we'll see you soon coming up, when we return, "squawk" news maker and interview, one of the cannons driving the conversation around the 2020 race for president? millionaire businessman tom steyer will join us to talk about trade, taxes, running against the trump econanomy d so much more. you don't want to miss the conversations. stay tuned you are watching "squawk box" on cnbc from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi. check your rate in 2 minutes or less. get a no-fee personal loan up to $100k.

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welcome back to "squawk box. we want to take a quick look at futures at this hour we are about an hour before the market is going to open. if we do right now the dow would open 260 points higher, the nasdaq 43 points higher and the s&p up about 27 points we're a little more than an hour away from the opening bell on we'll be right back. domenic chu joins us with a lock at the morning's biggest market movers i was wondering when we would do this, dom. >> reporter: the top of the morning. we try to get you -- >> i know. >> i hope you will appreciate it. >> you know i do don't i always pre tend i do like it a lot. but i do. >> reporter: all right joe, let's see if you like these ones, we have three, we will start with ge, gem electric up a percent around 230,000 shares pre-market volume. the industrial conglomerate has been started by morgan stanley

with an equal rating or neutral rating with a $so price target they cited risk/reward and balanced the opt miveng about af o-- optimistic and the aviation business and also there are shares of lyft which are kind of getting an yuf side move they hit a post ipo move yesterday before bouncing into positive territory up another 3 upon 5% today. thanks in part to coverage initiation by stifel nicolaus with a buy rating and a $70 price target they think it is bottoming out and regulatory fears are overplane as well and we'll end on shares of comcast, which are higher around 2% or so pre-market, roughly around 11,000 shares there. cable internet giant and parent company of nbc universal and cnbc is getting upgraded to oppenheimer, with a $50 price

target they think positive catalysts are coming in 2020 from olympics coverage and election coverage worth noting those shares did hit a record high in trading yesterday. speaking another boost today. >> tom is my retirement. >> exactly dom, thank you. when we come back, the latest reads on jobless claims, productivity and more all up after a quick break. by the way, check out the futures. this morning things seem to be roaring back again s&p up by 28 the nasdaq up by 95.

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. welcome back to "squawk box. rick santelli here with some breaking news. our second quarter final read on productivity, the silver bullet for capitalists market driven economy and it is up 2.3%, which matches our last look. so all the previous numbers dissolve into this final q2 number and it's a very solid number one thing that didn't change a bit. unit labor costs have moved up from 2.4 to 2 upon 6

now let's get to this week's initial jobless claims, 217,000. that's up 1,000 from a slightly revised 215 release last week, ended up at 216, add a thousand you arrive at 217,000, continuing claims a week in the rear view mirror 1.662 million >> that the a bit light, lowered from 1.701 last week kind of a awash lateral. down a smidge. nothing positive about negative rates finally seems to be getting socontraction in the world. a boone is getting closer to minus 60 than minus 75 with see the shots two year yield moving from minus 90s into the mid- to low minus 80s. this might not sound a lot

really it's huge as a matter of fact, there is whispers all over the globe that maybe mario draghi ride into the sun set is going to be less aggressive at the september 12th meeting. we have to wait and see. we can never talk about how there is very few positive about negative rates enough. it certainly seems the word is getting back joe, back to you. >> stick around. joining us now, senior markets commentator mark santoli and senior economics reporter steve liesman is here has well, steve it says you need to go first you need more time >> i don't need more time, real quick, jobless rates up. 216. usually 300 was the number we were concerned about i think it fell to 350 we are well below that, the jobless weekly numbers tells us the job markets is healthy productivity is weird.

there is declines in several sectors, manufacturing productivity is down, non-durable is down. total business is what's up. you want to be careful to watch that productivity number it's a good number, a solid number it goes around with decent growth we want to watch to see if manufacturing productivity can rebound. that's all i got. >> that's all you got. all right. >> that leaves it, will you have to do the heavy lifting then santoli. what do you got? >> well, i think it confirms the baseline view. the u.s. economy seems to be plucking along the bopped market has been relaxing already the stockmarket was going to have this almost 1% pop on the overnight news with renewed plans for china talks so this all makes sense to me. you know we went down from s&p 3,000 on the new tariff move and the kind of worsening of relations there. now we were already bouncing a little bit the top end of the range. now we have an excuse to catch above it

we reached deep into the 210 treasury curve the thing everyone was overconcerned last week. we'll see if real buyers come in, just under 1% looking right now. >> can i ask the question? he said some interesting stuff rick, you said two things, bares i first of all this idea that draghi is not going to think what the markets expect next week, i don't know how much, the word i'm looking forward to, disappointment, the ecb built into the market. the other thing picking up on what mike was saying, does the bond market have to test this rally it's had this the a fast and furious rally to coin the term, right? >> yes. >> does it have to check out the down side? >> generational rally there yeah. >> we're getting in between two really huge asuspects to me it's really exciting. 209 is a really huge area for 30-year bond, when it traded through there, it was lights out.

okay 136, 137's the massive double bottom all time low ever in ten-year note yields if we get above 209 before we violate 136, i think the all cheer sign can be shown. as a matter of fact, i think i'd be a little nervous if i was too long looking for lower rates, because snapbacks can be painful. so very interesting setup and as for looking for less out of the ecb, it's all around us. now, it's not huge yet, but you could see it simmering you could see 10s to 2s. i don't think inversion means much but the fact that it isn't the fact that actually europe's rates started to bubble higher than ours yesterday. this is all very significant. >> so rick, i mean, it looks like, i wonder if we got to think about a central bank disappointment next week, if draghi delivers less than is expected if powell gives only a quarter, mike, is that like a catalyst for a sell-off next week from the central banks?

>> at least from the fed point of view, i don't think a quarter point in itself is a disappointment if everything else is lining up. right? if it doesn't seem as if the fed is ignoring timely worsening data from the u.s., which doesn't really seem to be the case i don't know, look, we're still in this nervous trading range zone i think the market has benefitted in the last several days just from how negative sentiment. they look at this buying panic in bond and said, wow, i have to step aside i don't know what's going on there. that's being relaxed there is pressure let out on the valve there. how far it goes, i don't really know i'm sure the market is going to ask for more after a quarter point if it gets the quarter point whether it get it or not that a good question >> i tell you what, i stilly the there is a chance they don't now, it's not a huge chance, but i still think it's out there >> you got some voice saying that that still remains in play. >> i think a quarter is pretty

secure here. i think the guys who are looking for 50 i think what mike was alluding to, the guidance that powell gives us, does he repeat mid-cycle adjustment there is a reporter, mr. chairman, is this still a mid-cycle adjustment and go to whether or not he wants to use that language again or is this the beginning of an easing cycle? i think the market is expensive. >> why don't we start goading the politicians to get more busy with fiscal policy instead of driving j. powell crazy, he misspeaks. anybody with that kind of pressure, they like the weight of the world is on this man's shoulder >> exactly. >> even though chuck schumer says the only people that can help us is the fed >> that is the laziest, craziest comment i've heard from somebody in congress for more decades that i have been following markets. >> santoli, a good idea to give rick the last word i wanted to point that out as a career adviser

>> yeah. >> okay. >> coming up, when we return democratic presidential candidate tom stayer is going to join us live we will ask the billionaire businessman about the decr'smoat 2020 playbook. how he plans to run against the donald trump economy that's next. stay tuned "squawk box" is up next. "squawk box" is up next. zplmplts each new draft of every novel. (typing clicks) the finishing touch on every masterpiece. (newborn cries) it is humanity's official two-word war cry. words that move us all forward. the same two words that capital group believes have the power to improve lives. and that, for over 85 years, have inspired us to help people achieve their financial goals. talk to your advisor or consultant for investment risks and information.

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welcome back to "squawk box," everyone, let's quickly recap this hour's economic news. the latest adp report showing the addition of 195,000 private

sector jobs in august. this comes from the labor department economists are looking for 150,000 jobs added in the month of august. unemployment rate staying steady at 3.7%. we have been in the green all morning long, largely with the idea that trade talks will take place with chosen next month the dow futures are up s&p is up by 28, the nasdaq is up by 95 joining us is our "squawk" news maker of the morning, one of the candidates seeking the nomination for president, tom steyer, the founder of next gen america. tom, good to see you. >> becky, good to see. >> you tom, why are you running for president? >> well, i'm running for president because we have a broken government in washington, d.c. because this government, there has been a hostile corporate takeover of this government and if we're going to, in fact, meet any of the needs of the american

people, we're going to have to restore our democracy, get back to government of, by and for the people it's urgent. that's why i'm running, becky, someone's got to do the job. >> i think of other high profile business leaders who have looked at running for the nomination or as an independent, how old schultz who -- howard schultz and mayor plume berg looked at it and didn't see a clear path for election why as a business leader do you think you can make that case and get elected? >> well, i think two things, becky. first of all, for the last ten years, i have been putting together coalitions of ordinary american corporations and take over power and we have been winning. i have been doing this successfully as an outsider in the political system for ten years. second of all, i think it will be important for whatever democratic knoll knee to know a lot about the economy, to be able to take on mr. trump on the economy. and you have known me for over a

decade, i'm somebody who built a business from scratch into a big international business i've thought a lot about it. i believe i can expose mr. trump as the failure he was as a business person and as the failure he has been as the leading economic policy maker in the united states. so i think actually i'm the person who has a history of doing what's important as an outsider and the person who has the skill set to take on mr. trump successfully on the economy. >> hey, tom, as a billionaire and a businessman, there is probably a large chunk of your party that thinks that's going to disqualify you. you are somebody who has taken advantage of the capitalist system and there are a lot of people in your party who think capitalism has a big problem why do you think you are going to be able to go up against that realizing some of the things happening in the democratic party right now? >> well, i do think there is a problem with business in the united states, becky that's this business has decided it can take over government and

has successfully done so if you take a look at what's happened over the last 40 years, the business community has been able to rigwrite the rules for itself and how it's going to operate. you take a look at exactly what's happening in terms of distribution of income around this country you can see for 40 years, the vast bulk of americans hasn't gotten a raise that's two generations that's never happened before there is a problem with business interests not supposed to be the prime you know controller of the american government. the american people are. and that's something which i think it is urgent for us to address. and i think i'm the person to do it i successfully have been taking them on for ten years. >> tom, maybe it's a business question, but how do you feel about deficits how do you feel about balancing the budget clearly the budget and the deficit has continued to increase >> well, if you take a look at the republican trump tax plan that they pushed through, that

was a gigantic give away to corporations and the richest americans who own and run those corporations so when you talk about the deficit, what you are looking at is a starving of the government for revenues and a huge give away to the richest americans. and that's something where as a result the republicans are saying, oh, we can't afford to invest in americans. we can't afford to invest in education. everything is too expensive. >> so many people in the democratic party are talking about spending more, whether it's the green if you deal or other sorts of priorities. there doesn't seem to be any intention on balancing a budget. >> listen, it is the idea that republicans are talking about being deficit hawks is laughable. the truth of the matter is there has been a systemmatic attempt over 40 years to make sure that rich people in the united states and corporations in the united states can hang on to much more of their income than they had

before and as a result, people are now talking about the deficit which mr. trump and the republicans created. i'd find that honestly laughable. the truth of the matter is, we need a government that can pay for itself we need a government that understands that investing in the american people is how we're going to succeed this is an administration that doesn't know anything about economics that is dangerous for the american people and is really threatening our prosperity so i have no problem in saying there is no question here whose created this deficit and now who's trying to sit here and act high and mighty. the republican party has walked away from fiscal competence and fiscal conservatism. >> tom, the geographic ageograp of the party, elizabeth warren, bernie sanders, they'd have a problem with your corporate background, are you goldman,

hedge fund, it was a system that allowed to you make billions of dollars, which is why you are on cnbc and running for president they will also have a problem with some of the investments you made at fairlawn here's an ohio times pier, tom steyer's bets on private prisons and coal mining could spell trouble in 2020. more troublesome for steyer's public image is the funds history of investing in fossil fuel projects, including a giant coal mine in australia that generates vast quantities of carbon emissions it served as a koala habitat, and mined 1,200 tons of coal per year, steyer's critics have long seen his past personal stake in coal mining as hypocritical. tom, the koalas, if you moved the koalas out >> listen, when we worked at fairlawn, we invested in every

part of the economy including fossil fuel. over a decade ago, i realized the consequence e consequences of that were a threat to the safety and health of americans i diverted from all of those i took the giving pledge for ten years i have been working as an environmentalist to take on the oil and gas companies and to make sure that actually where what we are doing if terms of the climate change is responsible a tim person who would declare climate change a national emergency on day one of my presidency so what i'm asking americans to do, hang on what i'm asking americans to do is to do exactly what i have did myself which is to -- >> how do you -- >> -- to understand we're coming from a fossil fuel economy, there are unintended consequences to us that are a threat to us and we change and move to a clean xi i crafted my, a decade >> that is exactly what i have been asking other people to do. >> why would the democrats want

to nominate someone when climate change is so front and center they have a 7-hour town hall meeting with all the baggage that you have? why would they nominate you to take that on when they can have someone that, even jay inslee, he was an elected official, a governor of washington, he ran on climate change. he se no longer in the race. >> because i have been a person who has been working on climate change most successfully for over a decade. because a imthe person who actually has been taking on the oil companies at the ballot box and beating them i'm the person takening on the utilities at the ballot box and beating them i'm the person who actually closed the corporate tax loophole for a billion dollars and use you had it up to retrofit schools on an merge basis. if you look at that time record for the last ten years, time person that has done this my plan recognizes on day one the timing that's necessary and the knead to declare this a state of emergency to protect the health and safety of every american

so if you actually go to the videotape and take a look and see, who's been successful, who has been on top and leading? actually it's me. >> tom what do you need to do to actually get into -- you are in the conversation you are not nearly at the top of the ultimately need to be to make this work. so what do you have to do to get there? >> if you take a look at the places where i'm spending my time right now, i'm calling you from new hampshire you'll see in the four early primar primary states, i'm between 6% and 7% and either in fourth or fifth place. i've been in this race for six or seven weeks, not six or seven months so if you actually look at the places where i'm talking to people and where my message is getting out, i'm actually moving very well and people are very receptive to it. so in fact, if you look at the facts, you'll find out that what i have to say and the message that i'm bringing about a corporate takeover of our

government, the need for climate emergency, and myexperience in economics and my ability to expose mr. trump for the fake that he is and the fraud that he is, is something americans are responding to very well. >> tom, are you walking the walk now? how did you get to new hampshire? are you living a fossil fuel free life right now? how did you get to new hampshire? did you take a commercial flight, private flight how did you get there? >> of course i took a commercial flight i don't fly private planes >> okay. but you did take a commercial -- >> just so you know, and in fact, i don't know whether you guys have done this, but i've taken a look at my carbon footprint. i have a carbon footprint in which i have a huge experiment in resequestering carbon back into the ground in our ranch i've thought it through. i've had more than a decade to figure out how to divest from all this stuff i've had a decade to figure out how we can do this in a way that will make america richer, make us grow faster, raise wages.

it will create 46 million jobs over ten years 4.6 million on average per year. and it will make us much healthier. when we talk about the move away from fossil fuels, this isn't a question about hurting the economy or destroying jobs this is a question about us being better off, richer, more prosperous as a result of doing the right thing. >> tom, where do you think the economy stands right now >> look, i think we can all see signs that the economy is weak as a result of this trade war. i think that mr. trump's attempt to use tariffs to bludgeon other countries into doing what we want is a signal failure i think that what he's doing across the board economically shows that he doesn't understand what really drives american prosperity this is a guy who's trying to cut american research and development. this is a guy who doesn't believe in educating american citizens the way that we prosper, our

country is driven by the success of american citizens and our ability to innovate and do new things and create good-paying jobs i don't think he understands one part of that i think he's living in the past. and i think that his trade policy is a failure. i think his tax policy is a signal failure, and i think that what he's trying to do shows more and more that he doesn't understand what's going on in the 21st century >> if you think the economy is in trouble right now, do you think the fed should act to cut rates more rapidly than they've signaled to this point >> look, let me say this mr. trump's attempt to take political control of the fed is something which has for the last century been something american presidents have avoided. the independence of the fed is a critical part of our success so regardless of what the fed does, the big point here is that mr. trump is trying to -- every single lever he can think of to bail himself out between now and november 2020 to try and keep --

to stay in power and that's something which he realistically, it's wrong for him to be doing. i'm not surprised he's doing it. in the long run, what we need to do is get back to the kind of prosperity that americans have always looked for, which means broad-based prosperity where we're investing in the american people and doing the things that really create growth and jobs and shared income across society. >> tom, i want to thank you for your time. tom steyer is one of the candidates seeking the democratic nomination for president. thank you. >> becky, nice to talk to you. down at the new york stock exchange, jim cramer joins us now. i haven't talked to you in, i don't know -- it's really true it's not out of sight, out of mind it's absence makes the heart grow fonder, i think, jim. >> very kind >> we don't need to know where you were where are you now in terms of what's happening in investing

land >> remember, a week ago when i left, the mainstream media was saying trump lied about phone calls to china so now a week later, we know that we trust mnuchin over trump or whatever. to me, the market's up 300 dow points since i left. a lot of that is on a belief that the semiconductor cycle is back and the technology spending is back. that's a cyclical business we thought was totally hung on china. the other thing that's going right is the retails are doing well because they're telling their suppliers to eat any tariffs. so these are things that i think very few people expected, which is one of the reasons why the market has a great tone. >> strong again today. puts us not too far from highs you know, i just don't know how this finally plays itself out, jim. the meeting with china will put us past that october we were worried about the anniversary of this

nationalistic sort of fervor we're going to see on october 1st. do you think that both sides now are in a position where they're both willing to give a little bit to come to an arrangement? or are they both more set in their ways, do you think >> well, i think that the president, president trump, is set in his ways because he doesn't see any weakening. look at the jobless report today. someone earlier said that manufacturing is in recession. well, manufacturing has been in recession in this country for ages what i'm surprised at is how strong the consumer is i think the chinese still need it more than we do i know when i say that, everyone just says, well, wait a second, that's a nice bias you're showing. it's statistical i think our economy is very strong >> i can tell you that, that is something that president trump feels, feels like -- he feels like china is -- they want to make a deal because they're hurting more than we're hurting. that's a fact, that he feels that way >> we got the fed to lower rates

where the bond market says it should be, then i really wouldn't worry about a recession. i think the only people talking about recession isus i'm not going to do that >> all right, jim. thank you. we'll see you in a few minutes we got to go be right back. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.

and a quick final check on the markets. about a half hour before the market opens 288 points higher looks to open. nasdaq up 92 points. s&p 500 looking to open about 29 points higher. we got a big show tomorrow make sure you join us then in the meantime, "squawk on the street" begins right now ♪ ♪ good morning welcome to "squawk on the street." i'm david faber along with, yeah, his name is jim cramer he's been away for like months >> five business days. >> we'ring to, lie together, lih new york stock exchange. unfortunately, we're still down one. carl is on assignment. looking at futures trading 30 minutes from now. we are set up for a higher open. that takes us to our road map. the ma