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 market is up because, well, trade talks at least are back.

the u.s. and china agreeing to meet next month. stocks, as you saw, reacting positively to that we're going to talk abdomen goldman shrinking the partner ranks. interesting story. up to a dozen executives reportedly negotiating the exit. is it a sign of a broader shift for this wall street bank? and shares of palo alto, they are up, as you can see the ceo joins us exclusively in a few minutes. they're up ahead of the bell, of course, this morning let's start with the markets this morning a chance for jim and i to get back on the same page as to where things stand we also got fairly positive adp numbers. 195,000 private sector jobs added in august. that was above the estimate. the consumer continues to be quite strong in this economy i heard you talking to joe about, you know, we're the only ones that talk recession and we got a ten year above 1.5 again. >> i thought when i saw -- it's like the bonds also rise

i think what we've seen is this endless yield going down versus, say, where the one year is, has just spoken so loudly to people that unless the fed cuts dramatically, the drum beat of recession will continue. i continue to look at employment i keep waiting for some sign of weekly claims being not good i keep waiting for some number, which indicates to me that retail sales are bad i don't get it so i tepid to think that we do -- i've been stopped on the street by a construction guy, right here >> really? okay >> i like to talk to construction guys. there's a giant project that's going to last like 17 years. we'll all be dead before they finish the bankers trust building the guy grabs me and says, hey, what is this with the recession? i said, don't look at me he said, i am looking at you no, you got the wrong guy. he said media. i'm thinking, how sophisticated.

here's a hard hat guy saying, hey, listen, the media is talking us into recession while he's building one of the largest projects i feel that's metaphorical, anecdotal, of course the more we talk about it, the more people may believe it, but it's still not showing up what you look at walmart and costco >> no, it's not. it is showing up when you look at the lack of business investment to be fair, the vast majority of people we speak to during the course of the day are not calling for a recession. they are not they're calling for the same rate of growth, roughly 2% gdp growth happy with that. the bottom line in terms of these numbers, six -month averae job gains. it's still strong. >> you have to watch walmart,

amazon, target, costco, home depot. they are the new retailers i think that we spent a lot of time looking at them all and looking at who's in the mall and recognizing, hey, wait a second, there's weakness then i see w.a.t.c.h. and see consolidation. you realize you got to be careful saying the consumer is going to have to spend $800 more, which is old figures from the fed. the fed is talked about too much too. >> this is very interesting. >> what do you got >> you just referenced target basically telling suppliers, you deal with it. by the way, come on. what are they supposed to do if you're one of these suppliers, mid to small size business, how are you supposed to swallow that? >> you're going to have a bad year some of them have credit problems they will have to reconfigure. if you read dollar tree's unbelievable conference call last week, gary feldman saved me

$100 million >> strangely enough, i did read that i think you were gone, so i chose to read it >> how about the fact that the containers are not being used. the switching away continually -- >> but we're still talking about $270 billion worth of goods coming from china that will be tariffed we've got the additional october 1st tariffs, which will go into effect, the other 5%, taking it to 30%, which will take effect prior to any meetings that take place between the u.s. and china. >> you know what, i've been kind of right on the president's plan on tariffs i'm going to double down here. i think that his goal is to have all the tariffs be, say, 25 so he can take them down if he wants to ahead of the election remember, he looks at the stock market, the fed should be looking at the bond market, which is telling you your rates are too high the president looks at the stock

market because the president has always viewed that as the best gauge. here we are. the dow is up 330 points since i left what really happened well, we found out that two phone calls that most of the media believes were lies, with china. now i come back and it's like m mnuchin, who's the most trusted guy in the media, saying, hey, listen, things are good. i continue to see, david -- the two things i see are companies starting to take advantage of the low rates. $28 billion. >> did you see disney get the 2.75 on a 30 year? >> do you remember how much john deere was in trouble in 2008, 2009 now john deere, in the midst of what's supposed to be a trade war destroying the farmers, guess what, they borrow at incredibly low prices. >> quite helpful >> there's an article about at&t

and how they have the best wireless if at&t can refinance, do you think we're going to be sitting here worried about at&t? >> yes, i do i still believe we'll be worried about at&t over the next couple years and where the over/under is and how long it's going to be until there's concern about the dividend they will absolutely disagree with that, but i'm just reflecting a lot of conversation that i have endlessly with investors who own the stock, others who choose not to do so but look at it there are certainly plenty of people who would take issue with the fact their network is superior to verizon's, in terms of the way verizon optimizes for wireless and the fact that a lot of theirs comes from warner you can feel better about everything with the low rates, in terms of the companies to refinance and lower interest payments, which is only a good thing. >> right and the fact is there's $28 billion worth of ipos in one day last year. >> speaking of ipos, there's

headlines on the we work ipo i wanted to share some insight certainly it's a name that we've been waiting for to potentially hit the market they're starting to obviously sell they're not coming next week we can't expect that to be the case the valuation targets are continuing to decline in terms of at least what i'm hearing from -- oh, i didn't bring my pad with me. my notes but what i'm hearing is the demand is not there at this point at even 25 billion >> oh, boy >> there's a bloomberg headline that said 20 to 30 even at 25 right now, there's not going to be a great deal of demand it's going to be interesting to see where wework comes in. yesterday we had the noted real estate investor. let me just share what he said you can hear it yourself, of

course, in terms of that business he didn't have any real positive things to say. do we have that? >> i've had the privilege of investing in this kind of company once before. as a matter of fact, this kind of company began in 1956 wiho went to the floor and subdivided it every single company in this space has gone broke >> i don't know who that is, by the way. he may no longer be with us. but zell yesterday, roth, of course, all at an isi conference, all saying similarly negative things. all right. they're real estate guys they have an ax to grind maybe in some way. but there are certainly questions about the business model. thank you, my pad, i appreciate that we'll see where things end up, jim. >> i so don't want to be in that

deal i said that before i level >> you were quite negative, in fact unless my mother calls me, i really don't care. >> as the valuation number declines here and we see what their choices are in terms of where they would choose to go public, i think we should also remember softbank. such a significant investor here at higher numbers. post-money valuation at the time, i believe they took in 6 billion from softbank, 5 billion in the form of primary growth capital, another billion -- this was back earlier this year -- in secondary capital. that was around 47 billion valuation. so you have softbank going out to try to do vision fund two you have uber now trading below the prices that softbank invested in either time. remember, of course, they were about $6.6 billion into uber at

various prices and the prospect of wework coming public at a valuation below 25 billion, that's got to give pause to softbank in terms of their ability to go out with vision fund too. >> how desperate are they if they have to do this if it's a real winner, let's wait a little. although, like slack -- oh, work and wework it even has work in the title. i'm a seller >> we'll get to slack, of course around the bell, it's going to be down. the growth rate is still very, very strong. >> the rate is good. microsoft. >> when we come back, speaking of earnings, palo alto networks out with those results you can see the stock looks up as much as 10% before we get going here at the new york stock exchange we're going to speak with the company's ceo. by the way, one more look at futures as we get ready for that open you can see we are going to be higher on the prospect of new trade talks with china sometime in october >> and because i'm back. >> and because jim is finally back >> no arrogance there.

>> finally gone for five months johnson & johnson is a baby company. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

not always the case we have stock up 19, 20 points and have the ceo who's behind it. yes, that's right. we have a company whose stock is up more than 9% ahead of the bell, and it is palo alto networks, symbol panw.

first of all, congratulations. you traced out a vision yesterday, which is that not only are you going to be number one in what we can call firewall, which was somewhat older but still relevant how do you intend to be number one? >> well, jim, i think we are in a once in a lifetime generational shift in computing. every company you talk to is saying we're going to the cloud. either they're going to the cloud, they're talking about going to the cloud, they're working with amazon, google, alibaba, oracle, or microsoft, moving their workers to cloud. now, if you think about cybersecurity, there's no single large cybersecurity player who's actually focused on providing cloud security you cannot make this generational computing shift happen without securing the applications going to the cloud. so we took an early point of view about 12 months ago we went, acquired companies, integrated them, went to customers, demonstrated where the need for security is, and

we're doing well so far. fingers crossed. >> your company has been known for having slower growth than some of the bigger, also upstart players in, let's say, both cloud and cyber. you traced out a vision last night which would indicate that you can accelerate billing versus a lot of the favorites, including cramer fave octa, which i talk about constantly. >> i know you love the upstarts. it's very easy to drive revenue growth without profitability i would love to have that kind of business. unfortunately, my investors want cash flow and growth so we're going to go generate a billion-plus of free cash flow over the next three years, every year on top of that, we're going to go to our next generation billings and security revenue, approximately 57%, which next year would make us bigger than any of the upstarts we like. by '22, it probably makes us

about 80% bigger than your favorite company >> just so you know, i like octa but my travel trust owns palo alto three-year growth last night traced out well higher than some of the analyst models, of which you also indicated you follow. >> well, you know, i've been studying the industry, the company, the market for the last year i read about 25 analyst reports over the last three months very early in my life, i was an analyst. i understand how these models work you have to understand the growth rate probability and long-term cost of capital. i looked at every one and said what's going to make them change their point of view. i can give them all the song and dance about vision and strategy, they're going to try to put a number in the models >> okay. the thing that really struck me that was there were a lot of

people -- you said you're a deal maker. you're going to buy companies, buy company, buy companies there was some transition. to me what you straightened out last night is the acquisitions are so that you have the ultimate and also that there are some companies that have to deal with 212 vendors. if they bring you in and there are some big wins against z-scaler, some very big wins against cisco that you mentioned, i'm talking about government wins, retail chain wins, this is being done because companies really should consolidate, and you're the one that they can use. >> well, if you look at the landscape, and i studied enterprise companies enterprise companies are amazing at building the first set of products then you build a distribution on the back of it the question is, can you fill that distribution with a better product on a constant basis? can you go from being a one-trick pony to somebody with

multi-capability in the last 12 months, we have pivoted hard we're guiding to 800, 810 million next year, which is huge we've done a strong pivot. i believe we have to go out and get the best technology for our customers, get it integrated, and make sure that they don't have to go to multiple vendors now, they don't want to buy things off my price list they want it integrated because they're sick and tired of having multiple vendors an their infrastructure i wouldn't want them that's not making them more secure it's increasing risk, the more people we have in infrastructure so we're hopefully trying to answer the customers' call in providing that integrated platform so far it looks like it's resonating with our customers in the market >> to the extent you are still captive to the global economy, and we spent a lot of time at this desk talking about business investment or the lack thereof, perhaps, because of the uncertainty brought on by the trade war. is it a concern? are you seeing any evidence that perhaps people are not making

the migration as quickly to the cloud as they might otherwis given the capital that has to be used for it? is that a concern going forward? >> you know, i think technology is bigger than secular trends and economic investment. do you believe companies will survive amazon without investing in technology? do you believe companies will survive google or facebook or uber or all these companies we talked about here? i think in the next ten years, 50% of the market cap will be tech companies or you'll have to be a tech-enabled company is uber a transportation company or tech company? is airbnb hos pitality or tech >> actually, i should ask you. >> fundamentally, many of the new companies are technology enables. so if you have to make that generational shift, every company has to invest tons and tons of money and technology you have to make sure you have

customer data. you have to be able to mine it you can do so many tech things i don't think tech spending is going away if tech spending is not going away, they're going to need to be secure. we're in a growth business >> jack dorsey gets hacked jack dorsey. we all get hacked. everything is hacked what i come back to is what you said at the beginning of your call it's now artificial intelligence it's no longer just guise. how can you be smarter than the bad guys with ai >> you know, it's kind of uneven, asymmetrical playing field. the bad guys have to be right once you have to be right all the time it's a very, very high bar so the new word in our industry is called cyber resilience if i get kicked in the guts, how quickly can i stand up so it's no longer about cybersecurity. i need to make sure my business doesn't shut down. so the key is to set up your infrastructure in a way that you

don't put all the ground jewels in the same place. there's a lot of rearchitecting going on but a lot of companies are collecting data. it's the new goal. people are going after data. you've seen that in the consumer you've seen that in the financial services space the key is to design the architecture in a way that your stuff is security and the key is to reduce complexity >> i was a great fan of your predecessor. you're carrying on the tradition, doing a terrific job. it's right the stock be up those who sell is at 180, okay >> unfortunately, i can't buy. >> i struggle for a word how about stupid there you go thank you so much. >> thanks, jim coming up, we're going to have jim's mad dash as we count down to the opening bell one more look at futures we start trading about 7 1/2 minutes from now back right after this.

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five minutes before we get to an opening bell futures will lead us to a higher open on all the major averages on optimism once again about potential talks between china and the u.s. over the trade dispute. sfx: [phone ringing]

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♪♪ ♪♪ let's get to a mad dash. straight into that opening bell. you've been focused on signet. mostly a bad news story. this morning a little better >> some troubles turning the company around this stock shows you that if you have a longer term view, you would just say, wow, this is untouchable. well, she made it touchable today. she put out some numbers that show you some better free cash flow, better same-store sales, a

refinancing that gives them more room it's a small cap stock, but we're talking about zales, jared, piercing pagoda good online numbers. i went to see her last year at christmas time i had high hopes, and hopes were not delivered, but this does say they can make it this matters because ulta, very similar story, very bad number last week. >> you were not here for the big breakdown. >> would have been good for a lot of others. ulta had a very bad time with cosmetics. >> lack of contouring. behaviors are changing >> wow, i like that. >> i had to read the call there too. is this a real turn for signet, jim? >> more time buys more time for the holiday

season that matters because brick and mortar, david, is sinking, sinking, sinking the "a" there is amazon. we continue to see pressure on department stores. >> there's the opening bell for this thursday. at the big board, the american red cross. they're highlightingrelief efforts for the victims of hurricane dorian, which continues to rage. over at the nasdaq, opentext speaking of companies that let you do your job better, let's start with slack it is down about 14%, jim. it's still growing the top line at a very significant rate but it has not performed particularly well since its

first day performance, which was very strong. >> odd offering, the kind of offering we saw from spotify >> did not actually raise capital. >> but it's guidance i read between the lines and say has satya nadella decided he's tired of losing in this business as we listen, a lot of people feel that microsoft is not doing a great job in cyber they feel microsoft is not doing a great job in this community kind of software nakesh is right that microsoft hab hasn't been that great in cyber. but satya nadella is making a lot of good moves. i worry, just like i worry about dropbox. we now have azure. >> so the suite of products will include something that competes with a slack in the workplace. >> yes >> a concern, at least, that you would raise.

>> it's the opening of the nfl these days when you see them using a microsoft program on the sideline, tom brady, you're not going to say, oh, who made them do that? you're going to say, hey, it works okay what happened? do you have something new? >> no, we have the ceo on "squawk box" this morning. he said a lot about the long term let's listen in to at least one of the things he had to say in defending the company. >> going to make decisions over the long run this is a very strong quarter. whether it's up or down, yesterday up 8% in the regular market, down after it's not going to make a whole bunch of difference to the long-term holders or to the business this is a strong quarter 145 million revenue versus 92 million the year prior we're happy with that. >> also went on to say they have a strong cash position of close

to $800 million. if you're looking at minus 100 to 110 million in free cash flow, that seems prudent and responsible. they are obviously spending, as they have told us they would, to grow and continue to grow at a rapid rate >> i have carvana on tonight they're a company not necessarily -- they're selling cars but the idea of grow to grow grow yourself into a market cap and grow yourself into a business that works okay. butterfield is talking about the near term. well, pinterest is another company. these are two companies that kind of got hammered on some quarters and are coming back i agree with him that we should not necessarily measure any company on a quarter but david, if they don't do well in the next quarter, then it does matter. i know a lot of ceos say they don't look at stock. nakesh looks at stock, by the

way. i know that buffett says voting machine. andy grove said you as a ceo have to deliver on a quarter that's a sign in three months you should be able to make progress andy grove, who wrote a book, "only the paranoid survive," along with sh"shoe dog," the gra business book. >> i've read "shoedog. >> what do they borrow they're borrowing at german rates, right snmp >> you have to pay apple to take your money >> you know what that tells me they're going to buy all the

stock. but the analysts think that apple is going to have a bad quarter. i'm starting to think more about 5g analysts keep waiting for the boycott of apple that hasn't happened i'm talking about china. >> looking at the performance of our parent company comcast, up over 2% on a research nope from oppenheimer where they upgraded to talk about pricing power and free cash flow generation. also may be benefitting from a little relief from brexit. there was concern about what a hard brexit might mean, but that stock hitting new recent highs, 46.35. >> low rates help them too >> yes, yep. >> david, yesterday something happened that i think is totally interesting. union pacific basically guided down pretty severely stock is now straight up trade talks, business better than people expect, everyone

though it's not as good. i find that the rails are doing quite well here, and they shouldn't be if we're going into a recession. they were signaling that the real estate investment trust, another group that if we were going into recession shouldn't be this well off, and by the way, utilities should be refinancing like mad what i'm giving you is the theory that low rates are helping. >> you know, though, i'm looking at netflix because when you think about a company that could benefit from lower rates as well, given its debt low, its need to continue to raise capital in both the debt and sometimes the equity markets, but netflix is down. almost 2.5% this morning i don't actually know why. >> lower rates, does that correlate well with better shows? >> no. no, it doesn't >> i rest my case. the prosecution rests. >> but despite what some see as risks to netflix, specifically in the form -- and reed hastings will disagree with this -- in the form of disney plus and

whether or not that will result in slower growth or perhaps people are saying i'm not sure i need netflix anymore. and back to this idea of how much of it is really catalog viewing as opposed to originals. as long as rates stay low for netflix, i'm seeing that kind of threat is not as great they do rely a lot on the capital markets and the largess provided there >> a lot of people are talking about allocation reed hastings has always said more and more time being devote to this kind of product. david, at a certain point, there are only so many hours yes, they can be entirely consumed by programming. you have to go to sleep. i have not preferred that. tuesdays and fridays i don't sleep. >> at all? >> i try not to. >> that's good >> go to bed around 12:30, get up at 3:00 my trainer comes at 3:45 >> that's good very healthy

>> i know. mehmet oz once critiqued my lifestyle and found it wanting >> your dna is different than most of ours >> well, you know, you never know >> who knows one day at the desk, it's all over >> when the tariffs away, the mice play, except for oil, which still can't catch fire >> i did want to talk to you about the story in the journal it's funny because obviously as you might imagine, sort of talked to a number of bankers in the course of trying to do my job. i was aware of a couple departures the journal points out even more departures from goldman as david solomon, they report, tries to thin the ranks to a certain extent of what it means to be a partner there. those partnership ranks. really, it's more of a title than anything else obviously this is a public company. it's no longer the private company it once was where partnership was the big ring that you were always going after. but what do you make of that of course, i think of it in light of what we talk about so often, which is what is

significant change going on at this investment bank in terms of its approach >> they have to be something else when you look at the price journey's multiple, it is a little better than ford's, old client of goldman, of course >> that's right. they took ford public. >> exactly it is without a doubt a great quandary for those of us who work there or know their business to think that they could let this thing slip. i'm surprised that they weren't doing this earlier it's some consolidation of power. the people who are leaving, i think, are -- they're all good i know a lot of the guys leaving. that's not the point >> listen, when you're older, if you're in your mid-50s at goldman and you've been around, they're going to push you out to make room. there are also some other younger people >> i'm young >> no, you're not. no >> at least i was. >> i'd like to think of you as

young because that makes me a kid. >> yeah, you're a child. what solomon did, i think, is recognize you can't have all these people in their 50s. you're absolutely right. by the way, lloyd blankfein was right to step down when he did because you're going to lose guys like solomon. some of these departures are people who have found that they were on the wrong side there was two people trying to get the job. >> there were. you're right and the bankers perhaps in a better position than the traders. but of course, you and i, as we should have been focused on their efforts in terms of changing the face of the bank in terms of retail. mr. solomon will tell you, come on, we're still what we are, we're also making a pivot to a certain tex eextent >> at eight times multiple, they're not what we said they are. here's what no one is talking about, the apple card. i don't know if you've gotten it >> i have not. >> what the heck's with you? >> i have no interest in getting

the apple card why should i tell me. >> you don't even have the apple watch. the apple watch today told me i was on a cybex it actually knew pretty amazing but i would tell you that the apple card, the lowest cost of acquisition imaginable that goldman may have actually stumbled on something that nobody wanted. nobody wanted. that's a great idea in order to be able to build retail. i've never liked retail. i've never liked retail because when i was at goldman, we were supposed to go after elephants >> right just to make sure our viewers understand, particularly those maybe listening, not watching, retail as in retail investing. >> right >> retail -- >> smaller >> not retail as in selling stuff inside of a mall >> if the investor didn't give us $10 million, that person wasn't big enough. now that's a totally changed model. goldman is going after everything they're going up against schwab. i remember when they were going to buy schwab, 1999, 2000.

retrospect would have been good. >> i remember when schwab's market cap exceeded that of merrill lynch. by the way, the market cap is very size potential. >> why not they've taken more money per day than goldman was taking -- i don't know let's put it this way. >> charles schwab has a $52 billion market cap >> goldman is the great quandary it's not that big. >> no. >> by the way, we're not talking about the billion-dollar whale anymore. >> no, we're not >> that's no longer -- man, was that guy -- he was leading the life i never led that life. i was always doing the work. i read through what he did at the expense of goldman sachs and his country. i realized i missed my calling >> really? >> well, he was like, you know, kind of a fat, dopey looking guy. he just had models and the movies the guy had everything,

everything >> i want to talk more about wework at some point let's get to seema mody. she's been following some other things >> good morning, david that's right markets rallying after u.s. and china announced they would resume trade talks in early october. that's really raised hopes that both sides are working towards a deal we are up triple digits on the dow. s&p 500 up 1%, now trading at a one-month high it was a very strong session in asia as well we saw china up 1% the japanese stock market up about 2% and europe also higher, despite weak german factory orders released this morning. all of this as the u.s. dollar continues to weaken, down yet another today. that's one of the reasons e emergencyi --

emerging markets are up. tech is rebounding we're looking at industrials and chips. so certainly a risk-on tone to today's market meantime, a number of consumer names quietly hitting new highs yesterday. we had hershey's, procter & gamble, coke as well we'll have to see if they can continue the move to the upside. taking a step back, the dow has now gained around 4% since last monday, trading less than 3% away from its all-time high. the s&p 500 is just a little more than 2% below its all-time high now, whether this trade-induced r&b can contin rebound can continue t really rests on that jobs report tomorrow if it's too strong, that could certainly change the fed's timetable. back to you. >> seema, thank you. let's head to the bond pits now, check in with rick santelli at the cme group in chicago good morning, rick >> good morning, david you know, one-week chart, i'm

going to use all of them today for everything we're looking at because there has been a change. now, granted when you have an august the way we had with regard to humongous drops, not only domestically on the interest rate said, whether it's sovereigns or corporates, it's a global phenomenon. maybe we're not even leading this one look at one week of tens tens indeed are a bit higher do keep in mind we're at 1.47. the low closing yield going back three years plus is right around 1.43 so it isn't a huge bounce, but it's stabilizing now, look at one week. same time frame for ten year bund you can see the difference minus 60 how do you make minus .60 look terrific you start out at minus 0.73. indeed, it's a pretty good move. another reason to think that this is something significant is not only how equities have gained traction, which isn't a bad thing when you pair it with this move, but look at tens

minus twos three or four basis points isn't a lot, and i'm not going to make a big deal out of it, but i think the inversions didn't mean a lot either the fact the long end is doing this and the short end is allowing it to happen in the midst of all this global activity is significant. now, guns hot, euro versus the dollar look at one week of the euro very nice. the fact that rates are moving up before september 12th ecb meeting is significant finally, it comes at the behest of, yes, you guessed it, one week of the dollar index, which has actually given up a lot of ground, as you see on this chart. david, jim, back to you. >> thank you, rick >> semis are the star of the day. even intel is breaking out here. look at nvidia this is a sign, david, that people believe the cycle has bottomed and let's not worry too much about china. >> yeah, speaking of china, the anti-trust authorities in china are at least starting the review of the deal.

>> are you serious >> they hadn't actually taken it for review >> when i was with jensen wong, speaking about the brilliant ceo of nvidia, he told me not to worry. he repeatedly has told me not to worry. >> i don't know. they haven't approved it they just started the review >> i have that insight nobody else has >> not to worry. do you think he would have told you to worry i made a really big maistake >> he gave my dog an identity card my dog can get into nvidia's beautiful headquarters any time he wants >> note to call ceos out there let's talk about the nfl you talk about it a lot now. >> yeah, man i got a fantasy thing going today. >> 100th season, jim tonight, the chicago bears will kick it off. they're hosting the green bay packers. >> i'm playing montgomery.

he's going to tear it up tonight. >> hey, it's an nbc game 7:30 eastern >> it's that fabulous? can i play exxon valdez? that's my joke for him >> we had jerry jones on with us yesterday. he was here. by the way, natural gas prices, he seems to think things are going to go in the right direction. i think we might have a bit of a disagreement >> they just went above minus because of the new pipeline. >> but the new pipelines opening are going to be less flaring you'll have more gas >> you know, it's important -- look, methane gas gets a bad rap. it destroys the environment. what's the point of that methane gas, bad rap incandescent bulbs you know, the oil industry is actually -- >> you're talking about all the things the trump administration is trying to roll back the industry is actually not that interested in doing it.

>> the oil industry told me over and over again if they don't cut back on methane, if a democrat ever takes the white house, they're crushed. >> california standards. >> and the incandescent rollbacks are responsible for as much as a 20% decline. but these are things that america is against not republicans and democrats, but the president is not a great steward of the environment >> i think that's a fair point >> i promised my 28-year-old daughter that i would say that >> i never thought i'd see him say you can't have your lightbulbs that save energy. but let's get back to jerry jones and football something we can all agree on. >> jerry jones had some comments about me that were so nice you know, i drafted zeke he told me that i was so smart >> will you listen to what he had to say about that new contract >> i just turned my pockets out upstairs it means i'm $100 million lighter as of this morning

but seriously, zeke has been arguably our best player we're glad to get him booked in. we're glad to have him on the team >> there it is >> well, i had jerry on last year he knows i'm a year. i'm a fantasy guy. i said when i have fantasy and play a guy and doesn't do well or i lose, i am crushed. i said what do you think of that >> he said here's reality. when we lose i want to climb a tall building and jump off he takes it very personally. >> takes it hard. >> i couldn't believe i drafted zeke given how much i like the eagles who matters is jerry is one of the great owners because of his passion. >> all right we have done our part for corporate synergy. 7:30 eastern green bay and chicago. by the way, we are also staying on top of the rally going on right here at the new york stock exchange we have the s&p up 1.2%. we are back right after this

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a look at faang this morning. netflix is the -- >> wow. >> negative. a report they are denying about perhaps a change in the way people are avoid to view series. apparently, they are saying that is not the case. but you can see the stock is down everything else having a strong morning. back after this. [beep] you should be mad your neighbor always wants to hang out. 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.

welcome back time to ask jim what's going on tonight on "mad money." >> okay. here's what we got carvana, perhaps one of the most controversial stories of our time a car vending machine. doing incredibly well. there are shorts out there they have been steamrolled good to be back. >> good to have you. it's good to have you. >> you are good, man that stuff at the top. >> you like that always nice when he likes what we do here he'll be back here you can't not see him. he is on all the time. coming up, more reacti tthono is morning's rally. keep it right here

welcome back to "squawk on the street." a lot of breaking news left. let's go through it much the july read on factory orders better than expected up 1.4. if we take out transportation, solid. up 0.3 that's sequentially following a slightly revised town 0.1. durable goods is interesting because this is a final read for july so we take all the mid-month

reads away durable goods orders up 2%, and that 2% takes away the 2.1 that was in the spot. ultimately, it is a pretty good number it's the highest number we have had going back a while, actually going back to august of last year so that's solid. now let's go through the internals there. if you take out transportation, well, now it gets dinged down 0.4. we know aircraft made a difference in the mid-month read as well. now let's go for the money ball. capital goods order, non-defense, ex-aircraft a proxy for capital spending up 0.2. less than the 0.4 we are looking at in the rearview mirror. fi finally shipments down 0.6 that's really depressing finally, ism non-manufacturing, an august number, 56.4 much better than the 54 we were looking at and in this regard that is the, let's see, best number going

back to 56.4 going back to december -- no, sorry. may when it was 56.9 so may of this year. what's interesting about this, consider we haven't been under 50 in this series, because we know manufacturing did, we haven't been under since december of '09. sara, back to you. >> all right market likes it. rick, thank you. good morning, everyone welcome back to "squawk on the street." i'm sara eisen here with david faber and mike santelli live from post 9 at the new york stock exchange carl quintanilla is on assignment this morning. take a look at the markets jumping to session highs off the back of that better ism services number, especially assuring in light of the weaker number earlier in the week. s&p 3.1% off the back of news of trade talks between the u.s. and china. >> that's where our roadmap begins with stocks up. of course, as seemingly we are going to get china talks back on track in some fashion, we will have the latest on the trade war next. >> plus, the ceo of spirits

giant pernod rickard is with us. >> and we will hear from the ceo of royal caribbean on hurricane dorian's impact to the travel industry and the company's relief effort. first up, story moving the market, u.s. and china agree to meet in october for those trade negotiations eamon javers with the latest what do we know? >> we know the chinese were saying that it's going to be in october. but the u.s. side doesn't name a month when these talks are actually going to take place here is the statement from the u.s. trade representative's office given to cnbc last night. they say ambassador lighthizer and secretary steve mnuchin spoke wednesday night regarding u.s./china trade talks they agreed to hold meetings at the ministerial level in washington in the coming weeks in advance of these discussions deputy-level meetings take place in mid-september to lay the ground for more meaningful

progress the u.s. side laying out a two-tiered approach, the deputy meetings coming first. if those lay the groundwork for meaningful progress, whatever that means, then the ministerial level regarding secretary mnuchin himself. meanwhile, something to flag for you on cnbc.com an article posted laying out some of the analysis that we are seeing from chinese media and blogs that are seen as really a direct mouthpiece to the chinese government a couple of these very optimistic about this round of talks. global times saying there is more possibility of a breakthrough and the blog called the taoran blog saying it's likely there will be, quote, new developments in this round of trade talks. it would appear that chinese media that are connected to the government are pushing a line that these talks are somehow different from the past and it's likely there will be breakthroughs. not clear why they are saying

that we will be pressing white house officials on that throughout the day to get a sense of what they expect here and what's different this time. sara. >> eamon, what about the u.s. position is there any sense that economic advisors like larry kudlow, treasury secretary steve mnuchin or the president are starting to pay attention to the data, especially the manufacturing data, the factory orders data which is now consistently showing a slowdown and trade is being cited as the number one concern. might that change the posture? >> i mean, the economic team looks at the data all the time you heard the president yesterday saying he thought the dow could be much higher than it is now if it wasn't for the action taking on china but the president saying it's more important to focus on this action in china. in the president's mind, you know, he tells us directly again and again this is about a long-term goal, and he says repeatedly and has demonstrated he is willing to take short-term economic pain in the market and presumably for some retailers

and farmers and others who have been impacted by this trade war. the president views that as short term and he has a long-term goal in mind here. the question is at what point does that switching tole back? we don't know the answer to that >> for more on the trade talks invoes can christina hooparynd market strategist bob sench bob, this is a new development we are likely to get talks in october. how should investors take it >> i think it's a new old development. we have been here before this roller coaster keeps having ups and downs. you know, it's great to say they are going to have talks, but there is some real substantive issues and it's not clear that china is ready to give in on the substantive issues it's not clear the u.s. is willing to give in i don't think either side is ready to blink yet so i'm not sure this is going to

prove to be as optimistic as some of the language we are hearing rye now. >> right now. >> it's gotten worse in manufacturing. we just got a services number better than expected the majority of the economy in the u.s. is holding up pretty well does that give the president leverage >> that certainly gives the president leverage and more time but keep in mind his timeline ends in november 2020. as we get closer that that deadline, the united states is going to be more willing to make a deal, even if it only involves minor concessions on the part of china. for example, a reduction in the trade deficit. >> i was going to say if we go back to late july, the s&p 500 above 3,000, it was at a record level. we had this panic in the bond market yields collapsing. it really created this narrative of impending recession data since then say the economy is roughly as we thought it was, yet yields are lower what is the right level for

stocks right now >> well, stocks are certainly at a fairly appropriate level given where we have been, given that we have seen decent earnings the concern is that earnings deteriorate from here. of course, if we look at u.s. stocks relative to stocks outside the u.s., valuations seem stretched one could see a scenario where stocks remain at current levels with some volatility, but they really don't go that much higher supporting them will likely be a moray come daytive fed. >> are you surprised by the data releases adp shows that employers are still plenty in the mood to hire up 200,000 we will see what tomorrow's jobs report brings. services better. consumer continues to look in good shape bob, are you surprised at the resilience >> no. the data this week is a perfect example. a two-speed economy, right you have the tradeable goods sector, which you would expect

would be impacted by trade concerns, and that is heavily manufacturing and that is beginning to significantly jund perform. on the other side you have the non-tradeable goods sectors or the services sectser whior whic primarily domestic not only still strong labor markets, a 20, 25 cent decline in gasoline prices there is no 20 to 25 cent decline already through the month of tseptember. that is a huge benefit to consumers. they may not be buying manufactured goods, autos, and the like, but i think that money will continue to go into the services sector. so this is a perfect week, tradeable goods sectors, manufacturing week, non-tradeable goods services sectors very strong, and i think we will continue to see that and it will keep the economy moving forward. >> you mentioned the likelihood of a more accommodative fed.

the market seems to be taking that prospect okay today given the other news the fed is looking at the same numbers we are talking about right here what do you think the message would be, presuming we get a quarter point in a couple of weeks, after that? is the market going to ask for more does it not need it? >> the markets is going to ask for more so much depends on the messaging coming from the fed out of that meeting. the fed is going to have to really underscore the fact that it stands ready to provide more support, about you that it is very much data dependent and perhaps trade news dependent. >> bob, what do you think the fed's posture is going to be >> i think before i get to the fed, the more interesting meeting is actually going to be the ecb. i think the markets kind of say, okay, the ecb, they will do a major easer, now we can worry about the fed. i thi i think there are a lot of members of the governing board who think this is ludicrous

policy, that pushing rates more negative creates more problems than it benefits negative government bond yields are great if the governments will go out and stimulate and borrow, but there is little sign that that's going to happen. so i think there is going to be some disappointment on the monetary side globally, and i'd look at the ecb as one where people come out of that meeting and say, wait a second, i thought this was a slam dunk, you know, aggressive easing by the ecb. i think there will be a lot of push back. similarly, i think the fed will sit there and say we're data dependent and see away happens but i don't think we are going to get any guarantees after the september time. >> you are down on trade you are down on central banks. i mean, it sounds like you are pretty negative? >> i am down on central banks in the sense that it's the wrong tool and so monetary policy is not what you use to address a trade war, to address a decline in tradeable goods sectors around

the world. so it's the wrong tool i think some fed people have hinted that it's the wrong tool. so i don't think they are just going to sit here and roll over and keep using policy thinking that's going to address what ails the economy. >> central banks are the wrong tool for the economy, but they are the right tool for stock market and i think even if we get a 25 basis point rate cut, that's going to be a positive because given the economic data we are seeing, that's pretty generous coming from the fed. >> and that could help the economy, as alan greenspan would say. >> i guess i missed that part of the fed mandate. >> the german 30-year yield just turned positive for the first time in a month. so things are looking a little less abyss mall out there. bob, christina, thank you very much. when we come back, the ceo of spirits giant per know rickard, that is the company, they prepare to build a distillery in china. also a check on shares of match and iac.

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markets are rallying this morning. this of course on news about renewed trade talks going to take place between the u.s. and

china. pernod ricard, the maker of absolute vodka, jameson whiskey and malibu rum, amongst others, is opening a multi-million dollar whiskey distillery in china. joining sus the company's chairman, ceo, alexandre ricard. nice to have you here. >> great to be here. >> what is demand like in mainland china >> well, demand is still there we have just announced an investment of up to $150 million there to build a single malt whiskey distillery in china. but demand is very strong for cognac, for scotch there is good consumer demand. >> you don't do multi- have you ever had that in china? >> yes. >> that's brutal i hope you are making better stuff than that. the tsunami consumer is getting stronger in china. what are your estimates in terms of what you are going to see in terms of organic growth retaliates rates?

>> we believe we can grow china high single-digit, low double-digit value growth for the foreseeable future in a sustainable way just because of the emergence of middle class chinese consumers very clearly. >> you have tough comps. last year you had 23% organic revenue growth in aarsia. is the alcohol that is sold there made there in other words, are you dealing with tariffs when it comes to selling in china >> no. the reality is our industry and pernod ricard in particular, appalachians and origins if you want to drink american whiskey, it needs to come from america. if you want to drink cognac, it has to come from france. if you want scotch it has to come from scotland or ireland. >> what is the lidemand for american whiskey overseas? >> it's strong both in the u.s. and internationally, and that's what also led us to invest heavily in american whiskey more

recently basically added to our portfolio brands of kentucky-based whiskey and whiskey from texas hopefully soon as well jefferson whiskey, part of the castle brand's portfolio. >> when you are looking at these emerging brands to grab on to, at the same time that you are attempting to kind of reinforce customer loyalty to these, you know, hundreds of year old brands, how do you balance it? where do you think tastes are moving to right now? is it towards more niche brands? >> people like to have a repertoire of brands they really like big blockbuster strong, high quality strong heritage brands, while at the same time sometimes having a local alternative or niche brand. the good thing about pernod ricard is we have both we have strong international strategic brands and also what we call specialty brands we really have both. >> what's going on with absolute is vodka no longer in vogue?

>> vodka in the u.s. is the second largest spirit segment behind whiskey it's struggling a little bit in the u.s. competition is quite tough but outside the u.s. vodka is very strong. talk about china, absolutely in china. it grew more than 30%. absolute in india grew more than 30%. and absolute grew very nicely in western europe so it's just in the u.s. where right now tequila, cognac, and whiskey is probably more dynamic than vodka. >> the u.s. trends are not necessarily the global trends in terms of people's preferences. like i know gin is exploding in europe right now i'm not sure how hot it is in the u.s. >> you are absolutely correct. the good news is if you have a wide portfolio of brands covering all categories such as we do, you have cycles a little bit everywhere and right now in the u.s. it's good to have brands like jameson irish whiskey, the single malt

or tequila, which is quite hot but absolute in france, for instance, one of the fastest growing brands there. >> finally, how would you characterize consumer behavior worldwide? would you say it is strong >> yeah. number one it's strong, but with a strong desire for brands, high-quality brands. i think clearly led by the u.s., basically, people trading up to a higher quality in the u.s. is strong, and globally as well and healthness and well being are a strong trend people wanting to drink a little bit less, but much better. that's the value play. >> on the 20-year outlook, some people are wind rung on the street if you are being conservative, or if we are facing an uncertain outlook in terms. macro environment. >> as a matter of fact, every year we say the outlook is uncertain in terms of the environment. this year we changed and said the environment was particularly uncertain. i think that the degree of

uncertainty has notched up a bit. as i waf tv, i feel that that's a realistic guidance -- >> stre centrvery central bankef you. that's a code. >> thank you. >> pleasure. thank you. pernod ricard, chairman and ceo. much more on today's big rally. dow's up a 467 points. stocks hitting the highest level inorth aon "squawk on the street" will be right back (in dutch) tell him we need this merger. (in dutch) it's happening..! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing.

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despite today's rally, long-term yields still at hi historic lows. can the government help if recession does hit well, yes, says former director writing we have plenty of capacity in the federal budget to undertake vigorous counter cyclical tax and spending policies when the next recession arrives. theuth author of the piece, kennedy school dean, former cbo director why did you write this piece right now? >> i think it's important for

people to understand when good economic analysis says about our policy options good analysis says, yes, we have very high government debt and we will have to do something about that at some point, but at the same time if we hit a recession, we can shorten that recession, we can make it less severe by using fiscal policy, and we should do that. >> what type of fiscal stimulus do you have in mind? >> a combination of government spending increases and tax cuts can make sense we used a particular combination in 2009. if we had done more in that recession, it would have been shorter. more people would have kept their jobs or found jobs more quickly. we should do some combination of tax cuts and spending increases when we hit the next recession. >> doug, i suppose that you could talk about how the math works pretty well in terms of the government's borrowing capacity some are arguing that the government's borrowing capacity does not have an effective limit. on the other hand, the political

reality is that people like it throw out numbers like $22 trillion in gross national debt as if that is an impediment so is your message that politicians should think differently about the debt burden and how the government services it? >> yes, i think that's right there is a conventional wisdom that i have seen emerging in newspaper op-ed pieces and in analytics stories, a conventional wisdom that i think is not supported by the good economic analysis. i want to bring the analysis to the forefront. it has two numbers that i think are very important one is the amount of debt outstanding. the other is, as you have been reporting, interest rates are very low people are quite eager to lend money to the federal government. that changes the context of making decisions about fiscal policy it doesn't change the fact we ultimately will need to keep debt from just rising and rising as it is now but it says that the urgency of addressing that problem is less

than many of us, including i, have expected several years ago. that gives us a little more room, including room to fight recessions and recessions are very costly for people's lives we ought to fight them with whatever tools we have and fiscal policy is one of those tools today. >> to your point, nobody seems particularly focused on deficits to begin with. we are running trillion dollar deficits as it is. >> that's right. in fact, as i note in this piece that i wrote, a very substantial anti-recessionary policy would only cost about as much as our current annual borrowing so that's not a good commentary about our current annual borrowing, but the wrong time to start worrying about federal deficits and debt is when we hit a recession. the right time to think about is it is when times are good. when times are bad, we ought to use the fiscal tools that we have i worry in the things that i have been reading that people

will then stand up and say we have to worry about our fiscal problems that's exactly the wrong timing. >> what about the stimulus passed from the trump administration in the form of mainly corporate tax cuts, but also overall tax cuts? how beneficial do you think that was for the economy and was it worth piling on the debt >> well, those tax cuts created a short-term economic boost. we saw that the pattern of gdp numbers. gdp grew more quickly for a while. now that boost has passed and gdp growth is settling back down again. i think the mistake in the tax cuts was the way those funds were used. most of the money, as you just hinted, went to people who had been doing quite well economically over the last few decades. people towards the top of the income distribution. if we cut taxes, we should cut the tax burden on people not in the top 1% or top 20% and have had a hard time with globalization and technological change and so on so the tax cuts went the wrong direction across the income

distribution in terms of whose burden we should have been focused on reducing, but also that was just tax cuts it doesn't address the need for infrastructure investments and other things that we actually need government to do in this country. >> what's the most - >> it was not the debt it was the use to which the money was put. >> what is the best usage then let's assume -- i mean, for example, people are concerned that the fed is going to get so low in rates, they are not going to be in a position to necessarily help us if and when we actually move into the next recession. what would be the most effective form of government spending to do what you are talking about, doug >> i think the government can spend money on infrastructure. it can provide support to state governments whose budgets get very badly hit in recessions and it can give money back to individuals, to families to spend on their private needs i think a combination makes good sense economically because you are hedging your bets a bit about which particular use of the money will have the biggest

stimulative effect economists can't be sure about that i have my own preferences. i think we would benefit from a somewhat larger federal spending encore public services but that's different from the anti-recessionary argument that argument is just that we should do some combination of spending increases and tax cuts. my preference, other people have their preferences. the point is we should do something. agree on some combination of policies that would widen deficits, lead to more government borrowing now, but could have a positive effect on the economy in the short term and a number of years to follow. >> both parties seem to agree with you at the moment, doug thanks for joining us on your piece. >> happy to talk with you. thank you. a check on shares of cigna jewelers surging, beating on the top and bottom lines same-store sales front, while our same-store sal store were d,

we came ain ahead of guidance. e-commerce sales up 4.4% she said we saw positive comp sales growth from our zales and piercing pa goat a sales banners. shears of signet down 70% for the entire year. this is a tough and painful story. expectations have gotten so low. the market was looking for down three. any glimmer of hope is going to be key the other key for signet is the fourth quarter that's where they make all of their earnings per share for the year so that's going to be interesting to hear the outlook. for now they are getting the benefit of the doubt. >> without a cut to. i think it's a very heavily shorted stock, right in the crosshairs of exposure to malls, declining category obviously a lot of momentum to the downside

by the way, reaffirming this outlook for this year around $3 a share in earnings, it's less than five times earnings it's a gamestop cheap in terms of companies that were now valued for continued decline so that's where you see the violence of this. >> they also extended debt maturity people think that was a positive yeah, they are dealing with two major headwinds, which is consumer preferences bridal, for instance, has been pretty weak. also the mall. they are heavily exposed they have been closing stores. and until we see a return in mall traffic or they can right size their business, analysts, including citigroup, is sasays going to be a bumpy outlook. a cnbc update. >> good morning. here's what's happening at this hour hurricane dorian zeroing on the carolina coast it struck charleston overnight as a category 3 storm with winds up to 115 miles per hour and

heavy rainfall meteorologist david bigger has the latest forecast for dorian good morning, david. >> the path looks like it's still starting its northeasterly turn off the carolina coastline. it will continue to move along the coastline very slowly through the next couple of hours into the next day or so. keep in mind the winds extend outside of this cone of concern. so we will be looking at some windy conditions along much of the carolinas as well as some life-threatening storm surge and very heavy rainfall over the next couple of hours, which could cause some flash flooding. sue. >> thank you so much, david. meantime, british prime minister boris johnson welcoming vice president mike pence to 10 downing street it follows a trip to iceland and ireland earlier this week. pence calling on the e.u. to negotiate in good faith with britain on brexit. and britain's princess charlotte lit starting her first day of school. she arrived in south london this morning accompanied by her parents, prince william and kate, and of course her big

brother prince george, who also goes there and apparently they got a sibling discount that's the buzz. that's the news update this hour mike, back gdowntown to you. >> thank you, sue. whether we return royal caribbean's ceo will join us to discuss hurricane dorian's impact on the travel industry. their relief efforts and much more "squawk on the street" will be right back

hurricane dorian restrengthening into a category 3 storm and threatening landfall in the carolinas this after pummeling and loo leaving a path of destruction through the bahamas. many companies mobilizing to offer help and recovery assistance royal caribbean which has a private islands in the bahamas says it will send relief supplies on their cruise ships,

they will deliver 43,000 water bottles, 10,000 meals, generators and supplies. joining us the ceo richard fain. >> richard, thank you for making time i know it's been a hectic couple of days as your team puts together contingency plans haines are, unfortunately, a disruption that the crew has to deal with on a recurring basis we have seen the devastating footage of the bahamas, significant damage to the power plants, airport, the marina. what has been the impact on your operation and private island, cocoa cay? >> the direct imon us is very small. there is damage to the island. we expect to be back in operation by saturday. the real issue is the horrific damage in the bahamas, particularly at the aback owes and grand bahama island. given your large footprint you have been able to revise a

number of the crew's itineraries to the other parts of the caribbean and mexico how do you think this specific hurricane will impact the desire by travelers to crews given the attraction of the bahamas and the damage on the ground there >> well, one of the things, as you say, we are used to this we have contingency plans. our people have been working around the clock over the last peek really to reorganize, to go to different places, to be as accommodating as possible for this you know, actually, in terms of disrupting our cruises, it really doesn't happen as often as people think. but we're prepared for it and we repositioned in terms of people's long-term perspective, we tend -- and we have been through this before. we see a few days of concern, but then people look at the history and see, no, overall

this is not much disruption generally. and so i think people just look at the area and, if the history is any guide, and so far early bookings indicate it quickly recovers and we are back to normal within a few days go you think travelers will still want to go there given the damage we are seeing on the ground in the bahamas? >> oh, yeah. you know, one of the things that we have seen, i guess i've got this question a couple of times in my 30 years at royal caribbean. yes, the damage is -- it tends to be isolated we tend to see the pictures of the very most disrupted areas, and that's not where our guests go and, fortunately, the people of the caribbean are resilient. the bahamians have made it very clear to us they intend to make the investment they intend to put in the effort they want to be open for business right away and we intend to support that

from a cruise line point of view, only the one island really suffered much damage, and so we'll avoid that for a short period of time but overall the caribbean area is mostly untouched and demand remains fortunately, knock on wood, very high. >> from a technology point of view, is there an an opportunity to upgrade your fleet because the coverage cruise ship travels 22 knots an hour, twice the speed of a hurricane is there an opportunity to make these ships faster to ensure that they can get around these storms as they emerge? >> fortunately, we can go half our speed and avoid most of these storms and one of the things that i think we should all be very proud of is the work that noaa, the national hurricane center and others are doing to predict these storms so the one thing, many things we have to worry about. avoiding the storm in our ships isn't really one of them

we have enough advance notice, enough speed and enough technology on the ship to get around the storms with ease. the real problem is how do we harden the facilities in these countries so that we don't see the kind of devastation. >> lastly, you -- yeah, i want to just get to -- you put $1 million towards relief efforts what else is your team ready to do to ensure that this recovery in the bahamas is expedited? >> well, actually, as we speak, we are delivering the first of what will be 20,000 meals a day to the people in grand bahamas, which has been just -- it's really horrible to see what's happened there it's just devastating. and so the ability to give a little warmth, a little warm food, a little comfort is a small addition that we can make to help our friends there. so our people worked all night on the ships we are diverting ships from

other areas. we are diverting six different ships to bring in relief supplies we've had a tremendous outpouring of volunteers from within the company to go there and help, to make the meals, to district butte the meals so we'll be distributing about 20,000 a day we are also bringing water, canned goods i mean, teen toilet paper becomes an issue it's really awful to see what's happened there >> certainly is. richard, with e appreciate you making time today. richard fain, ceo of royal caribbean sfloo take a look at shares of slack, getting crushed after reporting its first quarterfinal results since going public beating expectations but a larger than expected loss for the first quarter. down double digits "squawk on the street" will be right back don't go away. johnson & johnson is a baby company.

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as many as a dozen partner at goldman sachs could be leaving by the end of this year. wilfordfrost joins us on set the thinning of the partner ranks? >> exactly the first question, david, why now? there are two reasons. first, david solomon made some top-level changes a year ago he had time to think and he is now making some more, a level or two below that second, the typical yearly cycle has been increased and brought forward ahead of goldman's big review and strategy announcement due around early january i get the sense it meant the company and the individuals needed to think this is right for us for three to five years, not just this still works for us

now. more broadly, there was a sense emerging towards the end of lloyd blankfein's tenure people were getting based on when the firm did well rather than based on individual p&l. they came from bear stearns originally, the ultimately eat what you kill culture investment bank a big part of his changes is to make partner a more aspirational title to get here's where we stand on what it means to be a partner today according to sources at the bank you are guaranteed a $1 million base salary. you almost always get at least a $1 million bonus most make $3 million or more in total. some make a lot more than that there is also a chance to invest in internal deals and funds. and there is now more regular internal partner meet ins and access to solomon, including, by the way, a partners lunch taking place today across the road.

currently, there are 450 partners, down from a peak of over 500 ing it tick down a little bit further from here over the coming years though. it should stay above 400 this is being framed by some as goldman leaving the classic wall street business models or the classic glory days i actually think it's solomon trying to give him self the flexibility and headroom to be able to return to it and pay people well but only when they really earn it and just needs a bit more flexibility in this guaranteed pay to do that. >> they are looking at what returns on investment capital for employees, in a sense? >> yeah, which is what some of the investment banks used to do. even if the headline of the bank twhaent good, if your department did super, super well, you get paid i think as the bank swelled and under the extended tenure, everyone was getting pretty solid pay packages kind of regardless now it's gone back to more based on what your individual --

that's what he wants it to be. >> even the fact that they have continued to call this level of executive partners, right? 20 years since it's been a partnership purely speaking. in a sense, they were trying to maintain this sense for a long time >> yes you go out from associate or analyst to associate to director, managing director -- >> manager director at mother firm is equivalent of partner. >> exactly it's still a title they have one or two title titl/* tiemtss above that this comes at the moment with a guaranteed base salary $1 million and almost a sort of right that you are going to get at least that in a bonus if you got zero bonus as a partner, it's akin to saying we are going to fire you. >> you sign yoa sign your time . >> a number of people get at least $2 million it gives you the flexibility to pay someone without the partner

title with a blowout year the bonus. >> david solomon has ifrimpleme other changes. do you have any sense of the number of other culture changes in goldman sachs and diversity has played a big part. do you know of anything of his female partners? because it's one thing to walk the walk >> i don't have numbers on that, but i do think there are two sort of messages that are coming out and they're not mutually exclusive when you think them through, although on the surface some people might think they are. absolutely, what you say, david has been really forward thinking he's saying, we're young, we're equal, we're a modern place. in fact, that is all happening i'm not saying it's not. but going back to the classic you eat what you kill business model, can also happen at the same time. and i think on the outside, it looks like david solomon isn't moving in that direction, but he is a classic bear stearns guy originally, which was, as i said at the top, the ultimate place where it doesn't even matter if firm is doing badly.

if you killed it, you'll get paid and i think he wants to bring that back, which got lost a little bit after you had a leader for over a decade >> that's that how david looks at his bookings. eat what you kill. >> damned right. >> watch out >> all right well, thanks let's turn it over to jon fortt with a look at what's coming up on "squawk alley". >> we can all get a good laugh out of that david faber reference there. the major indices all higher by about 1.5%, but not everybody doing well two companies, two recent joiners to the public markets, but two earnings reports and boy, at fidelity, leelieve your money we've got the ceo coming up on "squawk alley. when you open a new account.d and fidelity's rate is higher than e-trade's, td ameritrade's, even 10 times more than schwab's.

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the street". i'm dominic chu. stocks are hovering right near their best levels of the morning, so far boosted by optimism on u.s./china trade talks. as you can see behind me, financial and technology sectors are leading the way higher but take a look at this. let's drill down on one of the notable underperforming groups you can see behind me in the red, that's the utility sector

dragged down by names like an ex terra energy and american water works. that sector has rallied 5% in the month of august alone as investors searched for yield amid all of that heightened uncertainty in the market. you can see gold prices taking a notable leg lower off by more than 2%, on pace for its worst day since june of last year. keep an eye on the safety trade and gold and silver. i will send it become downtown to you guys at the stock exchange mike >> dom, thank you very much. looking here at the s&p 500, up 41 points, like a percent and a half at 2979 the index closed july 31st at 2980 so august was just kind of a nervous pad dream. and we had this kind of ugly shake out, a collapse in bond yields the ten-year treasury yield closed on july 31st at 2%. 202. that shows you how much bond yields came down the stock market has made a round trip it shows you there's probably room for this tension release to happen more, because that safety

trade is kind of bleeding away, at least for the day >> we are seeing yields higher across the board today ten-year yield up 158. a whopping 158 and the german 30-year bund goes positive there are signs that -- >> that we're relaxing there was a little bit of an overanticipation of a bad near-term economic outcome, and not seeing the evidence of it domestically and it seems as if positioning, people were almost not prepared for a little bit of better news and that's why you're seeing this rush to riskier stocks today. >> yeah. adp this morning, 195,000 private sector jobs added in august tomorrow, of course, we'll get the jobs report. but before then, sarah, we're also going to have a closing bell today, see if we can finish off this rally >> absolutely. up 440 on the dow. we've also got two big ceos coming up in the "closing bell" today. we are going to talk to the ceo of box, aaron levy he's going to discuss starboard's new stake in that company and also some new cybersecurity news that he wanted to go over.

and we've also got the ceo of kimberly clark, michael hsu to talk about the state of the american consumer, any trade war impacts on his business, and the fact that these consumer staple stocks like his have been trading at new highs he's a new ceo, he's got the benefit of the doubt in the market, has engineered a nice turnaround in terms of cost cuts and top line growth, but a big rival png hot on his heels that is growing at the fastest they've grown in years i'll see you at 3:00 >> when we come back right here, we'll have more on today's rally. "squawk alley" is up next. don't go anywhere.

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