it all of the rest >> richard, thank you. >> that's my view and i'm sticking with it. >> good. and we'll see you again soon hopefully. >> thanks for having me on. >> very welcome. we will be back again tomorrow and as for now, time for "squawk on the street. >> 18 years today sets the september 11th attacks wall street this morning marks this solemn anniversary with a moment of silence at the new york stock exchange. good wednesday morning withing to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. dow up five days in a row. nasdaq down three. europe is green. got yields backing up, though, as core wholesale inflation runs hot. up 23 year on year road map with apple, upping the ante in the streaming wars big reveal of apple tv plus

overshadowing the iphone 11. do either move the needle for investors? >> plus, quote, bone heads, president taking on the fed, calling the extcentral bank naie and telling them to cut to zero. >> is wall street afraid of elizabeth warren more from jim on what he's hearing from leaders in the financial industry about the 2020 presidential race start with apple, though, shares rising one day after the big product event, not only did the company unveil a new line of iphones, and other devices, created lots of buzz with news of apple tv plus that this is what tim cook had to say on stage. >> we're excited to tell you first shows will be available on november 1st and will be -- thank you and will be adding more apple originals every month and apple tv plus will be available in over 100 countries that launch and it is just $4.99 per month

for your whole family! >> we're going to talk to morgan stanley's katy huberty the event was compelling to a large degree because pricing was aggressive. >> i went through every single note i'm so glad you have her i didn't know that she is the one who i think really captured the zeitgeist of the moment and the term i would have used if i were working with her to say we have consumables now. apple has a lot of consumables no different from -- i'm interviewing david taylor from procter & gamble they have a line of consumables. now cook has it. $4.99, when i like is that's that level that i don't think about. i just don't -- let it be in my bill every single month, like the -- like the photo protection, the cloud. it is a great price level because it is a level that we will not think about we talked yesterday about a lot of the ones, how many can you have that are 10

apple has this store, the new york times talks negatively about the store today, apple has a store and you buy things there and it is the only place you don't bother to check out. just -- i've seen that i've seen some of the pr programming. >> we didn't get anything on the card, you were hoping for. little discussion of privacy, some said might be a talking point. >> yeah, i tried -- the card is a mystery. why they don't talk this up, because it is -- cards are per se not exciting. but they have -- it is another theme, you get it, it is in the app store. the video games, that was important. the thing that really stood out to me, i know the man to my left has never bought me -- he thinks about his parents, fallout shelters in 1962, they have a brand-new watch. and you don't have to flip your wrist. but most importantly, it is a $199 when the ipod mini went down to

$199, that's when it exploded. that's when it exploded. $199 will explode the watch. a very, i have big deal. that to me was the most important takeaway. >> they didn't raise the price for the high end either. >> no. >> $199 is an important price. that was a lot of people's take away, also the iphone prices come down. at least for -- you can get one for $699. >> yes, very sensible, something that people -- >> and they are already applying to some of their -- including the watch,i believe. >> yes i think this -- there was a moment where the senior vice president, phil shuler, said the new video is computational photography mad science. there is so much machine learning look, i think when people take pictures, have to understand, they're doing it for instagram everyone wants to be a professional and this is a professional level camera for instagram >> huberty, by the way,

reiterates outperform, target 247. she posts a study, survey of the morgan stanley summer interns asking them the most important features when you buy a new phone, number one. want to guess? battery life >> additional hour -- >> number two, compatibility with my other tech and number three is camera >> there you go. i wonder if those people shake hands, look them in the eye. >> they do they do. i had plenty of -- >> interns. >> my friends children now who i'm trying to help secure internships if i can, it is after junior year, very important, they serve during the summer and it means you get a job at morgan stanley or goldman sachs, they're an impressive bunch. >> they look you in the eye. they don't just text you >> they look you in the eye. they do a good job they have super days for interviews these kids go through that sound brutal them still want jobs at these places. >> i'm thrilled they actually -- the handshake is still in use? >> absolutely demand they sit down with me and i enjoy a

rigorous discussion with them before i would even think about recommending any of them >> arrogance and ignorance has been a hallmark. >> back to apple and the streaming thing, to call it -- to call their streaming an also ran is even being kind. >> oh, david. >> come on. >> $4.99, i don't care what the price is you sign up to watch what? >> what they send me because i like that they have. >> it is cheaper than a cup of coffee at starbucks, does it matter >> $5.97, no -- >> so much lower than disney $6.99, that's the price that changed everything in streaming. $6.99, period. for 24 bucks less a year, great, i can -- >> let me tell you why you're so wrong. >> i get jennifer aniston and reese witherspoon.

>> hey, sunshine -- >> he's still in the demo. >> sparky, get this. here is the deal -- >> don't sunshine me and sparky me. >> i'm sparky you, that's the lowest level imaginable. you try to lock for aprok for a icebreaker what are you watching? you know what he's watching? he's watching narcos this is a man who has taste. you'll be blown away >> he was watching a netflix show interesting. >> i'm saying he has taste >> what matters making the decisions about what is on -- >> oh! >> the board didn't hire tim cook because he was a programmer or a movie studio executive. >> i'm saying -- you're take meg literally. what i'm saying is they are watchers like us watcher like us. they love entertainment.

i'm saying they are not just technologists. >> they'll build it over time and maybe a few years from now talking about it come on. >> you're so patronizing what i mean, i want to go back on this. people say, cramer says that -- what i'm saying here, what i'm saying is that it is going to surprise you some things i've seen are so cool that i say to myself, you think these guys that are technologists wouldn't even think about it they are much more than that >> what got my attention is the watch, the face that stays -- >> don't have to do the compass, you come out of the subway, you know which way -- >> which face are you using now. i'm using the sunrise one. i alternate all the time tim says you got -- you got the mickey mouse i change everything. if you're on the cybex -- >> it works in the pool. i don't like anything on when

i'm swimming >> i think he ought to wear this one. it would hold up better. >> so huberty's target nearly 250. fair >> has to rise the price target. she will have a better, more articulate way to explain why i believe the 4$.99 will have interesting -- $4.99, you go to the movies, have you been to the movies >> say again. >> have you been to the movies >> i went last week for the first time in a long time. >> you went to see something diet coke is the same price as what he's paying per month the popcorn, the big popcorn and put that crummy butter on it now you got ones -- i got a guy who spilled a margarita on me. i went to one of those places where you eat. people are talking and they're eating i can't hear a darn thing. the guy spills a margarita on me. >> this has to do with the apple streaming service -- >> you go to the movies, full

year of apple. i'm going back on this again, i'm saying that the guys who run apple, if you put them -- >> we're going to be able to sit here a couple of years from now and tell you, i told you. >> you'll have it, you'll watch it you'll think jennifer aniston is -- >> the watch has done fairly well i will admit that. >> do i see you do karaoke for $4.99, i'm done with you. >> president sending another message to the feds. this morning he tweets, we should get down to zero or less and then start to refinance our debt, interest costs could be brought way down while at the same time substantially lengthing the term the usa should always be paying the lowest rate, no inflation, only naivete of jay powell that doesn't allow us to do it. other countries are already doing a once in a lifetime opportunity that we're missing because of bone heads. that's the word of the day

today. >> i think he should have used sunshine or sparky i know jay i used chowder head when people confuse me with people -- i think dick fisher was on earlier, he's a genius negative rates, we don't want negative rates, that's a sign we're not a robust economy is bone head appropriate for a fed chief who actually -- he appointed by the way, he appointed. that was his appointee. >> it was. >> do you think bone head is -- >> as we well know, he tires of people quickly and in this case he can't fire him. >> right. >> one would think given the frequency of tweets, if he could, it would have happened a long time. >> i think that you got a keen eye for the obvious. >> keen sense for the obvious is what i made a career out of. >> this is just -- if you came home from school, and you -- and your mom heard that you called

someone a bone head, i don't think it would go well i don't think it would go well you get that five fingers there, five days later, still see five fingers. >> we're seeing negative rates, back a bit in germany. >> minus 53. that sounds impressive no you it does >> robust. >> yeah. >> they could print money over there and put people to work it is really -- she is so rooted in history, it is strange. >> this -- >> you do believe trump is on to something and we talked a lot about it with get those rates as low as possible and issue long, long-term bonds to fund something or other he does sort of indicate that as a -- that's not wrong, the opportunity to reduce interest costs. nobody is talking about -- borrowing money long-term and using it for something productive. >> i talk about a 50 year bond

that we all love to make our roads great again. >> nobody in government. >> nobody in government. mnuchin, secretary mnuchin will be on squawkbox. good opportunity that is what -- the question is how much would you need congressional approval to do that gigantic 50 year -- i don't know that's something to hear. >> now you have jpmorgan, dimon, saying they're preparing for zero interest rates. lowering their guide on net income. >> someone posted they were looking at five yesterday. that was the best tweet of the day, carl. it just shows you, they prepare for everything or say i don't know what they're doing. i don't know which is a better way to do it. >> shows you how much can change in less than a year. obviously ma obviously marking the anniversary of the 9/11 attacks today. you'll see military service personnel coming into the floor. nypd it is a morning where we're going to remember, not just victims and their families but

the first responders, the servicemen and women who fought in the wars that followed, jim, you did some great work looking at the loss of infrastructure and just how long it took to build it back. >> 343 -- 343 members of the new york city fire departmentwere lost in that day and subsequently in the last 18 years since, couple more hundred have died through the 9/11 related illnesses. not to forget that >> you're going to be seeing a moment of silence at the new york stock exchange in a few moments. and the president obviously in washington, d.c. today, i think he'll be laying a wreath in arlington, we'll keep an eye on shanksville, pennsylvania, as the commemorations continue from all over the country today it was at 8:46 that the north

tower was nrbl linitially hit. 9:03, the south tower. and 9:37, the pentagon, followed by the collapses of the building and we'll mark time as we do every year amazing work being done today by politico, oral history of those who were involved. karl rove talking about the moment he first heard about the news told then president bush initially, this is what we have, and bush looked back at him and said get more. >> i think that there is a room in the museum memorial where it has the minute before what the world was like, they show, and then a minute after and everyone has to go to this. i remember now that there is so many people who kids who were born after and they got to think -- this should be a national field trip. i think that that museum is the most moving museum in -- they have the background of everybody. and it is just vital

we all should have gone to pearl harbor >> bloomberg has a piece about a new documentary from a filmmaker aimed at kids who were too young to remember, how did she get the idea for the project when she heard about third graders on a play date and googling 9/11 attacks. when you do that, you get imagery not appropriate for kids there is a new wave of journalism and film-making aimed at helping younger people understand what you and i understand too well. >> i think that's great. the re-creation of it, whether the phone calls and the stewardess, the unfortunate jumping that they tell people, be careful, whether it is the williams moment, talking about that is happening, we went in, friends, we came in, were going to go there for two hours and then see a show and go on high -- we just went home. it is just -- it is hard everyone must go everyone in the country. >> when we come back, we'll get the moment of silence at the big

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the nyse and nasdaq about to observe a moment of silence as we remember those who lost their lives on september 11th, 2001. you'll hear the words never

forget a lot today but it happens to be true. that we will never forget. nearly 3,000 people killed, 6,000 injured, 10,000 -- $10 billion in infrastructure damage >> i did a documentary about the -- quite stirring, amazing

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♪ we talked a lot about the momentum shift this week it is reflected in the nasdaq, down three straight days the dow up five straight days. opening bell, six minutes away ♪ limu emu & doug

hour 36 in the stakeout. as soon as the homeowners arrive, we'll inform them that liberty mutual customizes home insurance, so they'll only pay for what they need. your turn to keep watch, limu. wake me up if you see anything. [ snoring ]

[ loud squawking and siren blaring ] only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ experience the style, craftsmanship, and technology that have made the rx the leading luxury suv of all time. lease the 2019 rx 350 for $399 a month for 36 months. experience amazing at your lexus dealer. all right, we're counting down to the opening bell 3 1/2 minutes before stocks start trading here we have time to squeeze in a mad dash. >> yes, last week we had the ceo of palo alto network he talked about directly going against companies that were

really doing cybersecurity for the cloud. he's going to do firewall for the on premise and that was the call to sell z scaler. zs i like zs. it is a good company you see it is down that's because they dropped a bomb in the -- >> yeah. >> it is take longer for big deals to close. >> tell people what they do, jim, so they can understand it there are so many clout related things people can get confused. >> what is one thing we don't want we don't want anyone to hack the cloud and get our stuff. they're effective at making sure that doesn't happen. now, vm ware, vm ware is starting to do it. >> this them on last night. >> they talked about, we're gunning for these people and what has happened is that it is working in the sense it is getting crowded. what is good for palo alto is

just quite bad for -- >> what is the bomb that z scaler ropped. >> hard to close, hard to close big deals. you hear that, what it says is someone is looking at z scaler versus another company and taking their time rather than just buying z scaler they guided down from what we thought they were going to do, down to zero to 1 cent to two cents basically. and what i come back is they say, wow, this is a crowded segment and cash to clear. >> we should also point out this underlying rotation we have been talking about, this violent move that continues it is part of this too getting swept up in that >> high multiple. >> this momentum sell-off we have been referring to, this movement to value. morgan stanley this morning says 75% done, whatever that means. >> of the move is done. >> of the move is done >> who did that? >> same guys have been good. not the research sign. >> like for the -- yes, that -- whoever does that work, it is

really sophisticated i agree with that. they're almost done. i think you're starting to see yesterday, you saw some of the stocks bounce. they have not bounced. they just have been dead cat, dead cat, dead cat >> how about you got downgrades of clorox and costco and upgrades of micron and alcoa. >> clorox, very good piece about how clorox slowed meaningfully thatwas a very damming thing >> morgan stanley reiterates >> it was very rigorous piece. it made you feel like why am i still in that? here is a quiz what stock sells at three times earnings >> three >> three >> micron, i don't know. >> game stop >> game stop >> game stop, which cuts their sales forecast, right? >> 50,000 people work for them they still have a huge number of stores and what it says is they're not losing money, but people believe that when you

have -- 11% comparable store sales, somehow they're goners, they are very susceptible to cycles waiting for a launch let's watch that >> to the opening bell here, s&p 500 at the big board this morning, it is the fdny and nypd, representatives of the 9/11 national day of service at the nasdaq. it is tuesday's children promoting long-term healing to those directly impacted by the events on september 11th, 2001. >> cantor fitzgerald did more than 300 million they t the day they raise money a lot of good things today commemoration. to raise money. >> game stop, you mentioned, jim, not the only one cutting guidance dave & busters, despite a beat. >> they talked openly, they missed, their food and beverage is down badly. most importantly, they talk about cannibalization.

people felt that dave & busters could save them all. who is going to come in for sears, dave & busters. they say we have enough dave & busters for now we will not sack frifice our ra of return. what people didn't want to hear is that there are -- could be momentarily too many there is room, but they did miss the mark on a lot of the features they had tough comparisons, they had very good games that were introduced t ed the year before. i don't know if i want to buy it here they have a buyback. i don't know if i want to buy it i don't know if i want to buy game stop either. >> what do you make of this -- this move into value, added momentum, how long -- >> i think it is drying up >> it is doing some crazy things with some of the pnls of some of the asset managers out there at this point do you keep going with it? >> you can start -- i said last

night, you can start buying starbucks, down at the end of the day. >> on roku >> you have people think about apple, right now, apple stock is saying i'm going to be right on the 499, they have a lot of interesting programming. i know there are other people who feel the programming is suspect. i am saying that it is a $4.99 throwaway. okay maybe initially they don't know what they're doing maybe they only have a few i think people are taking long-term view and looking at the present value of the street. present value analysis >> okay. >> present value analysis. >> okay. >> elizabeth warren, last night, retweeted, an exchange that david and jim and i had on this show almost 100,000 likes at this point. take a listen. >> she becomes president, what do you i had is going to happen to the banks >> well, it is not a -- it would be a suboptimal situation for

the banks. >> you think elizabeth warren pushes banks into -- they're already down 20% from the highs. >> got to tell you, you get off the desk and talk to executives, they're more fearful of her winning. never heard anybody say, look, she's got to be stopped. she's got to be stopped. i don't know she's very -- she keeps going up in the polls. >> raised a ton of money. >> will win in iowa, i believe very compelling figure on the stump. >> by the way, i hear it too, and it is another reason why companies are being implored to do things now. if you want to get something done, m&a, anything, think about doing it soon. come early to mid-2020, if elizabeth warren is rolling along, everybody going to be, like, that's it. >> right now let's understand what i was saying, little inartful there, you -- when you speak to the

bankers, they say she must be stopped. whatever i've been -- i had go arounds with her on my show a number of times. >> not a secret. >> no. she's going to move to break up the banks. the pharmaceutical industry would say watch out. >> rich people rich people in general. >> yeah. there is going to be a lot of scare mongering too on the republican side about all of things. >> sure. >> who am i? i'm like a -- i'm hearing and trying to say what people -- what they tell me. they won't let me say, hey, aim so and so, i need to stop her. but me -- there is bone heads. a lot of bone heads. bone heads in twitter. >> others might respond, the banks are dealing now with an administration crushing their net interest margin. right? >> yes >> rates doesn't help either. >> laying off 600 people. >> they're the part of the rotation into low multiple

stocks and out of crowd strike and into citi that's what it says. citi, eight times earnings, goldman, nine times earnings, dj running the joint, just kidding, the guy is really smart. everything i say is taken out of context. david, i love you, man. >> thanks, chief >> yeah, banks not leading the charge by any means. >> worth mentioning, exchanges because even though it is not on these shores, it could -- you never know, hong kong, exchange, making a unsolicited bid to acquire the london stock exchange london stock exchange in the bid to buy the refinitiv business. it was when reuters split up and split up the data from the news, sold refinitiv to black stone and other private equity firms black stone turned around now and selling it in a deal to the lse. well, at -- if that deal closes, the london stock exchange becomes too large for anybody to buy it

and hong kong decided to make an unsolicited bid to prevent that deal and acquire the lse the refinitiv deal had the effect of putting the lse in play if you want to call it that where is it valued 2045 pence that values the lse at 23% premium to last night's closing stock price. but there is a lot here that could happen politics could get in the way. regulatory, of course. certainly are some overlaps. but there is also in lack of interest from other buyers that we have seen in the past nasdaq has looked at it. >> fin tech. >> we'll see what happens. >> they say, hey, we're fully committed to the refinitiv deal. the board will consider the pre posal, they say, and make further announcements in due course we're committed to making and making good progress on our

acquisition of refinitiv as they announce from the beginning of august. >> i wanted to ask you, speaking of deals in china, hong kong, i watched -- the spread has not closed on nvidia. mellanox, still 14%. nvidia stock continues to go up as if we saw the exceptions to the tariffs by the chinese, i -- remember jensen huang said this will go. you have to watch. >> they're still afraid of chinese antitrust approval, even though it was accepted for the review which you could argue is a positive doesn't mean -- doesn't mean the review has ended it could go on for a very long time could be held in a obey ans. >> people who own nvidia are acting as if they will get it. i like those situations. we have got duelling views >> sky work and micron, western

digital. part of the upgrade is about reductions i think in some inventory levels, right? capacity cuts. >> and, look, sky works is a huge component inside of apple and i -- leah griffin has done a fantastic job not navigating both china, the united states. micron, people are saying the inventories are so low the stock was at 37, 38, we had an unbelievable call made by sanjay, the ceo, saying, listening, we're bottoming tim archer, a ton stock for the company, look at that. i don't need to tell you where most of the downgrades came, do i? >> he said looking at the screen. >> well, micron, actually -- >> right up to date, i'm with you. i'm trying to do seven other

things get ready for my faber report. >> i'm sorry, sparky over there, just really all over me today. >> yes, yes. >> i'm all over you. >> do you want to touch on ge, baker hughes. >> i do. you had five straight days that the oil service stocks were up and, bam, bam, he hits you right in the face like a lion punch. he knew. what timing, huh how about that >> they have to take a write down on it once they do sell. they're going to be -- they're going to move below 50%, going to give up board seats and they're on their way to monetizing most of the stake and the proceeds will be helping to pay down debt. >> that group is so horrendous, let it rally for a little while. >> not like culp had anything to do with the deal just trying to clean it up. >> slumbchlumberger started to up want to go back for a second,

the momentum stocks, restoration harbor, rh, down in the premarket, fantastic quarter, the stock is going it go up nicely there is a stock i need you to know about the stock. this is the ultramimate momentum stock. okta if you see okta turn, it is for real, and it is terrific >> okay. that hasn't happened yet, has it >> watching. >> what? >> i'm watching. >> i know you're keeping an eye. you talked about okta a bit. it is up 2%. >> it is the passport protection in cyber if that can go up on the day when z scaler is down, and crud strike is down, you -- there is hope altera too these stocks are after and before before the downdraft and after down -- look at spotify. 403. they made a great acquisition. the stock dropped 70 straight points how about chipotle, people thought they too were caught up

in the so-called s.e.c. problem of disclosure. totally wrong. inaccurate story s.e.c. goes back and forth on comments about the way there should be certain accounting and it was not ever an inquiry it was just a kind of informal discussion among all the restaurant chains about what should happen, chipotle down 50 points, part of the before and after. >> funny, spotify is down 27%. >> that's tough. >> funny, listening to gurley yesterday on the halftime talk about direct listings. >> re tavery tall. >> very tall >> slack has been terrible >> we do have this company come public tonight, direct -- >> smile direct. >> that's one of those inv invisalign you can only do so much to look great. teeth straight use makeup that's why estee lauder has been really good.

botox, that's allergan situation. >> yes >> we compete with invisalign. >> the new term, the slow fee. the slow motion selfie did you see that part? >> honestly, i think there is so much we didn't really talk about that -- not just the -- what i think will be the good entertainment, but low level video, this kept multiple changes and how this -- the way it is able to do depth, night perception and fusion. i think we're all going to be as good as, say, i don't -- well, maybe like -- major directors. you know >> people will be able to produce some good content, apple streaming service. >> stop. >> i'm talking about citiz ingi cinematography, you know what

happens next content. >> yes. >> looks good. >> good story, though. all the cinematography in the world is not going to help -- >> i'm your captain. >> i'm going to talk about philip morris and -- >> there i, killer content. >> that's a long-standing brand there, still going after all these years. sunshine let's talk about this deal, shall we it was, what, august 23th, so a few weeks ago, jim and i were on the set here, blind sided at the time by the announcement that's all we got. that one paragraph, couple mergers of equal, soon after we indicated in our reporting that it really is a merger of equals on social issues, but not in the economic, more lukeike a 41, 59 split given the significantly higher market cap and the fact that they were going to do and are pursuing a deal based on a

note premium and the view of the stock price. these guys have been in a tough position because it leaked they put the paragraph out that misled people in terms of thinking it was a 50/50 moe and haven't had a chance to tell their story. they still don't what i can tell you right now is they continue to make progress towards a transaction, towards a deal, the economic issues having been largely dealt with, social issues, of course, are still being talked about but because the deal is not necessarily focused on synergy, shouldn't be that difficult. you can give up a ahead quarters and say, we'll base the headquarters, here or there, there is a decent amount of room, for example, i'm told, by people familiar with the situation. the key here is we may see deal in the near term not this week, but fairly soon, i'm told, and progress continues to be made it is important to point out that progress continues to be made, though in the face of what would have been a number o and said we don't think this is the right time

and a number of shareholders who indicated they may not be particularly behind the combination. but that goes back to the idea the two companies have been unable to communicate. why are he this doing this what i continue to hear from those able to chat about it a bit is it is really about having that window that is open right now, and being able to be a first mover when it comes to, jim, these reduced risk products now, vaping, obviously, is its own thing now. philip morris international has the icos product, a heat not burn product been approved. and they want to be here in the u.s. because the fda is still the stamp of approval. gives you the road map to take things worldwide and they want to be able to innovate around what they think is the first wave of these products as they watch their business go away for tobacco and so if and when it seems to be likely they do announce this deal, you're going to hear a lot more about r&d spending, enknow

vacation, the window is now, we got to get to market with these kinds of products that are going to be our future and that while synergies are going to be helpful here, it is going to be about that 70% overlap in the shareholder base of these tw what is fascinating is the market cap combined is less than it was when it was announced you feel like somebody will benefit and somebody will lose, if you got 70% overlap, why are shareholders opposed why will they be if and when they continue to be opposed. >> the architect of the breakup, just to give him his due, at its peak, this was the greatest value creation in history. you put different pieces together, better than apple. it is -- at the time, but its time has come and gone i can't be as optimistic as they are about the prospects. i think that these are wasting assets >> do you think their shareholder bases appreciate the fact that perhaps management

understands where their -- there is the way you have to go. >> management understands and tells a good story i'm not being facetious. good story of what has to happen at the same time, look, it is a new generation of fund managers. i'm going to ever lane today, they don't use any plastic this new generation is not waiting for the fda to bless or not bless. new generation is shutting down companies they think are bad actors >> had they announce it, they will be having to focus on making their story understood and being transparent about it and trying to get people to buy in it is going to need a shareholder vote on both sides regardless, that shareholder vote will be important given the opposition we heard already in this period where there is a vacuum, you're not hearing it all from two companies >> remember they split up, philip morris was supposed to be the growth vehicle and altria

would be the income vehicle. one of the things that really shows you that where we -- both of them are income vehicles and both have no growth. people overseas are still starting >> yes >> your documentary on juul was frankly the beginning of what people started realizing what is going on you said it was much more than just kids. you had that one presentation, also the british, the british are okay with it, but i watch the juul thing and i just said, that's it. i watch your documentary, that's it i'm going against these guys >> you made your point very clear. >> i'm going against them. >> piper downgraded m -- because of the cloud of uncertainty. >> they said that very thing any interest in a deal without a premium could suggest more stress on the underlying fundamentals and management outlook for the future than we had anticipated or appreciated,

said piper potential earnings from juul may be underappreciated. >> should be a prescription if you want to buy juul that's where we're going your documentary was fabulous. >> a little movement here on price. dow up 75. to bob pisani. >> yield is up that's what it's all about yield up market from negative to positive here and the question is that rotation story so a little bit flattish, maybe on the positive side for energy industrials, banks that's what's been moving recently that's that that value trade utilities and reits,e ive secto ral rallying banks up since the end of last week this is when the yield started moving up, transports and energy what we call the defensive names that are out there the consumer staple names and utilities and the real estate investment trusts. put up the next full screen, you see have been down since wednesday's close there. there is the move here that's what we're looking for.

we call this the value trade overall here as far as what else is going on, nice to see some rotation, nice to see small caps moving russell 2000 up 2.5% this week s&p is essentially flat on the week can it keep going? i don't know it depends on the weeg can it keep going? i don't know depends what happens with the trade talks. we've got positive momentum. we've got although volatility. we've got high levels of pessimism. internally, these are positive for the stock market overall david was referencing some of the ipos yes, we've had a few big receipt ipos that have been down on disappointing earning numbers, but we've got smile direct that will be pricing tonight on the nasdaq teeth straightening. talking about an $8 billion ipo. we're going to have cloud fair pricing thursday that will trade friday website security these look in very good shape. the ipo market is continuing to open up and do well. david mentioned bit for the hong

kong exchange by london. there are interesting geopolitical inspirations going on they have limited the inbound trading so hong kong has to lock elsewhere for business if something like this happened they would be the third biggest exchange in the world. they would be the big rival to the u.s. exchange for global listings and yes, theoretically the hong kong exchange is independent of beijing, let's not kid ourselves. we all know what's really going on here. obviously the beijing authorities blessed at least this bid being made, so china has already said they want to be a big global player in the equity business. this is the big back doorway the probability of this happen suggest fairly low, but very important geopolitical implications on the day we're remembering 9/11 victims, let's remember this is also about renewal downtown, that big beautiful world trade center down here

it's a completely different place than it was 18 years ago lots of new buildings. lots of new people coming down here this is where we live down here downtown and it's just a wonderful place to live and work as we remember those victims of 9/11 of course, one of the big draws, that beautiful 9/11 memorial guys, back to you. >> well, said, bob thank you. let's get to rick santelli having gotten inflation numbers this week. hey, rick. >> indeed they were a bit warmer than expected. will that leader to hotter cpi we'll see tomorrow morning we continue to move higher of course we're sitting basically on change in a two year but unchange in a two year. there's been a lot of basis points you can see clearly at 8:30 eastern we put in the bottom and rates moved up we gave a bit back we briefly touched 1 3/4 30 year bonds, i think that part of the curve has been the best gauge of the direction of rates and the fact that we are taking

back a big chunk of the drop in august look at august 1st of 30 year bonds and realize that the lowest close, not even talking intraday was a bit under 195 we've covered a lot of ground hovering at 222. finally the dollar index september 3rd is when we made our high close for the dollar index going back to may of 2017. we have done a real u turn this morning. we're up a third of a percent. kr carl, david and jim back to you and i hope you can watch us at 10:40 when we talk to john claude trichet. >> we'll see you in a little while. dow is up 43 points being led pie apple and cisco this morning. if you haven't heard by now, we're a podcast. you can listen to us, the opening bell hour of "squawk on the street" as cnbc.com/podcast

or wherever you listen to them we're back in a minute this is the age of expression. everyone has something to say. but in a world full of talking, shouldn't somebody be listening? so. let's talk. we are edward jones. with one financial advisor per office, we're built for hearing what's important to you. one to one. edward jones. it's time for investing to feel individual. they give us excellent customer otservice, every time.e. our 18 year old was in an accident. usaa took care of her car rental, and getting her car towed. all i had to take care of was making sure that my daughter was ok. if i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service.

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. jim, what's on mad tonight >> techs have been destroyed i've got the best after what i think has been an amazing prep. >> that's a tease. >> yes, it is. >> we'll see you tonight, jim. >> when we come back, we'll talk all things apple leading the dow right now with katie huberty of morgan stanley in a moment 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... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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welcome back to "squawk on the street". we have some breaking news post sale inventories and trade on our inventories number is a final read up .2 of 1% pretty much as expected because the up .2 in the rearview mirror was our mid month read that gets tossed and remains unchanged. on the sales side up .3. now, one could say this is a bit disappointing, but i would say we break the streak of three negative sales numbers in a row that were march, april and -- excuse me, april, may and june

this is up .3. we want to pay attention to the effects on gdp back to you. >> rick santelli, good wednesday morning, everyone. welcome back to "squawk on the street". got a brief spike here on the dow. got about 70 points to the upside but currently selling off just a touch s&p 2982. >> the president taking to twitter again calling for lower rates. what this means for investor. >> plus apple's streaming price tags how the announcement might impact its competitors. >> and peloton gearing up for a road show. we'll big through the details. >> the president once again attacking the fed on twitter this morning saying, quote the federal reserve should get our interest rates down to zero or less and we should then start to refinance our debt

interest rates could be brought down by lengthening the term more interesting in the past few moments are the headlines out of dow jones citing sources that the white house is set to hold a meeting today to discuss indexing capital gains taxes to inflation, mulling capital gains tax cut. will also focus on broader proposals to cut taxes maybe that's why we saw a brief surge. >> always unclear to know exactly what hope if any there is for getting anything like that together legislatively. hard to imagine. but the president also i thought, carl, had ruled out at one point this idea of index in terms of capital gains saying perhaps it would not be well thought of i guess maybe they're rethinking it. >> energy best performing sector in the s&p again today crude moving higher again despite selling off slightly yesterday after the news of bolton leaving the white house tech stocks rallying as well on

the heels of apple, communication services big theme in the market overall this week has been this idea of a rotation, a rotation into value, added growth. it looks like maybe some of those trends at least for today are taking pause nonetheless all the major averages are higher right now. >> as we discussed with kramer, some of that showing up on research this morning, downgrade at costco over at oppenheimer, cuts to market perform just a shade above where it is right now. one of the high fliers on trade over the past few months apple is the other big story the company debuting iphone 11, stealing the show with the pricing, but will that move the needle for investors in joining us for the outlook after the event, morgan stanley head, katy huber te hub huberty. >> good to be here thanks for having me. >> fascinating note out of you,

you look for 247 you say yesterday was compelling in part because expectations were a bit muted >> that's right. expectations were low into the event. it's also important to realize that iphone replacement cycles have lengthened from two years to four years and what that sets up for is an install base primed for upgrades there were a number of surprises yesterday. the entry price point for i fipe 11 and older iphone models are affordable apple is bundling tv plus which is a $60 value with the purchase of new devices the improvement in battery life and camera functionality are important to driving upgrades because this is what consumers say matter to them when they think about replacing their smartphone >> so you think this is -- people have been looking for a bridge, so to speak, between where we are now and whatever 5g

is going to deliver in a year. you think this is it >> we believe this is it we see iphone growth continuing to improve off the march lows. we see services growth already accelerating we published on that left week that app store growth is surpassing our expectations this quarter. that's before any of the new services that were announced in march come into the model. we also believe that the multiple will expand ahead of 5g that happened ahead of the iphone 6 and ahead of iphone x as services mix continue to grow and as investors start thinking about the fact that apple is yielding 9% between dividends and buybacks which becomes more compelling in a low interest rate environment. >> i think expectations ahead of yesterday's event were low and apple overdelivered relative to those. a lot of information, a lot of details, a lot of headlines.

was there anything that disappointed you or that you wanted to see more of? >> i think some investors wanted to see more features out of perhaps the watch and some of the other products, but you have to remember this time of the year apple is replenishing or refreshing many of their products they have to pick and choose where to focus we think they focus their efforts in the right places. as you know, iphone revenues have been declining whereas wearables revenue has been growing very fast, over 50% last quarter. so focusing the upgrade on the iphone around features and price points and bundling was the right strategy in our view >> i'm curious about china which remains an important market for apple. the lack of a 5g phone and the fact that their competitors have one in that market and that china is moving very aggressively to implement 5g, does that pose a problem for apple in the coming year

>> it's a good question. 5g networks needto be built ou before consumers can see the benefit. we believe that apple's launch of 5g will align with the time when the network capability is in place we've actually been very surprised by the strength of apple's business in china. the improvement in app store that we talked about last week, part of that is coming from china. the apple data out of the china government in the month of july improved materially. we also continue to see apple taking share of the active stall base of phones in china. the data is moving in the right direction whereas many investors and ourselves were concerned that the trade dialogue would start to impact demand that's just not happening in china. >> you've written and it was a while ago now that you wrote

that wearables and services would account for most, ifnot all, of the growth going forward. how low can iphone get as a percentage of overall sales before it gets worrisome >> sure. so iphone is, you know, used to be closer north of 60% of the business it's now closer to 50% of the business at the same time, look at gross profit services back in 2012 accounted for about 9% of gross profits. it's now 30% we believe it will become close to 50% of gross profits over the next year. so that evolution in the drivers of growth and the drivers of profit is in play at apple during that evolution, we've already seen four points of pe multiple expansion and we believe there will be another roughly 3 points of multiple expansion the next year. as that evolution continues, as investors anticipate the 5g

cycle and as apple starts to attract new investors on the back of that 9% yield i talked about. >> how should we think about pricing here obviously a lot of attention on the fact that this new iphone 11 is priced about $50 lower than its predecessor and you saw cuts on previous models as well given the fact we're seeing this strong dollar, especially relative to so many currencies around the world right now, how do the price cuts play out in other markets and what does that mean for demand? >> the good news is that apple showed a willingness to be flexible on price. if you remember apple lowered the price of the xr in china in january and followed that up with price cuts on other products in the month of march earlier this year. so we expect the company to continue to monitor currency and adjust pricing where it makes sense. >> and this replacement cycle that you began talking about, just take us back to that in terms of are you looking for

that to shorten again or you're simply saying that as a result of it lengthening the time is now in terms of upgrades for people who already have been waiting? >> i'd make two points one, the pc market, you know, again, is about a four year replacement cycle. and as that cycle peaked, the pc market returned to growth, even though it's viewed as very much of a mature market we expect that to happen in smartphones as well. the second is if you look at my model and street models, there is no schihrinking of the replacement cycle and that's where the upside in the model will likely come over the next couple of years. >> finally, katy, on the card for those who are looking for granularity, do they deserve to be frustrated, or is it just too new? >> i think it's too new. one point i'd make on the apple

card is it can really start to drive traffic from apple partners back to apple stores and online that's important because apple pays the channel we think about a 7% margin not only can it drive incremental services growth, but it can help drive a higher margin on products because the mix is shifting back to apple direct through stores and online >> katy, it's great to have you. really important for our viewers, especially after a day like yesterday thanks very much. >> glad to be here thank you. when we come back, quote, boneheads at the fed trump attacking the central bank yet again with the dow with six straight days of gains we'll speak with a long time tlk.et bull on his market plus peleton is looking toward

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welcome back to "squawk on the street". quote, boneheads at the fed. president trump once again taking to twitter to attack fed chair powell and the central bank this morning and calling to cut interest rates to zero or less joining us with what all of this means former fed economist, ed yardeni, also michael purvis good morning to you both i'll start with you. what does it mean for the markets when you see comments like this from trump >> you mean whether powell's blocked trump on his twitter feed

>> this call for zero rates or even less. >> i think powell is going to do his best to ignore all that. he's said that publicly and he has to i think the question really gets down to the gulf between what the rates market is telling us it's still very wide it got a little close the last couple weeks what's going to happen next week after the fomc is volatility one way or the other, whether it drives more sector rotation or whether it drives gas downward is to be seen here i think it's, you know, whether powell is going to -- my expectation is it will give us 25 with a less dovish message than a lot of people think it will the data is not supporting a lot of cuts. the index for inflation and the economy in the u.s. has been moving steadily higher for three months state. >> ed, do you agree with that? >> absolutely. i think that's right

the question is doing quite fine for the payroll employment number seemed a little bit weak, but i think every other indicator for the labor market shows that the -- there's plenty of jobs. as a matter of fact, more and more businesses are saying they just can't find people to hire there's actually a labor shortage out there and all in all the economy is continuing to grow around 2%, which is what it's been doing since about 2010 so i don't really see much of a need for more than 25 basis points at this next meeting. and then a long pause would probably be in order >> and i'm looking at this note from you from last week from fomo, fear of missing out, fear of negative interest rates >> i just loss you. >> your note from last week. >> i just lost you. >> can you hear me okay michael, taking a look at the markets right now, dow is up 23

points we're basically hugging the flat line one of the big focuses has been this idea of rotation or value >> if you look at the correlations of the russell 2,000 versus the ten year yield or look at tech versus financials, that equity pair relative to the 10 year yield, that pair ratio is all the exact same trade it's basically right now at trade, not necessarily longer term thesis on rates going higher rates got so low so aggressively when you step back, you look at the risk assets, sbx up 15% year to date. within that rally, there's been massive polarization utilities been to record levels. banks been to record levels. the other way. the backdrop of course is this massive contraction in rates

if rates are going to be going the other way, the unwind is very powerful. even if you're a longer term investor, you have to take stock of that. >> ed, i think we have you back now. i want to get your thoughts on this fear of negative interest rates and why that's bullish for thoughts. >> people have been arguing what's driving the market up is tina, there is no alternative, or fomo, fear of missing out recently it seems to be fonir which is fear of negative interest rates and maybe the president's comment today will only heighten that investors don't like negative interest rates it's basically a tax on wealth and so i think the closer that interest rates get to zero in the u.s., the more there's a concern that we're about to do what the europeans and the japanese have been doing which is having negative interest rates even in the bond market. and negative interest rates just don't work

they haven't worked in japan they haven't worked in europe. the president's right. the negative interest rates would certainly be a wonderful way to refinance a lot of debt but if we want to keep the economy growing, i think negative interest rates create a very negative karma for both industrial and business people >> what do you mean by negative karma? be a little more specific in terms of what they actually do. >> well, for one thing, it's not great for the financial system and the ecb may actually go still further negative and is considering creating some methods, procedures to offset that negative impact for banks but i think it just creates a perception that the economy will be in bad shape if we've got negative interest rates. it suggests that productive is nonexistent and that there aren't really any good opportunities to invest in the private economy given that you've got negative interest rates in the financial economy

>> thanks for joining us today >> thank you. still to come, former president john claude tric herks -- trichet. "squawk on the street" continues after a break. alling us. alling us. it's going to be a week before they can get through on these roads shhh, sorry, i didn't catch that. i said ask how soon they can be here right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪ should always be working harder.oney that's why, your cash automatically goes into a money market fund when you open a new account. just another reminder of the value you'll find at fidelity.

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it is time now for our etf spotlight. we're going to get a check on the transports it's hovering around the flat line this morning, but the broader sector coming off fourth positive session in five dow transports overall up about 5.5% in a week that averages outpacing the dow industrials year to date keep in mind over the past year it's still down more than 7% looking at the data, part of the reason we've seen this ral ne recent sessions has been maybe some of the data has been not quite as bad as expected people have seen the trade headlines playing out. take a look at asia pacific. there is still weakness there. i want to show you guys this

chart. volumes out of kong hong fell 11.9%. some may be protest. volumes out of shanghai fell 11.6%. the way they break this down, one of the protest indicators of overall asian pacific volumes is -- so what does it mean air freight 1% of the tangible goods that flow through the economy but more than 15% of the value of tangible goods flow think things like semiconductors, tech, engineering, some of these high value parts of the economy so what this is suggesting right here, maybe there is more weakness than some of the state data is suggesting coming out of china. what does that mean for tech what does that mean for trade flows between china and the rest of the world including u.s. and what does it mean for fedex?

data point to keep in mind. >> the fda is evaluating the first potential peanut allergy drug meg joins us now with more on that >> david, while shares are on the rice after the fda released briefing documents on the company's treatment for peanut allergy ahead of a committee meeting on friday. the documents provide a glimpse into how they view an experimental treatment and is in line with what investors have been expecting no negative surprises. the fda appears supportive of the -- all the patients in the study started by not being able to tolerate even a third of a peanut but there are side effects and that's where the fd a's focus may be when the committee meets friday they have to doo wi with how it works. it's peanut protein given to patients over time starting with a tiny amount. side effects have to do with

allergic reactions the vote friday will be a big vote this is the company's first product of a pipeline of similar treatments for different kinds of allergy given the severity of peanut allergies, analysts project it could drop more than a billion dollars in annual sales. back to you. >> how big is the potential market here for a peanut allerg drug i've got a toddler in school it's a big issue when it comes to the classroom and how kids are getting lunch. i would imagine there is potentially a big opportunity here. >> absolutely. there are estimates that maybe 2.5% of u.s. children are even more might have peanut allergy and it really depends on how parents want to treat it or if they want to treat it. avoiding peanuts is what they are supposed to do now and some may choose to continue doing that for parents who want to try to give their kids extra protection, they could pursue this it isn't so their kids can eat peanut butter.

it's to make sure they're protected if they come across it accidentally in the environment. >> one to watch. thank you. when we return, apple's streaming play with their big rvnouncement mean fist the other seices we'll discuss when "extracurricul"squawk on the street" returns. stay with us what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums.

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welcome back and good morning, everyone. here's your c nbc news update at this hours the president and first lady led a moment of silence at the white house this morning marking the 18th anniversary of the september 11th attacks they were joined by dozens of members of the executive branch. scotland's highest civil court ruling boris johnson's parliament suspension unlawful next tuesday a uk supreme court will rule definitively if that suspension is illegal or not

a tornado struck sioux falls, south dakota overnight. almost 40 buildings suffered significant damage and thousands of households and businesses lost power the tornado reached speeds of up to 100 miles per hour but no fatalities or serious injuries as of this morning and the final election of 2018 was decided last night when republican dan bishop mccreedy narrowly defeated in north carolina that keeps the number of seats at 18 for the republicans to flip the house in 2020 you are up to date that's the news update i'll send it back downtown to you. apple has been a big story all morning long undercutting netflix and disney with this $4.99 for apple tv plus. what does this mean for the streaming companies at large >> good morning, carl. apple tv plus $5 a month price tag is half of what some

analysts predicted and it may be a reasonable price considering its launching with nine exclusive shows and its rivals have more content. that news of price tag sending the others plummeting. ro roku losing 9%, disney down 2% apple pricing is lower than all the streaming giants including disney plus at $7 and netflix whose most popular offering comes in at $12.99 a month will it get consumers to drop rival services or whether apple tv plus is different enough that at this low price point consumers will not feel they have to choose and will tack on an additional service? jp morgan writing, quote, we believe the monthly subscription to be quite attractive, a positive catalyst for adoption

even as apple scales up the original content over time to compete head-to-head with netflix, prime video and disney among others netflix is protected, quote, we believe netflix's tenure head start scale sis unlikely to be dented by apple tv and it's worth noting that roku's move lower is an overreaction noting apple tv could end up driving roku's viewership because that tv plus app will be offered on the roku tv platform. carl, back to you. >> so julia, david and jim and all of us have been debating this now what $4.99 means in the past it's been $15 because of a show like this is like an option on a show you might like that might come along, right >> i guess that's fair you think about what you pay for hbo and maybe you only watch a handful of shows

putting this up there on that board with netflix, hulu, amazon, disney plus, it's not even in the same league. you're being kind. light content, no library. i'm sure over time they're going to be spending a lot of money to maybe be somewhat in the ballpark, but you can't consider them a real competitor right now, can you >> well, look, it's a very different type of service. they're launching with nine shows, but what apple would say and what tim cook has said is they consider this all premium content. they want each of these shows to have the draw of say game of thrones or a show like that. so they would argue that each show is so spectacular that it will drive people to sign up and they have a little bit of something for everyone the kids content, oprah content, et cetera. you are right, it is a totally different category and i think that the speculation among analysts that this could be $10

a month was really an extremely high price point for this much content content. $5 a month is still charging something. apple could have decided to bundle this in for a couple dollars extra a month with an apple music. the fact they are deciding to charge $5 a month is signaling they believe this is worth something. they believe it's worth paying an additional amount for separately and they're not going to throw it in free or close to free with apple music. >> it gives them a lot of room to raise prices if they increase the content. thank you. peloton is gearing up for the big ipo road show looking to raise $1.2 billion resly has been following that in addition to other potential ipos she joins us now. >> in the throws of ipos we're standing outside of goldman sachs which is peloton's lead ipo underwriter

under way right now abou halfway through the executives of peloton are meeting with goldman sachs, the sales team, to learn really how to pitch this deal to investors as you mentioned, they have $1.2 billion worth of stock to sell to investors. this effectively kicks off their road show process where they will spend the next two weeks to meet up with investors to pitch the deal they set a price range last night that values the company around $8 billion. according to the presentation that they posted this morning, they're going to really focus their marketing efforts on five key areas for them number one, scaling their subscribers base they have about 511,000 subscribers to scale over time they tout their strong revenue growth doubling year over year, their low churn and the stickiness of their product, what they call addictive fitness. strong unit economics. also they say over the long term they can be profitable

it's important to note that comcast, the parent of cnbc, is an investor in peloton also as one road show begins, another one ends smile direct club set to price its ipo today after the market closes that one, too, raising upwards of a billion dollars according to the range they've been marketing to investors and some analyst notes out indicate that investor sentiment surrounding this has been very positive and could likely price at the high end of the range >> leslie, hearing similar things you never know, of course, but hearing similar things in terms of the appetite. >> it can always change. >> yeah, it can. stay with us we want to bring in harness wealth ceo david joining us here onset. you're in the business of advising and helping employees of companies that go public in terms of how they should understand the progress and what to do with new found wealth. >> that's right. exactly. i think the spectrum of these

two ipos in comparison, we work shows it's important if equity is a big part of your conversation and to understand the nuances of what that means, preferences on top of you and not just bank on the highest private market valuation as the end all and be all of what that equity can mean for you. >> how does it figure into the psychology of senior employees, how they do their job, how they think about their future >> it's huge both the before and the after, i spoke with cfo who took his company public a few kweeyears . he gathered all the employees together and said i can almost guarantee in the 12 months after the ipo the stocks haven't moved 50%, i'm just not sure which direction. we're strong believers over time it will be really valuable, but it's a big shift from once every two years getting a new valuation that tends to only one g in one direction if the company goes well to being a public stock traded by the second. >> we focus so much on the success of ipos and names like

uber and lyft come to mind, both of those trading well below their ipo price still today. but when you see something like that play out, hugh does it affect employee morale does it? >> it certainly does even with uber, it hasn't quite hit the six month lockup which is typical for employees to actually be able to sell to former employees people are watching it very, very closely and it factors into the san francisco real estate market and whether someone is going to move from an apartment to a house it's a big factor and one that ultimately the average employee, even the senior one have a huge amount of control over. >> do we have a lot of viewers that work for startups, dream about having a day like this come look in their own lives what are the mistakes people make when they come into this much money >> there are a few pieces. one is just early on making sure that you're getting the right advice i missed things i should have done with early compass where i was an executive figuring out, you know, does the

stock qualify for the qualified small business program where you could have tax free gains. is it worth early exercising to lock in long term capital gains. how if you are a senior level executive you think about selling ways that aren't going to spook the market. all really important considerations. >> do they tend to want to live large right away, or are they smart enough having gotten where they to be conservative in their initial spending trend >> it tends to be outside of instances where there's a one year instagram huge success story. i mean, it's taken a lot of work, a lot of years, even once its public, there's that six month lock up, a structured ability to sell over time. typically those who made that wealth over a period appreciate it. >> what's the advice, for example, uber lockup stocks come well below where it was listed do you tell people to make an investment decision or should

they sell if they're an insider? >> you have to take a portfolio sort of in toll ttality if 99 is in one stock, even if it's not where you want to sell, it's probably worth taking money off the table. in the same way people shouldn't pull out of the market completely if they're pullbacks or shouldn't invest everything at one moment in time, similar psychology with a single stock concentration. >> leslie, it seems like another day, another ip otha you are covering as this pipeline continues to progress here one of the things you've noted today is that smile direct and peloton are within the biggest six ipos of 2019 so far. they're focused on the possibility of we work as well in terms of what's in the pipeline to go public, what are the biggest names investors need to keep an eye on and is there any sense that given the statement of the market that there's a rush to get them out

there? >> it's a good question, morgan, because i would say people i'm speaking with say that september really the biggest month so far for the rest of the 2019 for companies going public i don't think we will see anything that necessarily surpasses the sizes of those deals that are currently either undergoing road shows, finishing road shows, or debating whether to embark on a road show but that said, i have heard also that some of the companies that we've talked about as being potential ipos are also in discussions with regard to m and a. it could be a situation where companies that are thinking about going public may want to pursue an acquisition perhaps with some of the companies that have gone public also the market continues to be attractive and if you don't have to deal with some of the overhang of being a public company and watching that stock price fluctuate up and down and what that means for employee

morale, some companies opt not to do so. >> i do want to reiterate my reporting from yesterday which remains same on the we company which they are landing on that public offering. we maasai some governance changes by the company we've been hearing that. that's something else they would do the key question will be what's the price. road show again could begin very soon what do you do if you're at the we company and you watch valuation go from $47 billion to let's be generous here, 18 to $20 billion? does thataffect sort of how you're thinking about doing your job? >> hopefully at the end of the day the people there believe in the long term vision that adam's outlined and there's upside to it i think the scarier part is $10 billion of soft bank capital, additional capital on top of that i don't know for sure. i assume there is a liquidation preference that sits in all that capital. what value you really own is actually getting compressed more

than just the stock price if you were a public market investor. so you're paying attention, but the best you can hope for is that over the long term if you continue to grow and be a dominant player in that category that the value will come. >> yeah. david, appreciate it thank you for taking some time leslie, thank you for all your reporting. when we come back, former ecb chief john claude trichet on the economy. we remain in a tight range dow is up 38 points. we're back after a break

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the energy sector getting energized and there could be one under the radar way to play the ndutoronrally. fi o me trading nation. more "squawk on the street" coming up. tell him we're flexible. don't worry. my dutch is ok. just ok? (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. welcome back let's send it over to the cme group in chicago and rick santelli with a special edition. >> yes, thank you. i'd like to welcome my guests former ecb president john claude trichet. there is about a three second delay. thank you for joining me $17 trillion of negative interest rates, corporate securities joining that sub zero fray my question is easy. should mario's bazooka be fired again? has it missed the target and how

should they deal with the ha handoff considering a slowing economy, maybe a germany recession and the frayed infractions affecting the globe? >> well, first of all, you're right. we are experiencing exceptional times. the amount of debt standing that is in negative rates is gigantic and it is not only in europe it is also in japan as we know in europe it's not only the ecb but also quite a lot of other countries like switzerland, sweden and so forth. i will not say what the ecb governing council should do or not from now on. i would only say that i trust they will do exactly what is appropriate in the circumstances and the circumstances are very special in practically all advanced economy because you have a level of inflation which

is very abnormal in comparison with the previous evaluation even in the countries that are experienced full employment, including the u.s. doesn't seem to function as it did in the past and that creates the real problem for the central banks. it also proves that the central banks should not be the only game in town >> and that is my second question they can't be the only game in town we're seeing that in real time there has to be more fiscal stimulus it's been hinted at in germany my last question is a simple one. if we don't see some response to negative rates, how are we going to purge them? how are we going to have an exit should the globe go into a prolonged recession? >> first of all, i trust that the present situation is not assisting anybody in the long

run. i in more normal times. it's a question of time, of course second, i also trust that there is not only the governments and the parliaments to step in with structural reforms on the one hand and fiscal action on the other hand, you have also the social partners. one of the major problem we have is tha increases plus productivity progress delivering something which is much too meager, much too small in terms of growth, and that, of course, is the problem of inflation so as you see, when i see all the partners step in, it means all of the partner, including the private sector and the social partners. >> i guess my final question with the last very small amount of time we have left, is if negative rates and all the stimulus and quantitative easing

hasn't really addressed productivity or raised prices, then obviously a new strategy is needed any ideas what that may be along with the fiscal stimulus that may be needed? >> first of all, it's always very difficult to devise the counterfactual when one says the action of the central bank did nothing, you have to compare with what would have happened had they not stepped in and i take it that what they have done was really necessity and helped considerably to avoid materialization of a deflationary risk that would have been a real catastrophe so as you see, i'm not that excellent. >> excellent. >> i expect that the other partners would step in >> mr. trichet, thank you for your opinions. it's going to be very interesting to see how mario

draghi does tomorrow thank you for your time. david faber, back to you. >> mr. santelli, thank you we've been watching the california legislature closely and its attempts to regulate the gig economy. uber and lyft caught up in that. let's get to deirdre bosa who has more on new developments this morning. >> david, take a look at what they're doing in markets uber and lyft shares are climbing higher after california governor gavin newsom told the journal that he still hopes to reach a deal with them over the so-called gig economy bill he said in an interview as it relates to uber, lyft, these remain an ongoing discussion and is committed to continuing those negotiations this bill could change the way that ride-sharing companies classify their workers, requiring them to treat them as employees, leading to higher costs for companies, riders, potential legislation in other states but it underlines the fact this

is far from a done deal. >> we'll be watching closely and know you'll bring usthe latest thank you. let's send it over to jon fortt. >> we're going to keep talking about 85, among other things the head of the new york taxi and limousine commission, we'll talk about if there is a carve-out, what that could look like if there's not, what it means for the gig economy workers, not just uber and lyft, but door dash and all kinds of deliveries that's coming up on "squawk alley. great riches will find you when liberty mutual customizes your car insurance, so you only pay for what you need. wow. thanks, zoltar. how can i ever repay you? maybe you could free zoltar?

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welcome back to "squawk on the street." i'm dominic chu. nearly all sectors of the s&p are in positive territory today, save financials and real estate. energy, though, the standout upside performer the move also comes, and it makes it the farthest and furthest away, far and away the best-performing sector so far in september. the big gains are being driven by upside in oil prices, you've got noble energy, marathon oil, apache, hess, all among the leaders in that sector so far. even with the gains today, though, energy still the second worst-performing sector in 2019, just up about 6% or so in that time frame so energy a big day-to-day, a lot of ground to make up.

i'll send it back downtown to you at the stock exchange. back over to you, carl. when we come back, we'll hear from goldman's rod hall, get his takeaways from the apple event having also already to katie huber tee. dow is up 51 "squawk alley" starts next i wanna keep doing what i love, that's the retirement plan. with my annuity, i know there is a guarantee. it's for my family, its for my self, its for my future. annuities can provide protected income for life.

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