preparing a crackdown on flavored e cigarette products and what it could mean ecb minister expected to announce a stimulus package that is likely to make president trump green with envy, better than orange. big announcements today. it is thursday, september 12, 2019 "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps. this is "squawk box. >> good morning. we are live from nasdaq markets at time square i'm becky quick. mike santoli is in today you'll see green once again. do you futures up by about 60

points after a rally that saw all of the major averages up do you up by 227 points. s&p up by 21 nasdaq up about a percent at 85 points a lot of people muling through and looking at some deescalation it still continued but let up a little bit trade looks like a sidelined issue or better. much much lower but rising that made people feel like they didn't have enough exposure.

>> the dow is up around 2,000. russell 2000 is up >> first it is a catch up and then let's see how far we can stretch it overnight, with the headlines of the latest concessions, the s&p futures shot up. we are up six or so percent. >> if we wanted to, we couldn't make new lows or deals it is fairly far away. >> you are in this zone. you have a cushion below >> you see the 10-year 1.726

>> it is good. it is good it is good >> always a good side, bad side of things. >> in asia, we did see the president tweeting about postponing tariffs sang high composite ended up in europe, if you look at what is happening there, right now, markets have barely budged there. waiting to see what happens next >> president trump tweeting overnight, set to delay tariffs by two weeks >> it is significant >> but the two weeks -- we know how quickly time passes. >> it puts pressure on those

talks. >> october, i just get nervous about october every year with stocks they are going to have their anniversary in china it could be a totally different october or, there could be some reason for it to be a typical october. >> with the market >> octobers are horrible always a good bottom >> futures rallied they thought great, futures will shoot to the high. the pattern has been, they do something but don't promise anything after that. a dispointing response it is all in the mix >> a gesture ever good will and china is responding this morning. eunice, it has been a week and a half those phone calls that may or may not have happened.

over turs began then, it seems like we have evidence there was some type of thauing on both sides. what is your twitter thing again? @yoon tv >> only yoon tv. >> a really good one i try to get you hundreds of followers every time you come on i don't know what good it is, anyway >> thank you china thanks president trump for this good will gesture beijing does welcome this olive branch to recap, president trump tweeted that decision was made at the request of the vice premier and due to the fact that the people's republic of china will be celebrating their 70th an verse on october 1. the delay from the 1st to the

15th is like what you were talking about. not necessarily so meaningful and would be appreciated by beijing, which considers october 1 as a very important day. wouldn't want to see any distractions to add to the positive at moss fe atmosphere, companies here have started making inquiries at pricing in products like pork and soybeans even so, long-time china watchers say the fundamental differences between the two sides are still really big also, what was interesting today, people were joking about an old chinese saying, which is,

what you can't avoid on the 1st, you can't avoid on the 15th. the meaning, if something is meant to happen, it is going to happen on social media, this probably means the october tariffs and conflict with the united states. guys >> say that again. what you can avoid on the 1st? >> what can you avoid -- yeah. >> we can the can down the road on everything. >> the way it came up was about debt collection. in china, can you try to avoid somebody on the 1st and not pay your bills but on the 15th, you can't avoid paying now it is being used for these tariffs. >> i can meditate on that eunice, i think. welcome to the town of

one-handed clapping. i'm going to think about that. >> i think it is like this >> that works. >> people that don't want to clap have you ever been to a place where they snap fingers? >> i think that's edgy >> that goes back to the folk clubs. >> thank you, eunice the trade war isn't the only market catalyst today. mario draghi expected to release a package i can't help it. at the top of the show, it said could make president trump green with enviy to what my viewers say. if you are already orange, what

would you turn to? >> p maybe green and orange like the irish flag >> let's ask hans, you are bullish? kind of friendly towards stocks? you don't like emerging markets much why? that's right given the strength of the dollar, which has been remarkable, the better bet is in developed markets and the u.s. it's a bit of a change for me. i think it reflects the vesting you are dialing with the circumstances in fronts of you whether valuation or the like. >> hank, when you look everywhere, i think you sort of -- if you try to factor all the different variables, both of

them could be trending maybe we don't go as far, hank you've got maybe some signals that trade gets settled one way or another >> yes look, it is a perfect set up politically. trump is getting several rate cuts so the interest rate environment has improved he can come to a trade agreement what really matters is that this subject get off the table. certainty replaces uncertainty that will allow business confidence in 2020 to pick up and you have the potential for the economy to start to accelerate in 2020 which sets up

perfectly for the fall 2000 election >> interesting how you say that. makes me feel kind of dirty. doesn't matter whether we do anything with china or get anything let's get it done so the market goes up and let china take over the world in 2025. wouldn't it make more sense to say let's hold out and actually accomplish something >> that's the other view point trump see ises this conflict as beneficial to his campaign >> that's cynical. what about trying to do what's right for the united states and citizens is that totally wrong that we should let him steel stuff and not have a fair playing field? >> joe, strictly from an

economic standpoint, what is best for the united states is no tariffs. if we eliminated all tariffs, things would be much stronger. >> i don't know. if you look at the hawkish view point on china i want us to do well economically i want gdp to go back up, unemployment too the case can't be made that this might be the time that you address some of this stuff what do you think, hans. >> i don't think we'll make any durable or significant improvements this is sort of falling into the cold war equivalent with trade

>> thank you on that thank you hanz and hank. see you guys later when we come back, ipos likely to be a hot topic smile direct club prepares for a debut. there is a big truck out here for smile direct right in front of us. b budweiser takes another shot at the ipo in asia. don't miss our interview with steven mnuchin that's coming up home depot leading the way, up by 1%.

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that's where i want to be. i want to be on the front lines of implementation. welcome back we are remembering the life of oil tycoon, t. boone pickens he died yesterday at the age of 91 a frequent guest, brian sullivan takes a look at his life >> i don't view myself as a work a holic because i love to work >> known as t. boone pickens the corporate take overfrom texas. >> to friends, he was just boone. born in oklahoma in 1928, a businessman from the start >> when i was 12, goit my first

newspaper job. i always had money after that in my pocket. it was a good feeling. >> he graduated from oklahoma state university with a degree in geology he started his own company mesa petroleum with just $2,500 he spent years personally drilling for oil he took mesa public and realized the power of stock turning from geology to corporate finance, he became one of the first so-called corporate raiders. creating a playbook to be followed by others take a small stake in a company, pressure it to sell itself and become very rich in the process.

>> i would be foolish to tell you we lost in a deal where we made $500 million. >> also an advocate for share holder rights. >> remember, the stock holder holds the company and the management is the employee >> in 1997, at the same of 68, pickens started his investment firm, bp capital it was a nearly total flop at first but a huge bet on natural gas in 2000 set off a run to a billion dollar fortune he made america energy independent. >> we haven't done a thing to lower our dependancy on foreign

oil. >> he created a company called clean energy fuels >> he donated $500 billion to his almar where the football team now plays in the boone pickens stadium. he bought and moved his childhood home from oklahoma to the texas ranch and started to drill a new oil well there in 2016 >> i always said i'd go out in a box. a lasting memorial to a full life lived >> squawk viewers know him as a frequent guest boone was somebody who was always curious, always learning, always flexible. i think that's why he never considered it work as people get older, they get

set in their ways and think what they know is what they know and nobody would tell them otherwise. boon was always looking for the next big thing he was known as the oil man. he said, call me the gas man, wind man he thought there would be peek oil and changed his mind because he realized fraking was coming he would always go big he'd make a few billion, lose a few billion. >> i remember everything about boone when i was a stock broker at merle in 1981, boone began his whole mesa saga. i remember telling my clients.

mesa mlp, it was paying like 8% or 9%. it was not like a regular dividend he would argue, he went after city service, gulf oil, unical >> all companies bigger. >> yes this happened there. and then i got to meet him and know him he was really an endearing, sweet guy. you could bust his stones a little he would look closely at what you were saying. >> he was a student as well as a teacher and constantly learning along the way. that is an amazing sign when somebody is adaptable. >> what is unique, is nobody

else had the parallel life and then the share holder advocate who brought about the 70s and 80s. >> he's right. management teams are the employees. he was right to point all of those things out >> he was on the cover of "time" magazine right there in the middle of all the action in the 80s until 1987 then, a whole new life i got to know him on a completely different level >> and not just an oil man but also looking to alternative

fuels. water too. >> did you know he thought about running for president in 1988. >> he was a backer of many candidates >> that's a life well-lived. by time we knew him, he was in his 60s. sk >> i went to china with him when he was in 70s. i went to china with he and his wife at the time i spoke to warren buffett about him yesterday. he said, they grow big personalities in texas, none could top boone. i was never with him that wasn't fun. i think that is what everybody could say.

i had break fast with him about a year ago even after some of the effects of the stroke, he was still busting the chops. >> he loved the cowboys and osu. texas a&m didn't renew his scholarship. as a result, he went to osu, so they got the $500 billion. texas a&m sts lithat as one of the biggest mistakes of time we will miss him as a struggling actor,

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time for the executive edge. we'll start with some corporate stories. watching shares of oracle. ceo mark hurd taking a medical leave of absence they wouldn't be more specific founder and chairman handle his responsibilities reporting first quarter profits and revenues slightly below. shares fell after the announcement but mostly recovering losses now down just over half a percent. groupon facing pressure from investors. it could be considering a tiup with yelp. from the debut in 2011 has fallen yelp is valued at nearly

$2.5 billion >> budweiser's ipo in asia and treasury secretary steven mnuchin will join us to talk china trade. right now, a look at yesterday's s&p 500 winners and losers ♪ through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet...

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♪ >> welcome back. you have watching "squawk box" live from the nasdaq market site in time square >> good morning, u.s. equity futures up again last night, they were up triple digits we held on to a 50-point gain

after six straight days up for the do you the nasdaq which had been weak up s&p up as well lse set to reject the $36.6 billion hong kong bid. wiping out some $1 billion of market value as asian investors got a chance to adjust the unsolicited bid for the lse. and ab inbev revives the plan and what would have been the world's largest ipo. the brewer scaled down the offering the ipo is set to take place

before the end of september, which is less than three weeks left andrew is not here today but he has a report that says the leaders of 125 companies will send a letter today urging expansion of background checks of firearm sales and stronger red flag laws. among the companies that signed this letter, levi, twitter, air b&b and more when we come back, the government cracks down on e cigarettes and later this morning, treasury commissioner steven mnuchin coming up at 8:00 a.m. you are watching "squawk box" on cnbc ♪ i can shine, i can shine, ♪

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>> welcome back, the trump administration preparing to crack down on flavored vaping products sorry to tell you about that eamon. something else you like to do, maybe? joining us now with more this will not affect my life one

iota >> the idea is that these flavored products are too tempting and appealing to children that are being brought in this the vaping wave in huge numbers. it is alarming the idea is to roll back a waiver the fda had given under the obama and extended under trump that would allow the marketing and sale of these products they'll allow the tobacco products to stay a lot of smokers use these products to try to wean themselves off cigarettes in theory to stop smoking they say that is a good thing. they want to stop the piece of this that seems to be aimed at or appealing to children here is how the president talked about it yesterday >> we are looking at vaping very

strongly it is very dangerous children have died people have died the acting commissioner is something who is a true expert as much as somebody can be an expert on a new subject. we'll have important information come out shortly >> the president saying there we'll have some strong rules and regulations. the fda releasing information that the specifics are not being released it will be a while here before we know how this will play out the administration signaling here, it has to go after the flavored e cigarettes on the market >> we've been talking about this for a while. i think what caught everyone's attention is just how much of an issue this has become for high

school kids. something like 25% of high school kids have used it in the past month or so going back to when i was growing up and trying to stop kids from smoking. >> candy flavored tobacco products marketed to teenagers. maybe they deny that if someone were to tell you about this, it sounds like something you would see on snl glass in a bag >> remember the days they were stamping out the ads like joe camel. this is that times x we are in the back to school season a lot of parents are really focused on this. a lot of the initiative came from melania trump, whose son

barron is in school now. i see this with my own kids who report back. it is a scarey thing you wonder how are these products everywhere when five years ago, they seemed not to exist. >> joining us now to talk more about the crack down off e cigarettes, the congressman who accused juul of breaking the law and advertising. congressman, thank you for joining us what was your point? what would you like to see happen >> it is one thing for adults to perhaps vape, it is another thing all together for the industry to target our youth there are two aspects of this that are very alarming one is that 20% of high schoolers and 5% of middle schoolers are vaping, which makes it an epidemic hundreds of hundreds of people

are hospitals with severe respiratory illnesses, most of them youth six people have died i'm very glad the white house took a step yesterday. they cited our investigation and hearing. but more needs to be done. >> some of the picks and stories have been incredibly disturbing. you mention the numbers. but the hundreds of others you look at the stories and there is an 18-year-old high school athlete being told his lungs look like the lungs of a 70-year-old. what is there the fda is not already doing? >> i think there are multiple things that need to be done. first, it is good the fda is banning these e cigarettes from the market

we should probably put that in legislation and make that law. i'm very concerned about the very high nicotine levels. the amount of nicotine in one pod is more than one pack. you can imagine, they get hooked for a lifetime my wife and i are parents of a high schooler and middle schooler so this is personally alarming >> scott gottlieb has spoken to us over a year on these issues it sounds like juul is pulling back from some is of these marketing strategies it is kind of already out there. what next? there are questions being

raised, why is this the only vice being targeted. it sounds like many of the problems from the latest research is caused by unregulated vaping issues. nout just the ones being sold in the stores but it is hard to distinguish between them >> you are right i think juul and others let the marketing genie out of the bottle regardless whether they stopped last fall to target youth with social media and influencers. juul has 80% of the market they've dominated this market and continue to do so. the rise in youth vaping has been linked to the rise in their business third and final point, addressing what you said, is i think the entire market needs to

be cracked down upon not just juul but also the black market vapors. one sign is that they asked everyone to stop vaping especially if they are not vaping now they didn't limit to a certain device or a certain company's device they just don't know the cause of these mystery illnesseswhic can are a crisis right now >> this seems like a bipartisan issue. what kind of support are you receiving on this? that's right i have to tell you when i was home for the august recess, constituents across party lines were up in arms.

this is not a partisan issue our children are not for sale. you can't target them for vaping they are off limits. >> we've leave it on that strong message. congressman, thank you for your time >> thank you coming up, smile direct's first trade is on the way. more expected next week. they are right outside and they tried stop me on the way in here. i smiled at some guy and they said, here, i can help you >> the guy across the street was knocking on my window. >> a quick check at what's happening in european markets. we have some green in some places two out of three we'll be right back. ♪

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smile direct club is set to begin trading on the nasdaq in just a few hours joining us right now with his expectations with that and the rest of the ipo market, a lot of deals slated for this fall, john elton at gray croft. we should mention gray cost is invested in the we company and the real real so john cannot comment on those companies thank you for joining us >> hi. >> clearly the ipo market as a whole remains open even if it's maybe kind of discriminating because we all know about some companies that are deciding whether they can get the valuation they want. what's the general tone for you are and what's the formula for when the deal in this environment is going to work >> well, you're seeing a variety of companies that are going public today smile direct club is obviously in the health care -- you have companies like data dog which are much more technical. and i would say overall it's just great to see a relatively

healthy ipo market people are scouring each individual name and having tough questions. but overall there is an optimism the companies are getting public it's good for the country, good for investors. i think in general it's a positive environment >> has it not been a little bit of a collision of, you know, here's what kind of silicon valley venture capital world thinks these companies are worth and the public market saying yes or no? i'm wondering if there is a rethink going on or strictly business by business >> i think all of this is very name by name, but yes, i think there is, you know, you keep hearing about the latest private equity round, an ipo and if there is a discrepancy between those pricing. you know, it's kind of friction. you know, years ago i joked that ipos were the new down round >> right >> luckily we're not seeing that any more although in the individual names that can happen. but i think, again, overall,

while -- in one name it might go down, one name it might go up. >> sure. >> i think it's a healthy thing. it's good for private investors, it's good for public investors >> so there is not the same momentum to try and push up valuation rounds privately because it's going to lead to embarrassment. and if you're the ones pushing it up, you're going to get egg on your face when this comes to an exit strategy in the form of an ipo >> i mean, for us, we want to build long-term healthy companies that are sustainable and when we're investing, there is a' no concept of pushing the valuation up that's not good for us >> right >> right >> if you want to build long-term enduring companies, they have to do well in public markets. we're proud of that. that's something that we care about. we care about it even when companies get acquired by other companies. so, you know, any time i hear this like oh, the vcs are trying to get out -- we're locked up, too. >> am i wrong to think that there was this momentum that was

out there that if you didn't do a deal at a price, somebody else would, and maybe that's died down to? extent say bad actors pushing things up >> again, this isn't unique to private markets. i would say the tone in general in the economy today is a lile . there is the trade question which we talked about last time that could flip to the positive but now it's those kinds of things are weighing on the general economy. that's affecting valuations in the private world. it's affecting valuations in the public world i think in late-stage preipo rounds, i would imagine those are much more difficult conversations today. >> the rule has been in terms of how the ipos have performed and what the market really latches onto is. the more a company looks like pure software, the better the market seems to like it. if it's a little more of a kind of hardware consumer play like smile direct, i think you can say this is a great brand of franchise. we just don't know how big the

market is going to be, we don't know how it scales does that make sense at this point? and i think it kind of bears on peloton, too, how muchof it is technology company, how much of it is not. >> software companies are interesting. they're high margin recurring businesses that have a lot of scale. data dog is a perfect example of that two french founders in new york with three new york ipos with peloton we and data dog, so we're kind of having a moment in new york which is really exciting but that's a perfect example of a software company -- you see financials, it's got incredible leverage the founders have built a really incredible company and peloton, you know, is interesting because you're right, it combines some software, combines media, combines hardware. and i think what we're seeing now is that innovation is spreading into areas because a lot of like the things you think software would have been disrupted at this point, now it's seeping into other areas.

the macro on that is, you know, working out has become the new religion, religion in general is on the decline and working out is massive uptick as people are trying to live healthier lives and you're seeing that in peloton's number also. you have i think the interesting analog between peloton itself where you have a membership -- i think the retention rate is in the mid 90s. people -- user's rates are healthy. people love it they're subscribing. it has software like elements. they're the apple of the category i own one of the bikes it's a really well designed bike the software is -- the u.i. is great. that kind of stuff is subtle, but it's very difficult to disrupt. there's lots of bikes out there, but there have been lots of bikes out there ever since they started. >> right >> john foley, the founder, is still very involved. i think he's going to continue pushing innovation they rolled out this treadmill i tried the treadmill.

it's not incredible -- the best treadmill you'll ever be on. >> right >> so i think peloton is an interesting unique animal that has those cross-over element >> apple to category, high use and good experience. >> general profits go to the premium brand in a space smile direct, we're sort of the premium company some people call candid, that only uses orthodontists. one of the things that smile direct has been, you know, has had issues on -- >> one of the questions about. >> so we've sort of taken a different approach, have a higher end product and i think with peloton and candid and those kinds of companies, if you have a premium brand, i think the bulk of profits just like apple has it in the smartphone category >> john, thanks a lot. >> thanks for having me. >> when we come back, we're going to be talking to former fda commissioner scott gottleib. he will join us in the next hour to talk more about the trump administration's crackdown on flavored vaping products, what

he thinks are causing the lung illnesses we've heard about. first, though, the guest host the next hour is media mogul robert johnson >> where is he >> he's coming he's right in the wings. i see him right here we're going to tk altrade, trump, the economy and much more ♪ ♪ ual 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? thanks, lady. taxi! only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ i cowe can do theyour screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies

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♪ ♪ >> announcer: live from the beating heart of business, new

york this is "squawk box. >> good morning, everybody welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and mike santoli. futures have been indicated up dow has seen six days in a row of gains got the dow now above 27,000 and the s&p back above 3,000 right now we're indicated up one more time. dow futures up 50 points, s&p futures up 3 1/2 and nasdaq up 24 >> a number of signs this morning of decreasing trade tensions between the u.s. and china. as we noted president trump delayed the imposition of some new china tariffs as a good will gesture. initially chinese officials say chinese companies have started inquiring for purchases of u.s. agricultural goods all of this coming ahead of planned meeting between the u.s. and china in early october a key moment for the markets is less than 45 minutes away. the european central bank will issue a policy statement following the conclusion of its meeting. investors are expecting the ecb

to announce new stimulus measures and general electric has received $2.7 billion in net proceeds from the sale of shares in baker hughes. sale makes ge now a minority shareholder in the oil field services company, cutting its stake from 58% to 30%. ge sold its shares at 21.50 a share. >> retail news, walmart is rolling out a limited grocery subscription service it will cost $98 a year for same day delivery and will be available in 200 markets around the country. >> smile direct club pricing its ipo at $23 a share above the expected range the deal values the company which sells clear teeth aligners, they're called, at about $9 billion smile direct shares are expected to begin trading later today on the nasdaq under the symbol sdc. i think they could have come up with something better than that. smile direct club. >> if you're on the nasdaq grin.

>> yeah, yeah, there's a lot that -- a missed opportunity but do not miss the company's cfo and co-founder live on "squawk on the street" after the company's first -- it's a nasdaq stock? >> yeah. >> all right >> andrew is not here today, but he does have a new report in "the new york times" that says the leaders of 145 companies will send a letter to senate leaders today urging an expansion of background checks to all firearms sales, and stronger red flag laws those are laws that would allow courts to temporarily ban guns for people who are considered at-risk of violence. among the companies that signed, levi strauss, twitter, uber, lyft, airbnb, gap and bain capital. democratic presidential hopefuls will be facing off in houston tonight. kayla is there and she joins us with a preview good morning >> reporter: good morning, becky. you could see fire on the stage

tonight, the two front runners, joe biden and elizabeth warren take the stage together for the first time where biden is expected to criticize the spate of policy plans warren has released as impractical. here at texas southern university, a historically black university, the 650 students in the audience care about the job market that looms large as the word recession is talked about more frequently, even despite steady growth in the economy. here in texas, unemployment has bested the national average, but democrats see an opportunity in the white liberal voters who moved here for jobs in the tech and energy space energy has flourished under the trump administration due to deregulation, but it could come under fire tonight with all of these candidates having taken a pledge not to take money from the fossil fuel industry and fresh off of events where they've talked climate change. also health care is expected to figure prominently, and then firearms candidates have praised walmart's move, but said it doesn't go far enough. and beto o'rourke and cory

booker have also come out with plans that would require people owning assault weapons to have the government buy them back now, o'rourke has seen a surge in his campaign here in texas after relaunching it in the wake of two mass shootings in the state. here in texas, he is the second candidate in the polls behind joe biden, so we will see whether he has that home turf advantage tonight in houston guys, back to you. >> all right, kayla, thanks. we have a guest host, look forward to this morning for a while. back in july, billionaire business leader robert johnson who supported hillary clinton in the 2016 election told cnbc's hadley gamble, the economy is doing great. and he gave president trump a lot of that credit >> i think the economy is doing an absolutely great. and it's particularly reaching into populations that heretofore had very bad problems in terms of jobs, unemployment, and the opportunities that come with

full employment. so african-american unemployment is at its lowest level i give president trump -- and i said this before on "squawk box," i give the president a lot of credit for moving the economy in a positive direction that's benefiting a large number of americans. i think the tax cuts clearly helped stimulate the economy i think business people have a a little bit more confidence in the way the economy is going >> trump responded with a tweet reconfirming what johnson said about the economy, tax cuts and jobs and the president added, thank you, robert. one of our great business leaders. so welcome, bob, today it's great to have you here. >> thanks. >> first thing i would ask that might be most, you know, relatable to our viewers, is the economy -- do you still see it the same way because we've had a lot of recession fears of late. instead of getting into the politics of it -- >> i'm not going to define what a recession is

the economists can do that you know what it means but the real issue for me, and i said this on the interview you just showed, for african americans, the trend continues to be favorable. the more african americans have been in the workplace in the last cycle, more african-american women are getting hired in the workplace and the unemployment rate has drifted downward >> historical levels >> yeah. so when you look at all of that and you say where is that coming from, and it's coming from business people hiring more minorities, that means they're doing very well in terms of investment, in new plant equipment, and in growth and, therefore, in people and when you see more minorities getting jobs, you know, there used to be the old saying, when white america catches a cold,

african-americans get pneumonia. it's going the opposite way now. white unemployment is going down, african-american unemployment is going down that's a plus-plus that you can't argue with and as i said earlier, i give the president credit for doing positive things. and when i see a president doing positive things, particularly for african americans, what i do is go back to that particular leader and say, you've done this what else can you do and the president has responded to me -- i met with him less than two weeks ago on an issue that also focuses on the issue of wealth and economic opportunity for african americans. it's called retirement african americans lag way behind white americans in retirement savings. so i went to the labor department, the trump administration to get them to implement and approve a policy called auto portability of 401(k) account simply what it means, guys, when

you change jobs, if your 401(k) can go along with you, you retain that 401(k) account and its growth you don't pay taxes if you cash out. unfortunately, african americans compared to white americans cash out at a rate of about 60% that means millions of dollars or low-wage workers, people who have 5,000 or less, are leaving the system and african americans and hispanic americans are suffering from not having sufficient retirement savings, which also leads to the wealth gap that exists between white and african america. the president and jared have been supportive of this, and i'm asking -- i've asked the business round table, which as you know, changed a little bit -- they argued that a company now should look beyond just the shareholders, but look to a broad array of stakeholders including the community and other individuals, other

organizations, to join with me in making auto portability a national policy. if you do that -- if you do that, if the president does this, and he's supporting this and calling the record keepers, the van guards, the fidelities, to come together and implement this program which the labor department has given a legal exemption -- so there's no liability in terms of acting as a fiduciary as you move 401(k) accounts if this happens, literally trillions of dollars overall for all americans will go into the retirement system and stay hopefully. and more importantly, close to 600 million to a billion dollars of retirement wealth will be retained by minority, african-american, hispanic americans. it's a positive thing to do -- >> explain what's different. i thought i could take my 401(k) with me now. what's different about this?

>> you have the knowledge you're moving from job a to job b and you know you're going to do that if somebody doesn't say, becky, i can also make sure that when you move from job a -- your 401(k) will follow >> make it easier for me >> make it easier. you have options >> you have to rollover. >> you can take the cash, you can demand to take the cash. what happens is unfortunately, as i said earlier, african americans and hispanic americans take the cash. >> is it because they don't know to roll it over? is it because they don't have savings and maybe they need the cash >> it's probably a history of lack of savings. you don't have the wemt. you have to have some money to save the other is that it's complicated. but once -- what we do at the retirement clearinghouse, which manages our auto portability, don't make any decisions until we explain to you what your options are. >> right >> and just that notice of there's a way to save money in

your 401(k) program by not doing anything rash, that changes the dynamics and the behavior. it's simple. all we need is the large record keepers and the corporations -- >> right >> -- to say to the record keepers, look, under my 401(k) policy which all companies have, implement auto portability, save literally hundreds of millions of dollars for lows-income wage workers, billions of dollars >> are there tax implications? i assume when someone cashes out there are taxes that are incurred >> that's the double hit you lose obviously appreciation of t of the 401(k). >> do you think elizabeth warren would be as amenable to this proposal as president trump? i'm just wondering whether immediately you'd hear there's -- the tax gets paid eventually anyway. what is it net-net >> i'll tell you this. the one good thing about auto

portability, elizabeth warren was one of the original signers of a letter that we gave to the labor department back when the obama administration was in power saying auto portability is a good thing this is bipartisan we've got a group of 11 senators led by senator tim scott from south carolina on board with this from the republican side. and then we've got people from the democratic side, one is elizabeth warren so there's no reason why -- see, this is one thing i like about what the president is doing, is that if you can bring private business -- in this case a minority company -- and the government to look at a policy that would benefit african americans or hispanic americans or low-wage workers and say, hey, you come to us with a proposal that makes sense for workers and we can remove or regulatory impediment, and the end result is better economic benefits for americans, that's the kind of governing philosophy

from economic standpoint that i like that's what president trump is doing. >> so did you get push back from your comments in paris would you say mushback is a word here you are again saying the same stuff >> i got more exposure from this than i ever thought would happen because, again, when i did this with hadley, the correspondent, it was 6:00 a.m. in paris. i'm thinking -- >> it's a great shot, eiffel tower. it was pretty cool >> who is up at 1:00 a.m. in the u.s. >> you're a democrat, a lifelong democrat under any circumstances would you support the reelection of president trump in 2020? >> yeah, i don't say who i support in public. >> is it possible? >> well, i'll tell you what i will say -- what i will do in 1971 when the congressional black caucus was founded, the congressional black caucus said their philosophy is

african-american voters -- black voters black voters should have no permanent friends, no permanent enemies, just permanent interest and i would say to either the democratic party or the republican party, at a time when everything now is identity politics -- >> yep >> you're hispanic, you're lgbtq, you're this, you're that, women, men, all those things it's time for african americans to think in terms of their permanent interests, not being an appendage to either party either democrats or republican so i would invite -- and the democrats will argue, hey, we're already friends with african americans, they love us, they give us the vote that's a logical argument based on the facts what i would say to the republican party and to president trump -- he talks to me and i'll tell him this -- that here's what i would do. i would call african americans who wanted to do it to come to a white house meeting with the president and other members of

the republican party to say, look, come to us, not as friends necessarily, but not as enemies, but come to me and tell me what your permanent interest for african americans, some 40 million african americans in the country are. and if i listen to it and i can address some of those permanent interests, maybe we can be friends ormaybe we will just b in a relationship that we continue to look at issues but i don't think it's fundamentally in the best interest of african americans to be locked up in one party, particularly in an environment where everything is zero sum game >> because you get taken for granted? >> that's the only thing business is competition. if you're a consumer, you want to have company a selling you and company b because you're going to get the best results. same thing to me in politics, and i think for too long african americans have failed to recognize that they can be -- we

can be -- not they, we can be the balance of power in party. when people are talking about getting rid of the electoral college, people vote by numbers of majority vote you've got a huge voting block that can shift this way or that way. you can horse trade. i think what the congressional black caucus said in '71 should be the philosophy for african americans today. no permanent friends, no permanent enemies, just permanent interests. >> okay, bob will be with us for the rest of the hour thank you. 77 >> and coming up, one of the world's largest hedge funds making a big announcement this morning. we'll get the details in just a few minutes. and later, the trump administration plans to ban flavored e-cigarettes. we'll hear from former fda commissioner dr. scott gottleib. u' wchg ed yoreatin"squawk box" on cnbc who forget they're in public.

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still to come, one of the world's largest hedge funds is rebranding leslie picker will bring us special interviews "squawk box" will be right back. >> announcer: time now for today's aflac trivia question. the first penny press newspaper appeared in september of 1833. what was it called sw wn bc "ua'ssqwk box" continues

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>> announcer: now the answer to today's aflac trivia question. the first penny press newspaper appeared in september of 1833. what was it called the answer, the new york sun

>> one of the world's largest hedge funds is announcing a name shea change as part of a rebranding effort following scandals and management turmoil. leslie picker joins us now with a exclusive interview. leslie >> hey, mike thank you so much. and, rob schaeffer, the c.e.o., thank you for joining us oz if paid charges to pay for the settlement charges that's the firm that went through profile and management struggles to which you ultimately became c.e.o. a year and a half ago now the name change to skup or why the name change? is it to put the past behind you? >> i think it's really the final touch on a series of changes and events that have happened at this firm, leslie. i think to understand that as you say, you have to have some perspective on the firm.

the firm was founded 25 years ago by dan ack who was one of the real icons of the alternative asset management business, and he built a tremendously successful firm the firm has been known to have great consistent investment performance throughout its history which is something we're proud of to this day as you say, the firm went through a difficult period we had a regulatory issue in 2014 which we settled with the government in 2016, and i think events like that can destroy firms or firms can learn from those things and have the humility and the wherewithal to change and i think we've made material changes to our firm. we have, i believe, a first rate risk and compliance infrastructure today and we have evolved. you know, when you think about dan's retirement in 2018, transition from a founder is always a tricky thing to do. the good news for us really was that we had a really deep bench of talent in this organization and i think the real secret sauce is the fact that these people have all grown up here. if you look at the people who

are running the firm today, they've had 10 to 20 years of working together in this firm. they know the culture. they understand the risk process here so i think that's been fairly seamless but when you put it all together and you put the things behind us that we needed to put behind us and really have the new set of leaders in the seats, we fel mark the moment it made sense to change the name. >> so daniel ack is not involved any more with sculptor >> he's a shareholder but no longer involved n. management of the firm >> there are hedge funds these days that wouldn't have been able to successfully pivot from the founder as the head of the firm since you've been in the tide has shifted. you've been able to stem the outflow performances much better than your peers. it seems like the business is turning around what do you think is the key to succession in the hedge fund industry, especially as others -- you convert to family offices or shutdown altogether >> i think our performance has

been consistent throughout our history. and i think we continue to evolve our process but i think the key for us is really been, number one, to have those people who as i said grew up in this organization and work together and preserve that continuity the second piece is really just focusing the organization. so when we think about what we are, the simple question i asked when i got here, what are we good at? where can we demonstrate alpha and derive returns for shareholders that's three areas the multi strategy business, credit business and real estate business and i think a lot of alternative asset management firms are asset management firms in general have a tendency to be asset gatherers and they tend to try to basically get as much assets as they can we would rather be a bit more disciplined about that and stick to our knitting and stick to the areas we actually believe we have demonstrated, you know, the ability to drive performance and believe we can continue to do so >> sculptor is a rarity in the

industry do you think a lot of that discipline and change was driven by the fact you are publicly traded and it was kind of a necessity? you didn't really have the option to close your doors >> no, i don't know that i would say that i'd say, look, we are a public company and we are very focused on driving shareholder value to do that it's about executing the plan no one here is declaring victory. i think we have a clear strategy i have a lot of confidence in the people who are leading the organization today and if we can do what i believe we're capable of doing, that is going to drive investment performance. that investment performance is going to drive growth in our platform, and i think over time that will certainly manifest itself in the share price. >> speaking of growth within your underlying strategy, i was surprised in my research to learn that credit is actually two-thirds of your assets under management these days. multi-strategy about a third of your assets and management these days how durable is credit in this current environment? why do you think multi strat is

relative to your overall >> we have grown a credit platform the team underneath him, we have real capability both in performing credit as well as nonperforming credit we also express, you know, credit within our real estate platform as well as within the multi strat itself in terms of multi strat, i would say if you think about the environment the last ten years, we've been in an environment where you've had low volatility, low rates, and massively inflating asset prices and that is really behooved investors to be a pure risk on strategies anything from passive to private equity if you have been long this market, you have made a lot of money. the notion of a hedge fund that hedges out risk as a multi strat would do, has by definition generally on an absolute basis under performed those strategies but the real question that i would ask investors and i do ask investors is, okay, that's the

last ten years what about the next five not that anybody has a crystal ball i certainly don't. but when i think about that, if there is more volatility and there is less of a one directional market, the idea of something like a multi strat that preserves capital on the downside and participates on the up side, i think is a very sensible place to have money u. and for us we've got global scale. we've got capability across these asset classes. so i like our chances. >> all right bob shafir, c.e.o. of sculptor thank you for joining us today back to you guys >> leslie, thank you when we return, the ecb set to announce new measures to sure up the european other economy we'll get reaction at 7:45 eastern time and then dr. scott gottleib will join us to discuss the push to take flavored e-cigarette products off the market. right now, though, as we head to eqtyutes u. look at the.s ui fur so you only pay for what you need. nice. but, uh...

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the markets bracing for another round of stimulus from the ecb. that announcement is just minutes away and at the top of the hour treasury secretary steven mnuchin joins us to discuss y ade, the state of the econom and much more. "squawk box" will be right back.

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well, let's get to don chu, that time of day let's look at this morning's market movers what's up? >> good morning, joe among analyst calls, caterpillar, the shares are down

fractionally just around 3,000 shares premarket volume. the construction equipment giant gets downgraded by analysts at wells fargo from market perform to prior outperform. price target 143, it used to be 150. they are taking advantage of strength to lighten areas like fees they say construction demand in the u.s. will slow down. then you have shares of pay pal up fractionally 5,000 shares premarket volume payment processor gets upgraded by analystcanaccord. 1 # 18 from a prior 110. they like among other things better macro conditions for payment volumes and an attractive entry given pull back in shares. they call pay pal a payments juggernaut shares of abbvie, the biopharmaceutical company gets

upgraded to buy at ubs from neutral. the price target is from 79 to 85 they say purchase offaler began forms a new company that will be a free cash flow machine so, becky, those shares going up one and a third percent at this stage. >> don, thank you. good to see you. >> good to see you >> let's get back to our guest host this morning, founder and chairman bob johnson who is a cnbc contributor bob, you're a media mogul, founder of b.e.t you've been in this content business a very long time. what do you make of all the moves that are happening right now? you know, we've been talking about apple getting into the streaming business 4.99. at&t is doing it, comcast is doing it, everybody is doing it. what do you think? >> including us, i'm back in it. we have -- remember a year, year and a half ago, did an agreement strategic merger, if you will, with abc -- amc, excuse me, amc networks headed by josh sapan.

and we took two streaming services one is acorn tv, which does british mysteries and dramas, and urban movie channel targeted to the african americans much like i did with b.e.t. and then eventually with amc and the theory behind streaming makes sense if you can create a brand that appeals to a distinct target audience. i think those kind of platforms can grow and survive in fact, that's why we invested in it and why we believe in it on the other hand, when you get to this broad, huge network offering multiplicity of content of all types that are out there, all of those companies can't survive because -- >> all the direct -- >> all the direct streaming services can't survive because the customer is going to be put in the position that -- when i was in the cable industry, we

resisted all the time, everything was a la carte. that the customer was going to come in and say, i want to buy espn, i want to buy usa networks -- they don't think like that. they want somebody to curate in order to be the top curator, you've got to have a brand you've got to have a target. and you've got to have a lot of content. but everybody can't be in that position >> you know, i agree with you. >> there is going to be at some point the customer is going to say, i want three of these, not 20 of these. you go to a smorgasbord or buffet and get everything. you pick the things you like and you tend to stay with them that's where i think -- when the rubber meets the road, i don't know it's also beginning to show up already now in the pricing, you know >> with apple at 4.99? > >> apple at 4.99 some services will find their

way in pricing or won't find traction >> in terms of pressure on everybody else, does netflix suffer at this point do you see them as a competitor or distinct outside entity that's made its way into the home >> what i would say about netflix, netflix has created that mind moat that people sort of -- it's the default place you go for somebody to curate content for you. and i think as long as they can maintain price -- a price ratio that people are willing to pay for and continue to deliver compelling content -- because they had, as i said, that moat around people's mind when you think of streaming, what do you immediately think of it's netflix >> people think of it as a documentary -- >> when you go to it, you see everything and they keep moving it around in sort of a marketing way to make you think you're getting

new stuff, but you're getting the same stuff and so that's good so they've -- their management has been able to manage that relationship with the consumer the other companies are going to have to find that, and that's not ease hey to do. when you're selling people a lot of content stuff they know they can get other places >> all right, robert, stay with us we have some time left wish we had more time. breaking news from europe. market breaking for otr anhe-- bracing, hoping. we'll get details after the break. we'll be right back. 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.

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we've got some breaking news expected out of the european central bank on interest rates the potential for an additional cut there maybe some additional stimulus the bigger question is what will that mean for the federal reserve which is meeting here next week. very quickly take a look at what's been happening with the futures and let's get to steve liesman. >> we don't have the news yet, becky, but we are looking for .1 to .2. here it is breaking right now. give me a second here to call this up. it's a long statement here interest rates on the main refinancing operation on the market lending remain unchanged. hold on a second ecb cuts rates on deposit facility at . -- minus .5% we had a 10 to 20 basis point margin out there of expectations the ecb also saying that the

rate on the other units remains unchanged. trying to see if there is any other additional information here positive facility decreased by 10 that's the main news i'm getting here from these wire flashes here, becky. it now expects interest rates to remain at the the present or lower levels until it is seeing inflation robust converge. new stuff there. to a level sufficiently close to but below 2% within its projections. just reading the headlines here. net purchases will be restarted -- here's the qe part of it -- under at a monthly pace of $20 euros as from november 1, little bit maybe on the light side i've seen numbers as high as 30. of course, some people were taking off of the hawkish comments that were made, and they were saying it could be zero so they did get, i'm going to say more or less, what they wanted here. >> yeah, here's one headline, steve. they are saying the rates are going to stay at present or lower levels at least until

inflation appears to converge to the targets. low rates and continued low rates. >> remember he said whatever it takes. so there is the what, a qe cut, a qe increase, an interest rate cut. some forward guidance which becky just read, that's another tool you just pointed out there, becky. that's important there interest rates in each operation will not be set -- will now be is the set at a average rate level applied. technical stuff. i think that's the main news here, becky. you've got the cut i'm trying to take a look here at the markets not seeing much -- let me take a look at the two-year, 165. we were at 166, so a basis point off there, not much. 172 on the 10, we're at 173. not a big reaction i think what happened over time, becky, is that the market got way ahead of itself in terms of expectations for the ecb there were some comments that brought it back down now i think it has come in more or less at expectation

there is some resistance on the board from the typical monetary policy hawks that have been out there, but then you had like the fini fini finnish ecb member i think we're okay here. this does not dramatically change the pressure on the federal reserve here to do what everybody expects it's going to do, which is to cut by a quarter point, with the question being, what happens down the road is there more cutting to come from the ecb, does that then put additional pressure on the federal reserve. >> thank you >> it does seem like coming in right at the somewhat more muted expectation for the level of expect asian, it's meant to help the banks, european banks have been rallying with this announcement with that expectation. it does seem as if markets are absorbing it okay. it's certainly not, i guess, a up side dovish surprise some people were positioned for >> mike, i think it's worth

pointing out what the debate is out there. the debate is out there, how much more will additional or greater negative interest rates really help? with the big question that you reach a point where you start to go down the slope of the curve, where you start to hurt the bank so much in terms of their ability to lend that ultimately you end up hurting the economy overall. and there's a lot of speculation that the european central bank may be at or near that point >> steve, thank you. >> pleasure. >> okay. let's move on here to dr. gottleib tobacco stocks taking a hit after the white house announces a possible ban on e-cigarettes president trump said while vaping is big business, we need to protect our children. >> vaping has become a very big business, as i understand it, like a giant business in a very short period of time but we can't allow people to get sick, and we can't have our youth be so affected >> the national youth tobacco survey found that e-cigarette use increased among high school students by 78% between 2017 and

2018 joining us now former fda commissioner and cnbc contributor dr. scott gottleib worse in 2019, i think, too. these numbers are staggering >> right >> this is -- we do live in a place where we have a lot of freedom, and i'm sure that most people before you start doing things like this, you think long and hard about it. but this is the right action at this point, right, scott >> well, we have to do something. there is a 78% increase in youth vaping products from 2017 to 2018 the 2018 national tobacco survey showed 78% increase. that was on my watch in the 2019 survey which fda has access to right now, it showed greater than 25% increase. so that's a 25% increase on top of a 78% increase. you have fully 5 million kids using vaping products. there are only 8 million adults using them so almost as many kids using these products as adults at this point so it really requires some action trying to eliminate the flavors

is one option. you have to take steps to try to reduce the appeal and access the kids have to these products. another option would have been to eliminate the cartridge base products in the market, products like juul. that's what the kids find most accessible and frankly most appealing are these cartridge based disposable types of products >> just wonder, you know, with altec knowledge angie, the latest idea is let's -- before the horse has left the stable, let's get on top of this so we're at 5 million now. we should do this before it's 15 million, right these were all introduced without any thought as to whether it's okay or not, right? and now here we are at five. i mean, is it urgent, scott, do you think? >> well, it is urgent. the unfortunate thing is these products can be helpful in helping currently addicted adult smokers transition from combustible cigarettes not less safe, but less harmful they are less harmful than

combustible tobacco. it can come at an expense of addicting kids to nicotine >> getting off this -- >> exactly >> it doesn't make any sense >> when we put forward some policies related to vaping, we also put forward regulation to combustible cigarettes to make it less attractive to smokers. ban menthol and combustible tobacco. those regulations need to move forward as well simultaneous to putting restrictions on the e-cigarettes so we don't tilt the favor back to tobacco for adults trying to quit tobacco. unfortunately this problem, this crisis, this epidemic was created by one product, juul in 2019 tobacco survey, we're going to identifiably have data on how many kids are using juul. we put into the survey, what products are kids using when that full data set is out, we're going it know how many kids are actually using juul as opposed to other brands. there was a hint in a warning letter the fda issued to juul accusing them frankly of

withholding information from the agency there was a hint in that letter that suggested that it's a very high number. that the agency knows a high percentage of kids who are vaping are using the juul product. >> bob, you have a private equity, you have a lot of investments. did you consider this business as a viable one? and do you have a different view at this point? >> well, it's interesting. approximately -- i guess three to five years ago -- i think it's closer to five, when this whole idea of e-cigarettes was coming out and my private equity guys looked at it as a way to invest in a start-up business it was sold at that time as the doctor was saying, as the alternative to people who were smoking combustible cigarettes and, of course, african americans are heavy consumers of cigarette smoking and suffer some of the consequence. and so the argument was let's create and invest in this thing

which had, quote-unquote at that time, the perception of good qualities and, therefore, getting in on a start-up industry to me, you know, i never smoked. i never smoked in my entire life when i thought about it -- and they presented it, and they presented a very good business model -- i said, guys, we're going to pass on this one because i felt that somewhere down the line -- even though the argument was by the time there is a big concern, the big tobacco companies would buy out the e-cigarette world. and, you know, you'll get a good return but there was something about it that made me say, we're going to pass on this it just wasn't something that i wanted to have my name -- i mean, the company, rlg private equity i didn't want to have my name associated with cigarettes, whether they were e-cigarettes or vaping cigarettes or whatever and we passed on it. and 20/20 hindsight, we made the

right decision and looked for other places to put our money. but the challenge of the society today is, as you pointed out, joe, is that, you know, in a free market society and a market of free -- of liberty and free expression, it's hard with new technologies coming around for the government to make the proper decision as to what is available to the public in their own personal interest and what the government should regulate almost in a paternalistic way. >> right >> that's a difficult equation, but it's going to be an equation we're going to have to solve going forward or else we're going to have all kinds of problems like this coming to the market place >> we all think about prohibition and we think about what's happening with cannabis right now. society has to make some decisions here >> right but remember, these products were on the market out of an exercise of enforcement discretion by the food and drug administration these products are technically illegal under the current law.

fda has allowed these products to continue to be sold as a result of they can help adult smokers quit cigarettes. the vaping stores with the open tank vaping systems, those big contrans with the large batteries actually do cater to a large audience by banning flavors you're going to disadvantage stores -- those vaping stores and the open tank systems as well as cartridge base systems one consideration might have been to remove the enforcement like juul and blue and enjoy take those products off the market, require them to file oply indications like they're obligate today do under the law, but allow vaping stores continue to sell to a you dulgts. that might be something the agency is considering. that might be something we had on the table when we were looking at the policies. >> scott, thank you. always great to see you. we'll check in with you soon we also want to thank bob johnson for spending the hour with us. it's been great. please come back soon. >> will do, guys >> thank you when we return, treasury

secretary steven mnuchin is our guest. that news making interview after the break. also the futures after the ecb rate decision. looks like additional stimulus on the way, but anything out of whack with what the market was expecting. dow futures up 80 points we're a mating the news m.nderence that starts at 8:30 a. a we'll bring you the highlights as well you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. ♪

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some good will in the trade war. president trump announcing a brief delay in tariff increases. treasury secretary steven mnuchin will join us live. >> an industry on edge the trump administration preparing a ban on flavored e-cigarettes what the move could mean for the big business of vaping >> and protecting the house. >> protect this house. >> under armour facing an increasingly tough market place and some key trade uncertainties. we have a live interview with the c.e.o. and coo of the company coming up as the identifiable hour of "squawk box" begins right now. >> live from the most powerful city in the world, new york. this is "squawk box. >> good morning, welcome back to "squawk box" here on cnbc live

from the nasdaq market site in times square i'm joe kernen along with becky quick and mike santoli the futures this morning indicated higher again i think that would be 7 straight sessions, up about 86 points on the dow, s&p up 9, nasdaq indicated up 46. treasury yields, the ten year is currently at 1.68. so a little higher than that yesterday. the 30 year well above -- well above. 2.61%. >> some of the news in the last little while explains that bond move here are some top stories investors will be talking about today. european central bank announcing a rate cut in the last hour. it will cut its deposit rate from negative .4% to negative .5% also a new bond buying program, qe 20 billion euros a month. you see the euro reacting there to the downside, under 110 to the dollar also take a look at the ten year german bund yield.

that's more deemply negative at 0.64 just about. that's a response to the ecb the trump administration in the meantime placing a ban on youth vaping finalizing guidance to remove all non-tobacco flavors including mint from the market in 30 days companies could potentially reintroduce flavored products later but they'd have to get approval from the fda. purdue pharma the maker of oxycontin has agreed to settle 2000 lawsuits filed by states and local governments. it could cost purdue and its owners between 10 and $12 billion. the company is expected to file for bankruptcy not alltel the states are suing as part of the tentative agreement. >> president trump announcing a brief delay of tariff increases that were set to hit at the beginning of next month. in a pair of tweets last night, president trump said the move was a gesture of good will joining to us talk about this, the latest in the u.s./china

trade negotiations and much more, treasury secretary steven mnuchin. thanks for being with us today >> good morning. it's great to be with you. >> mr. secretary, earlier we heard from china, chinese ministry saying they are considering some moves, too, such as resuming purchases of u.s. pork. how would you describe the state of trade talks between the two countries right now? >> well, i think you know we've had a series of principal level conversations. we have a deputies meeting planned in the next two weeks where the chinese will be coming here and they'll be working on material and advance, the vice premiere coming here beginning of october to meet with the ambassador lighthizer and my several. we look forward to making progress the next few weeks. >> what happened the last time you went to china? seemed like that was a very brief trip >> well, i think as you know, we went to shanghai there was a real significance to them of us being in shanghai, and the shanghai agreement with kissinger. we clearly didn't make the progress we wanted to, and we look forward to when they're coming here that there is real

negotiation and real forward movement >> is that why the president is putting these tariffs off, but only by a couple weeks, moving it from october 1st to october 15th there really has to be some substance that takes place in those meetings in order for that to get pushed off or put back off? >> well, the president delayed it because of a request from the vice premiere. the optics of us raising the tariffs on october 1st, which is their 70th anniversary, caused them grave concern on the symbolism. and as a sign of good gesture, the president honored that request and delayed the tariffs. >> there is a report from the "wall street journal" just this morning suggesting that china is looking to try and narrow the scope of these negotiations to only trade matters they would like to put thornier national security issues as a separate track in an attempt to try and make some progress what do you say to that? >> i'm not going to comment on the specifics of our negotiations since i don't think that will be helpful but what i would say is we've been focused on many issues.

i think you know when we were on our way to an agreement, there are seven chapters and our number one concern is really around intellectual property, forced joint ventures, and making sure we have a level playing field on trade >> fair to say, though, that huawei and hong kong would be issues that would not be on the table? >> well, hong kong is definitely not on the table that is an issue for the secretary of state to deal with. that's not a trade issue i think you know the president has urged restraint and wants to make sure there is a peaceful solution to that but that is definitely not part of trade >> i know you don't want to get into the deep details of what's happened here. when we saw the last trip that you and ambassador lighthizer made to beijing, it seemed like it was a very abrupt departure, and i guess i wonder what would it take to really feel like you're making progress this time around when they come here to the united states? do you have a guideline that seems to you to say, okay, if we can make some progress on this

front, then it shows that we can move further down the road >> well, it wasn't an abrupt departure. and i know some of the reporting was that we left early i think we left 15 minutes early, and really that was on our way to a commercial flight but we expected that to be a short trip but i would saywe did not make nearly as much progress as we wanted, and that's part of the reason why we're having deputy-level meetings in advance of our principal level meetings to make sure that the necessary work is done in advance of this trip we don't want a trip that's just a series of discussions. we want to make meaningful progress >> so, secretary, there is a notion that the president could make a deat was kind of a deal doesn't accomplish as much as maybe we've stated that we want to accomplish. and i'm sure that it could be done with the idea that we really are accomplishing a lot i'm just wondering, how long do

you think we engage in what some might even call brink man ship you have a kmaechinese economy that's weaker than what we know, they have an impetus and we have an election coming up in 2020 do you think the president would ever make a deal that is sort of watered down just to get it off the table before the election? or are we in this to pass november of 2020 if necessary? >> the president is correct, h could do a deal any time, but he wants to do a good deal. let me remind you, these discussions have been going on 2 1/2 years, from the first meeting with of president trump and president xi, there was an acknowledgment from the chinese they would redo the negotiation. the president wants a deal that's good for u.s. companies and u.s. workers >> not just an ag buy or, you know, a couple half measures

a lot of people on wall street, guys are trying to figure out what's going to happen that's their base case, is that something is going to happen that maybe pushes things past the next election, for lack of a better term, kicks the can down the road for a next term, whomever is president at that point. that's not going to happen he will go -- the president will go to the mat this time around to get to these type of concessions that he wants for america? >> well, the president is a negotiator, and he is prepared to keep these tariffs in place he's prepared to raise tariffs if we need to raise tariffs. so this president is taking on an issue that's been going on for 20 years so this isn't an election issue. he's trying to do the right thing for american companies and the american public. and we need to rebalance this relationship, and they acknowledge it so if china comes here with a proposal that makes sense, we will consider it we will take it to the

president. and again, i'm cautiously optimistic i take the chinese in good faith that they want to come here with a deal now, as it relates to agriculture, we expect and we want them to buy agriculture we view that as a personal attack on our farmers. they need our agriculture, and they've always bought our agriculture. so this isn't about just selling them soybeans, but we want to sell them soybeans i want to be clear our farmers and our fishermen are important to us. >> mr. secretary, you note it's a negotiation. i wonder, is there anything that the united states is prepared to offeror concede, aside from the eventual removal of tariffs under the right circumstances. has the chinese side asked for anything aside from the removal of tariffs how does it go both ways in this negotiation? >> there are things that the chinese have asked for besides taking off the tariffs, certain things that they want. they've been on the table. we've negotiated that with our

issues i don't want to go into the specifics of the negotiation, but there have been very good two-way dialogue and as i've mentioned, the governor of the people's bank of china, my expectation is he will be coming for the trip also. we will be having a specific discussion around currency and currency manipulation. i've already had discussions with the imf i think you know that's another concern of ours. >> should we skip the strong dollar question, mr. secretary >> you can try >> no, no. no, no, i don't want to waste your time. how about the negative interest rate question? as treasury secretary, do you ever foresee that happening in our bond market here would it be a positive, in your view, if we had negative rates in the united states would you worry about mal investor no cost of capital and what happens when you get in doesn't seem to be working too well in europe do you think that's something we should hope for or expect in the united states? >> well, i will comment on

europe given my long-standing policy as treasury secretary, i won't comment on the fed and issues here. in europe, i'm not surprised that mario lowered rates the market expected that even though clearly europe has slowed down significantly, i think negative rates in europe are concerning for them for two reasons. one, it's very hard for banks to make money in negative interest rates. and if banks can't make money, it's hard to have a good economy. number two, i wouldn't be surprised if a lot of people start selling foreign bonds at negative rates and buying u.s. treasuries, which would have the impact of narrowing those spreads. >> i know you don't want to comment on the fed the president tweeted yesterday he would like to see, i think he called them the boneheads at the fed lowering interest rates. i think he did say something that is under your purview, the longer term borrowing we can do in the united states with lower rates. i know that is an issue you

opened up for discussion, long-term borrowing for u.s. treasuries where does that stand and when might we see longer than 30-year bonds issued by the u.s. treasury >> well, this is something i have talked about over the last two years, and it is something we are very seriously considering. we're looking at a 50-year bond, what we would call an ultra long bond we think there is some demand for it and that's something we'll very seriously consider for next year there are technology issues we need to make sure we have in place, there are market issues we would do this in a way that if there is demand, it's something that we would meet i personally think it would be a good thing to expand the u.s.'s borrowing capabilities a and although our job is not to market time rates, i would say it's quite attractive for us to extend and de-risk the u.s. treasury borrowing so we're also looking at extending the weighted average maturity of the treasury

borrowings to de-risk this for the u.s. people. >> one of the criticisms of that idea of going very long term with issuance, mr. secretary, has just been that it's hard to think that the united states could issue enough very long-term debt at very low rates to make much of a difference in the overall borrowing cost, especially since the 30-year right now, 2.15, presumably you're paying much more every year over those 50 years than you would on the shorter end >> well, we're going to look at what would be the spread of the 50-year to the 30-year, and we would only issue if we thought we could do it at an appropriate spread but innovation is important thing. when the treasury started tips, it was a small program and people said the same thing is there really going to be enough demand? i think innovation for the u.s. treasury is important. and as i said, this is somewhat market oriented. so if there is market demand, this is something we're seriously considering. we've reached out to the treasury borrowing committee

we've reached out beyond that to investors. we'll start speaking to foreign governments. and it's not on the table for this year, but it is something very seriously on the table we're looking at doing next year >> secretary mnuchin, on tuesday you testified before congress and laid out some of the plans for freddie and fannie, what you expect at this point i have seen notes circulating this morning that they expect that the sweep, the profitacry h of their profits, they expect that could end by september 30th is that overly optimistic or something you might think -- might happen >> well, that's something the fhfa and we are working on we are actively negotiating an amendment. our objective is to get it done by the end of the month. let me comment, what we would be doing is allowing fannie mae and freddie mac to increase capital. that is an important step on the way to recapitalizing them what we are negotiating is making sure the taxpayers receive proper compensation for

that delay but let me just also comment, we are very focused on housing reform we appreciated the opportunity to testify before the senate i was very pleased there was a lot of bipartisan support for many of the issues issues like affordable housing, which is very important in this country, making sure we have more affordable housing. so this is going to be a big priority of ours we want to make sure that fannie and freddie don't stay for another 11 years in conservatorship and go through another period where they put the taxpayers at risk. >> i can't believe it, mr. secretary. i thought we were done with the dollar discussion, and then the president just tweeted -- and i have to read it to you anyway, european central bank acting quickly, cut rate ten basis points they're trying and succeeding in depreciating the euro against the very capital -- all four letters are capitalized there, strong dollar hurting u.s. exports and the fed sits and sits and sits. they get paid to borrow money while we are paying interest

i'm just wondering whether you feel some pressure to maybe not continue the strong dollar policy that all treasury secretaries seem to always have in the back of their mind. i mean, the president is telling you almost overtly that the dollar is too strong -- telling us >> well, the only comment i would make is we've been focused on a stable dollar, and that's something over the long term, a stable dollar is important to the u.s. government. but i understand the president's concerns we talk about them all the time. and there is a lot of validity to the things that he's saying >> are there times we've heard recently about the president's relationship with some of the people in the administration where he likes to hear dissent, but only to a certain point. how do you handle that relationship about the dollar? what would you tell him today about whether the dollar should be depreciated >> well, that's a nice try i'm not going to tell you what i tell him, but i would say i've

known the president over 15 years. i've always felt completely comfortable telling him what i think. i've been in meetings with the president both on national security issues, economic issues and others he loves to hear people's opinions at the end of the day he's the president, the elected official and he'll make the final decision >> secretary mnuchin, just back to the freddie and fannie negotiations that are taking place right now. we did have diana olick who was watching your testimony at the senate banking committee tuesday. you were asked several times if president trump approved of the treasury plan to do this you said at that point, i don't know have you heard back from him does he approve of the plan you're moving forward with >> let me clarify, he does approve. it was a technical question i wasn't sure at the time i said we delivered it. i didn't know tech incomely he had approved it. they confirmed it yesterday and i'm happy to say he approved the plan

the more important issue is we're going to do things either administratively or we're going to work with congress. and working with congress is our first choice, and we're going to make sure we spend the next 90 days -- senator kennedy said he thinks that the committee should markup a bill and i agree with him completely let's make sure that on a bipartisan basis we see what can be done on, on legislation and it's an important issue for the american public and the treasury >> it has been a busy week, probably like every week in washington i know on tuesday you and secretary of state pompeo also unveiled some new sanctions on terror groups and financiers is the president going to meet with rouhani to negotiate? i just wonder what the impact of some of these additional sanctions you unveiled will be >> as of now, there's no plan for the president to meet with him, although the president has said that he is prepared to meet with no conditions i would say there were some

stories yesterday in regards to sanctions. let me just clarify this that secretary pompeo, i and the rest of the national security team are executing on a maximum pressure strategy with iran. there's no question it's working. we have cut off their money, and that's the reason why if they do come back to the negotiating table, they're coming back and again, no different than china. if the president can get the right deal that he's talked about, we'll negotiate with iran if not, we're -- continue the maximum pressure campaign which is working >> you know, as the first real c.e.o. businessman in the white house, the president knows how to have people he wants working for him and knows how to get rid of people he doesn't want around you've probably seen on other news networks they'll put up a list of people who have left you're surviving you've been there a long time on the island could you see yourself being part of the second term if the president were elected, mr. secretary? >> yes, i said before the

expectation is the president will be reelected. i think it's because of the economy and what he has delivered and his foreign policy and if the president wants me to serve a second term, i'm here. >> so, santoli, who is the longest running secretary? has anyone served eight years? >> i think you have to go back it's 13 years. i think it's -- who was i believe the third secretary. so it's been a long time i'm not breaking his record, i can assure you >> don't give people more fodder so you're thinking you might serve for the president for 13 years? now the third and fourth term are going to come back in. is that what you're proposing now? don't start that >> as of now i don't think he expects to have a third or fourth term. if the american people want it, i guess he'd consider it >> oh, my god. anyway -- >> he's saying that with a smile. >> i'm obviously joking. >> yes, you are. >> before we let you go, the president has also brought up the idea of slashing payroll taxes. he said that was something they'd consider, but it's not on

the table right now. where do you stand in terms of coming up with that plan or implementing with one? >> as reported we had a good session in the oval office he is not considering cutting payroll taxes. we'll call it tax cuts 2.0 which would require legislation, something i think we'll roll out later this year, beginning of next year. the president is focused on things that are going to create growth that will have tax cuts for small and medium size businesses and incentives and the middle class so unlike his competition, this president wants to grow the economy and make sure that we have tax cuts for the middle class and that they benefit. >> would it address things that weren't addressed in tax cuts 1.0 or would it fix things that were maybe -- maybe on the hindsight weren't as good? what would the basis of tax cuts 2.0 be >> all of the above. >> secretary mnuchin, thank you. we do appreciate your time it's always good to see you. >> great to see you, too

thank you. >> coming up, a special interview with two retail heavy hitters. courtney reagan is here with a preview. hi, courtney >> hey there, joe. here we are in the under armour brand house in new york city we're going to sit down with c.e.o. kevin plank and chief operating officer patrick. we're going to talk about the consumer, talk about tariffs, talk about strategy and lle ottion, maybe a little coegfoball if we have time that's when "squawk box" returns. y independence. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo. my dream is to help millions more people like me.

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welcome back to "squawk

box. uber and lyft say they won't reclassify their drivers as employees despite a new bill that was just passed in california that legislation is designed to give so-called gig workers things like minimum wage and overtime by calling them employees rather than contractors. uber's top lawyer says the bill only gives companies a higher bar to prove workers are true contractors. and he's confident his company can clear that hurdle. >> new tariffs on everything from clothing to shoes are just the latest hurdle facing retailers. recently courtney reagan joins us now with a pair of special guests who are navigating their company through the difficult market courtney >> hi, good morning to you, joe. i am here at under armour in new york city. it's a brand house store, the west field world trade center. c.e.o. kevin plank and coofrisk. we had steven mnuchin talking about a lot of things including

tariffs. since we heard from you last during earnings call, there have been new tariffs that have been imposed. this list 4 a and 4 b on clothing, shoes, socks what does that mean for under armour, kevin, when it comes to the cost margins and ultimately the prices that we would pay in a store like this? >> thanks, courtney. we wanted to come have this conversation because this is a brand-new transformation that's been moving from defense to offense and as part of that transformation, so much we did was setting ourselves up for the future in large part to be credited to our operations team for actually making china as not a place we're going to feel that great of an effect >> it's great. with the current tariffs, we're actually not being affected much at all only 10% comes to the u.s. from china. we're okay >> you figured out other mitigation tactics >> we have like kevin said, going from defense to offense, we feel this is a quiver in our arrow right now. >> you're in year three of a

three-year turn around you have lowered inventory, north american sales haven't stabilized as much as you'd hope you hired a new north american president. so, patrick, is this a symbol that maybe something needs to change with the north american strategy >> well, i think, you know, six months ago we came out and laid out a plan that really is over 20 quarters. we're two quarters into that plan we're confident with that plan but any plan needs a great leader we think we have hired that great leader right now in stephanie. stephanie is going to start on monday she's got great merchandising experience, great proven leadership talent. and we also think she is going to be, you know, that growth mind-set we need for north america. we're excited about what lies ahead. >> kevin, you've talked about getting a louder voice with your brand and with your brand messaging. obviously under armour is founded on performance some have pointed to an opportunity, though, in athleisure that perhaps you've missed to take the opportunity to use your product for more of a street wear. is that something you want to move into with your innovations and your transformation?

>> so, when we're doing it right it means we're a quiet company and really loud brand. that's some when we say getting on offense, you're going to start to see and feel that from us listen, we've heard all the reads on athleisure, what it means, are you in or not let's be crystal clear we've identified our consumer, we call the focus performer. that is a mind-set the consumer has. when they're thinking about what they wear, what they do with under armour, there's no here's performance and here's athleisure it is all performance. without beauty there is no performance. imagine product. the thing that makes it under armour, you look, you see an under armour product, this incredible talent i'm wearing, yes, i'm plugging uae.com. that's a really cool sweater next, what is it i'd say it's under armour. if the next question out of your mouth is under armour, what's it do we're the what's it do brand it can breathe and repel and keep the cold out. that idea of innovation, everything we do, that's what

the dna of the brand that's what the consumer knows when they buy under armour it is something making them better so that's what and who we are. that's what drives through >> so patrick, are these innovations getting customers to come into the stores this store is not an outlet store. 90% of your physical direct to consumer stores are. traffic in north america and traffic was an issue last quarter. that was something that pressured the result are the innovations driving traffic in the stores? >> you know, one of the interesting things we talked about in the plan that i mentioned before that we talked about at our investor day, we're going to continue to build more direct to consumer, more full price direct consumer here in north america going forward. we believe that's one way to drive our innovation, to make sure the consumer is able to come into stores like this and actually see the innovation that we're driving. we're going to couple that with great messaging, becoming a louder brand that's really what you're going to see as you turn the corner from '19 to '20. under armour doing best playing offense. >> how do you see the consumer,

kevin? we see the consumer as the linchpin holding the economy together seeing other points of weakness, what are you seeing? 70% of your business is still here >> we continue to see it through the lens ever upped of under ar. the consumer is looking for massive value or quality what we find is when we deliver innovation, hover platform, the sweater, the consumer is looking and saying, we'll buy there. the beautiful thing about being in sport is football is going to be played in the fall, baseball in the spring. lacrosse, et cetera. so sport has this luxury in our industry that, you know, we have a tendency to endure it doesn't guarantee you a thing, but i think with our brand in particular it's one that when we deliver the right product, the right price the right time we're going to win. we're a little bit shielded from that i think in sport. but i mean, our perspective is the opportunity basically sits in our hands so we love controlling our own destiny and you'll continue to watch us do that

>> we are extremely excited about the innovation pipeline we have coming up great pipeline with great messaging and actually turning on the loudness as we think a res piece f recipe for success going forward. >> obviously wholesale is a big seller for you you sell in department stores, mall based dick's sporting goods. some are malls, some aren't. how are your brands selling in those locations when traffic to the malls are pressured? >> that was a little bit lost in our earnings call. we were talking about wholesale. one of the great things is we see now as some of our old inventory is going off the shelves, we're putting new inventory in, new innovation and new messaging, it's really resonating with the consumer like we said, we see -- we're a little more optimistic about our wholesale business than we first thought this year. >> i think you're seeing that shake out that happened three years ago, through 2016 that we felt in our industry especially. the strong would survive and we knew that.

you've got terrific partners that are -- dick's sporting goods is dictating a tempo that's what we like to say about our business as well the success we're seeing in our wholesale business gives us confidence one of the things we've learned is how we segment, how we differentiate. how wholesale differs from our own retail stores. this is one of 1200 stores we have around the world now. one of the things we declared on the last earnings call we'll have close to 24, 2,500 stores in the next five years that commitment to understanding retail is one of the things we think is going to make us a better wholesale partner as well we're equally distributed in both of them >> what about your business on amazon.com, you are a first party vendor for amazon. is that going well for you how do you feel when it comes to competitive questions surrounding amazon's business? >> that's a great question we're focused on the consumer. our job is to understand how the consumer moves through their purchase journey today most searches start online so it's important for us to be

there. the balance of what we do and how we distribute will continue to evolve as the consumer evolves. our aim is to really stay focused on what the consumer is doing and follow the consumer. that's important to us kevin, do you want to add anything >> this world is changing so fast patrick now here, over two years, july 11, 2017, and just watching that partnership builds let me tell you how under armour works, the transformation, the transition from being the next level brand. our job is to meet the consumer wherever they want to transact making sure we're there right product, right price, right time we're seeing amazon has been a part of that but our strategy is also making sure our own e-commerce, our partner's own e-commerce, making sure we're doing a great job with them, that segmented product. it should be special, when you buy under armour it should be special. that's where that uniqueness is we want to make sure we offer that on our own website, giving people a reason to come shop our brand. >> very quickly before we go

here, we have some news out of can have the state senate has at least a profrmd the idea that college athletes may accept compensation right now you do sponsorships, ucla, berkeley would you look at going after superstar athletes instead of an entire athletic program? does that make sense for under armour >> i can't speak to that we have two great partner schools like cal and ucla. a massive deal in california we are a values led company. the first one says love athletes we absolutely love athletes. we recognize how much value that athletes are generated for some institutions and as a part of that, you know, the classic quid pro quo has been the college education. i'm someone who benefited having been a student athlete at university of maryland i think there are athletes driving incredible value for the institutions and frankly they should be fairly compensated i'm not sure that is exactly the case today we look forward in support and that drives again to we back the athlete. we want them to make sure there

is an even keel that takes place there. >> got it. thank you very much for joining us and bringing us into the brand house here today in new york city. >> thank you >> send it back to you guys in the studio >> courtney, thank you very much we have some breaking economic data during that interview initial jobless claims were down 15,000, the latest week to 204,000. consumer price index rose 0.1 percentage points, that met expectations the core cpi was up at 2.4% annualized rate, that's a little on the heavy side. this all as the federal reserve coming under fire from president trump again yesterday. he said interest rates should go to zero and then called fed leaders boneheads and this comes during a season of falling rates. with j.p. morgan jamie dimon saying his bank is preparing for zero itself. joining us with her perspective on the fed's path, sarah harass kin, former deputy secretary so, great to see you just quickly, reaction to this

cpi number more or lesson target on the headline number, but a little bit heavy, a little bit to the high side on the core number is this even filtering much into the fed's immediate equation on what they are deciding to do next week? >> i would say -- i would say no the day to day movement is something that the fed is going to be kind of wary of. what the fed is going to stay focused on is the longer term trends, where the inflation numbers are going, where the employment numbers are going, what the health is of the labor market and, of course, financial stability. so the longer-term trends are what the fed is focused on and that's what they're going to keep their eyes on as they go into this next set of meetings >> given that the longer-term trends by definition don't change that often, you expect the fed is going to give the quarter point cut that the market has now priced in for

next week? and then what? what would the message be and what should it be thereafter >> right so the fed, as you know, is facing an economy that is strong, but is slowing so we are seeing some flat lining in the manufacturing sector we are seeing a lot of trade -- tension and trade volatility, waiting to see how those trade issues spill into consumer sentiment. of course, the consumer piece is very important here because the contribution of consumer -- of consumption to growth is very high so waiting to see, really, how these effects in trade and in manufacturing are going to affect overall consumption is something that the fed is going to have its eyes on. and, of course, you know, continued issues regarding the

low inflation rate, and the fact that the price level has not gone to the 2% level that the fed has, has set for itself as a symmetric target >> we mentioned the president's continued sort of public campaign to get rates lower and lower and lower, pressure on the fed to do so how do you think at this point that plays inside the committee room obviously fed officials, chairman jay powell have said all the standard things how they don't think about politics or policy or pressure from outside. however, i wondered if the president saying that rates should be zero or below is so far from what the fed is actually considering in the moment that it's almost easier for the fed to say, fine, we'll cut rates if we see the conditions for that because it doesn't seem as if they're bending to any particular political pressure, if the political pressure is to go to zero >> right, right. so there's all these ways to do this reverse psychology.

you have such, you know, enormous and unceasing pressure coming from the white house on fed policy but here's the thing the fed is doing its best to really screen this out they're going to screen out the noise as best as they can. the problem, of course, is that the president isn't doing th economy any favors with this kind of talk ultimately we don't want people to lose confidence in one of the very important tools that our congress has set up, which is monetary policy. it's important that the fed stay credible the noise coming from the president is really counterproductive to that, and ultimately to the economy and to economic performance so it is, it is problematic to have discussions, particularly of discussions of tools that, you know, really are not fully

understood, where studies have not been fully conducted or have been conclusive, which isn't to say that the fed doesn't consider these tools because, of course, the fed is considering everything, and will consider everything should circumstances warrant. >> thank you very much appreciate it. >> coming up, a live update on the ecb's decision earlier this morning to cut interest rates. we'll bring you the headlines. and we'll talk stocks as the dow and the s&p sit less than 1% now below all-time highs stay tuned you're wchg quk x"n cnbc"sawbo o 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

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welcome back to "squawk box," everybody. the futures this morning have been higher all through the course of the morning. first on the idea that some of the de-escalation could be taking place between china and the united states. but then also on some of the other things we've heard along the way, including the latest numbers we just got on the data points dow futures right now up 67 points s&p futures up 9 nasdaq up 355. european central bank president mario draghi is speaking now they announced they are cutting a key rate steve liesman joins us with an update steve. >> thank you, becky. what he said so far is the weakness that he's highlighted in the european economies. he said incoming information indicates more protracted weakness of the euro area economy than previously

projected. he talked about the persistence of downside risk to the economy, talked about muted inflationary pressures. he had earlier said that the ecb remains ready to adjust all instruments and it adjusted a bunch of them this morning we'll talk about it in a ekd is. he talked about uncertainty of geopolitical factors and uncertainty of markets 1% ecb growth this year, 2% next year, both of those are lower than previously projected. as for what was done they lowered the refinance rate, increased quantitative easing. becky pointed out more forward guidance at these rates it will go lower until we get or the ecb gets the inflation target that it desires, which is close to 2%. joe? >> all right, steve. thank you. guess who is here, liesman >> who is that >> sri kumar

>> oh, man, why am i here and he's there i'm going to go listen to draghi >> i think you should listen to sri. >> i'll be back. joe, would you write down what he says for me send me an email >> actually there is a way of watching the show, not live, steve. i'm going to send you the details on that. >> oh, really? is there like -- >> it's going to be -- >> is there a technology for that >> that's the scary thing. this is all recorded it really scares me. >> get to that when you get a chance >> thanks for coming so, we bounced we bounced off the 140, those low yields on the ten year for people that don't know, when was that, 2 1/2 years ago you said we're going back below 2? you've been saying this for a while because for a lot of i think demographic reasons and global reasons, but i think you said we could go to 1 and below on the ten year. so is this a brief respite from

the continuation of a downward trend in yields? >> joe, i think that is very much it. we have had bounces before there were times when i had to explain on twitter repeatedly that when the ten year yield went up, i was still expecting it at that time to go below 2% and i think the current bounce is no different. i think there is a lot of optimism based both on the trade expectations as well as for the fed cutting interest rates but you just now this morning, you saw two big influences on the ten year yield one, you saw the ecb rate cut and the open-ended bund purchase which you spoke about a few minutes ago. that is pulling the u.s. yields down i think that is going to cost -- >> what's the other one? >> the other one, all three of you, you, becky and mike, made move market. i was watching it in the green room as secretary mnuchin was

speaking about the possibility of a 50-year bond. the yields went up for the ten-year and 30-year i don't -- if anything, that is going to spoil my forecast it is issuance of a 50-year bond and 100-year bond which i don't think the market will have an appetite for >> so, i was going to ask you, with you saying we're going to resume the downward move, whether that portends bad things for our domestic economy but the things you're talking about are europe or at least global factors except for the 50 year bond. but that's also sort of a global phenomenon, too, because rates everywhere are bringing rates here to those levels where we can do a 50-year, right? you're not saying our economy is ready to slow in a meaningful way that will bring the lower yields or you are saying that >> i am saying that. that is something -- >> domestically. >> -- quite a while. the difference, joe, what

happened with the ecb and all of your interview with secretary mnuchin, those are the new developments today and they are adding on to the pressure that i talked about to the extent the 50-year bond remains just a hope for the government and it is not a reality, i think the yields continue to go down because inflationary expectations won't pick up and real growth is slowing. >> let's bring in another tweet from the president president trump this morning tweeting just in the last minute or so, it is expected that china will be buying large amounts much our agricultural products no explanation on this, no talk if there is something, a phone call or anything that's happened, or if this is just laying the groundwork for the negotiations that are set to begin next month >> it may well be the latter, becky. we have heard expectation of big purchases in the past. the hopes have not materialized and i don't think the situation is any different

the concessions that were made on both sides, the u.s. side and chinese side, is to alleviate pain to the respective populations. it was not meant to be a truce on the trade war >> right >> china is hurting and u.s. farmers are hurting, and that is what it's supposed to do this is not a resolution of the trade fight at all >> sri, your bearish outlook on the domestic economy wouldn't seem to be requisite for lower rates because your entire move that you've forecast a year and a half ago has been with better gdp than we had prior to that, lower unemployment than we've had in many, many years, and we still dropped from where we thought we were going above 3 to where we were below 1 1/2 in very positive economic times in this, the next leg down will be accompanied by a weaker economy, in your view? does it have to be that, or could they continue to go down and still have a better economy here relative to the rest of the

world? >> even when i first said that to you, joe, two or two and a half years ago, a weak economy was the basis of it. >> it didn't happen. >> well, other than the sugar high that we got from the year-end 2017 tax cut, the growth was it went up because of the tax cut and we are slowing again the question is, how -- >> how do you -- 3.5% unemployment >> look at the participation rate >> okay. >> you're looking, participation rate has not returned -- >> ticking up -- >> -- to 2007 highs. >> they never with the baby boomers. >> no, even if you look at the 25 to 54-year-olds not affected by demography, that figure hasn't gone back to the pre -- >> it's improved in the last two years. >> it has improved, yes. but 11 years after the recovery has begun, our participation rate -- >> so what's our problem we have all the stimulus

are we being dragged down by the rest of the world? >> you need more immigration of skilled young individuals who bring both a mouth and two hands and helping -- >> to help with gdp. >> that will help. you also need something for worker training. you need more skill creation this is what we learned from the german experience of 2003. instead, what we are doing is to repeat the japanese, european situation, neither of which has paid off >> germany is at zero. why do we want to repeat what they did >> that is more recently if we look at where they were in 2003, they came roaring back for all these years until the most recent -- >> it helps when you have your currency controlled by economies that have a multi speed economies. i think i could do pretty well as germany, too, if i didn't have the mark any more >> but then the big improvement for germany happened at the early years of the eurozone being created.

we are talking about 2003 to 2008 that they improved. and that's just not happening yet, joe >> okay. all right, so where are we going, below one or just to one on the ten-year? >> i would just say one. i'm not looking for a negative rate >> bounced off one floor twice, 3 1/2 years apart, some of those chart readers are saying that's a real bottom. we'll see. >> i think 1.4, we are going well below 1.4% and the reason i say that, mike, is i'm looking for the german yield which went down sharply or whatever you call more negative rate is going down today as a result of the ecb move and as joe talked about, the recession signs as they become more apparent in germany, i think you're going to see that going down and when you have the spread so wide between germany and the united states, that's going to take the u.s. ten-year down. >> becky will tell you, we don't like people that pick bottoms around here.

right? am i right >> in that case, i'll mention that it was rick santelli who has been saying that >> you're not going to take me seriously. i was kidding around slee shri, that you can >> thank you let's get down to the new york stock exchange. jim cramer joins us right now, jim, you -- >> you >> i've been watching you. what you tweeted three hours ago, i want to pull up a full screen of what you said. three hours am, jim tweeted this spx futures were up huge last night after the "reprieve" on the next round of tariffs. we are now back to earth and really overbought. then we hear from the president making it sound at if what he has giveth, he has taken away in terms of what we expect from these negotiations >> yeah. look, the president is not about soybeans i think the chinese are using the olds model which is if we throw the united states a bone about buying some pork of whey,

then everything will be terrific and it's back to the m.o the press is not playing it that way at all i think the chinese continue to misread our president. i wish he would start talking about the idea that maybe hong kong shouldn't be able to buy the lse or talk about how we don't want any more listings of chinese companies. so the chinese just misread, misread, misread, but the mainstream media continues to think that trump is baffled by the chinese. it's the opposite way. >> jim, while you're here, i was hoping we could get your thoughts on boone pickens. great business leader and more importantly, just a great man. >> yeah. one of the things, i heard your comments yesterday, we all know him as a guy who always brought a smile to your face he was iconic and ironic in the last decade, he chose to be one of the funniest people i've ever interviewed.

he always had some kind of whiticism about other people that were in the same business but he loved our country and really believed we could be independent. would he not love what the eia is saying right now. it wasn't helped by the government it was all because of american ingenuity. how about how charitable he was. when you see the amount of money he gave to oklahoma state, he moved a house back there and will be buried back there. >> his parents' house. >> if every school had a backer line boone, we would have such a great educational system in this country. i brought it up this morning, but texas a&m, that's where he went for his first year of school he played on the basketball team there. he had a scholarship of $25 a month. they did not renew that scholarship. he went and went to osu and as a result osu got the $500 million. texas a&m has listed that as one of their biggest mistakes of all time

>> he had number 13. you see that in that jersey, 13, a bad number but there's nothing like boone he's a total american original i'm glad you and brian have done such great coverage. people need to know this man this man represented a real thesis which is america is going to be powerful in manager, let's help it along. >> by the way, don't miss our first on cnbc interview a little later with the cfo and co-founder of smile direct club. the company is set to see its first public trade after the opening bell this special interview will immediately follow that. stay tuned south carolina will "squawk box" will be right back

a final check of the markets, is dow is up, 67 points >> yields are down when the yields is up, stocks are up so bond yields down today. >> and i guess we are getting close to all-time highs. less than a percentage point away previously, sometimes, then, the

president thinks, we're back to all-time highs >> put the pressure on >> put the puddle to the metal on the chinese the euro, if you're worried about a strong dollar, there's the ten-year quickly take a look at the euro. we don't have much time left i'm going to have to say good-bye santoli, you're not here tomorrow >> no. i'm not here tomorrow. >> thank you make sure you join us tomorrow "squawk on the street" is next good thursday morning. i'm carl quintanilla, with david faber and jim creamer on "squawk on the street. in over a year, some good will gestures on trade from both china and the u.s. the president says