still in love with you i want you to do this. >> all right, i'll -- i'll -- >> look, he's putting his tie up, wow. >> he's got big plans maybe. >> who knows >> good luck godspeed have a fun weekend quayle is not going to sing to you. but he'll play air guitar for you. >> joe will sing to me. >> i will. join us next week. "squawk on the street" is next ♪ the choice is yours you can deal with this you can deal with that ♪ ♪ you can deal with this you can deal with that ♪ ♪ you can deal with this you can deal with this but this is where it's at ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. up nearly 100 as we inch closer to all time highs. dow needs less than 180 to get there. retail sales for august pretty solid. europe is green. bond sell-off continues as the ten year yield hits 183. and michigan sentiment is on the way. our road map this morning begins with records within reach.

the dow eyeing eight straight days of gains on growing optimism around u.s./china trade. >> wework's rocky road to an initial public offering. >> and the democratic face-off, warren, biden, sanders dominating the debate stage. just what their plans could mean for your portfolio stocks are chasing history this morning the dow and the s&p each within 1% of hitting record intraday highs. the blue chips in the midst of a seven-day win streak for first time since may of last year. you have signs of a health y consumer, government data shows retail sales up .4% in august, double expectations. core unchanged, looking for .1 but july even after that upside surprise revised higher. >> is this ever putting the pressure on jay? i think jay powell is uniquely faced with a difficult decision. you posted some stuff the other

day about -- you raised rates and the economy is not being hurt so why should we just want to cut them i continue to say he raised rates too much and i want -- i want to go for the full on 3% on employment, get those people who have -- davis always talked about, not part of the workforce in the workforce this is going to make it very hard for jay powell not to be more of a bone head than -- >> you got cpi had a two handle for 18 months. highest now in a decade. we're waiting for core pce to ratify that's the thing people are saying as long as core pce remains more tepid, maybe he's got a box in which he can fit a rate cut. retail sales are strong. what he has to do, the situation is say, all right, if this -- you can keep using the trade war. keep blaming it on trump at this trade war continues, things -- the friction gets bad, this will -- we got to cut because of what the president is

doing. that would be an -- that's what i would advise him if he were here right now let's say he were a guest now. we had john legend who are other guys >> many. >> spencer rascroft. >> wow spencer moved on he's still here. stock has been a tough one i would say, jay, look, giving you a chance to lower because the trade war has not let up i don't think that we're really that close to any sort of deal. >> you raise a group, u.s. china headed to a mini deal. >> mini deal >> that report yesterday of the interim deal, quickly swatted down. >> i don't think there is a deal i think that is an opportunity for jay to blame the president -- not directly. and say, hey, listen, we have to do this preemptively oh, my this is -- i would -- it is probably gut wrenching he's watching the show now and

thinking, do i really take the president on, do i say that. i want to remain independent he called me a bone head i really -- i don't think he's used to being called a bone head >> i had no idea i wonder sometimes whether he's, like, why did i take this job? >> you wonder sometimes? >> yeah, sometimes. >> sometimes at night i wake up, i think, geez -- >> in switzerland, said no regrets. no regrets. >> i don't think they'll come out and say i love being called a bone head. i don't care. >> it is a very difficult position forgetting even the constant pressure from the president. it would be difficult anyway. >> it is tough the other guy -- draghi yesterday, wants to take rates, china, he wants to take them all the way down meantime, nothing happens because they just want to sell bmws and volkswagens to china. china is the world's trading

partner. we let that happen, right? and then last night we have a debate and the debate, people bashing china, nobody likes china. >> nobody likes china. >> nobody likes china. >> china syndrome is not -- >> china syndrome. >> michael douglas i think lemon might have been in that too. >> so great. so underrated. >> if they do get 25 basis points next week, we're going to report highs >> yes, bingo. >> period, right i. >> i hope we come in a little bit. >> trimmed the price target. >> double down he's talking about an accounting issue that doesn't really affect the company, but i'm taking my price tag -- see where the price target is? i don't know if it is in the hundreds. >> from 187 to 165. >> that's great. where is the stock

187? no look at it it is 220. this guy disqualifies himself. >> he's been skeptical for a long time. >> yeah. >> had him on yesterday, or the day before. >> even wilf would say acceptable i find it unnewsworthy i checked in with apple. i know that david is very, very skeptical of apple tv. disney gets big credit bob iger with the checked shirt, he gets big credit they don't talk about how much money he has to spend. the stock went up 35 points. >> yes they're so different. >> what? >> well, i mean, the amount of apple programming that they're going to have on the service could fit into one little tiny part of disney plus. >> they could buy -- they could buy -- >> they could buy viacom and cbs. >> they could. >> without a doubt

>> they get the nfl. >> they have not shown an interest in doing that, certainly not at the tim cook level. i can remember when i was hearing they were interested in time warner. there were -- bewkes went it a dinner with tim cook thinking -- years ago, thinking cook would come to the table and they would talk about him buying warner >> no interest. >> what is the -- that's very difficult -- that's -- >> at apple, at apple. >> that's like, isn't that -- didn't the president call his -- is that tim apple's brother? >> not johnny. whatever, we'll get to his name. he thought that it might have interest, but there has never been interest among -- by your friend tim cook. >> your friend rod hall, rod hall, wasn't he a hockey player? i got to tell you, he's your guy. don't worry about it you don't have to worry about it he agrees with you you don't have to worry. >> nothing to do with that. >> he's killing apple stock. >> you're thinking of --

>> thank you >> head of -- >> he might have had -- >> that wasn't that hard to figure out >> brought bewkes and cook together and -- >> what do you think of bewkes >> great american. >> thank you. >> you're welcome. >> so is adam newman let's talk about the ipo market. yesterday, that fail on smile direct was fairly significant. not just for investors who bought into the ipo there and watched it decline markedly. this is a growth company, smile direct, not a lot of rounds of outside capital were raised, three large investors. so you didn't have anybody out there hedging it and creating a short in the name. the way we saw with lyft that occurred and happened in some other names. and yet it still went down priced not that much above the public comps still, collapsed in its public debut. why? maybe in part because growth managers as we have been discussing, sort of underlying

movement we have been seeing in the market of late into value away from growth and momentum stocks, maybe the growth managers said they would be there for a lot of allocation, but really weren't or afraid to, don't have the capacity to so this is set a tone in the ipo market to which the company is going to come. we have some important governance changes from the company overnight. we know that the company will be listing on the nasdaq. the government changes, they're going to appoint an independent director the voting power of the high vote stock will sunset automatically and decrease to one vote per share in the event that adam newman becomes incapacitated, they went on and on take a look, pages 13 to 14 in the amended s1 filed last night if you're interested all of this designed to deal

with concerns among the investor base that said, it is still going to be very interesting to see where -- when this thing gets priced, where there is demand. initially we thought perhaps as low as 20. then 18. now i'm hearing 15 or below. >> priceline. >> this thing could come -- by the way, they still would at 10 to 12 billion. that's going to be so interesting if they get down to a level like that when you consider that softbank has invested $10.5 billion in this company and could have a market value that is not that much above it once it goes public they need to raise $3 billion in some fashion in equity, in the public markets or if mass a want to write them a check again. all of the interrelated relationships. ubs, jpmorgan and credit suisse have all underwriters here, of course, have provided a line of credit up to half a billion dollars to mr. newman. 380 million of that was outstanding as of the end of

july he's also borrowed 97.5 million from jpmorgan bank mortgages and the like and jpmorgan and goldman sachs put a lot of clients in earlier rounds in this thing so there is so much going around on the wework ipo that is fascinating. so interesting to see where they finally come but they still remain determined despite what was a terrible performance yesterday for smile direct, which also may have impact on peloton and others. >> smile direct was one of the worst deals in a decade. maybe the worst in a decade. the pricing was completely wrong. there was no demand. how much money is out there for the yields if wework -- we have seen -- >> the last time i go in here 13 times over subscribe and it is going to be forget that conversation doesn't ever mean anything. >> what about pricing above the range. does that mean anything anymore? >> no. i was aghast -- i said yesterday, i didn't like smile direct i didn't understand the pricing.

i follow a line. invisalign not doing well. >> the stock has been terrible a lost competition coming around 3m trying to get in that everything i hear about wework is unless this deal is priced through the floor, it is going to hurt the stock market >> you know what, some are also saying it is a good reflection on the stock market there has been such resistance to a company with the governance they once had, though they are changing it. and to the vote -- and to all the different thins that have been a part of -- >> versus snap. >> now people talking to me about maybe 10 to 12 billion. >> that's unbelievable periodically goldman high net worth person has to take a loss. >> i think they will come, even if it is that number, and they'll be happy to get public and then they'll hopefully feel like they priced it correctly and mr. newman will be able

to -- >> let me ask you, david i always felt the one thing that never happens is the desk says this could be bad for a lot of stocks we got to price this right they try to please newman. >> i think at this point if they get that thing public, they'll be pleased they need to raise the three to get the six, need the capital. >> i struggle to recall -- >> it ends up being a game of chicken with massa, all right, we need 3 billion, are you going to write us another check or we're going. >> it is a rebel without a cause situation. ipo without a cause. the market doesn't want it the market says i don't want that deal. >> yeah. from the s1 on it has been nothing but drama in the last several weeks. we'll pay attention to that

story. check out our podcast, now can listen to us, the opening bell hour of "squawk on the street" at cnbc.com/podcasts or wherever you catch podcasts when we come back, cramer's mad dash, we're going for eight straight up on the dow for the first time in more than a year back in a moment what do you look for when you trade? i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪ (classical music playing throughout)

mad dash this morning, focus on broadcom. not particularly sanguine on the macro economy. >> exactly. >> but at the same time saying things -- >> exactly that's hawk tan, regarded as being a very smart guy when it comes to the cycle you have to parse his words. what he was saying versus say the last time i heard is that, look, we're closer to a bottom if not at the bottom now, this stock, by the way, had a good run and we also know, david, they have been moving into diversifying. bought ca. they said buy. >> i said buy. i believe in hawk tan. i think they'll turn around symantec a lot of guys in the crowd

strike end of the world, z scaler, they don't know what to do you can cut costs. but i like the call to buy i like the call to buy because if we are really bottoming, and hawk tan doesn't do this, this is an inexpensive stock that generates a huge amount of cash flow short conference call. people want to take a listen. >> apple is very important customer still >> it is huge. they never mentioned it. those are the rules. it is like fight club. you know apple and fight club, and, by the way, tim cook understands entertainment. apple and fight club and i -- look at that, david we did a -- it is not a head and shoulders. >> it isn't? >> no. i have procter & gamble next week. >> well done >> delivering alpha. >> delivering alpha, yes. >> a lot -- they turned that company around i just think this is one -- take the time out, understand that after a few let's say even hours this could turn around >> okay. all right. >> hawk tan is so good

>> they buy a lot of companies cut a lot of costs. >> he's a humble man. >> i would love him to come back on he has not come back on since that appearance. >> since the fight, since the fight. >> he's a good man >> we'll keep an eye on shares of broadcom. another company dumping into the public markets today, cloud fare, we're going to bring you the first trade. we'll talk with the co-founders of that company. here is another look at futures, of course. we get started with trading, last trading day of the week, it is friday, ten minutes from now. you see we are looking for a slightly higher open we think you would really shine in the aflac program. aflac! coach saban we have health insurance. did health insurance pay for everything? no, we still have bills. aflac gives you money directly to help with those. aflac! and your deductibles, knee brace, whatever you choose. aflac sounds like a winner. umhum... umhum... we try. get help with expenses health insurance doesn't cover.

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you're watching "squawk on the street" live from the financial capital of the world the opening bell in five minutes. a lot of orange vests today as clo cloudflare comes to the market here we had a big discussion about new issues is the pressure on for some of these that are just now getting here >> i'm not sure where this will go these guys are not a commodity i think this is an interesting company that a lot of tech guys will like. very different from smile direct, which turned out to be the company that people are -- they were hyped on something that is really a very competitive area this is -- this is a fractured market, not traditional cybersecurity, where we got symantec going against crowd strike, which is going against vm ware. so maybe this one works and we

forget about what happened yesterday. >> do you think it was a one-off yesterday? >> not if they bring -- not if they bring newman. >> what about peloton? that can't be easy. >> that will be difficult. >> you get this whole worry about others who are -- >> they claim they're a sass company. everyone is sassy. only real sassy guy is jassy he's a hitter. >> yeah. last night, if you missed it, third democratic debate, also in focus today. ten candidates squaring off in the race for the white house healthcare was one of the dominant topics last night senator warren in a push for universal healthcare took aim at insurance companies. take a listen. >> insurance companies last year sucked $23 billion in profits out of the system. how did they make that money

every one of those $23 billion was made by an insurance company saying no to your healthcare coverage. >> so we talked about warren this week, jim. >> one of the reasons i like united health and cvs, they sucked $23 billion -- once again, she has the numbers right. >> the number seems low to me. >> if you add unh -- maybe she didn't use centene managed care companies you have united health, the centene, anthem. i don't know if she counted all of them. i think they sucked more out of the system i think they're not nearly as bad as she does. it is very true that she, i felt, met her match on this.

with president obama, with vice president biden who is very articulate about obama care. and just that the republicans were willing to work to get a little tinkering than work centene on medicaid. areas where there is incentives to write where they aren't right now. i thought that vice president biden was very expelling on the idea we don't need -- we need better health insurance, not one -- not single payer. so watch the health insurance companies go up because of how well biden did last night. >> google had data overnight healthcare over guns, over trade, over trillion dollar deficits now healthcare number one. >> speaker pelosi would like to not make this the centerpiece. and speaker pelosi behind the scenes is as powerful as ever. i think that people have to

accept the fact that these candidates may want to bring it up but the house doesn't. they can avoid it. >> healthcare. don't want to deal with it. >> they want to tinker with obama care. >> right having the debate about -- >> yes, scrap everything they know how hard it is and they know the republicans will never go for it. why not go incrementally and try to fix it. >> you're going to close down the health insurers? unh from 217 billion to what to nothing >> zero. >> business goes away? >> well, i mean, it is kind of a wework situation. >> maybe ten years, wind down. >> united health, we had united health here, we tell you how much they saved system as -- look, it is absolutely true. biden is right the consensus in congress is to try to fix obama care, not shut it down.

and i think that we need speaker pelosi, who would then confirm, i believe, biden and not senator warren that's my thinking >> opening bell. and the s&p 500 at the cnbc real time exchange. here is cloudflare celebrating the ipo. talk to the co-founders later this morning on "squawk alley. at the nasdaq, 10x genomics. >> cloudflare is doing quite well 10% of the fortune 1,000 use them it is a fraction market. they got very good revenue growth and talk about increase of 59% and 43% respectively. it is a real company that could change the narrative of what smile direct did and if wework, there is always a price for all merchandise. we know that >> of course there is. it is a high growth company.

>> if they price it at a level where they have actual demand, this whole issue will go away. we'll be back talking about bone head >> what do you make of some of the reports that old line legacy real estate companies are saying, hey, we can do this too. not too late for us. >> they can. absolutely i've seen it be done in a competitive way when i looked. and -- >> you know what, wework's clientele is largely s&p 500 they're looking to be the international provider so wherever you go around the globe, they're going to be able to service your needs. there aren't that many real estate companies that can do that >> look, david, before we found out all these different issues about governance, i was excited about it it is a great concept. it was the governance stuff that freaked everybody out. >> they're addressing the governance. >> about time. >> they are addressing -- >> that's why the more they address it the more likely this deal comes. >> we're focused on that top 100 and we can basically take care of this in the same way that

amazon takes care of your cloud service now. we'll take care of all of your needs around the globe, for your employees, we'll make it more efficient for you. we'll save you money as a result that's the -- there is competition. >> that's part of the model. >> there are going to be real estate owners and developers who do the same thing in some of their space. can they offer, you know, an ibm or you name any big company that has offices around the world, that same -- >> no recession, that would be good the governance i'm worried about. we fit the governance -- they fix the governance i'll change my mind. >> fixing the governance, i mean, from what i understand, he'll still be able to vote out and rehire directors who would be friendly to him >> he's got to change that >> he's still going to have -- >> that's going to change. >> they will be doing certain things, he's not going to be selling as much with stock as well no more than 10% of the share

holdings in -- selling all the time. >> we mention this 47 billion number to be fair to them, that was a -- softbank did that deal to acquire another four or so billion worth of stock that was a consolation prize they wanted to take controlling stake, they were unable to do that they sort of had to come back. almost a breakup fee provision kind of thing that, well, then, you're buying at this level. so that's not where anybody had this thing marked. talk to people who own the stock, they had it mashed more like 25, 30 billion. at 12 or 15 even, will be well below. >> not used to people losing money on deals because that's not the way it works but it is working that way. >> by the way, talking about companies that are private, juul coming down sharply. >> i think that -- we all sit there and think, hold it, the arbiter, altria, paid x, the

arbiter is in the fight for its own life existential crisis >> there it is i've been talking to people in the -- this is not the public market, this is the private market, things don't trade in any way, so you got a wide value discrepancy. but philip morris brought into $250 a share, so to speak. stock traded as high as 300 this summer on the secondary market and now it is around 225, 230. >> sold to the man to the left of me. >> as you might expect, given everything going on, juul's value is down in the secondary market. >> think about the prescription drug it could be -- >> $35 billion. >> it could be nicorette >> they might argue, yeah, we're facing policy risk in the u.s. but europe, israel, india, china, are still huge potential growth markets always been an international story. that's where smoking rates never came down. >> international story your piece about the uk,

embracing it, that's where the action is. so i agree but i think that there has been a backlash that has gotten even to the president who -- he could tweet this thing back. >> right is united health being up 2% a proxy for -- >> biden looked very statesman-like last night. made the case for universal healthcare insurance for all not universal healthcare for all. i think that's where unh will have a run here. biden looked real good as opposed to your friend, david, rod hall, who has decided, i'm going to ruin all the greatness of apple he got up and said, i'm sick of that stock going up. this piece is fatuous. about accounting not about that they don't have great tv content that, i can understand the man to my left thinks that

tim cook and company wants to run reruns >> i would love to watch that. >> good show >> got to have the rockford files too. >> rockford files, very good a lot of -- a lot of irony underneath that. like bugs bunny. this apple thing is -- god bless you. this apple thing is -- i got to tell you, this guy has it in apple tv, a material negative impact on -- material. material this guy has been -- >> his point is asp is on hardware, will look soft, they're going to use this free trial as a accounting on services it will be made up later, i guess, on better service revenue. >> fatuous logic they got to spend for this >> isn't there too much focus on the streaming thing to begin with shouldn't it be more about the phone, where the pricing was on

the phone? >> no. that's the hardware side the watch, yes the watch, $199, that's the price point. i thought this was the kind of piece that would make people trade apple instead of own apple. which has been my mantra since it was at 5. my daughter demanded a second ipod because the first one was blue and she wanted a pink one i realized they were fashion accessories. >> august 3 month sales north america lowest in two years, up 6. >> that was disappointing. good downgrade from wells fargo. if we get any sort of trade deal and want to be in it, i reiterate that i don't think we're close to anything meaningful until and unless the chinese do something and when they said two tracks, the white house is very disturbed. the white house is very disturbed because they don't want two tracks. they don't want two tracks they want intellectual property,

they want the seven deadly sins that navarro is talking about. fentanyl fentanyl >> yeah. fentanyl number seven. >> right they want those addressed. not just the soybeans. >> cyber espionage >> all the things you introduced in your documentary. you introduced juul and i hated it ever since your documentary and you realize -- you told me you wouldn't use your phone in china, because you were worried. just gotten worse. the cybersecurity guys i put on, always china china and west africa. >> it is a big problem when i did that, it was because it was just getting to the board level. this is serve or eigven or eighs ago. it is a board level issue that is dealt with frequently u.s. companies are not -- doing their board meetings in china, lloyd blankfein with goldman sachs one year >> lloyd good to be back, lloyd

>> jim, we got a couple of upgrades today etsy at web bush and southwest macquarie to outperform. >> i think that -- gary is always going to get this thing right. southwest air. fantastic. i thought etsy had come down way too much i like to talk about free shipping i thought it is a changed company to the positive. i think it found a level now i'm waiting for square to find a level these are the ones that have been hit very hard, square and etsy southwest, amazing they're the one most connected to the max. >> once the max comes back, they'll use this upgraded revenue management system, be more seamless, reintroduction to service. we'll see. >> gary is handling this -- like everything else, he's handling it well. keeps it private he doesn't come out and blast boeing does private negotiations.

i think everyone knows he's just an outstanding executive and it was only a matter of time why would people even resumer that warren buffett wanted to buy southwest. >> the other thing is the russell. which struggled here around 157157 1575 three or four times this year. if it could get past this, to could mean big things for the overall market. >> i've watching the transports. look at union pacific. the stock was at 170, they preannounced a bad number. it is back it is back look at goldman sachs, have you seen that go up? >> i hadn't noticed. >> you hadn't noticed. >> goldman had a decent year. >> okta is down, tommy went on squawk and not my show think about that

that i abo think about that. >> the banks are having a good morning. goldman sleeft is the least of m back to the debates. >> look, i'm going to reiterate that last night was a really important night for the stock market joe biden held his own it looked pretty bad when people are attacking him. they were attacking obama. i've been waiting for that to happen suddenly he's front-runner he feels front-runnerish he's front-runnerish. >> he is >> that means that we don't want to destroy the banks we're not going to have show trials for wealthy people. perhaps we're not going to have a new group of taxes on people who make assets 50 million i'm talking about a -- the threat that we -- there are twoe market

senator warren is the person that the bank executives want stopped. the bankers. and she didn't do as well as biden, i believe and so you'll see managed care go up. you'll see the banks go up we forget how important the groups are to what the democrats attack i thought that was a significant debate i really stand by the idea that biden looked very presidential and that's why unh keeps going higher and you have to own goldman sachs. >> the other story today, bailout with their flows second biggest government bond redemptions ever in the past week as we have seen this bond rally completely melt down as the ten year has gone back to 183. >> we want that. we want the fed to cut rates at the same time as ten year goes up, we want a 50 year bond that secretary mnuchin was talking about. all these inverted yield curve got to sale people are going to be wearing the no clothes.

they will be emperors without clothes. they will be ambassadors without portfolios i'm talking about real portfolios what are you looking at? >> pg & e. >> i was talking about the -- >> sometimes i need to focus on other things other than what you're saying. >> when i'm talking? >> even when you're talking. >> you weren't doing fantasy football. >> i always try to listen to you. my hearing is starting to go in this ear they're getting close to settlements with a number of claimants at pg&e. >> can you explain that to people give people -- >> one of the airlines, which one, american airlines wasn't it? big equity recovery value there as well. >> i don't want people to get suckered in. >> they will be here the progress they're making with various claimants, it is

important, so you do have some headlines about plans to incorporate terms of settlement, subrogation claims and the like. that's why that stock is up. >> all right >> oil is all up people know that senator warren is anti-oil. just incredible. >> making decisions. >> yeah. >> silly season maybe. more than all of the dow's gain is unh and boeing. to bob pisani. >> 2-1 advancing to declining stocks nice start to the morning. want to remind everybody where we are, record high watch here, s&p here but you see sectors, back to cyclicals that are moving nicely here the banks, retailers, transports and energy this moved us forward the last six trading sessions it is that deep cyclical group the s&p, remember, 3027, old

intraday high. we're 11 points away we'll have more if we get anywhere near that what you want to look at here now is the cyclicals this week, that's what moved everything banks up 8%. retailers up 8%. transports up 5% energy is up 3.5%. you get the point here this is clearly a cyclical rally. one thing interesting, we're unwinding the crowded trade we have been talking about. that was long defensive names like consumer staples and going short sectors like the cyclical groups one thing that hasn't been unwound is going long bond trade that is out. there were inflows in the bond funds this week. i keep waiting for this to collapse it just doesn't. i don't follow these weekly numbers that much. equity had inflows, taxable bond funds. 7.3, it is still inflows that are going on remarkable considering as carl

noted, it has been a terrible month for bonds. look at the bonds in general, we see declines here, 20 plus treasuries, prices down 5%, 10 to 20. corporates are down 2% high yield holds it in there generally you think the bond bubble is starting to burst and people are giving up the ghost i don't see outflows yet i keep waiting for it to happen. the ipo business, cloudflare very important, on the other side here, big website security company, 35 million. i like pointing out where the original prices were 10 to 12, then to 12 to 14 and pricing at 15. this is important because this is a software company. a lot of scrutiny on the software companies remember what happened when the slack disappointed last week they had earnings out, a little disappointment slack down, a lot of the software companies were weak look this week, crowd strike, slack, zoom video, all down this

week people were watching this as indication of software and how it is going to go. early indications fine the concerns about valuations out there, thii think wework and smile direct were specific stock stories. misprice on the smile direct two specific companies here. i think the concept of what is going on with cloud fair is more important to watch that's software in general and that's a space that is getting a lot of scrutiny. right now, up 65 points in the dow. back to you. >> thank you, bob. to bertha coombs at the nasdaq, a lot of action today. >> a lot of action small companies are on pace for their best week. the russell 2000, in about three years. that's been the real gain. but in terms of getting us back toward new highs, two sector s very close the chip sector, 1% away about a point away from its

closing high earlier this year little bit of pressure this morning after broadcom's results. pretty much in line, but the company pretty much saying with the situation in china, they just don't see a rebound still too uncertain looking ahead as they start thinking about 2020 they were downgraded this morning. communications is the other sector a standout also just a fraction away in terms of a point from its all time closing high continues to be mixed today. among the best performers here that have gotten us back to those highs, include activision/blizzard, take two, the gamers, and comcast up 11% smile direct club bouncing a little bit still below what had been their anticipated range here at 17 bucks. and it is for these big brand marquis names, unicorn, such a mixed result here on the nasdaq. the ones that have been the losers among smile direct

include lyft and real, below the ipo prices beyond meat, it has come down, still 525% back to you. >> bertha, thank you very much. when we come back, we're on ipo watch, you're awaiting cloudflare's first trade we'll bring that to you and talk with the company's co-founders later on this morning. dow settling up 38 points at the open i can. the two words whispered at the start of every race. every new job.

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♪ dow gainers this week reflect a lot of optimism on the economy and trade. look at dow, cat, goldman and jp morgan trace we'll start trading with jim again in a moment.

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let's get to jim. >> a misconception about what's driving apple down it's not that apple has bad

content. he's using a 165 price target is how it's accounted for it is -- it's one way to account for it i can account another way. just be aware, it's not they have no content. it's what the way of accounting will do to the earnings. those are two very different things, so the people on twitter keep saying i told you they have none you have to read the piece the accounting is very difficult for when you have people paying $5 a month it's going to be a real debate. >> that's coming from the firm that has a card with apple. >> yes, it does. that's a very important read. >> jim, what's on tonight? >> i'm a little nervous just because the market is so overbought i do not think there will be a trade deal imminent. i think the biggest thing is bonehead -- is paypal and what do you do? how do you cut when you get

those numbers itted? are you acceding to the wishes of the president who has addressed you as bonehead and hasn't figured out how he became the fed chief. >> he appointed him. >> yes >> fly eagles fly? >> sunday night. by the way, fantasy players, i had godwin he went off last night >> carolina, right and tampa bay, yeah. >> jim,we'll see you tonight we'll keep our eye on cloud flare's public debut followed by an interview with the mpy'coans co-founder

good friday morning. welcome back i'll carl with david, sara eisen has the morning off. we inch closer and closer to morning highs. dow is up almost 60 as we await data. >> the road map does start with stocks as carl just mentioned.

how should investors be playing the market momentum. >> democratic candidates taking on taxes and insurance companies in last night's debate. >> and the house anti-trust panel ramping up its investigation on big tech. we have those details. >> market's up as trade tensions ease the president says he is open to considering an interim trade deal with china. the democratic presidential candidates weighed in on trump and trade in last night's debate here's what they said. >> we're losing billions right now because of trump's policy. >> we want fair trade, but we must work with the rest of the world and he has made a mockery of focus trade policy. >> i remember president trump's scoffed and said he'd like to see me making a deal with xi jinping. i'd like to see him making a deal with xi jinping is it just me or was that supposed to happen in april? >> our trade policy in america has been broken for decades and it has been broken because it

works for multinational corporations and not for much of anyone else. >> if we don't set the rules, we, in fact, are going to find ourselves with china setting the rules. >> joining us this morning, andrew slemon, keith lerner. happy friday good to see you both >> nice to see you. >> happy friday. >> keith, better trade headlines this week. macro's been at least less worse. i see this coming in at 92 do you think we get over the line and get fresh highs >> this has been along the line back in july we thought it was going to be a bumpy period we got that low. what was very interesting was how negative sentiment got in august and people braced for a lot of bad news.

we had the most hedging in the options market and as we've seen some de-escalation on the trade side, we've seen stocks move forward what's really important, what happened on monday, we had something called a breast thrust which is really intense buying when we look back in history, it's happened about 25 times 24 times a year later the stocks were up. that's a good risk reward in our view for the market. we still think the path of least resistance over the next 12 months is higher, but we will see the ongoing concerns and the periodic pull backs. >> how much is dependent on powell delivering next week? >> you know, i think by now the bond market's helped him out a bit by resetting, so i think the market expectations are baking in 25 basis points i think that's going to happen i think the market wants to know they will be vigilant, but i think the bond market and the yield moving back up has helped the fed out as the cut is likely off the table.

>> all right your thoughts as well? >> so look, the market is vulnerable to some type of disappointing move maybe with the fed next week. i think market is overbought, but i don't think there's a lot of down side in the market august was a very interested month. we had three really bad days and the market came rebounding back up i just think it's a story of there's too much cash that's been liquid out of equity, too much cash sitting in money market the down side is relatively limited. i agree with jim cramer, the market is overbought short term. i don't think bad news is going to lead to much down side. your other guest is right. the market ultimately will break to the upside. when you have a market that's been in a trading range for a year and a half, there's two outcomes number two, the market breaks the upside i think it's a question of when, not if and iswith so much cash n

the sideline, i don't see a lot of down side short term the market is overbought. >> if you don't see down side and you see a lot of cash on the sidelines and somebody is looking to get in, where can they still find value? >> the problem is they're not getting the pullback that people want to get in and that's evidenced -- we had a lot of bad news throughout the market in august and not much pullback i think ultimately we're having a rally in the value stocks, but i think the leadership going into the fourth quarter is going to go back to the growth stock and i think those will be the leaders until year end so value bounds, but i doin't think it's a question of growth or value what has been year bought is the defensive stocks and bull markets never end with people paying through the nose for stocks they think will do well in a recession bull markets end with people chasing the growth stock and i think that's going to be a

resumption of the leadership in the fourth quarter >> keith, a lot's been said about the last couple of weeks being largely technical. hedge funds unwinding. bearish positioning. if it's not met with more than that in terms of the business cycle and profits that we could top out here once again. what's the danger in that? >> our best case is the ongoing recession, the market starts to bake in some of those expectations as long as the economy just grinds forward and earners continue to move forward, i think that will be fine for the market in fact, the s&p forward earning estimates quietly just made a new high last week even with all those out, we haven't seen much come back in we're getting closer to the end of the year. there will be fear of missing out and trying to catch up the other part is there's all risk in different parts of the market, but the 10-year u.s.

treasury, we had the strongest or widest deviation from its trend in several years in fact, you go back the last 25 years. we were about 40% below the 200 day moving average for the 10-year moving treasury. we think the value trade has more legs and bullish on financials another one that's doing well even though rates are moving higher is home builders. i think that's a sign that we're growing confidence and we'll side step a recession. semiconductors are doing well and that's not consistent with the economy rolling over. >> to your point, keith, all-time highs today or i should say 52-week highs at least, lenar, in terms of sectors do you have favorites >> i like the home builders a lot. i think it's a value of some growth, some value you want to fade the staples and these defensive stocks that i

think are overvalued i don't have a problem owing financials i think it's a problem between growth and values. the last thing i will say, carl, is i've heard a lot of people come on and say earnings estimates are too high, they're going to come down my comment that i would love for you to ask the people to say that is well, how come the market is up close to 20% on the year when we've had flattering growth on the year the point is the market is anticipating that next year we're going to have positive earnings growth because we're coming off a flat base this is why the market's rallying this year next year we're going to have to worry about 2021 and that's the story of this year by the time it's obvious, the market will be on to what's going to come next and that i think is going to be more bearish. >> 2019 clearly turning into a multiple story we'll deal with what comes next later on keith, andrew, have a good weekend. thanks, guys. >> you too

a lot of people continue to be focused on the initial public offering market, not to mention of course our invests here for the debut of cloud flare yesterday the debut publicly of smile direct did not go well to put it mildly. in fact, it has created a tone in the public offering market that other companies planning ongoing public certainly have to take note of, whether it be peloton or what we've talked a great deal about the we companyings, otherwise known as wework overnight wework continued its move towards something i've been reporting on all week which is mainly the plan to begin a road early next week with potential to list the following week on the nasdaq, but what we also got last night is continued changes in the governance of the company trying to meet some of the needs of the investor base in terms of what they're willing to actually put up with in terms of levels of control by its founder and ceo adam newman. and so they will appoint a lead director by the end of the year.

their stock will decrease. the voting power of the stock will decrease to one vote per share in the event that mr. newman were to no longer be with the company or be permanently incapacitated. they go on to make a number of other significant changes in terms of directors being the majority of the board and the fact that mr. newman as well has entered into lockup agreements for one year with the underwriter, so he won't be selling stock. he'll only be selling 10% of his stock in the second and third years following the offering all of this is designed to entice investors who as we've been reporting have been somewhat unwilling to consider valuations anywhere near what the company was hoping for and it its 31 underwriters were hoping for. i'm now hearing talk in the marketplace that perhaps a value below $15 billion and perhaps between 10 and 12 could be something that wework would be willing to go with in the hope

it would create a lot of demand and there would be a successful offering it's got $6 million in debt. and needs to raise $3 million in equity it could go to soft bank which is the largest single investor other than mr. newman himself in the company and ask for more money with the prospect being hey, you've invested $10.5 billion, we may come public with as little as $5 billion, don't you want to invest another 3 and prevent us from doing that. we'll see how this all plays out. underwriters led by jp morgan have loaned mr. newman -- it's an intricate, interesting story and it will play out over the next week or two. >> it feels like every day you get new advances on this story from soft bank cringing with the valuations are now to

concessions newman's going to make to try to get this done. >> all right when we come back, health care dividing the democratic candidates for president we'll bring you highlights from last night's debate once again as we head to break, a look at the top performing stocks, unh leading the charge we're up 43. . attract new customers. that's when fastsigns recommended fleet graphics. yeah, and now business is rolling in. get started at fastsigns.com. by the way, she's the it wasnext mozart.g day. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius.

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trade and health care dividing democratic candidates last night

senator elizabeth warren criticizing u.s. trade policies calling them broken. >> our trade policies in america has been broken for decades. it has been broken because it works for giant multinational corporations and not for much of anyone else. these are giant corporations that, shoot, if they can safe a nickle by moving a job to a foreign country, they'll do it in a heartbeat and yet for decades now, who's been whispering in the ears of our trade negotiators? who has shaped our trade policy? it's been the giant corporations it's been their lobbyist and their executives >> senator bernie sanders also weighed in >> we're losing billions right now because of trump's policy. a trade policy which understands that if a company shuts down in america and goes abroad, they

think they're going to get online to get a lucrative federal contract on the bernie sanders, they've got another guess coming >> joining us for more, kayla and john in houston this morning. nice to see you both today how difficult is this tap dance for democrats who take, for instance, bernie sanders for many years railed against the dangers of free trade agreements when it came to protecting american jobs. john >> i think it's a very difficult tap dance in particular because of the way the democratic party has changed. in reality the democratic party at its roots has become more of a pro free trade policy than republicans. however, these candidates are sort of scared to come out and say it democrats represent the more upscale metropolitan trade dependent parts of the economy in congress and in the united states senate, but they're continuing to defer to sort of a yesterday's vision of what labor union opposition and

environmental opposition to trade policy they criticize president trump for the way he has gone after china, but because they're concerned about their political -- elements of their political base, they won't embrace things like the transpacific partnership which was in fact the alternative to what donald trump is doing right now. so that is a very, very awkward position for this field to be in. >> you know, kay larla, it stris me the crowd was generally able to skate past anything but criticism of the way trump is handling trade joe biden coming out and saying look f we don't set the trade policy, china legal was about the close toest to being an aggressive thought on trade. in the coming weeks, do you anticipate these democratic candidates are going to be pressed on how do you resolve the trade issue? >> it depends on what happens with the trade issue if the white house chooses to resolve it in its own way. i think that president trump not

being an ideological president on trade specifically and even to some degree on health care has made it really difficult for the democratic field to define exactly what he's doing wrong and what they would do right instead. they say, for instance, that tariffs are bad, but they also wouldn't remove them elizabeth warren, you just heard her say trade policy benefits big corporations she wants agriculture and labor at the table this administration has been criticized for having labor so involved in the negotiations they've been criticized by their own party. the u.s. representative his advisory committees from ag and labor that i weighing in it's hard to see what they would do differently and what president trump is doing wrong although they will all say and they all did last night that he is doing it wrong, that his trade strategy is not working. >> and health care was really driving the discussions last night and the debate i want to play that exchange between julian castro and former vice president joe biden >> barack obama's vision was not to leave 10 million people

uncovered. he wanted every single person in this country covered my plan would do that. your plan would not. >> they do not have to buy in. >> you just said that two minutes ago. you just said two minutes ago they would have to buy in you said they would have to buy in. >> they do not have to buy in. >> are you forgetting what you said two minutes ago are you forgetting already what you said just two minutes ago? i can't believe that you said two minutes ago that they had to buy in and now you're saying they don't have to buy in. you're forgetting that. >> you heard the reaction from the crowd there when castro brought up this forgetfulness in joe biden. health care to be a driving issue. i thought it was interesting you saw this back and forth between bernie sanders, elizabeth warren and biden who says this idea you have of universal health care, of medicare for all is going to just be too crazy, too

expensive. kayla, it was really a sharp division >> it was an extremely sharp division and biden has been trying to own this center here as he very clearly did it last night. we heard from advisers in the leadup to last night that he was planning to attack the candidates for the fact that it would be so difficult to pay for them and that's exactly what he did. in some case, elizabeth warren specifically had a difficult time answering that. she was asked by the moderators whether middle class taxes would go up and she did not answer that question. you also saw five candidates try to associate themselves with the care act, but if that halo effect in fact works for voters this time around, it's the vice president who's going to be able to benefit the most from that. >> john, what do you make of this pendulum swinging in the democratic party you've got a group of candidates

who are very far to the left and trying to pull the party off to the left when you have another group of candidates who are, like, let's just win back the middle and anyone but trump, try to beat trump in this next election how does this whole debate play into what happens in the next couple months for the democrats? >> i think the biggest thing that came out of this debate was that those moderates led by joe biden were backed up by amy klobuchar and pete buttigieg and brou -- they stood up and were making the argument that they had more practical ways to move on this issue as barack obama did when he was president. on previous debates the democrats who are considered moderate were a little bit more on their back foot and kind of deflecting now joe biden, because he felt the need to be forceful and vigorous led that fight and i

think that will redefine the debate a little bit. as for julian castro, that was just a bad look for him, especially because he was not accurate in what he said about joe biden. that was an extremely personal line of attack that is not going to help him at all. >> john harwood, kayla, a lot of fodder on health and wealth today coming out of that debate. thank you so much. meanwhile sticking with the debate, meg terrell joins us with the look at health care and pharma with unh up more than 2.5% good morning, meg. >> good morning. pharma is an extremely target among candidates on both sides and it's not surprising that according to a recent gallop poll the drug industry is now the least popular sector in the entire country unseeding the federal government what health care investors are really watching is the spread between vice president biden and other more progressive

candidates that's because investors see biden as sticking more to the status quo, returning and building on obamacare. elizabeth warren and bernie sanders are a bigger threat to health care current business models they have actually tracked this and the effect on health stocks. this compares the spread between joe biden and elizabeth warren using data charted against health care stocks relative to the sep. the health care etf includes not just pharma stock but also insurers like unitedhealth and device companies what it shows over time is that as warren gains against biden, health care stocks generally perform less well. it's not surprising given investor concerns over bigger changes like medicare for all and drug price controls proposed by a candidate like warren we don't yet have new numbers for this morning the strategist tells me there is some perception biden did well last night accordingly it is up a bit more than the s&p this morning

probably driven by the gain in unitedhealth. >> that's been interesting to watch this morning i haven't seen that stock do that in a bit. meg, thank you still to come, big tech is under fire again we've got a house ending trust panel ramping up its investigation. we'll fill you in next when "squawk on the street" returns looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ but when i started seeing things, i didn't know what was happening... so i kept it in. he started believing things that weren't true. i knew something was wrong... but i didn't say a word. during the course of their disease around 50% of people with parkinson's

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time now for etf spotlight we've got to check on which sectors are leading us in the direction of new record highs. >> yes not all groups have done as much work as others to get us here. first take a look at consumer d discretionary. this is a rare group where it's actually trading slightly above where it was the date the overall s&p 500 topped, july 26th of this year. still about half a percent below its own record high. amazon in here along with all the other standard consumer discretionary. consumer staplesreally have no given much back. this is another area, just the consumer broad leaf speaking

always remember it includes things like walmart, costco. it is not just about toothpaste and soap and food essentially. then on the flip side, s&p bank index, obviously a big lagger. you have jp morgan interestingly nosing up against an all-time high the bullish way to look at this is we've gotten to the cusp of a new high and the banks have been participating. i did want to look at the equal weighed in version of the s&p. sometimes it lags badly, but it's very close to its own all-time record high essentially if you own all 500 stocks in equal measure as opposed to market cap, we're still ago dodoing okay right now it doesn't tell you if you're going there to kiss the highs or back off as we get to a fed meeting next week. >> anything we're seeing in terms of etf movement with this

underlying trend, momentum out, value in. >> huge saws in performance obviously so the momentum funds and all the rest of it flows i don't think we know just yet you can bet that when etfs move, those under are going to chase i don't think it's been driven by flows, but if you look at the small caps or even the pure value etf i always look at, which is the cheapest stocks in the s&p, it basically went straight up as momentum went straight down. so it's been a very mechanical move i think it peaked on tuesday. >> does it feel to you now like august was a refresh, like a drew back up the truck moment? >> i don't know about back up the truck, but it feels like the moment when you kind of dodged a bullet the market kind of bent but didn't break people got way more negative and cautiously positioned than you would expect for a 6% pullback in the s&p i do think we did kind of front load a lot of fear

now we're feeding off it to get back to the old highs. >> mike, thank you let's get over to hq now and sue herera for a cnbc news update. >> good morning, everyone. here's what's happening. california utility pg and& e to resolve claims from the northern california wildfiresand the 2018 deadly campfire the european commission says eu president will meet with british prime minister johnson in monday for face-to-face brexit talks. johnson saying today there was rough shape of a brexit deal to be done and he was cautiously optimistic an agreement could be reached to smooth britain's exit from the european union. new zealand'sgovernment planning further restrictions to gun ownership. a bill introduced into parliament today would create a register to track all guns in

the country and require gun owners to renew their gun licenses every five years instead of ten >> we absolutely recognize there is legitimate and a need in our community to be able to access guns, particularly our rural community. what it does is recognize a real responsibility that comes with gun ownership. >> you are up to date. that's the news update this hour i will send it back downtown to you. >> all right, sue. thank you. when we return, is apple streaming service becoming an anti-trust issue jim stewart will give us his answer to that question when "squawk on the see rurtrt"etns

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markets nearing record highs with the dow aiming for its

eighth straight day of gains looking at some of the moves and some of the hunt for yields. >> with interest rates bouncing off the lows we've seen over the course of the past couple weeks, we are highlighting some of the themes that have been developing as investors who look for income, whether it's bond interest or dividend payments start to heat up a reminder that the s&p 500 currently yields just shy of 2%. the 10-year treasury yield is at 1.85 high yield etfs near 5.5% and certain senior bank loans yielding 5.5% as well. one other place we're watching is master limited partnerships those geared around energy pipelines and other infrastructure that in essence charge tolls to move product some of those are high yielding as well and this particular et f-1 of those ones attracts them. it is one we're watching as well also watching what's happening with certain parts of the market with the s&p 500 if you take a look at some of

the stocks that are close to their 52-week highs and yield at least 4%, we wield it down to a few names. even tech companies on the memory chip and hard drive side of things, 4.5% yield and at&t investor in that stock, a 5.3% yield. there are numerous places within the atmosphere for investors where they continue to hunt it the question is whether or not some of those assets have become so irishrichly valued. >> definitely a topic viewers want to hear more about. that's good stuff. meantime, the house antitrust panel is ramping up their investigation into big tech. elon joins us with the latest. >> the house judiciary committee is now requesting a slew of

detail detailed documents from big tech companies. this is all part of its ongoing antitrust investigation. on cnbc earlier today the ranking republican on the committee, doug collins, said that lawmakers have a very long list of questions about a broad set of issues. >> you cannot have a conversation concerning the competitive nature or the size dominance of an alphabet or google through the parent company google or a facebook or apple or amazon without having also the same concerns because of the amount of information that they store and not actually keep >> now, the committee did send letters to facebook, apple, amazon and google and the requests were really very specific in the case of facebook, lawmakers want information on the acquisitions of instagram, what's up, len ovo and others. they're going all the way back to the acquisition of whole foods. on google the purchases of

double click and youtube are of interest and for apple lawmakers are focused on why certain apps were removed from the app store. guys, they are also asking for any documents the companies have turned over to the doj and the ftc as part of those antitrust investigations and the deadline to submit everything is october 14th back over to you >> thank you next our guest says apple could face new antitrust scrutiny as it pushes into screening. looking to lure viewers into apple tv and making it free for viewers of apple hardware. does that give it an unfair advantage? joining us here, winning new york times columnist jim stewart. you buy an ipad, you get apple plus for free. is that unfair >> yeah, doesn't that sound great? everybody is happy when somebody gives you something for free until it leads to some kind of market dominance and then obviously apple isn't

there yet, but i found this giving it away free card is clearly following the amazon model which gave amazon prime free, quote/unquote to anyone who is an amazon prime member. what does streaming have to do with free delivery all of a sudden, there it was on my screen and i started watching it i think it is a huge advantage the market hasn't really appreciated this yet, that if you can get the streaming embedded on your screen, whatever it takes, you get a huge advantage over people who are going to make you pay for it i don't care what you pay. $2.95, $6.95, if you have to sign up for an account with a credit card charge, that's an entry. if it's there free, you're going to try it out. >> even if it's an introductory thing. i don't think you get it free forever. it's one year. >> it's one year, but apple could obviously tweet this

they could extend it to all apple product users. they could make it longer than one year they have a lot of flexibility this is where they're starting they're obviously testing this they'd like to maximize profits. they do have a disadvantage in that the good existing content has pretty much all been snapped up they're not going to be able to do reruns of "leave it to beaver" or something they're creating new material, kind of the hbo model which could be very successful the problem from an antitrust perspective and this is true of apple and will be true of amazon, if they achieve a level of dominance in streaming -- >> they're not going to achieve a level of dominance in streaming. >> i'd say we're a long way from there, but if they do, it looks like a tying arrangement you give something away free if you have another product it's like microsoft putting its browser embedded on the machine. exactly the same problem so if they really succeed here,

which i agree at the moment is a long shot, they're going to get some scrutiny from them. i think it's also important, looking at those yields you just showed, there's a lot of market depth about at&t you put an at&t under this strategy at&t has a lot of customers. if you start letting them sample things or letting them try hbo, we'll give you hbo free for a while, i think there's a lot of maneuvering. the problem for the legacy media companies, they don't have any other products to tie the entertainment to even disney, i think disney has a powerful brand it has the content it will do it. you start moving down beyond disney, what do they tie it to >> they've got to make money, too. they need to make money also they can't be giving hbo away for free. >> hollywood reporter has a piece that j.j. abrams turned down a ton of money from apple to go to warner. it's not like they're going to have the lion share of talent,

but maybe that's not your exact point. >> everybody has a price apple is clearly going to be feeling their way through this i think, look, the streaming wars is one of the big, fascinating long term stories of our day. who knows how it will turnout. everybody is feeling their way and a lot could change but again, it's great right now for talent i'm sure j.j. abrams got a good deal with warner, but at some price he'd go to apple so the possibilities are out there. it depends on who has the deepest pockets and how far down in those pockets they're willing to go. >> it's interesting, you were really pointing out, too, what a warning sign it is that tim cook turned around and sold the shares of apple that he had just gotten from the company and what your takeaway is on that what do you read into that >> l i think it's hard to know he still has a big ownership

stake. i don't know what he's doing with his money i don't know what he's going to do with it i don't read a whole lot into that i think it's true of all these tech companies right now they're at an inflection point how can apple grow at a double digit rate given how large it already is there may be more promising opportunities to put your money and i could see why he might want to entersidiversify a litt >> when i heard they were lowering the price of the iphone, i thought maybe it would make more people interested if you put a price point that seems more modest than what it was, oh, it's a bargain should we read into that differently that they think maybe the iphone is not going to be the big winner for them that it has been? >> i think anytime you see price being used as a competitive weapon, it's a little bit of a warning sign it's not the ideal strategy. you want desirability, prestige, superior quality you want to be that -- that's what you really want to drive

the purchase the minute you start having a price war, it's kind of conceding that well, we can't really compete on anything else. so i don't see it as a great sign on the other hand, it's maturing industry like this, how much more radical improvement can there be in the iphone i think once you reach that inflection point, you want to see how can i maximize my profits, how can i broaden market share and obviously price cutting is a last resort. >> i share your interest in the streaming wars we've spent a lot of time on it. we'll continue to. there is a key to first mover advantage. netflix has it, amazon disney plus many expect will be a success given the plethora of its content. hard to imagine, though, that many other entrants at this point really making a great deal of -- well, getting a lot of currency in this market given the overall build to the consumer is starting to mount

the more services you take on. >> i agree with that i've been wondering all along how many of these streaming services do you want to see on your tv? i don't want to see a hundred. i don't want to go back to the cable world, which was utterly confusing. even now i'm trying to remember whether something was on netflix or amazon prime and half the time i have trouble remembering. maybe that's just me >> no, you're not alone in that. >> i'm starting to think maybe not as many as i thought you can bill your time with amazon and netflix at a pretty robust programming add some sports and you're not looking around for something to watch. so i think it has to be some pretty compelling content to get you to add it on the screen, which is why i think apple is smart to make it easy, make it cheap. i mean, really make it free. it just is there as a bonus if you buy these things. >> jim, thanks

as always. have a great weekend. >> you too. >> jim stewart the results of cnbc's third quarter cfo survey on trade tensions are out let's go to frank holland. what are you learning? >> we take billions of dollars of u.s. and chinese goods and trade tensions were escalating a week before labor day. the survey got the most responses from cfos it ever has. nearly 2/3 said the u.s. trade policy is having a negative impact on their business more than a third see it as the single biggest external threat 16% say china is the biggest the dispute between the two largest economies in the world has financial decision makers worried about more than their industry they have downgraded the comment economic situation of prooicimp to stable. the eurozone in the uk also seen as declining

25% of cfos say they have made plans in case the trade war worsens. more than a quarter say they've had to increase their prices to offset those tariff costs. back over to you. >> a lot of information in this one. thanks, frank. as we go to break, take a look at the markets. dow is up 48 awfully close to record highs. s&p has been flirting with the flat le.in up only three points we're back in a moment

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aware of they have about 50 to 60 employees in new york i think iep. my understands is about half will be going down there i actually meant to call you because of course so much of this also has to do not just with him getting older he's 83. he83, likes the warm weather but taxes. >> yeah, yeah. and in his letter to employees he says it wasn't taxes but let's talk about why taxes probably played a role he is new york's fourth richest person, net worth of $18 billion. now carl icahn will likely be the richest man in florida, he is taking wealth and tax dollars to florida in the spring he is moving for warmer weather, slower pace, taxes probably played a role as well. new tax rules capping state and local tax deductions to $10,000, created new incentive for high earners to head to florida who has no income or estate taxes. more than 70 financial services

firms moved to palm beach county alone in the past three years, and even before the latest tax changes, billionaire hedge funders all packed up from the northeast and headed south in 2017, 64,000 people moved from new york to florida that's roughly in keeping with the historical averages, but tax experts say the pace probably accelerated last year, could accelerate further in 2019 he converted his hedge fund into a family office in 2013, he has about 50 employees, half of whom are expected to also move. he has a home in indian creek village, an island, he bought that house in 1997 for $7.5 million the island has about 34 homes with private police force and neighbors, new neighbors include julio iglesias, former dolphins coach don chul a, and eddie lamb pert

it is unclear whether he will sell two penthouses that he owns in museum tower in midtown but guys, clearly for a guy like that with his net worth and estate tax planning being important, florida is a wise tax choice back to you. >> he's not as worried about salt, for the employees it is more a factor, it is about tax rates in new york state. >> absolutely. as we talked about, you can't just move to florida and declare yourself a florida resident, it takes a couple years for new york state tax authorities to release you and that's a long and detailed process, so i think he is 83 obviously he's healthy but wants to plan ahead, given the tax authorities give you trouble for several years in order to grant you that exclusion from estate tax. that's the golden prize for older new yorkers, move to florida, to get rid of the estate tax >> yeah. one queens guy to another, that

being carl, sorry to see him go. robert, thank you. >> thank you, guys. let's get to jon fortt with a look at what's coming up on "squawk alley. >> hey, contessa it has been an active end of the week for ipos, we had smile week for ipos, we had smile direct yesterday, 10 x ain we will talk to the ceo coming up on "squawk alley. i can. the two words whispered at the start of every race. every new job. and attempt to parallel park. (electrical current buzzing) each new draft of every novel. (typing clicks) the finishing touch on every masterpiece. (newborn cries) it is humanity's official two-word war cry. words that move us all forward. the same two words that capital group believes have the power to improve lives.

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welcome back to "squawk on the street." i am dominic chu markets in striking distance of record high levels, key level to watch is 3027 in the s&p, inter day record high hit july 26th. seven sectors are within 2% of their own record highs today's laggard is technology and staples, and financials and materials are leading. now, among the stocks that are lifting the financial sector this morning, you've got sbv financial and lincoln and prudential a key focus with those financials back to you guys at the new york stock exchange >> dom, thanks for that.

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good morning, it is 8:00 a.m. at cloud flare headquarters, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ ♪ ♪ good friday morning. welcome to "squawk alley." i am carl quintanilla with morgan brennan and jon fortt at post nine of the new york stock exchange we're about 100 points shy of an all-time high closin