♪ it is 5:00 a.m. at cnbc and here is your top five at 5 on a monday morning forget hello, why some of wework's board members want to say good-bye pneumonia on the its ceo after yet another ipo delay. president trump and india's prime minister taking center stage in front of a packed house in houston we have the highlight. extraordinary nastiness. disney ceo bob iger detailing why he walked away from a deal to nearly buy twitter three years ago, opting for digital streaming startup instead. months, not weeks. new details on its massive push

to repair and could it be a september to remember. trying to brush off its reputation as one of the worst months of the year for stocks. it is monday, september 23rd and worldwide exchange begins right now. ♪ good morning, good afternoon or good evening and welcome from wherever in the world that you may be watching. wherever it may be, good morning, i'm brian sullivan. here is how your money and your global markets are setting up their day and their week futures now down 99 points right now. little red on the screen this morning. coming into today the s&p 500 has been up three sessions in a row. right now, looking like it's not going to make it 4 but a long way to go. in the credit markets, things have cooled off just a bit we'll talk about that in a second benchmark ten year treasury market 1.86 after all those wild

moves, things have cooled off just a bit in the last week. there are no major economic data points or policy speeches today. around the world in asia, japan was closed for a holiday the chinese markets we are seeing shanghai down just about 1% hong kong fell as well and in europe, again, not a major trend that we are spotting maybe little more red on the screen you can see the major market average now down about 1%. it's been a good month here and around the world as well still we are down across the screen this morning. it is maybe a busy week ahead. wall street trying to look past the trade war an the fed to more actionable items including things like nike's results they're out tomorrow afternoon we get a housing health check out as well. and the final reading on second quarter gdp on thursday. durable goods on friday. the bond market scenes after those wild moves we have to calmed down just a bit lately and just three months left in the year, let's try to figure

out to decipher what is ahead and bring in your guest of the morning who is chief investment officer of fixed income and portfolio manager at diamond hill capital management. bill, good morning happy monday, happy week what is to you the most important thing now? the fed is behind us trade war has been going on now for nearly two years what is the most important thing to you and your team to focus on right now? >> well, i think probably the trade wars versus the trade truce would be the biggest issue. are we going to get a trade deal or are we just going to get a trade truce? and could we even get an escalation of tariffs from here? >> now why does that matter to the credit markets and how do you see it affecting the markets going forward? >> well, i think certain parts of the credit markets are starting to price in a trade deal, which i think we see very little evidence of that. we are seeing evidence of a trade truce, but even that could

change at any minute. >> so what do we do? what's the best move for your clients and our viewers right now? >> you have to stick to your late cycle play book you have to be prepared for an escalation of tariffs which would have a very damaging effect on the u.s. economy it's already putting germany into recession or very close to recession. it's having an impact in china if it has a negative impact on the rest of the world, it's certainly going to come back and affect our economy >> do you see the economy slipping into recession in the next year or so, bill? >> i think we're right on the cusp of what the government bond market is telling us is that we're right on the cusp of high risk of recession or this mid cycle adjustment as chairman powell likes to refer to it. >> we look at markets now and say the bond market may have done the result of the federal curve. we're waiting on the fed, we

have seen yields come way down and back up to 137b9 7 hanging around these low interest rates for the foreseeable future or any way we can pop back to 2, 2.5 even 3% on the ten year? >> yeah. i think 3% on the ten year is a real long shot, but 2% on the ten year would be interesting. if the two-year stays around the levels right now, that's kind of how i would draw the line in the sand for whether we're talking about the risk of recession versus this mid cycle adjustment, two-year, let's say 175 or lower ten year more like 2%. right now the yield curve is still just barely positive, maybe three bases points between the ten-year yield and two-year yield. >> you're in columbus, ohio, i'll leave with probably the most important question you've ever heard, how badly will ohio state beat michigan this year because michigan is not good

>> i don't want to comment on that, but we did have a great come from behind victory against miami this weekend. >> oh, yeah, those red hawks, they really put it to you guys, 73 to 5? >> we were sweating it out we only pulled ahead by 71 points. >> my wife went to miami of ohio bill, thank you very much. we appreciate that. >> sure. meantime, your top corporate story, another twist in the seemingly endless saga of wework new this morning, board members and early investors in the startup are now pushing for the removal of its controversial co-founder and ceo adam newman frank holland with more on this story. good morning, frank. >> good morning, brian sources say wework's board could mean as soon as today to discuss details to possibly oust newman, softbank chief who had been one of newman's biggest supporters is now reportedly in favor of removing him softbank and its vision fund is

wework's largest exterm shareholder. some board members not associated with softbank align with pneumonia on the keep him as ceo the company postponed ipo road show after investors questioned its complicated governance giving newman large voting power. newman had once been forced to reschedule a private plane trip after marijuana was found on board. newman's erratic behavior includes desire to be the president of the world, living forever and becoming the world's first trillion nar they see this move against newman an effort to prevent the company's ipo. softbank views the write-down small in size and believes a leadership change would be beneficial for the wework in the long-term. >> thank you very much. there is so much left to do on this very busy monday morning. when we come back what cooling trade tensions between the u.s.

and india could mean for the markets and your money then, what happens when the world's toelsd travel and tourism company stops operating overnight. it happened. and there's about 150,000 angry travelers who want to know the answer. later, disney's bob iger on why he walked away from talks to buy twitter. a very busy hour straight ahead tus.rlidexan" ge rern as soon as the homeowners arrive, we'll inform them that liberty mutual customizes home insurance, so they'll only pay for what they need. your turn to keep watch, limu. wake me up if you see anything. [ snoring ] [ loud squawking and siren blaring ] only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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welcome back and good morning. your big number of the day, $142 billion. that is the total value of goods and services traded between the united states and india last year india's gdp now $2.5 trillion, basically the same as england. remember, india likely to become the world's most populus nation by the end of most of our lifetimes. that also makes india the u.s.'s ninth largest trading partner overall. something president trump has kept on top of mind during a howdy modi event in houston, texas, over the weekend. here is more on what was a massive weekend in houston >> that's right. president trump joining prime minister modi on stage at nrg stadium in houston he removed the country's

preferential trade in june both leaders sidelined the trade discussion and focussed their attention on reaffirming the u.s./india relationship and emphasizing the importance of border security for both countries. >> on this day i'm happy to report that the relationship between the united states and india is stronger than ever before the ties between our two nations are grounded in our common values and our shared commitment to democracy we are free nations with great fate and a fierce devotion to our national independence. we are strengthened by our love of liberty >> those comments come weeks after india sent troops to cashmere amid tensions with its neighbors pakistanpakistan it comes after an overwhelming majority of indian americans

voted for hillary clinton over trump in 2016. the warm exchange between trump and modi tees up forthcoming talks in new york this week at the united nations any deal will not likely address ecommerce rules that have challenged walmart and amazon's growth in the country. >> seema, what do you think that the stalled china trade talks mean for india are they going to be the net winner of all of this as companies look to move their supply chain >> i think if president trump is focussed on winning a trade deal of some sort, then it may potentially incentivize the u.s. administration to ink some type of deal with india in the coming weeks or months. and you wonder with the backdrop of stalled talks with china if that really pushes him to put some type of deal on the table

with india. >> seema, i would like to change gears while we have you and it's a spectacular pleasure to have you on s"worldwide exchange," we would like to talk about travel. thomas cook collapsed, literally ended business over the weekend suddenly it's liquidating and also setting in motion what is being called the biggest repatriation about 150,000 brits clients of thomas cook are now basically stranded around the world and being forced to seek alternate ways to get home what happened with thomas cook >> yeah, this is really an extraordinary story playing out in the travel world. we're talking about the world's oldest travel firm, of course, based in the uk. last ditch efforts to save thomas cook really failed. this is a company that's sitting on, i believe, 1.7 billion pounds of debt and it's been really hurt by the fast evolving nature of the online travel market

booking holdings and expedia plus geopolitics in turkey also hurt its bookings and stock chart over the past one year really tells the story some of its competitors are trading higher on this news. brian? >> a big company thomas cook a lot of people stranded trying to get a way home thank you for joining us on deck, the opioid crisis has devastated towns it has devastated families now there's new risks from a financial perspective. we're laying out stocks who may be at risk extremely delicious duo, why pizza hut chose to partner with its latest and greates [upbeat actiont creation in the snack food business

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of course that's what you heard us and other guests speak about on cnbc. costs could run into the hundreds of million dollars. am ram koe is pushing ahead with its ipo plans. they added ubs and deutsche bank as book runners for the deal in the meantime, despite being off the major headline, hong kong still remains a major global flash point pro-democracy protests stretching into the fourth month over the weekend demonstrators flooding a shopping mall yesterday, trampling a chinese flag and setting it on fire they chanted hong kong people strive on. the clashes in the mall followed street balts on saturday where protesters threw molotov cocktails at police. hong kong cancelled fireworks for the founder of the communist party which son october 1st of this year. coming up, new numbers this morning on the 2020 race for the white house. we'll give you those numbers and details ahead. plus, some famous royals are heading to africa this morning

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welcome back and good morning. it is exactly 5:22 stock futures, they're not indicating new record highs today. in fact, we have dow futures down about 73 points right now let's get a check on this morning's other top headlines including a new update on the race for the democratic

nomination for the white house nbc francis rivera is in new york with that and more. >> good morning. potential sign of trouble down the road in 2020 for president trump. the latest polls from nbc news and "the wall street journal" mounting trouble for the president. his approval rating is at 49% but 69% of voters say they don't personally like the president, politics aside half of voters say they're very uncomfortable with mr. trump as a presidential candidate elizabeth warren on the democratic side topped a new iowa poll for a first time in a statistical dead heat with former vice president joe biden. prince harry and meghan markle are traveling as a family bringing baby archie along for his first officials overseas tour they're expected to arrive in cape town south africa he is expected to honor the legacy of his mother angola. she was famously pictured by a mine field her 1997 trip raised worldwide

awareness of the damage land mines do downton abbey brought in $31 million domestically and 61.8 million worldwide making it the largest opening weekend from a specialty studio in a decade rambo got 19 million for a monday, those are your headlines. brian, back to you. >> francis, thank you very much and have a good day. up next a growing number of investors reportedly looking to oust weworks ceo plus, your morning rbi and why new york's real estate market may be a lot worse than you think. 5:24 we're back after this. do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended

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the 5:00 a.m. hour stock futures are down right now down about 70 points now, despite september's reputation as the worst month of the year for stocks, this year we're having one of the best months of the year we're having the best month since january and june the average return of s&p 500 stock this month 3.5%. check this out, 54 s&p 500 stocks are up 10% or more this month, september, doing a little reputation makeover. we're not going to catch june in january. still overall, not a bad month for stocks new developments this morning in the saga that is wework and its ceo adam newman. cnbc.com reporter joining us with the latest twist and turn alex, good morning good to see you. you've been all over the story is this the end for adam newman? >> we don't moe. as a weworks ceo he has friends on the board or let's bring us up to date here there's going to be a board

meeting today for people at weworks discussing the fate of adam newman as ceo he may stay on as chairman, similar to what happened at uber to, now we're going to find out who exactly is on what side. what we know so far is that soft there's bank, by far the largest external investor is for removing adam newman this is a surprise for people just joining the people. softbank is a huge supporter of wework for several years they pumped in billions and billions of dollars and wanted to pump in even more money. the ceo of softbank has been a big champion of adam newman. no longer. the question now is well why what's happened? >> is it more about the valuation which just continues to ratchet down? or is it more about adam newman? >> that depends on who you ask so people that i have been speaking over the weekend close to wework, think this is just

business to quote the "godfather." in other words, what softbank wants to happen here is for this company not to go public they invested final round at $47 billion. from what it looks like based on the reporting that we and others have done, wework if it does go public won't have a valuation of more than 20 billion or 10 billion. >> if you're m zrasayoshyi son,u have to ratchet it done. >> this would be a huge embarrassment for that and ramifications on their future fundraising. so if you get newman out of the ceo job, you can install your own ceo and have that person not take the company public. adam newman wants to take the company public and has been pushing back against soft bank and the advice of others to do so now for weeks, months from the softbank point of view,

the people have been saying to me, no, no, no, look, the write down is de minimis we don't want adam newman because he's not a professional ceo. >> don't they feel like leaks, alex the journal or times that huge story he's smoking pot on an airplane. >> "wall street journal," yeah. >> feels like those were the stories that people put out there to further their game, further their own ends, you know what i mean? >> depends on who you ask on that one softbank will say, no, that's why he should be this is maybe criminal who knows. but yeah on the weworks side, no, no, no, this is just an excuse as a means to an end to prevent this company from going public and that's why they've take thn battle stance. >> alex, stay here i want to bring you into the conversation but also bring in another voice here head of trading and media

technology and media trading at web bush securities. joel, good morning listen, i know weworks is not public you're not trading it per se, but you're a smart guy you're in technology you follow this story. what do you make about this? should newman be -- good-bye, pneumonia newman >> it really is one of the spectacular implosions we have seen in the last ten years even before ignited by the release of the prospectus not that long ago. the cracks in mayasyi son appeared last week there was chatter that he was floating the idea of ipoing t theal fund it's unraveling in a spectacular fashion. he invested nine separate times in wework. total $12 billion has been pumped in. there's been no better way to

light money on fire when it comes to investing he's been water cannoning money across silicon valley. he threw 100 million dollars at newman's wife's company we grow and uber and other food delivery competitors around the world so to me it's more of an issue of masa son. he's trying to save his reputation when it comes down to wework, this isn't a tech company in any shape or form. it's pretty obvious if anyone who has read just a little bit about what transpired here, this is a complete fraud on a lot of levels. >> there's been a lot of discussions about what is the strategy of the softbank vision fund a lot of people have scratched their heads over the past several years as they're pumping in $70 billion into all these different companies out there. originally, it was sort of a nebulous trying to invest in dominant platforms but investing

in a dog-walking company and wework and uber and slack and a bit confusing. when they go public like slack and uber and don't do very well, then investors i think take a pause. a lot of this money is coming from sovereign well funds that are now pulling back >> it's like they're trading amongst back and forth between themselves there's a lot of questions there. i want to move on. now stick around for this because i'm sure you have a point of view on this. another story this morning disney ceo bob iger got a little real in an interview with the new york times he said he considered buying twitter a few years ago but called it off because the platform is too problematic. troubles were greater than i wanted to take on. greater than i thought was responsible for us to take on. there were disney brand issues,

the whole impact of technology on society, the nastiness is extraordinary. i mean, i think bob iger, alex, is sort of reflecting a lot of us thought, it's an amazing platform but a lot of bad stuff. >> i actually broke this story in 2016 that disney was interested and in fact hired a financial adviser to take a look at twitter. >> i didn't just roll you into the conversation by accident, alex. >> the issue there which i think we subsequently broke there were brand issues going on. the question at the time, i think, if you remember twitter sort of put itself up for sale disney jumped into the mix it wasn't a clean fit with anyone now, disney in the end said it was the trolls and sort of the ugliness of twitter that got in the way. and that very well may be the case why it didn't work there. you think about disney buying ip, twitter doesn't quite fit into that nicely in the end, it would be a reach for any of these companies to buy it

would they continue to do what twitter does now, taken it into a different direction, use it more as a catch-all video platform i don't know but i think it makes sense in hindsight for twitter to stay independent. it was not doing well at the financially. it's done quite a bit better in recent years maybe it was for the best they didn't buy it. >> joel, what does this tell you about the future or lack of for twitter? >> two years ago twitter story was a lot different. stock was trading in the teens it's nearly risen 200, 300% since those times. i think twitter is a great platform and i think jack dorsey versus mark zuckerberg has attempted to clean up the toxicity of the platform he's been vocal in trying to clean up the platform for well over a year now where zuckerberg is just dragging his feet to say the least in trying to clean up the facebook platform. and remove it. but anyone who has been on

twitter, me personally i use it more for work purposes it's an extraordinary platform indeed, but when it comes down to personal use, it is pure toxic. i'm hoping it looks a lot different in ten years as far as disney, it doesn't fit in with the mouse. it's a completes 180 from what their brand represents i think what they're potentially looking how could they reach, improve their direct to consumer offering and twitter is obviously a platform that has that technological capabilities but at the end of the day, you know, it wasn't worth the risk the risk wasn't worth the reward. >> twitter punches above its weight i view twitter as part of my job. if i wasn't doing this job, i'm not sure i would be on there 80% of the country is not on twitter. 80% of adults don't use it or don't have an account. one more story, joel, we have you here because the cover

story for this weekend was called the opioid reckoning and the magazine discussed u.s. probes into the opioid crisis and the entire supply chain could spell troubles for investors in companies like johnson&johnson and cvs. increased regulatory scrutiny would provide a window for amazon to further disrupt the sector it was a very broad based, very important story. the opioid crisis affected millions of families what do you make of this story were they stretching in terms of the reach of the crisis or hit it on the mark >> no, i think they hit the nail on the head. you look at the polls this weekend, elizabeth warren making a push to the top of the most recent polls out of the iowa as well that would have pharmaceutical investors more nervous the landmark trial kicks off october 21st in cleveland. without a doubt, if anyone has seen i'm sure many people have seen documentaries about tim

pact that this has had in america to millions of families and especially from the drib distributor side, they were just shipping hundreds of thousands of these pills to certain small backwoods kind of pharmacies nothing adds up on so many levels you hope that people get taken out and have to face the repercussions because it's a tragedy to say the least so i think they did a great job covered a crook hit the nail on the head as far as who is impacted and why investors should be weary. in the coming years and especially with the election just over a year out, i think there's better pockets of the market to try to act p and generate alpha than in the pharmaceutical sector. >> great discussion there. we hit the trifecta top story. we appreciate it alex sherman, breaking stories on wework and twitter. we appreciate it, alex, as well. thank you very much. coming up, the u.s./china trade war, the real life impact

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liberty biberty... cut. we'll dub it. liberty mutual customizes your car insurance so you only pay for what you need. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ and based on the latest calculation of the imf, if the tariffs that are either here already or threatened to be applied were to apply, we're talking about reducing global growth by .8%. that's a massive number. >> of course, that was former imf director and now incoming christine lagarde talking to our own sara eisen about trade you can hear that full conversation later on today on

""squawk on the street"" and on "closing bell" both shows that sara hosts amazing how that works. we talk trade all the time as it's a major macro story for the market what about the day to day real world implications of the trade war. i'm being told to scoot this way. courtney reagan has a little lesson in called price elasticity. >> i need the screen, brian. i'm going to be a professor. >> thank you very much if you want to figure out how retail is handling tariffs you have to brush up on economics 101. typically raising prices is the last option. if that's the case, it doesn't necessarily mean the tariffed goods are the ones that end up with higher prices well, it's largely determined by price elasticity this is the economic theory that connects price, quantity and demand so this is our demand curve,

right? so for an item that's demand elast elastic, it's going to be higher up on the curve which basically means -- i knew i would have a couple here. the higher the price. >> she's heightening the higher the price, the fewer items that a consumer is going to buy now, if it's less demand elastic, it's going to be over here on the curve which basically means that prices that go up are not going to change the quantity demanded as much. there is such thing, of course, as something that is perfectly pliesed in elastic inlins or milk >> you have to buy it. >> you have to buy it and the quantity is not going to change. you will not pay more or less insulin if the price is more or less expensivexpensive. so home depot is using this theory to deal with the tariff costs. it's merchants are determining which products consumers are

willing to spend more for and that's where it will take the price increase if that product isn't subject to tariffs that's what it means when it's taking the portfolio approach. now, williamsy know ma said earlier this month that it increased items on select items. macy's had a very different experience when it tried to do this in recent months. it tried price increases on some housewares, luggage and furniture but its customers had very little appetite the items they picked were more price elastic than it realized. >> clothing has been overinventoried forever. maybe macy's has a macy's problem. you can go to t.j. maxx or -- >> in this case they were

talking about luggage and housewares not clothing. >> your example, professor, home depot, your lightbulb burns out. you have to buy the lightbulb. >> maybe you don't need your 16th pair of jeans or a new bag. it's something you want but you don't need. >> and this could be why we saw those price increases on the washington machine if it breaks you have to buy a new one. you're not buying it every month. maybe you're not as sensitive to what that price was before and what it is now that might have been more demand inelastic. >> you're in the retail world everyday just as a consumer, customer, forget about awesome reporter, have you looked at prices and said, tariff-ed up it's hard for me as a consumer to see a jacked up price. >> it's very hard. just because that item is going to be subject to tariff, it may

be very hard for us to actually see that price increase. they could take it a little bit at a time and on different items. >> i have some numbers for you >> oh gosh >> what is this? >> this is the score. >> it's a math test. >> of ohio state versus miami. >> my wife loves ohio state. >> this is my alma mater love it dearly >> let's do this can we do this i'm coming -- >> however, if miami or ohio were to beat ohio state then their season is ruined >> good. >> but that was a little excessive. >> your buddy jim harbaugh didn't have a good weekend. >> my buddy? >> i'm kidding michigan let's find out what else you'll be talking about today this morning's top trending stories. mr. frank holland is back with

those. frank? >> we'll switch from sports to entertainment. hbo took home the most wins at last night's primetime emmy awar awards amazon left with seven statues and best comedy series with fleabag. they nabbed a total of 34 wins netflix collected 27 wins and amazon left with 15. >> "game of thrones" across the board. last season a little shaky but overall body of work was amazing. >> they put three seasonings into seven shows suddenly they took over the city >> courtney, are you a fan >> i have no idea what you're talking about. >> you have never seen "game of thrones". >> i tried two or three times the first episode. it was a little much, the violence, the incest, i'm out. >> you put it that way >> violence, the incest. >> just saying

>> normal morning on worldwide exchange. >> shifting gears to retail. walmart will no longer sell e cigarettes they made the decision amid what it called regulatory complexity and uncertainty surrounding the vaping industry. health officials are investigating a lung disease linked to vaping that killed eight people so far. the fda says it will ban flavored e cigarettes while some nations banded the products a adds whole. >> this was an interesting one when it came across. walmart has been reigning in the way it sells its tobacco products both e cigarettes and traditional cigarettes they raised the age i'm still talking price elastotisty raised the age to 21 to buy products. i'm told it's a relatively small part of the business i don't exactly know the numbers. so maybe this is not a huge deal. >> may be a reason to get people

in the store nicotine addiction is inelastic. >> full circle speaking about elasticity, pizza hut launched a stuffed cheese-it pizza features four baked jumbo squares topped with cheese, sharp cheddar. available nationwide for 6:49. >> it sounds delicious but crunchy, i don't know. >> this isn't you. i'm like a neighborhood pizza guy. >> i'm fancy. >> we didn't plan this. how can we both be wrong

>> what does that mean >> pinky out, little sip. >> you know the hot restaurants in town. frank and i are like cheez-it pizza. >> philadelphia and dayton >> uh-huh, yeah. >> i'm from gardenino, california. >> stick out your pinky. >> some pizza on the side. >> my brain doesn't work awesome stuff. thank you very much. on deck, bernie sanders wants to eliminate 81 billion of your medical debt. but wait until you hear how he plans to pay for it. shelden aidleson called the president with a warning about trade. we'll tell you what he said when "worldwide exchange" returns

welcome back time for your executive recap, all the headlines you need in 60 seconds. let's go democratic presidential candidate bernie sanders releasing a plan to eliminate 81 billion of your overdue medical bills under his proposal the federal government would negotiate and pay off bills and collections and exclude medical debt from credit reports he plans to pay for the proposal with a tax on corporations based on pay for ceos. the new york stock exchange owner launched its bitcoin futures contract late yesterday. futures are physically delivered. they pay out in bitcoin on settlement shelden adelson called president trump last month and warned him

on the impact of the trade war he is a major republican party donor. "the wall street journal" reports the billionaire casino owner spoken to members of the trump re-election campaign indonesian is ready to fault boeing 737 max's design as well as lapses in the oversight for the fatal lion air crash last october. "the wall street journal" says that pilot errors and maintenance mistakes were also factors. this would be the first formal government finding in fault of the 737 max saga we're a half percent away from the all time high based on what we're seeing right now, we're seeing futures down across the board, but it is early. down 57 points on the dow. let's talk about what is the most important going forward for you and your money i feel like we're at some kind of a turning point, right? we had the fed sort of behind us now. brexit is sort of still hanging out there.

the trade war it's been going on so long. how many more headlines can we possibly have? what is going to be the next to you big market moving thing that we need to focus on right now? >> for me, it's really next year's earnings outlook. you look at the progression of earnings estimates for any calendar year, what typically happens is that the year before, the numbers are way too high they're like 10, 11, 12% and sit around for months and months because they're not really on the radar screen yet for most analysts because they're too far out. in the fourth quarter of the prior year, those numbers come down as the analysts focus on the following year we're at that point. we'll have third quarter earnings in a couple weeks we saw the guidance from fedex and probably see some more any company that's tied to the global industrial cycle is at

risk of maybe disappointing or guiding lower. but more importantly, the 2020 numbers ithink are going to start to come down during the fourth quarter so maybe we'll see 5 to 7% instead of 10 or 11% not the end of the world, but i do think that's sort of the next piece of the puzzle that's going to maybe move the markets and theoretically should prevent them from breaking out of this now 20-month long old holding pattern. >> we have 17.5, is that then too high are we overvalued given your expectation for the possible ratcheting down? >> 17 is okay as long as the earnings come through. that's what we're talking about right now. and valuation really is what this comes down to, right? if you deconstruct the total return for the s&p or any market, it's dividends plus earnings growth plus change in

the evaluation earnings growth is 420, 19 around 2.5% and risk of coming down, then really valuation has to carry the day and 17 is not at nosebleed levels historically speaking but it's also not cheap. so really for valuation to carry the day, it comes down to a relative valuation to bonds as opposed to an absolute valuation to stocks. one of the things that we've seen in the last few months with the bond yield plunging to 1.5 and now 1.7 is that the equity risk premium has gone up to the levels where it was last december when the market was down 20% you could make the valuation argument in either direction but i think that's what it comes down to here. >> it's always a pleasure. have a great day and a great week thank you. time for your morning rbi and this one you will not like if you own a condo in new york city but you would love it if

you want to own one. one in four condos build in the last six years is unsold and sitting empty. 16,000 condos built more than 4,000 without a buyer. one reason the median asking price for a new condo in manhattan is $2.3 million. random but expensive we'll see you tomorrow have a great day "squawk box" begins right now. good morning hello, newman. should it be good-bye newman weworks ceo is in the hot seat as board members and investors are considering plans to replace him. the full story straight ahead. the world's oldest travel agency collapsed overnight stranding hundreds of thousands of passengers. and bob iger explains why disney considered and rejected acquiring twitter, saying the nastiness is in his words extraordinary. yeah monday, september 23rd, 2019

"squawk box" begins right now. ♪ >> announcer: live from new york, where business never sleeps, this is "squawk box. good morning, welcome back to "squawk box" this morning on a monday morning here on cnbc live at the nasdaq market site in times square. becky is off today take a look at u.s. equity futures at this hour let's show you how things will open up and set themselves up. dow off 66 points right now about now. have three and a half hours to go nasdaq would open down 35 points let's quickly show you treasury yields as we speak, show you the ten-year note right now at 1.696 the two-year at 1.671. and the bi