>> announcer: live from new york where business never sleeps, this is "squawk box. >> good morning. welcome to "squawk box" here on cnbc we are live from the marketsite in times square. our guest host today is fast money trader joe taranova. >> i feel the look already from joe. >> you are a fast time reporter. >> today he's "squawk box. >> i fell into the trap of that. my fault >> i thought it was fast money >> no. it is half time. >> this is not my fault.

>> it is not but we are thrilled to have you here let's take a look at where the u.s. equities are. dow up by about 72 points. with these gains, the dow would actually erase the loss for the week at these levels s&p up about eight points. s&p up around 7.5. you'll see the 10-year note is yielding 1.716 >> global markets continue to follow the headlines learning trade talks between u.s. and china are set to resume october 10 sources say vice president premier lu will represent the

delegation we've had lower level things happen but this is the next big event. it's the back drop -- amazing. trump keeps plugging away. >> there is so many business news headlines i think portfolio managers are losing sight we are coming up on the quarter. the dollar rally but most of the conversations i'm having right now, it centers on the fourth quarter of last year everyone is reflecting upon it and thinking to themselves basically, you go into the fourth quarter of a football game with a 20-7 lead and end up losing 27-20 in the fourth

quarter. you don't want to havethat again. you walked into october 2018 with the s&p higher, december 2018, you left that quarter with the s&p lower. i think there is a defensive mentality built in >> do you think there is memory on that soar is it just muscle memory built in? >> or is it from every october we've had? >> it is about liquidity and the need for liquidity i think last year, the federal reserve was removing liquidity they seem far more a meanable to adding that. the world is short u.s. dollars.

the real issue is the value of the u.s. dollar. bank reserves need to be lifted higher i would imagine october 29, october 30 at the fomc meeting, they talk should we do a little qe light i think the federal reserve is a meanable to that maybe it differentiates that environment. >> there were all sorts of concerns about earnings at that point too. it was worries about the fed, earnings all of that. when the fed reverses course, everything came back >> i think it was the absence of liquidity. in december, there was not one

high-yield debt offering as soon as we turned to january 2019, chairman powell pivoted. as soon as he pivoted, the markets rallied. i feel a little better about where the fed is and where they'll be providing >> i thought you lost your mind. it reminded me of an snl skit. you were like, quiet thoughts. >> but half time report, you never look back. most traders are about looking forward. you are saying it harkens back you are saying the factors have set themselves up to be similar? >> yes

the big five banks are required -- >> you've been reflecting, i see. on your life, your career. >> purposeful reflection >> always. it is 5:00 and i'm standing in times square >> i noticed you coming in >> i noticed you too >> peloton shares dropped. priced at $29 a share at the high end the shares finished the day lower. check out some of these other

high-profile ipos. smile direct down 44%. all of these down since their debuts endeavor group pulls its ipo citing weak market conditions. the talent agency that owns miss universe and the ufc this is the second time they've hit the brakes >> the window closed quickly >> i think at this point, i think there was a maturity factor like uber, i think they came to the market too late. in the case of peloton

yesterday, i can't see the excitement surrounding this. it is a fitness company about fitness equipment. 80% of the revenue is coming from the treadmill or the bike that is the reality. >> wall street and retail investors are not going to fund growth at all costs. >> it is no longer going to be a story of getting bigger and beiger they all point to amazon as the season but the losses these companies are talking about are far beyond what amazon was talking about. >> this next story doesn't help. more drama at wework this is a big part a lot of companies are being painted with the same brush.

>> it would be a tough time no matter who you are this week's the company's ipo is postponed. wework ceo has stepped down. eventually the new co-ceos are expected to cut thousands. and is a main part of their leasing. and again, i'm totally immune. >> you are a leadite >> i've never done a door dash although, can you get taco bell? >> door dash says they have had a data breach. that happened back in may.

information exposed includes the last four digits of credit cards and driver's licenses of many of the workers. >> it hatches again and again. i feel like i'm insulated. >> i think we've made the assumption our information will be out there >> is there ever a bill to pay on this? >> there are certain circumstances where it does. i think it is a bigger story right now, the effect is on the individual >> individuals getting identities stolen, bank accounts cleaned out. >> i would trade a lot of

privacy for google maps. that has changed so many things. when are you going to be there 10:41. >> have they tracked you and sent a speeding ticket to your house. >> you get a 3% discounty if you are a really good driver the world will go, if you are texting, the insurance company will know. >> i'm worried about the orangish red lights and rolling through the right turn on reds >> speed limits. >> a lot of places in the burb

that they don't tell you, they go off the base limit of 35. do you know what a 40 or 42 in a 25 will do they call it like three points >> especially in a school zone coming up the uaw strike against general motors and the latest on talks. a look at the biggest pre-market winners and losers in the wow where united health has been added. great riches will find you when liberty mutual customizes your car insurance,

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>> welcome back to "squawk box." g plrch and united auto workers remain far apart on many issues. meanwhile, they said they will pay for health insurance on striking workers they said they had blindsided

workers with the decision. >> jeff, i think in a nutshell, you think the goal is in fact. they've held so far. what are you feeling day after all the political and some of the developments in the repo market you think there might be some choppy trading >> on the show, our trading models looking at the low and looking for the all-time high. time is running out. the first part of october, models indicate could be a problem for overall markets on a trading basis. not on a longer term market base

which is something we are in >> if you fail, like you just said, becoming more likely, maybe 50/50, are you looking at 5%, 10%? what would be your down side objective? >> i think 5 to 7% would be it we are coming out of the strokestro strongest part of the year is just noise we are doing well. last time i looked, we were outperforming the dow jones. despite the masinations of the trading, we are doing well here.

>> jim paulson says a lot of the economic numbers have been getting better instead of being lower expectations, they've been higher that sometimes means earnings are getting ready to reaccelerate would that surprise you? that's exactly what i think. he's got a good handle on the markets i see that hard economic data is improving and people are paying attention to the soft economic data. the hard numbers are improving i think that is very bullish >> do you think earnings can be better or not?

>> you always have that hope certainly. on a year-on year basis, that is difficult. the question i have is going into the fourth quarter, it seems as though growth names are mod rated on demands do we need those names to perform higher on the fourth quarter? >> i do. wall street will always pay out for true growth. i don't think it is any different now. >> based on the action you are seeing, what is your upside. you are secular bull now will we be talking like this in 2020, 2021

>> that's what i think i think these people don't have knowledge of history they may be short term bull and tactic tact tactical bear markets. the 1982 to 2000 market did not end with the 1987 crash, that went on another 13 years there are not any of us around to remember what secular bull markets look like. >> not many can say they've been following the market for 55 years. in the back drop globally be con deucive to this? some people think we can have a

domestic economy that stays strong and maybe dodges the rest of the slow down do we need growth globally to get this or are rates low enough to where it could happen >> i'm not of the opinion that growth globally will just stop things look pretty good to us. stocks are not all that expensive despite what you are hearing. i saw estimates for next year around $177, $180. our work suggests that 19 times earnings is a fair multiple going forward. 2020, how should i think about

that buy back if senator warren is victorious, they can't buy back their stock after 2020. that comes back once again >> let me say, i don't think elizabeth warren has a chance. she is just too far left i think the economy is going to reaccelerate they've been telling me for two years, earnings won't come in to expectations and they keep coming in even better. the mother's milk of bull markets is earnings. i think we have years left to go >> joe, thank you. good to see you. when we return, streaming while driving. we'll be right back.

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saying once you pay for first class, you should be guaranteed. >> it is life. can i make sure i look next to no annoying people >> it makes you a better person. you are either going to help the baby >> nobody gets on a plane trying to do everything possible to keep your baby happy it is hardest thing in the world to fly with a baby >> i just don't want to be sitting next to someone who crosses over the line. >> a spreader, man spreader? >> i heard from somebody that

said the baby was changed on the tray table and then offered the diaper to the flight attendant >> they can't. >> and so it went -- >> the seat back >> you should be required to keep your shoes on >> they are dirtier than a rest stop bathroom. >> nobody washes those things. >> those are the down sides. >> joe, i could see you complaining good you are in first class and somebody not in

first class uses the rest room >> be quiet. some day, maybe andrew will take me up there to see what it is like >> special behind the scenes content and the latest headlines. for for us every day on your pave ri favorite podcast app sub describe today >> that was wonderful. pretty great there was parts i didn't like, it was awful bo through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from using feedback to innovate...

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>> welcome back to "squawk box" live from marketsite on times

square >> up about 98 or so the ten-year, you can see there. 21 on the nasdaq 10-year where it has been in the most recent 1.7 has been where it was hasn't really done much. >> let's talk about some stocks to watch this morning. micron is reporting better than expected results micron is blaming trade and economic uncertainty it has resumed some shipments to huawei but sales could worsens if this continues. you can see the stock is off by about 6% micron's ceo will be on with an exclusive interview this

morning. delta buying latam giving delta a bigger presence in the south american region. shares of las vegas sands are rising it will be added to the s&p 500 replacing nectar which will be moved to the midcap. i would hate for that to happen. if you are a midcap, that only means you did one thing. nals you are buying back stock >> midcaps can become infavor.

>> know where you live >> i live in new york. >> i live in new jersey. >> because of all the legalized betting. >> it is the whole -- >> it is me. i've already been looking at the weekend. >> micron is that a big deal >> i would imagine the interview will be a compelling one i agree with jim cramer who said he didn't believe the conference call would be as bad it is back to huawei >> not knowing what will happen

next okay when we come back, bitcoin is hovering around 8,000. we'll talk about what is behind that decline next. and former philadelphia fed charl charles blaser

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>> welcome back. u.s. equity futures are higher dow up about 100 points. s&p up by 12 and nasdaq up by 23 local fox channels have gone dark for dish network customers as the two sides fail to come to a new agreement. check out bitcoin falling below 8,000 for the first time since june today, 50% -- this must be a pump stat tisic, 50% is set to expire did you give us that fact? >> i did not

anthony cofounder at morgan street assets. it is down from 12 or 13 to around 8 but still doubled for the year it went from pennies to 4,000, back to 13, back to 4,000, now at 8,000 obviously, it's hard to use as a currency there is a nail salon in springfield that accepts bitcoin. is it digital gold >> the way you think about it this, as you said, it has gone from being worth very little to worth more it is volatile if you look at the fundamental systems. it is very encouraging it is still over doubled this

year you are going to get this asset that can run two, three, four x. then it will pull back when you have a store of value, you need increased demand for that price to move upwards >> we've talked stock to flow before and people love that. on that chart, the stock to flow is how you can evaluate. for gold, it will make 62 years. even with stock flow, when it got up to 11,000 or 12,000, the actual chart, at 8,300 is where it is right now. this is not far from where the

stock to flow model would put the value. >> there are a few ways to put the value versus the price the value, the stock to flow most of those charts are saying we are right about where we should be. the price will go above and below that value >> what causes, in your view, what caused the sell off in the last week in your view >> when a price drops, there is more sellers than buyers >> that simple >> definitely other things the futures price point is lower. historically about 75% of the time before cme pays out, there is a drop. over the long term, i think futures are less impactful. >> you say it is a store of value. i'm not going to get into an

argument over that we will reach a point where the u.s. dollar will become digital. other currencies will become digital. >> if i'm the u.s. government, i think they should tokenize the dollar immediately look at china. every currency will be digital we'll have a competition of policy if china has a digital yuan and we don't have a digital dollar, it will be a higher option we've got a chance to keep that as the global reserve currency >> why would you own bitcoin if you could own for the u.s.

dollar i think people will opt for something not debatable. over time, people would choose a currency that a government that does not control there are a bunch of value props that bitcoin brings. it is valuable to different people for different people. if you are worried about being in a country where they could cease your finances. if you are in fear of that being ceased it brings different value. >> what if i'm living in a country where i want my currency to represent the value or growth of my economy? >> i don't think bitcoin will

disrupt those and they'll go away some portion of the population chooses to use the dollar, the yuan will still exist. people talk about having what they'll have next year the stock and flow will decrease continuing to follow that chart, it needs to get going if it is going to get there by may of next year. if we are in april and you are still at 10,000, something is wrong with the chart >> i don't think so. if you go back to 2017, we went from 10,000 to 20,000 bitcoin in 18 days. this is very volatile. looking back to just this year in march, we were around the

value. there is a bunch of different ways to describe what is happening. it is data if you look at the multiple, the stock to flow, met cap lawsuits. >> the power really well coordinates. >> absolutely. >> a lot of stuff. didn't wear your bitcoin tie today. i gave you the big one >> when we come back, the power of softbank. we'll look at their investments. has he taken on too many moon shots? heading to a quick break a check of what has been

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welcome back, everybody. wework's halted ipo is the latest company to shine a light on softbank and masa son's investments. are its high flying investments now beginning to hold it down? joining us is david gibson david, what do you think all of a sudden markets are questioning they don't want to be funding these never-ending growth projects that don't have any line of sight to

profitability. >> yeah. look, becky, you raise a really good point there's no doubt that masa has broken a cardinal investment rule he's concentrated too much in a couple of big investments and here we are with wework not coming off in reality, he started the funds in 2017, very keen to invest he was kind of turning up to the frat party with a truckload of beer when everyone else had a six-pack in the vc market. wework's the hangout the fact that it has rerated down and hasn't ipo'd and he needs the ipo markets. it's how he's going to cash out. that's how he will realize investment gains in the next 10 or 12 years. >> wework is a particular issue for the company because they've put in, what, about $10 billion and own 1/3 of the company it has to come out with a $25

billion investment. >> uber, it's a tricky one it was the late round as well. i think he's slightly ahead. a lot of these funds are original money wework was 2017. keep this in mind. so far he's made or the fund has made $20 billion of investment gains. the wework write down probably 7 a loser. we've got market of uber which is 4 and he'll lose 11 this quarter. he made 20 the fund is still ahead. i think the market's focused on that and recognizes that. >> he was a huge winner for a long time, gains of 29% annualized over a number of years. >> yeah. >> what would you say about the strategy he was the one who was funding all of these companies to go

out. his mantra was to build big, try and get the first mover advantage on all of these issues has the table turned on what the public markets will then accommodate? >> absolutely. i think clearly it's -- wework is a signal to banks, to everybody that real companies are the only ones we want to see ipo'd. the practice, business model is questionable i think it is a cleaning out of the process. i think what it means ultimately, there's another 70 odd companies that aren't listed within the vision fund he's talking about half a vision

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the impeachment inquiry impact new developments from washington and what it could mean for wall street straight ahead. whose tax plan will hit the nation's wealthiest harder, bernie sanders or elizabeth warren we compare and tell you what it could mean if either win the 2020 election. the business of betting. draft kings announcing a new partnership with the nfl the online sight gambling ceo joins us live. as the second hour of "squawk box" begins right now. ♪ ♪ live from the beating heart of business, new york. this is "squawk box. good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick. andrew's off but in studio with us this morning is cnbc contributor joe teranova, senior

managing director at curtis investment partners. is there only one or one of the senior -- >> i'm one of them. >> you're one of the senior. >> hopefully one of the more important ones. >> are there freshman, sophomore, junior -- >> they're called interns. >> that's good >> u.s. equity futures at this hour indicated up triple digits. >> all right let's get straight over to wilf. he has breaking news for us. >> reporter: the new wells fargo ceo will be charlie scharf this is breaking moments ago he will be ceo and president he'll be a member of the board at wells fargo betsy will remain as chair lady. those two roles were separated a while ago. this will be effective october 21st he has a very impressive track record including a broad track record in the financial services industry he was at bank one 2002 to 2004.

he was at jpmorgan 2004 to 2012 where he had retail banking experience, head of retail financial services then went to visa 2012 to 2016 and has payment space and technology experience. then asset management experience and in 2016 to '19 and seen as a high achiever. always, of course, seen as a long -- a potential successor to jamie dimon. unsurprising to see the share price jump 2.3%. he's a very credible appointment particularly in light of the delays it's taken them to find the permanent successor. once it took more than three months, six months this week since tim sloan stepped down they started to ask the question can they not attract someone of this caliber i think this will be seen as a win. >> the huge issue has been that anybody who's taken this role

has been a pinata when it comes to congress. >> absolutely. >> any of these democratic candidates running for president because they just think they're going to get beat up that's been something that warren buffet, the major shareholder in wells fargo has made the point that he and charlie munger felt they didn't think it should be somebody with a lot of wall street experience because of the concerns that happen however, you want somebody who understands banking and who knows how to do it coming from visa might be a good thing and bny melon maybe not one of the more incendiary places that might be attracting attention. >> whenever you broke the news of warren buffet's news on that i've been surprised. one aspect that has made it hard for this appointment is they have to get occ approval. >> right. >> when there was talk of oh, let's go get someone from google or more tech savvy person, i think that was a hard leap of face to get regulatory approval. the point you raise in terms of

the political pinata one of the other issues according to sources and reports, it's hard to find an appointment over the last six months has been the amount they have to pay to buy out options that high profile individuals have at other banks. >> that would not go over well with the regulators either. >> that's not in the release we don't know the numbers for charlie scharf he would have built up significant options. and they'll have to buy out from bank of new york melon i'm sure it comes at a high price. maybe he's been a bit more flexible this is someone that is very driven, who wants to have a legacy and he's taken as tough a job as he can. if he can turn it around, maybe there's been some tradeoff i'm sure it will come out that this has been expensive. might attract political attention. given the tradeoff they have a credible man. >> this is an excellent hire this is a hire that's going to make people want to own wells fargo, which in the last couple of years has not had that type of attraction.

when you think of jpmorgan and you think of what jamie dimon has done, he's executed on spending, on technology to advance the business charlie scharf will advance technology he sits on the board of microsoft. he understands technology. he spent on technology at bny. this is what wells fargo needs this is fantastic. >> couldn't agree more i think the problem or the big challenge in the next two or three years was going to be can they bring this bank into the 21st century in terms of technology they are seen as lagging a little bit compared to the top five rivals. the immediate concern is can they get the fed asset cap lifted the consent order is not taken in the consent order that's a separate issue. i do think one of the other issues they've had on getting this lifted is they didn't have a permanent ceo. even if they've done all the work, interim ceo alan parker who was in the role to try to

get the bank ready we can't list it until we know that you have a definitive long-term leader we're happy with that was no indication of that this was something that needed to happen. >> right >> but, listen, he's got this experience across a broad spectrum when we've gone through all of the names that have been linked-in the last six months, interestingly his hasn't been. i wonder why seems one of the obvious ones. this is someone of a high caliber and went high performance. he would have been up there in terms of the credibility then the caliber started to fallaway they can't get these people to take the job they have managed to get charlie scharf unsurprising the share is up 1%. it's come back a little bit. this is an appointment that will go down well. >> hopefully he will be visible. he will be here on cnbc talking about what the plan, what the strategy is. i think the investor base and

the potential investor wants to hear that. >> the only other thing i would say from the analyst perspective, we've literally crossed the six-month mark since tim sloan stepped down this week i was talking to analysts about that people are expecting this today. i've spoken to a lot literally this week were thinking it looks like it will be alan parker given the permanent ceo role or someone else hired do lower level to coo and president and that that was the kind of consensus from analysts. it had taken so long and i think this will be taken by surprise the analysts will be taken by surprise i think perhaps probably surprised. there is a call with charlie which investors and analysts will be on. >> wilfred frost here's what's making headlines right at this hour apple is reportedly planning to bring feature length films to theaters according to "the wall street journal." i think that was pass say.

these movies would be released in theaters several weeks before appearing on the company's new apple tv plus service. apple is said to have reached out to theater chains and also hired former imax executive greg foster. >> taking the opposite tact of netflix. kind of taking on the academy. >> yeah. not a good idea. fool mother nature, right? you're never going to win any award. shares of micron technology are falling this morning did report better than expected sales and profit for the latest quarter. it gave a current earnings forecast that falls largely below the estimates with micron citing trade and economic uncertainty. sanjay mehrotra will be on "squawk on the street" at 9 a.m. eastern time. busy morning for economic data government will be out with durable goods orders, personal income and consumer spending

all of that is at 8:30 eastern time we are getting the university of michigan's consumer sentiment index. the number of congress members supporting the impeachment inquiry continues to grow eamon javers joins us with more on the story that has washington and wall street watching eamon? >> reporter: good morning, becky. the mysterious whistle-blower got a boost. the president's own acting director of national intelligence, joseph maguire testifying on capitol hill yesterday. he said this -- >> i want to stress that i believe that the whistle-blower and the inspector general have acted in good faith throughout i have every reason to believe that they have done everything by the book and followed the law. respecting the privileged nature of the information and patiently waiting while the executive privilege issues were resolved >> reporter: so the acting

director of national intelligence striking a much different tone from the president himself who was returning from new york and washington spoke to reporters briefly about all of this and here's what he said. >> this is a disgrace. it's a terrible thing for our country. they can't do any work they're frozen, the democrats. they're going to lose the election, they know it that's why they're doing it. and it should never be allowed, what's happened to this president. >> reporter: so the president there saying this is a disgrace and should never be allowed even as his own acting director of national intelligence suggesting that the whistle-blower acted in faith and followed the book all the way through the process. where we go from here, guys, the rest of the day today, pretty much all of official washington will be consumed by this the expectation is next week there are additional hearings on capitol hill possibly involving the inspector general of the intelligence community that not set in stone just yet but that will be another flash point on this emerging scandal

here to watch as democrats consider whether or not to impeach the president of the united states. >> eamon, thank you very much. right now for a look at how impeachment proceedings could impact the market and trade talks, let's look at nicole lampeo she's a managing director and a fellow thanks for being here today. >> good morning. nice to see you, becky. >> what does this do for the president in terms of the trade talks with the chinese >> i have to say that all of this contributes to market uncertainty. i'm afraid it weakens the u.s. negotiating position i think at this point they may wait this out. they may think the president is vulnerable

we'll change and adjust the cadence and the timing of the negotiations to wait him out it's of concern. >> it's of concern i know it's something that ceos and business leaders are thinking about and looking at. if you watch the markets we are sitting near all-time highs. what's that tell you >> i think that certainly political trends do affect the markets. i think we'll see a lot of up and down as you know, we are in one of the longest bull markets that we have and i just think that we are a little bit living on borrowed time. there's a lot of economic uncertainty. i hope that the market continues to not be affected severely but i do worry about the uncertainty and really just the focus on things that aren't, you know, really driving american competitiveness. i think that we really need to be concerned about china's rise as it relates to innovation and technology and not be focused so

much on the tariffs and the trade war and this impeachment inquiry. >> nicole, one could make the argument that maybe the market is looking at this and thinking whatever the resolution might be it will come a lot quicker than what we witnessed with the mueller report how do we think about the situation though as it relates to iran? does this make the situation with the iranians much more contentious and create the possibility for something similar than what we witnessed a couple of weeks ago with saudi arabia >> well, it could. any distractions that the u.s. is faced with politically i think really weakens our hand with our adversaries i'm concerned about it i think that we really need to -- you know, the facts need to take us where they will, but i think that this impeachment inquiry really weakens the u.s. position with our adversaries

and i hope whatever happens the resolution is quick. >> nicole, thank you for your time it's good to see you. >> good to see you thank you so much. coming up, the big business of betting draft kings and the nfl announcing a partnership making an online gambling site the first official daily sports site a partner. we'll be joined after the break. former philadelphia fed president charles plosser will join us. ayst tuned, you're watching "squawk box" on cnbc

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you're finally giving in >> what can i do it's friday. if that's the only day you can -- >> drive you nuts? >> really? this might work. nfl previously kept its distance from the rapidly growing daily fantasy genre. is there gambling going on here? that's no longer the case. draft king is now the nfl's official daily partner

jason robbins, ceo at draft kings. do i need to recuse myself from this in the interest of disclosure, now -- you were on i love college football. i ask you, can i just bet on the point spread and you said yes so i do that and i'm pretty damn good, jason. >> wow >> i was 5-0 last week so i'm feeling like i'm really good anyway, tell us about this partnership and describe it exactly what it means for you. >> well, we're thrilled about this one of the things that stood out to me, you know, a lot of sponsorships that the nfl does here, you know, other things, it doesn't directly relate to their game the way that fantasy sports does so they were very thoughtful about this and so much of the discussion really centered around how do we engage fans how do we innovate on your product and less about the dollars and cents. i think that's the most exciting

thing about the partnership is that both parties are really focused on how we can improve the customer experience and product. >> i still don't do the fantasy stuff. i don't understand these numbers. like 66% increase in fantasy -- in the nfl who are these people not even that different from major league baseball. 49%. who's doing this you've got to be an uber fan, don't you, to know what's -- to do fantasy or not? >> not really. i mean, there are tens of millions of people in the u.s. doing this it's a very social activity. people like to talk about it and play with their friends. draftkings actually has private games you can set up and just play against your friends. last night, for example, on thursday we have contests where you can just play the thursday night game i think that we've made the game so that it can appeal to the serious fan and also a very casual fan as well. >> you must have a lot of conversations with your people and yourself about how to make

this more immersive in terms of social media somehow what's on the -- what are your plans for the future there >> we have a lot of integration with social media. we do a lot of content on social media. when we pay out big prizes we always promote them. every week in the nfl we have a game you can enter for $20 on sunday and somebody wins $1 million in that contest. so every week we promote as much as we can those types of winnings it's about connecting with the fans and social media is a great way to do that. >> jason, it's joe connecting with the fans, talk to me about the sophistication of your customer and the desire to absorb content before actually wagering. are they viewing -- listening to podcasts are they trying to understand and gain knowledge before they're actually making that wager or are they just wagering? >> you know, there's a mix of different approaches

some people like to do a lot of research certainly the desire for that type of content is increased as you're playing fantasy sports. there's a lot of people who go off instincts to watch the games and use their observations in order to make picks. there's a wide variety of approaches there's no single answer we see a lot of different approaches winning really it comes down to what you're trying to get out of the game how you feel making your picks a lot of people like talking about them with friends. really is a lot of different approaches but at the end what we're trying to do is create a fun experience as long as you're enjoying it we don't mind >> what are your three favorite days of the year >> i would probably get a very different answer -- you would get a very different answer if you ask my tech team opening day of football is my favorite that's probably the most stressful day of the year for my technology team. i love it. it's such an exciting moment super bowl is obviously a great day and then my favorite third

one is going to be an odd pick, the masters. i absolutely love the masters. it's a nice return to mainstream after the super bowl and the nfl has ended, baseball is just starting kind of a little bit of a dead period in february. >> but is that a big betting period i think joe was asking -- >> oh, yeah. >> -- because he wants to know what your biggest days are. >> well, in terms of participation, the masters is right up there outside of the nfl. certainly every nfl sunday is as big as it gets. >> you know, sundays it's definitely a crap shoot. there's so much parity so hard, isn't it, on any given sunday i guess different for fantasy, but just trying to beat the spreads is hard. i haven't figured out quite yet how whether i take the team that gets all the points or whether i take the team that's really good because i'm always in this -- i've mentioned this before. >> college is much easier. >> college is much better. i hate being in the position where i've got 24 points and i'm

watching the worst f'ing team in the world and they're losing by 40 points. why did i -- i'm watching them it's like oh, my god why do i have new mexico against -- not that they're the worse they won the next week >> don't do it. >> we can't go there >> 27 1/2 against michigan. >> what is it? >> rutgers. >> i love that >> see, i want to take rutgers this will be the same thing, jason. i'll be watching rutgers. >> i love, by the way, that we have turned your show into a discussion on which college football bets are the best this week that is a great accomplishment. >> you know what's cool? i spend $20 on some things and i don't even think about it. on this, my life like passes before my eyes if there's an interception at the end i thought i was going to win and i don't the world doesn't end for $20. >> i meet hedge fund people -- >> it makes everything so much more enjoyable when you have hardly anything even on these things >> i meet hedge fund people

managing billions of dollars in their portfolios and they're stressing out over a $15 bet >> exactly. >> jason, that's the sophistication component of it they want the content. maybe we'll do a halftime fantasy show. >> betting on stocks, isn't it >> we'll follow it up. the halftime report fantasy show >> that's not a bad idea, jason. >> i love it. >> not a bad idea. >> you should do it. >> all right see ya later thank you. >> thanks for having me. >> all right >> don't you feel bad about this >> probably. as long as you don't bet over, that's the -- >> i'm feeling like i need more action though. >> 20 bucks i think you can afford >> are you betting over your head this weekend? >> you're not going to take rutgers? >> i don't bet. >> michigan looked like dog dirt. >> i do bet on college basketball games maybe. >> okay. >> only for sweet 16, the final

4, for those things. that's it. when we come back -- it's like 5 bucks in a pool that's it. when we come back we'll talk interest rates with charles glosser. let's check out the futures. dow futures up by 95 points. that's enough to bring it higher s&p 500 and the nasdaq are up not enough to cover up the losses that they've seen over the course of the week s&p up by 11 and "squawk box" will be right back. time now for today's aflac trivia question. who was the oldest pitcher to ever play in the mlb the answer when cnbc's "squawk box" continues 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...

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now the aflac trivia quiz. who was the oldest pitcher to ever play in the mlb leroy satchel paige. >> welcome back to "squawk box," everybody. the co-founder adam neumann set

down and wall street journal the main leasing operations. >> phil nicro. >> what's harder and baseball in '59. >> i'm trying to figure it out >> former philadelphia fed president charles plosser will be our guest we check on the u.s. equities.

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wells fargo naming charles scharf, did we say it -- what wilf says. >> uh-huh. >> the chief executive officer of bank of new york melon to its top job. careful with that one. wells fargo interim ceo al ran parker will continue until scharf joins bank of new york melon named the cfo thomas gibbons as interim ceo. >> thank you, charles plosser is our guest. then whose tax plan will hit the wealthy harder we'll take a close look at the proposals of bernie sanders and elizabeth warren maybe get into biden's advisors looking for a break, too we'll talk ipo's master

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after a week of fed speak it appears central bankers are still divided. steve liesman joins us. >> thanks, good morning. markets are beginning to embrace this division and backing off at least near term from expectations of another quick rate cut we'll show you that in a second first we've analyzed all of the fed speak. we have two firmly against cuts. those are the two dissent terse, george and rosemary two are in the we'll support a race cut they would probably support two more rate cuts i'm not exactly sure what they say. that count so far is perhaps a bit more hawkish than the fed's own forecast released with the statement but might reflect the

fact that some of those in favor of cuts, they haven't spoken yet. from the sep or the statement of economic projections, seven want at least one more. five, no mas and five are against the cuts and they want a raise. that's the full board there. the result of all of this fed speak with pretty good economic data, markets are divided like the fed over what happens next month. in fact, fed fund futures markets priced to expect no cut in october now 55% say no cut 44% say they will be on hold then comedies you can see it changes. the market pricing suggests the fed delivers the third cut of the year whatever happens the division on the fed is more dissents to come and we went back and looked at the history. not that unusual 6 dissents this year there were more around the period of the financial crisis and whatever happened look back as you go back to the '60s, '70s, '80s, there were a lot of discents that is part of the process.

>> the dissent is everybody wants to do one thing. everybody else wants to maybe not do it. this time some people want to do one thing, some people want to do the opposite. that's not normal, is it you okay can i just finish a thought for once >> sure. >> all right do you think that it's possible to go back and do this and find any other time where some wanted 50 and some wanted none? >> yes. >> i think back in 2014 i think we had three dissents and i think it was -- i have to check this, but i believe that's the story. here's an interesting little stat if i say 62 38, one of those is the percentage of dissents for easing and the other is the percentage of dissents for tightening where would you say most dissents have been, on the tightening side or the easing side do you know, charlie we haven't introduced you yet.

don't talk that's not my job. that's becky's job i'm just a reporter. >> you would never choose to -- >> charlie plosser, go ahead. >> this is your guest. >> go, go, go. >> what do you think, charlie? have they been more likely to have dissents for tightening or easing >> i think there's more dissents for more easing. >> no. the st. louis fed, 62% of the dissents over the course of the time were for tightening, which gets to my sort of general take. like people get angry at me when i say this i don't think central bankers in their genes want to be at zero i think in general they like to have higher rates. they're more worried about -- i think that comes with the territory. you tend to be more worried about inflation, more worried about bubbles and you're more in that risk aversion camp from rates being too low than too high that's my general take. >> can i make one observation? >> as many as you like. >> i wrote one piece about this. if you look between 1976 let's

say and 1995, you had about 100 dissents, give or take a little. i don't remember the exact numbers. 100 dissents by governors and 100 dissents by presidents since 1996 there have been -- the next 20-year period, 2016, you had about 80 or 90 dissents by presidents, one dissent by government. >> yeah. >> the culture and the way the dissents manifested is different now than it used to be. >> if you can hold that thought. guys in the back can you put up that wall with the pictures of the fed guys charlie, what you said is so important. you've got to really know where the chairman is and then you bring five, six, seven votes along with it so wherever powell is, in general what charlie's saying is the governor's don't dissent. he has one vote there. six or seven

he has clarida again what charlie is saying, that's why you're more likely to have presidents on the side of the center because they're more likely to dissent. >> i think that's not a good thing that the governors all vote in block. that's a bad strategy. >> what we've been told is the chairman have been able to build a consensus and figure that out from it. not that it's group think. sounds like you think it's group think. >> nothing's ever one thing or another. it's usually a mixture of things but there's a lot of pressure on the fed and its decision making. the markets want consensus and the problem is is when you have consensus, you often have something about consensus that is as vague as it possibly can when the statement comes out, the statement becomes uninformative because it's written in a way to get as many people on board as you can and, therefore, it doesn't say much >> charlie, you have a conflict of interest here you should disclose because you're responsible for a bunch of those

dissents on that chart, right? you were a serial dissenter at one point? >> no, i was never serial. >> not serial. >> several in a row. there were several presidents or people who often dissented for an entire year almost. i never did that >> let's cut to the chase. what should the fed be doing now? should they be cutting additionally, cutting for insurance or should it be holding the line here, even raising rates? >> well, my view has been that they ought to be holding the line they need to be data dependent and they're not. the insured's argument i find is not very compelling. because i think -- remember, the fed used to say during the crisis, oh, we need more accommodation, we want to encourage risk taking and people going out and taking risk and that's going to help the economy. that's not true now. we have an uncertainty about a policy tree that can go either way. nobody knows what the answer's going to do. cutting rates today won't affect that decision and businesses in

particular, consumers as well, are looking out there saying, i don't know what's going to happen they're going to want to save. businesses are not going to want to invest and when the fed tries to tell them, go take risks, they're going to say, you've got to be kidding me it's not going to have any effect on the economy and secondly, secondly, if it does, the outcome of the trade policy or whatever the uncertainty gets realized you're going to find people on both sides of that bet and you're going to get more volatility, more instability because you encourage people to go out and take risk. >> everybody else is doing it. i know that's what high school kids say. >> loomings to the sea. >> i know. currency factors, if everybody else is doing it, we stay -- >> there is -- >> we need to get down to where it tells us to be, don't we? what's the saying, we should be 50 basis points lower? >> yes, for the yield curve?

>> five would give you -- >> you are stubborn. >> you are a serial dissenter. >> i am. just kidding just kidding there's no economic theory that tells us nominal interest rates need to be the same across countries. there's no theory behind that. >> money flows in here. >> that's a good thing we have a lot of capital flow into the united states people investing. >> what's going on with the repo markets. they're telling us we have to go what's your take on what's happening right now? >> i think -- my take is that this is another unintended consequence, at least partly, of our big balance sheet problem. what the fed did when it did qe and created interest on reserves, it essentially gutted the funds market there's no trading in the funds. >> the fed funds market? >> yes they gutted the fed funds market before the crisis in the old days, as we say, fed funds would be traded by banks and it would go to the banks or the dealers or wherever it was needed because there was an interest

rate and banks would engage in trading fed funds. they don't trade fed funds anymore. the big banks that used to have fed funds trading desk, they don't have them anymore. the big balance sheet is made it uninteresting for the banks to do this so my interpretation in large part is when the fed did qe, it got rid of the feds market practically so it's not functioning to get reserves or cash to where they need to be. i think that's a big part of the problem. >> that's exactly why the trading community, usually at 12:00 you get to understand what the trading community wants. >> right. >> the trading community is less concerned about 25 basis points than they are about possibly getting qe like. >> you wanted me to call it qe like we've been having this conversation on and off. >> it's building. >> i'm not calling it that i think it's an injection of

overnightly qu overnight liquidity. it's not cumulative. there is 100 billion -- i guess doing up to 100 on the daily and 68 on the term the terms will add up so the max is about 200 billion i want to say of liquidity that's not quantitative easing yet because it's all going to roll off what is interesting to me, i had a trader tell me, look, if you told me i could wake up and make three basis points before lunch, i would run to that trade any time now they're not running to the trade. there's a whole bunch of stuff out there. what charlie was talking about, we had beth here to complain about it there's a whole bunch of reasons why the banksare not stepping in to fill a gap where they could make that money, joe then this thing would go away. >> so the arbitrage isn't working. >> adding more qe, more reserves doesn't solve this problem. >> right. >> it doesn't get the reserves where they need to be. you have to have a market and we

destroyed that market and now we're realizing that was an unintended consequence of that fed funds, that is cash, is not moving around within the financial system in the short run to address these kind of problems that arise. it used to but it's not now. >> charles, thanks for being here the former president of the philadelphia fed steve, thank you. >> pleasure. >> bucket list o. >> the bucket list. >> you told the whole joke. >> oh, if people could see what's off set. >> coming up, whose tax plan will hit the wealthy harder? very wealthy individual is going to bring us up to date robert frank is here with a preview. can you dress like that and not be wealthy >> yes, you can. announcing his wealth tax, bernie sanders said billionaires should not exist jeff bezos would pay 9 billion a year under this. we'll take a look at the sanders

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whose tax plan will hit the wealthy harder elizabeth warren or bernie sanders? robert frank joins us now with a look at both and what it could mean for the nation's wealthiest my favorite thing, we never argue about whose tax plan will help lift up the people we're trying to help because that's never really part of the issue we want to make sure we lower

those -- >> yeah. when warren announced her plan she said what it would pay for bernie was very explicit bernie said, billionaires should not exist. >> perfect. >> and in the race to tax the wealthy bernie sanders did take the lead sanders wealth tax will raise 4.4 trillion and that is 60% more than warren's plan. the plan would increase total federal revenue by 10% all of that from 180,000 families the way he's going to get that added revenue is with a lower threshold and higher rates so warren would tax wealth over 50 million sanders wants to tax wealth over 32 that adds about 100,000 more households that he would hit warren taxes millionaires at 2%, billionaires at 3% sanders has a much more complicated sliding scale with five difference.

>> sanders promised that his plan would cut in half the fortunes of billionaires within 15 years make sure wealthy couples don't avoid the tax by divorcing he would have the threshold for single taxpayers, half of that for couples and households >> what's bernie's net worth, thirty-one five? no, he doesn't -- he's got a few houses but he doesn't have that kind of money. i'm kidding you. for more on the rival tax plans between the democratic candidates, joining us now heritage foundation's joel griffith and brookings institute vanessa williams seems unamerican to cap in terms of private property, the way we've done things for hundreds of years is that a worthy goal, to try

and cap the amount of money someone can actually accrue over a lifetime >> i think a lot of people would agree that 1% of americans having 40% of the wealth is maybe a little out of keeping with our own history maybe it's unamerican as well. the fact is that we've changed rules about property ownership all the time we abolish slavery we made marijuana legal. there are lots of things that change. >> so there -- >> i think that's okay. >> there should be an upper limit on how much someone is worth? >> that's what needs to happen when have a system as distorted as ours. >> how would it work in practice for someone who starts a successful company when you get to a billion, we see guys that have ipos immediately worth 3, 4 million mark zuckerberg, what a success, in his 30s worth that. how would you make sure they stay under a billion would you just take it >> i mean, the technicality -- >> would you confiscate it >> all taxes are con physician

ka t -- confiscatory. >> you would do that. >> the first $32 million or the first 50 million under warren, that's not going anywhere. that's not even subject to tax. >> you're not answering me do you take anything over a billion? does the government get it anything over a billion dollars? >> no. the tax plan is at $32 million -- >> never mind. >> you get the 1%. >> you're not going to answer me >> joel, how does this sound to you for our system the american way. >> i can actually answer your question because under this plan the irs would actually seize 8% of the wealth of the wealthiest each and every year and that would be under penalty of law. they have their own armed agents if you refuse to comply -- >> that won't go far enough for bernie how do you get to where we have no more billionaires how do you actually do that in practice if he's going to talk the talk, how are we going to do it?

>> make sure you leave the country. >> that's a good way to do it. who needs them anyway? >> i think what's also really fascinating about this is the amount of money it raises between 2.6 and $4.3 trillion over three years even if this unconstitutional tax were to be imposed, even if it were to be imposed, this would just pay for a fraction of the 40 to $90 trillion in the additional spending they propose. the dirty little secret is even if they were able to impose this and confiscate everything, it leaves a gaping hole the only way to fill the gaping hole is to raise taxes on everybody else, similar to what we see in europe where they have in excess of 50% payroll tax that's the dirty secret they don't want to discuss. >> if we can do some good, we can raise taxes on everyone if that's what we need to do.

do you have a good idea what to do with the money? in the past it hasn't been so great the way we seem to -- >> the fact is the payroll tax bernie sanders has talked about it it's quite clear in the plans. the payroll tax is one of the most popular tax for most voters i don't think there's any reason to shy away from payroll tax to pay for something as popular as medicare more importantly, i think the broader question here is about this unconstitutionality i want to make sure we clarify in 1796 we said we can tax property the clause was put in place by slave holders to try to prevent abolition by taxation. it's not the legal argument i would want to hang my hat on. >> one of the arguments is well the wealthy are avoiding the taxes. now the left is saying, the wealthy won't avoid this tax how do you think you're going to enforce a tax that europe has

largely abandoned because the wealthy spend a lot of their money on great accountants and great lawyers to get around these things >> look, i think the technical challenges are very real i'm not going to pretend that they're not. many laws are difficult to enforce. that doesn't mean we don't have them, right? if we think this is a good idea. if we think it's important to reduce wealth inequality, this is probably a great route to get there. >> all right >> i just don't understand how logically you run a general election campaign and raise funds from people that you're telling you're going to tax. >> save this for next time folks, thanks for joining us ac wha aotme bk,e ve l more to talk about a double whammy for the ipo market shares of peloton sink we'll talk about that. this is apple card.

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memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. breaking news from the banking sector wells fargo finally picks a new ceo after struggling to find one for months spinning out of control? peloton's first day of trading is in the books but it was the second worst debut for a unicorn this year. is there more trouble ahead. and the united auto workers walkout at gm closing in on two weeks. who is getting hit the hardest, the workers, the company, or the

communities involved the final hour of "squawk box" begins right now ♪ ♪ live from the most powerful city in the world, new york. this is "squawk box. >> good morning. and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick. andrew is off today. our guest host in andrew's chair, joe taranova, senior managing director at vertes investment partners and a cnbc contributor as well. just a regular. >> half-time report. >> half-time report with scott wapner. >> every day at noon >> but on 9:00 on the west coast? >> yes noon eastern >> all right good the futures right now indicated up about 91 points on the dow the s&p up indicated 11.

nasdaq 17. the 10-year 1.72 1.71 now. wells fargo finally finding a new ceo. wilfred frost is here and, wilf, it's been a long road. >> six months since tim sloan stepped down wells fargo have appointed charlie scharf as ceo and their president effective 21st of october. he'll also sit on the board. this is a big win for wells fargo. scharf was a top five wish list candidate but six months on from that, expectations of who they were able to attract slipped this has been kept hugely under wraps. the consensus shifting recently to expect interim ceo alan parker to get the role on a permanent basis. scharf was seen as a possible successor to jamie dimon payments from visa and capital markets and asset management

experience from bny melon gave him regulatory experience. he stood next to sloan earlier this year. his legacy though will now rest on whether he can reignite wells fargo's struggling fortunes. he will remain based in new york city west coast relocation had been seen as another hurdle as was pay given the political spotlight wells is under scharf unlikely to be cheap. it's a tradeoff they are likely to take. the occ has approved it. investors also approving shares up so far this morning and there's an investor call at 9 a.m., guys. >> wilf, it's like a mine field. okay gisifi do you take penicillin for that? >> stomach and financial institution. that was so long we're not meant to do acronyms >> antibiotics

>> there's eight of them they face way more scrutiny. he's already been in charge of one. >> good job. >> will you help me with marty mosby because you've probably got some -- >> i'll stick around for questions. >> joining us on the squawk news line, marty mosby. what did you think of wells fargo before this and what do you think of it now, marty >> well, wells fargo had defended its franchise it had to go through several things that had taken out earnings growth for the last couple of years. those are really financial things that they had to deal with constraint on the balance sheet growth having to go in and manage through the extra expenses to be able to get the regulatory stuff taken care of. but if you look past all of that noise, what they had was the customer base was still there. they had defended that at all costs. they spent extra money on marketi marketing. you had that foundation behind the scenes it was how could they transition and get somebody excited about

coming over and taking the helm. i think this actually is a real nice kind of marriage between a person that has the perfect background and was probably looking for something and a new opportunity which kind of came about with the wells fargo job being open here. >> did you think that this changes the likelihood of how soon the fed asset cap gets lifted >> i don't think this in itself changes that at all. i think they were on a progression and a path as they were working through all of the different pieces and what we've seen if we go back as far as m&t back when they had the aml bsa, it took them several years to finish all of the processes because they're having to get the whole thing done for the first time joe, as you were talking about gisifi and all of these things, the regulatory scrutiny when you get under this pressure becomes so intense that they're trying

to set the standard for everybody else so it just takes you longer to go through that process and come out the other side as you saw these banks that have done that, they then are well positioned because they've gone through the investment and the regulatory scrutiny to kind of check all the boxes off and when they come out they have a clean bill of health. >> the other thing i would add which has taken some by surprise is how quickly he's able to take up this role, october 21st bny melon not enforcing a harsh period and that's, i think, important for the share price reaction there's already been quite a long delay in six months and tim sloan stepped down this gets the ball rolling again with the new person in place. >> it does put them back on that timetable, you know, when you're looking at the six months and looking at dragging out, like you said, you know, having the interim ceo maybe having to stay over that now takes that off the table.

let's say the expenses get back on track put earnings back on the trajectory it should have been back is really out the window. this is the new base take this base and begin to grow off of it. you'll have plenty of money in the sense of investment for new things and products. one of the things that hasn't stopped is investment in the technology which he fits in and pop up this will be a competitive force to deal with as they have really been able to reallocate and create a nice pot of investment dollars for him to be able to transition the franchise into whatever he sees it being in the next five years. >> the other thing on the share price has significantly informed the kbw bank index year to date. the last couple of months it's picked up and kind of caught up with the rest a little bit in the premarket above 50 which it hasn't been if it opens there since about march. the last couple of months, whether it was short covering or yields picking up or what, it's played a bit of catchup.

still a lot of room to close in terms of valuation multiples with the other bank. >> nothing negative about this news story it's positive. the analyst community will come out. this he have to raise. ten buys, 18 holds, average price target is 4910 analysts will raise. >> do you think they talked to warren do you think he likes this guy do you know anything >> i don't know. i'll give him a call later today. it's still early on the west coast. >> i thought they would have spoken to him. >> that would be my guess. >> why wouldn't you? >> right. >> i would ask him -- >> be surprised to wake up that day, whoa, that's what happened -- >> he knew about tim sloan stepping down beforehand am' sure he would have been consulted. >> i don't know if he got a say but he maybe got a heads up. >> we'll see the political rags. the occ knew about this. i don't know if it would go a

step further should we consult some of the main politicians on our case i doubt it. >> i doubt it too. >> i haven't seen the ak yet that's when we'll see the kind of -- >> why would you go around and check it because anybody -- some of the harshest critics would like wouldn't like anybody who's got any banking experience you can't run a bank with somebody with zero banking experience. >> they've kept this amazingly under wraps. it would have gone further if they talked to anybody other than the key regulators. he was on the list of the top four or five people didn't think they could get him. i don't know what's taken six months he's made the decision and they have him now >> all right thank you. marty, thank you are you still there? >> thanks for having me on. >> okay. you're welcome. peloton finished the first day of trading with the second worst debut. keeping the markets at large so is what happened with peloton

just bad timing? is there something deeper going on here? was it just peloton specific joining us is brett wallace, ceo of triton and meghan lawrence. welcome to both of you good to see you. >> thank you. >> what was your rating on this company heading into the ipo in terms of what you thought about prospectus and the deal itself >> sure. the prospectus rated very highly the disclosure was great they gave us statistics on we work, uber, lyft so what it did is it framed up the debate for is this company going to sell 5 million bikes or is it going to sell 2 1/2, 3 million bikes. that's where the argument was. overall it scored pretty well, 6.9. i think putting aside the price chart yesterday, you hate to see that this company is worth $11 billion. it's worth twice as much as go pro and fitbit. >> get greedy, they priced it at

the high end of the price range. the ceo when he joined us on air, he said he thought they left a little on the table. >> who knows, maybe they could have done it higher, right the range was 26 to 29 they priced it at 29 the market said, no, 26. the whole debate happened inside the range. >> how much is this from wework. people think 47 billion, now it's 1/3 the window for ipos seemed to close this week, did it not? and even if you're a company that deserves a higher price, you're not going to get it and you might as well not do it. >> sure. i think we saw with endeavor, the difference between peloton and endeavor, got done at the highest point of the range wework and endeavor said we'll do this later or not at all. the window i think is going to be more influenced by the inventory. since lyft what we've seen is nine really traditional software companies go public, data dog, the most recent ones doing great. the misfit toys.

universalists, fibers are having trouble. they confined peloton to lyft. >> there are a lot of companies out there bringing a lot of revenue and losing a lot of money. the industry doesn't have patience for that, right >> absolutely. we're seeing that with wework. i don't think they're spooking investors. i stopped by peloton and almost all of them said wework wasn't influencing how they were thinking about peloton's path to profitability. they seemed bullish on the company though a number said they are not buying ipos some of the major wealth managers are not looking to take chunks of the ipos given how poorly they have performed. >> it may not be wework specific but it is the effect of all of these other situations out there? again, if you don't have earnings right now to show if you're going to say we're going to get to growth or we're going to get to profitability but it will be three, four, five years down the road or longer, good luck selling it. >> peloton is not doing itself

any favors due to the structure. some of the investors just don't buy into the dual class share structure now seeing how it's affected other companies and the ability o of leadership to move forward. >> how does this work itself out and come out the other side? does anyone decide to do anything now >> i think the next data dog, the next cloud player will be fine the question is inventory. what we've been saying for the past couple of months is everyone talks about the stampede of unicorns there aren't that many we've seen wework and we know we're not getting palantier. the bench isn't that deep. with all of the weirdless, i wouldn't be surprised if we didn't see much. >> surprised by the performance of slack >> yes >> slack should trade like all the other sas comps but it's off 12% from the benchmark price and i think that's what you get when you don't market a deal in the way that people are used to having a deal marketed to them

so it's very strange as an outlier because all of the other sas comps are up nicely even though they're off their highs slack is a real outlier. i think the only thing you can point to is they ran a different process because it's probably the best known of all the other companies in that category. >> brett, meghan, thank you for coming in. good to see you. coming up, inside the strike against general motors what the walkout means for the health of gm what it means for the midwestern economy and the auto industry as a whe.ol stay tuned, you're watching "squawk box" on cnbc ld shake your hand. granted. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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welcome back, everybody. the united auto worker's strike is closing in on two weeks phil lebeau joins us and he has the latest on the negotiations and what are we thinking, phil >> reporter: they're still talking. i would say they're making progress, becky. there were some reports that they were close to a tentative agreement. those were overstated. overall when you look at the talks, they are showing steady progress the big hurdle remains job guarantees which the uaw wants and the use of temporary workers. general motors needs that flexibility and wants that flexibility. by the way, today is the first paycheck that will be missed by uaw workers. this is when you might start to see the pressure by rank and

fi file it's a different thing now that i am gm sales are slightly higher in the first week of the uaw sales the dealers are worried about parts shortages. that will be more of a concern over the next week as for the presidential candidates, on the democratic side we have seen them all at some point, if not all of them, most of them go to the uaw picket lines this is where they can make their statement about changes in the u.s. economy and how things have to change take a look at shares of general motors over the last two weeks the strike losses at this point, guys, back of the envelope estimate, analysts say they're losing at least $50 million a day. do the math here we're going into the second week they probably lost anywhere between 600 million, maybe a billion dollars. that is the estimate at this

point. the suppliers, they're feeling it more. you're already seeing the ripple effect of layoffs happening because the suppliers are just not getting the orders from general motors because there's no production going on american axle down more than 13% since the strike started two weeks ago. guys, back to you. >> thank you, phil joining us now to talk more about the economic impact of the strike, democratic representaticongressman. what would you urge gm to do stick it out for the workers or is the community at this point being hurt where you'd like both sides to get together. >> in my case the community is those workers. they're fighting the jobs that the neighbors hold in flint we've lost about 90% of our manufacturing jobs over the years.

so, yes, there is some short-term struggle. short-term pain. it's being felt by the people on strike it's obviously being felt by the company but this is a long struggle for us and i think for many of us in places like flint we recognize that times we have to go through these moments in order to secure better wage structure and benefits structure for the people that we live and work with but also to make sure that when general motors is on its feet and actually doing well, it's a profitable company now, that that somehow translates to the workers who made those sacrifices nine years ago to help that company through bankruptcy and to the country that actually put its full faith and credit behind that company when it was actually going to go out of business had we not stepped in so, yes, there's short-term pain we hope that this is resolved soon there has been progress but i think for the people of my hometown, we're willing to stick it out and make sure that at the

end of this we have an agreement that's not just good for the company but good for the people who kept that company alive. >> congressman, do you know what the general public doesn't know about the negotiations and the progress that's being made can you tell us anything about which issues are most important? which issues do you think are most important and where are we in the negotiations >> there are three areas that we think are most important one is getting rid of sort of two or three-tea wage system that we have that was a part of the bankruptcy agreement, to have a whole class of workers making significantly less than the people working next to them on the assembly line. we understood the need for that when the company was losing money. in the last three years they've got over 30 billion in profits and i think it's a good time to get back to that also, the company is looking for significant transfer of costs of health care to workers i think what they're asking for is unreasonable but there is a reasonable compromise, i'm sure.

then the big question for all of us is the extent to which this agreement will address how much work that the company sees in the future is going to be in the united states as opposed to moving south of the border the company sent a terrible message leading into both usmca negotiations, the final stretch that, and the contract negotiations when last may they decided to shut plants in the united states and simultaneously increase work in mexico. that was just a terrible signal to send when we're trying to get a trade agreement negotiated and that's supposed to keep work here and bargain with workers which -- you know, especially when one of the major issues is the work that will be here in the united states, the extent to which the company is willing to invest here. >> congressman, i certainly understand your point in terms of workers here in the united states versus in other countries and what happens with that, but when it comes to health care

costs, i believe gm's initial offer was asking for workers to pay 15% of their health care costs. that's up significantly from the 3 to 4% they pay and well below the national average of 28%. what's a fair compromise >> that's a fair question. i don't want to negotiate except that this is a matter of coming up with a number that's more reasonable keeping in mind that obviously the company has to do what it needs i guess to save costs. that's important obviously has to do with their mission. >> just a national trend that workers have been asked to pay more for their health care costs for years. >> which many of us don't believe is a positive trend. >> no. >> let's say this. many of those workers, certainly anybody who was a close viewer of past any ghosh yagss know that very often they kept the health care contribution low in exchange for increased wages those manufacturing jobs over the last few decades against inflation have actually lost

about 20% because there have been such modest increases in wages. you can't look at any of these particular buckets in the exclusion of others. they made sacrifices on the wage front very often in the name of keeping their health care costs of being transferred to them now they have to come to an agreement. there has been some progress, the negotiations are now all at the main table that's a good sign. >> congressman, thanks for your time today we hope everything works out for everybody as we always do, but appreciate your time >> my pleasure thank you. when we return, some fresh economic data out at the bottom of the hour. we're going to bring you those numbers as they break. and a potentially risky development in the housing market what's behind the recent flipping market. you're watching "squawk box" on cnbc that's why the nfl chose verizon. because they need the massive capacity of 5g with ultra wideband,

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coming up, breaking economic news in just a couple of minutes. several reports out. including critical reads on durable goods orders and spending stay tuned "squawk box" will be back with those numbers. i don't know what's going on. i've done all sorts of research, read earnings reports, 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.

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welcome back to "squawk box" on cnbc. live from the nasdaq market site in times square, the deuce seconds away from some breaking economic data about six seconds. we're up on the session as far as the futures rick santelli has the numbers at the cme. >> august, 3 personal income exactly up as expected .4 no revision. spending up .1 that is a little light we were expecting a number around up .2, up .3. subtle revision from last month's whopping up .6 stands at up .5. that's a bit of averaging going on with last month being such a huge up side let's go for the deflator. month over month it was

unchanged. if we look at year over year, it was up 1.4 that's exactly as expected let's move to durable goods orders remember, this is august too but it's preliminary, joe, which means as we go through the month we'll be pulling that out and putting a new revised number in later in the month we're expecting a number with a negative side. up .2. strip out transportation, it jumps now. it jumps up to .5, a real solid number if we look at what i consider the most important aspect of this series, capital goods orders, non-defense ex-aircraft, proxy for business spending, it's a disappointment. down .2. we were expecting unchanged. if you switch to shipments versus orders, that's strong at up .4. a bit of a mixed bag on those orders and on defense proxy for spending, the last time we had a negative number was april of this year where it was minus 1.1 to give you some

context. this is only the second minus number since the beginning of the year and if you look at the market's response, nothing huge in the fixed income side you could say we're extending the futures equity gains just a bit. of course, university of michigan final september read coming up later in the show. becky, back to you. >> rick, thank you let's get more reaction to the data from our senior economics reporter steve liesman and from mike santoli steve, let's talk with you. >> the dynamic in the economy is manufacturing is weak. capital spending is weak but the consumer is strong we have data on both of those things to chew on here not definitive either way. rick was right to point out the capital spending ex-aircraft which is a proxy for business investment it gets rid of the durable goods and the vagary they make them and they don't and they've rolled into

inventory and up and down with the orders we get rid of transportation and look at what's happening overall. that number is not healthy down for the second month in a row. let me give you the tale of the tape had a good month of june which came back after a bad april but negative in july and negative in august the idea that the fed sees in this, wall street economists, they see the trade war, global certainly and the counter to this, i'm sorry to do one hand on the other hand, we haven't seen that manifest itself in hiring if you're a ceo and worried, you would think you might also if you're cutting back -- >> not necessarily. >> i'm going to hold on to people. >> hiring the people and hold onto the people to meet the demand i may not invest billions of dollars in a factory but i don't want to lose any of the sales or revenue that i have coming in. >> not every cap ex is a

factory. could be machines, software. the intangibles are weak now you look at the other side, the part that's been good, which is the income and spending number that spending number is a little weak 01 the income number is healthy 06 on wages, 05 in overall personal income. the savings rate is elevated the consumer looks to be healthy. i'm not going to be troubled by a month-over-month 05 in july. that could have been boosted, by the way. you had the amazon prime day that's another factor that rachets it up. the fact that you have an august -- the idea is that the consumer seems to be healthy so put it all together and i would say real quickly that it's still manufacturing weakness the consumer is still in good shape to hold up this economy in

a 2 to 2 poir.5% range. >> on the consumer spending, this is the smallest gain in six months >> yes. >> what's the read on that >> don't get -- i would not -- look, if i've tried to accomplish anything in 17 years of doing this job, it's don't get hung up on one number -- on one month's number i look at the overall average. 05 last month you might have pulled ahead some spending the wage number is good. the income number overall is good the savings rate's relatively high we don't see weakness right now or yet on the part of the consumer. >> to steve's point, not to take one data point and make too much of it, mike, let me ask you more broadly what you think about the market's reaction, with the peloton ipo, with wework getting pulled, some other things happening. how big of a cloud does that cast on the market overall >> the market's been kind of low energy, listless but also very resilient. it's been in this 2.5 week range right in the zone of the old

highs. not a lot of convincing action that says it's about to take off. honestly, there's been plenty of excuses for the broader market to back off more than it already has. i can take that as sort of people looking at this relatively ambiguous set of data that we have coming in these numbers today fit in you could make the case that we lost energy in the summer and economy. on the other hand, this is basically the zone we've been in we'll get an up turn from here i think the ipo indigestion that we've seen has been a little bit of a downer on sentiment it hasn't brought much down instead of some of the high value adjacent type companies that are public. maybe we have to downscale our idea of when they can get a profitable business model figured out. i think you want to have an ipo window open but not one that everybody can get through. there's a risk we're going towards not open but we're not there yet. >> mike, it's joe.

how do you think about the coming quarter in the earlier hours i was talking about reflecting back upon the fourth quarter of 2018. do you think people are defensively positioned with what happened this time last jeyear >> i do. there's no way people are positioned for kind of a fourth quarter surge at this point. i agree with the idea that people are -- have their guard up a little bit and, you know, perhaps for good reason. honestly it's sort of like if the bond market relaxes the stock market will relax right now. i've been looking since the data the ten-year yield has drifted down a couple of ticks the s&p futures slightly eased back the stock market has outsourced the worry function to bond traders. i do think that's going to dictate. if you sneak through september and there's no damage, 2 or 3% from a record high, i think you'll start to hear the chatter

from, well, look, maybe we dodged a bullet. we had the fourth quarter seasonality. when it fails, it fails pretty big. what are the chances it will fail big two years in a row? that's the debate we have. >> did the repo deal ease some concerns >> yes i am looking that up, mr. joseph there, that's a good call. the early morning one was below the amount that was offered so i think that's the first time in a bit we had one at the very outset and now we're waiting for the sec one this morning, the overnight. the 14-day was -- >> it doesn't change what charlie evans said earlier -- charlie plosser said earlier, look, the market's not there anymore. if that's the case, if we've destroyed this market, that's an unintended consequence, we can go through ups and downs with it but if he's right about what happened, you know, that's great as long as times are good. things get a little diceyer, i don't know what that means. >> i think that's right, becky

what we have is we have structural problems in the market that manifest themselves at times of return so the idea is to get the reserve level right and get the repo market right forex treem times like this i think the fed is doing probably what needs to be done to tie this over while they do a bigger rethink. >> what he said scared me. this market doesn't exist anymore, the banks don't do it the trading desks aren't there. >> i think charlie overstates it what it is, the federal home loan bank board, banks are the ones that are really big in the repo market. they have a lot of -- they have a lot of cash that really sets that rate. and the fed has to make some changes to the reserve level may have to make some regulatory changes. we have the goldman treasurer on earlier. in the meantime, they're injecting this liquidity to try to tide it over. it looks like they may have --

one of two things can happen they have the rightly quit at this -- right liquidity in the market. >> thanks, steve >> mike, we'll see you later bye, rick. it's getting tougher to make money flipping homes as the competition heats up right along with home prices that's why flippers are using more leverage, that is, mortgages. diana olick joins us now explain, diana please. >> reporter: joe, there are very few disclosures or stressed properties to rehab so they're in higher end neighborhoods finding older but pricey properties to flip and using financing to do it about 41% of flipped properties in the second quarter of this year were bought using either mortgages or private lending that's actually down from 46% a year ago but the dollar volume of those purchases was up 31%, from 6.4 billion to $8.4 billion

all according to adam data solutions. that's the highest level since the end of 2006. the investor on this house said mortgage rates are so low that it makes sense to finance flips and he said banks have loosened up >> it's harder to get a mortgage you can use leverage you can do many more deals if you're borrowing money the banks have become a little more easy in lending in this flip business. it used to be a lot tougher. >> reporter: the underwriting on these loans is much stricter than during the last housing boom documented risk seems low with so much demand for housing but if rates should move up again and prices should cool off, just saying back to you guys. >> diana, thank you very much. diana olick. when we return, we've got some top stocks making moves this friday morning and we'll get you ready for the open on wall street with one of our favorites. jim paulsen. jim cram iers coming up in a few

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under an hour to go until the opening bell on wall street. dom chu is here as we head into the weekend. he has a look at the biggest stock movers what's up today? >> tgif, becky and gang. shares of lyft, we're going to watch those. ride sharing company is up around a percent roughly 35,000 shares of premarket volume helped along by analysts at wells fargo. they say the stock is an

outperform or the buy rating $60 price target they cite among other things faster than expected growth in key sales metrics. optimism about metrics like bike and scooter. the shares getting a pop canopy growth moving in the opposite direction the marijuana company is down 2% roughly 40,000 shares premarket. analysts have downgraded that stock to a neutral from a prior buy. the target price goes from 35 bucks to 61. they still see canopy as a long-term industry leader but signed a nearer term slowdown in the canadian market. 2.5% to the down side. we'll end on shares up 3 plus percent or up 3500 namesake, tinder, gets upgraded. outperform from an in line estimate the target price goes from $95 to 78. they like better term subscriber trends and those shares are up

now, guys, 4%. back over to you i'm going to swipe this way. >> dom, thanks let's talk broader markets as we head towards the friday morning opening bell joining us, jim paulsen chief investment strategist at leuphold group i should test paulsen. jim, do you know what i was talking about earlier, i was talking about you? >> today, no i'm sorry. >> you weren't watching. see, you might like it when you don't even have to be here for me to put forth your very cogent and insightful ideas, which i've already done with somebody else anyway, let's get it right from the horse's mouth. and we can talk about it your point, what did you say as far as quintilse, quartiles. went from the bottom 20% or 25%

to the top 25% in the past that means earnings estimates are too low or at least there's going to be some outperformance in the corporate sector just based on better economic indicators. you've been seeing that. is that your first -- the first point you're making? >> yeah. i think when you think about this, joe, if we get another leg to the north wood side of the market, one thing that could do it is we see better manufacturing data the pmi turns up i think the biggest thing is if wall street starts to raise earnings estimates which have been falling all year long i feel a little better about the possibility that that could happen here in the next six months or so we've been struggling all year with economic reports coming in worse than expected and the economic surprise index been in the lower kwaquartile when that happens wall street raises its earnings estimates by

1% analyzed pace they often decline as has happened this year as to your point, in the last couple of months we've seen surprises go from lower quartile to upper quartile. in the past what that means is wall street earnings estimates in the next six months often start rising at about a 12% annualized pace. i think the increased momentum in the u.s. economy showing up in reports is probably going to be reflected by better corporate earnings >> they have 100 billion out they only took down 22, 23 billion. so the combination is the fed offered 160. the market only took down 70 maybe we're past the worst time or maybe the fed is in the right place.

>> all right paulsen should probably thank you for -- because i don't know if he wants to actually talk about this next point, and that is that productivity -- no, i know you don't because -- it's because of the tax reform and trump and you're going to have to give him credit and it's going to kill you to do that, paulsen. you're saying for ten years what was productivity what's it been for the last -- since 2016 tell me the difference you're like saying this is amazing. this is going to continue but you're loathe to give anyone any credit for it knowing you. >> well, yeah, i -- you know, it is amazing, joe. we're having a silent productivity miracle and it's getting virtually no coverage. in the first six years of this recovery between 2010 and 2016 productivity grew at 2/3 and 1% per annum. that was the worst six-year period in any post war history in terms of productivity but in the last ten quarters, 2 1/2 years which sort of dovetails with some kind of presidential

election we used to have -- >> it kills you. >> -- productivity growth now in the last 2 1/2 years has jumped up to better than 1.5% per annum. >> it's huge. >> it's up at 2.6 in the last quarter. >> maybe he does like this he's not sure it is the -- is air buds a new iphone anything but tax reform, right, paulson? >> i think, you know what is happening -- i recently looked at business investment, and there has been a big decline in old era industrial manufacturing investment spending, but there has been an acceleration in the last two years in new era spending on information processing equipment and intellectual property. and that acceleration has been very healthy and a surge sense since 2016 and i think that's why we're getting a productivity miracle because new era investment, which now constitutes 54% of total business investment in this country, it is the first time

new era has comprised the biggest share of investment, we can have recession in manufacturing and it might just go right on because new era is now the biggest part of the dollar >> we got d.c. involved now with these big tech companies they're going to put an end to this pretty soon, hopefully, with some much needed regulation so stay tuned for that you think there can be another -- actually, one more step higher with productivity, based on what, you think it can continue, jim? >> i do, joe if you think about it, we're worried because we're the longest recovery in our history. we're at full employment that's concerning. what is the one thing you need more than anything else in that situation? we need a recovery extender and that is productivity the essence of productivity, it can extend a recovery. if we can do productivity at 1.5% per year, we could are job creation slow below 1% and still grow more than 2 and not put a lot of pressure on fully

employed economy so i'd say if earnings estimates turn up, joe, with productivity in the corporate sector, we coo ha could have a good upside move. >> that ceiling we have, because we're not getting enough new workers, you could get around that with more productivity, i guess. >> right >> all right i know how -- i know how hard that was for you because i know you you're in minnesota. you think about, you know, humphrey and muskie and al franken. he's there, wasn't he? >> we got some gems out here real gems. >> anyway, jim, thank you. we will see you again -- you think a lot, don't you you're flying around or -- i always called you the garrison keilar of our guests so homey and down to earth thanks see you later. >> thanks. >> let's get down to the new york stock exchange. jim cramer joins us now.

headlines hitting about nymex crude. couple of headlines citing stuff that the iranian president is saying, i don't know if i believe anything of what he says, another headline says nymex crude is down. what do you think? are you hearing anything >> we're pumping i think we're underestimating how much we're pumping, two big pipelines now back online. online i think that if you go back to 1552, the five year curve, you can't touch anything oil in this market you can't. mr. there is a big divestiture going on led by the california system for the ucs. it is going to keep going. it is the beginning. it reminds me of apartheid in 1982, '84. the stocks have to be avoided. they have to be voided almost at all costs. >> jim, let me switch gears and ask about the peloton ipo yesterday. i know you didn't like it ahead of time. it was down 11%. you warned that if wework came

to market it would bring down the whole market what is happening with the ipo market and if that will have any broader impact on the overall market. >> they got to shut the spigot i thought was good that endeavor, that did not need the money, let's be clear, they have a huge amount of ebitda, they did not need the money, i'm glad it pulled out. it shows some constraint they did a bad job people do good and bad job on wall street. we always take these things as being, hey, you know what the investors got it wrong, the buyers got it wrong. there was no institutional demand for peloton underneath that, good road show and luncheon the day before. this market, once companies that have good growth, with dividends and buybacks, not companies that have high growth with big losses so peloton was the wrong place, wrong time and the brokers act like it is the right place. we need fewer smile directs. this whole class is turning into

a farce. it is a tragedy what is going on they got to pull back. these brokers need the money so bad, it is like there is no shame. it is time to stop it is time to cool it. and let the guys like ari, so right in endeavor, tell them to walk away. don't do deals here. unless you're so desperate i don't want your desperate deal wework bonds at 10%. no thank you >> jim, it is joe. i know you're tired from the eagles game last night are you happy -- >> i didn't actually see the game >> oh, liar. >> i didn't see the -- >> how do you know about the calls? you saw it, didn't you you said you don't need sleep. >> well, jordan howard knows how to catch, first of all yes, what is the point of sleep after a victory like that? i would have climbed a grease pole in philadelphia if it wasn't for a fact that the game was away i throw snowballs at santa

remember what kind of year santa had. he had a bad year. we act like he had a good year short memory short memory by this country >> jim, thank you. we're going to see you in a couple of minutes. >> yep >> by the way, don't miss an exclusive interview on trade and tech coming up on "squawk on the street" with the ceo of micron that company coming off a top and bottom line beat, but disappointing with its current quarter guidance jim was listening in he thought the call wasn't as bad as the street is making it out to be. don't miss interview "squawk box" will be right back. 's ...while helping plan, invest and protect for the future. so they'll be okay? i think they'll be fine. voya. helping you to and through retirement.

guest host today, joe ter terrenova, cnbc contributor and very metaphysical, almost a philosopher. he was reflecting, we all started reflecting early on. very calm. >> i need to be that way after you basically insulted me about my hair. >> i did not insult you about your hair. >> you told me i had a goatee on my head. >> he didn't say that on camera. >> you did say that, joe. >> some people grow goatees here you have --

>> scott would never treat me like that. >> i love goatees. >> on my head? >> i don't know why -- i think you could do the an true adrew d bring it back here and bring it all the way over it is not about the hair it is not about the hair. >> you turned the tables on him. >> yeah. that's okay. still friday >> thanks for come in. good to see you. >> join us next week "squawk on the street" is next ♪ good friday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. futures show the dow may erase the losses for the week as we keep an eye on micron, wells, wework and a tough week for ipos as peloton drops and endeavor gets pulled. europe is green. ten year steady despite the weakest consumer spending sprint in six months. charlie ha