we hand things over to "squawk on the street. we have been looking at the futures indicated higher, first trading day of the quarter the last quarters with a good one for the dow and the s&p 500. the nasdaq off slightly for the quarter. you see the nasdaq up by 29 points dow up by 87 s&p futures indicated by 9 that's it for today. join us tomorrow now it is time for "squawk on the street." ♪ ♪ >> good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. welcome to q4, getting kicked off with futures up nearly 100 amid the global bond sell-off today on the heels of a rough jgb auction. europe red on a weak pmi 457, inflation near a three year low. our own ten year near 175. road map begins with questions about q4 investors weighing the trade war

and impeachment inquiry as the fourth quarter gets under way. >> plus, no force can stop the chinese people, president xi commemorating the 70th anniversary of the chinese communist party's rule, this as violent protests in hong kong ramp up. >> facebook's mark zuckerberg rallying employees against critics, competitors, and presidential hopefuls, like senator elizabeth warren first up, though, investors looking ahead as we begin the fourth quarter after a volatile q3, which saw the dow and the s&p extend their quarterly win streaks to 3 the nasdaq fell just short of a similar run. for the year, though, leading the major indices with a 20% gain, s&p up almost 19 the best performance through q3 since '97. this is all affected by the fact that december was so bad last year. >> yeah. for instance, apple up 42% you say, wait a second, great year but apple preannounced the stock had gone down. you have to look at all these to see what is up from the bear

market whi what is interesting is this market has in leadership it keeps rotating. drugs are a leader and then speaker pelosi says be careful of the drugs managed care and then you immediately get the single payer. you get technology and then micron pulls it. you see these package good stocks and then one will be good, one will be bad. retail, just watch it is walmart, amazon, target, costco and home depot. nothing else nothing else so there is really just this, wow, what do we do >> most notable, most notable theme to the end of the quarter was the change from what had been focused on growth momentum to value >> totally that's why the banks went up. >> that's one of the key questions, will that continue? how much momentum will there be when it comes to these value stocks and have not gotten a lot of attention for a long period of time.

>> nxpi, it broke down, you covered it extensively. >> 127.50 was where they had a deal to be acquired. chinese never ruled. >> fabulous piece today about nxpi and how it is the backbone for the battery for ev you got these -- you got -- merging leader tech stock. i don't know advanced micro and micron,terink was a great stock for a few weeks and facebook is awful. and i think a lot of it is by washington it is by washington. >> market has gone sideways ever since the trade war escalated. wto today, again, for the third consecutive year, cuts global growth forecast. largely because of trade they see world merchandise trade 1, 2. >> that drives money to lennar, a fantastic performer. towards poult s polti, which ha

good the rates, mortgage rates going down spurred some house. housing punches above its weight how long is that leadership going to last? i find there is no leaders that last. >> do you think q4, seasonally strong >> yes >> fed is in a much different place than it was last q4. does that help >> don't fight the fed, don't fight the -- i see it that way i did expect that there would be more mutual fund selling second last week of september. when september got overbought, it got overbought, we had this big slide, now we're not overbought and the beginning of october tends to be pretty good. then a couple of months where people say, oh, my -- we'll do anniversary of crash stories tends not to rally on anniversary of crash stories october has been a pretty good month. >> you'll also have ipo weakness, and epo madness to throw in the mix >> make people a little more jittery. >> i wonder, we're so pelotoned,

my wife wanted to say, listen, not sports bra, okay, not -- it is lululemon that hangs on the peloton. >> it is lululemon, she corrected you. >> it is not sports -- never mention that that is wrong. i want to correct myself shouldn't have said sports bra, sorry, lisa, what i meant to say was lululemon. clear now? better >> we did spend the end of the quarter talking a lot about the market for initial public offering i think poor is a nice easy way to say it. not well received. >> why don't you smile directly at me. >> that was one of the worst >> we're done. just say no. i'm working on a piece tonight for "mad money." the president pulled the plug on the theory that maybe we'll pull the plug on chinese ipos i think the president should do it to protect our wealth. >> do what >> stop the chinese. >> not allow listings by chinese companies. >> the performance of these is

so horrible, that peter navarro would have had more ammo had he come on and talked about that yesterday. in that interesting interview that he did with "squawk box". >> you don't think what happens to the fund managers who have billions in these names, what happens to them. >> you have to be just in the s&p. i just really feel that the -- the msci decision to make it so you had to be overweighted, which is something that navarro talked about, you mentioned goldman sachs, actually msc, the company, it said it, that said that china should be allowed in, like, the kind of the regular, i don't know, league of nations, but the chinese don't have the disclosure navarro was right about that i'm looking at the disclosure they don't tell you a lot. like of neo, nio, the stock that went to ten on a 60 minutes piece, and it is at 2, a car company. >> jeffries comes out today, the

move would completely undermine the international market and would harm the u.s. role as a conduit for international capital. >> please. save us a lot of money. >> no, it wouldn't. >> come on >> come on nothing >> choose to invest in these, they can choose to do so we want to maintain the u.s. capital markets. >> happy 70th to you hey, sunshine, happy 70th to you. >> i'm saying. alibaba, you don't want any part of that. you can't get ten sent >> alibaba has u.s. financials a lot of the companies that have come public, david, do not have typical -- i don't think that we should allow in our country ipos. >> hard to borrow. >> why can't -- if you want to bring a u.s. deal, like, you know, we work -- you think that one sailed through the s.e.c.? if it was from china, it would can you imagine?

chinese we woowork how is wework doing with the new team you know the guy one of the co-ceos starting to come together? >> i think they have a tough road ahead of them when you're losing 1.6, $1.8 billion a year, you got to cut, you're going to burn through 700 million bucks. >> journal says they have enough cash to get through q1 bonds yielding 11. >> it is -- you know, when wework can anticipate coming back, trying to come to the public markets is -- >> it is a question. >> a mystery wrapped in a riddle. >> covered by an enigma. >> ill advised deal they wribri to the market. >> maybe they'll realize, hey, we're not losing as much money as we thought. >> maybe some of the tequila the president of mexico has great tequila. >> you would know. you're a -- >> wework is all part of this

era of, like, please, save us from wework, give us more mcdonald's, mcdonald's >> we'll get to that call. bad call out of jpmorgan. >> it is terrible. the guys, something went bad, everything is watching a game, and then the guy goes, oh, and he likes the mcdonald's thing, and everyone else is mad no, i mean, if we sit there and watch hours and hours of football, i want good commercials. >> jpmorgan says q3 comps are trending below consensus they expect them to disappoint once mcdonneald's -- >> how do they know? they use some tracking organization. >> yes channel checks. >> yes you think they have a channel -- what are you doing >> i'm texting important news people are in touch with me at all times i need to respond to them. >> i got important people myself i'm going important people >> i promise, i listen to you out of this ear. with this hand i'm doing

something else. >> i think mcdom's canald's cals not a call i want to -- you sell at 211, buy it back at 213 that's what the pajama traders -- i don't like that trade. i know we have to move on. that kind of trade, that kind of call is -- never mind. that kind of call is a really tough call for individuals to do >> you would say this even if the call were that it was trending above consensus. >> easter brook is doing a very good job he's instituting a series of technological advances it is chipotle and carne asada, really good. very nice. you're in and out of there, my time spent in the store, it is under 60 seconds >> it is amazing yesterday i said we got to have the carne asada, my wife said no only in new york, they deliver from 45th, by the time they deliver, they started door dash, at the house like this as long as it took the redskins to fall behind

>> sa . >> saw the new york times had a story about grubhub. >> they take everything. >> and talking about actually similar things you experienced in terms of pages being created that you weren't aware of. >> door dash, door dash says they are a provider. door dash buys caviar, now up the creek without a burrito. >> tough business as we know mark zuckerberg is rallying the troops in a leaked audio of a meeting with facebook employees obtained by the verge. he slams senator elizabeth warren's call to break up the social network >> elizabeth warren who thinks the right answer is to break up the company, i'll be honest, she is elected president, i will bet we will have a legal challenge and i will bet we will win the legal challenge. it is -- so basically it is -- and -- so -- does that still suck for us?

yeah i don't have to have a major lawsuit against our own government that's not like the position you want to be in when you're, you know, it is like we care about our country and want to work with our government to do good things and but, look, at the end of the day, if someone tries to threaten something existentially, you go to bat and you fight. >> tough to understand the audio there. he says go to the mat, if she tries to break us up, i would bet we have a legal challenge and i bet we will win. >> this is that new form of antitrust which reminds me of the old form this is facebook is too powerful, let's break it up. that's a different form of antitrust than we're used to our prices are going up because of monopoly. >> and in this case, you're not. you still have to deal with the actual law. >> the doctrine is you don't go after companies because they are powerful that's against the doctrine. >> in interviews i've done with the antitrust doj chief, he's made that point.

>> i know. >> you have to prove anti-competitive. >> senator warren -- it would be a different regime if senator warren came in a lot of people talking about -- >> a different regime in a lot of different ways. >> would she allow us to do what we do? >> the three of us >> we talk about stocks. >> if she tries to stop us, we're going to the mat. >> we're going to the mat too. >> or bear case. >> or the mattresses. >> etfs are going -- we go to the mattresses. >> we'll be okay >> fear of senator warren is getting overblown. there is commerce. >> sanders raises $25 million in q3, the most of any democratic hopeful so far. >> i got five sanders emails yesterday, between the first game and the second game i got just give me $2.83 it costs me $2.83 to read his stupid -- his ill advised email. the guy does spam -- he gets you

no matter where you are. >> he'll be around for a while with that kind of cash balance. >> forever i just -- i want to stop the fear of senator warren i really think that that's a mistake. i think that there is such a thing called congress. and i also don't think she's nearly as anti-business -- i think some of these faang stocks are so bad, i wish they would break them up. like alphabet. >> that conceivably could create a lot of value, some say. >> there are big companies against what alphabet does. >> no, yes, including one we know very well >> i like how you teed that up for him. big companies -- >> yeah. reports there comcast. a lot of information, a lot of companies have taken in terms of what they believe is somewhat anti-competitive behavior. snap did with facebook just do that in the course of business and maybe at some point have an opportunity to use it. >> business what kind of thing did walmart do to -- 99% of the small businesses in this country and no one said a thing. that was fine that walmart could

destroy all the small businesses because, what, they're benevolent, from arkansas. what is that about >> it was an issue it continued to be something of an issue. >> senator warren. >> a little late >> you're an impossible bird to deal with. >> thank you that's one of the nicest things you've ever said to me. >> we'll talk to casey newton of the verge about that story regarding facebook and that audio of zuckerberg. we'll get cramer's mad dash, countdown to the opening bell as the futures look good here, watching rates around the world as well. back in a moment turn on my tv and boom, it's got all my favorite shows right there. i wish my trading platform worked like that. well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions.

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♪ we're going to get started with trading in 12 minutes first, let's get in a mad dash as we count you down to the opening bell let's talk a little emerson. coming out with an announcement this morning at 7:00 a.m., clearly a response so they don't say it that way to an activist in their shares. what may be more than one activist from what i hear. de shaw was added by reuters late on friday, they are there without a doubt. i think they have been talking to management. we haven't heard from de shaw either. >> one thing i learned at goldman in the '80s was to sell a lot of credit cards -- no --

emerson is the one industrial you never sell why? it is the one that is best run and you know what is amazing they're talking about some of the parts, breakup emerson was always the opposite. >> this is a deutsche bank piece about what sum of the parts is, 12% upside, $74. the idea that this company is some sum of the parts rather than the best run industrial it seems like they're after management. >> i believe that's the case i don't have a great sense yet as to what they have been asking for. my sense here is things were done a bit prematurely in terms of it coming out in the markets. they were there and perhaps not quite -- weren't quite ready we get an announcement this morning, jim, from emerson, saying they concluded following discussion with their board over the course of this year. they concluded thorough -- this a thorough review of their cost structure capital allocation and portfolio will inform decisions that drive strong value, creation for shareholders, what we expect to be an uncertain

environment. >> isn't that what they do anyway you evaluate and think about uncertain environment. >> go on to say, they anticipate a clefhallenging landscape and focused on ensuring well positioned to drive out performance and shareholder value. they go on to affirm their full year 2019 gap earnings per share guidance of 360 to 370 kind of a weird little press release here didn't say too much. obviously in response to some of these reports. >> emerson and 3m, emerson is the -- the growth from emerson is from china. a lot of it is from china. this has been a play a lot of people think like caterpillar is dependent upon a trade agreement. these guys are saying that -- i believe the actors say, you can't just be trade agreement. nontrade agreement this is one of the great performers of all time.

>> time for far to go. >> the stock has been underperforming. how is that for an answer. >> very diplomatic. >> right how much am i jefferson-like >> hardly ever. >> thank you. >> you're welcome. >> dead right on wework. >> how am i doing on juul? i ain't be juuling, i rather juul than juul. >> we are -- we are a podcast. >> get out. >> yes, we are. >> you don't work on the podcast. most of the things you do are just silent to me and make me look like an idiot. >> i'm here to try to make you look like an idiot listen to us, you can do it. go to cnbc.com/podcast. >> listen to us because you should listen to us. >> yeah. >> where did you learn that. >> i'm good at this. >> is that from rut arledge, the ja ovior wsf cty. servicenow put our workflows in the cloud.

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futures green for the first day of october and the fourth quarter. plenty to talk about we'll get cramer's playbook for the next few months. talk about what the week might bring, it is far from over we're back in a moment [upbeat action music] ♪

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell in about three minutes. busy morning as we kick off q4 one thing i want to touch on before we get to stocks, this jgb auction, we never talk about jgb auction in japan, but it did spark a spike in rates all around the world. >> well, i have to -- i don't know how it is possible. but, yeah. the fact is that i've been waiting for these all to fail. >> auctions to fail. the worst since 2016. >> yes no is that the worst -- >> worst auction in three years. >> yeah. >> what are we doing -- like, a lot of these countries should just be buying our dollar, we

know the dollar is the strongest. than buying our bonds. we still have overinflated short-term rates why do people participate in auctions where you know you'll lose money what kind of fiduciary would ever just say, you know what, i'm going to lose money? >> well, some of them are -- have an obligation to own a certain amount of -- >> counting onthe bank of japan, to continue to inflate its ownership of -- >> and deflation has been something they have seen for a long time in japan that said, negative rates kill your banking system. >> right. >> kill your banks >> they do >> you got to figure out a way out of it. bank of japan seems to be somewhat more focused on that. >> it you see the eurozone their inflation rate >> eurozone inflation is near a three-year low and their pmis at 457, weakest since 12 germany weakest since '09. >> all big trading partners of

china. china is the epicenter of all of this, because the chinese have a slowing economy. and you're not going to get it from them. the 70th, they have good real weapons they unveiled. meantime, then you have hong kong we don't talk enough to about hong kong. >> it is a mess. the protesters there being shot with blue water cannons. hong kong police have confirmed that one protester was shot by a live round as the 70th anniversary of the modern china government is today, markets are closed for a week xi jinping making public appearances in beijing. >> did you see who congratulated them the president there had some positive news. >> said congratulations on 70 years. >> 70 years. >> way to go. >> chinese people, 70th anniversary. wow. i don't know why do they do that? sorry, i asked i mean, why do they do that? maybe good friend xi, maybe

settle this over a golf game there is real -- we're still -- we haven't gotten the stock yet. >> something to talk about when they get here in ten days. opening bell, s&p 500 at the cnbc real time exchange and big board is papa john's international at the nasdaq, the third largest pizza delivery company. we know howing about a category pizza is in restaurants. >> the big change is yum yum is doing better. and that's been a terrific stock. by the way, my playbook of what you do, buy stocks that have been unbelievable performers like yum chipotle no stopping that one now you know what i had the -- talking during the break, i happened to have the tyson chicken nuggets that are plant-based. they're not ready to be released yet, but i have to tell you, i defy you to tell me they don't

taste better than a regular chicken nugget >> really? >> yes, really >> they were fabulous. >> right >> chicken nugget is mostly corn anyway the chicken just eats corn. >> doesn't have any -- >> mostly bread, which is actually -- got chicken and corn -- >> plant-based >> corn. >> if you're a vegetarian, you know >> corn is a vegetable. >> how about the impossible, where they have people who say, hey, you know what, this tastes like a hamburger no kidding, that's the point got gmos, though millennials hate gmos. >> they don't like paying commissions. schwab is going zero commissions. effective october 7th. they say it will cut revenue 3% to 4%. >> that's big. >> seems low >> that's big. i just think that any number of cut of this environment is just brutal for a stock look at micron they didn't do that much to --

>> it is pressuring everybody in the system ameritrade, e-trade, everything is down. >> something that, you know -- >> look at ameritrade. >> oh, my. >> holy cow. >> that's incredible >> wow >> should do that every day. put -- send those other stocks down to zero can they go negative maybe negative pay you to do trades >> you mean like jgbs. >> yes >> that's unbelievable this is -- how much of it is robin hood which is, you know, i had robin hood on, san francisco, millennials love robin hood because you don't have to pay commission that is -- ouch. >> starts -- a week, i think >> i'm not allowed to trade, but holy cow, you could -- >> that's quite a move >> you can't make that up in volume, david. >> say again. >> can't make it up in volume. >> no. no, you can't.

it does show you the competitive landscape, they're feeling that they need to respond to what is going on among others as you say robin hood, others have continued to lower and the value of actually just having the balances there. and -- >> schwab has that great -- schwab has that machine in terms of how much the credit balance is, goldman is trying to have the big credit balances. see how that's doing. >> we talk about schwab, people may not realize, it is a $51 billion market cap company >> should be >> going to pass goldman wouldn't that be something -- >> not that far. you know what makes a big comeback, you haven't talked about it much. ulta beauty. >> we have been noticing that. on the leaderboard today. >> a lot of feel that it can't last, this downturn. you go back over that quarter, i deal with a lot of people in the hair care and perfume business you know, cosmetics, no one can understand why they did so poorly i think they're coming back.

>> corn is a grain, by the way i knew that. >> talking about ulta beauty. >> what about ulta you're talking about it coming back. >> what are you watching >> i'm watching this one >> you should put us on periodically we have a lot of good things >> are we on television? >> we're a podcast >> we're a podcast now merely a podcast. >> they cut the commission at mcdonald's, david. >> we were mentioning this leaked audio out of facebook of the verge has today in which mark zuckerberg says they would fight in an attempt to break up facebook says it would suck for the company. elizabeth warren now responding, says what would really, quote, suck, is if we don't fix the corrupt system that lets giant companies like facebook engage in a legal anti-competitive practices, stomp on consumer privacy rights and repeatedly fumble their responsibility to protect our democracy. >> i never thought you could use words suck on air. i guess that takes care of that. this is the power, the power of

companies. i think that we talked last week about facebook comes in and does instagram stories, does snap idea i don't know, if you remember, nelson peltz said, hey, listen, we'll steal people's ideas what is -- why can't zuckerberg just say, listen, we'll do what snap does? what is the matter with that what is the matter with that why can't he >> if somebody created a rival tv show and had a lightning round, you might have a problem with it. >> someone is doing that with on the nfl network. i'm not kidding. they're doing exactly the lightning round. i felt like going after them, i said, look, with what? >> hey, guys, cut that out >> it depends on the ip in particular whether it is defined as something. >> you don't like it when the chinese do it. >> nfl is more powerful. more powerful than anything, right? >> very powerful. >> the nfl is not perfect. perfect? >> i saw the rest of the season --

>> that was a great hit. >> by the way, on facebook, adam of instagram will be on the "today" show tomorrow, talking about changes to the instagram feed. >> really? maybe they'll back the businesses that are all going great stuff on instagram a lot of businesses. i think you do -- you open instagram and go to -- >> you're able to buy within the app. >> you go to spotify and you go to amazon web services and next thing you know you're a business. holy cow have you seen the stuff, like, we're buying stuff, glad bags, re-useable bags, i saw them on spotify to your house and you put them in the dishwasher. >> speaking of names like all thia tulta that are trying to come back from a big drop -- >> you go anywhere, you know, could be something that brian westbrook runs back against the giants, desean jackson runs up

against the giants, i just feel like that you don't know roku -- you don't know what is going to happen with roku you don't know whether apple tv -- they ran a lot of ads. >> on every nfl game. >> they spent a fortune. apple was for a moment there -- remember budweiser -- >> disney pluses had a pretty powerful ad campaign going as well. >> i know. roku, maybe it costs -- look, we have to find out how many different things millennials are willing to watch we don't know. >> the only beneficiary now of all these streaming services is network television >> are there show runners of stranger things, new nine figure deal for season four >> that's where it is ending up, all the digital companies spending enormous amounts on the large platforms. >> dish. don't drop us, we'll drop you. >> right >> what is that? >> they're fighting with -- >> that sucks. >> apple, because tim cook made

a comment in build, bild, a german publication, saying sales are strong that is the opposite of all of the slagging he's getting on wall street. >> what about not being given tariff relief on some of the chinese components even though they are building the macro -- >> i thought for sure that was -- got a call to lighthizer and navarro because i thought that was a done deal that was incredible. >> stock -- >> look at this apple. 233. if that takes -- i don't think it can take out 233. >> you saw -- you were out yesterday, but jpm took their december 2020 target to 265. >> that was important. these are important. if tim cook is -- if he's saying that more than just like a good -- if he said, look, i think the 11 is rippling through, very low expectations the three camera on instagram is so powerful, it is a $1700 nike

camera it is that good. >> that good >> not only that, you saw the ad where you pulverize and put it in water when my wife threw in the 7 by washing it, you know, we had -- thank god the prenup says you can't do that, it is okay, but it is amazing to me that this new one, you know, funny no prenup. never mind the new phone being able to withstand and also have the camera, i think the 11 is doing much better than expected. my channel checks that i do, which are actually real, indicate sold out, sold out, sold out. >> sold out. sold out watch, by the way sold out watch >> the series 5. >> yes, the series 5 watch, which allows me to press a button and david disappears. i transpond him to the nasdaq. poof poof >> is that something you would like to do >> no i like you >> the viewers think you want to do that. >> no, i like you. >> or the podcast listeners.

>> i like you. good guy likes his dog. >> i got a good guy. that's what i get out of you a good guy after all these years? >> listen, sunshine, you should be happy i threw that at you it is larry culp's anniversary. >> i think ge is below 9. >> the insight you bring to the show is really -- >> g ex-has a hard road ahead of them the industrial business is doing okay long-term care. >> you got to wait. >> wait until people die >> sadly, it is waiting for this vintage of people they use that word, i don't mean to use that but they use the vintage of people who got those policies, and china ameliorates the policies you talk about a policy that had very little, spending $200,000 a year in home health, and ge is on the hook.

they're trying trying to mitigate. >> they are. they'll continue to. it takes time to work through it. >> that's why 2019 is -- >> we're waiting for tusa, hasn't -- maybe tusa, which is culp -- >> he should do a happy birthday piece from jp morguen. >> birthday or anniversary anniversary of his taking over >> birthday? >> right >> okay, anniversary. >> one year anniversary. >> all right. >> apple is leading the dow to your point earlier, jim. as we're back to 2990. to bob pisani. >> heading to 3,000 pretty fast. cyclical rally by and large, take a look here what is going on we have semiconductors up nicely today. that's apple, helping things out. retail, these are all cyclicals here and the defensive names like utilities are lagging. apple and the apple suppliers, he's right, we're right near 52 week high, not there yet

near 52 week high on apple some of the apple suppliers all up nicely. comments from tim cook, new iphone 11 off to a strong start. his words here all helping the market overall we're starting october, but problem with right now is we're in a wishy washy middle phase. nothing really tremendously oversold or overbought if you look at some of the things, utilities had amazing moment in september. sure a bit on the overbought side oversold, not a lot. i see metals and mining sold rather agrigressively to the en of september biotech sold aggressively. some of the recent ipos, we covered that pretty well in september, for some of the ipos in last three to four months, crowd strike, pager duty, chewy, pinterest, all had terrible months. most 20% or more declines happened in the last two weeks of the year. the ipo etp moved down to the lowest level since february there. i thought it was very amusing.

you can tell it is concerned about how ipos have been doing, reports that some of the venture capitalists have been trying to convince people over in california who are considering ipos to use direct listings. this is an interesting idea. the cost is high, could be 4% to 7% of the proceeds the results can be uneven, can be annoying. point out here, any kind of direct listing, not guarantee that anything nice will happen spotify, the reference price we used 132 now we're looking at 114 so that's not up if the other one, direct listing, was slack that was $26 that was the referenceprice that was used there. slack now at $23 so i certainly agree, alternatively you can use a direct listing, but not raising money and there is no guarantee that that's going to perform any better for the company overall let's talk about what happened with the ebrokers. this is a rather surprising outcome, if you consider what really goes on, how the companies really make money.

schwab eliminating commissions for stocks and etfs. look at how the companies make money. schwab is essentially a bank look here. it gets almost all of its revenues from net interest revenue. 57%. it is a bank asset management is 32%. trading revenue is only 8% of the company's revenues in other words, the company can essentially afford to drop some money on trading revenues, providing it keeps its customers and it is continuing ability to scale up there is a lot of competition out there. not from the ebrokers, other people that are poaching the territory. jpmorgan has you invest out there. low cost brokerage firms bank of america, low cost brokerage. robin hood is out there. we know all sorts of competition is out there it is not dramatically eating into the ebrokerage yet. the key thing here is keep the customers in house, schwab very successful with their etf platform they're one of the big five. that's been working. so don't lose the customers even if you have to cut the prices. that's the key right now

back to you. >> bob pisani, thank you very much rick santelli, as we have ism manufacturing on the way rick >> we do we have that on the way as well. and maybe the most important thing in everybody's has been talking about, you've been talking about it today, that's pmi, weak inflation and all this in europe is very important because we're in this kind of race to the bottom what is the first thing you read when you hear these stories? the dollar is strong hasn't crossed over 100 since april. but that is the issue. will we follow look at how these patterns are so uniform, here is our ten-year, since the end of august i picked the end of august because the move that started there that we're retracing, about halfway, you'll see it on the ten-year chart, you see it on bunds maybe the pattern is a little different. but here is a french ten year, same pattern canadian ten year, same pattern. here is an australian ten year,

same pattern by the way, australia lowered rates today, historic lows and their ten year is under 100. even though all the rates may different, at the end of the day, the fact is we're all moving together and policies are going to start to ramp up. because the european central bank didn't do enough when they had a chance, and now as christine lagarde comes in, welcome to the show. as for the dollar index, i mentioned earlier, it is getting ever closer to 100 i'm sure this administration doesn't like it. some exporters say they don't like it. at the end of the day, we probably should like our data better than many countries whose currencies are weaker along with their economies. carl, jim, david, back to you. >> all right, rick, thank you very much. big news in the world of college sports, of course. yesterday california becomes the first state allowing college athletes to profit from endorsements governor gavin newsom signing that measure into law, despite the ncaa calling the move

unconstitutional david has been working this a bit. fascinating. >> it is a fascinating story one we sort of followed in the sense of in terms of the ability of amateur athletes to get paid, some of these kids obviously are really at the college solely to play sports, they can't get compensated, small group of them, their uniforms might be used in various ways, the colleges make money from them. the ncaa has raised the prospect of a boycott of these california universities and my understanding is at least according to a number of antitrust experts and other sources that were that to be the case, that you might very likely see action from the doj department of antitrust. saying, hey, you're acting as a monopoly. >> that's a real -- >> you're in coordination around the country, and so the ncaa better think long and hard about whether it wants to implement some sort of boycott here in response to mr. newsome signing this bill. it appears they're going to have

to think about the possibility of the doj and antitrust division responding. >> well, you know, anyone remembers the fab five, fabulous fab five, 30 for 30, they were -- why are we -- michigan, everyone is buying our stuff, why should we not be paid? and ncaa crushed that. >> that gymnast on youtube who wasn't getting paid for all the different o'bannon started this. >> i was a scholarship work study kid. and i got paid to proofread for -- that's how i put myself through school these guys are like the making fortunes for their schools and they -- that doesn't count how can that not count give them -- it is a job it is a job. it is a job. >> most of them were ending up with four year degree. you would say one thing.

but the fact is, that's not the case >> plus, it is hard to imagine the schools in the southeastern conference are the big ten just sitting, standing by right? >> right >> powerhouses >> there are other states that may very well follow california's leader. >> this is a big story doj, that's a great -- that's a great business story for us. >> when we come back, shares of u.s. steel down more than 30% this year. the stock is getting a lift as the company announces a new stake. we'll talk with the ceo. dow is up 124. we're back within ten points of 3k let me tell you something,

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♪ time for stop trading with jim. >> carl, david almost always asks me in your absence what's

the key to this. it's my kron micron when they reported last week just crushed the market well we had sanjay and he was talking about how the forecasts aren't that great but 2020 will be terrific. buying back another 7 bill in stock. all the semises that are running will continue to run and you will your leadership group from now until the end of the year. >> semis. >> micron has to hold. >> what's tonight on mad >> what's up the most, utilities and con ed up more than 20%. how do you like -- these german and japanese bond buyers this is a bond 3% yield mcavoy is very sharp yield up 20% that's skriincredible to me risk free versus lose a percentage because you bank on the government that's some trade.

schwab >> trade all you want. >> ameritade. >> all you can eat. >> ameritade is down 23%. >> that's impossible >> we'll see you tonight when we come back, ism, can it hold above 50? an eluvexcsi with the ceo of u.s. steel don't go away.

♪ good tuesday morning welcome back to "squawk on the street." i'm carl quintanilla with leslie picker and david faber let's get to ism and rick santelli >> yes our september read on ism manufacturing, sort of going the way of europe. 47.8 definitely a bit below the 50 we were looking for sequentially following 49.1. the issue here is 49.1 comped us back to january of '16 where we had 48 obviously 47.8 usurps that we're going way back in the way back machine that takes us back to june of '09, june of '09 to find a lower level. if we look at the employment component from 47.4 to 46.3.

prices paid, they moved up but not over 50. they moved from 46 to 49.7 fascinating. new orders 47.3. fairly lateral move from 47.2 last month all these, of course, are now under 50 and contraction mode. to be fair we all know that trade is affecting this data series it's not over. august construction spending expected to be up in the neighborhood of a half a percent. it's only up one tenth of a percent which is exactly what it was up last month which stands unrevised. the response in the marketplace is coming. we are definitely looking at yields moving a bit lower and that does make sense, as we consider how much europe, of course, was affected by their weak data points we'll continue to monitor all that as interest rates, dollar index is still up, but it's lost a little bit of its upside

leslie, back to you. >> all right rick, thank you. our road map starts with stocks rallying on the first day of q4. what investors should expect heading into the end of the year plus hong kong protests turn violent on the 70th anniversary of china's communist party rule. live to beijing. >> an exclusive with the ceo of u.s. steel we will talk trade, competition and the latest deal to acquire 49.9% of big river steel >> stocks trying to hold on to their gains after the ism number as q4 kicks off. what is the playbook citi's steven whiting and cantor fitzgerald keening is here what does it mean? >> manufacturing globally is contracting. the u.s. is not immune to that in any way we fortunately enough, if you take a look at the last core retail sales reading out of the united states, over 5% growth.

took a look at germany, over 4% growth china's slowing 7. at least right now, we have this gap between a growing demand side economy around the world, low inflation, and importantly easing central banks to outlast this manufacturing contraction this is what they should worry about and protect. >> you're worried about duration. >> out disntance. >> it all comes back to makes october 10th and 11th more important as these talks kick off? >> trade is clearly a factor and issue here let's be clear about this, the rollover in global isms began far in advance of the trade war. this has been progressing over time secondary of the change we identified in mid 2018 trade exacerbated that rollover. our argument for some time has been precisely that u.s. isms would follow global isms into

contraction where many of my peers disagreed with my team and i, and it has happened and we're starting to see the consumer weaken a little bit. that's been the sole pilar of strength that the bulls have been resting their hat on. retail sales have been volatile and we're starting to see lending standards tighten to the consumer and last point the fed is in a mid-cycle ease, but history shows very clearly that does not prevent economic slowdowns and moreover there isn't much room for the fed to act this part of the cycle. >> what's your expectation then for the consumer if you're citing at least what you believe is the beginning of some signs of weakness? >> our job as strategists is to try to identify the inflection point. by the time the data goes into contraction it's too late and the markets have reacted does this consumer still have access to credit let's be clear, real wages have not grown the way they have in

previous recoveries. they've been growing at 0.8%, well below what you should be seeing. >> what central banks around the world and especially here in the u.s. will do to react to that and what kind of fire power they have with regard to a potentially weakening consumer weakening manufacturing sector >> well, let's bear in mind that the u.s. consumer is going into this manufacturing slowdown at 8% it's going in with a record low consumer debt burden and we're looking at things like housing and consumer durables, you know, not having like this massive topping. we don't have just tremendous exuberance in the broader economy. you know, we have healthy fundamentals, very much in contrast to corporate fundamentals in a few particular areas, and so if we have low inflation, we have easing monetary policy, yes there will be some manufacturing slow down impacting those same workers, but we overall can hold this together, whether this is a

recession regime or a slow growth regime is the difference. >> savings rate 8 plus percent 12 months expectations the gap is widening between current condition and the future what makes you think spending is going to hold in >> i think that we have the inertia behind us of the sharp improvements in labor markets and the things that typically happen, right, when you have a central bank that's ignoring the signs of a downturn, oil shock, 90, 91, see what happened in saudi arabia, this is not being transmitted to consumers and i think that what we take a look at an easing central bank now and the federal reserve's lending standards survey, you can see that there is no crash here going on in the availability of lending to consumers. i think we will hold in. there will be a slower outlook when you think about markets reacting already, we now have the world's lowest historic interest rates again, we've gone there a good deal now in terms of taking down

expectations not perfect but we've gone a long way. >> others would say s&p is -- has become a defensive asset. >> yeah. >> if we can bang out 1 to 2% in this global environment all the money will come to us. >> listen, this is typically the way things play out. there is a rotation of capital flows into the u.s. typically late cycle that's not unusual especially with interest rates as low as they are, dividend yield on the s&p exceeds pretty much everything else here's the thing, equities are not a risk-free asset and that i think is the misperception amongst a lot of global investors. equities have risks and react to the economic cycle and unless we think we don't have economic cycles anymore equities are probably mispriced to the cycle risks right in front of us >> we got that number and we're going to get the first earnings print of the quarter this week too and then jobs friday we'll be talking again soon. thanks, guys. >> thank you. thank you. hong kong protesters taking to the streets with demonstrations

turning violent on china's 70th anniversary communist party rule live to eunice with more >> thanks so much. the events marking national day in hong kong and here in beijing couldn't be more different here in beijing, the day was all about pomp and pageantry we saw a military praise parade and a speech by president xi jinping and the day capped off with a gala that had 60,000 gathered on tiananmen square moments ago including president xi jinping president xi jinping had made comments about hong kong but in hong kong the situation was tens of thousands of people marching through the streets protesting rule by the communist party and, in fact, the violence got so bad that two protesters are now in critical condition one of them a teenager who was shot by police with a live bullet now as i said, president xi

jinping earlier at the parade made a failed warning to hong kong stressing the importance and the commitment to this party to the one china principle otherwise the messaging from president xi was that china is great again. in fact, at the parade he said that no force can stop the chinese people and the chinese nation forging ahead at the same time, president xi reiterated that the rise of china is going to be peaceful. that was in contrast, though, to the military display of hardware that we saw, including an intercontinental ballistic missile known as the df-41 which is said to be able to go as far as any target in the united states this was the first time that beijing unveiled that particular missile. now for investors, there was very little in the speech about

economic reforms or the trade war or china's international role in the world and that's been suggesting to many that investors should just expect that beijing will continue on this path of having a very nationalistic as well as hardline stance. in terms of the trade war and the trade talks that are supposed to happen next week, this whole pageantry really is the backdrop for vice premier lee hu heading to washington and to have conversations with his u.s. counterparts, but because he is coming off of this massive communist party party, it really is going to be difficult for him to be able to be seen as making concessions to the u.s. when the whole day and the messaging from beijing is that beijing and the communist party is not a weak party. guys >> eunice, thank you eunice yoon reporting for us important part of the world

right now. want to touch on big moves right back here that involve on-line brokers. take a look at the losses. charles schwab announced this morning it is ending commissions for on-line trading and stocks, etfs and options it's going to do so i think within a week. it is suffering, but its competitors even more so as bob pointed out earlier the revenue from commissions not as large as asset management and other parts of its business. this is clearly designed to respond to competitive pressures in the market from smaller players. the worry is others will have to follow suit. ameritade losing almost a quarter of its value this morning. >> i think the red you see on the screen is indicative of this race to the bottom and the commoditization we're seeing in terms of commissions on trading these types of things. it's completely reshaped the business models as you mentioned. the asset management becoming increasingly more important. >> all right when we come back don't miss a cnbc exclusive interview with the ceo of u.s. steel david

burritt as the company expands its footprint. dow did turn negative on the ism numbers at the top of the hour contraction in new orders, jobs and prices and the worse numbers at 47.8 since 2009 back in a moment isk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. we believe in education built for all people., - [woman] snhu was the best experience of my life. - [man] without snhu, i wouldn't be the leader i am today. - [woman] i graduated high school 19 years ago.

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its name is a lot bigger than its market cap but it has an important place in the u.s. economy. u.s. steel this morning reaching

a deal to buy a minority stake in big river steel it has the option to take complete control of the company in the next four years david burritt is the ceo of u.s. steel and joins us now. >> thanks for having me. >> why did you do the deal to buy 49.9% of big river steel >> this is a transformative action that we're taking right now that gives us the best of the integrated mills and now the best of the mini mills, in effect combing the two types of businesses together and creating this type of footprint that will enable us not to just compete, but to win in the coming years this is a very great transaction for us because we're now being thought of as a technology company because of what we get with big river which is high-tech, best grade, and the mini mill business. >> now some would say what took you so long? i mean mini mills have grown in capacity i think from some 15% to as much as 70% since 1970 in terms of steel output.

i believe you guys have as well haven't built a new hot strip mill since 1965. shouldn't you have moved a little faster? >> maybe you heard it's a difficult industry, right. >> i have. >> we certainly have made some progress if you think going back just a few years between the great recession in 2013, we were losing a couple million dollars a day and now here we are investing for the future last year, for example, was the best ebitda years since 2008 clearly we were in a lot better path than we were before, a lot better place and we're investing for the future we've invested here in the united states with a new electric art furnace that will be completed next year we're investing in europe with a steel mine we're investing in our hot strip mill in gary works and state-of-the-art, by 2022 endless casting and rolling, best north american mill will be created which has, again, the best of both integrated and the mini mill technology that will

happen, we'll complete that in 2022 with big river and what we're buying, buying talent, we're buying expertise and we're creating this relationship that, again, creates the best of integrated mills and the best of mini mills. >> as you've mentioned you come off a strong year last year where you had the introduction of the 232 tariffs put in place, march of 2018, the price of steel went up, the industry benefited but this year has been a very different story as demand has declined i believe steel prices are below where they were prior to the 232 tariffs. >> they are. >> how tough is it out there in? we got an ism manufacturing number that didn't look good either. >> the geo political issues overwhelm the economy right now and obviously we're going through a difficult time across the whole world as we find our way through what's going to happen here. europe is struggling, of course, and the tension between the united states and china will certainly continue for a time, but, you know, i have to tell

you, i'm extraordinarily optimistic about the future. >> why >> we'll get through this. for u.s. steel because we are the best of both, but also i do believe we'll get through, we'll get to more fair trade, we'll get to a usmca agreement, there will be an agreement with china, and we will get through this rough patch. you know, there will be at some point an infrastructure bill coming we need it it will come. >> we all know we need it, david. >> it will come. >> not any time in the rest of at least this term and/or until the election, wouldn't you think? >> we'll see when it happens but when it does we'll be ready because we have now best of grade, best of -- >> you're dealing with a slowing auto industry, strike at gm, the near term future doesn't look very good. >> we've been around for 118 years. we are a resilient company and we have a resiliency plans in place and we will adapt and do what's necessary to make sure that we have a good future and with this investment it's going to be even better. >> you are talking about it,

achieving as much as a billion dollars in capital and operational cash improvements by 2022 as a result of the deal you say through activities such as rescoping asset revitalization investments what does that mean? >> we've had big investments in terms of revitalizing our assets and bringing them up to world-class type standards and what we do over time is we reprioritize with this investment we'll be able to dial that back, maybe 200 to $250 million more to put in other priority assets to make sure that we get the best value for that we'll also look at other aspects of our business, including our ir iron ore assets which have low cost in north america. for the excess pellets we have there, we can monetize those assets over this time as well to create this opportunity. for my perspective i've been at u.s. steel six years and never seen a better time than where we are right now in terms of where we're headed in the future

because of the building blocks that we've put in place. our balance sheet has been much better shape than before and we have committed financing to do this deal with big river. >> i understand. do you expect as part of the deal you have the option obviously to buy the remainder, the other 51% essentially of the -- >> absolutely. >> do you expect that is going to be something that happens. >> we see that we will consolidate this and we're going to build capability with this. we're buying an organization highly entrepreneurial and what they're bringing to the table is the high tech and that's something we'll benefit from and marry that up with the integrated, the best of breed at the integrated mill and bring those together it's going to be a beautiful marriage ultimately. >> the stock is responding positively today and we can see what you're paying $700 million for that stake, but overall $2.3 billion enterprise value for big river if and when you do take full control i'm curious, the stock has cratered as has the market value

of the company as steel prices have dramatically declined, yet you sit here very optimistically what do you tell investors >> we tell them about what a great investment this is, we tell them about what a great investment we have in mon valley, pennsylvania, $1.2 billion, for 2022, the great technology investments that we're making in the hot strip mill in gary, indiana. all of these investments are coming together and over the next three years we'll be in better shape we obviously we know how to weather storms and we'll get through this. >> right. >> but -- >> for years the industry complained about cheap imports that has ended, correct? well -- >> that era is over? >> the era is not over until we get the fair trade agreements. we need usmca, that will come, and the administration is working through those situations and china has massive excess capacity we have a level playing field, we'll compete with anybody

these issues will take some time an get done. meanwhile, we are investing for the future and we're proving that we can actually -- >> are you concerned if there is an agreement with china that, in fact, steel will be a part of it in the sense of advantaging china again in some way or taking down these 232 triariffs >> i can't speculate i'm not part of the negotiations if we have fair trade it's better for us, meanwhile we're going to invest in the future and do what we do best, make steel. >> mr. burritt, thank you for taking time with us. >> thank you. >> david, when we come back the world's most profitable company saudi aramco stepping up its push be to investors laying the groundwork for a potential ipo we will talk with a former company senior executive next. as we check the averages dow down 155, responding to the disappointing ism number "squawk on the street" cties aomt.onnu

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welcome back to "squawk on the street." investors were chasing safety in

the third quarter. the utility spied er reflecting the top performing sector in q3. energy the biggest laggard down about 7% wti and brent in bear market territory as the tensions between saudi arabia and iran remain in focus. joining us this morning is the former saudi aramco executive, founder of this energy company great to have you back, doctor good morning >> good morning. thank you. >> i wonder, just can you reflect with us on what prices have been able to do in the face of what we thought was going to be at least a bit of a supply shock? >> yes i think iran had planned to create a real shock by taking out over 6 million barrels of saudi arabia's oil but the excellent reaction, the professional reaction of the operators at the plants are able to put the facilities back on

real quickly they had an excellent emergency response, they sidetracked some of the burning facilities, used excess capacity and i think they're back on-line and producing over 11 million just now. >> we're still -- we still have a lot of observers saying we're in a new chapter of defense, of low air defense, and the technical ability of these drones to attack facilities with very little warning. how much do you worry about that going forward from here? >> well, it is definitely a very serious challenge. i think the big picture, though, is what you need to look at. why are we having these attacks? what's the purpose obviously there's nobody with the technology in the middle east region anyway, other than iran, once you link it to iran you have to ask what is iran trying to do the obvious answer is to raise oil prices to such a high level that they would disrupt the global economy and then

hopefully in their eyes lift the sanctions. but in the long term, that's not going to work because how can you trust a country with nuclear weapons and missiles if it's going to go out there and sink ships and attack oil facilities. it is a serious concern. >> and yet, you know, this all happens against this backdrop of what investors are concerned about, weakening economic growth, which has seemed to erase the rally that took place shortly after those attacks. how do you kind of pair what's going on on the global growth side of things with the risk on the geopolitical side of things? >> well, you have an excellent point there, leslie. you do have two opposing factors at work. the economy is flat. it's not going to pick up very much so the demand for oil is not going to be there. the geopolitics in the long term has got to be resolved if you're going to have a country that attacks facilities of this scale, the next thing

they might try is shut down the whole production from the arabian gulf and that's a lot more oil you have two opposing factors and i think this really calls on the global community to get involved and try to put some sense into what's happening in tehran >> a journal this week takes a crack at u.s. production and asks why we're not seeing more robust gains at least year on year are you sensing any slippage in our own ability to produce, as strong as it is? >> well yes. there's no doubt un for you know, for a long time we heard about u.s. shale breaking even at $40, $50 that's not enough to recover your capital expenditures. breaking even may have been good for a while but in the long term you need to keep drilling new wells, particularly in the u.s., where the shale oil declines are severe, and the rig levels as

many of us have been monitoring have been going down very steadily not enough drilling, tougher oil to production. the best zones, best areas, have been pretty well drilled out the u.s., yeah, it's doing very well i mean let's face it, 12 million barrels a day is a very, very solid production but the world consumes 100 million barrels a day. that's not enough to take care of the whole world >> the saudis spend at least $68 billion, some have it as more, on defense every year. are you surprised that they have not responded to this attack >> no, i don't think it's that simple i mean this was on a friday dawn, that's like a sunday dawn for us, it was from a direction of iran where we weren't expecting anything like this it was with a very studied and highly technical attack.

18 drones and seven cruise missiles the drones carry individually different projectiles. it was a very sophisticated, low, difficult to detect attack and frankly it sounds to me like it was a pearl harbor. but this is not the end of it. where does it go from here how do you keep iran from trying more of these kind of disruptions and how do you change a bureaucracy run by radical ayatollahs from trying to create a new empire in the gulf that's really the big question >> yeah, but i mean pearl harbor did take us to war with japan. >> well, this is not saudi arabia's war this is a global issue the oil that saudi arabia produces goes out to the global economy, so it's not as if saudi arabia is the holder of the --

of all the resources for the whole world. there's kuwait, the uae, there's a lot of other countries involved in the gulf it's not a saudi problem, it's a global problem the global community needs to step up to the challenge and put some ceps in some sense into tehran. >> doctor, thanks for your time. we'll talk to you soon, i hope >> my pleasure >> cnbc's out with its new all america economic survey focusing on the impeachment hearings and the impact they're having on the economy. steve liesman joins us we he has the results. >> good morning. the latest cnbc all america economic survey finds americans by a narrow margin opposing impeachment, few now against it than two years ago here's the data. our nationwide poll of 800 americans, cnbc asked if congress should hold impeachment hearings to remove president trump from office.

44% favored impeachment hearings, 47% opposed within the poll's 3.5% margin of error. it's a lot closer margin than when the question was asked in december 2017. 54% then opposed impeachment, 41% favored them a chunk of the decline in those opposed to impeachment showing up as a rise in the percentage of americans who are unsure, growing to 9% from 5%. that leads myka roberts, a republican pollster for cnbc, says the american people are not jumping towards impeachment, they're cautiously moving away from imposing impeachment. party, 76% of democrats favor impeachment, just 6% of republicans. independents, pretty much where they always are, split, 42/43 against impeachment. the real bad news for president trump, though, comes in a decline in his overall and his economic approval ratings. take a look here 37%, just 37%, that is a low for

when we've been tracking this every quarter through his presidency, approving of the job the president is doing, 53% disapproving, that gap the largest we've had. his net approval rating. same on the economy, he's only been so-called under water twice while -- in any of the polls we've done 42% disapproving or approving of his job handling the economy, 50%, first time we've hit that number, disapproving of the job the president is doing handling the economy. what about impeachment and the negative effects potentially out there? 45% say impeachment could be negative for the stock market. 40% for the economy. most people, 23%, only 23%, saying it would affect their personal financial situation read these results on-line and we'll have full results of the all america economic survey coming up on thursday. >> steve, how much is it kind of a chicken and an egg issue here, where you've got people maybe opposing impeachment because the

economy is doing relatively well, but if that turns, if they don't like president trump's handing of the economy, then perhaps do you think people could be potentially more in favor of impeachment proceedings? how much are those two intertwined. >> i think they're definitely intertwined and the worse the economy does, and you did have that very bad siism number, peoe say it doesn't matter i'm not going to stand in the way of impeachment. it is worth saying, though, that president trump starts this process where we are right now at a relatively high level he's well above where president clinton ever was in the depths of the lewinsky scandal and, of course, that did not lead to a conviction in the senate however, he is below or remains below where the public was on the impeachment of richard nixon, which was well above 50%. he starts at a higher level but not as high as it was when richard nixon faced impeachment. >> all right thanks for that historical context, steve. over to sue herera for a

cnbc news update at this hour. >> good morning, leslie. good morning, everyone here's what's happening at this hour more violence in hong kong hong kong police shot a protester at close range leaving him bleeding from his shoulder in an escalation of the anti-government demonstrations the protester, an 18-year-old student, was reportedly taken to a hospital and undergoing surgery. a man with a sword-like weapon and a firearm killed one person and wounded at least nine others in a shopping center in finland. the attacker was also wounded and taken into custody a witness said the man was a student at a college that is in that shopping center secretary of state secretary of state mike pompeo arriving in reem rome meeting with the italian prime minister his visit comes as it was revealed he listened in on the july 25th phone call between president trump and the ukraine president zelensky speaking ofpresident zelensky he met with actor tom cruise in

kiev on monday evening cruise is considering ukraine as a venue for shooting one of his next films zelensky told cruise he was very good looking to which cruise replied, it pays the rent. a very large rent. you're ups to date leslie, i'll send it back downtown to you. >> thank you i'm sure that's a compliment tom cruise had never heard before. >> never ever. >> when we return, cause for alarm in the ipo market. some newly public companies hoping to rebound after a rough third quarter. we'll discuss the ipo playbook next when "squawk on the street" returns.

the president noticed the weak ism number, he writes as i predicted jay powell and the federal reserve allowed the

dollar to get so strong that our manufacturers are being negatively affected. fed rate too high. they are their own worst enemies. they don't have a clue pathetic he said, as the dollar hits a two-year high today and the dow is down about 109. right on schedule, as some have said. >> expecting that tweet to come, indeed pell low tan's drop in stock price the latest big ipo name to underperform and go in the red in 2019 it follows names like lyft, uber, as companies who are down big since their public market debut joining us now data track co-founder nicolas, at the university of chicago's boost school of business, steven kaplan start with you, is the ipo window closing >> looks like the ipo window is closing indeed, and as you know, the ipo market is very fickle. it goes up and down.

it's been up for quite some time and looks like it is -- might be closing. >> but why is it closing exactly? because usually you tend to see these ipo windows close from extraneous factors like a stock market slump or increase in volatility, seems like this was caused by just an s1 for a risky company or a company that was perceived by the market being risky being disclosed and everyone shied away from ipos altogether what's your assessment as to what's going on here and why suddenly investors are turned off by these types of companies? >> you now, if i knew i would be running a hedge fund i think. it happens it happened in the dotcom boom you had the crazy up through 2000 and then it just went down. i think part of it may be that you had the vision fund was to some extent pumping up valuations, they had, you know, $100 billion and they were an uber, a wework and it may be

some realization that, you know, maybe these companies are not worth what they were and the market has gotten cautious but it is always very volatile and, you know, opens and closes and sometimes you just don't know why >> nicolas, do you -- are we starting to see a ripple effect in silicon valley because of this how quickly does it get from ipo window shuts to vcs in silicon valley and elsewhere shed something of these riskier startups in terms of investing in them? >> it's a long leaded time vc looks at the stock market as a bit more fickcle and volatile than the way they think about the world. want to take time for them to recalibrate the kind of companies they fund and how they value them in order to re-set the reality of what's happening in our markets versus theirs. >> they don't take a public market mark right away if you're a private company in a similar sector and say wait we're nowhere near what we thought we were >> no, not so much

no they've got their own way of looking at the world they're much more complex. when you buy into a venture funded capital company you're buying a preferred, somewhere here the cap structure is different from ours. >> steven, were you going to say something as well? >> yeah. i think it affects the later stage deals much more quickly than the early stage, so i think you'll see deals that, you know, the vision fund might have been doing, those valuations will come down. >> psychologically, steven, how does it impact the minds of these investors? if they look at these examples of companies that haven't been able to get their ipos done because they have certain characteristics, you know, does that psychologically have maybe a quicker effect than actually, you know, the later stage rounds people are turning over cash >> i think what you'll see and you saw this in the dotcom bust, that in the boom, people were buying growth, they weren't worried about profitability, and

then at some point something switches and they all of a sudden care about profits and that's what seems to be happening now. there is like an old phrase that i use with my students that cimtym, cash is more important than your mother and eventually you need to make money and it's funny how sometimes the market lets you get away without making money and then at some point it says, you need to make money and i think we're at the point it is moving toward the you need to show us some profits >> nick, yesterday morgan stanley stays that the we company's failure to go public is [ inaudible ] time warner 2000, jp, bear stearns, does it seem like it's going to mark an end in a secular trend >> it feels like it marks an end in the explosive growth of very large, late funded companies coming public without much profits or a profit story.

that is over is it over for the market and a top for the market i don't think so we have to look at what this means for the longer term. we need companies like this to come public, create profits and create value over the last five years, you had over a trillion dollars of value created in five companies. google, amazon, facebook, we know the rest. this is how you create long-term value and the fact that venture capital can't deliver companies that can then grow in public markets really puts a crimp in long-term returns. vc is the farm team for our market and we need them to do our job properly to get our returns down the road? >> are you saying they weren't doing their jobs properly then >> absolutely not. if you look at wework that was a categorical failure, a failure of governance, goals, management when you look at that you think, if that were a public company it would have never come. it's one reason to take a company public earlier because you get the responsibility of our market not the group think of venture capital. >> group think all goes back to that behavioral

finance. nicolas and steven, thank you for joining us. >> thank you. >> as we go to a break, shares of credit suisse with the company's ceo -- stocks lower today as you can see 10% year to date dow continues to hover in the red down 120 here. we've got within ten points of s&p 3 k but back to 2970 your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you. - stand up if you are first generat(crowd cheering)ent. stand up if you're a mother.

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>> one top strategist sees a changing tide. find out more on tradingnation.cnbc.com more "squawk on the street" is still to come.

amid the recent vaping health headlines and a leadership shakeup at juul, juul labs says it will no longer lobby to support an effort to overturn san francisco's e-cigarette ban. as our colleagues at cnbc.com are out with a new report on how juul is utilizing an established

d.c. firm led by an ex-clinton campaign director to build a sophisticated lobbying campaign designed to look like a grassroots movement. here to discuss the findings, the story's author, angela who covers the e-cigarette space this got more interesting. what is juul interesting what is juul doing >> they are building this grass roots campaign and hired all kinds of people in d.c this particular effort it a public aa fairs firm they hired. they are reaching out to people in new york and asking for their switch stoiry looking for people that have used-grets as a way to stop combustible cigarettes, trying to collect the stories and show them to media lawmakers, try to support their position >> it's no different than their more recent ad campaign. trying to show smokers who have quit but this is disingenuous because it's supposed to look like a grass roots thing? >> they are saying to customers

in had e-mails we are working for ju, ul and would love to talk to you. if you're a lawmaker and someone reaches out to you and you have no idea they are being recruited by the company, does that make it a little disingenuous it's up to them. >> how effective is this campaign other examples in the past it seems like it's gaining in popularity in d.c. >> i talked to some professors and people in the the public affairs world. this is becoming more and more pop already. you look at airbnb, lyft, uber, when there's a new possible raid shairing restriction, you get a little notification saying talk to your local lawmaker about this >> how much measupressure is jul under as a business given what's going on and even some of the social ost ryization of people who work there within silicon valley? >> it's under so much pressure today you're seeing new numbers showing that the momentum behind

sales are slowing. even though this lung illness outbreak is tied to thc, it doesn't matter in people's minds, it's all the same it's vaping and that scares consumers and it just adds more pressure on juul people are saying this product is not good, we don't know enough about it so let's just stop >> this move to stop funding via opposition to the california prop, is that the first cig csil it's going to play by a different playbook >> when we talked to juul, they said everything is under review. the company is is analyzing all policies this is for sure the biggest indication that things might change they do like to take a more conciliatory approach to regulators it likes to work with the fda and say we're a supporter. we work with you juul is saying we'll no longer fight this ban on e-cigarettes in the hometown of san francisco, that's a big deal >> it truly is as we see big

change in culture perhaps. we'll keep our eye on that good stuff >> thank you let's send it over to john with a look the a what's coming up on "squawk alley. >> leaked audio from mark zuckerberg talking about antitrust. he's talking about competition he's talking about platform integrity. a rertpoer who broke the story is going to be with us, coming up sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪

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welcome back a tough start to the fourth quarter with stocks sliding into negative territory after data showed u.s. manufacturing contracted to the lowest level since june of 2009 among those sectors, moving right now to the downside. you have financials getting bogged down by weakness and online brokerages just like e-trade after they eliminated mags missions for online trade ing platform e-trade hitting a two-year low for the worst day since 2009 online brokers a big focus today. >> some big stories today. that's for sure. when we come back, mark zuckerberg taking on elizabeth warren we'll fill you in next on

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good morning, it's 11:00 at ups headquarters in atlanta. 11:00 a.m. on wall street and "squawk alley" is live. good morning, welcome to "squawk alley." had some gains at the open, but now the dow is down. september comes in worst since 2009 new orde