>> it is now 5:00 a.m. why a new riff is forming over china and the nba. new chips keep falling for boeing as they face a new $1 million lawsuit over the grounded max pressure on zuckerberg new investigation into the

social network we'll tell you why it matters on tuesday, october 8 as "worldwide exchange" begins right now it is raining outside. the team is -- the song is called "a fool in the rain." good morning, good afternoon, good evening from wherever you are watching talk about one specific trade war casualty check out ambarella. they've got a lot of exposure to china. now just 10% one company specifically that was black listed overnight as soon as people connected the dots between the black his of

hick vision. this is an exact and specific example of how american companies can get hit like that. we'll get more on this and other stories. trade likely to dominate trading again. twists and turns keep coming futures right now, they are actually lower after a drop in the dow yesterday. even with these drops we still remain within 2% of the all-time high it has been a day-to-day story bonds, they've been a big story. yields, they've been backing up at 1.55% on the upside, looking at

mortgage rates as yields come down, maybe those reifies and new purchase mortgages come up. 3.63%. higher than it was at the bottom if you want to buy a house or reify, not bad rates around the world, let's see what the asia markets did they came back to trading, japan is the market to watch they rose 100% the cheapest developing market in the world, over the last couple of weeks, it looks like traders are trying in the european markets, let's get a check on that. boom, seeing a mix of trade there. getting to your top story, word of the year is trade as a new round of talks are set to begin this week, releasing a

new list of black listed chinese companies causing yet another risk in the fight. joining us now with more on this story from beijing >> reporter: china's message to the u.s. today is butt out of our domestic affairs after they criticized the domestic department from expanding the black list from including 28 chinese entities on the ground of violating the human rights of the muslim minority group in the far west known as the uighurs saying beijing would continue to take firm measures to protect. many elicit companies like the surveillance company came out with statements strongly opposing the decision also saying that they were very concerned and would work with

the u.s. government because they are concerned that ban would block american tech firms from supplying critical components. they will likely compensate for these trade talks. confirming that the vice premier will head to washington for high-level conversations with u.s. counterparts. treasury secretary steven mnuchin and robert lighthizer. prospects already looked dim since the weekend since there were reports out that chinese were thinking about dropping all together one of the very important demands of the u.s that is the long-standing concern about state subsidies. still now, president trump said overnight. he's hoping for a big deal but a lot think things don't look good and maybe at best, we'll see an agreement to talk

again between the two leaders. >> when you are black listing firms before you sit down to have talks with the company. don't go away, i want to talk about something else that is the growing battle between china and the national basketball association. new developments this morning, apparently china state broadcasters saying it is not going to show any nba preseason broadcasts country wide? >> reporter: yes not only that. tencent, the private company said they are also going to halt all of their nba broadcasts. again, this is continued fall out because of a tweet the general manager of the houston rockets put out seeming to

support the prodemocracy protesters ctv said that they were strongly dissatisfied with the commissioner adam silver's defense of the houston rocket's tweet saying we believe any speech that challenges national sovereignty and social stability is not within the scope of freedom of speech. it has had a knock on effect the chinese basketball association which has a relationship with the nba says it has canceled all four preseason nba games. even the term houston rockets can no longer be searched on alibaba and jd's shopping sites. that shows you the difficulties

companies have when it comes to touching on a sensitive topic and that is hong kong for beijing. >> the government acted and a day late you are, the two biggest shopping sites in china wiped the houston rockets. can you imagine if trump said something and 24 hours later, amazon stopped selling that protect. by the way, adam silver, the nba commissioner is due to go to china later this week. >> reporter: in terms of the government's influence, it has a whole lot of influence over what chinese companies say and do private companies, you just don't know whether they are being instructed to do so. very likely, just as likely you could see private companies make these decisions themselves because they understand the

winds of the times interesting that adam silver will be coming here. he might not get the hero's welcome he probably would because the fact of the matter is that the nba has been incredibly popular on social media, one of the comments was, what it took david stern to build in 30 years, adam silver and the gm took three days to unwind >> it will come back together. houston rockets, second most popular team in china. thank you. appreciate this. let's tie everything together, if we can. welcome lucy mcdonald, global equity chief investor. we have got to stop meeting like this i think for the last two years, we've been talking about trade, trade war, global economy by the

way. at what point -- what is it they say the definition of insanity at what point do we factor in all of this and move on? >> i think this is going to run and run. there are some long. deep-seated issues here. those are not going to go away i think the expectation is that the expectation will remain in all of those spots that is more and more limited that's what we'll be looking for

as long as the talks keep going. as i say, our expects had shrunk >> that ties into macrostories china is slowing down. the u.s. is probably slowing down is there enough money? liquidity. is there enough liquidity in the world and maybe keep a floor under these markets next year that has decelerated the growth.

that means markets remain pretty strong however, if you look back a year ago, you look back 2%. that has been a flat return. that has been our expectation. can we keep these levels i think the central banks are all pretty focused they have not forgotten the financial crisis and don't want to go back there, their error on the side of caution still. >> does that mean they can own equities in this environment and feel relatively safe >> they should own selective equities the last ten years, you've been able to vest and make a very decent return. that environment is changing you should now expect from the

markets overall with lower returns. that means you need to be more selective and active when you are looking at the stocks, you'll really focus on companies that have good return, low debt, management that show they can deal with the trade wars they are agile enough to move operations around. that's what you need to be in this more tough environment. >> lucy, thank you i have a feeling our trade talks are not over >> boeing facing a new round of lawsuits over the grounded 737 max. and calling it quits the deal from the broken london stock exchange

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. >> welcome back. pilots at one major airline are taking boeing to court claiming the grounding of the 737 max is causing them millions in loss of

salary >> southwest airlines union have filed a lawsuit against boeing alleging the grounding of the max has cost them more than $100 million in loss wages. southwest is the largest operator with 34 in its fleet. it had 41 more planes on order but those deliveries now remain frozen the union said pilots agreed to flight max based on the sales pitch that it was air worthy and had time tested. in a statement, it says that was false and, quote, boeing's errors cost the lives of 346 people, damaged the critical bond between pilots and passengers and reduced the opportunities for air travel a boeing spokesperson says the

lawsuit is baseless. a company will work with southwest to safely return the max to service southwest is keeping the max off its schedule until at least early january pending its recertification. >> the owners of the hong kong stock exchange announcing it will drop the $36 billion offer to buy the london stock exchange marking an end to cap and break up the deal for the company refinitiv. shares are up. london down just over 5% turning up the heat on facebook as u.s. regulators look to put the squeeze. no netflix account no problem anybody wanted to see the latest

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antitrust division samsung expects third quarter profit to fall more than 50% as bad as that is, it might still beat forecast thanks to strong sales of the new galaxy note smartphone. oracle plans to at about 2,000 jobs as it expands its cloud business many jobs will be in seattle right in amazon's backyard as well as the san francisco area and india. still to come, rising risks. the oldest newest weapon real estate developers are using to fight rising tides we have that story and vest like it is 2015 miceio suisse is calling for a seressn. stick around

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welcome back every day, we like to show you one big number you need to know about. something that will make you a little bit smarter than the guy next to you. that number is $378 billion. that was the u.s. trade deficit with china last year a jump of more than 11% than the year before. let's check the other top headlines outside the world of money and business

frances rivera with those. >> good morning. we start with president trump who is sparking backlash with his abrupt decision to withdraw from syria saying the withdraw would only benef benefit russia, iran a report as part of the impeachment of trump appearing for a joint deposition he is facing scrutiny for text messages received last week. the top u.s. diplomat in ukraine called the idea of withholding help crazy he responded, there are no quid pro quos of any kind before he suggested they stop texting

about it >> a woman came home to find that in her ceiling. a wheel lodged in the ceiling. they live blocked away from an airport. it appears to be a dolly wheel from a helicopter. better helicopter than a wheel of a plane >> my first thought is has anybody checked on the pilot of the plane but glad it is a helicopter that's weird >> when we come back, democrats looking to hammer out details for the new nafta. they are traveling to mexico to get it done. how the trump administration is using trade deals to protect certain companies from legal battles. an interesting story you got to hear that is coming up.

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good morning, good afternoon, good evening welcome back thank you for being with us this rainy morning in new york city what else but trade talks likely to dominate trading once again twists and turns still coming. the markets have been mirroring them futures indicating maybe a loss of about 100 points. futures decelerating right now those are the markets. it feels like a month but has only been about five trading days seeing what has been hot and what has not starting with the bad news the s&p 500 performer, what else oil and gas apache down 16% in five trading days. following weak performance in

oil and gas. the xop is the biggest etf in it getting drilled. goldman sack noted the highlighting risk if we see the change come 2021 to the good news, who has been hot, spice literally. mccormick up nearly 8% this month. maybe garlic and taco seasoning are recession prove. spice up, oil down new developments in the u.s./china trade war expanding the black listed ban to include some top companies doing ai and technology startups for apparent human rights violations targeting many firms all of this happening as negotiators are preparing for a new round of trade talks set to

begin on thursday. those developments set to have a direct impact on your money. check out shares of chip maker an american company ambarella. one of their biggest customers is hike vision if they can't do business in america, ambarella getting whacked because investors saying you are not going to sell as much because by the way, you can't. house ways and means committee leading a delegation to mexico to talk trade. joining us now with a closer look on what they hope to accomplish >> democrats have raised concerns that the new nafta needs stronger enforcement of labor and environmental

standards. preventing the off shoring of u.s. jobs is working arriving in mexico to see on the ground whether in fact mexico businesses are raising businesses along the lines of reforms. ways and means chair leading the group in the way members would assemble the group aids say lawmakers are still waiting on lighthizer's response soon and they could usher in a busy few weeks to get this deal passed they need to send the legislation to capitol hill to start the clock for a vote trade watchers say that could happen during one of the few weeks both chambers are in session. they believe there could be a vote by thanksgiving

how long their vote would continue one that has the ear of lawmakers voting on this and wants to make sure they get all of their issues settled before they move forward. >> want to get your take on the interesting investigation from the "new york times" saying the white house is using trade deals to help shield big technology companies from global legal battles. connect the dots there >> it is from the usmca, language back in 1996 that keeps internet giants from being prosecuted for content that appears on their site. the u.s. administration has been frustrated by overseas administrations trying to administrator tech even as the u.s. is trying to shield u.s. tech companies from

this criticism and overadministration abroad. trying to regulate these companies themselves they want to make sure they are able to regulate those companies closely here and control the way those companies are treated overseas something that could come into the crosshairs with congress with more hearings in coming months >> thank you let's talk now trade joining us down from boston. joel, good to see you again. mccormick, the spice company is up that is in your wheel house. you are right. they've done great do you expect them to continue >> i expect midcaps to come back to where they were small caps down 12%, 13% they are still strong.

we see particularly the trade talks if they go reasonably well we think there is room for optimism >> they don't get the attention of the faangs and the big boys they are not as sexy why is this unloved group of stocks so interesting to you guys >> they fall in between two groups there is a lot of attention paid within that group, there is a lot in the russell 2000 and small caps we love them we track companies from $300 million on up. we love that space, that midcap space. the $8 billion, $10 billion range. they are moving up a lot of slow growth opportunities in it and health

care >> the weird thing is, i guess once they go do suck said, they get too big for you. >> that's true but we have new groups coming out. we run our midcaps not as an etf but as an active selection >> stocks start small, get bigger, they grow up they must have decent growth they are getting larger. >> that is why our midcaps do best a midcap can be a large cap coming down. sears at one time, large to midcap >> small, micro, mini. >> and then gone we track them up that's what we like to see >> what do you newly focused on right now? >> we like u.s. small cap, midcap if you are looking for a ememy,

corcept therapeutics it is a small cap. it has 30% by the way, we own it. >> i assume that >> it has about 24%, 30% off its highs. 20% revenue growth high margins at 98%. >> is biotech generally a big part of your strategy. i know you are a boston guy. >> biotech is a big part most of these companies don't have profits you'll hit modest revenues and large losses >> we are showing corcept. you've got to feel better.

came in here on crutches you going okay >> doing fine. >> i love the hardiness. >> we love to be with you. >> you are like the mailman. nothing is going to stop you >> coming up, fighting rising tides and extreme storms frmt why the best weapon could be that delicious little shell thing you loved so long. plus, if you are the parent of a lego lover, the most painful thing to step on a new solution for your old legos you'll want to hear. still around

>> welcome back. a surprising new weapon to help protect our shores more on the continuing series to

the rising risk to real estate ♪ >> at manhattan's iconic tavern where the menu celebrates locally sourced, sustainable food something transformational is going on in the trash. one of 70 new york area restaurants donating their wholly eaten half shells to repopulate their harbor. oyster reeves are natural barriers they knockdown the height and worse of waves they've been decimated >> we've seen a lost of over 80% of oysters >> university of north carolina

professor studies the growth and says the best way to protect coastal real estate from the effects of climate change is to go back to nature. the goal is to keep people safe and keep their property in tact. sometimes making their environment more natural and learning from the way before we developed it >> oyster reeves are being rehabbed from massachusetts to texas. the u.s. navy and air force. >> this is where we grow all of our oysters. >> the billion oyster project is a twist and table to farm. funded in part by state and federal grants from super storm sandie bringing them to governor's

island to cure for a year and then puts them in a hatchery you can see here two baby oysters. we realized how valuable oyster reeves could be. there used to be 200,000 oysters protecting the shore line. >> so our natural barrier is gone >> correct >> you are telling us this big pile of shells will save us? >> it will help. >> the goal is to place 100 billion across acres of reeves by 2025, bag by bag. projects had to prove not only were they making the shore lines more resilient and bringing even the largest communities together to protect their own real estate >> we want to engage

communities. that's how you get long-standing change if the community and people who live there and work there are actively involved. >> we are lucky to live and work in new york city where we have access to the best species with that comes responsibility of the choices we make >> just this summer, new legislation was introduced to fund $100 million in natural shore line restoration this is not easy work. not only do they need funding and oyster shells, they face tough hurdles to poachers. >> great to have you on set. why is zoning an issue why would anybody care about oyster shells to save their beach? >> you are talking extremely

expensive real estate. under the water, the ois tystern hurt your feet people care is it in the right place, is it going to bother my swimming >> they do have these things called tides that move things around >> people think it is going to detract from their home value. >> not having a home because it has been washed out. great piece. thank you. time for the top trending stories. now, another china related story. kind of funny, kind of >> the houston markets, not the

only american market getting scrubbed beijing removing south park. the show recently aired an episode criticizing the way hollywood -- the show called "banned. show creators issued a statement, quote, like the nba, we welcome the chinese censors into our homes and our hearts. >> they made a show they knew was going to be banned in china. they got it right. every way they could offend the country, they did. >> they did not shy ra way from it the film "the irishman" is

heading to broadway. the netflix film has been struggling to reach a deal primarily because plans to make the film available theaters usual i will ask for a 90-day period. they'll install modern screening equipment to make the experience similar to a movie experience. it will run for about a month making it considerable for oscar. that's really what it is all about. it has to be in a theater. >> you've got de niro, pacino. it is everybody. looking to get rid of old

legos. offering a new way to do so. launching a pilot program asking customers customer to send old bricks. they'll clean them off and package them up. allowing the company to be more environmentally friendly allowing the bricks to be played with as much as possible they already do this with the ca cartridges hp does this you can recycle ink jet cartridges to send them. >> i build a giant printer with my old printer cartridges. it hurt less >> it is a great idea. thank you very much. >> on deck, hong kong protests starting to have more of an

impact plus, you've heard of driverless cars, how about a 20,000 ton driverless ship. it is real and amazing a look at how the chief data scientist is using numbers to make investment decisions. >> how can the market be sufficient if we are surprised every quart. on january 3, tim cook said they are selling less phones in china. $75 billion is wiped off the market capital of apple. apple is one of the most valid stocks every one of those phones has social media, email. the data is in the world, not in the market whether your beauty routine is 3 steps... or 57, make nature's bounty hair skin and nails step one.

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>> time for the recap. the hong kong stock exchange dropping the bid to buy the london stock exchange after failing to convince lse management to back the deal. lse shares down. wall greens and kroger announcing they will no longer sell e cigarettes. joining ace growing list new numbers on softbank's son's pain cutting the fund by $5.5 billion for the quarter. the firm blaming decline in stock of uber and slack and the pulled wework ipo. other analysts are making

similar calls. time for the morning rbi you think autonomous cars are interesting, what about trucks this one may take that conversation to a new level. japanese shipping firm recently completed the first autonomous ship trip. the car carrier went from china to two ports in japan. it didn't dock using the system. the fact that a 20,000 ton ship sailed at sea using no captain, only a computer may send shivers through the sea captain community. >> some investment ideas for you. joining us, senior equity strategist at credit suisse. >> you don't look like a senior.

>> i'm a junior relative to my dad. >> going on 16, 17 years now how do we manage through this constant every day drip, drip, drip i think there are some issues on the table and get taken off the table where you need to separate the real koonksd the issues that get batted around. >> if we can protect the intellectual property of the u.s., that is something worth fighting for if it is a matter of shifting soybeans to china, sure local farmers will refer that. >> you argued that the changes

to taxes may be more important than trade or economic head winds. please explain >> we have the spending bill falling into place we had a ramp up in activity following that we suggest that rather the deceleration we are experiencing is because of the fact we are cycling that package rather than a material of impact the easy way to look at it is what are economists expecting. the answer is, expectations are dead flat. the deceleration expected by commerce rather than a growth from the facility. >> what do i do? >> we start talking about what

is a semirecession an area where the industrial recession is decelerating. we don't expect an economic recession. i think that is important. >> what is the difference? >> it doesn't impact teachers. it only impacts what is 10 to 15% of the economy the data slows down. services continue to do well this is why we have situations with growth like facebook. >> bottom line is yes, the industrial data and manufacturing is slowing down. you do not expect that to create a broad based macrorow session investors want to miss that recession. equities tend to go up there are portions which do better areas that have more growth? >> technology, communication

services those businesses are generating their own success. avoid anything with economic cyclicality. >> i can't speak better than that thank you all for watching "worldwide exchange" this fine tuesday morning. "squawk box" begins right now. >> good morning, a conflict with china escalating the u.s. adding more chinese firms to its black list. china suspended broadcast of the nba preseason games. no big loss. a live report from beijing straight ahead boeing facing a new $100 million lawsuit over the grounded max planes more retailers pulling e cigarettes from the shelves after a study linking them to an

increased risk of cancer in mice "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box. ♪ >> good morning, everybody welcome to "squawk box" here on cnbc let's look at u.s. equity futures. indicating the down direction. dow down by 93 points. s&p off more than nine, nasdaq off by more than 16. much optimism for anything getting done with the trade talks with china later those start on thursday. ahead of that, that tension seems to have ratcheted up on both sides let's look at what happened overnight in asia with their