it is 11:00 p.m. in fwabeij, 11:00 a.m. on wall street. "squawk alley" i ♪ ♪ ♪ ♪

good tuesday morning welcome to "squawk alley." i am carl quintanilla. post nine with morgan brennan and jon fortt. busy news day, selloff in place. dow down 245 we begin with the u.s. widening the trade black list, now including china's top ai startups ahead of trade talks later this week. kayla tauschehas more. >> reporter: they can no longer purchase american parts without licenses, both halted in trading. and alibaba backed company for ipo, they say they assisted china in detention of muslim minorities no word from commerce on why they're moving on this now, but it is clear tensions are ratcheting up ahead of high

level trade talks thursday they weighed restrictions for government pensions investing in chinese stocks, and tuesday, this coming tuesday, tariffs on $250 billion in chinese goods will rise to 30% china as we know is taking its own action against the nba despite all this, outright messaging on china in washington has started to warm a bit. in a september 20 press conference, president trump when asked about a partial deal twice said we're looking for a complete deal. i am not looking for a partial deal when asked this same question yesterday, president trump said this >> i think that we just have to see what happens i would much prefer a big deal i think that's what we're shooting for can something happen i guess yes, maybe, who knows, but it is probably unlikely. >> we have to see what happens nec director larry kudlow said the white house would see whatever the chinese delegation brings he sees opportunity for

progress when messages come out from the administration, they're not crafted hastily. >> we're going to talk with you more obviously, busy news day. do not miss an exclusive interview in the next hour with senator marco rubio. he will weigh in on the black list on trade talks and censorship in china. markets in the red bob pisani >> look what happened friday, great move up on the jobs report big thing on the jobs report, it tamped down recession talk we're going into the markets this week, hoping for word, progress on trade talks and essentially what happened is we got escalation that's a problem i see a big positive with the jobs report friday, tamping down

recession talk i think that's good. that was a positive. but negatives are strong trade talks, this is another escalation where are we in the market stocks are expensive now we're going into the third quarter, what we are looking for is fourth quarter earnings expectations if this keeps up, earnings guidance is not going to be positive that's what worries me overall we have this narrative growing in the market that we might not get a deal this year what's the trend what could reverse it? traders believe growth is lower in 2020, rates will be flat to lower, they think energy will be lower, and everybody is buying defensive stocks it makes sense what reverses that, clear element to -- even an 80% deal markets would be happy we're not sure we're getting that >> how big a deal, restriction of investments made by government pension funds in china. you talked about restricting capital flows.

is that one of the big things? >> it is a trade and tariff deal that matters yeah the u.s. getting into global portfolio trading management i think that's kind of an issue. the reason this has been happening the last ten years is that china is a tiny part of global investing the u.s. is 56% of market capitalization of the world stock market enormous hong kong is only 4% main land china is tiny, it is not representative where it is in the overall market capitalization because it is not in the index index providers have been slowly adding main land china as part of a rational effort you can come along and say we don't want companies supported partly by governments to be in any of the indexes or companies without u.s. accounting standards. unfortunately this is not a consistent standard. russia doesn't apply u.s. accounting standards, companies

here do this the turks don't either companies here have turkish listings that don't apply u.s. accounting standards i am in favor of accounting standards. but that's not a consistent global standard. >> what happens if the markets start to factor in chinese isolation as a real possibility? how much reprising do we end up with then? >> well, serious reprisin-pricig when you get into global portfolio management, that sounds like a reach, but that's usually what's going on, floating trial balloons about restricting ipos here, about de-listing, a serious legal issue, whether they can meet the standards of what de-listing constitutes, the global economy is based on reducing friction. that's why the wto was invented, to reduce friction, take disputes, much of which is legitimate, the beef with the chinese government, perfectly legitimate, to the wto and

resolve disputes there this is a breakdown of that whole system that means increased friction. and that reduces global growth and trade. >> all right, thank you. apple outpeacing the s&p 500 since the iphone 11 went on sale many analysts are upbeat about prospects for sales of that new device, goldman is bucking the trend, staying below consensus rob hall is with us. good morning >> good morning, jon. >> i saw about a month ago you had $165 price target on apple is that where it still is? >> yep, still the same and remember, that price target looks out beyond the 5g cycle next year. we're in october this year, it is a 12 month price target >> at this point that would be a long way down. the question i had about this

iphone cycle headed into the next one, do you think apple is shipping more iphones into the u.s., trying to get ahead of tariffs, could that effect the inventory situation and sell through the back half of the year or too early to tell? >> let me say we think the inventory situation coming into the cycle was extremely low. normally apple would build a bunch of inventory in summer to prepare for big buying season. this year we think what's happened is they've run low inventory because obviously last year things didn't go so well, they have been cautious into the cycle. what we have seen the last couple weeks is them adding a little to the build order. we expect that to continue to your point with tariffs coming, we think apple may want to lay inventory into the u.s. early to prepare for at least effects of the tariffs if they come into place later this year, at least the beginning of the year they have a little inventory >> going to the 5g point, you

said you don't think that's going to bring much to the iphone performance wise. demos i have seen of 5g technology might suggest different. are you arguing this is more of a 3d tv type moment technologically versus ge which moved the smart phone industry ahead? >> let me make a couple of points on 5g one of the main points of the note, actually i don't come on here lately with a lot of positive news on apple, it was a positive point they've created some cost margin in phones this year so the cost to make an iphone has come down, mainly because of memory prices. that creates room for 5g to be added without much margin impact that's a point we were making, the primary point. in terms of 5g as a consumer feature, we call it a brand, not a feature because we don't believe most consumers will

notice the difference. the latency are -- they're designed for machines, and in terms of band width, what you'll experience in terms of speed and so on, things aren't going to change much. this is mainly a technology change geared for carriers to deliver bits more cheaply and also geared toward industrial automation, iot, automated cars, things like that >> so not even -- latency doesn't make gaming more realistic, something that would effect the consumer, rob >> the latency drops from ten milliseconds to one. but a person can't detect that it won't matter to you at all. gaming latency, if you're playing fortnite or something online, you're probably on a broadband connection if you're on a phone, you're still getting good performance with lte. >> the point of industrial

internet and early applications of 5g feeds back into the argument about huawei and national security and why in many ways the u.s. and china are engaged in a tech cold war now we are seeing some blow back on american brands in china, in many cases because of specific actions or situations that played out i wonder when you see the black list growing on chinese, telco, and tech companies, whether you think that's a real rising risk for apple in china >> yeah, there's been a lot of theory around chinese consumers maybe shifting to local brands, away from apple. haven't seen much evidence of that that apple brand is still very strong it is really about consumer demand, how strong the consumer is in china. clearly if they're feeling worried about the economy, they'll buy cheaper phones, and apple is not a cheap phone that's more of the issue in china at the moment anyway, this

nationalism or shifting to chinese brands at least in my opinion. >> thank you when we come back, china is taking on the nba as it suspends broadcasts of preseason games. the nba isn't the only one being censored and later, hearing from the owner of the sacramento kings and later, senator marco rubio a big show ahead "squawk alley" is back after this yeah, that's half the fun of a new house. seeing what people left behind in the attic. well, saving on homeowners insurance with geico's help was pretty fun too. ahhhh, it's a tiny dancer. they left a ton of stuff up here. welp, enjoy your house.

nope. no thank you. geico could help you save on homeowners and renters insurance. it's how we bring hope to our patients- like viola. her team treated her cancer and strengthened her spirit. so viola could focus on their future. cancer treatment centers of america. appointments available now.

welcome back to "squawk alley. a selloff, dow down 250 points, the s&p 2906 optimism over the u.s./china trade talks fades. is china using market power to bully u.s. companies and who will it hurt next. just some of the questions joining us, allen patrickoff great to have you. >> nice to be here >> we can talk about this blow back on some u.s. brands now, whether it is the nba or other companies that have come under fire in the last couple days, we can also talk about chinese tech companies added to the u.s. black list either way, seems like there's

an increasing decoupling between the u.s. and china how deep could this go, and how sustained could it be? >> i think when trump got elected two-and-a-half years ago, i said the market hates surprises. we got surprises squared with our president. so every day there's a new surprise today is china, yesterday was ukraine. who knows where it will be next. i think we're going through a very confusing time, the market is reflecting that no one knows what to do next, frankly, and it is creating uncertainty. fortunately, in the venture business, we avoid equipment that we as an industry, avoid equipment based companies. it is almost like a no-no. >> why >> it always has been traditional, no one wants to get heavy capital investment and equipment is investment, means imports, so most companies that

are backed by venture capitalists are in the software services area. you look through portfolios, you know, whether it is slack, uber, you just go down the list, a lot of companies, health insurance, real estate. we started last week a new real estate marketplace exchange called lex, so what happens in china honestly, they don't really care. interest rates are the same thing. they're not borrowing money, all financed with equity. >> it is a growth market we thought was open to business a half decade ago, now we're not sure i mean, that's changed. >> exactly i'm speaking outside the venture industry a lot of companies are dependent on chinese components and have been shifting. i can't give you specific names, but i've had friends i talked with and they've been shifting to mexico, vietnam, and it is

taking place the last six or nine months because they saw the handwriting on the wall. this was not going to go in a favorable direction. we'll see more surprises, no one can expect we come out with a nice happy ending to the story, it will be more confusion i think >> what would be your assumption, a further decoupling from china or we sort of go back to status quo we had before, they can sing ko-- >> to deal with a tweet and reference so unimportant, china made it much more important than it really was. it would have disappeared, no one would have even noticed. i saw something about tiffany having an ad with someone with their hand over their face, which was done in may before all of this happened, now it is a symbol of something. i think we're going through a

very difficult time and unfortunately i am prejudiced, there i see the picture up, i think we're going through a time where lack of predictability on both sides and it is tough to plan in times like this. >> it seems like we're hitting this boiling point there's a handful of companies and american brands in the last couple of days that are experiencing blow back, whether it is china or in hong kong because of things going on there, but the story has been simmering for awhile i think google is probably a good example of that, under increased scrutiny because of its ai research and efforts in china as well. so i think it begs the question companies, american companies sort of torn between american brands, built on american principles, trying to make money in one of the biggest markets in the world now, how do they navigate >> honestly, you tell me i don't think anybody knows the answer i think there's no question for

a lot of companies china represents a big marketplace again, not for any of our companies. i hate to be not in the middle of everything, but i'm an observer like a lot of people are i think we've got to hopefully do something in our leadership to change the equation that will make this a lot clearer for a lot of people. >> which is a segue to the next topic. we're staying with political pressure democratic presidential candidate elizabeth warren ramping up a push for break up of big tech, sharpening her fatigue of facebook in a series of tweets calling on congress and state authorities to begin opening investigations and conducting hearings to make facebook executive explain the company's policies and practices under oath this has been really ramping up, allen, in the last couple of days, even the last couple of weeks, as she starts to gain in polls, how real is the threat of

further investigation and even potential breakup of facebook? >> well, full disclosure, i have come out supporting vice president biden in the last week or two, so that's where -- i think you have to take elizabeth warren seriously there are people that have gotten interested, even people in the financial world who say some of the things she says make sense. destroying dodd-frank was not the smartest move, putting pressure on the federal reserve like we have seen is not the smartest move. breaking up companies, i think that's a big step. i think closer regulation, closer attention to the facebook, google, amazon which are the platforms that so many companies, there are companies deeply involved, they're dependent on these platforms. >> what about the wealth tax you've got a lot of money. >> not enough.

>> got enough for elizabeth warren to take 2%? >> no comment. i don't think it really makes sense. wealth taxes, there are better ways of addressing there's income inequality. i saw one of the ratios are if a ceo makes 500 times what the lowest employee does, think about that, 500 times. on the other hand, we're living in a free economy and people get paid what they're worth. i think there are abuses and i think that some of the things i have to be honest, i think she makes sense. but i think vice president biden is aware of the same issue, just hasn't made it a campaign issue. i think that there are hearings going on in terms of facebook and google being brought into congress, i think there will be more tech companies coming in.

hopefully in the process, congress persons will become more knowledgeable about what the issues are and come up with some sensible regulations without trying to destroy the companies. i don't think they set out to take over the world. it just happens to be their growth has been so endemic that we can't live without these platforms. that's how they're getting bigger, and letting them acquire a lot of companies i can't believe facebook bought a company for $500 million that reads brain waves. it is now like we have gone to the ultimate, whether they're going to read our hair follicles next. >> i'm not worried about that, that will be fine. >> we talk about tech lash, really, it is more of a faang lash always good to get your thoughts. when we come back, senator marco rubio will weigh in on the upcoming trade talks the new black list of chinese ai

companies. awaly"s ckn ia moment hat does the word "partner" really mean? someone i can trust. (impact, click) who is with me for the long-term. who understands i'm dealing with lives, not only livelihoods. that in order to help people, i need more than products, i need quality support and insights. can i find someone who partners with me to achieve people's long-term success? with capital group, i can. talk to your advisor or consultant for investment risks and information. yuch

welcome back to "squawk alley. this week, taking stock of the most value backed venture capital companies in the world deer -- >> reporter: they simplified a process that involved banks, processors, gate ways. all they had to do was plug that code into the website or app, it was suddenly shopable. that made stripe the backbone for a generation of startups from loiyft to doordash. from amazon to target, even the big chinese giants yesterday we talked about airbnb, what we know about their financials it is not a lot, but the company has given nims related to

quarterly revenue, when you look at stripe valued at $35 billion, more than airbnb, we know far less only that a process is hundreds of billions in online transactions annually. here's how the business model works. on those transactions, it takes a small cut of 2.9%. stripe is in turn charged a small fee by banks it deals with on behalf of customers the critical question is what is left over, is it a profit or is stripe like other high profile names foregoing profit for market share we know how they reacted to those kinds of companies at the same time, stripe branches into other financial services, billings, instant payouts, likely to boost the bottom line. may not get details or ipo from stripe they raised $250 million earlier this year, the founder

john collison said he has no plans to go public this is another aging unicorn. they have to hope it is more than 2,000 employees are as patient for an ipo back to you, jon. >> eager to see the numbers. thank you. also, don't miss tomorrow's look at juul labs. that will be something >> one to watch. european markets are closing. seema mody has a breakdown of the action overseas. >> hi, morgan. european stocks lower across the board after german industrial production rose 0.3% in august, though most say don't read too much in this more pressure to the down side for germany's manufacturing sector hong kong exchange abandoning $37 billion offer for london stock exchange, that would have created a global exchange, spanning asia to europe. in response, they remain focused on acquisition of a provider

in the telecom space, reuters reporting that vodafone plans to shut 50% of european retail outlets as it turns more real estate into larger stores, focused on consumer experiences. shares are down fractionally on the day. meantime, turkey has reportedly completed preparations for a military operation into the northeastern part of syria, a decision that's been met with strong push back from european leaders like angela merkel and officials in d.c president trump tweeting president erdogan is confirmed to visit on november 13th. the currency market responsing, elevated geopolitical risk sends the lira lower, trading at the lowest level in a month we'll continue to watch. carl, back to you. >> quite a day yesterday let's get to sue herera for a news update. >> indeed, carl. thanks so much here's what's happening at this hour, everyone

secretary of state mike pompeo welcoming estonia foreign minister to washington, they're expected to talk about security and defense issues pompeo ignoring a shouted question about the state department barring ambassador sondland from testifying before congress about ukraine. lbgt activists at the steps of the supreme court this morning, the court set to hear arguments in a case dealing with lbgt rights. the question is whether the civil rights act of 1964 which bans discrimination on the basis of sex applies to lbgt people. a bomb went off in afghanistan, wounding at least 19 university students last month, a magnetic explosive device attached to a mini bus belonging to the same university was detonated, killing the driver. the kremlin releasing photos and video of the russian president, vladimir putin, celebrating his 67th birthday monday in the siberian

mountains, picking berries and mushrooms in the company of his defense minister you are up to date that's the news update at this hour guys, back downtown to you jon? >> thank you, sue. surprised he didn't wrestle a bear. >> but he had a shirt on. >> that's true, he did. up next, china backlash. the nba preseason games will not be televised there amid a twitter flap co-owner of the sacramento kings will join us "squawk alley" is back after this don't go away.

welcome back to "squawk alley. watching the market selloff, close to session lows. mike santoli is back every trade related headline, movement. >> gets at least a bit of a flutter through the market you know, i think you could come into this week and say there was nothing particularly dramatic priced into the market, but i do think there was enough suspense whether you get the next round of tariffs forestalled, and absence of other things going on brexit did not have a good effect on the market treasury pulling back. that's the formula for the market under pressure. to bring us up to date, s&p's low last week was 2066 a half percent down from now it pretty much defines being in

this sideways slop that is roughly like we have been in in august we've now lost the friday post jobs report pop, but that's all you can say. it is not as if there was a dramatic move that shows inflection a lot of people point to the fact that reversal last thursday morning looks like it was potentially important just because you had the crescendo of negative economic sentiment that built up, then released. >> i thought that was reaction to soft survey data then discounted >> yes, but that was midday thursday you bottomed after the ism number i don't know if it was just because fed expectations were toward easing, kind of splitting it fine here i think the bottom line is the market has gotten to this point through this flat earnings period because we got super low yields credit markets are hanging in, not as if credit is shut off, and ambiguous, will it be

recession or not to me still goes. >> how much of this is technical? the fact that the s&p 500 is now below 2900, just below art cashin flagged 2900 as a key level. >> it is one of the stops along the way. i think there's been a lot of clustering of activity yes, it has a little bit of significance i don't think it is one of the kind of kety technical trends, but one we're watching 2950 i was saying 1940 2940 was in m, and we got to 2938 yesterday that's kind of the market we have been in for some time now it's definitely technical, definitely tactical, not as if people are pricing in long term economic outlooks. >> all right mike santoli, thank you. china is playing hard ball with the nba state-run television network suspending broadcast of the

preseason games after a tweet from the houston rockets gm. some of china's top retailers, alibaba and jd.com removing rockets items from websites. adam silver reacting to news ahead of the visit to china tomorrow >> we are not apologizing for daryl exercising his freedom of expression i regret again having communicated directly with many friends in china that so many people are upset, including millions and millions of our fans it is my hope that for our chinese fans and our partners in china, they will see those remarks in the context of now a three decade if not longer relationship >> joining us, co-owner of the nba sacramento kings, andy miller, also owner of e sports

team, san francisco shock, founder and ceo of nrg e-sports. good morning >> good morning. >> can the nba thread this needle, support free speech and stay popular in china? >> i'm sure adam silver can figure it out. you know, it is a pretty complicated political and business issue nba has a long-standing relationship with china. china loves basketball they love the nba. full faith in adam who has done an amazing job in his tenure as commissioner to work through this >> you have an e-sports team as well what would you do in this situation if a player or somebody involved with that team said something about hong kong that angered people in china would that be a business deal breaker for you in china would you try to regulate their speech in some way, put out a

different message? >> well, that's a tough one. we're all for freedom of speech, especially video games are very different animal than traditional sports in that it is boundariless with new leagues like overwatch league, there's a sort of local component. in other games, it is more of an international, everybody is a fan of their favorite teams and players. that's just a real political issue. we definitely back freedom of speech. >> let's talk about the overwatch league grand finals. big win for your team. this is one area that makes me feel old because i know e-sports is big, i can feel it, we talk about it, but i don't feel like i'm really participating is it going to break through into the mainstream, mainstream at some point? what's it going to take? >> no doubt. it's getting there really fast we saw 2018, 2019, big year for video games.

lots of videogame costumes knocking on your halloween door. a lot of parents realize it is a mainstream activity. one in three people game every month. if you look at what happened last weekend in philadelphia with overwatch league grand finals, sold out, wells fargo center, 12, 13,000 watching live in person, it was crazy. average age was not 13 it was probably 25, 30 and there were millions of people watching around the world. i think we're getting there quickly. people say is this the sport of the future it is the sport of now if you go four, five, ten years into the future, this is what people have been doing for the last decade. this is their sport, how they hang out, spend their time this is their passion. they're going to continue to do it as they get older. >> andy, go back to china. whether it is the big business of basketball or whether it is big potential business of e-sports, from the kings

perspective or from the nrg perspective, what's on the line in terms of breaking into china and that marketplace >> well, it is a huge market for video games. massive. massive viewership for overwatch league, all of asia loves games, e-sports, loves to participate it's really important for the growth of e-sports and gaming as a whole. a lot of games, a lot of traditions started in korea, china, asia, as the home of video games. i think the two are very intertwined. >> what's the next chronological level for e sports we kind of understand how processing power, gpus is part of the overall gaming experience how much does 5g matter when it comes to people viewing e sports on the go? how much are mobile platforms going to matter in the future? what's going to catalyze the business for you

>> i think we're seeing, we've seen emergence of the streaming platforms and competition now for twitch across microsoft and facebook and other platforms of course youtube is huge now. there's the accessibility of watching e-sports, playing games is everywhere now. so it fits into sort of that internet life-style of which gaming and gaming culture is the core of it >> what about augmented reality, the company you used to work at, apple, is trying to push on that for quite awhile i would say they haven't been successful frankly very limited success does that start to come into play at some point >> i think so. we'll see video games develop the way people want to spend time, entertainment, their entertainment dollars, passions. we'll see. ar, vr, i'm sure we'll be able to look down, see avatars, having a different viewing

experience because the game is digital that we're watching as spectators, i think the viewing experience will lead the way. >> all right thank you. andy miller. >> thank you >> co-owner in the nba and in e-sports when we come back, trade talk dwindling wh "sqwkusrco rubio joins enua alley" comes back ame is sam going to tell you about exciting plans available to anyone with medicare. many plans provide broad coverage and still may save you money on monthly premiums and prescription drugs. with original medicare, you're covered for hospital stays and doctor office visits, but you have to meet a deductible for each and then you're still responsible for 20% of the cost. next, let's look at a medicare supplement plan. as you can see, they cover the same things as original medicare and they also

cover your medicare deductibles and co-insurance. but they often have higher monthly premiums and no prescription drug coverage. now, let's take a look at humana's medicare advantage plans. with a humana medicare plan, hospital stays, doctor office visits and medicare deductibles are covered. and, of course, most humana medicare advantage plans include prescription drug coverage. in fact, in 2018, humana medicare advantage prescription drug plan members saved an estimated $7400, on average, on their prescription costs. most humana medicare advantage plans help you stay active and keep fit by including a silver sneakers fitness program at no extra cost. and, you may be able to save on dental and vision expenses, because coverage is now included with most humana medicare advantage plans. you get all this coverage for as low as a zero dollar monthly plan

premium in many areas. and your doctor and hospital may already be a part of humana's large network. if you want the facts, call right now for the free decision guide from humana. there is no obligation, so call the number on your screen right now to see if your doctor is in our network; to find out if you can save on your prescriptions and to get our free decision guide. licensed humana sales agents are standing by, so call now. - stand up if you are first generation college student. (crowd cheering) stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent, but it doesn't equally distribute opportunity, and paths are not always the same. - i'm so proud of you dad. - [man] i will tell you this, southern new hampshire university can change the whole trajectory of your life. (uplifting music)

i am brian sullivan. here's what's coming up. stocks dropping as optimism fades for hope in u.s./china talks. fed chair powell set to speak this afternoon. speaking of stocks, credit suisse naming names. seven contrarian stock ideas for you. and new analyst, new opinion. one of microsoft investors, a bullish call we have that and more on the halftime report coming up in a few minutes. carl, i'll send it back to you now. >> see you in a bit. trade talks obviously set to resume in washington this week the trump white house widening the trade blacklist, 20 entities including china startups added to the list which restricts organizations doing business with american firms. worth noting several on the list, joining us on the phone, florida republican senator marco rubio. good to have you with us

good morning >> good morning. >> this entity list is the story of the day china is urging the u.s. to remove those entities from the black list why did the administration do this right when talks were going to begin >> i don't think these matters have anything to do with trade these are companies that are responsible for two things first, they pose a national security threat to the united states they're part of a vast capability that the chinese are building through commercial, and selling these products around the world, using it to gather data, the key to 21st century and multiple industry. their presence is problematic from a national security standpoint the other is the role they played in setting up the large scale systemic system of human rights abuses against religious and ethnic minorities. this is not a trade matter, it is national human rights matter. >> how does it impact the trade matter which is something

obviously a lot of viewers are thinking about >> well, it might impact the trade matter, but that can't be a factor we cannot put ourselves in position of saying we're going to allow you to compromise national security and going to allow you to go around the world, conduct egregious human rights violations because it is good for getting a trade deal done on broader matters. and we have to separate the two. the trade deals are not very good if they require you to give in or jeopardize your national security or your values as a nation >> senator marco rubio, there's a lot on the line. longer term if you pay attention to defense and weapons hardware, i wonder what you think of the parade, the military parade we saw in china for the 70th anniversary last week. a lot of attention given to missiles we saw a number of autonomous systems, including a stealth

combat drone displayed when you talk about technology and you're talking about ai capabilities, it goes broader, beyond commercial or consumer uses, right? >> that's right. beyond that, i would say you look at some advances to their credit are indigenously produced they have not increased their capabilities of making these on their own. they have gotten their hands-on technology even by driving someone or hacking into something or planting researchers or capturing a down aircraft or reverse engineering. many cases because companies are doing business in china. so they have made advances to military weapon and military hardware and capabilities that pose massive security presence in the united states the parade is the most visible

example of it for those of us who have been following this, this has been evidence for some time >> senator, you positioned the list ings of foreign stocks as a national security issue. if they are not giving the same amount of information following the same standards as u.s. stocks i am wondering what you think o f a realistic timeline for saying other companies outside the u.s. needs to follow those standards and giving them time to start following those standards. >> the chinese says they'll not follow those standards, in fact, they prohibited. in second, every other company in the world other than those of headquarters following those standards. >> this is about china and u.s.? >> our capitol markets are the deepest and liquid in the world. and it is simple chinese companies want capital

u.s. markets, they should follow our law the way american companies have to follow their laws over there. that's why the financial side of the u.s./china relationships on tea these terms have not gotten focused. of the u.s. global order and can no longer allow authoritarian government to reach the reward of international capital markets while avoiding transparencies. that pla that places our investors at risk >> i wonder whether today of the report of limiting number of chinese stocks and government funds and restricting iopos. which of those things are most likely >> i don't know which ones are most likely. i think looking at how federal, the time of investment and make

decisions is pornimportant. i think this matters of desure and transparency is a matter of security we got this investor who needs to be protected and has no insights of this company and taking a tremendous risk including other multi national and gullible companies who are being sold on our market i hope they all happen i think the entity, this is the one that they can move on the quickest >> finally, we spent the last couple of minutes talking to china as a national security threat you were asked whether the president really meant it when they should help them investigate the bidens, you are trying to bake the press do you standby that? why should we consider china such a threat and also accept their help regarding a political opponent >> acouple of thing, i don't think what he said was right

i don't agree with it. there is a different of serious proposal i am not tell you it is an appropriate comment. it is not going to happen. these things are happening >> how do you know, senate snor >> it will be all over tomorrow you tell me there is actually administration working on a plan but the chinese get their hands-on joe biden or anybody for that matter, i would be all over that that's different from an offhand comment made as part of a pattern that's been going on now for four years where he says something and everybody gets their hair on fire and we spend 48 or 72 hours focused on that. it is not a real proposal. but, not a real proposal that's under taking these are actually happening >> can you sympathize with reporters who have to decide whether this is a quote "offhand

comment" or a "policy statement" by the president of the united states > . >> absolutely. >> i am not criticizing. it is. it is driven by generatin gener viewers and controversies and outrage. having to chase this tail every single day and every single day something gets introduced in the the narrative and everybody spends all day running their hair on fire until we start over again tomorrow we got a bunch of things that's going on in the world that deserves attention as well you have to make a decision am i going to become a daily participant of the outrage of the day or when are we going to have time on my end focus on what's happening like the thing in syria is happening. threats from china is actually happening. these things deserve a lot of attention and gets loss in the daily's normal

>> that's why we ask you to come on and i appreciate you come on talking about something that really matters to a lot of our viewers. senator, come back soon. >> thank you >> senator mark cubor marco rubo >> "squawk alley" is back after this don't go away.

rick santelli. >> we saw this cti today it take us back to september 15

to find the lower run on core and minus .3 let's quickly go to the board. here is 10 and 30 since july 1st. the reason, 5 degrees of separation we made our historic bottom on 8.27 five sexssions later, we made th cycle low at 1.26. the reason i am doing all this, we are basically six bases points away and once we get there. we'll be ten bases points away never have i seen so many important technical levels, all converging right around the same price. you want to make sure you watch both of these on a closing bases. that'll unleash more buying. carl and john, morgan, back to you.

>> we'll be looking out for tweets don't forget powell speaks at 2.5 hours. the topic is about data dependen dependence who knows where he could take it >> on gross stock. major indices are all lower. >> every sector in the s&p is in the red. let's get to sully >> all right, carl, morgan john. thank you so much. a new round of trade talks and a new round of headlines for investors to navigate. it is not just trade the fed also says to be a major factor of today's trading. it is 12:00 noon eastern, it is "the halftime report." >> will fed chair later today calm nerves. microsoft marvels, out performing the faangs. stocks may be going higher from

a lot longer from here it is our call of the