platform with molecules called the new ceo. thursday, october 10, 2019 macro cycles that's exactly right the atp binding pocket in the "squawk box" begins right now. >> announcer: live from new york kinase where business never sleeps, >> the cancer can't mutate around -- >> it catches it >> this really works this is "squawk box." the inhibitors actually work >> good morning, welcome to >> it's a $20 billion market "squawk box" on cnbc we are live from the nasdaq within oncology alone. it was the paradigm to start marketsite in times square this market off. buckle up, it has been a wild >> it's easier for big molecules ride all night to rotate around >> the story resonated to investors because we were going do y after treatment resistance, dow futures are down around 15 right. we were going after a patient population they've been treated with a tki. unfortunately their tumor continued to progress and now points when it looked like the vice there is nothing approved. >> how long were you a private company before you went public premier of china may be leaving >> we were about five years private and i did watch your segment this morning early. we are getting all sorts of we had raised much less capital. >> you had done a secondary as conflicting reports. well >> we have done a secondary.

you guys know better that not nasdaq indicated down and s&p anyone doing a secondary in your ipo is unparalleled. down by one. that is a testament to the investors we brought into the down was down by 180 points ipo that believedin us again we did that a month ago over the yesterday. every move we see seems to be premium of the price trigger by the moves of these >> the larger conversation being had about investors -- i think trade talks. there is a difference here let's look at the treasury this is why i think this is succeeding a, not only are you nailing the market the 10-year looks likes it numbers, but, b, because you are yielding 1.592%. only for five years and you had to take in crazy amounts of 30-year about 2.1% money prior, right don't you think that's a huge part of this >> i do. i think we had very strong investors previously when we were a private company in today's environment, if we two-year trading at 1.462% needed them to do a 100% insider one earnings report of note today, delta airlines will participated ipo, they would have done it we didn't need that. release earnings around 7:00 we had enough with the story that was resonating -- a.m. eastern >> can i ask a question, please? he had bastian the delta ceo >> the professor you go for the science will join us >> did your chemist start with later today due at 8:30 a.m. the bigger molecules and start

eastern time with the most important part -- on the trade front, those they didn't design it from scratch. >> jean is our chief scientific high-level tooks will resume officer. she was the founder of the today in washington. company. >> how did she do it >> u.s. equity futures have been >> she developed two kinase volatile overnight after a report that said u.s. and china made no progress in deputy-level inhibitors, not necessarily smaller circles. they weren't closed loops. she had a history of doing this talks on monday. successfully twice prior to higher level meetings are founding -- supposed to begin today. >> i can't imagine doing -- one report says the chinese >> there was that side of the story. my side of the story is i have delegation is planning to leave been part of four that have been brought to market. earlier than expected. the balance of our team resonated to the street when we were out marketing the offering, you know, earlier this year telling cnbc the schedule has right after the government become, quote, fluid shutdown >> are we increasingly moving chip stocks taking a big hit on towards where chemists are going to be designing some of these all of these early reports but drugs rakter than molecular biologists >> what i think you saw was a have mod rated wave of immuno oncology coming getting you over to eunice yoon. into favor clearly we should talk about what is in addition to obviously everything happening outside of going on in hong kong over this oncology and gene therapy, we're apple app that seems to have going back into that wave. been pulled. if your portfolio was

eunice >> reporter: that's right. exclusively within precision first of all, on the trade oncology, which predominantly talks. would be tkis, you would be up expectations here about any type 200% since 2015. of meaningful deal have been >> because it works. managed way down >> exactly the state media has been less >> athena, can you use this beyond lung cancer >> absolutely. than encouraging and so the way that our pipeline the global times said there is was built is specifically little hope for pleasant looking at oncogenic driver surprises out of washington this mutations. that could be for lung, colon, week this pessimistic take comes smaller indications in breast, these are subpopulations of after the hong kong newspaper tumor types. you probably know the oncology quoted sources saying deputy-level officials didn't story as well. make any progress this week incredibly successful company. they went after trek, which is a because the chinese have refused different target than ross 1 which is what we focus on to talk about forced technology predominantly. it's for solid tumors. transfers, which is a demand of the u.s. >> thank you the americans didn't want to we haven't made clearly as much discuss lifting tariffs, which progress on solid. is a priority for beijing. >> business and science. the chinese delegation said to what about -- come on. be leaving one day early >> forget about the money. we should be caring about our as andrew was saying, the white health >> thank you there are bigger issues than money. >> thank you very much >> the nba doesn't realize house told kayla that isn't

coming up, the widening fallout quite correct. that they don't have any from the nearly month-long worker strike at gm. information that the vice we'll hear from a top industry watcher on the ripple effects premier's schedule has been now hitting other businesses and what they stand toose lthe changed. a senior official said a dinner longer the two sides can't come is still on for thursday night together stay tuned you're watching "squawk box" on cnbc separately, the "new york times" has been reporting that the trump administration was preparing to green light granting certain licenses for ♪ nonsensitive components of american suppliers for huawei ♪ technologies, which you remember was black listed ♪ foreign ministry commented urging the u.s. to ease its "um houston, we've had a problem" pressure on chinese companies including huawei but it didn't it's human nature to hate problems. comment directly about the trade but why is that? problems inspire us to re-write the rule books. talks. one update on the nba and its the history books and future books. spat with its chinese critics. that's why so many people work with ibm the nba commissioner adam silver on everything from city traffic to ocean plastic.

is in shanghai the exhibition game between the from flight delays to food safety. lakers and the nets is still on. problems even got us to the moon and back to give you a sense of how on one tank of gas. sensitive things are, the press and who knows where they'll take us next. briefing has been pulled to take care of yourself. it shows how sensitive things but nature's bounty has innovative ways are. the other thing that is to help you maintain balance interesting, there is a lot of and help keep you active and well-rested. other things asking what does because hey, tomorrow's coming up fast. nature's bounty. beijing want want silver to do because you're better off healthy. today, we might have a little hint the state news agency has been talking a lot about how the u.s. and nba has a double standard when it comes to free speech they've made comparisons between the houston exec and former owner of the clippers donald sterling who had made some

racist remarks but in the same way, the nba hasn't punished morey for comments that is the comparison being made now there is a suggestion that morey coming up when we return, should be punished similarly as breaking inflation data. we'll bring it to you, the sterling was latest read on congress super >> the great irony there is on prices out in just minutes we'll bring you those numbers. the flip side, so many players, instant analysis coaches and others -- i'm all of it when squawk returns in a moment thinking of the criticism lobbed at lebron james and steve kur cme group can help you navigate risks and others that haven't been and capture opportunities. more outspoken we enable you to reach global markets when asked questions about this, they've tried to avoid the and drive forward with broader possibilities. question at the same time on many other issues, including cme group - how the world advances. politics, they've been very ♪ outspoken about how they feel about the president of the united states and others

their people are criticizing them in a different way. i want to ask you about this apple controversy. because apple appears to have removed an application that had allowed users to see effectively -- what is your take >> well, i think it was interesting because apple today said that they are now going to pull that app out of their app store for china. this app allowed the hong kong ♪ ♪ protesters to track the movement ♪ of police. apple said in a statement that ♪ they decided that people were using it in a way that it wasn't ♪ meant to be used ♪ as we were talking about as ♪ well, this all comes after the ♪ people's daily, which is a

author tative communist voice had criticized apple for the inclusion of this app. it is just another mine field. you see apple as well as other foreign companies will have to face when dealing with such a look lucrative market. >> for years, they've gone after them to remove the waze app. there has been a lot of criticism in the united states and the san bernardino situation. in some situations that seem even bigger, they've been unwilling. >> reaction to the hong kong protest as well. they've threatened to visit the

apple store. >> i'm sorry, becky. all right. go ahead welcome back to "squawk box," everyone we're just a few seconds away back to your point about the from the weekly jobless claims nba, what will be interesting is and cpi numbers. futures ahead of all of this to see how packed the stands are future down by 60 points s&p off by 6 tonight. even though, there has been all let's get to rick santelli standing by in chicago >> yes, let's see if it's as this criticism from the nba and cool as ppi. the chinese government no, it is not. but still moderate, unchanged on perspective, they've said the september headline consumer nba has hurt the feelings of price index. we are expecting a 10th higher 1.4 billion people this game has been sold out. and if you strip out the all-important food and energy, a lot of the talk about the it's also a bit inflation-like price of the tickets, the prices are hundreds of dollars. 1/10, half of expectations no revisions, up 1/10 and 3/10 that is common a lot of talk has been about how many famous american players respectively let's go year over year, up 1.7. will be at that game maybe a little cooler. capacity of 18,000 will not be 2.4 oncor year over year, and that is a number that continues broadcast. that will be really interesting. to be very solid above the 2% there has been a lot of level. and if we look at real average discussion on line the topic about the shanghai

weekly earnings for september, they were up 9/10 versus our game has received 250 million last look up 1.1, if we look up views. people are saying they are hourly earnings year over year, up 1.2 really critical. definitely up light. people said one of the ways they jobless claims, you've been are going to show criticism is waiting patiently. we move from 220 to 210,000, and by waving the chinese national even 10,000 shaved off last week originally reported flag at the game but they are 219, now stands at 220, and saying they are not going to go continuing claims move from 1.6, to the game. >> this is like an al gory of 5.5 million, to 6.84 so a smidge higher how far apart the two countries the aftermath, we're sitting at are. we had ted cruz on levels and interest rates that were considered the highs yesterday on the long end. he was ee vis rating the nba for the curve has steep ened a bit more being so timid in coming to the short rates have moderated just a bit, and the dollar index houston rocket's exec defense. definitely losing a bit of mojo, but still in the grand scheme of things, it's about two-thirds a and coming in and being really cent away from the best close in strong and defiant 29 months.

joe? they have so much power there. a lot going on back to you. >> there is a lot going on we've got people over here we're not getting updates on the thinking that nba totally score of the basketball game any more, rick suddenly i'm interested in pre-season basketball. anyway, thank you. steve liesman joins us now capitulated. you guys totally mangled your there's a game going on in china right now. >> an nba game >> nba game, preseason game apology. we are this far apart. between the nets -- can you the chinese think the nba -- and believe it was the nets, sorkin? what was the chance it was going over here, the nba is already to be the lakers >> a reason for it getting criticized in their >> which may explain why joe had to be as vociferous as he was. >> about >> i wonder. defense. go ahead he was going there >> i think from the chinese his team was going to be there, government perspective, they are saying the nba and a lot of right? is it really impossible to find the score? american companies don't i'm looking to find the score. >> are you really? understand china enough. >> yeah, i'm looking and it's they don't understand the not so easy. history, the sensitivity about >> i think this may be the first time anyone ever googled a hong kong, how difficult it was pre-season nba score for china. and maybe google wasn't set up this is when you read in the for the algorithms for this. report today, they are saying i don't think anyone has ever cared before, andrew

you may be the first that they feel that uk -- china liesman, what are you looking at got swindled having to give up >> it's not a very clear inflation report here. hong kong to the brits, very i mean, i think one way to do it long time ago. is to keep it to the simplest still something they feel very soar about possible numbers, which is >> it is not the brits arguing looking at the year over year rate 1.7 on the headline and 2.4 on this point >> we were talking about that on the core, which is above the fed sort of expectation there when tuesday. they can refuse to go to the it comes -- when it comes down, when they adjust the inflation white house if they win but when nup, the cpi for pce, it's about they ask steve kerr about it, in line. the dance he did yesterday on -- it's at or close to the fed's target goal which is the well i haven't really studied argument of some of the guys who the situation and i'm unable to were against rate cuts hey, you're at the target. but when i look at this number, make any informed decision let me tell you what's going on. it was awesome watching him. we did 01, 01, 01 three months you saw tucker carlson in a row, then 03 four months in >> you have not seen a memo. a row. it bounced back, a reversion a part there are some negatives. i know it is money i'll tell you some of the you have not seen an internal internals here vehicle prices have been coming -- came down. nba note to all players, don't they came down 0.6 they were up 0.3

say anything you saw th hosts gasoline prices down two months in a row what else, transportation, that was the vehicle prices down two >> that is unbelievable. months in a row. but then you have things like recreation was up 0.5. >> by the way, think about it's unchanged this month. i'm just going to cut it short disney and all their business and say there's no definitive inside china drift here with what's going on with the inflation report. >> a lot of players have their the numbers appear to be at or own interests there as well. around where the fed wants them to be. some guys look at other numbers and say they're light. >> somebody must have said to others say it's a victory some is of these players, look, getting at or close to where we should be here on this issue. >> meanwhile, just so you keep it down know -- >> it's 46, 47 >> lakers are up 47-46 points. >> i know but corporations that the right supports know all about the money over there we've been looking the other way >> now we care about the human rights of the people we trade with is that the idea, we do business for 20 years and nobody on the with right said anything about it what's that? we don't when it comes to saudi arabia and other countries >> 20 years -- there is so much hypocrisy >> we don't care i heard the whole thing, joe >> we've been in this marriage a

long time. we've looked the other way for a everywhere we are all part of the same lot of problems with this marriage a lot of the problems have to do hypocrisy. both of us with money for as much as we're trashing our family and the squawk the nba, we could trash all -- >> you have the business round table coming out saying every family company is supposed to have a >> thanks, eunice. purpose and mission and this and that >> you knew that was a joke. >> i'm not saying it's a joke. >> totally in bed with the mob i'm saying does it change the dynamic -- >> you add an element, having spent a lot of time overseas the trade earnings on the agenda foreign policy, if we made them today. more capitalist, they could we'll talk strategy next become more democratic senator from nevada. >> right >> and i think you guys are both u.s. equity futures are up right. one guy brings up tpp, which was now up anything that comes out, as we an idea that would have brought them into -- would have sort of surrounded them with labor standards and environmental one. head to break, a look at the and then joe is right. the dems abandon it just as biggest winners and losers surely as the republicans. >> this is an op-ed in "the new pre-market in the dow. ♪ york times" today. manju. it's fascinating because he writes in no uncertain terms, it turns out the west's entire

political theory, what you were talking about china, has been spectacularly wrong. ferocious economic growth in the past half century, but china's growth has not come at the cost of a political choke hold. a darker truth is dawning on the world. they haven't just failed to liberate chinese people. it has corrupted the rest of us outside of china >> can i respond to that i have just a little experience with it, not a lot, but this one program worked in russia it's when we brought russians for farmers here, this is our life's work. over and when we employed them in u.s. companies. but when a recall happens, that worked really well in terms perfectly good food goes to waste. of showing them both u.s. now, we've got away around that. looks good. business methods and u.s. we're on target. blockchain on the ibm cloud democratic methods >> that's when we lost a lot of helps pinpoint a problem anywhere from farm to shelf. intellectual property. with the chinese it's used by some of the biggest retailers everywhere. >> intellectual property, the others -- the other thing is a nice wedge. so more food ends up on your table, that if you make a bigger middle is that daddy's lettuce? class, the entire drift of yeah. and less food goes to waste. ♪ ♪ humanity is greater wealth comes

with demands for greater political freedom. let me finish. let me finish. the question is when do you pull the plug to evaluate the program and say it's not working the idea that china eventually will be a country that provides some measure of political freedom to its growing wealthier middle class, i think it's not time to give up the ghost on that i am a globalist i am about engagement. i don't think what we did before was not working. and now i'll just leave it to and less food goes to waste. >> i'm not your charity case. you guys to debate >> culturally we're going to -- >> i am not your excuse to buy a i mean, it's complicated new dress for the annual fundraiser. >> yeah. >> it's complicated how it >> i am not the poster child for your big donation. finally works out. you are trying to become a >> i am out of debts and in my own home. consumer culture -- economy. >> i am off opioids. >> i'm graduating on time liesman -- >> one thing we knew, joe. and on my way to a great job. chinese people were demanding much more environmental >> i am. >> we are. accountability of their local >> what it means to live united. government as things -- as they got wealthier there. maybe not political freedom, but certainly there was a lot more of an environmental -- >> because a lot of them were

getting really sick. >> that's right. >> you were the model for the americans. i don't know if anyone has seen that tv show >> absolutely. my kids believe my wife and i to be russian spies >> the guy living next to you jim comey? he's very tall >> he's there and i don't know it >> gm has reached its fourth week wage losses for workers and suppliers are mounting quickly joining us to talk about the growing fallout, patrick anderson, principal and c.e.o. at anderson economic group they've been releasing reports weekly on the financial strike adding up. is it not, patrick >> time now to get you ready for is it adding up to the point where both sides are saying, the trading day ahead. we're ready to do some things? >> it's adding up to quite a here on set, chief investment bit. and now in the fourth week, and officer for the americas at dws essentially it's going to be the entire fourth week now we're looking at potentially part of the fifth week of lost group. i was walking over before you wages. most of these workers have now lost two paychecks came up here, you were in a bad they tend to be well-paid

workers, but few americans can take two paycheck losses mood, sour look on your face i said are you bullish and general motors, even last >> it is early week we said they lost $660 you said, no i'm not. million. their average daily losses now >> i said i'm great but i'm not are about $90 million, we estimate so it is a very, very expensive strike now that has hit the entire southeastern michigan economy. it's cost over $400 million in bullish. lost wages you'd like to be in the stock that was last week it's going to be more this week. so it's expensive for both market you don't feel that way now but sides. >> people forget that becomes payroll tax and federal income you would call it short to med tax. and michigan income tax. yum turn so, you know, michigan isn't really a place that's so flush >> i don't expect the park et to that it can afford this either, i don't think. >> no, the economy has been slowing. the midwestern economy has been reasonably good recently remain high. but the economy is slowing auto sales are slowing as you just noted transaction prices for autos are you would lighten up, get going down because demand is slowing. defensive. we've sold record numbers of cars the automobile industry in the what would you do? united states is healthy

we have good products. however, companies like general motors have a cost disadvantage >> with corporate credit state when you look at the most efficient of their rivals. and that's really what most of this debate is about where the dividends are safe it's, as i've written about here, there's three big issues on the table we believe the trade conflict and the least difficult to deal with is just plain money, which between the differences between would be a wage increase for the u.s. and china workers, which general motors said at the beginning they were for those trying to understand willing to offer what happened here ahead of the so there's big issues on the table which is why the strike is divorce. u.s. and china are in the now headed through a complete process of separating. month. why the expense to the workers, i think they are headed to a the expense to suppliers, the expense to the company is adding divorce. >> a difference of ideology. up and i'm actually quite concerned if we go into a fifth week >> where are all the suppliers >> the lure of 1.4 billion all of them in michigan? people allows us to look the many of them are in lansing? >> right around lansing, east other way on a lot of issues >> because this has gone so lansing. we have two general motors assembly plants that produce a lot of the products. also flint but you have michigan, you have northern indiana, you have ohio,

public, it forces people to pick and then you have places, for an aisle example, in kentucky and >> it is incredible how far tennessee and texas. but the midwest is still the center of the american auto we'vegone industry ontario also is very important, especially the ontario basically from windsor out to london that area of the country, that area of the continent produces an enormous share of the manufactured goods right now we're looking at if you define that as a state, we'd if we look at late 2020 past the essentially be looking at a single-quarter recession in this area of the country going well outside the automobile industry. elections. the chance of that happening for and a lot of towns which have the next year and a half, you are going to be wrong there. auto industry dominating the it will go above 3,000 or bee economy are really feeling the pinch. >> michigan is an important state for the election, too. lee 2,700. i just wonder, who is going to >> it is a long cycle. blink, do you think, patrick a lot of things are more >> it's not just blinking here elongated than usual it's three days -- >> we talked about it with china, too who needs the deal more? after the last slow down from >> well, both these parties are

these highs, that has a hard intertwined remember, if general motors doesn't make profits and time doing that. >> last time we were on feeling make products that consumers want to buy, there aren't any more bullish jobs for the uaw where are you? are you feeling a little better? and if general motors adjusts its work so it's moving its >> i think interest rates plants around wherever it wants and acts like, say, an falling again are forcing electronics manufacturing company, the uaw may not feel it has a role or its workers may investors to get near the same not feel it has a role so there are serious issues on the table here return if you look where the markets general motors leadership signalled this very clearly last have been, it is only 2% from fall when they unallocated those last september three plants, three storied plants that had a reputations we've marked time. earnings have done the same and histories. and that they need to be competitive in order to weather thing. i do think this trade conflict the next downturn. and that's really what's the or war that has redefined this major sticking point on the table. it's not just about money. it's about the future. >> all right relationship, i'm not sure if it are you optimistic about the rest of your schedule, michigan, is a divorce but a i mean i'm not. i'm worried about you, you know, recertification of a partnership with what i've seen so far are you worried? and creating an unforced error >> i am worried, yes

>> i bet you're worried. they've got some tough -- you bleeding into the equity have some tough games coming up. good look, though. markets. that said, will force investors we appreciate you coming on today. hopefully this works out as to be vested if they are going well >> okay, coming up what's ahead to maintain the purchasing power on wall street of their capital and force them bank of america, she's going to be joining us to make sense of to get morris being. >> i think we are in counseling. the wild market moves. check out the futures at this hour 45 minutes before the market i think -- >> couples counseling. opens, and we'd open down. >> we've got all this time dow off 36 points. together s&p 500 off 3 1/2 points 20 years you don't want to throw that stay tuned you're watching scott walker on away you don't want to go into the cnbc squawk on cnbc single's scene behind the chainsaws. we'll find a way that these are not irreconcilable smart. yeah. ok. you'll find a way. >> you think we are going to if you're in a horror movie, you make poor decisions. it's what you do. divorce and throw all of those this was a good idea. shhhh. years away, andrew i'm being quiet. you're breathing on me! if you want to save fifteen percent >> if you've got kids, it is or more on car insurance, you switch to geico. it's what you do. still a relationship let's go to the cemetery! >> there are going to be

weekends we do things together >> and difficult conversations >> and we are going to date other people >> s&p companies are growth minded entities. if we don't look east, we'll look south. >> are we still going to have sex? is china you okay with that? >> you took it to a different plants capture co2. place. >> i was serious about that, i think it is so important for what if other kinds of plants captured it too? both sides >> it is but you also have the if these industrial plants had technology hard liners on both sides amping that captured carbon like trees it up making it more difficult we could help lower emissions. to come together with some deal. carbon capture is important technology - >> we are going to do a half and experts agree. that's why we're working on ways to improve it. measure deal with grains so plants... can be a little more... >> that would have been easier like plants. to do last week. ♪ i do think china took a miss

man: how can i deliver step with the nba thing. superior long-term results? now the american public that it begins with a distinctive approach to managing money. didn't even know these talks that for over 85 years were going on is up in arms. has focused on keeping confidence up when markets are down. it makes it more difficult for an approach where portfolio managers president trump to make a deal work well independently. and even better together. >> america knows about hong who don't just invest, but are personally invested. can i find a proven approach kong >> he cannot afford a recession designed to deliver results? with capital group, i can. going into 2020. talk to your advisor or consultant china is not thrilled with the for investment risks and information. prospect of elizabeth warren >> both sides have allowed the welcome back to "squawk other to deck taictate coming in box," everybody. the futures this morning are indicated a little bit weaker. although it seems that the markets at this point are waiting to take their next cues >> why was he so optimistic? on what's happening with the >> i don't know. u.s./china trade talks he'll talk to people in dow futures are down 33 points washington but not beijing s&p futures off 3. nasdaq off by 9. >> and the closely watched -- anything they tell you from we're not going to do that, i guess. washington could be negated by we were.

the president. >> what if the nba becomes the did you see how they did that at the last minute? andrew >> let's look at a few stocks to watch. check out shares of sprint and pingpong >> they want the gm to be t-mobile good news for both of those disciplined because they think companies. mississippi dropping its legal it is just as bad as what challenge to the proposed $26 sterling did that will never apply. billion merger between the two wireless carriers. >> hans, i got lost. and this comes following an agreement between the two sides are you raising cash which would, among other things, what are you doing >> no, no. expand high speed internet we are trying to be vested in access to the state's rural areas. you're looking at sprint stock up marginally, t-mobile off things where we can get growth slightly a little bit of that is a play but also look at shares of dow component united health. the stock downgraded to hold from buy at jeffries which points to tough on the international front, we competition from health care rivals anthem as well as policy are looking at more developed uncertainty related to recent markets and bigger companies court rulings. of course, the upcoming we are trying to navigate in a presidential election which is taking a toll, really on the whole space. responsible way. >> we're going to start this -- >> you look like you have the we're going to savita eventually weight of the world on your if we come out of commercial shoulders. are you okay break. we may be able to tell you -- >> the nets are up 57-55 at you good is it starting to weigh you down

a little bit halftime >> halftime, so we're at a >> i worry about the dating break. >> break in the action >> break in the action it's a pre-season exhibition nba analogy. i am not sure there is a market game, but it happens to be in china. >> yes for guys with bow ties >> very closely watched. >> who are we hoping for >> i do. guess we're hoping for the i think we are in counseling lakers to beat the alibaba guy >> i was thinking the nets because they're here all right. >> what do you think, sorkin, do thank you both we want the lakers to beat the >> coming up, more on "squawk alibaba guy? box. the story of one of our favorite >> i'm a new yorker. i was in new york when the nets stocks this morning. were in jersey why bed bath&beyond shares are it makes me so upset i have to root for the nets at this point. sorry. >> we're watching. i can't believe it closely watched lakers and nets soaring. no, i did not get in game is underway in shanghai sfx: [phone ringing] china's government purportedly prohibited team and nba post game news conferences for the latest you're not allowed to wear anything here, are you, becky, can't say anything with uighur >> it was a washington game. >> the washington game where the

fans had google uighur >> google uighur >> they had t-shirts on, took their signs and ticked them out. >> espn, it's crazy. they resorted to talking about sports i mean, who would have ever thought that espn would be talking about sports jonathan chang is china bureau chief at the "wall street journal. are you a basketball fan, too, john >> i am, but i'm a raptors guy because i'm from up north. definitely, yeah >> you had a few things -- what a great, great year. i even became a -- what's that, raptors fan. i think we're all fans after last year. is there any way the nba comes out of this without looking bad? i just don't see how they do this now, jon. >> no, i don't think, i don't think there really is a way for them to come out of it unscathed. there is a little bit of damned if you do, damned if you don't

on the apology china makes it so black or white. they really aren't really in the mood to have any compromise. you have to go all in or get out of the country you know, it's possible the nba manages to get through this and, you know, without being blocked entirely but it is going to be tough going for the next couple days, that's for sure. >> is there any way they could give china the apology that its looker for and just say -- other you still have service? call the insurance company it's them, calling us. companies in the united states, it's going to be a week before they can get through on these roads shhh, sorry, i didn't catch that. everybody understands what's happening here i said ask how soon they can be here right now? 1.4 billion consumers, you know, what's now? 500 million basketball fans or he says they're surveying our property now they're probably at the wrong house more, whatever we kind of understand that i don't see any hovering they're over a barrel, don't we? his name is hovering? or do we really want them to be look up? by automating claims with machine learning and analytics, the one entity that stands up and says, all right, it's not cognizant is helping insurance companies advance going to be about money, it's how they serve even hard to reach customers. going to be about human rights cool does anyone really expect them ♪ to be able to do that? >> no, maybe the only ideal can

expect that to happen. at the same time, the nba has so much more clout than any other ♪ brands that come in here arguably, china needs the nba as much as the nba needs china. of course, that's a thesis the nba may not really want to test, but that's you know, that's what a lot of people are saying and they have a point. but you know in our conversations with chyronese basketball fans, you know, no one would dare talk to the "wall street journal" and say otherwise. but they all say, look, i love basketball i have been a basketball fan since yao ming was drafed. but china you know country comes first, basically, so that's sort of the deba it that people are sort of weighing in their heads here i think the nba if they're smart, i think the comment that they realize announcer: fidelity is redefining value >> if there is any entity that with zero account fees for brokerage accounts. can say you need us more than we need you even apple, i don't know, i and zero minimums to open an account. don't think can say that so of all the maybe the nba is at fidelity those zeros really add up. the one entity that can say that ♪ maybe i'll win has some sway over china because ♪ saved by zero it's so important. >> john, i just wanted to play

back this quote. we were talking about it earlier with steve leishman. this is in the "new york times" today in an op ed, it says, china's economic miracle hasn't just failed to liberate chinese people, it is now routinely corrupting the rest of us outside of china what do you make of that >> yeah, look, that's an argument made by a lot of folks right now who say an engagement with china over the last 20, 30 years hasn't brought the democracy or sort of gains that >> welcome back to "squawk box." we've expected you know that political legalization of the economic legalization. and you know, that's a thesis that i think we are still all bed bath&beyond hires former trying to figure out here and you know some people have already made their target operating officer determination, but i think with each one of these episodes we he'll start there soon get a new test case. the nba is different it doesn't follow the playbook the revamp with big names. of the past. they usually cave in and apologize, a lot of people say the nba will show more spine they actually have shown more

than others. so whether or not it's enough, that's a different debate. but certainly you know this story isn't finished yet. >> we can get a payoff formerly with in ordnordstroms d things happen quickly. no knows if hong kong is the winning, you pull out a thread, other giants who knows if that brings >> there is a certain skill set. something, i don't know for lack of a better word an arab spring >> a magic gut or something leak that maybe not. maybe not. this guy has got it. >> that whole thesis, andrew, could change in an instant >> i'm saying, if i had to stock theoretically. all right. john, thank you. you want to believe your ip. a store with inventory that was we'll update you on a score again in a couple minutes. >> halftime. >> oh, it's halftime. going to sell to anybody >> one thing, once they start men, women, children, teens, it again, it is the normal would be impossible. halftime the times? >> agreed. >> all right we are under an hour until the >> you see what i mean, you can opening bell on wall street. have a retail skill in your so let's talk markets and what you should be watching today, blood. it will translate. joining sus the managing director and head of u.s. equity there is a reason stock is up and quantitative strategy at merrill lynch global research. today. have you gotten the heavy one? savida, we're watching china it's not just the nba game

>> weighted one? all of this falls into the trade >> you got one talks. >> it's not just basketball. >> what do you tell people >> yeah, ahead of this well, it's interesting >> is it hot balls i there they -- so far the >> the feeling >> is there beads in it? market has seen reconciliation >> no. i think the question is do we want a hasty trade deal if it it would have been used to make comes at the expense of long-term growth so that's the question this isn't just about soy beans. it's about tech. a heavy curtain it's about national security >> a weighted duvet. i think those are the issues that companies and investors need to be thinking about. so you know, here are our trade >> why haven't you gotten one? ideas. you don't have the money for it? i think defense seems to be a >> i haven't had time. great place to be for the fourth >> we'll go this weekend quarter and the future >> it makes you feel like you because of the geopolitical tensions across the globe. are in the womb. i mean, we're hitting a fever are they beads of glass? pitch in terms of income and >> i want to be swadled. equality and shifting to protectionism. there are all sorts of competing >> when we come back, lights out forces that i think will bolster the idea that nobody is going to in california. we have an update on the cut defense spending at this

point if time. millions of people in the dark right. >> that would be a pretty as wild fire risk forces massive short-sided thing to do. >> although you could see a situation where it's going to be a very nationalistic spending power shut downs and you are only going to get and first, a look at the latest dollars coming from your home country? >> potentially winners and losers i think the other argument to your point is go domestic. so think about u.s. companies that will benefit from u.s. growth and for now, multi-nationals look a little bit risky. one of the things we track aciduously in our quantitative work is earnings revisions we have noticed analysts have been revising upexpectations for domestic companies far more than for multi-nationals through the at&t network, edge-to-edge intelligence so i think what we are seeing gives you the power to see every corner of your growing business. across the globe is a lot of uncertainty about this idea that from finding out what's selling best... has globalization actually been good for corporate america when to managing your fleet... it's been bright for margins, but has it really been good for our competitive family >> elizabeth warren/defense spending >> so that's the warren factor i to collaborating remotely with your teams. think that we talked about giving you a nice big edge over your competition. separately >> separately. >> so i think that there is a lot of optics and fear around

that's the power of edge-to-edge intelligence. the idea of a warren win and not being negative for corporation at large as well as for defense spending you know, from a political perspective, the one sector that i think we want to avoid heading into the elections is healthcare because healthcare - >> it's down. >> it's down, i think it could go down further. if you look back in 2015, we have the same story. in 2015, healthcare was super crowded by disastroindustrious. it's super crowded today the seconder heated up in the -- >> it's one of the sectors they're looking for growth i went by a sector by sector call. >> earnings have been great, fundamentals were great. they were great in 2016. what mattered more is headlines and politics i think that's keeping generalist investors out of healthcare for the time being. >> thank you meantime, i want to go down to the new york stock exchange where our good friend jim cramer

joins us now a couple stocks we can talk about. we can also talk about the nba and china, jim. >> do you have a score is it halftime >> we're in the halftime but, curious to get your thoughts. >> atkinson is a fabulous coach. i'd love to hear what he has to say. she probably one of the more thoughtful people. the nets free spirited remember who the nets are owned by maybe coach kenny is a jam here. >> who are you rooting for >> i actually just ordered the nets package the nets are fun >> what's your take on how to play today's market? given what's taking place with china or not and we don't know, obviously, washington. >> you know, i have been trying. the various discussions we just had about healthcare there is the deminishing number of stocks that you can like here, almost every day and i find, for instance, i had hormel today i got my hormel pumpkin spice

spam this thing sold out in seven hours. if you are just down there buying hormel, you are kind of running out of ideas i think there is a tremendous lack of ideas and new ideas to buy. delta looked good. then you got to sell delta i mean, this is, wow, it's a tough time >> okay. i want to hear more of your ideas on dell that i am sure you will be talking about that on quk t see i"sawonhetrt"n a couple minutes where we will see you. "squawk" returns in just a moment >> announcer: welcome back you are watching "squawk box" live from the nasdaq marketsite in times square. >> good morning, everyone. welcome back to "squawk box. u.s. equity futures are basically flat lining. we've seen a big roller coaste ride on concerns that the trade talks

were not going well and the vice premier would leave a day early. there has been contradicting headlines out there. white house telling cnbc the schedule has not changed dow futures down by about 11 points s&p 500 futures down less than ♪ ♪ i've been a caregiver for 20 years. half point pge shut off power to millions no two patients are the same. of homes predicting the next step for them can be challenging. the total number impacted is in today we're using the ibm cloud to run new analytics tools the millions that help us better predict and plan a patient's recovery. residents scramble to buy ♪ ♪ flashlights and food ultimately, it's helping thousands of patients some were frustrated by the short notice and difficulty return home. and who doesn't love going home. finding information. pg&e's website was shut down by overwhelming traffic for the

second day >> coming up, the worst year for ipos see which have actually performed well delta airlines reporting its earnings ed bastian will join us live to talk about those numbers talk about those numbers >>retirement savings with pacific life sponsd and crea bypa pacific life.ng. which means you can retire, without retiring from life. having the flexibility to retire on your terms. that's the power of pacific. ask your financial professional about pacific life today.

we take you washington, d.c. a few moments ago. the treasury secretary and the chinese delegation arriving at u the tr as this video rolls as we have endured a wild overnight session in futures as we got a bunch of conflicting headlines about the u.s. trade what we do know is the delegation arrives for u.s.-china trade talks of course, we have complete coverage keep an eye on europe as well, ten year is back on as september cti runs up cool up 1, 7 greer on year. we -- year on year. jim, we know what we went through last night in some of these taped bombs about travel schedules and currency plans the "time's" with the piece about limiting access to american capital now. >> we have become hostage to events that are not totally out of our hand, i

whether your beauty routine is 3or 57,... make nature's bounty hair skin and nails step one. it's the number one brand uniquely formulated for silky hair, glowing skin and healthy nails. nature's bounty, because you're better off healthy.

>> welcome back. venture capitalists are expected to invest $100 million this could be record setting in the private market but the worst year for the ipo joining us is rigup founder and managing partner jeff lewis who was the first outside investor i want to talk to you about rigup. this is so different in terms of what is taking place with how we are thinking about these consumer companies jeff, i'm curious if we can talk

about this broader concept which is why you think all of these ipos have done as poorly as they have >> absolutely. i think a lot of these companies have been overvalued almost to a tee. almost every single company that has gone out has been overvalued in later rounds. >> geoff, private investors were supposed to be the smart money is that what is happening here >> i think at the end of the day, people are never as smart as they seem from a distance the challenge has been so much more capital in the growth

stage, the later stage there is too much capital on the private side chasing too few companies. these prices have really gotten bid up that said, there are always exceptions to the rule we believe in three or five years, when rigup goes out, it with be an exception >> you have a new valuation today and have raised some new money. how have you thought about the valuation piece of all of this >> i think several different points to make but i think the important dynamics are, there continues to be opportunities for companies like ours to serve markets that aren't being served we build technology for energy enter prize companies that

decemb desperately need it to manage a blue collar work force in the gig economy. from our perspective, there is not a lot of technology businesses focused on building this layer, it allows us to be a little more aggressive and the ability to be very rigorous thinking about unit economics and growth >> your company is a platform or oil, energy workers and employers. >> correct >> to separate issues, you have money coming in. you have a $300 million valuation. >> i can't comment on valuation. >> you raised $300 million >> correct

>> given its vintage and looking around and thinking, did we value properly how do you think about that? >> i can't speak for the others who have gone out but for us it is about high-return growth. the opportunities are readily available in the markets we serve because the workers we serve desperately want to make more money, get more jobs, have more empowerment the energy services desperately need more so they can make money. >> you were one of the original investors in this company. as these things get marked up -- and at some point, there has to be an exit >> absolutely.

this business, we believe, is very fairly valued you were earlier talking about the energy shortage in california with pg&e energy is a massive industry $100 billion just with tam rigup has become the default platform for people to get to work, make more money, freedom to work on the jobs they want across all facets from downstream to renewables we believe this is a business carving out a dominant position. based on the fundamentals, the valuation is a very reasonable one. >> i think the piece of this in terms of valuation i'm trying to get it and understand, there is

an argument that these monies are staying private too long so by the time they get to the public market, there isn't the same command there used to be and the growth for investors to participate in how do you think about that? >> don't think that's going to happen here. it has happened with a lot of other companies. there have been other labor marketplaces that have gone out night and day. something like upwork, fiber, those are like michael's craft store to rigup as home depot it hasn't raised that much capital. they've only raised under $500 million. this round at $300

prior to that, i think less than $200 this has been a relatively capital efficient business on top of the metric. investors need to be weary but we think this will be an investment to the rule >> final word? do you think you'll try to pursue an ipo or sell the company? >> i think we'll try to build the best business we possibly can. for our investors and stake holders, founder's fund and the first investors, the ownness is on us to deliver >> thank you for waking up early on the west coast. >> a pleasure. thank you. >> we'll tell you about a new call from goldman sach that says the only thing between us and

the earnings sector. looking at the european markets. biggest earner is the cac. we'll be right back. make fitness routine with pure protein. high protein. low sugar. tastes great! high protein. low sugar. so good! high protein. low sugar. mmmm, birthday cake! pure protein. the best combination for every fitness routine. ♪ ♪

♪ ♪ ♪ ♪ ♪ ♪ you should be mad that this is your daily commute. you should be mad at people who forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade, which isn't complicated. their app makes trading quick and simple so you can strike when the time is right.

don't get mad, get e*trade and start trading today.

hi, welcome back, everybody. third quarter earnings season is upon us and the expectations aren't pretty. our next guest out with the call he says the quarter will end up being negative orl if the normal surprise splaz out, we could end up with flat to slightly positive numbers that's according to mike thompson, managing director at goldman sachs asset management mike, you're looking for earnings decline of 4.1% >> indeed. this would be potentially the first and possibly last quarter of negative growth as we get out of the really tough comp period as a function of that tax reform bill so, yes, right now the consensus down negative 4.1. we've been seeing about a 3 to

4% surprise. i think your best opportunity to get that deficit up would be the technology sector, which is currently the read on that from the market is down 8.5 prrs. >> for earnings. >> yes >> i feel like i've heard this story several times the last many quarters. we keep thinking it's going to be an earnings recession and it turns out companies have under promised and over delivered. do you think that would be the case >> i don't see why that would be the difference there's been a lot of hand wringing here's a little more of good news as we move away, again, from 2018 when we have that inflated earnings because of all that extra cash that companies got from tax reform, and in '19 it really stole a lot of that earnings potential right there because the comps went higher. i think you now get to see a better picture of what earnings are, and they look better. they look better presuming you continue to have avoid recession and you have even inexorably

slow growth. expectations of next quarter already over 3%, then it even getswe're looking at an 8% expectation for earnings growth. >> that's such a long way out and there are so many things that could change things between here and now i mean, just the china trade talks because they have a huge impact on what any of these companies are reporting a month from now, let alone six months or tway year from now. >> absolutely. i think the one interesting thing is that if you listen to the narrative from the market, you know, at goldman sachs asset management we're considering a lot of this stuff. but you do concern yourself about kind of the impact on trade, you know, the trade issues and the notion of a global slowing that would have an impact. but if we avoid -- if we avoid recession and there's enough economic strength, we think that these earnings continue to kind of move forward. and let me just kind of break this up. let's think about the s&p.

the s&p has the ability to generate earnings, not just from basically the businesses they have the ability to buy back shares. in fact, that's what they're doing. do you know, i was actually looking at an s&p report, and every quarter they add .7% of earnings growth just by virtue of buy back. so on an annualized basis you're getting 2.8% annually in buy-back yield add that to the 1.9 that you get from the dividend yield. you're at 4.76 starting. >> so the headline is, okay, we're looking for negative numbers, but maybe don't believe the hype just yet? >> i think the numbers might be actually not all that bad. >> mike, thank you it's great to see you. >> good to see you >> all right coming up -- what is coming up lots coming up we're going to talk about facebook's decision to allow trump's campaign ad cnn schoez not to run

should facebook shareholders be worried about regulatory backlash delta numbers we'll bring them as soon as they cross. a first on cnbc interview, c.e.o. ed bastian on "squawk box" on cnbc ♪ you can get a satisfaction guarantee. ♪ you can also wonder why our competitors don't offer that. schwab, a modern approach to wealth management. announcer: fidelity is redefining value with zero account fees for brokerage accounts. and zero minimums to open an account. at fidelity those zeros really add up. ♪ maybe i'll win

♪ saved by zero so servicenow put your workflows imm-hm.cloud, huh? 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. >> announcer: let the trade talks begin. high-level trade officials meeting in washington. will a deal get done

and what does it mean for your investments? earnings from delta. the company's c.e.o. joins us for a first on cnbc interview. and facebook's stand on political ads. the social media giant doubling down on its policy to allow speech from politicians to go unchecked. is it the right move we'll debate, as the second hour of "squawk box" begins right now. live from the beating heart of business, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with becky quick and andrew ross sorkin u.s. equity futures are now back down 35 points or so wild ride earlier when most of us were sleeping down 300 points, then turned around and actually got

positive now down just fractionally after a positive session yesterday we'll keep an eye on it. >> yeah, don't turn away anything could happen at any moment here's what else is in our headlines at this hour apple has removed an app from its store that protesters in hong kong were using to track police movements apple had been under fire from chinese officials which it accused the company of being complicit in helping those protesters the app had only gone online last week. all of this comes as u.s./china trade talks are set to resume and we'll have more on that in a few moments. fidelity investments has joined rivals in eliminating commissions for stock trades schwab went to commission free trading and was followed by e. trade and t.d. ameritrade. the government will be out with the consumer price index in less than 90 minutes' time. economists think the headline inflation will be up 0.1% with the ex-food and energy rate up 0.2% we should note earlier this week economists had similar

expectations for the consumer price index which showed a decline of 0.3% last month >> delta airlines just out with earnings company reporting profit of 2.32 a share beating consince estimate of 2.26 joining us the c.e.o. of delta airlines good to have you on the day, mr. bastian. your stock had been doing better, i think you're the second best performer in terms of airlines. you don't fly the max, but interesting that overtime pay among your pilots could be a part of adding to some of your costs which people have been following kind of closely. you've had to make up for a lot of the canceled flights. that's a good problem to have, i think. >> it is a good problem to have. thanks, joe. we had a great quarter in our third quarter. demand for our product has never been stronger, and clearly not having the max helped us on the margin i don't think it was a main driver of our results. our revenues were up close to 7%

in the quarter we were able to flow that through to bottom line, expand our margins by 200 basis points. eps was up 30%, and the result was a $2 billion profit. and, yes, we did have some cost pressures giving the large volumes we've been carrying. we addressed it it n a call wit the analysts a couple weeks ago. we'll increase our costs going forward. that said, fourth quarter we're looking to grow our eps meaningfully as well >> that's probably what people are looking at in terms of stock. i mean, it's not a huge move up 1.5% who knows by the end of the day. but is that something that people would have noticed that you warned about costs maybe going up a couple weeks ago, and then that's reflected in the report is that what you would attribute -- you beat earnings why do you think the stock is down because of the guiding costs a little bit higher? >> i think some of the cost growth is -- the investors are catching up with the news. we'll be addressing that on our

call in the fourth quarter we had some accounting matters, about half of that cost growth above our baseline cost that we'll be addressing then there is another point, we had wage increases for all of our ground stach and flight attendants of 4% that went in effect october 1st then tenning to reinvest in our business we've grown our business, top line, 15% the last two years it's hard to keep our unit costs down in the 1 to 2% range when you're growing your volumes at that level so long term, our outlook is great. our cost outlook long term is to stay within 2% and we're still within that range. >> hey, ed, if part of this is because of overtime where you're picking up additional flights because your rivals who use the 737-max can't do some of those flights, do you think that these are going to be long-term market share gains that you hold onto and if that's the case, do you expect to hire more pilots instead of paying them overtime? >> we are hiring pilots, we're hiring flight attendants, ground

staff, all categories of the company. we're in the process of hiring 6000 people this year, and at least a like amount next year. i do expect the share gains to be held. our net promoter score, which is our key measure of customer satisfaction, is also at an all-time high. it was up five points year to date so i think long term our growth story is intact. we're going to have some costs to invest to keep the product in the service strong and keep the satisfaction growing >> capacity is something that, you know, it's hard to -- there's good times and then sometimes it seems like it gets too good is it in balance right now, ed >> i think it's in balance, joe. i think one of the things that's weighing on the airline stocks as a whole is the question about how the max returns next year. >> right >> and what will be the sequencing of it i think that will be the capacity story that most investors will try to look out for, given that we don't have it it's not as much an issue at

delta. but to the extent there is incremental supply above demand, that will certainly put a pressure on pricing. >> ed, can you speak to that specifically i know it's not a plane that you fly, but obviously investors are asking you questions about it. they're thinking about it in terms of the multiples, the comps they're putting on you relative to everybody else where this shakes out in terms of the timing on that plane and these new reports that suggest that there's a -- at least some kind of skirmish taking place between european regulators and faa and others >> well, we don't fly the plane, andrew, so i'm probably limited in what i can say. but i said all along i think it's going to take longer to get that plane back in the sky than anyone had thought given some of the sensitivities, particularly some of those political skirmishes that you're talking about with the regulators we expect to see that plane in the first part of next year. we look forward to competing against the plane. one thing about the max, all the other airlines that had it i think have done a very good job of holding onto their key profit pools and their key revenue

pools. so to the extent that they did not have that incremental lift, it was obviously in the weakest, some of the weakest markets they flew so competitively, our outlook looks strong and any share gains we picked up in the year i'm sure we're going to continue to fight hard to hold >> the international, is that a positive or negative is it slow internationally, ed >> well, international is choppy on the u.s. side, which is our bread and butter, about two-thirds of what we fly is domestic we were up 8% in the quarter internationally there's been pockets of weakness, particularly in asia certainly the tariff issues on some of our automotive and heavy manufacturing customers have cutback their travel to asia europe was a bit weaker given primarily currency effects so it was much more expensive to fly out of europe. so as a result, the u.s. inbound traffic into europe was strong,

but exit europe was a bit weak but that said, we also have seen a lot of capacity come out of the european transatlantic low-cost markets in fact, thiswinter we expect that market place, the low-cost european transatlantic to be down almost 20% in terms of the many of the bankruptcies we've seen in the last number of months >> ed, to that point, how many flights a day do you fly directly either branded as delta or co-branded with partners to china right now? >> china is about 3% of our total revenues so it really is relatively small. and we're at a max in terms of the level of flights that we're allowed, either u.s. carriers going into china or the chinese carriers coming out of the major markets into the u.s so i think the capacity is largely fixed at this point until there's a new set of bilateral discussions between the u.s. and chinese authorities. it's relatively small for delta. >> all right, ed bastian, we appreciate you coming here and talking over the results

and as we said, i think delta, most carriers are down for the year, but delta stock up, off a little bit today can i update you before we go to break? >> on? >> the two nobel prizes for literature you don't want to do this story because one person's name, polish author, olga tkarczik that was 2018. two of them. this is rare two of them. 2019, austrian author peter henke. i like these guys, the way they talk the first one was given because of a narrative, imagination with encyclopedic passion represents the cross of boundaries in the form of life that was olga. and then the other one was even more complicated an influential work that with linguistic ingenuity has explored the specificity of human experience

i want to read both of these things just to bone up -- >> on amazon now >> bone up on both of these subjects, sorkin, don't you think? >> we can all benefit from that. >> that's the last of the -- and as -- that's the last of the real nobel prize >> economics is not real >> it's from a committee >> coming up when we return, conflicts -- conflicting reports, i should say, over ongoing u.s. trade talks sending futures this morning on a wild ride what investors are expect as negotiations are hashed out or not. "squawk box" returns with all of the details when we return

♪ ♪ welcome back to "squawk box. reports that high-level trade talks have yet again stalled sending markets on a wild ride this morning want to get over to kayla who has some details and maybe some news that's actually made the markets turn into this bit of a roller coaster kayla. >> it's hard to know, andrew because every hour it changes. talks with chinese principals

will still take place today. despite what i'm told, there were difficult and tense conversations among lower level go negotiators this week. it's the level of talks that's being most closely watched now the south china post reported than will leave tonight signalling displeasure and frustration to the u.s white house negotiators were caught unaware of that news. a spokesman saying there was no change in the schedule and the senior administration official telling me the u.s. still believed there was a big dinner planned thursday and the vice premiere was going to be departing friday evening an hour later a principal from the u.s. said the situation was fluid and whether talks extend to friday was still an open question that maybe some in the chinese delegation could leave or that the round could indeed end early. but that was still an open question media reports today show a couple olive branches that the u.s. may offer to change that. one green lighting license for huawei suppliers, and two, rolling out an already agreed

currency deal. a senior administration official tells me the president still hasn't made up his mind how he will proceed he's going to, based on how negotiations go today, but here's how he responded when asked about a deal publicly yesterday. >> i told that to president xi i said, you know, this can't be like a 50/50 deal because the 50/50 deal, you're like up there, we're down here so 50/50 doesn't work, right you have to have a little balance. this has to be a better deal from our standpoint. and i think they fully understand it. >> reporter: chinese officials have said any deal would need to put the two countries on equal footing. it would need to treat them equally. it would need to be a win/win situation. clearly, becky, what the president is describing is not that we'll see how talks go behind closed doors we'll bring you the latest as we have it. >> kayla, maybe the most important point for the markets now is what you said about the fluidity of the situation. things changing so quickly, which may be why we're now seeing the futures relatively

flat compared to what we've seen earlier in the trading session >> things changing relatively quickly. the chinese officials not shy about using press outlets to telegraph exactly how they feel. and exactly what they plan to do and how they could throw a wrench in these talks and how the markets could respond. that is a very clear message they are trying to send to the white house and to the president. we'll see if it lands. >> kayla, thank you. kayla tausche. joining us for more on all of this is the c.e.o. leland miller leland, these are some of the most complicated things to try and discern even if you have sources close in washington. you don't know what the other side is thinking the sides could be changing their minds pretty rapidly, too. how do you read the tea leaves how do you play this mind game that's taking place? >> the most important part of reading the tea leaves is figuring out what's white noise. the reality is almost everything you're hearing right now is white noise. the fact the deputy's meeting didn't accomplish anything -- >> no surprise >> news flash.

no one in that room had authority to do anything the idea the chinese are threatening to leave early is a power play >> mnuchin and lighthizer left early last time around >> maybe that. there was bad news from a chinese perspective earlier this week whether you're talking about sanctions, blacklists, visas being pulled away. the chinese have reason to try to show their displeasure with this but all the nitty-gritty is going to happen today and tomorrow in the trade room and they have a lot planned. >> if tomorrow happens >> look, anything could happen if they cancel tomorrow, it's not because of what happened in the deputy's meeting it's because they don't get what they wanted to i have a feeling they're going to get more substance today. >> you think the chinese will get more substance than they expected >> the chinese had to do one thing in order to go into the talks. they had to be prepared to buy a sizeable amount of agriculture my understanding -- >> they signalled that >> they signalled that they may beat expectations on that >> you heard what president trump just said, saying we need more than a 50/50 deal because we're at the disadvantage here >> right

>> the idea that you're going to walk out with $10 billion in additional soybean purchases doesn't seem like it would live up to the expectations that the trump administration and lots of americans have >> that's exactly right. i think that's the tip of the spear. so you get soybean purchases, you get your commodities purchase magically, huawei is going to see some licenses soon we've been told. you know, you start hearing about the i.p. chapter one of the reasons there's been no progress so far is the administration hasn't formally put a december punt on the table and they've been unwilling to talk about a pull back of the september tariffs. these are in play right now -- >> we have october 15th the tariffs are expected to go from 25% to 35. >> october never gets brought up they don't see it as substantively important. markets are looking at this as an enormous bellwether the white house isn't. it's laser focused on december they're focused on september if they can pull it off >> in october tariffs are not going to increase, that's off

the table? >> there are chances than not we see a punt -- today's talks go as well as they perhaps should at the same time i think if you see a punt, it's good news if you don't see a punt i don't think it dispositive to a deal in november. >> all right let's play out this little turn of events.e vice premiere of china leaves early let's say then october 15th the tariffs go from 25% on those goods to 30% then what happens? how would you read that? >> the leaving early if it happens and they send a signal about that, that's not good. what you want to see, the biggest tell you could possibly see is after these talks end, if they schedule an immediate follow-up and lighthizer goes to beijing, which is my understanding what will happen if there is a really good meeting in the next several weeks. all of a sudden this stuff kicks into high gear if you don't, if they can't come to any type of agreement today or tomorrow and things fizzle and you're just seeing a little lag, little huawei, that is a negative sign.

>> what would you do in terms of being able to hedge bets on this you say the positive potential outcome versus the negative. what would you say odds are of getting either one >> the white house wants to move this direction and the chinese are happy buying ag. the question will be, i think, the next step -- look, there will be how much political pressure the chinese feel at home from -- from the bad news that happened earlier this week, but also how much they're willing to move on i.p i think that this step should move forward in a relatively positive direction it's whether the white house realizes that maybe the october tariffs are a bigger signal for the chinese than we think. >> what do you think about how the nba situation is playing out, apple has now pulled this app the chinese said hong kong protesters were using to track police there that to me shows a whole new world in trying to deal -- american companies in trying to deal and operate in china. >> on the one hand it shows, look, decoupling or even moving towards a direction is going to have serious repercussions for corporate america, for financial

america, for everyone. on the other hand, there is a real push back in what's happening with the nba across partisan -- this is not -- this is an america issue, this isn't a partisan issue, which is unusual these days. i think what the chinese are going to soon realize, they can play this card, but it's going to -- it's a not going to work for much longer. >> is this a new card or this card has been played daily for the last 40 years, and for the most part, we have not taken true notice of it. >> that is exactly it. but i think an issue like this, everyone is watching the nba now people are -- right. now people are taking notice what you're going to see is the idea an airline would concede to china or hotel chain would concede to china that's not what people are paying attention to. now i think people are going to put the big picture together and there is going to be a concerted america pushback on this >> you're saying decoupling. go back to my -- we've been in this marriage sort of with china. symbiotic relationship we're getting divorced >> we're not getting divorced. >> we're going to stay together? are we going to live in separate

bedrooms are we going to live in separate places are we going to get separated? are we going to be able to patch things up? >> separate bedrooms, but flirt in the hallway along the way >> what? >> was that ambiguous enough >> this is getting weirder and weirder. >> i'm trying to figure out what the nuance, what that actually means. >> part of the decoupling -- >> where are the kids? >> the kids are screaming in the background as all kids do >> but this is -- we're in counseling both sides are willing to do certain things, we can preserve this, we don't throw away all this >> the ambiguity is intentional i'm throwing into the situation here you say decoupling we're not going to draw a fine line between the two countries and separate what we see is supply chains moving their own direction you have a 5g battle separating the world. we already have a separate internet >> this is the new normal. we're not going back to where we were before. >> that's exactly right. this is a long-term trend.

separate bedrooms. >> forever >> flirting in the hall. >> smart >> okay. >> leland, thanks. >> thank you it does help, you're kind of simple -- it helps me to sort through all this you see what i'm saying? bring it down to this. >> it's a decent analogy >> it is we have a long history together. i don't think we should throw it away >> i'll think of a better analogy for next time. >> this is pretty good i like the hallway >> okay. 9 fed, facebook and your corporate headlines, all straight ahead we'll bring them to you when "squawk box" returns right after this >> announcer: time now for today's aflac trivia question. when was the first u.s. thanerhechlauned e sw wn cnbc's "squawk box" continues aflac! coach saban we have health insurance. did health insurance pay for everything? no, we still have bills. aflac gives you money directly to help with those. aflac! and your deductibles, knee brace, whatever you choose.

aflac sounds like a winner. umhum... umhum... we try. get help with expenses health insurance doesn't cover. get to know us at... duck: aflac! dot com

♪ ♪ problems. it's human nature to hate problems. but why is that?spe us , bend things, make things better. to rewrite the rule books, the history books, and future books. that's why so many people work with ibm, on everything from city traffic to ocean plastic. from new schools, to new energy. from flight delays to food safety.

problems even got us to the moon and back on one tank of gas. and who knows where they'll take us next. ♪ ♪ >> announcer: now the answer to today's aflac trivia question. when was the first u.s. satellite launched the answer, january 31, 1958, called explorer.

>> joyous day that happened as i recall shares of bed bath & beyond are soaring. company announced late yesterday it is hiring chief merchandising officer mark tritten effective november 4th tritton hemmed streamline the shopping experience at target both in store and online he led the revamp of stories introducing private-label products in collaboration with big-name brands like vines and hunter boots he previously worked at nordstrom, timber land, and nike >> fidelity investments have now eliminated trading commissions on its online brokerage. that matches the move by charles schwab, and e. trade financial previously they charged 4.95 for online stock trades. the dropped commission begins today. of course, not all of them are doing this if you really understand the model behind robinhood, which is the first one to drop the commissions, the way that they

are able to make money and drop the commissions is they sell the trading flow and all of the data on your trades to folks like citadel and other hedge funds. so it is a bit -- there is an argument about front running and about what that actually even means and the idea that you're selling the data >> there is no such thing as a free lunch hello. >> exactly you can't get it for free. >> but do we care again? >> that's actually the fund amount at question at the moment apparently we don't. at some point i imagine we will again. >> you know, google maps, take my info. >> take your info. >> give me google maps, take my info don't take away my google maps, right, right >> in this case, though, the question is are you giving out your info and are people able to use that info -- >> to trade against you and make you get a worse deal because they're fronting the numbers >> this is your stock trading. >> as a result, you may get a lower spot in the line >> a lower spot in the line. it may be a penny, it may be

less than a penny. it's all on the margin then the question is, is that penny, how valuable is that penny relative to what you paid for it >> the regulators haven't said this shouldn't be happening. >> when we come back, maybe we'll debate this. are you ready for this the nba tipping off in china in just a few minutes we are going to talk hong kong fallout and much more when "squawk box" continues may show you a little bit of that as well as we head to a break look at u.s. equity futures. off 50 points on the dow quk x"etnsn 16 points. "sawbo rur ia moment

welcome back to "squawk box. apple now removing an app from its app store that hong kong protesters had used to track police movements the app is called hk map.live. it was rejected by apple earlier this month, but then allowed to go on the service last week. apple said they verified with authorities -- of course, hong kong authorities we should say the app had been used to target and ambush police and threaten public safety. after apple removed the app, some protesters said they may, quote, visit its hong kong

store. we have talked about this a bit yesterday on the show, but this is a new development in terms of them taking it off the service, and then the secondary piece is when other authorities go to apple in the united states, for example, and i'm thinking of ways and sheriffs have already done so and said to google, stop putting this on the ways service. apple, stop taking the service there are other apps in the united states and europe where you can see where police and other people are how it's being used, i don't know but it's interesting >> just interesting that every step is going to be so much more closely monitored from any corporation. >> right >> and i think getting forced to choose sides >> and so is this just a political issue right here i mean, is this -- i mean, the question mark is -- >> i don't know. i don't know enough about it >> is it to this specific issue? >> i don't know enough about it in this situation. i don't know if there were police that were targeted. certainly seems like the situation where you'd like to hear more. >> if we had a g8 in seattle

again or something like that -- >> right >> -- would we be mad if apple shutdown an app that allowed those protesters -- >> no, i'd like see them do it if that's the case and i will say the difference with ways is you know where police are stationed when you're speeding and you're trying to -- >> look, ways is the one that made the argument that knowing where police are it actually slows people down. it reduces -- >> they were never legal >> it reduces speeding rather than increases it. i don't know if that's true or not. >> still to come on "squawk box" this morning fed chairman jay powell insisting starting the treasury repurchases was in no way quantitative easing. we'll talk about the fed's move right after this break then facebook stand on political ads. we will talk about their hands-off approach and what it could mean for the 2020

election trade talks were stalled, back on again, back off again. dow futures right now down 72 points we'll tell you what you need to owefthe opening bell on wall street. "squawk box" will be right back. is the monolithic view of emerging markets obsolete? at pgim, we see alpha in the trends driving specific sectors of outperformance. where a rising middle class powers a booming auto industry... a leap into the digital era draws youthful populations to mobile banking and e-commerce... trade and travel surge between emerging markets. every day, our 1,100 investment professionals

around the world search out opportunities for alpha. partner with pgim, the global investment management businesses of prudential. but in my mind i'm still 25. that's why i take osteo bi-flex,

to keep me moving the way i was made to. it nourishes and strengthens my joints for the long term. osteo bi-flex - now in triple strength plus magnesium. woman: what gives me confidence about investment decisions? rigorous fundamental research. with portfolio managers t long term. who look beyond the spreadsheets to understand companies, from breakroom to boardroom. who know the only way to get a 360 view is to go around the world to get it. can i rely on deep research to help make quality investment decisions? with capital group, i can. talk to your advisor or consultant for investment risks and information.

welcome back, everyone the fed discussing permanently increasing the size of its balance sheet. is that the same thing as quantitative easing? senior eric no, ma'am iks reporter steve liesman joins us with discussion on the fed balance sheet debate if it smells like quantitative easing and it quacks like quantitative easing, what do you think, steve >> i think you have a opinion on this, becky. >> just a little >> let's talk about q.e., how much q there is, and how much e it will lead to. the fed will resume growing its balance sheet. it is concerned markets not see this as a round of quantitative easing q.e., remember, a program from the financial crisis where the fed bought large quantities of mostly large term bonds to spur economic growth. this the fed says is not going to be that the new move it says is in response to a lack of liquidity in over night funding maurkts that drove the fed funds rate above the fed target rate. there are two parts to what the fed will likely be doing over the coming months and perhaps forever here

part one, replace the temporary operations with a permanent increase in the size of its balance sheet. you can see on this chart the recent bump up is the temporary operations that raised the size of the balance sheet they need to make that permanent by going outright and buying treasuries, probably buying treasury bills, though, on the short end. about $200 billion worth of operations, but no particular time line on that. part two, resume growth of the balance sheet in line with nominal economic growth. that is 4 to 5% annually on 3.8 trillion we did the math so you don't have to. that's plus or minus $15 billion a month. maybe forever. the fed says, part one, adding the 200 billion in reserves, just getting the market the supply it needs where the funds rate is going to trade-in line with the market. that's normal operations going back to the precrisis year when the balance sheet grew right along with nominal growth, it is a q.e. in size, isn't q.e. in intent. that isn't designed to drive

down rates and spur economic growth in other words, they say at least there's not a lot of q and that's not going to lead to very much e >> okay. so i have an opinion, but i value your opinion what do you think, is this q.e. infi infinity >> let me start with one thing if the fed wanted to do q.e., they would say they're doing q.e. a lot of the whole way the q.e. worked is by telling everybody we're doing kwfrq.e. the market gets out in front of that, you don't have to do all of it or it has a bigger effect. there's no reason if the fed really wants to do q.e. to keep q.e. quiet i think that's one two, this is a third of the size of the smallest q.e. operation there is not a whole lot of quantity also, it is on the shorter end of it all. >> it's just a little bit of q.e. >> if you need to call it q.e. to feel good, becky, you just go ahead and call it q.e.

i don't think it's q.e i don't think it's q.e >> a big fed balance sheet here to stay forever? >> what it is interestingly is an acknowledgment the fed went too far in reducing the size of the balance sheet, which i think you excuse because the banks kept telling them we only need this much. then when the so and so hit the fan, they needed that much >> i know it's skinny q.e. >> little bitty tiny bit >> we decide skinny market what was it yesterday? >> skinny deal >> skinny margarita, skinny bundle >> mike santoli is here, too what do you think, mike? >> with steve here, it's going back to a time when the fed just accommodated -- >> hold on the exhibition game between the nets and the lakers tipping off in shanghai. it's currently 0-0 the chinese government has mandated that there be no team or league news conferences in conjunction with that game it's not being broadcast anywhere in china, but that's --

>> from looking at it, it did not look like there were any empty seats, which was the question we were talking about with eunice earlier today. 18,000 seats were sold out we only saw part of the crowd. >> the score was 0-0 also worth noting the nets are owned by joe tsai, one of the founders of alibaba. one of the vociferous spokes men on behalf of china >> what did he say >> he came out three days ago and was effectively on the side of china that itself created a separate debate, did he go to the nba first, did the chinese government go to him and say we want you to make this statement on behalf of china it's complicated nonetheless -- >> looked like a pretty good game depth see much didn't see much of t. >> i was looking at the crowd. >> want to get back to the markets. steve finished the point we were going to santoli, why don't we do that. >> santoli was agreeing with me

when he was cut off, for the record >> we'll see about that. howard ward is here, chief investment officer, tgm institutional investors joining us from chicago. we will begin with mr. santoli agreeing maybe, or not -- >> agreeing. if you say the current fed policy is to keep rates within this target range, it is just maintaining the same policy to buy what you need to do and do reserves at the short end. >> i understand that >> the balance sheet grew 5% a year before the financial crisis nobody ever talked about it or noticed it or cared. that's what's going on now >> how much were we before -- >> it's a lot more regulatory requirements for excess reserves, and that's really where the nut is on this thing >> market is smaller -- by the way, the pool of treasuries is vastly larger, too >> this is the normal. we're never going back to where we were. >> 15 net billion buying the

bills. treasury securities, 10 trillion this year. >> i think becky is having an interesting moment here, which is remember the moment in apollo 13 where tom hanks says we just lost the moon? >> yes >> i think you're right in saying, we just lost the ability to go back -- >> this is the new normal. we're never going back >> as we knew it, it's never happening again. and if that's the conclusion you have, i think you are 100% right. >> 100%. >> we're never going back to an $800 billion -- this is a moment balance sheet. >> except everything they told us about how this was temporary, this is not. everything has changed >> the economy is outgrowing it over time. >> it's not because the economy grew three times in size the economy -- >> did anybody think the balance sheet was the absolute perfect number, we had to maintain >> no, but i will tell you that it means that there was a much bigger need for this and that it is part of the easing overall. it is why there's so much liquidity out there. if you want to take it out of

the equation, it means something to have that much liquidity there. >> it's for the most part. >> it means something to have it out there. >> it also means the fed is going to be a part of the treasury market. >> right >> by the way, in less of a percentage than the ecb and the bank of japan are relative to gdp, that is true, too but maybe mr. howard has -- >> exactly let's go to mr. howard a, do you agree with what steve is saying? b, how do you play it? >> i view it as a form of q.e. light. i don't think it's really q.e. because unless they're buying coupon-bearing debt, bringing down longer yields, i don't think it's going to have any real impact. >> q.e. skinny >> you had to say q.e. light, not q.e. skinny -- >> i had to say something different -- >> we've had a number of guests come on the show in the past week who have suggested that effectively -- not that they're getting out of the market entirely, but that they are truly lightning up what are you doing >> very defensive. i mean, it's unusual for me to be very defensive, but i'm more

defensive than i've been in a number of years. the data is lining up in a negative way we're looking at now earnings estimate revisions have gone from plus 10% going into the year to 2% they may be negative >> does that mean staying in the market moving to defensive oriented stocks? or does that mean something else defensive oriented stocks plus cash >> holding onto it -- in a moment >> i think you have a better opportunity the next three to six months to deploy cash. stocks you have you should be defensive. would i take capital gains with the idea of getting back in at a lower level? no, i wouldn't do that i think we're going to have an upturn at some point next year i think we have some rough sliding ahead. we're entering a phase -- hold on we're entering a phase in the market where we are likely to see contracting earnings and contracting multiples. this is the most dangerous phase for the market it's when most of the losses occur in stocks and we're on the precipice of that happening. >> i have to get to jim. i'm trying to understand what

you said, there will be an upward trend sometime next year. >> next year, probably late spring of next year. i think you're going to -- >> ahead of election season you think there will be an upturn? >> that's a very good point. if we get to that level -- if we get to march, april, may and the economy is doing better and the pmi s are rising, not falling. elizabeth warren is the leading candidate, frankly, she's probably a lovely person, but i think her recipe for the economy and for regulation would be very bad for the stock market >> and sends it where? jim, you've been very patient. what are you hearing where you sit and your reaction to what howard is saying >> well, i think there's one element that's being forgotten here if we do see p.e.'s contract and multip multiples contract, we are going to see the fed respond to that we have free money in the world. you have to ask yourself, where is money going to go if not the

u.s. stock market? i think that the fed could save it as it's done in the past. this china thing has been fascinating. we haven't really talked about it at all. but if you thought like i thought, you know, that we were going to become numb to these headlines, clearly we're not the vixx is running at almost 18% over the last year, over the last five years. 15%. to me that means that people aren't complacent. to me that's a positive for the stock market, not a negative >> i just wonder, though, dave was talking about this in the last hour. is it right for the fed to cut rates and spur -- yeah >> no, not jim it was david, yeah, david. >> spur investors to take more risk into what is really a riskier time >> no. >> i'm not sure that makes sense. so the spectrum by reducing rates and they're really pushing you into the problem that's coming ahead >> yep >> gentlemen -- >> they'll tell you.

>> would you reduce the risk themselves >> that's true would you spell skinny with a q, joe? s-q-i-n-n-y. [leaf blower]

you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.

welcome back, everybody. facebook making headlines this week after rejecting a biden campaign request to remove a trump campaign ad targeting joe biden. facebook said that the video did not violate company policy joining us to talk about facebook's role in all this is leah goodman, former fec

commissioner and partner at wiley ryan sarah fischer axios media reporter thank you both for being here. lee, what do you think, does this invite additional scrutiny from regulators? >> no, i think that facebook, like all publishers, has to have reasonable editorial policies in place. and i think what we're seeing here is an exercise of their editorial freedom to feature candidate ads without fact checking and allow the political process to be the arbiter of truth and falsity in political advertising by the candidates themselves >> sarah, that sounds like a personal -- a completely respectable expectation. that's certainly what we've seen in the past. i would almost argue that everything is becoming more politicized and you're seeing everybody forced to choose sides, much like the nba is. when it's squeezed between china and the united states. it's a heightened political environment. what are you seeing? >> i definitely think it's a heightened political

environment, especially for facebook which is facing so much scrutiny on capitol hill not just over this issue, but over a lot of issues at the end of the day, this isn't a new thing. there have been media companies that have accepted ads with false content or misinformation for decades. i think what's new here is that people look at facebook, they think it's huge, and they're worried that if it allows misinformation on its platform, it's going to completely twist our political system i think people are focusing a little too much on facebook's exact role in reality, tons of networks are accepting this ad and have accepted other ads of misinformation before. in the hyper political environment facebook is getting the brunt of this. >> maybe i should put it this way. do you think it's more likely politicians go after facebook, not regulators who might follow the rule of law, but politicians tend to follow where the public wants them to go >> well, facebook is condemned whether they do or whether they don't. >> yeah. >> and, you know, they don't

want to be the arbiter and they don't want to take sides in these political debates. their stated policy i think is fair when it is candidates' direct speech, whether it's free posts on their web pages on facebook or whether it's paid advertising, they are going to allow the people and the other politicians and the press just like we're discussing it here, they're going to let the political process be the arbiter of truth and falsity especially where the speech is direct speech by a candidate to the american people. >> lee, what do you make of networks, papers, tv, outside of the facebook world who oftentimes look at ads, see if they're accurate or inaccurate and say, we are or aren't publishing these things? >> there is a legal overlay to those editorial decisions across media. for example, broadcast media cannot sensor candidate speech

under the communications act they must carry and disseminate an advertisement by a candidate, and they are afforded liability protection, particularly for defamation, when they do cable casters, such as cnbc, they have editorial rights over the ads that they run, and they also do not have the legal protection against defamation, so they have a little more proactive approach to regulating what they disseminate in paid ads and do not on the internet, it is different. the internet, facebook has editorial control over what it posts and doesn't post, both free post as well as paid ads. and they have immunity protection under section 230 of the communications decency act so the editorial decisions are drawn not only by the editorial choices of the various media platforms, but the liability >> lee, do you have a problem? last year, i don't know if you

recall, cnn and fox in an almost bipartisan approach, removed a commercial that president trump's political team had put together portraying immigrants as a violent threat. was that -- do you agree with that decision, disagree with that decision? >> what i agree with is that all those media you just mentioned, they are cable programmers they have editorial standards, and they are allowed to apply those editorial standards to the ads that they run, unlike broadcast. facebook, however, just in the area of candidate advertisements, and solely candidate advertisements, they are taking a hands-off approach and they say, we aren't going to referee truth or falsity, opinion versus fact, candidate versus candidate debates >> lee, sarah, i want to thank you both for joining us. i get the feeling we'll have you both back soon to talk about it. >> thank you >> when we return, much more on the markets and the china trade

talks. we'll be right back. >> announcer: in the next hour of "squawk box," a round up of what investors should take away from the china trade talks plus, the gm strike, day 25. will a deal be reached before suppliers feel a pinch that plus your later corporate headlines when "squawk box" returns. at synchrony, we're changing what's possible every single day. but what does "changing what's possible" mean anyway? ♪ well... if you run a business,

it means a lot. for starters, we provide you with financing options for your customers. that way, you can help them buy the things they love instantly and pay over time. and that turns them into serious fans. hang on, there's more. want customer insights? we've got those, too. we use data to show you what your shoppers have already bought so we can tell you what they might consider buying next. and you can offer them the perfect products. that ceo gets it. from adding unique capabilities to your company's apps to bringing you loyalty programs, our technology and financial solutions are changing what's possible in all sorts of ways. so, how can we change what's possible for you?

♪ ♪ i can shine. ♪ i'mma do what i'm made to do. ♪ built for excellence. you start from the foundation up. the excellence is reaching dreams and chasing them at the same time.

trade keeping markets on edge volatility in the futures as u.s. and chinese negotiators get set to meet in washington. >> apple getting caught up in the unrest in hong kong. the company deciding to pull an app used by protesters >> and inside a global ride sharing giant. no, it's not uber or lyft, but it books more rides than both. the final hour of "squawk box" begins right now >> live from the most powerful city in the world, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm joe kernen along with becky quick and andrew ross sorkin futures right now down 56 this

morning. they've been kind of wide range in the last 12 hoursor so, in the premarket session. down much more than that it was positive at one point now down 53. everything keying off of any comments or overtures out of china. it's october 10th, believe it or not. remember when that seemed so far away october 10th, here it is october 10th s&p down 4 1/2 nasdaq indicated down 12 treasuries been in a pretty tight range recently we're in the mid to high, 1.5. almost 1.6 on the ten year >> let's get you caught up on some of the stories investors are going to be talking about today. apple has removed an app from its app store that's been used by some of the hong kong protesters demonstrators have used this app called hk map.live to track movements by local police at least according to the hong kong government apple said the app which the company rejected earlier this month was approved just last week

they say it violated its rules because it was used to ambush authorities. the official newspaper of the communist party in china blasted what it called apple's complicity in the hong kong protest. third quarter results out from delta airlines this morning. the company beat estimates for adjusti adjusting quarterly profit revenue was a little below what the street was looking for it was helped by demand growth by pilots, airport workers delta doesn't have any of the 737-max airlines it was able to poach from its competitors that did have the airlines sidelined used a lot of pilots in overtime that added to their costs. they get double time for it which is why they're hiring more pilots now >> costs are suddenly an issue pilots were sitting around in a lot of other airlines. >> southwest pilots who are now suing boeing saying they didn't make the overtime pay they were anticipating delta airline shares down by 3.5% also check out shares of bed

bath & beyond. housewares retailer named target chief marketing officer as its new c.e.o. succeeding interim c.e.o. mary winston. it is effective november 4th that stock is up 23% steve liesman is back. he's got breaking news this morning. steve, what are you seeing >> dallas federal reserve president robert kaplan out with an essay this morning. he said the fed may may have raised rates inappropriately last year. he's behind the last two rate cuts the fed did, but wants to take a little time now he said he's concerned -- he said it is appropriate before the july and september meetings to have lowered rates. concern recent weakness could spread he's a little bit concerned about the consumer here. says if we wait till the data or the weakness was up in the consumer, it's too late. but he wants to reserve judgment on the need for future rate cuts kaplan is not a voter this year. looks like he's a voter next year from what i can tell. and just fy i, i will be

interviewing minneapolis fed president tomorrow at the foreign relations. >> who is voting it's either this year or next year he's a voting member? >> i have neal voting next year. he's an alternate this year. same with kaplan >> seeing fed bank presidents putting out statements like this, i mean it's a little interesting the jockeying before the next meeting everybody is trying to get out there where they're coming before they get into the room. >> i thought powell was a little more circumspect about the need for rate cuts than the market seemed to think it was i always have concern about leaning too much where the markets priced >> is this messaging meant for the markets? >> it's not as much of a done deal by the way, they debated yesterday according -- i'm looking at the probabilities for -- it's not as much a done 2k50e8 th deal they debated yesterday not to price in the way of rate cuts in the future. i have the possibility or probability of a rate cut this

month at 82%, but the debate's been about next month -- sorry, the next meeting december, where it's just 47%. that had been above, then it went below and it's been even lower than 47. that's where we are now. we're banking on the october cut, debating december >> steve, thank you. >> pleasure. >> okay. top trade negotiators from china and the u.s. getting ready to sit down in washington it is the first time they'll be meeting in more than two months, but there has been already questions about how far these conversations will go. kayla joins us this morning with more as the market tries to bet on that great question kayla. >> andrew, you can see the media crush starting to form behind me chinese state media, u.s. media from a variety of outlets awaiting the arrival of the chinese vice premiere here at the office of the u.s. trade representative where the talks have taken place at a high level on and off for the better part of the last two years. this one appears to be crunch

time you have had a flurry of media reports all throughout the week in the wake of some very hawkish moves by the trump administration to introduce a chinese business blacklist for certain type companies also banning visas for certain chinese officials tied to human rights violations in northwest china. all of that seems to frustrate the vice premiere. chinese officials now telling certain chinese outlets that they will cut their visit short. they will wrap up talks today at the end of the day that's a day earlier than planned. it was something that caught the white house unaware last night when these reports first broke a white house spokesperson on the record said there had been no change in the schedule and a senior administration official telling me there was still a dinner planned with the delegation for this evening and the vice premiere was expected to leave tomorrow. i'm told now by a principal the situation is fluid, that talks are open-ended, that it's an open question as to whether tomorrow will still be part of

the trade negotiations, whether the delegation will split, whether the vice premiere will, in fact, leave early that is an important point to chinese officials who view some of that diplomatic format as very important signalling as to their frustration, how serious they are and whether progress is, in fact, being made. we'll be here, we'll be monitoring it for you. as to where the president stands who is the final decision maker here and has been unpredictable throughout the situation, senior administration official tells me last night he has not made up his mind andrew >> okay. kayla, thank you so very much for that report. we're going to continue this conversation let's talk more about what's at stake in those latest trade talks. joining us right now, joe -- >> what? >> you go. >> founding partner, nicole lamb hale managing director at crowal nicole, do you have friends back

there? do you know anything we don't know about what's actually going on behind the scenes with the talks right now? can you tell us? >> well, i wish i could. i wish i could give you some certainty there. i mean, there's a lot at stake this week. our clients at crowal and dufenfelts, both sides are suffering. we're seeing a slow down in the u.s. in terms of manufacturing activity extended beyond agriculture. in china as supply chains begin to shift to third countries, they are beginning to feel pain so there's a lot at stake here >> for lack of a better term, we're looking for a skinny deal, something that sort of, at best, i guess, moves it to a year or two from now we don't solve all the i.p. and contentious issues, but we get something on paper, we delay additional tariffs, get some ag buys is there hope fonicole, in your -- >> i think a skinny deal is probably hopeful

it disappoints me, though, because at the end of the day, the structural changes in terms of i.p. protection and in making sure that subsidies are not given to state-owned enterprises to level the playing field i mean, those are the big ticket items. a skinny deal just kicks these issues down the road and i have to tell you, i'm very encouraged, one ray of hope. crowal recently issued its global fraud and risk report where we found that 94% of chinese executives that were surveyed with chinese companies believed that i.p. protection is something that's critical. and so that gives me some hope that maybe the chinese government will accelerate its efforts to improve i.p. protection, which is a structural issue that we need to really focus on. >> i don't know if you're going to make us feel any better about a fat deal is it a skinny deal, that's the best we can hope for >> it's metaphor day here. we've been using small deal

metaphors like that since last december, at best a 90 day, remember it was going to happen in 90 days that was impossible. it was ridiculous. the best you could hope for was a small deal it's time to be honest now we're talking about fake deal or lipstick on a pig deal >> right >> because we're talking about little concessions right now that would get us halfway back to where we would have been had we not started this whole thing. that's not to say that we shouldn't be contesting challenging where china is going, what's happening in its system take the nba situation, for example. you know, to go ahead and get ahead of the question you're going to ask anyway. you can't ask a c.e.o. to be both a public affairs officer and the chief executive looking after the balance sheet of a company. that's serving two masters it just doesn't work there's hugh costs to where this whole thing is going we've been pretending -- >> the round table thinks it works. >> they're doing what they have to do in the moment. i get that i have the opportunity, the luxury of kind of calling it a little truer this doesn't work. this is not going in a good place.

there's no happy outcome >> well, that's depressing nicole, it sounds like you -- you're in the obama administration, and what i usually hear from democrats, they sort of want to take on china, but they want to do it with our allies and they don't want to do it through tariffs. are you in favor of the tract that's been used so far to bring china to the table or should we have done it the some other way? sounds like you think i.p. is a problem. >> right >> and the subsidized the state industries, those are all problems you would have done this >> well, i have to tell you, the critical mistake that was made by the trump administration was pulling out of t.p.p tariffs don't work economists have said that for years. now we're in a case study. we're living in a case study of how tariffs don't work i think that being involved in a multi-lateral effort like tpp that would bring our allies together and force china's hand would have been the way to go.

>> hillary wasn't going to do it either neither was -- and the president, president obama tried to do it and didn't have the democrats -- had more republicans on the side for tpp than democrats so i know what you're saying, trump ended it, but that didn't have a chance anywhere >> well, i think it could have, and i think that it's something we should begin to look at again. that's a longer-term play at this point and i also have to say i think that we need to be more culturally sensitive in our negotiations it's very disappointing that the vice premiere may be leaving early. some of the negotiation tactics i think we need to be careful about because there is a culture sensitivity -- >> nicole, when you say the tactics, are you saying we placate the chinese? >> no, i'm not at all. what i'm suggesting is that certainly announcing efforts that really box china in before we even come to the table again aren't the right way to go and that happened today. >> i see >> real quick, before we go, how do you think u.s. companies should deal with china, and clearly the nba is a clear

example of where this all meets in the middle? >> sure. i think that u.s. companies should remain true to their values i think that it's not a winning game to compromise your values >> you mean money takes precedence over everything, nicole that's basically what -- >> i wouldn't say that money is a value. >> that's -- i mean, that's what we're seeing with, you know, we blame the nba, but then we went back and said, you know, find a corporation that hasn't sort of appeased china because of 1.4 billion -- >> these are tricky issues, and you can't solve them by tweet. you really need to sit down and have discussions and try to come to a -- >> this is bipartisan. >> i also think these are the type of things the government should be sitting down and discussing and not leaving corporations to decide on a case-by-case basis >> exactly >> that is 100% right. >> they should be discussing --

>> important point, is this u.s./china or multiple -- the big thing that happened, choosing to make human rights part of the conversation that didn't even come out of the oval office. that came out of somewhere else. >> all right that's an interesting point, too. >> well, thanks, daniel. >> thank you good to be with you. >> when we come back, we'll take an inside look at the world's second largest venture-backed company, chinese ride sharing company didi it may book more rides than uber and lyft, but it's not without its own problems plus a year of some big name ipo disappointments. we'll talk to one c.e.o. of the stand outs on what she and her company did write. stay tuned you're watching squawks on cnbc.

difficu welcome back, everybody. all this week we are taking an inside look at the world's most valuable venture backed private companies. deirdre bosa joins us now. she has a heavy weight in the ride sharing industry. and no, we're not talking about uber or lyft deirdre, good to see you >> becky, we're talking didi, china's ride sharing giant the second most valuable company. based on the funding in 2017, this is an important distinction because that was before the implosion of we work's i.p.o reports suggest dee dee idi is g priced in the valuation. didi is another softbank

investment another potential black eye for the recent record as he's raising money for vision fund 2. like uber, softbank was a late investor putting money in the $6 billion valuation. didi is a ride sharing monster that makes our own american platforms look tiny in comparison last year's average daily rides were twice that of uber's, 15 times that of lyft's while uber has been getting out of unprofitable businesses overseas, its overseas markets, didi has been doubling down. remember it defeated uber in china. it has poured billions of dollars into uber's rival in southeast asia and now it is battling the american ride sharing giant in one of its most important markets, that would be south america. now, like our ridesharing players, though, didi is bleeding money and facing many regulatory challenges. according to reports, it had been operating at a loss for six straight years and paid out $1.7 billion in subsidies and

discounts to passengers and drivers in the first half of 2018 alone guys, back to you. >> okay, thank you, deirdre. one stand out in the 2019 i.p.o. class is turning point therapeutics the stock is up 20% since it started in april joining us to talk about the business pre and post, how did i do >> good. >> almost. >> athena was accurate >> contouriotis. >> your last name is much easier than mine. >> let me ask you this we started this segment or came into this segment talking about sort of the ipo class, this vintage. what do you think is going on right now in terms of how the market is looking at all these companies? i know that they're not, one, monolith you're stand out compared to what we've seen. >> the reason we outperformed the other biotechs throughout the year, across almost all ipos

also biotech is we have delivered on the promises we made we did a lot of marketing before launching our ipo. we had a very strong scientific platform we have more than one molecule we have now advanced essentially almost our third into the clinic since the ipo. we've had consistent improvement in our clinical data for our lead asset and having that clinical data really was the premise for us in terms of building on the foundation of our science. and being able to be able to support -- yes, we had strong science, but being able to show when we translated that into the clinic -- >> i want to ask you about that, by the way you're our biotech expert here >> it is interesting so these are kinase inhibitors you have a small molecule that is less likely to be mutated around by lung cancer. >> so, what we've done as you know very well, targeted oncology is a precedent that precedes us, but what wen an en