good morning it's 11:00 a.m. at under armour headquarters in baltimore, maryland, 11:00 a.m. on wall street, and "squawk alley" is live ♪ good wednesday morning welcome to "squawk alley."

morgan has the morning off interesting market day setting up despite all the volatility. tech remains the market leader this year. the xlk handily outpacing the s&p. semis up more than 40% for the year, almost doubling the gains of the nasdaq. then you've got the earnings spotlight tonight. netflix after the bell joining us this morning, joel killeen and kenny picari good morning, guys, good to see you. >> good morning. >> semis, banks with a second good day vix below 14 is a rotation happening? >> i think the earnings season is not going to be as disastrous as the street and some analysts have made a lot of people expect it's already started the bank numbers yesterday and today performed much better than expected nobody is talking about it

i actually feel good about it but i think there is a rotation, depending on what's going on so there will be rotation but it's all part of the process. >> you still think we're range bound here >> i think we're range bound on the lower ending we'll test the lows, 2758 earlier this month. 2758 is also the 200-day moving average. not 27, excuse me, 2858 was the 200-day moving average i wouldn't be surprised if over the course of the earning cycle we see the market test lower there. not break it but test lower. i think as we move to the end of the year the market rallies back to the highs just around 3000 is where we'll be. >> s&p just went positive a few minutes ago. we'll see where it goes from there. joel, a lot of turbulence in tech, particularly software. last week or so there was a call from morgan stanley about i.t. spending that got people concerned. then goldman sachs on hardware

then we got work day, which is software, which is cloud i thought that was supposed to be safe. what's going on? >> xlk highs of the year leading the market but there's a lot of moving parts under the hood. you can say death by prospectus. anything with a loft evaluation in growth had been carried out to the woodshed. you had cisco warning in august. >> adobe downgrade today. >> the morgan stanley cio survey call clearly whether it's valuations being compressed on the private side, poor ipo performance, just negative macro impact. hence the semis continue to benefit from the cyclical rotation they're main not that well owned by the hedge fund community. hence it feels like it's going to be a death grind higher in the chips and no one wants to touch the software names. >> despite inventories at all-time highs pretty much.

>> with the semis, at least you have semi equipment. they're benefitting from china becoming more silicon independent. 5g acceleration. so there's good stories but there's a lot of debates and moving parts under the hood. >> kenny, you talk about earnings not being as bad as feared i worry about guidance some of the guidance has been good but tech guidance in particular, when we're getting projections in 2020 in the first half not so great for semis, i.t. spending looking to slow down what do you expect to hear on that >> listen, that's a sector of the broader market, right, the broader s&p. >> arguably it brought us here, though. >> it did bring us here. i think there's this rotation going on if you start to see, as we're starting to see some pull back or modification of the earnings, i'm not going to be really surprised. i still think tech has a place in the portfolio but look, if tech starts to come under a little pressure, is it going to really affect that industry it will affect the nasdaq but i

think the broader market feels really good to me. >> do you think netflix is a canary for anything, or is it so specific that even if they miss guidance -- >> it is very specific when they miss q2 that badly three months ago, it was essentially dead money you could short the stock and it would have been one heck of a trade since then with netflix the bulls are hopeful. the positioning is the most favorable it's been in some time longs have been trimming, shorts near a 12-month high a $6 billion notional value from the near base. if we say squeeze, i'd see the multiple cap to the upside in netflix simply because there's no pricing power left in the model and you have real competition coming so i think investors want to see disney plus numbers for a couple of quarters to get a sense of where netflix stands i think growth will moderate >> but if they miss, then people will use it as an opportunity. once again, they'll jump in, they're overpriced, they'll sell them off and do all that stuff then stop and scratch their head

and what are we doing? it's a miss in netflix. >> kenny, if the heat comes off adobe and workday and the likes of those, even netflix, can we count on the disneys and walmarts to power us higher? that's not what you would have thought a couple of years ago. >> no, it's not. i tend to be a more conservative player so if you're somebody who's worried going into 2020 and the election cycle and you're worried about this big, bad boogieman of a recession that's coming at some point and you're somebody that wants to have stock exposure, i would imagine you would flock into value names. whether or not you say disney is a value stock, it's got a nice dividend, it's a healthy name. it's a name everybody knows. it's a name that provides some stability and security so i wouldn't be surprised to see kind of that rotation into those big americana names as you move into a period where you might be a little bit anxious, cautious. >> we'll see they have talked about the integration issues they'll have with fox assets, not to mention

they want to see proven performance on disney plus maybe the bigger story tonight, who knows, could be csx. we already know what rail traffic has been like. gdp is going negative by the end of the year. if they say something marginally negative, people will put some investment in that. >> well, they will put some investment in that if we think it's going to go marginally negative, that speaks very specific. i'm not sure we could see the slowdown it's certainly coming, no one should be surprised, but i'm not necessarily sure that one report in csx now, if they all start with the same story and they all start missing and lowering guidance and talking negative, that will be a different story but the jury is still out. >> banks have not done that. >> banks have absolutely not done that. >> guys, information continues to flow in we'll see what happens tonight good to see you. >> and you. when we return, disrupting the cloud and cutting amazon down to size john chambers joins us right

here next with the venture he n'ys that will do it dot go anywhere, we're back in a moment johnso johnson is a baby company. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

amazon's cloud dominance is coming to a close. that according to john chambers who says his next venture is set to disrupt the entire space. joining us now here at post nine, a cnbc exclusive, john chambers and sony jendoni.

>> good to see you. >> bold claims but i would expect no less from you. i take it you've caught another market transition. but tell us exactly what you this group does, legendary in i.t. doing innovative things within cisco, left cisco a few years back under some controversial circumstances. is this a chip is this software who's the customer >> all right taken the sequence that you talked about, the market transition is the cloud. what it does is pushing compute, storage, networking, security, the apps, big data, driving off a lot of the major tech trends, 5g, et cetera, into the cloud. as that occurs, it gives the opportunity to create for each company their own customized version of the cloud systems in other words really to make it

work very uniquely we have yet to miss with any enterprise, service provider, cloud player in the world when we sit down and say what we do for your listeners, sony, we talked about the ios from apple and the android. a good example of exactly what we're doing. put it in those terms if you would. >> very simply put, if you look at the trends apple an pursuing with the iphone and ios software, starting from the chip all the way to the software and the device is something that only apple and apple's customers can consume. we have the equivalent of the android platform which is open which allows the whole ecosystem to play and the chip and software run on standard off the shelf infrastructure, whether it's built by cloud customers or taken by enterprise customers. >> so who are you taking share from whose wallet is the money coming out of are you trying to get cloud providers like microsoft to build this into azure?

>> hewlett-packard will be a strategic investor, so their customers will acquire this technology in hp infrastructure and enable them to build that cloud architecture at the same time cloud customers have also validated this architecture as a result of which you will see announcements that are part of our overall customers that we have hadded, including oracle cloud >> i think what you're looking at is a whole new category of opportunities here our addressable market today is $40 billion a year the ones who get hit first are the appliance players, the vpns, the low balancers because we'll consolidate that it's a software play on top of silicon. where it goes, it gives these companies a chance to innovate

it's then you suddenly give controls so these companies can innovate faster, use their technology to combine it with business models as everything moves to the cloud. so think of us as the platform that is players choice and a well run, extremely dominant company in amazon that we've challenged to give everybody choice and selection on where they go and innovation. >> john, broadly, we've seen some survey work on i.t. budget growth spending. >> yes. >> expectations sliding four straight quarters. we know what cisco's guidance was like, a downgrade of adobe today. are ceos going to want to spend more or less >> the budgets will be tight to down so if you're purely selling to the i.t. department, it's a tough realm. >> because >> because their budgets will get squeezed as people get concerned about a recession, et

cetera. >> is that what it is? >> secondly you're getting good productivity out of i.t. so they're leveraging that. the key issue and most of the startups i'm involved with, they sell to the technical elite, business elite and ceo level if you're in topics like security, my security startup is growing 200% a year, whether it's detecting what could have been permitted in saudi arabia or a smartphone i showed you guys, it won sole source as dissa, the air force, et cetera. but where the budget is, it's where they want to lead. so if you're only selling to i.t. that's okay the next year or two with people concerned if you're selling business outcomes then things get very good we're looking at probably growth per year of 80% and head count last year, 70% this next year. we're looking at not how to create 10,000 millionaires like cisco but we know what the stock has to do to create a

millionaire for every one of our employees. >> ipo how soon? >> the goal is to get there in four years. >> and the fun part is different than the other startups you're seeing, we will do it already making money the fourth year we should generate $100 million in profits and $100 million in cash we designed this to be profitable and we are not going to let some of the mistakes some of the peers have made in terms of breaking culture or not having a plan for profitability and free cash flow we think it's all about profits, cash flow and culture. >> you mentioned startups. are either of you discouraged about what you heard out of the debates or is this primary silly season policywise? >> i'm going to protect you on this one. >> i'm run interference. >> i was very disappointed when i cocked to macron in france two weeks ago, he outlined a vision for his country where startups play. how are you going to do job creation and create average

household income with modi in new york two weeks ago, honored to be his ambassador and i'll see him this next week in india he talks about gdp growth of 6%, 7%, 8% nobody told me last night in that debate how they're going to generate 25 million jobs in the next decade and replace 10 million jobs that will disappear due to automation. >> even if we did that, do we have the people to do those jobs i didn't hear a lot of talk about education, about preparing the workforce of the future. some on apprenticeships but giving away $1,000, raising the minimum wage isn't necessarily going to get you the people who can build and work for the next pensando, is it? >> i think this is where biden was the calmest of the group and was focused on what needs to be done i was at west virginia university and this is an example not for a university but for the whole nation we met with the president of the university, with the governor's office, with the speaker of the house, the president of the

senate both u.s. senators, democrat and republican, we said we're going to make this state a startup state. we're putting it in the university, changing the curriculum everybody will be required to take entrepreneur courses. break down the silos between engineers, business and med school do it for west virginia, you do it across the central part of the nation and the southeast so you have to have people that are able to envision the future and say how do you do job creation that will dream to say how we make our kids millionaires rather than say how do we take money out of one pocket and give it to another pocket that will dream about our future, large companies not adding jobs but the small companies. >> even smaller ball, we've got to get our kids proficient at math >> entrepreneurship. >> entrepreneurship too. great to have you oth. >> thank you thanks for our enthusiasm. follow this company. they'll make a great ipo thank you, guys, as always. netflix does post tonight

after the bell we'll talk about what to expect after a break with the dow just moderately down 16 don't go away. woman: my reputation was trashed online.

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rival streamers and a risk of subscription overload are in focus as netflix prepares to report after the bell tonight. julia boorstin is in l.a. with a look at what to expect this is going to be a big quarter, julia. >> it will indeed, carl. and with netflix shares down about 22% over the last three months, the streaming giant's subscriber numbers will once again be in focus, especially after last quarter netflix' u.s. subscriber numbers dipped for the first time in years and its international growth fell far short of analysts' expectations the number to watch is 7 million and 9.5 million, that's the number of subscribers analysts say they will guide to in the fourth quarter that guidance is more important

for the fourth quarter than ever because disney plus and apple tv plus are launching about a month into the quarter, joining an already crowded streaming space. now, even before these new services launch, a new survey out just yesterday reveals that consumers are already feeling subscription overload. 27% of consumers polled say they spend more than $100 on entertainment subscription services, while 59% say they're happy with their current subscriptions. a fifth of consumers say they would consider adding a new service if something new came to market but the more subscriptions, the bigger the hassle. a third of respondents say remembering account passwords is their biggest pain point and 39% say having all of their services bundled into one platform would make it easier. we'll have to see how many subscriptions people are indeed willing to pay for once some of these new entrants hit and see if netflix hangs on to that first mover advantage. carl, back over to you.

>> all right, julia, thanks, i'll take it european markets set to close in just a few minutes. seema mody has the news. >> right now european stocks are mixed, to the upside with the german dax about up half a percent. there's new comments from eu's donald tusk saying the basic foundations of the agreement are ready and could be accepted tomorrow he noted there could be some doubts on the british side tusk saying the picture should be clearer in seven to eight hours. as we await that summit in brussels to kick off, watch the ftse 250 that should benefit from a stronger pound the index has outperformed in the past week up 5% to 6% versus the ftse 100 which is more diversified. it's up fractionally separately, the big story is yields have come off their july

lows there is some talk among economists in europe there's only so much left for the european central bank to cut further. the next policy meeting, by the way, on the 24th of october which is next thursday meantime higher yields helping european banks this morning. we have commerce bank, deutsche bank, all up 1% to 2%. lastly, all my retail, asos avoiding another profit warning and that's helping shares outperform, up nearly 30%. carl, back to you. >> seema, thank you very much. let's get a news update with sue herera at hq with that. >> good morning, carl. good morning, everyone here's what's happening at this hour turkish president erdogan telling parliament that syrian kurdish fighters must leave an area in northeast syria as of tonight. that's a condition for turkey to stop its military offensive. he rejected u.s. calls for an immediate cease-fire prosecutors rejecting a proposed plea deal for the man

charged with killing 11 worshippers inside a pittsburgh synagogue. robert bowers offering to plead guilty in exchange for life in prison, but prosecutors are seeking the death penalty. a jury in wisconsin has awarded $450,000 to the father of a boy killed in the 2012 sandy hook school shooting after he filed a defamation lawsuit against a conspiracy theorist who falsely claimed that the massacre never happened. james fetser, a retired professor who co-wrote the book titled "nobody died at sandy hook" called the amount absurd and said he would appeal. and chicago public schools will be closed tomorrow. mayor lori lightfoot said she cannot accept a teachers union demand that would cost the city $2.5 billion that it cannot aford. the union is expected to vote later today for a strike back downtown to "squawk alley." jon, back to you. in just a few minutes, sir

richard branson and under armour ceo kevin plank will join us y they together? we'll tell you after the break things, i didn't know what was happening... so i kept it in. he started believing things that weren't true. i knew something was wrong... but i didn't say a word. during the course of their disease around 50% of people with parkinson's may experience hallucinations or delusions. but now, doctors are prescribing nuplazid. the only fda approved medicine... proven to significantly reduce hallucinations and delusions related to parkinson's. don't take nuplazid if you are allergic to its ingredients. nuplazid can increase the risk of death in elderly people with dementia-related psychosis and is not for treating symptoms unrelated to parkinson's disease. nuplazid can cause changes in heart rhythm and should not be taken if you have certain abnormal heart rhythms or take other drugs that are known to cause changes in heart rhythm. tell your doctor about any changes in medicines you're taking. the most common side effects are swelling of the arms and legs and confusion. we spoke up and it made all the difference.

ask your parkinson's specialist about nuplazid.

filmgate is growing really staffing a small bquickly and... is challenging. ...i needed to fill a production coordinator role. i was looking for someone with specific skills. so i posted a job on linkedin. maribel had all the skills i was looking for... and looking at her profile... . ...i saw shared connections. that was a plus. but the most important thing... ...is the ability to connect to people and she had it. and i knew... ...she was the one. post a job today at linkedin.com/grow the president made some comments about china a few moments ago. for all of that we'll get to eamon javers at the white house. >> reporter: good morning, carl. the president has been sitting alongside the president of the italy in the oval office taking some questions on china. the president said he would likely not sign a trade deal with the chinese until he meets with xi jinping at the apex

summit in the middle of november, giving us more clarity on the time frame there. he also said that the trade deal announced last week is in the process of being formalized on paper. he called it papering the deal there are questions now today about potential inconsistencies between what the president said about the chinese commitment to $50 billion of agricultural purchases on friday and doing that in a two-year time frame and what the chinese said since friday in which they haven't confirmed that number in terms of a dollar figure or the timeline the president is going in now to a news conference at noon and we'll see if we can get a question to him on exactly what the chinese committed to and whether he's prepared to deliver that deal before that december increase in tariffs that he's put out there on the horizon or whether or not it will have to wait until after that time frame, carl. >> certainly his comments did help push the markets slightly into the green this morning, eamon. thanks don't miss larry kudlow on

"squawk" tomorrow, 8:30 a.m. eastern time that's an important interview given all we learned last week and all we still don't know. meantime, breaking up big tech and how it should be done was a big theme of last night's democratic debates in westerville, ohio. kayla tausche and john harwood join us now from there to break it all down. hey, guys. kayla -- >> good morning. >> i'll start just by asking, it didn't seem like everybody was on the same page, particularly when it came to elizabeth warren and big tech breakup where did you see it breaking down among the candidates? >> well, this is one of the first times, john, that we've even seen those battle lines being drawn where there was a substantive enough debate on this topic where you could see where a lot of these candidates stood. most of them are in favor of more regulation, closer oversight of these big companies. you heard senator booker and senator harris talk about that senator klobuchar also supported

more competition but you did have a pretty decisive moment when former congressman beto o'rourke said that these companies should be monitored but they should not be broken up. he specifically cited a company like at&t/time warner. he said that breaking up a company like a big media company would essentially threaten the power of the media or an independent press. he suggested that doing something like that would actually have the opposite effect that some of those candidates are going for andrew yang also said that simply that wouldn't work that, no one really wants to use the fourth tier product and sometimes competition is false competition and consumers don't actually want those products >> i've got to say, john, listening to some of the debate, it seems like tech and maybe billionaires broadly are the new banks. there was nothing positive to say of substance about them, about opportunity.

might they be overshooting what the base is really looking for here i didn't hear a lot of optimism. >> well, i do think that big is a target for democrats, and to the extent tech gets associated with big, that's something they'll go after i do think as kayla indicated sort of significant that you had beto o'rourke, andrew yang, cory booker all saying that breaking up big tech was not necessarily the answer they agree on antitrust enforcement, but they're not saying that is the solution to economic problems. more broadly, what elizabeth warren found last night was having set the pace on policy ideas for months now and seeing other candidates chase her, now that she's gotten to the front of the pack, they're challenging her on whether her ideas are practical, whether they can be passed, whether they'll work, and i think that's a new place for her to be. we're going to have to see how voters process how well she defended herself on that

you know, andrew yang made the point about bing and microsoft and said that even though microsoft is huge, their product failed because it wasn't a very good product you can make an argument that the size of tech companies isn't the issue as much as their practices on privacy and on how they deal with everyone's data and how they deal in the case of facebook with fake news, that sort of thing. >> kayla, obviously given the market's interest in warren and sanders, a lot of viewers might be interested to know what the read is on how biden defended his position last night. what's the general take on that? >> well, certainly there was a moment, carl, where all of the candidates who were at the top of the age bracket were asked about their health sanders coming off of a recent heart attack and a procedure to put two stents in an artery. he said he is doing just fine. he plans to release all of his

health records there was a moment of levity where sanders talked about sanders' support of medical marijuana and sanders said i'm not on it tonight. in all seriousness, senator warren made similar comments about how she can outlast and outrun anyone. former vice president joe biden said that it's actually his age that is working in his favor and his experience and certainly that he would bring that to the office on day one and that age is not a detractor but it's a benefit in that case. >> john, contrast for us, if you will, last debate it seemed like joe biden was more of a target and maybe his sharpness or lack thereof. elizabeth warren this time more of a target because of her policies, perhaps lack of clarity on medicare for all. who do you think fared better between those two debates? >> well, i think what we saw was a fundamentally different race in this debate than we had seen

in the previous ones the sun did not revolve around joe biden in this debate there was a lot of talk about whether impeachment was going to be dominant, whether a trump focus would be dominant given the way trump has gone afternoon joe biden. that was not the case. what you had was klobuchar, buttigieg and others all going after elizabeth warren on practicality, on the political wisdom of her proposals, whether it's going to help democrats win the general election or not. i think that's a different position we have two front-runners in the race, but clearly elizabeth warren's rivals think she's the one to beat at this point. she's going to have to adjust to that and show that she can handle the incoming, especially in a party that doesn't always reward the most liberal candidate. in many cases in the past, a more centrist candidate has emerged with the nomination. that's what joe biden is trying to do this time. she's trying to upend that pattern. >> guys, appreciate that

good readout from last night's debate, john harwood and kayla tausche. you can see at the bottom of the screen that the uaw says that it has reached a tentative agreement with general motors on a labor deal covering 48,000 striking workers about a month into that work action. we'll see what the price reaction is. in fact let's get to phil lebeau and see what else we know about this tentative agreement phil >> carl, not a surprise given the fact that we were told yesterday that they thought some of the people i was talking about close to the negotiations thought they were in the home stretch of reaching a proposed tentative agreement. i'm not going to get too caught up in the language here, carl, but here's where it stands it's a proposed tentative agreement that will now be voted on by the leadership all of the presidents of the different locations of the uaw, they're all meeting in detroit tomorrow they then will vote on this agreement. depending on their vote, they either reject it, which would send the negotiators back to the table with general motors, or they say, yes, we agree to this at which point they would send

it out to the rank and file for a vote also tomorrow at this meeting that's when the presidents of the various uaw locals will decide do the rank and file members stay on the picket lines while they're voting on this contract or do they go back to work and let's take the next four, five days for them to take a look at the contract, the rank and file members in the meantime they'll be able to work and start getting some income coming their way relatively soon. so that's where things stand not a huge surprise. we're seeing a little move up for general motors i think more than anything, this is a bit of a relief rally for those gm investors, because the costs were mounting for general motors, estimated by one analyst yesterday, john murphy of bank of america, he puts it at $2 billion, the cost to general motors and certainly if they can have an agreement locked in place and ratified by the rank and file, that is a huge, huge relief for gm investors and they can now say, okay, let's look forward

from here. >> all right in the meantime, though, phil, essentially pending that approval, the strike does continue for now >> correct they will make a decision tomorrow at this meeting either the members stay on strike while they vote on this contract, which could take anywhere from three, four, five days, depending on how quickly they can do it, or they can say go back to work, the strike is over while we vote on this agreement. it could be that the rank and file after whatever length of time it takes to vote on it, they could say, you know what, we don't like this we think we need a better contract go back on strike at that point. so there's a number of possibilities here i wouldn't be surprised if they go back to work while voting on this it makes it much easier in terms of voting locations, close by the plants it's a lot easier to do it that way than to allow people to stay on the picket line. >> sticking point you expect might come up among the uaw members, how long it takes to

reach the top wage. >> correct. >> use of temporary workers, what >> all of that, jon, all of that we do not believe health care will be a huge issue because gm has said we're not changing the health care. it still continues to be a very generous package in terms of how much of the health care responsibilities are born by the employees relative to the company. the other issue that comes up is what kind of commitment did the uaw get from general motors in terms of product and plants and where they're going to be. remember, the uaw said for some time we want commitments that certain models are put in certain plants or certain plants will be staying open while they build a particular vehicle i would be skeptical if gm made explicit promises on models, but we'll wait and see in terms of the details of this contract >> all right, phil looks like there's more to be learned about that, but we'll keep our eye on gm obviously with a nice 2% gain there.

phil lebeau, thanks. the core of big tech's business model under fire this morning on capitol hill. we will explain with an update in a moment. - at southern new hampshire university,

we believe in education built for all people. - [woman] snhu was the best experience of my life. - [man] without snhu, i wouldn't be the leader i am today. - [woman] i graduated high school 19 years ago. i still finished. - [man] in the military, you feel that sense of accomplishment. that's what snhu is. - you will march from this arena and say to the world.. i did it. - [woman] you did it. i love you. - [graduate] i love you too. but when i started seeing things, i didn't know what was happening... so i kept it in. he started believing things that weren't true. i knew something was wrong... but i didn't say a word. during the course of their disease around 50% of people with parkinson's may experience hallucinations or delusions. but now, doctors are prescribing nuplazid.

the only fda approved medicine... proven to significantly reduce hallucinations and delusions related to parkinson's. don't take nuplazid if you are allergic to its ingredients. nuplazid can increase the risk of death in elderly people with dementia-related psychosis and is not for treating symptoms unrelated to parkinson's disease. nuplazid can cause changes in heart rhythm and should not be taken if you have certain abnormal heart rhythms or take other drugs that are known to cause changes in heart rhythm. tell your doctor about any changes in medicines you're taking. the most common side effects are swelling of the arms and legs and confusion. we spoke up and it made all the difference. ask your parkinson's specialist about nuplazid. here's what's coming up at the top of the quarter we're counting down to netflix earnings plus we're live in las vegas with the trades on gaming stocks, the future of sports betting. much more on the table and one firm out with its top picks for the next six mojnths

the investment committee tells us which to buy, which to avoid all at noon on the half. jon, we'll see you in 15. >> thank you. both reddit and google on capitol hill defending the heart of big tech's business model that's the idea that they aren't legally responsible for the content of all user posts. ylan mui joins us now from washington with the latest ylan. >> reporter: jon, reddit's ceo delivered some very forceful testimony this morning he argued that big tech's liability shield, which is known as section 230 of the communications decency act, is essential not just to his business but to the internet as we know it >> changes to 230 pose an existential threat not just to us but thousands of startups across the country and would destroy what little competition remains in our industry. >> reporter: but lawmakers also heard from an expert who argued that the liability shield has become simply too broad. it's being used to protect the worst of the internet, like revenge porn sites or sites that

traffic in dangerous goods and there was agreement from both republicans and democrats that at the very least they need to take a good, hard look at this law and tech companies need to be more aggressive in policing their sites for harmful or for hateful content now, there was also bipartisan concern that similar liability protections are being included in the new usmca trade deal. this has become an emerging flash point in the negotiations, and both sides said they want it out. >> as a member of the working group that is helping to negotiate that agreement, i am pushing hard to make sure that it just isn't there. >> i'm a big free trader, but we're getting blown off on this, and i'm tired of it. >> reporter: guys, lawmakers did invite u.s. trade ambassador robert lighthizer to testify at this hearing he turned them down. back over to you >> ylan mui keeping track of that for us on capitol hill. and coming up, we must

protect this space station under armour will create space suits for virgin galactic passengers both kevin plank and sir richard branson will join us next in a first on cnbc interview. stay witush johnso hnson is a baby company. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

got some fiery sound from mark benioff this morning. he talked about capitalism, antitrust, breaking up big tech and why facebook is the new tobacco.

>> maybe is the new cigarettes it's addictive, bad for you. jim, they're after your kids. >> that's not fair people can change, marc, people can change. >> the political ads that are going on there's not a commitment to trust and truth. and now they're comingling the data of all of their acquisitions facebook probably should be broken up because they're using these assets in a way to further manipulate even more people. i think that there needs to be change it hasn't happened fast enough you can watch that great documentary on netflix, the great hack really, i don't know if you watched that, but it really lays out how that's happened. and you know they just unplugged 50,000 partners because they were all doing the same thing. so i think change does need to come to some of these companies. >> well, i've got to tell you that to hear you talk about it -- >> it's not the first time we've talked about it. >> no, but it does -- >> january 2018 -- >> people change, can't people change do you think amazon web services

47% of the market is too powerful >> no, i don't, because you're dealing with a monopoly called microsoft. there is a consent decree against microsoft. you have many platforms that are out in the marketplace today, and we're still battling very much, you know, the monopoly that is microsoft. that's a major issue for all tech companies the largest and most important company in the technology industry for all -- all players is to to watch what microsoft is doing because of their traditional monopolistic practices i mean, there is still a consent decree out there on them. >> a lot more from ben i don't have tonighted on "mad money" with jim 6:00 p.m. eastern time he has been this critical before of facebook specifically but is dove tailing it with the thesis of his book where if you operate in this new capitalism where you have a wider spectrum of stakeholders maybe you don't run into these policy risks. >> that is true. interesting to contrast the way he was talking about it with the

democratic debate last night more moderation on his part. the shout out to microsoft i don't know if you're sitting in redmond do you take that as a compliment that you're very much in the mix a few years ago eric schmidt was saying they didn't even matter the top four platforms they didn't get into the acronym, they didn't get into faang they're monopolists again. >> we didn't even get to things like "time magazine," the way in which he's trying to reinvent modern media, the well told story by now about his attempts to buy twitter and how he rethought it at the last minute in part because he slipped on a sidewalk and scraped his leg and thought maybe this is a sign i'm on my way to a meeting to pitch some investors. >> it might be like microsoft avoiding yahoo you know, sometimes it's good to slip his message on capitalism changing kind of tying that into business round table, i don't know if that's going to really catch momentum

he's been speaking out on this, things like homeless issued in san francisco. if you line up with things he's been talking about and things you hear republicans talking about there isn't too much daylight between them. homeless problem, for example, we will see how that conversation in the business realm with the likes of bwith benioff develops. >> it ratifies his view, maybe not as extreme as he is but he uses that as an example to show, look, i'm on the right track the book is called trailblazer the power of business is the greatest platform for change it will be interesting to see where else jim takes the conversation with matt the outlook for enterprise spending, we know certain pockets are very deep, but if cios are starting to try to protect next year's results, maybe spending does come in. >> and particularly some of these cloud names, workday, adobe, you mentioned, taking it on the chin, those were the ones

that were impervious. call it the spacesuit for space tourists under armour unveiling the highly anticipated design for its virgin galactic space gear last hour. exclusive technical suits for passengers to wear on virgin's expected flights to the edge of space. joining us first on cnbc this morning virgin founder sir richard branson and under armour's founder and ceo kevin plank. great to have you back good morning. >> good morning to you, too. >> sir richard, what were you looking for in terms of form and function here? >> well, we were lucky enough to decide about two and a half years ago when i met kevin that under armour would be the perfect people to create a spacesuit. they have a fantastic team of people and we wanted it to be comfortable, flexible, strong, dealing with slightly colder weather and hotter weather and

we wanted to be sexy and look good, if i was a younger model you would understand that it is sexy and it does look good >> kevin, why do this? i mean, volume isn't going to be there one would argue, we are not all going to space are there things that you learn from this that you can use more broadly? >> well, first of all, the mandate from richard was awesome and we decided to deliver exactly on that and this fit perfectly into what our brand is the cool thing about this suit is that the time frames, of course, like always they seem compressed and when i had gotten off the phone with richard and sort of got the green light to go ahead and do this i walked into the teams and said, great news, you are going to make a spacesu spacesuit. how do you begin to attack that? they attacked it the exact same way we would signing a new football club or australian rules or any sport that we do. the neat thing about this suit from the base layer to the suit

itself, it's actually -- it's utilizing about eight different technologies that we're already using in our inline products, both what we have out available in market in 2019 and about another four that will be coming to market in 2020. so our cold gear technology with infrared on the inside, things like our rush technology that actually allows your muscles to recover faster, it's things like our intelligent sweater. it's a commercial application. apparently there's something happening with people asking for the boots now, too. >> you have to look at the boots. >> the boots have gotten a pick of pick up these are space ready boots, no ordinarily boots it's going to be pricey in commercial. >> sir richard, i mean, if we're designing what we're going to wear obviously this is moving the ball forward what do you think it says about your specific commercial timeline, are all the promises and predictions that have been made still relevant right now?

>> yes we put five people into space in the last few months and it happened to be the only space company -- private space company in the world to have done that we're now -- we've now pretty much moved everybody to new mexico where the space port is and then the mothership is there, the spaceship will be moved there in the next couple months and then we will start the final test flights out of new mexico before next year i go up and then other people go up as well. >> i want to broaden this out for a moment, kevin. the nba has been having some issues clearly with china over the hong kong controversy, of course, under armour is big in sports, has big hopes in china you've said in the past brands are all about trust, trust is built in drops and lost in buckets. so what is happening here?

how do you as an american executive, i guess, promoting american values navigate china and brand issues there >> well, today we're talking about putting space and there was a cool quote that came from one of the future astronauts here, a guy named trevor, of understanding that this mission that has been so long in the making that, you know, seeing the suits today was something that would actually allow our give him the ability to actually feel like he's articulating what it's going to be like to go in space. the cool thing about space, it's going to give us all a global perspective. when you're up there you get to look down and you get to see one planet so i'm looking forward to the day when we can all sort of embrace that and this is going to be one of those moments that will help drive a much easier conversation >> yeah, but for now, kevin, and i don't want to belabor it because you're going to kill me. >> he dodged your question perfectly. he's not going to give you a

better answer than that. >> thank you. >> i mean, it's just been such a difficult week, what lebron has gone through, how this has all been inflamed by much larger issues, i think our question for you, kevin, is what is the smart conversation to have how -- i mean, can we have an actual debate or do we have to shy away from all of these topics and that goes for companies, too. >> yeah, sports is a powerful -- one of the things that we're thrilled to be a part of bringing people together we are active about our role in doing that in every market around the world and the politics will play out on their own scene, but we look forward to being the best that we can do to deliver the best innovation in the world to athletes everywhere and that's beginning with these virgin galactic suits. >> i mean, these decisions are not easy i mean, you know, we were about to get a big check from the saudi government to fund a space

company a couple of years ago and then that horrible incident took place and we decided not to take the money and, therefore, we're floating next week instead. so, you know, obviously when you sort of -- when you decide to stand up for what you believe to be right it can be quite a big -- you know, quite damaging for a company and it's not easy for -- you know, it's not easy to do, but, you know -- yeah -- sorry. i just want to get that out. >> can we talk space can we talk suits and selling commercial products? >> we did, but you guys are important and knowledgeable people, there are a lot of big issues facing us and the economy and, sir richard, one of them has to do with wealth. i know the uk is going through brexit, here in the u.s. we're gearing up for a presidential

election, there are questions about what the conversation should be about prosperity, about entrepreneurship, about taxes and giving back. what do you think the conversation should be sn>> i believe the conversation should be quite similar to what quite a lot of the democrats in america are saying, let's have entrepreneurs, you know, entrepreneurs create pretty well all the jobs in a country and the very wealthy people we can afford to pay more in tax and if that ends up helping get a universal health care system in each country around the world, that would be wonderful. >> gentlemen, congratulations. it looks great our viewers agree. we appreciate you human ring us with your time we will see you next time. >> looking forward to going to

space. let'