for being with us today on our first day in this new set. fantastic guest host >> final check on the markets, if the s&p were to open where it is now, i think it would be close to a new high. gave back a little bit yesterday, from an all time high we're right on the cusp of another one. join us tomorrow, we liked it here we'll be back here tomorrow. ♪ and congratulations to "squawk box" on their new set. welcome to "squawk on the street." i'm scott wapner with jim cramer live from the new york stock exchange carl is on assignment, he's going to be back later fire squawk alley." we'll have an exclusive with the warner media ceo john stankey, looking forward to that. he'll discuss the new hbo max

streaming service. let's look at futures this morning. some economic data better than expected today that's the picture on fed day. dow opens higher by 34 s&p by 2.5 nasdaq by 17 road map this morning starts with right there, the futures, pointing to higher open after that stronger than forecast economic data. investors staying cautious ahead of the fed record highs within striking distance again plus, shares of general electric popping after an earnings beat the company raising its 2019 cash flow forecast and streaming wars at&t set to challenge netflix, apple and disney, unveiling details for its upcoming hcupcome upcoming hbo max service david talks with warner media ceo john stankey and that's coming up in the next hour as we said, looking forward to that big interview the markets, the fed, fed day. the data was better than expected this morning. still confirms we're slowing, so

the fed will be cutting, right >> the fed raised too much it is just a fact. jay powell overdid it. the economy couldn't take it there are a lot of people who come on air and say it didn't matter you look at the mortgage purchase numbers this morning, clearly does matter. internationally, scott, we're lucky that -- the stocks are doing far better than the economy. people aren't hiring international, they're hiring domestic i think we need to cut how many quarters can you have where numbers are bad because of the strong dollar? so, look, jay didn't do it right. and that's okay. it is okay people make mistakes all the time we accept mistakes in -- other than for the new england patriots and sports. we accept mistakes in school, we accept mistakes in science why can't we just accept mistakes in fed policy >> he's been trying to make up for it if anything maybe this will be the third cut. what if it is a cut and pause.

is that a mistake? >> there is an algorithm that says cut, pause, cut, pause. they'll act immediately. people should wait for the cut pause. the greatest thing jay could do is say, you know what, i'm going to take written questions and -- because last time he had people, like, hi, hi, i'm from the springfield -- from -- what is that, woodrow wilson high, what is that school >> springfield >> the high school in washington, d.c. that everybody likes. in bethesda. >> woodward. >> i'll from woodward, i'm the editor in chief of the woodward paper, what do you think about going green? did you see that fiasco of a press conference what did he do invite people from junior high he has got to tighten up his game he has got to say, you know what, i'm going to pause and take a couple of questions, not a lot of questions, i have other things to do i don't care what else he has to do >> stop acting like he plays for the hilltoppers and start -- >> he plays for the hilltoppers.

it is killing me, killing me, killing me he is playing for the hilltoppers which play, of course, that's the summit team i coached a game, we beat vo voorhees it is amateur hour he has to be more professional he has to say, listen, i may pause, data dependent, data dependent, we can't take it anymore and turn on some pre-baseball stuff >> david, you got, you know, gdp coming in at 1.9 you got earnings coming in better than expected, expectations were low. and there are those who are saying, why do we need a cut the market expects it and we're likely to get it. >> yeah. i mean, you spent a lot of time, we spent a great deal of time discussing this on your show, scott, and on our show as well and jim made these points many times that, you know, maybe there is one more or a couple more because we went too far i don't know the industrial economy perhaps

not as strong as we would like strong dollar, of course, a part of that. you know, jim, you look at ge earnings today, and you have to wonder, again, is that a reflection of things getting a bit better >> no, that's just literally, david, i'm not kidding that's larry culp rationalizing the company. and, by the way, if the 737 max doesn't fly, those numbers won't matter but i happen to think that larry is -- larry culp is getting -- getting his arms around what was an impossible situation. i am not going to say that better free cash flow is related to the idea the economy is better that's related to the idea that larry culp has finally undone a lot of mistakes. even allison looks like you can't find it, so i don't want to scribe that ch robinson, a company that does freight forwarding, miserable numbers. i just find, david, international is bad, my hat is off to larry culp, he has gotten

control of power, david. he's in power. >> yeah, well, i mean, right, that has been the key from the very beginning as you know, jim, getting their arms around power and in terms of at least putting it on a much steadier -- or stabilizing it, i guess, is the right thing to say that's a big statement you just made if they really are sort of -- and have stabilized power, and can at least have a sense where the business is going from here, that's a big deal. because culp has told us, i mean, you know, a year ago, we sat down for his first interview, he certainly indicated at that time, that's why the stock sunk if you recall wasn't -- power wasn't done. if -- in terms of at least the bleeding and so if that's the case, jim, that's a significant moment for the company. >> that's why, jim, people like stephanie link bought the stock, have added to the stock, on the very belief of what david was just talking about, and what you said, culp, he's gotten control of power, which was the breaking

point. so is the stock not a buy then if he's gotten control of what was one of the worst areas of the company? >> look, what happens if the 737 max is grounded in the first quarter? okay i don't think it will be, but the numbers are too high that said, long-term care, i regard it as being under control, no adjustments this time other than for having to do with interest rates. wind is turning out to be as good if not better as nat gas. aerospace services really good i'm going to say you buy half. you buy half i don't like the thing -- remember, we'll have some hearings, we have muilenburg's, the 737 max. >> i'm interested in hearing, david, until stephen tusa comes out, i guess and gives his take -- >> he gave us a little -- he made me feel -- >> two weeks ago, a $5 price target jim is furiously looking for

his -- >> tusa was saying it was boring it was boring. >> he's got a lot of room. >> i got it. >> get out of my area, jim, all right? >> man, stay out of my zone. >> out of sight, out of mind you're out of here he can do whatever he wants. >> i got -- you're not going anywhere >> anybody who tells you southern california is not freezing in the morning is lying to you it is like 27 degrees. >> lose the vest just lose the vest i can't stand it >> tell us what tusa had to say. >> here's what he says the quarter was in line and there is not much controversy here there is some need for clarity on a few items that actually sounds like a real company. it sounds like a real company now. i think tusa is saying, listen, this is a real company and i can start putting in actual multiple audit, david it is very important, mr. cashmere it is going to be like that. >> what did i say? left him speechless. >> we're still talking ten

bucks. it hasn't -- it has hung around that level for a long time now, jim. >> well, what, what do you mean? >> still lost $9.5 billion in the quarter. >> they had an $8 billion charge, nine cash, baker hughes, this company did so many stupid things it is almost as -- it is like grubhub. >> you said to the -- for david's first question, are things getting better you said no. >> no, he said the economy -- is the economy getting better can you read through -- did you read the economy the answer is no you can read through >> ge is getting better. >> free cash flow, he's rationalizing the company. we never have been able to put a multiple on this company because it became cats and dogs. we have to move on in my ear someone says we have to move on in re aality, i don't want to mv on this is not in our basement, it is a show. we have to move on it is not wayne's world. >> at&t is unveiling hbo max

streaming service. david has those details if you copt tell couldn't tell by now why he is in southern california with the beautiful backdrop and the vest. >> it is a sweater i think it might be cashmere, i'm not sure and i need it. as i said, it is really cold here we're waiting for the sun to come up. we're waiting to be joined by john stankey, the president and ceo of at&t, also running warner media, we're going to talk to him about the presentation yesterday, 3:00 p.m. local time here, so 6:00. a lot of people digesting all of the news that came out, almost overnight if you will, from 6:00 to 9:00 yesterday as they presented the plan for hbo max, $14.99 being a key price point here, very similar to what hbo is priced at with 34 million subscribers. the question is how many will simply move to hbo max given there is no price differential given what you're paying most of

your cable distributors for that a lot of focus on all of the content and particularly they kept coming back to the idea of breadth and depth. and of trying to service areas and demographics perhaps that hbo currently doesn't hit as hard women, for example, young adults being another one, millennials, gen z, talking about the top 100 titles on these services drive 50% of usage in general at the svods. interface that is in my opinion certainly seems far superior to what you get now with hbo. if you use that digitally. and may rival if not exceed some of the ones already on the market not just using algorithms, but actual human recommendations in terms of what you might like don't forget the humans. the key question here is going to be will it resonate in the marketplace at that price point?

certainly with current hbo subscribers yes. will you get the additional 16 million incremental subscribers they will add over the next five years by 2025, that's a question there is a lot of content there, 10,000 hours of library, 35 new shows, right off the bat for hbo max itself and all that hbo content as well but it will be interesting given where the price point is not that it was a surprise it may have been lower than some anticipated that it would be a lot to talk to stankey about around the top of the next hour. >> david, part of the commentary i saw this morning from the likes of rich green field say that to be successful in the streaming business, you need premiere content, check, you need a tech platform, check. and you need marketing and distribution capability like they have, check so they enter at a point of offense where a lot of the others in the streaming business or the fledgling competitors here don't necessarily have all

of those attributes. you believe that >> yeah, listen, you -- the question, of course, is how many streaming services is the average home going to want is it three, four? you have to consider this is going to be in the mix no doubt about it. if you consider a netflix, amazon already coming into your home, if you're a prime subscriber, disney plus, if you have children. but given the breadth and the depth of content that they're going to have available here, beyond hbo itself, what is the premium and what they maintain will still be the premium offerings out there had it comes to videos, scott, you have to consider that this will be something that people will consider but, you know, you do wonder -- i do wonder about the price point. hbo has been in the marketplace for a long time. it has 34 million domestic subscribers. netflix has more than that and that is a key reason so because it is fairly expensive. so you do wonder how much it is going to resonate with people

who perhaps are on a budget or a younger people, who somewhat -- are somewhat unwilling to pay for these kinds of services. and those are some of the questions as well. the investment will be fairly significant, they are saying it is going to be profitable by 2025 jim? >> david, let me give you a -- just a happen -- let me say a theory when you and i used to speak to mr. buchus, a great american, the idea that hbo was worth a huge amount of money, underle have youed within the mix, was something talked about all the time do you think in order to raise money, that at&t could spin off some of hbo? >> you know, no. i don't. they are all in here it is central to their strategy, certainly at warner. i can't tell you how many times the various people who took the stage said we're all in. that was stankey

everything starts with hbo that was greenblatt. they talk about d.c. and say, you know, we're in all there too. and it is hard to imagine given the focus they have on this particular product and the importance they're placing on it for driving warner overall, and obviously being a defense against the trends we all know are so pervasive right now in terms of cord cutting, that they would ever consider doing that i don't anticipate that or think that would be a possibility. >> david, they're going to spend from what i see 4 billion on -- playing the music. you know what, we'll come back to you we'll come back to you >> we got the music. >> either in the ear we got to go or the music which tells you we got to go without the stuff in the ear up next, cramer's mad dash, we count down to the opening ell. futures, we were poised to open higher on better than expected economic data. pretty much in a holding pattern

there. dow would open higher by more than 30, s&p by 3. more "squawk on the street" from the new york stock exchange is straight ahead driverless cars, or trips to mars. no commission. delivery drones, or the latest phones. no commission. no matter what you trade, at fidelity you'll pay no commission for online u.s. equity trades. at fidelity you'll pay no commission by the way, she's the it wasnext mozart.g day. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius.

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♪ all right, we're back, about 11 minutes before the opening

bell time for cramer's mad dash ahead of the open. we have -- >> amd scott, you and i like sports we make no secret. >> fair comment. >> we often talk about how important coaching is. probably the most important. how teams win. well, look at the coach, lisa sue, takes over a company that people have given up on. bad balance sheet, no road map for growth, over here, look what she's done i think this is the greatest turn around story of our lifetime and this quarter was excellent. even people like citi, by the way, citi, very funny, shows you where people were, advanced micro, another miss, not meaningful, has an $8 price target i think the train left the station for this man this quarter had a road map for growth there will be sellers. she did not say it is the greatest thing ever, it is not lisa sue's way. >> didn't they have a weaker

revenue guide? >> you know, i've gone over -- i went over every line of every single one it is all systems go with the data center. all systems go with gaming i think that anyone who thinks there is a weaker are revenue line, you're missing orders in the second half and first half of next year it is a winner people have been itching to take profits. if they take profits, you got to own it. >> despite lisa belichick's performance, what is the overall read, you got amd, texan, a disappointment and then -- >> texan was internet of things. they have too much auto, trying to diverse away from cell phone. intel telling everything is fantastic in their market. the reason i'm not worried about the revenue, she is taking share from intel and intel had a great quarter. she has the great data center chips. her whole road map is perfect. she is so good and you're right,

the only thing that she's going to do wrong, she's going to come to philadelphia and lose to the eagles we should talk to her as being belichick. belichick doesn't have enough fingers for the rings. >> remember where you got that from. >> i steal things all the time from you. >> we have many movers to get to this morning stick around for more "squawk on the street." we're going to count down to the opening bell next.

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you're watching cnbc's "squawk on the street. live from the financial capital of the world the opening bell set to ring in just about three minutes' time let's go back to ge. a big winner off the open and as we said, the notes are starting to come through. i mentioned stephanie link to you. she sends to me, i never heard culp this confident and in command of the company since he started. i think the free cash flow inflexion should have folks taking notice, not just for a day. >> i think she's right i think that what you're getting here with ge is the -- it is the turn it is the turn we got long-term care in a box i'm not as concerned about it. i was before i wanted to see free cash flow go up. we got that. 365 million from industrial, industrial company, again, the pension plan, weunderstood that, took a hit that one solved. wind is making not a lot of money, but the prerhee newables

doing well turbines, issues with nat gas but under control. the max has to get back. everyone, everyone when i look at what's going on with this situation, with ge, with honeywell, with united technologies, david, this max is everything it really is otherwise you want to own all the stocks what are you hearing >> i only listen to what phil lebeau tells me. right? don't you? i don't know how much longer is muilenburg going to be the ceo of boeing. that's where people are focused as much as they are when the plane returns to service, jim. >> it has become the ultimate guessing game. >> so the aforementioned tusa is out with commentary as well. no, quote, smoking gun here, as always the follow-up in details will be key for forward

estimates, for which we remain well below consensus >> you know, look, he can keep talking about that i don't think it is about consensus. i think it is about credibility, which a year ago there was none. i think it is about the idea that there is no cash strain to the point we should be worried about the common stock i think it is about 20/20. culp always said that. david, when steve tusa says those comments, the way i read it is, hey, listen, i am not excited about the stock. but i no longer think it is a situation that is dire don't you think that >> yeah. i tend to think that i mean, jim, are we -- do we feel like we're safe when it comes to long-term care. are they done? is this it there are questions. don't forget harry and his entire indictment would be a accounting of the company as well that seems to have come and gone

without too much -- >> well, look, i'm still waiting for the gigantic decline in the debt position. we don't have that that's what the free cash flow can do i think that -- the damage here turned out to be not irreparable, let's put it that way. i read what tusa is saying, i think he's saying, look, if you talk to tusa, i haven't changed my view one bit. >> that's what you take from his -- >> i listen to larry culp, i think how can you not change your view one bit? if you have -- stephanie link at this point, i will -- in a claymation death match between stephanie link and steve tusa, i'm going with the linkster. >> what do you think we can get for that on pay-per-view >> i don't know. it is up to david on what he says about stankey it should be the ultimate fight club it is the linkster versus tusa

and my inclination is that the linkster has a combo, a 1-2 combo that will put tusa right on the canvas. tusa on the canvas versus linkster. >> some dudes on my show found out the hard way, right? take on the linkster >> linkster. >> end up on the canvas. >> 355, she's on the treadmill, doing ten miles starting at 4:00 do you think tusa does that? i'm all in stephanie link, tusa, step aside, two enter, one leaves, it is stephanie. >> in the octagon. speaking of, a big match this weekend at msg at the big board, the bells, the regional board regional management, and up the at nasdaq, scholastic, publisher and distributor of children's books and educational media. you know what stock i wanted to hit? i wanted to follow up on grubhub from yesterday slub hub it is down again

40% yesterday. >> i think that if you look at the sub text of his call, he took it from buy to sell >> he did. >> he's got to be careful, you got to -- you write the conference calls, you have to be in the light of day, no offense. but there is a great goldman piece and it starts out with we got it wrong don't you love that? we got it wrong. david, you know, i got to tell you, remember when you used to have the penguins with the analysts >> yes >> this is -- this is a break -- a penguin breakout a jail break of penguins worst i've ever seen. >> yes >> worst i've ever seen. >> used to have them running off the iceberg. we looked for lemmings, couldn't find a video, went with the penguins and for years on the old "squawk box" we would use them to indicate the worthlessness of analysts in a

case where they were reacting to the news itself and no actual help because none of them actually forecasted what might have happened. now -- forecast promiscutitpromi don't know. >> can i go out to dinner in another restaurant besides the longshoreman there is nothing to distinguish these companies. this is the ultimate commodity except for one of them plays with venture capital money and, david, venture capital money is like going against nuclear weapons and your conventional and i -- even though this guy gave up a lot to be able to get all these big cap restaurant chains, this thing is a disaster, david. it is a disaster second day, we have full -- like radiation. second day downgrades. >> yeah. it is an interesting point you raise, though, about all that capital that rushes into these business models that aren't

necessarily able to prove even profitability. but have the effect of overall depressing prices for the public entrance think about, for example, uber, which is up against didi in some markets. both funded by softbank money. you're talking as well i think about door dash, correct funded by softbank money yeah >> postmates. >> david, if you have softbank money, do they give it to you and say, listen, you're allowsed to lose every penny and more adam neumann seemed to do that door dash, they're saying, hey, this restaurant, the longshoreman, one day i go to the website and it says that door dash is exclusive distributor. they're not. they weren't and then they go and they buy caviar and now they are. they're buying business, they are making very little money, if anything, you know, they're not making money at all. they're not making money at all. >> you think these things cannot stand alone as individual

companies. i think dan nathan made a point last night saying they need to be part of a larger entity that can sustain some of the losses and lack of profitability, at least in the near term i don't know how do you compete? >> it is a bunch of guys on bicycles taking food to somebody's house that is not a great business. >> we have developing news as well boeing ceo dennis muilenburg arriving on capitol hill for a second day of hearings, taking questions from phil lebeau let's listen in. >> >> we'll take it back here that's phil lebeau walking with the boeing ceo, day two of

testimony. phil's with us now phil, you described his performance yesterday. i think it was average at best, is how you said. >> oh, yeah. yeah and really the second half of yesterday, it was not good look, didn't have a chance to answer many questions manly because a number of the senators said flat out this company is a mess and there are a number of problems, specifically with the max, with the faa certification, senator tammy duckworth from illinois, she called him a liar, she said you lied, your company lied to us, that's what i asked him about in the hallway he essentially dodged the question and said, look, we have never been lying to anyone we have been forth right much the same message we heard from him time and again. as bad as those questions were yesterday for dennis muilenburg, it may be rougher with some of the representatives talking today. peter davalio, they have been doing an investigation, his committee has been doing an investigation, they are loaded to bear. and they're going to come at him hard and i think he's not the

only one i think there will be more specific questions about what he knew, when he knew it, and specifically with the chief technical pilot and the instant messages and the emails that he exchanged with another boeing employee where he suggested that he misled regulators yesterday, dennis muilenburg said yes, i was aware of those emails and instant messages since before the second 737 max crash in march of last year. that was one of those moments where everybody kind of looked around and said, okay, did you read the message, did you know that, what specifically did you know about those messages and why wasn't that brought up immediately in terms of discussions with the faa, et cetera guys, back to you. >> phil, i got to tell you, felt like had tim sloan ceo of wells fargo went to washington and it really wasn't sloan's fault, he was cleaning up john stump's

mess, he was hurting the franchise. and he told me, if he was hurting the wells fargo franchise, he would resign i'm not -- i thought that dennis was contrite, but i think that if the board says that he's hurting the franchise, well, phil, doesn't he have to do what tim sloan did? >> which brings up the question, if you buy that, and i'm not saying that's a wrong theory, but, jim, if you buy that, is it better it replace your ceo now when you've got a ton of things that are up in the air and a ton of uncertainty regarding the max and getting it back in service, or are you better served by saying, okay, we don't think he's the right person, but let's get through this crucial period, then we address this once the faa recertified the plane, whether that happens by the end of the year, or shortly after the new year that's really what the -- >> it has to be the latter you cannot do it right now

it has to be up to the board and dennis dealing with the board, but, yes, you can't do it right now. but i hear you, phil and i'm rooting for dennis and rooting for boeing, because it is a great american company. but i understand that there are people in washington who are basically saying if you want this company in 2020 to be in the mix of defense contractors, in the mix of what's blessed, we're going to need a change and i thought that was harsh, i thought dennis was contrite, but, wow, phil, those two options you offer, i'm taking the second. >> one quick note, jim, when this all started, i specifically brought this question to several boeing executives and their pr people, i said, why don't you bring in an outside investigator much like general motors did with the ignition switch failure recall, and you bring in that outside investigator and say, have at it find what you need to find, you come to us at a certain point, and tell us where the problem

is, who did what, we'll take action from there. the response that i got time and again from boeing executives was everybody said time and again they said, we don't need that. the board is going to look into this we're going to look into this. we can handle this ourselves what happened since then, jim, drip upon drip upon drip of new revelations that have come out. this creates the appearance which we heard yesterday from the senators of you're not being straight with us you lied to us according to senator tammy duckworth and that's the problem with them not bringing in somebody with the stellar reputation, who can investigate this from the get-go. >> they should have brought in ted wells, from paul wise. we don't talk about fox being a corrupt or crooked company ted wells said how we see -- you're right, phil ted would have been the guy beyond reproach, tough, think about the nfl, they went in the nfl, they decide, you know, the nfl, some argue is the most powerful organization in the

country, and paul wise said here's the way we see it you are so right, phil they should have brought in someone like paul wise who cannot be bought >> phil, we will leave it there for now. i'm sure we will see you often throughout the day that's phil lebeau with his -- >> hearing starts at 10:00 >> all right we appreciate it thank you. >> why didn't they listen to phil why didn't they? is there anyone who knows more i'm not kidding -- >> boeing thought of everything, maybe. >> they should have listened to phil phil covers the story. he understood. >> let's pivot to another company in the cross hairs that's j & j, johnson and johnson rising this morning, the company says it is testing found no asbestos in the baby powder that testing included a single bottle that the fda said contained trace amounts of asbestos, prompting j&j to recall a lot of 33,000 bottles earlier this month back in december, ceo alex gorsky defended the product when talking to jim on "mad money."

>> -- believe that our talc, our baby powder does not contain asbestos that's demonstrated in thousands of studies, studies not only conducted by johnson & johnson, but studies conducted by this happened authorities, well respected authorities, where we work closely with regulators who are overlooking the methodology and throughout this process, we also not only use the best testing methodologies available, but we continue to improve them through the years. >> okay. so that's gorsky with you. >> beyond reproach this man is beyond reproach. stuff really drives me crazy i know the reporters are covering it are very, very good. i absolutely -- the reuters reporter who won the award, she's fantastic. but this test is -- look, conclusi conclusive they did -- it is independent, they did much more work than the fda. >> much more strenuous

>> much more rigorous. much more rigorous but the key is walmart, cvs and rite aid, do they bring it back? do they bring it back? i put baby -- this stuff on every day. i admit, i stopped i stopped. because the fda. i'm back i trust alex gorsky far more than the fda he's more rigorous, he is -- he is a man who is taking his whole reputation on this -- on these tasks. >> will customers -- will mothers trust gorsky over the fda? >> the fda has to back down. the fda is unlikely. you trust -- the government versus gorsky, i know. i go with gorsky gorsky, who is a ranger in the army, gorsky, who sued every day by plaintiffs and never loses his cool gorsky who i would vote for president if he ran for president, our country would be much better off.

that's how i feel about him. >> that's quite a statement. that stock is up 2.5%. bob pisani, among the big movers this morning here on the big board. >> good morning, scott, good morning, everybody happy wednesday. 3039, our old closing high shy of that. indeterminant open this morning. our leadership, for the month, healthcare, utilities have lagged tech has done pretty well, semis for the month here banks are done exceptionally well, a market leader. yield curve helping that consumer staples down. this is an indeterminant trading. keep your eye on the big picture, the trend first thing about october, no blowups. look at our month for october here basically a slow meltup, despite the fact we had a little bit of chaos here around trade issues, tariffs. a slow, slow meltup here we're just off the historic highs. the other thing that is important, we're getting rotation and that's why the market is holding up so well that's what's kept us generally in the green all throughout the

year take a look. banks, the fed helped here we got a higher yield and a generally steeper yield curve for the month. that's helping the banks healthcare, which is a defensive group up techs, semiconductors, defensive and as well as cyclical sector that are up here and the old leadership groups, defensive stocks, consumer staples and utilities down this month. we're getting a little rotation that is really helping the market i think that's extremely healthy for what has been going on here. so if you take a look here, what am i worried about, complacency? i have been complaining for weeks about the volumes. it is terrible etf volumes are below normal general equity volumes are below normal even options below normal trading. nobody is out doing a lot, committing a lot we're moving up on lack of selling, not enthusiastic buying that's an important mind set difference the vix is at 13 that may be an obvious reason. put call ratios, generally low, that means traders are not going

out and trying to buy protection for the market, not terribly worried. this is classic complacency. the market is like a coiled spring it can be sensitive to anything that would move it to the downside like the fed coming out and trying to imply we're done for the year, we're not going to do anything else. there is a little bit of risk to the market the federal reserve helped, they have been buying short-term treasuries again, helping the yield curve. we want to know what the direction is, what are they doing? that's what we'll hear about today. the old fed statement and what their last committee statement was, the commit contemplates the future path of the target range. it will continue to monitor the implications for the economic outlook and will act as appropriate. we'll see if they change that. we're looking for any indication that this is three and done at this point and how market might react to that. the coiled spring idea, the complacency is very, very high right now. the market is vulnerable to some

short-term shocks and it could come from the federal reserve. scott, back to you. >> we appreciate that very much, that's bob pisani. to the bond picks, rick santelli at the cme group in chicago. good morning to you, rick. >> good morning, scott a fascinating day, not only do we get an important bit of data in the first look at third quarter gdp, also awaiting the fed and its decision the reason that's interesting is because yields, not only u.s., global yields most likely leading have been rising all the way through october into this meeting. after we had the good data points on gdp, everything reversed in the u.s. and in europe look at 24 hour chart of two ey year note yields that was up 1. now down 2 if you look at 10s, up a couple of basis points as well. now down three basis points. 1.80 the breakout on monday. really this is a key level and

shouldn't surprise anyone that the treasury complex goes in on an important technical area into a fed meeting, that happens many times. look at one week chart of those 10s. you can see not only did we have the breakout, but we're starting to slip back the bund, one week chart, it also slipped back a bit. do keep in mind that ten-year bunds three month yield high in the neighborhood of a reversed a bit, the two-year, the shots in europe, five-month high. the dollar index, it benefited also from the data points, but it has in the benefitted from the easing cycle it is now back down on the day you go on to watch 98 in the dollar index after the fed decision scott and jim, back to you. >> thank you coming up, hbo max and the streaming wars, david has that exclusive with at&t coo and warner media ceo john stankey top of the hour. "squawk on the street" is back right after this is the monolithic view of emerging markets obsolete?

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let's take another look at at&t that stock is up 35% so far this year this morning getting another bump by about 1.5% stay tuned for david's exclusive with at&t president and warner media ceo john stankey on the launch of the hbo max streaming nt,seic upex though, it is stock trading with jim if you have medicare, listen up. the medicare enrollment deadline is only weeks away. having the wrong plan may cost you thousands of dollars out of pocket. that's why i love healthmarkets

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it's time now for cramer and "stop trading. >> seven important things you need, iphone revenues, ipad max sales. you have to have every one be good with the stock where it is right now. >> i was going to ask you that is it overextended >> these all have to be good it's a lot it's a lot it's a big steeplechase. >> and china and the narrative and that >> it's a steeplechase did they buy back stock? i got to tell you, i want to hear shortages

air. i love the air buds. >> the new ones? >> no, i haven't got them yet. i need noise cancellation but crying babies, everybody loves babies but i have gone from first class to coach if there's a crying baby. these apparently are the answer. >> you've gone back behind the curtain, not in front of it? >> absolutely. crying baby, i'll take any seat i can get. but not anymore. now i'm going to get these i know there's some shortages and there's issues whether there's real shortages tim has to be on his game because of all this nonsense about people don't like their programming. one program? if the guy wanted to buy cbs and viacom if he wanted to buy the nfl he could do it. honest to god! this is ridiculous yes, david is out there with hbo and they got a lot i think millennials don't even know they're paying for the bill i got my apple bill yesterday. it's e-mail. by the way, my credit card, they told me i was past due i was mortified.

>> your -- >> my fico score dropped by like 300 points they told me i was past due. didn't know how to link it to my chase account. i couldn't buy a bungalow now after that fico change >> what's coming up on "mad" tonight? >> i got trex. you can't even tell it's not wood wing span had the best of any. restaurants. i tried to get a wing span franchise, i said how do i get one? he said get four burger king franchises and maybe i'll speak to you he gave me the heisman >> coming up, john stankey keep it right here

good wednesday morning welcome back to "squawk on the street." i'm back with leslie picker carl will be back later for "squawk alley.

in a few moments, we'll be sitting down with warnermedia ceo john stankey let's take a look at the markets. the dow is a little bit lower. we're lower across the board, l albeit slightly. dow is down a fraction, about 9 points, s&p down 3 and the nasdaq down 12.5 we'll tell you how the play the market ahead of a key fed decision later on today. >> and ge is soaring but is there more room to run for that stock? >> and who will win the media wars we'll hear from job stankey on the new service in a few minutes. >> first, let's get down to steve.

>> reporter: two big econ data points the adp came in at 125,000, stronger thanes the estimate fo friday's payroll gdp coming in .3 stronger at 1.9% the strength was offset which a second quarterly decline in business spending, which was just awful in the words of one economist, writing could have been worse about q3, q4 probably will be. the engines of growth are tiring late in the business cycle the data does not change what the markets expect the fed to do today, cut rates by a quarter point and signal a shift in policy that will make the next move by jay powell automatic

a cut falls to 22% for another cut in december. the market providing that flexibility that the fed has wanted and then the next cut is priced in for april, but there's a lot of time between then and now. barkley's writes we think that chair jay powell will emphasize the committees moving away from easing, towards data independence the markets are prepared to provide that kind of flexibility to the fed but listen closely to powell when he says we might cut, we night not cut, we're just not going to definitely cut. carl >> it's scott, steve i have a question for you. >> oh, scott >> we look at gdp this morning, 1.9, better than expected and they also look at it and say it's confirmation that we're sloei slowing, especially in the manufacturing and business space so they have to view that within

the prism of their overall thought of where we are and most importantly where they think we're going. >> i think that's right, scott they'll say, we expected a slowing, we know there's a drag from the economic weakness and trade war. there's actually ammunition for the hawks in this. however, you do know that federal spending was a little bit more helpful or government spending and the question is whether or not the consumer ahead of the tariffs this summer, scott, we debated this on another show brought forward some purchases and the big question, the big thing to watch in the fourth quarter is going to be consumer spending and the christmas holiday season to see how strong it is that's going to be the big swing factor for fourth quarter growth >> all right, steve, we'll look forward to it later this afternoon. now let's get out to burbank, california where our david faber is sitting down with a very special guest. take it away, david. >> thanks, scott we are on the warner brothers

lot. i am joined by john stankey, th president and ceo of at&t and runs warnermedia, as well as the company's ceo. thanks for joining us this morning. >> we appreciate you coming and joining us for the announcement money. >> i was there for all of it we want to start there given that's the news of the morning, hbo max being introduced, you'll introduce the service itself in may of next year how important is it to the future of warner media >> it's extremely important not just to warner media but to at&t there's no question if you're going to produce general entertainment content, you need a new way of getting it to customers, which is on demand and on these platforms with the at&t connections, having content, something emotional and stick oy to attac to those products is important for the health to continue to

support an ad model. >> a lot of participants yesterday, including you when you took the stage initially were all in. a lot of people kept saying sort of that same theme, we're all in what does that actually mean >> i think the team is incredibly committed to what we're doing here it's a hard pivot. we've restructured this business and asked people to work in a different way and asked people to work beyond what used to be their typical divisional silos so we could bring the strength of all the warner companies together it requires divisional change and that people get past their own domain and work together and people said they believe this is necessary for the future of their business and what they're responsible for. >> have you managed to get that level of cooperation is that the way we should look at yesterday's announcement? and what is the bringing together of all this content

under the hbo/max umbrella when you've succeeded in getting these silos to work together >> we succeeded when we get customers that want to buy a great product, that's where success comes in i think the team understands that any time you do an m & a transacti transaction, there's a certain period of disruption that follow it you go through a cycle of recalifornia brating and resetting the business we've made great progress. it's been moments of disruption and displacement and anxiety that have occurred, but we're in a much better place right now than we were at the date of the transaction close. it was a challenging situation given the delay, getting this thing approved you know, human nature is that folks don't like uncertainty, creates anxiety and so while you're going through a court case and waiting, anxiety rises but we're in such a much better place right now, i think you saw that by the team

i'm read proud of the hbo max team and what they've done but we've still got more to do to get this place in the right position and get our culture reset and do ul a the things a good, healthy business does. >> you got them to wrap the water tower in hbo max it's not insignificant, is it? >> it's not insignificant. it might be the first time hbo have adorned the warner brothers lot. >> this is hollywood there's always disruption in any business that does a large m & a transaction. you've been for parade by some who have left the country as being the bad guy, coming in and knocking heads and not listening necessarily. is it a long road to sort of get that cooperation and do you risk something on the creative side in terms of breaking down these

solos? >> first of a -- silos >> the creative side of this business is still 100% in fact from the day we closed this transaction. we qua we walk you through an incredible amount of creative people who have been here and are still here i think we've done a really good job of ensuring those folks have had free rein to do what they want to do and increased investment levels and give them an opportunity to do something like hbo max you saw yesterday not just the creatives that work for warner media company but our partners, jj abrams, and a variety of others that come through the session yesterday say this is a good place for us to work, we're excited about the future and the options available in this business >> i want to get to the product itself, specific to the price. that was something that many in the investment community were waiting for yesterday.

14.99. there are 34 million subscribers right now at hbo who are more or less paying a similar price to their cable distributor. what gives you the confidence at that price level you're going to be able to attract the 16 million incremental subscribers you think you will >> twice the content for the same price, i've had much more difficult marketing prop sessions to sell on the market than that. i this i this is an incredible value pup saw yesterday there's some really good product in there and as you saw bob walk through and he did a remarkable job showing how the team is thinking about expanding the traditional hbo demo and we focused a lot of incremental investment to make sure we broaden that app tur of the market we can address.

there's probably people who will say there's enough in there for me where i want to get into that, plus where i maybe wasn't interested in $15 for hbo before, there are some things that i think i might with with it we talk to a lot of customers every day and the distribution engine is incredibly strong. and the question for the offer down the road is to get people to sample. >> you mention avot, add supported video on demand. >> as we shared yesterday, some of this is coming out in time and this is our road map and where we're going. the team's had a lot of work to do we got clearance from the court in march of this year, and that allowed us to start doing some

of the things structurally to execute on hbomax so the team has been incredibly focused to get the domestic product out there and do it quickly and effectively and we're doing second iterations on release two and three. the avod product is going through the development phase and the specking of it so when we're ready and comfortable that we have the right price and the right structure of it, we'll communicate it i think we've been a little criticized over the course of the last year as we've gone through those iterations and development cycles people don't think we've been really crisp in our messaging. i don't think i want to make that mistake again >> back to price, 34, why you think it can resonate in the marketplace. at the same time, hbo has been around for a long time it's a premium product that many enjoy, i know at my household we

do >> thank you >> incrementally while it will be acontent, why you feel there are more people willing to pay, disney is 6.99 netflix is a bit list. >> first of all, they're not the same product the kind of content it provides, it's not the same product. we can go in with a muff broader dem oaf and slate of content -- i think you saw pretty impressive and unique content in there. would i tell you secondly, as we go forward on this, people aren't going to just buy content for content sake they're going to buy content because it associated with other products and services. whether it's amazon, who chooses to offer marketplace incentives to have video, or it's at&t that chooses to put great value with pay tv or connectivity or

broadband $ with it. that's are other reasons for people to come into the product as well. i have no yes this creative team can put the right content out there and hit the right ap tur he's a profl in that regard. i think he's going to lead the team with kevin and sarah and others to do a great job >> does actually offering video on your platform in some way lower churn in the wireless business >> unequivocally we already know what we've done in time, hbo, our best wireless subscribers, it drives up engagement and lowers the churn aspect for those customers we've offered it to. i think this product is even better because right now with the size of the content offering of hbo, it's limited in terms of the number of minutes a day by

broadening and governing the contenting we'll increase the time of engagement the more time somebody spends with it on a daly basis, the burt that will be. >> the importance you seem to be placing on this not just for warner but for at&t would seem to go to that metric as much as any other. looking out to 2025, you're going to be profitable but you're talking maybe $1 billion on ebidta and a country that generates $16 balance in free cash i mean, the up in don't seem to be that great given all the emphasis on the product itself >> think that's the dynamic this company driving $ about 100 million in our wireless business, there's a huge incentive to use it in the right way. we think it's going to help that

business to generate such a massive amount of the cash for the at&t company >> you started the presentation, john, by saying you should have in speaking to the investing audience, you should have great confidence in your management team it struck me because there are a lot of investors who don't have great confidence in the management team or at least look at the recent history and say we're not so sure, including eliot, which is now supportive but as little as six weeks ago was certainly fairly critical. why should investors have great confidence in your management? >> i think if you look back at the history, not only of at&t but of time warner and warner immedia warnermedia, these businesses have been through a lot of transitions. thinking of the media company to move away from theatrical and get deep into television, you think about how significant that's been. when i started in this country and worked for at&t, we thought

call waiting was a pretty enough and innovative and important feature what was going to come out. this is a business who understands how to get through these transitions and manage subscriber bases through these transitions i believe at the end of the dave these plays that you run have a lot of repetition and similarity and i believe will do very well in that regard >> despite what many people have been a misstep in directv, given the sub losses when you aquid pro quo it for $67 million >> we probably have some things we would like to have seen differently. i think the erosion in the pay tv bundle has opinion a little bit fasters than we expected we said we weren't buying it because we loved the satellite business, we loved the customer base pulled a lot of cash out of that business in the time that we've had it and that's the most important part in terms of what

we needed to do. we always said this was going to be a transition from satellite subscribers to software subscribers. hbo max and what we're doing with at&t-tv, the enough software product, is part of that transition. i'm ale will des popted we're not -- we've been a little bit slow in that transition but i think this is going to pick up and you've probably seen the peak of losses in the last quarter and we're going to incrementally get better moving forwa forward. >> why do you feel like this is the peak of losses at directv and sublosses? >> we're ready to move out with a different product. back when i left the directv business in the middle of 2017, one of the things i thought was very important to stain that

base so that they could stay on a platform and not have to go is a great pairing with us now. we can within the stamly but offer a pleas for our best and most pro and hits the broad app tur of the demographics that you and i just discussed and i think that gives the pay tv product more life as well. >> directv is now at&t now, the ott product. how should we be viewing that in light of hbo max or paired with it >> you should think about them as two coming together over time we'll start with synthetic bundling where can buy both products at an attractive price. our if you're a great hbo practice, you and we'll get a

platform that allows the customer to do more integrated search and discovery where it doesn't feel like they're working through two separate environments and, third, i believe these platforms that are being built right now are the new distribution platforms they're the replacement of what started out as the big product networks, moved to cable infrastructure thatting ing aggd and in most case it aggregates and gets sent out to a customer. we want hbomax to be one of those platforms. live will come into it over time >> you said that yesterday as well that's a number of years out i assume live, news, sports, what that means with live. >> that's the reality of what's going to what and it will become the new distribution for the next ten years >> off more, one would expect. and it been great.

it's been incredibly profitabprofitable >> it's been incredibly good for you, ain't it? >> not so lucky. >> you have a few more years ahead of you here. >> how do you view that? what is your expectation of the average household in terms of how many of these products they were going to be willing to subscribe to >> i think we're in such a state of change in the industry, i don't think anyone of us can say that sen of investment will -- and it product is not that different either, is it? >> i think scale is different. it was more profitable to service 25% of the market in the hold days. now if you're a disor, you might serve 125 million subscribers instead of 25 million subscribe subscribers. >> how do you think about your -- what's ahead of you

moving forward, you know, randal stevenson, the company's ceo has been quoted as saying you got to be successful as running this play, meaning stankey's got to be if you want to become the ceo. do you want to become the ceo and do you feel the pressure to actually perform over this next period of period of time in terms of what we're talking about here in order to potentially ascend to that job >> you know i've been working for 34 years and i think in virtually every job that i've taken i've always felt a pressure to perform and actually add value back to the business i don't think that changes or i feel any different about that. i've got a lot in front of me to do right now this introduction to this product is incredibly important. every job i've come into, it's always been what needs to change, what's something that can add value to the business and how do you focus on doing it well that's what i'm going to do right now and that's all i'm concerned about right now. what comes from it comes from it the beauty i are is i have th--s

i work because i want to work not because i have to work and that's a blessing. i want to do what's in front of me right now >> does it hit hard when you see an elliott letter and part of it it's on you saying we not sheer we want stankey to unare the company or anonymous comments of previous or current employees who take shots at you. do you care? >> of course i care. i care about my reputation i think at the end of the day i get paid a lot of money to put up with a lot of different things what i don't like about it is sometimes it's distracting to the people around me, people we're gee pending on to bring it's not that it bothers me that they're saying things about me, it's that i want the

organization to perform well and be focused. >> is there a lot of pos tilt out there? do you sense it amongst the people around us here in this incredibly creative spot, or do you feel like you really do have the level of cooperation you're going to need to achieve what are significant goals? >> you know, i've been through a lot in my career i've had a lot of great opportunities and been through a lot of interesting moments, probably eight major m & a ingt actions in my career putting businesses together isn't the easiest thing in the world. often you buy a company, you pay a preium and you can't run it the same >> as a pivotal moment as you have said it is for the busine business >> and this is an example right now and there's been many before styles and sometimes when you change the direction of a

business after you acquire it, there are people who don't agree with your perspective. i'm sure there's a fairly long trail of individuals that fall into that category over the course of my career that maybe don't have the greatest things to say about me. i try to work with the people i work with every day who are committed to the new direction we're setting, include them and work with them in an instructive packsbut i'm not perfect and we all can do better from time to time >> i do want to come back and my final question just to the product itself because a number of reports were positive this morning. >> you sound surprised >> no, i'm not surprised i was there. it's an impressive breadth, depth, you're focused in terms of the demographics hbo doesn't hit, the interface, all those things but there was one thing coming up i would love to get an answer to up are going after sort of a younger demographic to a certain extent that and there's a

concern they're never going to pay for it how can you be confident given that focus that you're going to be able to get the incremental subscribers and the targeting around the world on their willingness to pay i think their willingness to pay is directly correlated to their discretionary and disposable income i think they get ib krcred and belief is these businesses run through their life cycle and earn money if you put something of value in front of them, they will pay something. maybe on a college campus, they might be a little more aggressive about finding something without having to pay for it i think our job is to give them ways to be upon part of the and

how a family moves through a life cycle eventually, you may graduate from your parents' wireless account vaund your own as your life circumstances changes. that's natural >> favorite hbo show right now >> no question, it's got to be "succession. >> you and i agree on that john stankey is president, coo and ceo of warner media, president and ceo of at&t. thanks for coming down >> sure thing. >> we appreciate you bringing that interview to us we want to go the white house. what can you tell us >> that apec summit is off chile that was going to host it said they will not be able to pull it off. there have been intense protests

and riots in chile, some unrest in the streets there and now the president of chile saying that investigation is that means for the china trade deal a lot of expectation centering around president trump and xi jinping meeting in chile in order to sign the phase one trade deal now the question is is there going to be an apex summit at all? and, secondly, will there be a meeting between president trump and xi jinping at some other location those questions are unanswered at the moment. a spokesman said at that point they didn't even know the chilean government was cancelling it. they're trying to figure out if there's a backup location. and when we have deal dee tails, we'll bring them to you, scott >> thank you scrambling going on now. >> a lot of questions out there. we appreciate that report, though thank you so much. when we return, boeing ceo is

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it is time now for our etf spotlight. let's look at the nasdaq biotech ticker you have amgen pull being back despite beating earnings and raising full-year guidance the ibb and ticker ihf are up more than 7% mondth to date health care the top performing sector and on trend to break a three-month losing streak. >> good morning, everybody iran and russia criticizing washington's plans to protect oil deposits in syria, accusing the u.s. of illegal actions. >> we believe that the territory of syria should be controlled by the government and military and armed forces of syria and they should be responsible for

providing security to syria and to the neighbors of syria. >> russian forces patrolling long the syrian/turkish border in northeastern syria, russia has deployed troops in that area as part of a deal reached with turkey to ensure the removal of kurdish fighters from the bored are area >> and more than 500 items of actress and singer olivia newton john go up for auction scott, i'll send it back downtown to you. >> boeing ceo dennis mullenberg back on the hill for a second day of questioning phil lebeau caught up with him moments before going into the hearing room >> that hearing has just begun

he has not yet addressed the house committee. i did have a few moments to catch up with him. >> senator duckworth was straight forward in saying you lied to her, you and your company lied to her. what's your action >> i have a great deal respect for senator duckworth, veteran, i've known her for a very long time -- >> did you lie to her? >> we took her feedback and we'll make sure shoe she has all the information she's looking for. >> reporter: when they say have you not been forth right, what do you say to them >> we've done our best to bring forward the data, be very transpare transparent. >> there are more than a few senators and today representatives who think they have not done new. they're coming out guns ablazing there th is representative peter

defazio. >> i talked to a lot of pissed off pilots we are the backup system how do they think we can be backup when we don't know something is going to take over our plane? >> again, this hearing for the house transportation committee is just beginning. we have yet to hear from dennis mullenbergthe guys will be here not only getting comments from the representatives but also let you know what dennis mullenberg has to say because he's no doubt going to get greld by this guys. >> the as we take a quick break, let's take a look at the markets this morning the is specific looking for its third straight day of i tra day record highs we're lower fractionally across the board. we did have the news just moments ago of that apex summit

next month being called off, calls into question whether that phase one of the trade deal between president trump and president xi of china would be signed that's your market picture at this moment. more "squawk on the street" when we come back ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ by the way, she's the it wasnext mozart.g day. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened.

not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places. the amount of student loan debt i have, i'm embarrassed to even say. we just decided we didn't want debt any longer. ♪

i didn't realize how easy investing could be. i'm picking companies that i believe in. ♪ i think sofi money is amazing. ♪ thank you sofi. sofi thank you, we love you. ♪ stocks and treasury yields falling ahead of today's fed decision investors now would you know der if t -- wonder if the third time will be the charm. how much is riding on what happens this afternoon >> well, i think that if the fed was to surprise and not cut, there could be quite a bit riding on that but as you say, this cut is probably priced in and then we

always need to see what the press conference and the language afterwards, you know, does the fed have a clear, consistent message that they're data dependent or they see more cuts ahead >> cut and pause, if that's what happens today or if the market is led to believe that's what's going to happen, is the market okay with that >> i think that we're going to need to see more cuts in the future as the u.s. economy slows, and so really if it's, you know, pause and data dependent, i think the market could be okay with that. but i would point out there are many other factors going on here, and we think that we are closer to the tom ofp of a tradg range thank a bottom all of this, the fed discussion, earnings, all these suggestions come back even more so to what happens with the trade picture >> we just got news a few moments ago that maybe you're

not going to get this phase one signing because of the apec cancellation is that a problem? does the market care about that happening next month i mean, stop and maybe as a finalization to that story >> yeah, i think the market has anticipated that something will happen based on a lot of good noise. and i don't know, you know, i don't know if they will meet the president xi and president trump or, you know, where that will take place but one thing we are pretty confident about, president xi is not going to show up with one those checks that says $40 billion for u.s. soy beans and that's some of the numbers that are out there. so the most that china as a whole, private and state-owned enterprises that were bought in

$26 billion, so maybe they could do some of these points are unclear and we still have more tear i was going we're going to need a lot more clarity on this deal for the market to break out. >> all right mark, stay with us we want to get over to jane wells because massive wildfires continuing to ravage the state of california jane is in moore park with the latest jane >> hey, yes. we have the first of the fires that have started in this new red flag warning situation with these gusts that have started. gusts are expected to hit as high as 80 miles an hour today behind me -- well, the fire is coming this way. can you see the smoke here we've lost the sun the reagan library, where the president and nancy are buried and have all their archives is

on the hill behind me. the fire could be endangering that facility right now. there have been some mandatory evacuations and over here you can see the smoke is stretching all this way this broke out about 6 a.m. local so 9 a.m. east coast time and we knew there were going to be fires because of this red flag warning situation, but there are mandatory evacuations they have started to get air sport in here but this wind is just amazing the sun is starting to peek out there. i live about four miles away and i got my warning fromison that is probably going to go out shortly. they're saying we could see winds here that we haven't seen since october 2007, so we're talking 12 years ago so all hands on deck there could be more power outages. so far as far as we know, there have been no structures lost but

there are mandatory evacuations going on right now this is what the santa ana winds are like, folks. that's just a little taste of it >> on what is just the beginning of this day. >> stay safe and hope all the good folks out there do the same >> let's bring back in mark on the markets as we count down to the fed decision you think the equity back drop is positive? it's hard to tell a bad story. industrials new high, financials new pi some of the better areas of the are the -- we haven't. we certainly prefer u.s. equities to european equities. we think that u.s. earnings decelerating but we'll come in this quarter around expectations

whereas, say, europe is likely to surprise a bit to the down side but overall, again, i think that a lot of that strength has been around trade so -- and a lot of that is priced in now. now we have to get something look a deal on the table that is signed and even if we do, you know, one of the things that we've also seen besides the slower earnings is one of the causes for that has been less investment by companies and we see this with our own clients who improprietary surveys we do of them show urs they're slightly less willing to invest given the uncertainty around and that could weigh on future profits and economic growth going forward as well. >> so, mark, given that uncertainty that coincides with some of the trade wa are deliberations, can the fed cut rates enough that would circumvent some of those businesses are having as it

relates to the trade war or is it dependent on some kind of deal being signed in earnest >> well, i think our message would be no recession but not enough stimulus, either fiscal or monetary, to launch risk assets significantly higher here the fed does still have ammunition, unlike some central banks around the world, above the zero bound, and they can use that to help keep the u.s. economy going and hopefully produce some growth, albeit sluggish growth. >> all right, mark, thank you so much i think the big question here is how low ed thank you so much for joining us >> as we go to break, take a look at shares of matel, surging on its earnings beat the toy maker is reporting that auditors have are come his post

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could stocks be on the verge of a pullback as the fed prepares to cut rates? nor "squawk on the street" coming up. obvious. sometimes, they just drop in. cme group can help you navigate risks

and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ now let's get to the cme group in chicago rick santelli with "the santelli exchange." i'd like to welcome vincent reinhart thanks for joining me. let's get right into it. i liked when jay powell came in and overtime morphed to the notion we'll make our decision as time and conditions necessitate. we're using the model of three eases and a pause. in the mid 90s, no ecb, no negative interest rates, no

euro the ecb didn't come into existence until june of '98 watching "truman show" and "armageddon. is this the right way to proceed? >> i would pity jay powell because his office is in a building full of economists and their message is just sinking in to him and we're getting a little less of the plain-spoken chair we thought we'd get at the beginning. you're exactly right they haven't gotten the memo that the united states is part our trading partners than to us, but it's still important to us, and that matters for the efficacy of federal reserve policy. >> now, let's take this a step farther. the liquidity issues that seem to be at least for the time being under control really are a function of what we did after the crisis with dodd-frank but maybe more importantly we're finally getting a feedback loop through debt

all this issuance of t-bills with the structure and plumbing smaller is going to be an ongoing issue, don't you think >> yeah, i think there are two separate issues. the one is sort of a climate and the climate is if you've got $16 trillion of negative sovereign debt abroad, that's pulling down u.s. yields you can't explain a 10-year treasury at 1.80 based on the current condition of the u.s. economy. the second part is about the resilience of financial markets in an environment in which intermediation is shrinking, in which the big banks hold reserves, they don't use them, and it's just tougher for the fed to get their liquidity pumped through the whole plumbing of the financial system >> you know, vincent, i continue to look towards europe and to some extent japan. the bank of japan of course has their announcement tonight/tomorrow but in the final analysis, we've seen quite an interesting rise

in rates in europe, and i do believe that if they are reversing their policies, that will definitely be more of a tsunami in the global financial markets than this third ease maybe the fed should consider keeping it in their pocket >> i think they are too far over the board not to jump into the pool right now when 95% pricing of policy ease is there, it becomes self-fulfilling. i think you're right, though, if the global economy changes and the european economy looks better, then that will be consequential everywhere and that goes back to the point. trade matters more to our trading partners than to us. the trade deal is more important for europe and japan than it is for us >> and finally, the last issue i want to bring up is this morning gdp. listen, 1.9 isn't terrific, but it is terrific considering all the negativity and all the pushback around the globe regarding the policies and

strategies of straight and ongoing issues with regard to the u.s. economy your thoughts on today's number. >> the important thing about today's number, 1.9% may not sound terrific but it's sustainable. we couldn't be growing at 3% like we were last year in an environment in which our population isn't going up much and we're not generating productivity 2% in the neighborhood, that's sustainable. we can -- >> thank you, vin secent we'll have to leave it there talk to you after the meeting ends potentially and we'll discuss what the statement says. scott, back to you. >> all right, rick, thank you. ge shares highest level today since july after its earnings beat. our seema mody joins us fresh off a call with larry culp. >> i just spoke with general electric's ceo, larry culp, and he said he's more optimistic today than a year ago and 2019 is a reset year. there are still a lot of cleanup

to do and it's going to take time to drive the changes that he's been articulating since becoming ceo one year ago. within aviation, culp says despite the grounding of the boe boeing 737 max plane, the company is seeing healthy demand from airbus. it's growing military business, its after market business but at the same time it is working with boeing for a safe return to service. while ge did raise its industrial-free cash flow outlook, its power division continues to struggle. quarterly revenue falling 14% year over year, but culp says power is in the midst of a multi-year transformation and he sees a lot of opportunity in renewable energy and onshore wind turbines. so we'll have to see how ge continues to turn around power he does remain focused in general raising cash to pay down debt it's in the process of selling down its stake in baker hughes and continuing that sale of biopharma for $21 billion.

that is really what the market wants to see take a look at the stock, it's trading at $10 and change. highest level since july, as you were pointing out, scott, and i should add it's moving on heavy volume. >> just off the highs of the day as well, 12% gainer is general electric seema, thanks. >> thank you now let's send it over to jon fortt with a look at what's coming up on "squawk alley" today. >> sean radd is the co-founder and former ceo of tinder he's going to join us and we'll talk about the $2 billion lawsuit he has pending and a philanthropic venture he's got might want to do a little role reversal, tease my show and toss it back to scott wapner. >> good stuff, jon, thanks. it's been a volatile start overall but we've seen a little chill after chile called off a

key summit where president trump and chinese president xi jinping were expected to discuss phase 1 of a possible trade deal we are seeing weakness in material stocks as you can see behind me here, so stocks still relatively in a holding pattern. the worst performing sector so far is the energy side of things after data showed a surprise building of u.s. crude stw inventories. you've got hess adding to losses after posting a miss on revenues and lowering its capital expenditures outlook the rest of the year so the energy in focus and it's a fed day, we'll keep financials in focus as well i will sent it back downtown to you guys at the new york stock exchange >> all right, good stuff, dom, thank you. when we come back, we'll take a look at the market real quick. we're treading water, at least on the dow, ahead of the fed decision heard dom talking about some of the movers in the financial space. industrials have been at a 52-week high of late we're in wait-and-see mode

we have big earnings after the bell we're counting down to as apple and facebook are getting set to report. we'll tell you wt eechatoxpt because "squawk alley" is up next don't go away. it was sophie's big day. by the way, she's the next mozart. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut.

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good morning it is 8:00 a.m. at lime headquarters in san francisco, it's 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ good wednesday morning, welcome to "squawk alley." interesting day on this fed day as markets holding its cards close to the vest. we'll start with the busiest