chamath palihapitiya good morning, and welcome to "squawk on the street," i'm david faber along with jim cramer, carl has the morning off this morning let's give you a look at futures as we get ready to trade 30 minutes from now of course, you can see we are looking for a stun open. let's get to our roadmap, it does start with the september slump for stocks, at least so far. technology stocks heading lower once again, at least many of them, and as you saw features are extending losses this after worse than expected jobless claims plus, there are concerns about overall economic growth. goldman sachs cutting in half its fourth quarter growth forecast given it doesn't see

any new stimulus in sight. and that tiktok trade, you can't really trade it, can you, because it's not a public company, but bytedance is formally seeking china's approval for a deal with oracle and walmart, those are two publicly-traded companies. yes, they are, jim let's talk markets let's start with that. you know, it's funny, i don't know what you make of the pull back today, to the extent we are going to have one or what we've been seeing in apple lately. i keep wondering coming back to that softbank option purchase that we kind of -- we talked about it for a day or two and then we moved on. >> right. >> you know, a number of people have come back on it with me, jim, and sort of said maybe it had a bigger impact than we realized in terms of the run up of some of these names. >> it did jack the market up in 1999 fashion which, you know, you know, led to 2000-2001 which was a disaster and it was frankly unnatural other than

zoom almost every one of those stocks that they took up have been crushed apple tested down 25% on monday. >> yes. >> could see it again. david, you're right. that kind of unnatural buying was very similar to herd buying we have seen together whenever we have -- right before a really big selloff. yeah, it was artificial, just like 1987 when the japanese would come in every morning, artificial i'd like to know more about the trade, but you have a beat on something that i had not thought b i really like that. >> i think you're right, we need to know more and unfortunately i don't have great insight i mean, they were selling puts to buy calls maybe it's all over and done with at this point it's not clear that it actually did work out given how big -- but it was an enormous, enormous trade. >> david, what's interesting is that they thought that the market could handle it like it was another generation like it was the '90s or the 2000s. everything is so thin. when you come in with options coming in and you come in

blazing, you do a blitz, the other side of the trade just freaks out and so what you have is you could just have this incredible short buy, short buy, cover, cover, cover, that just takes it -- it turned into something where even without any bad earnings, because the earnings were actually pretty good, we fell apart and i think that it didn't have anything to do with stimulus, didn't have anything to do with earnings, just had to do with the fact that the unnatural buying could not be sustained and now we're dealing with the september hangover, we have a couple more days. i think -- i use the proprietary oscillator i paid for from s & p and it came finally, year five, minus 5. typically it historically means you have to do some buying so i'm there and that's my view. >> and you have bien been saying that for the past couple days. >> monday was terrible there is a note today, david, a note from morgan stanley about alphabet, about google, and they raised the price target and they

also talked lovingly about the earnings and about search but the main thing is, david, the stock it up 5% i mean, 5% that's not that dangerous. good balance sheet, right? >> right. >> doing a lot of things right that's not an expensive stock. you might have thought that, well, that must be up 20% for the year no, we've given up a gigantic chunk of performance both in the soft goods, cloroxs, mccormicks and also in the flebalphabets a anything other than zoom the cloud stocks have been rolling over for a long time no one talks about how awful this market has been away from tech there is a note today about wells fargo talking about the stage coach might be leaving, what is that like jon fortt or something? holy cow, stage coach is not going anywhere i don't think this is a compelling buying opportunity. look at the banks, look at the tangible book of goldman sachs, we are well south of the tangible book. a note this morning upgrading it now, this is only up to jefferies which you know better

than anybody, they had a better than expected quarter. >> jefferies had a strong quarter, records on a lot of different fronts there yeah. >> so what does that say that's a transactional firm. >> it is. >> i don't want to recommend any bank stock for fear of looking like a fool, but jefferies bought a huge amount of stock at 16, you don't usually think about brokers buying back stock and i just think that that group -- that group has to bottom and we need to see apple and microsoft, facebook bottom and then we're going to get an okay market. i do think we need to see some rollovers on the ones that haven't rolled over. i don't think that snowflake should still be up here. i do think that the crowd strike should be up here, okta is too high david, i don't know, people come in and buy zoom as a default and i question that, too >> yeah. i guess you can and you can continue to given the multiple of revenues that we are talking

about there. >> 50, up 70 you look at nikola and you say -- nikola -- you say to yourself, well, wait a second, there was a stock that was at 80. >> wedbush suddenly see that the light has turned from yellow to red and they're now down grading it. >> i always love a heads up like that. >> yeah. >> 18. >> it's been a twilight-zone-like few weeks for nikola investors they say. some highs, the flagship gm partnership and a couple lows. i didn't see your "mad money" piece on t but i did read it yesterday. you were pretty -- >> i blew this one to kingdom come about 20 points ago because i didn't believe in the bp deal which the short seller hindenburg blew up the bp deal -- didn't really blow it up, bh -- >> they may or may not have. from nikola's point of view you could say, listen, we were very close to getting another anchor of our strategy, we had the gm deal, we were going to get this -- starting to move on hydrogen stations in a

significant way with a partner there and we would have actually executed on the vision if not for this piece. >> i mean, again, david, that truck that looked like it was going 60 -- >> it was. >> but it was just going down the hill that's a bad fact for bp. >> that was not a good fact. they never said it was self-propelled in their defense. they never actually said it. >> david, bosh is on the board. >> they are. >> bosh dishwasher, it's a real company. don't they have to step off the board or do they just say we don't care who we are affiliated with. >> i don't know. steven gur ski is a real guy. >> sometimes you just get had. >> sometimes you do. >> mary beth, did she know about the magical truck? >> i don't know what she knew or didn't know. >> how about milton trevor, where has he been? >> he's in quarantine, but not related to covid.

>> steven girsky is a real guy you want those trying to say i screwed this up but they never do that. they doubled down. now are we talking too much about nikola do you want to focus jobless claims >> we can talk about jobless claims i'm happy to talk about whatever you want. >> darden, i want to talk about darden. >> i don't want to talk about darden, how about that i don't. >> no? >> i want to keep talking about speculation in this market did you see sbi energy yesterday? >> isn't this california >> it was a 40-fold increase in a day. i've never seen anything quite like that. >> california insisting on -- we love solar. >> it was a hemp company, it's chinese to your favorite, you love those chinese companies yeah, it was a buck, it was about to be delisted and then they moved suddenly into ev. >> that's good. >> and the stock yesterday was up at one point. >> is it a spac, too >> 40 fold i'm not saying four. 4-0.

4,000%. >> that's a nice gain. that's like -- it's like powerball. >> it's still there. >> your robin hood traders are still out. there they're still out there, jim. >> fryer tuck is about to -- >> is fryer tuck dave portnoy. >> no, he's doing the sports book there he's still stocks, a resilient fella. david, there are some calls i thought you were going to drive me to in terms of a speculative tok. >> okay. >> designee. when you see needham cutting numbers by 26%, looking for 69 cent loss, parks down 69%, david, that's not good. >> it's not good parks is tough we know that we know that as well for comcast. theme parks is a tough business to be in. >> in a pandemic it's their first pandemic. >> listen, at least they're open. >> yeah. >> people are coming. >> they are open but when they start -- >> movie theaters, remember

those, still an important part of it. and then sports rights and -- listen, bundle -- we know all the questions, but investors, jim, are solely focused on one thing at disney and you know what it is. >> what? >> direct to consumer. that's it. that's all they care about. >> why not ultimate fight club that's on some island somewhere, we don't know where that is in order to be able to prevent covid. >> is that what they're doing now? >> yes, they are on an island. >> okay. >> i'm not kidding. >> so an island with all these fighters on it. >> how about thumper -- i mean, bambi's mother. >> yes. >> fantasy island, this stuff is too scary. talk about twilight zone i love some of these calls today, david i'm thinking in bed bath & beyond call is the one the call of the day, baird making big calls foundational changes occurring 80% of the analysts hate it. 58% short. it is a home spending opportunity and they're calling it too hard to ignore.

i like that. i mean, i like that, but i also do the other side, i like nike coming down. there is a lot to talk about. >> bed bath, how about that. >> how about that. >> the physical stores are doing okay or is it really just -- is it the digital channel for them that they have to hope -- >> they have to put in a digital channel. >> i know. >> i know i'm going a little scatter shot here but the market is scatter shot. >> let's come back to the broad market for a second andthen i want to talk apple we mentioned briefly at the very top this down grading of the fourth quarter expectations over at goldman sachs and the reason of course seems to be that we estimate the withdrawal of fiscal support will reduce disposable income to the pre pandemic level an extra round of benefits is being disbursed and nothing further is coming because we are not going to get a deal out of congress they go from 6% to 3% gdp growth on a quarterly annualized basis for the fourth quarter. >> if the market just craters,

don't the republicans come to the table? president trump doesn't want that the more the market goes down the more likely we have stimulus. >> because he's focused on the stock market. >> completely. >> he's focused on a number of things. >> he doesn't want the stock market to go down. he doesn't have a lot of firepower like powell does, but he can come in and make a deal with the republicans david, you keep talking apple. i see you, apple, and i raise you with j bill. a better than expected quarter what do they make in electronic manufacturing they make apple, they make the cellphone. >> right. >> one of the many makers. meanwhile, people are selling apple taking it down 25% why? because the chart is bad the chart is bad, apple. >> it's been rare has been the day when you haven't liked apple but you certainly seem to be positive. >> i liked it since 2.5. that's a good call a lot of people think i'm a knuckle head on twitter and they are all right because i'm jimmy chill. like when i do the mask and gave a lot of money to have a mask

competition, a lot of people hate that. that's a good idea to hate me for that, right? >> i don't know about that. >> i got 3m involved, i got honeywell involved, i got under armour involved and i'm hated for that. >> speaking of twitter, does the move in twitter yesterday, it did come down add the market weakened over the course of the day. a pivotal research note, people take that analyst seriously. >> twitter might have voice, let's get siegel on, unless you can get dorsey on. >> back to apple for a moment. >> okay. >> what is the thesis in -- >> the thesis is like -- okay. it's down 25%, it is going to have a 5g coming soon, that's -- that's not a refresh, that's a gigantic news cycle. the revenue streams for service are even better. you talk about disney direct to consumer, i'm giving you the falva director making a movie for apple. i paid my apple bill again this week, i didn't know it

contactless. my world -- my little world that's pathetic because my wife doesn't live with me anymore revolves around this i -- >> by the way, we should make it clear to people -- it sounded like -- it's not -- that's a choice based on the virus, correct? not necessarily -- >> oh, you mean like -- >> that you're living separately >> it's a chose issue, my wife lives away from me because there is this thing called the pandemic and we want to be socially distant by like 70 miles. >> that can work. >> right but i have this. i talk to siri every night because i ain't got nobody to talk to. >> you ain't got nothing. >> she's polite. >> that's a reason to own apple, siri can be your imaginable friend google the price target go up. facebook nothing today but $50 billion opportunity in the shops that nobody is thinking about. all right. amazon, i mean, really is amazon doing badly? if the pandemic rages again?

>> of course not but the stock is up 62% this year. >> i want to go buy a good steel mill, right? >> if you are in the market for one i have a good one for. >> you we have to stay away from -- do you want first horizon, david i will give you some first horizon. >> okay. sold to you. >> i have give you some truist. >> oh, yeah. >> i played truist -- he's playing quarterback for me in fantasy, turns out it was a back. >> coming up, hey, why not talk more about that tiktok deal, plus a lot more. we have talked a lot about movers this morning, we have hit some research but we have a lot more keep it here diane retired and opened that pottery studio. how did you come up with all these backstories? i got help from a pro. my financial professional explained to me all the ways nationwide can help protect financial futures in peytonville. nationwide can help the greens get lifetime income because their son kyle is moving back home and could help set up a financial plan for mrs. garcia. and he explained how nationwide can help mr. paisley retire early and spend more time with his pal, peyton.

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bytedance of course the china owner of tiktok filing with beijing with the chinese government for approval for that deal for the app to be at least sold in part to walmart and, of course, oracle, jim. the question here is in terms of the export of ai, which is something that is now regulated by the chinese government and whether or not they will say yes to this highly unusual and significantly structured deal. >> well, it would help -- if you wanted the deal to occur -- it would help, i believe, for some of the principals, for walmart, for oracle to come out and talk about the jobs, to appear on air, to make a case both for china and for this country, risk

the wrath of the president for saying something about how china does okay. oracle is now back to where it was before this happened, which is is incredible because it's such a good deal for oracle, but they're too secretive, david larry ellison is too secretive, safra catz is too secretive. everyone is afraid of the president, i think, even though i know he will son -- you don't want to say the chinese can do good here, this is a good deal, because the president doesn't want to hear anything about china doing well and i think that's an obstacle. >> the white house in some ways does seem to be trying to provoke the chinese and it will be interesting if the chinese take that or continue to step back the way that they largely have over these last six months. since the tensions have been ratcheted up since the virus. >> good for america, 25,000 jobs, pretty good in austin, oracle does well, walmart does well i think that the navarro wing just doesn't want anything good

to happen to china. >> you are a hardliner but i do wonder about whether or not we are going to have this technological divergence between our country and china t appears that that is going to be the case and when it comes to ai in particular which we could argue is the next significant wave in evolution of technology in the world, the chinese are equal if not ahead of us in some ways. >> and that's not acceptable. >> this platform, people think of it as fun videos and things like that, it's ai that's what it is. and the fact is that you may think of this as a game company, but it really is ai masqueradin as that and it's incredibly sophisticated artificial intelligence. >> yes, that's why they use fastly they have to use fastly. fastly is the only content delivery network that can handle this thing that's one of the reasons fastly trades up. fastly is trick tok, that's how it works so well you are so right, david, ai as jensen wong would tell you the brilliant man who runs nvidia is

not the future which is what marc benioff with a was saying yesterday, it's now. >> it's now. >> as someone who i regard myself as a patriot, you can't let them win ai. ai isnow and i understand the navarro wing entirely, but i think this tiktok deal is such a big win for america and i cannot believe that oracle and walmart remain silent. who are they fearing >> it's not them that they need to convince, it's beijing that needs to be convinced. >> they can talk about how beijing does well, too all we hear about is beijing is a big loser. >> and how are they a winner here >> it's a huge amount of money, david, versus what it would have been alibaba, carrie firestone recommended it yesterday david, i think that that stock is one that we have to keep an eye on when i look at what happened with nike in china, the chinese consumer spending like you wouldn't believe 8% growth. again, the president doesn't want to hear, who is cramer, why is he saying good things about china, the empirical, the

numbers there are very good, alibaba is very good it is time for someone to say it's okay if the chinese win something. it's a trade war, we don't want it to be a hot war even i don't want a hot war, i don't want to go back to the days when nixon is visiting china stealing those little things. >> that is the concern among some when you get to -- >> you don't want it to be like going to the yaloo. >> you had benioff on the other day talking about ellison. let's take a listen. you don't want to do that now? or you do? >> oh, it was on closing bell. >> you meaning the generic you. >> when benioff comes on i assume he's always on "mad money." >> i know, it hurt my feelings but that's okay. >> i bet it did. >> it did, it hurt my feelings i texted him. >> you did >> i said what are you doing on that show? >> i don't blame you here is what he had to say about larry ellison. >> you should never sell larry ellison short. everyone in the world knows that so, look, i don't understand everything that's going on, but, wow, i'm so impressed by seeing,

you know, them and everyone else make these aggressive moves because i'm mostly worried about the companies that aren't making aggressive moves larry ellison is the master of relevance, you know, this is a move to make him relevant. this is so important and, by the way, he's giving you a master class in relevance. >> he's so right look, ellison gave -- of course gave marc his start, he worked for ellison and he worked for steve jobs, which is pretty amazing, right, when he was a teenager basically yeah, larry has got to come on, he is a very compelling figure and marc is so right this is a transformational deal for oracle we have to keep this in front of us because oracle and walmart are huge winners and so is the country. all right, david >> no, i'm listening to you. >> are you going to trash j & j at some point today? >> no, sometimes i like to counter some of your hyperbole. >> hyper ball. >> that, too

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only at t-mobile. we get started with trading in about four minutes, four and a half minutes from now. you can see accenture going to

be among the laggards when we get started, an earnings miss, we had julie sweet on, were wondering about the job cuts there, perhaps they were looking to save some money in the wake of aevue ren miss. we will take a closer look when we come back ♪

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>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. all right. let's get to a mad dash before we get to an opening bell. penn national gaming. >> yes, well, that is dave portnoy, barstool merged with penn national gaming, 14 million shares being offered raising about a billion dollars, has $3 billion in straight debt. he can pay it down in a lot of different ways deutsche bank reiterates its sell, they have hated it for a long time. they are no fan of portnoy, either mcquarry down grades it, tough over/under not playing to line moves. these are people who don't recognize that sports gambling is the future and penn national and taken the torch from wynn, from las vegas sands, from mgm they figured out nationwide

gambling, very, very smart company and the sports book that was unveiled this weekend was probably one of the great sports books. you know that dave portnoy is very much a captivating figure. >> yes, captivating. >> yesterday he was having a piece of pizza with bon jovi. >> that's interesting. >> isn't it? >> there it is the opening bell. the slt green realty celebrating new york's new skyscraper. >> do they need that, david. >> a beautiful building. over at the nasdaq bentley systems celebrating its ipo, that happened yesterday. yeah, i know, the idea of new office towers -- >> well, maybe. >> i don't know. do you know what, you walk around our beautiful property, there is a lot of parking lots there is something to be said for an urban office tower as opposed to endless acreage for parking lots. >> you can get the honeywell

mask or s&p is now not that good here, you need the mask, i don't recommend the goggles, you don't need the goggles, i wear the goggles if i am on a plane. >> there is no doubt you have to be cautious. i've been talking to a number of people, particularly in the investment banking community and leaders there and there is a frustration with how few people are willing to come back to the office. >> yeah. >> leaders want people back in the office they don't want -- >> i've always opted to not be sick. >> there are ways to do this in a place like new york with a positivity rate well below 1, there are ways to do >> you need the abbott app, you take the test, takes 15 minutes. why do we all not have this app and why are we using it? because the federal government took the first 150 million okay they have 150 million tests my understanding is they want to use them for students to be able to figure out whether they have it so they can go back to school very noble if you ever a single parent you don't have to choose between staying at home and losing your job and helping your kid the government has to do it and

abbott is spending hundreds of millions of dollars, hiring thousands of people to make it so we can go to cvs, take the test, get home, see that we are fine and use this to wand ourselves on the airplane to go to the eagles in the super bowl and disney world. >> and can allow people to feel more positive about getting back to life. >> you want to feel positive, look at darden. >> okay. i will. >> they reinstated the dividend, they actually -- they made more money than i thought, the ebitda was very strong. >> yes. >> what it says to me is darden won mom and pop stores nothing because darden is able to stay here, have 80% of the volume they had last year, but the average pizza place, david, what, with 12 tables, what are we going to do for them? do we just make them a casualty of washington? >> it's funny you mentioned that and it's a good place for us to play some sound from brian moynihan, somebody you follow closely. >> i sure do. >> he runs bank of america he had some comments on this very subject take a listen.

>> the sharp snap back has to be prolonged. in my view the stimulus has to be aimed much more precisely than in the past, it has to be aimed at the people who are still unploimd, it has to be aimed in performance venues and restaurants, another round of ppp would be helpful to help those restaurants. >> there you go, jim. >> look, brian has gone from being a conservative lawyer who ran a bank that was under the regulator's gun to being, i think, the chief spokesperson for what a bank can do to help create change in this country. positive change. i know we all worship at the alter of jamie dimon, he's captivating, like dave portnoy, not really, but when you listen to brian moynihan he is talking about everything from social justice, the need to be able to help people who are out of work and esg. he doesn't get enough credit so i'm singing his praises. >> it is interesting to watch the transformation of certain executives he has been in that seat for quite some time and he is more

confident i think in his views. >> he's grown into it. >> and his willingness to articulate them. right. which you see. at first as you pointed out he was afraid to say anything he wouldn't even get you his name. >> -- she's not a fan of the banks. >> no, she's not. >> charlie scharf on the firing line. >> yes, he was you mentioned wells fargo earlier. let's take a look at the banks because we did get the jefferies numbers that were very strong for that company, perhaps pointing to a strong quarter in terms of trading and currency and commodities, things of that nature, fixed income for the likes of a goldman or morgan stanley. >> goldman there was an upgrade this morning, goldman. >> wells fargo is down again at levels, decade lows. >> david, let me ask you something, do you remember glen fed and california fed, trading at 40% of tangible book. >> there was a reason for that. >> citi tangible book 70 those were trading like bank co

santander, like deutsche bank where the book means nothing does the book mean nothing at goldm goldman? >> no, i think it probably -- no, i think it is important. >> well, then we have to watch that. >> we do with he still are dealing with a difficult economy in which you have to question the credit quality in certain areas, but particularly on the consumer level, particularly in credit card portfolios and things of that nature, not necessarily at a goldman, although they have moved as we know with marcus and everything else into that consumer realm but it's not that large a part of the business. >> i just want to -- i want people to understand i have tremendous respect for jamie, jamie dimon, he has been an unbelievable job my charitable trust has a big position in jpmorgan brian moynihan needs people like me to say great things, he is so nonpromotional jamie is not, either, but he went through the torture as did

brian and jamie's bank i think is radically undervalued, but nobody cares nobody cares >> nobody cares. >> look at that. >> when you let me know when they ring the bell when they start to care again, will you do that. >> goldman .9 tangible book -- do you remember kwen you were talking about return on tangible equity we would never get to 6, they're shooting for 12. >> did you see the numbers from jefferies, i think they were at 17%. >> jefferies is unbelievable. >> a very large return on tangible equity there and you're right, they are in double digits again. that said i can remember a time when these things -- i mean, some of these small banks -- do you remember when an accounting company got sold for 3 or 4 times the book. >> they put 7.9 shares -- 1626 -- record net earnings $268 million. >> donald marin sold payne weber to ubs for some incredible multiple of the book. >> what an art collection. >> he is no longer with us, he passed away, but he was a great

creator of value. >> what are the three things that hold up in hyperinflation. >> i don't know, what? >> master work art, mansions and gold that's why my wife whom i don't see anymore but i am still with i will point out. >> good. >> says, listen, we have to buy real estate. in hyperinflation that's the thing that holds up. >> you already have a lot of it. >> we have way too many houses and she has a beat on a new one. >> you have to get art and will build tunnels for old. >> i lost a lot of art earlier on. >> in a previous life and or marriage. >> who i liked whatever. >> jim, we looked at the laggards on the s&p, i want to come back to accenture, this is not an insignificant company with 146, 150 billion dollar market value we had julie sweet the ceo of the company on last week. >> who is great, by the way. >> they came in a bit below. the fourth quarter, let's just go through some of the numbers. >> true miss. >> i wonder whether is it reflective of a slowdown in technology spending overall, revenues for the fourth quarter 10.84 billion, down 2% in

dollars, 1% in local currency, consulting revenues were down 8% as well, jim outsourcing revenues were up 6%, but, you know, overall a disappointment. >> yeah, i had frank calderony on last night from a small company but he says deloitte doing incrediblywell -- by the way, ey doing incredibly well. i don't know, is it share take because ey is having maybe one of the strongest periods its ever had in its history. i am not going to make accenture to be the reason -- i'm not going to make any judgment of slowing down because of accenture. if you type the symbol in, acn it always spell checks c-a-n. >> i get a-c-n. >> no, you don't hit up the symbol a-c-n, see if it doesn't come out c-a-n, trust me. >> on pple. >> no accenture. >> i did it right here.

>> the symbol comes out c-a-n. >> i did it right away. >> david, we have some work to do, all right? >> i want to do scripps, i was just looking for the actual symbol there, somehow i forgot it and the press release that went along with it. >> are you going back to -- >> the scripps deal buying ion, $2.65 billion and berkshire is investing $600 million in a preferred, getting paid 8% -- >> they got that with occidental. >> take a look at scripps, i mean, by the way, it may be up even more than that. it's a play on national advertising is what it is and creating these free national networks that they are advertising. ion, you may -- i don't know if you have ever seen it, a lot of those crime -- >> i watch those shows true crime, i love true crime. >> similar to -- there is a turner network that has a lot of this em. >> did you ever watch criminal porn on cbs?

>> criminal what >> criminal minds. guy the it wrong. >> law and order, if you walk around the streets of new york you always see some version of law and order being filmed, they are a constant presence and a great source of work for broadway actors. >> jerry orbach was one of the great. i saw him on broadway, he was a genius, but no one is going to write a book on him. >> he was a good dancer. >> a song and dance man. triple threat. amd -- >> we have moved on from scripps -- wait. before you get to amd. i want to come back to a name that you like, look at him, he's got his hands up. >> do you know what that is? >> yeah, it's -- >> club med. >> thank you buccaneers cove, my friend. >> turks and caicos. nikola is down 20%. >> well, yeah. 20%. >> the hindenburg was down about 20%. >> that's a lot.

that stock is quickly moving back to its offering price for the spac. >> it is guy for girsky to come on >> i don't know. it might be. it might be. i know you have your issues with t i can defend on certain areas of it as well, but when you lose the visionary do you lose the vision >> maybe the vision is like 40/40. >> maybe >> david -- >> we made that same argument -- >> do not compare this to tesla. >> uber. >> uber. >> travis left, they kind of lost their mojo, didn't they >> they did. he had a different kind of culture there. >> he did and it wasn't necessarily a good one, understood. >> while nikola -- rome is burning here look at this. >> those are all your friends over at robin hood. >> i have no friends just sayin'. >> what about me >> marginal.

i love you look what's leading -- i spend more time with you than i do my wife. >> yes. >> look at this nvidia, david, apple, these are -- these are signs that there are buyers just they don't want to be aggressive i say the tale of this tape -- remember when you used to ask me what's the key to this market? >> i do. >> it is nike because nike should turn around it was just such an unbelievable quarter. nike should turn around. if nike goes green i'm going to say it's not going to be a hideous day like a lot of people think it is. watch broadcom, $36 million worth of broadcom stock bought by the chairman the other day. >> yes. >> $36 million that's real. >> that's real money. >> right who knows whether secretary mnuchin doesn't come back and say we can make a deal. >> that would be a real positive. >> then we get this $150 million abbott labs instant test, the government gives it to cvs and walgreens or rite aid which had

a good quarter and we get people back to school. >> you're giving us a good news view of the view. >> when it's a sea of green i go negative. >> disputed election results. >> can we move on, david >> let's get to bob pisani bob, take it away, please. >> change the topic a little bit. futures were down a little bit going into the jobless claims report jobless claims were flattish and the market dropped a little bit on that, that's one problem, the other problem is dollar is up four days in a row, folks, that's an interesting trend, we haven't seen that in a little while. generally weak dollar market generally likes weak dollars, keep an eye on that. sectors all 11 basically down this morning various degrees, but energy, again, leading on the down side, tech, industrials, health care, consumer staples, doesn't matter, we have general mills was up earlier on. i think we have a real problem here the average stock is not doing very well. average stock, what's that watch the equal weight s&p, the rsp, that is essentially at its

lowest levels since going back to seem in mid-july, that's a drown trend, folks there is a lot of stuff in down trends essentially energy, just look at what's going on in september here, energy, banks, even technology small caps, this is the s&p small caps, these are all in down trends right now. tech is a pretty big part of the overall market and so are banks. tough to move when techs and banks are in a down trend. as for investing styles, i know we love to talk about everything, growth, value, quality, momentum, low volatility it doesn't matter. whatever investment style you have, they're all rotten in september. everything is down 5% to 9% as you can see here take your pick even value not doing very well. you can't blame it for traders for getting worried. look at the half dozen buckets we always talk to, the stuff that moves the markets, okay i only see one that's been a clear positive in the last few weeks, the vaccine and treatment, that's number one, that's a positive, we are still getting good news on that, that's good news, but the reopening and stimulus there's

been a lot of negative headlines about the problems getting things through congress, the fed may be done, china trade generally the headlines have been negative on that. valuati valuation, i think there's a problem, i think tech stocks benefitted from coronavirus and work from home but nobody knows how to value them. you guys love talking about apple, look at apple in the last couple of months apple goes at the end of july from $100 to $138 in the month of august and then goes back all the way down you see here at $107 let me get this right, we rally 40% in the month of august and then we're down 20% in the month of september does that make any sense to you for the largest company in the situates does that tell you that investors are kind of clueless about how to value apple and this is apple, imagine everybody else that is a much smaller and whose earnings trajectory shall we say is a little more difficult to figure out. it's no wonder everybody is confused at this point when i'm confused i call art cashin and ask him what goes on, with he did a trader talk on

this this morning, art explains what's going on in the market, you're looking for logic in a market that's not logical. it's momentum driven, the covid stocks up like apple and when they get too frothy they hit sell stops and the momentum guys have very tight sell stops that they will sell at and then they move down really fast. that's what happened to apple so he's big on watching the sell stops. why not listen to art? we are going to have him on at 11:30 eastern time he's going to explain all of this and why we should worry and not worry. certain things we should worry about, certain things we should not worry about, my old buddy arlt cashin on with us at 11:30 a.m. eastern time. back to you. >> good to see art bob, thank you i still maintain those softbank option purchases which did involve apple as well may have had an outsized impact in that period you were talking about. thank you, bob let's get over to rick santelli now at the cme group for a check in on the fixed income markets good morning, rick. >> good morning, david you know, if we look at the

notion that as bob pointed out for the most part we looked at rather stagnant initial and continuing claims meaning not much change, not much variation from last week and that really is the point we've stopped making a lot of progress on drops in both the initial and continuing claims and if you look at an intraday chart of ten year note yields it hasn't had a huge range but the low yields were established right after that 8:30 release although we are continuing to melt again 30-year bonds just slipped under 140 and we want to pay close attention to this next chart here is an august 1st chart of seven-year notes as you see in early august they made their all time low yield close at 35 basis points we are now 10 basis points higher than that and at 1:00 eastern we will have a record sized 50 billion auction of those seven-year notes dollar index, yes, we have been on a run here, you can even see it in the euro the euro now this is a two-day chart it is at its fifth day in

a row down, closed down today. four already in the can and now the fifth one is in progress, the dollar index if you see on this july chart has really had a nice turn around, it's hovering at two-month lows after establishing 27-month lows so two-month highs after 27-month lows and finally even against the chinese currency, here is a mid-august look at the dollar versus the on shore chinese yuan what's interesting here is also we are starting to gain some traction after establishing 16-plus month lows against that currency in mid-september. so it's mostly weakness in the euro, but the dollar is starting to gain some momentum to the upside but it really was the catalyst of weaker euro and the euro was weaker because of all the spiking covids in europe jim, david, back to you. >> rick santelli with the bond report. coming up, tesla versus the white house on tariffs we are going to discuss that with 2016 presidential candidate

of course the former ceo of hewlett packer carly feern na. later on "squawk alley."

simplnchts united airlines becoming the first u.s. airline to offer a covid-19 testing program for travelers. the airline will offer some hawaii-bound customers rapid coronavirus tests at the airport. that's in effort to get around hawaii's quarantine requirements and eventually hopes to open up more destinations.

passengers will be responsible for paying for the test, but it's what you're talking about >> but they're doing it all wrong. they're just doing it all wrong. it's kind of embarrassing. what you do is you connect with abbott labs. they have millions -- hundreds of millions of tests you have -- you go to cvs or wall greens the day before you don't go it at the airport you get it like a ticket like an e-ticket and waive it. what is with united? are they -- they're this is the way to do it the government has 150 million okay they're taking the first two months, but then we're going to all just want. you don't do a test at the airport. that is ludicrous. you have people get it day before it's good for 24 -- it's -- it gives you a pass says you're negative you don't have a viral load instantly. if you're negative, you're negative go that morning. don't do it at the airport that makes no sense.

and disney, set up a deal with cvs, and abbott. i'm doing my own mask contest. now i'm going to broker this i get nothing. i make nothing, david. but this is the business i've chosen >> yes you are very wrapped up in your own mythology. >> i'm the center of my own attention. 'rjut's your world wee st living in it. much more squawk ahead don't go anywhere. what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity

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time to stop trading square >> yes fin tech is on the square. square upgraded. got a buy. square is the stock to watch why? because the stock is down 20 this is what i like. down 20 from the high. doing well along with pay pal. they are the two to watch. if we get fin tech going and capital equipment and get the semis going and faang going, we may have an up day >> a little early to say that. although the s&p has pared the losses >> you got to have people -- you

know all that stuff. but i -- i do think that we're a little oversold, and you can pick at things that are down 20, 30 points from the high. don't be aggressive, please. i do like nike >> you do what >> i do like nike. >> i know you do you said it's the key to the market >> it's up ten points more than it was now great quarter. >> what do you have on mad tonight? >> sanofi. another vaccine play antibodies from lily and regeneron and tests from abbott. and i have to hook everybody up with abbott. they're doing crazy things tests in airport please how about a nationally recognized company with rigor, with rigor >> but you've got to get the tests still. you have to go where >> your pharmacists can do it. you go like this and put it in a credit card size thing 15 minutes later it shows up an your app

then you go. go to the super bowls. get people back in the stadium >> you think it will happen? >> three months. >> three months? >> if the government hadn't bought audiotape 150 -- bought all 150 million of these things. i have to go >> don't go too far. a lot i want to talk to you about later. good thursday morning. welcome to another hour of "squawk on the street. carl and morgan both have the morning off. let's give you a look at markets as we're a half hour into trading. and we're well off the lows. the s&p had not been down that much, but almost three quarters of a percent at one point. the nasdaq is recovering faang is up. many of the big technologies are up as well in the early going. new home sales out moments ago let's get to rick santelli for that >> wow pretty exciting news here. our august read on new home sales, get ready for this.

finally popped above 1 million 1 million seasonally adjusted annualized units and it's interesting. this is the best number since september of 2006 when it was 1.16 million it's up close to 5% from a slightly revised upward previous look for july which now stands at 965,000 and for the complete breakdown and all the intricate details of the report, let's go to diana. >> rick, this is a huge number just like you said well above expectations. what's really interesting here, though, is that prices are actually down somewhat 3% year over year, which is surprising because the builders have been telling us they have been raising prices but we're seeing the inventory of homes for sale to a 3.3 month supply that's down from a 4 % supply

last month builders are having trouble keeping up with the incredible demand we've seen. we've talked to builders in the earnings calls they're having trouble with land, labor, materials, the cost of lumber. menard's saying they were slowing production because the cost of production was so high they didn't want to get caught building at the high prices. what's interesting is that these are based on signed contracts. that's people out shopping in the month of august. now, august we started with record low mortgage rates. they popped up a quarter of a percentage point by the middle of august. apparently it didn't matter to anyone out there shopping given the numbers. an incredible beat on new home sales. the question is can it continue into the fall, and can builders really keep up that's the story we're going to be watching. again, a really big beat on this one. back to you guys >> yeah. big move up in home builders as well nvp diana, thank you. checking on the markets. all three major averages have turned positive. an early reversal in the first half hour of trade

the open end into yesterday. a 3% down move on the nasdaq yesterday. joins us for more is tony kanaris. thank you for joining us i know you're value investors. there was a glimmer of hope for value stocks in the last few weeks but it's faded and been swept up in the selling. does it tell you there's deeper economic concerns at play? >> it's always hard to tell with the market, what it's telling you, but at oak mark we're focussed on buying good businesses at good prices run by good people. we're finding great opportunities in a market like this which is bifurcated between the haves and have notes from a value perspective. it's a ripe environment for us to be picking stocks >> have and have notes from a co-vid perspective as well in terms of which industries are doing well and which aren't. where are the opportunities right now? give us picks. >> sure, i'll talk about a sector that's out of favor and i'll talk about a name we find

interesting and is really overlooked fundamentally right now. as for the single name, t mobile is a stock that we bought in the oak mark fund in the second quarter. this is a classic good to great story. it was good company before the sprint merger. we think it's going to be great after. before sprint they took 8 5% of the subscriber growth in the industry it's great after sprint they're going to have more spectrum than verizon and at&t combined. they're going to have three times the 5g network capability capacity that verizon has today. and then there's the synergies and management is targeting $5.5 billion of synergies. we think that's conservative, and this is going to be a much more competitive company with a better network and a better cost structure. and we think they're going to do great in that environment. when you look at the valuation, it sells in line with at&t and verizon which we believe is undeserved given the better

growth track record and the synergy is not in ebt da numbers this year. that's an opportunity on an absolute basis, if you look out three to four years after the synergies are running through the income statement, you could see t mobile generating over $15 a share in free cash flow. and if they do that, we think the stock at 100 and change is far too cheap. >> when i asked you which value picks you were going to go for, i was thinking maybe you'd say something in travel, airlines, hotels, cruiselines. all the really cheap stocks or at least the ones beaten up hard in the market. t mobile hasn't done all that bad. so i guess it depends what your definition is of value >> that's true, and at oak mark our former chairman used to say it's not where it's been, it's where it's going, and that's the approach we take to have reinvestment it's focusing on the future. it's not what the stock price as done for you lately. it's where it's going. >> interesting to see that i mean, as sara pointed out, t

mobile has done extraordinarily well it's up 40% already this year. but that is not keeping you away from your view that there's a lot more to come, i guess. >> that's exactly right. but there are some areas of the market that are beat up and down and we own a lot of, for instance, we own a lot of the banking industry >> yeah. >> we're finding a lot of value there. >> yeah. well, it keeps getting -- there's more and more value but less and less or i should say the discrepancy is getting larger what is it going to take to turn sort of sentiment on the banks in a significant way jim and i were talking about it this morning every time it seems as though there's perhaps a point at which, okay, that makes since, they're cheap and may go up, and then it's followed by a bad week >> sure. there's two things that are pressuring the bank fundamentals today. number one is credit and credit concerns. number two is interest rates if you look at the banking sector, especially the large banks in the u.s. today, it's

one of the few areas where i see 40%, 50% up side on conservative assumptions. and what do i mean by that number one, i think we'd all agree and brian was on this morning talking about the strength of bank balance sheets. the balance sheets are building capital. they have record capital liquidity and they've done it while building record reserves on the balance sheets. they're making money it's not about whether they're going to survive the credit crisis we're in. when you look at just credit normalization for the banks, if we just go i think no one would question whether or not we're going to have better credit two years from now when the economy recovers if we just have the same punk interest rates we have today, and credit improves to what it normally is, the large banks are selling for seven times earnings, if you put on ten times, that's an up side you don't have to worry about

the interest rates if interest rates and bond yields provide a real turn, there's up side, maybe 25% for the banks. but you don't have to count on that to like them here all you have to believe is they can get to the other side without diluting when you look at the balance sheets, that's clear, and believe in science that we're going to get through this economic disruption and the credit losses are going to go away >> tony, leslie here, i want to get your thoughts on volatility. you said in the past you don't see it as a proxy for risk, but a lot of investors are positioning their books ahead of the election anticipating produ volatility people are increasing margin requirements for clients effectively requiring them to put up more cash to trade using leverage i'm assuming you don't use a lot of leverage in your investing, but are you concerned about volatility over the next few weeks and what are you -- how are you positioning in advance of that? >> yeah. that's a good question i'm glad you asked it.

at oak mark, you're right, we don't take an academic view of risk which equates volatility with risk. we take advantage of volatility. that's how we think about it business values tend to be pretty stable, stock prices are anything but and it's our job as investors to put our clients in the best stocks and we do that by taking advantage of those dislocations between price and value. and if you do that and you're generally right more often than you're wrong ant the fundamentals of businesses, you're going to do well for your clients. that's what we're focussed on, not whether or not the market volatility is going up or down >> do you have a view on the election more and more chatter, not so much about who wins or loses but whether there will be a winner or loser after election night, and what kind of risk that could present of the market if there is a disagreement or issues with the transition of power. >> well, my only view is there

will be an election that i can share. i think people pay us to pick stocks for us and invest their money. there are a lot of people smarter than me on things political that could do a better job of discussing that >> yeah. just trying to get a feel for now investors are positioning around it. tony, thanks for joining us. we appreciate it >> thank you thousands of companies are suing the trump administration to block tariffs on chinese goods. we have the latest the word tariffs just don't seem to go away these days. huh? >> yeah. that's right but what the companies who are filing the suits are hoping is that those tariffs will, in fact, go away. this is being described as a soouc tsunami lawsuits in a relatively obscure court. there was a deadline earlier in the week based on the lie for all the companies to file the suits. a couple companies filed and a bunch of other companies jumped on board look at what we have right now it's more than 4,000 plaintiffs

here filing more than 3,400 individual lawsuits. they're all filed in the u.s. court of international trade the company's involved are tesla, home epot, target and ford what they're hoping to do is push the trump administration to roll back the tariffs going forward or even reimburse them for the tariffs they've paid these are the american companies who are paying these tariffs these are importers who are paying the u.s. government for the privilege of bringing in goods from china under the law, what they're saying here is that the administration botched the timing deadline under the trade extension act and the trade act which regulates whether or not an administration can put tariffs in place in the first place. they're saying that deadline wasn't adhered to therefore the tariffs should be invalid. we haven't heard from the administration, but we expect their argument will be because the law allows them to quote, unquote, modify existing tariffs, therefore, any additional tariffs they put on after the deadline were modifications of tariffs that already existed and so,

therefore, this was all appropriate and the companies should take their complaints and go away. so we'll see where it ends but it's thousands of people involved here. billions of dollars. it's a massive fight behind the scenes back over to you >> massive fight indeed. thank you. after the break, another company going public through, yes, a spac. and this time it's another ev play the ceo of charge point will join us on the other side of the break. stayitus wh i felt like... ...i was just fighting an uphill battle in my career. so when i heard about the applied digital skills courses, i'm thinking i can become more marketable. you don't need to be a computer expert to be great at this. these are skills lots of people can learn.

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i want to take a look at shares of what we kind of consider ev companies. of course, tesla is the main name it's down a bit today. this after what was not a bad day yesterday -- that's not true it was down yesterday. well off the recent highs but still up 351% for the year with a $350 billion market value. nikola a controversial company we've been following closely the founder, the visionary, of course, trevor milton stepping down last week as the executive chair. or was that this week? it's all one big sea of days i just don't even know >> they all blend together but to your point, as we talk about ev names, these are big story stocks especially with nikola and tesla. day shifts, well known founders. whether they're part of the company or still kind of facing that reputation overhang

another point to note with ev, especially as we transition to our next guest is the idea they've really gotten a lot of esg money over the last year or so esg meaning environmental social governance it's been a huge trend and ev has been a big beneficiary of that >> and there are a number of other names we don't talk about as much. cincinnati company it was going up even amid the nikola disaster, and just yesterday got dragged down along with tesla and some of the other smaller cap names in the selloff. let's get to our own phil who has been covering all the moves and he's there along with the ceo of chargepoint phil, take it away >> thank you let's bring in pasquale romano he's the ceo of chargepoint joining us from california let's talk about the spac ownership announced. a deal valued at $2.4 billion

dplchl you're going to get $500 million in revenue to fund your expansion. why now? why do you believe this is the right time for your company to go public through a spac >> well, we've been eyeing when to take the company public we've always had goals to do that, and right now with the market for electric vehicles being now starting to establish and climb that hockey stick and consumer acceptance, it's just the right time to add the capital to the company to really fuel our growth. we're 13 years old we've been in the market for ten years selling product. we've amassed 4,000 business customers in that time frame and climbing quickly so for us we had a lot of optionalty on the timing, but given the recent i think awakening in the investment community that this trend is

here to stay, it was good timing for us >> at the same time, pasquale, let's be honest, you're not yet profitable you had $147 million in revenue last year, and i know you're projecting to be profitable a couple years down the road from here, but by my count, you're at least the sixth ev-related spac announced since may, and when i talk with people in the auto industry, people who deal with the ev industry, almost everybody says the same thing. some of the spaces are going to blow up in the face of investors. how do you counter that story that line out there that these are not all companies and some people would say that about chargepoint, that should go public right now >> we're very different. this is an established company it's had a ten-year track record of shipping product, supporting customers. we are in revenue. we do not have the risks of a prerevenue company, and more importantly, we're an index for the electrify kags of

transportation, because as all of the existing auto makers and the new auto makers begin to transition to electric vehicles, that drives demand for us. so we're broadly attached to the acceptance of evs. we have very good predictability based on our ten-year track record we see our revenue directly proportional to the acceptance of evs we think that from an achievement of our financial goals perspective, we have the maturity and the predictability to be able to do that, and it's very different for us. >> pasquale, you guys sell subscriptions to those customers who put in an ev charging station. places like a walgreens or maybe a target parking lot we've all seen the charging stations you guys are essentially operating a lot of those what kind of growth are you seeing right now in terms of where you look at where growth is in demand for ev charging

stations, where do you see it right now? >> it's actually very broad-based. that's what we're encouraged by. you know, our -- as i said, our revenue is directlytied to ev sales. and given that evs are projected to grow tremendously for decades to come, you know, ours will as well and the components of that are broad-based and they're really the easiest way to think about it is wherever your car is parked is a place it's likely to on board fuel, and the different sub segments of the market that we sell into are attached to that for example, work is a place outside your home your car is parked for a long period of time workplace is a strong per sen advantage of our business. we taileretailers, and now with fleets starting to electrify

with cost benefits to their operations, we see that as a huge growth segment as well. >> i'm sure you were thrilled to see governor newsom's announcement yesterday in california that he wants to ban gas fuelled cars by 2035 phase out the internal combustion engine. what do you think the impact is going to be and do you expect others to follow >> the auto industry and chargepoint as well, we're all selling globally while i support an applaud with the courage the governor had to establish that ban, it's the first state-wide one in the united states and california has been a leader here in the u.s. of setting trends with evs globally it is not unique, and auto makers and companies like chargepoint have to sell their

products globally. so it's driving the r&d shift in the auto makers to electric. because to service in other parts of the work, you have to be on electric the bans are in place. i saw the california announcement as reinforcing the theme that you're already seeing globally >> pass kwaquale, a lot of peopy i like the idea, but when i'm driving to work and i have to stop and charge up, the fast charge is really not as fast as i need it to be. i still need it to be like going into a gas station, filling up and getting out on the road in a matter of four or five minutes where do we stand as an industry in terms of really improvements in fast charging really bringing down that time it takes to get a 25, 30% or 50% charge >> the technology is in place.

the auto manufacturers are rolling that into their product lines. but i think the real question is -- answer, i should say to the question is more centered around how consumer behavior changes the minute they drive an electric vehicle while that's a natural question if you've been driving a gas car and fuming it when the yellow light comes on, it's not how you drive an ev. you manage your ev much more like you manage your consumer electronics that are battery operated you plug it in while you're parked and top off occasionally. gone is the chore of having to go to the gas station. the only time in the scenario you mentioned is really in force is when you're trying to drive beyond your battery range. at that point you need it to go fast, and i would contend that the current speeds that you're seeing for large battery electric vehicles on the market are plenty fast for that, and getting even faster. >> last question, pasquale

ford is a good example of a company that said commercial vehicles, we need to see that market electrify they're puting a lot of resources put in there do you see that market growing faster you and i going out whether it's to buy a tesla or volkswagen >> i do. and we're speaking with our r&d dollars inside chargepoint we're placing an enormous bet. but i think it's a fairly safe bet. the reason is the total cost of ownership is dramatically improved of a vehicle when you electrify it these are high use vehicles relative to your car and fleet operators, i think are waiting for production volumes to rise on the vehicles that they need, and as that happens, pleat managers will be a dollars and cents decision to start the

converse process we expect it to convert to 100% electric faster than passenger cars convert to 100% electric. >> pasquale romano, the chargepoint ceo joining us from the company's head quarters in california on a day when we have yet another ev-related spac. this one will generate almost $500 million that chargepoint will now use to expand its business leslie, back to you. >> that's right. they have certainly been raking the money in now looking att ticker iyj. it's barely in negative territory, and negative territory for the year, of course, one of its holdings accenture is down, missing with

the quarterly results and issuing revenue guidance below the street consensus clients spend less during the pandemic "squawk on the street" will be ayituso nus.te st wh ♪ ♪ ♪ ♪

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the #1 pediatrician recommended brand, pampers, helps keep baby's skin dry and healthy. so every touch is as comforting as the first. pampers. the #1 pediatrician recommended brand . a group of high profile developers are joining forces against apple's app store policies julia has the details. >> this is the latest in the battle that epic started with apple and google over app store fees on the games.

the launch of the coalition for app fairness was announced today. it's a nonprofit that advocates for enforcement and preforms to preserve consumer choice and a level playing field for app and game developers that rely on app store and platforms. the coalition is launching with 13 companies including epic games, spotify, match, and others the coalition taking issue with what they call an app tax. an up to 30% fee apple charges on payments made through the app store. they're also taking issue with the lack of competitive options and accusing apple of anti-competitive policies that favor their products and steal ideas from competitors the coalition laying out 10 principles of fair treatment including not requiring the developers use an app store exclusively or use the payment system saying developer's data should not be used to compete with a developer and developers should have the right to communicate directly with users through the app. app stores they say should not

preference their own apps or interface with users or interfere with user's choices saying developers should not be required to pay fees because it comes down to those fees we have reached out to apple and google no comment yet but it's worth noting this comes ahead of apple and epic's virtual court hearing on monday in which they'll present their cases for whether epic's fortnig fortnite should stay >> it sounds like they're just organizing, essentially, against apple. what is the ultimate goal here is it to force apple's hand by the forcing court of public opinion to change or just bring it to the court? >> i think it's both i think they're going to pursue this in the courts and they're also trying to get the public to come around. there was this whole campaign when this issue first arose

between epic and the app store epic put out a game that referred to the old apple tv ad in 198 4 trying to really get people to understand that they were paying a fee to apple it will be interesting to see how it plays out this is that this is organized. it's only 13 companies now but some of them are high profile like spotify so we'll see how apple and google respond >> julia, thank you. more on that story later on squawk alley for now, time for a news update with sue >> good morning. here's what's happening at this hour across the nation protesters took to the streets in anger after a grand jury did not indict any police officers in the death of breonna taylor. two police officers were shot in louisville and riots were declared in seattle and portland, oregon protests in many other cities were largely peaceful. in israel a nationwide two-week lockdown has been announced as covid-19 infection

rates have soared to the highest in the world in madrid a partial lockdown in opposition. it affects working class areas and some residents say the restrictions stig mytize the poor here at home the tribune company sent emails saying employees would receive bonuses. but it was a test as the company tries to help stop phishing attacks. employees forced to take pay cuts reacted with furor. the tribune company has since apologized you're up to date. sara, back to you. >> thank you take a look at shares of darden up nicely. almost 5% higher beating forecasts and reinstating the dividend overall, we've softened up we went positive at the top of the lower.

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look at the markets. all three major indexes up officially in the red despite starting they started in the red and briefly went into positive territory. now back down into the red so to help us decipher what is going on amid yesterday's pressure in the markets, we're joined now brian and liz ann saunders thank you for joining us as we look at the markets in the red, the big five remain largely in the green with the exception of facebook right now. but the recent selloff in tech has some kind of speaking about the comparisons to the dot com bubble they're looking at the recent bull market and saying are there

risks. i brian, i want to start with you to see if there are aspects of the market that are riskier than what we experienced in 2000 >> thanks for having us. i would say this if you go back and look at the fundamental construct of the technology sector versus 20 years ago, it's different whether the companies, two or the three times as many companies are paying dividends you have double the cash flow and earnings that are stable but like in any other momentum market, there are going to be issues that stocks go up too much stocks go up too much in a momentum market and down too much in a momentum market. we clearly saw that on the downside in march. we started to see it toward the end of august as well. and as you said at the beginning of this hit, that the big five have taken the brunt of the damage and they're starting to come back. i think that's because of the secular growth on a fundamental

basis that they propose, but the more speculative issue is whether or not it's issue or nikola or some of the other new ipos that have come out. i think time will tell in terms of their fundamental wherewithal, but i technology is an asset with respect to continuing to just show strong secular growth remember, when growth is scarce, growth outperforms, you can find growth in secular areas and cyclical areas and dividend growth that's why we're poised in those areas. >> i want to get liz ann's thoughts on the idea of being a momentum market, momentum to the up side or downside. and as you look at what's going on with ipos and spaces as brian mentioned, do you see that as a short-term burst of momentum or do you see that as more long-term bullish sentiment in the market >> well, some of the most significant momentum that was tied to really where we were

seeing some speculative froth started in the middle part of the summer and that was interestingly driven more by or at least initially by the newly minted day traders. initially trading in the options market alongside what they were doing in stocks, but then more recently into the peaks in the market just trading in the options market in an unpaired away, and of course what that leads to is the market makers selling the call positions to the retail investors or traders, whatever you want to call them, has to purchase the stock. it sort of forces momentum on the part of institutions and then you've got institutions that are not market makers but they're benchmarked to the s&p 500. as you approach a calendar quarter end, they're forced to be in the names driving the index. that really pushed momentum. i think the interesting question is when you look at that new cohort of again, newly minted day traders of the small

investors, what happens if selling pressure picks up? do they panic? do they just leave the market? or do they press their best in the opposite direction say on the put side of the options market and i think that's one of the more fascinating things to think about. i don't have any answer to that, because this is such a new cohort, and the sentiment being expressed by those traders, i guess the good news is it's not pervasive unlike circa 2000. other measures of sentiment and behavioral don't show anywhere near that same kind of froth >> yeah. that is a question out there brian, my other question especially given comments from bank of america and others is can this market really resume any meaningful up trend without fiscal stimulus? which appears to be nowhere in congress right now >> great point nice to see you, sara. i would say this the strength in the wherewithal of the consumer, you never bet

against the u.s. consumer ever and even in this growing chaotic time again, as we've learned the last several months to co-exist with the virus, i would not put it past congress to get something done, number one, but more importantly, with respect to what the fed has said, and if you read between the lines in terms of their language, they stand at the ready it's more about what you do versus what you say, quite frankly in life and in investing in general and the fed stepped up in march when the government was kind of being wishy washy. we think they're prepared to step up again. the market we think can continue to go up without stimulus. clearly with respect to confidence that's a big thing on a psychological basis. we think the train has left the station in terms of the next leg of our secular bull market >> i want to get liz ann's thoughts on the bull market. in the second quarter we saw the lowest level of baybacks from companies buying back their own stocks going back eight years. recently this week we've seen

lululemon saying they resumed their buyback program. dollar tree is resuming theirs does this signal companies believe there's less uncertainty out there now than there was six months ago >> well, not necessarily i think there's been a lot of talk about the cash floor built by companies given the shutdown in the economy and what the application of the cash hoard will be. the thinking is a lot of it will go back into stock buybacks and dividends. it's clearly to the benefit of the market and shareholders of the companies. but may also be reflective of concerns about the environment for long-term capital investments, and that's not a pandemic thing we were dealing with that prepandemic largely due to uncertainty prior to the trade war with tariffs but with china and tariffs. and the only area where you really saw consistent strength in capex was technology.

there's not the long-term confidence it's gone back into pseudo financial engineering on the buyback side to the benefit of shareholders but may not be an expression of confidence in the long-term health of the economy. >> liz ann, it's sara. my last question is about where to go to hide in this world. safe havens. gold fell yesterday. the dollar rose, so there's that but treasuries haven't acted that safe. we haven't seen yields budge too much where would you tell people to go >> i think you to focus on quality. in particular balance sheet quality. if you look at -- you screen for that balance sheet quality metric regardless. and brian touched on this in a different sense, but regardless of whether you're looking within growth or value sectors or cyclical types of industries and sectors, the more defensive. that quality factor has dominated in terms of

outperformance so i think the factor is actually more important in terms of where to be, where you're going to find leadership than, say, at the sector level i think that's the most important thing for investors to do is keep that quality bias in their portfolios >> that was great. brian, liz ann, thank you both for joining us >> thank you >> coming up next week, don't miss delivering alpha back for the 10th year. some of this year's speakers include steven mnuchin, and many more that's next wednesday on september 30th visit deliveringalpha.com to register

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welcome back will your package make it in time for the holidays this year? frank holland is looking at the severe delay in shipping we're already seeing >> 700 million gifts globally are at risk of not arriving on time according to a new forecast global supply chains could be pushed 5% over capacity as e-commerce booms we're seeing the signs of the logistics strains at the port of l.a. spikes of 18% higher as businesses add inventory for the holiday season many companies are increasing stock in response to the pandemic shock and the disruptions from the trade war macy's commented on delays and higher costs in the recent

earnings ups, fedex and the post office already seeing holiday volumes august really giving insight into the holiday peak. anything above 95% delivery is great. below 95%, it's a further strain on capacity as more new packages continue to come in. amazon which touches more than a third of all e-commerce has been experiencing on time delivery issues for months. from april to mid september this year, only 70% were made on time 78 million packages are shipped every day. during the peak it's expected to surge to 122 million 30% of the packages are returned adding to the capacity strain. there's potential you buying gifts for you and then returning them which is a growing trend could be the reason your holiday gifts don't arrive on time

>> wow talk about the holidays already. frank, thank you >> thank you all right, everyone. look at shares of scripps. a good day, up almost 24 % after announcing the deal to acquire the operator ion media digital antennas we'll talk to the ceo of scripps about why they're doing the deal ♪ ♪ ♪ ♪

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shares of scripps are up the price tag is 2. bill

they also do have warrants let's talk about the deal. we have adam simpson nice to have you it is a big deal for your company. nationaltizing you think will be a vibrant market why are you doing this deal? >> yes, the first thing that your listeners have to understand is there is no medium more equipped than television advertises this fakes ang takes advantage of over the air. as digital has grown, cord cutting and cord numbers, over t air broadcasting is speernlsiexg

a real come back you say over the air may not be sexy, at least not yet, what will make it sexy? younger people appreciate the value of their digital antenna when they lug it in. and i think we're going to continue to see significant growth in that marketplace over the air is a tremendous opportunity. i think it is not sexy today because it doesn't have what digital does, but it looks to us like the early days of cable we love businesses with significant barriers to entry and we think the over the air

argument place is prime to continue to grow significantly right alongside ott and digital. why do you want another platform when i have tnt or usa a lot of networks that air the shows. >> yeah, but you just described is able network. there is a lot of consumers that will be ut out, i think they are the double threat. i think they delivered on cable, but it is also available in that growing over the air marketplace. for the procedural dramas, it is going to be the fifth most

watched network. it is top ten in television overall if is a strategy that was deployed by the networks they watch them. i'm a huge fan of the "law and order" franchise and i think i will be for the foreseeable future >> hi, leslie picker here, you announced about half a billion dollars worth of synergies >> yes, that is why i think this is such a unique opportunity they come from distribution. we own the business, we have five multicast or broadcast networks today, and we lease spectrum, excess spectrum from broadcasters the leasing agreements are the

largest expense. when the contracts come up, we can migrate the streams into ion's multicast and that is a significant savings in the next six years. the vast majority of that $500 million in synergies >> you're paying for the privilege, an 8% dividend is what you're paying them on that preferred. you're given the warrants that are almost in the money on right now. it would scare some companies. >> well, look, berkshire will be a tarierrific partner to this company. they see what we see an opportunity for this company to transform, reposition itself, take vangs of the disruption in the television marketplace and profit that is fundamental to their investment

we went with berkshire because we wanted to maintain a leverage ratio that was pip kal this business with the combination of our businesses together with ion will generate significant free cash flow that will propel us to pay down our traditional debt and get us to the place where we typically like to be in the 3.5 to 4 times range. >> what can you play on for this strategy i assume you're not going to give another deal or will you will wrong to assume that. >> i think we will be focused on paying down debt i think you'll see us spend a lot of time evolving the opportunity. there is also the significant opportunity ahead with athc 3.0 or nexgen television we will be the largest holder of

spectrum i think frankly this is a company committed to stewardship. we're one of america's oldest journalist companies, and we will relish the opportunity to take a leadership position as the broadcast industry transitions to a new broadcasting standard and identifies new opportunities to come to htc 3.0. >> we have to leave it there for now nap is a conversation at well that we can have another time congrats on announcing the deal and thank you for being with us. >> thank you, have a good morning. fighting apple, more on the alliance including spotify, games, and a number of other major companies rallying against ape'app orpls ste policies "squawk alley" starts in two minutes. the lexus es.

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