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tv   Squawk Alley  CNBC  September 12, 2018 11:00am-12:00pm EDT

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fidelity. open an account today. good morning it is 8:00 a.m. at apple's product launch at cupertino, it's 11:00 a.m. on wall street and "squawk alley" is live.
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good wednesday morning and welcome to "squawk alley." we're outside apple's headquarters in cupertino, california it is apple's big day. the company is expected to unveil new hardware including the latest batch of its most valuable product, the iphone tim cook tweeting just a moment ago rise and shine, we are ready for a big day at apple park. john, what can we expect how much of this is about phones, the watch, services streaming and everything else? >> well, it's mostly about phones, carl let's be honest here apple sold more than $141 billion worth of iphones last fiscal year and that's massive but it's about more than phones now. i'm old enough to remember when the average selling price of an iphone was around $650 we could today see iphones well over $1,000 in price, which could potentially lift the
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average selling price of an iphone towards $900. we're getting to the point where the high-end iphone today could be like selling two iphones for apple and i think that's the core business question here is what's the story with the replacement cycle? we've been talking about it for years, how the replacement cycle has been slowing if apple has figured out how to essentially sell two iphones worth of iphone with just one sale that really changes the equation that's when you start to add in services that's when you start to add in new apple watches and you potentially have a different kind of lifetime value equation of the apple customer, which could be a really important point for investors to watch, carl. >> john, don't go anywhere obviously we'll bring in dan rosensweig is here good morning good to see you. bernstein did a piece on what would happen if prices went up due to tariffs and they say we would be most concerned about
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price elasticity if sport phones went up 10% to 20% and doubtlessly elongate the replacement cycle. any problem with asps going up >> no, i don't think so. apple showed us their average sales price has gone up steadily i think what you're seeing is apple is effectively a luxury goods maker. it's owning that category and focusing on north america and european customers and getting more and more -- as john said, getting more and more revenue out of them. a second question is what does this mean for markets like india and china and other growth markets. apple is doing the obvious thing in its traditional core markets. >> in addition to the iphones, expectations for other pieces of hardware as well, maybe new air pods, a new smart watch, new ipads. how much would be focused on some of those other items as well >> i don't think that they're going to matter in terms of their earnings but i do think they matter in terms of the ecosystem. what is the average price now,
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$750 it was $650 a couple years ago the price will continue to go up they have a lower price phone which is actually makes the higher priced ones seem more valuable in terms of why you would get them because it's all about the storage, storage, storage. if you read all this stuff they're going to have three tiers of storage storage matters. having bought my daughter a x without the right storage, i heard all about it. >> she complained you got her a x and she said sha, dad, where' storage? >> she said this is incredibly generous it would have been slightly more generous if it had morestorage because i have a lot of music and video on my phone. these things last three years. so would you pay $300 a year for your essential device of your life i think the answer is question. >> some of these details that appear to have been leaked via apple's website, i mean 512
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gigabytes. that will get your attention >> it will apple has tried to get people to move to the cloud, to tell icloud as a service. at the same time, there's a core group of applecustomers, dan's daughter included, who really want to keep a lot of content local, especially if it's video. that's the big one that takes up a lot of space and they're willing to either pay a premium or have their parents do it. either way, that is margin for apple. i think one of the most interesting things to watch for is if we in fact see a suite around the iphone x, a good, better, best tiering system. maybe there is a sub $1,000 phone and there's another that's more expensive and a whole range of storage options we kept asking tim cook throughout the year is the iphone x the best-selling phone? it turned out to be. now, if they can expand that and make the suite seem like the
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main option for the people who want the latest thing, hey, that's all margin. >> yeah. you look like you have something to say. >> i think that's particularly interesting when you look at the markets outside of the u.s. and europe in china and india, apple's growth hasn't been great in fact their strategy has been to sell old iphones into that market what's interesting about this suite that we're talking about with iphones, it gives them a lower priced phone with services around it that actually does have some sheen that they can sell the lower price point in those markets. if they do that, there is a chance that they could actually make a difference in terms of their growth here. >> you know, if you think about it, the -- every company that's a subscription business, which you can debate software company, hardware company, i think they're a subscription company with the ecosystem they built, you continue to subscribe to icloud and services through apple, through the app store you can get netflix through it they're going to produce their own video through these things
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so every indication if you were a ceo you'd want to see which is units up, rpu up, yield up, so i think they're going to have a really good day and a really good fourth quarter. what else is there to buy for the holiday season if your going to buy something they time it right but also we have the largest database of students in the country and it's very clear that they would -- we don't like them to do it, but they do leverage themselves to get more iphones because the value proposition to them, it's the centerpiece o their life. >> we always say the stock has two seasons, capital return in the spring, product return in the fall we're going to interrupt to get to sue herera on some interesting comments this morning out of damy dimon. >> indeed, they are very interesting, carl, thank you very much. this came from a jpmorgan event. mr. dimon, who is always plain spoken and some say outspoken was making the comments to a moderator who asked him, jamie,
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why don't you throw your hat into the ring, meaning the run for the presidency here's what mr. dimon said quote. i think i could beat trump because i'm as tough as he is. i'm smarter than he is i cannot beat the liberal side of the democratic party, end quote. then he continued to say basically he could punch me all he wants and it wouldn't work. he went on to say, and by the way, this wealthy new yorker actually earned his money. it wasn't a gift from daddy. so we will see whether we get a response from the president to those comments i know that he follows mr. dimon closely because, of koefcourse,y were both new yorkers. jpmorgan is a global bank and it will be interesting to see if he gets a response. he didn't say he was going to throw his hat into the ring but he didn't say he wasn't. >> these make his bitcoin comments look like child's play. >> totally, yes.
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>> obviously eamon javers from the white house will watch for a reaction from the oval office, but it's -- it's plain spoken and i guess people are trying to figure out dimon's motivation here. >> reporter: two ways to look at this the first one is just in terms of corporations and their brands generally vis-a-vis the trump administration we're seeing sort of a tipping point with some companies and some corporate leaders who early on in the trump administration were deathly afraid of getting an angry tweet from the president of the united states because that could affect their bottom line. now you're seeing sort of am emboldened corporate world at least in some respects i think of the nike colin kaepernick commercial and now these documents from dimon. now you're seeing corporate leaders unafraid to take oppositional stances against the president of the united states that's something that's relatively new companies traditionally had been extremely wary of any political
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involvement because it could cost you half are your customers. some companies and some corporate leaders seem to be making calculations like this that comments like this will get them more customers than they'll lose as a result so they seem to be willing to be outspoken. the other question is could jamie dimon actually beat donald trump? i think that's a fascinating one and unknowable because of dimon's point which is probably right that he couldn't get the democratic nomination. the question is what has donald trump's candidacy in 2016 done to the potential field of candidates in 2020 i think it's just sort of ripped open a lid on the type of people who can run for president of the united states. it used to be senators, governors and maybe some generals and that was it now i think you're going to see a whole crop of business leaders, reality tv people, celebrities and others who look at this and say, you know what, i can do what donald trump has done and in their own heads they'll be thinking i can do it
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better so i think 2020 will be a wild election season where we see a lot of untraditional candidates enter this race on the democratic side and possibly the republican side. >> maggie haberman of "the new york times" says it just seems like the why not me caucus is growing larger to your point david, we have had a school of executives where the guessing game has revolved around iger, howard schultz, even dimon in some instances. >> that is true. you mentioned the key business leaders, iger went fairly far along in exploring the idea before of course the fox deal has precluded that he's going to stay at that company through the election in 2020 interesting comments, though i think eamon gets it right in the sense you wonder whether dimon would have felt comfortable knowing this was going to get out saying something along these lines, even as little as six months to a year ago
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another guy from queens, that being jamie, in addition to our president. there had been of course as you know speculation in the past about would he consider being treasury secretary or, to your point, would he ever consider trying a run for national office in that way. as for dimon, he's described himself as barely hanging on as a democrat for years and going on to extoll all the virtues of our country in terms of transparency, its rule of law, it's armed services and on and on, but certainly a very patriotic fellow is mr. dimon. yeah, interesting comments that he chose to share there. >> yeah. david, on a day where he tells the ft in an interview that he's handed off some responsibility, although he wasn't specific about which ones, eamon. >> yeah, carl, it's been interesting in this whole succession question, about jamie with blankfein leaving
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particularly with the ten-year anniversary of the crisis. bla blankfein stepping down very soon what is he doing to make sure the next generation may be in a position to actually succeed him, because there have been a number of generational changes there below him where they have lost a lot of people who conceivably could have been considered for that top job in the past that's one of the key reasons why, for example, blankfein chose to leave after 12 years. dimon is still sitting there after it's been at least 16, i believe. >> you know, carl, jamie dimon has always been highly attuned to washington, d.c he makes regular appearances here he hosts dinners here when he's in town. he's got his ear to the tracks he's in touch with political figures across the country but, you know, it's just -- it's sort of fascinating to contemplate a democratic primary in which you've got jamie dimon running against perhaps michael
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avenatti, the lawyer for stormy daniels who's been in iowa exploring a presidential campaign of his own. both of them could have an appeal to specific aspects of the democratic party base. and i think that the rules have changed on the presidency entirely and so dimon versus avenatti for the democratic primary is not impossible at all. the question is who else would be in that race? i think there's a lot of people up on capitol hill who are also looking to get into the race because a lot of democrats see the president's approval and job performance saying he's beatable in 2020. >> yeah, and another name we haven't mentioned the potential for michael bloomberg, another new york billionaire to get into this as well. >> and mark cuban, because he -- i believe he's seriously considering it so we did a poll against college kids in the last few months just with a bunch of different names. jamie dimon wasn't one of them what was very clear is based on their reaction to the current administration, they would actually prefer to see somebody who isn't a business person.
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so they're lumping business people into this category because they don't really know the difference between jamie dimon or mark cuban. but they see that as this is what business people do. it was really fascinating to me that they look more towards now somebody who knows how to run government as opposed to know how to run a business. and that will change over time i mean it does ebbs and flows with college kids in particular, but i just found it interesting that that was the case so the winner in all this becomes twitter. because the more people that are running for office, the more people will be focusing on twitter. so this is going to be a really good day for twitter. >> and you have to imagine is going to respond to this he doesn't take these sitting down. >> the countdown is on, no doubt about that. >> aren't we just looking at our screens waiting? >> i think bloomberg is an interesting example, michael bloomberg, who considered it the last time around and decided not
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to one of the questions,the political climate has changed but one of the questions at that time is to what extent is new york and finance, can you build an electorate that gets you elected to the presidency in our day and age. that was closer to the financial crisis, closer to occupy wall street, and one question if jamie dimon is serious and we start polling his chances, one thing i'd look at closely is to what extent can his business profile play outside of the east coast? >> key questions here. there were some other comments here it looks like from dimon as well that i line up with some of the comments ray made about pensions on our air yesterday. he said here's the problem with debt it will go to 95% like a hockey stick. somewhere in that journey it will cause a crisis and you'll see the pensions and it's 100% health care. the later we way, the worse it will be. i'm very much in favor have fixing it. is this going to become a bigger
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conversation in the midterm elections and 2020 >> no doubt. the fact that we don't have either party seeming to care about it is shocking so the time where the economy is growing is the time to make the harder decisions if you're going to be like a ceo that would be the time you're going to make those decisions. the priorities of the country, one side wants additional health care, the other side wants other things for the money, but the fact is we are living on borrowed time. i've never seen a company survive having this much debt. i don't know how a country survives having this much debt with nobody seeming to care. if the answer is if we just grow at 4% sustainably, well, we're not going to. >> a day after the cbo talks about the trillion dollar deficit on track by the way, you see the pop in the market dow jones say the u.s. is said to propose new round of china
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headlines. other headlines saying the talks being shearheaded by mnuchin, so not low level undersecretary talks. we got about an 80-point pop in the dow at least eamon, are you watching that as well >> reporter: i am. there had been this expectation, carl, that there would be the china tariff announcement as early as this week you saw the president tweeting about the possibility of china tariffs over the weekend as if it was coming imminently a lot of folks in washington felt that $200 billion announcement would be coming this week. i'm now not as confident that that expectation is accurate as i was at the beginning of the week i do feel because of the hurricane and perhaps other things there might be a stall here on the announcement of those $200 billion in tariffs. we'll see if we can get that confirmed from high-level officials here but it doesn't feel like they're moving headlong toward that as they were earlier in the week. that goes to the question of whether or not that would give opponents of the tariffs an opportunity to sort of weigh in here with the president and
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redirect him onto some other course of action and perhaps we might be seeing some of that action right now. >> that's more than you guys bargained for when you walked in today. >> i don't think we saw this day coming i just want to congratulate kayla tausche on her brand new baby she tweeted it this morning, so congratulations. and thanks for having me. >> thank you for coming in the dow is up 102 points highs of the day it does seem to be related to these trade headlines. we've got boeing, some of the other israels in the dow spiking right now. we've got a big showhe aad more "squawk alley" after the break. this isn't just any moving day.
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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. we had some very big interviews today on our air. we sat down with bob bakish last hour a big interview in light of the cbs settlement and the departure of les moonves david, some reflexes on that and everything else you brought us today. >> we wanted to hear from mr. bakish on the prospect of the future of the linkage between cbs and viacom giving moonves' exit as ceo. also the talks between the two, they could never agree, leslie moonves and viacom could never
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agree on the social issues mr. moonves wanted to be nowhere near the company bakish wouldn't engage really on the idea of, well, is it worth revisiting now, remember this deal that nai settled with cbs' board on prevents nai from a potential transaction but it doesn't prevent bob bakish from doing so or the cbs board from doing so in terms of trying to re-engage there. nonetheless, he didn't want to re-engage on the idea of it, although he did admit that scale in the current media environment is of importance >> there's no question that scale is valuable. part of what i did when i ran international was create scale there by getting the company to work together. we're doing the same thing here, leveraging the combined assets even our new approach to distribution leverages our ad business in addition to our product and also our production business because it's a much more -- a wider deal we're creating scale with
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companies that we don't own. look at our ad sales business outside the united states where we have a number of sales in place including a joint venture with discovery and fox so there's a lot of ways to get the benefits of scale. we're getting them more and more inside our company we're doing some small targeted m & a to accelerate our strategies they're not scale plays per se, they're accelerants. and we're feeling really good about that >> of course investors haven't been perhaps as focused as bakish would like on the progress he believes has been made in turning around viacom in of course the key networks and the paramount studio, paramount tv as well and he does admit to frustration, carl, in terms of the actual stock price and perhaps a bit of disappointment that at least at this point the market hasn't caught up with what he believes are significant advances in terms of securing
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the future for viacom. here's what he had to say. >> it's definitely frustrating we're focused on putting points on the board we are coming out of our third quarter i believe we started to get some recognition for that coming out of our fourth quarter when we deliver not only sequential growth, i think we'll get some respect for that. >> so we'll keep an eye on shares of viacom of course and the larger sort of scheme of things, carl, we'll also keep an eye on viacom and cbs as a potential entity at some point perhaps being recreated. we'll see. not any time soon, i don't think, given the tumult taking place at cbs but it is certainly not inconceivable that perhaps next year board members of cbs and/or viacom might think, you know what, scale is important perhaps given previous attempts, succeeded at least on the
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economics, it's worth taking another go at it we'll see. for now we'll keep an eye on that share price, which is having a good day, much of course to the happiness of mr. bakish. >> along with discovery and some other names too. what a well-timed conference good to have you there, david. meanwhile dow popping up 127 now. s&p has about 4 pointsout of this coming up, ten years since the crisis and the fall of lehman. we'll talk to the former ceo plus david tepper will be on "the half" tomorrow, 12:00 p.m. eastern time for an extended interview. you do not want to miss that back in a minute
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will you get your money back we hope so so the questions went on for a while and then it died down. and then harry reid was leading the discussion he said, remember, he said mr. secretary, mr. chairman, he said i want to thank you for coming down here and explaining this
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situation to us. he says, but i want you to understand one thing -- >> that was former fed chief ben bernanke talking specifically about aig tuesday and the reaction to that in a panel discussion with our andrew ross sorkin of andrew's document carry that arizoirs tonight at 0 p.m. eastern joining us tonight is brad, cfo of lehman, currently an adjunct professor of finance it's good to have you back it's been a while. >> thank you thank you for having me. >> thoughts on what you heard today and some of it was me mea culpas in terms of getting if not the policy response wrong, the politics surrounding it wrong. >> that's a question good way to put it they talked about some of the stuff that the macro economists have already talked about, we needed more stimulus could you have gotten that out of government? that's a debate.
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the other issue is we should have helped the average american more whether that would have actually done anything to improve it, it certainly would have put a better gloss on the entire thing because let's face it, right now the average american still believes that this was saving wall street, not saving the financial -- the capital markets. >> which of course begs the question and we discussed this just a few moments ago when you hear comments like jamie daimon saying he could beat president trump, not putting his hat in the ring, but would that go over well with main street? ten years ago the optics were that wall street got a bailout. >> i think the way to think about this is doctors versus bankers. >> okay. >> if a banker gets rich, is he popular? no if a doctor gets rich, is he
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popular? yes. he's doing god's work. so when a famous ceo said we're doing god's work, i winced at that because the business itself is necessary for the economy there's great macroeconomic work that supports that, but it certainly isn't popular. when bankers' compensation was one of the mistakes in the crisis the street overpaid itself. >> and even paulsen today said he couldn't believe how much it showed banks' lack of awareness of what was going on bernanke was asked specifically about lehman take a listen to that. >> making a loan against the collateral that was available would at best sustain the company for a few days, that it was not a viable business, that all we would do is end upbringing a lot of bad assets onto the balance sheet and maybe protect a few creditors, but it would not be sufficient to keep the company alive.
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and that was the critical element. and so, again, not a narrow legal judgment, it was a judgment about feasibility and that is something on which we have never wavered. >> this remains a pretty potent debate even today. there are those who believe if you had done more to save it, you might have undone a lot of the damage that came afterwards. >> i was in milan. i landed in milan on monday morning when lehman filed for bankruptcy while i was on the plane, it was clear lehman was filing for bankruptcy and this trip was a mistake. bernstein set up a conference call with 1100 institutional investors. remember, wall street's analysts were muffled at this point because all of their firms were involved in the crisis, they couldn't talk. so the beauty of being the bernstein analyst, i was the only one who could talk. the question from the 1100 major institutional investors was why
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did lehman fail? the fed stepped in to save it. it provided access to financing. so the surprise of that caused everyone to panic. so i guess the debate will always be, you know, should you have done an aig for lehman because that would have -- that would have delayed the crisis, spread the crisis more it certainly caused institutional investors and banks around the world to pull in, right? they pulled in all of their exposure and in the process cut lending, cut foreign exchange lines, and the world teetered at the edge the fed pulled it back you know, we need to take our hats off to those guys but that was a mistake letting lehman go down was a mistake. >> ten years later, i mean you're a professor, you're teaching i'm sure quite a number of meillenials. it's the biggest generation in america. it's an adult generation that has basically come of age after
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all of this happened, has existed in an environment with very low volatility in terms of financial markets, outsized unprecedented stimulus from the central banks, low interest rates, et cetera, et cetera. how do you teach this generation about what markets looked like before the crisis and is this the new normal >> actually there's great data, just wonderful, wonderful data it isn't used by very many people there's a database that goes back quarterly all the way to 1980 and you can actually see in numbers how wall street built its trading business, leveraged itself up and blew itself up it's a beautiful story in terms of teaching people but in any case, the other one is to teach them the reality, which is quantitative analysis doesn't always work. i mean i was -- i was 100% wrong in august of 2007 when the
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crisis went global you know, at that point you had them say they're not going to mark to market and i wrote the worst piece of research i had ever done. the piece showed all the previous downturns in the financial market, credit events. and i said, you know, the average is 2.2 quarters. the average is about a 40% drop in fixed income revenues the street can handle this it was wonderfully quantitative and 100% wrong >> even paulsen today was asked about was there a data point he should have paid more attention to and he had in the end these are called unpredictable for reasons. brad, thank you. >> thank you for having me. >> brad hintz joining us watch the documentary tonight, "crisis on wall street" at 10:00 p.m. eastern tonight
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two factors behind european stocks today first the surge in oil prices plus new headlines around the u.s. proposing new trade talks with china but back to oil. energy stocks, specifically in the oil and gas sector are up over 1.5%. basic resources also getting a bit and this comes as we get weaker than expected economic data eurozone industrial production falling again and italy missing expectations this is the first time since june of 2016 it comes ahead of the ecb policy decision tomorrow on whether the central bank is still on track to hike rates from now you can bet emerging markets, the distress in turkey and italy could also come up in the q & a session with morrario draghi. fiat chrysler is seeking
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money for a unit on rolls royce, falling after an issue with an emergency made forc fora plane force a landing. let's get over to sue her a herera. good morning here's what's happening at this hour european union lawmakers have voted overwhelmingly in favor of launching actions against the hungarian government for allegedly undermining the blocks democratic values and rule of law. this could lead to a suspension of the eu voting rights. russian president putin says russia has identified the two men that britain names as suspects in the poisoning of a former russian spy and that there is nothing criminal about them he insisted they do not work for the russian military chinese president xi and
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japanese prime minister abe meeting on the sidelines of an economic forum and talked about further improving the bilateral ties. here at home, the fda says teenage use of e-cigarettes has reached epidemic levels and is calling on the industry to address the problem or risk having their flavored products pulled off the market. the five largest e-cigarette makers will have 60 days to release plans. you are up to date that's the news update and i'll send it back downtown to you all. carl. >> thank you very much as we go to break, take a look at the markets. definitely in favor of these headlines that argue according to dow jones the u.s. is interested in restarting some china trade talks. this is coming after the best day for stocks in two weeks. the dow is up 140. i'm april kennedy and i'm an arborist
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with pg&e in the sierras. since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.
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it's been an eventful hour for jpmorgan's jamie dimon who not too long ago said that he could beat the president in an election, he said i'm smarter than he is our wilfred frost is here to talk about that. >> that first comment that you said that he said that he could beat president trump also came off an article that also talked about succession planning so it's a topic in the air. he's just given us a direct
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statement in response to his statement two hours ago and all of us talking about it saying, quote, i should not have said it i'm not running for president. it proves i wouldn't make a good politician i get frustrated because i want all sides to come together to help solve big problems. but, i'll just go back to what he did say two hours earlier as you just summarized. of course he did say that he could beat president trump that line, i think i could beat trump. i can't beat the liberal side of the democratic party but he said i think i can beat trump what that says to me is that he has at least thought about running for president. clearly he said -- as he said in the ft article today, again, that he's staying on he said late last year probably around five years. but he has at least thought about it maybe he's thought about it and rejected it, because he loves his current job so much, but he has at least considered it going back to the ft article this morning, lots of little headlines in that that we were discussing before he gave us a
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more juicy one the one that stood out to me was from daniel pinto, and he said jamie is a great ceo but he's human. he has a lot of external engagements and travels a lot so essentially now we are sharing among the three of us. even if he hadn't had the follow-up comment about beating truch, trump, to me that was a step further. it does show that he's sharing more of the power and responsibility and look at other things so certainly that timeline -- >> i guess sort of the obvious thing to me is going back to the statement that you just received and read to us that we want all sides to come together to solve some big problems, fiesty comments about the president is probably not conducive to that >> no, i think his point on that, of course, is he wants to see more action. jpmorgan has been on the case of this for the last couple of years. he's criticized washington
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before i read that roosevelt quote to him once in one of my interviews about the person in the ring takes the heat and should he throw his hat into the ring and he's denied it in the past clearly he does political type things quite often, both himself with his rhetoric and with his company's money. we've seen big investments into detroit, big investments into chicago. a new fund announced today asking cities to apply to them for this $500 million of funding. now, the first reason behind that funding is to help those that need it, unquestionably, but they are actions and he has rhetoric that does have political connotations quite often. >> this backtrack is stunning. eamon javers at the white house, we talked a few minutes about this jamie dimon close to the business roundtable, not to mention running one of the biggest institutions in the world. >> sure, and the two men have known each other for many, many
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years before president trump got involved in politics now jamie dimon is going out to deal with this administration after having made those comments i just ducked my head into the west wing and talked to sarah huckabee sanders a few minutes ago and other officials here no comment here from the white house about jamie dimon's statements about the president this morning they're referring all questions about that to the trump presidential campaign, which has not responded. so you might see the official white house folks remain silent here nonetheless, keep an eye on the president's twitter account, because he does not like to take these kinds of insults from prominent figures, particularly prominent establishment new york business figures, so i imagine you'd see something there but no official statement from the white house. another company that's tangling in washington right now, that's google google now putting out a response to congressman kevin mccarthy who criticized the company for what he called a conservative bias in response to a story about a leaked e-mail from a google employee that
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talked internally about efforts to improve latino voter turnout in the last presidential election here's google's statement now on this whole matter saying the suggestion that google's products or actions are politically biases is simply wrong. for the past decade, we've worked alongside other technology companies to provide users with voting information before they head to the polls and have offered tools to protect elections from hacking and digital attacks. the employee's e-mail is an expression of her personal political views about the outcome of the 2016 election, and those views do not reflect any official stance by the company. we have nearly 90,000 employees comprising a broad array of political affiliations the e-mail itself explicitly notes that she is speaking personally and that google's efforts were nonpartisan here's the tweet from kevin mccarthy earlier today he said google claims to be fair but gave a silent donation to a left-wing group to stop trump. works with china/russia to censor the internet but cancelled a contract with our military, ignores senate
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hearing. it's time for google to answer some questions an invite will be on its way so google now being drawn into this political controversy we saw the tweets from the president criticizing google after he looked at the google news results under his own name and saw that cnn and other media outlets that he doesn't like were toniurning up as news sour under google news, so this is going to be a controversy we can expect to see through the election, guys. >> eamon javers, thank you wilfred frost, thank you as well for the reporting. let's get to the other news of the day, shall we back out to cupertino to jon fortt and his awesome leather jacket for more an apple's big day. jon? >> yeah, it's going to get busy here in cupertino as well. josh lipton is here with me. josh, what's more interesting, apple challenging this idea that
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to make more money you have to sell more iphones, or something around the apple ecosystem, things we might see around watches, around augmented reality? >> so i think both are really interesting, jon, because i think in one sense a very different company, and we've talked about this, operating in a different smartphone market. so i do find it fascinating just how broad the portfolio is right now you have phones ranging from $349 to upwards of $1,149 you know, different phones based on pricing, on specs, on memory content. if the rumor mill is right, it stays that broad i'm really interested in what they're doing at the high end specifically, a differentiation there on pricing and specs and to your point about the ecosystem, i think it would be interesting if the high-end phone is what we think it's going to be and you get this 6.5 inch oled display and a faster processor, a more powerful device with a better camera, what is that as we talk about
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augmented reality, do we see new features there there's a lot of technology that tim cook is excited about, but a.r. may be among the most that he gets excited about on conference calls. >> china has been recent past. so tim cook has shown chinese apple stores, talked up how big the business is there, talked about making it a first tier market for iphone launches some uncertainty around china and this launch with the trade tensions between the u.s. and china. do you expect we're going to hear more about china again? maybe talk about india instead >> who knows what tim cook brings up on that stage. certainly for investors china is pivotal. they know mainland china accounts for an estimated 15% of sales. so that's going to be front and center whatever products come out. >> reporter: all right josh and i will be here to bring that you news as it develops here in cupertino. back to you.
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guys, thank you. chinese electric vehicle company is going public. nio has billed itself as a rival to tesla valued at $6 billion. for a first on cnbc interview, nio ceo is here today. so outside of the exchange we have some really sharp looking vehicles, i do have to say insight in terms of the ipo, a challenging time with the trade tensions between the u.s. and china. what have you been telling investors? >> basically it is a challengin market as we found out during the ipo road show. we're telling investors the opportunity in front of nio is huge china is 60% of the global market and growing even this year 80% a year even though the auto market is down. it continues to grow the second nio is the pioneer. we're the first with a premium
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electric vehicle in china. and the only other company with an suv in china is tesla with model x. ours comes in at less than half the price, better feature, a faster car so it's customized for the modern chinese family, seven-seater, roomy, fully featured all the local content and services everything they would want at $65,000 u.s. dollars a competitive product. >> when tesla says it's looking to expand and build out facilities in china, does that concern you? other local competitors as the bigger rivals potentially down the road >> we'll get competition from everybody. we're expecting it we want to execute our own business plan. i think we'll be competitive -- tesla should do it i would get rid of some of the transportation costs as our vehicle -- we have a new one coming out called es-6 that
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will be about two-thirds the price of a model 3 it is faster, 0 to 60 in five seconds. it's longer range, 450 to 500 kilometers it has all the bells and whistles >> and is this the suv >> it will be a smaller version of it, a sportier one, a five-passenger one coming in december we have the seven and the five >> everything in auto right now given the trade dynamic is about local production do you envision selling cars or is it about china? >> we would like to sell in the u.s. and europe. we want to come in with something different. we're looking for a platform two suvs and a sedan on platform one which is comparable to what's available from tesla and mercedes we have a platform two product we will finalize in two or three years. super fast charging. a whole new design similar to
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what you just saw. >> you don't think tariffs or whatever inhibitors to trade at that point would make your product uncompetitive? >> that's why we would consider local manufacturing. >> you would >> of course the bilateral trade is pushing everyone to local manufacturing. that seems to be the way of the future unless things change, global trade becomes -- >> and what's the likelihood of that >> there you go. >> i'm guessing from your response you don't think it's likely >> not until 2022. >> i want to dig into technology more before we let you go. do you have cars that are driving around autonomously in china right now? >> we don't yet. nio pilot will be turned on in q-1 of 2019. you need a lot of data we have a license in china and
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need to collect more data to launch the nio pilot park, emergency braking, all the other features, parking assist, everything is in there that last one will take a little bit of time to get enough data it works we need to collect enough. >> louis hsieh, the ceo of nio, thank you for joining us on this day where your stock went public it's currently down 3% as we take a break do not miss our documentary tonight, "crisis on wall street: the week that shook the world "it premieres tonight at 10:00 p.m. eastern time and pacific. executive produced by our own andrew ross sorkin the dow is off the high 73 need a change of scenery?
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the dow got a nice pop out of the headlines if the u.s. is interested in restarting chinese trade talks but lost some of that in the last few moments we'll continue to watch any developments on that or on the canada/u.s. front as mexico waits on the sidelines there interesting action this morning whether it's trade, the hurricane, jamie dimon but this afternoon, jon for it tt, it will be largely about apple. >> reporter: it will, carl, and the central issue, i think, this
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idea we've had for years about apple that for apple to make more money, they have to sell more iphones the ipad turned out not to be the same breakout hit the watch was that we've been looking for hits for more iphones. apple seems to be shifting the script they can sell the same number of iphones but charge more and all of these other devices and services end up adding revenue and margin on top of it. that may be enough growth to make a difference. we'll see if the narrative advance that is storyline. >> yeah, jon, we saw a nice pop yesterday in apple shares. they're down about 1% right now but i have a feeling that will change as the day goes on. in terms of potential new news around services or, say, a streaming service, do you think we could get that? >> reporter: they might talk a little bit about content here, but really the hero of this event is always hardware, the iphone itself. sometimes you get a new laptop
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you expect to have news on the wealth and health applications around that, but this is really a hardware product driven event. expect to hear more about that and also a.r., augmented reality. >> all right, jon. just an hour away. meantime, let's get to the judge. i'm scott wapner stocks making a dramatic turn this hour. did prospects after trade deal with china get a big boost this is "the halftime report." emerging problems -- as markets tumble outside the u.s., is the u.s. a safe harbor? safe harbors are in demand as a monster storm takes aim. we'll take you there live. and one analyst throws in the towel on a stock traders love to trade. "the halftime report" starts now.


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