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tv   Squawk Alley  CNBC  September 18, 2019 11:00am-12:00pm EDT

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good morning it is 10:00 a.m. at fedex headquarters in memphis, tennessee, it's 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ good wednesday morning, welcome to "squawk alley." the dow is down some 61 points we'll start with the streamers today. netflix, comcast, disney, apple,
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more details coming this week on each of those offerings and content buys as a crowded space competes over hit shows like "seinfeld" and "the big bang theory" not to mention their own original content joining us to discuss, lara ipho and laura martin good morning, guys, good to see you. this is getting crazy. the price tags for some of these shows that are decades old is this a reasonable chase of content right here >> it's war, and war is on we're seeing just the only skirmishes there's going to be war on content, billions of dollars will be spent. distribution, the studios against the tech companies everyone will go and shoot against netflix with its 150 million subs, 190 countries, distribution, it's a war of attrition. >> how are we going to know who
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the losers are >> i think we know who losers are because the marginal price of streaming services is free. apple is going to give you a device and free content even though the posted price is $5. anyone with a kid under 10 is signing up for disney for $3 and nbc announced peacock is free so while the government is whining about the faangs, they are bringing consumer pricing down and i don't know how you sell a $13 a month service or a $15 a month service if you have your amazon prime for me because you've got shipping and three other services for free. >> so the last i got from netflix was the last >> i think it will have to introduce a $6 service supported with advertising. >> netflix >> it has to it cannot support a $13 price point against free. >> we've seen this in a way before with g mail and online storage.
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these big companies need attention and want people on their platforms. is content any different can this play out any differently than that did? >> well, so a big part of it is who has the most content, who has the content people wanting obviously disney for kids. it's really ironic all these high-priced shows, $500 million for "seinfeld" and "the big bang theory" all of these are broadcast television shows that have been on the air the past 15 to 20 years. i don't know if that's the content that will drive these services forward so original content. netflix already spends about $13 billion a year so it's a content war. it's going to be what is the consumer going to want and where are they going to see the most concentration of that content. >> what pays for that content? is it ads? i ask that in part because i've been, i'll admit it, obsessively streaming on my ad-supported hulu those ads are really annoying.
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i don't know how many services i could want to take on that are ad-supported right now. >> well, i think everyone is going for the jugular and they all think i'm going to price this as cheaply as i can, give it for free. not everybody is going to survive. by the way, the real losses here are going to be with the cord cutting. this is only going to accelerate cord cutting, which is really interesting for people like at&t >> it seems like as you were mentioning, there's downward pressure on the prices that they're charging for subscriptions, those who are charging subscriptions, but still upward prices on certain premium content that the services feel like they have to have. >> that's true. >> who can kind of hold their breath longer or win in this game of chicken? is it the big companies like your apples, your amazons, your googles, who just have a ton of cash to throw at this, or is it the companies that are used to dealing with premium content >> so i think you have to have a cash forward to play this
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battle if you have a consumer bundle to bundle this wish if you show up at a theme park and get disney for free, my guess is you won't turn it off you've got to have a bundle and you've got to have a branding. i don't think content is enough to win this war. when people say they have 3.5 services, they forget they have amazon because they view it as free because it's part of their shipping i want to make a point about advertising. all of us are watching lots of non-ad driven content. how do they reach us you know who benefits? outdoor, other services where we are forced to look at ads are going up in price because we're spending more time on sbod services with no ads whatsoever. so there's going to be a real circulation towards advertising. >> what about the international story, eric, are we in a stage where those who have a lead outside of the u.s. will get
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some credit for that >> i think so. netflix has a huge advantage there. they're in 190 countries about half of the content that i see in the united states is foreign. and some -- we're discovering some fantastic shows as a result of that, so the content is getting broader. nbc with the peacock services announcing a big spanish language service because of telemundo. so yeah, at the beginning people like disney and at&t do not have a foreign advantage. netflix does. >> laura, going back to the idea of cord cutting and the loser in all this could potentially be linear tv, i guess how much of a loser could linear tv be, especially if you do see something like the rights to nfl in the coming years go strictly to the streamers >> yeah. so i think sports is the main thing that's holding people onto skinny bundles and big bundles but i do think what you're going to end up with is svod services
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that are free, or to you they seem free because you're bundling it in to something you're already buying anyway then you're going to have super special superserved niches like wwe or the rugby channel i don't know that sports is going to be able to afford those or garner the audiences. you might put thursday night on amazon, but you have to be on a broadcaster. you have to reach everybody if you want to create the next generation of jets fans. >> but wwe was one of the first ones out of the gate with the ote service. >> so we'll see how special interest -- but i see consolidation. i think they have to do rollups and consolidate and have bigger balance sheets behind them. >> we'll talk more about that next time. great insights in a short periods of time. thanks, guys, appreciate it. >> thank you very much. speaking of streaming, we're getting more news out of our parent company comcast julia boorstin has that from l.a. >> brian roberts making comcast's biggest play for cord
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cutters yet, announcing that comcast is making an xfinity flex streaming tv box available for no additional cost to its broadband only customers, dropping its $5 a month fee for its subscriber's first box giving people who just pay for internet and may have cut the tv cord access to over 10,000 free movies and shows along with live content. this will enable users to search and browse content from all of the digital services they subscribe to, such as netflix and amazon here comcast is looking to tie consumers who don't necessarily pay for live tv into its family of services by becoming the base of their new streaming bundles this puts comcast into competition with apple tv, amazon, roku and others. now, roku, which also sells a box and offers free content seeing its shares fall dramatically on this news. those shares off now over 10%. morgan, back over to you. >> julia, thank you. meantime, take a look at
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shares of fedex. that stock has been plunging in early trading today. you could say not delivering this quarter down 14% now a big move for that name missing estimates on both the top and bottom lines while also cutting its full-year forecast aggressively higher costs as fedex expands ground capacity and capabilities lower revenue from amazon deliveries after fedex parted ways on ground service, also some of its express services earlier this summer and a slowing global economy, all contributing to that slashed outlook. shares are down about 14% right now. worst performer in the s&p also dragging the broader dow transports average down something like 1.5% today. guys, we've seen a flurry of analysts downgrades on this as well i actually think one of the lines that kind of captures this came from donald bratton once again fedex is a global economy bellwether in 90 days it's gone from
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expecting growth to moderate growth and single-digit earnings decline to an earnings decline of 16% to 30%. in many ways, i think this is a perfect storm. you see the weakness in europe, you see ongoing issues around that tnt express integration you see slowing global growth, impact from china and business there and then in general, i mean this is -- this is a company that has continued to shift its investments to keep up and keep pace with e-commerce and that has tended to be a lower yielding delivery service. >> i feel like they talked out of both sides of their mouth on amazon oh, amazon, 1.3% of the business not a big deal, not a big deal now all of a sudden, well, that 1.3% was actually profitable and they're including amazon specifically in the list of all these other things that are causing headwinds. >> yeah. and i think that gets at the very heart of the debate around this stock right now and why you're seeing those shares down as much as they are. how much of this is a company
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signaling broader macro issues and how much of it is fedex-specific, and we had this conversation in the past hour with an analyst about what could be management missteps over the past year and a half we're going to have to see how all of this plays out. meantime shares are down big and they are dragging the transports with them. >> yes, and also meanwhile wall street is bracing for the fed decision, now less than three hours away we're going to discuss what to expect next. stay with us markets. the business of trading goods and services. nasdaq operates among the largest markets in the world. and our technology powers markets from indonesia to chile. great markets are built on a foundation of trust and integrity, forged through leading edge technology and a smart regulatory framework. as technology advances, regulation must keep pace to allow the markets to evolve.
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welcome back to "squawk alley. saudi arabia's defense ministry saying that drone and missile debris proves an iranian role in last week's attack this as president trump orders new sanctions on iran. all as wall street looks ahead to the fed this afternoon, expecting the second interest rate cut of the past decade. joining us now here at post nine is jpmorgan asset management market strategist jack manley and burns mckinney both here at post 9. gentlemen, thanks for joining us. >> thank you. >> thank you >> jack, i'll start with you what is your expectation from the fed later today? and is the market ready for what we get from powell when he talks? >> i think the market is ready for some, it's not ready for all right now. i think we'll definitely get an interest rate cut, 25 basis points i think we'll probably see a cut
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to the reserves rate by perhaps a little more and i wouldn't be surprised if we saw a restarting of some quantitative easing at least in the form of open market operations it wouldn't surprise me a whole lot if jay powell comes out there and takes a hard stance on this being the last cut of this mid-cycle adjustment markets are pricing in more than that and i don't think they're going to get more than one more cut. >> burns, do you agree with that it's been not as bad as feared but better than expected. >> it certainly doesn't justify a 50 basis point cut really the economic data probably doesn't in the near term justify a 25 basis point cut. because the fed has said they're going to make the cut, we do expect a 25 basis point cut almost absolutely going to happen this is one of those instances where they say actions speak louder than words. in this case it's probably the
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reverse. the action is what we know is baked in what makes more difference is what chairman powell's words are later on we probably expect him to, if anything, have a little bit of a dovish tone, not mentioning mid-cycle adjustments this time and just making very clear that the fed is ready and prepared to do more without necessarily committing to a timeline. >> jack, does the attack on saudi oil production change anything >> i don't think it changes a whole lot. we've already seen 50% of production back online within a day. i think the saudis are well in control of this. i think what's important to remember is if for some reason this does extend into a longer duration problem, the u.s. has plenty of capacity to up production, push prices down and resupply the market. >> some discussion this morning on the repo squeeze. goldman saying we do not believe this widening is a precursorto a period of financial market stress driven by technical factors. we've been asking whether or not we're going to get some clarity on this from powell today.
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>> it's something that the fed -- it's already a challenging day for investors anyway, even without this. so the fed, they have a lot on their plate. chairman powell probably will address it he probably is going to try to reassure the markets, let them know this is technical, this is shorter term in nature in layman's terms it really has a lot more to do with the fact that we are at the ending of a quantitative tightening cycle and it's just you have a lot of window dressing that does take place at the end of quarters but it's not something that's probably going to be a primary focus of chairman powell. >> so, jack, given expectations around the fed this afternoon and beyond, given all the geopolitical stuff that's playing out in the world right now and of course these trade talks which we'll see what happens there, how do investors need to be positioned? >> i still overweight to the equity side of things. but i think especially if the fed comes out a little bit more with that hard-line view, we're going see some of the more defensive sectors take a little bit of a beating
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things like staples, utilities i don't know if that's where i would be positioned right now because i think they may have been bid up. still room for risk, but opportunities are a little bit more challenged. >> burns, i'll put the same question to you quickly. >> within equities, we think right now because we are late in the cycle, we expect investors to probably to do best with companies with visible earnings, clean balance sheets we like companies that are growing their dividends. dividend payers have gotten a little bid up but those are probably a good place to be right now. >> thanks for joining us, burns and jack. >> thank you. keep your eye on apple today. we're getting some reviews of the watch this time. is it a must have? we'll finding out what cnbc's own tech reviewer, todd hazelton, is saying when he joins us at post 9 in a moment the dow is down 55 so servicenow put your workflows in the cloud, huh?
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close in just a few minutes. our dom chu has that covered dom? >> jon, markets across europe mostly higher ahead of today's big fed decision as you can see behind me, lots more green across the screen the uk stocks are the biggest laggards after a softer than expected read on inflation in the united kingdom this past month. turning to sectors overall, marginal losses in retail and banks being offset by some strength relatively in autos and technology but the focus continues to be on the energy sector as we track the fallout from this past weekend's attacks on saudi oil facilities in the kingdom. oil and gas stocks are leading the gains today, as you can see here still, though, most of the major european countries so far have adopted a more wait-and-see approach to the overall scheme the uk and germany both condemned those attacks but have stopped short of assigning any blame for them france's foreign minister also reluctant to call out iran, specifically saying the country has no proof of where those drones had originated from
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finally, sticking with g geopolitics, wanting to flag the stock of the day in europe, and that's montclaire. the protests in hong kong could hurt the business environment so they are off 6% to 7% in trading. morgan, back to you. let's get to sue herera now for a news update. >> good morning, everyone, here's what's happening at this hour saudi arabia alleging that iranian cruise missiles and drones attacked its oil facilities, showing journalists the remains of the weapons while stopping short of directly accusing tehran of launching the assault. a saudi military spokesman says the attack came from the north. the european parliament's chief brexit official has welcomed a nonbinding resolution adopted by eu lawmakers supporting another extension to brexit if britain requests one >> it was for me and for
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everybody in the house very important that in the midst of this end game or negotiations on brexit, there will be a clear position by the new elected parliament former president jimmy carter, who was just weeks shy of his 95th birthday, says he doesn't believe that he could have managed the presidency at 80 years old he was answering audience questions during his annual report at the carter center in atlanta. two leading 2020 candidates, joe biden and bernie sanders, would turn 80 during their terms if they were elected. you are up to date that's the news update this hour back downtown to you guys on "squawk alley. back down to you, morgan >> sue, thank you. after the break, paypal and co-founder joe lonsdale is with us his take on the latest in the
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wework saga. dow is down 59 king har that's why your cash king har automatically goes into a money market fund when you open a new account. and fidelity's rate is higher than e*trade's, td ameritrade's, even 9 times more than schwab's. plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. just another reminder of the value you'll only find at fidelity. open an account today. by the way, she's the it wasnext mozart.g day. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places.
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getting some tweets from the president a few moments ago. our phil lebeau has more on those from chicago phil. >> carl, has expected, president trump says that the trump administration is moving forward with plans to revoke california's ability to set its own standards when it comes to fuel economy, standards for vehicles he tweets out the trump administration is revoking california's federal waiver on
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emissions in order to produce far less expensive cars for the consumer, while at the same time making the cars substantially safer. this will lead to more production because of this pricing and safety advantage and also due to the fact that older, highly polluting cars will be replaced by new, extremely environmentally friendly cars. there will be very little difference in emissions between the california standard and the new u.s. standard but the cars will be far safer and much less expensive. many more cars will be produced under the new uniform standard meaning significantly more jobs, jobs, jobs automakers should seize the opportunity because this all -- because without this alternative to california, you will be out of business. this was expected. they sent a note to the epa and the d.o.t. sent a note to the california air resources board saying that they planned on moving forward with revoking the status of california to set its own standards. we expect to hear from not only
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the head of carb, the california air resources board but california's governor and attorney general likely within the next couple of hours they're spoiling for a fight as much as the trump administration they believe they have this federal waiver which allows them to set their own standards so we'll see how this plays out over the next couple of months. >> it's going to play out in court, phil. >> yep. >> probably all the way to the supremes, right? >> yeah. look, the standards -- we're not going to see them finally put in place for a long time because it's going to take some time before this plays out. >> phil lebeau humbled, that is how wework founder and ceo described himself in the midst of the ipo process. that debut is delayed at least a month so we turn to a tech investor, many of whose own portfolio companies are wework customers. joe lonsdale joe, good to see you good morning.
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>> good morning. >> so what's the lesson of the controversy around this wework ipo so far >> well, you know, there's a lot of things in silicon valley about this one this company had very mediocre governance and over confident might be the nice way of saying it in terms of the founder honestly it's not a company that's been innovating in areas that most of us care about it's not one that a lot of people here that i know have been rooting for. >> so how different is this really, though, from snap? it had some pretty creative corporate governance standards that it presented during its ipo. facebook, google before it kind of pushed this founder control in the beginning yes, they have taken it perhaps a step further, but is the business model here and perhaps the lack of technology in the way that they run their business
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the real sin >> i think the lack of technology at least as it's perceived by people out here is a big problem in terms of something -- it doesn't really feel like a company of sill vaug silicon valley, it feels like new york in a sense what they're doing. frankly there are some rules that they violated these days we won't back a company unless the founder would have to give up control if they were to leave. i think it's really great that he is being forced to make these changes. give back the money that he got from naming the company. a lot of that stuff seemed pretty silly it seems like it is going in a good direction where he's being responsible and hopefully cleaning it up enough that people will tolerate it. >> so, joe, is wework a one-off? and i ask this based on some of the performances we've gotten from recent companies that have ipo'ed in the last week or so. is investor sentiment changing around some of these private, quote unquote, unicorns that are looking to go public >> i think there are two different sets of companies
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here there are companies that have grown with just huge amounts of money that they have raised where it's very unclear what the long-term business model is and how they're valued and there's companies that have worked really hard for ten years to develop a really hard new technology that fundamentally changes and then grow based on that i think those companies that work to really have the best engineers in the world solving hard problems that matter to industry, the things we're doing in health care and logistics and other areas, those are real companies. i think this one people are a lot more skeptical about is it a real innovation. >> right there's two different things going on here, joe one is the business model itself and the way we would judge it, no matter who they were, but the other is the corporate governance issues that they have tried to remedy and you pointed that out which do you think is truly responsible for the delay of the ipo? >> that's a tough question i think they kind of mesh together you get something that's very overconfident that's breaking all the rules, and i think
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that's part of what's going on too. they're putting billions of dollars to work very, very quickly and it's unclear what it's actually worth. i think the combination of having a questionable business model with extreme governance was too much maybe either one by themself it might have worked out. >> joe, talk to me about the fundamentals, though, of work and the future of work and where people are going to work every five years there's a different idea about this. everybody was supposed to be working from home and now everybody is supposed to be coming to the office we're agile now, it's urban. is this going to shift in five years? what are you telling portfolio companies, entrepreneurs who are trying to plan their expansion and where they're going to have their employees? >> that's a great question you know, i helped start a company called terminal that's helping tens of companies in silicon valley hire people in canada and hire people in mexico i'd love to hire people here in the bay area 40% of the land is being used by cattle so it's too expensive
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because we can't build housing i think the way you're going to get people working from home around working from everywhere is you'll have to have a lot better augmented reality and better ways of making it feel like you're next to somebody i think those technologies are coming in the next ten years. >> joe, you have comments coming out of saudi arabia right now that they have evidence that the attack launched on aramco facilities was not launched from yemen, it came from the north and was definitely supported by iran they have missile debris that cruise missiles were used in these attacks as well. it's shedding a lot of light on saudis missile systems, the capabilities that are in place and whether those technologies can keep up with some of these attacks from drones and the like what is your take on that, and since you are invested in a number of companies focused on national security and where is the technology headed?
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does this increase demand for it >> well, that's a great question silicon valley was created by defense companies and defense has not been a popular place to work here lately my friends and i are spending a lot more time trying to figure out how to innovate in defense there's $780 billion we're spending in our country and there's new systems we're building out here right now to work on drone defense, to work on how we take out these systems. it's a very scary world right now. i think we need a lot more people trying to solve these problems >> joe lonsdale, thank you for joining us minor changes, but still a must have. that's the review from our own todd hazelton on the new apple watch. todd joins us this morning at post 9 i'm especially curious to hear what you think about this because we've heard about the phones but this is just as interesting. >> yeah, it is it has a couple new features it's not a huge update but it has an always on display which means if you look at it here,
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the screen stays on and then turns back on when you look at it so before it would just turn off, which was annoying when you were working out or something like that, you'd have to flick it and get it to turn back on so that's a big deal. also it has a compass built in which doesn't seem like a big deal except when you get out of the subway in new york city, open up maps and it shows which way you're facing. apple told me during the call that 70% of its apple watch buyers are buying for the first time so unlike products like the iphone, they're not necessarily going after upgrades every year. so someone with a series 4 doesn't need to buy this model unless they want that always-on display. really they're trying to attract people to the apple watch still in general i think that's why we saw the series 3 drop down to $199 for people who don't want to spend $399 for this one. >> any noticeable impact on battery with the always on >> no, it's been fine. it's been 18 hours can i go from when i wake up in the morning to when i go to bed and i go to bed early, i'll admit that
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but i do get there the one thing i didn't see here is sleep tracking and that would be a problem with the current battery life of 18 hours you wouldn't make it through the night. there are third-party apps that do that. apple is waiting to see if it can get it right they purchased bed-it a couple of years ago and haven't done anything with it so we'll see if he add sleep tracking. >> you've reviewed the apple watch and the new lineup of iphones. what are you more excited about? >> i usually like the apple watch each year as my favorite gadget this year, i don't know. i had the series 4 i did buy the series 5 because i like the always-on display i think i'm leaning towards the pro iphone because i like that ultra wide lens on it this year. >> does the always-on display show you things like heart rate if you're in the right mode or is it just going to show you a very limited number of -- >> it is very limited but does show workout stats so your heart rate while you're on the treadmill, show you how far you're run, altitude, other things
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but if you have the maps open or anything like that, it starts to show the clock and doesn't show everything else. >> which is the bigger deal, the $199 price on last year's model or the fact that this watch actually still works as a watch when your wrist is -- >> no, jon, that's a great question i think the $199 is the bigger deal there's a lot of people who are like apple watch seems cool. i don't want to spend $399 and that's just the starting price the ceramic model costs more than $1,300. i think the $200 is dangerous for companies like fitbit because now you can get the apple watch. but the apple watch doesn't support android still. so there are millions of people that are on android. i don't think it will add that but it would open up the audience. >> that's for sure it looks nice. thanks, todd. >> it is nice. thanks for having me. >> see you later. goldman sacks forecasting this will be the worst year for ipo profits since 1999 the year the dotcom bubble began
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to burst cnbc's kate rooney reporting that that analysts at goldsman believe only 24% of companies going public this year will report positive net income a lot more online now at on this story icbrwee ckft a aer quk eak. liberty mutual customizes your car insurance,
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so you only pay for what you need. i wish i could shake your hand. granted. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ i'm scott wapner, here's what's coming up at the top of the hour on "the halftime report." jeffrey gundlach is live with us we'll get his thoughts on rates,
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the repo market and where he is looking to make money. plus another big price bump for roku today our traders will debate that stock, it's our call of the day. and the ten names you must own right now, according to one wall street firm we'll reveal them, debate them and we'll do it in about 20 minutes or so, a little less than that. we'll see you then. >> looking forward to it, scott, thanks. let's get over to the cme and rick santelli. >> of course this is a big fed day. july 31st we had our first easing, which means we have eight quarter points left to fight any future slowdowns, recessions, unforeseen issues. eight isn't many but it's more than other central banks have which ought to be i think foremost in our central bankers' minds. but unfortunately i think we have more of a 3-d fed, d for data dependent, which seems to be well into the rear-view
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mirror, more into d for dot plots which leads me to think of that d as day trading. basically dot plots, just get the fed deeper and deeper in trying to explain the unexplainable. i mean let's face it, we have a 3-d fed, but we have flat earth markets. think about the markets. think about minus 50 basis points bunds in europe think about the 2-year in europe down close to 70 basis points. markets don't make sense we have huge amounts of debt you know, the recently issued debt last week, 3s, 10s and 30s along with the litany of debt we're going to be issuing in this country was at least one of the reasons we had a bit of a crunch in overnight funding. maybe it was one-off with tax day and all the other issues you've heard about over the last 24 hours, but if it's not a one-off, maybe there's a lot of little one-offs because things
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just don't make sense. let's go to the flat earth markets. think about it we have central banks, passive bond funds, pension funds that continue to plow in and buy. and they have no regard for fundamentals they're just matching their liabilities, and it creates so many distortions in the marketplace that after the dust settles, how can we reconcile such wide disparities between our positive rates and all the rest of the low, ultra low and negative rates across the globe? well, traders are a pretty smart group. they know how to hire programmers. if you look at how they make money at this time, it isn't only the greater fool's theory where there's always somebody behind you willing to pay more negative and allow you to get out at a profit, but when we look at the forwards and forward exchange and our positive rates, there's games that are played with these carry trades that are basically currency hedges that make money is that a bad thing? no but what it underscores is a whole cottage industry that
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always crops which leads to days like yesterday i think the fed needs to sit back and pause i get it they have plenty of reasons why they could ease. but they have one big reason why they shouldn't, because our economy is doing better than others, and the other economies are going to be scrambling if the downturn becomes a larger downturn carl carl, back to you. >> good to get on the record, thanks, rick rick santelli. there's more trouble for juul today and it's not just here in this country aditi roy explains from san francisco. >> carl, india is the latest country to ban e-cigarette sales which is bad news for companies like juul and philip morris international. juul has not launched in india but it does have a team there doing due diligence. the ban follows news that china has halted sales of juul products just days after the company launched there
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juul has been rapidly expanding internationally. it's currently in 18 countries outside the u.s., excluding china. china has about one-third of the world's smokers and europe and asia together, they're a big focus for juul as it faces increasing regulatory risks in the u.s. speaking of those domestic headwinds, congress is threatening to subpoena juul for not handing over some documents in a probe over juul's role in the teen vaping epidemic the committee says juul's record is woefully inadequate among the documents they are requesting, the contract between juul and altria. this development comes after new york just enacted a ban on flavored e-cigarettes following a similar ban in michigan, and california also cracking down on e-cigs this week it will be going after counterfeits and issuing warning labels on vaping products. all of this putting a lot of pressure on altria shares have slipped 11% in the last month
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juul's valuation also taking a hit. sources telling cnbc that the company's secondary shares have slid about 20% incidentally, some analysts believe these will be a boon for traditional cigarettes which could see sales climb as more restrictions are placed on e-cigs morgan, back to you. >> thank you. we're getting some headlines from jamie dimon ylan mui has those from washington. >> reporter: jamie dimon just speaking to reporters and saying that he doesn't believe a fed rate cut today will offset the impact of the trade war. he said that the fed needs to make its own decision in response to a tax on the fed from president trump he said the fed's independence is paramount and he called jay powell a, quote, quality human being, though he did say that the fed needs to perhaps communicate less and reduce the number of governors and fed presidents who speak and give their opinion. on a recession going forward,
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jamie dimon said that he does not believe one is imminent because he feels the consumer is still strong, even though ceo optimism is waning and on china trade talks, he said that he has spoken with president trump about the harmful impact of tariffs and the trade tensions on businesses on their supply chains, but he said that he is skeptical of reaching a deal before 2020. guys, back to you. >> ylan, he covered so much ground he even got to negative rates, right? >> reporter: that's right. he said he's not really a fan of negative rates we don't understand the long-term consequences of them but he said that right now 25 basis points is not going to move the needle on the economy >> pretty comprehensive pen and paper with dimon ylan, thank you very much for that up next, the startup that's turning high schoolers into e-sports players the ceo of play vs joins us on the other side of this break we'll be right back. ly a treet guy. what's the hesitation?
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eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
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get your head in the video game play verses. the first sanctioned e sports league announcing its intention to extend to all 50 states this fall and a $50 million round raised close to $100 million in just 13 months joining us now, the company's ceo. good morning >> good morning. thanks for having me >> great to have you tell me, a lot of parents are
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trying to get their kids to be on the screens less. and yet, now there's actual business, a future, behind e sports what's your pitch with this league as it goes nationwide >> to parents, what we found is that parents actually want their kids to have success in the student environment. and so sports and activities have actually allowed and have shown evidence of increase in student gpa, student engagement. student attendance and it's giving kids a structured environment to do the things that they love and parents are really just rallied around this concept of making sure their kids reach the next level and have success within school we've not received any pushback from parents they support play verses and the work we're doing within e sports >> now the business, what you're going to do with this investment capital you've got, explain what
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the process is of building this out nationwide what the infrastructure is what's going to keep anybody else from just move ng and doing the same thing you're doing? >> sure, yeah, so our infrastructure is built around exclusive distribution with the national federation of state high school athletic associat n associations they essentially govern high school sports and write the rules for high school sports and they've been around for 100 years operating parallel to the ncaa so we've signed an exclusive partnership with them as of last january to introduce e sports in the same way that traditional sports have been b introduced any almost 20,000 high schools across the country we have unparalleled relationships with game publishers that allow us to commercialize their ip, but then also to integrate both operationally and technically to be able to make their games varsity high school sports and internally, we've built an incredible product to be able to facile it that and obviously, we
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have tons of resources at our disposal to be able to scale our offering within this market. >> it's unusual. more than it should be, to see an first amendment entrepreneur active in this space and raising kind of money that you have. how did you do it? give me your take on what the process has been like and how others can >> it's been, it's been a long process. and draining an exhaustive process. internally, in reality, the time period has been short. we started the company last january and have now raised $96 million over the past 13 months. i wouldn't be able to, it's, i don't know if i have enough time to actually share the process, but what i'll say is that i wouldn't be able to have accomplished this without the help and support of my team. i built an incredible team talented educators and start up executives and people like
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technologists and product leaders and we're super excited about our position within the market and to continue to service our community, especially our kids who rely on us who you know are, are so excited about play verses because it gives them an opportunity to be validated and recognized for their talents. so the backbone of our success is because of our team >> i understand that you're building out this national infrastructure and creating this onramp for high schoolers to get more involved in e sports. how are you making money we have an opportunity to have a robust business model. today, we focus on anticipation fee. our first product is called seasons. this first concept of kids playing on behalf of their school on coaching, on the campus for their sports team competing for a championship we charge $64 for that that participation from and it's typically paid for by parents or the school itself.
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down the road, we'll monotize in other ways we really believe that it will be not only a generational gaming product, but also a $100 million plus user subscription business >> all right, $50 million series c. congratulations. great to have you. >> thank you by the way, tomorrow, nba lenld and also noted tech investor, kobe b bryant, is going to be b with us 9:00 a.m. eastern time dow down 76. tight range going into the fed decision back in three minutes woman: my reputation was trashed online.
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take look at shares of adobe. they are down this morning despite posting on the top and bottom lines sh, they said current quarter revenue might come in under expectations it's down almost 3%. digital media, the advertising linked group has a bit to do with that. >> yeah. meantime, taking a look at the broader markets right now, dow's down 68 points s&p down less than nine. 29.96. it's been a tight trading range. this session is really bookended by two different entities with the word fed
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fedex earnings after the bell last night which were pretty rough and dragging down the transports nearly 2% then the fed meeting today. >> yes, r although i guess equal weighted transports still outperforming the s&p so far this year. see how long that can last get to the judge back at hq. >> the countdown to the decision one that has so much riding on it the move and message likely to drive your money in less than two hours. yes, that was the back of steve weiss' head. it's all new and it's the halftime report. >> the fed expected to cut rates for the second time in a decade. will powell signal more are coming and what happens if investors don't like what they hear? the bond king making a big call. jeffrey gundl arach weighsn.


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