BOJ's Kuroda says no rate hike 'for an extended time': paper

The Bank of Japan is unlikely to raise interest rates for "quite some time" and recent steps to make policy more flexible are not preparation for policy normalization, Governor Haruhiko Kuroda said in an interview published on Saturday.

The BOJ pledged in July to keep interest rates "extremely low" for an extended period and adjusted policy so it could buy stocks and bonds more flexibly, including allowing the 10-year government bond yield to move in a slightly wider band around zero percent.

Economists polled by Reuters soon afterwards said this meant the central bank was laying the groundwork for an eventual exit from its massive stimulus but most said the move would not happen soon.

Kuroda told the Yomiuri Shimbun daily that any change in the BOJ's interest rate policy remains distant.

"There is no thought about raising (rates) for quite some time," he was quoted by the paper as saying, without giving further details except to say that there is currently no specific time span in mind.

"As long as uncertainties remain, the commitment is to maintain the current low rates," he said, citing a planned consumption tax hike in October 2019 as one uncertainty among others he did not list.

Despite five years of massive asset buying and ultra-low rates under Kuroda, the BOJ remains far from achieving its 2 percent inflation target.

However, when asked if this target will be met during Kuroda's term, which ends in 2023, he was quoted as saying "of

course."

"The economy has improved and the labour market is tight. If you think according to common sense, (inflation) would reach the mid-one percent level in 2020. Barring some huge change that stops this upward move, I believe we'll reach it," he said.

Former BOJ board member Koji Ishida told Reuters in August that Japan's healthy economic growth should allow the central bank to whittle down its stimulus program even before inflation hits 2 percent.

Another former board member said that the BOJ's July decision to make its policy more flexible was more than just a tweak and that it could take further steps to normalize policy later this year.

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China's Meituan Dianping said to set Hong Kong IPO valuation at up to $55 billion

China's Meituan Dianping, an online food delivery-to-ticketing services platform, has set an indicative price range of HK$60 to HK$72 ($7.64-$9.17) per share for its initial public offering (IPO) in Hong Kong, valuing itself at up to $55 billion, four people with direct knowledge of the matter said.

Meituan, already one of China's most valuable internet firms, could raise as much as $4 billion before the exercise of a "greenshoe" or over-allotment option, whereby additional shares are sold depending on demand.

The company is discussing a valuation of $46 billion to $55 billion and planning to secure a total of $1.5 billion from five cornerstone investors, including its main backer gaming and social media company Tencent Holdings, and global asset manager OppenheimerFunds, the people said.

Oppenheimer will commit $500 million and Tencent $400 million, they said.

Other cornerstone investors include U.K.-based hedge fund Lansdowne Partners ($300 million), U.S. hedge fund Darsana Master Fund ($200 million) and Chinese state-owned conglomerate China Chengtong Holdings ($100 million).

The five cornerstone investors did not immediately respond to requests for comment. Calls to Darsana went unanswered.

Meituan declined to comment when reached by Reuters.

The Beijing-based firm filed plans for the city's second multibillion-dollar tech float this year after smartphone maker Xiaomi's blockbuster IPO of nearly $5 billion.

It plans to use the process to upgrade its technology, develop new services and products and pursue acquisitions among other things, according to its IPO filing.

Meituan is also - after Xiaomi - the latest company with a dual-class share structure to file for a Hong Kong listing, under the city's new rules designed to attract tech companies.

However, in late July Hong Kong Exchanges and Clearing (HKEX), the operator of Hong Kong exchange, said it would delay changes that would allow companies to hold shares with more voting rights, as more time was needed for investors to become accustomed to recent rule changes.

Meituan was valued at around $30 billion in a fundraising round late last year.

Xiaomi started trading in July after a closely watched but disappointing initial public offering that valued it at almost half the $100 billion that industry analysts had initially estimated.

Meituan has been likened to U.S. discounting platform Groupon.

Founded in 2010 by serial entrepreneur Wang Xing, it completed a $15 billion merger with Dianping in 2015, akin to U.S. online review firm Yelp Inc. It offers a broad range of services including movie ticketing, food delivery, hotel and travel booking as well as ride-hailing.

Competitors include food-delivery platform Ele.me, backed by e-commerce firm Alibaba Group Holding, and leading ride-hailing firm Didi Chuxing, backed by Japan's SoftBank Group.

Bank of America Merrill Lynch, Goldman Sachs Group and Morgan Stanley are sponsors of Meituan's IPO.

China Renaissance is the financial advisor.

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Trump to skip summits in Singapore, Papua New Guinea; Pence to attend

President Donald Trump will skip summits with Asian leaders in Singapore and Papua New Guinea in November, sending Vice President Mike Pence in his place, the White House said on Friday, an announcement that will raise questions about his commitment to a regional strategy to counter China.

Trump was invited to attend the U.S.-Association of Southeast Asian Nations summit and the East Asia summit in Singapore and also the Asia Pacific Economic Cooperation forum in Papua New Guinea. He had attended these events last November.

White House spokeswoman Sarah Sanders said Trump asked Pence to represent him at the summits, where he will "highlight the United States' vision of a free and open Indo-Pacific, based on respect for sovereignty, the rule of law, and the principles of free, fair and reciprocal trade."

Trump will travel to Paris to attend a Nov. 11 commemoration of the 100th anniversary of the armistice that ended World War One. Trump had wanted a U.S. military parade in Washington but balked at price estimates.

"While in Europe, the president also will visit Ireland to renew the deep and historic ties between our two nations," Sanders said.

Later in November, Trump will attend the Group of 20 summit in Buenos Aires and will also travel to Colombia for talks about security, narcotics and regional affairs, Sanders said.

Trump's decision to skip the Asian summits will inevitably raise questions about the extent of his commitment to a region that is home to some of the most pressing U.S. foreign policy challenges.

These include Trump's stalled efforts to persuade North Korea to give up a nuclear weapons program that threatens the United States and strategic rivalry with China, with which Trump has engaged in a major trade war.

The Trump administration has touted an Indo-Pacific strategy aimed at increasing regional cooperation, notably with India, Australia and Japan, to counter China's influence, including in the disputed South China Sea, where Washington has mounted naval patrols to challenge what it sees as Beijing's excessive territorial claims.

In August, U.S. Secretary of State Mike Pompeo attended a regional foreign ministers' meeting in Singapore to prepare for the November summits and pledged nearly $300 million in new security funding for the Indo-Pacific — a drop in the ocean compared to the billions China has been pouring into the region.

Asia experts were not surprised by Trump's decision.

"Trump hates traveling outside the U.S. and dislikes multilateral meetings," said Bonnie Glaser of Washington's Center for Strategic and International Studies.

"Convincing Trump to travel to PNG, in particular, was likely impossible," she said. "He will have a chance to meet with (Chinese President) Xi Jinping at the G-20 a few weeks later," adding that the decision on the summits "will further stoke doubts about the administration's commitment to the Indo-Pacific region."

Jonathan Pollack of the Brookings Institution think tank, noted that Trump was not the first president to cancel trips to the Asian summits — his predecessor Barack Obama caused great disappointment when he withdrew from them in 2013.

Obama did so due to a government shutdown at home, but the decision raised questions about his vaunted "pivot" to Asia to counter China.

"There's no question that many in Southeast Asia see the region caught uncomfortably between the United States and China," Pollack said.

"The Trump administration's repeated calls for a free and open Indo-Pacific have fallen flat in various capitals, which many see as very thin gruel, begging the issue of how the U.S. intends to remain relevant to the regional future."

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US accuses China of 'super aggressive' spy campaign on LinkedIn

The United States' top spy catcher said Chinese espionage agencies are using fake LinkedIn accounts to try to recruit Americans with access to government and commercial secrets, and the company should shut them down.

William Evanina, the U.S. counter-intelligence chief, told Reuters in an interview that intelligence and law enforcement officials have told LinkedIn, owned by Microsoft, about China's "super aggressive" efforts on the site.

He said the Chinese campaign includes contacting thousands of LinkedIn members at a time, but he declined to say how many fake accounts U.S. intelligence had discovered, how many Americans may have been contacted and how much success China has had in the recruitment drive.

German and British authorities have previously warned their citizens that Beijing is using LinkedIn to try to recruit them as spies. But this is the first time a U.S. official has publicly discussed the challenge in the United States and indicated it is a bigger problem than previously known.

Evanina said LinkedIn should look at copying the response of Twitter, Google and Facebook, which have all purged fake accounts allegedly linked to Iranian and Russian intelligence agencies.

"I recently saw that Twitter is cancelling, I don't know, millions of fake accounts, and our request would be maybe LinkedIn could go ahead and be part of that," said Evanina, who heads the U.S. National Counter-Intelligence and Security Center.

It is highly unusual for a senior U.S. intelligence official to single out an American-owned company by name and publicly recommend it take action. LinkedIn says it has 575 million users in more than 200 counties and territories, including more than 150 million U.S. members.

Evanina did not, however, say whether he was frustrated by LinkedIn's response or whether he believes it has done enough.

LinkedIn's head of trust and safety, Paul Rockwell, confirmed the company had been talking to U.S. law enforcement agencies about Chinese espionage efforts. Earlier this month, LinkedIn said it had taken down "less than 40" fake accounts whose users were attempting to contact LinkedIn members associated with unidentified political organizations. Rockwell did not say whether those were Chinese accounts.

"We are doing everything we can to identify and stop this activity," Rockwell told Reuters. "We've never waited for requests to act and actively identify bad actors and remove bad accounts using information we uncover and intelligence from a variety of sources including government agencies."

Rockwell declined to provide numbers of fake accounts associated with Chinese intelligence agencies. He said the company takes "very prompt action to restrict accounts and mitigate and stop any essential damage that can happen" but gave no details.

LinkedIn "is a victim here," Evanina said. "I think the cautionary tale ... is, 'You are going to be like Facebook. Do you want to be where Facebook was this past spring with congressional testimony, right?'" he said, referring to lawmakers' questioning of Facebook CEO Mark Zuckerberg on Russia's use of Facebook to meddle in the 2016 U.S. elections.

China's foreign ministry disputed Evanina's allegations.

"We do not know what evidence the relevant U.S. officials you cite have to reach this conclusion. What they say is complete nonsense and has ulterior motives," the ministry said in a statement.

But Senator Mark Warner, the top Democrat on the Senate Intelligence Committee, said Beijing's exploitation of LinkedIn "demonstrates the length to which Chinese intelligence will go, and the 21st Century counter-intelligence challenges facing us in a world where everybody's got an online footprint."

Evanina said he was speaking out in part because of the case of Kevin Mallory, a retired CIA officer convicted in June of conspiring to commit espionage for China.

A fluent Mandarin speaker, Mallory was struggling financially when he was contacted via a LinkedIn message in February 2017 by a Chinese national posing as a headhunter, according to court records and trial evidence.

The individual, using the name Richard Yang, arranged a telephone call between Mallory and a man claiming to work at a Shanghai think tank.

During two subsequent trips to Shanghai, Mallory agreed to sell U.S. defense secrets — sent over a special cellular device he was given — even though he assessed his Chinese contacts to be intelligence officers, according to the U.S. government's case against him. He is due to be sentenced in September and could face life in prison.

While Russia, Iran, North Korea and other nations also use LinkedIn and other platforms to identify recruitment targets, the U.S. intelligence officials said China is the most prolific and poses the biggest threat.

U.S. officials said China's Ministry of State Security has "co-optees" — individuals who are not employed by intelligence agencies but work with them - set up fake accounts to approach potential recruits.

They said the targets include experts in fields such as supercomputing, nuclear energy, nanotechnology, semi-conductors, stealth technology, health care, hybrid grains, seeds and green energy.

Chinese intelligence uses bribery or phony business propositions in its recruitment efforts. Academics and scientists, for example, are offered payment for scholarly or professional papers and, in some cases, are later asked or pressured to pass on U.S. government or commercial secrets.

Some of those who set up fake accounts have been linked to IP addresses associated with Chinese intelligence agencies, while others have been set up by bogus companies, including some that purport to be in the executive recruiting business, said a senior U.S. intelligence official, who requested anonymity in order to discuss the matter.

The official said "some correlation" has been found between Americans targeted through LinkedIn and data hacked from the Office of Personnel Management, a U.S. government agency, in attacks in 2014 and 2015.

The hackers stole sensitive private information, such as addresses, financial and medical records, employment history and fingerprints, of more than 22 million Americans who had undergone background checks for security clearances.

The United States identified China as the leading suspect in the massive hacking, an assertion China's foreign ministry at the time dismissed as "absurd logic."

About 70 percent of China's overall espionage is aimed at the U.S. private sector, rather than the government, said Joshua Skule, the head of the FBI's intelligence branch, whose responsibilities include ensuring the flow of intelligence to the bureau's counter-espionage operations.

"They are conducting economic espionage at a rate that is unparalleled in our history," he said.

Evanina said five current and former U.S. officials — including Mallory — have been charged with or convicted of spying for China in the past two and a half years.

He indicated that additional cases of suspected espionage for China by U.S. citizens are being investigated, but declined to provide details.

U.S. intelligence services are alerting current and former officials to the threat and telling them what security measures they can take to protect themselves.

Some current and former officials post significant details about their government work history online — even sometimes naming classified intelligence units that the government does not publicly acknowledge.

LinkedIn "is a very good site," Evanina said. "But it makes for a great venue for foreign adversaries to target not only individuals in the government, formers, former CIA folks, but academics, scientists, engineers, anything they want. It's the ultimate playground for collection."

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Top VC Deals: Amazon buys Tapzo, Apple buys Akonia, and Outset raised a round to reinvent dialysis

Here's a round-up of the most important deals in venture capital from the past week.

Amazon acquired Tapzo to help expand its mobile payments business in India, Economic Times reported. Tapzo is a "personal assistant" app that helps users make payments, as well as purchase food and buy transportation tickets. Economic Times reported that Tapzo saw about 15,000 transactions per month on its data card recharging and bill payment services prior to the acquisition, which was reportedly valued at $40 million to $50 million. Tapzo's venture backers included Sequoia Capital, American Express Ventures, RB Investments and Ru-Net.

Apple has acquired Akonia Holographics, a start-up that makes lenses for augmented reality glasses. The deal was seen as a sign that Apple could be developing a headset or glasses that would superimpose digital information onto real world scenes. Prior to the acquisition, Akonia had raised $11.6 million in venture funding from investors including Acadia Woods Partners, according to Crunchbase. The deal marks the second augmented reality acquisition for Apple, after the iPhone maker bought AR software start-up Metaio in 2015.

VMWare is acquiring CloudHealth Technologies, a cloud management platform, in a deal reportedly valued at around $500 million. The start-up had raised $85 million in venture funding from enterprise investors including Kleiner Perkins, SAP-backed Sapphire Ventures, and Scale Venture Partners.

Outset Medical, which is developing a new generation of kidney dialysis machines, raised $132 million in series D funding. CEO Leslie Trigg said she joined Outset after realizing this corner of health care hadn't changed in 30 years. The investment was led by Abu Dhabi's Mubadala, which is looking to get into U.S. health tech, and was joined by earlier backers including Baxter Ventures.

Swiss crypto start-up Dfinity raised $102 million in equity funding from Andreessen Horowitz's crypto fund, Polychain Capital and several other firms to build what it's calling the "World Computer," a decentralized cloud computing network that could challenge the current cloud infrastructure giants, Amazon, Microsoft and Google.

Puls Technologies raised $50 million for its same-day repairs service. Puls (pronounced "pulse") sends technicians to a customer's home to fix cracked or otherwise damaged smartphones and tablets, or to install items like entertainment systems, smart speakers and automated garage door. Temasek led the round, which was joined by the company's earlier backers including Sequoia Capital and Samsung NEXT.

Yihang.ai, a Beijing start-up that's developing autonomous vehicle technology, raised $32 million from investors including Matrix Partners China and CICC, a joint venture investment bank in China. The company aims to become a tier 1 supplier to auto manufacturers that plan to offer self-driving cars.

A financial tech startup, Salary Finance, raised $20 million in series B funding from Legal & General and Blenheim Chalcot. The company works with medium-sized and large corporations to offer employees financial education and loans as a benefit. Employees can set up automatic payments deduced from their paychecks. The ability to get a loan at work and make automatic payments reduces employees' need to turn to predatory or payday lenders, and helps them avoid spending too much on interest.

Singulato, which is developing smart electric vehicles, has reportedly raised around $9 million from Itochu, the Japanese trading company.The funding is a small, strategic investment in Singulato, which raised around $474 million in a series C round in April. The company plans to start manufacturing and selling its first car, an electric SUV called the iS6, by the end of 2018 in China.

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Einhorn's Greenlight off 25% for year; Ackman up double-digits

Billionaire investor David Einhorn's Greenlight Capital hedge fund, whose bets on car companies General Motors and Tesla both moved against him in August, lost 7.6 percent this month, leaving the fund down 25.1 percent for the year, two investors said on Friday.

Einhorn sent investors his monthly update after the market closed on Friday but gave no specific reason for the fresh losses, people who received it said.

Shares of General Motors, one of Einhorn's largest holdings, fell 3.4 percent.

Greenlight is also one of a handful of hedge funds that took a short position on Tesla - betting that the stock would fall.

That took a toll when Tesla founder Elon Musk shocked markets in early August by tweeting that he was mulling taking the company private.

Tesla's stock, after rising and then falling during the month, fueled by Musk's decision to remain a public company after all, ended the month up, hurting short sellers.

Einhorn investors have been losing patience with him for some time and have been pulling money out. August's numbers could prompt more departures at year-end when the manager will next let investors redeem money, one person said.

An Einhorn spokesman declined to comment.

At the same time, Daniel Loeb's Third Point, currently pushing Nestle to spin off units and working on getting Campbell Soup to put itself up for sale, posted only tiny gains in August. His Third Point Partners fund inched up 0.1 percent, leaving it up 0.9 percent for the year-to-date, an investor said.

William Ackman, the third in the trio of managers who for many years shared many of same investors, has swung to big gains this year, and his private hedge fund is up roughly 15 percent for the year, an investor said.

His gains have been fueled by strong performances at Automatic Data Processing, Chipotle Mexican Grill and Lowe's Companies, one of his more recent investments.

The average hedge fund has fallen roughly half a percent this year, preliminary numbers from Hedge Fund Research show.

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US ends funding of UN agency for Palestinian refugees

The United States is ending its decades of funding for the U.N. agency that helps Palestinian refugees, the State Department announced Friday, a week after slashing bilateral U.S. aid for projects in the West Bank and Gaza.

The U.S. supplies nearly 30 percent of the total budget of the U.N. Relief and Works Agency, or UNRWA, and had been demanding reforms in the way it is run. The department said in a written statement that the United States "will no longer commit further funding to this irredeemably flawed operation." The decision cuts nearly $300 million of planned support.

It comes as President Donald Trump and his Middle East pointmen, Jared Kushner and Jason Greenblatt, prepare for the rollout of a much-vaunted but as yet unclear peace plan for Israel and the Palestinians, and it could intensify Palestinian suspicions that Washington is using the humanitarian funding as leverage.

The Palestinian leadership has been openly hostile to any proposal from the administration, citing what it says is a pro-Israel bias, notably after Trump recognized Jerusalem as Israel's capital in December and moved the U.S. embassy there from Tel Aviv in May. The Palestinian Authority broke off contact with the U.S. after the Jerusalem announcement.

In 2016, the U.S. donated $355 million to the UNRWA, which provides health care, education and social services to Palestinians in the West Bank, Gaza Strip, Jordan, Syria and Lebanon, and it was set to make a similar contribution this year. In January the Trump administration released $60 million in funds but withheld a further $65 million it had been due to provide. The remaining amount — around $290 million — had yet to be allocated.

"When we made a U.S. contribution of $60 million in January, we made it clear that the United States was no longer willing to shoulder the very disproportionate share of the burden of UNRWA's costs that we had assumed for many years," the statement said. "Several countries, including Jordan, Egypt, Sweden, Qatar, and the UAE (United Arab Emirates) have shown leadership in addressing this problem, but the overall international response has not been sufficient."

The statement criticized the "fundamental business model and fiscal practices" of UNRWA, and what the department characterized as the "endlessly and exponentially expanding community of entitled beneficiaries."

Hundreds of thousands of Palestinians fled or were forced from their homes during the war that led to Israel's establishment in 1948. Today, there are an estimated 5 million refugees and their descendants, mostly scattered across the region — a figure that has become a point of contention. Palestinian leaders assert the right of those refugees to return to land now under Israeli control.

Last Friday, the State Department announced the U.S. was cutting more than $200 million in bilateral aid to the Palestinians, following a review of the funding for projects in the West Bank and Gaza. Palestinian President Mahmoud Abbas' spokesman called that U.S. decision an attempt to force the Palestinians to abandon their claim to Jerusalem.

Speaking before the announcement on UNRWA, its representative in Washington, Elizabeth Campbell, said the withdrawal of U.S. funding would leave the agency facing a financial crisis, but noted that Saudi Arabia, Qatar, the United Arab Emirates and others have provided more than $200 million in new funding to help cover its budget this year.

In recent days, senior Trump administration officials publicly expressed dissatisfaction with UNRWA but stopped short of saying the U.S. would defund the agency.

On Tuesday, Nikki Haley, the U.S. ambassador to the United Nations, complained that "Palestinians continue to bash America" although it's the main donor for UNRWA. Speaking at the Foundation for Defense of Democracies think tank, Haley also said, "we have to look at right of return" of those classified as Palestinian refugees. She called on Middle East nations to increase aid.

There is deepening international concern over deteriorating humanitarian conditions in the West Bank and Gaza, and the U.S. decision to defund provoked strong and polarized reactions in Washington.

Jeremy Ben-Ami, president of J Street, a liberal advocacy group, said Trump's decision "has the potential to harm millions of innocent civilians" and "will ratchet up the risk of greater destabilization and conflict across the Middle East."

But Richard Goldberg, senior adviser at the Foundation for Defense of Democracies, called it "a win for U.S. taxpayers and peace" that would make Palestinians more self-sufficient and prepare them "for a true peace with Israel."

The State Department statement said the U.S. will intensify dialogue with the United Nations, host governments and international stakeholders about new models and new approaches to help Palestinians, especially schoolchildren, which may include direct bilateral assistance from the U.S. and others.

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Tech analyst: 'We put too much emphasis on the iPhone'

Leading up to Apple's fall product launch, it's time we all stopped putting so much emphasis on the success of the iPhone, analyst Brian White of Monness, Crespi, Hardt told CNBC on Friday.

"I think these events are becoming more about 'Planet Apple,' not just about iPhones," White said Friday on CNBC's "Power Lunch."

"I think we put too much emphasis on the iPhone," he added.

Apple stock hit new all-time highs on Thursday and again on Friday, after the technology giant announced it would host a product reveal event on Sept. 12 that is rumored to be impressive even by Apple's standards. Analysts and news outlets are expecting upgrades to nearly every Apple product line. Reports have suggested a new line of iPhones, a new MacBook Air and updated Mac Mini, upgrades to the iPad and a new Apple Watch.

Apple closed the week up 1.16 percent at $227.63 per share.

"While it's the time of the year that the new iPhones come out, we should get a nice iPad update, a nice Mac update and get a lot better information about what they're doing in [augmented reality] and [virtual reality]," said White.

White, a longtime Apple bullwho called the tech company "the most underappreciated stock in the world" after it hit a market capitalization of $1 trillion earlier in August, said other products, such as the Apple Watch and even the HomePod, are becoming increasingly important to Apple's growing services revenue.

"You get the double effect: the hardware sale, and services over time," he said.

Veteran investor Paul Meeks told CNBC on Thursday that he worries about Apple, because bulls, such as White, base their arguments on services revenue. Apple CEO Tim Cook has previously said services revenue could climb to$50 billion by 2020, but iPhone sales were essentially flat year over year for the June quarter.

"What happens with [an iPhone sales] lag is you will have a slowdown in the services business, because they are tied at the hip," Meeks said Thursday on CNBC's "Power Lunch."

But White argued that beyond the iPhone, other hardware and technologies will increasingly help contribute to Apple's growing services sector.

"That's what Apple is doing, they are planting all these different trees that will yield revenue from things like services in the future," White said.

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Trump says he will go to deep-red Texas to campaign for Ted Cruz, as Democrat Beto O'Rourke surges

President Donald Trump on Friday announced that will travel to Texas in October to campaign for Sen. Ted Cruz, R-Texas, an incumbent in a deep-red state who is facing an unexpectedly tough race for reelection.

Trump Tweet

The announcement of a presidential campaign trip more than a month in advance reflects the growing sense of panic among Republicans, who fear that a Senate seat once considered among the most solidly Republican in all of American politics could be up for grabs.

The reason for the GOP's panic is not so much that Cruz is doing poorly, per se, but that his opponent, Rep. Beto O'Rourke, D-Texas, is doing so well.

At 45, O'Rourke is considered a rising star in the national Democratic Party. But in the past month, his campaign has gone into overdrive, bolstered by a viral video of O'Rourke explaining why NFL players should be permitted to kneel in protest during the national anthem.

By mid-August, a large statewide NBC News/Marist poll was showing O'Rourke trailing Cruz by just four points among registered voters. (The poll's margin of error was 3.8 percent for registered voters.) The relatively unknown congressman is now close to tying his race with Cruz, a feat that would have been considered impossible just a few months ago.

Cruz won his 2012 Senate race by more than 16 points.

Cruz is also grappling with a "Trump factor" that could even further complicate his prospects for reelection.

The same August Marist poll that showed O'Rourke closing in on Cruz also revealed that the president's approval ratings among adults in Lone Star State are underwater. Only 43 percent of the nearly 1,000 respondents in the weighted survey said they approved of the job Trump is doing as president. Forty-six percent, meanwhile, said they disapproved, and 11 percent said they were unsure.

For Cruz, the idea that his fellow Republican, the president, could actually harm his reelection prospects in Texas would be an especially bitter pill for the senator, who lost the 2016 Republican presidential primary to Trump.

The battle for the nomination raged for months between Trump and Cruz, and it often got ugly and personal.

Trump repeatedly insulted Cruz's wife, Heidi Cruz, and at one point Trump suggested that Cruz's father, a Cuban immigrant, may have been involved in the assassination of President John F. Kennedy.

Cruz, for his part, called Trump a "pathological liar" a "sniveling coward," a "serial philanderer" and "utterly amoral.

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Trade talks with Canada will restart next week as Trump seeks a deal in 90 days

Trade talks between the United States and Canada will kick off again Wednesday after the two sides ended Friday's negotiations without a deal.

Earlier in the day, President Donald Trump notified Congress that he wants to sign a trade agreement with Mexico, and potentially Canada, in 90 days, U.S. Trade Representative Robert Lighthizer said in a statement.

Read Lighthizer's full statement:

"Today the President notified the Congress of his intent to sign a trade agreement with Mexico – and Canada, if it is willing – 90 days from now. The agreement is the most advanced and high-standard trade agreement in the world. Over the next few weeks, Congress and cleared advisors from civil society and the private sector will be able to examine the agreement. They will find it has huge benefits for our workers, farmers, ranchers, and businesses.

"We have also been negotiating with Canada throughout this year-long process. This week those meetings continued at all levels. The talks were constructive, and we made progress. Our officials are continuing to work toward agreement. The USTR team will meet with Minister Freeland and her colleagues Wednesday of next week."

This story is developing. Please check back for updates.

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Aston Martin manages a turnaround unlikely even for 007

It's the sort of rescue mission that, on film, might have required the likes of a James Bond to pull off, something that would seem apropos considering Aston Martin has long been the brand of choice for super-spy 007.

Not that many years ago, the British automaker seemed teetering on the edge of what could have become its ninth bankruptcy in a century. Now, with its balance sheet solidly in the black and a plan to double sales over the next few years on the back of new products, Aston has announced it is ready for a long-rumored IPO. It's a move CEO Andy Palmer hopes will echo what happened when arch-rival Ferrari went public in 2015.

"Today's announcement represents a key milestone in the history of the company, which is reporting strong financial results and increased global demand for its award-winning sports cars," Palmer said in a statement on Wednesday.

A long-time senior strategist at Nissan, Palmer, now 55, joined Aston four years ago. Many wondered why he did considering the British carmaker's sorry shape. Aston had been sold off by former parent Ford Motor in 2007 and barely seemed to survive the Great Recession under its new owners, a consortium that included Kuwaiti firms Investment Dar and Adeem Investment, and Italy's Investindustrial.

With an aging product line and little market momentum, some wondered when, rather than if, the company would go under again. It had already gone broke at least six times, and possibly eight, marketing chief Simon Sproule recalled in an interview ahead of the IPO announcement, adding that, "The records get hazy when you go back over the last 105 years."

Palmer moved fast to put the company on a different track. He quickly drew up a plan to launch seven completely new product lines in seven years, starting with the DB11 sports car that debuted two years ago. It and the DBS Superleggera, which followed it to market, are classic Astons — sleek looking and blindingly fast. Aston's investors bought into what was to become, at a projected cost of $845 million, the largest project in the Gaydon, England-based company's history.

But Palmer wasn't planning to just repeat, albeit on a larger scale, Aston's traditional formula. Within days of coming onboard in autumn 2014, he set the company's product team to work developing the DBX. A prototype of the luxury SUV debuted just months later, at the 2015 Geneva Motor Show, to strong reviews. A production version will follow in a little more than a year.

"I knew the mass of the market had clearly moved over to SUVs. I also knew 72 percent of Aston owners had an SUV, so why wouldn't we transition those brand advocates out of something like a Range Rover and into an Aston SUV?" Palmer asked during an interview.

He would soon push even further out from Aston's comfort zone by announcing a second SUV to debut in 2020, this one to wear the badge of the Lagonda brand, a subsidiary that hadn't produced a vehicle in decades. Even more radically, the utility vehicle – which will target the likes of the new Rolls-Royce Cullinan – is going to be all-electric, as will all future Lagonda models, including a sedan coming in 2021.

To leverage what is still, on the automotive scale, a relatively small bank account, Aston has been pushing to develop a series of strategic partners. Red Bull Racing, for example, is helping develop its upcoming "hypercar," the Valkyrie. Daimler, meanwhile, has taken a 5 percent stake in its erstwhile rival, a trade-out for providing Aston much-needed V-8 engines from its high-performance Mercedes-AMG unit, as well as the infotainment systems going into new models like the DB11 and Superleggera.

When describing his strategic vision, Palmer envisions Aston as more than a carmaker, preferring to compare it to the likes of LVMH Moët Hennessy Louis Vuitton. But don't expect to see it selling caps and scarves. However, it is venturing out of its comfort zone with things like the personal sub being developed in partnership with Triton Submarines. Then there's the 66-story condo complex, the Aston Martin Residences, going up in Miami.

And, at this year's Farnborough Air Show it revealed something James Bond would likely appreciate, a three-seat personal aircraft capable of jaunting from London to Paris in just 30 minutes that Palmer sees as part of a rapidly changing world of transportation. It would be. Developed in cooperation with Cranfield University and Rolls-Royce Aerospace, a functioning prototype is due in 2020 and he seriously predicts a production model could follow before 2030.

"It's remarkable what Andy Palmer has been able to do at Aston Martin on just a shoestring budget (and) in a very short time without diluting the brand," said David Sullivan, a senior analyst with AutoPacific.

What investors may be more closely focused on, however, is what the CEO has been able to accomplish on Aston's bottom line, which is now in the black for the first time in about a decade, according to Simon Sproule, its global marketing chief. In a regulatory filing ahead of the planned IPO on the London Exchange, Aston noted that adjusted pretax earnings for the first half of the year increased 14 percent year-over-year, to 5 billion pounds ($137 million). Sales during the period jumped 8 percent, to 445 million pounds.

That would be just a starting point under Palmer's plans, if it can hold course. Aston sold a record 5,117 vehicles last year, its best numbers since 2008. It is looking to quickly reach 7,000 to 8,000 annually, then 14,000 by the time all seven of its new models are in production. Looking further out, Palmer sees still more opportunity for growth, though he quickly added his preference to err on the "conservative side."

Asked what makes him wake up in a sweat at night, the native Brit said he doesn't think either Brexit or a Trump import tariff will be more than minor setbacks. He's more worried about a global, Lehman Brothers-level financial shock.

Whether investors will buy that optimism could be demonstrated in the coming year, the timing and pricing of the planned IPO yet to be revealed.

Clearly, Palmer hopes to replicate the success of Ferrari, which went public in 2015. It's now valued at around $24 billion, or 35 times earnings. Anything close to Ferrari-level multiples would be impressive, said Sullivan, not only considering Aston Martin's troubled history but what has been happening with its former parent, Ford, which just suffered a downgrade in its debt to one notch above junk grade.

"It makes you wonder what would have happened," said Sullivan, "had Ford been able to make things work with the Premier Automotive Group," the one-time collection of European luxury brands that included Jaguar, Land Rover and Volvo, as well as Aston Martin.

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Emerging market pain is seen lasting into next year, as Argentina and Turkey lead currency crisis

As Argentina's currency plungedand interest rates spiked this week, the South American country was at the epicenter of an emerging markets' financial spiral that is expected to continue well into next year.

Argentina's peso steadied Friday after losing about 20 percent against the dollar since Tuesday as its central bank said it would auction dollar reserves. On Thursday, the country's central bank jacked up interest rates to 60 percent from 45 percent.

The International Monetary Fund on Friday said it supports Argentina and that it would meet with officials Tuesday on a revised economic plan, after the country requested accelerated payments from a $50 billion credit line.

The emerging markets have been hurt by U.S. Federal Reserve rate hikes, which have driven up the value of the dollar versus other currencies, making it more expensive to repay dollar-denominated debt. Trade wars have also been a factor, and they hurt commodity prices. Commodities are important revenue sources in emerging markets.

As Argentina's currency suffered, other emerging markets' currencies fell in sympathy this past week, including Turkey's lira, which has been under pressure recently as its central bank has refused to hike interest rates. The lira was recovering some losses Friday.

"This is not over by any means," said National Alliance's Andrew Brenner. "The longer the Fed takes easing away, the more they're tightening, the more trouble for emerging markets, and we haven't seen the worst of it."

Argentina and Turkey have some unique circumstances not shared by other emerging markets.

"Their dependence on foreign capital flows is much higher," said William Jackson, chief emerging markets economist at Capital Economics. "They also have large foreign currency debt."

Argentina's inflation rate is now more than 30 percent, and Turkey is expected to release new inflation data next week, which Jackson said could show a pace of 20 percent.

But while Turkey has resisted taking the steps strategists see as necessary, like raising interest rates. Argentina has tried to restore confidence, but so far its difficulties are recurring.

"Part of it is that their economic vulnerability is really large. They've had a recession every two years for the past six years. The IMF deal is the 23rd since the 1950s," said Jackson. "They have a quite weak domestic base, a large reliance on imports."

Capital Economics says the Argentine peso may have stabilized for now, and the focus is on the government's press conference on Monday, when it is expected to discuss its economic plan. Argentina's problems are bad, but they have been made worse because of investors' aversion this year to emerging markets.

"We're in an environment where everyone is negative on EM. Argentina got caught wrong-footed at a bad time for EM," said Win Thin, senior currency strategist at Brown Brothers Harriman.

Thin said the weakness is not likely to abate across the emerging markets any time soon. "U.S. rates rising, trade tensions, China slowing — for me that's a negative backdrop for EM," he said. The widely held iShares MSCI Emerging Markets ETF temporarily crossed in to bear market territory in August, dropping 20 percent from its January high. The ETF was down more than 4 percent in August and about 1 percent this past week.

J. P. Morgan economists said the pain in Argentina and Turkey is not yet indicative of a broader emerging markets contagion.

"The forecast continues to assume that the spillover from these countries to the rest of the EM will be fairly limited," wrote the J. P. Morgan economists. "Nonetheless, financial conditions have tightened in the remainder of the EM this year and it is hard to know whether this is fully incorporated in our forecast for this group."

Strategists said trade tensions have been one big factor hitting emerging markets, starting with China. The Trump administration has put tariffs on steel and aluminum globally and on $50 billion of Chinese goods. The president is expected to consider tariffs on another $200 billion in Chinese goods in September.

China's U.S. Ambassador Cui Tiankai said China will not give in to intimidation. "This has to be a process of goodwill for goodwill and good faith for good faith. If we can reach an agreement through this approach, I don't think the current economic and trade issues would be that difficult," he said on Thursday.

China, meanwhile, has been easing up on policy to encourage more bank lending and growth.

"China's economy is still slowing. Commodities prices are not favorable, and we do see as we go towards next year, as the Fed tightening starts to filter through, you're going to get a slow down in the U.S," said Jackson. "Turkey and Argentina are going into recession. We see slowing growth in most parts of the emerging world over the next couple quarters, large parts of Latin America, Eastern Europe and China. There are stronger forecasts than most for Russia, Mexico and Brazil. It might be a cyclical recovery in the economy even if their markets do badly."

Capital Economics says growth is slowing into the third quarter after GDP in the emerging markets grew by about 4.6 percent in the second quarter, up from 4.5 percent in the first quarter. Stronger growth in Asia offset a slowdown in Latin America.

Jackson said Brazil may be one of the economies with a brighter outlook, but it suffers from serious political risk. Currently, a large part of its population favors jailed former president Luiz Inácio Lula da Silva in the next election while no other candidate has more than 20 percent support. "There's a lot of uncertainty about the elections in October," he said. "The field is wide open."

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Traders bet Amazon could hit a $1 trillion market cap next week

As Amazon scores fresh all-time highs and is now just inches away from a $1 trillion market cap, some traders are betting the retail giant could hit the milestone as soon as next week.

Amazon's unrelenting dominance in the consumer space has pushed the company's shares up 72 percent this year and it is now just one of a handful of stocks trading above the $2,000 level. According to Dan Nathan, co-founder and editor of RiskReversal.com, options traders are betting the retailer could reach a trillion-dollar value by next Friday.

On Thursday, Amazon saw a surge of options activity at two times its average daily call volume. Within the action Nathan highlighted a block of traders who purchased the Sept. 7 weekly 2050 calls paying an average of $9 per contract.

"It's really important to remember $9 seems like a lot, but not on a $2,000 stock, that's less than a half a percent of the stock price," he said Thursday on CNBC's "Fast Money." This bullish bet also implies that shares of Amazon will be above $2,059, and officially at the trillion-dollar threshold, by next Friday's expiration.

Shares of Amazon have jumped nearly 6 percent in just the past week, notching an intraday all-time high of $2025.57 at one point. The move was fueled by a massive price target upgrade from $1,850 to $2,500 by Morgan Stanley on Wednesday.

According to Nathan, while market optimism will likely push Amazon to $1 trillion "sooner or later" the options market is only implying a 25 percent chance that it will happen by next Friday.

"The probabilities are going to decline as we go day by day," he said, "I'm not sure buying those out-of-the-money calls a week ahead is the way to play it."

Amazon's stock is up 105 percent in the past year and was higher Friday afternoon at around $2,010.

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Emerging markets crisis casts shadow on reelection bids in Argentina and India

Pro-business leaders in Argentina and India have been thrust into an emerging market currency rout that threatens their credibility and reelection hopes.

Both Argentina's President Mauricio Macri and India's Prime Minister Narendra Modi are pro-business leaders who promised better economic times ahead, often using economic data as evidence of their success. They both face reelection next year.

But while progress has been made, the recent currency crisis in both countries could hurt confidence.

In 2015, Macri was the face of change for Argentina. He promised citizens he would turn around South America's second largest economy, which had been suffering from lavish public spending, and make it strong enough to be able to sell government bonds again to investors after being shut out of the market for years.

Argentina issued bonds again in 2016 as Macri sold the Argentina story to foreign investors promising them this time around things would be "different." But then things fell apart again, as the recent move in the Argentine peso suggests.

Despite the central bank's attempt to combat runaway inflation, the peso continues to tumble, and is the world's worst performing currency in 2018. It shed 20 percent against the dollar over two days this week alone.

"I hope he can stick around to follow thru with what is needed," said Peter Boockvar, the chief investment officer at Bleakley Advisory.

External organizations, like the International Monetary Fund, could ultimately save Macri. Argentina asked for an early release of a $50 billion loan from the IMF on Wednesday.

"The IMF's recent agreement to alter the terms of its lending program to Argentina shows the IMF's continuing willingness to engage constructively with the country. Moreover, it shows a commitment to Macri's economic agenda," said Gavin Serkin, managing editor of Exotix Capital.

If not, political analysts say, Macri will likely face strong opposition. Recent polls already show citizens are losing faith in their leader.

While India's economy is much larger than Argentina's, it too could suffer from the emerging market currency rout. The Indian rupee touched an all-time low this week, 70.8100 against the dollar.

But for Modi, experts say rising oil prices could be a bigger concern for India, a net oil importer.

"[Oil] is a bigger political issue for Modi because he scaled back the energy subsidies and the Indian consumer is really feeling the effects of the price increase in a way that they were not before," said Helima Croft, Head of Commodity Strategy at RCB Capital Markets.

The latest data on India's economy suggests the country's growth story remains intact. Friday morning, India's government reported that gross domestic product grew 8.2 percent in the three months through June compared with a year earlier.

Modi will likely ignore the rupee depreciation and tout the country's strong growth story as he looks to get reelected next year. But skeptics are already casting doubt. Ruchir Sharma of Morgan Stanley said Modi's chances of getting re-elected have dropped to 50 percent.

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Showdown — and potential shutdown — loom over border funding

When Congress returns from recess after Labor Day weekend, lawmakers will have just 11 legislative days before an Oct. 1 deadline to pass new spending legislation or a stopgap funding bill to keep the government open, or risk the third government shutdown in 2018.

But the White House is considering at least one alternative option, according to three people who have discussed the idea with West Wing officials: A "partial shutdown," in which President Donald Trump would sign stand-alone bills to fund the majority of the government, while reserving the right to veto others if they don't include funding for the border wall.

"It hasn't been ruled out," said a senior administration official, who said there are multiple scenarios being discussed with GOP leaders. "But it hasn't been ruled in, either."

The strategy, said to be supported internally by senior policy advisor Stephen Miller and, to a lesser extent, budget director Mick Mulvaney, would eliminate traditional shutdown vignettes of withheld paychecks and closed national parks and veterans affairs facilities. It would allow the White House to exact leverage over a specific campaign issue before a potential party reorg in Congress — and prevent a forced signature on a wide-ranging and opaque spending bill that excludes his top priority.

"The president won't sign another bill like the omnibus," said one person who's discussed the strategy with the White House, referring to the February $1.3 trillion bipartisan spending package on which Trump threatened a last-minute veto.

A second senior administration official said the current preference is not a shutdown but a Homeland Security bill that includes $5 billion in funding set aside for a wall along the southern border, a dollar amount Trump has signaled publicly he'd support.

Marc Short, former White House director of legislative affairs, said the president encouraged Republican leadership to stay in town in August to finish the piecemeal government funding bills.

"That [progress] benefits the president to isolate a national security or border security issue in any funding battle," Short tells CNBC.

A senior GOP aide said Republican leaders in both chambers of Congress are aligned in wanting to make as much progress as possible on the 12 appropriations bills required to fund the government. So far, roughly three-quarters of the spending has been bundled into three "minibus" packages being negotiated — or set for future negotiation — between the House and Senate.

But it's up to the White House, according to the aide, to decide how far it will push to fund the Department of Homeland Security and, within that, the border wall, which are not in the packages being considered. Neither is funding for the departments of Justice or Transportation, which also could become lightning rods in the debate because of money set aside for the Russia investigation or the Gateway tunnel between New York and New Jersey.

In late July, Trump tweeted he'd be willing to "shut down" the government if Democrats didn't vote for his border package — despite the fact that he agreed privately with House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell weeks earlier not to shut down the government ahead of midterms.

trump tweet

"The president wants to get border security done – whether it's this month, next month, or December," the first senior administration official said.

Spokespersons for both Ryan and McConnell told CNBC that they plan to address any government funding gaps through a continuing resolution, a short-term measure that would likely fund the government until late November.

"Congress doesn't want a shutdown or an individual agency shutdown," said Stan Collender, professor of public policy at Georgetown University. "They want to go home; they want to fundraise; they want to campaign."

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If you invested $1,000 in Amazon in 1997, here's how much you'd have now

It's been almost a year since Amazon closed its deal to purchase Whole Foods and the verdict is in for shareholders of the online retail giant. Amazon's stock has more than doubled over the past year, outperforming other publicly traded grocery chains by a wide margin. Since the Amazon-Whole Food deal closed, the S&P 500 index has been up 18 percent.

As impressive as that is, original investors in Amazon fare even better. If you had invested $1,000 during Amazon's IPO in May 1997, your investment would be worth $1,341,000 as of August 31, according to CNBC calculations.

That's better than all of the market's five most popular, best-performing tech stocks, Facebook, Apple, Amazon, Netflix and Alphabet's Google, as well as Ebay. Apple's gain, which was the second highest at a nearly 58,000 percent, is notable, but it also had a 17-year head start and its return is still less than half of Amazon's.

Amazon is not only crushing the competition from other grocery stores; it continues to reign supreme in retail as well. Since its IPO in May 1997, Amazon has gained over 134,000 percent, far surpassing other competitors. Helping Amazon's rise, of course, is the fact that the S&P has been up 246 percent since the online retailer's first trading day.

It's also worth noting that Amazon began as an online bookstore before it grew and diversified. Barnes & Noble, another book retailer, has seen the value of its stock go down nearly by half.

Despite Amazon's remarkable stock performance, any individual stock can over- or under-perform and past returns do not predict future results.

Want to invest in the next Amazon? Research your options carefully before jumping into the stock market. Experienced investors like Warren Buffett recommend starting out with index funds. These investments hold every stock in an index like the S&P 500, and offer low fees. They also fluctuate with the market, so they offer less risk than picking individual stocks.

—Additional reporting by George Manessis and Christoper Hayes.

Don't miss: If you invested $1,000 in Tesla in 2010, here's how much you'd have now

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Watch: Trump attends retirement security event

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President Donald Trump is set to attend a signing event on retirement security in America.

The signing event arrives amid rising trade tensions, as the U.S. and Canada approach a deadline to agree to a deal that would replace the North American Free Trade Agreement.

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Happy birthday on turning 26. Now get your own health plan!

Like other adult things, choosing your first health insurance plan seems scary until you do it.

Lots of acronyms you never heard before? Check. You know it's going to hit your wallet? Check. It's some mysterious part of your job with a lot of brochures? Check.

When you're looking through your plan choices, ask yourself what's going on in your life, says Jeff Oldham, senior vice president of institutional and global markets at Benefitfocus, a benefits enrollment software company.

But first, learn the following words and acronyms. When you meet with the HR people at your company, you'll have a head start and the sheer bulk of information won't seem so daunting.

You'll need to know these terms so you can make informed decisions:

• Deductible: This is how much you have to pay before the employer and health-care company starts kicking in for your medical costs. But remember: Annual and preventive exams are free, even if you haven't reached your deductible, thanks to the Affordable Care Act.
• Premium: You'll see an amount deducted from each pay check. This money goes to the insurance company to pay for the health insurance policy. Your premiums do not pay for any medical care. It means you get a card from the company with your name and policy number.
• Copayment or copay: Most plans charge a fee when you see a doctor, and the cost is often on your insurance card. The health insurance company pays the balance.
• CDHP or HDHP: These two acronyms – consumer-driven health plan or high-deductible health plan – are often used interchangeably. Here's how these plans work: You must meet a high deductible of at least $1,350 — the government sets this bottom limit — before the health insurer starts kicking in for your bills. For people who are young and in relatively good health, this may not be much of an issue. Older people run the risk of delaying seeing a doctor or filling prescriptions if they feel financially squeezed.

• HSA: Employer-sponsored high-deductible plans are always paired with a health savings account. You can save money, pre-tax, from your pay check in an investment account. For 2018, you can save up to $3,450.
  Next year, the limit for a single person saving in an HSA is $3,500. The government sets these amounts, too.
• FSA: You might not be offered a flexible spending account if you have the health savings account, but know the difference between these two. The FSA lets you save money, pre-tax, for qualified health expenses – but you have a time limit on using the money.
• PPO: Preferred provider organizations are generally more expensive, Oldham says. They outline the specific medical providers you can work with at in-network (read: more affordable) levels.

Millennials are drawn to high-deductible health plans for a few reasons.

The amount of the deductible may seem daunting, "but your premium is much lower," Oldham said. "You are telling the insurance company you're in pretty good health."

Decades of growth on pre-tax money makes the HSA a powerful savings vehicle for your retirement years, Oldham says.

The average retiree spends more than $275,000 on health care alone, a figure that could easily double by the time millennials hit the golden years, according to Oldham.

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If you're planning a trip to some rugged, remote location, Oldham recommends accident insurance. That way, you can still take advantage of the lower cost of a high-deductible plan.

And if you're thinking of ditching insurance, don't. "The mandate to have health insurance was repealed, but it doesn't take effect till 2019," Oldham said.

One last piece of advice. "Don't' take the money you save on lower premiums and blow it," Oldham said. Develop good savings habits by stashing it in your HSA or putting it toward student debt.

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Trump's move to scrap federal employee raises could damage the GOP as it defends House majority

At least three House Republicans in Virginia face fights for their political lives in November. President Donald Trump isn't helping them.

The president on Thursday scrapped a 2.1 percent pay raise for civilian federal government employees previously set to take effect in January. In a letter to House Speaker Paul Ryan, Trump cited a need to "put our Nation on a fiscally sustainable course" and contended that the action "will not materially affect our ability to attract and retain a well qualified Federal workforce."

The move could further imperil some House Republicans already locked in competitive races to keep their seats in November. GOP Reps. Barbara Comstock, Scott Taylor and Dave Brat hope to defend their competitive Virginia districts as Republicans try to stop Democrats from taking a House majority.

As the state — and particularly Comstock's 10th District west of Washington — sits in close proximity to Washington D.C., it has a significant federal civilian employee workforce. By denying raises to a chunk of their voters, Trump just added another obstacle between those lawmakers and re-election.

Democrats Jennifer Wexton, Elaine Luria and Abigail Spanberger — challengers to Comstock, Taylor and Brat, respectively — all swiftly slammed Trump's decision on Thursday. That suggests they will press their Republican opponents on the issue between now and November.

Comstock, considered by many the most imperiled GOP House incumbent, did not need the additional challenge in an area with tens of thousands of federal employees. She trailed Wexton by about 10 percentage points in a district where 47 percent of voters strongly disapprove of Trump, according to a June Monmouth University poll. A Politico report Friday morning indicated that national Republicans would consider cutting Comstock off from funding as they chose the districts in which their funds would be most useful.

Congress can still authorize a raise for the federal civilian employees, which was set to cost about $25 billion. In a statement Thursday saying that "we cannot balance the budget on the backs of our federal employees," Comstock said she would "work with [her] House and Senate colleagues to keep the pay increase" during the congressional appropriations process next month.

"I don't know how much this hurts, but it doesn't help, and she probably needs help," Kyle Kondik, the manager editor of nonpartisan election analysis site Sabato's Crystal Ball, said in an email.

Comstock will see "no electoral downside for coming out against" the pay freeze, said Michael Cohen, an adjunct professor of public administration at the University of Southern California who is based in Comstock's district. But "the fact of the matter is it's not going to help her very much," he added.

Taylor's 2nd District in the southeastern part of the state, which has a heavy Naval presence, has about 30,000 federal employees, according to a statement from the Republican representative Thursday. It is unclear exactly how many are civilians and how many are military, who will still receive a pay raise. Still, Taylor opposed the president's move.

"Federal employees in the Second Congressional District must be properly paid for the contributions they make to our nation and its defense. I oppose this decision and will lead an effort to reverse its effect," Taylor said in a statement Thursday.

Kondik said that "one could imagine this being an issue for Scott Taylor" as well as Comstock, although he was unsure of how big of an effect it would have. Sabato's Crystal Ball rates Taylor's race as a toss-up, while nonpartisan sites Cook Political Report and Inside Elections both consider it one that leans Republican.

Based on the concentration of federal workers in his 7th District, Brat appears to face less risk from the pay freeze than either Comstock or Taylor do. Brat, who shockingly upset Republican House Majority Leader Eric Cantor in a 2014 primary on his way to winning the seat, has built a brand of Tea Party-infused fiscal conservatism as a member of Congress.

Still, he does not support the president's move to scrap the pay increases.

"We should seek ways to aggressively cut the budget, but removing promised raises from federal employees last minute is not the way to do it," Brat said in a statement to CNBC on Friday.

Sabato's Crystal Ball and Cook Political Report rate Brat's race as a toss-up. Inside Elections considers it one that tilts Republican.

Trump's move complicates an already tricky electoral landscape for Virginia Republicans. Democrats lead by about 8 percentage points in a rolling average of national congressional generic ballots asking voters which party they would prefer, according to FiveThirtyEight.

Trump's relatively poor approval rating, lackluster support for key GOP congressional initiatives and historical challenges for the president's party in midterms have all contributed to a challenging environment for Republicans this year.

Democratic Gov. Ralph Northam won election in the state by about 8 percentage points last year. He carried the counties that make up Comstock's district overwhelmingly.

In addition, the Senate candidate at the top of the GOP's ticket in the state could add yet another difficulty for Republicans. Polls have consistently showed Democratic Sen. Tim Kaine trouncing Republican Corey Stewart. Stewart has avidly defended symbols of the Confederacy and pledged to crack down on illegal immigration.

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Jaron Lanier: Tech needs to channel Netflix and 'clear the trash out of the internet'

Big technology companies can start to fix the problems they've created by making the user the customer — like Netflix did, technology pioneer Jaron Lanier told CNBC on Friday.

"What we have to do is change the business model so they become more like real businesses where the user is also the customer," Lanier, an interdisciplinary scientist at Microsoft, said on CNBC's "Squawk Alley." "We need to go through that transition to clear the trash out of the internet."

Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg are both expected to attend a hearing next week by the Senate Select Committee on Intelligence to address the issue of Russian meddling in the 2016 presidential election and how to proceed as the November midterm elections draw near. Google CEO Sundar Pichai is not expected to attend.

Big technology companies have been under scrutiny as they attempt to strike a balance between allowing freedom of speech on their platforms and preventing abuse by bad actors. Google's parent, Alphabet, along with Twitter and Facebook, earlier this monthremoved accounts tied to Russian and Iranian propaganda efforts. Earlier this year, 13 Russians were indicted for attempting to interfere in the U.S. presidential election. Meanwhile, President Donald Trump has doubled down on threats against Facebook, Google and Twitter for what he perceives to be anti-conservative bias.

Silicon Valley veteran Lanier, a computer scientist and staunch critic of social media, says companies such as Facebook and Google brought these problems on themselves with their ad-based, data-driven business models.

"As long as that's the business model, of course you undermine the ability to create brands that enforce quality, because it's all about manipulation," Lanier said. "Then you create all the incentive in the world for that cranky, paranoid stuff that has taken over."

By the same token, those institutions that traditionally upheld standards of truth and quality have been radically undermined as big technology takes an ever-growing share of users' media consumption, Jaron said.

"The companies brought this on themselves. When Facebook had a slogan saying, 'Move fast and break things,' the stuff that they broke was institutions, like ... journalistic entities that would maintain quality," Lanier said.

In order to fix what's been broken, Lanier said technology companies can start by fixing their business models. They would do well to follow in the footsteps of Netflix and make the user the customer, instead of prioritizing advertisers.

"It works. Netflix proved it works. We used to think, 'Oh, nobody will ever pay for a movie online, because you can get them for free.' But actually, if you're willing to pay for them, they get better. You get peak TV," Lanier said.

The idea that technology companies will somehow be able to tell users what they can and can't say, and who can hear what, will never work, Lanier warned, "no matter how smart and well-intentioned."

"What we have to do is fix the things that we broke ... so that the tech companies aren't in this position of being arbiters for all society and civilization. It's a terrible role. Nobody wants them to have it; they don't want it," Lanier said.

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United Airlines raises fee to check a bag to $30

United Airlines on Friday became the latest carrier to raise the cost of checking a bag, as airlines grapple with a profit-crimping surge in fuel prices.

The fee to check a bag on the third-largest U.S. carrier on domestic, Caribbean and Central American flights booked Friday or later will cost $30, up $5. The move follows a similar change announced this week by JetBlue Airways. JetBlue also raised fees to change tickets, but United said it did not change any other fees.

Airlines have added or increased fees as more expensive jet fuel eats into their profits. They also have added new classes of no-frills service. U.S. jet fuel prices are about 20 percent more expensive than a year ago, according to S&P Global Platts.

The spotlight on baggage fees is now on American Airlines and Delta Air Lines, which recently started charging $60 for passengers on the cheapest class of service on trans-Atlantic routes to check a first bag. Delta and American did not comment on whether they would increase checked baggage fees for travelers on domestic routes.

Travelers paid U.S. airlines a record $4.6 billion to check bags last year, according to the U.S. Department of Transportation.

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One sector is beating tech this quarter, but one technician sees a ceiling

One sector has been tearing up the S&P 500 this quarter, rocketing to new highs, and it's not tech. Health care has been the surprise winner as the third quarter enters the home stretch.

The XLV health care ETF has marched 11 percent higher since the beginning of July, putting it on track for its best performance since early 2013. Stocks such as Regeneron, Illumina, Allergan, Pfizer and Merck have all torn higher with double-digit gains over a three-month stretch.

However, the group could hit a ceiling here, according to Bill Baruch, president of Blue Line Futures.

"This sector has been on fire and to play devil's advocate I want to take a look at where the resistance can come in," Baruch told CNBC's "Trading Nation" on Thursday. "If you look back at the 2015 high, there's a trend line that goes up to that January high in XLV and that comes in just above the market around $95 or $96 so there is some headwind there."

The XLV ETF is still a 2.6 percent rally from $95, a level that would mark a record. It last hit an all-time high on Thursday.

Pfizer looks to be the sector's biggest winner, said Baruch.

"It's already broken out above [its own trend line] and now comes in as support at $40 so I like being long Pfizer. It's bullish right now and I think it could trade up through $45," he said.

Pfizer last set a record on Aug. 20, but has since pulled back around 3 percent. It would need to add nearly 9 percent to its current price to get to $45.

Gina Sanchez, CEO of Chantico Global, sees the health-care sector heading even higher as a shift in the market gives it a tail wind.

There's a "rotation toward more defensive stocks and health care is a very defensive sector when the market starts to turn," she said Thursday on "Trading Nation."

Defensive stocks, such as health care, tend to outperform when investors anticipate a slowdown in economic activity. These stocks are often used as a safe haven for investors during a downturn.

"We're not saying that the market is necessarily turning yet but we are seeing some signs and some canaries in the coal mine that tell us that the market is moving away from these high-flying momentum names into more robust and defensive names," Sanchez added.

The XLV ETF has added 12 percent so far this year, above the S&P 500's 8 percent advance.

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