tv Squawk Alley CNBC August 23, 2017 11:00am-12:00pm EDT
good wednesday morning welcome to "squawk alley." i'm carl quintanilla sara eisen is here as well the dow is down 59 points following the best day since april. and tech's best day in just over a week nasdaq is now lower for four of the past five trading days for more on all of this, we are joined by the chief investment officer john rutledge. >> good morning, carl. >> you put more credence on the action yesterday or today, john? >> i think the risk is the thing you have to watch out for. so i guess that means today. and it is really event risk. event risk is something investors don't think about very much, but it is like lifting a dumbbell big left, big right, nothing in the middle so you have good economics, bad politics around the world, and
then it's adding up to a lot of risk and makes me want to be cautious. >> you take risk on or off here? >> we're keeping risk on, carl our opinion is this is not uncommon over the last 8 1/2 to 9 years. this has been the most remarkable process of recovery, now normalization. there is risk, but it amounts to price discovery, which will create volatility, which will be more like normal volatility if we ever get to that. so at this point, we would be more focused at holding the risk that we have in looking for opportunity. if we get any cheaper prices near-term. >> so john rutledge, what should the folks at home do if they're rebalancing the 401(k)s? dealing with stocks in the portfolio, you say prices are too high and there's huge risk, does that mean going more into precious metals? shifting some into asia? what should they do? >> well, it's a strange market out there. you know, you've got pretty darn good economic fundamentals
growth here is good except autos. a enthe revenues are rising 5%, which is good for debt service and good growth in the emerging markets in china a little bit of growth in europe and japan. and uk, i feel better than most about the uk so that part is pretty good. inflation is firming, labor market, et cetera. the political risk is the real issue. i don't mean whether you like or don't like the president what i mean is there could be events here, i don't think price -- a tax cut is priced into the market. i don't think a big negative event is priced in the market. so that makes me want to hold cash in the event there's a negative event and so from my personal portfolio 30% cash would be defensive. >> we'll talk about the neckive events that the president put firmly on the radar, which is a potential government shutdown if they don't pass a budget by the end of september he threatened they have to include the wall or else shut
the government down. we have been there, done that, for the markets, moderate declines, what, half a percent to 1%. is there any time to think this will be different? >> i don't think so, sara. i remember in 2013, as i recall, the government was shut down for two weeks. and then it was warren buffett on cnbc who embarrassed the people who were stalling things in washington. just said, we haven't default on our debt in 235 years, this is no time to stop. people talked and got through it i think if we have a shutdown, i think it will be relatively short. and i think especially the fact that we're coming into a midterm election next year, you don't want to be on the side that causes the government time to come close to defaulting on its debt or shuts the government down to an extent to damage the economy. >> zero risk this is political theater. to get people scared enough to support spending money >> you're in line with
mcconnell, he said zero chance of a shutdown. >> well, whether it shuts down or not, as john said, it would be just a little bit and who cares. basically the debt is good, they are doing this for marketing purposes, so this is not a big story. it's a smaller story. >> so which political risks then are you referring to that you're so worried about >> well, there's a things go wrong for the white house. think of russia investigations there's a tax bill that could happen that's not priced in. there's a healthcare bill not priced in that could happen and go the other way there's foreign policy, north korea, china, middle east, afghanistan, iraq, syria, iran, name your list, all of those are things that you could have a thing happen overnight, you wake up in the morning, you say, holy cow, i wish i had known this yesterday. those are big spikey event risks. and those are the things you just can't forecast. >> mcconnell said zero chance of a default, not the shut down but if we get close and markets got jittery, you would essentially go shopping.
>> yeah, don't forget, in 2013, the s&p 500 was up 29% it was up for that year. it was up around 32% with dividends reinvested and that's with a government shutdown in the fall we had a taper tantrum by the bond market that took yields from 1.69% in may of that year to 3.02% by december the resilience, i believe, is in this market relative to improving fundamentals economically and on the corporate level. and with a global economic recovery that is less deniable every day. >> this political risk that you bring up, john, it's interesting to look at it from the investor lens and just how serious to take one statement to the next we saw, for instance, after the afghanistan speech, the takeaway was the bark is worse than the bite the policy doesn't necessarily match up with the harsh and fiery rhetoric. >> it was a barking speech >> that's right. >> so are investors used to what
we saw last night? or should it make them jittery >> i think the jitters will go both ways. that's not the real risk, the big event is that, oh, gee, we have a new president that's not impossible. or the uk is throwing out brexit and we have a new story there. but the risk we haven't talked about is the market has not priced in rising interest rate, risk to speak of, or inflation risk which makes some real estate assets more attractive than they otherwise would be there's still opportunities for that and people don't remember, when i was in the white house in 1981, before you were born -- >> that's true >> reporter: the 30-year bond was 15.5%. if you owned a 30-year coupon until today, you made 100 times your money >> i can remember talking to clients who were dfiduciaries of the bond if you would buy the treasury at 13%, they would say, no, thanks,
johnny, we know the fed will tank and interest rates are going up from here and that wasn't the trend at all. >> they are dragging their feet on the other direction but these rates are too low. >> any final predictions on what we get out of jackson hole or nothing at all? >> i think you get warm fuzzy speeches the governors here are worried more about the little slowing in autos and the like so i don't think you get an aggressive speech. >> central bankers don't do warm and fuzzy, john. they do academic and wonky. >> for another day, we'll talk about that the academic input into the fed has caused rate problems so for another day >> yes as we con template who the next fed chair could be. >> as fed presidents jump on and off twitter. >> i love that transparency. >> thanks very much. good to see you. >> thank you >> pleasure. getting news from the world of golf, scott wagner is back at hq with big news.
>> big news. billy payne, the chairman of the augusta national golf club is retiring today, effective october 16th he's the second longest chairman having assumed that role in may 2016 overseeing a number of key initiatives, as you know, most notably the inclusion of women for the first condoleeza rice was invited there in 2012. he will be succeeded by fred ridley, the first to have play in the masters tournament, having done in '76, '77 and '78. billy payne brought the olympics to atlanta i retire knowing it is simply the right thing to do. and at the right moment to open the door and invite someone new to be called upon to lead, bring forth new ideas and craft a new vision that will honor our founders and serve the game of
golf for many years to come. so billy payne retires as the second longest-serving chairman of the augusta national golf club carl, a new face and certainly will be interesting in butler cabin now after the masters crowns its winner sitting there in butler cabin with a new face along with jim nantz every year. >> that is literally a change in eras sco scott, thank you walmart is taking on amazon with a little help from google we'll bring you up to speed on that blake irving is retiring as the ceo of godaddy he'll join us in a first on cnbc interview. then later samsung is unveiling the new galaxy 8 smartphone in new york city at this hour. what that means for the brand and apple's upcoming iphone when "squawk alley" retnsur
walmart has a new answer to amazon and the alexa voice ordering system. courtney reagan is back at hq with the story and it involves google courtney >> reporter: walmart launched a number of innovative programs from employees dropping off orders to shoppers on their way home, to pick up discount, now the largest retailer is bringing out a big partner to take on amazon, google so next month shoppers will be able to order hundreds of thousands of items from walmart with just voice commands using google's assistant the best case is for reordering by linking your walmart account to google, the assistant will
have your complete order history, allowing consumers to order peanut butter instead of jif creamy 16 ounce, for instance grocery order will be added to some locations or the ability to pick up orders in the store for a pickup discount, if eligible i asked the walmart ceo what the financial opportunity is with artificial intelligence ordering, but he doesn't expect massive volume flowing through right away, but did say, quote, one day as the experience improves and as artificial intelligence continues to get bett better, i do see this as being a primary way for consumers to shop under certain conditions, under certain use cases. now, walmart isn't the only retailer partnering with google, however. around 40 retailers including amazon's whole foods, costco and target are already google express retailers. so since february, shoppers have been able to use google home voice for ordering walmart is the first, however, to link accounts for past purchasing history but google express general
manager brian elliott tells me there's nothing exclusive about the walmart partnership and the account linking saying google is open to any partner to make shopping easier, even amazon walmart is the first to link the accounts carl >> can i just ask you one question, courtney as an amazon prime user, is there any edge in shifting over to the google walmart system do you get anything extra or different? is it lower prices what's the opportunity there >> i mean, not that walmart has disclosed at this point, no. right now, if you use amazon's alexa, you can't ordser on walmart. from the home assistant, you can order in some places including walmart. but next year they willed a in some of the options that are already available for online orders and a number of different places like the pickup discount, if it's an item eligible for that, that's not going to be right away right now hundreds of thousands of orders when it launches, but eventually they will add more products so they are kind of putting out the products they think may be
most popular, particularly those reorder items. >> court, thank you very much. for more on this, we'll bring in the managing director at capital markets and the managing director with raymond james. guys, good morning, good to see you both. >> good morning, how are ya? >> how will we measure whether this is working and how much it's working for walmart >> well, i think you'll measure it through the continued growth of e-commerce and the growth of walmart's revenue. so that's the way that you're going to see it. and that's the way it will get disclosed as part of the disclosure event >> i was just going to say, i mean, we're watching the numbers already, but how do we know whether this new partnership with google and the entry into voice shopping is making additional delta >> well, i think i agree with mark's comment we saw on shoptalk in january the real beginning of voice. and so far mobile has been where it's been growing, but i think
over the foreseeable future, you'll see more voice ordering and that will be the new mobile as you go down the next five to ten years. so i think it's something that i asked at that time at shoptalk, whether walmart would be involved in voice. and i was basically told stay tuned. and now the stay tuned as happened today >> ed, how does this change the landscape for small and mid-sized retailers? i mean, they were already facing pressure from amazon i suppose they could have bought ads on google before, but why should they if walmart and others are going to get most paid for nation status >> well, one thing that has been really interesting with walmart and amazon is their focus on marketplace. so they have enabled a lot of the very small retailers to have a great online presence through marketplace. this was one of walmart's key growth areas so i don't know if i agree i think we're in an environment where clearly amazon and walmart are duking it out, but they are developing ecosystems to allow some of the smaller players to
thrive >> ed, as the amazon -- >> i agree with that >> ed, i want to ask you, does jeff bezos have anything to worry about when he sees this announcement >> he's very customer focused and talks a lot about the five and ten-year view. three to four years ago, it was clear amazon was the undisputed leader in retail and now you have a walmart that is incredibly aggressive with innovating they are clearly following amazon's moves and in some areas become more aggressive than amazon it's gone from a one person leading the pack to a two-horse race >> but as someone who covers walmart, do you agree with the assertion? more innovative than amazon? >> well, i think in some respects, yes. the discount and store discount is something that amazon can't do one thing that i think is a little different on this particular issue is that in late september when it begins, it will be walmart items that will be available for ordering. it won't be the marketplace
orders or items at this point in time that may get added many the future, but not at this point in time i think walmart is showing significant willingness to innovate the idea of the employee delivering, that's right now only in three stores and there are some significant hurdles to be overcome to get that to be done, but they are looking for any way that they can to innovate and really help the consumer with convenience and, as always, with walmart, with price >> so budd, does this take the phantom antitrust pressure to some degree off amazon i mean, there are rumors that there could be some kind of case built against amazon, but if you have google and walmart teaming up and adding the in-store element, does that help amazon's case that actually there's plenty of competition out there? >> well, i think there's always plenty of competition. i can't answer the question on anti-trust we'll have to let others who have more expertise in that particular area answer that. but i think that it certainly is
a competitive and hyper competitive market as we wrote in the most recent note. and walmart's doing a lot to make sure that there are, they are working to satisfy the customer in store and online that's an area right now that amazon can't compete with. and i think we're seeing it in the accounts, which are terrific now for 12 consecutive quarters for walmart. and the traffic has been consecutively up for 11 of the quarters that's just a terrific indication of walmart u.s. and for the stock, walmart u.s. is critical. >> absolutely. fascinating to watch these giants start to join hands budd, ed, appreciate your time, thanks, guys. >> thank you >> thank you still to come on the show, we've got details behind blake irving's announcement that he is retiring as ceo of godaddy at the end of the year. he joins us, next, in a first on cnbc interview and we'll take you live to samsung galaxy 8's event
happening in midtown manhattan today. this is the successor to the recalled galaxy note 7 and we're expecting announcements around the voice assistant. we'll fill you in on the details. more ahead on "squawk alley. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if... ....there was a single site... ...where you could find the... ...right hotel for you at the best price? there is. because tripadvisor now compares... ...prices from over 200 booking... ...sites ...to save you up to 30%... ...on the hotel you want. trust this bird's words. tripadvisor. the latest reviews. the lowest prices.
welcome back to "squawk alley. godaddy announced that their ceo is retiring at the end of the year naming scott wagner as his replacement. joining us now in a first on cnbc interview, outgoing godaddy ceo blake irving blake, good to see you. >> good to see you, john >> so ipo is in april 2015, the stock is up better than 60 -- yeah, 2015, the stock is up better than 60% since then is this retirement for you or is this a pause before another ceo gig? >> well, you know, shoot, really, i've spent 35 years in
tech i've been married for 32 years my wife is definitely on the short end of the shrift on that. so spending time with her and actually knocking off the bucket list is something that's really important to us. and we really haven't had time to do it so we're going to do that. it's really a confluence of where the business is, too because the business as you said, we've grown, the stock value of the company, doubled revenues, doubled earnings, more than double the cash flow, it just feels like the momentum the company is on right now, john, is just really positive. we have assembled a great team scott wagner, who has been the guy i've been tag-teaming this company with for five years now, is just ready to step into this role and it's a perfect time for me to, i think, move on to what is next for me and to have scott move into the position and he's ready and i think the company's in the perfect position to move on that >> you dealt with plenty of controversy in your tenure, not only godaddy's image before you
took over, grace hopper stuff, but recently around all of this racial uprising and tension, some white supremacists who had been using your site, you decided to take down their web pages in essence and push them to go host somewhere else. how important is that sort of, i don't know whether you call it censorship, where do you draw the line in this era of so much controversy and still be a web host for everyone? >> you know, we've been really clear that our job one is to protect free speech, not just, i think, the first amendment rights, but speech, free speech on the internet. it's incredibly important for our customers to feel like they can publish what they think is important to them, regardless of whether their values are great values or hatred, bigotry, et cetera but the terms of service is very clear. when somebody steps over the
line and is talking about injuring somebody or creating violence and trying to incite violence, look, our terms of service is clear and we pull it down so we didn't actually host the site, we host the domain name, which allows us to actually sever this important for us, you're walking across the fence you're trying to be very protective of the first amendment rights we all enjoy in this country at the same time, trying to make sure that hate speech doesn't turn into inciting violence, which we believe it absolutely did in this case >> and justto be clear, does this announcement from you have any relation at all to that action or how long has this been, how long has this been in the works, your decision to step down >> no, it's been in the works for a while. when i took the role, my promise to my spouse was, look, i'm going to do this for five years or so and then we'll get onto the next part of our lives our kids left the house a couple
years ago, so she effectively retired at that point, raising two children and they are off to the races now, and now it's basically my time to do a bunch of things with her we have been trying to do for a long time >> blake, it's sara, i just want to ask you about the issue that you tackled head-on. when you came, you helped reform the image around sexism from the company, the half naked women in the super bowl ads, i'm curious how you diagnosed the problem in broader silicon valley right now after that big google scandal and the conversation around gender stereotypes how bad is it? and what would your advice be to symptom of the ceos like sunder pitch high dealing with right now? >> i think coming into the company, there are two different brand realities at the company how the company was internally whether people were immensely proud of the work they did, really in touch with customers, pretty goody versety inside the company, yet the way we were
projecting ourselves certainly didn't describe what was happening inside the company we just aligned those things up to say, look, women are more than 50% of small businesses in the united states. that's our customer. and it's even more so true outside of the united states so we've said we're going to show women proudly as small business people, fighting the good fight, running the business and working hard and frankly, it was pretty -- it was a pretty easy pivot for us because everybody in the company is supported in the valley, generally, i think there's definitely, i think, an overall problem, but you know, the thing that i think the people lose sight of is it's starting to surface in really big ways today so it's a discussion this has been going on in sill v silicon valley for decades, yet people feel they can step out, discuss it, bring it to light, and in some cases, i know in google that ended up in a termination, but honestly, at
least folks are raising it and it's become a topic that is very important in the valley >> well, blake, it sounds like we can't quite call it a retirement but with the stock up better than 60%, you certainly have a lot that you can accomplished there at godaddy thank you for joining us on "squawk alley. blake irving, ceo. >> thanks, guys. all right. let's get over now to michelle caruso-cabrera back at hq with the european close >> good morning, sara. european stocks on track for the fourth loss in the past five sessions part of the reason may be the strength in the euro and the wake of comments from mario draghi which we'll tell you in a second we show you the dollar/euro chart, but we'll show you a ten-year of the british pound versus the euro. pound at the eight-year low against the euro the strength in the euro coming from the manufacturing pmi, the manufacturing data that showed a jump to the two-month high at 57.4 led by strength in germany. also boosted by the fastest rise in exports for 6.5 years
additionally, uncertainly regarding the brexit talks and weighing on the pound. so back to the mario draghi speech in germany, draghi defending xwadefend ing quantitative easing saying, quote, there's a large bodty of imp imp imperical research in these policies in supporting the economy and inflation, both in the euro and in the united states holding up an example. his speech comes two days ahead of another speech he'll make in jackson hole much anticipated specific stock stories, advertising giant wpp, take a look, getting hammered by 11% after the company warned for the second time this year, the ceo earlier on "squawk on the street." >> i think there are three forces at work here. first is digital disruption, which is not a threat to the industry, it's an opportunity more than a threat the second thing is, activist investors are taking positions, particularly in package good
companies, which have put them on the short-term pressure and then the third force here is the zero-based budgeters >> wpp competitors omnicom group falling in sympathy. >> worst day for wpp in 17 years. michelle, thank you. let's get back over to hq. sue herrera now with the news update hi, sue. >> hello, sara hello, everyone. here's what's happening at this hour senator democratic leader chuck schumer addressing president trump's threat to shut down the government if funding for a wall with mexico is not approved. schumer saying that if mr. trump follows through with that threat, it would lead to a government shutdown that, quote, nobody will like, end quote. hundreds rallying at unc over a confederate statue on campus that they want torn down. it was erected more than 1500 years ago for alumni that served in the confederate army. three arrests during the protest
but no reports of injuries. hillary clinton getting ready to release a new book that chronicles her presidential run. in the book, she writes that donald trump's pacing and demeanor during the october 2016 debate made her skin crawl clinton's book is due to come out next month and a segment on milk allergies, look at this. turning into romper room during a live british newscast. that's the veteran newscaster alister stewart interviewing a mother on food allergies when her toddler, iris, climbed onto the anchor desk, literally stealing the show. that's the news update at this hour back downtown to "squawk alley." carl, back to you. >> we love that piece of tape, sue. >> you never know what the little ones are going to do. >> that's true when we come back this morning, what happens when brands strike back at amazon favoring local retailers instead of e-commerce giants we'll talk to one ceo championing that trend when "squawk alley" continues
but first, a quick programming note speaker ryan will be joining "power lunch" in a cnbc exclusive tomorrow at 1:00 p.m. eastern time as the discussion over tax reform kicks into a new gear "squawk alley" continues after this ♪ it's time for the biggest sale of the year with the new sleep number 360 smart bed. it senses your every move and automatically adjusts on both sides to keep you effortlessly comfortable. and snoring.... does your bed do that?
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deirdre bosa >> hey, carl we are just a few floors up from where the vote was in favor of whole foods being acquired by amazon now, amazon has said that it expects to close the deal by the end of the year. the next step is regulatory approval a person familiar with the situation tells me that it could happen sooner rather than later. now, there was no q&a session and no further details about what whole foods under amazon looks like amazon said they previous lip don't plan on any layoffs and don't plan to automate the cashier as it does in one of the trial grocery stores and simply that it's excited to add whole foods to its offerings of other grocery offerings now, one design firm, though, based here in austin, ergo design, has imagined a further off future where an amazon whole foods hybrid could change the entire food industry we have some images of their mock-ups representing that vision there's an echo refrigerator with an exterior-facing door
that lets vehicles pull up to deliver groceries. they have garage gardens that take local fresh to another level. what they cleverly call produce as a service and car badge as a service garbage as a service and a meal-sharing system that is like a cross between blue apron and airbnb that sounds like a foreign idea, but i spoke to one of the creators this morning, mark barger, who said these are not sigh fie ideas they could happen within the next five years and was inspired by this acquisition. of course, one vision, there are others that aren't so optimistic and we have talked to folks, whether it be shareholders, lawmakers, suppliers or employees, that have concerns about the deal ranging from antitrust issues to the impact on local businesses and culture clashes. back over to you >> yeah, sort of still a mystery as to how it's all going to look in the future. but a lot of ideas out there deirdre, thank you our next guest has a creative strategy to give
customers amazon alternatives. joining us post nine is bob manahan at upper baby, if you are not familiar with it, go to the upper west side and you'll see them all over the place. welcome. >> thank you >> what is the anti-dominant strategy that you're using >> well, quite frankly, we are not totally anti-amazon. i personally shop amazon and believe in the subscribe and save i use a lot of the features. i believe in certainly the commodity items and certain items that you don't need to see and touch and feel i think that it's a great service. i think that with products like baby strollers, as you may be checking out, the brick and mortars have a decision to touch and feel it. this is a big part of your life for three to four years, it could be eight to ten years depending on the children you have. >> a big part of your wallet, too. you have to spend $1,000 for a
stroller these days? >> i look at strollers like bikes. you can buy a bike for $75 at a big box. you can buy a bike for $10,000 you know, we're in the $800 range for our top end. and really what you do is you get $800 worth of product. high-end fashions, aircraft-grade aluminum, great ball bearings and modularity to snap seats in and out, add a second seat, add a piggy-back walk-a-long. you get what you pay for you can't get a stroller for less money. >> it feels like we're competing against amazon and the solution is really, when the product portfolio is one thing, where it's so specialized that, in this case, obviously, a stroller, you want to handle it first. how do you grow then how do you broaden that portfolio? >> in terms of our products? >> yeah. or getting, the danger is getting into other areas that could easily be co mcomoditized.
>> we are in the area of attainable luxury. amazon has to kind of work, batteries, cell phone cords, they are getting into grocery, all that but i think it's a while before they get to us and things we protect, too, we're really about price like minimum advertising we watch that like hawks i mean, our strollers are the same price wherever you go so there's no -- you're not paying, if you go to a nice specialty boutique, you get to touch and feel it, get to know the people on amazon, you would pay the same price. >> which retailer do you get the most business from >> we do a lot of business with bye-bye baby we do a lot with amazon and a lot of business with the specialties inning aggregate. >> we see a lot of them here in new york city, but how broad is your market? >> well, first of all, thank you to new york. we love new york my wife is from new york and we got our start here in the
city at snyders and alby's and selling in brooklyn. >> apparently the leather versions are selling like crazy. >> we tried leather and now leather is super hot we use, it's not pvc or plastic, it's real leather and a nice feel but new york has been very good to us. and growing from there we feel this is a place where people really use their strollers. i mean, i live in kind of the burbs, and we use our strollers and throw them in the trunk a lot, but new yorkers living in brooklyn, they live in it. they put -- we have a nice big basket in the stroller it's got nice comfortable wheels so if we make it here, it's kind of like frank sinatra, we can make it anywhere. >> cnbc has an expert on cou consumer products who should have a blog about this she wants to know why the gluxe wheels squeak. i don't know what that means. >> very specific
the g-luxe is one of the opening price products they shouldn't squeak. if they do squeak, get them to us there could be sand in there, a certain dust, hopefully we'll talk about the tune-ups. if you have a tune-up with the retail you brought it into, we'll take care of it and make that happen for you. we have a fantastic customer service program to help with that they shouldn't squeak. we'll take care of it if they do. >> bob monahan, the ceo of uppababy, one of the big decisions. uppababy, bugaboo, could go either way. samsung is unveiling their latest 8 phone in new york city. we'll take aook en lwh we come back on "squawk. the dow is down 84
samsung is holding a massive event today. let's go to seema mody >> reporter: the dual-lens is being unveiled with samsung in the launch of the galaxy 8 two 12-megapixels on the back of the phone. this increases the picture on the phone, especially in dart-lit settings. and the overall functionality. something samsung tried to make a point of in the presentation the sheer size really notable as i hold it in my hand 6.5 inches, making it one of the
largest devices on the market, much larger than the apple iphone 7-plus that measures around 5.5 inches. but samsung says this makes the phone more functional, more versatile, also the ability to multi-task in fact, if you go to the home screen, you can see there's multi-window mode, which basically means you can launch two apps simultaneously. right now here on my phone, i have the google maps and google music. what is also notable is the s-pen, which has been enhanced, great for notetaking of course, the whole event has been seen at samsung's redemption moment after the note 7 recall last year the big challenge will be not just today's event to see what customer reception is like, but also when the phone is actually used by customers, to see if there are any safety or quality-control issues if there are, that will be seen as a challenge for samsung the biggest south korean tech company going forward. the other challenge will be the upcoming launch of the apple
iphone 8 will customers grab this phone or wait for the iphone 8 we'll have to see what happens back to you. >> all right i will take it, seema. with more on samsung and what the launch means for the market as apple prepares to launch the latest iphone, we'll bring in guggenheim's apple analyst here and samsung's analyst. we'll start with you, rob. lately a lot of lower cost chinese manufacturers, or really a couple, have been gaining shares so how, if at all, does this change the landscape, should we expect to see a premium surge in terms of marketshare at tend of the year >> i think, keep in mind, apple and samsung have been competing at the high-end against surging chinese oems for several years now. so i don't think that is anything new you know, in apple's camp, what they have going for them is they are the only ones who make ios phones so if you want an ios phone, you
have to buy from apple samsung really is the one who has to compete across the board. because it's selling android phones like everybody else >> medi, how much of apple's success over the past year, and the stock is up quite a bit as we talk about often, because they essentially have a power-play in hockey terms samsung playing with one fewer on the ice and does this fix that should apple investors be concerned, samsung investors be cheered if this phone just performs at par? >> i actually think note8 is somewhat immaterial to competition between samsung and apple. apple iphone 8 will be introduced in the next month or so and how samsung follows up with the galaxy s9 will be critical to samsung's earning in 2018 remind you that note has a very
limited following. and is not really a direct competition with apple for instance, i estimate samsung to ship about 42 to 45 gs8 in 2017 that comes close to the estimate of compares to an estimate of 6 to 8 million of note 8 for the same period again, note 8 is exciting, but it has a very limited following. and i think how samsung follows up with their gs9 will be critical, especially following iphone's introduction later in the year >> but mehdi, i'm wondering, who what extent is the note 8 a hero product that affects samsung's reputation overall we were all on planes in the past year, hearing the announcements, if you havesome samsung phone, shut it down. that must have had some negative brand effect is this phone perhaps not volume wise important, but reputation
marketing, brand wise important even to that 9 launch we expect to see next year >> not really. i think we had this same debate a year ago when note 7 recall happened skand we discussed how samsung gs8 was going to have a big exact. and gs8 was a success and helped samsung and samsung brand name i think note 7 and the recall is behind us and to that extent, note 8 is a small increment to the shipment but in terms of the brand, samsung did regain the brand awareness, with the gs8, and how they follow up with gs9 would be the key important factor not necessarily note 8 >> rob, can we yet tell what feature really matters here, what's going to catalyze people to buy i mean, dual cameras, an improvement there has been, at least something that apple and samsung have been dueling back and forth on, but also, there are these screen features.
which one, in particular, is going to matter as far as what's going to push that premium consumer to choose one versus the other? >> well, you're right. it's really apple and samsung competing for what is the latest, greatest phone i mean, interestingly, screen technology is something to compete on and yet, apple's iphone 8 is actually going to use a samsung screen so kind of ironic there. and so, apple is sort of catching up a little bit on on samsung using their own technology, moving to an oled screen at the high end apple has generally thought to have the best camera setup, at least until now. cameras are always something everybody competes on, but i don't know that it's necessarily the biggest selling feature. with -- >> right >> with i think both, though, the note and with the iphone 8 coming out, what's interesting is you're seeing actually the price point go higher for high-end smartphones
so both companies are not competing with each other, driving prices down. they're actually competing with each other, you know, driving prices up. i think recognizing that people, because they love their phones so much, they're willing to actually spend even more if you give them more >> and now it's time to watch the lines outside the stores, the shipping lead times, and of course, the sales numbers, when you eventually get those rob, mehdi, thanks >> thanks very much. >> thank you coming up, you know what's cooler than $1 million how about $700 million excitement around powerball jackpot reaching a fever pitch across the nation. 'lha dai wn quk alley" returns
$700 million on the line in tonight's powerball jackpot drawing. our contessa brewer is in new york with the details. contessa >> reporter: sarah, i'm at one of the oldest dive bars in one of the oldest neighborhoods in manhattan. the beer here is served in styrofoam and the powerball is self-serve with $700 million on the line, i probably found the only machine in this city that doesn't have a long line lee's the manager. what do you get out of having a machine inside the bar >> we really only get 5 cents to the dollar, so we're not breaking the bank, but really, it's for the people. >> people come here. go ahead go ahead you want your ticket get your ticket. here it is, $700 million, a 1 in 292 million-dollar chance -- not
"dollar chance," a 292 million chance sarah, those aren't good odds. >> 1 out of 292 doesn't sound that bad for me. for the second largest jackpot in history >> yes, we were just discussing how good those odds really are john's going to have lincoln reid hoffman and tim o'reilly at 4:00 let's get to wapner and the half >> and welcome to the "halftime report." i'm scott wapner our top trade this hour, target amazon what wall street's partner with google means for the shopping wars and your money. with us for the hour today, stephanie link, josh brown, stephanie link, jon najarian let's begin with that partnership between walmart and google express, a deal that escalates a growing battle between the two shopping giants. josh, others are running scared from amazon. not walmart, they seem to be the only ones ready, willing, and able to be abl