tv Squawk Alley CNBC October 23, 2017 11:00am-12:00pm EDT
with health care by a fairly wide margin. winners include align technology, intuitive surgical, and baxter international around 2% all of this as a big week of earnings kicks off overall the health care sector up 3% this month certainly, a sector to watch now back downtown to the start of "squawk alley." back over to you >> thank you very much morning, it's 8:00 a.m. at cisco headquarters in san jose, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ good monday morning, welcome to "squawk alley," i'm carl quintanilla with sara eisen,
john fortt on the new york stock exchange watch the markets set more record highs dow's up 20. >> all about earnings. investors awaiting the busiest earnings week of the quarter more than 160 s&p 500 companies and 12 dow components are set to report big companies like mcdonald's, microsoft, amazon, alpha bet, and more on tap. let's bring in john from charles schwab, also joining us here post 9, bob pisani we're having a debate whether it's tax reform or earnings. what say you >> absolutely the earnings situation with tax reform a cherry on the top. we're going to be down this quarter opposed to double digit in the prior two quarters, but that's because the insurance companies are getting hit on the hurricanes, that will change in the next quarter, and the oil profits aren't quite as high because oil started turning around third quarter last year
overall, we are near record high earnings and it's the global economy expanding that's the most important thing right now >> expecting hurricane disruptions. on this topic, andrew ross sorkin talked to prince this morning, who's done very well since the election kingdom holdings, about how much tax reform is factored into this market listen to what he said >> let me quote the treasury secretary of the united states, mr. mnuchin. he said if there's no tax reforms, the market will tank. he said that, i'm quoting him. >> is that what you believe? >> it's all a bet right now on tax reforms, clearly tax reform, 35% to 20% on the corporate tax, going down, so inevitably profits will go up. i think there's a big bet on that, obviously, but clearly there's a lot of optimism in the united states. >> there is a lot of optimism, jeff, you can't deny that fact investors are in good spirits. how much is factored in when it comes to tax reform and is it in
the earnings expectations for as soon as next year? >> sara, you make a good point i don't think it's in earnings expectations, at least that's not what i'm seeing. however, we have seen a rally in some of the sectors most sensitive to changes in tax rates. sectors like financials pay something close to the statutory rate, so more impactful than tech and financials have started to perform better recently, but that could be due to higher rates and assessment of what the fed is likely to do going forward, so i don't think a lot of that on tax reform is priced into the market. i'll add geopolitical and political concerns are taking a back seat to earnings, as bob said you can see it in the stock market of a country like south korea, where you think north korea would be a major factor and instead stocks and earnings are moving in lockstep >> or japan, who has been on an epic winning streak. >> exactly important distinction has to be made here. first, there's undoubtedly a psychological premium in the
market for tax cuts. i believe that, jeff believes that, prince believes that, as well if president trump said no tax cuts today, no tax cuts, it's over, what would the market do the average trader says 5% to 10% decline in the markets i think that's reasonable, but that's different than saying analysts have incorporated tax cuts into their models they haven't yet and if something goes through, they'll raise their numbers overall. remember, i agree with the point here psychologically the market does believe there's going to be a tax cut coming >> jeff, how closely are you going to be watching the volume and the volatility around the reactions to these earnings reports? we saw positive earnings out of netflix a few days ago, but the reaction wasn't quite as dramatic as we're used to seeing how important is the drama behind the reaction? >> i think this is a really good point you're making. this is a broad global growth environment, yet not all boats are rising equally and we can
see that in the numbers, sure, they are up, but are they up enough in the tech sector, for example, most earnings are coming from the semiconductor sector if you took them out, tech earnings would be negative, and half coming from just one stock. we have to take a look at underneath the hood here this earnings season very important, especially in technology there are haves and believe it or not, have nots and some of the numbers some coming up, not enough to exceed estimates this is a tough quarter for a number of reasons. we talked about hurricanes affecting energy and insurance, but in tech there's a lot of cross currents, as well. looking at the details, very important to understand the reactions this quarter >> i think the biggest threat to the market right now, believe it or not, is not the earnings. i'm actually pretty sanguine about the earnings i think it's a mistake on the fed, and i think even an appointment, if you put taylor in there, i think the market's going to get aflutter on something like that. even warsh
they'll be happy with powell and yellen, but the market is consistently told me, everybody i've talked to in six months, they are worried the fed could get overly aggressive and change things we don't know what happens when they reverse this ocean of liquidity out there. i think that's a reasonable concern. we have no history about this. >> is the concern that taylor or warsh bring higher rates or go more aggressive -- >> much more aggressive than where everybody else is right now. i think this is a legitimate concern. i think the market would move on that >> i agree, although, jeff, this is a president that's said he likes low interest rates and a weaker dollar. >> likes yellen a lot. >> likes yellen a lot, but likes to borrow money and has plans to spend on infrastructure and tax cuts and needs the low rates to fuel it, don't you think >> we spend a lot of time on the personalities at the fed coming in, but i think as inflation begins to emerge in a clearer trend next year, i'm a believer we're starting to see a revival
of inflation as global unemployment has come down and that relationship remains intact once you get a data driven path higher in inflation, the fed's personalities matter less and the data matters more. i think markets will fixate on that if not, it's going to come down to a battle of personalities and a more hawkish entry into the fed would be considered negatively by the markets. >> all right well, we'll get a big data point on friday. first look at third quarter gdp. maybe we'll start from there thank you very much, jeff klinetop and bob pisani. cisco buying broadsoft in a move to shore up an area where cisco's been trying to play for a long time. unified communications cisco's ceo chuck robins joined us exclusively this morning. >> first thing to consider is every customer when they think about their digital strategies, they think about how they interact with their customers and trying to drive greater k
intimacy when customers drive portfolios, so this actually gives us the most comprehensive set of collaboration solutions for our customers across enterprise and small/medium business, on premise, and through the cloud. >> now, if cisco's going to spend around $2 billion, it's interesting to me that they decide to spend it on a company like broadsoft look, take a look at the stock in this company, it's trading around where it was six, seven years ago. unified communications, not a brand new area for cisco they've been messing with cisco phones and web x and what not for a long time, so this looks like that classic, hey, broadsoft is growing, say, 9% a year, they see operational efficiencies sure, you say cloud, but everybody's got a cloud play these days this is blocking and tackling perhaps a value-type play. they only offered 2% more than
the stock was trading in terms of price here. >> yeah. >> i was going to add, didn't you ask whether there were tax reform implications? >> yeah, every bank earnings call was loaded with questions about whether tax reform is affecting m & a positively or negatively he said this wasn't a concern. they are optimistic for a deal if not this year, early next >> not spending it on some hot start-up i'm sure a lot would like it going for the small premium on a company that's been public for almost ten years >> stock is up, almost a percent. doing quite well this year when we return this morning, more from andrew's interview with prince alwaleed then amazon's gender diversity problem. kara swisher is going to join us from recode. the case for and against breaking up big tech as the big three are set to testify on capitol hill in more than a week when "squawk alley" returns.
rep. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
ge does not dramatically affect the dow's overall index number because of the lightweighting, but it's down 5% now, close to the lows of the day. got downgrades today from morgan stanley, negative note out of argis after the remarkable turn around friday. >> looked like it was going to be down nearly 10% on friday came back. jim cramer, our own jim cramer,
said be careful before getting into the stock some would say volatility expected >> the ceo said it himself best in the interview with david, which was we know we're a show me story at this point and we're going to start to see results. he's making all sorts of sweeping changes, in his view, and cramer said the indication will be the cash, which the ceo came in and said is in a horrible position. >> we'll keep our eye on that. meanwhile, andrew ross sorkin sitting down with prince alwaleed alwaleed is a major investor in twitter and weighed in on the future of the platform and its competitors. >> clearly, google and facebook may do whatever to jump to where they are right now, and i think twitter maybe and snapchat are in a similar situation whereby the takeover is not very fast and swift, but i believe that the future of twitter and snapchat is almost guaranteed, but still going through a learning curve whereby they are ever to monetize more their
model. >> twitter has earnings out on thursday for more on this, let's bring in kara swisher, recode's executive editor good morning to you. >> hi. >> still going through a learning curve got to have it, the prince is a patient man. >> i guess, he's really rich, i don't know okay all right. learning curve they've been public for a while, operating for a while. they have severe issues, check, check, check, so i don't know if he -- what is he going to say, what a bad investment, or, oh, well, you have to own everything i'm not sure what he could say but, you know, he has a lot of other things that are working out okay for him >> right if we can agree, the learning curve continues, then where do you think they are in that process? >> they are interesting. they are different companies snapchat, i have a lot of regard for evan spiegel's innovation at snapchat my kids use it and love it every time they come up with the
maps they did, snap maps, amazing, really interesting, innovative, changing, things like that that do keep them very relevant, and at the same time they faced facebook grabbing all those innovations putting them in their service, so that's a problem. twitter i want to see more innovation of the product, they want to see, you know, even up to everyone still not getting 240 tweets, they talked about it, didn't innovate it we want to see it being cleaned up i think a lot of people feel the discourse on there is toxic, as i talked about before. the ability to report, the bullying, the use of it for spreading of lies and stuff like that you know, just general the product is not innovated for a very long time i think you use it actively and know that for sure >> kara, i'm trying to figure out the bull case for twitter, snapchat, basically everybody who's not facebook and google in this space i'm trying to think, is it like
retail where you had ebay versus amazon maybe not, because monotization was never the issue for ebay maybe it was long-term investment and infrastructure. is it like search, where you had yahoo! bing, and many others bing seems to have managed to become a search business over time is that what the twitters and snapchats have to hope for >> i think twitter and snapchat are very different to put them together, i don't think you can. snapchat, they've got competitors everywhere in the communications space, not just here, but across the world, you know, we chat and other things like that. you know, i think they have the problem of they've got to attract enough of an audience that keeps with it over time you don't know if their teen and young people audience moves on with them, and that's the real issue. it's certainly a fun app to use, certainly something that's always interesting, but the size issue is the problem they have and in terms of getting more advertisers and more audience there. with twitter you have a host of
problems around, you know, they are dealing with them all the time and on top of it you've got, you know, a lot of controversy about the use by the president, it's always attracting attention, there's always one controversy after the next on it, so i think the problem with snapchat you can see someone buying it if they got into some trouble because it's such an interesting platform with twitter, they have some issues they have to clean up before, you know, in terms of getting rid of snap, it's too big and everything like that i think they are very different beasts and twitter, i think about twitter a lot these days and thinking about who would buy it, how would they buy it, would that be possible for them. if not, how could they grow to a size that's decent and creates a, you know, viable business >> but just to be clear, you believe, a, snapchat is a more likely target and that twitter -- the fact it's still working through issues is an inhibitor to m & a, to being bought >> i have nothing but regard for
jack dorsey. i think he's a really interesting entrepreneur and i also think he's innovative with the stuff they are doing at square, it's fantastic and you see a lot of attraction with square i don't think you can have a half-time ceo. a lot of people think that and you'll see more pressure on that over time. there's got to be a ceo during just these hearings that happen where they just weren't present enough in leadership to deal, you know, getting all those complaints from congressmen, as we talked about before i think you need a more present, active leadership at that company and a more product centric leadership they've hired some great people recently, but they keep losing great people i think they've got -- it's a real -- i wouldn't want to manage that. it's going to be tough going, especially because the media focus on it, because the media are a bunch of narcissists like myself and you all, so we are very interested in twitter and what happens to it, in terms of its size, the amount of attention it gets is kind of ridiculous, but nonetheless, the
media loves it, so, therefore, it's going to be in the media spotlight. >> we haven't really talked about it as an m & a target in a long time. who do you think at this point would be a good fit? who is your latest thinking? >> i always thought google would buy it, but it's a hairball to a lot of people. disney wouldn't touch it again, you have the president of the united states sort of free ranging all over that platform, and if you buy it, you buy a lot of controversy around now with russia, bullying, ads. it just goes on and on and on, so i think that's the issues they are going to face a lot of issues that someone like google just doesn't want to -- they can go off and buy an a.i. company and do better for half the amount of money. look at microsoft, again, i don't see them doing it. you would think some of the asian companies, maybe alibaba would buy it, but i don't think that would be allowed in this country at this time and then you look at, you know,
none of the media companies, you know, maybe news corp. is feeli feeling frisky, i don't know i don't know who would want to buy that much trouble. comcast, the owner of nbc could look at it, but i don't think they have anyone to run it you have to have a plan in mind in what you want to do with a company like that. >> kara, switch gears a bit here recode has a headline on amazon this morning it's 2017 and amazon only has one woman among its 18 most powerful executives with a slew of diversity and corporate culture issues coming to light in silicon valley. is it time for amazon to make changes in the lineup? >> we thought we'd point that out. jason del ray did a great job making it obvious of what's going on there we did this a couple years ago in facebook, before sheryl sandberg got there, it was the men and no women of facebook, and, you know, it's something we at recode think it's important to point out, and especially in light of the situation around roy price. not just us, but others have
suggested that maybe he was given a bit of a light treatment initially because there wasn't enough diversity in the room discussing it. i think they'll deny that, but they didn't do anything until it became public. and so i mention that last week, so we just wanted to point it out. >> i personally believe that equity and representation, diversity, all levels of a company, very important, but this is a slippery slope amazon, i believe, has three female directors on its board out of ten members if you take a look at apple's senior leadership, also only one woman, angela ahrens if you go down to the vp level it's different tim cook has done a lot of work at apple >> we noted that we noted there are three critical vps, but there's a lot of vps there's a lot of vps i think jeff bezos addressed it, as noted in the story, he dr
addre addressed it at a meeting, the reason these vps can't rise is because nobody leaves, and that's 100% true they are very good executives, wilkie, who runs the main service, you know, these are great executives they haven't gone anywhere, they've been there for years it's still an interesting question of how do you introduce as much, again, it's not diversity for diversity sake, it makes for a better company you know, as i said 100 times before, the only time standards are ever brought up around adding women or people of color to the workplace is when it has to do with women or people of color and never about the standards of the men that were there. the white men typically that were there so i think the question is, does it make for a better company, how can you try to do this you know, we struggle with it at recode i think about it all the time and i'm sure jeff bezos does, too. and it's something i think about. >> this didn't surprise me, but
what would surprise me is finding a company that actually does this well >> i think the best numbers are facebook at this point i think the 53% of the top -- i mean, what was interesting about the amazon numbers you were talking about was amazon's numbers are still high when you go down. i think it's 74% are white men i think that's the number, and facebook's at like 53% or something like that. even if you go down, john, it's still not great and it's the worst of all of them, i think. i think we showed a bunch of them and i think it's just this question of why -- we were trying to discuss this, why did roy price initially get -- it was sort of soft roll out the door initially they didn't do anything, then when this producer went public, that's when he got suspended, that's when he got fired. why wasn't the investigation enough to something to happen -- same with harvey weinstein why until it became public did nothing happen at any of these companies? and i think, you know, you saw
megyn kelly talking this morning about bill o'reilly. people are talking and i think that's a good thing. all we wanted to do here is say, hey, everybody, you might want to notice this situation here at amazon and we'll keep doing it at all the campaigns >> i think it was farhad last week that said that "times" piece on harvey weinstein might be the most socially impactful piece of reporting in the last few years. we'll see. >> along with ronan's story. the two together, ronan farrow's story in "the new yorker" and that one together, i don't know which should win a pulitzer prize. both of them should. i don't know >> kara, covered a lot of ground we'll talk a bit more business next time. kara swisher joining us from recode still to come, amazon taking on square and paypal with a new payment service of its own plus, fired from a think tank and claims it's google's fault. we'll speak with open market stuts unr rrlyinite'fodebay nn when "squawk alley" returns. where's gary?
amazon's looking to take even more control of the internet shopping experience from ordering, to delivery, now focusing on payments, as well. our deidre bossa is live at the money 2020 conference in las vegas. deidre >> good morning, john. and we can bring this news to you exclusively. amazon is expending its shopping experience through amazon pay, and heating up the competition with the likes of paypal and square in the payment space. here's how it works. the feature lets users order directly from restaurants within the amazon app, and then they pay using the payment details already stored there all they have to do then is pick up the food from the restaurant, they don't have to use cash, debit, or credit amazon was texting this with tgif, but this represents an extension of that program and it's not hard to see how this could easily be expended to other merchants or retailers and
perhaps even to whole foods. now, for the merchants partnering with amazon is a way to speed up the checkout process and tap into amazon's millions of users, but they'll also have to decide whether it's worth it to give up all of that data. money 2020, guys, kicked off over the weekend and we've already heard from apple pay vp jennifer bailey, who provided a small update on when the company's apple pay peer-to-peer transaction is going to be happening in imessage. she would only say it is coming soon i also sat down with apple cofounder steve wozniak and asked him about the upcoming iphone x here's what he said. >> i'm just worried about what it provides me i'd rather wait and watch that one and i'm happy with my iphone 8, same as the iphone 7, same as the iphone 6, to me. iphone x is going to be the first one i didn't on day one upgrade to, but my wife did, so i'll be close enough to see it >> guys, he also said he was
skeptical face i.d. would work the way it's supposed to not exactly a vote of confidence from the apple cofounder just days before the iphone x is available for preorder back over to you >> all right, deidre, good stuff. deidre bossa let's get to seema mody at post 9 >> european stocks beginning the week mostly higher following asia's lead after a landslide election victory for shinzo abe. that news offsetting the standoff that continues in spain, but again, abe's victory paving the way for more ultra easy monetary policy in japan, and as a result european bond prices have been moving higher most of the day ahead of thursday's meeting in which the central bank is expected to cut its monthly bond purchases the watch is on to see how long the program there might be extended today's action in bonds shows that the gap or the spread between italian and german ten-year yields narrowing to its
smallest in more than two months in the meantime in the currency world the euro is pulling back take a look how it's trading against the dollar here at 1.17. now on to the situation in spain and catalonia's refusal to withdraw its bid for independence prime minister rajoy urging lawmakers to grant him power to remove catalan leaders the catalan parliament plans to convene on thursday to debate how to respond to rajoy's plan, which would result in spain's government taking direct control of catalonia and we'll switch to autos and likeat daimler and volkswagen. widening the investigation between alleged collusion between germany's top law makers they say they were raided after bmw said their office had been searched as part of an inspection clearly, a developing story, but these stocks trading higher. guys, back to you. >> seema, thank you for that
seema mody at post 9 back to hq and get a news update good morning >> here's your update. defense secretary jim mattis addressing the north korean nuclear threat in japan. japan says north korea's ballistic missile capabilities have gone to an unprecedented, critical level and it supports the u.s. stance on all options to combat the threat bosnian and serbian rivers topping the list of the most poe luted in europe. authorities are blaming a faulty hoverboard for an early morning fire, which raged through six homes in pennsylvania. it happened after a 12-year-old girl plugged it into an outlet three of the six homes were destroyed. no reports of any injuries, thankfully justin timberlake is returning to the super bowl. it's going to be his first appearance since performing with janet jackson during that now infamous wardrobe malfunction 13
years ago. this year's super bowl is on february 4th in minneapolis. that's our cnbc news update. now back to "squawk alley. sara >> no more nipplegate. thank you, michelle. up next, long-time silicon valley critic barry lynn on breaking up big tech you'll hear from him quk le wl rht back ♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to? ...from godaddy! in fact, 68% of people who have built their...
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our own andrew ross sorkin sitting down with saudi prince alwaleed bin talal the prince sharing his thoughts on google and facebook >> clearly, companies like google, amazon, facebook, apple, microsoft, these are giants. their combined market cap is above $2.5 trillion, so these are really giants, and we have seen right now a lot of voices in the united states about the need to regulate what's happening on facebook and twitter. so these are bandwidth companies, but each one is mo no
monopo listic. >> you believe thermonoplies >> who is going to get into online shopping against amazon and who's going to go against these two giants they are giants. and good luck for them, frankly speaking so, these are really bandwidth companies right now and i think because they had good business model that proved to be successful in the market >> prince alwaleed later saying he's not in favor of breaking up big tech, this coming off headlines that amazon, facebook, and google are pouring millions into federal lobbying spending this quarter ahead of their november 1st trip to capitol hill for more we're joined by long-time silicon valley critic and observer, barry lynn, director of the open markets institute. barry, welcome >> thank you for having me >> so, question is, what to do about this it's easy to use a word like monopolies, but i think, in fact, it's difficult to make the case that many of these do, in
fact, have monopoly power when you look broadly at retail or at advertising, et cetera what do you think? >> no, that's absolutely true. when you look broadly at retail, often you don't see monopolies, but when you look at specific sectors, then you see something very different in the case of books and amazon, amazon has a real monopoly over the sale of books. when you look at video, google has a real monopoly over video with youtube, so, you know, you can't just look at the corporations as part of the whole political economy. you have to look at them in the power that they have over specific sectors, specific activities within our political economy. >> i mean, you're saying that google has a monopoly on video, but amazon is also on video. we can't forget about netflix, different model, but still video arguably having a bigger effect on premium video than youtube is i mean, isn't that in a sense
the market working correctly what kind of regulation can really address that when you have all these big companies fighting each other? >> we have to understand also that calling these companies monopolies is not a bad thing, it's just calling them what they are, and online having monopolies could be a very natural thing. we've seen this in the past with other communications firms, with telephones, with telegraph, you know, so having a single company that provides the back bone for certain kinds of information flows, that's normal that's actually part of, you know, the way technology evolves. but what we have to look at is what are the ways in which the americans in the past have regulated these kinds of technology monopolies. and we actually have a whole bunch of approaches that we've used very successfully time and again over the decades, really over the centuries >> and yet we're grappling with these questions again, barry, which must be sort of odd to you, because you've been dealing with this for years. for those that don't know your
background, can you talk a little about your experience with the new america foundation and google and how you got into this issue of cracking down on these big corporate technology giants >> well, i have -- i worked for about 15 years at a think tank in washington called the new america foundation, and for that whole time -- i wrote a couple of books there, then i built up a small group of scholars and lawyers to work on these issues, and, you know, we did the same thing for 15 years, which was study monopoly and sort of look at ways to, you know, fix it if there was a problem. and for 15 years we had a very good run at new america and then finally we had two problems in the course of those 15 years once in june 2016 and in june of 2017 when we criticized google, which provided quite a bit of support for new america. and this year when we criticized google, we were shown the door
we were given two months to leave. >> barry, last week former head of google ventures, bill mamari said he wouldn't be surprised if google broke up these entities because google and facebook are more powerful than at&t ever was. is that wrong? >> no, that's absolutely right they are far more powerful than at&t ever was. they are far more powerful than the western union telegraph system ever was. they are far more powerful than any company we have ever dealt with in this country before. so, this is a pressing problem we haven't turned the corner to a point where it's too late, but it is vital that people on capitol hill and, you know, across the society, you know, the american society, sort of understand just how much power these companies have, the ways in which they wielded that can harm us, and also sort of come to terms with the fact that we have a lot of tools we can use
to make these companies safe >> right barry -- that's where we have to get to i don't have a problem with big, powerful companies with companies succeeding getting rich the question is, what is it as americans that we're trying to protect, that we're trying to shield what values are there that we want to defend against potential encroachment by these companies? can you articulate that? >> what we want as a people, i believe, and i think probably most people would agree with me, is we want to be able to communicate directly with one another without intermediaries manipulating the flow of information, the flow of reporting, the flow of ideas between citizen and citizen. i think that's a pretty basic american value we've managed to do a good job over the course of 240 years of doing that, and we have to actually figure out how to do that now, because, frankly, google and facebook are emerging as the two main chokepoints for the flow of information and
ideas and news between citizen and citizen. but this is true also in terms of commerce, you know, what did we learn from the tea party? we don't want intermediaries standing between the makers of things and the buyers of things. and that's also another issue we have to be dealing with. >> and we will continue to, thank you for your perspective and insight. barry lynn from open market institute. when we come back, why prince alwaleed is not investing in tesla but first, rick santelli, what are you watching today? >> you know, i'm watching the calendar ecb meeting coming up quickly, and foreign exchange markets are getting very close to very important technical levels we'll talk about the alignment of those two issues after the break.
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we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. monopolistic. i'm scott walker coming up today, "halftime report," top of the hour will the busiest week of earnings season propel or punk this record setting rally? we'll debate the reports that matter most to your money. plus, making money in bitcoin. a bull whose fund returned 2,000% year to date takes on the saudi prince who calls the whole thing an enron-like fraud. and a real estate investor who says making money in that space is more science than art his exclusive list where you should look to cash in see you at noon. sara, see you in about 15. >> see you then, scott, thank you. earlier on "squawk box,"
saudi prince alwaleed bin talal talked everything from geopolitics, to big tech he also dug in on electric cars and for that we go to phil lebeau in chicago with specific thoughts on tesla. >> essentially what it comes down to is whether or not the prince is a believer in tesla as an investment, not as a company, but as an investment when you look at shars of tesla, if you were in it the last three years he would have had a great return, but right now he's not buying tesla here's what the prince had to say this morning to andrew ross sorkin >> i'd rather not comment on that, because maybe some people believe the value is right, but not for me to enter at that price, too exuberant for me. >> at least that's how he feels about tesla shares those comments coming after a report from "the wall street journal" that tesla has reached an agreement with the shanghai local government to open a plant in shanghai in the free trade zone there what's interesting is this would be a wholly owned final assembly
plant, not one with a chinese partner. we reached out to tesla, it has no comment, but when you look at shares of tesla versus crude oil over the last three years, what an interesting chart this is, guys a lot of people three years ago would have said maybe a little tesla, but over the long term crude is the way to go that's not the case over the last three years >> that is a good chart. i don't think i'd seen that one lately, phil, thank you for that let's hop over to the cme group and get the santelli exchange hey, rick. >> hi, carl. you know, while i'm speaking i'd like you to look at the chart on the screen this is a one-year chart of ten-year note yields on the dollar/yen of course, interest rate differential, currency, interest rates lined up of course, they are. i get that but every market gets in and out of phase, nothing is precise look at forwards, sometimes
things that converge take a very different path before the ultimate convergence now let's go to my board with the same chart what's interesting, red is dollar/yen, black is ten-year note yields is they are right on top of each other, but for the point of this exercise, today we had a high in the dollar/yen of 134.10-ish the high price thus far for this trade is right around 134.31 the point is, is that the ten-year note yields settle at 244 and failed to get above 240 a couple of times. so the key here is, 244 for ten-year yields and right around, you know, 114, even to 114.30 is something you want to pay very close attention to. and it doesn't matter which comes first, because as you can see on the chart, they are highly correlated. you want to watch both of them
well, it doesn't actually end there, because we see other relationships. those are actually the prices i was quoting. very close to the all-time high today, 131.10-ish. the point of this is the same thing. my guess is all these relationships are 131.10ish so when we get a close above 130 in the euro/yen all three of these will happen sooner or later, a day apart, a couple days apart and keep in mind, 20/26 this nurse, ecb days after. halloween, not many days after the bank of japan meeting. these are huge i can't tell you what either is going to do, but there's a certain amount of expectations built n.on the ecb side, lower for longer, whether it's the dollar amount of question or interest rates, but on the bank of japan side everything has changed with the lection certainly seems as though abe's place is secure so maybe the real wild card is watching what the b of j does more but the
both lead to the same issue. how much anxiety are the central banks willing to take to turn the ship along with the u.s. and my contention is maybe not as much as you thing jon forth, back to you. >> thank you, rick santelli, talking real currency markets which brings us to what's happens the call of the day. bitcoin. is it the next enron, really "squawk alley" is back in a moment [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
i just don't believe in the bitcoin thick. i think there implode. i think this is enron in the making >> really? enron in the making? >> i don't believe in bitcoin completely. >> because >> it doesn't make sense it's not regulated or under control. it's not under the supervision of any fed -- any united states federal reserve or any other central bank so i don't believe in this whole thing at all i think it will implode. i'm in agreement with the jpmorgan dimon. >> saudi prince bin al bilal it doesn't parse lock chain technology versus bitcoin itself but clearly enron in the making it's a headline-grabbing comment. >> it is and a sound bite, and what he says is true it's not backed by regulators, and that's perhaps the biggest price impediment or what could cause a crash people say in bitcoin, but then why is almost
every financial institution looking into the underlying technology, an it's not just financial institutions it's central banks, and it's big organizations like the international monetary fund. clearly there's a technology and a currency, and the currency may be a speculative asset that the prince doesn't believe it. >> that's important. >> like technology. >> like believing in protein and not liking mcdonald's hamburgers but you are all for protein and think it's good for growing muscle and that makes sense and people are buying bitcoin which is why it's up near 6,000 bucks. that's what people need to watch out for. agree or disagree with the prince, but i think his point makes a heck of a lot of sense even if you believe in block chain. >> fascinating to see high-profile people in finance and investing basically plant a flag i mean, you've got dimon saying you can all do what you want to do i don't care, having asked about it a million times. >> i will note on the price.
trading near $6,000. it's increased five-fold in the last year. there's clearly demand at a time when regulators and some of the biggest commission in the world like china have started to crack down on it there's clearly something there. >> i know. i remember you walking into the office one day and you saying it's back to 1,200 it's two weeks ago. >> i told my ex-boyfriend to buy it at a dollar a year ago, one of my best calls no more calls after that. >> "squawk alley" returns in just a moment.
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we continue to watch shares of ge which may not drag the dow down a whole lot but are having a remarkable last two and a half sessions we're down more than 5%. three partners says the 3 billion plus in short interest makes ge the biggest short in the global industrial conglomerate sector after friday's announcement. >> even after investors sort of gave the stock a vote of confidence, after hearing from the ceo on our air and in the conference call, the proof will be in the pudding and they have an activist investor in the form of trian on the board now and another stock i'm watching is hasbro and the ceo will be on "mad money" which will be
interesting because it was all about that forecast for the holiday season. >> yeah. wasn't watching that one, but -- it's all up to the kids now. >> yeah. >> hasbro was selling i think 9% of inventory was going through toys "r" us and we'll see how name packets the quarter as you said, we'll talk a lot more retail over the next few weeks. >> oh, yes halloween, thanksgiving. christmas, the best time of the year. >> let's get over to the judge and "the half. and welcome to "the halftime report." i'm scott wapner our top trade this hour, earnings palooza, what the busiest week of the season so far will mean for this record rally. can google, amazon, microsoft and so many more big names keep stocks climbing? with us for the hour, jim terranova, jim lebenthal, jo