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tv   Squawk Alley  CNBC  October 31, 2017 11:00am-12:00pm EDT

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welcome back to "squawk on the street." i'm dominic chu. tech having a breakout, leading all sectors. on pace for its best, chip makers a big part of the story check out what's happening with all of these guys, 17-year high going back to the tech bubble. that does it for this hour of "squawk on the street. let's send it back downtown for the start of "squawk alley." guys, back over to you >> dom, thank you very much. good morning it is 8:00 a.m. at qualcomm headquarters in san diego, 11:00 a.m. on wall street.
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"squawk alley" is live ♪ ♪ >> good tuesday morning, welcome to "squawk alley." i'm carl quintanilla with john fortt, sara eisen, who's back at post 9 at the new york stock exchange tech sector looking scary good right now. on pace for its best month since july 2016. up more than 7%. this is awaiting earnings from tech giants apple and facebook later this week. both of those stocks hitting all-time highs today for more we're joined by bob peck, head of internet investment banking good to have you here. this seems to be an earnings cycle where the focus is on top line growth. people aren't so worried about cost, especially if it seems to
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be investment in future growth >> yeah. >> but for the likes of facebook and even apple, is success already priced in? these stocks are based on other companies' earnings last week. >> technology has been very strong year to date, the tech stocks are -- fangs, up 50%, and the valuations compared to growth aren't that egregious. you have google trading around 12 times, facebook around the high teens or so growth rates of 25%, 30% or so, so historically in that range. i think what's really key for technology, though, is you're seeing big plays on very emblematic scenes, so autonomous, internet of things, big data, cloud, very large themes or opportunities. these are the leaders, so i think that's why investors in the market are so optimistic about technology going forward here >> some of the chiefs of these companies getting marched out on capitol hill how much do investors worry
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about that at the same time that's happening, stocks are posting all-time highs is it much to do about not much yet? >> it's very important and very serious. having said that, though, when you look at the absolute numbers, today facebook released 20 million people, have been exposed to fake ads, often about a $2 billion or so base. the impact to financials isn't as significant and google got penalized in the u about $2.5 billion, so very important significant topics, but as far as impacts to the financial, not as significant >> you mention tams, total adjustable markets we don't really understand what those markets are going to be in five years, so what metrics do you use? >> it's amazing because you're getting a stacking of "s" curving and not only connectivity, but hardware has improved, you have better functionality, software and analytics provides experiences we haven't had before. things like a.i., i.r., iot, the
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stacking of these s curves is creating an inflection point in technology and that's why you're seeing so much private money softbank with a $100 billion fund very large opportunities that we don't know what form it will take, but we do know it's an inflection point in technology >> when michael dell, for example, says that's all going to be 100 times the size of the internet as we know it today, is that -- does that sound halfway reasonable to you? >> i'll let the expert frame it himself. what i think is interesting is when you see posts by john zimmer at lyft talk about the new digital city and what happens as autonomous takes over, how that impacts not only our digital life, but physical landscape, also enables services, functionality, so it's going to be an interesting next ten years. >> it's exciting for investors to think about, but most of these businesses if you look at facebook and alphabet are built on advertising and that's where
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the growth is. how can you actually price in these sort of big themes when it's unclear how big of a revenue stream they are going to be and what that actually looks like >> i think for investors they look at optionality, portions of it come to fruition, but when you look at the core numbers being reported today, where i was before on those multiples, you're justifying the valuations right now off of core near term numbers. that's what's so exciting and why so many people focus on amazon and what they are doing some of the barriers they are breaking down. some of the things not coming into fruition are the numbers today, the core supporting the numbers today, but the optionality further down the field. >> bob, i'm hearing a lot more ipo chatter over the last few weeks, maybe these recent market highs, encouraging companies that were on the cusp of going public to hurry up and do it, but i can't figure out is this a healthy environment for smaller companies looking to go public, or is it punishing because these
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big companies of the previous era are showing a lot of strength >> yeah, great question. in fact, you've had acceleration of ipos in the back half of 017, so it's on pace for technology almost 50% more ipos than '16, so you're starting to see the bounceback the ipos that have taken place since labor day or year to date are up 20% versus the s&p, only up about 15% you've had great return. you've also had a lack of investable alpha for portfolio managers for the portfolio managers trailing their benchmark, they are looking for technology you've had a contraction of available securities due to buybacks, due to m & a, so there's a big appetite in the market for ipos. >> looking at a list of announced m & a, i.t. is down 60%, m & a volume in the u.s why? >> so m & a over the last two years is up over the average over the last ten years.
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'15 and '16 had very strong years and that's why the comp number would be down, but this year it's up 3% to 5% over the last ten-year average. what is interesting, a lot of money on the sidelines towards regulatory question, but there are large balance sheets, google has over 150 billion, so a lot of liquidity out there and as we get more color on tax and regulatory, you can see more action there >> one more question to bring it to today, since we are going to look for the general counsels of twitter, alphabet, and facebook, you say it's not a material threat to business what would change that in your view would it be regulation or something self imposed some restrictions on advertising? >> to be clear, i think it's very important, very serious issue and the companies are taking that. my comment was more around the materiality of the impact to the financials and what you could have is a restriction or a blocking of maybe these 126 million views that got exposed to it over that period, but once
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again that's over 2 billion daus that facebook has, so the material impact of that would be smaller. don't forget the way these models work in advertising, google and facebook, it's an auction based, so one large bidder drops out, the rest of the market fills that. i don't think you'll see that material impact in the financials >> all right, bob peck, thanks for being with us. >> thanks for having me. we are watching mylan this morning taking a hit here in the last few moments meg? >> that's right, carl, news an investigation into generic drug makers for price fixing on drugs is going to be expanded, according to a report from reuters, citing sources. a separate report from bloomberg on that same investigation essentially saying mylan's president appears to be targeted in this investigation, guys, so mylan is down about 6.5% here. we have reached out for a comment from the company, we have not yet received it back, but we'll bring you any more news on this back to you. >> thank you, meg. meanwhile, shares of
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qualcomm sinking this morning, down, i think, about 6%, 6.5%. reports saying apple's next generation of iphones and ipads might not include qualcomm components instead, apple preparing to consider chips from intel, possibly even media tech actually, here's a clip of the ceo of qualcomm, sorry, the chairman of qualcomm, paul jacobs, discussing this tip with apple. >> we've had these battles, even when i took over in '05 as ceo, we had a battle back then. it was nokia and erickson and broadcom, it was also a big, big battle similar sort of thing. people want to get around, you know, they see intellectual property as a cost in their bill of materials and they want to pay less >> hard to see how much of this is job owning, how much is real.
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this was supposed to be over whether qualcomm had access to the software tool to test qualcomm's latest modem, but qualcomm saying to me and others this morning they've already delivered that component to people like apple to be able to use, so it can't be about that really what both sides are trying to do is raise the stakes in this fight. like a couple having a really bitter dispute, right? and throwing meaner and meaner stuff at each other, whether it's involving suppliers, what not, back and forth. so unclear whether apple would actually try to cut qualcomm out here qualcomm's products tend to review better than intel's and media tech, so it could hurt apple products if they do that >> if it were to happen, is it existential for qualcomm >> yes apple's products are very high margin, very high end, they tend to buy high end products, that that absolutely would hit the profit margins of qualcomm, but what the market's not realizing,
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it would also hurt apple if samsung and others are using these higher end components making arguably better products, at least in some areas, than apple is there's already some controversy about the way apple has used modems from qualcomm and intel and slowed down the qualcomm modems to be equal to intel. if they cut out qualcomm altogether, see what happens to the product. >> find out if it actually happens, they are definitely ratcheting up the rhetoric, that's for sure. when we return, reps from facebook, twitter, and alphabet set to testify on the hill today. we'll discuss the latest revolutions and talk with athena health's reported merger with aetna. later on, the reviews are in for the new iphone x why our next guest says apple's latest and greatest elfes like a concept car when "squawk alley" returns.
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we are learning some new developments on president trump's upcoming trip to asia. our kayla tausche in d.c. with the latest good morning. >> there was a briefing that just wrapped at the white house with senior administration officials filling in some of the details about the president's trip they confirm it will be his longest since taking office and the most diverse and most countries visited since george w. bush traveled to asia in 2003 the president will continue to make a long-term commitment to
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the region as the u.s.'s most important bilateral relationship we learned the president will be playing golf with japan's prime minister shinzo abe on november 5th, but he will not be visiting the demilitarized zone between north and south korea. that had been up for discussion a couple weeks ago, it was still potentially on the table, but senior administration officials said on one hand scheduling was difficult. they want the president to visit american troops and families and also speak with south korea president moon to reaffirm it is a joint effort on the ground in their alliance in thwarting the north korean threat. he also said that it's become a bit of a cliche with the vice president, the secretary of state, and the defense secretary all visiting the dmz earlier this year, so there isn't a need for the president to visit as there may have been. again they touted the needs for china to really open their markets and fix the trade deficits and exert more pressure
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on north korea, but we're still waiting on the exact details, guys, on how the president plans to turn this on china next week. >> kayla, thank you so much for good information about an important trip coming up meanwhile in washington today, big tech is, obviously, set to face lawmakers, top lawyers from facebook, twitter, and alphabet head to the senate to testify on the russian ad buys during the 2016 elections head of news, government, and elections, ceo of sharp things and joins us today at post 9 good to have you back, adam. nice op-ed in "the hill" where you argued it can't be left to the companies on an ad hoc basis, but can't be entirely the work of imposed legislation, right? >> exactly all sides need to come to the table to solve these problems. companies left to their own devices you end up with a fragmented system. that doesn't work. but regulators, not good at figuring out tech. i think that's one thing we're going to see on display later
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today. the government should set standards, let the companies come up with creative implementations of them. >> we've heard the companies go from nothing happened, to saying small things happened, and now they are talking 126 million people on facebook, nearly 300 million impressions on twitter are they going to try to cap what they believe the influence was? set a number and say no more than this? >> well, right now they are tracing it all back to this one entity, the internet research agency, and we don't know if there are other players, other patient zeros, if you will, out there. i think one transition we're seeing is the move of the conversation from the advertising piece of the equation to the more organic read, which is, of course, where these platforms have their strengths. i think today you'll hear a three-pronged argument first, here are the facts, the numbers as we have them today. second, thooers the context, how big our platforms are and why these things are actually quite small in their view. and, three, here are the things
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we have already done to address them and why we don't thin washington should get involved >> the problem isn't really political advertising. is it -- it's really knowing who are these people online, where are they, and what have their actions been over time are they trying to influence not only elections themselves in the very political process in this country? is any of the legislation or the proposed legislation that's being put out there really going to address those core issues >> no, not at all. in fact, the only piece of legislation that has notably been introduced in the wake of this is the honest ads act from amy klobuchar and mark warner saying social media ads should have the paid for by so and such disclaimer that tv ads have. so we're just barely catching technology up to where we were 30 years ago in election regulations. the fec had an opportunity to make these rules six years ago google and facebook argued against. twitter at the time did have
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those disclaimers. the fec did nothing and it became the instant standard. >> why are we seeing the ceos on the hill because they weren't summoned specifically isn't it the serious enough, big enough issue at this point where 126 million, half of the voting population of the u.s., are exposed to these ads, that we should see a sheryl sandberg or mark zuckerberg on the hill? >> i don't know who the committee actually called to testify, so i can't speak to whether it was the committees or the companies that chose who to speak. i think one thing you will see today is evidence of the culture clash. you'll find no two further disparate mindsets than washington and silicon valley, and at least the general councils have the legal backing to speak both languages. >> if you had to parse the three names, twitter, alphabet, facebook, who walks on to the hill with more vulnerability twitter because of the exposure to bots? facebook because of their scale?
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google because of search >> i think it's facebook and part of that is because they are so much of the wall garden twitter came with new data today, but, of course, there were already third party reports on the scope of these compromises on twitter because it is a public platform where others can peek in and see what's going on. everything that's happened on facebook we're taking their word for it on top of that, they have the biggest set of data on users of any of these companies and i think the lawmakers are going to have serious questions about those. >> when facebook was starting out, it was all about reality, kind of mapping reality to the digital realm. if you see somebody on facebook, you know who that really is based on who they are actually attached to. seems like somewhere in the process that got frayed, especially when it comes to business and advertiser, you don't know who they are or who's behind the company, et cetera what should be done, in your view, as somebody who's been in the industry, to either tie these companies and processes back to reality, or otherwise
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prevent this kind of fraud from going on >> what you touch on is part of the strength of the platforms in terms of the organic reach it's not just the ad that has the impact, it's when a friend of yours reshares or posts it, so it comes to you as so and such likes this advertiser and now you have your friend's credibility added to this entity you don't know i do think the companies should have higher standards for advertisers, particularly in the political realm. i think we saw a lot of weaknesses in the process this last cycle in that arena i think we do need to be careful, though, about how far the government goes in to setting those standards. there is a piece of legislation, the communications decency act, that gives the companies a broad immunity for basically doing nothing on their platforms it's one of the few industries that has a clause and law that says it supersedes constitutional provisions. i think there is time to say that immunity should be more limited, but it shouldn't be a
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checklist from the government saying this is good, this is bad. >> one last question, part of your job at twitter was to help campaign and candidates expand their reach, right learn how to use the tool. do the companies -- was that wrong? do they bear any responsibility for teaching, essentially, some bad actors how to -- who's their influence? >> i like to think we worked on good actors. we certainly did not work with some of these players that have come up in the report so far at the end of the day when you look at the work twitter, facebook, and google have done with donald trump, hillary clinton, and others, i think anything that brings these candidates into the public sphere, making them more accessible to the electorate, to ask direct questions and hear directly from them is a good thing, but, obviously, those tactics can also be used for the russians >> it seems they built their businesses on targeting advertising and knowing about you and knowing who you are and your preferences, and selling
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that to the advertiser, and it sort of blows that whole idea up, or it shows how bad the consequences of that very model can be >> yeah, and we saw just yesterday, buzzfeed had this presentation from facebook stating exactly how they segmented people one category was the great outdoors, millennials who like the nra, and i think if anything positive comes out of this for the consumer, it isa better understanding for that concept of if you're not paying for it, you're the product both twitter and facebook have announced these new transparency initiatives that will supposedly allow people to see how they were targeted. i think that is a first step, but if you look at the privacy settings on a lot of these platforms, it winds up being a form you never really know exactly what you're giving up and to whom. companies need to be more clear on how that works. >> going to be interesting afternoon and tomorrow thanks for coming in and sharing insight. adam sharp
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when we come back, athenahealth ceo jonathan bush talks amazon's push into pharma and much more. plus, some early impressions are in on the iphone x a first look when "squawk alley" returns. if you're on medicare, remember, the open enrollment period is here. the time to choose your medicare coverage... begins october 15th and ends december 7th. so call unitedhealthcare to learn about... a plan that could give you the benefits you're looking for. it's the aarp medicarecomplete plan
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quick look at ibm this morning on news the board has authorized a $3 billion stock repurchase of course, big blue has remained in the news ever since earnings. we continue to watch developments out of the company. >> hanging in there in the 150s. some optimism lately around the cloud strategy, but this little bit of what some would call financial engineering, not moving the stock that much lots of hope, though, on growth in the cloud meantime, the amazon threat continues to transform the health care industry most recently news cvs is in talks to acquire aetna shares falling this morning. the ceo declined to discuss the cvs reports during the call.
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joining us to share his thoughts on the industry consolidation, the amazon effect, and much more, athenahealth ceo jonathan bush welcome back, nice to see you. >> hey there, sara, happy halloween. >> happy halloween to you, my friend so how would this deal potentially transform the industry we've been talking a lot about it, and do you think it is a direct response to amazon's threat >> well, certainly, there's been lots and lots of deals over the last decade, and in any industry that kind of mature to try to get ahold of market share, people try to buy or merge with the supply chain, the referral chain, and there is something to that between aetna and cvs there's also great cost opportunity with drugs being such a huge cost and be able to collectively purchase between them and, of course, they've got to be thinking at cvs about amazon plucking off their retail side and then maybe putting some health care in the everything store.
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>> so, if we were to see this combination go through, who feels the most heat? is it other retail pharmacies? is it a prescription benefit manager, the actual drug companies themselves >> one of the things that pharmacies can do to remain relevant when a lot of their retail gets plucked by the cloud is to be more actively engaged as health care providers, so there's a different initiative that we work with pharmacies on when the doctor prescribes a drug, having a technician talk patients through how to take the drug cvs, of course, has the minute clinics which have full-on nurse practitioners in the store to do basic primary care visits, in addition to talking people through how to get good value from their drugs drugs are one of those things that don't work. it's not a pill. you have to take it just right over a period of time with the right diet and the right behavior, so there's a whole big
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opportunity to take advantage of building a business model where you make money saving money for the health care payer. and with aetna as a health care payer, you have that synergy built in between cvs and aetna, so could be kind of a cool move. >> jonathan, your business, the health care software business, is it coming back? your stock has done well, or is it the presence of your new investor paul singer, who took a stake in may >> well, athenahealth has had a great little chapter of late we've had to do some refocusing with the change of administration, so we sharpened our focus in terms of the product and the activities we're doing. we got more efficient, and that was feedback from all our investors, and we, you know, little resistant at first to hear our baby was sacked, but we're thrilled with the results of our work. and we now have energy to focus on things that are unique. you call us a health care software company, i call us the freaking health care internet,
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right? we have the ability to fund collecting to every lab, pharmacy, hospital, and doctor's office in the country and make money doing it that hasn't existed before, and we're doing it we're going to have almost 100% of the major academic medical centers connected to athenanet by the end of this year and the ability to make money doing it i'm feeling like it's a good time for athena these days >> got a new chief technology officer helping you to build out that technological capability. what's the next milestone technologywise that's going to perhaps set you apart, allow that next phase of growth for you? >> a big milestone for us on the technology side is replatforming athenanet as a series of separate, untethered micro services that can work in the retail internet, as well as in the guts of health care. so, for example, we just built an untethered calendar asset that can plug into, say, an amazon or an apple store or to
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yelp or to google to allow the appointments of our doctor clients to be available like an open table restaurant appointment. that movement, you know, deductibles are coming up, obamacare is kind of fading back that movement of the retail internet into medicine is something that an internet-based company like us can take advantage of for our clients this a way that every other software company can't that's why i think you've seen the enterprise software companies that are publicly traded that share their info, their bookings are down 20% to 25%. kind of a rough patch, but we're able to get real growth potential out of this next chapter, i think >> finally, jonathan, we had you on all summer, we talked about the potential for aca repeal, then we moved to graham/cassidy, then the bit about the csrs. what will health policy look like >> i'm forecasting a large number of tweets related to
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health policy in 2018, and i'm actually not forecasting a whole lot more i think actually the sort of subtle acceptance that there may not be any game changer kind of thing is allowing people to settle down and build businesses it's exciting at athena, there's a long sort of micro aggressions that we haven't been able to focus on while we reacted to federal policy that we're now getting into the clipboard, the referrals, the authorizations, the doctor having to put in all these different codes to get paid, we're starting to use machine learning and a.i. to pull that out live and it's much more inspiring to work on hopefully just the tweets for a while, god willing >> all right, jonathan bush. we've gotten used to them, the tweets >> can't help but love them a little take care, you guys. >> and to you. normally at this time we'd bring you the european close,
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but due to europe going off its version of daylight savings time, european markets close at 12:30 eastern this week. the close returns to this time next week. let's get over to sue herera and get a news update. good morning again, sue. >> good morning once again, carl good morning, everyone here's what's happening at this hour sergey lavrov says he sees nothing wrong with a former campaign adviser to president trump reaching out to a kremlin-linked think tank. court documents say george papadopoulos was approached by people claiming tie it is to russia and offering him dirt on hillary clinton. lavrov called those accusations groundless at least 15 people were killed in air strikes in an eastern libyan city late last night. those attacks continued for about an hour and hit a hillside area outside the city. another 17 were wounded. all of the victims appeared to be civilians military officials declined comment. hillary clinton was in a chicago suburb monday for her book signing
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hundreds of supporters came out to see her as she signed copies, she briefly reacted to the mueller indictment, saying she has a great chapter on russia in her new book the olympic flame was officially handed over to the organizers of the pyeongchang winter games the 2018 games will be held in south korea, and they begin on february 9th you're up to date. that's the news update at this hour back to "squawk alley. carl, i'll sends it to you >> sue, thanks so much when we come back, an in-depth look at apple's iphone x as shares of the company hit all-time highs earlier this morning. o w is up almost 30, close t session highs. we're back in a moment whoo! ( ♪ ) woman: class, let's turn to page 136, recessive traits skip generations. ( ♪ ) molly: i reprogrammed the robots to do the inspection.
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our next two guests have had a few hours at least to review the iphone x with new features like no home button, face i.d., and animojis, let's take a closer look. senior editor with c-net and jeff fowler, technology columnist with "washington post." welcome to both of you scott, did a lot of tests with this, face i.d. is the biggest question people have out there for you it worked well my question is, are you in love with it enough to recommend that people spend $1,000 for the features and if so, what's the one feature that should push people over the top >> not quite yet, no, and i agree. there are a lot of iphones right now and i think the decision is
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really tough and it reminds me of the mac books where suddenly which one do you get i think the best feature is the size of the screen element, although that screen is not the same thing as the iphone 8 plus or 7 plus, which means sometimes it actually feels like less screen space for a movie, sometimes it may feel like more. there's funky things going on. i think that the face i.d., touch i.d., works for a lot of people already face i.d. did work with me with beard testing, hair testing, most every day stuff it works, but it requires a whole new gesture language whether for apple pay you're double clicking and bringing it up to unlock, some face i.d. things happen automatically with pass codes where they seemingly happen, but to unlock the phone you need to bring it up, it unlocks, and then i need to still do that and swipe to enter. >> ready to look at your face. >> before it's ready to open your phone so it's like a two-step. it's not, oh, i do this and it's
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open, no hands required. so getting used to that when is the hand required, and to me, the most difficult part is that instead of the home button, you're swiping up. so instead of a touch, it's a swipe. if you're walking around on the go, swipe is harder to do. >> jeff fowler, apple stock is up perhaps in part on strong tech earnings. in general last week, and certainly in part because of what seemed to be strong preorders of this phone. you compare it to an awkward first date getting used to this new interface without the home bu button is this date going to end well for apple? investors sort of need to know >> listen, i think it's no slam dunk here. when ordinary people are considering giving up the phone they've known for ten years, you look at the iphone x, it requires a whole new relationship i mean, you're breaking up with that home button, and, look, you get some really cool things for that, as scott was saying. you get this screen, which is
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incredible, you get sort of the opportunity of a large screen and much smaller form factor, but you also have to learn a totally new way to learn your phone. all that muscle memory to pressing the home button has to be retrained apple taught us that in the first place, but they have to convince people it's worth the $1,000 or more to buy into this. and that's where i think there's a ton of possibility for apple to really help us envision a future where, look, your phone is a much more personal device it literally knows your face it can tell if you're smiling or frowning, but they've got a lot more work to do, as well as other app developers, to help people understand why that's something that's worth spending a lot more money to get. especially given that we've got so many other great iphone choices out there right now, the 8 and even the 7 is looking like a fantastic deal at almost half the price of the iphone x. >> scott, i wonder if there are any security questions around that, using the face i.d. to
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unlock the phone >> well, it seems -- in terms of what apple is doing, similar to touch i.d. in the sense it's all local here, it's one device, it's one face at a time. you know, and -- >> in other words, they are not storing an image of your face in the cloud that can be hacked and somebody steals your face. >> exactly >> people tell me i look like people sometimes will they be able to open my phone? >> well, i haven't done any duplicate testing with myself yet, but, you know, i don't think that's going to be a tremendous concern, but we have to check that out. very early days looking at this. i think that the question to me is, like, how reliable is it going to be when you really want to use it all the time the other thing is, all this stuff, face i.d., touch i.d., still with pass codes as a fall-back option so you still have a pass code, so when is that going to, you know, become something that could disappear? to me that's another option of getting in your phone. >> to me it's really about how
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reliable it's going to be. you know, is it going to be able to work for you when you're in bed reaching for your phone in the middle of the night and unlock successfully? for me that worked about nine times out of ten, but it's really about getting the proper distance from the face if you get it too close, it won't work if you're one of those people that sits in bed like this looking at your phone, it's not going to work that way >> all right well, the relationship metaphors abound, scott, jeff, thanks for joining us we'll see what thelines look like on friday, because the stores are supposed to have inventory this time. first time in a while. thanks, guys as we go to break, we are still watching shares of under armour down this morning on their guidance dow's up 22. rick santelli, what are you watching >> you know, i'm looking at the wind up of the markets not only from the standpoint of the fed, but also in front of the bank of england, post bank of japan, and in front of the big jobs number. how elusive is 3% growth maybe a little less elusive
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every day. we'll talk about that after the break.
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i'm scott walker coming up today on the "halftime report" at the top of the hour, under armour hitting a four-year low today, but as wall street bails on the stock, is anyone on our desk ready to jump in? plus, big tech grilled before congress over russia's involvement in the election. how much risk is now on facebook, google, and twitter? and forget those other reviews of the iphone x, there it is,
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got our own right here we're going to debate whether shares are about to take another leg up "halftime report," sara, starts at noon eastern. see you in less than 15 minutes. >> all right, very eager to hear the under armour discussion, thank you very much. we're watching shares of this stock because it's now the worst performer on the s&p 500, the class a stock down 17%, the other one down about 14% it's also one of the worst performers so far for the year, down more than 50% under armour today slashing its forecast for 2017, both sales and earnings, that eps guidance cut in half. it was the second time in a row. so what is really going on with the athleticapparel maker that was once riding high and growing fast well, i did talk to kevin plank, the ceo, this morning. he got on the call with his new coo and president, said that there are two reasons for what they've been seeing in the business, which is a slowdown in north america. it's internal and it's external.
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internal they grew too fast, over their skis, had some maturing to do and some diversification to do when the marketplace changed away from the athletics, performance-driven nature of sportswear into the lifestyle trend, which adidas conquered so well and stolen growth from under armour he said he now has this president, number two, that's going to focus on operating the business better on financial discipline, so that plank himself can focus on brand and product. so this is a company finding itself in an unusual position, guys, of promising changes and restructuring to investors blank says it's a two-year story, little bit of a journey we might see results in the next year it's interesting given nike gave investors reason for optimism last week. analysts say adidas has been surging, killing it, more than 100% higher the last two years and under armour has gone the complete opposite way. >> yeah. sounds like kevin plank ate a
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little crow on the call, as well >> modest, more modest sounding plank. they know they have work to do they have to grow the international business faster, they have to grow women, and they've got to get into more lifestyle versus just the performance wear >> in the meantime, let's get to the cme group, check in with rick santelli and get the santelli exchange. hey, rick. >> hi, carl. you know, a lot of talk, especially on this particular trading floor, is about why interest rates haven't gone higher faster, but maybe we should all take a step back, because this could be the week look at all the events we've had the market needs to pay attention to bank of japan, they didn't really change. maybe they are going to be odd man out. mr. carney and the bank of england thursday looked like they may be ready to move, losing stimulus, and the negotiations with regard to brexit, headlines made the pound trade a bit higher that's very interesting in and of itself. one of the eu negotiators seems to think we need to get this thing moving along faster.
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look at the other issues responsible for the potential for better global growth we see things in data, and you could call it soft data, but whether it's chicago purchasing managers survey, confidence number, university of michigan, these are the confidence board or and maybe it's more animal spirits than anything kwhaun tative you can point to, but animal spirits are important, and just today alone. two analysts i saw that were totally dead set thinking 3% or higher growth six, seven months ago, didn't think it was possible and now they are wavering a bit i can understand why even if you look at what we saw, the wage component and the employment cost index today. it wasn't perfect, but it's been improving. we've seen average hourly earnings improve, and it isn't only here. it's -- you can't have us a stand-alone economy in this global environment and think we can lift all the water ourselves, usually when i think of global growth, i think of some of the lag yards like the
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french the french are doing tax reform! macron is actually a reformer. it's very impressive but certainly not going to hurt the cause of this administration to try to move better policy and tax policy, make capital cheaper, and finally, it's all about jobs, jobs, jobs this could be the key. tying everything together with regard to rates and finally maybe 3% growth. let's go to the board here these are all the employment numbers we've had this near hon non-farm payrolls. what you've noticed is jan, feb, march, look at the numbers on a stand-alone basis, you saw they averaged -- let's go the other way. more enlightening. look at the last three numbers they averaged 91,000 if you look at six numbers, they averaged 139,000 if you look at the whole year, an it was much better in the beginning, they averaged 148 you see what i'm saying? the trend is going the wrong way. if this number starts to reverse that process, maybe that
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ten-year yield for march, the current high, could be something that becomes more possible to try for a second dance carl, back to you. >> we will find out. friday is going to be a big day. thanks, rick santelli. still to come, the multi-billion dollar story behind the dodgers historic run to this year's world seer i we'll get a live report from dg sdi ia ment my "business" was going nowhere... so i built this kickin' new website with godaddy. building a website in under an hour is easy! 68% of people... ...who have built their website using gocentral, did it in... ...under an hour, and you can too. type in your business or idea. pick your favourite design. personalize it with beautiful images.'re done! and now business is booming. harriet, it's a double stitch not a cross stitch! build a better website - in under an hour. free to try. no credit card required. gocentral from godaddy.
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fans are getting red for a wild night in los angeles has the houston astros and l.a.
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dodgers prepare for game six of the world series our jane wells is live i'm sure there will be lots of costumes tonight there, jane [ no audio ] >> we didn't hear jane too bad. try to work on getting her back. >> a gorgeous shot. >> an amazing shot we'll make that happen no doubt we'll get back to jane later on this morning going ton an exciting game six dow for the meantime is up about 16 points. a number of headlines crossing regarding tax reform and we are expecting some pool playback from the president not too long from now let's try one more time on jane wells at dodger stadium. >> reporter: hello, hello. hey, can you hear me now, as they used to say in the ad all right. happy halloween. happy halloween from dodger stadium. we're in this crazy series, tonight game six will be a trick for one team but overall it's been a treat for viewers
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ratings for fox have trailed last year's epic cubs victory, but sunday night, game five, they had been up significantly over the previous two world series and the ten-inning see-saw beat "sunday night football." retail prices for game six plummeted after the astros broke l.a.'s heart you can see the orange line. that's game five the middle line is game six. the top line though, if it goes to game seven, you're seeing the prices are already starting to rise that's assuming everybody lives this long. it's been exhausting trying to get through this series. we've seen 22 home runs. that is a world series record, and pitching coaches from both teams are now complaining about the balls. look at this picture from "sports illustrated," a regular season ball on the left, a world series ball on the right some pitchers are saying the world series balls are slicker than normal, making it tougher to throw a slider effectively, and finally the dodgers own verse spent an astronomical amount of money to get here.
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over $2 billion to buy the team and another $2 billion plus to get to the world series. we'll ask stan kasten and we'll ask him about that and a lot more, including whether home plate umpires should be replaced by computers >> can't wait for that h.more of "squawk alley" is back after this [vo] quickbooks introduces rodney. he has a new business teaching lessons. rodney wanted to know how his business was doing... he got quickbooks. it organizes all his accounts, so he can see his bottom line. ahhh...that's a profit. know where you stand instantly. visit quickbooks-dot-com. approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five,
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a busy week rolls on earnings tonight include electronic arts among some other names. >> that's an interesting name, especially on the mobile side and apple and facebook are the ones we're looking forward to. >> let get to wapner and "the half." and welcome to "the halftime report." i'm scott wapner our top trade this hour. under assault. chairs of under armour hitting a four-year low and the company cutting its sales outlook and missing its earnings what ceo kevin plank just told investors. with us, joe terranova, stephanie link, joe lebenthal jon najarian. >> kevin plank is calling 2017 a reset for our business and our brand. the question is, steph, can they do that?


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