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tv   Squawk Alley  CNBC  July 30, 2019 11:00am-12:00pm EDT

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headquarters in el segundo, california it's 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ good tuesday morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan. there's a lot to watch today, but we're going to start with beyond meat, getting hurt in today's session after mixed result in the announcement of that secondary share offering. aditi roy has all the latest this morning from san francisco. hi, aditi. >> hi, carl. the stock is down despite the company posting some strong numbers on certain metrics investors, though, are trading
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on a secondary stock offering by the company. beyond is on track for its second-worst day ever. its worst day was back on june 11th, when it went down more than 25% in volatile trade the secondary offer is for 3.25 million shares 3 million will be sold by current shareholdered while 250,000 will be offered by the company. a regulatory filing chose that ceo ethan brown plans to share more than 38,000 shares which could net him $38.7 million. they'll use the proceeds for expanding supply and marketing some believe that could lead to further short interest in the stock, because it could cut borrowing rates. but the bulls say the offering could be a positive for the company if the shares end up in sticky hands this as the company's actual results were fairly strong beyond raised its yearly revenue guidance from $210 million to $240 million
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it attributed its quarterly revenue beat to new partnerships and increased demand from existing customers despite the stock taking a hit, many analysts also seem bullish on the company jpmorgan saying, we continue to see beyond as a beat and raise story, one for which at least in the near-term fundamental momentum may matter more than valuation. both jpmorgan and bernstein analysts raised their price targets on the stock back to you guys >> aditi roy, thank you. let's bring in tom lee and mike santoli both with us here at post nine. is beyond meat's run-up to this report indicative of the investor sentiment we're seeing in the market? tom, is it >> i think the run-up really shows how the market has started to put a big premium on execution stories, rather than valuation sensitivity. i think it's even handling today's news quite well. you know, this massive increase in shares should have destroyed the stock. and 10% is kind of a mild pullback >> exactly it's all relative, right
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we're still talking about a name that three months ago when it ipo'd, it's up 800%. since then, i think it begs the question, mike santoli, especially when you do see the ceo also selling some of the shares and doing it earlier than the six-month lockup, could you look at this as a potential market top >> i wouldn't say it absolutely, clearly is a market top. first of all, there weren't enough shares out there to absorb all of the big picture enthusiasm for this long-term story about plant-based meat, obviously. so getting more shares out there, in itself, isn't necessarily something that's going to upend the stock but it's not the greatest signal when insiders can't wait another three months to hit the bid of the market so i think that's why there's some hesitation right here that's clearly, it happened before it had to kind of jump ahead of this lockup period so, look, i think that you have to step back and say, if the stock was only at 100 today, it would be a massive win if that's all it did is went from 25 to 100 so the more that this story --
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this stock is about people who actually want to own it for a while, as opposed to just flip it everyday. because yesterday, the entire float traded, yesterday. >> tom, is it dangerous to try to read too much into beyond meat in a way it reminds me of go pero pro. it had this amazing run for a while. who knows where beyond meat goes from here. we know go pro did this. but it didn't really necessarily mean that much there was some stock that ran up back then that didn't tank >> that's right. i think that's true. one, it's not as widely retail held as we think it's not even a top 20 stock in robin hood there's more cannabis there than no-protein things. and it's not an institutional name if increase will help esg funds get exposure so i think it's kind of a unique story, a moment in time. and if they can leverage their equity right and acquire ip, it's actually a really bullish story. >> how much of this, though -- we've got a fed poised to ease how much of this speaks to the fact that investors are looking for that next big shiny area of
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growth >> it really does feed into the narrative. you know, i just had breakfast with one of our biggest clients and they were saying, if you had to look at this market this year, as people start to think the world is shifting towards mmt and zero rates, they're re-rating secular growth stories. that's a lot of what we've seen in tech. i think beyond meat is another example. it might have the effect of overall lifting the markets. so, yeah, it kind of fits that narrative. but institutions aren't really big in beyond meat >> it's interesting, because on one side, the market is really being driven by these eternal brand name companies that have been around forever and they're really trading just like bonds, in a sense very, very highly valued bonds with a growth kicker, like png and disney and coke and all the rest of it on the other end, you have a lot of these softer stocks, that are all about a call option on some long-running trend and i think beyond meat would fit into that latter category. but neither one of them says, this market is in a froth and
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it's a speculative fervor that's about to tip over. >> okay. well, meantime, we're halfway through earrings season, no collapse in guidance, but no clarity on global growth, either bob pisani explains. bob? >> and the good news here is flattish earnings are coming to fruition and that's not a big surprise for the markets here's what i mean by flattish french quart first quarter, we're up 1.6. and the future quarters, down slightly, and this is a lot of hope in the first quarter that things will improve. this is what you call flattish where you're seeing an impact right now is there is an impact for companies that have big international operations from the global slowdown and the trade in tariffs wars. you can see this with companies that have more than 50% of their revenues outside the united states these tend to be internationally focused. their earnings for the second quarter, down 13%, among those who have reported. those that have less than 50% of their revenues, outside the
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united states, more domestic-focused companies their earnings are up 3% this is a very, very big difference there's your trade in tariff wars, there's your global slowdown, a little part of this, and it's clearly impacting earnings overall, but it's not causing them to collapse or crater so where are we right now in the earnings picture right now for the second quarter, 76% reporting or beating, that's about average, believe it or not. so nothing unusual going on there. we are not seeing, guidance has come down for the second half of the year a little bit, but it's not collapsing and that's the good news there is a few exceptions, but that's the good news we do not have clarity on global growth we don't have clarity on what's going on in the economy in europe or china or the trade in tariff wars. that's a problem for the markets. but the most important thing, why we're holding up so well is the global, to the just the fed, but the global central bank backstop and that's the most important thing. and the one thing i get real worries about from traders is, what happens if that central back backstop, the continual cutting of interest rates, doesn't serve to support the
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global economy anymore, that the global economy keeps slipping down further and further in other words, they're out of bullets. it doesn't work anymore. then you're going to see the earnings estimates come down rather dramatically. that is not happening yet, but it is probably the most important worry that's out there. we can't answer that for a little while back to you guys >> still going to try to dig into it, bob pisani. and tom, i'll put you on the spot with that it almost seems like a foregone conclusion we're getting some kind of cut from the fed tomorrow the bigger question maybe hanging behind that. what does easing look like continuing into the back haftlfo the year what do you think about that i know there's a lot of discussion right now about maybe halting the balance sheet reduction program right now. is it warranted? >> yeah, i think there's -- it's important for the fed to take action now, as insurance, and financial conditions outside the u.s. really warrant that but i think investors who think the fed cut's not going to make a difference are underestimating how much support there is for
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markets right now. bob was talking about the earnings u.s. corporates have gotten stronger because of the trade war. so it's a comparative advantage. the white house is supportive of profit growth, and now we're going to get policy support from the fed. that's a huge trifecta it should be super bullish and year-to-date, 2019 is the best year since before 2008 so the market is on track to beat 2009. >> we saw that micron and intel both said that they'd figured out ways around kind of tariff headaches. and that seemed to, in a way, save their quarters in a way that people didn't expect. irobot on the other hand did not figure out a way could we be kind of up against the tariff that broke the camel's back we see what happens when people don't figure out ways around this, but enough of the big guys seem to figure out ways, too >> and i think that has been the rule if you kind of have been in these markets forever, you have a diverse supply chain and you can sort of have scale and
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essentially be the more important customer yes, you can probably figure out a way around it. i don't think right now we're at that moment where the tariffs are -- have created a break point. if you escalate from here, if it becomes more kind of broadly applicable to more companies, yeah, sure i think the market has really set it aside, except in those instances where it has a true and identifiable impact. the markets right now on fed watch, essentially saying there's, you know, yields an co kored at these low levels. the fed will try to make this technical judgment to get short-term yields down lower it's not a rescue economy for the economy. and we're riding out this flat issue earnings period. by the way, apple, best example of a very, very flat earnings trend absent buybacks and the market seems at least willing for a while to ride it out >> data trek today says it's starting to look like 2014, 2016 where s&p earnings were about $119 for three years and you're up 28% in stocks does that sound familiar to you?
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>> and i think that's really kind of a spot-on observation that p\e matters a lot more tha "e." i think at the start of this year, everybody knew that earnings revisions would be negative the people that are eps people got bearish. but p\e has been expanding and p\e matters more to markets, 21 out of the last 28 years, it's all about p\e. >> so goldman's call today where they raised their target and cut their earnings estimate doesn't seem ludicrous to you? >> no, in fact, it's probably a little bit backwards looking, because it's in response to where we're already at 3,000 but i think people are underestimating how much markets can advance into year end. you know, on the first fed cut, when the leis are positive, the average three-month gain is 14%. that means 3,400ish for year end. >> how important are small caps for this equation? to go back to that chart that bob pisani showed, companies with revenues greater than 50% outside of the u.s. versus those with less than and the divergence there
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yet, small caps continue to lag and continue to hover in correction territory >> i think small caps are suffering more from a liquidity issue. you know, i think that there's equity tina happening, so money flows are going into u.s. large cap, u.s. secular stories, and small caps aren't benefiting from those flows i think large caps will still outperform small caps for now. >> great gentlemen, thanks for joining us today. >> thank you >> tom and mike. and after the break, big tobacco's response to the rise in vaping criticism. the ceo of phillip morris international joins us right here at post nine next here at post nine next don't go anywhere. exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. soun see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade.
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phillip morris international shares down today, but up about 30% so far this year, despite this industry-wide decline in cigarette sales, as electronic cigarettes and heated tobacco products gain popularity and criticism. it was a subject of a cnbc documentary, "vaporized" and we spoke with the cofounder of juul, about the marketing of smoking alternatives and the impact on young consumers. >> when we launched juul, we had a campaign that was arguably to kind of lifestyle oriented, too flashy, it lasted less than six months it was in the early days of the product introduction we think it had no impact on sales. >> sales of juul soared nearly a thousand percent in the year after that campaign. joining us in a cnbc exclusive today is the ceo of phillip
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morris international you've been pretty direct about the existential dilemma that combustible tobacco is facing. where's your head right now on that >> well, our objective is to phase out cigarettes worldwide as soon as possible. that's why we've developed a portfolio of alternatives that include the vapor products, hidden tobacco products that are existing in 48 markets worldwide, and just now, we are about to start commercialization finally in the u.s. following the fda authorization that they're appropriate for public health so i feel very good about the situation. but we're also competing in the combustible business and last quarter and since the beginning of the year, actually, we're pretty happy because we have a good performance in the combustible and much more importantly, obviously, very fast growth in our smoke-free
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products, including our product, icos >> what's the strategy in the u.s. and is it your most important priority around the world? >> first of all, i'm very happy that we bring icos to 4 million americans that spoke today so we start with a test market, actually, altria, sour ex-parent company, and they have an exclusive license distribution agreement, we start in one city and we'll expand after that. but we feneed to learn first. for me, it's very important for two reasons. first of all, because we offer an alternative to the evapor products, to the people who otherwise would continue to smoke. and then a product in the u.s. helps the rest of the world. >> what is phillip morris'
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commitment to health overall because i hear you saying that the idea is to reduce cigarette use. there are some people who say the research is not conclusive that icos and heated tobacco is actually better for you. i don't know either way, but is there a standard that you're using on the products you release and a commitment to the consumer that's health specific? >> well, depends on, first of all, the research of pre-clinical and clinical, points to the fact that this products are better. icos is a better product than cigarettes, for sure now, the fda has authorized the product, as i said previously, at this stage as appropriate for public health and they're reviewingreview ing the modified tobacco population that you can tell consumers this is better than cigarette if and when that happens. in the rest of the world, based on the regulatory regimes, we
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communicate to consumers the fact that it is better alternative than cigarettes, because that's essentially what the consumers need to know how the standards are applied, as far as industry standards, as i said, with clinical, in icos in particular, we have a 90 to 95% reduction in exposure to chemicals compared to cigarettes and all the other evidence points to a better product and over time, as this product is adopted and, you know, by the way, we celebrated 11 million users of icos last quarter, of which 8 million are fully converted and use exclusively the icos so we have epidemiology to quantify exactly what is the reduction in disease and pl premature deaths and what is the absolutely clear impact on public health. but i think this product will have an impact on public health. >> question, which is more profitable combustible cigarettes or icos
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>> in terms of unit margins? >> yeah. >> for the consumable part, icos has better margins than the combustible products, for a very simple reason. governments everywhere in the world recognize that this is not a cigarette, so they are classified in a separate category of noncombustible products or under other tobacco categories that have a bit more favorable treatment. >> here in the u.s., altria, which was split apart from phillip morris international over a decade ago is licensing the ability to sell iqos here stateside. they also have this majority investment in juul wh how do you feel about that? >> well, they have a minority investment >> minority investment, 35% stake. >> that's why we've developed a portfolio of products, including vapor and pure nicotine products i think consumers over time have the choice to either adopt one product, like only vapor or only heated tobacco, or use more than
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one. i mean, a little bit how you do with alcohol, you drink beer, you drink wine, you drink i don't know what. you're not an exclusive user of one category i think today the category that has the ability to switch people more and more permanently, as i said, 70% is heated tobacco products, but i think there's space for every product. and altria follows the same logic of portfolio approach, including smokeless than we have, so i don't think we have difference in strategy >> are you worried at all? obviously, teen use is what's gotten juul in so much scrutiny from the fda in particular, but parents everywhere, do you think you're going to avoid that trouble? has juul already become so cool that they wouldn't migrate to something else >> look, i think that, first of all, the youth use of nicotine
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is clearly something they're very sensitive to. the second thing is, if we look at facts, around the world today, we're in 48 markets we have no issue with youth use of iqos. and on any other non-smoker or non-previous smoker, you know, audience now, if we come to the u.s., the fda together with the authorization has also issued very clear marketing rules on how you commercialize this product, including, i think, the objective here for the fda is to maximize switching and minimize intended use, and measure all of these parameters, so we act on facts. because sometimes, there is a lot of emotion and understandably around the youth smoking issue, but a little bit of facts and data help the decision making. and i think once the vapor products go through the pmta approval of the fda and the same rules apply, that will help
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enormously plus, all the other majors that have been discussed in the u.s., increase of age, access, control, you know, education in schools, because we've been telling the kids, don't smoke, and now we have to tell them, don't use nicotine and technology that can link a device to a person that biuys an then that will happen. >> we'll see what the survey data says later this year. >> yeah. >> andre, thanks for coming in please come back be sure to catch cnbc's documentary, "vaporized: america's e-cigarette addiction," it's available to stream on fire tv, appletv, or for purchase on itunes and amazon when we return, traditional cord cutting is freaking ugly, that's one analyst's response to dish and the stf e re othpay-per-tv providers this quarter prepare for a pivot. we'll explain that, after the break.
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what's in your portfolio
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take a look at shares of capital one, scloedisclosing a data breh discovered on july 19th. 100 million credit card applications involved, and of that, social security numbers of about 140,000 credit card customers, along with 80,000 bank account numbers other data exposed in the breach includes names, addresses, phone numbers and credit scores. that's the type of information that thieves would add to the mix in trying to pursue identity theft, things like that. in a statement, capital one said the hack affected, again, approximately 100 million individuals in the u.s., but said that credit card numbers themselves and login credentials were not impacted. you can see shares there down almost 7%, guys. >> interesting take from dan clifton over that the strategas today, said that clients of amazon receiving a cloud contract, a pentagon cloud contract that has been very controversial, will point to the
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capital one data breach as a reason to deny amazon the contract >> what? why >> i think it's a little bit of a stretch, but just interesting -- >> how do these two things connect? >> the fact that i think sort of going back to the fact that the person who's been taken into custody for allegedly doing this, paige thompson, was a former aws employee. >> but until we know exactly what capital one's security practices were >> kbre, lots of question marks. >> it's kind of hard to connect these two. it's kind of like blaming microsoft for somebody using a windows computer >> true. i mean, amazon is off a hundred bucks from july 12th, but really, in kind of a weak take for large cap today, as well it's hard to read. >> true, indeed. let's get over to sue herrera now for a knnews update. >> here's what's happening at this hour. president trump talking to reporters before heading to historic jamestown in virginia to commemorate the 400th anniversary of american
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democracy. he says black legislatures who plan to boycott his appearance are going against people of color. >> they're so happy that i pointed out the corrupt politics of baltimore it's filthy dirty, it's so horrible, and they are happy as hell so you may have a couple of politicians boycott, but it's all a fix. >> thousands of sudanese students have taken to the streets. security forces fired live ammunition on monday to disperse student protests, killing at least five people. and take a look at this. a cable stayed bridge with the world's largest and heaviest span was rotated into position in northern china and that bridge will have eight lanes on its 130-foot-wide deck the bridge's total weight, it's being rotated, comes in at 81,000 tons. you are up to date they that is the news update
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this hour. guys, i'll send it back to you >> sue, thank you very much. when we come back, we'll do more on beyond meat has the bubble burst item ear early investors join us after the break. personal shopper by prime wardrobe will cost prime members $4.99 a month and it's offering closely resembles stitch we'll talk about that in a minute
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shares of beyond meat are slumping after announcing a secondary stock offering, overshadowing quarterly sales that nearly quadrupled from a year ago the company also raising full-year revenue guidance stocks still up more than 600% from its may ipo price joining us now to discuss is lever vc managing partner and earlier beyond meat investor, nick cooney. >> thank you for having me >> the market not really responding that strongly to this, based on what it could be doing. what's your take on the earnings and the reaction >> look, a week ago, the share price was around 200 today, it's around 200 it's gone up, gone down in between. but if you look at just what's in the earnings report, it's extremely positive for beyond meat projected revenue if the year, up from 210 million to $240 million. a number of other good things in there, as well so bottom line, if we cut through the noise of the past few days, ninthings are looking very good for this company >> how do you justify the $21 billion plus market cap on this? especially considering you know
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impossible's out there, you know -- even though the supply thus far have been pretty good, high-quality pea protein can be hard to come by. what does beyond meat have to turn into in the next five years to justify all of this >> i think it's important to keep in mind the big picture here, which is the pace of growth of this sector overall. so ubs just came out with projections a few weeks ago that this market is going to be an $85 billion market within the next decade. that matches projections from goldman sachs and barclays and others so within this rapidly growing space, beyond meat is clearly one of the market leaders, both here in the u.s. and globally. so this is clearly a rising tide situation, and beyond meat is one of the best out there. >> what do you think thismarke does look like in a decade and i ask that, because you are investored in quite a number of companies in this emerging space. >> if we look at the plant-based milk segment as a corollary. so ten years ago was around 1% of the market. today in the u.s., it's 13%. in europe, it's similar. plant-based meat is now growing
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very quickly, so this year, it's passed 2% of retail meat sales and growing very quickly i think in the next fyi to sivex years, we'll see that percentage continue to climb very significantly and that presents huge opportunities for companies like beyond meat that have a best in class product. >> i realize that beyond market is sort of a market leader and also the first one that' publicly traded that's pure play in this area right now, but there is a lot of competition out there. is there room for everybody? >> certainly not everybody, but there's certainly room for a number of winners. so i think if you look at beyond and impossible, it's going to be a pepsico type of situation, where both companies will do very, very well because of consumer excitement around this space. >> the plant-based milk comparison is interesting, because i'm not sure did somebody get really, really ri rich, were there $10 billion, $15 billion market cap companies built on silk or coconut milk or whatever it was? why would this be different? because it seems like a number of the more traditional brands
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were able to move into that category and do quite well >> so i think an example of the plant-based dairy sigh is dannon acquired white wave, which was one of the largest plant-based milk producers for north of $10 billion. so there are some very strong exits there. why the difference the meat market is just far bigger than the fluid milk market so for a company like beyond meat that ultimately means, much higher revenue potential >> i guess, john's question is why should the growth in protein match the growth in what beverages did, right could it be different? could it be more >> yeah, so it could be different, on the dairy side, there are some allergen concerns that you don't have on the meat side on the other hand -- >> but drive demand, you mean? >> drive demand towards plant-based. but on the other hand, all of the other drivers of demand towards plant-based products are the same if you're talking about the health benefits of switching to plant-based products instead of conventional meats, if you're talking about consumers or have some sustainable, all of those things are identical on both the meat and the dairy side.
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and so i think we're going to see things move in that same trajectory now, will the plant-based meat market take 13% in the next decade i don't know but i think it will be somewhere in that 5, 10, 12% range >> do you have a good answer as to what tyson is up to or why they would want to exit so early for something that had such amazing growth >> clearly, tyson missed a market on that call, but tyson has introduced their own line of plant-based proteins, a variety of products in the space they, too, see the potential in this space, as do a number of other leaders like cargill and others who are investoring in the space or introducing their own products, because they see where the market -- >> are you in on those guys, too? do you have tsn in any others? >> our fund, we're an early stage investor, so we invested in beyond meat when they were much, much, much earlier on. we are investing in a number of companies in this space that we think, like beyond can be global category leaders >> are you surprised to see a secondary offering for beyond three months after it went
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public >> not really. i mean, this is not too uncommon for companies after they ipo and if you look at where most of the shares are coming from, it's from their early stage vc backers. and for those companies, getting their returns a few months early can increase those revenue multiples that they're delivering to their lps. i think that's the motivation. >> nick, what has to happen in supply for this market to work, especially on pea protein? >> certainly, there's going to be more ingredient needs and beyond meat's ceo, ethan brown, on the earnings call yesterday spoke about the fact that beyond meat has been diversifying their sourcing. so whereas a couple of years ago they had essentially one supplier of their key pea protein ingredient, now they have three they have also added some other plant-based proteins to the mix, as well. they are diversifying and there are more companies coming online to meet the needs of companies like beyond and others that are using these types of -- >> and you're saying that's enough >> at this point, it seems like the supply is meeting what they need >> nick, thank >> thank you
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>> beyond down just about 4% still to come, twitter's one-day ceo. we're going to explain that. but first, rick santelli, what are you watching today >> you know, first, i was watching some pretty good data we'll get to that. but i'm watching the dollar index. it's about that much away from a fresh 26-month high. and somehow, i don't think that matches what fed expectations would be for the dollar index, and that will be the topic after the break. - when i hear never, i say now. - [announcer] southern new hampshire university is education made to fit your goals r 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. (cheering) - so when i face barriers, i can break through. - [announcer] breakthrough at
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i'm scott wapner here's what's coming up "halftime report" at the top of the hour the fed in focus, so we know a rate cut is baked in tomorrow, right? but what is the market really expecting from the central bank? we'll debate where stocks go from here. plus, two downgrades for pfizer today, so is that stock now in the penalty box? we'll also set you up for apple earnings after the bell. that stock is up 31% year-to-date we'll see you at noon on the half carl, we're about 15 away. we'll look forward to today. see you then >> nice to have you in the house, scott see you in a few minutes let's get to the cme and get the santelli exchange. rick zblm good morning, carl first day of a two-day fed meeting. we're talking about that a lot, as we should this morning, we had some data points that i found -- actually, one was solid, one was shocking. the shocking was this chart. this is consumer confidence from the confidence board, going back to january of 2000 today's read at 135.7 is the
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third best read going back to 2000, as you see on that chart these are powerful now, whether it's ism numbers, confidence numbers like michigan or from the conference board, they're all very helpful but traditional data, retail sales, gdp, even some of the lagging fundamentals like unemployment, to some extent, initial jobless claims, they all figure in. but at the end of the day, it seems very difficult for me to think that we're stilldata dependent. as a matter of fact, if we are, one thing really jumps out at me, that the fed is changing gears kind of like a day trader. if there's a time lag for their policy decisions, maybe the rate hike in december is just starting to run its course, many called it a mistake, but one thing for sure, i think that we've moved from data dependent, in a way to dollar dependent now, let's look at a dollar chart. this is a dollar index chart that goes back to may of 2017. and as you can see, we're
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currently trading around 9812, 9815 from april of this year, 98.20 is the highest closing price for the dollar index since may of 2017 and the reason i bring it up is quite simple you know, if you start putting the pieces together, you listen to the president, at first it was all of these balloons floetd about dollar intervention and then that was denied, although many stories were written about the topic. it was larry kudlow that put a r.i.p. on that notion. but look at fed nominee, dr. judy shelton i love her firm, hard dollar policy but in the end, it seems as though some issues she's brought up are now central and one of those issues is, you can't wait too long. we even heard jay powell bring this up with regard to trying to tackle whether it's prices or the embedded notion of policy, because they want that dollar to be a bit lower they don't want advantage given to those central banks that
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arizing easing but the problem is, is it really going to be one and done everyone knows my preference is none and done. and if you lower rates, it makes signing the budget and all the broken signals that much better with lower interest rates. or is it going to be string theory where we start a long line of easing will there ever be takebacks one thing i know, at the end of the day, dollar is much stronger than the fed wants and that's with an action already built into the cake. jon fortt, back to you >> glad you weighed in rick santelli. and dish, meanwhile, reporting last night just one of many tv providers showing ongoing cord cutting, including our parent, comcast, one of many also focusing on a pivot away from the tv bundle to other areas of growth. julia boorstin is in l.a. with a look julia? >> well, jon, all the paid tv providers have now reported their second quarter numbers and, quote, traditional cord cutting is freaking ugly that's according to analyst
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michael nathanson. and he predicts that the trend of cord cutting will only worsen in the second half of the year one and a quarter million video subscribers were lost in the second quarter by the three largest paid tv providers, comcast, at&t, and charter alone. that's 1 million more than they lost in the year earlier quarter. now, in the second quarter, the rate of cord cutting is estimated to have hit its fasts pace ever. the loss of 5.5% of paid tv subscribers. now, even if you include growing in streaming and skinny bundles, the pace of decline is 2.7%. that's also a record so now companies that used to focus on selling tv are pivoting to other faster growing businesses and it seems to be working for investors. year-to-date, at&t shares -- i'm sorry, at&t shares are up 20%. comcast about 30%. charter, nearly 40%, and dish shares are up 45%. dish is focusing on its plan to launch a wireless phone bids and to build a new 5g network.
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charter is looking at its growing overall customer relationships with new internet and mobile subscribers comcast has been emphasizing the growth of its high-speed internet business and it's, of course, looking ahead to its new ad-supporting streaming service in the works at&t, which lost nearly 1 million video customers in the quarter is pointing to its growing cell phone customers as well as its upcoming streaming service called hbo max now, we're sure to hear more about the diversification away from the rest of cord cutting from disney when it reports in a week of course, disney is focusing on its news streaming services. guys, back over to you >> julia boorstin, thank you just ahead wh, what to expet from apple after the bell today. and in just a few minutes, do not miss mario gabelli on the "halftime report." that's at the top of the hour. we're down after a quick break dow's down 42.
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wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. welcome back to "squawk alley" as trade talks between the china and u.s. unfold. huawei revenue rose 23% in the first half of the year despite being added to the u.s. entity list one indication of the u.s. black listings says sales have slowed down this overseas markets 80% of the level before the commerce department action according to huawei. analyst expect more headwind in the second half of the year. despite the slowdown overseas,
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huawei smartphone shipments in china are expected to have risen 31% in the second quarter according to catalysts with huawei holding a 32% share due to consumers flocking to the company and analysts say apple declined 14% which brings us to one of the biggest earnings reports after the day after the bell which is apple, and josh lipton and, carl, i'm going to toss it over to you now. >> yes let's do that. let's get to seema mody who has a little bit more on how some of these supply chains are moving out of china into countries like vietnam. hey, seema. >> carl, that's exactly right. apple's plan to reportedly shift some of its air pod production out of china to vietnam marks yet another company trying to get around u.s.-china trade tariffs. it's already a big conversation on second-quarter earnings calls. however, our cnbc analysis shows it's not just vietnam capitalizing on this shift companies like cooper tire,
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ingersoll-rand, harley-davidson showing they are broadening their search to countries like india, malaysia and others toy-maker hasbro is adding new geographies for production globally including india while "i, robot" is going to move a line of products to malaysia by the end of this year global consulting firm pwc which helps big clients with supply chain shifts says given the uncertainty of not knowing which country would be targeted next by the u.s. administration, companies are not only looking to move production to one country but in some cases diversify their supply chain across a number of manufacturing hubs in asia and mexico as well. experts say that's a smart move. just yesterday the u.s. trade representative robert lighthizer taking aim at vietnam saying the country must cut its trade surplus with the u.s those comments come as more multi-nationals invest in the country. last year's vietnam trade surplus with the u.s. reached a record high of $40 billion carl, i know it's a story you've
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been watching given the time you spent on the ground there. >> yes, ingood, seema mody apple set to report ever at bell this afternoon josh lipton will be covering that from cupertino. >> josh. >> reporter: heading into this earnings report apple stock has enjoyed a strong move. seen it jump more than 30% this year up more than 40% since its low in early january and one big important question for investors today is this. how is apple miss in china real performing last quarter reported the greater china revenue of $10.2 billion and that was a drop of more than 20%. now at the time ceo tim cook told me that he was seeing signs of improvement in china though and specifically that the month of march, he said was better than the average for the quarter, and for that cook credited price adjustments, his trade-in program, and he called out easing trade tensions, but since then, of course, we know
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that trade sections, they have persisted between the u.s. and china. just this morning we saw president trump tweeting that the chinese in his words just don't come through, so how does this really impact apple's business in china, of course, a key market for the company, a critical part of the supply chain. we'll find out in just a few hours. guys, back for you. >> a big piece of the story tonight, josh. thanks so much for setting it up for us we continue to see some erosion in the losses. doisw down 55 "squawk alley" is back in less than three minutes
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that's the new ceo of
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twitter. jack-doers getting fired in the process. for those who don't know, dorsey's official comp is $1.40 a year hence the joke about the number of characters that you used to be able to tweet. >> yes, yes, yes >> he's got some shares though, so that helps. also, this joke really funny in 2019 in 2017 not so funny, so it shows something about twitter. also shows something about rap lill nas, lill john and lil wayne stayed little and lill bow would you is not little anymore. it's the age you take it on. "old town road" the top song for longer than any other. >> also points to twitter's long-standing strength in african-american engagement. one of the highest levels of any social media platform. >> that's right. >> black twitter is a big deal. >> i don't know that lill nas is
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representative of black twitter. >> i love that mariah carey actually congratulated lill nas on twitter and also that he made the case for it though it would seem unsuccessfully for an edit which many users have longed for for many years on the social media platform. >> we'll watch to see what dorsey, if they have anything to do with square which points to on thursday night. >> it's a tough day in general stitch fix early this morning was looking for the worst day since march. we really think amazon was on their tail. >> they want to be. >> wardrobe service, they actually launched a year ago this is a modification to it they went after etsy >> amazon has been trying to crack into fashion in a more meaningful way for some time now and definitely one to watch and once again you're seeing the knee jerk on stitch fix like other industries. >> and finally apple, see what
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kind of attention amg and amgen and celgene get. >> apple is a big one. >> iphone sales down 13% more. less, going to trade around that >> all right and then buckle up for a fed decision tomorrow and let get to the judge. >> carl, thanks. i'm scott wapner front and center the fed and real a rate cut all but certain this week the big question will it send stocks surging in the months ahead? it's 12:00 noon. this is the halftime report. >> the fed on the vernal of cutting rates for the first time in about a decade. the markets divided on whether it's even needed, and goldman making a big call on the record rally ahead of it. apple earnings after the bell. the street split over its fastest growing business china sales a question mark, too. under armour having


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