tv Squawk Alley CNBC January 8, 2016 11:00am-12:01pm EST
>> it's the weekend. one more alley to go. >> it may be the weekend for you, we still have some more to go. good morning, it's 8:00 app at apple headquarters, 11:00 on wall street. "squawk alley" is live. ♪ good friday morning, jon fortt on his way back after a week at ces. stocks did start with a nice gain after that jobs number of 292,000 for december. but it has been whittled away. now the dow hanging on to 36 points. bob pisani is on the floor watching what's moving. >> the important thing is we have a rally, but it's modest,
and not very enthusiastic. the volume not very strong. let's look at the s&p 500. we did have a gaap on tp on the, 12, 14 points, but they sold into it. this is what happened into europe. even germany bounced on our non-farm payroll report. but they sold into that as well. a lot of cross-currents in the markets now. here's the three biggest ones. the jobs report. now there's a concern that there will be more fed hikes than the market anticipates. market anticipating two or three. fed officials may be anticipating four. that's an issue. on the positive side, china walked back several big issues. they set the yuan mid point higher, removed the stock circuit breakers and kept the ban on insider trading in place. and another positive, stocks are dramatically oversold and sentiment is very bearish. we should see a bounce today, yet the response of the market is mediocre.
europe is not far from closing here. we had big oversold conditions in the auto americas, like daimler, semens and other names, allianz and basf. they are modestly on the down side. all the stocks were positive a couple hours ago in europe. here in the u.s., financials dramatically oversold this week on concerns rates would stay lower longer. yet today, on a move that would imply higher interest rates, you can see we were all positive early on. these financials, morgan stanley, goldman sachs at new lows. yesterday down 9% on the year. yet no real bounce here today. this is a source of great disappointment on the street. oil still not behaving. can't get a rally in oil at all. the xle, the main energy etf to the down side. a lot of cross currents and disappointment here. back to you. >> thank you very much. for more on the markets, art cashin director of floor operations joins us, along with
mike santoli. good morning. >> good morning. >> if we go back last night, mike, shanghai closing higher, a good jobs number would have been about the best scenario we could build today. what's going on. >> y you had the other places in play. i don't think you wanted this kind of tepid bounce at the open. that typically is not the greatest formula for follow-through. also a friday, i don't think you should underestimate the degree to which fridays are not high-conviction days for rallies. >> simon is heading off for the weekend. people are going ahead and leaving. there's a sense that there will be a next time. china stabilized for the day. because it's an immature market. a while atrial and error market will be more pain around the corner. how soon could that be? >> could be as soon as next week.
everybody makes a big thing of the chinese stock market. the big concern is the chinese currency. they marked that down eight days in a row until today. the only reason we got a bounce today is because they marked it up. they lost close to $500 billion in reserves in the last five months. you can't keep that up forever. so i think that pressure, it will rebuild again. and not to be a wet blanket, but that jobs number is a little suspect. if you look at the household survey, 485,000 jobs, 35% of those went to people under the age of 19. now, another chunk went to people over 55. only 16,000 out of 485,000 jobs went to people between the ages of 24 and 55. that sounds like a lot of part-time hiring to me. so, we'll see how that all comes down. >> we had some discussions about that. david kelly this morning argued
food service was not a huge contributor to the headline survey. you're saying household flies in the face of that. >> household does fly in the face of that. i think it will presented a problem. we'll have to take a look. next month may be completely different. this could be our christmas part-time jobs, wrappers, whatever. >> sunday night going to be worrisome? >> it could be. i'm watching not necessarily for anything to be fixed in china. these things happen, it becomes a preoccupation, greece, china, all the rest of it. they don't get fixed, they get discounted. i don't know if all markets properly discounted the situation over there, or if something will break. if something breaks beyond what we already figured out what's happening there. if this market can't shake it off, it's not just about china or the currency or those vague growth years, it's because the market is busted. >> when you think about what happened with this summer, when we had this lag, that wound in
china, we had contagion over here, then we got earnings, apple, starbucks, all of these consumer companies said that china was still strong. what happens if that happens again? >> i think it's so difficult on a month to month quarter to quarter basis to figure out how the transition of this economy is proceeding. i think earnings in general can be a net positive. they tended to be just because returns focus to corporate elements as opposed to macro stuff. that's only if we're weak heading into the reporting season. all of a sudden we kind of got too negative and -- >> only if the reports are good, to too. >> i think that the jobs number today is fine. we would like to see a higher number versus closer number. especially because i don't think the stakes were high for the fed with this number with a couple months go before they're expect
dodd anything at all. >> art, the likes of alarian and others talking about the weakening tools central banks have. you are seeing more analogs to 37. do you take those seriously? do you think about those? >> i do. i'm concerned that, you know, you can -- rick santelli went at it to some degree yesterday. part of china's problem is the central bank of the united states. their currency was partially pegged to the dollar. now we take action that lifts the dollar, which then forces their currency higher, which puts them in a negative position. so that's why they want to move it down. that's causing pressure on everything else in asia. >> when fischer says four here, they score them over there. >> absolutely. absolutely. and you know my bet, i think it will be zero before it's 1%. he can keep trying for his four. i don't know we'll get there.
>> you don't think march is on the table? >> march may be on the table but it could have serious consequences. i think if they move in march, what we have seen over the past week could repeat itself in spade spades. >> art cashin, mike santolli, thank you very much. >> when we come back, calls for weakness in iphone sales. a top analyst predicting an unprecedented decline in q1. >> and the white house metering with top executives from apple, twitter and more to figure out how to disrupt radicalization. and finally twitter is raising eyebrows today. a one handle for the first time ever. below $20. down about 15% for the year. we'll talk about what's next for them.
welcome back. i'm sue herera with breaking news concerning volkswagen. according to reuters, volkswagen is refusing to turn over internal e-mails to u.s. state attorneys generals, and they are citing german law as a result of that. they say they will not turn over documents, specifically connecticut's attorney general says volkswagen is resisting cooperation by citing german law in the diesel emissions probe. we will see where this goes, carl.
i think there's another chapter here. back to you. >> thank you very much, sue herera. let's bring in teresa galt. welcome back. >> hi, carl. thanks for having me. >> stocks in the green, but we're off of the highs. the dow and s&p posting their worst four days to start a year. tech sector on pace for the worst weekly performance going back to august. amazon, apple, netflix, the worst performers today. twitter below $20 for the first time. it's clear if you had gains in some of these gains last year, you're cashing in some chips, right? >> i think there's a lot of profit taking going on. this is a bad indicator for funding for private companies which is where i spend most of
my time. the last time the markets were like this in late august, q4 was down significantly in private venture capital funding for tech companies. when the public markets react like this, it has an impact with start-ups as well. >> where do you see that impact specifically? it seems to be popping up in different places. do these companies feel it on the revenue side when there is some volatility, a little bit more apprehension? >> so, i think companies feel it more in the funding side. and we are not really seeing a lack of growth opportunity from a revenue perspective, kayla, but i think the smart ceos like sam shank, who has been on your show before from hotel tonight and others are belt tightening. so when they realize that the flows of capital, the massive flows of capital that were coming to tech companies both public and private, particularly private companies who don't have the ability to continue to tap the public markets, they are
belt tightening. so it's gone from sort of, i would say, unbridled growth and optimism at all costs to growth with an eye towards profitability and unit economics. >> we have gotten a taste of down rounds and take unders in the past month or two. any reason to believe that won't be the narrative for 2016 overall? >> you know, i think that that is -- i personally agree with you. i think that's going to be the narrative. i've seen valuations, you know, even for new money coming in not necessarily down rounds but new clean capital moderating. we have seen -- we've seen some down rounds. we've seen down rounds, companies that had done very high-flying billion dollar plus valuations as private companies, and when they went public, companies like square being financed at significantly less at the ipo than the last private round. we have seen the public hedge
funds and public mutual funds take significant markdowns in the carrying values of those private companies. when you see that, that means less capital, a lot of people were pencils down q4. with the current market conditions, it's felt with the late stage companies. there's always the tale of the haves and have-nots, the companies like the ubers who continue to raise as well as certain sectors. i continue to see a lot of interest in security and cybersecurity companies, some of the companies that i'm involved with, like four scout did a significant round, even in the face of q4. so i think there's still pockets where, you know, i think if you look at the news today, there's certain areas where even in light of people being less sure of the macro economics, large corporations are going to continue to spend to shore up security defenses. it is a boardroom topic in every public company's boardroom now.
it's up there with the audit committee report. what's the risk assessment on cybersecurity. >> and that takes us to our next topic. white house officials and intelligence officials set to meet with top silicon valley executives today, companies like apple, google, facebook, twitter. they want to counter terrorists disrupting radicalization. it's unclear who is actually attending. a lot of companies expected to send lhigh ranking executives wh. what gets done out of this? >> i think megan smith, who is from the valley, a friend, a former googler, i think that will help a lot in making sure the conversation both gets the people to come, but also, i think, having a conversation where there will be action items coming out of it. my understanding is that they'll be talking about, as you said, the use of social media for
recruitment and radicalization. i think one of the interesting things they talked about, if you continue to read sort of the agenda, is not just sort of how people can cooperate better with law enforcement to help them, you know, get information, but also how they might use social media and alternative voices that are positive to sort of counter propaganda to the militants propaganda. that's interesting. using the bright minds who understand and created the social media to send messages that will be much more positive for counterterroism. >> teresa, on tha point, the reports say one of these aims is helping ordinary users create, publish and amplify content that can undercut some radical groups. is that going a step too far? that seems to behe antithesisha believe in, the steering of
content. >> i think that you're right. there's a risk, you can always overstep. i think the reality is if they're genuine voices, and people are creating this content, it's really just using the technology to sort of bring certain things to the surface. you can choose to bring positive things or negative things. so i would not hope -- i would hope they're not trying to create artificial content. if it's authentic content from original users, just has a positive message that counters some of the militant negative messages, and finding ways to sort of bring that higher up in the feed, if you will, i don't think that's necessarily a bad thing. >> is it a missed opportunity to not tackle encryption at this meeting? >> oh, sort of the thousand dollar question, the third rail no one wants to talk about. i'm sure it will come up. i'm not sure how much progress will be made. i think that most of the tech
executives that i speak to, both on the cybersecurity side and from the big tech companies, the big social media companies, i think there continues to be push back on weakening encryption. for example, they've come out publicly against some recent legislation that the uk is trying to put in place that weakens encryption and increases the uk government's ability to spy, if youu lshgyou will, on o citizens. i'm not sure that one will make as much progress as the prior set of topics. >> always appreciate your guidance. see you next time. >> great to see you. thank you. up next, stocks continue to move near the flat line, dow is now down 8 points. s&p down by just about 1 point. amid all of this volatility, the next thing to watch in today's market, the european close. we'll bring that to you in about ten minutes.
a strong december jobs report coupled with that sigh of relief out of china should have been good medicine for the markets. major averages in negative territory. will this roller coaster ride continue for investors? jeff kleintop is from charles schwab. is this still a new years hangover or have we gone beyond that. >> we entitle our outlook for 2016 unfinished business. we see this is the type of volatility we saw last year. in december we had three days where the stock market fell more than 1.5%. it's not all back-to-back like this week, but this volatility is not new. it's likely to remain with us over the course of the year. >> we've been hearing all week perhaps if the data out of the u.s. were better, if manufacturing were better, if wages were better, if jobs data were better, then perhaps our
market would be more resilient to china. we got a good jobs number but we're learning how little that means when the rest of the data doesn't really add up. what do you think we should look for next? >> well, i think we want to focus on the earnings reports. we have gotten a lot of economic data, which has been mixed. some good. some weaker or i guess i'd point to the difference between the chinese pmi and the european pmi. europe looking better. china worse. the real key is what does it mean for businesses? last season we heard from industrial companies in the manufacturing sector still talking about a decelerating pace of activity in china. yet we heard from the consumer discretionary companies, nike, apple, starbucks, how strong demand was. i want to hear if any of those pictures changed. has the consumer in china weakened or has the manufacturing sector firmed up? that will set the tone for how
the market interprets chinese markets go forward. >> you have taken up how we hold cash? >> no our outlook for asset allocation is in long for your long-term strategic waiting. this is the year to buy the drops. not necessarily the dips. a typical year will have four 5% 10% declines in it. we may be getting those this year. those are the areas where you want to push the cash to work. investors have been fearful lately, there may be opportunities to put that to work in 2016. >> investors have been used to putting money into treasuries and gold when the market was volatile. but now we're learning that traditional safe havens are not as effective as they used to be what is the new safe haven? is it cash? >> you know, cash won't hurt you, but it won't do a whole lot more for you. interestingly we have seep the bond market react inversely to
the stock market here lately. outside of maybe the high yield bond market which suffered along with equities, bonds have provided insulation here from what's going on in the u.s. stock market. you can also find some sectors that have been doing better. i guess i note some of the defense companies did well in the face of the geopolitical risks. a diversified asset allocation should prove to help against some excessive volatility. >> jeff, appreciate your time. >> thank you. >> jeff kleintop from charles schwab. when we come back, apple in a relativity difficult time is seeing a nice gain today. a top shareholder will join us live. and minutes away from europe's final close of the week. here at the td ameritrade trader group, they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store.
come happy birthday. i just had a heart attack... and now i have a choice. for her. for them. and him. a choice to take brilinta. a prescription for people who've been hospitalized for a heart attack. i take brilinta with a baby aspirin ...no more than 100 mg. as it affects how well it works. it's such an important thing to do to help protect against another heart attack. brilinta worked better than plavix. and even reduced the chances of dying from another one. don't stop taking brilinta without talking to doctor. since stopping it too soon increases your risk of clots in your stent, heart attack, stroke, and even death. brilinta may cause bruising or bleeding more easily or serious, sometimes fatal bleeding. don't take brilinta if you have bleeding,
like stomach ulcers. a history of bleeding in the brain, or severe liver problems. tell your doctor about bleeding, new or unexpected shortness of breath, any planned surgery and all medicines you take. i will take brilinta today. tomorrow. and every day for as long as my doctor tells me. don't miss a day of brilinta. good morning, i'm sue herera, here is your cnbc news update. the terror suspect emanuel lutchman arriving in federal court this morning. people who know him say he's only a panhandler with mental issues. more refugees arriving on the greek island of lesbos today. according to the u.n., more than 1 million people arrived in europe by boat in 2015.
85% of them landing in greece. campbells soup says it starts a mandatory national labeling standard for products containing genetically modified ingredients. about three quarters of campbell's products contain products from dmo crops. check out any dimes you may have stashed away. an 1894 s dime minted in san francisco was sold at action last night for just under $2 million. only 24 were minted. only nine likely exist. the winning bidder wants to remain anonymous. that's the news update this hour. let's get back to "squawk alley." carl? >> thank you very much. europe is about to close here. first breaking news on the fed. steve liesman is at hq. >> san francisco fed president john williams out with comments saying four rate hikes this year would be consistent with a gradual path and he says it will take three years to reach a stable fed funds rate.
and a very low funds rate is the new normal. that long-run fed funds rate could be below 3%. he goes on to say it could take six years to normalize the balance sheet, but he sees strong job growth in the market now, but the labor force participation rate is unlikely to pick up the headwinds from abroad. and to wrap it up we got the inventory number at 10:00. we knew it would effect gdp. downward revision again. q4 tracking 1.2% on the back of weaker wholesale inventories. bank of tokyo, down 0.2%. barclays slashing 0.4, and morgan stanley just above zero. 0.1%. domestic demand looks to be okay. this is a major inventory that
will bring in the number way down. >> interesting to watch, steve, thank you. >> yeah. >> that does bring us to what the markets are doing, specifically europe this weekend. simon? >> the close is much worse than it looked earlier in the session. oils and materials have moved further to the down side during the course of what has been a momentous week on both sides of the atlantic. if you look at the week overall, europe has lost 6%, 6.5% against a 5% decline in this country. the big news is digesting what's happening in china, and an argument that europe is much worse affected by what's happening there. the peoples bank of china, after eight days, eight consecutive days in which it weakened the yuan, stopped today. this is analysis from deutsche bank saying the chinese are mark the end of an era saying their own economy has suffered due to
the peg to the u.s. dollar. they followed it all the way up. and the rest of the world during that time was bitterly deval ewing. they are now effectively, he says, terminating a regime of competitive devaluation. what that means is that qe, further qe from the ecb or the b.o.j. will be less effective, because they will not allow those currencies to weaken against their own. and if you look back at how the yuan pegged to the dollar, of course, has traded, the euro in anticipation of qe here was able to lose a huge amount of ground to the benefit of the europeans and the detriment of the chinese. and that's the argument that further down the line that qe may be less effective, which is why if you look for example at the autos and the material stocks during the course of the week, the mining stocks, they have been so badly hit, down 11%, 12%. it's not necessarily about what is happening now with the peoples bank of china, it's the fact that they may not allow the
ecb to further weaken the euro against their own currency. get where i'm going? i should mention we also have a top gainer today, barclays upgraded tesco, which lost half of its market cap in the last few years. they say you should overweight it on the valuation grounds. the other news is that martin spencer, again within the uk, lost its ceo. the tribulations of martin spencer, they hold it close to their heart. >> simon, thanks. have a great weekend. a big name tech stock rally fading this morning with an eye on the so-called f.a.n.g. stocks, facebook, amazon, netflix, google giving up early
gains. amazon eking out a small gain. apple continues to trade below that $100 per share mark this morning. well below it now. below $97. it's down 20% for the past six months. joining us now is apple investor and portfolio manager at wed wedgewood partners, david roth. thanks for joining us. the sense of this week is people who held these high-flying names sell first and ask questions later. cash in your gains and regroup. how you are looking at it? >> the only f.a.n.g. stock we own is google. you need to take some money off the table, but in terms of apple, which is not part of that group, it's getting cheap here. really cheap. >> sometimes these stocks break technical levels. apple has been called a broken
stock since it broke through 115. what levels are you watching and is there a scenario where it can recover? >> yeah, i think there is. it's been a -- for the bulls it's been a kick in the teeth since last september. the stock has been miserable. when you consider the stock at $97 a share, the valuations really cheap. for the stock to stay here for another quarter or two, you need to start checking off bearish boxes. check off a box that units in the second quarter fall below 40 million. check off the box that were consensus for the full year of 2016 of 250 million iphone units, that number probably has to come under 200. earnings have to fall under $9 a share. we're not in that camp. i think the stock has been a good reset, and the pendulum now
on valuation swings more towards the bullish camp. >> david, it's never been expensive to use a technical term. but the bear case, which you say has been well played, is that you're sort of in this peak phone cycle, and absent a giant new revenue stream, it's a question of where the growth comes from. are you arguing that the company has another big lane to plow? >> i don't know if they have another imminent lane to plow, but going back to the iphone, if the iphone can't recover from the second quarter and renew some year over year growth, again specifically with the iphone, you have to start asking yourself if we are at peak iphone at an installed base now of 500 million users. you have to ask yourself, is it failing to take share from android? is adoption rates starting to
roll over? is there not going to be an interest in the iphone 7? at least in our view those are tough boxes to check off. no doubt about it, we're seeing relatively poor iphone 6s adoption rates as we speak here. expectations have been reset. and, again, the stock is a little more -- 6 1/2 times enterprise value to free cash flow. we're almost back to the spring of 2013 right now, carl, i believe, in terms of the sentiment. that turned out to be a good buying opportunity. >> i was going to ask you, david, how much does this trough, if that's what it is, look like the pattern we saw in 2012, 2013 before it went into this super cycle? >> i think it's almost a dead ringer for that type of sentiment. estimates are coming down. valuation got really cheap. what's different from then is, you know, we got a significant buyback, significant capital
return, which, you know, i hope cook and company are buying every share they can now at current prices. that's a metric i'll pay attention to with the upcoming earnings release. >> they certainly have the firepower too, that's for sure. appreciate your time. >> thanks again. check out the markets. session lows. dow is down 51. pre-market indicated as much as up 200 points on the dow. that's all gone and then some. rick santelli what are you watching today? >> we have to talk a bit about today's jobs report. we'll talk about it maybe in the context of the fed and the context of the stock market. as you pointed out, down 47 in the dow. and we'll revisit chinese issues. all after the break.
coming up on the half, investor mark lasry is with us today. we will talk markets and what he calls a once in a lifetime opportunity. and three more apple cuts today. and portfolios with purpose. we'll tell you how you can trade alongside the best in the business in a contest for charity. kayla, we'll be joined by one of the top-ranked financial advisers in this country. he'll help us deal with this market turmoil. see you guys in about 20 minutes. >> we'll see you in a few minutes. >> check out the intraday chart of the dow. it's well off the highs of the morning. it was up sharply in the
pre-market as well as at the open. then that gain evaporated quickly. dom chu all week has been looking at some safe havens amid this volatility. where are we going today? >> some of these names have been relative winners given the down draft that we've seen overall in stocks. like you said, the charts have not been pretty to start 2016. if you look at some of the names we've been highlights throughout the course of the week, they're not in terms of winning streaks winners every single day. four out of last five days, kohl's, walmart and signet. some of these names were beaten up last year like walmart or in the holiday season like kohl's and signet. right now they're up four out of the last five days. so a strong start to the year despite what's happening with china and our economy. there are two names in the s&p 500 that are riding winning streaks for all of 2016.
in some cases beyond. utilities like con edison. con edison up marginally, 3.5%. it's been positive every day so far in 2016, five straight. time warner, there's a lot of activist chatter, david faber reporting on that. time warner shares riding a six-day winning streak. maybe short-covering part of the story. perhaps fundamental buying. on the flip side, just to balance things out there are some names that are riding some notable down trends. general motors on the carmaker's side. apache, also alcoa having real sharp moves to the down side. they are riding serious losing streaks. those may continue, carl, if we do see any kind of weakness in the economy and overall with the china situation. >> dom, thank you very much. let's hop over to the cme and get the santelli exchange. good morning, rick.
>> good morning, carl. art cashin today mentioned some things we've been doing with currencies. i want to tip my hat to art, he's right. he, like many investors, traders on the floor are gravitating to the notion of catalysts, the fed, connecting the dots, not fed dots but market dots as to when markets turn, when they change, when they start to move quickly, when the end startedyeo move quickly and the yuan started to move quickly. when i look at today's numbers and see where the dow s the market on the buying side, investors seem to be taking a rest. despite 292,000. let's keep it superficial. good number. historically a good number no matter how you slice a good number. can i dig down and find more insightful aspects? yes. let's gloss over. also a positive revision. why is the stock market down? i look at interest rates, not much changed. the high yield, still the first
day's close, which is the way we ended '14, started '15. the way we ended '13, started '14. all in all, tens and 30s have been tame on a closing year basis, especially quarterly and annually. that speaks volumes as to the glide path of growth. in particular, when i talk to jim bianco today, we can question whether the pillars are right, but they are what they are. the fed seeing this type of number, i think, goes a long way to explain the stock market. investors get it. the front-loaded aspects of what we learned from richard fischer, the fact this number is probably not going to change the glide path of tightening of rates and the glide path of tightening of rates may be for many significant issues that don't have a prioritized aspect of necessarily economic data and how strong it is, as evidenced by the fact that gdp in 2012 is better than the year we
tightened of 2015. the last topic is china listen, whether it's jim cramer, myself, long time ago saying the communist party will never get it right. that's about allocating resources, commodities, how they stockpiled and created strange anomalies, when it comes to pricing money, i'm not sure our 17 people are worse than some of the ivy league educated pboc. but here we are taking a rest. unfortunately, you know, if you look at china and google anything about investors and journalists, stock market from august to september, it's a bit of a different arrest. many heads of many companies won't be speaking to the point on this issue because they probably have offices in china that they may hope to visit and actually come back from. kayla, back to you. >> thanks. up next, apple shares are up today, but our next guest is calling for an iphone slowdown that could be unprecedented. he'll make that case with us
a lot of apple news floating around today. just crossing the wires now, the nfl. according to reuters citing sources is going to live-stream all three london games next season. and reuters reports that according to sources apple and google are among the bidders for the rights to that live stream. of course meanwhile patcrest today just the latest firm to
adjust their numbers for iphones in 2016 calling for what would be an unprecedented 20% drop in the second quarter. andy hargreaves is an analyst with pacific crest and he joins us from portland. your report is titled "stop me if you've heard this" because we have heard this over and over. so how do you weigh the number trim with your net bullish view on the -- on apple altogether? >> yeah, well, the stock i think obviously in the action we've seen in the last few weeks has priced in a lot of that decline. and from our perspective this isn't competitive share loss, it's just a reality that the 6 cycle was extraordinary and the 6s cycle isn't quite as good but we think once you get back to the 7 cycle we'll be back to growing. so at the current valuation the stock looks attractive. >> andy, some of the reports, the news reports have suggested that the april to june quarter could see shipments return to, quote unquote, normal. do you see the normalization happening that quickly? is this just a one-quarter
phenomenon? >> well, it depends on what you define as normal, i guess. normal for what this cycle has become, yeah, i would agree with that. i'm not expecting a strong june quarter. i think, you know, we're seeing right now that demand during the current cycle, and part of it is macro, part of it is just that so many people bought the 6, is lower than what we thought a few weeks ago. and i would expect that to continue through june. >> andy, we always talk about they're a phone company plain and simple and we can talk about music and the ecosystem forever and that's not going to move the needle, as they say. but this nfl news is intriguing. we had the a.i. acquisition earlier in the week, also intriguing. what do you think they're up to on the sports front? >> well, i'd be shocked if we saw them actually buy the rights to those games. i think the nfl in particular is really expensive and it's hard to make a solid r.o.i. on that unless you have an extraordinary distribution platform for video
already. if they did do it, i think it would just be sort of a promo thing, a one-off for apple tv, but i'd be surprised if they did. >> but it would be a less expensive experiment for a company like apple than it was for a company like yahoo. with a company that has $200 billion in cash, can't they afford an experiment like that? >> yeah, they could probably dig through the couch and find the money to do it. but still, you know, money is money. and the amount of money it would take to buy the rights to those games could probably be put to something else, you know, more profitably for them. >> does your view -- is your overall view, is it colored by optimism about the 7, and do you have any color you want to add to that? >> well, it is. now, i don't have any details that other people don't have about what the 7 is going to include. but just the nature of the replacement volume is what makes
us positive on the 7 cycle. you had the user base grow so phenomenally in the 6 cycle, and those people will be coming into their normal replacement window. so as long as the 7 is decent, which apple has a pretty good track record of doing, i think you'll get a large growth in replacement sales during that cycle that drives growth for the phone overall, for the company overall. >> well, one thing's for sure. the debate over the stock is raging and it's good to get your insight, andy. we'll see you next time. >> thanks for having me. >> andy hargreaves joining us from pac crest. >> meanwhile, as you know, chinese markets closing positive today, stemming their steep slide that they've seen in the first week of the new year. the shanghai composite still down about 10% for the week. meantime, this weekend "star wars" is set to open in china. so will the record-busting film hit a chinese economic wall? we spoke to imax ceo rich gelfand who says he's optimistic about continued demand for the
film, telling us this week that despite the market turmoil chinese consumers are still spending. take a listen. >> we're seeing tremendous consumer demand. consumer discretionary as a general category is doing very well. i was on cramer three months ago and he talked about how imax stock was correlated to the shanghai index. and we went public in hong kong, and one reason we did that was to sort of break the correlation and say just because manufacturing data's down doesn't mean that imax ticket sales are down. even earlier in the week when the market was down 7% imax china was down less than 2%. and just this past weekend we have a movie called "mojin" that's playing in china and it will be the highest grossing chinese movie in imax's history in the next couple days. it's going to pass 27, 28 million dollars for us, which was our biggest. and we're doing 10% of the chinese box office on a chinese movie. and remember, people are paying
50% more for the imax experience than for regular ticket. so we're seeing not really a big change in consumer behavior. at least at the higher end in kind of luxury purchase. >> "star wars" has already been record-breaking for imax, but the china puzzle piece is crucial. more than a third of imax's global box office revenue comes from china. it has 270 theaters in the region. so we will have imax ceo rich gelfond with us on monday with an update after the open in china. >> i could talk to that guy about movies forever. when we come back, stocks mixed despite that strong jobs number. the s&p back down to 1941. we'll look at some top movers in just a moment.
take a look at shares of gopro sliding today. of course we've talked a long time about the difficulties the company's had. really, kayla, since the middle of the summer. twitter another one. the high 74 and change at the end of 2013 with a one handle today for the first time ever. >> investors are saying the company thought that its biggest issue for value was dick costolo. now obviously the product is coming into focus. we'll see what they can drum up. >> finally, time warner we
discussed yesterday. the big winner for the s&p so far. more reports swirling around about potential activism. david faber's been doing some good reporting but that's going to be a story that bleeds well into the next few weeks. >> investors hope where there's smoke there's fire. >> dow back in the green but just about by 18 points. have a good weekend. pay attention sunday night. let's get back to headquarters. scott wapner and the half. bl . all right, guys, thanks so much. welcome to the halftime show. let's meet our starting line-up. steve weiss is here along with jim levinthal, josh brown, and a special guest for the hour, achb capital's mark lassry, who specializes in distressed investing. our game plan looks like this. opportunity of a lifetime. that's what mark lasry calls a big investment idea. we'll have those stories straight ahead. portfolios with purpose. how you can trade alongside some of the biggest names on wall street. and it's all for charity. we begin, though, with this rough week for the