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tv   Squawk Alley  CNBC  January 14, 2016 11:00am-12:01pm EST

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welcome to "squawk alley". on a day of interesting market action. they definitely sold the open, but they -- joining us this morning from palo alto, roger. good morning to you. let's talk about this reversal here. a lot of volatility. at least on the dow. we started in the green, fell 76 points in the intraday low, and now the dow almost 200 points. taking a big chunk back from the losses of yesterday. bob pasani is on the floor to tell us what's going on. >> we are also used to coming on at 11:00 saying another failed rally here.
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today is different. i think the number one reason is pretty obvious. we had a big oil turnaround in the middle of the morning, and that's primarily what turned things around, if you look at the sector. we have been so deeply over sold. i mean for days. for example, the put-call ratio at one point, that's really elevated. all sorts of sentiment indicators. retail sentiment way oversold. we just have been waiting for days for many some kind of bounce. oil was the catalyst there. look at the s&p. it corresponds with roughly the time that oil started moving down. remember, we have brent exploration today. that may be adding volatility here. in terms of sectors, obviously, you have energy leading the rally here. we've got almost 4% move in energy. health care, industrials. you see consumer staples are lagging here. that's on the bottom here. obviously the defensive stocks are weaker here. stocks blowing up this week, not surprisingly, are doing better. freeport mcmoran turning around a little bit, for example. alcoa, cf industries. all of it higher.
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freeport dramatically imploded this week. energy stocks, you talk about williams and, of course, one of the big decliners, that's on the up side. marathon oil, some of the other ones. chevron. even exxon also rallying here. exxon has been a real performer playing the safety stock for most of the month of january. finally, just note the vix moved steadily down. we've been pretty elevated in the vix. the contract has been very high. higher than all of the futures contracts in the following month. that's very unusual, and it's going on -- been going on for days. looking forward to seeing that turn around. that doesn't happen intestine. carl sitting there at the highs of the day. back to you. >> bob pasani, thanks very much. let's talk markets here. obviously you know what the first couple of weeks of the year have been like. you have been cautious. do you have a shopping list? are you getting interested at some price here? >> definitely.
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>> the fed was as accommodating to the financial markets as it has ever been, and the new reality is that rates are just a little bit hire, but the change in direction is really important. i don't think we're done. i think the problem here is that for china where demand is lower, they're forced to lower the value of their currency. they're buying a lot fewer commodities, spending a lot less money on all the things that support emerging markets around the world, and as a consequence with the rising dollar, there are all sorts of things that don't work as well. stock buy-backs don't work as well. a lot of the hedge fund arbitrages don't work as well. this is going to shake out over a period of months, and it wouldn't surprise me if we have a nicer bounce. further sell-offs as well.
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it's a different environment. i think we're going to see a lot of volatility for the next three months. >> after some six years of gains, there was a feeling that there was a spring that had been coiled for so long. what we've seen at the beginning of this year was just a bounce back of that spring. at what point would you look at the market and say, okay, this is where it's done? >> it's a great question, kayla, and i don't honestly know. in a sense, you know, it depends what other things go on around the world. i do know within individual stocks -- i look at apple. right now people are all freaked out because they're going, you know, march quarter numbers from suppliers don't look that great. i look at it and go, seriously, that market is very mature. the smartphone market isn't going to grow super rapidly. that's already in apple's stock price, and i don't know whether this is the right time to buy it or not.
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we're getting closer. so i'm paying really good attention there. i look really closely at facebook. another stock i have liked for a long time. again, back under $100. definitely worth looking at. the problem is there are a lot of other stocks that have gotten cheaper. we're going to talk about twitter and talk about gopro. where i think the outlook is not as bright and where i would be far more careful about my entry price. >> roger, when you look at a gopro or a twitter, yelp, fitbit, they put together bear markets in a matter of days. have you noticed whether or how that's having an affect, a concrete affect, on the psyche of the valley? >> right now denial is still the most popular form of entertainment in the value.
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they really aren't as valuable as they look. that kind of stuff is spreading all over the place. there's still a lot of options. people are still raising seed funds. people are still putting money to work. uber is out there trying to raise money at $60 billion. if they get that done, that will at least tell you that there are some people who haven't read the memo. >> speaking of gopro, specifically stocks in freefall. the stock down as much as 28% in after hours trading after the company said it would cut 7% of staff, warned on worse than expected sales. goldman thinks the company is not done cutting estimates. the firm cuts their price target nearly in half. roger, we've called it camera on a stick or some have. going back to ipo days. how did it get to 98, and where does it deserve to be? >> well, here's the thing. i tip my hat to gopro.
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remember that cisco bought the flip phone, the flip camera guys, i don't know, three, four years ago and then shut it down six months later, and then next thing you know gopro comes out with the same idea, puts a strap on it so you can wear it on your head or on your arm and if in some adventure sport and suddenly turns into a billion dollar business. i mean, that was a truly amazing accomplishment. i look at it now and go, seriously, the fad appears to be over. you know, there's no reason they can't build new businesses, but i think the notion that people are going to pay a huge premium for the stock, i think those days are done. that's not -- that's not a criticism of the company. i think what they did in that business is truly amazing, but it's going to carry a much lower valuation going forward because they have to prove any new market, and the market is just not going to give them the benefit of the doubt. >> i got a little bit more critical of a take on where gopro is right now. they messed up big-time. on the call the last quarterly call, they said the hero 4
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session, we mispriced it at first. now we've got it priced right. we dropped the price $100. then a few weeks later they dropped the price another $100. now they're saying, oh, well, we've got it priced now, and, by the way, we're cutting 7% of staff, but things are going to be fine. when you get these situations where demand dramatically slows down, and you skrup the product, this is not to me just a product that was mispriced. they're essentially saying, if we had just planned to not make any profit on it, it would have been fine. this was a bad product launch. it was a bad idea. the timing and the whole roll-out of the hero 4 line was bad. now they're cutting 7%. that's a little cut for a hardware company that has a big inventory problem. you worry about death by 1,000 cuts if they have to come back in a quarter and say, yeah, we still haven't solved this problem. they're going to start burning a lot of cash. that's a lot of problem. really it's software also with this. initially you had the camera. it worked really well. they didn't come out with the software to make it really easy to use. i've been asking them about that
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for more than a year. they keep on saying it's coming, it's coming. well, it's still not here. >> well, john, the one pushback i would make on that is that i really think the market is saturated. to me the miracle was how many people wanted an adventure camera. they could have shipped the perfect camera at the perfect price, and it wouldn't have made any difference. i think that everybody who wants one of these things as they are today already has one. if these guys are going to have a future, they have to invent something new. they're really smart, so it wouldn't shock me if they did that. i think you're going to pay a lot lower valuation going forward. snoo what about the future of the company? yes, they are making some near term changes. they're reducing their work force. they're revising their guidance, but they had a key man who is supposed to be building the new content channel that was supposed to be a new revenue stream, leaving the company to become ceo of survey monkey. that eliminates potentially the big up side for gopro. >> yeah. if you believe that media was going to be a big part of the
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future, then i think that's true. i think that was always extreme long shot. as a consequence, i think that john's earlier point, this is a hardware company, plain and simple. they made a noble effort to try to build a software business, but as far as i can tell, it isn't a business. the software thing is just the fun part around the enlz. you know, again, i just think they have a market saturation problem, and they need to do a reboot, and while they're doing that, you shouldn't pay much for it or pay much attention to it. let's just wait and see what products they put out, and if they put out a great one, people will be skeptical at the beginning. you're going to get a chance to buy it after you have seen the product. if it's good enough, it will be good enough to power the stock, even if you're not there the first day. >> yeah, definitely skeptical today. roger well, look forward the next time we speak, whenever that is. >> you all take care, and good luck. watch out for falling stock prices.
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>> roger joining us there. we'll keep watching these markets with stocks back in rally mode at least based on the morning's action. art cashin will join us. jp morgan seeing a nice gain. kayla will bring down these numbers, and the earnings parade continues tonight. intel after the bell. we're going to tell you what to watch out for when we come back in a moment. we live in a pick and choose world.
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zoout up 7 p, and then it was down 77. we did start in the green. albeit slightly. we turned back around partly due to the rise and reversal in oil. let's bring in art cashin to walk us through what we should be watching. art, over the past few days, it seems like maybe we shouldn't come in until 10:30. that's when the real action starts. >> you're right about that. >> for weeks west texas intermediate -- brent was what today's action was all about. brept was a little bit better in the morning, rolled over. sold down somewhat seriously. the stock market followed it. brent had turned back up. we have turned back up. the good thing for that is they managed to get back above 1,900 in the s&p, and they stopped right at the resistance band of 1917, 1921. >> the selloff yesterday really gained steam going into the
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close. 90% of the volume was to sell. why wasn't there a sense that it was oversold at that point this morning? >> well, i think there was still shorting crude. a lot of rumors yesterday about forced sales, some rumors that it was a hedge fund. other rumors that it might have even been the sovereign wealth funds who are suffering because of the lower crude prices. either way people tiptoed in rather cautious. you know, is there going to be a follow-through in margin calls? what do i have to worry about? >> there are comments about oil and inflation expectations. the rally didn't begin right
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away following -- i think you want to watch you had weren't from boston where heed. he is a voter. he appeared to have second thoughts about where the economy was going, and now you have bullard. two voting members are having second thoughts about where things are going. >> do you call them second thoughts? >> yeah, i do. you know, you know my theory. i believe we'll see zero before we see 1%. at some point the fed probably will renege on their 25 basis point move. >> is that the next move you expect from the fed as kind of a suggestion back in that direction? wh
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what. >> 280,000 seasonal adjustment. we're really only 11,000. we went to the house. 35% of it went to people under the age of 19. only 3% of that number went to people between the ages of 25 and 55. that screams out to me that it was christmas season. the next two payrolls will be considerably weaker, which i think will give the fed second thoughts. now, you have the other geopolitical risk going on. -- the two things you want to watch for is the chinese currency disadvantaging them relative to exports. you have a somewhat similar thing going on with the saudi
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arabian currency, which is also pegged to the dollar. you'll get a little feedback. >> one last question. if the fed truly turns tail, right, and we get more comments like bullard's, is that good for a rally, or have they made their bed? >> well, i think you can get kind of relaxation rally. my concern because i told them not to do it in the first place, if they have to reverse, then they may lose all credibility because people will say lagarde told you not to to it, larry sommers told you not to do it. >> art cashin told you not to do it. they obviously weren't listening. >> right. >> art, always good to see you. a lot can happen between now and march. we'll hear a lot from you between now and then too. >> up next, earnings season really gearing up with jp morgan reporting this morning, and intel set to report after the bell. we've got the story on both coming up. plus, the next thing to watch in today's volatile market is the european close.
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>> release aring the earnings this morning on twitter. the stock moved sharply higher on a beat. it's up 2% and still down 11% for the year. the bank diagnose grow revenue by 2%. profits by 10%. largely due to expenses falling in the investment bank. wroefr all costs were down 7% despite the bank setting more money aside for potentially bad loans. in the past banks were able to release these funds to their bottom line because credit was good, but now in part because of weakness the oil and gas space are having to stoe more away instead. >> i wouldn't call it a cycle per se.
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if you have a recession, you will see a normal cyclical increase in all those losses. we're not forecasting recession. we only think the u.s. economy looks good at this point. >> fixed income trading should pick up slightly as the rate picture continues to evolve. some of that rate increase will hit the bank's balance sheet, and speaking of the balance sheet, it's gotten about $220 billion smaller this year, and in jp morgan's case, it's not just a number. it's very important. it completely alters the bank's risk profile because previously regulation across the globe deemed jp morgan to be the most systemically important bank with the highest level of risk and because of that it needed the most capital. you can see how much capital in yellow it was required to hold
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just as of this summer because it has sh shrunk that balance sheet. now it only needs as much in blue lowering its level to what citigroup and some of its other peers have to hold. jp morgan said it would continue to realign its business to make regulation easier to stomach. the change, though, guys in just a year's time is pretty dramatic for a bank that was called too big to fail, too big to manage. really showing that it can slim down. >> people want to know if they've set the table for banks and the quarter overall. how many banks can keep comp in line, can keep the legal costs in line, can have that kind of loan growth, have been that cautious on energy over time? it's the high hurdle. >> well, and they made points that their energy exposure is less than other banks. citigroup, bank of america, wells fargo, are a little bit more exposed to the oil patch. jp morgan might turn out to be best in class, but they have set the tone pretty positively. >> speaking of jp morgan ceo, jamie dimon will joan us next week live from davos.
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make sure you tune in for that interview. >> also, reporting earnings intel after the bell today. data center revenue is going to slow pc business. i spoke to intel ceo brian at ces last week. i asked him how he is going to keep mega scale cloud providers like amazon and microsoft from forcing chip prices down as they become a bigger part of the data center story. here's what he said. >> first, always make sure you take care of those customers and, you know, please them as much as you need to to keep them coming back. secondly, keep driving technology such that people have to go. you know, they want to go buy your parts. there's a need for the performance that are you going to provide. our acquisition of altera, things line 3d cross point memory, it drives them to the next level. >> he also said that second tier cloud providers, those smaller than your amazons, your microsofts are actually growing
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faster in 2015 i guess in terms of the equipment that they were buying. that bodes well for them. i wonder, though, if eventually there's a disconnect. every survey i see all the numbers from analysts suggest that amazon and microsoft are pulling away from those smaller providers. if they're buying across the enterprise i think the story is it you're getting bigger and bigger consolidated customers in the cloud like your amazons and microsofts when, if ever, do they start to use that leverage to force prices down a percentage saying innovation will keep that from happening. >> good stuff. always good to get them on camera. when we come back, this is not what gopro and twitter investors want to see as both stocks continue to struggle. twitter down about 3%. go pro down about 19%. just a few minutes away from europe's close. always big for the markets. although brent not as good as you might expect with this intraday reversal to the up side. be right back. at td ameritrade, they work hard.
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>> dpm. i'm sue her air wra. here is your cnbc news update this hour. an earthquake with a preliminary magnitude of 6.7 striking northern japan today. the japanese meteorological agency did not issue a tsunami warning, but it did urge people to be very careful of possible avalanches and falling rocks in the affected areas. details of flirtatious phone messaging chats between joaquin
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elchapo guzman and actress kate dell castillo ripping mexico. the drug lord's obsession with her led to his capture. there are three winning tickets in the $1. 6 million powerball jackpot. one was sold at 7-eleven in chino hills, california. people gathered to celebrate the win. the other who two tickets were sold in melbourne beach, florida, and tennessee. no one has come forward yetted. british actor alan rickman has died. after a battle with cancer. he was often cast as the bad guy, including hans gruber in "die hard" back in 19 88. he was 69 years old. let's get back to "squawk alley." carl, he had the most amazing voice. >> and to be gone at 69, like bowie, it's terrible. >> it is. >> thank you very much. take a look at europe here. they're going to close off the lows, but not enough to get out of the red. simon is here at post nine. >> europe is basically getting
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rip-sawed by what happened in the united states. yesterday, of course, wall street fell 2.5% after europe shut down so, bang, we were down almost 3% in france and germany. we've risen here. it's cut the losses. that's kind of the story of the day, if you like. central bank is front and center. the european central bank issued the minutes of the december 3 policy meeting when they disapointed everybody. actually, basically detailing the disent, the dovish dissent there was in that. jp morgan saying, hey, give them what they want. cutting the deposit rate. maybe there would be further easing. there's an overriding article from many by reuters suggesting that they're in no mood to loosen. stwroo as the fed has done during the course of the year. meantime, on the individual stocks, we've had some of the basic resource stocks leap
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higher during the course of the session as each has stories, individual stories, about effectively raising capital. statoil is buying -- south 32 made big from one of inc. low's units in brazil. it's a $1 billion deal. at the same time, glencorps is finalizing bids on its chili mine, which, again, is $1 billion they could raise, although -- those stocks during the course of the session, and then you have the problem with two more carmakers on top of vw. now we learn and renault admits it has factories and offices in connection with the french investigation as to whether it, too, was emitting levels. chrysler, which, of course, is quoted here is on this exchange and in milan were suspended on news from chicago. two dealers alleged i racketeering. they are suggesting denying that suggesting that they will will defend themselves on that
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accusation that is effectively they were asking dealers to inflict sales and paying them for that. obviously, that's subdued, if you like. the travel stocks, which all seem to be quoted in london. those that are falling today. we had a downgrade on ihg. others are in negative territory. just be aware, we have some pretty bad figures coming out in this country in the united states for the first week of the month. an indication perhaps that things are not going so well in lodging. back to you. >> just after we got the news from united airlines, the travel was hurt in november as well. we'll continue to watch those. thanks, simon. in the meantime, shares of gopro hitting a new all-time low this morning after the company announced disappointing holiday sales and job cuts. josh lipton has been all over that story since it broke yesterday. we'll go back to him on the west coast. hey, josh. >> well, kayla, of course, even before this latest news gopro stock was down more than 75% over the past 12 months.
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gopro preannouncing q4 revenue up 435 million. that badly missed the street's estimates, pinning the weakness on mispricing of that hero 4 session camera. gopro also announcing that it's cutting its work force by 7%, or about 100 employees. in a letter to employees, ceo nick woodman saying this was a difficult and deeply emotional decision, but it was a necessary one." now, investors knew gopro was under pressure, but clearly still surprised by this news. the stock now down some 90% from that all-time high of nearly $100 in october 2014. what gets this stock working again? well, alex of jmp securities says woodman and his team need to learn from the mistakes in 2015, release a new camera that is more appropriately priced with stronger features with some $1.5 billion a year in revenue, $450 million in cash. gopro can still invest in
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technology, & its brand in a way many others can't. he also says the company us must upgrade its software, make it easier for users to edit and share content, and that gopro drone scheduled for release in the first half of this year needs to be a hit. charlie anderson of daugherty and company, another did gpro bull, estimates the gopro drone could add about $20 million in sales in year. of course, another big question many investors must be asking this morning, is woodman the right ceo for this company? he said woodman's mistakes last year do raise some serious questions about his leadership, but he said woodman's youth, energy, and imagination still make him the right ceo for the company for now. guys, back to you. >> thanks, josh. let's stick with the mounting concern over go did pros and bring in cnbc contributor, former ceo at the a daily mail north america" josh steinberg. i get passionate about consumer hardware because it's the first thing that i started covering really with apple 15 years ago,
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and they screwed this up big-time. there was time. there were resources focused on the hero 4 session they had to cut the price in half. meanwhile, they haven't come out with this software that's supposed to make it easier to use. even if the drone does 30 million in sales in 2016, that's a drop in the bucket compared to what they need to restructure overall. what's your take on this announcement and where they go from here? >> this has to have been one of the easiest shorts you could ever have done. you had four points, and i'll go through quickly. first of all, the media business was always a head fake. we knew it was a head fake. they were talking about big youtube numbers. number two, when you went on wish.com, you could see all of these clones of gopro cameras. now you can see a 360 degree camera from recode. there's competitors there and no software innovation. the claim that they didn't market enough, which is what they said to josh lipton, that was a crazy claim to make. no company markets more than them. that's really disappointing that he came out and used thats aan skugs when he could have taken the pain.
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finally, my personal favorite pumpkin gate on october 29th where i gave him a hard time, and you guys said i was too tough. he said the ideal use case for a gopro is to take carving footage of a pumpkin with your child, right? >> i didn't say -- >> that's -- that is out of -- that is out of ideas. to be honest, i don't see it. it's a $2 billion company. i wouldn't short it here because obviously it's going to get taken out. >> i mean, i also carved pumpkin with my kids. i used an iphone and a gopro. the iphone footage was easier to handle. my take is not that, hey, what else could he have done? they could have get software for multi-camera editing. if it was easier to work with multiple go pros, i would buy another one. >> those are promises that he made before. seamless editing, seamless downloading. >> he admitted that he has a stack of sd cards that staring him in the face too that it's hard for him to edit, and this was more than a year ago, i believe, and he said, yeah, we're coming out with the software. it's in alpha now. we still don't have it. for me it's an issue of focus and priorities. they focused on the session where they cut the price in
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half, and maybe they should have focused on something else. >> i like what you said earlier in the area. what were they going to do, price it so low they didn't make any money. hardware is getting worse. the golden child of hardware just had a really bad quarter. gopro is not a software company. they've never made any good software. >> the vin investing case was one direction. people stopped shorting the stock because 70% of the shares outstanding were being sold short, and it got too expensive a trade. how could you not have seen that writing on the wall? >> i don't know. i don't even know why the stock is trading down so much today. it doesn't make any sense. we had so many bad cases. maybe right now they feel like this is the final leg down that, it really is over now, there is no up side. maybe this is the last bit. >> 7% revenue miss?
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how do you not bring that up with lipton on october 29th? >> let's move on to twitter whose share price has been halved since jack dorsey's return. what's your take on where they are with periscope? i mean, it seems to me this twitter integration is better for periscope than it is for twitter. it's like a free ad for periscope pay. you can see what's going on here. maybe you should sign up for the full thing. twitter in general, though, still more plumbing. it's hard for me to explain to other people who maybe aren't as into tech why they should get on this thing. what they're going to get when they sign up. >> also, i think coming out and saying you've done 100 million broadcasts, that strikes me as a desperate move when we know that from reports that snapchat is doing $7 billion reported videos. >> you trust all these numbers? >> i'm just saying i think between the facebook claim of eight billion videos and reports, at least, let's say they're half.
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let's say it's $3 billion a day. let's say it's $1 billion a day. they're talking about 100 million lifetime broadcasts. >> i mean, people are increasingly arguing that twitter in general should stop comparing itself to facebook and snap chat and just accept their role as a niche influential player, right? >> i think that they could go further intoed data licensing business. they could be be aa modern pr newswire. you can't change the metric when you don't like the metric, and ultimately, look, they are a competitor to facebook. they're both trying to cover live events. they are one of the major dominant social networks, and they haven't grown. i don't see how it works. now they don't need a lot of users. >> jp morgan, for the pr newswire example, did use twitter as the primary tool for disseminating its earnings this morning, but doesn't that feel like something twitter should have explored a couple of years ago leveraging that? >> i think that they keep trying to kind of go back and forth between saying that we don't need to have a lot of users, we're going to be able to influence the network, and then
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put up big numbers which saying periscope is huge and everybody is using it, and it's neither here n there, and all the product changes to date have been incremental. where you see this company trading far below a lot of the private company comps, the question is how much cheaper can twitter really get. at this point i think it's getting relatively low. >> before what? before it also eventually gets taken out. >> i was going to go there. i have to think that it's a regulatory issue. why would google not buy twitter unless they can't get the deal done. why would amazon not buy it. it's so cheap. so much cheaper than what's app was. >> that's true. what is it around $14 billion. you have to pay -- >> 15 cent premium. >> maybe when apple breaks up, they'll swallow that other -- >> apple -- >> three times. >> apple is the natural -- i should have brought up apple instead of google. apple came to agreement with twitter before they could come to agreement with facebook for the integration, and apple has done very out of the box thing. i like the apple-twitter deal a
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lot. >> they should buy yelp before twitter. not saying they should buy either one. >> ity twitter is a much better buy for them than yelp. >> it's integrated into maps and -- john steinberg, always great to have you. hate to stop talking with you. >> awww. >> up next, extraordinary economic, political, and geopolitical uncertainty in 2016. that's the outlook this year from the u.s. chamber of commerce. we'll talk to you as president and ceo tom donahue when we return.
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sfroo coming up on the half too many show more than a trillion dollars of market cap wiped out already this year. we're getting a bit of a bounce today, but can it hold? gopro in freefall. we talked to the analyst who was way ahead of the street on that one, and bonnie baja of jeffrey gundlach joining us as well. we'll see you in about 15 minutes, and lots to discuss today. >> all right. sounds good, scott. thank you very much. consumers are benefitting obviously from falling oil prices, but what about american businesses? the u.s. chamber of commerce is out with its state of american business. joining us first on cnbc is thomas donahue, the president and ceo of the u.s. chamber of commerce. it's great to have you back, tom. thanks for joining us. >> i'm glad to be here. >> we just had a state of the union. obviously it's been a tumultuous start to the year in equities. what does business want to see this year more than anything? >> well, i think business -- by
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the way, i talk to hundreds of them every year on a one-on-one basis, businesses, about what they have to do to get jobs and growth. they are concerned about what's going on in the economy, particularly across the globe. watching a promise from the administration issued again yesterday for unbelievable expansion and regulatory and direct actions by the president that take more control of the economy. they are concerned that politics be dealt with in a way that leaves them with some strength in the economy, some strength in the financial area where we are limiting the amount of funds that we can get to people for investment and particularly in small companies. it's a difficult time. business wants the opportunity to do what they can do well
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without further jumping on top from the federal and state governments. >> tom, we often debate the net effect of these low oil prices. on the one hand you would think for business having a lower input cost, having transportation be less expensive would be a net positive, but then you have job losses in the energy cache. how do your businesses balance that, and what are you hearing from the members of the chamber? >> well, you said that very, very well. we have to look for a balance. you want to get it down as low as you can so you can -- for the consumer that's driving their car, and that helps the industry for transportation and for the airlines it tha have the biggest profits they've had in recent time. you get to a certain point if you keep driving it down it is not now efficient or possible for the people that take it out of the ground, that refine it, and transport it to do so on the price for which they can sell
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it. i do believe it's very interesting. here we're talking. we get two messages in the last two days that it could go down into the 20s, and on the other side some serious people saying before the end of the year we can be back up in the 60s. that's all about the surpluses we have and when will they disappear? oil prices -- of all the commodities, they're up and down like a yo-yo, and generally we're able to deal with them. they're way down now, and we have to see what happens. >> you mentioned a number of concerns that small businesses have these days. what would you say are the top two fixes near term that you would say or at least things that would help the situation and the concerns that they're raising for you? >> i think there are two things that would fit right into your question, and then one overriding deal. first of all, the availability of capital and the availability
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of working capital, the ability to get the kind of money that small businesses need to just run their business. the second thing is there has been such an explotion of regulation in every walk of american life for every business, for every one of their fundamental issues in terms of finance, in terms of the environment, in terms of regulation of what they do with their products. we have got to make more cash available, and we have got to slow down. this government controls everything. bottom line, though, i think small and large businesses are looking for a message from government that they understand that growth is the way to job creation. it's the way to really get people to go into business, and government has got to back off this we run everything, we
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decide everything, and business is not the answer when it fundamentally is the answer for the future. >> we know, finally, large businesses have a lot of cash. not all of it on shore, but a lot of cash. cap ex doesn't make sense in a lot of cases given where capacity utilization is so they buy back stock. do you have a problem with that? >> i have always had a problem when i have served on many very significant boards, and i always had a problem if you had a sole strategy to keep buying back stock because, you know, you wonder what the management is doing if they don't have another option. of course, buying back stock strate strategically at particular times makes sense. right now if you couldn't buy back stock and your job in a major corporation was to figure out what to do with your capital, sure, you can buy some
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other companies, but the bottom line is how do we get into the foreign markets better? how do we get into the technology markets better? how do we improve our efficiency? how do we improve the supply chain? there are a lot of things we can do with our cash that will give us a better return? the problem with buying back stock is it's not often pushed inside the company. it's being pushed by the investments outside the company that are not worried about their future. they're worried about how many shares are going to be bought back and what kind of dividend is going to be paid. >> it's worth reading, as always, the state of american business. good to see you. >> good. look forward to talking to you soon. up next, lots of volatility this morning. stocks off the highs but holding on to gains. all up about a percent except the nasdaq. rick santelli will break it all down when we come back.
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>> rick santelli here live. i can't tell you how many different articles, interviews have come to the point that finally who is to blame for all of this volatility? the fed for raising rates. unelected officials ruining the party, taking away the punch bowl. there's something to be said for that logic, but in a slightly different way. the fomc committee and the notion a small group of people
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should control the price of money in this country or in any small group around the world, i think that ought to be under review. the issue isn't what's going on. reality is hitting. we can't point to the fed as responsible directly for this. the party had to end. zero interest rate policy was a price -- they kept it there long after the crisis. that's the issue. i declare that the age of transparency should be dead. it didn't turn out that we had blasted to see what was going on. what we actually had was a television. every time things weren't the picture they wanted us to see, they changed the channel. whether it was employment, the rate of unemployment, it all changed. more important, how many times today have you heard smart guests saying, oh, 292,000 wasn't really the jobs number when you look at this aspect and that aspect and the household survey and temporary workers and the holidays. it was really hardly anything. you know who we should hear that
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from? the fed. all along we haven't heard that from the fed. they createded their own beef stew in this instance. pillar number one in terms of deflationary issues, just think japan, how past its prime these ideas are. in japan, an island with virtually no resources, and they're worried about falling commodities? they want to correct that? that's a little strange. pillar two, we have just gone over it. in terms of the employment scenario, if you're not honest about it, once you actually have to do something about what you portrayed on the employment scene, if it isn't accurate, it's of your own making. all along the fed if they were focused on employment should have been honest about the quality and true quantity of jobs. if we are rallying because they're pulling this back, we certainly will turn into japan. back to you. >> right on, santelli, as one viewer rights. one second it's there.
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>> this one as a talk show host a little worried. steven colbert worried if twitter's stock price goes any lower, i'm concerned that none of us are going to get paid for
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this. he, of course, is talking about celebrity endorsed tweets. this is a stock price that's made its way to the broad media. >> the post about new traditional supplements will get erased pretty quickly. >> one to watch. >> gains for the dow holding in at 191. let's get over to headquarters. scott whopner and "the half." ♪ welcome to the halftime show. let's meet our starting line-up for today. steven weiss is here along with josh brown and john and pete. our game plan looks like this. freefall. gopro shares plummeting today. is there any homohope in seat for a trnaround? we'll speak to the analyst who has been right on the money on that name. pass the mayo. top bank analyst mike mayo joining us this hour on jp morgan's results and whether it is still the lebron james of that space. we do begin with the markets and finally some green is on the board after days of selling. dow right now up more than 200

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