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tv   Squawk Alley  CNBC  January 26, 2016 11:00am-12:01pm EST

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♪ >> welcome to squawk alley on this tuesday morning. cnbc senior markets commentator. carl is out today but let's jump right in with what's happening in the markets. rally mode right now. dow is up 241 points. for more on what investors should expect today and this week. art, we thought we would say wednesday was the bottom. yesterday gave us a scare. are we out of the woods now? >> there's a good chance you might be. today is one of the most favorable days for the bulls ever in that the day before an
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fomc meeting has a bias that's phenomenal. there's a regional fed study that indicates that something like 50 to 70% of all the gains in the stock market could be had if you just added up these days. >> there's some discussion of what investors would like to see in the fed statement this week. whether they need the fed to show support to the markets. whether they need to back away from the mention of increases in september. does any of that need to happen for the market to stay positive? >> the feds will be a little obstinate about things. at least they're carefully monitoring what's going on elsewhere and that they remain data dependent and they're going to wait for the thing to build up so that will give us a little bit of space. >> how much of this has to do with the fact that crude seems to be behaving. is that allowing people to kind of look beyond that at other things? does that mean that we should pay even closer attention to
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earnings this week? of course we have apple on tap after the close. that those sorts of things will matter? >> i think apple will be very very important and people will look to see if it appears they're either losing momentum -- apple is in a position as the biggest company in the world they're still a product by product company and they have to make it work. whatever they bring out. >> apple is almost like an asset class in and of itself, mike. >> it is. it's also not in my opinion, at least by some of the evidence, it kind of operates on its own kind of mini economy and i don't think it's going to tell us tremendously about anything much more than how apple has navigated this period and how investors are willing to receive it now that the stock has been underperforming for awhile. to your point about earnings when crude oil behaves and it's stable it frees everybody up to look at more company specific
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stuff. credit firms and today you're seeing the old industrial companies actually get a little bit of a good reception. 3-m. some of the other industries. johnson & johnson driving the dow. that's one of those things, it gives a green light for us to look at the other things including apple later on. >> we did get data this morning art and i want to ask you specifically about the service sector. it was positive and above 50 and better than we saw before but they did suggest that spending capex and energy were going to start eating away. was that something we need to start worrying about? >> it can be a problem. the number we got from the fed yesterday was a disaster but that is indicative of problems in the fracking area and the petrol system so i think we're here. there's an outside chance that you may be seeing a real reversal in oil. we'll give it a couple of more days and if that's the case then we may get a rally from our oversold conditions.
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that could take us into february and see where we go from there. >> this is a political season that we're entering into. looking at iowa, looking at new hampshire. anything investors should be thinking about and how that tends to effect the markets or not in a year like this? >> what you're seeing here is in the early stages, things like drug pricing and major areas that could come under on a full sense of how any of the candidates would handle the entire economy i don't think they have given us enough quite yet. so i would watch item by item industry by industry. >> and i was just going to say, it's really hard to quantify but just the idea that the race is so seemingly wide open and basically both parties have these big challenges right down to the end and historically these years when you have no incumbent running, at least there's an extra wildcard but to art's point it's early i think for the market to start to really handicap this.
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>> it's going to make the next few months very interesting as some of the rhetoric starts getting firmed up but for investors so far this year, art, pretty much no asset class has paid off for investors. we heard from jeffrey, i want to play you this sound bite. here's what he told cnbc. >> what are these people doing is the question you have to ask yourself and at least to an investment environment which is non-productive, how many people in this room made 10% on their combined investment portfolio last year? probably not very many. most people made zero or negative last year and the fed seems intent on continuing this low return environment. >> of course he said what are these people doing? he's talking about the fed. you have him. saying when you see the declines that would tell you maybe a recession is on the horizon. why are bears so loud right now? >> because i'm kind of in the camp of the fed may have made a policy mistake and you have heard me say before i think
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we'll be back at zero before we get to 1%. but they will have to be dragged yelling and screaming into any changes and that's why i think they will be some what like that tomorrow. they'll fight what they think is their credibility but i don't think we'll see any rate hikes. >> even if history doesn't show it was an outright mistake. it was a very unusual set up for the first fed increase in the cycle. you had profits late in the cycle and turning down. you had just in general the cycles run for so long and asset prices got far along that you knew there was probably going to be a little bit of an unsettled reaction no matter what. >> and the manufacturing sector was in a recession already. >> and now could services follow it? >> i hope not but there's always that risk. for now the market is very self-absorbed. it has that prefomc bias and
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it's going to keep it. today will be a good day and we should be okay right up until the statement tomorrow. >> so we know the bias for today is good but you've said 1889 is a trap door for the s&p. what level should we be watching? >> well, there is resistance up around 1907. 1911. they might have a difficult time getting through there. if you reverse, i would again watch 1889, give it a second try even though we broke it yesterday. >> art and his crystal ball. great to see you. >> coming up, a massive day for tech earnings. well, mostly because of apple which is set to report after the bell. we'll tell you what to expect and what to look for. plus the future of twitter and the next stop for kick costolo. he's going to join us live later on this hour. and the markets in rally mode. right now the dow up more than 250 points. the nasdaq up just shy of a
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percent. we're back in just a moment.
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apple set to report earnings after the bell today. investors will be paying close attention to the iphone with sales expected to show minimal growth for the first time in history. josh is live outside apple's headquaters with more on what to expect.
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josh. we've been getting indications of iphone weakness for weeks and you have seen a number of big apple supply chain partners talking about current quarter weakness and that's why financial analysts that cover apple you see them cutting estimates for iphone demand. he's looking for march quarter iphone units of 55 million. that would be a drop of about 10%. now if that's the case, he tells me that bad news is priced in at these levels and then some. you have a stock that's been under real pressure now down some 20% in the past six months. bulls argue though that the iphone franchise is solid. that there are new products in the pipeline including the iphone 7 and that valuation is very attractive at these levels with apple now trading at historically low pe ratios. of course cheap can get cheaper. the near term risk for apple is that weakness in iphone demand is worse than what wall street
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anticipates. we're going to soon find out. guys back to you. >> thanks so much josh lipton. shares of apples are still hovering around that $100 per share. down for the year. we've seen the corelary. are the signs going to be baked into this quarter? >> most of it is baked in. the question is what people see several months ahead. so i do think right now it would have to be a really bad fumbled quarter to react too much negatively but the market told you net income wise take away the buy backs it's been a very slow growth company since 2012. the buy backs have covered that up and it's been a smart use of cash but it's not necessarily -- and it's the first physical quarter. >> they do. right now their second fiscal quarter.
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>> but this is what they're reporting? >> yeah. they're about to report their first fiscal quarter. what boggles my mind is how little faith people have in apple. like no other company they're consistent in bringing out well crafted products and software backing them and maintaining high margins. but you look at the chart and it's all over the place. people are like oh my goodness. i'd love to have apple at 100 when it's at 130. but then at 100 it's going to go to 80. can't touch it. this is one of the companies you don't have to worry about it going away or completely stumbling. they have cash in the bank. they have room to fumble. the question is whether or not they do. we'll see. >> let's bring in another voice to this conversation. it's funny to hear people say it's the largest company in the world. of course the franchise is intact but now we're asking the question by how much will iphone sales have slumped in this quarter? what are you saying? >> yeah, you know what, i think
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the mistake we end up making is we end uptaking one or two quarters data points and extrapolating them to eternity. that's what people did last year when there were positive data points and had a very bullish view on the company. and right now we're seeing year over year declines in iphone units in the march quarter, probably flattish shipments for the quarter but if you take a step back and look at the bigger picture the franchises are still intact. people are still buying a new iphone every 2.5 years or 3 years and buying other am products. >> so you're saying the march quarter is the trough for iphone sales? and if that's the case is that going to be the trough for the stock? >> it could very well be. and otherwise as we get into second half of this calendar
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year we think the stock should start resuming it's upward journey from here. >> a couple of things that i'm looking at i want your thoughts. in a short-term inventory seems to be particularly important. over the past couple of years they have been supply constrained during the holiday quarter. i want to see if they're exiting the holiday quarter within their target range of 5 to 7 weeks of inventory and it will color their guidance and longer term they seem to be evening out the spikes and product spikes in sales the way they're doing this iphone upgrade program. how quickly do they expect to move that to the web and not just store only? are those things that you're going to be looking at as well? >> absolutely. i think the program there's a lot of things. we don't know if people are actually taking it or not. we'll get the data points over the next few quarters and that's one positive and the other factor over there is clearly as apple is trying to garner as you
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mention, smooth out it's product cycle and do a mid cycle that helps on the unit shipment side. so i think there's a lot they can do. they have a really solid franchise which is what we are banking on for the stock to turn. >> and is there anything else outside of iphone that you think is going to capture investors attention at least in the coming quarters here? the other products they added? pretty good reception but nothing that overtook all the attention on iphone? >> iphone is the biggest category we need to pay attention to. it's the largest revenue driver and profit driver for the company and that's where they drive the stickiness with the customer as well. yes watch and some of the other products makes sense but they're not driving the numbers yet. >> what is interesting to me too is that apple is more like a domestic company in china. they're opening up their 33rd
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retail store there. they actually have a big chinese work force not just contracting but actually working for them at retail. could that make a difference in their growth trajectory in that company -- i'm sorry in that country which is having some trouble business purchasing wise but where the consumer still seems to be spending? >> that is a concern and that's been -- china gives, what, 25% of the revenues which includes taiwan and hong kong as well but mainland china is still a big part of it and if the economy continues to slow over there that can have an impact on their growth rate. that's probably why they're looking at other markets outside of china where they can invest more and get more returns on those markets. >> if the street doesn't get the numbers that it wants consensus right now. 323 per share revenues of $76.5 billion. how quickly does the conversation then turn to apple's massive capital return program that they usually update
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in april? >> yeah as we move into the april, the march quarter end, the conversation is going to move toward the capital return and we'll get some update this april as well. >> and at this point a little bit of a miss is baked in. december numbers and down for the march numbers seems to be baked into the stock. >> it's worth noting you have $120 price target on the stock so you expect at least a little bit of upside from here. we appreciate your time this morning. >> up next, make sure you stay tuned to squawk alley. former twitter ceo dick costolo will join us live talking twitter and his next big move coming up later on. one eye on the markets. dow up 252 points. it's best day since early december but we'll be watching the next thing that could be leading the markets and that's the european close. it's happening in just a few minutes. stay tuned.
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>> amazon studios coughing up $10 million to outbid traditional hollywood studios for the distribution rights of manchester by the sea. amazon acquired four films at sun dance so far. netflix also a big buyer at the festival purchasing three films. a lot of traditional distributors haven't picked up anything yet. meantime a new report shows just how broad amazon's reach is becoming. according to consumer intelligence research partners there were 54 million amazon prime members at the end of 2015. that's about one in every five adults and the triangulation of amazon here, giving away when you're a prime member certain digital assets but realizing based on their great data how much more likely that makes you to take advantage of that two
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day free shipping and keep buying, it is amazing to see the growth and to see the money coming out of my wallet as i buy more stuff. >> without a doubt. >> and also the presence at sun dance is fascinating because their economics are perfect for that. they can take advantage of content that appeals because it's that extra bit of stickiness for small groups that they can target better than anybody else. >> small groups is the keyword though because i mean when you think about the traditional networks they have to have such broad mass appeal that a lot of the sun dance films wouldn't work on those platforms. >> that's exactly the disagreement we're having. and it's exactly. >> the one point about that consumer intelligence research partners report, it's 1 in 5 adults but that's about half of u.s. households because the households are of course more than one person which is insane. >> yeah. doesn't count with people piggy
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backing either. always great to have you. you can talk intelligently about anything. >> i try. >> this may sound like a movie but it, in fact, is real life. nasa is building it's most powerful rocket ever and it's hired boeing for some help. jane wells is live in l.a. with more. >> hey, kayla. we want to get to mars for real. not in a motion picture but it's so big and so expensive nasa doesn't think it's going to be able to ride on someone else's market. there's no other commercial market for a private company to make such an investment. it designs it's own rocket. the space lunch system sls which is going to cost taxpayers billions of dollars. the rocket's first test flight is planned for 2018 and by 2021 it will take astronauts to the dark side of the moon. further than we have ever gone before. the plan is to get to mars and while it's nasa's rocket the core is being built by boeing. >> what you're looking at is the largest welding system in the world. >> we got a sneak peek inside
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this facility outside where nasa is welding a rocket together vertically with a special season. it cig any can'tly cuts down on weight which is important. boeing is getting much of the $2 billion congress approved just this year for the program. it's also helping build new towers in huntsville to test the core fuel tanks to failure to find their limits. boeing is also using old technology to the shuttle program like engines and solid fuel rocket boosters but isn't that looking backward? >> there's a place for new things. there's also a place for proven reliable things and things that we haven't had. why reinvent the wheel if the wheel works. >> now nasa is benefitting from renewed interest in space. congress gave the space agency this year more than it asked for but it is up to boeing to make sure that the sls performs and it's delivered on time and on budget and that support for the program will last the next 20 year which is is how long it's probably going to take to get
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someone to mars. we have a whole lot more on this amazing powerful piece of equipment being built coming up on cnbc.com. back to you. >> great. >> coming up the next act for former twitter ceo dick costelo. he's going to join us live in a moment. still watching the market with stocks in rally mode. maybe a little bit off the highs. we're under 250 point gain on the dow but still strong. the next catalyst for today's market is the close in europe. we'll bring that to you live when we come right back. 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. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade.
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meeting with pope francis and the vatican as part of his historic tour. he asked the pope to pray for him after presenting him with a rug. >> ford is recalling 400,000 ranger pick ups because the driver side air bag inflaters can explode with too much force and cause injuries. the recall kovcovers trucks fro 2004 to 2006 and it comes days after a south carolina man was killed when an air bag in his
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truck exploded after an accident. >> jp morgan chase rolling out two atm's that don't require a debit or credit card. it allows the use of a smartphone app for deposits and withdrawals. the new machines will be rolled out later this year. that's the news update this hour. let's get back downtown to squawk alley. >> thanks. the future is here with those atms. markets are are about to close in the u.k. and across continental europe. stocks have been erasing earlier losses. they finished higher helped by a rise intraday and brent crude currently above 3150 per barrel. the energy sector rebounding from monday's decline. also the mining sector is doing pretty well despite having weakness in asia overmite. there's also some earnings winners, take a look at siemens up close to 9% closing there. raising full year guidance and beating expectations with it's quarterly results. the german industrial giant citing strong performance in health care, and energy
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management. phillips also posting better than expected quarterly earnings despite what the dutch electronics company calls challenging market conditions. that stock is up 6.5% as earnings season continues rolling on. >> yes, indeed. >> all right it's been just a few months since former twitter ceo dick costolo stepped down from his post. what's he up to now? the former ceo of twitter joined index venture as a venture partner and also launching a software platform for personal fitness and it's great to see you again, dick. i ran into you at the consumer electronics show. i want to get to start ups in general. but first this start up, why fitness in particular? are you just looking to get back in shape after all of those sleepless nights or what's going on? >> no, i think, you know, the
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fitness industry mythologizes the path to fitness as one of self-actualization and you see their ads reinforcing this individual iron will but the reality is that most of us are are really successful at getting from point a to point b through social queues, social accountability, and social support and that's what we're going to do. we're going to bring all of that together in a software platform and really address that challenge in the space. >> so what is missing with what's out there already? because under armour, we just saw is trying to attack the same thing. they have a scale that does your weight and your percent body fat. the band that's supposed to track your activity levels and more, you know, trying to tie all of that together. the chest strap for heart rate. what are the current -- >> you're sort of -- you're sort of getting to one of the issues. there's an absolute
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fragmentation and no sbi grags at all across these different kind of trackers apps for specific kinds of workouts. there's specific apps for running. there's specific apps for cycling. there's different apps for mountain biking to say nothing of the increased specialization in areas like crossfit and these boot camp classes that lots of folks are going to now so we're going to bring all of that together. readd the community aspect that we think is really missing from the fitness space and causing this problem and it's no fun at all and we have six or seven proof of concept groups going now and they're all working tremendously well. we're excited tho get this out to a mass audience. >> so broaden this out with me now. you have been the ceo of a publicly traded company. you've been an executive at google before that. lots of other stuff you did.
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now you're in a unique position as a start up founder. what is this period that we're in now as far as start ups in silicon valley. talk a bit about valuations. talk about the type of innovation that's needed versus what other entrepreneurs are trying to bring to market. >> there's more access to capital than ever been. doing this again and having done it before it's going to obviously be a lot easier for me than it would be for a first time person but there's just a lot more capital out there. looking to be put to work. i would say that's not changing at all. even as some of the late stage private growth valuations come down. the pure start up access to capital has never been better. on the innovation space, particularly around areas of personal wellness and fitness and so forth as you mentioned we
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saw each other at the consumer electronics show. i think there's increasing fragmentation in the space and that fragmentation is ripe for innovation. it ties all of these things together for people so they're not having to go to nine different trackers and nine different apps particularly when trying to understand how they're doing in relation to their friends. >> so dick there might be a surplus of capital floating around there but i wonder how much caution is coming with the capital being deployed into these companies and how tightly monitored some of this capital is by the people who are investing it. >> i'm smiling because last night i was reading a note from a friend in the industry where you can tell that boards are paying a lot more attention to burn rates now. margins. unit economics. everything on down t you know, the balance sheet and the pnl
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statement and that can only be a good thing. and i think you'll see that in earlier stages now and you'll see boards wanting these companies to get to fiscal health. whether that means growth with losses but they can tell that the margin expansion is happening and so on, you'll see more of that earlier. >> i know you respectfully want to be careful talking about twitter seeing as you were recently running the place but earlier this week, just yesterday and the day before we saw news that a number of those executives that used to work for you are heading for the door. to what extent for you surprised by that? what did those sorts of executive movements at well-known companies say about this time for talent in the valley? that there's so much mobility. >> well, i think that first of all these people are all wonderful people.
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>> i've known leslie for awhile coming from american express and i think she is fantastic. jack is a great leader. jack is an inspirational leader so i refer to him on the future of the company. the company is in capable hands with him. i do think that just as regards your question about mobility in the valley when everybody's private valuations are growing quarter of quarter of quarter you see a lot more of that mobility than i think you'll see as companies start to hunker down and focus on fiscal health and their financial futures that don't just enjoy a check at a much higher mark up. i think you'll see a little bit of that mobility tighten up. >> it's probably not surprising to people that you chose twitter as the platform to announce your new venture but interestingly you tweeted a picture of a note that you had written on your phone that was a lengthy
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description of what your company will do. now that you're approaching twitter as an outsideer do you think they can make it richer and easier to do? >> what i was doing there is getting behind jack's announcement that they're going to expand the length of the tweet. that was my way of moral support. >> could you have done the twitter ceo job and been the ceo of something else at the same time? are you scratching your head at how jack is going to pull that off? >> a lot of people view that particular question from a perspective of what i'll call tactical pragmatism. i view it from a perspective of leadership and as i mentioned before and said numerous times jack is an extraordinary leader and that's the way i think about it. >> so as now an investor it's not something that concerns you because you feel like from jack's position having been with
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the product so long he'll be able to figure it out. >> jack is an extraordinary leader. i have been about as public as i can be about it he speaks with a purity of thought and clarity about the product that i think is unrivalled. so i am very financially invested in twitter's future and i think jack is the right leader for the company. >> we know you have a great sense of humor. the one job we haven't asked you about is your outside advising to the writers of silicon valley on hbo. what sort of comic relief did you find and could we see any of that channelled into the new season that's about to come out? >> it's one of the most extraordinarilial lenned groups of people i ever had the pleasure to be associated with. it was fun and interesting to go
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from being ceo of one company to sitting around a room of 12 people and being the last person to get their cup of coffee. that was an interesting switch. i think there will be some things in the upcoming season that people attribute to me that probably shouldn't be attributed to me. i can guarentee you right from the outset that will happen in the first episode. i probably have the lowest hit rate possible of writing suggestions in that room that made it into actual episodes but there maybe one or two. >> you had time away from the ceo seat now. what's your biggest takeaway? how has that experience in the hot seat changed you as you embark on the new ventures? >> particularly for a public company ceo, you really migrate from this world of being internally focused and trying to rally the team around internal priorities and what's most
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important and the big takeaway for me regarding twitter is when you're a public company ceo, you have to do both the internal and -- you have to have the internal focus and the internal narrative about what's going on right now while understanding that there's an external narrative that, you know, has a mark in time as of what the public announcement was at the end of last quarter and you have to be managing that as well. that was a big take away for me and great lesson learned. >> what do you tell ceos of private companies looking to go public coming to you for advice? >> just exactly what i told you now. when you're a private company you have a board of directors that you can talk to every day. and tell them exactly what's going on and have lots of material non-public discussions and you have the kind of public conversations you can have and need to have so those are different ways of thinking about
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working with your shareholder base and you have to learn them and acclimate yourself to them. >> a lot of that is jack's problem now though i'm sure you're enjoying starting up a new venture from a different perspective. thanks for sharing your perspective. always good to see you. >> john and kayla, thanks for having me. >> come back soon. >> up next, we're still keeping an eye on the markets. rally mode all morning. the dow up 230 points. rick santelli, what have you got your eye on today? >> i'm watching the dow. i find it interesting we're up over 230 points today. especially with china's stock market down so much. so i wonder exactly what is going on the next 48 hours that would make stock traders so happy. what do you think it could be? i make a few guesses after the break.
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one analyst doubling down on the retailer. it's our call of the day. the best energy stocks to buy amid the volatility. are there any? we will investigate. straight ahead. we'll see you in about 15. >> are there any? let's get over to rick santelli and the santelli exchange.
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>> thank you. shanghai composite over 6% today when it settled on that important closing low it pretty much has gone down a bit. we talked many times that that's a good way to watch the market globally. the insurance isn't going to last forever and i understand that the global contribution of an economy that's much bigger than it used to be at a lower percentage. everybody understands that. but it isn't necessarily the numbers. at 8:30 eastern when i do numbers one of the most important issues you have to hit on is what's built into the market. expectations. so really many emerging markets have a growth rate that's much faster than developed markets
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because they're transitioning in developed markets but the growth rate and the strategic investments that go along with it are creating the profile of the global economy. take something away the profile is different. it doesn't mean that a smaller per cent of a larger economy isn't contributing more. it just isn't contributing what was built in. today i see once again 235 points up on the dow. with china down oil is up so the story is about oil. i understand that. i think oil is a business a lot like the savings and loans business. one difference after the savings and loans blew up there wasn't a lot left. when the oil blows up and this is key -- i heard so many commentators talk about saudi arabia and opec. i will continue to look at everything going on in energy as the competitive forces in the world i grew up in when i was younger. the 60s. four corners at a gas station. price kept going down, down,
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down and once the price reached a certain level number 4 disappeared, number three disappeared and you had one gas station. what do you think happened to the price? i think that fracking and technology accomplished that. so i think oil is a driver for the markets and everybody is nervous about the business of the oil. but the oil is still there and somebody is going to buy it at a price that will pull it out of the ground profitably. i hope we get $8 oil and no matter how low it goes the fed should ignore this because for the most part it's a good thing except for near term investors and that's the only group lately the federal reserve cares about. the stock market is up because of the federal reserve meeting tomorrow. i hope they don't pull it back. we're going through a purge. it would be a shame if it's the dog that bit us that's the solution. >> thanks, rick. coming up, is it possible to mass produce good healthy fresh food and deliver it on demand? the ceo of munchery thinks so.
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so what about this? your old technology... it's time to get into the new with ford ♪ come and get it if you really want it... ♪ new is ecoboost technology. new is a foot-activated liftgate. new is tougher, stronger and lighter. new is ford. america's best-selling brand. now get into a new focus, fusion, or escape with 0% financing for 60 months plus $2,000 dollars trade-assist cash. only at your local ford dealer. >> our next guest has made a long journey from being a refugee from vietnam to mit to today where his company is rethinking how consumers receive food deliveries. what does it take to get here? and how do his roots influence his business today? he is the ceo of munchery. good to see you again. we'll have to do that again soon
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but i want to ask you about how your business is scaling? you're able to buy a lot of raw material at a low price and you say deliver high quality food there at a competitive price. are you still growing as fast as you were in markets like san francisco and new york? >> we're doing very well. people are always looking if the great quality food. it's cook to order one order at a time. we're able to cook for a lot of people on any given day and that allows us to scale this at great sizing and scale and bring great prices to the customer that way. >> so what is your competition then? a lot of people don't realize you have these industrial ovens. you had really a very
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sophisticated technology behind what you're trying to do. is this a luxury? are you competing in a sense with the economy? are you competing with grocery stores? what? >> i mean, at the end of the day we're getting people to rethink do they need to go to the grocery market every weekend and every day and cook up everything from scratch. we think that's the true competition. people are so engrained into that habit but we're introducing a great way to get great food. very conveniently. so to us that's the so-called competition. not so much a specific restaurant or companies that deliver food from local restaurants. >> the price point obviously would go down the more that you scale your operations. currently it's anywhere between 12 to 15 or $16 per meal and can afford that type of the meal
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when going to the grocery store is cheaper. >> when we started the company and now you can get a fillet of salmon with mashed potatoes and green bean on the side for $11. we have come a long way to get to that price point and we're able to continue to do more. as we scale up more we can bring that price down to even further to the sub $10 price range. now that's incredible to get a fillet of salmon or a roast chicken or a piece of steak for this $8 to $10 price point. that's competitive with anything out there. sometimes you can go to a grocery market and buy raw ingredients and it might cost you just as much if not more at some points because you have to pay retail price for that. >> quickly, if you can, how do you think about scaling in this environment where it's harder for companies already out there to get the capital that they
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need to grow? are you being more careful about the way you do that based on some uncertainty under how easy it might be? >> yeah, you know what, we -- our mission is very simple. to bring great food, real food to everyone everywhere and the way we do that is we're building this brand new and very different platform on how you can bring together great food from all different partners. not just our own in house chefs but chinese food for example and this allowed us to have a great diversification in terms of menu and what people like to eat and doing so at scale. all of these other partners don't have the facilities or the know how to make food at scale and we think that will remain competitive for the long run. >> we'll have to have you back. i want to get more into how you scale in this type of environment where it can be hard to raise capital. ceo and co-founder of munchery.
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thank you for joining us. >> thank you. >> coming up another look at the markets still heavily into the green on that rally day reversing what we saw yesterday. we'll take a look at the movers when we come back. i think it landed last tuesday. one second it's there. then, woosh, it's gone. i swear i saw it swallow seven people. seven. i just wish one of those people could have been mrs. johnson. [dog bark] trust me, we're dealing with a higher intelligence here. ♪ the all-new audi q7 is here. ♪
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twitter shares are up 1.3% as the company continues to make a number of changes to its executive team. former ceo joined us here just a few moments ago and here was his take on twitter's leadership. >> as i mentioned before and said numerous times i think jack is an extraordinary leader and that's the way i think about it. >> comes on a day when goldman sachs cut twitter's price target from $28 to 40. there's still value in the platform but there is execution risk with these executives gone. >> stocks still near highs of the day. they did get a new chief marketing officer from american express as recode suggested they might. it's good to see dick again and good to see that he still supports the leadership there.
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he always was a classy guy. >> you'll be watching apple as will i this afternoon. that's it for squawk alley today. let's send it over to fast money and the halftime report. >> let's meet our starting line-up for today. our game plan looks like this. bottoms up. so far so good for joe's call on crude. we are going to trade the most important market metric and pick some stocks that will pop. our call focused on a retailer as a well-known analyst doubles down on that stock. it was once america's most loved stock and has suddenly buck one of the more controversial. shares are down

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