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tv   Squawk Alley  CNBC  May 5, 2016 11:00am-12:01pm EDT

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the jobs report. could the latest numbers force the fed's hand? insight and analysis from the best in the business. "squawk box" tomorrow on cnbc. good morning. it is 8:00 a.m. at tesla headquarters in palo alto, california, and 11:00 a.m. on squawk street, and we are live.
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♪ ♪ i see a letter and i want it to be black ♪ ♪ and no colors that i want to turn black ♪ ♪ i see the girls standing there in their summer clothes ♪ ♪ i have to turn my head until my darkness goes ♪ good thursday morning. welcome the "squawk alley." kayla tausche is live for us at # 1 squawk alley and shes han a exclusive with jack dorsey on the closing bell, and meanwhile jon fortt and myself at post 9 and henry blodgett ceo and finder with insider h, and a lot to to get with us. and start with the alibaba shares after the revenue jumps 39% helped by the gross merchandising value, and that is after jim chanos at the sohn
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conference say said that he is shorting i. >> we are short. we are short because of accounting reasons, and we have question questions about the met u ricks and real questions on the cash flow, and most importantly, the biggest part of the business which is the fulfillment part of the business delivering the package is unconsolidated on the financial statements, and we don't see how profitable or unprofitable that business is, and i suspect it is unprofitable and funding it from the cash flows of the parent, and therefore will there is no free cash flows of ali bbaba. >> and here with more is our mark mahaney, and welcome. first off, reaction to chanos' questions of the fundamentals of the business here. >> well, i will make one basic point is that as the marketplace model they are generating high level levels of cash flow on the core business, the parent business, the mall part of the business
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with the full margins around and the fiscal year that just ended in march they generated $8 billion in u.s. cash flow s as this they do have unconsolidated assets and strategy on their part to keep them unconsolidated and so i have not found anything nefarious about that, and so there is no dramatic misdeed in the account iing, and it is a hh flow cash business, period. >> mark, the next amazon or ebay, and by that, i mean, it seems that ebay's model in the dotcom model was better than everybody's, because they didn't get involved in all of the logistics, but it turned out not to be as good as amazon investing in the right things. there are a couple of things that with alibaba, going either way. now maybe it has not panned out
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with growth in either way. >> and it is the hardest question on alibaba, because i am struck by how similar the strategy is to amazon and not back then 15 years ago, but today. you look at the cloud computing business that is what they are trying to build up and it is / 1/20th of a percentile of the business of amazon. so i think that are there is strikingly a number of similar, and outside of the core business similarities of their strategy and amazon and if they get it rig, that is why the stock can go up materially from the current levels. >> although, henry blodget, this is a popular stock to short even if you believe that the company itself, and the fundamentals of the company are sound, it is a pr proxy to short china. if you are believing that china is is going to be growing slower or
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stumble or have a hard time, and alibaba has padded the bottom with one-time eye teams like the sale of the stake in china's version of groupon, and if they can escape the macro cloud with the one-time items? >> well, right now sh, they are escaping it, and the growth rate for the company this size is expressively impressive growing 39% year over year, and they are in a great place in the economy ax and this is where the activity is moving, but one of the questions for mark at t he beginning of the ipo, it seemed that alibaba would buy up all of this stuff in the u.s., and is this a china play or will they start to deploy some of the tremendous cash flow to buy stuff all around the world? >> henry, the right question and one of the new growth areas for them, and we have not much suck shesz in the u.s., but they took
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to a stake in groupon which is low-quality asset and also in zulily and not much to show for the international strength, but to your point, henry, they have twice the revenue as amazon, and boy, it is great to have exposure to the chinese consumer. and overall, the yen may be weakening, but remember that the secular growth in china like we have watched it over the the last 15 years in the u.s., we are seeing it play out in spade s in china, and alibaba is the best way to play it, an unless there is a real implosion in china, this going the work. >> should they stick to the knitting, and if so, how much gdp would they take in the market share? >> well, don't buy it on the market success, because they have not proven it yet, so don't buy it for that, but buy it for the core chinese business with the core cloud computing business which we feel is a strongly profitable business.
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yes, jd.com is a major competitive risk, but the the size difference between the two companies is large, and don't get too caught up on how low the secular penetration is in china and the few retail sales online. >> interesting evolution in that story. as always, mark mahaney is joining us out west. >> thank you. and tesla is showing more loss, and elon musk is saying that he wants them to deliver 500,000 cars by the year 2018 which is two years ahead of schedule, and henry, they need more money to make it happen. >> well, you can't say enough about elon musk and the ability to sell the future. the preorder for the cars is what it present, but the question is nailing it. how much capital, and to the
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dissolution of the equity to the company, and investors should be worried about this. >> and the analysts are not. we are seeingi it go up. >> well, the investors are, because it is eating capital and business that is not high margin busine business, and so the idea to have a massive profit margin a few years out even if they get to the number bes they are talking about which is a spectacular increase of production and now at 50,000 to 500,000 in two years? they are already struggling to make what they make. so there is a lot to show on that. >> and this is not a guy who delivers on time, right? i mean, on the -- just to start with, and then to have themselves in trouble by putting too many bells and whistles into the latest car, and then the people that you really want to believe in the production schedule, the executives who are actually in charge of producing it, they seem to be walking out the door. so how much should the investors
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pay attention to that? because the guy whose job it is to protus the car are going, eh, i will have go do something else. right? >> well, the company would point out that the executive turnover is part of the process, especially in a dynamic bizps like this one, and we know that musk goes lu the executives in communications for instance like some people went through tissues. >> and darth vader through the admiral s. >> yes, your lack of faith disturbs me. >> and the apple is getting into this, and google is getting into this, and it is exciting if you are a cuttinging edge car manufacturing or design executive, a lot of cool stuff to do, and the stock is stagnate and people have vested out, so time to move on or at least listen to phone ring. >> and the price target is going up a stnd journal says that it is priced for perfect is shun as it is. >> and the problem with the stocks like this is that if you are even going out ten years saying they will be wildly successful, modest changes in
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the assumptions yield huge differential in the price, and discounted cash flow business and are we in a range that one could justify with the same projection projections? yes. and are we assuming great things going forward? yeah, at this level we are. >> kayla? >> henry, i'm wondering what you think of scale is for this company, because investors seem to be excited about the 500,000 annual production target, but thinking about a company like china which sells $211 million in cars per year, and tesla seems like a speck on the hor ryes horizon of the industry. >> yes,p tesla started to compete on the luxury end of the market, and now trying to move into the middle of the market, and this sun usual for the carmaker to do, because you are either luxury or middle or lo - lowf-end car, and so they are trying to do everything.
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it is going to be interesting if the brand extends to that, but sure, in terms of the number of units, they are at the level of porsche in the united states and, and so are they going 500,000 big piece? well, there are a number of cars sold where it is 17 million annual run rate, and a huge opportunity to gain the share, but the only way is to enter in the middle market, and not proven that it is there. >> and a lot of the orders, and see how many can be delivered. henry is going to stick around after the break. ooh all right. the markets are right now trading slightly higher, but off of the highs of the session, and whole foods in the green after earnings and profit beatst mates, and however, the company did cut the full year profit and sales for cast, and also a good day for zynga rallying a of the the expectations were increased. they did see the customer base decline, but not hurting the shares so far. and let me give you the numbers
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of the major indices, the dow is up about 411, and the nasdaq and the s&p fractionally higher at 1.8%, 1.8%, and the nasdaq up 1.4, carl. >> when we come back, barry diller is one of many sounding the alarm on donald trump, and we will see what the silicon valley leader thinks of trump. and the street is looking at a company beating the estimates here as we will get the ceo here from time, inc. and also the maker of that fit bit, and what we are seeing on "squawk alley" sop keep it here. ♪ does nobody use a turn signal anymore? ♪
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back to the big political story of the day with both cruz and kasich out of the gop race, donald trump is now the party's presumptive nominee, and while anti-trump efforts may have failed, the billionaire media mogul and backer barry diller told our own simon hobbs that he is ready to take up the movement. take a listen. >> i said that i would either leave the country or join the resistance which i said six or seven months and i have decided not the leave the country for sure if he is president which i still think impossible, but i will join the resistance as will everyone who is sent yent. >> what does that mean joining the resistance? >> pitch forks. >> and meanwhile, tech executives and silicon valleys
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showing any warming to the trump? joining us here at 1 market is foundation capital general partner paul holland and henry blodget is pack in new york, and is so you are a centrist, and gathering the leaders in the valley to discuss trump and what is the feedback that you have gotten? >> well, we put together a issan of 35 people across the spectrum of the people in the sill conn valley, right, left, men, women, different religions and we had a rich discussion, but as i mentioned before like a car accident, we could not take our eyes off of trump, and it kept veering back to him as a candidate. now sh now, there are things that are fundamentally different about the bay area than about what we have seen so far in the national political scene, and the standard republican primary is very different than the reception we will see out here in bay area which is the rich vein of thought there. >> and are there pitch forks like barry dillon mentioned, and is that how tech feels about what happens in november?
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>> well, we are not as dramatic as pitch forks here. but looking at here, the bay area is a different microcosm with a lots and lots of px hds and not from trump university, and i mean like real phds and people who are really, really thoughtfu thoughtful, and we have a diverse metropolitan area, and statistical statistically, the most diverse metropolitan area in the world which means we have lots of women, and lots of hispanics and muslims and people of all sorts of races, religions and colors burk what we don't have a lot of is angry white men, and that is what donald trump has been able to prey on so fark and he has not been as successful here as other places. >> but there quite a bit of conflict in the few trips ahead of the june 7th primary, and henry, i'm wondering who you think that donald trump is selling now, that he is the presumptive nominee, and some of the primaries that are still to come seem like victory laps, and what happens from here?
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>> well, it is a good question, and the answer is that we don't know yet what trump's pitch is going to be now that he has clobbered the republican field and won the nomination, and i would suspect that it is quite different. this is a great salesman, and he says what people want to hear, and he has the advantage of not having very clear policies, and everybody is guessing what he is going to do, and he has said some hateful anti-american thing, and a lot of people feel the way that barry diller does, and there is a lot of resistance there, and on the other hand americans are angry right now, and this is fueling trump's rise and fueled bernie sanders' rise, and a lot of people who want change. and i suspect that what we will hear from trump going forward is a much more reasonable practical centrist view where he is going to say, look, it is time for change, and he is a great campaigner, and this is the o sd this thing that people are underestimating i think that hillary clinton by her own admission is much better at doing the job than campaigning
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to get the job, and so trump's salesmanship is going to be coming in. >> and one, chelsea clinton is on the iaa board, and you were not thinking that he would get the nomination, but you thought that he stood a better chance ha than people realize, and do you believe the same now? >> well, you have the easy call that he is going to be obliterated in the historic landslide and given the things that he has said that are incredibly insulting to huge voter groups of american, but that said, he is now pitching to a new customer base, and i think that he is going to be ignoring a lot of what he said previously and a new story, and it is a one-on-one head's up matchup in a country that is justifiably frustrated a on the problem is the economy for most americans still is not working that well, and when you have a situation like that, people want the change, and they don't know necessarily what is right or who
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is right, but they say we want something different, and hillary has the disadvantage of being effectively more of the same. >> and paul, it is the last question, i have for you, but does trump help hillary raise more money otherwise in silicon valley, and frechb the seven fr centrists in silicon valley. >> one thing that came out of the salon is that the winner of the last seven elections is the one of the most charisma, and donald trump has a ton of charisma, and he is going to be pulling the views to the center from that per spspective. all that said, i don't believe there is any chance that he will have a chance of winning california. the demographics are just all wrong for him here, and they don't work for the message and i don't believe it is something that is fgoing to be working. he is certainly going to be winning the primary, but he is competing against the hallow and the lame and the the blind here. >> paul holland from foundation
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capital, and henry blodget at post 9. back to you. >> thank you, kayla. and our jane wells is live in albuquerque, and hello, jane. >> hey, carl. despite this large strike on the east coast on the 23rd day and verizon shares down 6% in a month, out west, the verizon shareholders have overwhelmingly re-elected the whole board of directors and the compensation package and soundly defeated three shareholder proposals to separate the roles of chairman and ceo and one that would have required a shareholder vote on go golden parachute severance package, and that being said, there is a large protest outside and some verizon employees on strike who are sharehold hers in the meeting as well. most of the protesters though they are union supporters, and they claim that there is 400 such protests outside of the verizon stores today. a large one here, and the main sticking point in this very large strike on the east coast
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with 39,000 workers centering on verizon wanting to have the ability to transfer calls to various call scenter, and the striking workers fear that means that it will be outsourcing of jobs outside of the u.s. there seems to be no budget in that plan in the negotiations right now, and no budging there, and it is not about the pay and the health care. finally, i did speak briefly with the chairman and the ceo, and yes h he gets to keep both titles, lowell mcadam, and he said that they have a second round in nondisclosure about the verizon and yahoo. this where the rubber hits the road. and also, coming up later dreamworks and artificial intelligence when we come back.
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shares of time, inc. company
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beat expectations, but looking for the larger loss to expand the digital platforms. joining us is the ceo of time inc, and welcome back, joe. >> thank you. >> and the cover of time continues to make news every time and this week on zika, and when you want one piece of the company to define the overall company, what is it? >> it is no one piece, because it is made up of 90 brands, and we have incredible content to supering all sorts of customers, so it is expanding the dinl tall and the voc, mobile, and all of the different ways, and our moenl audiences are up 40% in the last year alone. >> and joe, this is the core question in the era of programmatic advertising and having great journalist, it is not clear how to monetize it, because facebook and google say
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we know how to do it, and how to advertise on the lowest application of the web, and not to sell it to fortune, and pay them a bunch of money, but sell it to them when they are reading the e-mail, and how do you drive the profitable growth? >> well, facebook is driving the profitable growth with my content, too, and they need me, too, and we have just acquired another part that is going to entitle us to facebook, so the content with the ability to target individuals across multiple devices is the same advantages in the marketplace as facebook right now. >> kayla? >> joe, a lot of reports that time inc was looking at teaming up with private equity to lob a bid for yahoo and then you ended up not bidding, and if you are under the nondisclosure agreement, i know you cannot comment, but some of the investors would like to know your intentions for yahoo! and
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whether you think that yahoo! is a media company. >> well, we can't comment on anything like that, but the reality is that we are careful in the investment decisions, and whenever there is an opportunity that is coming by that is available to us, we will take a look at ate, and there is a great opportunity of the company to use the digital traffic to monetize it with the digital content, and we will look at it, and we won't comment on any specific one. >> and the bets of the ott, and the people of the entertainment weekly channel, and is this a toe in the water or how would you describe the effort? >> well, it is the first time to get a ott network to put some ed a ver tiz on it. because most of them are subscription based and we are working with the advertisers and the content parters who say we have great content and launch it on the ott network and be the first place to monetize the eyeballs that we are creating and we are excited about it. >> and making tv is expensive.
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it is. >> it is very expensive and the reality is that we created 28,000 videos last year, and 40,000-some-odd this year, and creating a lot of content, and our editors meet fascinating people everyday. >> so making good video, and content on tv is very expensive we should say. >> yes sh, there is, to put on facebook which is growing dramatically, and live is dramatic, and we look at this, as the cable companies had a big grab and the hold on the cable, and if you wanted to create a cable channel, it would be hundreds of millions of tlars to launch it, but not anymore, and the people like us wo are very good at content and video, we have the opportunity there, and there is land grab going on, and we e regoing to be grabbing some of it. >> and yesterday, they said that cable is like the rail road, and if you have the track laid, stay a in the business, but why would
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you start from scratch? >> because it is totally different. i started when time inc launched home box office, and we know what it did with the growth, but that business is different now, and over the top video is threatening the entire distribution system, and opening up opportunities for ourselves to take a land grab, and we are going to go for it. >> and we are going to be watching that and the new life vr application. >> and a brand like life who has not published in years is highly profitable, and when you think of life and vr, it is great. we are creating a lot of vr conten content, and we have talked about the swimsuit models, and the live from the oscar coverage and a lot of coverage for us, because we interview and engage with the most interesting people in the world, and live vr is going the bring that to you. >> thank you, joe ripp from time inc. >> now over the simon hobbs across the european markets? >> well, the stocks are slightly higher or dipping lower as we head into the close, one-month
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lows now, but it is worth pointing out on the 4th trading day of may, the difference of trade in this country and what you are getting in europe. europe on those first few days actually fell dramatically, and therefore, it is effectively stabilizing as the things stand at the moment. and i am hoping that we can have a look at the chart, guys. yes, thank you very much. the european stocks fell almost 3% on the four trading days and now a stabilization and far worse performance here on the s&p 500. standout stock today is centrico who is the largest energy provider, and you can see the cash flow there which has been thumped down 10%, and the uk is a big focus. we had data today that suggested that the uk is slowing down in advance of the brexit referendum on june 23rd. it is the services, ism, beg your pardon, the pmi that came in at 52.3 which is a three-year
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low, which is putting sterling on the back foot, and are remember the obama bounce, and now the slightly dissipating now. and now, also the local elections. this is watched, because the turnout is critical for the read-through on what the brexit vote will be, and whether those who want to stay in the european union will have a sufficient volume in order to achieve that, and the second thing they are watching for is that we have a potentially new, and we will have a new mayor of london by tonight anyway, and the guy that is actually running sadiqqe khan and it is going to be raising questions if a muslim mayor would be allowed in the u.s. under the policies of trump. back to you. >> and the sale of our parent
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company comcast and the slight gains the there with dreamworks.
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good morning, once again, i'm sue herera, and here is the cnbc news update at this hour. two blasts struck a central syrian village kill iing at lea six people and wounding dozens more. the officials say that the blasts were triggered by a car bomb and suicide attacker wearing an explosive belt who detonated the device in the
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village. no immediate claim of responsibility. a woman has been found alive after six days in a collapsed building in kenya. workers freed here increasing the hope that more survivors can be found. the death toll has risen to 33 and 80 people are still missing. hundreds of taxi drivers in sal paulo, brazil are protesting uber. the city gives preferential treatment to uber. and justin bieber's pop-up is drawing huge clouds. it is setting up for two days to hawk merchandise from his current tour. that is the cnbc news update and back downtown to squawk alley, john. >> thank you, sue. over to simon hobbs with more of the exclusive interview with
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barry diller. >> thank you, john. the ceo of expedia giving us a chance to talk to the billionaire businessman about his merger of the dreamworks and also a good friend of jeffrey katzenberg and he talks about the sale of comcast to dreamworks. >> it is necessary and a little sad, and not overwhelmingly. >> and why is that sad? >> well, look, the dreamworks started when it is the whole thing which is movies, television, animation, and several other thing, and as an altertive -- alternative to the closed studio system. it was a studio with big dream, and for life reasons, god knows you could not have gotten three smarter people together, but for life reasons, interest reasons, changing times reasons, that dream of building that into an independent major company
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essentially didn't work out. it didn't work out, because little rally the members of that consortium all had their interests were not -- they were not as interested as time went in the same things. so it is a little sad, but by the way, how can you be sad? steven spielberg is making great movies, and seems happy, and david geffin wakes up happy with a ton of money to give away, and jeffrey katzenberg said that i can't wait to get on to the new ad venture, and so jeff ri will have a third act. >> and recently, barry diller has warned travel executives that artificial intelligence is about to transform their industry. the chairman of expedia foresees machine learning applied to big data and bringing the waves of
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innovation to the travel industries' distribution. >> artificial intelligence is the next advance and much more to me in an evolutionary way than is vr, because virtual reality to me is, well, a nice whistle, but it is not a profound thing. but the ability of these services to be able to serve you in ways that to you appears like magic, that is why the artificial intelligence when it relates to travel, when it relates to being able to essentially serve you without even your understanding how and give you a result that the delights you. that is magic. >> and elon musk says that we should be scared. >> yeah. if you take the artificial
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intelligence to the natural conclusion, then in fact you have smarter beings than we are who can walk and talk. and kill and control. >> although, he says that we are probably 30 years away from that, so you can rest comfortable, jon. >> i feel like it is moving in the opposite direction, and when i have a complicated travel now, i go back old school to the human travel agent and especially high value, and somebody who i can ask the detailed question, and i am not sewer that the chat bot s wis w get there any time soon. >> and maybe because you are a high net worth individual, jon, because that is what they do, their have their own travel agents. >> that is a problem. >> but as far as vr is, that is a whistle. that is all it is. >> thank you, simon. >> and up next, shares of square falling after the bell, and kayla is going the join us with a preview ahead of the exclusive interview this afternoon with
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ceo jack dorsey. we will be right back. zero-gra. but it's actually a triumph of predictive analytics. because of optum. through population health data, they provide insights so doctors and hospitals can identify high-risk patients. like me... asthma... potential hospital visit. so now thanks to optum, this asthma thing's under control. gravity not so much. this is healthier, powered by optum. from health plans to providers to employers. we connect all parts of health care. healthier is here.
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coming up on the halftime report, chanos versus musk and who is right on where tesla is go going? and david yike horn's bullish call on gold. and we are told to get out of stocks and into gold, and is that a good call or not? kayla is going to talk all about that. and sending it over to you in
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san francisco. back over to you. >> thank you, scott. i am in san francisco, and square is set to report after the bell, the first quarter 2016 earnings and we will speak to jack dorsey the ceo and chairman of square, and again from the square headquarters and the company is expected to post another loss on $344 million in revenue, but the investors are watching to see whether or not square can affirm the guidance to turn an adjusted profit this year. when i spoke to dorsey last quarter, we asked him where that profit would come from and how they would get into the black at the end of the year, and he chalked it up to continually strong revenues and perhaps the placement in the apple store, and when we talked to him, it was the middle of march, and perhaps a good line of sight into the quarter, and we have have also since then seen healthy transaction volumes for the other payment peers, but the stock is up close the 10% since the earn inings, so, guys it remains to be seen how much of that value from the first quarter is already baked into
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the stock, and what they will eventually report. that is happening today after the bell. >> kayla, on the key turns of phrase or the hints about the coming quarter or rather the quarter that we are in right now that you will be listening for from him? >> certainly. we have seen the softer retail sales than expect and we saw a surprise dip in the u.s. in march, and that is is certainly unexpected and that didn't seem to affect the visas, paypals or m mastercards of the world which are able to see the healthy global volume, but jon, square is not as global as others ash sond they are less diversified in that way, but we have not gotten the april retail sales or the macro data that is directionally going to apply the square. so whether he sees, you know, the stock compensation, the costs going down or whether he sees the revenues continuing at a healthy clip, and all of those are important the listen for.
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>> and not the mention that mastercard and visa did not get the warmest reception out of their own prints . we will see what the close says. now over to rick santelli on the cme. >> well, it is about going negative, and first the rates, fitch said ta if you are looking at the global sovereign long-term, and short-term paper is approaching cumulatively $10 trillion in terms of the paper being in negative, less than zero. and also, opinion s ons on the negativity side. china, as we know, and carl icahn brought it up, and it is not necessarily about the economy, but the rules of the road or the lack thereof. china continues to clampp down on the negative sentiment, and if you are an economist or market watcher, and if you are me in china, you have to watch out, because there is banned media, and new york times and google, and the "wall street journal," and facebook and
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twitter and we know that apple has issues, well so does netflix. in this country, if you want to go negative, go. because it is not that big off a problemp and remember that john boehner called cruz lucifer, and it ended his trek to the white house, and did that have anything to do with it? hey, we might have the first presidential debate, and have a rating just to watch. and one opinion that i did not see anywhere that we had to go crazy to find the transcript, and i have to thank sapford daily for providing an audio file for some of the things that john boehner said on the 27th that may surprise you. everybody wants to speculate how much trouble she is in and i had no idea. everybody wants to speck ulate about the e-mail, but don't be shocked if we get to a week or two weeks before, and here comes joe biden parachuting in, and barack obama fanning the flames to make it all happen. it is no secret that the obama and the clinton team, and it is
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a rocky road and while the clintons and the obamas have a good team, the political teams have a awful relationship, and nothing i would think that would make obama happier than to see this pathway paved for joe biden. i can't tell you about the facts there, or the history of hillary's e-mail, but i know one thing, unlike china, we can throw all of the negatives out there, but maybe similar to china, you don't get the whole story. carl, back to you. >> and an interview worth reading and i am glad that you brought it back to us. thank you, rick santelli. >> and tough day for godaddy, even though the revenue beat the earnings. we will talk to blake irving here in an cnbc exclusive. the stocks are meandering a little higher, but don't go away.
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welcome back to "squawk alley. ""steve liesman out here in the hoover institute in stanford, and jim bowie the fed president making comments in california this morning saying that he is undecided if the fed or the markets have the right path on the rates here. the markets are obviously forecasting almost no tightening where the fed is forecasting a little bit more up to 3.75 in the long run, and the bullard is okay looking at the arguments, if you look at the weak gdpp and the market expectations, the market has it right, but if you look at the tight labor market, and inflation, the fed has it
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right. so it is important that he is so in between here. and the global influence, and the influences of the weak global e kconomy are waning arod and the effects of the strong dollar are easing, and finally, the q1 weakness is related to something that we have talked about which is easeality. and coming up, we have two fed presidents, john williams from the san francisco fed, and dennis lockhart, the atlanta fed president. and back to you, carl, from beautiful stanford, california. >> hopefully they are going to be moving the needle more than bullard did. thank you, steve liesman. and more earnings on godaddy. double your money back guarantee. always discreet is for bladder leaks and it's drier than poise. try it. we're so confident you'll love it, we'll give you double your money back
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we are posting web posting small business company godaddy is topping the earning estimates with 15% rise in revenues. what can we expect going forward, blake irving is the ceo of godaddy and he is joining us now. good to see you, blake. >> thank you, jon. >> and lots of interesting details in report including the
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expansion of revenue per user, and you talked about on the call the role that office 365 plays in the role of productivity and tell me hoy that is playing out, and where is that demand coming from ver is us is the more traditional means of getting productivity software? >> well, one of the things that we did when we licensed office 365 from microsoft. we changed installation process to remove a number of steps, so office 365 for sus a one-page installation for small business, and allow and allows them to, allows u us to automatically configure the e domain name for them, and the mail record, and the dns record, and so it is souper simple. and the installation process takes 93 seconds to provision. and for a small person without an i.t. person, it is a different motion than having an i.t. person to come in to install it. it so isp happening so quickly, and to get that professional set of applications that makes them
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feel like you are competing with the big guys. the customers are small b business, and most of them under five people. it is important to have the easiest software possible. the application business for us grew 47% last year which is a strong growth, and the growth in that did have a lot to do with our business. >> we talk about how your company is a play on the small business creation, and small business expansion, and are you making a call on who you want to win the presidency when it comes to the policies like the corporate taxes, and r&d and regulation? >> gosh, i don't know where -- no, i am not making a call. no, it is not my call to make. look, we service customer tas are democrats and we service the customers republicans, independents, libertarians and hone honestly, it does not matter to me in terms of my own particular politic, and i don't believe
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that we have actually heard these candidates are going to be coming in for small businesses. >> and blake, we are seeing a drop doff and stag nancy in demand of the growth of smartphones, and talking to the web to the some degree, can you talk about that being on the downswing as all of the other technologies are ramping up. how does that a affect your b biz -- how does that affect your business? and you have room to grow on the web, and is that the focus or other ways to connect the businesses to the customers beyond the web now? yeah, so. look, what we try to do is to help small businesses be successful whether it is a web presence or the name or staking out the real estate and helping them to run the back office, and increasingly around the world. and we have entered 11 asian countries, and 53 markets, and
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44 different currencies and 82 languages, and all of the cu customers want to to use the devices they have whether it is a pc or the smartphone with greater effect and positive impact on the business. so what we are doing is to provide a rich set of fast tools whose software and business tools to allow them to connect with the customers. e-mail marketing to allow them to reach out the give the offers to the can customer, and provide them the web tools to update the w website often. and help them to fco is the product to help with a bing result or others, and that is what we want it to do, and whether the pcs are waning or the smartphones are waning, folks need to know how the use the things to their benefit. that what we do. >> yeah, well, blake, nice to see the growth in the quarterer, and thank you for coming on to explain the strategy going
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forward. >> well, thank you. my pleasure. it is a great quarter for us, and 18% if you remove the fx, and great top line for us, and we are confident with the business going forward for the rest of the year. >> thank you, and as he pointed out, busy night with wind, and gopro, and jack dorsey is going to be interviewed by kayla. and we go over to scott wapner with "the half ". >> this is the trading of tes l.a. and the famed short seller jim chanos saying it is a seller stock, and this is a smackdown on the halftime report at the sohn conference. >> well, everybody is confident what they will make in 2020 or 2045. >> that is for the hour of e joe terranova and john and pete

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