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tv   Squawk Alley  CNBC  May 18, 2016 11:00am-12:01pm EDT

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from 8,500 to under 3,800 to declining, and imagine if twitch was a public company or oculus or zip zap and not only would the markets be fun and high growth companies to talk about, but the positioning of facebook and youtube and google and the positioning of amazon would be completely different. these are four examples, and what you are getting instead is that i saw a little study that said that since 2010 in total raise ed d in the ipos, 4% havee to chinese companies, and that is crazy. we are, where silicon valley is so wrong and hurting the economy is that we have to get them thinking again that, you know, to take the companies public, because the market needs them and donald is 180% wrong. >> and why are people like peter teal backing him?
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>> well, you know, some people just get so tribal about the politics. it is a hate hillary or a hate trump, and we refuse to look at the actual data, and we refuse to look at the actual issues. we make these things flashpoints and then we stop digging if in. you know, i have said it before about donald's campaign, and it is the "seinfeld" campaign, the c campaign about nothing. he se smart, because the more he gets into the details the more the followers and the tribe, their eyes glaze over and so it is to his benefit not the do it, and hillary is just battling crooked hillary and battling the pejorative comments about her, and we never get into the details. >> mark, it is carl quintanilla and good to have you on the phone. >> hi, carl. >> good to have you on. >> sure. >> and we had travis callan from uber on, and he said, look, give us a break, we plan to be around for 30 or 40 year, and we are
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e early in the life cycle, and so easy on the pressure to go public. >> and tell that to travis' employees who have no liquidity and they are, you know, probably getting paid decently, but they are praying for the day when he goes public. look, it is not about any one company, but look at what happens when uber goes public, all right. they have been around for five years, but they have already had all of the hypergrowth. they are not growi ing 100% yea over year, and same metric of same-store sales, and what revenue generating in dallas last year to this year, and it is not growing 100% year over year, and so when they do get to market, the public investors are not toing the be participating in the hypergrowth. >> i understand that, but on the one hand, you are telling the companies to list, but in the past, we have heard you say not so nice things about the overall market structure in this country. >> and oh, no, the market
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structure is a different issue. that is my buddies at the ftc who are clueless about it. but that a risk, and there are intrinsic market risks to the stock market, but in the event that the stock market fails for structuralist reasons where do the vcs go? so if the companies don't go b public, you will create more power for the incumbent or the legacy companies that are already public. and so what is happening now, and you have talked all of the time about the lack of the capital investment, and the lack of the investment in r&d, and just the companies buying back the stock or continuing to accumulate cash, and why is that happening? it is happening in my opinion, it is happening because as a large public company, whether it is tech company like facebook, or the biotech company or you make name it, they can sit back and say that the companies are going public, the vcs want exits
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and they still want a return for the fund, and because of that, rather than investing in my own infrastructure, and my own r&d, and i can make acquisitions using my public stock, and while there are certain risks to the the market infrastructure, and no question about it, and the high frequency trading is a horrible risk factor for the market, and by not going public, you know, we are creating significant issues in the economy, significant issue s s the market. i mean, it is a real problem for all of us. >> mark, this is kayla tausche. >> hi, kayla. >> you mentioned instagram, and oculus and what's app, and you say they should be public company, and what is wrong with facebook being the highest bidder, and being a public company and let investors in that way? >> well, you don't get into it. when you have a $290 billion market cap like facebook, and more power to them.
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congratulations to mark zuckerberg for recognizing that if the guys are not going to be going public, i might as well snatch them up, but they become on the margin companies, and look at it, again, looking at the alternative. if we are look at the instagram's growth rates and pab they wouldn't have grown as quick quickly outside of facebook or maybe faster, and maybe they would have been forced to do more things, but now, we would be talking about it as well. look at the exciting company, and we would be talking about oculus, and look at the exciting company and the growth rates, and that is a representation of entrepreneurship in the united states of where the companies can go, and that would create an example for other companies to go public. instead, what do we have? if you want to invest in the public markets today for whatever reason, where's the growth company that you can put your money into? name me one. le hello? >> hey, mark, i wanted to tie up the trump technology spat which seems to be only intensifying.
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is this ultimately going to be hurting him, because he has gone after jeff bezos and mark z zuckerberg. >> no. are you kidding me? it is a nerf ball battle, and you can throw them at anybody and they won't get hurt. it helps him with the tribe. the people who follow trump are not looking for the substance, and he is smart not to provide it. >> so well with twitter and his own use of social media? >> and this is one. look, people say that he has been great on social media, but he doesn't understand twitter whatsoever, and if he is, he would use all of the sources. you can see him on facebook and can you imagine donald trump snap chatting? it would be hysterical, and even on instagram. >> i don't know, 8 million twitter followers, carl. >> but twitter found him more
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than he found twitter. i don't look at donald as, and look, i love to mess with him on twitter, because he doesn't get it. he does not understand the way that twitter works, but he knows that it is the new pr newswire and so he will use it as a news distribution opportunity. >> and two questions, mark, before we let you go. what is the difference between trump talking a tech bubble, and yellin saying that tech is inflated? >> yes, one works from data and the other works from who knows what, so there is a huge difference. whether or not you agree with janet yellin she is trying to offer insights based on the data, and so there is a huge difference. >> and the people from whom your comments are directed going public, do you have regrets of looking at your own history with the broadcast.com, and would you have done it different ly?
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>> not at all. are you kidding me? but at the same time we had to grow 30% quarter to quarter, and how many companies in the public universe today are expected to grow 30% quarter to quarter, and that is an issue. and again, let me go back to this, and when i was public 20 years ago, there were 8,500 public companies in the universe, in the u.s., and now 3 3,800 and nasdaq and the new york stock exchange have to gravel just to get the listings, and the number of listings continue to decline. so from the common sense per pecktive, there is more money facing fewer companies with fewer new companies coming on board, and of the new companies in the ipos and going back to 2010 in terms of the dollars, 14% of those are going to the chinese companies who were based in a communist country, and 8% of those ipo listings are basd d in a chinese and based in a communist country, so more money went to china than probably went
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to any state-owned industry other than new york and l.a. and b biotech and tech. and that is crazy to think about it saying that the chinese countries in some respects or metrics are more entrepreneurial and leveraging our ipo markets and stock markets better than american citizens are, and i mean i know it is high especially, but it is crazy to think about. and so when you -- hyperbole, and so it is crazy to think about, so there has to be a cultural change that has to be happening with the betterment, and look at the employees not getting the liquidity, and so many things inherently wrong with it. >> and i want to ask you, mark, before we let you go, something that you are opining on, and that is student finance and you say to limit the easy money to the students by capping it to $30,000 in total al and tuition will plummet. >> first of all, already federal
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loan limits, and you know, for the guarantees for the -- but there are no limits for the kids' parents asked to co-sign a loan or take out a loan themselves which happens far too often, and compare it to the 2007 housing bubble. what caused the price of housing to be inflated? the fact that there was easy money. anybody was eligible to borrow almost any amount and they could spend it on any home, and we saw the prices of houses escalate. once the money dried up, we know what happened. the same thing with colleges and universities. and so when there is 1$1.3 trillion in debt not only a reality for the students and the parents, and so much pressure to go to college for students, and by the way it is a great idea, and so much pressure to go, why
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would the university stop raising the tuition? inherent hly in that what is happening is that you will see a huge investment if you want to call it that or spending on administrators and you know, the ratio of the administrators making over $200,000 has grown significantly, and the amount in buildings. i gave money to my alma mater indi indiana university, that it could not be used to build anything but to remodel, and the reality is that we don't need more fitness centers or stadiums or more calf tefeterias, and yo know, the buildings that they have typically are good enough, and all they do is to cause the tuition to go up. so just to simplify, when there is easy money, things are expensiv expensive, and if you cut the easy money by putting the caps on the student loans, you will see the tuitions drop significantly and quickly. >> thank youer for running
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through the themes today so quickly, mark cuban. calling in today and weighing in on the education, markets and donald trump. >> we have been talking to mark cuban if you are just joining us about the current state. and welcome in jessica and mike, and i don't know if you have been hearing about cuban saying, but what trump has said, and what are you are playing? >> the only thing that silicon valley hates more than trump is the bubble talk. this is a story to rile up people on twitter. as mark said, depending what markets you are looking at, trump does have a point, particularly if you are talking about the private markets, but silicon valley is looking to pick a fight with anyone who is implying that things are out of whack here, and with trump. so this is the perfect storm.
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>> mike, what do you think is up with trump and silicon valley, and this is the second time, he could have a point if he has this piece that he is clearly not talking about and referring to the amazon anti-trust thing where he said that i have to idea what he is talking about and nobody does, unless you are talking about the ebooks and now this, and is he trying to bait silicon valley in some way, and get some billionaire to crack to go after them, so he can appear to be equals with them? >> yes, he loves the throw the grenades on twitter, and he is going to do the little retweets or the manual retweets from groups s accident alabama whit supremists, and it is to keep them on top of mind for everybody. a lot of times the point does not need to stand with the actual constituents. you know, if the we are digging
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into it more, what mark is saying is right, the private and the public markets are totally different here, and what we have is the bubble of the private markets where nobody is going public, and he is chucking the grenades and maybe he might hit zuckerburg or bezos, but i don't believe they will stick. it is keeping him in the news. >> and jessica, regardless of the nuance of said bubble, there are still some voice hs -- some voices in silicon valley who believe there is froth, and the real ti as marc andreesen pointed out if you are agreeing with a bubble, you are agreeing with trump and something that a lot of the people don't like. >> and speaking of the people who have mas the tered twitter, marc andreesen is up there as well. so, look, we are in an interesting point in the private markets, and mark cuban raised some good points. you know, should the companies
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be public companies? the public investors are missing out on hypergrowth, but from the point of the view of the private companies, that i can raise monies at such a higher valuation in the private markets and why would they accept half of the multiple in the public markets? and so in the same point, some of the same companies that mark cubans wanted to be public, instagram, what's up, oculus, they are losing money, too, and i am not sure they are ready to be public companies. so we are in a strange period of where obviously moving forward through it, but it is not obvious to me that the private guys are ready to be solid p public companies. >> and although, the lack of a profit never stopped anybody from going public, and maybe that is a topic for another day. but good topic, guy. and meanwhile, the google conference opening up today. and our josh lipton is out west watching that. >> well, carl, some hints here of the news that we could get today.
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new york times now reporting that google is going to be introducing this new voice activated program called home. and they say that amazon has sold 3 billion echos and it is a multibillion market, and google wants a piece of that and they plan to release it in the fall. and also when patay takes the stage, it will be front and center with the google's virtual reality system ises, and expect new features. and speaking of vr, rico is reporting that google is going to upgrade the cardboard
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headse headset, and we know that it could have revenue over $20 billion according to digi capital. and so that is red hot. and looking at the size here of the venue, and shoreline can accommodate some 20,000 people, and so maybe we will get some car news today, and maybe some android auto updates and that is the update to the apple's car play, and we will be here all day and bring you the headline s as they come. >> busy week for you, josh. quick comment from mike and jessica of what to expect out of google having already gotten some headlines from amazon's meeting, and fa a while ago, mike? >> well, google le is doing an update on the products that everybody is attacking right now. facebook as the oculus headset, and they are pushing, that and
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they have advantage of the hardware sidef of it with partnerships of samsung and pushing it out to seeding the eco global system of folks into the vr. and so google has to crack the living room which what you might see with the home thing they are introducing, and the problem is that google is an employer of a lot of people who think in terms of math and orithm s rather than how people interact in the homes. they are better at developing the product than the use. >> yes. >> and jessica, they have talked about android which is not going anywhere, and the apple watch gets a lot of wear, and everybody is talking about the amazon echo as a home product even though most people don't have it connected to the home,
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and google glass, and the audio product to make in the u.s. which they nef made and they did cardboard which is a nonentity, and it seemed that they were snarkly laughing at oculus, and nobody is laughing anymore and doesn't google have to step up the io game? >> yes, absolutely, jon. and they have to step up the hardware and don't forget about nest. our sources were telling us about the audio device, and there are specifically, a lot of audio projects within google and nes ness, and so it is going to be interesting to see what comes out. and there are many in the works, and absolutely, they have to prove that they can release the products that people want. i do think that the home speaker category integrated with voice is the time is now, and good product, and people are ready for it, and not one winner. so i can't imagine that they can't have some traction with it, but you know, we have to see, because they have to prove themselves, and i do think that
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we will have some of the more traditional software developer stuff out of io as well, and the source sources are telling us to hear more talk about bots and messaging apps which of course, we are absolutely at a bot bubble in my opinion. but we think thatting google is going to try to power the bots for developers across lots of messaging services which is an interesting play and maybe a recognition that its own messaging product hangouts has not taken off. >> covered a lot of ground, guy s thank you for rolling with the punches today. mike isaac and jessicalessin. >> and we are have a news alert on the new york stock exchange glitch reported moments ago, and over to mary thompson for more on that. >> the new york stock exchange is commenting on the glitch that is impacting the tradinging of 9 99 stocks, and the spokesman said that they were aware of the issue before the market opened and the stocks traded here at post 5 to my left.
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it is important to e note that the stocks are continuing to trade on other venues including the nyse arca and nevertheless, they are working on it, and they have canceled the orders route ed to the new york stock exchange floor, and the stocks are trading elsewhere, but the new york stock exchange is working on it impacting about 199 stocks that trade on the floor here of the nyse and they are trading in other venue, and they have been working on this glitch since before the markets opened. back to you, carl. >> thank you, mary. and now, coming back, we will talk to the president of the chinese company didi. ♪ the intelligent, all-new audi a4 is here.
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♪ ♪ ain't got time to make no apologies...♪
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. on the heels of apple's billion dollar investment our eunice yoon eun is talking to t investment company. she join s s us from china. >> as didi chuxing has been talking about the meeting with tim cook, and she says that she has not known the company long, but she is looking forward to future collaboration, and this is what she said. >> i was joking with the team, because it feels like a speed date. we got to know the apple team, a and they got to know us not too long ago, but we click very
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qui quickly, and because the two companies share at lot of the similar philosophy, right? we both care about the community, and we both want to have a collaborate and inclusive culture about the company culture, and that is going to give a lot of common ground, right? and in the same time in china we actually share a huge overlap in the customer base. our driver base and the passengers, they use apple and iphone a lot, and the ipad, so it is very intuitive. >> like many chinese companies, didi has scale. most of the analysts believe that didi has at least twice the market share in the private car hailing business compared to uber here. uber has about 50 cities and growing fast, and the company has said before, it believes that uber, itself, is in a better financial position, because even though it is losing $1 billion a year here, it is still able to tap the profits overseas. jean shot back and said that her
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company has a new round of funding and it is oversubscribed. she said that overseas, they are looking at several different partners many of which happy to but ber's rivals. -- to be uber's rival s. >> we have seen some promising result in india, and our philosophy is that we believe in low cost champions, because they understand the market and the background the most, and also it is good for the chinese passengers and travelers, right, because these days, smaller scope, and right now in the states, the chinese travelers, that i can access to easily access to mobility service using didi's app. even without knowing english, because we are working with lift. >> and this week, there have been a plenty of rumors about a
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possible ipo and maybe even in new york, and jean liu said that so far, they have no plans, at least not for now. >> eunice, a quickle follow-up for you, and based on the conversation with jean liu, what is the biggest potential strategic upside for aple in the relationsh relationship? better maps of china based on the data that it is getting from them, or cultural insight that is going to hep them to build better products hardware or software? >> i asked her that exact same question, and she said that is a question for apple. she did talk a lot about what didi his to offer. and what didi has to offer, and moving forward is a potential of the market, but she was also hopeful for a lot of collaboration, and i brought up apple k and talking about car technology, and she said nothing
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specific on the table at this time. and one of the things that is interesting about her business model as compared to uber or others is that they do look at sca scale. so when she was talking about the moving beyond taxis, she was describing having buses going from point to point so that you would invest in the technology so that you could meet the supply and the demand and match it so that 40 people who need to go someplace in china can get matched and then you have a shuttle going from point to point. and that kind of technology and innovation is something that she was pushing, and she is hoping to get ideas from apple in that way. >> all right. a lot more than just a billion dollar windfall. lots of things on the table. thank you, eunice eun for bringing us this important note. >> it is an interesting day in europe and whether you are watching the pound or the brexit polls, simon is back at 9. >> well, goldman is moving on neutral of equities is is
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weighing on the european markets, but as carl said, the action is on the foreign exchange markets, and the major wrap under way for the uk pound, and another poll in the times newspaper breaking to the idea that the uk is going to be staying within the european union on that vote june 23, 44-40, and we have put on this -- and look at this, one cent 60, so this is 1.5 cents which is a huge move on the foreign exchange markets as you can see. and the uk banks are following through after the session to the upside and i'm not sure if it is brexit argument or guilt argument but nonetheless, sharp movement along with the italian banks. in london, the queen is having the state opening of parliament in which she leads out the list of the legislative agenda for prime minister cameron's government over the next year, and the lead campaign has seized on the fact that there is no sovereignty bill in the list,
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and the nobody believes that the uk can tame the european union moving forward. meantime, the queen, herself, has won a battle with rupert murdoch's son newspaper, and the press regulator saying that the march edition which said that she was in favor of brexit was significantly misleading and had unsubstantiated allegations that she had broken her obligation of commenting in public on the actual debate and she is not allowed to do that, and that is not the deal. the "sun" saying that she keeps it to herself is nonsense as we saw with the criticism of the video of the chinese for being rude last week. meantime in brussels the european commission has voted to the surprise of many not there to fine spain and portugal for oversuspension. it is the first time they have done that in the eurozone until
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after the election in june of 2016. and that one hell of a week, the uk vote, on brexit, and also spain and portugal are going to be voting on spending in europe, and so vacations are postponed. >> yes, thank you, simon. gold is rallying and up about 4%, and the headline on the note says that goldman is quote putting in our reservation for model 3. back in a moment. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen.
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>> hello, everybody, i'm sue herera, and this is is the update. thomas bock says that the zero tolerance policy will be applied if allegations of the russi russian-state supported doping are supported. he has asked the ioc world doping agency to carry out a investigation. and in sri lanka police are using sticks and bare hands to dig through huge piles of homes covered by landslides. and 200 bodies have been pulled from the mud, but 220 families are unaccounted for. oppositionmakers in south africa braled with -- africa brawled with leaders over
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objections to jacob zuma. >> and the alligator with a sweet tooth. law enforcement snapped a picture of this snapper with the giant jaws around a watermelon. he stole it out of the field, but what is unusual about the theft is that watermelon are not generally part of the alligator's diet. refreshing though. that is all of the news for this hour, and back downtown to kayla tausche. >> and the watermelon is not eaten whole. that looks like it hurts. thank you sh, sue. >> yes. see you. and tim cook is in india after stopping in chai ninchina they are expected to announce a new program with the start-ups. and we have more details from india with our kritika. >> yes, tim cook has had a very busy day in india starting with
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a visit to the temple in mumbai at 5:00 a.m., and since then busy in meetings all day, and the meeting with the chairman with the top management of india's private sector bank that is at the largest private sector bank, and that is followed with lunch at her alliance chairman, and cook spent the afternoon in meetings with the consultants of india. and it was not just about the markets, because he met some around a round table to talk about the growth of to app ecosystem. the meeting is coming to a close at the bollywood actress's residence, and we understand that he is going to be launching the first tech center outside of the u.s., and it is going to be housing the new digital app center, and we will have all
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technical support services within india. and that is not the only investment, because the company said it will advance the startup scene and tens of thousands of workers are to design apps in this center. and the endeavors we believe will end in the national capital in new delhi where he is expected to meet top government officials and possibly the prime minister as well. >> and just a quick follow-up. i am wondering if apple lost the bid to import refurbished phones in india to allow them to get cheaper hardware into the hands of the indian people, but it seems they want more investment from apple, and for people to make phones in india, and what does the government want from tim cook and what can he get for apple strategically out of the business? >> well, you hit the nail on the head. the government is going out of
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the way to try to ensure that apple has a good experience in india, and will be able to invest in india smooth arealsmo. so there are negotiations to take place in new delhi. and we had the top official on a few days ago and ensuring us that they will go out of their way to clear up the loopholes, and he did not specify the issues, but he did issue sourcing within india that apple had taken up for the government to be looked into, and smoother passage for apple to set up shop over here, and that is something that very few large or tech companies have been able to do in respect to the issue of sourcing. >> and thank you very much, and big story regarding apple in d india. when we come back, the future of the music business according to garth brooks.
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and we will tell you what he told us. rick santelli, what are you watching? >> with the fed minutes coming up, we have to watch the trez shy ri market, and the yield curve, and look at the issues of the long and the short end, and talk about the little bit about what is going on in spain. you know the economy that everybody is so proud of and made a big rebound? well, maybe a fly in the ointment. what is it? we will tell you after the break.
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. coming up on the halftime report why the fed's minutes are
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critical for the markets which are having a hard time facing what we are calling the new rate reality. and shark kevin o'leary is going the be with with us from "shark tank" to share his new idea. and toni sacconaghi is going to join us as well. >> and garth brooks is going to be returning to the a first concert in new york city in central park since 1997. it is not just new york getting the cold shoulder, because he took 13er years off of music and making a comeback in 2014, and we caught up with the singer announcing the tour and asked him how the industry has changed? >> the industry has changed night and day, and the radio and the record labels were on the brink of extinction until
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streaming came, and now, who has the most catalog wins which is the record label and they are back in charge now. >> and now, garth brooks is one of the top selling acts in music history, but you won't find him on pandora or spotify or sold on itunes, and he told us why he is concerned about the industry's new stream iing business model. >> nashville alone in the last 110 years has lost 80% of the songwriters, 80%. that is not good. that is telling you that the business is upside down, and trust me, it is like trying to run a farm without seed. it can't happen. so that is why i say that the future is really scary right now, and we have to get the songwriters back, and get them to be able to make a living. it is a culture or a way that is going to eat itself sort of thing, and you are here just trying as guys, great guys like prince spent his whole life to do and warning people that if we don't take care of the songwriters believe it or not the music will go away. >> and the last stop for the
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2016 tour, the only thing hotter than the tickets is going to be the merchandise, because you can't find the music anywhere else. when i was home in atlanta a couple of weeks ago i found the double live album and i tried to listen to it, but it was covered in scratching and skipping for hour and i forgot that happening when you are listening to cds. >> sounds like you are going. >> i will. >> and we can get you comped. >> okay i have to. >> and the dow is up 40 point, and so let's get to the cme and the stock exchange. hi, carl. >> yes, if you picked up the journal today, and watching cnbc, we are hanging out at the water cooler if anybody has some yield curve which is going from under the radar to over the radar and it is a good thing, but the only thing about it is that i am not sure what we are supposed to do with it entirely. i think that the yield curve on the short end is kind of short on facts, and reminds me of a water mitty trade.
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why? because the investors get nervous before the meetings or the minutes, and when you have decent data, and much less nr vous when the -- nervous on the opposite end. and just because the short ends aric taen, and thes a prin with it, does not mean that there is a reality, because if no matter what they believe if janet yellen does not do it, it doesn't matter. so the way that the statements have gone, nothing imminent on the rate hikes is happening and in terms of the long end, it is long on personalities, and remember the movie "sybil" or the younger crowd "the faces of eve" and part of the personality is the relative value on rates and the other part of the personality is how the corporate distortions and the negative interest rates are skewing, and then of course, the more realities of the growth, but the real ti is moving to so many issues and the flat yield is
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important, and now, looking at the one-month chart of the fed fund futures and i'm not showing it because of the percentages, but i am looking at the end of the year, because the fed fund futures have a contract every month, and december is like the big garbage can, and everything that is happening in the last year has to affect the prices of the last month of the year. you can see what it has done recently, and when it is down like any fixed income product, the rates go up. okay. the rates will go up and the percentages up, but i don't look at that, because i want you to see the short end issues there which are reflected in the fed funds. finally, this morning, talking about andy rothman about china, and he decided all about china, and probably crisis is not the worry, but all of the remedies to avoid it probably give it a japanese slow growth future, and think spain. everybody is bragging about spain, and in the depth of the crisis, everything was horrible, and they have high unemployment, and the gdp rebounded nicely,
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and even though it is not a huge economy, and they are one of the bigger ones in the eurozone, and at least on the southern areas, and this is the problem, we have learned that the debt to gdp recently crossed 100%. 100%, and 1.1 trillion euros or 1.2 trillion of debt. think china thinking spain. sometimes, the medicine that you take is going to make the certain symptoms is different than others. back to you, kayla. >> and rick santelli in chicago, thank you. now, the housing market is back and should continue to grow for the continuing year, and ceo and design company of "house" will tell us u why.
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narrator: sometimes it's the things that the rest of us don't see that can make all the difference in california's classrooms. it's part of my responsibility as someone who's experienced to allow the door to be open for younger teachers. the teamwork between the teachers is essential. when we collaborate with each other... ...it makes everyone stronger. by helping my fellow teachers be successful, i'm helping kids be successful. narrator: the california teachers association:
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educators who know quality public schools make a better california for all of us. we send it over to dominic chu for a quick market flash. >> the stocks are near the recession highs, but target sha shares are falling 8% so far and the latest retailer to the post quarterlile sales that missed the analysts expectations, and also the s&p retails are reporting weaker than reported consumer spending, and the spdr and the ticker xrt is falling 1% to track for the fifth negative week since 2008, and again, the first time since 2008, and target, walmart, costco and best buy are the biggest names falling for that sector. back over to you guys. >> meanwhile, home improvement is rebounding, and home design
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and platform remodeling is s seeing the user base grow and change over the last couple of years with more than 40 million unique users and push for international expansion, and what are some of the home remodeling trend s ths that the company is seeing as the user base evolves with age. and we are joined by the owner and ceo of houzz, and i would say that you sell everything but the kitchen sinks, but you do that, too. >> yes, and they are very popular on "houzz ". >> what are you seeing with the consumer strength? >> well, much in line from the del rio report, and the indicators of the remodeling activities in the u.s., we have a large day the base of users and 40 million people on the homeowner side, and 40 million on the professional side, and indicating strong growth, and so we have the baby boomers driving the remodeling in the u.s., and
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the millennials are going to join them with buying the newer home, and the baby boomers are going to still spend twice as much, but the me will lineals started to do something, too, and the kitchens are the top remodeling projects in the u.s., and the baby boomers and the millennials across the board, 80% of them would use savings versus borrowing the money, which is really changing over the past few years. 80% use savings. baby boomers are more likely to use some equity line, and the millennials credit cards twice as much as the baby boomers and 80% over 50%, but still healthy with 80% using the savings. >> how does that trickle over to homeownership, because 90% of the users are homeowners and so many millennials are renters and can you not capture the customer base? >> yes, so it is true that 90%
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are homeowners, but in the past few years the millennial s as a twice as much to move, and that is wi they are spending less. kitchens and bathrooms are big, but they are not wanting to spend as much as the baby boomers, but they are spending and the priorities changed over time. we saw a few years ago that people were saying that it is mainly for resale value, and we are not doing for it the ourselves, and now people appreciate that they can build a beautiful home for themselves across the board and now they are saying that the major reason to do it is that now we have the time, and number two reason, 35% are saying that we finally saved the money, and more a percentage of millennials saying, yeah, we have a home, and we want to remodel. >> we saw the mortgage applications are down 1.6%. what is the difference of what people do when they are fixing up the place to stay versus fixing it up to sell?
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>> i think that functionality and lifestyles for your family became a top priority, and so when they are there to stay, they would think less about what would apply for other people, but more think of themselves and the families and the friends, and we definitely see a strong trend there, because people are not planning to sell as much as they used to. it is more of the light fixing up the place when it comes to i want to flip it. but we are seeing and less and less of that in the last few years. and the professional side supports it, because the professionals are seeing a tremendous growth in 2015 alone in the u.s., we had an enormous growth, and 70% of the professionals on housing reported significant growth in revenues in 2015. we actually had housing drive to $3.2 billion revenues in in 2015. and 50% of them are an tticipatg
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the growth will continue in 2016, and they anticipate at least 10% growth in revenues this year, so this is pretty significant coming from both sides. and i think that empowering the people to the really think about themselves, and how wonderful that is going to be is the key. >> it is great to have you, adi, and come back soon, because we will be talking about the housing market all throughout the summer, and so we appreciate that. >> and also in the fall, winter and spring. >> yes. and that is true. >> adi, thank you. >> and we should mention that house is houzz is a member of the class of disrupters. they were in the top 50 in 2015, and now we are looking for that list coming out in june. ♪ [engine revs] ♪
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are retail stocks are weighing on the market, and the lose ers on the sap, and gap trading at levels not seen since 2011 and gap hosted the annual inv
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investor meeting and the ceo asked whether he would tap amazon to consumers, and this is to reverse the same-store sales. >> and to not consider amazon and others is going to be in my view delusional and around the customers behavior. and so what i would say is that we are always considering all of the opportunities beyond our traditional mix of channels and stores. and looking at all of the those, and amazon is certainly one, and others out there as well. >> delusional and not the consider amazon as a distributor as well. and no contest as to who has the leverage in that conversation. >> and what is interesting is that amazon has decided to go into private label fashion, and foods and home goods that it is going to be destroying third party vendors and based on the comments, it is not. >> and the question is can gap
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differentiate with amazon enough to hold in on the pricing rer sus others, and now they got out of the business so amazon has a shot to take it over. >> and target has not had a 7% down day since 2008 and it could do that easily given the prices right now. >> and over to headquarters, scott wapner and the half. >> all right. welcome to the halftime report, and i'm scott wapner and the trade this hour, rate rage, and not one, but three fed heads are calling for a rate hike in june. and now, john weiss, and jon and pete fa jarron, and kevin o'leary, the oshares chairman and also analyst on "shark." and now, investors are coming in with all important fed minutes and judging the way

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