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tv   Power Lunch  CNBC  June 13, 2016 1:00pm-3:01pm EDT

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think they actually did steal this linked in give or take because of where it was and i think guy -- >> they pay too much or others say they didn't pay enough given where the stock once traded. it's been fun and do it tomorrow. that does it for us here on "the halftime show." >> thanks very much. hardware is the brain. software the soul. that's how steve jobs described apple's products and today apple is expected to unveil plenty of soul for developers, consumers, investors, this at its worldwide developers conference in stance. apple shares right now, you see them down 1 1/4%. welcome to "power." melissa and brian is here and michele is off. now you know who is here and who is not. apple's big event under way. the ceo tim cook set to speak right now and josh lipton is there live in san francisco. josh.
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>> this show just about to kick off. remember apple has four different operating systems, right? mobile, mac, watch and tv so there should be a lot to talk about today. two really big pieces of news we're anticipating, tyler, one has to do with siri, that voice activate ed virtual assistant a you could use siri to order an uber. there is this fierce war when it comes to virtual assistants. apple's siri, alexa, google assistant. these tech giants maybe could use virtual assistants to move hardware. for example, the team at forester think they've sold 3 million amazon he can coast. maybe you open it up and get a piece of that but first and foremost even before the business model all these tech giants and event, developers and consumers and investors that they're all keeping pace with
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each other and what's thought about as the next great phase of personal computing, also today we think we're going to get a makeover to apple music, remember, it was just a year ago apple music was the talk at this conference, all the excitement, today apple music we know has 13 million paying subscribers and counting. apple certainly does have certain advantages in this space, those very deep pockets, a global reach but the service has also been criticized by some as confusing so what changes will apple roll out to convince consumers they have a streaming service that's really different than the competition as you mentioned, this show just now ticking off. i'll be here all director and bring you guys headlines as they come. back to you guy. >> all right, we'll check back in. thanks so much. our all-star apple panel to discuss the news. cole ingillis, tim lesco and jason ware at albion.
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seems like apple is ignoring developers for a long time could steps like opening siri to its developers move the needle at all? >> yeah, absolutely. and it's, you know, slow -- they're sluggish in doing so and have the echo at home and skills they're bringing on is impressive. when you interact with these assistants, right, with their artificial intelligence it's quite powerful so want and we'll see this most likely from apple in the next hour or so but the thing is, right, apple has always had a lead with their developers because they're the most aflew emption segment but down to below 15% market share. they shouldn't be too reliant those developers will always be there. part of the problem that the watch hasn't worked is the developers didn't really build that killer application for watch os, that one app that moved the needle, the must have is not there so apple needs to do -- >> do you think that's it or
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people are sick of charging stuff every day? >> a variety of things, it needs a use case but many times a use case comes from the developer community. >> tim, what do you think? do you think that this could be another -- i mean everybody always talks about the apple ecosystem, yet this seems to be ang area where apple didn't put as much effort as some of the other competitor colin was talking about and you see the commercials alexa order mooer me an uber and there it is, can't do that with siri. >> you guys are hitting on good points and do need to open up siri to more transactional-based events for people but let's be honest, you know, so far they've sold a whopping 3 million of the echoes whereas apple sells 3 million phones in a weekend so the idea they need to do something on a hardware basis to compete with echo probably isn't true. because people are carrying their siri digital assistant with them all the time so opening that up i think could be pretty powerful. now they also have years of data with siri to help siri be the
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best personal dij at that time assistant rather than just be pretty good. >> siri doesn't understand english very well. >> yeah, but siri understands english than the others. >> i do not agree with you at all. >> you may not agree but there are actually studies that ran through them that showed just last week that siri was able to answer more complicated questions better and maybe it's a personalal use. >> not my experience. jason, is this likely to be an evolutionary event or a revolutionary event? i think i know the answer. >> the answer is obvious. it's evolutionary and that's what we need to remember. these conferences are nice and create talking points and that's all well and good and something we talked about and albion has, growth being important to the long-run story tore apple. seeing these iterations is positive and we celebrate that but let's not forget this is an
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iphone phone and continues to be an iphone phone and that will move the needle over the medium term what is the iphone 7 look like. what's the next upgrade cycle look like and, you know, are they going to be able to get back to some level of growth here, particularly after the last quarter showed the first decline in quite some time. >> quickly, i was on a plane a lot recently and when you walk the plane, every single person on a computer, everyone is on a mac, every starbucks, everyone is on a mac. why aren't we talking about apple's computer business. it seems huge but we never talk about it. >> a percentage of revenue relatively small. >> isn't that then everything going to be small and -- >> i say, is it going to be the next 250 billion of market cap or greater or is it going to be downward? right? i worry the next 250 billion in market cap will be a decrease because nothing will replace the iphone in that revenue stream. if that starts to break down, there's no solution for apple.
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now, to your point about google, google makes the best software out there. you compare siri versus google now, google's software absolutely blow as way siri's recognition in my opinion, right? if you look at apple's hardware skills, they're fantastic but apple as a software company lags. if you use the app store it's not a pleasant experience. you know, it's not -- you don't have any serendipity, no beautiful discovery. so far behind in terms of what they could do with the app store, it's time for them to improve. >> why is that? because they invented it? >> it's part of being the first mover advantage. they've always had these developers, right. always built first for ios then for android but that's the piece you have to watch. you don't want that to unravel at all especially as they lose market share. now, developers build for android and ios at the same time. >> guy, stick around. a lot more to cover on this, in fact, apple's ceo tim cook is taking the stage and bring you
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the headlines. other big tech story, microsoft buying linkedin for $26.5 billion and john has all the detail. >> yeah, melissa, it's a very interesting deal and marries microsoft which, of course is second with linkedin with this professional network. both focused on business customers but in different ways and had a conference call with a number of analysts talking about the deal, one interesting thing to come out of that microsoft cfo amy hood saying she's focused in this deal on just general revenue growth and then on the benefits that linkedin's network can bring to microsoft's other properties. you can imagine she might mean that linkedin members who cross over to office 365 and perhaps start paying for those services and getting more engaged on those, of course, we have the first interview with nadella and wiener, the ceos of microsoft and linkedin and asked jeff wiener if this will allow
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linkedin to focus more on growth than margins in the short term. here is what he said. >> you always want to remain focused on what it is you're trying to accomplish but the reality is there's going to be volatility. there's going to be increasing demand for growth and/or growing margins and the realization of what we're trying to accomplish and the way it creates value for the combined companies so we are looking forward totying to pursue intelligent growth through additional investment. >> now, it's clear that they don't have a specific plan just one plan for how to integrate these companies and laid out a number of possibilities and, of course, it's going to take some time for this integration to the degree that they want to integrate the two companies to take place but it's a fine line they'll have to walk because linkedin is going to remain a separate brandment run by jeff weinor. nadella said he wants them to remain the culture but have all
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these integrations with azure and they'll have to work closely together but culturally remain separate at the same time. >> john, thanks very much. now back to our panel, co colin. gillis. as a microsoft shareholder are you happy with this deal? >> you know, on net we're happy with it. it's going to be difficult to see what ultimately happens with the buy-out. any time have you a big acquisition there's certainly some risks. but, you know, if you look at what nadella has tried to do since coming to the head of microsoft he wanted to switch away from a pc company and done that with cloud in a very impressive way gaining share there and enterprise cloud so if you look at the past of microsoft they missed mobile and social. they missed cloud early on. i think this is a way to try to get a beachhead into two of
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those three spots and adding growth is an important thing for microsoft to do at this point especially after the last four quarters of declining sales growth. so, you know, they have the balance sheet to fund it, they have a pretty strong management time and linkedin last a great niche. >> tim, listen, it's a nice headline. we love it. $26 million deal to talk about and of course, everybody is all atwitter with the news but this is linkedin's revenues are less than the surface tablet. do we care? do you care as a shareholder. >> i care at the name a company we own spends $26 billion on anything and microsoft hasn't had the best recent track record on acquisitions. that being said, nadella's focus on enterprise gives us confidence they're trying to build something that will build for collaboration among windows users in the future which is the holy grail if you can communicate with people, maybe also through skype and connect with them through linkedin, perhaps you're starting to build
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synergies there. >> saying not the best track record is putting it diplom diplomatical diplomatically. going back to a quantum does anybody remember what a quantive is? >> we have skype for 8.5 billion in 2011. the minecraft acquisition. minecraft is big with the kids. colin, what do you make of this? >> the worst m & a track record out there. >> the yahoo! deal -- >> almost paid 33 billion for yahoo! >> i always said if facebook is, you know, 325 billion, then the economic graph should be worth, you know, some fraction of that, right. if not the same. so, you know, i always thought linkedin could be a $100 billion company. there's been a couple of cracks in it. we see that. why are they selling it for 26 billion? why are they content with that?
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that's a relatively small number in the -- >> lower than the price was -- would have been a year ago. >> right. and you look at skype, skype was left, you know, as a stand-alone business -- >> how much growth are they really buying here. talk about bottom-on growth. linkedin has never been hugely profitable. >> it's going to be a big delta between their, you know, adjusted eps and gap eps so from a gap perspective, right, linkedin's numbers don't look as attractive as you pull all the adjustments out. >> 515% revenue growth. i ran the numbers this morning. >> it's slowing? >> they'll be issuing debt and don't have the domestic cash to fund it. skype was an overseas deal. that seemed okay and bought yammer. >> sit tight. let's go out west to josh lipton with breaking news from apple. josh. >> well, apple, guy, as we know has a lot to talk about today,
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four different operating systems and one is the watch and so they're starting off this big software show with some changes to that watch os, that watch operating system. really looks like a revamping here of the ui, the user interface. the point here seems to be trying to make this operating system faster to use, apps they say will download a loss faster and also easier to use. you know, we know the watch is a multibillion dollar business, people use it a lot for their digital notification, of course, also analysts do think, though, when the watch is finally billed as a truly independent device independent from your phone that's where you could see real differences here for that product. but certainly interesting they're starting off with the watch and more headlines i'll bring to you as they come. back to you. >> josh, thank you very much. let's quickly go back to our panel. jason, a lot of talk, i know you're a twitter shareholder and defended twitter on this network many times. the initial reaction everybody, oh, goodness, this adds to the
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value of twitter. i would say it doesn't, i don't think linkedin is a social media company. it's different, but are you more optimistic on twitter because of this deal or just remain the same? >> well, the first point is i don't think twitter is a quote/unquote social media company. it's more of a media company and shared that in the past. just like linkedin has its own niche twitter has a specific niche as well not a facebook and if anyone is looking at it as a facebook you'll be disappointed. but, no, i mean when we tao the news our first thought, oh, microsoft, you should have bought twitter but of course they didn't but what it does it increases at least over the near term the optics for a potential buy-out for twitter. i'm not going to speculate on who is going to buy twitter. it's an attractive asset and large user base not growing as quickly as most investors would like to see and the company would like to see it but still a valuable asset. i think what this does is it reminds people that, you know,
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linkedin was left for dead. had a horrible share price reaction in february and then it was like, oh, growth tech is over and social media -- unless your facebook is struggling and it's a $26 billion take-out so again i think it reminds people just when you think a company may not be worth what you want it to be then you wake up and realize it is so i'm not going to sit here and speculate this is going to make twitter a buy tomorrow but it does excite us a little bit. >> all right. jason, thank you very much. tim, thank you very much. colin, thank you. i know we'll see you in a bit. should i stay or should i go? it really is a clash over in britain about leaving the eu. why you and your money should care. coming up. you both have a perfect driving record. >>perfect. no tickets. no accidents... >>that is until one of you clips a food truck, ruining your perfect record. >>yup... now, you would think your insurance company
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the deadly shooting in orlando is the worst in u.s. history. 50 dead including the gunman. fbi director james comey speaking about the tragedy. eamon javers live on the ground. eamon. >> yeah, hi, melissa. nbc news reporting that investigators here in florida are looking into a chilling new possibility that the killer here at the pulse nightclub also traveled to disney world to potentially plan an attack there. that is something investigators are looking at as they scrutinize all of his travel both domestically and internationally and just speaking a little while ago, the director of the fbi, james comey
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gave reporters a sense what have they found out so far. here's what he said. >> so far we see no indication that this was a plot directed from outside the united states and we see no indication that he was part of any kind of network. it is also not entirely clear at this point just what terrorist group he aspired to support. although he made clear his affinity at the time of the attack for isil and generally leading up to the attack for radical islamist groups. >> reporter: so the picture that paints is of a terrorist who is sort of free-floating anger and dysfunction was so intense he just simply didn't know which terrorist group he wanted to join. that is a disturbing picture of somebody whose rage overpowered everything else in his life. we also heard from the president of the united states today and here's what he had to say. >> that somebody who they are watching has purchased a gun.
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and if they do get alerted sometimes it's hard for them to stop them from getting a gun. it's crazy. it's a problem. and we have to i think do some soul searching. >> reporter: so, guy, investigators here in florida still have a long way to go until they understand the full picture of what took place here in orlando but obviously it is a tragic day here in florida. back over to you. >> eamon, thanks very much. the shooting raises the question how did omar mateen slip through the fbi's net? joining us is former boston police commissioner in charge during the boston marathon bombing. commissioner, thanks for being with us. mr. comey said in may of 2013 and then in july of 2014 they had him on their radar and on both of those occasions i believe interviewed that individual, but the investigation led to the conclusion that there was really
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nothing much more that was worth investigating. what do we need to learn from this or what telltales there may have been that could cause us to dig maybe deeper and uncover something that could have impeded this tragedy? >> you know, the investigators, tyler, are in a difficult situation here. you have the law as it stands today and it's very clear that this individual did not violate the law. so the case is put aside and they move on. what we're looking at now is a clear threat to the united states by individuals who have become radicalized. some of the fringe players they have psych problems, there are all kinds of issues going on with them. but at what point in time do why start to take sanctions against people who have espoused this radical philosophy? you need to have a database that
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would prohibit somebody like this from having a firearm, from having a trusted position in a security role. there has to be safeguards that we haven't put in place yet because of the threat that we're seeing now. we're living in a different age and the law has to catch up with the threat that we have. >> so you as a law enforcement person, a person that runs your own security company, you would favor some sort of restriction for individuals like mr. mateen who was -- had been interviewed regarding islamic radical saizan from being able to purchase a gun. >> that's logical and common sense at this time category the threat we're facing with this nation right now. >> have we been too polite -- that's my word, not yours obviously in the way we approach
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individuals who have -- whether he had connects outside of this country or not is unclear right now. but clearly he had said some inflammatory statements -- i think that was the word direct ler comey said and contradictory statements about that. have we been too polite in dealing with these individuals? >> well, these are very complex issues? you touch on first amendment rights. you touch on religion. and i think everybody is being very cautious and they should be. but at some point in time when this happens to us over and over again, we have to recognize that the strategy isn't working and we need to turn up our vigilance in certain areas, regulatory area, areas of the law and maybe a military response. it needs to be a different plan. >> so how do you do that and as you point out i think absolutely correctly respect the basic
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protections that are part of, you know, this country, the freedom of speech, freedom of association, freedom to say what you believe, how do you strike that balance between that and national and personal security? >> you need to be very careful with it. the legal system has to become involved. these questions have occurred before, during world war i, the clear and present danger language around the first amendment was created. so this is not unprecedented. this type of a threat we've seen before, the question is, when does congress move to start to tighten things up and how do we stop 50 civilians from being targeted by a group that has radicalized people in our own country? this is a unique challenge. we need unique laws to deal wit. >> you mentioned earlier you would favor the idea anyone who is being interviewed and looked at for potential radicalization should not be able to buy a gun.
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would you favor the reinstatement of the assault weapons ban that lapsed in 2004? >> i think that having military-style weapons in the hands of civilians, these bullets, i fired them. i know what kind of damage they can do, they really should not be in the hands of civilians. i thought that the ban on military-style weapons was well thought out and i think it should be in place. >> commissioner davis, thank you very much. appreciate you being with us. >> thank you, sir. >> microsoft buying linkedin for $26 billion. how does this deal rank on the list of biggest tech deals ever? you might be surprised. the answer coming up on "power lunch" when we return in two minutes. looking for balance in your digestive system?
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i'm sue herera. here's your update for the hour. president obama speaking from the oval office after meeting with fbi director james comey says the gunman who killed 49 people in an orlando nightclub was an example of homegrown extremism that officials have been worrying about for years. >> there's no evidence so far that he was, in fact, directed by anyone and there's no direct evidence that he was part of a larger plot and that sense it is -- appears to be similar to what we saw in san bernardino but we don't yet know.
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>> forensic investigators began work at the site of a bomb blast which targeted lebanon's second biggest bank. it exploded late sunday outside the bank's headquarters in beirut. no one claiming responsibility so far for that attack. oscar pistorius appearing in court to be sentenced for the murder of his girlfriend reeva steenkamp. today was day one of sentencing testimony. the judge is expected to make a final ruling a bit later this week. and mcdonald's is moving back to chicago and into the old home of the oprah winfrey show. the company saying it signed a lease to move its corporate headquarters from the suburbs of oakbrook, illinois, to downtown chicago in 2018. they're trying to attract more millennial workers. that is the update. "power lunch" right back. [beekeeper] from bees to business expenses,
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welcome back to "power lunch." safety theme going on in today's session. volatile, vix almost at 20 today and also some softness in the u.s. dollar adding up to 0.8% gain in gold. 1286.10. copper is the one of note. it is up by more than 1%. just over $2 there.
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so let's take a check. we're seeing that and key in on the ten-year yield and ten-year yield right now is at 1.616% and that is the lowest since february. as for the two-year 0.179%. the 2:00 hour we're heading into and markets down pretty much across the board. in a tight trading range. the one thing i do want to point out, though, the concerns about a brexit appear to have an influence on the european market at the close and even in our markets, uk markets, the ftse 100 and basket of the 100 biggest stocks trading in the uk. around 11, 11:3030 our time prior to the closing there was a new poll out, a guardian ism poll that showed strength for leaving the european union on the part of the uk appears to have been strengthening and that
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did have some influence on the uk market if aer pass and europe as well if you put that up you see the uk market moved to the downside and germany moved down. all of europe moved towards the lows of the day. same thing happened in the united states. s&p is trading at a fairly narrow range but drooped in the middle. ftse 100. drooping down right at the close there. put up the s&p 500, you'll see we drooped down a little going into the 11:00, 11:30 hour and bond yields moved down. melissa mentioned yields moving down and essentially at 2012 lows. 1.60. look at that and the thing i notice most the rapid move up in the vix. now, the vix doesn't normally move that quickly but this happened exactly at those polls coming out and concern about breaks in increasing here. one thing beer in mind coin druidwitching that will create market volatility overall.
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back to you. > how should you an individual investigator navigate the brexit vote. we have two people here to talk about that. welcome. let's start with brexit, dave. how big a deal is this likely to be for u.s. investors over the short and medium term and when i say medium i'm thinking between now and year end? >> certainly in the next ten days and perhaps shortly thereafter if the vote goes toward leave a source of global market volatility but not a decisive factor in whether we end up having a decent year in the u.s. equity market. >> would you do anything different? i'm not sure where your assumption is? but as you say the polls are now indicating that the leave faction or the leave camp has an edge here. would you do anything different? >> in terms of u.s. equity positioning, no, our view is that the key determinant whether
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we're going to have a good year or not is going to be corporate earnings in the second half of the year. we're in an earnings recession now. and the expectation is we'll come out of it in the second half of the year. whether or not that happens is going to be a much bigger driver for equity prices here than brexit. >> matt, so i don't mean to put words in dave's mouth but sounds like he is saying the brexit vote could create some short-term noise but really isn't going to add up to very much whichever way it goes over the long term. do you buy that? >> i do. i actually believe if there is some noise and there probably will be in the pound and some fear in the markets it would be pretty good opportunity longer term. it's not an unimportant economy. it's one of the ten largest in the world but i do believe they'll be able to renegotiate some of the treaties people are worried about and customize their immigration policy which will be helpful to them anticipate we'll get through this. world economy is not going to shut down because britain, you know, or the uk left the eu.
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i mean, many years ago, the call was the british are coming. i guess now the calm is the british are leaving here in boston, we used to say that and the reality is i don't think it'll be a major issue long-term. i think as they do renegotiate some treaties and so forth might create a path for others feeling constrained by the eu to think about it after a two-year window when they figure out how to do it. >> that is the worry, isn't it, matt and, dave, you weigh in here that if britain executes a successful, quote/unquote, exit from the european union that other countries might follow suit and that might be destabilizing. >> yeah, i think it raises the odds if the leave side wins that other countries start scratching their heads and wondering about the future of the european union and you could see either peripheral countries like greece or portugal consider leaving or even some of the more economically financially strong countries like a netherlands. >> so, matt, picks advanced auto
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parts and disnidz. what is your go-to sector or picks right here? >> well, we're focused really on more noncyclical recurring revenue streams like information technology services and health care services would fit the bill. >> all right, gentlemen, thank you very much. dave, matt, we appreciate you being with us today. >> thank you. >> go to powerlunch.cnbc.com to see what dave is avoiding. that's powerlunch.cnbc.com. the latest from apple's big conference, live back out to france in a moment. plus guns and politics. the presidential candidates reacting to the orlando mass shooting, what they are saying still ahead. you both have a
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lunch." i'm josh lipton. in san francisco at apple's big software show apple exec craig federigi is taking the stage and talking about their new operating system and focusing on icloud and noting 10 billion documents in icloud drive today. he's just starting to talk about this operating system, what's going to be interesting is whether siri is now coming to the mac. that was one big rumor of this software show, that siri would be coming to the desktop. we'll see if he mentions that and note eddie cue was just on stage talking about the tv, remember apple wants to be everywhere you are so on your phone, at work, in the car and also on your living room. apple's mantra has been, remember, that the future of tv is apps and cue talking about how there are 1300 video channels on apple tv. 6,000 native apps in the past seven months, apps like sling which offers live cable channels, that's coming.
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today cue said siri on that apple tv can search some 650,000 movies and tv shows, you can also use siri to search youtube, so, get on siri and say, siri, search youtube for steph curry three-39ers. siri can do that. listen, we heard siri would be front and center at this show. a big battle going on right now in terms of virtual assistants, that's thought of as the next great platform for personal computing. apple is in there battling amazon, battling google and microsoft. so far that seems to be true. siri really the focus, we'll keep listening to headlines bring you them as they come. guy, back to you. >> all right, josh, thank you. now let's get back to you are all-star panel, jason, tim and colin. three or four, five -- >> tyler, you can never have too
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many. >> tim, you know the band hootie and the blowfish? >> yes. >> okay, stick with me. i'm making a point. their first album sold 16 million copy, one of the best-selling debut of all time, their next, 4, which would be good because it's measured against the 16, didn't look good. my point is apple built a $400 billion smartphone industry in a decade. do we expect too. of them now? >> no, i think that if cell phones were moving toward a device that apple didn't make then perhaps you would have a blackberry situation or a nokia situation where people really concerned that their technology was fading but as long as we're talking about roughly 3x5 index-card like touch phones they're making the best. androids always going to have more market share and be selling the cheaper phones. >> i hear everything you saying. my point, tim, was we keep
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waiting for the next iphone. what if there's not a next iphone? >> right, maybe it's ios, maybe it's mac ios and the integration of all of them and that's where apple is headed and sure we'll focus on iphone sales until the rest of the shrubs they're building final i start to compete with the big tree iphone call it as an analogy. >> what are you looking for from the conference? tweaks to the watch os, i'm sure, is not going to top a story on the information. >> no, it's not. i think big picture here, what we're seeing is and i think we'll get into this later on in the conference today is apple moving into other area, services. it wants to bring in revenue from things like music, $10 a month for music, $10 a month for, you know, icloud but also rumors that -- we've reported it's going to open up siri, so siri can be used on other apps and it's also going to take imessage and allow that to be used on android as well.
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here's a number, 17 billion imessages sent a day but it's only available on iphone and apple has done that to kind of force meme to use an iphone and communicate on imessage. that's cool but these days i think to compete in these markets like facebook messenger, for instance, get nothing commerce, apple wants to open that up and get that onto other services so i think you'll see apple across the board on lots of different devices and platforms in the future. >> brian made an interesting point back to the hootie and the blowfish metaphor he was trying to put out there. yes, they built a huge tri but they are expecting the next great thing, at least to keep up their revenue growth. it doesn't matter where it's from, they just want the revenue growth number to keep being there in order to be investable. so was there anything they could have said tall, colin, that would have made you think they're on to something and they are going to at least on the edges replace that revenue
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growth that is coming or used to come from the iphone. >> sorry, that whole concept of planting the shrubs. >> right. >> exactly on the iphone revenue starts to slow down that you have new revenue streams coming up. but when you take $100 billion of your domestic cash and use to it repurchase shares, you know, there aren't enough shrubs planted right now. they haven't acted -- when i discuss apple as being sluggish in my view it's because they're not preparing themselves for when this revenue starts to slow and it's happened right now and there's nothing that is going to take the place and we can talk about watch, we can talk about tv, you know, areas like home kit could be very explosive and, you know, it's been a disappointment. you know, icloud to a degree has been a disappointment. the tv has been a massive disappointment, right so if you want to start to push, you know, across all screens, let's start having better, you know, game play broadcasting, let's, you know, have more services layered on that third screen and apple
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hasn't been planting those seeds in the past and i don't see future revenue streams materializing while the revenue for the iphone slows down. >> jason ware, okay, we've heard a little bit here and has the mac watch os changing it to os sierra. let's talk quickly about the investing aspect from a tv perspective. i'm a big apple tv user. if you haven't downloaded the cnbc app, it's quite good. download it today. is there anything you heard that makes you want to buy more. >> we currently own and have some -- anything i heard that makes me want to buy more, no. what we've heard today, i think, certainly underscores our longer-term bullish thesis. your other gifts have called and talked about it seems like he's disappointed in the echo system and i couldn't disagree more. the way i see, you know, apple building those or planting those software and services shrubs
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into their ecosystem is really setting the stage for the next leg of growth over the next couple of years, and, yes, right now it's imma material because the iphone has been so successful and device lineup so successful but i think it's missing the forest for the trees using another planting analogy. to say that, looking at software and services, well, it's buggy here and hasn't been as impressive here. rolling out the tv and going over the top if you will, is certainly an incremental positive and especially this whole youtube thing being able to search youtube and search this library of content is huge. as i look at the value, that brings to people who are inside of the apple platform, i think that just reiterates that they're making the right investments over the long term to create value. >> you know, the whole point is a big game for google. apple should be having their own video service that they're searching for. it has to paint app that will they're allowing siri to search youtube. where is apple's version of
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youtube? we'll get more on that and answer that question, colin, in a few moments and do have breaking news from the apple conference. let's get the news with josh lipton. >> reporter: i just lost the show. >> no, you didn't. we see you, buddy. siri, can buddy. siri, can you hear me? >> all right. >> lipton -- >> sorry, we got you. the magic of live tv, sullivan. technical issues. i think you got me now. more news here. one with apple pay. that is now coming to the web. you're going to have a pay with apple pay button on web sites. the whole point that they launch apple pay. the whole point is to make the checkout process easier, of course that, could be a big boom for apple pay volumes. i also want to point out that we were just talking about this. one rumor was that siri was coming to the mac. indeed, it is. you have them saying that siri that, voice activated virtual assistant coming to the desktop. can you ask siri, how do you like being on the mac?
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she even takes jokes. more importantly, he is making the point that siri on a mac means can you get a lot more work done. for example, ask siri to get certain sow fis kuwaphisticated. she can do that. rivals have moves into that space. microsoft's virtual assistant came onboard last year. the big news is siri coming to your desktop. >> siri come together desktop. more coming. we'll get immediate reaction on apple stock. we'll talk about linkedin and a lot of news. at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday.
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kellogg trading off the highest ans 1952. american tower bashgs being to the ipo in 1998. still up. back in. two
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. in the past one month, the russell 2000 gained 5% and is outperforming the s & p which is
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up 2%. let's look at the best stocks in each space. our guests join us. guys, great to have you with us. stephen, last time you were on the show, you liked the wallberg manufacture. you have another name in the same space. is this a bet on the continued construction here in the u.s.? >> sure. we talked about couldn't nental building products. it remains very strong momentum. there was a recent ipo two weeks ago, the name of the company is gms. there is a largest distributor of wall bored in the u.s. when bricing and volume with going your way, distribution companies are great way to play it, given it the recent ipo. there is not a lot of coverage right now. i think there is a great opportunity to buy this stock. basically at the ipo price. >> you also like the contractor and telecom industry. i want to dive forward to
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advanced drainage. wms. you talked about the stock before. it is water infrastructure. i'm wondering if you're thinking that the political cycle will benefit some of the inf infrastructure plays? >> absolutely. we have a new highway build. but with advanced drainage, you have a stock that is very undercovered and they're fundamental earnings growth is misunderstood. they just recently became an updated filer. here's a company in a flat economic environment that is giving you double digit top line and bottom line growth at a very attractive valuation. and it is a great way to play lower commodity costs as the biggest input is something called hdpe which tracks the price of oil. >> stephen, great to speak with you. appreciate your time. the small cap picks from federated. i want to go you to. you favor large caps. you say defensive, lower beta. but, yet, the three picks you gave us don't seem to fit that category. you have amazon, paloalto networks and cellgene.
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how do you expect the two? >> thanks for having me. well, that's exactly where investing comes n the two i picked are significant underperformers. palo alto networks is a play on networks security. it is long term security tail wind for the company and companies within that space. and cellgene, that has also been under fire because of the political landscape here is a large cap bioform supharmaceuti company that is working on to develop and cure cancer. they're not going away any time soon. amazon is a standout. it's a play on both ek commer-c and web services. it's like you get two companies in one. it's a relief to large caps the the most important thing to remember right now is with correlations coming in so must, you see correlations in the s&p 500 coming down to about 48%. i think right now exactly the time when you need to focus on stock stories rather than cap or
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style stories. and you need to focus and identify large cap quality businesses that we think will continue to sustain that growth and these are just three of the -- within the focus strategies. we have 35 others that we like quite bate. >> all right. thank you a lot for joining us and bringing us your picks. over you to. >> thank you. well, it is just after 2:00 on wall street. 11. 067891 a.m. out west where there are two huge stories today. microsoft buying linkedin for $26 billion in cash. more on that later on. but we start with the letter a for apple. the headlines out of the big worldwide developer conference where josh lip ston live with more on the headlines. they're crossing fast and furious. >> they are. so apple executive is still on stage right behind me here now talking. he moved on to ios. ios 10. he is billing this as the biggest ios release ever. he is talking about ten new features come together mobile
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operating system. new home screen, lock screen, notification system. more interactive notifications. i point out there seems to be a lot of emphasis on that 3-d touch feature as well. the big news really coming is that siri is going to be opened up to developors. of course, we have reports that this was coming. developors can now work that voice activated virtual system into their app. it means users can ask siri to send chats to a friend. you can ask siri to order you a ride with uber or lyft. the reason that's a big deal is because in this battle of virtual assistants, they say amazon's alexa is really good at voice recognition. they'll say google is really good at voice translation. and so if i ask them what do you think apple's advantage, is they'll always say it's really that powerful ecosystem of developors all around the world and now you see with am the decision to open up siri to the
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developors, they realize that and trying to maximize that advantage on the hop on. more headlines coming. i'll bring them you to as soon as they cross. >> all right. thanks so much. let's get back to our all star apple panel right now. >> that's a giant shot of my head. >> i was confused because i saw you. the director of research at bsg financial and we have jason wear, the chief investment officer over at balbian financial. tim, i go you to first. what you are thinking at this point? >> well, i think that somehow we're really focus ond siri, whether it is an ios or mac os or on the watch. i think what i'd like to see is more talk how they bring siri to everything. that is home kit and the car at some point. where all of your interface in the future might be through a -- an interface like siri. then you might see the real long term power of apple. i'm happy they continue to make
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the steps and having success. i think there is still more to come on this story. >> collin, how would apple make money if it brought siri to all the devices? how does that monday he ties? >> right. what you want to see is -- they're still making the money on the sale of hardware. it's like apple pay. they'll make maybe, you know, little pieces of money here and. there the main point is to bring functionality in to continue to have that ecosystem intablgt ct sell hardware devices. we want to see a shift to more reoccurring revenue streams. that is that pivot that april sl in process of making. >> what you would sflik that's the continue you'll gripe, right? they need to move into services that they can have reoccurring stream. what do they turn that on? how do they do it? >> i think the bedrock is being laid already. i mean you're talking about a $25 billion run rate services and software business for this year which is 15%, 20% growth
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over last year. because the iphone tree is so large, i think it's easy to miss, you know, what's right under our noses. so what's the next things that going to, you know, transition everyone in such a way? this is now what we can focus on as investors? it's the largest piece of the pie. that is not a story for today. that's a story for down the road. i think the things that they're doing each year are certainly, you know, setting the stage for more valuable ecosystem. and that's what we hope for as investors. i think that's what we're seeing each year. >> tim, a quick question here. i was going to make it a jump off. are there ways that apple could begin to charge? i believe it was jason who mentioned earlier, charge for some of the things that are currently free. whether it is music or it is space in the cloud or it is i messaging? >> i think they've already begun that, tyler. they're charging for music on a subscription basis. they're charging for icloud if
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you become an icloud user and need more storage. they're getting hands in people's wallets. and apple pays a great mechanic mix to continue that. if you think of a world where you locked into am because you're using i also cloud and music and the other services, eventually you're going to be paying apple on a monthly basis and the phone becomes the freebie along with that. i think they have a solid stream of revenue coming from the sources as jason mentioned and it's hang. >> that's enough for smin vestors. >> good to see you. >> collin? tim, jason. >> thanks for having us. >> you're welcome. >> we're now getting the political reaction to the terror attack in orlando. let's get to john harwood with the latest washington. john? >> tyler, the most important reaction we got is from president obama who was briefed by national security officials at the white house today. made some comments before the cameras a short while ago. here is the president. >> there's no evidence so far that he was in fact directed by
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isis and there is no direct evidence that he was part of a larger plot. in that sense, it appears to be similar to what we saw in san bernardino but we don't yet know. >> now the candidates have been speaking about this from early in the morning on various television shows and in speeches. donald trump even on fox this morning suggesting that president obama might have been complicit in terror attacks saying he's either not tough, not smart, or he has something else in mind. without spes fig what this something else is. we're going to hear from donald trump in new hampshire in a few minutes where he's going to lay out what he says is his plan for going after isis. hillary clinton just spoke a short while ago. she cast it as a nonpolitical speech. she didn't mention donald trump's name. she certainly targeted donald trump's ideas when she said it's not the kind of time we are -- should be reaching out to
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demonize muslims. i think we have a sound on that. let's listen to hillary clinton. >> there is a moment when all americans need to stand together. no matter how many times we endure attacks like this, the horror never fades. the murder of innocent people breaks our hearts. tears at our sense of security and makes furious. >> so you can see that hillary clinton was trying to strike a very subdued tone in her remarks even as she was going after donald trump's approach. she is trying to advance her argument that he is temperatu temperamentally not able to be president. donald trump is trying to advance the argument that he is stronger, tougher than president obama or hillary clinton. and we're going to watch that argument be prosecuted over the next few days. >> john harwood, thank you very
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much. our next guest firmly believes that existing gun laws need to be strengthened. he is ed rendell and was a two term mayor of philadelphia. welcome back to "power lunch," governor rendell. you know, much has been made over the past 24 hours over the phrasing of the ways we describe terrorists like the man in orlando. mr. trump criticized the president for not using the phrase islamic terror or some variation of that. is that important to you? >> no, not at all. i don't think how you characterize it is what is important. what is important is what we do about it to prevent it from happening again. i saw the press conference this morning. everybody got up there and said community is coming together. first responders did a great job. the medical personnel did a great job. all that is true.
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but we say that after every mass killing in the united states. and we never get to the heart of the issue. the heart of the issue is why there is one individual citizen come in with a assault rifle and unlimited capacity magazines so that he can fire off -- remember, he hit -- he killed 49 and he injured 53. at least he fired 102 bullets. we think he probably fired two or three times as many bullets. where do people get magazines with that many bullets without pausing? it's insane. if you go back to when president clinton passed the crime bill, we banned importation and sale and possession of assault rifles and limited magazines to ten bullets at a time. if that guy, you know, the right is always saying well gun laws don't make a difference. but if all he had was ten bullet magazines, he would have will to
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reload ten or 11 or 12 or 13 or 14 times to do the damage did he in two minutes. he wouldn't have been able to do it. he would have been disarmed. he would ahave ran out of time o spew that violence around. when are we going to do common sense? in hunter uses assault rifles. it's time to act. >> just to play a devil's advocate here. there are those who would say that type of gun, the capacity of the magazine, the caliber of the bullet is not going to deter a person who has a psychological issue as this individual must have had. >> agreed. i absolutely agree. but instead of killing 49 and wound 53, if he had a ten bullet magazine and had to reload, he may have killed 10 or 15 and wun wounded 10. is that worth doing? of course it's worth doing.
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can you do things that matter that, have a consequence. is it going to stop someone from doing stuff like this? no. but kit limit the damage. and god knows we ought to be limiting the damage. >> police commissioner davis was on with us in the last hour. he made the case there ought to be some way when someone is investigated as this individual was on two occasions by the fbi that their name goes into some kind of data base. and he bought the weapons within the last week this individual did legally in the state of florida which i don't believe has background checks. there ought to be some way that that could have been intercepted. that that transaction could have shown up. do you buy that? >> yeah. i think there is. and i think governor -- i mean senator robert casey from pennsylvania introduced the bill this morning that says when you're on the fbi's watch list,
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terrorist list, you should be prevented from buying a fire arm and go into the national data base. but, of course, there's the gun show loophole. we need to have uniform background checks everywhere in america. we couldn't even get our congress, it never went to the house and our senate. we couldn't get 60 votes for it to close off filibuster. it's a disgrace. what are those senators afraid of? the nra? big deal. most nra members favor background checks. most nra members wouldn't think you needed a magazine -- there are some magazines that have 100 bullets in them. what are we thinking? >> all right. grofrn republic governor rendell, we appreciate your time. governor ed rendell of pennsylvania. >> will linkedin bring to microsoft? we'll talk to a top microsoft executive and ask what this means for the stock which is down 10% so far this year. that's next on "power lunch."
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welcome back to "power lunch." shares of linkedin are soaring on the news that microsoft is buying the company. let's get right to cnbc's report wloer is stand big one of microsoft's top executives. take it away. >> thank you so much, melissa. i'm with the corporate vp of microsoft's windows and devices group. now we're here at the video game convention. you said the straight announcement about the x box. first we have to ask about the linked inin deal.
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how will this impact the divisions you cover and are in charge of at microsoft? >> one thing that we're excited about in the windows and devices group is we're able to pull together all of the, you know, capabilities to help people be more productive in their daily lives whether it's the surface pen and how you ink or how you talk. having the business network in allows us to build better experiences for customers with the connection thez has they ha oun people. >> give me examples of how consumers may see something different. >> for example if, you're pulling up the office e-mail and you say i need to connect with some people around a certain business topic. now because of the linkedin business network, we can better connect with you those folks. when you pull on your hollow lens and you lay out in your kitchen in the morning or doing some work, you can put up the network and seat feed from your linkedin along with the e-mail. it provides a much richer way to be connected and productive. >> great. now moving on to the news here at the x box announcement at
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ethree. you mentioned project scorpio. high definition s this console going to be what it takes for x box to beat sony's ps-4. >> the big news we will today, you heard in the room going crazy, there is two big things. one is the biggest gain game lineup we ever had combined with two new con soles the x box 1-s and project scorpio. and then the other big thing is inflection point on the progress to make gaming for everyone. meaning, you can game with the people you want on any devices you want. i think that's a huge opportunity for our business and x box. >> you have project scorpio launching. you have the new toner $99 console coming out sooner p. s-4 has outsold x box 1 consistently. what you are going to do to compete in the world of virtual
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reality that is so popular? >> there's a lot of stuff in there that you talked b i think first thing i'd say, we feel great about this console generation. it is moving faster than the previous generation. so we feel great about the console gaming. and i think hats off to sony and their project. we're thrilled with our x box. we sold more units than we've ever done before. the second is the emerging area for the virtual reality. it's very early space. we're excited about. that i think can you play at multiple levels. you'll see microsoft show up with minecraft across all of the levels. you see the gaming head sets on the device. and you'll see innovation in the form of windows holographics. >> you also announced new options for competitive gaming. how do you expect microsoft to make money out of e-sports? >> that is one of the fastest growing areas. we see so much excitement on the xbox live network. what we announced with arena and
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tournament capability with xbox live, we think we can provide a bunch of service. you saw that they'll be coming to. that we feel like we have a great opportunity. >> great. we're out of time. thank you for joining us to talk linkedin and your big announcements. thank you. >> we have a news alert relating to microsoft. let's go to sue herrera. >> we do. and moody's is placing microsoft's aaa rating on review for a possible downgrade following the announced acquisition of linkedin today. moody's says that basically they see the acquisition as providing meaningful benefits to the ecosystem surrounding microsoft's cloud-based services and platforms and linkedin's network. however, they say, funding the acquisition entirely was w. debt will increase microsoft's gross debt to approximately two times in excess of 1.5 times leverage. what are he had looking for as
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they do this review snt review will consider microsoft's plan if any to reduce gross leverage and debt to at or below 1.5 times while maintaining a significant cash position. they don't think the cash position will be a problem. but lowering the debt may. they put the triple-a rating on review for possible downgrade. back to you. >> thank you. let's get more on this move, potential move out of moody's. we have a senior equities analyst with us. and we have the senior editor with "fortune" us with. scott, this sounds procedural. microsoft is a cash cow. is this a concern of yours? >> look, i think it's fair to say that for some people it mate be surprising that a company with $105 billion in cash and investments would feel necessary to finance a transaction like this with debt. but that's what microsoft said. and when you have $47 billion in debt, adding $26 billion on top
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of that does cause some questions, no question about. that. >> what is your take on the deal? how does microsoft monetize this? >> the short answer, is look, when we look at m & a, we think about it in two kind of dimensions. one is the price and i think it's fair to say that they're paying a pretty significant premium. i think it's close to 60 times expected earnings for linked dms this year. on the other hand, the stock in november was $250 plus the share. microsoft is paying less than $200, right? so it seems like price, it seems stretched but it's okay. from a strategic perspective, a lot of us can understand how they would connect the dots with linked in in terms of thinking about outlook and contacts and the network and contact there's. the problem is as you point out, how do they monday he ties that? how does that accelerate growth? linked dms is a company that had a 35% growth rate in 2015 and is going to decelerate next year to
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about 20%. so there are questions there. >> scott, what about the valuation? microsoft, 17 1/2 times forward earnings. apple, 10 1/2 times forward earnings. microsoft isn't growing. do they deserve that kind of premium to apple? maybe apple is wildly undervalues. >> right. we agree with your latter comment that we think apple is very undervalued right here. on the other hand, look, microsoft historically software companies trade at premiums to hardware companies. because they're able to kind of sustain their business models and user mixes over longer periods of time and we have seen that over and over again. that being said, to your point, brian, we have a hold opinion on microsoft. in part because of what you just said which is they trade at a premium to the market. yet, the growth rate arguably is at a discount to the market. and so for those reasons, and, of course, adding the uncertainties related to this deal where it's a very large deal, one of the biggest in the
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history of the tech sector. you have microsoft which frankly hasn't been so successf at identifying acquisitions, we think this is one that might not work out. >> dan that, was the question i was going to x we were talking last hour to put it chairbly, microsoft's record in making big deals of scale has not been all that great. and more broadly, big deals in tech often don't work out. think of all the ones that hp did during its checkered acquisition history. how do you look at this one? n. that light? >> so the microsoft history on big deals doesn't really bother me too much. if you look at it, they've only done one big deal which was the mindcraft maker. that is much, much, much smaller than. this you think of the microsoft deals. yeah, they're microsoft deals but they were a different management team. the jury is out. it's the same company but different cultures. i think you have to say the jury is out and we'll see. you're right, more broadly speaking, a lot of the deals
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don't work out. that is not just a tech issue. big mergers often don't work when all said and done. but look, some do, some don't. i don't think can you say this one is a bad deal just because there have been other bad deals in related sectors in the past. >> so dan, do you expect this to sort of ignite animal spirit in tech m & as this the kind of deal or the kind of deal that we're seeing from blue coat where you see consolidation in the industry? feasibly this is a deal where microsoft is searching for growth. are we in that stage of the market? >> i think we are. not just sim ymantecs. you look at blue coat and with vista taking marquetta out last week. when you talk about cloud software companies which is what linkedin ultimately is, there is a sense from both strategic buyers and financial buyers the prices have financially gotten down. we said earlier, lyn r linkedin was paying above this price that microsoft is paying today back gentleman n. january. january of this year.
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bluecoat is viewed about it marring ans. there is a feeling now that these cash rich companies finally can get relative bargains in the market. >> you know, dan, everybody is all aflutter about twitter, right? twitter stock up a couple percent today. it is still $10 a share below the ipo price even with this sort of implied deal premium that linked in is giving it today in your expert opinion. does this deal make twitter a more attractive takeout candidate or the same on friday? >> i think it's the same. i think a deal is less likely because microsoft is one of the potential buyers and it seems unlikely to me after buying linked in and getting that social networking capability that it then goes and buys twitter also. >> all right. gentlemen, thank you. >> all right. the vix is at the highest level than in three months. we have more details next. you both have a
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call liberty mutual at switch to liberty mutual and you could save up to $509 call today at see car insurance in a whole new light. liberty mutual insurance. hello, everybody. here is your cnbc news update. at a washington news conference, the fbi director says the shooter that killed 49 people at an orlando nightclub may have
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been inspired by terrorist organizations. >> there are strong indications of radicalization by this killer and the potential inspiration by foreign terrorist organizations. we're spending a tremendous amount of time as you would imagine trying to understand every moment of this killer's path to that terrible might in orlando. >> in europe, dozens of peace activists disrupted the opening of an arms exhibition in terrorist. they threw fake paint on a armored vehicle. there is a defense security trade show. 387 migrants arrived at a port today. they were less krescued at sea vessel owned about it private search and rescue commission called moas. they were to be moved to reception sent areas cross italy. and pope frances railing against consumersism and food waste saying it is a selfish and wrong distribution of resources.
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he denounced the brazen way in which weapons circulate in many parts of the world. he made his comments in a speech to thousands of employees of the u.n.'s world food program in rome. you're up to date. that's the news update this hour. i send it back out to you, me list yachlt. >> thank you very much. let's get to josh lipton. breaking news. josh? >> well, we now moved on to talking about apple music. remember, it was a year ago where apple music was all the talk at this big software show. a lot of fanfare and excitement about that service. some change that's were just announced to this service is going to be a new kind of cleaner user interface, a new lyrics plain so you can read lyrics as you're listening. there is going to be a tabitha offers the daily curated play lists. nothing that seems too radically changing to the service which is interesting because announce aid year ago that in april apple
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said they had 13 million paid subscribers. one is we do know that service came in for criticism. some people said it was clunky and confusing to use. for consumers, you twha is announced to day addresses those concerns. for investors, obviously this is a competitive space tlchltz a the love companies that want to offer this service. all the streaming music can you handle for $10. we hear something that gives apple a competitive advantage here. tyler, i'm going to keep listening to the headline and before you you the news as they come. >> thank you very much, josh lipton. donald trump speaking at a college in new hampshire. he has just begun up. there we'll monitor that event. and we'll bring you any headlines. "power lunch" continues in two minutes.
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raising price target after the analyst meeting and a sunday diabetes briefing at the ada meeting. they see debites treatment as having nearly 12% revenue growth at medtronic versus 6% previously. that led to more top line growth. the too h. target goes to $98 from $93. so about 13% upside. >> and within health care, the device makers are standouts. take a look at that run. next up, agios pharmaceuticals. a bearish call. a sharp pop at the open. you see there, that has since faded. the cast lit was positive results of a small mid stage study that showed 9 of 13 patients giving treatment for a rare anemia found increases in he heem yoe globe in. they were healthy let the lack of impact is troubling. they cut the fair value estimate by $5 to $47. >> did you know, because i did not, this was a $135 stock 15
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months ago. it's now at $50. >> next up. nvidia. yet, another upgrade for the stock. third or fourth one of the past month or so. upgrading it to a buy from a neutral. the target goes to $55 from $35. the stock is well above the $35 level. either way, the new target adds 15% to the current price. last week ubs upped the target to $53. goldman sachs began coverage with a buy rating. a lot of optimism around data centers. the company is really known for speegd up your video game. >> right. faster gpu processing. fwhut is a -- you know, ever since we got that good data point out after plied materials on earnings, that really sent chips on fire. this is definitely one of the beneficiaries. next up, we're talking about this symantec. getting bullish on symantec after announcing that deal to acquire blue coat systems. they're moving the price target to $21.
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blue coat, of course, known for the aappliances. it's been expanding to the cloud another hot area. blue coat got $2 billion in debt and coupled with symantec's money to finance the deal this means a higher leverage level. >> when is it appropriate to call something a long suffering. i'm a chargers football fan s that long suffering. >> down it 23% in one year is long suffering. >> it's an $18.40. it was a $19 stock in 2006. if you traded it, you made a little money. the stock hasn't moved overall on a net basis in a decade. >> yeah. and how many sib area tacks are there? constant cyber attacks. that is the story of that sector. >> let's calling it long suffering. >> today's under the radar name, pra health sciences. clinical trials company. upgraded to an overweight. the analyst called it the quiet company. they're bullish on earnings
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because the backlog and bookings are solid. they say that business has noticeably picked up in recent quarters. nine analysts cover the name. prah is the ticker. the average target is under $53 a share. 18% upside. a lot of bulls there. >> quiet reaction to this call. >> that is definitely not me. >> definitely not. we'll leave it there. >> time now for "trading nation." traders trade better together. today we're looking at the vix. the volatility index often known as the fear index. it hit the highest level in three months. historically low. nick, yes, it's up to 19 pl 8. it ain't at 40, how do you read it? >> it looks like the smashgt trying to discount not just the brexit which is focusing a lot of market observers or the fed meeting. a lot of other events happening the next couple of weeks. for example, we have the fed
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results of the stress tests of the big banks coming up the same day as the brexit votes. then the capital requirements reports just a week later. the day after the brexit vote, we have the rustle rebalance. and then we have more on. that it seems the vix and volatility measures are trying to measure one or two events or five or six. that is real i didn't think probl -- real i didn't think problem here. >> historically, not that hichlt rich, when we look at the clarts, i don't know the fear gauge. the fear chart is based on headlines. is there a way to see where there is going? you can just in vest in this if you want. >> yeah. i wouldn't recommend that, brian. measuring sentiment is art and balance. it's best to combine market based factors like the vix. the vix is one of the less useful tools. it's coincidence to insert fear.
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we know about the outflows and low volumes, skepticism remains elevated. we know about the figures that have been out in the news over the past two months telling you how bearish they are, how concerned they are about the world economy. brian, here's the rub. you zoom out and you look at the weekly chart of the s & p 500. for all the skepticism and concern out, there you see an s&p 500 which is one, 1.5% of an all time high in and around that resistance there at the high end of a multiyear trading range. it is trading at 19 times earnings. if everyone is skeptical, someone out there is buying stocks. what i really like is the breadth is expanding. it's at a all time high. the dollar eased providing support for crude oil, em currency ands high yield credit. all chf comes back for the s&p 500. if the chips fall our way with the fed and brexit, that's a pretty big if, the technicals are saying you're set up for a surprise and a break out of that
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multitrading range. >> okay. but if the chips fall our way, right? if we don't roll snake eyes. you get it. >> indeed. regard lz of how awe tact market, this is a big if for everyone. whether you're technical, fundamental, any way you cut it. this is a rolf the dil of the d all much us. >> thank you. thank you very much. we appreciate it. for more "trading nation," head to our website. "power lunch" rolls on right after this quick break.
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the bureau of alcohol, tobacco and firearms confirming the guns used in the orlando shootings was a .9 millimeter semiconductor automatic pistol and a rifle known as the ar-15.
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in 2013, we reported about the ar-15. take a look. >> it's been -- >> the ar-15 is once exclusive to colt. but to date name refers to a general style of gun. that is allowed dozens of u.s. manufacturers to get into the game. helping make the ar usually pricesen with $1,000 and $2,000, one of the best-selling firearms in america. >> now i want to be absolutely clear, we do not know the exact manufacturer of that rifle that was used in the killings, guys. a lot of people think that ar-15 stands for assault rifle. it does not. it was tweaked out and became the m-16. a number of manufacturers including colt which bought certain rights to the gun make it. but ar stands for armalife. can you see that reairing to night at 7:00 p.m. eastern time
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right here on cnbc. >> brian, thank you. our next two guests help evaluate train businesses for active shootings situations and scenarios. can they prevent employees from coming into harm's way. michael barrett, former white house homeland security director, in and out ceo of diligent innovations and jeffrey visner, ceo of ages security and investigations. gentlemen, welcome to both of you. you say we can and must get better and faster at our response. what do you mean and do you think that the orlando law enforcement people were not fast? >> sure n this particular instance, mine, it was a hostage taking event. i'm not going second guess the tactical decisions of the police. i'll sure they did things well at that point. i'm talking more strategically. we spent millions and millions of dollars over the last decade, decade and a half getting really
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good at arms response to a tactical situation like this. but i do think it's time to start taking a step back and figuring out how do we use technology to enhance everybody's reaction? one of the examples i use is that to this date when there is an active shooter, everybody thooz find the command van. everybody seen this in the movies. they're in the back of a bus or conference room and everyone thooz manually check n they get a radio and go out to the area that they've been assigned. to that is ridiculous in 2the 21st century. we have fusion centers set up for the state and local law enforcement. we have military, you know, software and programs that we develop for the war on terrorism. there is all sorts of technical solution that's allow us to do even better in this situation where minutes and seconds count. >> so you would not have that sort of oh, i guess i call it interimmediate airy stop at a command post. you could just go in on the fly and coordinate that way. is that what i'm understanding? >> exactly.
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it is a virtual command post. there is no reason to still have people come in physically and check in and then assign generally large sectors to different groups because everything these days is a multiagency response. and so you are assigning a large section to some groups of naem have never been on the ground and n. that location before. there are ways to use satellite imagery, tablets that everybody is carrying to forward the imagery feeds to squad cars. people can actually come together and come towards the event. they're coming from the north, there is no reason to circle around the event location, park their car and then walk to a command post. >> jeff, you trained businesses. we've had training here. nbc does it. lots of big companies do it for these kinds of situations. i guess that the montra that people say is flee, hide, or fight. right? >> yes. that's 100% correct. the problem is the training that is out there currently doesn't
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tell you how. so if you're going to run, where do you run? how do run? where do run to? you go from cover to cover. cover to concealment? nobody ever teaches you how to barricade. so our job is to get you in scenario together and run you through the methods. >> does barricading generally work? if i turn over a desk s that going to stop the kind of caliber round that this individual was firing. >> no, not necessarily. it's part of our training and it's distinguishing between cover and concealment. you're talking about time distance barriers and you and a threat. if you're talking about closing a door or locking a door, that's maybe putting a desk in front of the door or finding a safe place behind to stop bullets. >> we have to leave it there. jeff, thank you as well. coming up, where does linched in rank among the biggest deals in history?
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today's big news microsoft will buy linkedin. dom chu is at the wall of knowledge with the answer. >> the wall of knowledge is a
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good way to put it here because we talked to all the experts on wall street and they come up with the numbers. rich peterson at s&p global market intelligence told us some big deals. let's put it in the industry. with regard to u.s. history, the biggest deal of all time is this one, linkedin's pending acquisition. if you include debt and everything else that goes in the total enterprise value of this deal, peter says it's closer to $30 billion, $30.5 billion. the second place one was that one as well. whatsapp bought by facebook and network solutions back in 2000 was a $19 billion deal. with regard to the u.s. tech overall sector of all time, this particular deal ranks number seven. now, number seven here, this particular deal here, it's, again, some of the big ones out there including number one. dell and denali holding.
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that's about $75.75 billion. so, again, if you put it in history, linkedin, ranks pretty high up there in terms of the overall sector. >> dom chu, thank you. the latest developers from san francisco. we've got them next on "power lunch." no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business.
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lunch." i'm josh lipton. here in san francisco at the apple worldwide developers wrapping up. one feature, changes to imessages. they're saying the camera will be better. they point out apple service will be integrated. opening up imessage up to developers. some people said rumors could have been that apple would have started to directly process peter peter payments in imessage. it was built as a potential mode killer. when we talk about the service, always important to realize just how popular it is. remember am's eddie cue noticed apple can process up to 200,000 messages a second. so that gives you an idea how many people all over the world are using this. again, this conference just wrapping up here, and we're going to bring you headlines as they come. back to you.
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>> josh, i'm curious about these announcements. how apple could possibly monetize it? is there a longer game plan for charging people for thinking like imessage, for instance? >> well, with siri, what's interesting is -- and it's a good point. that was clearly some big news today. siri is going to open up to developers so they can weave siri into their apps. for our viewers, that's certainly the question for traders and investors. how do you make none after them. i think -- you can think of different business models that can work. maybe you use virtual assistants to move hardware. they've shipped already 3 million echos. they make money but as you open up virtual assistants to developers, you make money off the transactions. i think the business model is still down the road. they're trying to have the best virtual assistant. >> all right. josh lipton, thanks so much.
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apple worldwide developers conference. >> how about stop messing with itunes. songs disappearing, going grayed out. forget it, map. >> thanks for watching "power lunch." >> "closing bell" startis right now. hi and welcome to the "closing bell," everybody. i'm kelly evans with the new york stock exchange. >> and i'm bill griffeth. in case you haven't heard, microsoft is buying linkedin for $26 billion. we're going to talk about whether this acquisition even makes sense and if it could spark a new wave. in sympathy as we say. >> now apple just announcing siri's role is expanding. the personal assistant now coming to the mac and apple tv. we're live in san francisco with all the great news. >> and we'll

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