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tv   Power Lunch  CNBC  September 23, 2016 1:00pm-3:01pm EDT

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if growth and momentum turns around, this picks back up strongly. >> sniff that out though before -- >> liquidity is in market interest rates. they start to move up, we'll know, okay, we're wrong. >> thank you for being here. that does it for us. have a great weekend. "power lunch" starts now. happy friday. i'm melissa lee. here's what's on the menu. big countdown for your money is on. how clinton and trump words could affect your financial future. a massive data breach at yahoo! 500 million accounts attacked. how worried should you be about your data online? we'll break that down. who said video killed the radio star? bob pitman on how he's taking on pandora and spotify. "power lunch" starts right now. welcome to "power lunch." i'm sara eisen. stocks in the red. less than half a percentage
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point declines. the dow and the s&p 500 are still on track to have their best weekly gains in about two months. as far as performance real estate is the best performer now in the s&p 500. that new 11th sector. technology and industrials are lagging. >> sarah, thank you. i'm tyler mathisen. facebook shares sliding. wall street journal reporting the company overstated a key video metric for two years that pertains to how much advertising consumers were watching. more on that straight ahead. and faa advisory panel recommending action to prevent cyberthreats to planes in the air as well as on the ground. and minneapolis fed president neel kashkari speaking today saying he's more worried about raising rates too fast than too slow. we begin with politics. the countdown is on in three hours -- three days and seven hours or thereabouts.
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hillary clinton and donald trump go head to head in the first president ideal debate out at hofstra university. what happens on the stage there could have a profound impact not only on the election, but on your money. aymeamon javers with the rhetor we should expect to hear from both. >> so much to watch for in this showdown on monday evening, including whether or not the two candidates single out any particular companies by name for criticism. something we have seen out on the campaign trail, all through the year. this can really be clenched teeth time for ceos of american companies as they watch it debate and wait to see whether they are dinged by the candidates, both donald trump and hillary clinton have singled out particular companies. trump singling out jeff bezos and amazon, hillary clinton singling out johnson controls over the course of this year. look at what they have said already this year. >> he thinks i would go after him for antitrust because he's got a huge antitrust problem,
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because he's controlling so much. amazon is controlling so much of what they're doing. >> of companies like johnson controls that we bailed out when they were an auto parts company and we saved the auto industry and we want to avoid paying taxes. >> and then, of course, there are the bigger economic issues, the broad issues of debt and taxes, both candidates have plans out there, analysts have been trying to make sense of those plans. sometimes the details in the rhetoric are not precise enough for analysts to really measure them, but look at the debt plan over ten years of what each candidate would add to the u.s. deficit and debt over that period of time. there has been one analyst analysis done so far. hillary clinton's plan would add $200 billion to the debt over ten years according to that analysis. donald trump would add $5.3 trillion to the debt over that period of time. that's largely because he's got a lot of tax cut proposals and a lot of spending increase
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proposals and that leads to an increase in the debt. also on taxes, both candidates have plans out there, watch for the details of those as they come across during the course of the debate on monday night. hillary clinton would raise the top marginal income tax rate to 43.6%. she would enact the buffett rule which would have a minimum standard tax percentage for people in high income brackets, donald trump by contrast consolidates the seven individual brackets into three at 12, 25 and 33%. all of those details will come into play and be fodder for that debate on monday night. >> thank you very much. our next guest is a presidential scholar who successfully predicted every election. today he's made his 2016 call and he says donald trump is going to win. alan lichtman is a distinguished professor of history and joins us on the "power lunch" newsline. welcome. good to have you with us. you have 13 characteristics you say can be predictive.
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you say if one -- if six of those go in one direction that is determinative. it basically is based on whether the incumbent party will hold office. let's go down the ones that you say truly -- basically suggest mr. trump will win, beginning with one. is the party mandate and how well the parties did in the midterms. the democrats got crushed here. that's a bad signal. >> correct. that's a false. remember, six falses and you're out. remember, this is a scientific prediction. it is not an endorsement. >> right. and it is based on history. you came up with this methodology. key number two is the sitting president is not running. if the sitting president is running, that tilts in the favor of the incumbent, right? >> right. that's a second false. six falses and you're out. >> keynote, no smashing foreign policy success, that's in there, right? >> that's in there. that's three down. >> three down. hillary clinton is no franklin
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roosevelt. that means she does not have high charisma, right? >> four down. >> four down. five would be no major -- lacks charisma, no big change in obama's second term. in other words, big policy things that they can point to, right? >> correct. like obamacare in the first term. that's five. >> that's five. looking for one more if you're a trump supporter. >> yes. >> here it is. >> yes. >> that is the presence of a third party candidate who is going to pull high and presumably take votes away from the incumbent. right? >> that's right. and bedevil the incumbent. there are a lot of people who don't like trump and they might otherwise vote for hillary clinton. but a third party provides a cushion. and the rule is if you anticipate the third party to get at least 5%, that key is false. and that would be the sixth key. >> as you back tested this, how many times has it proven correct? how far back have you gone? >> correctly predicting every
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election since '84 and retrospectively the system is based on every election since 1860. let me stress, this is an historical system. i'm not gene dixon looking in a psychic, you know, in a crystal ball. >> for those who remember gene dixon. >> gene dixon, the psychic, i'm not. as i say in my washington post article, there is a kicker here. donald trump is such an outlying candidate, we have never seen a candidate remotely like donald trump. and there is a reasonable chance that donald trump is such an outlier that he will smash the patterns of history and snatch defeat from the jaws of victory. generic republican is predicted, but donald trump with all the things he has said, all the groups he has offended, his embrace of a russian dictator -- >> he's anything but generic. >> called for meddling and the election could change everything. >> come monday, one of the keys was sort of subjective that the
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charisma measure, one candidate is more charismatic than the other -- >> that's not it. that's not how it works. >> can monday change how this calculates? >> i don't think so. it is not a comparative thing. rather it is are you a charismatic candidate, period? are you the once in a generation extraordinary candidate? are you a franklin roosevelt? are you a ronald reagan? and i don't think hillary clinton can turn that around. by the way, i give the democrats the other side of that, donald trump cannot a ronald reagan or a theodore roosevelt. he's the highest negatives in history and hillary clinton is not too far behind. >> thanks as always. we appreciate having you on. allan lichtman. >> what would a trump presidency look like and are investors prepared? let's bring in william lee now, of citigroup. good to see you. you also put out a probability at citigroup and you last had hillary clinton winning by 65%.
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everybody has a model here. how do you get to your number and is that still where you guys are? >> these are poll based and it is -- our assessment of where the polls are going. i think the main question that you're asking is are the markets ready? and every client meeting i had for the last several months have always been asking about what would a trump victory mean for us? it is not considered the baseline, but everybody is considering it a black swan event and starting to prepare for it. >> you say a trump win risks slower growth or a recession. >> the basis of a lot of the optimistic projections is that there will be a lot of infrastructure spending, fiscal stimulus. we think the rhetoric will come to a halt when it comes to passing it through congress and getting it through ryan. ryan has got a one mandate in mind, to keep government small. he's going to try to make sure that every dollar spent is going to be financed by some dollar of taxes and that's where the negotiating has to come in. we don't think that will net us
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enough stimulus to do much to growth. on the other hand, what trump does say that we are very worried about is trade restrictions. because imminence of a trade war is the one thing that would send us in a recession sooner rather than later. >> emerging market stocks have been on a roll, they had their best week since back in july. i see it in the mexican peso. you don't see it anywhere else. >> the emerging markets have been reacting to the fed delay. and i think the fact that the -- you look at global growth, the only source of global growth that is sustainable is here in the u.s. for growth opportunities and all those reasons, the emerging market funds have been encouraged by the fact that the rise in rates in the u.s. have been delayed. as far as the trump victory is concerned, they will be the most affected by the trump victory because a dollar strengthening that could come about because the u.s. considers it a safe
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haven and a trade war. in the event of a trade war, people sought the dollar as refuge. >> we'll see what happens. we'll see if the markets start reacting to the polls and after the debate. william lee, thank you for joining us, with citigroup. the economy will be one of the main topics during the first presidential debate. don't miss cnbc's special your money, your vote coverage, monday night 9:00 p.m. eastern time. a lot of people are saying that is an event risk for the markets, could be a catalyst, we had the big fed meeting and people looking for what is next. >> 100%, particularly for sectors like biotech, banking sector, that will be key. >> it is a market mover. most open us have thibvious thi. >> check on oil prices, wti sitting at 10 cents a barrel off session lows now, down by 3.9%. the turn is intraday really happened when the headlines crossing saying the saudis were saying no deal when it comes to the next opec meeting next week in algiers when we saw the downturn in oil.
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that took down oil equities and seeing that play out in the stocks. look at the oil stocks here. devon energy down 5.7%. sticking with energy, the rig count numbers are out. let's go straight to sue herera with those. >> the u.s. oil drilling rig count is up 2 at 418 in the latest week. down 223 versus a year ago, however. and also u.s. oil drillers added rigs for the 12th week in 13 according to baker hughes. now to a major developing story in technology. twitter shares surging on reports that the company is close to a sale. neil doshi has a neutral rating on twitter, $15 price target. great to have you with us. a lot has happened in addition to the huge pop in twitter stocks this morning. google or alphabet i should say crm chief digital officer making
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mysterious tweets about why twitter could be it. what is your take on this? we heard this story before. >> nothing really surprises us at this point. microsoft bought linked in, sales force bidding for linked in. yahoo! got sold to horizon. we had good companies getting sold, bad companies getting sold. so at this point, you know, with sales force not getting linked in, maybe they are looking to twitter. from a business perspective, i think it doesn't make any sense, sales force doesn't really deal with, like, with advertising type of revenue and doesn't deal with kind of social media personal data from that perspective. so very different businesses and, you know, maybe growing at similar rates. we're a little skeptical on that front. >> business deal that makes no sense. we have seen some of them before. can you imagine a bidding war breaking out? >> you know, if -- i would not be surprised, also private
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equity tried to get involved here. google would seem to make the most logical sense as an acquirer. however, i think with the user growth really stalled at twitter, i think spending 15 or $20 billion, you know, would actually be a negative from a shareholder perspective for google. we would much rather see them spend that type of money on snapchat, an asset growing significantly faster, can plug into google and give google great -- much broader exposure to the social media side. >> is there any chance there are antitrust concerns if alphabet expresses interest? >> i think that's another issue as well. with the ec really looking down on google and scrutinizing every move they make, google tries to buy something like a twitter, you know that could first of all, you know, cause a lot of red flags to go up. secondly, if they're trying to close a deal in a short period of time, i think this will be dragged on for a much longer period. if the sales force came in with
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an as good or slightly lower offer than google, then perhaps twitter would be more amenable to doing something. >> all these companies you talked about have deep pockets. how do you go about contemplating the price of twitter, the value of a company that is seeing slowing in growth, and seems to go up when there is speculation that someone will come in and buy it. >> it is a great question. thankfully this is a publicly traded company, so we can look at their financials. the company is trading at 15 times ebitda for 2017. it is not a huge -- not a very expensive stock, but then again it not a very cheap stock. for a market cap perspective, stock is around 14. $15 billion. it is a pretty large acquisition for any of these companies to make. and, you know, i think if you're going to make a big acquisition, it needs to provide growth or something very strategic in value. not just for the sake of buying
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something. >> neil, thanks for your time. appreciate it. a neutral rating of $15 price target. it is the biggest single site hack. what you need to know to protect your information. and are we becoming more and more numb to hack attacks? plus, the tale two of ipos, one skyrocketing, up more than 46%.
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[tires screech] [car horn beeps] [texting keystrokes]
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welcome back. two ipos on deck, valvoline making the public debut at the new york stock exchange under ticker symbol vvv. the company, the second largest operator of oil changed stores. you can find its products at autozone and o'reilly auto parts. shares trading higher. up almost 7%. when they opened this morning, they were up about 10%. the other big ipo, apptio. the price above the range at $16. shares spiked 50% at the open, now trading at just under 23 bucks, up by 43%. goldman and jpmorgan the lead underwriters for this issue. first on cnbc, ceo and founder sunny gupta. thank you for being here. can you explain what your products actually help cios do? >> every business is powered by
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technology. and technology budgets are rising, 2.7 trillion today spent on technology worldwide. and cios are managing the business of technology and spreadsheets. apptio's cloud based applications help with spending. >> i was reading your s-1, you posted net losses that mounted year on year. revenue year on year, the growth rate has also dwindled. what are your forecasts in terms of being profitable or is being profitable a secondary concern of yours at this point? >> yeah, so obviously we are talking about the future, but you know apptio is a massive market opportunity in front of us, 350 customers and we believe every ceo and cio needs apptio needs the technology to spend better. the best days ahead of us, early days and we're balancing the
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vectors of sustained growth. >> your last funding round valued your company at about $23 a share, approximately what -- where it is trading at right now. that was a few years back, your last funding round. do you see that as vindication of where your company should be right now? has your company actually changed over the past three years? were you overvalued back then? what can you tell us about how you see yourself in the private market versus now being a publicly traded company. >> we're really excited about the outcome today. and it is a great validation moment for all the apptio employees and customers and shareholders and really the company gets valued very differently in the private markets. and that pricing from few years ago doesn't areally hareally ha impact on pricing or trading today. we focused on building a long-term sustainable business and this is a step in the
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journey rather than looking at the short-term stock price? >> we'll leave it there. congratulations, thanks for your time. >> thank you so much. >> sunny gupta, ceo of apptio which made the debut today. cybersecurity, sneakers and the cloud. the good, the bad and the ugly on deck. rought i.t. orchestration to our school and modernized our classroom experience. which is sick, unless you're the class clown. the cloud app ecosystem got everyone excited about learning again, instead of my hilarious pranks and shenanigans. [ frog croaking ] and the new wireless infrastructure lets miss smarty pants access her data from anywhere. i might have to actually learn something this year. modernized learning, thanks to i.t. orchestration by cdw. hey, jesse. who are you? i'm vern, the orange money retirement rabbit from voya. orange money represents the money you put away for retirement. over time, your money could multiply. hello, all of you.
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the ugly in today's trade. first to the good. shares of im people. imperva are soaring. the price up 21%. on to the bad, finish line, the retailer under pressure despite meeting pressure estimates. but during a conference call, they said current quarter comps are off to a slow start. ugly day for sales force.com, the worst performer now in the s&p 500, the company could be a possible buyer of twitter. and shares now are down almost 5.5%. >> thank you. who said radio was dead? iheart's bob pitman is taking on the likes of pandora and spotify. he'll tell us how straight ahead.
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hi, everyone. i'm sue herera. here is your cnbc news update for this hour. a girl has been pulled alive from the rubble of a collapsed building from aleppo with the tense moments captured on amateur video. the 5-year-old was covered in
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dust and debris. after being freed, she was taken to a local hospital where she is expected to survive. u.p.s. is testing the use of drones in its delivery system. it partnered with a massachusetts robot maker to use drones to make commercial deliveries to remote locations. morgan brennan will have more on that story in the next half hour. a former aide to andrew cuomo was in court today on corruption charges. joseph bracoco with two other defendants was arrested in a bribery and fraud case. and a rare al capone letter that reveals his softer side and his day to day activities on alcatraz will be auctioned off on monday. it was written to his son around 1938. it was signed, love and kisses, your dear dad, alfonse capone. love and kisses from al capone. that's the news update. that's one way of putting it.
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back to you. >> thank you, sue. a check on where the markets stand right now this is the first day of losses in four session for the major three averages. down by half a percent or so across the board here with the s&p 500 just off of session lows. what took us down lower in the middle of the day were these reports that saudi arabia saying no deal at the next opec meeting next month. that took crude oil down. that's just off session lows now too. you can see here energy equities are also taking a leg lower. >> to the bond market now for the hand wringing. rick santelli tracking the action at the cme group. >> they're going the other way, pretty much everywhere, in terms of global sovereigns and along the entire yield curve as well. to that point, let's look at intraday of 2s, going nowhere quick. we go to the weekend, a lot of monday city with the weekly closures. see the dripping continuing in the two-year, down a couple of base points today. down close to ten basis points in the ten-year.
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look at the one week of tens. i can't stress enough, you'll see this chart a lot the next one, august 1st start. all the 150 closes. it will be technically significant should we start to break in under 160. want to pay close attention, traders on guard and that same start date for dollar yen, if it is about weakening the currency, this dollar yen chart shows bank of japan isn't very successful, but you do want to keep an eye on what happens to the market goes the other way. in the middle of that chart, there is a bottom in august, 9989. round it to 100. any close could see action, especially in some of the over the counter option markets. back to you. >> rick, thank you very much. rick santelli. bob pitman has one of the longest and most glittering ceo resumes around, co-found irofer mtv, time warner enterprises and one of the most powerful guys in music, head of iheart media, a
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streaming and live entertainment service with over a quarter of a billion followers. just announced a new plan to take on the likes of pandora and spotify. and bob joins us from las vegas where the iheart music festival kicks off today. it is a big event. we'll talk about it in a minute. welcome. you've got some of the biggest headliners in music lined up for the weekend event. let me get, however, to the new services that you're rolling out. iheart radio plus and iheart radio all access. i've read the press release. you're going to have to explain to me what the heck it does. i don't get it. what can i do with this new service that is new and easy to use? >> if you look at iheart radio today, you got all the radio stations and you can make custom stations. but iheart plus or all access, what you can do is take that on demand experience and move it to the radio experience. so if you're listening to the radio, you hear a song, you push a button, you instantly replay a
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song. if 70% of people discover the main way they discover new music is fm radio, spotify and pandora users, and now they'll be able to just push a button and save it directly to the play list, put it on their music collection, so the two become seamlessly interconnected. you look at the size of the marketplace, just our broadcast radio alone has over a quarter of a billion listeners every month, only other two services that are over 200 million are facebook and google. and 90% of those people have no streaming service whatsoever. so got this huge market to sell into. will be able to do everything you can do on spotify. plus make your radio experience both interactive and seamlessly connect to your music collection. so to watch, i think for the mass market and most of the people, we're making it dead easy, simple to use, moving sort of past the early adopters, the technology, sophisticated people and the people who want -- >> if i'm driving in my car, and
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i hear the latest song from bieber, i'm going to -- i'm a bieber freak, i can press a button and it is going to replay it on the radio? >> if you're on your -- if you're listening to the radio on your iheart radio device, your phone, pumping it into your car, you can be you know, using it on your computer, yes, you'll have a button there, click it and it goes straight to your play list, replay it, do whatever you want to do. >> i have to use my app to do it, not like i'm listening to hot 97 or whatever it is and i press the button? >> well if you're listening to it again, iheart radio is another way we listen, use that radio, you can. right now we have almost 100 million registered users of iheart radio, fastest growing music service ever. and so off of that base we already have a lot of people there. >> this new service, bob, is a service that one has to pay for. and i'm just curious, i'm sure that you're going to say that
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that your service is going to offer these very unique features, but when you look at consumer who is willing to spend on music, is in a music wallet for the consumer, so there is only so many services you're going to pay for or is that unlimited in your view? >> i think what people pay for is they tend to pay for a particular service, i think right now you've got spotify competing with apple. what we're doing is not ancestor is not the ip. i think there will be some people that have spotify or apple that will add this to it because we're making radio interactive. like today you probably have netflix, apple tv, pay-per-view on your cable system, and other services altogether. i would expect the same thing is happening to music and this is the first service, first service that is going to be differentiated from the others and coming at it from the radio side, where all the users are. we have 250 million of them,
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many of those people have never bought music. but i think here this will be dead easy, simple, and convenient. iheart radio, basic service, will be free. but if you want enhancements, that will be adding a charge to it, but i think it is, again, a whole fresh market and now it is the mass market. >> isn't it going to be a lot more expensive for you to license the music directly from the labels streaming versus what you do traditionally in radio? how much more is that and are the chargers to the consumer going to make up for it? >> the idea is, yes, we're going to pay a lot of money to the music companies we hope and to the artists. but that will be a percentage of the money we're bringing in from the consumer. we're all in this together. we're partnering. we're putting enormous amounts of promotional value behind this. estimated almost a billion tha s dollars of advertising. i think that's why it is done so
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extraordinarily well. and we anticipate putting that same kind of muscle behind this as well. you listen to the radio stations, they're telling you how to use it and they're going to be seamlessly connecting you. >> we're talking about new radio here, i think. i'll characterize it that way. how is old radio doing? over the air? >> by the way, that's about the average, 90% of listening to all radio is broadcast radio. our broadcast radio listening last year was up 10% year over year. and digital listening up 30% year over year. every bit of digital is mathematically additive to it. good old broadcast radio to the consumer looks a lot like mobile. that radio in the car is probably the most widely used mobile device in the world, and we don't see that declining at all. >> if we can pivot, you're a co-founder of mtv, the ceo of mtv networks. when you look at what is going on with viacom, one criticism of the former management now is
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that it had been mismanaged. a lot of the great brands, the ma marquis brands were largely ignored and underinvested in. when you look at what happened to mtv, what is your assessment? >> i think when tom and judy were there, who worked with me at mtv, we were all creative people. you had a creative person sitting at the head of the company. and i think what was always important was the creative idea first. if we do something new and exciting, the consumer loves it, we'll figure out how to make money on it. that got turns a bit. good news is sherry and the board look like they're back to, this is a great creative endeavor, we'll make creativity the forefront of what we're doing and that's probably really good for the business. >> tell us quick about the music fest, u2, drake, britney, sam hunt among others. >> pit bull, on and on, great fun. you should be out here. i don't know why you're back
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there. >> i don't know why i'm here either. i keep threatening every year to come to it. >> come on. >> next year. i'm coming. >> next year. >> maybe if bieber comes. >> bieber has been there before. >> he's been here before. you just missed the year. >> i like that song, what is that song i really like? >> sorry? >> what is it? >> sorry. >> you don't love -- love yourself. got to go. bob pittman, iheart radio music festival kicks off today. see you next year, bob. next up, one housing stock that could be primed for a major breakout. that name straight ahead. what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods?
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the value of capital is to create, not just wealth, but things that matter. morgan stanley today i am helping people everywhere do what they do... better. i work with startups like alpha modus to predict markets five times more accurately. i am helping tv networks use social data to predict what people want to watch. and i worked with marchesa to turn fan feeds into a dress that thinks. hello, my name is watson. working together, we can outthink anything. [text message alert rings] [texting keystrokes]
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welcome back to "power lunch." as you just saw, stocks are in the red this hour, the dow is off about half a percent, but real estate is a bright spot. it is the best performing sector today and for the week. and if you're expecting a rally ahead in the housing name, there is one stock you need to be following. landon dowdy is here with that story. >> we continue our deep dive into consumer discretionary stocks now with a look at housing following a week when we saw results from lennar and a slew of economic data out, including the housing economic starts, a clear look at the market. and the news has been mixed, which begs the question, are the home builders on the road to recovery. year to date, dr horton down 4.7%. lennar slipping 10.5%. housing starts coming in well below forecast, but don't let those performances fool you. dr horton outperform rating.
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lennar reporting third quarter results on tuesday, beating the street's expectations with new orders and deliveries higher there. despite weaker data, robert wettenwall says the stock sell-off is a solid buying opportunity and the housing recovery is going to be stronger for longer, making lennar well positioned to benefit from the trend and the home builder announcing yesterday it will buy wc communities, sharing dropping 34% on the news on the week. and that on top of improved home builder sentiment, spiking to an 11 month high in september. slowly but surely on the road to recovery. >> landon, thank you. landon dowdy. time for power pitch. entrepreneurs have 60 seconds to convince a panel of experts if their business has what it takes to be the next big thing. >> hello. i'm dr. alex kryuk founder of the joule.
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it is not always time to find time for a cup of coffee. that's why we developed the wearable caffeine solution, by combining technology with stylish wearable. joule is the first caffeine bracelet. it uses a patent deliver technology that helps deliver caffeine through the skin gradually over four hours. with slow release, it doesn't -- crashes like other sources of caffeine. you can get a boost while running, studying all without having to miss a beat. it has the potential to reach millions with total market size of coffee products in the u.s. of $30 billion. we are poised to launch. >> welcome to power pitch. i'm melissa lee. you saw alex's pitch. joining us is alicia surret, kelly keenan, and david wu.
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we heard alex's pitch. he's in the hot seat. alicia, first question. >> on the research front, i understand there is research around transdermal patches but not on your product. when can we expect research on the use of your product? >> not a medical drug, so we're not planning to do a clinical trial for the product. it is not required with regulation. so -- but we already did our tests and we know that the product is working. that's why we're ready to bring the product to the market. >> kelly? >> still a lot of information i want to hear about and hopefully will shortly. are you selling online yet? >> we're not selling at the moment. the product will be available soon in a few weeks from now. and it would be sold online. >> david? >> who is exactly your perfect target customer for this product? >> our major customers are the people who really like coffee and who really like to have a boost throughout the day. they don't have time to go and buy another cup of coffee or energy drink. >> we have one of the bracelets here, if you can walk me through
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exactly how you use it. >> the bracelet contains the two parts of it. so one part when you can apply the patch, once you apply the patch, you can put it on your skin and you can wear it for the next four hours. >> so basically the patch is on this bracelet. >> yes. >> kelly? >> so you said this will require fda regulation. where are you in that process? how long is it going to take? >> we're finishing this process. it would be manufactured by the time we have -- we would file all the required documents. >> i would like to hear more about the distribution strategy. are you only going to sell direct to consumer or looking at retail strategy here? >> we'll approach the amazon exclusives, pure internet market strategy. we have a product available to be sold on our website. and the third thing is that we are in the discussion with a few north american and european distributors who would like to work with this product in retail. >> okay, we heard what alex had to say. we want to know if the panel is in or out. what do you say?
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>> i just don't have enough data yet about people using it on an everyday basis to prove that it is more than just a novelty. so unfortunately for now i'm out. >> kelly? >> it is a cool idea. i'm not so sure that the wearable technology is what consumers really want. the patch itself might be something they're interested in. i also like to see more about how this gets delivered to the consumers. right now it is just a little too early for me. so i'm out. >> all right, so two outs. david, you? >> i think it is the right team to come up with the delivery mechanism, but i don't think they have the right people on the team to build the big breakout brand so i'm going to be out. >> three outs. alex, what is your reaction? >> i'm really grateful for the feedback and for the time and thank you. thank you. was a great experience for me. >> okay. well, thank you, alex, from joule and our panelists. that is today's power pitch. you heard what the panel had to say. find out if you're in or out on joule. follow the conversation on
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twitter. for more, head over to power lunch. the biggest single site hack in history. 500 million, half a billion yahoo! accounts compromised. it happened two years ago. why are we only finding out about it now? what you can do to protect your own information next. ♪ using 60,000 points from my chase ink card i bought all the framework... wire... and plants needed to give my shop... a face... no one will forget. see what the power of points can do for your business. learn more at chase.com/ink
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want to check it on the markets here. we're just about at session lows across the board. on the dow, the s&p as well as the nasdaq. and look at apple, intraday specifically because we did see a turn lower here. it is sitting at session lows. really precipitous decline, just in the past 15 minutes or so. it is now down by 1.5%. as soon as we get more information on that, we'll get that to you. we're also following the story on yahoo! 500 million accounts hacked. it certainly is big. but the question is how does it measure up to other historical data breaches? eric cheney is here with more on that. this has to be one of the biggest. >> not one of the biggest, the
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biggest. this is the biggest data breach ever. you'll see other high profile tech names like my space, linkedin and ebay. each saw well over 100 million breached accounts. the biggest data breaches were by accident, like an employee losing a laptop. now hacking is by far the biggest reason for breaches and the biggest hacks ever have all happened in the last few year and we're finding out about them this year. one scary thing about the numbers, how many times a company will first report a small number, like say only 6 million accounts and then offer up a more accurate estimate, let's say over 100 million accounts. in the case of some of the examples we have seen. similar with yahoo! this summer, we saw 200 million records were available for sale on the black market. but further investigation found that total number to be half a billion, in addition to the numbers going up, we're seeing a big lag time between when records are stolen and when the public finds out. this yahoo! hack was two years ago.
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we should be immediately wondering what is being hacked right now that we will not know about until 2018. that's the scary thing. >> eric, thank you. cyberattacks of this magnitude becoming the new norm. have we grown numb to hacking headlines or should we be more afraid than ever for the safety our private data. let's bring in jeremy croel. jeremy, great to have you with us. are all these hacks the cost of living digitally or are the companies not spending enough money on cybersecurity and/or the hackers getting that much better? >> all great questions. let's just start with the basic facts. this problem is not going away. it is getting larger. if you think about how commerce has grown, there used to be a guy on the corner with a tag sale, eventually ebay emerged. now today there is a black market for data, it has gotten incredibly sophisticated and very efficient. so anyone who has got a catchment of private information
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that could be used to grab financial data, health data, intellectual property is definitely a target. there is about 2 million jobs shortage as of i think two years from now for cybersecurity professionals. so companies are scrambling to develop more talent. there is a lot of investment in technology. but at the end of the day, it is about are you doing what you need to do to protect yourself and your network. >> so are people too complacent? >> i think that most people don't want to go to the doctor before they're sick or before they might have a cavity. they don't go to the dentist. so preventive medicine more than ever is critical in this day and age. so i worry about complacency. i know in the corporate space companies are investing in massive amounts. there is a talent issue, but even when they're protecting themselves with technology, and perimeters, the employees inside
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are not practicing good cyberhygiene. you have to go seek preventive medicine in this day and age more than ever. >> i'll wash my hands repeatedly after this. so let me ask you this, there is 500 million records breached here for yahoo!. we hear those huge numbers. how many of those people will really be victimized, lose money, have something happen to them as a result of this? >> well, tyler, they're just one in a long conga line of hacking victims as a company. it is fair to say that the majority of human beings in the modern world have already been hacked or compromised, so then the question is, how fresh is your data when it comes to accessing bank accounts, corporate networks, or even health information. so you always have to think about staying one more step ahead of this threat. so i hate to say that most people have already been compromised, in the context of
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corporate m&a what we're seeing more and more of is vigilance before a deal is even consummated. do your due diligence, not just once, but on a continuous basis. >> i guess my question is the distinction between being hacked and being hurt. see what i'm saying? >> yes. so being a victim at one level and having private data being exposed or acquired and then whether that information can then lead to either financial loss or reputational harm. we're only learning about what we see published in the media or provided by the government. but in our work, where we see in the dark web lots of indicators of compromise that there is victimization going on without people realizing. so if you look at the average notification period, it is almost 9 months until a company realizes they have been breached. so that's imagining you're pregnant, you never got a sonogram and you woke up one day and you had a baby. that's the period of time. people are not getting the
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sonograms, not getting the diagnostics soon enough to detect. >> memorable metaphor. thank you. jeremy croel. >> thank you, melissa. >> facebook and google, biggest players in the video ad market, do they have too much pricing power. should washington take aim at big tech over that and other things? that story straight ahead. announcer: alvin and the chipmunks want to remind you-- bacteria can hide in food and make you ill. wow! announcer: but you can keep bacteria from ruining your day with 4 simple steps: clean, separate, cook, and chill. the roadchip to food safety starts at foodsafety.gov. new biwhat are we gonna do?ys... how about we pump more into promotions? ♪ nah. what else? what if we hire more sales reps? ♪ nah. what else? what if we digitize the whole supply chain? so people can customize their bike before they buy it.
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here's what's on the "power lunch" menu for the second hour. facebook shares sliding, reports it overstated a key video metric for two years. facebook and google the biggest players in the video ad market. do they need more scrutiny from washington. a watchdog, a score keeper. congress looking into one of the companies key medications. and a foodies fantasy, america's greatest restaurants delivered right to your doorstep. second hour of "power" begins right now.
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>> i'm melissa lee. a check on the markets. two hours until the closing bell, the closing bell for the week, stocks down across the board. this after two days of a fed fueled rally. we're sitting at session lows. the dow is now down by just about three quarters of a point. p&g and apple, the biggest losers now. look at energy stocks among the worst performers on the s&p 500. they're moving lower with the downturn in oil. and quickly if we can, take a check on apple, sitting on session lows, this is bringing the indices down to session lows here. apple taking a turn in the last half hour or so, understanding there has been data released indicating the iphone 7 sales overseas are under pressure. we'll get more on this as we have it. shares are taking a nose-dive down right now, we don't have the level. >> i'm sara eisen. in the headlines this hour, one person hurt in an explosion at a power plant north of boston.
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goldman sachs cutting 90 jobs, 30% of the investment banking jobs in asia. excluding japan. and the united autoworkers union seas 25% of members support donald trump, lower than the support for previous republican presidential candidates according to the uaw. >> we just want to bring you this developing story right now and that is shares of apple taking a nose-dive midsession. pull up the intraday, you see what i mean. the stock is now down by 2.25%. 11204 is the last rate here. this sputing pressu is putting major averages. we're learning that a data firm, research firm, is releasing data indicating that iphone 7 sales are weak overseas. this could be the reason behind this tumble here midday. paul meeks top tech investor, previously with saterna capital. great to have you on.
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>> good to be here. >> so much to talk about between twitter and what is going on with facebook. wasn i want to kick it off with apple. i'm not sure if you're an investor, but would you be concerned about these preliminary numbers being released by a research firm? >> i'm not really concerned about those. i was on your program about a week ago when the day of the iphone 7 launched and i'm just not impressed and so today's news isn't really new to me. the way i look at that particular stock is i don't think it can possibly go lower than 89, if the stock has a drop and it gets closer at the level, it is probably a better value buy, not a growth stock anymore. if it does have any kind of bounce on any news whatsoever, i trim the position. >> okay, so it has a floor at 89. michael, your thoughts. when apple saw that tremendous powerful rally, that one week, after the iphone 7 release, it also took up a lot of the apple suppliers and had a halo effect. helped the markets overall. would you be concerned if this
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has the ramifications on the trades that we saw rise along with apple that would have the negative impact and that could be a cloud over tech. >> yeah. i mean, it does bring up the same issue with apple seeing before. if it is a lifestyle company, it is reasonably priced and people pay a premium for it. if it is a hardware company and there is competition with its latest device, which sounds like that may be at the root of the situation here, then it is more of a hardware company. it is subject to competitive pressures and pricing pressures and it is not as valuable and doesn't deserve the same multiple. i think in the long-term, i'm not sure where this goes, but it does highlight the decision investors have to make with respect to apple. i would agree with paul's comments in terms of valuation. >> as we look to the nasdaq, trading not far off the record high, closed there yesterday, amazon is a big part of that story. you like the stock before. do you still like it now, above $800 a share? >> i think it is a great cloud
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leadership story and has some of the best fundamentals in the group. the problem is that the current price, i think it is just a hold. if the stock were to drop on something amazon specific or even a drop in the overall market, then i probably either initiate a position or add to it. but not here. >> michael, your thoughts on that. >> similar. it is a great company as a customer. i love it. the price is just way too high. and as an investor, i know people talk about how they can turn on the profit engine anytime they want. but they're reinvesting back in the business. and that's great. and it had people continually buy the stock. at some point, as an investor, i want to see profits and big profits given the multiple that it is trading at. so great company as a user. i need to see a big correction in the price to be interested from an investment standpoint. >> what about twitter? >> twitter, you want to talk about unicorns, twitter is the ultimate unicorn in a sense in that it is a real niche company.
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it is -- i don't know how to describe it, there is a market for it, but it has not been able to turn on the sort of mass population to its service, it is based on quick news feeds and people that are into that have used it. i can understand why the advertising may not be effective on it because unless you're an impulse buyer, you may not want to buy that way. and so maybe advertisers aren't getting the benefit there. the news was made on the recent streaming and the nfl and that's great, except i would probably rather watch on the big screen. it can be a profitable business. what it is, it could be a great add on to somebody and that's been the news today. but i don't know why anybody would want to pay a big premium for it. the revenue numbers may be challenged going forward. and i don't see a big growth story there going forward. it is an interesting company, but just not a great growth story. >> paul, last question to you, both you and michael like facebook. but paul specifically, the facebook story where they overstate this average time that users spend watching videos by
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up to 80%, is this a concern of yours or are you using this pullback as a buying opportunity? >> i'm using the actualback apu buying opportunity. all the metrics are brand-new and there is a difference between how snapchat is going to take a look at this and youtube and facebook, i don't think they're doing anything sleazy there. i think we need to define it better. >> guys, thank you very much for your time. paul, michael. we're just a few days from the first presidential debate between donald trump and hillary clinton. most polls showing a very tight race now. john harwood joins us now from washington. what happened to hillary clinton's lead? did she fumble or did trump just take the ball and run? >> well, she built a lead after her convention and mistakes that donald trump was making in early august. and built a lead that couldn't be sustained because donald trump was bound to get back some of those republicans. and the narrowing was donald
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trump bringing republicans back to him, but something is changing now, tyler. we're seeing the polling averages widen again. hillary clinton's lead in the real clear politics polling average had narrow to less than 1 percentage point. now up to 3 in part because our own poll this week showed in the two-way race, hillary clinton up 7 points over donald trump, that's pretty substantial. then look at a race including third party candidates, you see her lead, which also narrowed slightly, now up to 2.1 in part because our poll showed a 6-point edge in a for candidate race with gary johnson and jill stein. if you look at the electoral college, if you take all the state polls we have and take the averages, and assign a winner to all of those states, she's got 272, he's got 266, that is very tight indeed. but if we -- the movement that we're seeing this week in polls and two polls out this morning, also showed a six point lead for hillary clinton, it is pretty clear that the one who needs to
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make something happen on monday night in hofstra university is donald trump. >> it is, as you point out, not just a single election or single race, it is 50 state races. the key states from where you sit that mr. trump has to have to win. >> well, he starts with the 206 electoral votes that mitt romney got. he's got to hold them, means holding north carolina, that's a state that has been very close. then he's got to pick off some substantial ones. he's done well in the last couple of weeks in ohio and florida, give him those two. then give him nevada where he's also been leading, a state that barack obama won twice. he still does not have enough. has to win somewhere else and the question is where is that. is it pennsylvania? hillary clinton's got a lead there. clinton campaign believes they can stop donald trump by holding colorado, virginia, new hampshire. there are other states that have been competitive in some polls. michigan, for example,
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wisconsin. so there are some opportunities for donald trump, but he has got the uphill fight, hillary clinton has got the high ground where -- from where we sit right now. >> john, thanks. a reminder that the first presidential debate is just three days away. we got special your money, your vote coverage monday night at 9:00 eastern time. speaking of politics, some on wall street said a donald trump win would be bad for stocks. today, our very own kelly evans asked bruce berkowitz about what he thought of a trump presidency and his answer might surprise you. >> are you voting for donald trump? >> why did you ask me this? i'm going to be some such trouble with so many of my friends. so here's how i'm looking at it. i can't believe i'm telling you this. i'm not looking at the candidates. i'm looking at the people that will be doing the major work for the candidates. i'm taking away the personalities of the presidents and treating them more as they are the cheerleader for the
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country, pr. but i'm looking at the people who are going to do the hard work for the country in terms of reforming financial systems, welfare benefits, and i have to tell you, when i make that comparison, between who is going to be working on this side and who is going to be working on that side for the president, right now i'm picking the people that donald trump is picking to do the heavy lifting for the country. and that's -- and that can change. but i want to see who is going to be in charge of the treasury. i have a lot of difficulty with the last administration. >> more of that interview coming up today on closing bell. 3:00 p.m. the full interview on cnbc pro later today. endorsement. i like the candidate's people, not the candidate. fair? >> unusual? >> fair. oil down 3% today ahead of the big opec meeting next week. why should we believe there will be an agreement on production cuts this time? or a freeze?
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and why did the orioles give david ortiz a broken phone as a retirement gift. we'll explain coming up on "power lunch." [phone buzzing] some things are simply impossible to ignore. the strikingly designed lexus nx turbo and hybrid.
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an unusual retirement gift for david ortiz, big papi. baltimore orioles gave him a broken phone, the phone he smashed with his bat after striking out in 2013.
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look. wrong number. going to make a donation in ortiz's name to the damage drbt wounded phone project. >> my phone looks like that and i did not smash it with a baseball bat. >> what did you smash it with? >> i just dropped it a lot. >> crude oil is down significantly today. reports saying saudi arabia is offering to cut oil production only if rival iran caps its own output. the big question is whether an agreement between the two opec heavyweights is still even possible. wti down 4%. joining us is helenia croft. good to see you. >> thank you for having me. >> heading into a big week for oil. what are the rumors and speculation add up to when it comes to any possible deal next week. >> we had had competing headlines. we had headlines saying that saudi arabia was to cut. everyone thought it would be a freeze. and when the wire service story
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saying that some unnamed saudi officials don't expect anything in algiers next week. my view is they're putting a lot of advance work into trying to get this thing done. you have the saudis, the iranians, everybody needs the money. the question is can you bridge the gap? >> even if they do, what are we talking about? freezing at these levels or potentially even cutting? >> that kind of shock is a little bit, the saudi introduction of the cut. the saudis produce a high this summer, tend to trend lower going into fall. worked for them to say. the iranians, the big question, where do you assign their freeze number? the saudis say we want you to use secondary sources. it is really getting down to minute details to get the iranians on board. >> what is your base case? opec hasn't done anything in a long time. >> vethey haven't. the saudis have burned 200 billion in excess reserves. nobody wants to be back in the
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30s. the odds are greater this time than going into doha the last couple of opec meetings. >> i think of opec and the fed as separated at birth. heard the same, you know, sort of arguments forever and don't do anything. >> here is the thing, though. going into doha in iranians are very clear. we shouldn't have had any expectation of a deal. the rhetoric has been better. i would argue the economic circumstances are tougher now than they were in april. >> looking at a price. stays in the range of 40 to 50. still higher on the week. what is priced in at this point? >> i think no one, if you look at analyst service, people expect nothing to get done. it is out of consensus to say you expect even a freeze at this point. if we get a freeze next week, or a constructive framework, we're going to talk about it some more, that will provide support to oil.
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>> support to oil where in. >> a freeze, up a couple of dollars. if we get some constructive statement, maybe -- >> that's a natural trading range for oil. >> the question is going forth, going to november 30th opec meeting, do you change sentiment in this market right now? sentiment is we're oversupplied and opec has no pulse. i think if we get something out of them, we'll move higher. >> what is the -- where are we in the u.s. energy sector and how are the companies doing? we're seeing surprise drawdowns in inventories this week and rig counts -- >> rig counts are moving up this week. what is the head wind for oil, u.s. production. i think that is a variable everyone is trying to handicap. how fast can the u.s. come back on. >> thank you very much. good to see you. i have a feeling we'll be seeing you a lot more. the ceo of mylan grilled in congress over pricing of the
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epipen. we'll tell you which company could be dragged over the drug pricing coals next. and time to break up big tech? "power lunch" will be right back. ♪ there's no one road out there. no one surface... no one speed... no one way of driving on each and every road. but there is one car that can conquer them all. the mercedes-benz c-class. five driving modes let you customize the steering, shift points, and suspension to fit the mood you're in... and the road you're on. the 2016 c-class. lease the c300 for $369 a month at your local mercedes-benz dealer.
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mylan ceo grilled in congress over the pricing of its epipen. meg terrell with more. >> we know that the opioid epidemic is at gigantic proportions in the united states now. and one drug that public health departments turn to is naloxone, around since 1971. it acts as an antidote to an overdose. but some public health departments are saying the price has become a huge problem. look at dr. lena wen from baltimore. >> unfortunately the price of naloxone in baltimore city has more than doubled in the last few years. we are being priced out of this medication at a time when we need it the most. >> there are several manufacturers of different versions of naloxone products. she specifically was referring to a product she says rose in price from $16.50 a dose in 2012
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to $37 a dose in 2015 in terms of how the baltimore public health department is purchasing it. this is starting to catch a lot of attention. senator bernie sanders and congressman elijah cummings looking into pricing at am if amphistar. >> is their product, the one that is injected through the nose? the nasal one? >> there is a new product approved last year from adapt pharmaceuticals, a private company, called narcan. >> what is interesting about this is there are many manufacturers of this drug, where as for the epipen, they had a monopoly and were able to jack up the prices. this would imply the industry
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sort of cooperated in saying i'm going to jack up price and you jack up price and you can jack up price and everybody has a price increase here. >> the demand has gone up. >> the demand has gone up. wise something we're trying to get to the bottom of today. there are some products that have come into the market including one from caleo which makes the obvicu. they had a partnership with santa fe on that product. they mack a similar naloxone product that increase in price to $37.50 in 2016. people are starting to pay attention to these products. and not everybody is really getting focused on here in terms of being a bad apple. there is concern across the is it im. >> the biotech index had a strong week, despite all the political pressures. >> there is a lot of political pressure and something that investors are getting pretty used to. >> meg, thank you. >> facebook reportedly overestimated how much time its users spend watching videos.
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it is an advertising statistic that it uses to sell. have big tech firms gotten too big? and a big drop today for oil. we'll get the closing prices live from the nymex next on power. audi pilotless vehicles have conquered highways, mountains, and racetracks. and now much of that same advanced technology is found in the audi a4. with one notable difference... ♪ the highly advanced audi a4, with available traffic jam assist. ♪ but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business...
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i'm sue herera. some dramatic video of a deadly encounter between charlotte police and keith scott with scott's wife repeatedly telling officers he is not armed and pleading with them not to shoot her husband as they shout commands to drop a gun. >> don't shoot him. don't shoot him. he has no weapon. he has no weapon. don't shoot him. don't shoot him. don't shoot him. he didn't do anything. >> in other news, new york's attorney general has announced a settlement with trump hotels saying that company has agreed to pay $50,000 and shore up data security after breaches exposed more than 70,000 credit card numbers. authorities say the company waited four months before notifying customers of that breach. and nba all-star chris bosh
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failed his physical and was not cleared to play by the miami heat. the discovery of blood clots has ended bosh's last two seasons each with the heat. it could now end his career. that's the news update this hour. back to you guys. >> we're watching the price of oil here tanking into the close. jackie deangelis at the nymex with the closing trades. what do you see? >> good afternoon. it looks like a decline of about 4% on the session. just closing here probably under 44.5%. oil taking the nose-dive after reports that the saudi arabians said there will be no deal next week in algeria. crude still holding close to that $45 range and it has been sticking there for the last week or two. the problem here has been that the market has discounted the fact we're going to have some sort of an outcome in algeria. at the same time, it takes into account the what if scenario when the cartel meets. they seem fragmented now. earlier this week we had some countries saying a deal is
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possible if not even close. the saudis tamping down expectations for that today. the next meeting on record is november 30th. some people talking about an emergency meeting in between. still a lot of unknowns here. the bottom line of today's headlines is that if we don't see an outcome next week, we do stand in the same place that we once were, that we have more oil than we really can use at this point and that glut continues to push prices down. for the week, oil prices are up a little bit more than 3%. back to you. >> that weaker dollar helps as well. thank you. the major averages talking stocks now hitting session lows. apple one of the biggest drags on the dow, taking 14 points off of it now. bob pisani on the floor for an update. >> about 1 40, 150 we saw apple start moving down. apple's volume had been below normal up until then. you see that drop there. went from 114 to 111. it recovered a little bit around 112. there were some reports these are unconfirmed that a firm
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named gfk had a report out about potentially slower iphone 7 sales. i did speak to a representative from gfk, not aware a report was out, but said he was checking with the different divisions to see if a report was out. i asked if he could confirm that. they're getting back to us. as soon as we have more information, we'll let you know. this firm gfk does electronic sales measurements overseas and they have a division called boutique that forecasts electronic sales in the u.s. and in overseas. certainly within their area of expertise. as soon as i get confirmation on whether there is or is not a report and what the content of that, we'll get back to you. if you look at the effect this has on technology, the xlk is where everybody goes to buy technology stocks. apple is so big that it is 14% of the waiting of the xlk. that means if apple drops even two or 3%, the xlk will have not
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the same amount, but significant drop. so you see that's down about maybe a half a percent from where it was before. even the overall s&p down 3 or 4 points since that report, since the rumors of those reports came out. back to you. >> bob, i'm glad you mentioned that you had actually phoned gfk. the reason we bring it to your attention is because the stock is clearly moving on us. people have made trades on what is out there and we bring it to people's attention because it did move the stock and very clearly and, bob, it is interesting because after the iphone 7 was released, we saw apple at the start of a very powerful rally and that also took up a lot of the supply chain. we look at some of the suppliers now that gained most, sky rock solution, up around 15% on the heels of that iphone release. that is up sharply today. the impact on the semiconductor etf is very clear. >> you have a fairly quiet day after a couple of days where the markets moved on the fed here. so the volume is below normal.
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the volume we have seen in apple is greater than the volume for the whole day in apple. normally they do about 40 million shares, somewhere around there. i think we're probably close to 40 million. we were below normal up until about half an hour ago. just a lot of sudden churning in apple and you can see the response. >> shouldn't we say that the skepticism is warranted after the anecdotal reports last week on the new iphone 7 were tremendously strong from the likes of sprint, t-mobile, apple, saying the new jet black color was already sold out. >> i think this really underscores the doubts that people might have, apple certainly slingshot higher on the back of this 7 release and the back of what sprint and t-mobile said about its presale numbers. and it moved very quickly very fast. so, you know -- >> vulnerable? >> yes. >> shows you how vulnerable the stock is to a whiff of some bad
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news. >> the trader, the headlines, we have seen this before. >> bob, thank you. facebook overestimating how much time its users spend watching videos and that's a key metric for advertisers. even if advertisers are upset about the inflated numbers, they don't have many choices when it comes to replacing digital ads. to josh lipton with the story. >> when it comes to the fight for digital advertising dollars, mark zuckerberg and larry page have already won. the numbers really tell the story here. google will capture more than 32% of the global digital ad market this year. facebook comes in second at 13%. so who comes in third? alibaba and baidu at just 5%. when it comes to mobile ads, the story is the same. google takes first place at 35% of that market. facebook at 20%. alibaba at 11%. why do marketers looking to
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spend money on the web turn to facebook and google? martin utreras says the answer is simple. that's where the consumers are. google reaches people all over the world through search and youtube and android devices. also because these two companies have so much data about us. they know what you and your friends are shopping for and that is very valuable information for brands. so is the ad market healthy when there is such concentrated control? on the one happened, markers would love to diversify their spending. no business wants to be so reliant on just two vendors. however, brands also know that no companies get in the reach of these two titans. google's dominance has come under scrutiny in the eu, where the antitrust chief is probing some of the company's advertising services. >> josh, because there is only a couple of games in town, that doesn't mean now with the new corrected metrics people won't say i'm not paying that premium i used to pay you because your
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metrics were off by 80%. >> we'll see how it plays out. i think markers know really they can spread their money around to twit, pandora. it will be interesting how it plays out. they have a set group of money and marketers know the name of the game is getting with google and with facebook. you don't have a choice there. >> the mismeasurement here pertained to the time spent viewing video ads, not the time spent viewing videos. is that correct? >> that's as i understand it. we should mention that in this wall street journal report, facebook is also confirmed of course as always -- already fixed that metric. >> josh, thanks. want to keep the conversation going. our next guest wrote an op-ed on the topic of the scale and size of the big tech companies. steven strauss. welcome. you basically get to the idea that these companies might well be ripe to be broken up, but before we get there, the case
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that is on the radar screen now has to do with the measurement of time spent viewing video ads. is the problem one that needs to be solved by breaking up the companies or is it one that would require an independent auditor or an independent score keeper to go in and do the measuring rather than having advertisers rely on numbers supplied by google or facebook? >> well, first, thank you for having me on. >> glad to have you. >> i think it sort of depends what problem you're trying to solve. if you're trying to solve the immediate problem that there is no transparency, creating a process where there is much better independent auditing solves that problem from the advertisers point of view. some of the advertising agencies are starting to push in that direction. when you're looking to, for example, measure network tv, cable tv viewership, you don't necessarily rely on the network
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tv company, you rely on nielsen or a third party. so one thing i suspect you will see is advertisers, the agencies pushing down much more on the way of third party volume daali >> you break up large companies or move it break up large companies because they act anti-competitively. so i would like to get your ideas as to whether you think any of the companies you mention in your article, facebook, google, amazon, have acted anti-competitively, have they been bad or just been awfully good? >> actually, you have several different issues there. you may break up a company in anticipation that somebody else might be there and will do something evil with it. remember, google's model of do no evil. but if you look at facebook and google, there is a good argument, i think also on the case of facebook, that it helped
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to gut the news print industry. if you think about facebook as a distribution platform for news, i think it is about 40% of all americans say they get a good chunk of their news via facebook. it is a situation where they're taking the articles from newspapers, new york times, washington post, et cetera, wall street journal, and that are being shared on their platform, but they're getting a lot of the revenues. imagine if you like in the early 20th century, we all relied on newspapers and imagine there was a trucking company that controlled all of the distribution of new york times and new york city. and the trucking company was deciding how much profit it would make and how much profit the new york times would make. >> base td on your claim, who i getting hurt the most? their competitors like twitter and yahoo! the advertisers, the consumers in terms of limitation of choice.
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how do the regulators get at that? >> we need more information about what is going on. these are both companies that are black boxes. but looking at them, the particular piece of it that i would say i'm most worried about regarding facebook and google is cure ration of news and a look at facebook as an example. good old days, 1960s, 1970s, which you saw on tv, which you saw on the newspaper, what an editor curated. facebook goes to great things to say we are not a media company. we don't curate or make editorial decisions, we have this algorithm that is allocating news items. it is basically designed to maximize their profits. you look at the various conspiracy theories that are floated around. most notably the birther
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movement, you have to look at the companies and ask were they a part of why this basically lie lasted for five or six years. there wasn't anyone in editorial control saying this is dumb, we're not going to keep broadcasting this. >> we have to leave it there. thank you very much for your insights. we'll have you back soon. just because you live in new york doesn't mean you can't eat at your favorite kansas city barbecue joint. the man bringing food from the finest restaurants across the country right to your front door. no matter where your door might be. stay tuned. apparently our studio.
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see what the power of points can do for your business. what's going on here? i'm val, the orange money retirement squirrel from voya. we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? more of a spokes metaphor. get organized at voya.com. narrator:kubo: est place come on, this way.e... narrator: ...is in the forest. kubo: wow. narrator: so grab your loved ones monkey: don't even. narrator: and explore a world of possibilities. kubo: it's beautiful. narrator: visit discovertheforest.org to find the closest forest or park to you. you recommend synthetic and can yover cedar?to me why "super food"? is that a real thing? it's a great school, but is it e right the one for her? is this really any better than the one you got last year? if we consolidate suppliers what's the savings there? so should we go with the 467 horsepower? or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund.
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ok. sure. but are you asking enough about how your wealth is managed? wealth management, at charles schwab. our next guest made his name as a top investment banker during the height of the internet boom. now he's a ceo of foodie direct, a startup that chips iconic regional foods from the best restaurants, bakeries and shops right to your doorstep. joining us is brad caning. welcome to the show. thank you for bringing the spread. >> thank you for having me. >> treats from around the country. >> how did you maybe the
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transition? >> i've been at goldman sachs for 21 years and i i've been a passionate food lover. i was acting on my passion. i loved great food and great restaurants and the owners and the stores behind them. and felt that it would be great for a food lover like me to be able to access a diagnosestinat marketplace that would feature a highly curated selection of the best foods from all over the country. >> how does the business work? had h how do you get the food from the origin to me quickly and freshly? >> so you would come on our site and you could browse and discover and order from any one of our 125 purveyors. this barbecue is -- has been fully smoked for 12 hours in the mississippi delta by the brother and sister teams, owner chefs of
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a place called the shed, featured on a number of food network shows and it -- when you place an order, we charge your credit card, we send you a confirmation and we provide the shed with a -- the order contents, a packing slip and a shipping label so they'll ship out of their own restaurant. >> quick to do that. >> very quick to do that and we heavily test not only for the quality of the food, but also the quality and the packaging and our purveyors commitment to customer satisfaction. >> isn't it expensive for you in terms of shipping costs and do you get a better deal? is that why the restaurants don't do this on their own and they go through you. >> there is a couple of reasons. we're a marketplace. they can be part of the marketplace, be featured in a compelling way with great original content, and because of our volume, we have much lower shipping costs from u.p.s. and federal express than the
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individual purveyors would on their own. >> you led a lost big ipos. do you have plans on your own? >> that may be down the road. >> what i love is that this guy used to be a financial power, now brings lunch. >> you have to ship it in dry ice? >> this is ice cream. this is from one of our new purveyors, tin pot creamery in palo alto. founded by becky sunseri, the head pastry chef at facebook, left to pursue her passion. they got a series of great flavors including sweet barbecue swirl. and she likes to say it is the coolest thing to come out of silicon valley since the iphone. >> who is the pastry chef here? >> i don't know. >> foodie direct, huh? >> foodie direct. >> i bet it is a good gift. >> incredible products for gifts.
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this is a levy high pecan caramel apple pie, 18 hand peeled and hand sliced grannie smith apples in it. >> like a beehive. >> incredible gift. >> must weigh ten pounds at least. we're told that it isser inially -- it is nearly impossible to log on to your site. >> thank you for having me. >> if you think drones are annoying right now, it is probably only going to get worse. u.p.s. testing drones for packaged delivery and that's the start of the drone economy. we'll take a deeper dive when "power lunch" comes right back.
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comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. u.p.s. is starting to test drones for package delivery. morgan brennan is live in marblehead, massachusetts, for a firsthand look at the testing. hey, morgan. >> hey, melissa. i'm actually standing inside the drone labs at sci-fi, a start-up that's collaborating with u.p.s., which is also an investor, to test package delivery drones. now, the two companies actually launched a commercial drone delivery test yesterday for packages. and that made u.p.s. the first major transportation carrier to try this delivery attempt on u.s. soil. so this was a three-mile,
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eight-minute mission over water. it was a mock delivery of an asthma inhaler for a child on a remote island and it actually used this specific device. so this is a hexacopter that was designed by sci-fi works. it's fully automated, spoofproof, and can fly up to 30 miles an hour. it can stay in the air, conditions-dependent, for about 35 minutes. and with the faa rolling out new indications a little over three weeks ago, we're really tonight precipice here of a commercial drone delivery or a commercial drone boom. so so over the next ten years, it's unmanned aircraft systems could generate more than $82 billion for the u.s. economy. that's according to the white house. and faa officials estimate that there will be 600,000 drones in operation stateside within the next year. even so, drone use for package deliveries has been much slower to catch on, behind things like
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agriculture and aerial photography, and the reason for that is that one of these rules says an operator must have a visual line of sight on the drones at all times. for that reason, until that changes, which many experts do expect to happen as the data t gets collected, until that happens, it's going to be delivery scenarios with the one like u.p.s. and cyphy works, these urgent deliveries that makes the most sense when it comes to package delivery. >> it even has that signature brown and yellow u.p.s. logo. let's talk more about the drone economy. joining me now is andrew irkowitz, who just hosted a drone day for investors this week. you've done a lot of work on this sector. i guess the biggest question investors have is when does the regulatory environment actually catch up? when is it going to be legal from the faa to use drones? >> that's a really good question. i think that's the biggest
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question on everybody ice mind, the regulatory. they did pass a lot of laws recently, new rules, but they didn't really clear anything up. the line of sight is a big issue. for drones to get to 600,000 or 60 billion ideaed to the economy, you really need self-flying drones and so forth. you cannot do that until regulatory -- >> and just to clarify what you're talking about, the regulators said you can only fly them if the operator can see the drones. which would make u.p.s. and amazon -- >> and even to fly over people is very difficult to do. you have to get approval for that. so it's a very difficult environment right now. >> from an investor standpoint, the commercial part of the drone demand seeps like the bigger piece of the pie. but the estimates are all over the map. you put out in your white paper, by 2020, one firm says $2 billion, by 2020, another firm says $6 billion. what's an investor to believe in terms of what the actual promise? >> and that's why we try not to put a number out there, because i think it's so early. >> if there's no number, it's
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not an investable story? >> i think it's an investable story, but i think you've got to look towards something other than commercial. right now it's going to be consumer or a supply chain guy who supplies to every drone maker. we cover a company, amba, they went from a zero contribution to drones to now 15%. that is a big opportunity for them. >> what about the weight-bearing capacity of these things. if you're going to use them in package delivery, it's not going to be just little inhales for a sick person on a big island. they're going to be bigger and there are going to be power lines. >> when it comes to package delivery, we're kind of negative on that. aside from just weight concerns and automation, just, you know, privacy concerns and people watching these things fly around their house and land at neighbors. >> i can't imagine in new york. >> but agriculture, mining, you know, real estate, there is a numerous number of other opportunities there.
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self-flying is the big one. that's why we like ambrella is designing the chips. >> wine drones. >> chipotle is working on burrito drones. >> that's vital delivery. that's urgent. >> andrew, thank you. we'll keep an eye on that. i'm sure we'll have you back to talk about the drone economy from oppenheimer. and if you're looking more ways to play in the drone space, clever wording there, here's a look at the ten highest weighted components of the drone index. go to cnbc/ken schole for more. check, please, is next.
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check, please. the pow"power lunch" viewers ha spoken. they have the power. the foodydirect website we just told you about is down right now because too many "power lunch" viewers were on it to order their lunch. >> it's to die for, we split a piece. >> and the idea was interesting. >> apple shares still down about 1.8%. bob pisani's got more on that gsk report. >> and there had been reports earlier on from gfk that iphone sales were slower. the company has responded to us, asking for information. they said the findings were based on a point of sale data in 17 countries, during the launch
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weekend. however, they've reiterated, this is for subscribers only and they will not be releasing any information. that's all we've got right now. >> so they're confirming that the sales are week? >> no, they're not. they're saying the findings are based on a point of sale data in 17 countries during the launch weekend and they won't be giving anymore data. >> thanks, bob. we'll track the data from apple. thanks for watching "power lunch." "closing bell" starts right now. hi, everybody. welcome to the "closing bell" on this friday. i'm kelly evans at the new york stock exchange. >> kind of an eventful friday at the end of a busy week. i'm mike santoli in for bill griffeth. stocks breaking their three-day winning streak today. energy's the biggest loser with oil prices down 4% right now. and apple selling off late in the afternoon, which is weighing on the dow, not to mention the nasdaq. >> and twitter is surging on david faber's report, the company is moving closer to

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