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tv   Squawk Alley  CNBC  November 2, 2016 11:00am-12:01pm EDT

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good morning. it is 8:00 a.m. at microsoft headquarters. 11:00 a.m. on wall street. squawk alley is live. ♪ good wednesday morning. welcome to squawk alley. along with zillow ceo who has a lot to talk about this morning. good to see you. a tight race from six days election day. the real clear politics average shows hillary clinton up a
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little over two points. business leaders continue to speak out about the election. this is what mark cuban told us on this program yesterday. >> he is going to say things that are stupid and ofshive that could lead to some sort of military action not originating from the united states but from another country that is the worse thing possible for the stock market. >> so spencer we are looking at the longest losing streak of the year, maybe five years, depends how we close today. all is all that a reaction to the things cuban is talking about? >> i think it is. we saw this friday with the new fbi letter coming out. the market hates uncertainty whether stock market or housing market. what could be more uncertain than prospect of a president trump? >> some say a president clinton. >> i think the most ardent trump supporter would agree that trump
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revels in being unscripted and off the cuff. you don't know what he will say and what he will do and that is the definition of uncertainty. >> that seems to be the crux of his argument but he went on to say that the risk premium for clinton winning the white house isn't necessarily zero, that spending will remain at higher levels, that there will be foreign policy that not everyone agrees with. how do you match them up together when you think of how to invest. >> you have the known and the unknown. the fear of the unknown is greater than volatility. from a housing perspective we look at both candidates and what most housing economists say is clinton will be neutral. the survey of 100 economists that we collected data on seems to agree that that is general consensus. >> wouldn't you expect the market to figure it out over time how trump works, how he
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communicates? >> there are questions of international policy. either candidate when elected president will be stymied domestically. there is no doubt they will walk in and implement policies. if there is a president trump what foreign adventures will he take us on? >> and that scares people like mark cuban and the market. >> we think most near term about we are getting into the holiday season and will there be a hangover and where will election results manifest itself in the economy. neither of these candidates will emerge unscathed. what does the hangover look like? >> it is a contested election. that would be the worst possible outcome that clinton wins and trump doesn't. it doesn't concede defeat. we have who knows how long of this cloud over us that will be very unfortunate. either candidate will lack a mandate when elected and a
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contested election will create more uncertainty for the market. >> what if clinton wins, it's not uncontested but the overhang of what the fbi looks into continues? >> that seems like the most likely scenario. that will create another cloud over clinton. it will be difficult to govern because trump catalyzed the right and created so much attention and focus on clinton's flaws. if there is an ongoing investigation it will make it more difficult. >> that's the only thing that we can agree on from this is either case is not clear as skies ahead. >> spencer mentions housing speaking of the election and housing. here is a question. which candidate is better for the housing market? we have thoughts on that in washington. >> reporter: hard to say because housing has been absent in the political rhetoric.
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neither candidate put forth plan to reform mortgage market nor to accelerate what has been a slow and bumpy housing recovery. housing will come down to regulation and the government's role. donald trump is anti-regulation opposed to dodd-frank. if he were to break down the regulation in the mortgage market and banks were less afraid of getting sued we might see the mortgage market open up a little bit. he favors private capital but bringing that back to a still shaky mortgage market is a lot harder than it sounds. hillary clinton has talked some about affordable housing in under served communities. there have been proposals for down payment assistance programs. she would be building on what is already in place in the obama administration that is lowering fha premiums, cutting guarantee fees, both of which make mortgages cheaper and help borrowers to qualify for credit.
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>> i think there are barriers to housing that are relatively easy to remove and can be done via executive power. we don't need to re-invent the system on day one. >> now, in the end housing comes down to the economy like everything else, whichever candidate is better for jobs and incomes will be better for housing because those are the primary drivers of homeownership. if you want to hear more opinions on this it is online. >> thank you for that. our next topic microsoft says a group of hackers linked to the russian government were behind cyber attacks that exploited a security flaw in windows. microsoft says it will release a patch on november 8. microsoft ceo set to speak at an event in new york city. we will monitor that to see if he has comment. just in the last couple of weeks the narrative had begun that it was microsoft doing the interesting things, not apple.
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>> i mean, the clear winner of this election cycle and news cycle have been the cyber security stocks and cyber security overall. if you are running a public company or private company and you are not focussed on cyber security you have your head in the sand. this is moved out of the suite and into the board room. what is interesting about this situation is google is the one that actually identified the hackers and posted about it. >> which did not make microsoft or adobe -- >> microsoft was very disappointed to say the least that google called us out publically. i think they are grateful that google identified the flaw. it's a lot to chew on as a tech leader. >> google said it found the flaw about a week ago and it has an obligation to its users to disclose it. what is best practice. microsoft will not patch it for another week. >> if you ask best practices to discuss it privately google made
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it publically known that there is a hack on a competitor service and won't be fixed for another week. tech companies work behind the scenes all the time and share information all the time. that was a bit surprising to those in the know. >> it is rich considering that the majority of mobile hacks happen on the android operating system and that a campaign manager for a major political party had all g mails dumped on to wiki leaks. you think they were trying to have press deflection? >> i don't think so. i like to believe that they really were doing the right thing for their users and we weren't motivated by other moti motives. >> why shares of those companies aren't higher? >> i think the stocks come out with a bang. and then they end up trading on company specific issues, not macro issues.
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cyber is in the news but they had a big company. the big surprise to me is daily dumb beat of wiki leaks information is that there haven't been more revelations or scandals. we have learned that a couple of days ago we learned hillary clinton sent well-worded e-mails to parents concerned about the foundation. we learned eric schmidt sent advice to the clinton campaign. we learned dnc leadership wanted hillary clinton to get the nomination. those things should surprise nobody. with tens of thousands of e-mails i kind of felt there would be more juicy stuff. >> a couple more days. >> there is a lot to sift through. there could be something on it. >> i assume every e-mail i write will be publically revealed. it's just that is the day and age that we live in. you should assume that, too. as i say, it is surprising that more hasn't come out. >> let's get to shares of zillow
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enjoying a nice day back to 35 beating on revenue and earnings, raising revenue outlook for a full year thanks to increase in user numbers. we had on tough quarters this doesn't appear to be one of those. >> revenue up 35% year over year. fwr we raised full year outlook. things are going very well. the benefits of our combined audience scale are starting to acquire fruit. all brands have between two thirds and three quarters of all home shoppers looking for real estate either on desktop or mobile. we are firing on all cylinders. >> are you sensing a flurry because people sense rates are rising? >> rates have been so low for so long. you have to remember how the math works. a 25 point basis increase equates to $25 a month increase on mortgage. $200,000 mortgage.
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the average u.s. mortgage 25 is $25 a month. it doesn't move until higher mortgage rates. >> we hear people complaining about supply that there is not enough on the market but making prices rise to a point beyond affordability. >> about half of home buyers don't get the first home they bid on. what remedies that is slow and steady price depreciation. we have 12% of all homes with mortgage upside down on their home. they can't list because they have negative equity. the issue with new construction is it comes in at the high end. there is not that much inventory at the low and mid part. >> we have seen the percentage of sales on some types of homes coming from first-time buyers. >> zillow released the largest study of all home buyers ever.
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it has got incredible information that shows 46% of all home purchases are gogoing to age 36 and younger. the millennial buyer is the buyer. that flies in the face of home buyer being in 50s or 60s. those people are using the internet and smart phones to shop for real estate and agents and much more smarter going into the transaction. >> millennials will end up having to buy homes. they are going up against biology . >> the media sometimes says millennials don't buy music or movies or cars. that is just false. >> if i show you a chart of home depot, whirlpool noticeable. >> i don't know about those stocks. i know that the demographic data
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says millennials want to buy homes and they are. half of all home sales are going to millennials. they are impacting the market in a big way. >> good to see you again. thanks for coming in. joining us from zillow. >> markets are cutting the losses at this hour. people are looking towards the election and the uncertainty and then the fed decision coming out and then there is this inventory build largest on record although underlying data is very nuanced. definitely worth looking at that. crude is down by about 3%. bro broadcom announcing it will buy brocade. broadcom is up 1.5%. take a look at visa. the company was reportedly set to lay offtween 800 to 1,500
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people. the company says it is eliminating some roles after acquisition of visa europe. the company didn't disclose the number of people affected. the shares are down about half of 1%. you see this in almost every single m&a transaction. that is a large percentage of the work force. square seeing a nice gain after beating on revenue and raising its full year guidance. the company's cfo will join us. watching facebook getting ready to report earnings after the bell tonight. we will tell you what to watch. shares of alibaba worth noting. a closer look at those numbers when squawk alley continues. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head.
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take a look at shares of square up 6.5% after reporting strong third quarter earnings this week. shares as you can see 11.81, one of their highest levels of the year. sarah friar is cfo of square and joins us from one market. great to have you. >> thanks for having me. >> you have now had three quarters not only of strong performance but of increased guidance for the full year. have you previously been guiding too conservatively or has momentum been better than expected? >> i think the company has been executing on all cylinders. we have definitely executed
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beyond our expectations. we see it in our results. three quarters of beating the overall analyst forecast and lifting our guidance. we are particularly pleased with the year over year growth and adjusted revenue. >> one of the big parts of the square growth story is square capital and lending $208 million in credit extended to small businesses including square customers and including those who are not square merchants. how does that break down? how many people outside the square ecosystem are taking you up on a cash advance? >> as you mentioned, the business has been going from strength to strength. that billion dollars went in just two years. it is amazing for a product that is just starting from scratch. you are right that one of the avenues for growth is starting to work with partners so we announced a partner in the quarter and began to take the first step into merchants that aren't necessarily on the square ecosystem.
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it is just one step. there is still a lot of opportunity in our base. over the next several years most of our growth will come from square sellers sitting on the square ecosystem. >> you know, the most iconic symbol of the company is the square reader that plugs into an iphone or sits on the counter. that is becoming a shrinking part of the business although credit s swrks uisse upgraded your stock based on the fact that hardware losses are expected to be smaller than previously thought. how big or small a part of the business would you like that to be? >> so absolutely the whole ecosystem is premised on hardware and software and services that we add on top. hardware is important because it is a way for us to bring our sellers on to the system with the best possible technology. you know the head phone jack we released a new reader at the end
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of last year that connects to the phone through blue tooth. it was important because it accepts things like apple pay and android pay just making it much more secure for the seller and the buyer and also just so much easier. i think it is also worth noting that so much technology is coming through software so the amount that hits the head phone jack is down to about 18%. that is software way of taking payments. it is about staying foot forward from a technology standpoint and ease of use standpoint. >> when you look at the trajectory of small business creation or expansion in this country whether or not you think the election is material in how that changes over time. >> so the resilience of the u.s. economy has been wowing to watch. i think you see it in square's results. so the fact that we are now processing $13.2 billion, almost 40% year over year we see no
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slow down in just the health and just the vibrancy of that small business market. i think almost 500,000 new businesses are created monthly. i think that is a huge part of what keeps the u.s. economy strong. i think regardless of how the election turns out we will continue to see that just growth from the entrepreneurs who really get business going in this country. >> are there parts of the country where growth or expansion is slower than in major cities because of some of these head winds and because of the economic forces holding consumers and businesses back? >> it's an interesting question because square is so broad we actually get a really deep real time look at microcosms. one example is weather. when we saw the hurricane blow through florida we absolutely see that impact happen to businesses and we want to be there as they get back up on their feet and make sure that while other systems might be down square because it is mobile
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is right there with them. i think beyond that we do watch to see are there parts of the economy perhaps particularly merchant types that are slowing or growing faster. i wouldn't say right now that we see any particular trend happening. i would go back to what i said previously that small businesses are very healthy at the moment. i think it is because they can do things like get access to capital, getting right down into places where banks, et cetera can't reach any sort of cost effective way. >> as square diversifies and adds new businesses and refines its strategy there are some analysts who say parts of the business that were previously focuses for the company can you talk about whether you see square owning caviar a few months from now? >> we are delighted with caviar's performance. i think we got into that business for exactly the reason we are in business. we want to bring more sales to
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our seller base. caviar does that. if you are a restaurant you are constrained by the size of your restaurant and the amount of time where you can feed people for dinner, for example. what caviar does is opens up that restaurant kitchen to do things like delivery or pickup. since we bought it orders are up 11 x which is an amazing growth trajectory. it helps us get into bigger businesses. so the average caviar plus square merchant is doing over $500,000 in revenue. so for us we view it as core to our strategy to help sellers grow. i think as you look into next year our goal is to bring it more tightly into the fold and make sure that all of our ecosystem gets more and more tightly integrated so we can create that cycle back to sellers. >> we covered a lot of ground. appreciate your time this morning. the cfo of square which has quite a few buys on the stock.
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11 buys and 14 holds. up next on squawk alley alibaba shares after beating on both top and bottom line. they have been up pretty sharply but now are lower by close to 1% despite revenue being up year on year. we will go beyond the numbers with a closer look in just a moment. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
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alibaba shares losing early gains after earnings beat on top and bottom lines. we have a closer look at that. >> pulling back slightly but the stock is up nearly 25% since january. the e commerce giant has been able to successfully shake off concerns about china's slowing economy. the company reported a 14% jump in annual active buyers to 4 39d million. but the more interesting story is perhaps the other areas where
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alibaba is generating growth. that is cloud computing and digital media and entertainment. executive vice chairman speaking about their importance on the earnings call earlier today. >> core commerce business builds up tremendous cash flow to enable investments in important strategic areas. two of these strategic areas are cloud computing and digital media and entertainment. both segments are coming into their own in terms of scale and market position. each seeing triple digit revenue growth this quarter. >> alibaba is doubling down on cloud computing much in the same way that amazon is. revenue jumping 130% year on year and the team reiterated this morning that expansion not profitability is their top priority. also address the elephant in the room, the recent new york post report alleging that one or more whistle blowers were helping the
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fcc with investigation. >> you don't think there is factual basis to the new york story. i just want to say i'm not surprised data leading up -- >> the chinese holiday coming up on november 11 that alibaba turned into the biggest 24 hour online spending bonanza in the world. this year expected to generate $20 billion. back over to you. >> thanks so much. up next, just six days to the election. we are live in ohio. one of the biggest battle ground states to see where things stand. facebook set to report earnings after the bell. a look at what to watch for when we return. man creates softwar, used by this bank, to protect this customer, who lives here and flies to hong kong,
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not just wealth, but things that matter. morgan stanley
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good morning once again. i'm sue herera. here is your cnbc news update. police have captured 46-year-old scott michael green suspected of killing two iowa police officers earlier this morning in an ambush style attack. the two were shot as they sat in
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their individual patrol cars. bill cosby returning to a pennsylvania court for a pretrial hearing related to his sexual assault charge. the judge deciding to allow the testimony from an accusers lawsuit to be used. two newly elected hong kong lawmakers barred from parliament for insulting china. scuffling with guards as they try to retake their oaths in the chamber. security guards tried to throw them out but other lawmakers rushed to their defense. taco bell will be offering a free doritos locoes taco at participating locations. the fast food chain promised that award if a player stole a base in game one or two of the world series which happened in game one. get in line. that is the cnbc news update this hour. >> can't wait for tonight.
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>> i can't either. six days until the election. new polling shows the candidates in a dead heat. the president giving an interview to the news where he addressed the fbi disclosure of new e-mails which dominated the campaign. >> setting aside particulars of this case, i know that she is somebody who has always looked out for the interest of america and the american people first and i do think that there is a norm that when there are investigations we don't operate on incomplete information. we don't operate on leaks. we operate based on concrete decisions that are made. >> our john harwood is live this morning having made his way quickly to dayton, ohio. >> reporter: you know, that washington post abc news
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tracking poll does show the race tied 46-46 today. clearly the clinton lead has narrowed. most pollsteres in both parties tell me they think she has the national lead. look at the battle ground map. lectorally she has the advantage. if you take states that lead to one party or the other she is still over the 270 votes she needs to be elected president. donald trump is pulling every lever he can trying to capitalize on the news about the fbi and hillary clinton's e-mails. he was in wisconsin last night. the midwest is a critical area for him trying to tell people if they voted early they have time to switch. >> this is a message for any democratic voter who have already cast their ballots for hillary clinton and who are having a bad case of buyer's
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remorse. in other words, you want to change your vote. wisconsin is one of several states where you can change your early ballot if you think you have made a mistake. >> reporter: it's very difficult for somebody to change their vote. hillary clinton is trying to hit back having surrogates vouch for her. bill weld who is the libertarian nominee for vice president went on rachel mad ow last night and said i can vouch for her based on personal experience. president obama in that interview that you played a clip earlier signaled without saying outright that he did not think the e-mail controversy involved a breach of national security and he does not think it involves any malice on hillary clinton's part. here is the president, more from that interview. >> when she makes a mistake, an honest mistake it ends up being blown up as if it is just some crazy thing. i trust her.
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i know her. and i wouldn't be supporting her if i didn't have absolute confidence in her integrity and her interest in making sure that people have a better future. >> reporter: an honest mistake blown up into some crazy thing. that is president obama's assessment. you can see him leaning in trying to use that plus 50% approval rating to ensure he succeeded by a democratic president. >> it is a race to the finish line. i know you race to ohio and will get more from you later on today. meanwhile, facebook is reporting earnings after the bell. today the company expected to report sales growth north of 50% over last year. that would be the fourth straight quarter that it came in at that level. joining us for his facebook forecast is senior internet analyst john blackledge. the company sets expectations for itself.
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do they run the risk of getting ahead of themselves? >> i don't think so. we are looking for 57% ad revenue growth driven by mobile. remember the company has beaten the last two quarters and we think they can beat again driven by upside to revenue and earnings. that would lead numbers to go up and we think the stock will grind up. >> there were some comments that maybe the real estate for their advertising was getting a little full. how much inventory do they have to work with and how much slack can instagram pick up from facebook? >> great question. so cfo mentioned that the ad load growth contribution would begin to slow down in second half '17. that is a ways out. that will not impact this quarter or next quarter. back half of next year. your report on instagram helping, there are levers for facebook's ad revenue growth.
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instagram is one of them. they rolled out the instagram stories in mid august. the company as of a couple of weeks ago said there is 100 million daily active users. that is a third of the daily users. pretty powerful given the launch in mid august. >> john, occuls estimates have come way down since this thing became known. zuckerburg said it has gotten off to a bit of a slow start. how concerning should it be? >> carl, i don't think it is that concerning at all. it will have no impact on this quarter, next quarter, probably next year. for us what we want to hear from facebook is engagement and particularly engagement at facebook. there is a lot of buzz in the investment community about snap chat and per our data here we see in the younger cohorts
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facebook and 18 to 24 cohort more users than snap chat. about 60% of them spend over an hour a day. the reason we found is aside from sharing content and video viewing facebook has broader use cases namely news consumption is huge on facebook. i think investors are looking for things like engagement, talk about video and the comments than probably aculus. >> and then the issue that has been the wildcard for this company and that is monetization of what's app and messenger. we have seen it evolve into chat box and partnership with pay pal. do we see meaningful revenue from messenger? >> i don't think so. not this year. perhaps we start to see it next year. maybe they are good enough when they start to slow the ad load
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at core facebook in the back half of next year they start to bring the messenger monetization. i don't think it will be impactful near term. the thing that is interesting that you bring up is transactional nature on facebook aside from messenger and what's app they introduced a market place on the facebook app. that is new. and that's another area that investors are looking forward to hear about tonight. >> that happens after the bell. sounds good. john blackledge always good to see you. >> thank you. when we come back a pretty good day for shares of yelp rallying after reporting better than expected profit giving up guidance for the rest of the year. we will get to that. dow down 23. rick santelli, what are you watching? >> well, you know, by afternoon we have a fed meeting. by night we have a big game in cleveland. and you know they are kind of connected. towards janet yellen.
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go fed go. go fed go. janet, what do you say? maybe time to raise rates today. talk about that after the break.
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we'll see you then. we are gelting a first look at fourth quarter gdp. steve liesman is in washington with that rapid update. >> first look at the fourth quarter after that vehicle sales number coming in better than expected. and we are off to a pretty decent start. 2.3 is the number. that is a bit higher than expected. i see a lot of numbers that might have been in the 1.5 range. this comes after the above trade number now tracking at 3%. as to who is where, the atlanta fed they started the quarter at 2.3 along with hfe, action economics and moody's analytics which calculates the survey for us from the five economists. we will see how that plays out. still a lot of data to come. we only have a small group that estimates the vehicle numbers.
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back to you. i know you write this number down on your hand and update it as the quarter goes by. >> every time we get a new one. thanks so much. steve liesman. let's get to the cme group. rick santelli and get the exchange. >> they are killing me with that. cubbies. the problem with one shade of gray, all of you thinking about the federal reserve, there is no flexibility at least thus far regarding one of the pillars and that, of course, is the inflation pillar in the preferred inflation games which is running what they still deem to be after everything we have been through, after growth cut more than half, productivity slashed and the target of 2% remains even though we can talk about how the notion is really pretty arbitrary if you look at the legislation that created that pillar there is no real number there. my point is this.
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the fed does understand flexibility. look at what they did to try to combat the great recession. who would have ever thought back in 2000 that they would have a balance sheet this large? flexibility on the labor market. the goal post with wheels with regard to what targeted unemployment rate would be the trigger. they have shown flexibility. all the flexibility that i have seen from the federal reserve, from the ecb, bank of japan, bank of england has been flexibility to do more, to do it longer and ignore benefit analysis which is difficult because these are first ophitems. my point is this. they need to have flexibility on the second pillar, as well. why? well, i have mr. olsen, former fed governor on today. his thought was we haven't reached the target. i push back.
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what if we don't reach the target for another couple of years? there are damaging aspects, unknown aspects, unknown outcomes, negative rates, impact on the financial markets. all of this. it will be very difficult for one central bank to break out and not the rest. we can learn a lot by how we follow europe in january down when the rates went down. think about things like leverage and the duration of fixed income sovereign products that basically have zero coupons. these rates start to move they will move big. my final notion is i talked about normalization for many years. sorry, i have to now decay that concept. i don't think we can go back to what was considered normal with central banking. i don't think it is possible anymore. that doesn't mean we can't address the new world order we are in but we are going to have to move slowly. they need to be committed and need to be forth right that it
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is the right move to try to put some semblance of back in the capitalist system. back to you. and go cubs go. >> good luck tonight. rick santelli and the rest of chicago. coming up, one ride hailing service looking to give uber and lyft a run for their money. rsu. it begins from the second we're born. because, healthier doesn't happen all by itself. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen.
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>> are lines and loyalty is constantly blurred. gm announced a partnership with uber in san francisco on top of its already existing partnership with lyft. it's not just uber and lyft fighting for your next ride. via is also disrupting the space with its own unique approach. bringing us up-to-date the founder and ceo to post nine. it's great to have you back. good morning. >> good morning. >> expanding to williamsburg and brooklyn. not to get too local on a national show. i like this line. >> we believe -- >> it took many years for people to realize that smoking is a public issue. that it's not just a personal choice. it really affects the entire health system. for transportation it's a similar issue. we really need to think about what our cities look like, what our air quality is like, and by allowing millions and millions of cars that have four or more seats in them to ferry around just one passenger, i think we're hurting ourselves. focussing on this is very important.
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>> although single rides are still reduced. it's still a more efficient use than a vehicle, is it not? >> single rides versus -- >> owning one that's -- >> owning one. >> it gets used 4% of the time. >> i think that's right. if we can fit three, four, six people into a vehicle, then you'll be that much more efficient. our cities will look different. i think we all benefit. >> the consumer benefits because the price is a lot lower. >> you're obviously not the only company with that world view, but when you think about where your company fits in to the ride sharing landscape, how did you design the model to say what we offer is a little bit different for riders, what we offer is a little bit different for drivers. yet, we can still be a going concern. >> we have a singular focus on shared rides. in that we're unique. that's the only thing we do. via was built from the ground up to provide shared rides. if you try the service, which half a million new yorkers have, i think you'll find the experience is quite different from anything else. it feels much more like a dynamic bus. you get in. you expect to see other passengers. vast majority of the time you're
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with multiple other passengers, and the whole atmosphere is really about sharing and the alga rhythm allows that to happen efficiently. >> does it change the way you have to raise money? strategicall strategically? >> i think it helps us a lot. it's clear -- if you think about instagram when they were going up against facebook, they were very focused on the mobile phone, on mobile devices on sharing on mobile devices, sharing photos at the time, and they had a very clear niche and expertise, and they were able to leverage that. similarly, we're able to leverage our technological benefits and just product benefits of having something that does one thing. does it very, very well. >> you use your own map service. not google maps or ways, which adds a lot of costs and complexity when you could just be leaning on another company. why do you do that? >> we also partner with google maps to get realtime traffic data, but that's a small piece of our mapping system. the core mapping system is primarily we built it ourselves. we get feedback from all of our
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vehicles that are driving around. you get feedback from google maps. it allows us to create a much more efficient algarhythm, and we could go into it in depth, but the core of being able to match riders and drivers quickly and efficiently, requires sophisticated mapping technology. >> we'll keep our eye on it. please come back. >> thanks. >> joining us from via today. when we come back, another look at shares of yelp jumping after reporting that unexpected profit in q3 will dig into some of those numbers. dow is down 26. don't go away. ♪ ♪ ♪
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shares of yelp surging after reporting a surprise profit for the third quarter. net income coming in at 2 cents versus a loss of 11 cents a year ago. also announce it will lay off 4% of its work force. that's about 175 jobs as it tries to refocus on the u.s. and scale back on international efforts. also a big mobile story here. elp says mobile web users increased 11% to 72 million average monthly users.
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desk top down 2%, but it's really that notion that sort of giving up on aspirations of expanding around the globe trying to focus on what they do wrl here in the states. zlo th . >> that refocussing is what investors like. i just checked the short interest because it has been a very popular name on investor short lists. only about 6% of the shares outstanding are currently being borrowed for short. certainly a lower number than in previous quarters too. >> yep. if if you recall canceled plans to try to sell themselves. they have consecutive quarters of profitability now for the second time since they went public. same as facebook going public. obviously different trajectories for the stock. as for tonight we're going to be busy watching fox, qualcomm, facebook, which we just talked about with john blackridge over at cowan. he points out only once since facebook's ipo have they missed on earnings. amazing. >> and revenue guidance the company continues to outdo not only the street, but its own guidance on that.
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that's why i asked him whether he thinks that maybe they're leading wall street on. as you heard him say, he does not at all. >> we'll watch that. of course, the fed decision coming up at 2:00 eastern time. skblo let's get to scott wapner and "the half." >> welcome to "the halftime report." i'm scope wapner. a lot to get to today in the markets, including the rollover and the continued one in tech stocks. first, new at noon today a new letter from paul singer's elliott management. >> hey, good afternoon, scott. i was about to say good morning. interesting words from elliott management. they always have a pretty long and well considered letter to investors. this one is no exception. for starters, they were up

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