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tv   Squawk Alley  CNBC  November 3, 2016 11:00am-12:01pm EDT

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good morning. it is 10:00 a.m. at wrigley field in chicago. it's 11:00 a.m. on wall street. and "squawk alley" is live. ♪ welcome to "squawk alley" for a thursday. jon fortt is back at post 9, sara eisen will join us for the hour along with henry blodget, business insider. great to have you. >> great to be here.
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>> to the campaign trail for our top story. five days to go until the presidential election. new national polls show hillary clinton once again pulling ahead of donald trump as both candidates set their sights on swing states in the homestretch. john harwood is live in lima, ohio weather the latest. >> i want to step back for a minute from this strongly republican county, al lep county where lima is located, to look at the national picture. donald trump has fallen two points behind in "the washington post" poll. if you look at the nbc news battleground map you can see hillary clinton is either solidly or slightly leaning in enough states to get her over the 270 electoral votes she needs to be elected president. now, donald trump tends to do better when he follows the direction of his campaign staff and stays on script. in fact, donald trump yesterday was musing out loud about that. >> we are going to win the great
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state of florida, and we are going to win the white house. we're going to win it. it it's feeling like it already, isn't it? we've got to be nice and cool, nice and cool. right? stay on point, donald. stay on point. no side tracks, donald. nice and easy. nice and easy. i've been watching hillary the last few days. she's totally unhinged. >> stay on point. nice and cool. nice and easy. there's donald trump reading the stage directions. but there are some places in the country where he is so popular that they look at the things that other people arnold the country consider, gaffes and things that are inappropriate for him to say and say that's what makes him a real person. i talked this morning to the chairman of the allen county republican party keith cheney. here's how he talked about that. >> look, every great leader has controversy. there's no doubt about that.
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what has been said in the past, what they said 10 or 11 years ago, look, in our lifetimes we've all probably said things that quite frankly we wish we hadn't. i believe that donald trump will be a true leader and that's what i'm looking for in america. >> you can take it to the bank. donald trump's going to win allen county whatever he says or however he behaves over the next week, but he's got a bigger fish to fry than that. he hopes to carry here in ohio, where he's ahead by five percentage points. -in a quinnipiac poll out yesterday. but he has to do more than that and carry states like florida he mentioned yesterday. within an hour we'll see jim jordan, the congressman representing this district and also the chair of the house freedom caucus. he's going to rally with some of these volunteers behind me who have been organizing and trying to get out the vote, make yard signs, that sort of thing. there are stakes beyond the presidential race in this
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election in particular the fate of the house of representatives, republicans are expected to maintain control, but who's going to be the speaker? some in the house freedom caucus have talked about moving to replace paul ryan, the speaker. they had a meeting yesterday. we'll talk to jim jordan about that when he arrives within the hour. guys? >> john harwood in lima, ohio. thank you very much for that. henry, turning to you on the markets, we asked a trump surrogate in the last hour whether he thought the sell-off was driven by the polls. he argued no. you think so, though? i think so. if you look at what trump represents it is uncertainty and risk and if you take what he's said about business at his word he is arguing for big protectionist tactics which historically have not been good for the economy, and frankly in today's global economy, an absurd throwback to some lost world. this is a global economy. our companies compete on a global stage. he has singled out great american companies for
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punishment and threatened them in saying in amazon's case, boy, are we going to have problems, going after ford. that is scary to any investor. and so i do think that one of the reasons the stock market is selling off is, in fact, his odds of becoming president are rising rapidly. >> a clinton white house is going to come with some uncertainty, too, if you believe any of those leaks. >> some, but most people think it will be more of the same which a lot of business folks like. yes, we'd all like to pay lower taxes, we need to get more pay to the middle class. that is the problem in this economy. but note that trump is not advocating for big increases in the minimum wage or businesses have to pay more. that's not what he's saying he's going to do. it's no surprise that of the top companies very few ceos are actually supporting him and a lot have come out strongly against him. >> which sort of makes me whonder what they would do if the gets elected president, a jeff bezos, tim cook, who trump
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has gone after by company name. do they suck it up and work with whoever is president? what's that. >> rick: relationship looks like? >> it depends on how he behaves. in public comments and behavior he's always been very vengeful. the idea is hit back harder pap lot of ceos have come out and said you know what, he's not the right leader for the country. would not be surprising to see him actually attack them personally for it and their companies to punish them for it. if so, the stock market is going to go down a lot more because that is not an environment conducive to business, not pro business in any way. >> he's gone after amazon, apple, google to the extent the questions about whether searches for hillary clinton were churning out the right sorts of things. to what extent do you feel like the executive branch has the power to specifically harm individual companies versus craft larger policies? and how does that affect the republican party overall if we have a trump presidency? >> i think what trump has shown
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he's very effective at doing is persuading people through the media to take action. and if he get up and uses the bully pulpit to go after amazon, go after google, macy's, nabisco for making cookies or whatever, he could easily call on people, you should boycott these companies. i think there's a lot they can do. >> he's said those things. >> absolutely. there's a lot he could do to hurt the companies. as an investor you look at -- >> can't you just -- they make the mistake all the time of taking candidates for their word and they become president -- >> he's meta smart argument for trumpl. don't believe anything he says. he's going to be a very pragmatic, effective leader. he would never do any of that. okay. that seems like a pretty big leap of faith, not that almost half the country is in the polls ready to make it, so we shall see. but, again, ignoring everything somebody says, usually
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politicians do what they say they're going to do. in this case he's promising to do a lot of things that have unnerved business people and investors. >> sort of an echo of what the president said this past week. we'll talk more about that later. we'll shift to an earnings story today. shares of facebook taking a bit of a beating despite topping estimates on the top and bottom lines. the social media giant passing the 1 billion mark in mobile daily active users. good news for investors ended there as the company warned about ad growth likely to slow in a couple years, costing risi rising. take a listen. >> ad load has been one of the three primary factors fuelling that growth with a much smaller contribution from this important factor going forward. we expect to see ad revenue growth rates come down meaningfully. secondly, on expenses, though it is premature to provide specific expense guidance, as mark mentioned we anticipate 2017 will be an aggressive investment year. adding top engineering talent remains one of our key investment priorities as we
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continue to execute on our three, five, and ten-year growth map. >> two things, people expected this day to come eventually, and it doesn't necessarily mean they their mp or duopoly is going away anytime soon. >> no. this is another great move by facebook and they've done it at least twice since the ipo, come out and said expenses are going up, margins are going down because we are investing for the future. each time, vost say that's terrible and they've sold the stock and it's the momentum investors, short term, of course they'll sell, puts pressure on it, but this is great for facebook. it is great for facebook users, and it is great for anybody who looks to business to continue to invest and innovate over the long haul. facebook has an incredibly high profit margin. they are simply choosing to reinvest a lot more of that in future growth and opportunities in great products for users. we should celebrate that. >> so they're not letting the valuation run away here, right, they're pumping the brakes a little. they tend to sort of
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underpromise, overdeliver when it comes to revenue growth and then sort of do the opposite when it comes to cost. they say we'll have all these costs and somehow they manage to spend a little less. should we look to instagram? should we look to areas like facebook messenger to see where the growth in 2017 comes from and where the upside might be? >> there is a lot of upside i would say in instagram, which is a huge platform we're seeing in business insider and insider, huge growth on instagram. not a lot of monetization there so that's a big opportunity. easy to see how they continue to grow at a very nice grade but i also agree i think there's a little bit of sandbagging going on here. otherwise you would see the stock down considerably more. >> advertising revenue growing 59%, even on margin, expanding 460 basis points, investment for growth, type of story, all the metrics on facebook. there stl a sexier growth story in this environment right now?
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>> the metrics are staggering. for a business this size to be growing at this rate and be this profitable, you've got to look at google, look at a couple of -- there are very few companies that have had that. the metrics are are tremendous. they're not just making up the idea that revenue is going to slow or they have filled the feed with ads. there's not a lot of space left there, so prices probably go up. google went through this transition as well, rolled out search to the world, had tremendously fast growth while they were doing, that but then growth slowed to 10% to 20%. facebook will do that at some point, but google has done just fine. the stock paused for a few years and it's off to the races again. >> are you worried at all the awl about -- i was looking at ex facebook and google. it's not exactly setting the world on fire. >> those two companies are swallowing an unbelievable amount of spending. >> then "the times," the journal, gannett, legacy media, it's tough. >> certainly legacy newspapers.
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television is doing fine. but legacy newspapers, what's really changed there and it's been very sudden is print decline, print advertising decline has suddenly fallen off a cliff. "new york times" down 19% year over year. that is hard to recover from. the great news for "the times" is they made five years ago a big bet on circulation and subscripti subscriptions. it has worked out beautifully. they will be in great shape even if they have to reduce their budgets over time. >> henry, a lot to cover. good to see you. thanks so much. henry blodget at post 9. let's get a check on the market ts right now, trading a little to the upside for the dow and the s&p, the dow looking to rebound from its current five-day losing streak. the s&p and nasdaq have fallen for seven sessions straight. right now the nasdaq is slightly to the negative,.11%. shares of fitbit are getting crushed, the company posting mixed results for its third quarter. its fourth quarter outlook, though, came in well below
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estimates. those revenues not coming in in the 20% to 30% range or even high they're the street was expecting. the company's now expecting sales between $725 million and $750 million for the holiday season comparing to estimate analysts up close to a billion in revenue, shares trading fresh record lows this morning. carl? >> when we come back on "squawk alley," an all-star lineup of exclusives starting the hp's dion weiss ler. that's next. then go daddy out with results after the close. we spoke with blake irving. and don't miss our exclusive wi interview. this man creates software, used by this bank, to protect this customer, who lives here and flies to hong kong, to visit this company that makes smart phones, used by this vice president, this little kid, oops, and this obstetrician,
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this week marks the one-year anniversary of hp, inc., trading as a stand-alone company. dion weisler joins us with josh lipton. hey, josh. >> hey, carl. dion, thank you for joining us this morning. >> great to be here with you. thanks for having me. >> dion, as we look to now next year, when we talk about your pc strategy, dion, the focus has clearly been you're going to go after that premium part of the market with products like hp specter, but others clearly see opportunity there as well, dion. you saw tim cook just unveil those new mac book pros.
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looking ahead, what are going to be your specific competitive advantages in this fight? >> of course in the past year this has been a story of reinvention. we're faster, more nimble, focused, and focused on delighting our cus mers every single day whether it's in our printing business or personal systems by. our personal systems business has been ma nighally focused on the premium segment, on gaming with really gaining traction in both markets. but we're not forgetting our core business where we've been successful for so many years. we're reinventing across the entire company. >> i know when it comes to pc, your investors are going to be really curious about how you protect those average-selling prices. we know they're under pressure for windows partners. is that going to mean over this next year you're going to have to invest more in software to arrest that decline, dion? >> well, it's interesting. when you look at the pc market, that's actually split between what we would all ordinarily
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think of as the classic pc business, but in addition to that, there's about another 50% of the business that includes accessories, displays, services. everything is moving to a service from transactional motions to contractual motions. we're building devices with services, being very successful with our manage print services and we're going to obviously defend our core business but move into these new areas that represent growth for us. >> dion, it's jon fortt in new york. i'm wondering how you look at the kind of pro premium end of the laptop market, not thin and light but the rest of it. apple clearly moving to remove ports, saying wireless is the future. do you agree with that? how do you strategically look at what the professional customer wants out of a laptop and the sort of connectivity that hp is going to provide? >> i think there's vus just a very broad range of customers along the spectrum of what i call complexity of the past, and
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people choose their devices based on that complexity of task. some customers want an incredible thin and light devices. we make those, two in ones, detachables, convertibles. of course wireless is here to stay and in our thin and light notebooks we've removed some of the rj-45 ports you plug the cables into and we have the ability to adapt to those through docking stations but of course wireless is very prevalent. >> and, dion, you know, we talked about your pc business. i obviously want to talk about your printing business as well. you have worked hard to reduce inventory of printing supplies, but i know some are wondering, dion, why hasn't stabilization come to that business sooner? sit just because that market is that bad, dion? >> well, of course the printing market is an annuity business, and in many cases the average life of the printer inside the consumer world is about three years, in the commercial world
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about seven years. so things we did four, five, six, seven years ago are still impacting our business today. we've made a lot of decisions to really place high value units and ensure that that drives the fly wheel of supplies well into the future. we're well on track to stabilizing our supplies business by the end of '17, and we're excited by the new portfolio really innovating every single day, particularly around security, the printer offen the trojan horse on the network. >> well, dion, thank you so much for joining thus morning. we appreciate it. >> great to be here. thanks again. >> josh, thanks for bringing us the interview. josh lipton. still to come on "squawk alley," well eel sit down with go daddy ceo blake irving, a cnbc exclusive, next. and later, game seven may have been played in cleveland, but it certainly was a wild night in the windy city. we'll take you there. see how rick santelli and his friends at the cm ex-group are feeling this morning after a nigh of partying.
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go daddy reporting better than expected third-quarter earnings. the company recently announcing e-mail archiving and encryption for office 365 users and a search engine for emoji-based domain names. what's next for the company? blake irving is the ceo and joins us now. blake, good morning. >> jon, thanks. good morning to you. >> so investors apparently having trouble parsing through these results praised largely on the street. stocks down a bit this morning though still up solidly for the year. so i want to focus first on what went right. talk about that, and then talk maybe about the applications business and why that fell a little bit short of what the
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street was looking for. >> yeah. well, as you know, jon, we've delivered above guidance both at the top line and bottom line, cash flow was great, conversion to cash was great. the business is doing well. internationally we grew at 27% on a constant currency basis, double-digit growth in every business sector. we felt pretty good both in domains and our hosting and presence business and applications business as well. we talked about a lot of new products and we're announcing some things we just recently announced that we really feel that are starting to really l t lift. i think the technology capability is starting to prove this platform we've built is a global platform and providing us the ability to expand our product line around the world pretty darn quickly. >> how much should we expect to see you push into voice service, voice products, basically phone calling over the internet for small business in 2017? and what kind of growth potential does that have based on this freedom voice acquisition that you'll be
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innovating? >> yeah. so it's really interesting technology. if you can use spotify or facebook, you've got the ability to have a good data feed. and what we've done is we've introduced a second phone line for that one phone that you carry around. so for small businesses who are putting their personal number on their website or their personal number on their facebook page to be reached, what we're doing is allowing them for about six bucks a month or less to be able to have a phone number that is personal on their phone that allows them to make calls from that phone number, receive calls from that phone number, and it's strictly a business line that protects your personal information. we view that as a new on-ramp for us. so, you know, we have on-ramps that have been basically domains, i think, historically for us. we have two new on-ramps we're prointroducing. one is build a website -- >> to the voice thing quickly, how much of that is an opportunity that's opened up for you since google seems to have kind of let google voice wither on the vine? there were a bunch of services five-plus years ago that don't
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seem to have a ton of traction. you hear smaller ones advertising on talk radio. is this a space where you see a lot of demand and no big mare take advantage? >> we do, and what we've seen is our customers actually asking for it. we pay a lot of attention to our customers. we talk to them 1.5 million times a month on the phone. so we get a really good pulse on what folks are looking for. they have clearly asked for this. nobody's really offering it. the selling motion we have with our organization and the way we talk to folks make us a really easy place to go acquire this capability. and when they talk about the phone company, the service isn't great, they'd really like to use our service capability to deliver that kind of capability and-in their business. you know, it's voice mail, it's receiving calls, placing calls. it's call trees, taking a voice mail and interpolating it into text so you can read it instead of listen to it. there's a lot of cool features we'll introduce and this stuff will start rolling out in the
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first quarter of 2017. we think it's a real positive market. we think it's going to gives us a little bit of growth. it's new. it's 2017. beal it rating and experimenting with it. we've told and guided the street, don't think this had been a big thing for us in 2017 but we're expecting to see customers use it, give us information, and we'll perfect the service over 2017. >> blake, i want's sara. >> hey, sara. >> hello. taking the pulse of your clients, your customers, largely small business, i did want to ask you about politics. you sit at an interesting intersection. >> yeah. >> the pro-trump supporting small businesses, silicon valley, which is largely backing clinton, and headquartered in a state that traditionally votes republican and now is a swing state. i'm curious as to how you think this election is going to play out and how it's impacting your business. >> it's not impacting our business at all. so we have republicans, democrats, independents, libertarians is our customers today. and i think both of the
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candidates have put forth what they think is the right proposal and program for them. clinton has got very specific things that she has said she'll do for small business, you know, loosened regulations on local banks, defer student loan payments, you know, giving a new tax credit for health care for under 50 employees and i think trump has basically said, look, we're going to basically lower taxes for everybody and, you know, going to get the tax advantages for big businesses and small businesses as well. so i think both candidates have kind of come in with a pretty clear notion of what they want to do to improve small business start-ups. i think hillary has said, you know, my dad was a small business, he was in the drapery business, so she seems to be kind of super close to it. but i think, you know, people are going to decide based on not just what they're going to do for small business but their overall platform. >> all right, blake. we'll leave it there. stock is down just over 4% today but still up 22% over the past
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12 months. blake irving of godaddy, thanks for joining us. >> thanks, jon. thank you. >> when we come back, another look at facebook shares, down 4% after words last night from the cfo about ad growth slowing down. we'll talk more about that after the break. another "squawk alley" exclusive, the ceo of adobe. what a name ha has been. and an exclusive with tesla's elon musk and ron baron himself 11:00 a.m. eastern time. you don't want to miss it.
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jooim . i'm sue herera. a passenger train crashed into the back of another in karachi, pakistan, killing 19 and injuring 50 more. rescuers are working to free people trapped in the wreckage. defense attorneys in the bridgegate scandal have filed for a mistrial in the middle of jury deliberations. yesterday they asked the judge to give new instructions to the jurors on the top conspiracy count in the indictment. the trial for a white former plimp accused of shooting an unarmed black man is under way in charleston. the judge issuing instructions to the 12-person jury before opening statements. michael slager is charged in the death of walter scott. if you can't deal with this election hype, jetblue feels your pain and is making it easier for travelers to get away with an election day air fare
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sale. the two-day sale has numerous flights that cost less than 50 bucks one way. you have until tonight to book the flights. that's the news update this hour. back downtown to "squawk alley." jon? >> thank you, sue. and normally at this time we'd be recapping the european close, but this week's close is at 12:30 p.m. eastern since daylight saving time ended in europe on sunday. european markets are currently mixed. the close is going to return to this time on monday after most americans turn their clocks back an hour this coming weekend. >> an extra hour of sleep. >> yeah. very confusing when the bank of england came out at 8:00 a.m. instead of 7:00 a.m. this morning as usual. >> that was insane. >> insane. and the pound jump was even bigger. i know you're mocking me. you wouldn't be the first. facebo facebook, meantime, beating estimates. the stock is falling right now, off the lows but down more than 4%. investors spooked by the company's forward guidance even as mark zuckerberg outlined
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plans to make the social media giant a video-first company. listen to his thoughts from yesterday's conference call. >> we are interested in making sure that the business model that we have works for folks who produce content of their business to make sure they can make money from it so their best content comes on facebook. >> joining us now is neil doshi, analyst at mizzou hoe, and eric sheridan. both have lowered price targets on facebook this morning. both have a bye. what is the take-away, eric, if you're an investor that owns facebook or is looking to swoop in on this dip? >> i think the main take-away is this was a very good quarter for the third quarter and while there was a set of commentary about 2017 that can give some pause, at the end of the day, this is a company that tends to be very conservative in the way they talk about forward trends. we believe this is still going to be well north of 30% top-line grower next year and do $5 plus of earnings, and that's a pretty
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compelling valuation for 30% growers looking forward one year in a world that struggles to find growth opportunities. >> do you agree, neil? and is that, quote, aggressive investment year and meaningful slowdown in the growth rate something for investors to be concerned about? >> yeah. you know, we've actually looked at the past earnings reports and transcripts for the past four years and every year they've used the words "meaningful investment" or "significant investment," and every year they've come out with a set of operating expense guidelines and they've always done better than what their initial guide was. so we do believe that, you know, maybe there's a little bit of pause here as they invest in the core platform, but we do expect them to come out with a fairly aggressive operating expense bunch budget and they'll probably execute well against that and lower that guideline throughout the course of the year. >> eric -- sorry. go ahead, neil.
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>> and one thing we've also thought about is when google and amazon both went into deep investment modes, they've come out significantly better. google has come out with display, with mobile, with android. amazon has come out with aws, significant prime third party. i think with facebook at peak margins, you know, they could probably gave little bit of that margin up and come out significantly further ahead in terms of social messaging and video. >> eric, in the past when facebook, as neil just mentioned, has come out and said we're going into this investment period, i want's almost been a head fake, like, yes, they ear being conservative. is there any reason to believe that this cycle could be different just based on the macro environment, based on maybe the fact they've exploited so much in terms of ad load in the main product, instagram coming along, but beyond instagram it's not clear if there's another big property with inventory that they can exploit. >> i think there's a couple issues in there. let's tease those out. i think on the revenue side of
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the equation there are clearly call options around virtual reality, messaging, and then longer-term options around connectivity and the enterprise that probably might not come to fruition over the next six months. we think over the next 12 to 36 months will bear fruit. i think you're going to require some patience to watch those call options play out over the medium to long term. on expenses, we're always going to be mindful the large cap internet space doesn't lack for ambition. these companies want to be bigger. they want their ecosystems to continue to grow, pull in more users, pull in more time spent. there's always going to be investments against that level of scope of ambition for these companies. where will be the most mindful. video. you could make investments around infrastructure, around content. that's something we're going to be waping over the next year that could, you know, measure against the conservativism that's usually the course here but we're sticking with conservativism today. >> let's talk about video for a
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moment, neil. we started this conversation with mark zuckerberg saying they want to be video first. what exactly are the ambitions here for monetizing video and are they going to start to aggressively go after tv advertising, video advertising, in a way that's sort of different than digital where they basically dominate that market with google? >> yeah. you know, today video and facebook, a lot of that content is user generated. we've seen a 4x increase in terms of facebook live. still that's a small portion of how people can zoom in and watch video. so we think over the next 12 to 24 months, facebook will be making aggressive investments against content that's professionally curated, professionally developed, and then they'll be able to actually really bring in more brand advertising dollars against that professional content. so we think there's a big opportunity both on the live side but also on the professional side. and, you know, i think east gaming does really well on
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facebook in general, both on mobile and also on pc. we see esports could be another huge opportunity that facebook could really become a great platform for sharing content and also for watching content. >> and quickly, they talk a lot about recruiting the most talented people in silicon valley, the best engineers. who's getting the best and the brightest right now? >> we still -- >> eric, that was to you. quickly. thank you. >> we're still seeing the large-cap players being able to offer the most impressive compensation plans, the largest scope of investment projects that are out there, the most ambitious projects. talent normally wants to look for ambition and compensation and we think amazon, facebook, alphabet in our coverage universe certainly are those types of names that are attractive. >> gentlemen, thank you. good discussion there on facebook. neil and eric. ahead on "squawk alley," an exclusive with tom brady talking everything from donald trump to the nfl's shaky tv ratings.
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plus adobe systems ceo shantanu narayen is going to join us in a "squawk alley" exclusive. ♪ guyhey nicole, happening here? this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all? not only that, you can act on that opportunity with just one tap right from the alert. wow, i guess we don't need the kid anymore. custom alerts on thinkorswim. only at td ameritrade. if you're on medicare, remember, the open enrollment period is here. the time to choose your medicare coverage begins october 15th and ends december 7th. so call unitedhealthcare to enroll... in a plan that could give you the benefits and stability you're looking for, an aarp medicarecomplete plan insured through unitedhealthcare.
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allocation strategy for 2017. and the men who may play king maker in the battle for the control of the house of representatives is with us today. all coming up at the top of the hour. ? thank you, scott. adobe is hosting its -- hosting adobe macs are keynote speakers include quentin tarantino. the company is showcasing creative cloud applications including photo shop, white room, and others as well as project felix, a 3d rendering tool. the stock right now is up by just petter than 1.5%. shantanu narayen is the ceo of adobe and joins us live from adobe macs in san diego. great to see you. >> thanks for having me, jon. >> i want to start out with adoe see sense, artificial intelligence. when we think of a.i., we think of driverless cars, search, the stuff amazon is doing, but you guys have a unique use for this technology you've been working on for a while. what's your vision for how artificial intelligence works in
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the creative process when we're talking about finding creative assets or maybe even tools to correct problems in the work hub? >> we have been a company focused on decades. creative community which has gathered here has been accustomed to seeing incredible magic from adobe. and what our goal and vision is to really combine art and science, which is how can we analyze pictures, how do we understand the si man tick meaning of documents and on the marketing side how do we help with better attribution and segment take. it's probably not trademarkable. we focused on sensai a way to bring to bear all the technology and innovation we've had combining art and science. i think that's different for us is it's very domain specific wp we understand video better than
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anybody else. we understand images better than anybody else as well as documents and that's really the goal is to bring that together in a framework not just from adobe but also for our entire ecosystem of partners. >> i want to ask you about adobe stock contributor site. you've had this in beta for a while. basically you'll allow anybody to submit photos they've taken into the marketplace of stock photography, collect, you know, revenue from people who are buying their photos, their vector graphics, their videos, et cetera. is this expanding a new trukt and service category for adobe and how big of a contributor do you think this can be, opening up more marketplaces for creative professionals? >> jon, i think the entire mark place is over $2 billion or $3 billion in terms of the total addressable market. as you know, adobe has over 80% of the people who buy all of the stock content as well as 80% of
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the people who are cribbing the content. so it was a natural for us to think about krich cloud as this one-stop shop. everything from monetization. we showed some phenomenal sen say technology there as well in terms of being able to search for visually similar pictures or 3d or art, so enabling people to monetize their creation, i think it's a natural extension for adobe and we think it's a reasonable market for us. >> how is the marketing business looking heading into the holiday season? q4 is always huge for you an people are looking to gauge exactly how big e-commerce is going to be an mobile. what kind of a role it will play in holiday shopping. how is that business looking to you? >> with respect to our results, jon, we reaffirmed our p&l targets for q 3 and 4 so we continue to strengthen the digital media as well as the digital marketing place. black friday is coming up and
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with the holiday season being as large as it is for online retailers and anybody who has an online presence, especially on mobile as you pointed out, we continue to see the signs moving away from traditional retail travel and hospitality to national services all moving online, which i think is a tail wind for our business. >> and finally, 3d, you've got project felix you're talking more about. of course microsoft on the lower end is talking about building tools into windows 10. is this going to be another feature you think alongside the products that you already have in creative cloud or should we expect to see perhaps a new adobe product that tackles 3d, tackles vr, some of these new areas the companies are pushing into? >> i think it's so great being here at macs this week and seeing the largest creative community in the world gather to give u.s. feedback. we have introduced multiple new products. we think photorealistic rendering and combining 2d and 3d is a massive opportunity for
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us. we introduced a brand-new way of dealing with digital photography. xt enables anyone to create the next generation of mobile applications. so we look at this as a natural extension and when you think about augmented reality, life, character, animation as well as virtual reality, those are all natural extensions. bart simpson was here yesterday live talking about how character animator has changed how we do online tv. >> and you've got jordan peele there as well so, quite the cast of characters. shantanu narayen, ceo of adobe from adobe max, thanks for joining us. >> thank you. when we come back, tom brady on everything from donald trump and the election to under armour and the nfl's rating problem. but first, rick santelli still awake after an all-nighter after that extra-innings championship. what are you watching besides the celebrations today, rick? >> first, you can't buy a newspaper in chicago.
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most of the double shots of all high-energy drinks are sold out. but obviously the talk is seventh game, bottom of the tenth for central bankers. we'll talk about that after the break. the pursuit of healthier. 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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you wouldn't pick a slow race car. then why settle for slow internet? comcast business. built for speed. built for business. keeping the power lines clear,my job to protect public safety, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california. let's get to the home of the world champion chicago cubs. the cme group rick santelli has got the santelli exchange. rick? >> john, it sounds funny even to say it out loud, doesn't it,
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buddy? oh, my god, unreal. and just think, think about the intensity, the confrontation, the nail biting. can you believe what's going on between the department of justice and the fbi? really? of course, we're always using these metaphors and analogies with chicago baseball, because there's intense things going on all around us and all these things have influences in the market place, whether it's indirect through election, which we don't know the result of, but more importantly, it is the seventh game, bottom of the tenth for central banks. it truly is. so this week, you have the bank of england, you have rfmoc, of course, and you had the bank of japan. and if you look at recent market activity, now, we can say there's bubbling inflation a little bit, there is, but if you really look at how the markets acted in the beginning of the year when rates were falling and look at how they're acting the now, truly the epicenter of some of the anxieties about investors could be summed up quite simply. and i think richard fisher on our air did it yesterday.
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it's a greater fool theory. all of these low and negative interest rates, the only sustainable possibility is that you find a greater fool to buy them at these levels or at these negative rates. and the greater fool theory has a problem. there's an end game there. and many think the end game is here and central bankers see the handwriting on the wall. it's not a bad thing, but it's going to require market adjustments, big-time! the other issue is, of course, how do you deal with that as traders? and i try to always make it clear and maybe easy. maybe even oversimplify, because there are things to look at. the first one, the dollar index. the dollar index really kind of led the charge tonight beginning of all of this, as it made its move and crossed into positive territory. but last friday, it dipped back below. so you absolutely want to watch 98.63 in the dollar index. that's where it closed 2015. and the key levels for the major
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sovereigns, whether it's the guilds, 1.22, the ten-year, those are big levels, and of course, bond yields, i would watch 20 to 25 basis points. all on closing basis. sarah, back to you? >> we will watch with a chicago theme. congrats again, rick. when we come back, tom brady with everything on the nfl's bet on twitter to the elections. "squawk alley" will be right back. you can't predict the market. but through good times and bad... t. rowe price... ...we've helped our investors stay confident for over 75 years. call us or your advisor. t. rowe price. invest with confidence.
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tom brady at the grand opening of under armour's first boston store yesterday. we caught up with the four-time super bowl champion exclusively to talk about everything from donald trump to the falling nfl ratings. take a listen. >> i'm not sure. i mean, i don't know. you know, i feel like the product is great. i mean, guys are out there playing as hard as they ever played. i think maybe there's a lot of choices out there now and certainly, i don't think the presidential election and all the coverage that that gets winwini think, draws probably some people away. we'll see. it's a long season, hopefully it keeps building. but there's a lot of very smart people at the nfl that can figure those things out. >> we also asked him about the nfl streaming live games now on
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twitter. here's his take on that. >> i think, you know, the more people that can see the game and understand the game, you know, whether that's digitally or, obviously, in front of tv sets, listening on the radio, there's so many different means for people to see the game and understand the game. so twitter, i know they did something on yahoo last year. there's lots of different ways to get nfl content and digital is obviously everything. everyone's now so mobile. and it's great that -- i think the nfl saw that coming and tried to allow people to experience that, as that kind of became really the thing to do. >> and brady, for the record, did say he didn't think it was because he was out for the first four games, didn't want to blame it there on roger goodell. our thanks to jess golden, our producer, who was able to sit down with brady last night. >> and he came back strong. that's an amazing story for him alone. but i do want to say again, tomorrow, "squawk alley," elon musk will onus from the baron
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conference. that is exclusive. be sure to tune in for that. crazy day for tech, iac up almost 50% >> facebook under pressure. tech the worst-performing sector in the s&p. financials the best on higher yields. there's your picture with the dow and s&p higher. the nasdaq underperforming. >> thanks for being with me on "squawk alley," sarah. now it's time for the halftime report and scott wapner. >> guys, thanks so much. our top trade from post nine at the new york stock exchange today is face plant. why facebook shares are selling off today, despite a strong earnings beat. is it the best sign yet that tech is in trouble? with us for the hour today, john najarian, and our resident shark, kevin o'leary, the etf investments chairman. i want to kick things off with facebook.


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