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tv   Squawk Alley  CNBC  October 19, 2017 11:00am-12:00pm EDT

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welcome back to "squawk on the street," i'm kate rogers stocks are pulling back from record highs with the s&p tech sector among the worst sectors hewlett packard enterprise shares are lower after giving a mixed 2018 outlook and approving $5 million more to buy back stock. now back downtown for the start of "squawk alley." >> all right, thank you for the, kate good morning, it is 8:00 a.m. at apple headquarters in cupertino, california, it's 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪
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good thursday morning, welcome to "squawk alley." i'm carl quintanilla with john fortt, sara eisen at post 9. business insider, editor in chief, henry blodget dow is down about 47 half of that is apple after the first close above 23,000 apple is dragging the dow lower right now. it is the biggest lager on pace for its worst day since early august the cellular service for the company's new watch has been shut off for some customers as the economic daily news says apple is cutting supplier orders for the 8 and 8 plus by as much as 50% john, this is like perennial every new model comes with worries about orders >> yes none of this matters yet i mean, the china thing, it's a
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concern. there's a new type of sim card in the apple watch and probably the chinese government wants to be able to track it better, which you'd expect in china, but this iphone 8 thing, the real question is what happens when the 10 comes out, because an unknown number of people this cycle are waiting to see the 10 before they decide whether they are going to get the 10 or 8 or something else normally with apple investors, analysts, are used to some level of consistency, measurability. what happened last year versus what's happening this year you don't do that at all this year if you're freaking out about these order rumors or about the demand numbers for the iphone 8 now, you don't have a clear picture until we get all the new phones in supply and in the stores >> that doesn't hit until november 3rd should investors be worried about that >> they should certainly be concerned about the speed of adoption, because there's huge excitement around the iphone x, but if it's supply con trained, everybody holding back waiting for it, may be hard to get, how
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many they can sell, that's a question, but the other thing highlighted here is the smartphone market has matured. problem with the iphone 8 is it's boring. tiny upgrade over the 7, which was a tiny incremental upgrade over the 6 someone who bought one on the first couple of days in our office says by the time i got back to the office i was already bored. >> not another emojis? >> when was the last exciting smartphone >> the big one, big screen finally, but samsung beat them to it. that was a huge upgrade cycle. >> they made billions and billions since then. >> they have turned it into an annuity. it used to be hardware was this terrible business because the prices would go to zero. apple, i am hooked whatever they want to charge me for this, i will buy a new one when it breaks i have to. so they are in good shape, but much less ability to drive people out, except for the folks waiting for the x and they want to see it, but from what i hear,
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may not be many available. you don't know how long it's going to take them >> john, how reliable is it to watch some of the semiconductors that trade overseas? this morning in taiwan, pegatron sales down, hon high, we watch these, very secretive, but there are rumors >> signal for apple? >> correct >> are they accurate >> i don't think you can watch those as a signal for apple. there's one thing to look for signals about how a launch is going to go for a product, and again this year that's all over the place because there's all kinds of noise because apple is doing it differently, but how is longer term adoption going to go is there going to be the equivalent of a pokemon go that's going to drive demand for newer phones versus older phones it's difficult to know that stuff and not dependent on what's happening with semiconductors another important part of the story is mixed if we do get supply constraints at the high end, which is
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guaranteed with apple, chances are people are going to pay more for a higher end version because apple magically has more of the expensive versions of the phones than others. >> all the bullish calls lately have been about better market segmentation, as they carve out more of the luxury space by the way, almost every component in the semi index is down today, on a day bitcoin is up mid single digits >> not even bitcoin can help those. more pressure on facebook, google, and twitter this morning, john mccain becoming the first republican to cosponsor a bill that would increase disclosure requirements for political ads that appear on social media democratic senators amy klobuchar will introduce what they call the honest ads act before 1:00 p.m. today some are already calling it the facebook bills pushing ahead of the testimony on november 1st, basically asking them to keep track of the ads and the engagement and copies of any information about it and make what they call
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reasonable efforts to ensure it's not being bought by a foreign entity >> this in itself is a small thing, totally reasonable, not big regulation, but potentially the first of many attempts to regulate facebook. sure, it's a step in the right direction if you happen to be an honest political advertiser and volunteer for this, you'll be now regulated a little bit, but the laughable part of it is, when russia came in to meddle in the election using facebook and other tools, they didn't say, hi, we're a political advertiser they said, okay, let's create all sorts of lies and fake stuff and target it at people. >> wasn't even about the candidates it was about gun rights, gay rights, issues >> the real problem here, and it's a much bigger challenge for facebook and congress trying to regulate it, they have millions of customers and they have no idea who they are. it's why after the election, they had no idea that any of this had happened until later. that's much harder to deal with. >> fundamental challenge here is, they are aiming at the wrong
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target political advertising, it's important and probably ought to have protections around it like traditional media does, but it's really a question of do you know who's placing the ads and do you have reasonable line of sight into where they are. now, there's been some work done on this in the past couple of weeks where we see how foreign agents apparently even influencing people inside the u.s. to post things, to perhaps foment protests, using social media as a vehicle for that. there's no way to regulate that. so perhaps it's better that we have social media as at least a way to see the footprints in the sand for how we got here in the past when russia, the soviet union at the time, wanted to use u.s. agents to try to foment, there was no paper trail. >> also, we're going to talk later this morning about what the former head of google ventures said about potentially wouldn't surprise him if it was the end of the golden age of silicon valley, but also wouldn't be surprised to see the government trying to break up
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google and facebook. in his words, they are more powerful than at&t ever was. >> they are, but the idea of trying to break them up, they are powerful because they are global networks. where are you going to crack them it's the same question with microsoft. how do you begin to break it up? but they are the point they are now the most powerful media and communications companies in the world is right on point and it's why if they don't regulate themselves and get a handle on this very fast, you're just going to see more and more of this attempt to regulate them, which could be a disaster. >> the fact senator john mccain is onboard this bill also points to the fact this is a bipartisan effort this does not split across partisan lines it seems like both parties have a real interest in trying to crack down because of what happened last election >> we all do there's no question. >> it's unusual for washington >> very. encouraging in a way, you might even say we do have an ipo at the nasdaq, mongodb made big gains,
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coming as bill maris does say the sun is setting on silicon valley you've followed this company for years. >> founded in our office ten years ago, literally, one of the folks, the founder of business insider, great engineer, whole idea was, hey, business insider is kind of struggling with this distributed computing, what about a new database designed for internet modern computing. that's where it was founded. fun to watch and see a deep technology company like this come from new york it's good. >> you don't have shares, do you? >> i do not. funny little story there, i had the ability to invest in the first round, but we were running on the initial version of mongodb, having problems with it and it was causing morale in our company. if i invest, it looks like i'm conflicted, having us on this platform because i have the investment no, i won't do that. now i feel like a moron. but congratulations to everybody. very good outcome.
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>> yeah, $1.2 billion valuation, raising almost $2 million. >> here's a company that went public from new york, which i think is important, outside silicon valley, but it went public at a time a lot of companies are not going public henry, what do you think that says perhaps about the enterprise technology space and how investors ought to think about where value is, and also perhaps about the need for cash and the quality of companies at this point in time when so many valuations are high? >> there's huge opportunity in enterprise and new technologies around internet architecture, so you'll continue to see that, but important point here, mongodb is ten years old, yet another one of these companies that is effectively going public at a much later stage of maturity than a lot of companies in the 1990s, and depends how you think about this, what you think the purpose of the public market is. if the purpose is to protect people who shouldn't be investing in companies like this anyway by making them wait to go public, then we're doing a great job. if the purpose is free flow of
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capital, give aggressive investors the opportunity to buy into companies like mongodb eight years ago when it was tiny or amazon when it was only $400 million, then it's too bad that we've broken our public market >> investors would have made a lot of money >> absolutely. >> though this is not a profitable company and still burning cash, so it could be a test for that, as well >> a lot of companies go public, aren't profitable, turn profitable later there are investors comfortable with that. you could argue investors take responsibility for themselves, it's better if they have the opportunity to invest or not, but we have, obviously, come a different way in our public market now the idea is to protect, stay out. >> henry, good stuff today, thanks, as always. henry blodget. when we come back, lam research up 70%. we'll talk with the ceo in a cnbc exclusive deadline day for cities to submit their names as candidates
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for amazon's hq2 we'll go live to amazon's current global headquarters in a moment not a secure selloff, but the worst of the month going back to september 25 back in a minute ah, dinner.
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throughout history, the one meal when we come together, break bread, share our day and connect as a family. [ bloop, clicking ] and connect, as a family. just, uh one second voice guy. [ bloop ] huh? hey? i paused it. bam, family time. so how is everyone? find your awesome with xfinity xfi and change the way you wifi. lam research reporting earnings this week beating both the top and bottom lines the chipmaker stock has doubled in the last year, but is lower this morning with the rest of the semi industry.
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joining us now, president and ceo at lam research. good morning >> john, good morning, it's nice to be with you, thank you. >> now, i think the big concern after even a great quarter like you had in the cycles in semiconductors i mean, you know, demand is high, there's a lot of building that happens and there's demand for equipment and technology like yours, but then it's overbuilt. demand bottoms out, supply too high, and then you have a problem. when is that going to happen or why is it not going to happen this time? >> yeah, i think, you know, that's certainly a perspective, not one we share we have a perspective that the world of semiconductors, the connectivity of the world, the cloud, storage, memory, environments, created a platform of innovation. this is all about artificial intelligence and applications
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enabled growth and silicon sits at the very center of that trajectory, so this is a very different world than the world of only five years ago, and we think there's much more sustainability to the investment of our customers our customers are disciplined adding capacity and the diversity of demand today is dramatically different than the days of a pc era environment or cell phone era a cell phone is still incredibly relevant, but it's all that density and application, so super exciting time and, of course, lam is part of that story. >> i mean, you argue that innovation defends you in the situation right now. there's so many potential sources of demand, a.i., machine learning, et cetera, but isn't it also a threat when you look at what google has done with building chips for a.i. that mean they need far less equipment, if that trend spreads, doesn't it reduce chip demand and cause a problem for
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you? >> no. i think quite the reverse, actually i think the innovation and the application that's coming from the chips that you've just referred to creates a cycle of increased demand and, you know, the capital intensity of the industry is different today, and i think what's really important for lam research is we've built a product portfolio in the company that is about as relevant as any equipment company's portfolio, certainly more relevant than ever for us, and we sit right in the center of these technology inflections, so very, very pleased about the position of the company, and i think, again, with discipline and the diversification of demand, we feel good about sustainability in fact, we just gave perspective around the first half of next year and also next year's capital spending and our view is both are positive headlines. so our visibility is stronger today than ever before and we feel very good about the totality of the industry
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>> you say your visibility is stronger today than ever before. why is that? >> big part of that is the relevant of the company and the breadth of the company's contribution to the success of our customers. so, you know, ten years ago lam research was a single product company. that's not true today. we are a multiproduct enterprise, and we deliver enabling solutions to the most critical technology inflections of the semiconductor industry. that relevance has created an engagement with our customers and the ecosystem that gives us much more visibility than true five to ten years ago. we don't have the crystal ball, that's true to say, but we certainly in relative terms have more visibility today than was true five to ten years ago >> you've got memory as a really big percentage, i believe, about half of shipments representing what your technology is used for. does that not tie you to some degree to end user devices, demands for those, as people
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look at this holiday season and wonder what demand is going to be, say, in the smartphone category >> you know, i think memory is a real strength of the company to your point, but it's also one of the most relevant growth trajectories for the entire semiconductor industry it's a great place to be and the role of memory, not just in storage, but in computation and systems architecture is becoming increasingly important again, i would make the point that it's really not a units conversation today, it's all about density. the average cell phone today has content that is probably ten to one to a high end cell phone, so as applications drive opportunity for more content, our memory customers are disciplined, our memory customers are making lots of money, our memory customers are investing when there is demand, and as a supplier and as a member of the ecosystem, you know, we're doing our best to
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contribute to their success and we're optimistic about sustainability, as i said. >> well, martin, quite a chart you've got you're up 20% in the last three months, nearly 50% in six months, doubled in a year. martin anstice, ceo at lam research, thanks for joining us. >> thank you big news to tell you about for lyft capital g alphabet's growth investment fund is leading a $1 billion financing round in the company. according to lyft, this brings the company's valuation to now $11 billion. as part of the funding, capital g partner david lawie is joining lyft's board not quite that eye-popping $70 billion we last heard for uber's valuation. >> if you buy that number, sure. what has me scratching my head, google was an investor in uber not too many years ago then you got softbank saying, yeah, we'll invest in uber or lyft it's interesting that lyft and uber are being brought up in the
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same conversation, sometimes by the same investors now, when a couple of years ago conventional wisdom was uber was blowing them out of the water >> by the way, google is on the cover of "business week" this week the headline, "everyone is mad at google. boxed in by regulators, critics on both the right, the left, even their own employees >> just to make your love triangle more complicated, they are on a lawsuit with uber, right? >> that is true. i prefer bizarre let's call the love triangle bizarre. >> bizarre now we learned alphabet fund leading a billion dollar financing round for lyft still to come on "squawk alley. live to amazon headquarters in seattle as the deadline approaches for cities to submit their names for a chance to host the company's hq2. but first, take a look at shares of ebay today they are trading lower the company out with generally positive results after the close yesterday, but warningnvto iesrs on the current quarter stock is down 1.5%
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we'll be right back. global markets,t's thef the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. i'll have the langoustine lfor you, sir?i. the original call was for langoustine ravioli. a langoustine is a tiny kind of lobster. a slight shellfish allergy rules that out, plus my wife ordered the langoustine. i will have chicken tenders and tater tots. if you're a ref, you way over-explain things. it's what you do. if you want to save fifteen percent or more on car insurance you switch to geico. sir, we don't have tater tots. it's what you do. i will have nachos!
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it is deadline day for cities to submit their names in the hopes of hosting amazon's new hq2. our deidre bossa is live at amazon's current headquarters this morning good morning >> good morning, carl. amazon tells us submissions have been picking up since tuesday. they are going to accept them until the deadline, 11:5 tonight. they simply said they've received a lot we've been here all week looking at the impact amazon had on the first city, seattle. to give you an idea, we're in the center of downtown seattle in the middle of amazon's campus flanked by two 40-story buildings amazon owns and occupies to the left are the spheres slated to open in 2019 and this construction site is one of several developments of amazon's meant to keep up with its rapid expansion. yeah, guys, even what you see here is just a fraction of
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amazon's footprint in the city in total it has more than 8 million square feet in office space, making its footprint more than twice as large as any other company in any big city in the u.s. since 2010 its seattle workforce has grown from 5,000 to 40,000 amazon hasn't been shy to tout the impact its growth has had on this city. billions in capital expenditures and employee compensation, billions more in indirect impacts, the kind of numbers that have proven to be so irresistible to cities across america vying for a fully equal hq2. guys, we have also seen and spoken to some seattle-ites about its affects on congestion and soaring real estate prices, plus hopeful h q2 cities are dangling tax breaks and subsidies to lure amazon and bezos to their cities. we spoke to a group, good jobs first, that tracks that kind of
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information and say it's not clear whether seattle or the state of washington has given tax breaks or subsidies to amazon since it's been here. back over to you >> all right, thank you, deidre. when we come back, the senate is set for a crucial vote on a budget resolution today could tax reform be next details coming up. plus, shares of adobe are soaring, hitting all-time highs today. the company forecasting full-year 2018 profit above estimates, also making some big product ans ichgeatts max conference "squawk alley" is back in a moment whoo! ( ♪ ) woman: class, let's turn to page 136, recessive traits skip generations. ( ♪ ) molly: i reprogrammed the robots to do the inspection. it's running much faster now. see? it's amazing, molly. thank you.
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quality data for more than a decade and a huge celebrity auction is set for next month. among the iconic items up for sale, tom hanks' forrest gump costume, julie andrews "mary
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poppens" umbrella. and an idaho farmer grew this pumpkin which tops the scale at 1,400 pounds he claims it is the biggest one ever found in the state. think of the pumpkin chia lattes out of that. that's your update for this hour let's get back to the alley, "squawk alley. >> okay, tyler thank you very much. let's get to seema mody here europe is going to close with weakness >> that is exactly right notable selloff following the rough session we saw in asia overnight. cautious comments coming from the chinese bank governor, but look at spain, the spanish equity index falling after spain's government set in motion a plan to suspend catalonia's autonomy after catalan leaders ignored today's deadline to drop their bid for secession. prime minister rajoy saying his cabinet will meet on saturday to impose direct rule in catalonia, though the catalon president has threatened to unilaterally
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declare independence if rajoy refuses to engage in talks very fluid situation right now, as you can see spanish banks under pressure led by catalonia we are seeing weakness of shares on unilever as it loses market share to smaller competitors poor weather in europe and natural disasters in the united states and mexico have hurt results. that stock down 5.5% meantime, its rival nestle is speeding up a planned restructuring program to improve profit margins the company experienced a sales dip in the first nine months of the year, including weakness in the u.s. that stock down 1% let's also talk tech, because european apple suppliers are under pressure on that report from taiwan, which says apple has cut orders linked to the iphone 8 models by more than 50%. ams, dialogue semiconductor and stmi microelectronics seeing
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weakness in today's trade. lastly on politics, theresa may is in brussels for a summit meeting with e.u. leaders following a deadlock in brexit talks. the prime minister saying she looks forward to progress in upcoming discussions and pledges cooperation with the e.u. on issues including defense and security guys, another hot topic at the summit will be turkey's membership in the european union, following what many people are calling a freeze in talks. a lot happening at that summit >> seema, thank you. meantime, we are watching washington, the senate poised to pass its 2018 budget later today. it's a move which marks a key first step in moving ahead with president trump's tax reform agenda today's vote could allow for the gop to pass tax reform with a simple majority vote by the end of the year. joining us to discuss, gene sperling, director under presidents bush and obama, and american action forum president and formercongressional budget
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director welcome to both of you doug, just talk about the importance today of this reconciliation vote and how much it could increase republicans' opportunity to pass tax reform >> well, it's the first in a series of procedural steps to get to actually doing tax reform if it passes the senate today, then the senate and house will have to sit down and work out the differences in the two budget resolutions they'll then have to go back and vote in the house and senate and have a single unified budget resolution that gives them the vehicle, as you said, to pass tax reform with 51 votes in the senate, but doesn't give them a tax bill, so the real work is drafting a tax bill in the house, passing it, drafting a bill in the senate, passing it, seeing if they match there's a lot of work left to do >> yeah, and a lot of questions of what's going to go in it. gene, do you predict president trump, he was talking yesterday about bipartisan efforts here. do you predict he'll have a chance at getting democrats onboard with tax reform, and if
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so, what needs to go in there to make that work >> well, the question is not whether he has a chance to he, obviously, could work on a bipartisan bill if he was trying to do the type of corporate tax reform that barack obama had proposed to bring the rates down reasonably and do it in a way that would be good for infrastructure and wouldn't raise a penny of the deficit and he could have a middle class tax cut, a tax cut that was directed just at the middle class or, you know, i just did a proposal in the atlantic for a major expansion of the earned income tax credit. those type of things could bring people together, but just uttering the words bipartisan when you have a tax plan that's going to go to a $2 trillion deficit increase on the corporate side going all the way to 20%, not seeking to pay for it, and on the individual side, and this is stunning, the tax policy center estimates that by 2027 80% of the benefit would go to the top 1%. now think of that.
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that means that the top 1% of americans, those doing the absolute best the last 15, 20 years, would get four times more than the other 99% combined. secretary mnuchin says it's hard to cut taxes without helping the wealthy. it's not hard. just direct taxes for true small businesses, for true working families, then you can start to talk about getting democrats onboard. >> doug, what should the goal of tax reform be for the working class, for the middle class? it seems to me, you can talk about $1,000 here or there, and that is significant in the short term, but what about things like giving business increased incentive to pay for higher education so our workforce becomes what it really needs to be for the next 100 years? >>. >> the key fact here is the status quo is unacceptable if you look at 2016, families that work full time, full year, had a zero increase in their real incomes and that's just not
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okay in the status quo, we keep trillions of dollars parked offshore, we send our i.p. to other countries, we have a preference based on the tax code to have production be overseas instead of the u.s this is an opportunity to change all those things and the most important thing for the middle class is nothing that's in the tax code it's not a bracket or a standard deduction. it's the capacity to actually get ahead, have the economy grow at a reasonable rate, have the standard of living rise. they've been flat for almost a decade, and this is a chance to change that trajectory it's absolutely essential that we not allow some sort of demagoguing of tax reform stop us from doing something, because the status quo is really dangerous. >> gene, it's carl i got a question on corporate. deutsche has a note out this morning. they say since 2012 the s&p, companies in the s&p on aggregate have paid two-thirds of their earnings through dividends and buybacks, and i wonder where you are on this notion that money is fungible
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when it comes back into the system that eventually it will wind up in households, even though it might not be as direct as some want >> so this is a really important issue. if i could i mean, this exercise is going to be a repatriation on a date certain, the tax law will say we pretend you brought that money back to the u.s you're going to have to pay tax on it no matter what then the real issue is, is the rest of the tax reform good enough that it actually comes back there actually have incentives to invest, innovate, hire people and pay better wages in the united states. it's the litmus test for how we do this well >> gene? >> carl, first of all, the one thing you see from this conversation is the entire push, and you're hearing this from doug, is the single reason that we've had wage stagnation for our workers over the last 17 years, the single reason is that major corporations are not paying low enough taxes. because remember, this isn't just about tax reform. they want something that
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actually net reduces taxes and increases the deficit by $2 trillion, and there is no evidence -- >> gene, gene, reconciliation instruction says trillion and a half so, at least stick to the facts. >> hold it just one second. the corporate tax side goes down to 20%, and i think -- >> and you don't know -- >> overall, the corporate tax cut will be $2 trillion. and, listen -- >> you don't know the base, so you really can't say that. you can't. >> you know, doug, what's absolutely amazing and disappointing is people like yourself, who have been so serious in the past about dynamic scoring, about seriousness, are now willing to throw all of that overboard for one thing, to convince the united states that a $1.5 trillion net tax cut, deficit-increasing tax cut of which $2 trillion would be going on the corporate tax side with nearly 80% going to the top 1% is the right thing and the question was, and i
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think it was right, is this what's right for the middle class, is this what's really going to help families more than infrastructure, college opportunity, training, skills, is a large deficit-increasing tax cut, which in their own budget resolution they make clear they are going to pay for with a $1.3 trillion cut in medicaid we've just seen how much the public does not want to see cuts in health care and medicaid and long-term care going to support a tax cut for the top 1% i was part of the obama team that supported rationalizing our corporate tax system, going to 8% >> but you never did anything, gene >> this is not a responsible measure. >> and you're still talking now. now is a time for actual action. >> we've, unfortunately, run out of time. we could go on and on about this we could go on and on about this, and similar things are being said about kevin hassett, the president's top economic adviser on this very point
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we'll leave it there gene sperling, doug, thank you very much. a lot more to come it is a busy day in washington the president is reportedly sent to interview yellen today. eamon javers watching that at the white house. good morning >> good morning, we're on high alert for the arrival of janet yellen they have not put it on the official schedule of the white house, but we do believe this meeting is going to take place later this afternoon no specific time given to us by sources in the west wing, so we will continue to stake out janet yellen here. not clear what the president is interested in hearing from janet yellen today the president has said he likes and respects her in the past he's also said he considers himself a low interest rate guy, but yesterday i asked sarah huckabee sanders whether or not the president still considers himself a low interest rate guy and she didn't want to answer the question yesterday we're told now that the president is going to make this decision take a look at the five remaining candidates for fed chair. the president is going to make the decision before he leaves
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for asia on november 3rd, so we're expecting this decision any day now and after he meets with yellen today, he'll have met with all five candidates which one will the president pick, it's unclear seems unlikely he'd stick with janet yellen, just because she was appointed by barack obama and the president has been anxious to move out obama-era holdovers and having his own stamp on that office might be something that's appealing to this president on the other hand, the economy is going well, the president cites the stock market's success in recent months as a barometer of his own success and he might want to have not rocked the boat approach here, but we'll wait and see what janet yellen says when she comes out, if anything, and what the white house says about how the meeting went back to you. >> i think it's so weird to see reports republicans are lobbying against janet yellen, when that's one thing that's really working right now for this administration >> we saw the president in the rose garden the other day with the prime minister of greece he began his remarks talking about just how good the economy
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was and just how good the stock market is. this president likes this stock market, he feels that the bull run that we've seen since the election is in response to his election, in response to the deregulatory agenda, in response to his efforts to cut taxes, and he wants to take credit for that and so that would argue traditionally for keeping onboard the fed chair, but there's also this competing animus within the administration, which is to put their own stamp on it and have their own person in there. we'll see where the president comes down on it >> hard to predict what president trump is going to do eamon javers, thanks still to come, jeff immelt, former ge ceo facing scrutiny this morning for his use of resources while he was at the helm of that company first, rick santelli, what's on your mind this morning? >> you know, 30 years ago i remember vividly where i was, what the markets were doing on black monday maybe you'll not remember things so clearly
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bonds, well, yeah, yields went down dramatically, but not at first. it was also something called harmonic convergence astrology, you ask yes, all connected after the break.
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coming up on "halftime report" top of the hour, it's apple's worst day of the month, blip for the stock or something to be concerned about long term? plus, janet yellen heads to
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the white house for a big meeting with the president and goldman hits nike with a down grade. the stock's down 10% in the past three months alone see you at noon. var? >> see you then, scott, thank you. former ge ceo jeff immelt under the microscope this morning for his reported use of two company jets morgan brennan back at hq with this busy story. morgan >> certainly buzzy you have quarterly earnings tomorrow and ahead of that a "wall street journal" report highlighting the use of a second business jet on jeff immelt's business trips around the world, a plane used as a spare incase his ge-owned jet had mechanical problems ge did tell the journal two planes were used for business critical or security purposes. in other words, this wasn't done regularly, rather an extra plane would be put on standby while immelt was on site in certain
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locations, for example maybe some parts after seven-stop trip involving africa nonetheless, raises questions about companies keeping their ceos on safe and on schedule we've reached out to corporations and security experts for more insight on this type of practice we'll share that once we have some more, but meantime this speaks to an even bigger story at play for ge right now, cost cutting. new ceo john flannery has said repeatedly there are no sacred cows he's already scrapping the company's business jets, company cars, and what could be thousands of corporate-level jobs that is key for investors. shares are down about 26% so far this year, and there is so much concern on the street right now about the dividend, even though ge does say it's safe. more expected at flannery's big investor update on november 13th meantime, we have earnings tomorrow morning, followed by an exclusive cnbc interview with john flannery by david faber at 10:00 a.m. eastern tomorrow.
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you do not want to miss that shares of general electric today are more than 1% higher in the meantime back over to you >> still the worst performing stock on the dow of the year morgan, thank you. now let's get over to the cme group, rick santelli with the santelli exchange as we continue our coverage looking back 30 years ago today, rick? >> i really can't believe it was 30 years ago today, sara and you know what, some of the things i'm going to tell you, you might say, oh, my god, i can't believe that, but it really is true okay, we all remember, i remember elaine, she was at sheerson at the time, ended up being part of lehman and that was gone in another crisis moment many years later, but she really did have the call and got quite a lot of notoriety and accolades for it, but there was something else going on at this time you know, you remember back to december 12th, 2012, all the issues, the mayan calendar and everything let me tell you, technical analysis does have this kind of weird side, and i've discovered it in the late '70s when i
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started doing charts i was lucky enough to visit some of the archives with one of the greatest technicians that ever lived, w.d. gann he used to do things with soybean markets where he'd tell the wall street journals months, sometimes years ahead of time end up with infallible accuracy. unbelievable but i got to go through some of his notes and then they all disappeared. a train car in seattle, washington, he'd long been dead. the point is he had astro logical and astronomy various overlays on his charts i never thought much about it. what many will remember in the summer of 1987 there was another event where they planted in way of highly unusual and got name harmonic convergence technicians were going wild. they were ready for something big. they were early. they were a couple of months early. now, fast forward, i had a customer and i can't tell you his name, long dead, but at the time really rich
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one of the best traders at a big firm i was with drexel at the time didn't trade much, but a couple of days before the crash he started buying huge amounts of calls. now, keep in mind on the tuesday before the black monday we still had the dow trading around 2,500. we had the price of 30-year bonds, we didn't think about tens as much it was all about 30s they had a price of $80. and that price was somewhere around maybe 9.25%, 9.5% a week before that they were at 9% come friday the stock market of course traded down a bit around 2,200 if i recall on the dow. yields kept going higher, prices were down in the 77s this customer was buying 84, 86 and 88 calls eventually the market turned around and the bond market started to go crazy. limit up and the rest on black monday at 1738 in the dow is history, but the point is
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volatility was mispriced at the point of the crash in equities and fixed income for years maybe there's a lesson to be learned there for sure carl, back to you. >> all right, rick, thank you very much for that rick santelli. it is a busy week in the world of sports. the start of the nba season, of course the yankees come back, the anthem protest with the nfl. we're going to talk to the head of fantasy site fandual in a moment my name is jeff sheldon, and i'm the founder of ugmonk. before shipstation it was crazy. it's great when you see a hundred orders come in,
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a hundred orders come in, but then you realize i've got a hundred orders i have to ship out. shipstation streamlined that wh the order data, the weights of , everything is seamlessly put into shipstation, so when we print the shipping ll everything's pretty much done. it's so much easier so now, we're ready, bring on t. shipstation. the number one ch of online sellers. go to and get two months free.
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night while the nfl continues to deal with its anthem controversy. ratings down 7.5% through the first six weeks of the nfl season for more on the impacts ratings are having on daily fantasy sports, we're joined now onset by fanduel co-founder and ceo nigel eccles, welcome. so how does that interest translate into the kind of action you see on your platform? >> so we've seen a strong start as well. we don't always see a complete correlation. you know, ratings can go down, but with us, you know, things can grow because we have a much younger audience engaging not only on their television but on smartphone, facebook in a different way. so with a younger audience sort of more mobile savvy. >> how does the nfl look for you? >> it's strong we've been in solid reactivation it's highest than it's ever been that's been encouraging for us. >> do you have data on how many users actually watch a full game or do they just need stats >> yeah, like we definitely
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drive up consumption one of the stats we worked out was when somebody becomes a fantasy basketball player with us they watch 65% more basketball they would watch a lot more, but they were in a way they were watching a more, i watch a bit of this game because i have that player, i watch the end of this because i want to see somehow switch on this game because this player's important to me. >> there is this theory out there that people, the ratings have declined because everyone's on fantasy and watching the red zone and has nothing to do with the anthem protest do you have a view on that >> so i think it's a bunch of factors. i think the interesting one is last year they tried to be a narrative it was a one-time event. but what they ignored are some of the -- or the country ignored is actually nfl has seen three straight years of decline among millennials, among younger audience this is a trend. and the trend we think is that people are moving from watching just like three hours of sport in one sitting and they're watching bits of sport, they're catching it in different places, but the fans are still there. >> unfortunately, we got to leave it there
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real interesting topic we're going to revisit it a lot, i'm sure thank you, nigel. ou thank y thanks very much. >> dow's down 47 "squawk alley" back in a moment.
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not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan. apple accounts for about half of the dow's decline.
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we got annex last night. tonight it's paypal whose market cap is not that different. >> some in tech looking good adobe's up 11% >> a big day in the morning for ge and b & g, you'll be busy. >> and nike's come back out of this day, bold move next week where they layout innovation. >> let's get to the judge. welcome to "halftime report," i'm scott wapner. apple, stocks concerns over sales in china, maybe iphone concerns too is there a real reason to worry or should you buy today's dip? wi let's begin with america's best loved stock, the world's biggest company under pressure this hour on a couple different reports. josh


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