tv Squawk on the Street CNBC August 5, 2015 9:00am-11:01am EDT
capitalize in this industry. no surprise hackers are taking notice. your smart phone has become a pretty big target. mobile cyber attacks last year jumped four fold. thanks, josh. make sure you join us tomorrow. "squawk on the street" is next. shares of disney set to shave about 50 points off the dow at the open after earnings last night. we're going to talk to bob iger in a minute. good wednesday morning. i'm carl quintanilla with jim cramer and david faber. disney asaid futures higher has adp comes in light. june revised down. a lot of big movers today. ten-year climbs almost to 2.24 as the trade gap widens and oil is trying to peek at 26 -- $46
again. bob iger joins us in a few moments. >> apple looks set to continue. but merrill lynch adding insult to injury. >> and tonight tesla and fitbit coming out. but first up disney reported better than expected earnings. but they were hurt by slowed growth at the international theme parks but still up more than 20% so far this year. and we'll have an exclusive interview with bob iger in just a few moments from now. jim, you were up very early reading through the quarter, reading transcripts, i assume. you said today is the bear's day. >> well, i think a lot of it is self-inflicted pi disney. they gave a prediction which was a high single digit projection for cable.
it's about 42% of their business and they missed the projection. when you set a benchmark and you underperform, even if it's not as important as other things, you have to take the pain. and they're getting punished for that. but let's find out. i mean, he certainly knows more. and for joining us is bob iger, let's go to it. you gave us three words. and the words were quite frankly some subscriber losses. lost in your own narrative, a narrative that created by saying things are going to be high single digit is star wars and shanghai and a doubling of the buyback. a lot of sequels. 22% growth away. that's much better. why did you create what i regard as a negative narrative for a company with the best narrative that we know? >> we wanted to be candid. we feel we had a great quarter.
look at the results. it was our 11th beat in a row in terms of analysts estimates. that's not necessarily a benchmark that we look to but our businesses performed extremely tell and we have a strong outlook going forward but given the importance of espn to the company and cable networks in general that it was important for us to be candid about what we see in the environment. we are very bullish about our cable business and espn. we did want to note the sub losses we had seen. we also have an nba deal that kicks in in 2017 but after 2017, we believe espn is going to deliver compelling growth. it's a great product and brand and it's in an industry that we feel bullish about. >> bob, again, to push back on that. i understand that espn is loved and you have some great numbers about how many people want it.
at the same time we know, i went out to see what i can get for $50. i can get rid of espn and save a little money. i'm beginning to see when i look anecdotely, simmons gone, three star wars, three ten poles that you have paid too much for programming and therefore have to cut back on staff of high profile people that we love because espn's costs are going up and viewership going down. that's the way it reads. is that an accurate assessment of what's going on with espn? >> well, on the cost management front, we expect every one of our businesses to operate at peak efficiency. that means each one of our businesses are going to go through periods where they take a harder look at their expense side and essentially make cuts to run more efficiently. it's as simple as that.
i'm not going to comment on the decisions that were made on those individuals that you mentioned but espn and all the oh businesses are expected to be as efficient as possible. we did go out and we bought the most valuable sports packages that were out there. the nfl and major league baseball and the nba and a number of different college sports including basketball and football and the college football championships. that was designed to enable espn to continue to be not just for this decade but into the next decade, not only a leader in sports television but a leader in media. that's one of the most valuable brands in media. it is a must have brand. it's vital to current distributors and it is vital to my new distributor that comes into the marketplace. not only is it not going away, but it's going to continue to grow and given what's going on with technology, and the ability for espn to engage more deeply with fans, to reach more people
and enable people to reach espn, we feel bullish about espn's future. >> so to the that point, analysts may not have the easiest time understanding fully where that future goes. we know the bundle is in a decline. though it may represent a good economic value for many. this idea of how do you create the growth and the traditional bundle is in decline and are these models you're referring to going to be less or more profitable than the current one? >> i can't speak for our businesses that offer the bundle. i can only speak for ours. since espn seems to be the topic of the day for obvious reasons, i'll talk about them. obviously the bundle presents great value to espn and will
continue to. the bundle is not going away. it's still relatively strong when you look at it given all the competition that's in the marketplace and you look at what percentage the bunlds represents, not just in terms of revenue but in terms of how people watch television. it's still the dominant form of television viewing in the home. espn is fortunate that it's a brand that we believe ports well to any new platform whether that's smaller bundle, whether that's an over the top package of programming or whether it's a direct to consumer business because we have invested over the years in the strength of the brand and that gives espn the ability to essentially manage through whatever disruption is going on in the bundle or in television or in media. it is one of the strongest brands out there. and if you want to have one brand at a time -- during a time of such change, i would argue it's espn, particularly given the rights that i mentioned earlier that they have going
into the next decade. >> is it relates to some of the disrupters like netflix, a lot of people believe that content providers such as yourself are feeding that beast that is changing the model by licensing content to netflix because of the money you get in the short term. would you ever consider a strategic shift in that strategy? >> we view netflix has friend, not foe. there's no reason for us to beat netflix. we actually are taking advantage of netflix' great growth. we're selling products that are off network, abc and other networks. we're fortunate that we have products like how to get away with murder that netflix really covets. we're also selling our movies to netflix. the output kicks in starting with our 2016 slate. and they've come forward as an
aggressive buyer for original television. i would imagine we have opportunities to expand our relationship with netflix in terms of supplying original television. so suddenly we have a huge customer out there that is willing to spend and is already spending billions of dollars on intellectual property that this company owns. we view that as a positive, not a negative. i also, as i look at netflix, i view it as a compliment to what i'll call traditional television, not necessarily as just a disrupter of it or a replacement of it. >> all right, bob. a lot of people are going to sell the stock today, and i think one of the leads that was buried in the conference call at the end of your excellent cfo's chatter was you're going to increase the pace to the buyback. you're talking about maybe 4 billion a year. maybe $6 billion to $8 billion a year.
i'm wondering whether at these prices given the fact that you bought a ton back right around here. whether you wouldn't just step right in and buy the heck out of the stock as soon as everyone is finished selling it or maybe right in the middle of it? >> we're obviously believers in our stock, which is why we have been aggressive buyers of it over the last ten years during my ten years as ceo and why we mentioned yesterday on the call that we're going to increase our buyback in fiscal 2016 to between as you mentioned, jim, 6 to $8 billion. we made the announcement when it was trading at almost $122 a share. we believe even buying our stock at that level is accretive to us as the buybacks as the last ten years have been. this is a great company. when you think about abc and pixar and marvel, no one has an
array of media brands like we do. the pipeline is rich when you think about the movies coming into the marketplace starting with "star wars" in december of this year. we have sequels to finding nemo 'and incredibles and thor and captain america and alice and wonder land. and we've got shanghai disney land which we haven't even talked about. our decision to buy our stock back at a greater rate in 2016 is tied completely to the confidence that we have in that array of businesses in those brands and the future of this company going forward, even in a world that is being disrupted by technology. for the most part, technology is moving to be friend, not foe, to this company and those businesses. >> all right. i remember when abc was going down and people were telling me, you have to short this. abc is disney.
i'm wondering, media grew 9%. the rest of the company grew 23%. that gives you a blended average of 15%. if i look at this one year from now when i have all these things. i'm talking about all the movies. i'm thinking that this company is no longer just levered to espn but there are other reasons i want to own it. and those who decide not to be there versus a weekend opening that could be the biggest ever? >> you're right. over the last five years the company has grown 15%. the components of that were 9% growth in media and 23% growth in our other businesses. those brands that i mentioned, that movie slate is a great example of that and those movies flow through our other businesses in terms of creating growth. so even with some of the things that we've said about the media business and espn, we're
extremely bullish about this company going forward and i think the announcement yesterday is one example of that or one illustration of how bullish we are about this company. >> bob, because it is going to be the theme of the day, i want to return to the idea of the bundle and where we sit right now. you were asked about it as i referenced on the call plenty. at the end of long remarks you made, you said something when i see something that's too disruptive, we'll tell you about it. indicating you haven't seen it yet. when do you expect you will see it and what would represent that change in your mind that hey, wait a second, this world really is being disrupted in your words, too fast? >> well, i think what i was referring to is, or i was actually responding to a question. it was when do we become a disrupter of our own business versus hanging on and either
experiencing disruption or trying in some form or another to maintain the status quo? we've been very forward thinking and aggressive when it comes to the adoption of new technology to distribute our product to consumers in new ways. that goes all the way back to 2005 when steve jobs and i did a deal for the ipod. our feeling is the current media environment is still of good business, meaning for our company. we are reaping the rewards of a huge universe in terms of expanded basic homes. and the rights and the subscription fees that we get paid by drishts for that. at the same time that's going on, every new platform, we just talked about netflix, that comes forward, comes to us as a first stop. they want abc and disney and other products at the company as well. we actually believe we're in
enviable position in a market so that if there is disruption of what i'll call the traditional businesses, the opportunities that the disrupters are creating for us are very exciting as far as we see it and we're going to participate and take advantage of those tuntss. in terms of timing, that's for us to determine and it's hard for me to get into a specific discussion about it because i don't know what you're specifically referring to, but i talked when i was on cnbc last week about the opportunity to sell espn direct to consumer. obviously, we feel we have the ability with that brand to do that. we could do it today in that if we took espn out to consumer, i guarantee there's enough out there that would be willing to pay a healthy enough price to make that extremely good business for us, and create some other forms of growth because we all know that getting a closer relationship to consumers and a
closer relationship to advertisers could create great value. >> well, hbo seems to be doing it. >> i don't know that it's the time to do that. it may work for them, but we don't believe it's the time to do that. espn is a far more mass consumed product than hbo. i love hbo. i'm a consumer of them, but we don't feel it's the time to do that. when we see the time, we believe we'll be able to flip a switch and do it but it's not in the near future. there's no need to do that. that simple. >> last week you put the five-year thing out there and i think people got it in their heads that it's not going to happen until 2020. are you saying it could happen before then? >> i was asked a question. i think about five to ten years or something? i think that was the nature of the question. and i think i said not in the near term but in five to ten years i could see that happening or there's an inevitability. i still feel that but i'm not going to say that in either 2020
or certainly before 2020 that's likely to happen. >> all right. bob, there's one thing i want to know. where did viewers go? we were at 800,000 households during the the great recession. we're now at 1.3. we have people watching more tv. five and a half hours to six. what happened to the additional viewers from those households. that's a huge gap i can't figure out at the same time you have subscriber losses. >> typically what we've found is that when a family forms, when people get married and they have children, for instance, they become multichannel subscribers and in particular, they become disney fans. we like people having kids. it's a strategic priority for us as a company, i guess. in terms of what happened to them, we're simply talking about the environment that exists near term. i don't know -- i'm not as
familiar with the statistics that you just sited as maybe you are, but we feel that with the array of businesses or channel brands that we've got, any growth in households is going to be positive for this company. >> all right. well, bob, thank you so much for coming and peeking to us. that's bob iger who runs disney. great to talk to you. >> thank you. >> on december 18th, first showing. >> i'll be there. >> i'll do a field trip. i think i remember watching the first one in '77. yeah. interesting to hear from him. certainly on espn which is the focus and we focussed on it because we've been talking so often about the bundle for so long and when will it start to get eaton away. it's not growing anymore but you heard him. he basically said listen that day may come but it's not here yet and when it does, we can go to the consumer.
it will still bring them significant growth. that is sort of going to be a theme that people go back and forth on for years to come, i would assume. >> yes, and i think that, again, for viewers at home trying to figure out why analysts are downgrading, what people are trying to sauce out is when they talk about how there will be a high single digit re knew but it would not fall to the bottom line, they talked about it would be some subscriber loss but some foreign exchange, and they put a number of 500 million foreign exchange. people are saying if it's not that bad, don't use the word some. tell us so we can put pen to paper. and they refuse to do that. when you refuse to talk to people on the specifics and you use generalities, people presume the worst. that's where they hurt themselves. >> yeah. they have not given the subscriber numbers and some would like information. i know. and bob will say we give you plenty. plenty of information. >> but in an environment where apple goes down every day, apple
sells at 1 1 times earnings, this stock is at 25 times earnings. you're not going to get multiple shrink damage because we don't know the makeup of it. i say look at the franchises. it's "finding nemo" and shanghai. >> wait until shanghai disney opens. >> the stock market decline is going to make it so, well, they'll stay home and watch tv that isn't disney. >> going on the roller coasters to have the same effect as the stock market. >> statement that shanghai disney openings, crouching tiger hidden dragon netflix opens. buy netflix and sell disney. there's the call of the day. >> when we come back, so much more news. we haven't gotten to apple downgraded need. netflix and price line in the mix. also ahead, the home of skinny pop popcorn. one more look at the premarket
which got a bit of a bounce on a weaker than expected adp although some of the gains have faded. we're back in just a moment. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.
territory. merrill lynch downgrading the stock from neutral to buy. now 113 and change. we'll get details on that and cramer's mad dash as we count down to the opening bell. it took joel silverman years to become a master dog trainer. but only a few commands to master depositing checks at chase atms. technology designed for you. so you can easily master the way you bank.
all right. we've going to do a seated mad dash this morning on this hump day. about three and a half minutes before the opening bell. >> there's so much to talk about. yesterday saying they're data dependent. we could talk zillow. but i want to go focus on two that aren't being focussed on. one is society general.
europe is up big. they had a giant surprise. do you remember when many of the short sellers wrote them off in. >> yes. there were people saying there were huge holes in their balance sheet and there was a great deal of concern and debate about it a number of years ago. >> they are back and they are lending. that is the tone of europe. europe is coming back faster than people said. in an interview this morning, they were talking about growth in france. you want growth -- >> growth in france? those words don't go together. >> i'm not making it up. price line, you want to see growth, price line. 30% of the businesses on mobile, this is the company whether it be from kayak or open table or the bookings, people use mobile. if you have an application that is mobile oriented, it had tremendous growth this quarter. you can see what about yelp but i have to tell you that there is
an element of short-squeeze against price line thinking that travel and leisure would be bad. there was a remarkable quarter with remarkable numbers. i want to point out the strong vacation rentals which jibes with home away. some parts of the web other than netflix are doing well. >> all right. >> and by the way, earlier today, i raised my price of netflix. i'm raising it again, just now. i'll go from 130 to $137. >> and what about apple? as we head into the open this morning, that seems to be -- and people wonder if that will lead us. >> that was a shocker. bank of america merrill lynch downgraded perhaps because of the slow down in china. do you know i apologized last night on my show. there's a slow down in china for
iphones so i'm sorry that i'm repeating the obvious. well, it turns out to be not so zbl . >> is that just an excuse for an analyst? >> the two-day moving -- not facetious. don't go over. usa today, with 478 reasons to sell apple now. >> yeah. i tweeted that not only that but the most settle headline of the morning, free fall. >> right here right now, david faber right now. >> what's happening? >> that's it. i've had it. that's the apple watch coming off, and you think i -- >> he carries it around with him. >> i knew this moment would come. >> once it broke the 200 day. >> this could be the moment the stock starts going back up. >> this could change everything. look at the applause for my
watch. >> it tells time. i always wonders. >> there's a boat going to china with billions of those and it's being sent back. >> that applause is not for jim's watch. it's for the opening bell. at the big board, amplify, we'll talk to the ceo later. and sun run also celebrating the ipo. and we'll talk to the ceo in squawk alley. a couple of interesting tidbits on disney. a 9.1% loss today. not there yet, would be the biggest for disney since the financial crisis. it's only had ten double digit drops since '72. one reason, jim, you said it's the stock you buy for your kids. >> yeah. look, i'm not backing away from it. when you see a decline of this
magnitude c magnitude, it means there are large institutions that are trying to get out. and what's going on here is big institutions can't sell fast enough. so this will be probably a two-day sell, but who comes in and buys -- when i look at the buyback, it was aggressive last quarter. there was an ebola scare where they bought back stock. it can be a fabulous augmentation to earnings. sometimes i think are we bundle obsessed? >> say again? >> are we bundle obsessed? >> yes. well, everybody is. >> it's the house we live in. we probably overplay it. >> if you're a media investor right now trying to understand the landscape, you have v to get a handle on it. the changes in the way that programming is distributed, and consumed. and we know that there is an
economic value for a household in having a bundle, so to speak, a fairly large one including espn at $7 a month but it's not for everybody and the more that you have the opportunity to access slimmer bundles, so-called streaming options and by the way, we may even get the dish sling numbers on the call today. i'm curious to see. the last time i interviewed charlie ergen, he indicated they might be willing to give us numbers. we'll start to see how things are doing. as that world is created, you have to watch the espns. how is it doing? you have to keep an eye on via come and wonder, can it compete with all the networks. are they must haves? is amc and discovery? does there need to be consolidation among the smaller players. these are the questions. >> last night i'm looking to see what i can get. there's a $50 option that cuts back the number of espns that i
have. there's a lot of them. that is the $50 option which i like very much in a bundle suddenly saves me money by cutting out a couple of espns that i don't need. i don't. >> right. although right now verizon and disney are not seeing eye to eye. >> that's what i mean. this is a lawsuit going on and right in your face. this is the august option. i like to check the options. >> there's also the question of the sports only rights that can go away. and the proprietary content of espn is entirely different. >> that's true. i think -- there was a time when i watched for espn. i was surprised fantasy hasn't helped the numbers given how successful it is. >> i wonder how many homes are you paying for espn in yourself? >> the espn, the technology is extraordinary. i watch it on my verizon cell phone, everything that i need,
and the wife is happy. i don't have it on. it's a marriage zaisaver. >> digitally, they're big. >> disney parks were fine. consumer products, what a business that is. they have stuff that they've already paid for so it's like over 100% margin -- it's incredible. they're still selling frozen stuff, and shanghai, disney is going to be a big one and "star wars" but today the focus continues to be on the bundle, how quickly it's eroding and what espn's place is in this changing eco system. >> we feel we have the ability with that brand to do that. we could do it today in that if we took espn out to consumers, i guarantee there's enough of them out there that would be willing to pay a healthy enough price to
make that an extremely good business for us, and create some other forms of growth because we all know that getting a closer relationship to consumers and a closer relationship to advertisers could create great value. i don't believe that it's the time to do that. >> and there you have it. can we mention time warner which also reported earnings and 8% revenue growth. the stock is one 2.5 %. it's a negative halo effect of disney on time warner. otherwise, that stock would likely be up. although, frankly, i don't know when the call is starting. i haven't had a chance to update people on that. everything from the release seemed to be pretty positive in terms of time warner. >> as we're talking about all this netflix just set another record high. it's up more than 6 %. almost $129. >> i have to raise my price target again. $138 now. this is in reaction to the fact that the market cap is too small
relative to the other networks. that's what people are thinking. and there's also a short base in netflix. i think we have to focus on what's causing one of the most favored stocks in america to go down at the same time that the other favorite, by the way is on the border. apple is going down. while literally every, literally every other stock on my screen here is going higher. >> brings netflix year to date gains to 164%. we made a big deal when it doubled. that was three weeks ago. >> yes. remember, you have to -- if you use the presplit, whoa. anyone could have bought them and made a bid for netflix. on mad money i tried to sell this company ten times to people. >> when carl icahn came in in
the fo40s, he was trying to get them to sell themselves. it's good they didn't. the value of staying a public company has been enormous the entire media complex is getting hit by disney. viacom is down 1%. fox is down almost 4 %. cbc also down about 1%. and time warner which reported numbers that 8 % revenue growth. i haven't seen that for a while, it's down almost 3%. we'll begin an hour from now. >> i want to caution people. a lot of instant reactions have been wrong. price line was up 100. it's now down. yesterday i mentioned denny's. it was down. now it's up nicely. i just mentioned the misperceptions of stocks trading very rapidly. if i had to -- look, i know apple is so in the dog house. it's really bad. but what happened if apple went up today? riddle me. i mean, humor me.
what would happen if they reversed? possible. >> did you see the headline on drudge that a collapse in apple could bring about a collapse in the entire stock market. >> apple would be collapsing china. maybe we have the cart before the horse. >> all it could be is one tweet from carl icahn. >> he owns 53 million shares. >> the downgrade, let's go over the downgrade, the substances that the watch isn't happening fast enough. >> the deacceleration in the iphone. >> look, a tremendous amount of business in china. i understand it. we had a pmi last night that was good in china, not that anybody seems to care right now because bmw sales were bad for the second quarter in a row, and do we write off china? i think what we have to recognize is there are stocks gripped by technicals. that's what people fall back on
when things go wrong. this is a robust rally and it's based on europe. i see in turn in europe. >> speaking of which, we got some consumer names. kate comp is up 10. pretty good comps in handbags. rl beat by a dime. revenues in line. >> and a negative european story. i find that europe is turning much faster than people realize. i know people don't want to believe that but this greek roadblock really did hurt them. now, that is not that great. we have to -- when we had lock hart's comments yesterday, he made the dollar go up and killed the euro. energy costs going down in europe really helps. the resolution of greece helps and the stronger dollar helps. that -- the latter has to go away if we're going to get some number raises, even disney.
500 million, a hit. >> look at that nice breadth on the s&p. etsy down almost 20% as expenses go up 49%. and lumber liquidators is the other story. comps down 10. >> etsy, mass manufactured and counterfeit goods were talked about. it doesn't move the gross merchandise. it went from 28 down to this 24. amazon is killing these guys. amazon is killing them. >> they moved into -- i know. >> now they're tightening the rules on prime membership which some people made fun of like they're doing things that you would do if you want to make money. >> spoil the whole story. as long as they weren't making money, you keep raising your price target. once you start making money, you have to worry about the
multiple. >> does anyone care about the netflix price earnings multiple? >> beats me. >> when they cut cord, they play video games. this activism blizzard, electronic arts? i mean, what? do people work? if tv hours went up and netflix hours went up, and people are on amazon more, and they're shopping more. >> are there more hours in the day? i work for a living and i don't sleep, as we know, but i don't have time to do these other things. what's the rate for these video games? minimum wage for playing a video game? how do people do it? shared economy. the numbers were incredible. should i be playing war craft? >> ieger has people watching five and a half hours to six. >> watch the fourth quarter of games that don't matter. don't laugh at me. return of guitar hero.
i was never that good at it but maybe if i practice five hours a day, i'll be good. do you know the arch growth of call of duty -- those are warmongers. is everybody a video warmonger? >> derek jeter's girlfriend, where is she? sorry. msi, quickly before we go to bob pisani. motorola mobile, this is an interesting deal that i wanted to mention. you have an investment in a public equity from silver lake, a so-called pipe and the stock is moving up sharply. it's basically pe putting some of their money to work here and what some hope is an ownership mentality, if you will. the public comes along. you have large shareholders
there already in value act, and so this almost becomes a quasi public company. they're doing a 2% convertible, i think it's 68.50. a bit of a conversion premium. >> activists love. >> and pe has been so inactive, and so it's interesting to see them do a deal like this. apparently, also, the ceo's comp actually will potentially move up into the stock price moves up. >> you mean -- >> as if it's a double the stock price, he gets 1% of the up side. interesting deal and worth noting not just because msi stock price is moving up. this may become something we see a bit more of from both private markets and activists. >> i think we saw them on this morning. i kind of gave up on that company and suddenly it's back.
>> so many companies than there used to be. that's one of the -- fitbit. where are we going to fit it in? >> not today. right now the dow is 41. shaved 70 points by disney. 15 by apple. let's get to bob. >> the dow once again underperforming. s&p is up .6%. dow is only up .2%. a nice crowd for amplify. we were talking yesterday about 14 to 16 for pricing for them. they priced at $18. didn't up the number of shares but this is a hot haiarea. better for you foods in snack snoods. they have the skinny pop popcorn. you'll have the ceo on. i'm sure he'll talk about it. should be open in the next ten minutes or so.
also on the nasdaq, solar stocks are hot. the president was talking about his clean energy program. good time to go ipo. sun run 17.9 million shares at 14. solar stocks doing well this year. vivent is going to be bought by sun edison. that's why it's up. all the others up. the s&p is to the downside a little bit. this should be open around 10:40 or so eastern time. on earnings, a bounce in the beatup luxury sector. net sales up almost 6% for kate spade and the comps were better than anticipated. ralph lauren, the net revenues were down almost 5%. it was almost entirely due to curren
currency. take out currency and the net revenues were largely flat. again, indicating how important currency is to these international companies. and apple, decelerating iphone sales. apple is down fractionally. they are in rare territory. it's more than 10% below the 50-day moving average. we asked our friends how many times was it ever this far away from its 50-day moving standard. it's only seven times. every time the move has been higher after this. on average, 1 .9 days after you hit these lows, it moves to the up side. the point is, statistically, they're due for a bounce here at apple. great binterview with bob iger. i want to point out even with the declines of 9% today, disney is the third best performing stock even with a 9% decline in the dow today.
led only by nike and united health. futures moved down when we got the adp numbers. this is in the bad news is good news department. it's kind of unfortunate. i think lock hart changed the game yesterday. right now the dow is up 64 points. >> we barely mentioned the adp. let's get to rick santelli in chicago. >> hello, carl. once again grading on a curve has some dangers and the handicapping of why adp number was on the weaker side and looking at how it all averages out and factoring in gdp. we do have issues regarding the fed. and that seems to be a big theme. we're already looking at interest rates and equities firming long before the data released at 8:15 eastern.
look at a one-day chart of ten-year note yields and we had the outlier where we closed below on change. that has evaporated. now twos are trading above higher yield. fives are getting close to their on change. tens are over it and 30s never went below it. look at a two-day chart of bunds. the same. for the first time in a while, getting traction of higher yields and selling. open up to june 1st and you see what i mean. if we now look at the relationship between our ten-year notes and theirs and this chart, i love this chart because there's so many things going on here. but if you really want to see what's going on, look at the difference. 153 basis points and basically since june 1st, it looks like a heart beat. that is important. they're linked.
let's look at what happens with tens minus twos. the fed is getting a little steepening today. you can see the dollar index has an upward trajectory getting close to key levels. the stronger it gets, the more these traders will think the fed could tighten in september. back to you. >> rick santelli in chicago. we'll come back to you later. later this morning zillow ceo, stocks up better than 7 % as revenues double in q 2. what about the guidance for the back half? we'll talk about that. dow is up almost 73 points. hello. i am a fully automated investment advisory service. i can help you choose investments. monitor them. and rebalance your portfolio. i can do a lot of what humans can.
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general motors is doing that. tricks are no longer for kids, i guess. this group is on fire. these are stocks that go up when you think the world is going to slow down. i don't think it's going to slow down but a lot of people are embracing these stocks and i'm willing to say that the cereal wars, the buy one get one wars are over. cereal companies don't get in a room and fix prices but there is a sense that the food group is back whether it be from m&a and whether it be because people are recognizing that they're going more natural and organic. and it's positive. i salute these companies just like cvc. >> kellogg is almost an all time high. >> and pringles was good. >> ever since they took the fruit juice out of monster, it's
been on fire. >> okay, rr donnelly is slitt g splitting itself up. and there's a company i'm going to suggest he buy with a new parking lot of donnelly. i'm getting some investment banking credit by suggesting his division buy quad. >> i have to take off the apple watch again. >> the power you have. >> at the low, the watch came off and the breitling came back. i can control apple now. >> mad money tonight. when we come back, ism services. don't go away.
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60 point gain. >> we have breaking news into the mix from rick santelli on ism services. >> sometimes there's a debate as to whether numbers are good or bad. there's no debate here. our july read on nonmanufacturing ism, reaches the 60 hands. that's right. you know how long it's been since we were above 60? pretty close to ten years. august of '05 comps on this where it was a little over 61. it's a powerful number if you put a lot of credence in your strategy regarding the respondent's view of the world. if we look at new orders, 63 .8 versus 68.3. and the component leaped almost
to 59.6. all in all, this piece of data was a solid piece of data and what are the markets doing? well, i could tell you one thing, interest rates are moving up a bit. we're getting ever closer to a 2.30 yield. yesterday and the day before the debate was whether we were going to see 2%. things are rocking on in the future pits. back to you. >> unbelievable, rick. just a stunning number. the employment sub index, the highest since '05. we'll get back to you after a light adp. disney, the stock weighing and down about 8%. bob iger joined us earlier. readdressed everything from to be price to the bundle. >> the bundle is not going away. the bundle is actually still relatively strong when you look at it given all the competition that's in the marketplace and you look at what percentage the bundle represents, not just in
terms of revenue but in terms of how people watch television. it's still the dominant form of information viewing in the home. espn is fortunate that it is a brand that we believe ports well to any new platform, whether that's smaller bundle or an over the top package of programming or whether it's a direct to consumer business because we have invested in the strength of the brand and that gives espn the ability to manage through whatever disruption is going on with the bundle or in television in general or in media. it is one of the strongest brands out there and if you want to have one brand at a time -- during a time of such change, i would argue it's espn. we feel they with have the ability with that brand to do that. we could do it today in that if we took espn out to consumers, i guarantee there would be enough of them out there willing to pay a healthy enough price to make that an extremely good business
for us and create some other forms of growth because we all know that getting a closer relationship to consumers and a closer relationship to advertisers could create great value. i don't believe that it's the time to do that. we view netflix as friend, not foe. there's no reason for us to beat netflix. we actually are taking advantage of netflix' great growth and you could argue maybe we've helped the great growth. we're selling things off network. we're fortunate that we have product like "how to get away with murder" that netflix consumers. we're also selling movies to them. and netflix has also come forward as an aggressive buyer of original programming. i would imagine we have opportunities to expand our relationship with netflix in terms of supplying original
television. so suddenly, we have a huge customer out there that is willing to spend and is already spending billions of dollars on intellectual property this company owns. we view that as a positive, not a negative. we're obviously believers in our stock. that's why we've been aggressive buyers of it as my time as ceo and why we mentioned yesterday we're going to increase our buyback in fiscal 2016 to between as you mentioned, jim, six to eight billion dollars. by way the, we made that announcement when the stock was trading at almost $122 a share, and we believe that buying back our stock at that level would be accretive to us as the buybacks in the last ten years have been. this is a great company. when you think about abc and disney and pixar and marvel, no one has an array of media brands
like we do and the pipeline going forward is rich when you just think about the movies we have coming into the marketplace starting with star wars in december of this year. we have sequels to "finding nemo" and "incredibles" and "cars" and "alice and wonderland", and we have shang l -- shanghai disney land. our decision to buy back stock has to do with the future of this company going forward even in a world that is being disrupted by technology. for the most part, technology is proving to be friend, not foe. >> wow. there's a lot we didn't cover because of the time we spent on the bundle. >> it's true. >> but it is the concerns over operating net and the cable business that has the stock down. it's no longer the leader of the
dow. it's been relaced by nike and unh. >> it may be overdone today. we don't know how many subs they actually lost as a result of people cutting the cord or going to these skinnier bundled packages but time warrener, they had a big number today. the conference call begins in about 20 minutes. disney over 8. viac viacom, our cable company down almost 2%. this hit a cord with people who have been focussed on the changing landscape in the way media is dribistributed. bob iger going onto say when it comes to espn, they believe the bundle is the best way to get growth. >> that's the implied threat. people who don't want to pay for sport but at the same time if they remove it from the
packages, enthink thiand i thinn implied threat. espn is what holds the whole bundle together. that is why people buy a capel package, to watch live sports. the rest of us may peel away at the edge. >> we're going to get numbers, i think, we'll see, from sling tvr. the dish offering does include espn. this is the new world and i think it's rez nasonating today. it's the first time people are getting concerned because they're seeing it from the leading network. >> apple stock managing to bounce back above the flat line reversing what looked like down for the ten of the 11 days. a technical break down snowba snowballing into a selling frenzy.
apple's decline destroying $100 billion shareholder value. and we have an analyst at deutsche bank. this seems like an important point for people owning apple stock. is this the beginning of a major turn. >> >> we'll see. the stock has been declining for a number of days. to some extent, we're probably seeing a bounce. we had another downgrade thaoda. there are a lot of concerns about what's the growth going forward. what are the new opportunities for apple, and there's not a lot of catalysts. we'll see what happens today. >> you mentioned the downgrade. it comes from merrill lynch. they still have $130 price target. they say this this. we do not dispute that valuation metrics remain compelling for apple. in the last down cycle despite compelling valuation, the stock
am stock has rallied 40%. it underlines the unique position that apple has as a momentum stock that is widely held. it may define where it arguably should be on valuation. >> i think valuation for apple is a unique thing. it's a momentum stock. and we had sort of the positive momentum of the iphone rollout but when you think about valuation with apple being as large as it is, a percentage of the s&p 500 it's hard for them to get a market multiple. it's widely owned. some funds cannot own it more than a certain percentage. i don't know that apple will ever get a market multiple. request f you look at the last decline, it fell ten times. it's a good valuation but for apple that's probably where we are. >> how unusual is it just from your observational point of view to have a company as big as apple be a momentum stock as you just described it? >> you know, i know other stocks
have been as big a percentage to the s&p 500. i don't know that any of them have been a momentum stock like apple. >> i saw overnight it was a mistake to do what others haven't done, split the stocks that go into the dow. now you're being compared to ibm and walmart, even though you may be growing faster than google. >> i think the stock split was a good idea. i don't think it was a bad idea to do that. we've seen a lot of stock appreciation since they've done that. >> nice to see you. thank you for joining us. >> the count down is on. we are just one year away from the olympic games in rio. natalie is live with more on that. natalie, there's also a gift of you salsa dancing that's gone viral. good morning. >> reporter: really? oh, dear. i was doing the samba.
carl, this is a city that really knows how to throw a party. the question is, will rio be ready in time. we have a year to go. it's crunch time here. we went out to some of the venues and all or most are well underway. construction sites everywhere to make sure the infrastructure is ready to go as well as the olympic venues. we saw at least 50 or better completion so far. that's a good sign. the ioc president was here cede as well. he says he's confident rio will have everything ready and in place. there are a lot of hurdles and there are going to be with a year to go. as we mentioned, the pressure is on. water quality is an issue here, as you no doubt have read the headlines about water quality tests at some of the swimming and sailing venues. the world health organization is addressing those and saying they will make sure that the water is
clean enough for the olympic athletes and they will be testing to make sure that everything is in order to do that. but for the most part, this is a city that is excited. they're ready. hopefully going to be ready on time and willing to put on a great show as they do every year. we have a lot of people super excited. somebody even screaming off to the side, and when you're in rio, you have to learn how to samba. here are some steps. yeah. from the portella school. we're having a good time. and you'd better believe it's going to be a great time next year. >> that is a live shot right there, natalie. we can't wait. the year is going to go by quickly. can you believe it's a year away? >> i don't think you can avoid the samba by changing the subject. >> i'll be doing it, and our parent company is now expecting million in ad revenue. >> almost as high as for the star wars movie. >> star wars now 3 billion?
>> i thought it was 2. >> a whisper number, let's say. >> when it comes to rio, i hope that clean that water up. >> really? >> that looks horrible. it's bad. >> if this would be a catalyst for that kind of positive change, i'm up for it. up next, ralph lauren up for a boost today. they're dealing with currency trouble. and the first half of the year is the businesseest for m&a. blai r effron joins us on that. (vo) rush hour around here starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell.
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shares of ralph laush, the company facing its share of challenges. kourtney reagan joins us with a look at more. >> ralph lauren surprised the street on the upside reaffirming full year revenue guidance. profits still down 41% year over year. revenue also slightly lower. currency impacts muddying the waters with the results. comparable sales down 8% or down 2% constant currency. on the conference call, ralph lauren executives explained that international business retail comps were positive driven by strong acceptance of the products as well as increased traffic flows from countries like japan.
there were fewer foreign tourists shopping in the u.s. and that hurt domestic comparable sales. ralph lauren has raised prices by mid to single high digits where currency has weakened. now, online sales were also weaker than expected overall. internationally commerce comparable sales increasing by double digits but there was weakness in the u.s. as the executives explained, they chose not to go down the promotional game path but they stand by the decision to protect the brand equity in the lang run. another premium retailer updated the progress of reorganization saying it has established six global brand groups and filled the brand president roles. as you can see, there's a lot of work to do, especially when it comes to revenue growth. >> yes. that's something of an
understatement. thank you very much, kourtney with ralph lauren. straight ahead, the fed's jerome powell saying that nothing has been decided so far as raising interest rates in september. so what after yesterday's big moves in bonds should we be preparing for. we are waiting for amply fie to open. having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car.
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the dow nearing a triple digit gain. we have a triple dimt gain. 100 points on the gain. >> reporter: moving in the opposite direction. check out genworth financial. the ceo said it will probably not sell its entire life and annuity insurance businesses on the company's earnings call this morning. he also said the company will instead look for a buyer for blocks of life insurance contracts. genworth posted earnings that missed expectations after yesterday's closing bell. the stock is now down about 30% so far this year. back to you.
>> on the up side, let's mention where we are on price line. the largest online travel agency comes through with results. they are up 4%. throughout the earnings season people have said the strong dollar is going to crimp, usually revenue more than profits. and price line has warned that's the case as well. they're in a unique position that although it has a translation effect from the biggest business which is in europe yrn europe, because the euro is low, you're seeing a boost in volumes in europe which makes up for that. hotel volume now up 26% at price line and the market liking it. >> just extraordinary. just to look at the price tag. >> here at the new york stock exchan exchange, the maker of the skinny pop, we're going to talk to the ceo as soon as they open for trading. much more "squawk on the street" straight ahead.
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i'm a senior field technician for pg&e here in san jose. pg&e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. raising a family here in the city of san jose has been a wonderful experience. my oldest son now works for pg&e. when i do get a chance, an opportunity to work with him, it's always a pleasure. i love my job and i care about the work i do. i know how hard our crews work for our customers. i want them to know that they do have a safe and reliable system. together, we're building a better california. good morning, everyone. here is your news update at this hour. secretary of state meeting with turkey's foreign minister. turkey says u.s. air force and troens are arriving to start a comprehensive battle against
isis. the guide that assisted in killing cecil the lion. his trial was postponed until september 2nd. >> a massive wildfire continuing to burn in california. the rocky fire consuming more than 100 square miles of terrain and forcing thousands to evacuate. 50 structures have been destroyed with more than 7,000 under threat. the rocky fire has been burning for more than a week. a quarantine is in place after a concern of ebola. the patient is being treated at the university of alabama after developing symptoms and also notifying authorities. two family members have been asked to stay inside their home. and that is your news update at this hour. right now back to "squawk on the street." >> amplify snacks, maker of
skinny pop popcorn, down about five and a third%. joining us here at post nine, literally seconds after the bill, the ceo of amplify snack brands. what are the economics of the popcorn market? >> it's great. it's a category that's on fire in salty snacks. it's americans rediscovering popcorn. it's a great category. americans love popcorn. we eat it at the movie theaters. advances in cooking and packaging technology, it's great. it's fresh. and americans are loving it. >> now, i've been waiting white cheddar popcorn for years. what's the advancement that set you apart? >> i think for us it's what we call the wet pop product. ours is cooked in sun flower oil. it gives it that crunch and buttery flavor without heavy
seasonings and people come back time and time again. we have the highest level of repeat in all of salty snacks on skinny pop. people love it. >> people point to limited points of distribution. heavy reliance on one product. when does that change in. >> that's beginning to change. we're gaining distribution like mad. we're in target, walmarwalmart, costco, sams. and then we acquired another business partnering with an entrepreneur for tortilla chips. we partnered with the founder. we're going to take it national in the first quarter. we're excited about building a port foal ya. >> isn't it too direct a play on what corn does? we see people get burned on corn all the time. >> we have corn and popcorn. they're two different kmoi commodities but they represent a small part of our cost of goods. even if corn goes up, we're still in good shape. >> did the jobs act help you
guys go public. >> it helped advance what we're trying to do. >> what difference did it make, specifically? as people look to all of these companies, relatively small like you coming to market, you wouldn't have been able to do this several years ago? >> i think our company could have done it but it's the process. it's less owners to get to the public markets than before the jobs act. >> the skinny part doesn't come from the fact that it's good for you. it's less ingredients? >> we've taken all the garbage for you. it's about simplicity and transparency of ingredients. >> could you not get a trade sale for the business? >> we didn't want that. when we started this out, the intent was to build this public and build something for the long ha haul. >> wouldn't it grow more rapidly
if it was -- >> i think it was hard to beat our growth rates. they're great. and you'd have to ask their big boys what they're thinking about it. we just have our nose done. >> marketing costs, you're going to have to keep up with players with a lot of cash. >> we can market through social media, nee field marketing. if we can get the product in somebody's mouth, they're in. we spend a lot of our time visiting with consumers and getting products in their mouth. >> the priced at 18. are you disappointed with your underwriters? >> not at all. we're above the range. i can't look at this today. i have to focus on what we're trying to do and we're building a great company. just getting great products to great people. >> we'll watch you through the course of the day. thanks for coming on. >> thank you.
>> we have breaking news. >> the eia, a bullish report this morning. crude prices up about $0.58 before the number came out. a draw down of 4.4 million barrels. $46.67. session highs for wti right now. what's interesting is the api set us up for a draw down. a lot of traders saying we have to see what's happening with imports. the last few weeks we've been seeing the imports come down and they why we could see draw downs. the other thing i want to talk about is gasoline inventories. we have a build of 800,000 barrels. we were looking for a decline. this could be a sign as we're coming to the end of the summer, it will start to build and that demand will bring crude prices down as well. a lot of factors to watch. interesting we're up almost a dollar. dollar index up over 98.
>> thank you for now. markets slowly climbing. private sector job growth slowing this morning. possibly widening trade deficits as well. earlier we spoke about the labor market's impact on rates. >> nothing has been decided. and i haven't made any decisions about what i would support and certainly the committee hasn't. we're working with the same framework and looking for some further improvement in the labor market. and i'm going to be very, very focussed on the data between now and the meeting. particularly the labor market data. >> let's talk about some of that data with the chief u.s. economist at barclays. welcome. good to see you this morning. michael, let me start with you. if we're laser focussed on the data, how big is it that it was missed this morning. >> the strength of the nonlabor market has been coming to the up
side. we can handle a little bit of a miss to the downside. we're looking for 200,000 for payrolls on friday. that would be a hair softer than last month. not a big downside surprise, but the bulk of the data on the activity side and the labor market side are consistent with a rate hike in september. we think that will be the case but the data has to justify it. >> ethan, which is more important to you, the monthly reports and the jobs report coming friday or the higher frequency data like the private ism survey released a half hour ago that jumped to a ten-year high? >> they're all important. the fed obviously is very zeroed in on the numbers right now, but i don't think we want to get too excited about the adp number. anything above 120 is consistent with the declining unemployment rate. that's what the fed really wants here. they want jobs numbers that push down the unemployment rate.
the nonmanufacturing ism report was quite strong. if you looked across all the categories, so i would agree with michael that the good news there, probably more than us, that's the bad news in the adp report. >> michael, how are they going to explain to people if they hike rates that they're doing that when consumer price inflation is near zero with the collapse in commodity prices and likely to go lower. does the fed understand what the economy is going with so many different moving parts. >> i think you highlight the most difficult part of their message. that's justifying why they can start to raise rates now even though inflationary pressures are quite soft. their message is that at some point, we don't know exactly when or to what degree but at some point further labor market improvement should support wages which should get us back to 2% inflation.
it's a forecast-based decision. we'll see if that pans out. that has been the hardest thing for them to communicate. >> michael, aren't we in danger of being in a situation where they keep overestimating what growth is going to do. they should have raised rates earlier. they haven't raised rates. now they feel they need to to make up for time but the economy may have changed and the effect of the rate rise may be quite negative, some would be concerned. >> that certainly would be a concern. that's not a view that we would have. our view is basically that labor markets have just improved enough or they have to go and start this process. we'll see how strong the inflation data is over time. if not, the path will be slower than they expect. i think that's just how we frame it at this point. >> i would add to that. the fact is that the u.s. economy is a lot healthier than it was a few years ago. the fed has been fighting to heal the wounds of the 2008,
2009 crisis but there's been a tremendous recovery. the fed was fighting to keep the economy growing in the face of constant fiscal austerity and in moments in washington. those head winds are gone now. and so the economy can handle higher interest rates. i don't think this is a mistake by the fed. i think they're right. the economy is ready for a very slow careful normalization. >> before we go, ethan, one of the other big changes in the economy since then, arguably, is the rise of the uber and some of the companies that didn't exist during the crisis periods. are we accounting for whether the economy is stronger because of the workers or whether the jobs report needs for nuance that we're not used to giving it. >> there may be some undermeasurement of new products in the economy. if there's a lot of free services and better quality services that the government doesn't measure properly, the true health of the economy and the kind of welfare of the
american people is a little better than we're thinking, i don't think this is a massive underreporting though. generally speaking, we're in a modest growth recovery, and, you know, that's pretty much what we have to live with. >> yeah. as we have. all right, thank you both this morning. it's ethan harrison and michael gateman. >> still ahead, zillow's revenue doubling. the stock is up sharply. the ceo will join squawk alley live. "squawk on the street" will be back after a quick break.
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everyone is most interested in, china. when you cut through it all, take a macro view. adding or taking away horse power in the global economy? >> taking away. man, thathave they got a mountao climb. >> their economy has grown in size if you have a smaller gdp on a bigger dollar amount, still mitigates some of that, but net net, it's still shrinking. >> it's grown on a pile of debt. we know how much leverage has gone up. >> put it in perspective for me. >> if you look at the rate of change. there's a couple of provinces in china that have put in plans investment plans that are from the 1980s. incredible amounts of debt. and it's debt piled on top of pile. they're shifting away from the export and going forward more
consumption. that takes time. you don't have markets that clear. they've made lots of reforms. there are things they can do but will they get it right is the question. >> today's data, what did you think about today's data in the context that the federal reserve and what are your thoughts about the september meeting? >> bullish on the dollar. and i think there's a hike at the september meeting and there's a real risk of a disorderly adjustment in the dollar. it goes through the roof and this is difficult for emerging markets. >> of course. the tides come in and go out and they have little say so about the level of the moon and the water. you think the fed is going to do? many do. when i look at data, i'm not so sure that holds water but nonetheless, they need to do it and what is your opinion as to why they seem to certain to do it now? >> i think they're concerned
about being blamed for policy r mistakes. like all central banks, people anywhere, they're always worried about being blamed. they have great people but they realize like anyone else they're going to be cleaned out by congress if something gets on the wrong side of where they need to be. >> quickly, you said the dollar strength. it's unavoidable. when they normalize the dollar is going to get strong and there's not a lot they can do about it. >> they have to get on the structural reforms otherwise it's crisis after crisis. the markets are going to go down. that's when you load the boat. >> kind of the warren buffett. when nobody else wants to do it, you step in. >> yeah. i'm there. >> mike, thank you very much. let's go back to kelly and the gang. >> up next, you won't want to mess this.
blair effron, one of the biggest investment banks in the company weighing in on m&a. "squawk on the street" is back in two. you focus on making great burgers, or building the best houses in town. or becoming the next highly-unlikely dotcom superstar. and us, we'll be right there with you, helping with the questions you need answered to get your brand new business started. we're legalzoom and we've already partnered with over a million new business owners to do just that. check us out today to see how you can become one of them. legalzoom. legal help is here. no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop,
it may be, $30 million bid from shire from baxalta eclipsed the full year record set last year. since we have deal after mega deal right now for the first half of 2015, the busiest on record, what can we expect? more of the same? well, let's bring in blair effron. >> thank you for having me. >> nice to have you. rare in my long career have i seen a period like this and it feels like it has momentum, but it brings up the thought are we at the blow off stage? >> it's a question we all ask. rare in my career with this much activity. the next few months strike us as continuing to be busy. you can tell by the nature of some of the dialogues out there but you have to step back and look at valuations. the average valuation in the m&a market today is 13 times ebita.
as reminder in 2012, it was ten times. the last time we were at 13 times was 2007. the last time year to date 40 2007. i think most people in my community, are asking the same question you're asking -- what will change the environment to get us back to a more normalized period. >> back then a lot of activity was led by financial buyers, they're noticeably absent from the current period. it's much more strategic. >> it's the companies you advise, whether they be seller or buyer. they seem to be encouraged, because their stock prices go up every time they do a deal. okay, more confidence, more confidence, but it does have a way much ending. will it be a stupid deal that gets us there? >> it's never one stupid deal. markets are more supportive on announcement than they've ever been. that's a warning sign. i would say the 20 largest deals, the stock has been up 4%
on average, versus 1% historically. that said, companies have gotten much better about focusing on what makes sense strategically and once better about integrating once they do something transactionally and you mentioned health care, health care has done a good job consolidating positions around certain disease states and being aggressive both internally with organic growth and externally through m&a to continue to improve those competitive positions, that's the key driver here. >> to the extent we're in the later stage if we kind of agree perhaps that's the case. are there any industries you're surprised haven't participated that will? where are you going to see the activity? >> i'm surprised there has not been done more in technology. you have very cash-rich balance sheets. you have companies grow iing better than how they're getting valued in the marketplace and that prompts boards of companies
to step back and say what can we do or ought we to think about in terms of m&a activity that might put news a better place. so i would say, i see that sector and obviously everybody talks about energy. it strikes me as early. there's always several quarters after a seismic event in any industry where things have to settle out? >> are we still settling there? i hear it too. there is as you say some question as to when are we going to see potential consolidation, given the underlying price of commodities? >> i don't necessarily feel the urgency and i think it's too early, companies can make mistakes, you don't want to buy and then find out you have actually purchased something at the wrong time. i think it's actually quite a bit a way before we can sit back and say there's enough here that you can make an informed, appropriate judgments. >> confidence seems to always play a key role here.
we've had so many other things in play, but is that what happens when you're in the board room, whether it's a sale or a purchase? >> m&a aside, confidence in the board room, confidence among senior leaders is at a high point. it's not at a high point because they think there's breakout growth. it's at a high point because particularly in the u.s. for seven years now we've managed to do fine enough. and you've had companies that have figured out how to produce good results, against a macro backdrop of 2.5% growth here, and 3% growth globally and that gives them a certain little of confidence that they can keep being attentive to their base business as they think more broadly about where they might expand. you hear that a lot. i think the, there's much more focus on the upside part of the equation on the risk/reward ratio. than there is on what are the big issues that on the down side that can hurt them. >> but i see you perhaps a bit more cautious than one might anticipate, you're not --
>> give me the rah-rah here. what would be something that you would think would be a bad sign? >> fundamentally, i think that values are high and being justified to today's rate environment. and today's equity multiple environment. you need to be comfortable that across a multi-year cycle, in different rate environments, different equity environments, that if you're advising on a transaction, it would still make sense, i think the, it is robust, but not crazy. and the big question is whether it goes one level up or people maintain the discipline we've seen since 2008. >> something that is always a part of this overall ecosystem these days is activism. no stop there. money seems to keep pouring into to those who have an activist orientation. do you think that continues? do we get even bigger positions
in some of the well-known names? >> i do. i think there's so much money that has gone into these activist funds, i think it was $200 billion, before you use leverage, we have a sense that bigger positions are being built, sizes we haven't seen in really big questions. the question is, when you are buying a big position in a really big company, where your overall ownership is relatively small, can you have the same impact that you would have had previously? and i do think there's a growing question in board rooms as to this focus of short-term performance versus long-term. and companies are certainly attentive to the idea that as they need to perform short-term, they need to invest whether it's r&d, whether it's i.t., people for the longer term. that's going to be a little bit of the rub. >> and finally, blair, we watched a popcorn company go public not too long ago.
center view has great success, 200 bankers, would you ever consider going public, 200 bankers? >> not today, we think it's good for us culturally and good for our clients. >> you like to stay private? >> we do. >> blair effron, thank you. founder and partner it center view. simon, back to you. let's see what's on deck with jon fortt. good morning, jon. >> we're going to talk about disney's bob eiger was exclusively on air with us just a couple of hours ago. he's effusive in his praise of netflix. find out why. also apple continues to be down. is it down for the count? maybe not, tune in for that. and finally netflix itself, new all-time highs this morning. what's next for that company? all that and more coming up. ♪ [ radio chatter ] ♪ [ male announcer ] andrew.
♪ ♪ good wednesday morning, joining us at the far end of the desk, john broad, co-founder of aol ventures, kelly evans back with us, thank you for joining us, jon fortt at post 9, we want to begin at disney. shares getting hit after revenue missed estimates, and company nts noted some modest subscriber losses at espn as the company continues to shift to digital. take a listen to bob eyeing another joined us earlier. >> obviously the bundle deler