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tv   Squawk Alley  CNBC  June 20, 2017 11:00am-12:01pm EDT

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good morning it's 8:00 a.m. qual come headquarters in san diego. "squawk alley" is live
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good tuesday morning we're at post nine at the new york stock exchange. joining us from palo alto, roger mackname ceos meeting with the president yesterday. research, immigration policy, modernizing government operations here some sound from bezos >> i think it will be impossible to overstate this is that the united states needs to in every way at every level be working on machine learning and artificial intelligence and that can be used in every part of government to improve the services that government provides to citizens >> all right roger, i have to get your take on what you think was about. your read of the body language and all the optics but more importantly, what happens now as some of these conversations continue between
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the valley and the white house >> so i think the core thing, carl, is that the agenda of the day really looked like it was about secretary tsecretary the groundwork for privatizing a lot of government services wlchlt you think that's a good idea or bad idea, i think that government is not currently structured with a mission that privatis well. you can imagine, we had a little test trial balloon of that a couple weeks ago relative to air traffic control. and in my mind, the image that came up was the notion of planes circling and calling the tower and getting the message. you know, your call is important to us. you're now number 217 in line. we'll get to you as soon as we can. i do think that there are admirable elements of the agenda as they put it forward they clearly government can be wildly more responsive and it can be wildly more transparent but i find it hard to believe --
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really not credible that this administration that's currently not even doing press conferences or press briefings where they can film is likely to be a leader in transparency i think if we can trust them to to da that, that would be a very good thing this is mostly about show. i think this is mostly about, you know, parading the most successful americans through the white house and legitimizing an administration that at least so far has done everything in its power to undermine tech through, you know, restriction onz immigration, through all kinds of os tilt towards our largest trading partners i mean these things are not consistent with each other and if anything were to come out of yesterday's event, it would have to be packaged with a much smarter immigration policy and much smarter trade policies, neither cof which appear to be forthcoming. >> some are listening to what the president said at the table yesterday and reading into that perhaps the white house has at least has heard silicon valley, whether they act on it or not is
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a different storey but certainly they've been open eared, receptive to what the valley is telling them >> you know, we'll find out. i think watching a press availability which is really what that was is not a best way of getting a clear picture i think, again, we need to watch what's going on relative to immigration policy and relative to trade policy. for the tech industry, those are the two baindicators that will tell whether you the administration is serious or not. it has don't opposite of what tech would like to this point. i think that's why there has been such a high level of skepticism. >> so to what extent is the pushback becoming the story now? we see these meetings. it's a familiar scene. high powered executives sitting around the table with the president. but it's no the clear what's coming out of it now we're getting headlines on tim cook pushing back on immigration. we've seen them tweet about climate change as well s that
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becoming the story of the meetings >> we can only hope, so john i mean, the administration will be so much better off if it weren't so hostile to what i would characterize as the american way this is a country built on immigration. it's a country that has prospered because of global trade. and undermining those two things is just bad for our economy. it's bad for our culture it's obviously horrible for tech and we can only hope that pushback from the tech industry and hopefully from other industries will have a positive impact because let's face it. it's not useful to win this argument in terms of winning it on television. what you have to do is change the policy and get good things to happen from the economy there is no way that we're going to grow the economy if we're cutting back on global trade and cutting back on immigration. >> so, roger, setting some of the controversial issues aside where tech disagrees with the administration, i mean, the meeting to me seemed to be about
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modernizing government instra structure and everyone agreed there's a lot of work to do. i'm wonldering how big a client the u.s. government could potentially be to some of the companies, who stands to benefit? are they going to shop out contracts? what kind of business is in this for the companies when it comes to cyber and getting systems on the cloud and everything else that was talked about during these hours about how behind the government is on technology? >> well, i think it's a great question to me though, they have not even nominated people for roughly 400 cabinet and subcabinet positions in the administration. it strikes me as inconceivable that you could actually implement a large technology strategy when you do not have secretaries for some of the core cabinet offices where you don't have people in many of the key roles in government.
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for government to function, you have got to have, you know, a manage ment structure that can make decisions and at the moment, this administration does not have that so personally, i find it -- i would not be betting on anything good actually coming out of this i just don't think they have the horsepower they don't have the team they don't have the staff to actually administer things within the administration. clearly, the department's had great people i think at the administration level there are just too many holes in personnel to implement anything valuable. >> we're going to watch for that, see how that develops, roger. we'll pivot to amazon. prime wardrobe is an outfit delivery service for prime customers similar to stitchfix, trunkclub and others as we get new comments from whole foods john mackey on amazon's plan to buy a high grosser at a town hall with employees he characterized it love at first sight. suggested, roger, that maybe
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amazon could thread out some additional brands and addition to whole foods itself. there is discussion today about data being the real crown jewel here we haven't had a chance to get your take on friday's news >> what i would say is that i believe that amazon has a strategy that really we haven't seen in the economy to this point. there's a fellow by the name of ben thompson who writes a blog in hong kong called striktechory his view of business mod slz one that applies here. what amazon is doing is creating services where eachst operations is not actually a business in their mind it's a customer. so if you think about it, when they created amazon web services and prime, their number one customer was their own amazon.com but they also made those services available to everybody else in the world. and i think that's what they're going to do in grocery that's what they're going to do
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in apparel the central notion is that what whole foods gives amazon is critical mass, a customer that is large enough for them to get all the services related to food, to be as efficient as they are with aws as they are with prime. and then i would imagine they would then open the platform up just as they did with aws and prime. and make it available to restaurants and other retailers who want to offer food products. and that strategy is amazon's current scale. hard to stop >> you're talking third party? in other words, sarah and i have a restaurant -- >> for sure. think about amazon -- think about it -- think about their strategy in food basically, grocery is like 20% of retail. it's the largest single category and restaurants and all that are another big piece of the economy. amazon wants to be the logistics
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and information hub for those industries if you think about amazon strategy, it's taking a small piece of every economic transaction in the economy, i think that's going to get you pretty close to the way jeff bezos thinks about things. and if you look at the food category that way, what you realize is that amazon fresh was a way to sort of learn some things i didn't have critical mass. it wasn't large enough to be the customer around which they could get to giant global scale. now in combination with whole foods though, the ball game changes overnight. so i wouldn't expect big changes in whole foods i expect them to treat them as a customer >> roger, i worry sometimes -- amazon is big. amazon is brilliant. they executed amazingly. i worry sometimes that we're sort of getting stock market investor style religion about amazon when it comes to what they can actually execute. and to me what was sobering about john mackey's statements is how little in the near term
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we should expect to chafrmnge. employee benefits staying the same the culture of whole foods staying the same amazon is going to let them continue to run the stores the way they have run them sult dreams about whole foods stores turning into distribution centers. hold your horses >> i don't buy that. yeah >> right >> carl, i think you're absolutely right i don't think he wants to change anything for some period of time that, again, if you view whole foods as though they were amazon's largest customer in the food category, then in that context, you don't want to mess with them. you want to let whole foods be exactly what it is today because it has, you know, it has enormous brand appeal. fraen amazon's point of view, right now what they need to do is create the equivalent of aws to service that. there is no reason to mess with the formula at all and all these people are talking about distribution centers maybe that comes some day. i don't see that in the near term at all and i don't see that
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as being strategic to this transaction. to me the strategy is about viewing food as one of the largest categories in the economy and whole foods as the first best customer to learn and develop all the infrastructure necessary to shoupport every otr customer in that category. that is really defensible. >> so what you're saying roger and john maybe i'll pose it you to, makes me wonder about amazon's ambitions on apparel. they haven't really reached critical mass. when i think amazon apparel, maybe i buy bras there, stuff you have to buy like toilet paper and towels i'm wondering if they have to make a big acquisition like whole foods so to bridto bridge market the way we're expecting them to in grocery >> i think you're right. i think amazon wardrobe announcement follows along the whole foods line in this way
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we're seeing the limits of pure e- commerce. there is only so much that we can do just through the web browser, just throughout app that's what the whole foods example says that's what this idea you pick a bunch of clothes and get them in a box and decide what to send back there is too much shopping cart abandonment. they're trying to send you the stuff before you paid for it so that they'll be able to convert better, don't you think, roger >> john, i'm totally with you. and the way i would think about this is they made the -- amazon made first effort in grocery in 1999 so this has been a strategy developing over a long period of time i think this apparel thing may be the equivalent of what amazon fresh was which is to say a direct native strategy in a category but not one that's going to get them to critical mass and that eventually, yes, they're going to have to get a first best customer around which they can then build all the services to operate globally for
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everybody. and how important that is to them i don't know. apparel is big it's obviously a lot smaller category than food i don't know how long it takes them to get there. i wouldn't hold my breath on that in my mind, you know, the reason this is compelling is that sfoodfood is a gigantic category >> one last question how important is it that they close this deal assuming we get a rival bid if we do >> you know, i don't know what to say i think there are other players that they could go with. what is really great about whole foods and i think the thing that makes it unique is that it maps really well to the prime customer base, demographically and in that sense, i think it's really, really valuable. i don't know, you know, whether there's going to be another bidder and, you know this is not a category where the consolidation strategies of the existing players are going to be able to resist a play from
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amazon in the long run so i would expect amazon to find some customer in this category around which they can build this strategy i think they picked whole foods because i think that's the best natural fit. i suspect it's not the only one they could do it on. >> all right good stuff today, roger. appreciate it as always. >> my pleasure >> when we come back, we're watching apple we'll talk about the price action there apple stepping up the legal battle with qualcomm we'll hear what paul jacobs has to say about that. the latest season of binge is out and ready to stream. here is six time emmy winner allen alda >> you played shelly >> yeah. >> uncle pete in horse are you as profane in real life as those two characters? [ beep ] yes. >> full episodes of binge streaming on cnbc.com/binge.
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[ mhow was work?g ] well, actually... you're fired! [ screaming ] lucy and i were invited to not work at the a.v.l. anymore. no! minions! we're going back to villainy. [ cheering ] so, you're villains now? oh no! no. no. no. no. no. [ laughing ] [ evil chuckles ] yow! yes. despicable me 3. rated pg. a mixed bag for tech stocks this morning as the f.a.n.g. rally loses a little steam the dow hit another record intraday high earlier this morning. we're joined by bernstein research analyst tony sakanagi nice to see you, tony. >> nice to be with you >> everybody follows your calls on apple
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i blep you'elieve you're still overweight at $160 bring us up to speed now that stock had 25% run this year and often seen as a signal or about a ramter barometer. where do you think the stock goes from here >> we continue to like the stock at current levels. and our belief ultimately is that the iphone 8 cycle will be significant. particularly in china. and we've seen historically that apple stock outperforms very meaningfully in advance of product relisa announease annous they outperformed in the three months and six months prior to the announcement of a new iphone we're in that sweet spot and we like the name. i think the market is struggling a little bit with how well tech has done year to date. and whether that can persist
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so you are seeing some give and take in the tech tape overall particularly among the leaders like apple >> how you are playing the hype around this particular iphone cycle? i don't -- it's been years since we've seen one this hyped up wherepeople are expecting a bi cycle. there is often a sell on the news effect for iphone announcements. are you expecting that >> yeah. i think looking back to the iphone 6 cycle which was really an analogous cycle, you had a significant form factor change is helpful and what we found in that cycle is that the peak relative price to forward earnings multiple for apple was just under market multiple about, .94 times f we applied that to apple's expected earnings for next year, we get a stock price of 170, $172 so if we are going to see the stock move to a similar relative
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level, we think that we can see a stock price of $170. if earning goes up, we could see a higher stock price now i think in terms of timing, you're right, historically we have seen significant outperformance in the stock in the three to six months prior to the announcement we've generally seen flat performance on a relative basis in the three or four months following at announcement. so history would say you may want to trim positionors take some profits around the time of the product announce ment. but i think that will largely be shaped about how high expectations are at the time of the launch >> tony, can the model of high end competition in china be replicated here? if not, why not? >> well, you know, technically i don't think apple has had the best phone on the market for five or six years. clearly when the iphone was introduced, it was a paradigm shift. you moved to a pain of glass
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with an app store. and that was very different. but after two or three years, you had competitors running android, emulating what apple is ultimately delivering. i think technically if you were to look at hardware feature functionality, other names whether it was hdc seven or eight years ago, samsung four to five years ago have had superior hardware technical specifications so clearly it's not just that that matters apple continued to hold or in some cases gain share. i think it's a combination of brand which is particularly important worldwide. ecosystem because ios is familiar, easy to use and many owners have not only an iphone but other apple devices. as well as industrial design apple products are really nicely designed and consumers appreciate that. so i think that's what apple
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historically over the last five years has had relative to peers that had have technically competent or comparable phones and i believe those will continue to be advantages for apple. >> finally, tony, we're pondering the aftermath of amazon buying whole foods. i know you're focused on tech hardware companies clearly speculation is heightened on m & a deals, the fact we could get repatriation. a lot of the companies have overseas cash. where do you see any deals happening in the space where are you on the apple speculation that they're going to have to follow in amazon's footsteps and buy something big and bold >> yeah, so apple set a very ambitious target to double its services revenue over the next four years so that would be taking annual services revenues from $24 billion to $48 billion that's a really aggressive target to do in four years to give you a sense, netflix is a
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little over $10 billion. auto you'd have to be adding 2, 2 1/2 netflixes in terms of annual revenues. and we think that will be very difficult for april toll do with its existing set of services so i do think it's likely that apple will use its balance sheet and use its cash balance to try and augment the services capability now that could be in the form of licensing content. apple might choose to spend billions of dollars a year licensing content. it may choose ultimately to try and pursue an existing content business another area where apple has seen very robust growth has been in gaming on the app store and so that's also a potential area where apple could look to august ment through a modest or significant acquisition. >> we'll watch that space. tony, thank you for weighing in on the tech stocks today and straight ahead, auto desk making a new ceo. he's going to join us for one
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market and then live from the festival, hear in carolyn everson, everything from advertising to fake news there "squawk alley" is back after this they are the natural borns enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care,
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they become something beautiful.
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[ upbeat music ] [ gasps ] i'm gonna be empaled! [ chuckles ] i'm okay. [ exhales ] despicable me 3. rated pg. auto desk naming a new president and ceo. shares are down 1.5% joining us now is auto desk's new president and ceo. andrew, congratulations. >> thank you, john good morning good to be back. >> great wa i want to start off asking you about product. the co-ceo and headed product for you guys is leaving as part of this shuffling that often happens. what are your plans for the product organization to stabilize and strengthen there >> the great thing is martin and i work together for a long time. i'm really sad to see him leave. but he built an incredibly
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strong bench of development talent right at the top of the organization and further down. that really is his legacy to the organization so i have a huge pull of talent to dip into to strengthen the organization and keep it developing the innovative products it's been developing over the last few years. >> as you look at pushing forward more on your cloud strategy which has become a key four growth wise, what are the areas of greatest opportunity? it is those emerging markets where you started to pick up paying customer that's before weren't paying so much >> yeah. you know there are two kinds of opportunity we're facing one is emerging markets places where people weren't paying for the software previously, huge growth opportunity whuchlt lo when you look to the cloud, construction and the rise of the cloud on the construction site, that's going to be a big growth opportunity for auto desk. >> so what peg should we look for on a global basis to see
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what is driving that is it the health of the economies worldwide? is it infrastructure plans for growth in the united states and other place that's sort of give us a sense of where people might begin spending on your product >> yeah. you know, there's always this joke, can you go out and count cranes and that's an indication wr of where the markets are going with our invest ments in infrastructure and buildings there's a global building boom people are building new cities, new environments for growing populations and in the mature markets, people are rebuilding i mean i think infrastructure say big story everywhere aging infrastructure, the need for new instra frfrastructure, f those are signs of growth for our customers which is ultimately growth for us >> andrew, i want to get your temperature on where mobile is now as part of the strategy. apple's ipad sales have
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flattened out. they're sinking. i know you guys and adobe invested somewhat in building mobile apps. kind of as companions to your main product to what degree is mobile important for you going forward? how has it added value or how does it continue to add value as you plan out where to invest >> you can't manage on a construction site without a mobile device. so mobile is always going to be a critical component of our strategy because that's how you get design information on is site where something being built. or into the factory where some product is being built so mobile sales might be going down across the board globally, but for our markets, mobile is where it's at in terms of getting information to where things are built >> all right andrew, stock is up better than 80% over the last 12 months. and you've been in the driver seat for a lot of that
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congratulations. the new ceo of auto desk. >> thank you so much >> europe is going to close mostly in the red. >> that's right. stocks off the highs of the day during a session in which the german dax hit a new record train day high what happened? the dramatic drop in oil prices. that is the catalyst now down 22% from its recent high oil officially in bear market territory. take a look at the leaders all down between 1 and 3% on the day. miners included in the selloff also under pressure. this lower for longer, will it make it harder to support dividend payouts that's some of the commentary from energy anlialysts this morning. the u uk pound falling to a two month low after they said now is not the time to raise interest rates. carney warned that the brexit is likely to result in weaker real income growth.
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listen in. >> before long, we will all begin to find out the extent to which brexit is a gentle stroll along a smooth path towards a land of cake and consumption >> in reaction to carney's comments tashgke a look at the guilt yield. this is not about currencies but the bond market reaction as well. >> thank you very much for that. the president is meeting with the ukrainian president a few moments ago in the oval there was a shouted question about the death of otto warmbier he said if he was brought home sooner from north korea, i think the result would have been different. warmbier was a prisoner in north korea for 15 months. tragic situation there getting the president's comments on. that. >> hi, there carl. here is the news update. police investigating the murder
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of a muslim teenager in virginia as roads rage, not a hate crime. they say 17-year-old got into a dispute with a young nona vehicle near the mosque where she attended he attacked her, killed her with a baseball bat according to police on tuesday. vigils will soon get underway across the country to honor the teen firefighters estimate 70% of wildfires in portugal are now under control at least 64 people including a fireman died in those fires about 125 miles from lisbon this is the deadliest forest fire in the country's history. adelle met with london fire fighters to offer support. the city's dement released photos of the singer with the first responders the firefighters fought the high-rise apartment fire last week that killed at least 79 people back at home, louisiana is under a tropical storm warning a weather system with sustained winds near 40 miles an hour closing in on the coast. the national hurricane center
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says this one could strengthen you can see that rotation. it looks like it's going to be a nasty one for louisiana. that's our cnbc news update. we'll get back to "squawk alley" now. >> as we head to a break, a quick programming note tomorrow on "squawk on the street," don't miss david faber's sitdown with jack ma we'll be right back.
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let's get out to julia
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borsten who has another special guest. >> hi, i'm joined about it head of ad sales for facebook also giving us an exclusive nugget of news you're announcing today that instagram stories has 250 million daily active users it's up from 200 million in april and you just launched that stories format in august the question, is how are you making money from that growth? >> it's amazing. if you think about it, a year ago when we sat together, instagram stories didn't exist today on the platform, we not only have 250 million people using it but actually a third are businesses using instagram stories and one million advertisers. and so not only are advertisers using and benefiting from the instagram feed and utilizing stories as a great format. beats by dre and michael kors are two of them. >> how much are they spending in ads?
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>> investments are growing across the board. >> now is your user growth of that stories format coming at the expense of snapchat? >> our user growth for stories is actually coming at the explosive growth for instagram overall. instagram is now at 700 million people globally. so we feel it's a privilege to earn people's time and attention in both platforms are doing that >> now facebook has in the past acknowledged very publicly that this stories format was pioneered, invented by snapchat. how do you address the criticism they're just copying a format that snapchat invented >> you think about feed, facebook invented feed, sta instagram utilized feed. we think stories is also another format that not only consumers but advertisers use. you're going to see stories in a lot of different platforms. >> so you are going to copy everything that snapchat does? >> we're very thrilled that innovation that instagram is
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doing and the explosive growth they h 250 million people using stories is larger than any other ad platform now. >> the biggest competitor google is here. there say lot of talk here about how they have taken more steps to announce on sunday to crock down on terrorists and offensive content on that platform does that raise the bar for what you have to do next to address that issue >> facebook is a safe place for brands let me start there second thing i would say is we have zero tolerance, zero tolerance for hate speech and terrorism. there is no place for any of that on our platforms. and we have already made a commitment to hire more people to review that content we've already made a commitment last week we made an announcement about our investment continuing in ai and we also view the 1.9 billion plus people our best assets to report that content. >> two days ago there was a shootout in myrtle beach that one of the users live streamed when that kind of thing continues to happen despite all the investments your making, how
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do you reassure advertisers about brand snast. >> we have given them platform opt outs five areas of concern of them and an opportunity to give us blacklist for web sites and app thez don't want to be a part of with an audience network, and instream video and instant articles to make it as safe as possible. >> what about the thing that this keeps happening you made all sorts of announcements, the number of people you're hiring, artificial intelligence but it's an issue s there anything you kefer guarantee will never be a problem? >> our policy is zero tolerance that, doesn't mean zero occurrence if facebook didn't exist anymore and 1.9 billion people on this planet, there are bad things that are going to happen that is reality. that is life facebook is a reflection of that life it is our job to make the community as safe as possible. not only for the people that use it which, is of course, incredibly important but also
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for the brands that work us with. >> what about the issue of fake news and the role that facebook plays in allowing this threat of fake news and sporgt that or blocking it? i know you're about to sit down with your top advertisers here what are you going to tell them about fake news? >> we have taken significant measures since the fall to stop the proliferation of news that is not true. and that is including better tools, better reporting, working with third parties, working with ngos to really understand and make sure that we do the very best job we can to ensure that when news gets delivered, it's actually accurate. >> so is fake news a nonproblem now on facebook? >> we look at all of the things as works in progress so be it fake news or brand safety, we're continuing to learn and make investments to ensure that our platform not only are people informed the way they need to be informed but it is the safe as possible. >> now you are investing in some professional content i know you aren't really starting to roll it out yet, but you're making the investments. are you starting to spend money to create shows for facebook
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you want to create more brand safe options >> people love to consume content on our platforms when they're spending five and three quarters of the hour on digital platforms, majority being mobile and we have the privilege of well over 50 minutes on all our platforms, we want to make sure that we have as many content options as possible so we're looking at licensing, we're looking at having content created for the mobile environment. but we see our -- our job is tone sure that every time people come on the platform, facebook or instagram, they have the very best experience possible. >> i spoke to suzanne daniels yesterday. she is not concerned about competition from youtube or facebook making original content. she thinks people don't go to facebook to watch content. what do you say to that? >> i stay that we have 45 minuts alone on facebook every day and most of our majority of markets. each day people are consuming everything from news stories to their favorite sports content to actually friends and family to
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information from brands. so we're very happy with our position >> we're starting to see amazon, alexa build the ad business r you concerned will b. jeff bezos taking a bite out of your ad sfwhiz. >> we have huge respect for amazon they're most sophisticated advertisers across facebook and instagram. >> you never want to count out jeff baez yezos >> amazon has an advertising business and many of our partners have ad businesses but they also advertise us with. that is part of the new ecosystem. it's a lot of collaboration and very different relationship that's we have with each other. >> perhaps friendlies. thank you so much for joining us we look forward to hearing what comes out of your meetings with all your cmos this week. >> thank you >> carl, back over to you. >> another good one, jewel yachlt our julia borsten thanks when we come back, apple stepping up its legal fight against qualcomm what qualcomm's paul jacobs thinks about that suit then academy award winning director ron howard, one of the
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many guests on the season of "binge." his take on the pace of technological change >> because technology is moving so quickly, it's really a sort of moving target and, you know, audiences know what they like today and the way they like to see or hear it. but they may not know tomorrow and so that's why it's a guessing game and a kind of a nightmare for those that need to invest in these things >> full episodes of "binge" season three streaming on cnbc.com/binge online u.s. equity trades...
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♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪
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looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
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coming up, a top market watcher's warning to investors you're in denial about the rally. you'll hear from him live today. plus, sax's bold call. and one of our happen time traders positions herself for a major breakout in one part of the health care sector plus, speaker of the house paul ryan is live today on "halftime" as he makes a new push to get the tax plan passed in 2017. all starts at the top of the hour about ten minutes or so away. >> all right scott, looking forward to that and apple stepping up the legal fight with qualcomm this morning arguing in a filing that some of the chipmaker's patents are invalid and they violate patent law. this comes five months after apple first initiated a suit against qualcomm i caught up with the qualcomm executive chairman paul jacobs yesterday and sat down for the
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for the knox podcast lawsuits like these are nothing new. >> we've had these battles even when i took over in '05 as ceo we had a battle back then that was nokia and ericson and broadcom and ti, panasonic i mean it was also a big, big battle similar sort of thing. people want to get around, you know, they see interlekt you'lls in the billing materials and they want to pay less. we want to continue to drive technology forward and spread it across a very broad ecosystem as well >> now qualcomm believes it's got fundamental technology at the heart of the modern smart phone enabling everything from app stores to just the way the phone functions on high speed data apple is trying to position qualcomm as xwujust another component supplier qualcomm's illegal business practices are harming apple and the entire industry.
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they supply us with a single connectivity component but for years are demanding a percentage of total cost of our products effectively taxing apple's innovation we shouldn't have to pay them for technology nothing to do wi. we've always been willing to pay a fair rate for standard technology used on our products, et cetera. qualcomm would say, hogwash! look the technology that we built enables the modern wireless internet and apple, you'd be selling a bunch of ipod touches without that that's their argument. >> so they're going to their corners. how is this going to play out? >> well, lawyers are going to get paid a whole lot of money and then probably they're going to end up making their arguments in front of a jury it and comes down to, which company can do the best job at distilling what it does in front of a jury. they both have lots of practice, but people having suing qualcomm over this kind of stuff for literally decades. they know how to play this game. >> they call it intellectual
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property for a reason. code is is intellectual and they have the resources to pay the lawyers, so it turns litigious as we go to break, let's watch some oil seven-month lows in the bear market, down 22% from the all-time high. rrtlw 43 a moment ago, but cueny 43.01. back in a minute world ugly and messy. they are the natural born enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful.
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the so[ gags ]e day. i love the combination of gummy bears and meat. it's payback time gru. bratt has the girls. [ shouting ] ♪ so bad ♪ so good that i'm so bad... ♪ momma's coming girls. [ minions yelling ] hey. are you okay? [ minion babble ] despicable me 3. rated pg. let's hop over to the cme group and check in with rick santelli and get the santelli exchange >> thanks, carl. i want to welcome my guest, peter chur, thanks for taking the time
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>> thanks for having me, rick. >> you know, i would love to read your material, and there's a big debate now going on. i never thought i would live long enough to hear this particular debate. policy error by the u.s. fed are they moving the too fast are they talking about tightening too much, given the data, what are your thoughts >> i'm surprised that they were as hawkish as they came out last week they had the chance to pull back, act a little bit more dovish they came out very hawkish, that they're going to hike more this year, hike next year, and they also want to start shrinking the balance sheet. and this is all while the data is actually a little bit weaker. >> all right now, peter, the data over the last 15 to 18 quarters has been up and down, up and down, but i do see maybe a drift my question to you is, if the yield curve, 2s to 10s, was 40 or 50 basis points steeper, do you think that would put an end to some of these policy error questions? just a hypothetical. >> i think it would. i think when we look at the steepness of the yield curve or how flat it is, that's
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concerning, because it indicates that the back end of the treasury market is concerned that the fed is going to crimp off growth too quickly you also see it in some of the inflation break-evens and the t.i.p.s. data. there's concern that the data is now divergent from what the market believes is possible. >> now i'm going to separate two issues move the inflation and the break-evens off to the side. i want to concentrate on the yield curve. because i agree with your comment. the very flat curve, the 5 to 30s today, the flattest since '07, it's changed the psyche of how many are interpreting with, the future path, whatever it may be, with regard to the fed but isn't that in itself an error? that's my new mantra, that the flatness or the steepness of the curve is manipulated due to holdings by central banks. could not see that line of thinking, peter? >> i think there are a lot of flows that are driving the long end of the yield curve you've got the central bank flows, both direct and people anticipating that. you also see a lot of what i
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call the risk parody trade, where people are realizing they really just want to hold some equities and hold some long bonds and let those things work together i think that's driven a lot of flows into that long end of the treasury skurcurve. plus, the real mistake was keeping rates so low for so long, so people are still stuck chasing for yield eight years later. >> and all the behavior, chasing yields can create. peter, thank you i think this is a discussion that needs to be ramped up carl, back to you. >> all right, rick, thank you quk ryuc "sawalley" continues after this than just unlimited data. we want unlimited entertainment. so we can stream unlimited action. watch unlimited robots. watch unlimited romance. if you are into that. but we also want more like... unlimited hbo. can i stop dying now mark? no can't do mi amigo. it's unlimited. besides you are really good at it james. don't settle for any unlimited data plan. only the at&t unlimited plus plan comes with hbo included at no extra charge.
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turns out the gender gap in america is going in the wrong direction. a new report out that the number of new female board numbers actually dropped last year, according to executive search him, hyde, rick, and struggles women were appointed to 28% of board room seats a 2 percentage point decline, guys, from the year before we could talk about this for a long time. we don't have much time. i will say, though, for the purposes of this show, technology was an outperformer about 40% of those positions that turned over actually went to women, maybe a reflection of
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some of the struggles of the reputation there with uber and everything else. >> and 27.8 is still better than the average. so there is growth just the pace of growth isn't keeping up to where a lot would like to see it >> rolling down the hill a little bit >> makes no sense. you need diversity >> speaker ryan talking this hour let's get over to wapner and the hal half welcome to the "halftime report." i'm scottwapner. our top trade this hour, in overdrive or in denial have stocks gone too far, too fast or does the rally have more room to run with us for the hour today, john and pete najarian, stephanie link, joe terranova. stocks have touched lower this hour, however, the s&p is coming off its 24th record close of the year a sign of how strong the rally in stocks has been the great debate now, how long this could

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