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tv   Squawk Alley  CNBC  November 13, 2018 11:00am-12:00pm EST

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t. rowe price. invest with confidence. good morning, it is 11:00 a.m. in long island city, new york, but 10:00 a.m. in nashville. those are amazon's major office locations. it is 11:00 a.m. on wall street. "squawk alley" is live ♪
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♪ ♪ happy tuesday. welcome to "squawk alley." i am jon fortt, here with david faber, morgan brennan. carl is on assignment. and we start with the market tech coming off the worst day since october 24th, nasdaq dropping below the 200 day average with apple leading the slide. is this a clear sign of deteriorating sentiment for tech weighing in, bob peck, head of internet global investment banking at credit suisse good to see you. >> thanks for having me. >> at least in the short term it seems that some folks are souring on tech. what has fundamentally changed, aside from interest rate, trade stuff we are dealing with for
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months, is anything that different? >> you're right. investors are thinking about interest rates, trade wars, and regulation what's important, pull the lens back a little. look at the broader picture of how tech has done this year. nasdaq is up 4, 5% s&p and dow are up, we had a decent year. when you look at big tech names, microsoft up over 20%, you had amazon up over 40%, netflix over 50%, sales force 30% even apple with the more recent hit is over 10% or so this year. you've actually had a pretty good year. when you look closely at the third quarter, how tech did on earnings, top lines going double digits, earnings north of 20%. beating expectations on the top and bottom line. it set up a decent quarter how has tech done since labor day to halloween if you look at that period, tech
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was down about 10% or so what's really interesting is that from halloween to today you've seen the stabilization, up 1, 2% or so you've gotten some stabilization in tech which is setting up well for the next year in ipos. >> are you saying everybody wants a pull back, a buying opportunity until it comes is that what we're looking at? some of the companies in earnings season didn't do as well as hoped. apple, facebook. here's the chance to get in if you couldn't before. >> what's interesting, look at where tech is trading, around 16 times earnings not really expansive what's interesting about that, you have a voracious appetite.
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i think it sets up well for 2019 and the ipos are up on average 30%, north of 30%. you have a robust alpha generating ipo market for the portfolio managers >> bob, i have seen a number of notes in the past week saying faang is out, maga is in microsoft, amazon, google, apple. what do you think? >> some of the numbers i pointed to before, what you see interesting is the faang trade there are various multiples. apple is a different multiple than where amazon trades it is a stock picker's market. you're seeing board level discussions on some big trends taking place not only is it driving ipos but also m and a you look at this year, year to date for the first three quarters, we are up 40% from last year on dollar volume basis. look at where we sit the rest of
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the year, we're up 80% over the ten year average and close to high water marks of 15 and 16. you see machine learning, ai, cyber security, tech driving demand from not only portfolio managers but from board level decisions. >> when it comes to faang, three of the names, also hearing a theme about their market power lately the president has been tweeting about it and many others, over in europe, perhaps a stronger case being made to some extent is that a concern? is that something you're hearing out there that some investors and or executives are at least focused on >> very much so. you're seeing some weight on the stocks now you're also seeing it become a focus for the companies. take an example like facebook, to get where it needs to get to
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what to become one of the leading ai machine learning companies out there, hence the resources put into the platform. a wielding power of whether known or unknown is big an important. i think that's why you've seen publicly the ceos talk about importance of having this responsibility as they think of tech and their power going forward. >> you mention the stock picker's market, one of my favorite terms for this point in the cycle. is there a class of stock, specific stock, you think has been overlooked in this period where everything has been doing well, people have been focused on big, flashing names what should investors be looking at and where should they be fishing now? >> when we talk to ceos and boards, they're focused on mega trenl trends powered by secular trends you see things like ai, autonomous, cyber security, all
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of these themes investors are looking to play. >> all right i want names next time, bob. thank you. bob peck >> thanks for having me. thank you. amazon selecting new york city and northern virginia for the new east coast headquarters. the company announcing a smaller facility in nashville. we have team coverage around the country. courtney reagan in long island city, diana olick in crystal city, virginia, and scott cohn is on the cnbc news line scott, we'll start with you. >> reporter: thanks, morgan. in the end, amazon had looked at 238 bids, whittled it down to 20 finalists. couldn't find one city that could fulfill all of its requirements of hq2 that would house 50,000 high tech workers the fact is there aren't enough
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high tech workers to go around so it is divided into three. the places we have been evaluating the last year crystal city, the area that will be rebranded is an area directly adjacent to reagan national airport, across the potomac from washington, d.c. look at the report card we came up with, based on amazon's criteria and top states for business data on the cities and states overall, b plus solid rating where it fell short to some degree was location, that's infrastructure but it is something that apparently virginia will do something about. new york city, long island city, up and coming neighborhood, and area across the east river from manhattan where also there's a
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good splief teupply and other is amazon asking for a stable, business friendly environment. new york state is not exactly stable it is not exactly business friendly, although the economy is strong, there is a good share of tech work force, b minus there because of the union presence maybe that's not a big deal. and location relates to infrastructure which needs work. again something that new york city might help. and nashville which will get what amazon is calling center of excellence, operations center, with 5,000 workers, we were there a couple of weeks ago, the governor of tennessee saying that they were still in the running, and apparently he was not kidding. difficulty in nashville is talent it had the lowest percentage of stem workers of any of the 20 finalists, nonetheless, nashville getting a consolation prize. guys >> scott, particularly in new
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york because the grades weren't good, what was amazon to your thoughts perhaps weighing more heavily than you might have or we may have weighed it when we were giving out the grades >> reporter: it might be -- might be 1.6 billion reasons, the incentives that new york state is offering. not huge incentives in the general scheme of things remember, new jersey offered $7 billion to locate in newark, and maryland was offering $8 billion. in that sense, maybe a relative bargain. the difference with all of these, we looked at the publicly available data about these different locations, all 20 of them but amazon could come in and make a difference in that by demanding and getting incentives, states and cities working to improve weak nlnessei transportation which is what will happen here the bottom line is that amazon
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could not find one single location in all of north america that could give them the critical mass of tech talent they say they need if you accept their intentions as pure, they wanted to do it from one place from the start, north america failed them. >> well, i don't know if we could ever just accept their intentions as pure, scott, as i'm sure you don't either. plenty of big companies manage to locate in all these places. thank you, scott always good information, especially linked to cnbc's top states for business. also, we will speak to the nashville mayor in a few minutes when we come back. and president trump's antitrust chief on breaking up big tech tim wu says we're living in an area of monopoly he joins us to discuss
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and bob doll and later, an exclusive look siinde tesla's battery gigafactory. "squawk alley" is back after this
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exclusively to makan delrahim from the antitrust division of department of justice. he says big tech is stifling
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innovation >> in this country it is alive and well new companies pop up every now and then, but that's what we do. antitrust laws need to be there to make sure they do not prevent the next competitor to come in that's exactly what justice department did in microsoft 20 years ago. and a lot of people were worried about the power microsoft had, particularly when they were trying to suffocate the internet browser because it was challenging their monopoly power in the operating system. i think that case probably led to a lot of the innovations we're seeing today >> joining us, tim wu, columbia law school professor and author of "the curse of big-ness. tim, i quoted you a couple of times to delrahim. he says he has great respect for you. i was quoting the op-ed this weekend that you had
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he seems to indicate and said previously big by itself is not bad. you seemed to indicate that more and more large companies and their power is a threat to democracy. >> yes, i think so i think we're living in an age both of very extreme corporate concentration and new threats to democracy, and it is worth looking back to see whether those are linked i think we have not done enough to control market concentration, and ultimately that may be dangerous for democracies around the world. >> anything you hear out of delrahim, for example, that would in your mind indicate a willingness to take a look at that issue in a larger framework and potentially bring action >> that clip you played was very mixed. on one hand, he said silicon valley is alive and well, but didn't point out how important it was to take on microsoft.
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it could be important to take action against facebook to break up some of the illegal mergers, especially instagram and what's app to recharge the innovation environment. today, you try to get a company started, somebody thinks facebook could destroy you or copy you, who will fund it i think we're in a situation where it is time for another big antitrust case >> given delrahim's comments and the fact that there have been concerns, regulatory concerns, antitrust concerns here and also abroad in places like europe around big cap tech names, how should investors be looking at this and investing accordingly >> thanks for having me. just as luck would have it, we have a conference this thursday looking at this issue because we think as a firm this is an emerging issue, and as professor wu said, there's nothing we heard in the comments from doj
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that gives a clue if this is an issue. he left it open ended. we take it seriously professor wu is speaking at the conference i think tekch investors have ben lulled into thinking it is all easy pickings. i think in the past month or so, people are paying attention, perhaps there's a regulatory change coming. we take it quite seriously and it does impact thinking on facebook to that point >> tim, on this theme of big companies, some would argue that cities across the country just got played by amazon this idea that amazon was going to put one shiny new headquarters in some maybe midwestern city that could be wholly changed by it, they end up putting it really not a headquarters, some branch offices in the d.c. area, new york area, and operations hub in nashville. what does that signal about the
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influence of large companies, who's holding the economic cards here >> no, i think it signals a lot. i'm into capitalism. i don't believe in subsidization of companies i don't think they need the help of government to succeed it shows that companies that are so large and visible, they're much better getting government to do what they want there might be 100 smaller companies that in total the value of amazon, but they're not able to get together and tell the government to help them out. it is this visibility, influence. it tends to corrupt the capital system and something we need to be worried about from a democratic perspective and if you believe in capitalism working the way it should. >> when it comes to facebook, for example, they bought instagram, what was it, a billion dollar deal, something like that. it was not a large deal at the time you could make the same argument with alphabet and youtube at the
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time they purchased it are you saying you think those deals should have been stopped when they occurred or there should be action based on what happened since then? >> i'm saying both i think even at the time everyone -- actually i think business analysts were good on this, they understood facebook was buying a competitor. what's app was even more obvious. $18 million wasn't necessarily just for the company, it was to degrease the competition i think retroactively they should be broken up. that would increase competition, lead to better quality control, and frankly shake things up in silicon valley which needs periodically a shakeup we heard about microsoft that was now 18 years ago or more i think it is time to sort of shake things up again. >> michael, real quick, last word to you. you seem to think there's a possibility that facebook could be broken up did i hear you right
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>> no. i think that this is a growing issue, i really do i think when we are digging into the research here, there's definitely an emerging school of thought that says these platforms are a risk to capitalism and democracy people are underestimating the potential shift in thinking about regulation here. >> we're going to stay on it then thanks to you both >> thanks. straight ahead, we go inside tesla's nevada gigafactory in a cnbc exclusive phil lebeau is there live. "squawk alley" is back in a moment dow is positive, up 109 points hi, my name is sam davis and i'm going to tell you about exciting plans available to anyone with medicare. many plans provide broad coverage and still may save you money on monthly premiums and prescription drugs. these are affordable, all-in-one plans that help pay for doctor visits, hospital stays and emergency care. but they also
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today, but five years ago almost exactly it was a competition around tesla that had the attention and where they were putting their gigafactory. flash forward to today, we find phil lebeau in nevada. >> reporter: this gigafactory has been big and keeps getting bigger 5.5 million square feet, over 7,000 employees, cranking out about 5,000 battery packs a week, all of those for the newest vehicle from tesla, the model 3. as we spent the last couple days out here, walking around, getting a sense, couple things stand out. first of all, the level of automation and robotics. that's key as the company drives down cost when it comes to electric batteries one of the focal points for elon musk and his management team the other thing that stands out, it is not completely automated there are about 7,000 employees here, a number of them working in battery and drive unit production areas when we talk with the head of tesla automotive, he believes
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there's a lot more they can ring out of the facility when it comes to driving down costs. >> the battery remains the in dust tree us part of the vehicle. it is important that we include efficiency and design to make them more affordable >> reporter: when it comes to battery cost, this chart says it all. tesla is ahead of its competitors in terms of cost per battery cell it is well ahead of other automakers they're catching up, but tesla expects to have this advantage and others expect tesla to have that advantage for some time you look at shares of tesla, keep in mind that a lot of people say what's in a battery pack is it one giant battery? it is actually made up of 4400 cells like this. this is a battery cell in the bottom of a tesla vehicle, there's a battery pack with 4400 of these that's where the energy and power comes from in tesla
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vehicles we have been walking around, getting an exclusive look at efforts to drive down costs. more coming up in "power lunch." fascinating facility when you see ougauto medicatio automatio. >> it doesn't look like there's many people walking around is that the case >> reporter: no, there are 7,000 people here. doesn't seem like many because it is a massive facility 5.5 million square feet. and it can double in size. it could be 13 million in square feet they could stick 33 football fields in here and have plenty of room. showed you with the drone how big this place is. think about it it only will double in size. >> phil lebeau, thank you. >> that is cool. markets, what are they doing? they're about to close in europe let's get to dom chu at hq with
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the european close. >> david, you can see stocks are generally positive across the atlantic with fractional gains in major forces led by the daks, which is up over a percent in germany. european shares a bit of a rebound with apple suppliers in focus. among them ams which plunged yesterday on concerns of possibly slowing apple iphone demand iqe also in that apple supply chain, was higher earlier. shares of bayer, they had better than expected profits after sales of a cardiovascular drug weaker results in animal health unit and number of plaintiffs looking for damages from the roundup weed killer are dragging that down. and big part of the uk story is uncertainty over brexit.
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howard davies told cnbc tuesday that the uk risks a slow down to the economy if the uncertainty continues. british banks bounlsed today after being hit hard yesterday with global market selloff certainly banks to watch back to you. >> thanks, dom straight ahead a relatively volatility session after yesterday's 600 point loss, boeing among the biggest dow laggards on reports it withheld information on futures in the 737 that may have contributed to the crash of a lion air jet for mo, b lls rebodo iwith us next "squawk alley" back after this
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welcome to emirates mr. jones. just sit back, relax and let us entertain you... ...with over 3,500 channels of entertainment, including the latest movies and box sets from around the world. ( ♪ ) we even have live sports and news channels. ( ♪ )
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and your free wi-fi will start shortly. enjoy your flight mr. jones. world's best inflight entertainment. fly emirates. fly better. good morning, everyone i am sue herera. here's your cnbc news update at this hour. cnn is suing the trump administration demanding that correspondent jim acosta's press credentials be returned. they were revoked following the contentious news conference where acosta refused to give up the microphone when the president cut him off. vice president pence arriving in singapore, he will attend the asean summit on behalf of the president. talks on a regional trade pact to further open markets in that region. hundreds of california residents gathering in an auditorium to hear the latest on
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the camp fire. most were evacuees more than 40 lost their lives in the blaze, the deadliest in that state's history. residents of thousand oaks remembering the 12 killed in last week's bar shooting they gathered at a makeshift memorial outside the bar that included mounlds of crosses featuring angel wings. that's the news update i will send it downtown to you >> thank you, sue herera. trade discussions resume between the u.s. and china this week as they do, president trump's top trade adviser peter navarro delivered a scathing warning for goldman, sachs and "the wall street journal" in general not to meddle in negotiations. listen to what he said friday. >> if there is a deal, if and when there is a deal, it will be on president donald j. trump's
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terms, not wall street terms but if wall street is involved and continues to insinuate itself into the negotiations, there will be a stench, a stench around any deal that's consummated because it will have goldman, sachs and wall street i urge unpaid foreign agents to stand down on this issue >> last hour, another trump adviser, larry kudlow, telling us that comments like this actually do a disservice to the administration take a listen. >> he was not speaking for the president nor was he speaking for the administration his remarks were way off base, they were not authorized by anybody. i actually think he did the president a great disservice >> kudlow says the renewed china, u.s. trade talks in his opinion are quite positive. which white house is the market going to be dealing with?
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joining us, asset management chief investment strategist, bob doll bob, good morning. >> good morning to you >> this is a bit weird, this back and forth, maybe not back and forth but this response from larry kudlow to navarro, except that the trump administration seems to have this pattern of good cop bad cop sometimes it is the president himself playing bad cop. i wonder how is the market to interpret this is this peter navarro going off script or is this the pattern we have seen of trying to send a couple of different messages so the president has room to maneuver >> look, i think they're sophisticated, i suspect there's some purpose in all of this. the skeptic says no, they're just disorganized and nobody knows who's on first as you know, the chinese complained but they don't know who to talk to, who speaks for
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the administration they're going to have to get their act together and have a voice. obviously the president will have the voice when he is with president xi here in a few days. i'm sure they'll make nice and it will look like things are on track, but the devil is always in the details. >> what is the market to do, pay attention to what's measurable that comes out of the president's talks? should we expect that the market will react to all of these various inputs what should the smart investor do >> i think sadly the market will bounce around based on who spoke last because no one really knows. look, the president and president xi need and want a deal and this is not a black and white issue, it is not like everything has to be solved or nothing is solved. this could go in stages. if we get some sort of victory in the next couple of months, the market will stand up and applaud, even though it is only
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a small one and temporary. the whole thing will take a long time china and the u.s., most important trade relationship in the world, we desperately need each other no one wins in a trade war politically, the president needs a victory, the chinese economy is slowing they need a victory here i think meantime wall street is going to bounce all over the place, not knowing who to pay attention to >> bob, you've got all of the focus on trade, you've got worried whether we're at peak earnings, you have a strong dollar, the fed and rising interest rates s&p is 2744. where do you see it ending the year >> my target beginning of the year was 2800. and i'm sticking with that little bit of a rally. i would be shocked if we see a new all-time high. i think there's more work to be done to consolidate what was a pretty nasty correction and pretty unimpressive rally.
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i think there's work to be done and all the issues you cited are the reason we are bouncing around, likely to do that. growth is decelerating, earnings growth decelerating, but not going negative there's usually a time in that where markets struggle. >> so then bob positioning-wise, how should investors think of this it is not as if the old play book of expecting things to move the same direction and lock step appears to be working. what do you emphasize more heading into the end of the year >> right question. therefore it is not so much what the market is doing, it is more about what stocks you own and don't you own, so the themes in my portfolios that i recommend are companies that benefit from the economic cycle it's not over, even though it is tee se-- decelerating to compans with positive cash flow, using it to grow the business, not just paying back shareholders. three, companies that are more
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domestically oriented, the international slowdown is still problematic for the multinationals and if you pick those kinds of companies, they exist in different sectors, i think you do okay, but you have to be willing. it is no longer a beta world, it is an alpha world. >> thank you, bob doll >> all the best. you heard about larger market trends. tech this morning as it comes off the worst day since late october, 73% of the tech sector is in correction levels or worse. joining us, aaron kessler who covers amazon, and research analyst walter pisak who covers apple. good morning >> good morning. >> walter, i'll start with you we have seen weakness in apple, it helps lead the dow lower,
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yesterday with a 600 point decline. until last week or so, it had held up relatively better than other big cap tech names where do you stand on the stock? >> we like the stock there's been pressure from a slew of revision from the supply chain that feeds into apple, creating concerns on units as you know, the company is no longer reporting the units so you're going to have cuts, there's probably additional pressure ports about downward revisions. ultimately what drives revenue for the quarter is that asp lift, which is not a new story units have been down ever since the iphone 6 it is not a new story that apple is leaning on price increases to sustain and increase revenue from the iphone business >> aaron, amazon is bouncing around all morning on news about two new headquarters and the new facility it will build in nashville, it is up higher right
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now. what's the take away for the company and the stock? >> i mean, the headquarters expected the last couple of days, that was previewed, not a big surprise there given big tech centers in those areas as well, a lot of professionals in terms of amazon, investors are looking at one unit growth of about 15% we think higher on like for like basis, but that was concern on the quarter. you still have aws growing 40% plus, peak margins for aws business, advertising growing 60%. that's growing strong as well. tend to see better earnings but investors didn't like units slowdown investors are cautious after last quarter. >> aaron, have investors factored in the costs associated with three major locations for amazon instead of one and the fact that two of those are in high cost locations which is
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sure to hit the bottom line somehow, whether it comes to recruiting or other issues, or do we cross that bridge when we come to it >> historically high growth for amazon, slower growth in operating expenses we expect an up cycle in 2019. greater investments partially by the two new headquarters we think that's largely factored in i think investors are focused on revenue growth side, which was the concern from last quarter. >> walter, when you look at apple now and the way it has reacted to the supplier issues, that combined with the fact that apple is no longer breaking out units for iphone, how should the investor think of turbulence that comes from reports, rumors, extrapolations that in the past haven't proven to give the best view of where apple is headed. >> that's the important part in the past, we have seen reports like this on a number of different occasions, and the
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company executed on delivering revenues in some katcases units came in below expectations i think it is early in the quarter to get concerned about units. the holiday selling season hasn't kicked in, the 10 r is only out a week or so. what's really happening is people are holding on to phones longer, and those upgrades may not be occurring in the first or second week the product launches, could occur towards the end of the quarter as holiday gift items, whether it is accessories or the iphones themselves people have old product. upgrade rates are at historic lows that's the thing to focus on as opposed to reacting to the latest supply chain data as you point out in the past, it has proven not always helpful to investors. >> gentlemen, thank you for joining us when we come back, a lot more on amazon's east coast
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expansion. we're going live to arlington and long island city next. but first, rick santelli, what are you watching today? >> you know, it seems lately when we get big up moves in the dollar, we get big down moves in global equities. today, the dollar is down, equities are coming back i don't think that's coincidence. bendt tethbrbout what might be hi iafr e eak. welcome to the place where people go to learn about their medicare options... before they're on medicare. come on in.
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the halftime report is live from cme global leadership conference here in sunny naples, florida. we have a live interview and exclusive with apple co-founder steve wozniak on the slide in the stock, what he thinks about the company's future now, looking forward to that. terry duffy is also with us on all things markets also joined by traders today all coming up top of the hour from down here in naples, guys see you in a bit we are 15 minutes away or so see you then >> looking forward to it as well, scott. back to the big story, amazon expanding to long island city, new york, arlington, virginia, and nashville, tennessee. diana olick is in crystal city, virginia >> reporter: this is one of amazon's new homes they're going to bring 25,000 jobs to the area for an average
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of $150,000, that's more than double what the queens county average is now for salaries. they're looking at a $2.5 billion investment from long island. this western area of queens is one subway stop from manhattan looking for 4 million square feet of office space to start, opportunity to double to 8 million. incremental tax revenue of 10 million over 20 years for the area all of this will add substantially to tech jobs in the area according to new york state comptroller, there was about 47,000 tech jobs added between 2010 and 2016. total of 240,000 there's a press conference scheduled and coming to fruition here in 15 minutes from now, with new york governor cuomo and bill de blasio in the release, governor cuomo said we attracted one of the largest, most competitive
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economic developments in u.s. history, and mayor bill de blasio says we're using this opportunity toopen good career and tech to thousands of people looking for a foot hold in the new economy, including those in city colleges and public housing. there has been critics of this there are concerns the infrastructure in the area isn't ready to handle the influx of a company like amazon coming in. so long island city councilman and state senator are saying in a joint statement new yorkers have real unmet needs from their government, our subways are crumbling, children lack school seats, and too many of our neighbors lack adequate health care it is unfathomable we sign a check to amazon in the face of these challenges where is amazon going to go in long island city it appears in the beginning they're going to occupy a little of the space that city occupies. they're going to relocate 1100 employees to make way for amazon
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next year. back to you guys >> courtney, thank you let's get to diana olick in crystal city, virginia, the area formerly called crystal city >> reporter: i was going to say, you can't call it crystal anymore because amazon called it national landing and nobody knew what it was. apparently it is regranting crystal city, parts of pentagon city and we just got the news out from a major office developer saying they are officially partners with amazon. the support jobs it creates will increase employment by 23% according to data from transwestern reaction is coming in to this $2.5 billion investment in northern virginia. the go of saying more than half a billion in incentive will go to amazon from the commonwealth,
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metro station improvements, a pedestrian bridge. virginia tech putting out a statement saying its innovation campus was a key reason for the choice senator mark warner former tech exec said this could lead to job growth in tech and other sectors as well. aol's founder steve case put out a statement today talking about the growth of the tech sector in the d.c. area and how the defense sector played a great part you know all about that, of course >> oh, i do as they compete for the jedi cloud contract. thank you. as we head to break we're keeping a close eye on oil crude has extended its losses falling below $58 a barrel that would be the lowest level
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we've seen since december of 2017
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take a look at the dow it's up 56 points but not because of boeing. boeing is the biggest drag on the dow down 1.5%. the latest is unveiled regarding that lion airplane crash the biggest point drag on the dow, home depot lower. he reft ts.
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the dow is up fractionally the nasdaq up a full percent now let's go to the cme. rick santelli has "the santelli ex change. rick thanks, jon.
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when we have low interest rates for so long, what ultimately happens is we created a world of complicated but very profitable trades you could generically call them carried trades with low interest rates there are so many ways to find finance structures that benefit the fact you could borrow at different places around the globe really cheap and then by converting to different currencies to invest in different areas and sectors, your goal was you could make much more in your trading position than the carry was on the borrowed structures that got you to capital to do it. but the problem is ultimately monetary policy started to get a little firmer. and it wasn't only that. it was long periods of low volatility so basically you had redemptions that were the cause of much of the volatility, investors just wanted out along with tighter monetary policy as we continued
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to see just look at the difference between bunds and ten-year notes. at various points around the globe the carried trades started to deteriorate and then we see the pace that powell seems to be tightening seems to be one of the critical issues investors are bugged about it makes sense recently too many borrowed dollars have found their way in markets where the old trades don't seem to work as good as the new trades when you add in the redemptions and all the momentum trades, think faang, deteriorating, we have a quick move of the dollar to the upside replacing the shorted dollars. ultimately i think the volatility wears away. the problem is monetary policy between europe, japan and the u.s. will continue to widen. and that differential of interest rates will pressure anyone who doesn't have an ample supply of cheap dollars.
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jon fortt, back to you. >> thank you, rick santelli. as we head to noon a look at shares of ge rebounding today. >> they're up about 7% baker hughes, ge up about 3% after news they'll sell out sooner than expected >> nvidia also bouncing. but for now to scott wapner and "the half. jon, thanks. i'm scott wapner welcome to "the halftime report." we are live from the annual global financial leadership conference down here in naples, florida. we're going to begin with a special interview, an exclusive, especially timely, given what's been going on in the markets lately and in particular how apple has been trading the world's most valuable publicly traded company under a lot of pressure, as you know, lately we're pleased to welcome in one of the company's founders, steve wozniak, is with us today, as i

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