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tv   The Exchange  CNBC  July 5, 2019 1:00pm-2:00pm EDT

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>> shake shack breaking five-year highs. act like you know. >> the consumer name wingstock >> folks, it's been fun. thank you. you made me feel right at home that does it for "halftime." "the exchange" begins now. thank you, tyler hi, everybody. and here is what's ahead this hour some major fairworks on wall street as big job gains dampen are they right especially as the president repeats his call for lower rates, we will ask plus,{stranger things" netflix is getting more attention. why the company's spending spree could come back to bite investors. and the nba's big push to keep players safe from secret hackers. anyway, those secrets and more plus, a makeover session, but we do begin with the markets.
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>> you didn't believe me about kuwai in the finals. things are down for the market, but as you can see, we are well off the worst levels of the day. at one point the dow was down 232 points, only down abou61 right now. and of course we still are on 3,000 watch when it comes to the s&p 500. when will we get there we don't know. nasdaq composite off by almost one-half of 1% if you take a look, it's what's happening between the overall s&p 500, the broader market, and then the transportation stocks that gap a little bit wider than some would like. transportation stocks lagging so far today. we'll see if that trend continues. and then one of the worst performing stocks of the day is electronic arts. why? because their big game, apex legends, it was supposed to be the fortnite it came out with some new releases of its new season, and
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those views not quite up to par. shares are down 4% following up on yesterday's losses. so you can see some movement down in electronic arts, again, one of the worst performers on the s&p 500 today. back over to you, kelly. >> we'll see you soon. welcome to "the exchange," everyone i'm kelly evans. after the u.s. had a 224,000 jobs last job. the price of gold has sunk back below $1,400 an ounce. oil prices are holding pretty steady opec has now hit a five-year low. on the reaction to that jobs report with seema mody down at the new york stock exchange, it's all about what this means for the fed now, right >> reporter: it really is, kelly. the question the market is trying to answer is whether the strong jobs report in june will delay a rate cut in july while more jobs were added in june than expected, we're not seeing any signs of wage growth heating up, which one might expect when the labor market is
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improving. in fact, wage growth actually decreased from 3.2 to 3.1% and that's unlikely to drive inflation of the fed's target of 2% in the near term. plenty of fed speed could further provide clarity on the fed's next move. plus, the meeting minutes all due in the week ahead. kelly, while the fed does have a dual mandate, they have cited other factors as to why the fed should ease. >> and we'll get more into all of this, seema thanks very much, seema mody also earlier at the white house, president trump repeated his criticism of the fed for not having lower interest rates. listen >> we are paying a lot of interest, and it's unnecessary, but we don't have a fed that knows what they're doing, so it's one of those little things. but if we had a fed that would lower rates, you would have a rocketship when president obama was here, he paid close to 0 interest
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rates. i'm paying real interest and yet our economy is much better than it's ever been >> well, for more on what the fed's next move should be now in light of that pressure and the strong jobs report today, i am joined by the chief economic adviser at allianz so welcome to you both mohamed, when do you go to queens >> so, october next year >> next year, all right. so we've got a long lead time, you know, to get all your thoughts on this before you are in the land of academia. that's actually a good launching point for this discussion today. do you think the fed is still going to cut rates at the end of this month >> yeah. i think you're going to get 25 basis point cut this month i think putting it as an insurance rate cut is the right way. the economy is not in trouble. today's employment report actually is very good news for the economy. and it's good news long-term for the markets. >> mike at jp morgan, medicine
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of course ohamed basically said if you ask me why they're going to cut, i could come up with something, but basically i think they're going to cut because they've told us that they will is there an element of truth to that >> yeah. i think he's absolutely right. they cannot afford another miscommunication kelly, i think we've got to look beyond the fed in two ways one is a more realistic pricing of fed expectations. we as the market base had gotten carried away, carried away thinking it will be 50 basis points in july, thinking we are going to get three cuts by the end of the year. we are going to get one in july and maybe, maybe two and that's about it. and secondly, it's about time we narrow the gap between elevated asset prices and fundamentals. and that's what today's employments report is starting to do. >> okay. and, peter, i still -- you know,
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i understand the way that this is a slow-moving machine, the fed is but is cutting rates because they've already kind of signaled that they're going to do so really a great reason to cut rates? >> absolutely not. but powell will have the opportunity to pull back market expectations going into the june meeting. but instead all he did is reaffirm what the bond market was pricing in powell is now a prisoner of the bond market. to say six weeks before the july meeting and sort of pigeon-hole himself into saying maybe we do two or three rate cuts and maybe even cut 50, well, that's not really being data dependent. >> but here's the thing. if we had this sense that all they're doing is telling us some possible scenarios, why does it can be that just because he floats that possibility means it's a definite. why can't he say that was the scenario then, but the scenario now might be different couldn't they be that flexible >> well, they should be. he's got to be more careful with his words, and that's been the history of jay powell is he
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hasn't been so careful he's got to be better at playing the middle ground, leaving it open-ended as to what they're going to do. we have to take a step back. the bond market's already eased for the fed. if you're looking to buy a house, your mortgage rate is 75 basis points than it was a year ago. and to this point of an insurance cut, i think the concept of an insurance cut is pure hurerous. in 1995 when they did it, we were only four years into a recovery in 1998, it led the spark for the greatest bubble in the history of the stock market. >> not just that we had had the asian financial crisis there were a lot of things happening then that don't look as severe now. mohamed, they have framed this discussion as a way of bailing out the economy. they could have framed it differently. they could say, look, the is a strong economy there's just not a lot of inflammation so for this kind of economy, we just don't need higher interest
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rates. will they ever frame the discussion that way? because then you can have your cake and eat it too. >> they might try. really, kelly what, they need to do first, the first cut last year was excessive. we underestimated the global weakness second, the global weakness and the economic uncertainty hasn't going to way and then third, the market has put us in a really tough position and we worried about financial market instability that is the argument i think in the back of the head, but it's very difficult to say it out loud because it means you made a mistake, it means you're being held hostage by the market >> peter, i sympathize with their position look, you can get a couple of weeks or a couple of months' worth of data. you have the ism surveys you could build a case for, hey, this looks a little worry some, we have the tariffs kind of at an unpress debted situation.
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should they just not -- why do they have to be right? why can't they just say, yeah, look, the jobs report came out, was super strong and maybe the slow-down's not here yet if their rhetoric changes and the where does that leave to mohamed's point, where should the bond market and the stock market be and not the kind of reaction we thought a week or two ago. >> well, i agree they're sort of in a no-win situation. first half growth is going to be about 2.25 so there is a case to cut based on the pmis we're seeing on the manufacturing side, spilling over into the services side. but i argue that they have only nine rates to cut. first of all i don't think they should go back to zero anyway, but powell seems intent on doing it if he needs to. you can't just throw out one or here, you have to use them, i believe, when you really need them, as opposed to previous
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rate-cutting cycles when they had 400 or 500 basis point to cut. so, yeah, powell needs to do a better job of not letting the markets basically take away policy from him. >> okay. >> now the long end certainly can because they can do what it wants. but on the short end, if you're going to be dpat-dependent, then don't give the market one direction and carry it >> and finally, mohamed, does a 2%, 10-year yield make any sense in light of this morning's job report >> yes, because the german bond at minus 36 basis points i mean, we live in an interconnected market. look at what happened to the differential today with the u.s. up here and germany negative territory kelly, one last point. keep an eye on the dollar. because the fed certainly will not ignore it. and that's up half a% today. we're back above 97 on the dxy so there is all this conflicted information, and the fed is
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going to somehow have to navigate this very delicate balance. >> guys, thanks, really appreciate it today. mohamed, peter, thanks now with a summer job used to be a teen right of passage, but that has been steadily dropping over the years. kate rogers is on on the jersey shore with a look at how companies are enticing teen workers, kate? >> reporter: the share of teens who are either working or looking for work has been pretty stagnant the past few years at about 40%. about ten years ago it was closer to 50%. about 20 years ago it was closer to 60% this at the same time that summer school enrollment has actually good afternoon from 10% in july of 1985 to 45% last summer business owners around the country like mike haines in atlanta say they are getting creative with hiring as teen availability shifts. >> the amount of hours that they
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are devoting to work the consistency of that availability is significantly different even though we haven't been dramatically affected i think by the number of teens, teen applicants being reduced >> reporter: so haines actually hold us he will sometimes hire one and a half workers for one role so he can give those teens that added sense of flexibility that they need with these extracurricular activities for college applications >> although i'm sure he preferred to hire one person >> reporter: that's right. >> i am told you don't say i'm going down to the shore. you just say i'm going down the shore. is that right? >> reporter: down the shore, yep, that's right. we're at exit 105 off the parkway. i can give you a runway on the parkway sometime if you want the big tutorial, but that's right, it's just down the shore >> nevertheless, you know, the
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summer jersey shore road trip aside, it is interesting to see what's happening there kate, i appreciate it very much. here's what's still ahead today on "the exchange." >> coming up, netflix has a problem. how "stranger things" is highlighting what it is. plus, the cavs have a new defender, but this one is keeping the nba team safe from hackers. and what your travel data is worth on the black market. this is "the exchange. on cnbc this is "the exchange. [ sniffing ] come on. this summer, add a new member to the family. hurry into the mercedes-benz summer event today
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welcome back. netflix is expected to shell out nearly $15 billion this year to purchase, license, and produce content. but critics say shows like "stranger things" don't drive enough viewership to offset that spending and netflix doesn't even own most of its original content for this we bring in the media reporter at new york times welcome, guys. ed, it's an interesting point from one of the long-time barriers granted on this that of the top 20 most watched shows on netflix, only six are originals, and only one of those is actually owned by the company. >> i think that's the bigger picture on netflix and all the spending that they're doing. with disney coming down the pipe
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and at&t doing its streaming service early next year, chances are they are holding back their content, they are not going to be licensing it to others like netflix. so it puts them in a tougher spot however, netflix has a nice long runway they have been streaming for years and years now, and people are less likely just to cut that because new ones are coming along. longer term though they need to get the classics in there, the ones people are going to be used to watching whether it's a "seinfeld" or "friends." >> so they can continue to spend more, you know, and hope that that content, their original content backfills the library. they said in terms of the options to combat those costs they could raise prices, get more subscribers or cut spending in some other ways those red blood cells a lot of palletability options. >> i've been in this space for many, many years and even though netflix has completely disrupted
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how consumers content, they haven't reinvented at all the film and television-making stack which is to say the sourcing, assembling and financing of that content. in fact, they've been overspending to try to win over talent and win over projects and the writing was on the wall. >> it was pretty obvious that this was gone kpla come back and bite them in the butt eventually but it's okay because now they are figuring out what most of the old-school studios have known for a long time which is to be competitive and be cash efficient. they're going to have to pick and choose what to make. generally they are going to want to make bigger things that are more franchisable and let the market fill the rest >> so netflix is looking to do a little bit of the disney tent pole thing they have signed ryan murphy i would say the difference between netflix and the studios though is they have a monthly subscription fee that they are picking up from people all the time isn't that a fundamental
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difference, and why hasn't the stock price or the company suffered yet from all of these problems people have described all along? >> well, this is long-time coming first of all let's all agree, everything is moving into a subscription model including the theater chains which are all starting to roll out there, unlimited usage for a fixed monthly fee. so everyone's getting into the business of how do you maximize the lift of new subscribers and minimize the churn at the end of the day they all want great content, whether it is theatrical, because everybody wants to get out of the house at some point to go to the theater or whether it's a series which is like a mini franchise for ste streaming. you can't get all your talent in house because you have to overpay to lock them down. the old, old, old studio model failed >> from the '30s or the '40s, whatever it was. >> yeah, no, so what happened is the reason why the independent film sector blew up is because
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most of the great creative talent, they're free agents, they are out there trying new and experimental things. so to assemble films you need an open marketplace we've already become the largest -- we've had over 250 films get released theatrically. and even netflix has ended aup choiring projects. so i think the future is very much an open competitive marketplace and smart streamers like netflix are going to come in and bid and try to be nimble. >> and the content is only going to go up like, so we saw "the office" nbc universal is going to keep it for themselves for their streaming service. they actually, it went to auction, it on, netflix lost o that so even for the things you own, you still have to price them there's profit parpss, they need their end on it. it's going to be expensive even
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if it is sitting in your library to bring it to streaming it's only going to go higher >> and yet everyone is piling into netflix guys, thanks will either of you be watching "stranger things"? >> i already watched it. i binged the whole thing on the fourth >> benefitting from the consumer side, clearly. have a grade weekend, ed lee and stephan. coming up, not even a trade war with china can derail the tech sector. three predictions for tech are coming up. but first should pbr change eyreovme to pabst blue roast th a ming into calf nated beverages. that's coming up in "rapid that's coming up in "rapid fire." improves memory. the secret is an ingredient originally discovered...
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welcome back to "the exchange." here are some of the movers this hour the banks are climbing today after that jobs report said interest rates higher. jp morgan, bank of america and citigroup are among those on the move meantime, canopy growth is falling on a report that chief executive bruce linton's departure from the company followed tension with co-ceo bill newlands. those shares down about 1.5% today. and hitting metal prices and this coming as report out of china said authorities are concerned over iron ore's recent
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increase now to sue herera for a cnbc update >> hello, everyone here's what's happening at this hour family members of victims from the ethiopian airlines crash in march are rejecting boeing's plan to donate $100 million to help those affected by the accident the lawyer for the group says the deal does not eliminate the need for families to seek further payments seattle's hospitals have opened operating rooms. one patient died and five others developed serious infections after undergoing procedures in those rooms. the hospital deep-cleaned the sites and they upgraded the air purification systems the summer box office is in a slump despite huge hits such as "avengers: endgame" and "toy story 4. experts say streaming services
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are partly to blame. and a group of children helped conservationists in indonesia release 80 baby sea turtles into the waters off of indonesia's bali island. it's part of a program to fight against poaching in that region. kelly, back to you >> they're adorable. sue, thanks, i appreciate it here's what's still ahead on "the exchange. >> ahead, citi group wants to pay your amazon prime membership bitcoin consumes more energy than switzerland and paying with your face just became more beautiful. that's all ahead on "rapid that's all ahead on "rapid fire." ooo! ♪ ♪ and protect it all. customer records, our financials, they better be secured. but i also need easy access, to manage data across my clouds - no matter where it lives. ♪ ♪ so if an auditor shows up, i can be a step ahead.
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bill just swallowed a mint hole [ laughter ] as he clears his throat. it is time for "rapid fire." here to break down the headlines are mr. griffith, leslie picker, happy belated birthday, and dominic chu. bigger yeast foreipo proceeds in nearly two decades and everybody's benefitting. companies have so far returned
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20% on average >> not too shabby. what's interesting is the superlative here i think a lot of people are starting to notice that this is the highest amount of proceeds raised in the first half of the year since >> was it 90 -- >> 2000. and so i think people are saying everything's going up, everything is working. i mean, there are some exceptions here. we see some smaller biotech companies that are in the red for the year, for example. or uber and lyft, exactly, which represented about a third of the proceeds for the first half of the year, by the way so people have definitely lost money. but i think there is this question of are investors being discerning enough when they are looking at the ipos or are they just saying there's momentum behind these things, i am getting in while the going's hot. >> yes, it's a lot of money raised, but the number of deals out there significantly below what it was even at the same time last year so 81 pricings according to renaissance at least theologiac
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has those numbers. at this same time last year, that's a 22% drop. >> from last year? >> just from last year wow, right so it's a handful of ipos that are very large in size that are accounting for the bulk of that. so before we start making correlations to the dot com boom, this is like a handful of companies raising a lot of it. >> i think this has been a pretty healthy ipo season, don't you? it's been a good cross section of businesses that have come to market i think the market's done a good job of separating the winners from the losers. we were all hyped about uber and lyft, but look what happened to them but out of nowhere comes beyond meat, which is a bit of a bubble but you also have some solid ipos like zoom and chewy and cio. >> how about lei strauss who's left in the back half?
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>> we've got peloton we've got the ps maybe palantier. >> that's the word that it's still -- they are still on file, anyway so we will see how discretionary investors become >> used love to see how that does i think you're right that will tell us a lot about when t whether it's getting frothy. now you can get a $1,200 rebate towards things like amazon prime, spotify and costco at least if you're a citi gold member and you use your checking account to pay for services like those from the company's partners >> let's all face it it's been a long time, but the traditional banking business model is dead. the model of borrowing and lending and making money on the spread just doesn't work anymore. so now -
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>> it's the old borrow lee, lend three and out at the golf course >> it has become a fee-based business they make the greatest fees off of the great cash cow that is the checking account that is the free one they have to pay you on the money market funds and some of the other interest-bearing accounts, which don't make all that much. but it does cost them money. checking account costs them nothing. yet they can make some money off of that if you keep a certain amount in your account >> there's been such fee compression and spread compression in the business banking and retail relationship banking model. it's the same reason why if you have a great relationship with the bank of your choosing and you get your mortgage through them, you open up your investing accounts and roll over your 401(k) with them they try to keep you in that same ecosystem chase does the same thing with their say fire card and their banking sapphire card. you are doing this at a time when it's already near zero interest rates overall from a macro perspective. and your cost of funding are
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still zero as well so you better be doing something. >> my only point about this, and i think you will only qualify -- average monthly combined balance of $200,000. but that includes retirement accounts let's leerks here's my point $200 a year? am i supposed to change my banking relationship, one of the stickiest most difficult in order to get $200 a year that i'm going to use towards stuff i probably already pay for >> well, that is the big question and banking relationships are already really sticky. and people have their cards and, you know, they don't want to -- even if you lose a card you don't want to go through the whole process of finding a new card also i think this speaks to the point of the fact that citi is offering these subscription services because they recognize that this relationship is sticky and they want to keep you around as opposed to offering a one-time toaster >> if we're now analogizing if that's a word. >> it is >> amazon prime, costco gold,
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and spotify to a toaster what, does that tell us about those businesses >> or our consumption. you open a bank account and you fall asleep. you never leave. >> unless they charge me a fee >> even if they charge you a fee, when was the last time you changed banks? >> the reason why is because i've always found the situation that i paid the least amount of fees on or zero fees no matter how much i have to transfer. >> do you bank-hop that much >> i don't bank-hop. i always find a product within my banking organization that allows me to have a fee-free situation. >> i had to change upon marriage and let me tell you, it took a lot of in-person long, drawn out. good luck. >> i hoped he was worth it [ laughter ] >> my wife and i both have separate >> so do we. >> separate banks. topic for you. here's a new school. bitcoin has rebounded big time this year. and a new study shows just how energy intensive the crypto currency can be. cambridge researchers shows us
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that the whole network uses 65 terawatt hour energies a year. >> so what i wanted to know is where bitcoin levels are does that have a direct correlation with, you know, the amount of energy consumption that these computers are using to mine -- >> i think there is because when bitcoin was back up to 18, 19,000 per coin, everybody was mining it. you had mining operations all over the place, everybody with their server farms so that happens. but i'm not sure if that just the switzerland idea is pretty staggering >> i agree by the way, we talked so long about banking that we don't have time to talk about pabst blue ribbon >> they are making hard coffee i would point out of mixing irish whiskey with coffee at the great buena vista cafe just try that. >> and forget all this stuff >> does anybody remember four loco
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remember that? they banned it back in the day >> it was an alcoholic caffeinated drink. it came in those tall cans, and it got banned. >> what about different world? >> redbull vodka that's not banned. i see people drinking those. >> you can mix that yourself okay finally today alibaba's ewallet affiliate way, they want you to use racial recognition in the checkout here's the problem according to a new survey, more than 60% of respondents felt they looked uglier in that picture. and it shows up like in china when you're using it so ali's solution is to use beauty filters in the app. so we all gave it a try. okay here's my before and after this isn't their actual -- okay, this is not actually ali pay, but it's just. >> but you look good in both of them anyway. >> because i've had hair and makeup but on the right i think i look ten years younger. can we see bill's?
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[ laughter ] >> no change >> and this is our own technology -- oh, definitely like, you know, a little brighter i mean, and finally dom. [ laughter ] dom turned into an elf apparently >> we all know people by the way who do this a lot. i've never used a filter on my face, but i have friends who use those filters all the time i cannot tell sometimes whether that's the real photo of them or not. >> but does anybody not think this will make you use it more at a checkout if you look a little better? i think it will. >> i can change my dmv photo too, right >> you re-enter the united states and you have to take a picture at those little kiosk things at the airports and everything i press the button and i leave immediately. and only because i have to re-enter the united states if i had a choice. >> does anybody driver's license
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photo look like you or look decent no, but we all still drive anyway although i will say the look on your face is -- the only time you really have to pull your driver's license out is to hand it to the cop when he pulls you over, and that's about how you look anyway when you're handing it to him. >> which is going to be the real point? is it the before or after? one more time for dom's. >> i just mean if a tsa agent saw me in that right-hand photo they'd be like what? [ laughter ] they wouldn't even bother. >> it's your new twitter profile. >> they'd flag you down in a heartbeat. >> in fact if ali could send the technology to us, we'll repeat the experience >> have a lovely weekend tech is the best performing sector this year three big predictions that could keep that going coming up right keep that going coming up right after thissounds like a case of analysis paralysis.
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welcome back. how about this the tech sector is up 28% so far in 2019. can that momentum continue john lipton has a look at what to expect in the second half of the year >> even with the looming threat of a trade war, tech is the top performing sector so far this year here's what else to watch for in the rest of 2019 first, new iphones tim cook tells cnbc that the iphone 10 r has consistently been his top seller which is the least expensive of the phones launched last fall that means this fall when cook introduces his new lineup, he might focus more on mid-tier phones with new features, capabilities and marketing dollars. two, jedi. the u.s. department of defense is deciding which company will win a big cloud computing contract known as jedi, worth up to $10 billion the winner could be announced as soon as august amazon and microsoft are in the
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running. the winner could use the deal as a selling point, convincing companies and other data-sensitive industries from finance to health care to entrust it with their information too. three, regulation. state, federal, and international regulators all have tech in their sites, including alphabet's google and apple, amazon, and facebook. and that means there's little likelihood of approval for any big acquisitions that could be a challenge as these companies hunt for growth and one their chinese rivals don't face >> in fact, we just found out that the uk's competition regulator is reviewing amazon's recent investment in deliverroo. so these tech giants continuing to feel pressure on both sides of the atlantic. >> and josh we are also learning more about jony ive's success at apple. >> there was a good piece on jeff williams. like tim cook, he is a true tested apple veteran he also like cook is experienced
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as an operations guy, and he is taking on more responsibility in product design too the watch has been his baby for years. and of course we learned that when jony ive stepped down to design are going to be reporting to jeff williams i think that's interesting in part, kelly, because at apple they are now focused most are on operations than product design of course you saw tim cook come out and rebut those reports. it's not so much that one is superseding the other. is it possible that just operations and design maybe they work more hand in hand together than in before because apple today is just a very different company. it's so much bigger, it's so much broader, selling hundreds of millions of products. maybe the ascension of jeff williams kind of speaks to that trend. >> josh lipton just about 15 minutes to go until "power lunch." here's tyler mathison. >> we are going to take a second-half playbook and we are going to talk housing in the second half and take a look at what could be expected there as
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interest rates come back down towards those historic lows, below 4% in many areas inventory still pretty tight but in my neighborhood, i'll tell you, there's a lot out there for sale and not a lot is moving i don't know whether this has to do with the lack of assault discussion >> i wonder if it's still true that they think the spring is going to be delayed to more of a summer season. >> and some of the hottest markets right now are those that were among the coldest for many a year like pittsburg, vy hot is pittsburg, salt lake city as well, prices there moving up very swiftly >> tyler, we'll see you soon hackers have found a new target ahead here, we will talk about the nba and how teams are protecting players and fans. the hacking adviser to the cavs the hacking adviser to the cavs joins me straight ahead.
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welcome back in less than 4 hours, nba teams will officially begin signing their free agent targets and finalizing the agreements and deals we've been hearing about
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all week my next guest works with one franchise to protect its fans and players from hacks he is now working to defend against sports i.t. theft. for more let me bring in david kennedy. he is the ceo of trusted sec and the hacking adviser for the cleveland cavaliers. david, welcome >> thanks for having me. i appreciate it. >> so can you tell us where kawhi is going >> that would be a great betting if i could do that and kind of hijack that a little bit from a hacking perspective. but i think he is sticking with the raptors. >> oh, you do? we'll see. hopefully soon tell us about some of the high-profile problems that have plagued the nba. >> you look at the nba as a whole, this is a multi, multibillion dollar organization and if you look at each of the teams, these are individual businesses that operate hospitality, everything from when you go and you buy popcorn to their online stores, you know, trade information, draft information, how they're going to structure their teams
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there's a lot of information that these basketball teams have uniquely to themselves as well as the entire nba as a whole we've seen recent attacks hawksh where hackers were able to hack the online store and steal a bunch of credit card data. we had tahackers, a hacker from georgia grabbed a bunch of personal information from their apple account. we're seeing more and more of these attacks hit the nba in the different actual franchises as well and so now these teams hire hackers like myself to come in to see if he cwe can fix it. >> i did not realize what was going on with the pace ers they had driver's license data taken. the milwaukee bucks had w-2s stolen we've seen a spate of towns b and cities being held ransom with demands from bitcoin and
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that kind of thing when it comes to nba teams, are we going to see something of the same kind of thing happening or are teams just going to wisen up and say hey, this is more of a r corporate issue where we need to bring in corporate level defense to make sure this dubt get worse? >> you've seen an increase around the states. even airports. locally here in cleveland, hopkins had substantial outages when it came to ransom ware. if you look at what the nba has done, they've seen an uptick in different sports in general. you saw what happened with the astros where they were hacked from the cardinals and were trying to steal information around doing their plays so the nba has been really focusing on as a parent company and organization how do we provide services to the rest of the nba teams to try to get them more secure so these campaigns or online thefts don't happen. the big challenge though is is that these are really individual businesses even though they report through the nba and
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there's guidelines they have to adhere to, security is still a thing that's really lagging behind across every organization that's what we've done with the cavaliers. focus on what their business has been moving to >> so, for now u, we're still talk i talking about a lot of effectively crime, just in this arena. do you think we're going to see an increase in competitive hacking where people understand hey, whether especially if sports gambling goes mainstream, there's going to be a huge premium on accessing that information. >> a great question and one of the biggest concerns for the nba. i can't speak on behalf of them. if you look at the different states, there's 13 that have passed easier laws when it comes to online gambling and performing it in a much easier capacity, so as this becomes more and more of a thing, especially sports gambling, understanding where rtain people may be going, their percentages and odds, you can
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make a substantial amount of money just by taking the data or understanding what a team's going to be able to do this is going to be a major problem. not just for the nba, but sports in general where hacking is going to be a part where it can give you an edge to promote your odds and make gains >> ifascinating. i hope he goes to l.a., but i think i'm the only one we'll see. >> good luck see you today or tomorrow. >> mope hoepfully, come on david kennedy, thanks very much. your passport she said could be the next target of a cybersecurity attack how they're targeting travelers. with all that usaa offers
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nearly 49 million americans are traveling and for some hackers, hoyour information is prime target on the load each passport sales for $1,000 on average here to tell us more is charles henderson, global managing director of i brk m access red, their hacker division and kate charles, there's sort of a
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surprise that the passport is worth $1,000 although again it's valuable, i get that, but to me, the real shocker is that the social security on the dark web is worth just a dollar? >> well, you think about it, the social security number is really valuable in one country where as the passport can be b a world traveling phenomenon you see depending on the abry beaut, you can see prices go up into the 4 and $5,000 per passport >> i think they were talking about complete passports not just a number. >> they're for an actual physical fully formed passport that will work at a port of entry. tha difficult to put together which is where there's leg work there. so for most people, passport expire, or the information got you on the dark web isn't the full scope, but certainly this is something that's happening and it's serious >> a lot of the times when we travel, especially when you're going to an air bnb or hotel,
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they say make sure you hide the pass r port. lock it away really go to extra precautions i mean look, does that accomplish anything? what are the real ways if you really want ed to try to keep that information safe to do so >> so that is a good idea that's sage advice. but the problem is it's not just the physical copy. it's thedigital copy the digital trail you leave when you travel think about all the sites. all the companies that have access to your information store your information that you provide your information. and criminals are targeting those sites, those companies and they're doing it to big numbers. the tune of about $60 billion in 2018 alone that's with a b. not an m >> while that's a huge industry, social security numbers only worth a dollar they're not as valuable internationally, which is interesting. credit cards with cvv numbers,
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that three-digit code, only $5 and a driver's license goes for 20 bucks >> i think it makes a lot of sense and it's probably a testament to how far we've come in being able to respond to these incidents that a credit card is is really only good as you have not been called by your bank and told it's used for fraud. you get better at stopping fraud, but then there's something else that become more valuable do you see that happening or are we getting better? >> absolutely. you think about these travel companies that have the trifecta of data. pii. personal identifiable information. things like passport numbers credit card information. your payment information and then finally, they have your loyalty program information. >> yeah. >> and what's actually interesting is it is easier to transfer the information across
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borders than it is to transfer actual currency. you can see organizations such as organizatied crime or any ot criminal organization transfer this data across borders in lieu of cash and that actually, that really lends itself to their practice >> appreciate your joining me today. >> welcome, everybody. i'm tyler mathisen new at 2:00, will it make the fed rethink its plans, plans they have, to cut interest rates. now if the chances of a cut have gone and some say they have, what does it mean for this record breaking rally. plus low, low, low mortgage rates. soaring

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