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tv   Squawk Alley  CNBC  July 12, 2019 11:00am-12:00pm EDT

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good friday morning. welcome to "squawk alley." i'm carl quintanilla jon fortt is off we're going to start the hour in washington, getting some news out of treasury today. elan el elan ylan muy has that >> the letter says that it is impossible to know exactly when the treasury will run out of cash, and so mnuchin called on congress to raise the daelebt ceiling before they leave at the end of this month. house speaker nancy pelosi is scheduled to have a phone call with mnuchin today she said yesterday she's open to negotiating a deal to raise a debt ceiling along with the federal spending caps over the next several weeks we'll bring you any details on those discussion as we have them
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back over to you >> that's going to be a topic of more importance as we get through the back half of the year ylan, thank you. a move to crypto now, especially facebook's libra. the president took to twitter to say he's not a fan of bitcoin or other cryptocurrencies adding, quote, facebook's will have little standing or credibility. libra a major topic on capitol hill during the fed chair's testimony. take a listen. >> we agree that libra raises a lot of serious concerns. and those would include around privacy, money laundering, consumer protection, financial stability, and those are going to need to be thoroughly and publicly assessed and evaluated before this proceeds >> now we've got mark cuban sitting down with deirdre last night, saying that facebook is out over its skis. >> i'm not a big fan of what they're doing there. i think it's a big mistake not so much because of what will happen here in the united states, but what will happen globally there's going to be some despot
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in some african country that gets really upset that they can't control their currency anymore, and that's where real problems start to happen i'm not a big fan of what they're doing. i think they're way ahead of their skis on that, but it's only in the talking stage right now, so we'll see what happens >> let's bring in syria sreenivasan joins us to talk about this should they be worried >> i think the facebook folks should be worried. because there's so much buildup of resentment, questions, concerns about this. and because facebook has other issues in the media right now, this is just adding to it and making it more complicated >> what do you think their next move is going to be? >> i think that they have to show that they are not the only player in this you know, there are going to be a hundred other partners, and that they are in control of the various issues that have come up >> sri, there's been so much bashing, so let me just play devil's advocate here. should we be more worried if facebook wasn't the one doing this we talk about how big of a network it has, but you look at
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china's ten cent and we chat they also have $1 billion users. and so, some say that this could usher in a new era of banking. what's the downside, if facebook or an american company doesn't do this? >> the fact is if they don't, someone else might be the one who kind of gets the lead on this but i think the timing of it is awkward for everybody, because right now, there is too much other noise at the moment. >> awkward, to say the least, certainly. but i mean, is that missing the point here that someone's going to do and it it's better off to be one of our big tech companies >> in the future, this will be something that we'll look back at a moment and say, this may have been too early, but it will definitely ñ&fhappen >> i had somebody really smart point this out to me this morning, this idea that, i mean, i think with the cuban -- that there's really no government that's going to make it easier for people to compete with their currency and basically take control of their monetary policy and when you put it in a context like that, of course, you would have somebody like president trump coming out and talking about things like banking charters >> absolutely.
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and you've seen with president trump just last week, he was complaining that the dollar is too strong today he's saying, he's boasting about how strong it is so even america can't happen what's happening with its currently, imagine what happened with the others. >> the white paper did come with the list of partners it's not clear to me why they haven't made that more of a centerpiece, right >> i think the way that they have handled it is that they're the leader through 2019 and when it launches next year, everyone will be equally there. and facebook doesn't have a bigger thumb on the scale, is what they say. >> is it going to launch next year how optimistic are you with this much pushback, and you even had the fed chair saying that there needs to be a lot more assessment of what it would do >> if i could make tech predictions, i would be very rich and not here. so it's very hard to tell at the moment >> all right we're going to watch it closely. obviously, it's been quite a week for libra meantime, eavesdropping devices. google disclosing today that it pays contractors to listen to
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customers' audio recordings by its digital assistant, while apple is disabling that so-called walkie talkie app on the watch, after a glitch was found that allowed people to listen in on user's calls. all right, let's take the google part first, is this really a mystery to anybody, that these things can be listened to >> no one should be shocked. these companies are taking our recordings and they need to listen to them so that they can transcribe them better and teach the machines how to get smarter at the voice technology. so they shouldn't be surprised, but it's still hard to hear when that's happening >> do consumers care i mean, are they becoming immune to these stories we've heard so many of them, is it going to have any real effect on the amount that consumers actually purchase and the amount that they use it >> i don't think it will have an effect, because over the years, we have learned that when consumers are faced with convenience and security and privacy, they'll always choose convenience. remember 15 years ago when g-mail launched, people were worried that it would read to your email to serve up ads
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of course, that made g mai-mail better and no one's complaining now. >> do you think that's really the case, or do you think given the fact that there's a bigger, broader discussion happening right now and critical lens on these tech companies and these ideas of privacy regulation that maybe that's changing. >> well, we hope that people will take steps to be more careful online but it's a real slippery slope, i think. we have four, five devices in our home and i also learned that you have to be careful when you go on vacation we were in a rental home, and they had alexa, we used it all the time and realized every question that we ask is being recorded and sent in theory to the owner of the home. so even if it's not your own device -- so, you know, anything we were sort of asking questions of it, they know >> you actually brought devices here today let's talk about this and why you actually did bring them. >> i brought in two of the smallest devices one is the alexa echo dot here from amazon and the other is a google mini. the reason i brought them is that there is a fail-safe way, apart from not owning one, to
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make this safe from anyone listening to you without the wake word, as they say in this case, right here, there is a button that you can press that will not turn the microphone at all on so you'll have to turn it on to have -- >> but then that defeats the whole purpose. >> exactly >> this speaker that you can talk to. >> exactly same thing here. >> question, if there was a facebook model right there beside you, if they had developed their own. >> they have something now -- >> it isn't the same, it hasn't gained the same pollutpularity,o you think this would be more of a hot topic? >> i think if that facebook product would have been more successful, we would have seen more concern about that, because of the minute that facebook is in at the moment, that's the problem. >> knowing as much as you do about digital innovation, obviously, there's some friction here on voice assist do you see it slowing down adoption really meaningfully over time? >> no, no. i think that it may not pick up as fast as we think, but it will definitely be a default way of the way people communicate >> we're talking about all of
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this technology in the home right now, but as you see more and more smart city technology roll out and now there's brewing debate around facial recognition and that being used by governments, i guess, how much bigger does this become? and how do, you know, countries like the u.s. begin to establish these rules of road? >> and it's something that everyone has to be concerned about. i have seen in india, airports are developing boarding pass lists entry, because just the facial recognition so other countries, which may not care as much as about these privacy questions will end up ahead of us. and you'll be just able to walk into an airport the way you can, in these new amazon stores, for example, you know? >> right sri, we've got a lot to handle in the years to come thanks good to see you again. >> speaking of amazon, it's highly anticipated prime day is really only a few hours away at this point, set to kick off at the beginning of next week and courtney reagan is back at hq with more on what we can expect hi, court. >> hi, morgan. it's better than ever, it's the
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fifth-ever amazon created shopping day it will go for 48 hours, 12 hours longer than last year. 18 countries, that's one more than in 2018, a million deals, including new lightning deals. those items will be in shorter supply for a shorter period of time now, core sight projects prime day could generate $5.8 billion in global sales. that's up significantly from the $900 million estimated for that first 24-hour prime day. the goal for amazon, not just to generate sales, though sign up new members. that's key cowen and company estimates there are about 63 million u.s. households that are currently prime members with 10% of non-u.s. households indicating, ye yeah, they'd sign up in prime to take part of the deals whether you're a first-party vendor or a marketplace seller on amazon, playing on prime day is a must. brands that participated last year saw three to four times their average daily sales on that day and two-thirds of the
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products with a prime day traffic lift actually saw it last for the following two weeks as well. but, commerce iq is warning a number of companies based on their past 30-day supply on amazon, supply could be short of demand on prime day. so just some of those companies that commerce iq is warning, unilever and face care, garnier and makeup, nestle and conagra, and coffey and tea, post general mills, and even amazon's owned whole foods in the cereal category infa mil and baby food, johnson's baby products, samsung and lexmark printers among others shortages could help the hundreds of other retailers offering competing deals prime day last year, one of amazon's biggest digital days of the year and adobe analytics says u.s. retailers, the big ones, could see sales surge 79% compared to an average monday, tuesday, in july back over to you >> courtney, it feels like every year, prime day gets a little
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bit longer, just wish they would give us more data around it. >> isn't that the truth? >> thank you for that, courtney. >> you got it. still ahead here on "squawk alley," breaking up big tech that's only going to give those companies more power that's what mark cuban told me last night we'll discuss, next. hiv controlling, joint replacing, and depression relieving company. from the day you're born we never stop taking care of you.
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welcome back to "squawk alley. ai for the rest of us. that's how ceo fallon fa teemy
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describes her company, node, which just received another $16 million in funding from the likes of will smith and mark cuban. i smoke with fallon and cuban last night about node and what separates it from its competitors, particularly the big tech players >> so all the tools that these big companies are putting out there are really for a data scientist. they're all these lego blocks to help piece together a solution every organization in the enterprise will still need to figure out how to acquire data, clean data, normalize, set up data architecture, and then figure out how to actually build models that drive the business outcomes they care about and figure out how to scale it in a personalized way for their end customers. >> aside from node, i also got cuban's take on everything from facebook's libra, which we just chatted about, to the election to the tech lash out of d.c. he spoke to me at length about antitrust and about why breaking up these companies could only make them stronger >> i don't see it as an anti-trust problem at all. no one has to use facebook you know, there's alternatives for search
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you know, just because they've been able to develop a lot of big customer base doesn't mean it's anti-trust. and so, no, i don't think it's an issue i do think facebook has got a lot of issues in terms of privacy and use of data, but we always have to remember, the law of unintended consequences people talk about facebook not wanting to make data available to others. to me, it's scarier at facebook or google or others keep all the data to themselves because that gives them a significant advantage. so we have to be very careful on how we approach these issues >> so should that be regulated then because you said that there's alternatives to facebook, but the most popular alternatives are instagram and wechat i mean, snap, yes, but the numbers aren't there >> i -- no, i mean, facebook usage in the united states is declining. the average age of a facebook user in the united states increasing yes, they have instagram, but instagram is a completely different type of tool it's not a news source there are so many different alternative sources of news. apple is making a bigger push there. there's third party news sources. i don't see that as a risk
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factor at all. i think, you know, people don't really understand where things are going. i mean, to get back to node, people don't understand artificial intelligence and its impact people are afraid what the future impacts are going to be and so they just take it out on -- well, let's just break up these big f.a.a.n.g. companies that's not what's going to solve it and again, when you break these companies up, you actually give them more power. because there's nobody else out there that's small, that's going to step in to their place. you'll just have a few more companies doing more of the same thing, but only having the protections of the anti-trust regulations. >> right and i want to move on from this in just a moment, mark, what i'm hearing is they do or don't need to be regulated and who does that >> who does it is a big question, but in terms of relation, i think we have to really, really be careful. the law of unintended consequences will smack us upside the head in ways we don't expect you try to stop facebook from selling data or put valuations
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on data, which i don't even know what this accomplishes, now all of a sudden they're forced to keep the data to themselves and having facebook with all their own data and not sharing it, having google with all their own data and not sharing it, having microsoft, et cetera, with all their own data and not sharing it, that's scary, because that gives them an incredible competitive advantage. and even if you broke facebook into multiple companies, facebook, instagram, oculus, each of those entities is so big, they would still have such a significant data advantage and also protections, because now they just followed whatever was prescripted to them, you're not going to solve any problems. you're just going to create more problems i'm still more laissez-faire, where beyond privacy -- privacy is a separate issue. but beyond privacy, we need to just encourage development and we need to encourage innovation, like, because that's how we're going to compete the concept to me that facebook is the end-all, be-all product for news sources or saving pictures or sharing with grandma is crazy same with instagram.
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they'll be preempted at some point. it's inevitable. >> so, guys, cuban talked a lot about being very careful regulation could have these unintended consequences. but i think a lot of folks, especially lawmakers, might wonder, if you're too careful, you risk letting them grow even bigger and bigger. so the big question, and the point i took away from that is we still don't really have clear answers on who regulates and how that happens >> yeah, sfwreit's interesting,, he mentioned apple in that conversation, as well. they're also under the anti-trust lens because of scrutiny right now because of the app store. and he seems to be -- he mentioned facebook, seems to be a little bit more focused on the consumer piece of this, but there is the business argument as well against some of these other companies like, for example, apple and facebook and google you know, in terms of advertising dominance, in terms of being able to get their apps out there, et cetera and i just wonder -- i just wonder if that's going to end up being the area where you do see some of this increased regulatory scrutiny. >> it's amazing. i asked him about big tech and he zeroed in on facebook, which
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is sort of what you hear a lot of folks do these days, right? and you mentioned apple. they -- i feel like they're not brought into the conversation as much when they do run the app store. and they've really made it a strategy and you see the marketing. i see it in san francisco, you know, saying, we protect privacy, really as much as i see advertising for the iphone these days >> his point about competition is interesting, but when these companies are this big and they can buy competitors pretty easily, it does change the equation but it's great to get his thoughts cuban's a deep thinker >> it was interesting, he was sitting beside one of his latest investments, node, which is very interesting. ai is a service company. and he says, i don't think it matter ifs you's if you're goink them up, because no one small enough can actually get it and i thought that was a little bit interesting, too how do you create a landscape where these start-ups aren't just acquired, but compete >> exactly good stuff from social media to media, other silicon valley execs are in idaho for the alan and
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company conference this week julia boorstin has been in sun valley for a few days and has the best from day four hey, julia >> well, carl, the consensus of a number of ceos here, both in the media and tech space, is that regulation is inevitable for the tech giants, but they also all agree and they tell us that getting regulation right and actually benefiting consumers will be very tough now, i spoke to sam altman he founded the start-up incubator and is now founder of open ai and tells me that he's really concerned that new laws could unfairly advantage the big companies that it can afford to pay for new regulations. and that it's very key that regulation comes soon. >> a lot of companies have gotten so big and so powerful and so intertwined, but i think when i talked to most of them, they sort of actively want regulation lake we're all sort of in uncharted territory. and i think either we figure out how to regulate more quickly and more effectively than we have in
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the past, or we end up in a world where at some point, we have to do it in a very clumsy way. >> reporter: with facebook, google, and amazon sending executives to testify on capitol hill in hearings next week about anti-trust concerns, former twitter ceo, dick kcoslo says he's concerned about conflating antitrust with privacy issues and thinks those two issues and concerns should be kept separate >> it's not just the fact that companies are big that should cause them to be regulated the size of the company doesn't have really any impact on the kinds of things it might be doing. it's those specific things that companies are doing with data. the way they're managing it. >> all the tech giants are here, jeff bezos, satya nadella, tim cook, mark zuckerberg, sheryl sandberg, and i hear mark zuckerberg is hosting his annual
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karaoke party tonight in town. so these media moguls aren't just talking business, they're also getting a little bit of vacation >> hopefully not singing the blues. i had to i just had to, julia thank you, your reporting has been great this week julia boorstin out in sun valley as we head to break, dow hitting another record high this morning, coming off its first close ever above that 27,000 mark here are the names driving the index even higher this morning we've got more "squawk alley" after a quick break. ntral. it's so important to us that verizon is supporting military families. when i have a child deployed, having a reliable network means everything. so, when i get a video chat, and i get to see their face, it's the best thing in the world. and i've earned every one of these gray hairs. military moms, we serve too. (vo) the network more people rely on, gives you more. like military plans with a special price on unlimited, $100 per line, and big savings on our best phones when you switch.
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welcome back european markets set to close. leslie picker joins us with a breakdown of today's action. >> european markets losing some steam late in the session, but still mostly higher, european industrial production for may came in above expectations factory output grew 9/10 of a percent versus expectations of a
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0.2% rise. that data offsetting declines over the past two months, softening some concerns over a prolonged slowdown, though production was still down half a percent year over year automakers are among the leaders in europe, with daimler, a notable underperformer after the company issued its second profit warning in less than a month, saying its full-year profit would be significantly below last year's. elsewhere, the lira is under pressure this morning, after turkey took delivery of a russian missile defense system in defiance of tariff threats from the u.s and finally, europe taking a softer approach to iran, with dow jones reporting that leaders are likely to put off a decision on whether to take action against the country for twice breaching the nuclear deal this month. guys, back over to you >> leslie picker, thank you. let's get over to sue herrera now for a news update. hey, sue >> good morning, morgan. good morning, everybody. here's what's happening at this hour president trump announcing that labor secretary alex acosta will resign this following acosta's handling
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of a 2018 secret plea deal with jeffrey epstein, who was accused of sexually abusing dozens of underage girls president trump had nothing but praise for acosta. >> he was a great labor secretary, not a good labor secretary. he's done a fantastic job. he's a friend of everybody in the administration and i got a call this morning, early from alex. and i think he did a very good job yesterday, under a lot of pressure, he did a fantastic job. >> china says it will impose sanctions on u.s. businesses selling arms to taiwan this after the state department proposed the sale of $2.2 billion in arms to the self-governing island. beijing says that the sales constitute a serious violation of international law and britain announcing that it is sending a navy destroyer to the persian gulf, as iran demands the british navy release an iranian oil tanker seized this week after gibraltar. britain says that it's moving up the timetable for the larger hms
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duncan to relieve the hms montrose, which is a frigate operating in the persian gulf. so those tensions continue and that is the news update this hour guys, i will send it back downtown to you. carl >> sue, thank you very much. with high-end real estate sales skplolowing in the most expensive cities in the world, developers in luxury markets are looking for some creative ways to lure in high net worth home buyers our robert frank explains. >> reporter: one way developers in l.a. are upping megamansion curb appeal is by adding eye-popping amenities. this hollywood hills home upped the ante with a two-story wine elevator broecker mauricio umansky shows us how it works. >> you can access any bottle of wine from downstairs or upstairs right next to your bedroom >> and the pool includes a subterranean surprise. >> we have a peekaboo window and you can see the pool from the gym as well. and check out this party pad in
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l.a. to grab the attention of a super rich bachelor, developer don bowland built not one but seven cocktail bars. >> one, two, three, four, five, six, seven >> reporter: and designed a 12-foot waterfall that cascades down theroof into the 80-foot long infinity pool it lured in infamous instagram and marijuana entrepreneur, dan billzarian who bought the place for about $65 million. and a simple garage just wouldn't do for the developer who built this $88 million estate in l.a. >> this is one of the coolest driveways in america, and not just because of the mercedes spinner. >> reporter: broker aaron kerman showed us this jaw-dropping ten-ton car lift and the subterranean sparking spots down below. so far, he's had no takers >> do not missing brand-new episodes of "secret lives of the super rich" tonight right here on cnbc beginning at 9:00 p.m.
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when we come back, snap gets an upgrade over at goldman today. heath terry is the analyst behind that call he will join us right here at post nine in a moment.
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shares of snap getting some attention today, moving higher on the heels of this upgrade over at goldman. the firm says it does expect user growth to outperform following the new android app, the launch of some games, these nuz le new lenses joining us to discuss is the
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analyst behind the call, goldman sachs' lead internet analyst, heath terry is here at post nine heath, good to see you welcome. the stocks had a move. you think there's more >> we do think that there's more sof obviously, we wish we had done this earlier but in addition to allmentionede android app, snap gains, we see a lot more happening behind the scenes in their ad tech stack. advertisers are starting to see a lot more value and utility out of advertising on snap this integration they've done with shopify which has opened up some ecommerce channels, ultimately means the ad inventory they got from all of this new usage will get monetized at a higher level. and at the end of the day, that's what matters. >> you've got some charts on downloads, looking much better are we done with executive departures and in-house drama? >> that certainly helps. and that's one of the reasons that we sort of held off on doing this sooner, is we wanted to see some signs of real stability there. but i think you've got a new cfo
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in place that clearly is committed to being there you've got a management team around some of the operations that brings some real experience, that we think, you know, can help carry snap into a new level of maturity. >> you also upgraded stitchfix why? >> for us, a lot of it is -- and we've talked about this before, we want to own as much in ecommerce as we can right now. you look at the retail store closure numbers that are happening in the u.s., that's going to be a big benefit to any company involved in ecommerce. that's a big part of why we're as positive on amazon as we are. a lot of those store closures are happening in apparel, department stores, and footwear. all areas that benefit stitchfix. so to the extent that you live in a part of the country and you're losing access to a lot of your apair options, stitchfix actually becomes pretty powerful we've also done a really good job recently of launching new products around men's and kids we're launching in the uk. and their algorithms, the underlying piece of it that makes sure you get what you want
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has also gotten better >> you mentioned amazon. how big of a deal will prime day be for the country next week >> it's a big deal from a marketing standpoint and a customer acquisition standpoint just to drive some attention in terms of numbers, it doesn't really -- one day is not going to make it or break it for amazon more importantly for us is the fact that they're putting $800 million into same-day delivery, which means you're going to be getting your products faster, it opens up a whole new part of the wallet for them. and you're seeing, again, these retail store closures benefit them in a pretty meaningful way. >> is amazon the best ecommerce play when you look at the earnings, their online store growth, krem revenue growth has really been slowing down are you interested in that because of ecommerce or the other things they're doing, because advertising and smarthome? >> it's a combination of all of that we actually think that that retail number for them is going to accelerate in the second half store closures, same-day delivery, easier comps i don't think that that's something that consensus is expecting at this point.
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so if that growth reaccelerates, it should benefit the stock. you could see the same thing in aws. we've made the case for a while that depending upon how you look at the numbers, you can justify amazon's valuation, just off of aws by itself. and then the advertising piece, which started to slow in the fourth quarter of last year, we're starting to hear from some of our checks with advertisers the suggestion that there's some real acceleration happening there. >> let's talk taxes. you have digital taxes france this week, now the uk, looking into implementing its own digital taxes. a lot of that will be on these big tech companies that are american how does this play out and how much of a risk is this to these company's financials >> like everything, it's all about the details. if you're facebook or a company with 40% margins, this actually isn't that bad 3% of revenue on a 40% margin business means about a 12% tax rate if you're talking about a company like amazon that has 5% margins, then you're talking about nearly a 60% tax rate.
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so we don't think that this is going to go through in the way that it's currently been proposed obviously, the current administration in the u.s. is trying to affect the way that this is going to protect, but it's a clear part of this bigger trend around regulation in making sure that companies are paying their fair share. >> we started the hour talking about libra and so far the bruising it's taken from several sides this week. how important is it to facebook and what kind of gauntlet is libra going to face? >> yeah. i mean, in the big picture, not at all >> because early theories is this would supplant certain other large businesses for them, in the long, long-term >> yeah, but you look at how hard payments actually is, right? and facebook has been working on payments for a long time ultimately, they ended up partnering with paypal amazon has been working on paypal for a long time, nothing's happened google has gone through this three or four different times. and i think it's just
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unrealistic for us to expect that any one initiative, even something that's as widely supported as something like libra is, is going to have that big of an impact, especially on a company that's already as big as facebook is >> i feel like we've been talking about that for years, why sort of big tech is going into payments, but not in a huge way. now facebook has taken that plunge and you can see how much it's opened the company up to scrutiny could libra end up hurting facebook >> i do think it opens up a door for regulation, right? the most regulated part of our economy maybe outside of health care is financial services and areas like payments. and this gives a completely separate part of the government almost on a global basis an entry into regulating the companies that are involved in it >> first half of the year, many of these internet names, tech names have been some of the top performers we got earnings season kicking off next week in earnest, including some of the names you cover like netflix and ebay. what do second quarter earnings look like for this group
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and how does it set us up for the second half of the year? >> we actually feel pretty good going into this earnings season. and obviously, when you're talking about a space like er internet, there's going to be a lot of dispersion. netflix kicks it off next week we feel really good about the numbers going into print there largely because content editions have been so strong. and you've got a very strong content slate going into the second half. consensus right now is looking for 28, 29 million net subscribers, we think that will be closer to 34, 36 million. and that's what we see driving the stock. especially given the flow through that you're going to see on profitability there >> that's going to be a big day. and we'll talk about them and disney for the rest of the year. thanks interesting call today heath terry of goldman still to come on the show, jay-z's joint effort with cannabis company caliva.
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we'll explain after break.
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i'm scott wapner with a look at what's coming up on the "halftime report" today. another new record for stocks thanks to fed chair powell's testimony. now earnings are front and center will they be good enough to keep the rally going? we'll try to answer that question plus, we've got more than a dozen names. one firm says they're likely to outperform in the months ahead we will reveal that list and trade it on the desk and a new stock from pete najarian that could be about to move based on its options action it is all ahead at noon on the half deirdre, we'll see you in a little more than 15 minutes. look forward to it >> scott, looking forward to it,
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as well. let's get over now to the cme and rick santelli for the santelli exchange. rick >> good morning and thank you. remember, if it's earnings season, it's rebecca corbin, corbin advisers. welcome. let's start out right at the beginning. tell me who the respondents are and the date of the survey >> inside the buy-side survey, we surveyed global institutional investors, we had 84 respondents managing $2.4 trillion and our survey ran mid- to late june of this year. >> the big question on everybody's mind, so we'll start macro, what do they think about the economy, globally, domestically >> so the economy in their eyes slowing. global growth slowing. so it's really a tale of two cities we have slowing growth, which is the negative but on the positive side, we have a low interest rate environment, a strong consumer, and the vast majority of investors that we surveyed do not see that we're going into recession in the next 12 months. >> now, having said that, can we drill down a little bit specifically on earnings and equity valuations? >> sure. so earnings is going to be a challenge period 53% of investors actually expect
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earnings to come in worse than consensus. we're going to see 41% expect deceleration, quarter over quarter. so we're absolutely in this deceleration period, but they seem to have gotten their heads around that. >> so, coasting, so to speak >> absolutely. >> when you're coasting and you're making investments, normally you want the companies you're investing in to do different things with their cash is there any notion of the preferred uses of cash and liquidity? >> yeah, with 62% of investors describing the economy as losing steam, the vast majority of investors want companies to pay down debt. that's the number one, followed by reinvestment. and i think it's important that m&a, which had been very significant in previous surveys is now the second-to-last, right in front of dry powder >> but it really isn't surprising they don't want you to remodel a house and buy new furniture, you know, if the income is questionable, the outlook of one's job is questionable. >> sure. >> so in remodeling, conservative cash. that makes perfect sense now, wherever i think about cash, i always think about interest rates
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are there any specifics in these respondents minds regarding how these companies should deal with interest rates or their views on interest rates >> interest rates are absolutely significantly priced into the market >> in what respect lower. >> yeah, lower interest rate market, absolutely they are expecti ining one to to rate cuts by the end of the year, so that's priced in as well >> we could spend hours just talking about that, because it's the demands of investors, domestically and globally that are putting these central banks in very uncomfortable positions. finally, your respondents are global, so kind of rank which part of the globe they laike best >> the best part is india. they're not subject to tariffs we're seeing a lot of strength in india, obviously, the re-election of modi, pro-business that's the number one economy that's going to grow over these next six months. in terms of other places, it's pretty down beat europe, you'eurozone, pretty do beat
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the european investors are slightly more bearish on u.s. and other counterparts china, also slowing growth, and of course, the latin american markets are fits and starts. >> real quickly, in the time we have left, trade in tariffs seem to be a big thing on anybody talking about business news these days you contrast that now with input costs. can you ridiculous, are input costs rhyming with the notion of the fear on trade and tariffs? >> we have seen really outsized concerns around input costs over the last several quarters. companies have done a pretty good job with regard to handling the input costs, passing on the costs, cutting costs so actually, margins for the first time seem to be stabilizing versus decelerating. >> that's really incredible. because everybody, of course, wants to weigh in and it's a lily charged situation with global trade but businesses are dealing with it, margins are holding -- >> and in a slowing growth environment, companies need to be focused on margins. >> thank you so much, rebecca corbin see you next quarter morgan, back to you. >> rick santelli, thank you.
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when we return, can't knock the hustle jay-z partnering with cannabis company caliva stay with us, the dow is up 129. at fidelity , it's just $4.95 per online u.s. equity trade.
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welcome back to "squawk alley. i'm not a businessman, i'm a business, man. all right, that was my attempt jay-z announcing a multi-year partnership with
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california-based cannabis company caliva joining us now is caliva ceo&t, dennis o'malley. thanks for joining us today. tell us a little bit more about what this partnership with jay-z will entail and what you expecta business standpoint. >> thanks so much for having us. we are so excited to be partners up in a multiyear agreement with mr. sean carter as our chief brand strategy he is obviously a creative genius and a cultural icon and we've had so much respect for his past success in businesses so we are really looking forward to mr. carter really helping caliva take our brand to the next level we've been known as the number one brand in california and we are certainly making no small plans. so we look forward over the next couple years to really working with him and bringing the brand out on a national basis. >> you mentioned that you have
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no small plans what are those plans and how does the partnership speak to how you will get those plans executed >> absolutely. so today we are really known as one of the number one brands in cannabis in california we've had the top selling flower in the state, top selling vape pens, and we continue to seek to be the most trusted name in cannabis in california but we obviously have aspirations to go beyond california into other states over the next couple years and we really believe that mr. carter's creative genius and his ability to really have the pulse of what a cultural movement is will be able to help caliva do that we really believe that people are looking for plant based solutions to be able to really change out their natural health and wellness options to live a better life and we're very
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passionate about bringing that to everyone nationwide >> obviously a lot of consolidation in your space. i'm wondering if you have any thoughts on bruce linton being fired from the company that he created. does that make you think differently about a potential merger/acquisition with a big cpg player or otherwise? >> it doesn't make us think any differently. we at caliva are an independent company and we continue to look and seek to be an independent company. and we are growing organically extremely quickly. in regards to i would say others in the industry who have been out there both in canada and before us, we have a lot of respect for what they have built, but we're focused on building the most trusted name in can that business akan thcans our growth trajectory is extremely fast and we're just trying to come up with our own growth and focused on that >> i want to get your thoughts,
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melissa lee just released an investigation taking a look at the black market in california given the fact that you do have all of thoo ledgis legislative p and high taxes and it has not hurt the black market within that state, what is for you as a legal purveyor of cannabis, what is the cost of doing business there and how much of a risk is that black market to future business >> i think that you bring up a really good point. california specifically is a very tough market. it is the largest cannabis market in the world. it is almost 35% of the entire u.s. market. and it is really tough to compete and win here not only is the black market there but for a legal market, taxes are high, regulation is behind trying to keep up with the amount of change that is why we believe at caliva our growth in terms of
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outperforming the market, we're very proud what have we've accomplished and what we're moving forward with. in what we call the fun for you market, which is really subject to the flower black market, our prices of flower have gone up versus down because we find discerning consumers who are looking for a trusted brand and trusted service and tested product have sought out indoor floor. we're number one and i think our business continues to outperform the market but absolutely the black market is a major city. regulations and taxes are a major issue and it is a tough market to compete in >> dennis, i'm curious because i think you said that jay-z actually approached you guys how did that happen? >> yeah, mr. carter could have his pick to work with any cannabis company in the world. and he chose caliva. and we are very honored by that.
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we have a lot of responsibility to be able to make this partnership into what we both believe is something that is an absolute game changer in the industry so when his team reached out to us, we were searcertainly thrild at we saw that our values were aligned, it gives us a lot of confidence of the success of this partnership moving forward. >> you mentioned strength of flower are you seeing any concerns about smoking combustible weed when vaping is such an alternative? >> overall i think it is a great question i think that the fun for you market as we see it today and as shown in taxes is actually going down that is why you are seeing caliva invest a lot into the health and healing markets so our best selling product today is actually a best selling
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pain lotion. so you will see a lot of the product development and move forward basis is helping people with pain, sleep, anxiety and then energy and recovery there is no black market for pain lotions so you will see a lot of different form factors, whether loeg lotions or beverages, in the coming year. >> deny ghis owe mnis, thanks f us >> and monday don't miss our special vaporized, is vaping a cure or a curse? thats nd jy th10 imoayul15, :00 a.m. eastern it's amazing. oh is that travis's app? it's pretty cool, isn't it? there's two of them. they're multiplying. no, guys, its me. see, i'm real. i'm real!
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we have an update on the estimated cloud competition we've been following oracle losing its legal challenge after a federal court denied their procetest of the joint enterprise defense, ruling in favor of the department of the u.s. saying oracle did not meet certain criterias so it clears the way for the department of defense to award
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either amazon web services or microsoft, this contract as soon as next month. which is viewed as really something of a scene setter for what is expected to be even more significant defense security and intelligence work as the federal government continues to rely more heavily on the cloud. this is one to watch >> big earns weings next week let's get to the judge >> thanks. the powell push for stocks as major averages hit new records again. big question now, can earnings keep the rally going this is the "halftime report." record rally s&p down, consumer staples and tech hitting new highs and value at new highs, that trade coming up. plus we'll hear from key companies next week like jp more began, netflix and honeywell will earning


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