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tv   Squawk Alley  CNBC  July 23, 2019 11:00am-12:00pm EDT

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good tuesday morning welcome to "squawk alley." i'm carl quintanilla with deirdre bosa i'm jon fortt. got to start with tech today and a rally in some of the big earnings names nasdaq coming off its best day in a couple of weeks, with the tech sector on pace for a record close. you've got names like facebook, amazon, alphabet and twitter all set to report this week and snap after the bell tonight where is the value in tech, as we work through this busiest week of earnings season? janice henderson's denny fish is with us today.
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denny, welcome good to see you. >> thank you for having me appreciate it. >> we've got about a hundred s&p names on the tape so far for the quarter and in tech, at least, if you strip out netflix, what has there been to complain about, really? >> there really hasn't so far. you know, the numbers, particularly if you're focused on companies with long duration competitive advantage and you would highlight over the last couple of weeks, we've seen microsoft, for example, put up exceptional numbers, as the cloud transition continues and azure continues to ramp and you know, it's just amazing, if we think about the numbers there of -- their commercial cloud business, which is effectively the size of amazon web services. it's a different kpocomposition, mix of business. but both of those businesses are growing 40% at $40 billion annualized it's pretty remarkable numbers so, you know, a great area to continue to be in. microsoft, you know, still trades at, you know, an evaluated but reasonable
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valuation. asml put up great numbers. and obviously, you know, a very competitively advantaged company, with a monopoly position in what's called euv, which is semiconductor capital equipment company, where its technology will be inserted for many, many years, to continue to propagate moore's law. and then, you know, we expect the digital add ecosystem, particularly around social in the facebook numbers, and the ad numbers from amazon should hopefully continue to show progression there. google, a little more muted. and then, you know, this continuing narrative out of the semiconductor companies like we heard out of tsmc, where things aren't getting worse things have been adjusted a little bit for supply chains and for huawei, but things look to be getting a little bit better from here. >> okay. now, let's bring in synovus trust portfolio manager, dan morgan
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dan, that was a set-up to what i consider to be a deeper question for investors here we're in such an unusual period, take microsoft for example when you get these big cloud and 5g transitions, often the big stocks don't make a really big move microsoft has managed to do that so if you're an investor, how do you find the next microsoft, maybe a big stock that has got a lot of potential still >> well, jon, you know, just kind of taking from the earlier discussion, i wanted expect those microsoft numbers to roll into the amazon report that's going to be coming out on friday we know that the infrastructure has a service cloud space that's very strong. i think we're looking for aws at about 8.5 billion, about a 40% increase we know that commercial cloud, intelligent cloud, and azure were all very strong for microsoft. so i would expect those good numbers for microsoft to roll into another big cap tech name like amazon who will be reporting on thursday. so looking for good things out
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of cloud and looking for a good migration from microsoft's report over to amazon coming later this week. >> denny, what do you make of the realogy/amazon partnership today? do you think this is amazon making a play into real estate, or is this a way for them to get more of their devices into homes? in other words, should other realtors, the zillows of the world, be worried about this move >> you know, it's too early to tell, but it could be either you know, real estate's a huge category and whether that's the ownership of real estate, the sale of release or the rental of real estate and if we think about amazon, for example, and the point you just made and we think about what some of the highest selling merchandise was on prime day, it was all around the connected home, right? whether it's, you know, thermostats, doorbells, or echo
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devices. it helps to highlight the virtuous relationship that amazon wi is in with its customers that's really important. and there's a lot that amazon can leverage from that so we'll see where they go with it >> dan, i'm curious about alphabet and specifically, youtube, which has been an important growth area for them but some choppiness lately but i wonder if we could be putting the wrong focus on who's likely to get hit by disney plus' rollout. could it be youtube? should investors be a little bit wary about that younger demographic that's all about youtube now, but traditionally belong to disney and might be going back >> it's interesting to see what's going to happen with youtube. are google going to eventually try to compete in that space in terms of, you know, being more focused on streaming they've got youtube premiere
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are they going to enter the wars with amazon and fox and disney and netflix and so forth and start getting more involved and having their own content and so forth? it's kind of an interesting thing. because as you know, jon, they don't break out the youtube numbers. it's in that other revenue category with their gcp, which is their cloud unit. it's kind of hard to figure out exactly what's going on with that unit, but it will be interesting. i think it does create an opportunity going forward for google as we know, their core ad business was only up 16% in the first quarter and it seems like that's starting to mature. it will be interesting to see if they can make bigger inroads in, kind of with the snap crowd, so to speak, with regards to streaming and can they make youtube and youtube premium actually work for them and become a huge profit center? it will be interesting to see what direction they take that. >> denny, your thoughts on alphabet, too, in the unscientific work we do here at this desk, it does seem like
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there's more consternation going into that print than any of the other major ones >> yeah wing that's a really fair point if we rewind the clock to last quarter and look at digital ad ecosystem and whether it was facebook and amazon that put up both very strong results in terms of the big walled gardens or even the long tail, where we saw continued healthy spending in places like twitter zmap and, you know, places that have struggled a little bit and then it was the -- it really was the cor core aggregation of search and youtube together. so i think it's twofold. one is social advertising growing much faster and outside of the purview of google, hence the incremental dollars are a little more difficult to grab because of the likes of amazon in the market now and engagement levels at places like facebook and the targeting mechanisms
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around first party data there. and secondarily, as the digital ad market eclipses roughly half of the total advertising market ex-china, are we just getting to the point where it's harder for google to grow multiples faster than what the ad market is growing? so is the answer 2x versus 3x or 4x that we've seen historically? and i think that's really what all of us are struggling with to define right now and it will be interesting to see, you know, what we get out of google's report, relative to the other platforms. and then the other dynamic that's important for google is, it's investing heavily in a lot of other businesses, be it hardware, cloud, or google play. and unfortunately, those come with incremental margins that are lower than the core search business, so you have this ongoing pressure on the margin line, which puts a little bit of pressure on their ability to grow earnings. so that's how i would characterize google. >> a quick one for both of you guys
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i noticed that you both hold alibaba and that stock is up nearly 30% year-to-date. dan, why don't we just go to you. do you hold on to this stock how is it or isn't it potentially affected by trade talks between china and the u.s. >> well, that's an issue for alibaba, no doubt. i think the real core reason that we hold the stock is because of their strength that they had on the last quarter in terms of their ali cloud business they are making some small inroads in the u.s. but are making some bigger inroads over in china in terms of being more of a player against an aws or an azor in that space so i think, as you mentioned, you know, the trifts aariffs ano that and how it affected, obviously, is something to be concerned about. but the reason we're holding the stock is off a ali cloud and some of the inroads they've made in that space. >> all right denny, dan, good conversation. we covered a lot of ground see you guys soon. >> thanks, carl. >> thank you >> sorry, guys a big show still ahead bradley tusk joins us with his
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take on all the regulatory headwinds facing big tech. the first of the tech earnings at this eck woowe can's snap seo report we'll dig in on what to expect and which of these five tech giants spent the most on lobbying this quarter? we'll tell you that's all ahead stay with us yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪
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i know all about huawei, i know all about 5g and we're working on it. and we have companies that are now getting very, very strong in that department. we're going to have the best 5g in the world, just like we have everything else. our silicon valley cannot be competed with. there's nobody that can compete with silicon valley for the brain power or for what we do. >> as the u.s. and china get set to restart face-to-face trade negotiations, president trump using chinese telecom giant as an olive branch. the president promising timely licensing decisions when he huddled with the ceos of seven tech giants at the white house yesterday. joining us now from washington, for more on this, former national economic counsel deputy director in the trump administration, clete wilhelms he left the administration this spring clete, thanks for being with us this morning and i've got to ask, did
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yesterday's meeting really change anything? we have the ban going into full effect in mid-august where do we go from here and what do you really take from that timely decisions? >> well, i'm encouraged by where things are headed at the moment. i think yesterday was an indication that the united states is going to handle this in an appropriate manner and that's that the u.s. is going to crack down on transactions that pose core national security threats, but that they're going to let things moving forward where those same concerns aren't going to be raised and that they're going to do it in a timely fashion. so i would view yesterday as positive i also think that if you look over the weekend, china's talking about makinging more ag purchases. they made a big sorghum purchase last week and as you know, there's a lot of talk about a trip so things are trending in the right place, but i want to put a little bit of caution out there and say that huawei, agriculture, these aren't the reasons that the talks broke down about two months ago, and
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structural issues and tariffs are what this is really about. so i would just curb our enthusiasm a little bit until you see more news on that front. >> clete, what makes you think that huawei wasn't a critical piece of this? and you know, if you're encouraged and it's trending in the right way, how does it actually get past lawmakers and, you know, there's bipartisan support from both sides that huawei is a security threat and american companies shouldn't be allowed to supply the company. >> right i think the position that the administration is moving towards on huawei is totally defensible and that's that when we say national security, we mean national security and we're going to crack down on transactions related to the network and things like that, that really could cause a problem for us but at the same time, the administration is talking about allowing transactions to move forward, where our companies would be competing with companies from korea and japan and our companies should be able to compete for those kinds of
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things and if thaw don't raise a national security threat, if it's something related to a cell phone and not the network, that should be able to go forward and i think the u.s., to be credible here, is it needs to do this in a nuanced way. now, the point i made earlier about huawei not being the reason that things broke down was that if you recall in may, where the u.s. and china got into problems was over how china was going to make legal changes in order to effectuate commitments on forced technology transfer and that is what they need to get back to. i think huawei is helpful for the atmospheric. it is clearly something that china cares about, but this deal, at the end of the day, is about forced technology transfer, it's about the tariffs and how the two sides are going to get through those issues. >> why is huawei even in the trade discussion i don't get it either it's a bold-faced security threat that's been completely infiltrated by the chinese government and the administration was justified in
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the really extreme step of stopping all of these u.s. suppliers from dealing with them, or it's just a bargaining chip and we were bluffing. how can we have it both ways >> well, china is the one who has been raising huawei as part of the trade talks when i was part of the negotiating team, we went to great lengths to keep this out of there but china has been raising it. and i think, again, where the u.s. is going on this is defensible it doesn't need to take the maximalist position, which is to say that every transaction with huawei is problematic. the u.s. can protect national security by focusing on national security-related transactions. and so i just go back to the point that doing this in a sophisticated way, where we draw distinction between those things that really cause a problem for our networks, as distinguished with semi-conductor components that go into cell phones for use in china, i think there's a difference there
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so i think that the administration can't handle this while being responsive to the legitimate national security threats. >> if all that's true, clete, why do some still believe that restrictions, broadly, are still tied to whether or not the chinese buy our agriculture? >> so in the most recent discussions, those two issues have been linked but what i'm trying to say is the core of the real deal between the u.s. and china is about forced technology transfer and that the tariffs that the u.s. put in place to combat that so this is an issue that we need to get through in order to focus on those real issues >> clete, we'll see ysoon how much really is dependent on huawei thanks so much for being with us today, clete willems >> and when we return, who was the top tech spender in lobbying this quarter the answer depends on how you
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count it we're back after a quick break (gentle music) - my degree from snhu has helped me tremendously. the flexible class schedules allow me to go to work full-time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we, at southern new hampshire university, are the ones who succeed. we are the ones who break through.
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is your anonymous data really that anonymous? leslie picker is back at hq to tell us. leslie >> jon, you've likely checked that box under terms of service, you know, the one allowing companies to share or sell your data, and chances are you agreed to this because they told you that your data would be anonmized. a new study found that even if personal attributes like your name and email address are stripped from your data set, it could still be possible for someone to re-identify you in fact, a team of european researchers found that 99.98% of americans could be correctly reidentified in any data set using just 15 demographic attributes, like age, gender, and marital status the researchers published a demonstration tool that shows how likely you are to be traced, just by providing your zip code,
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gender, and birthday we tried this out on some prominent ceos jeff bezos' uniqueness is about average at 82% warren buffett has a near-perfect chance of being identified at 97%, and mark zuckerberg is below average with just a 51% uniqueness when it comes to those three demographic traits the researchers say their findings contradict the reassurances we've heard from companies and governments for years. this idea that de-identification is enough to protect the privacy of people's data in fact, the standard of anom sedationizati ization for privacy laws is simply defined as data-rendered anonymous in such a manner that the data is no longer identifying. the question from this research, though, is whether these laws need to be tightened in order to ensure that data is truly anonmized. carl >> that's fascinating, leslie. that buffet number of 97 is this a matter of your age, meaning the footprint that
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you've left? because buffett's not sociallily media active but he's certainly been around a while. >> it's his age and also where the population density is. one would that imagine that omaha, for example, has less population density in his specific zip code than say, seattle or san francisco suburbs, like where mark zuckerberg lives so i think it's a combination of all of those things. i tried it out on myself and i only have auniqueness, so well below average, but i live in manhattan where there's a greater population density than you might have in some other parts of the united states >> interesting i did give leslie my information. leslie, i'm not sure if you ran it, but i'm not even sure i want to know at this point. >> i didn't -- >> i wonder if it changes anything that i'm canadian >> i think being a san francisco native -- or a native now, at least, might skew the data to be a little bit more, you know, closer to where i'm at, lower than the ease in which someone
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might be able to re-identify a warren buffett, say. i do think that has something to do with it, as well as the age there aren't that many people who have the same birth date as warren buffett that are still living today >> yeah. >> good point. leslie, thank you for that really interesting let's get over to sue herrera now for a news update. sue? >> good morning, deirdre good morning, everyone here's what's happening at this hour president trump is giving immigration officers more authority to deport undocumented immigrants beginning today, fast-track deportation applies to anyone in the country illegally for less than two years this used to only apply to people caught while crossing the border by land iranian foreign minister zarif sending a message to incoming british prime minister boris johnson saying it's important for him to understand that iran does not seek confrontation. zarif spoke during a news conference with nicaragua's foreign minister north korean leader kim jong-un inspected a newly built submarine, as he ordered officials to further bolster that country's military
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capability last week, north korea said it may lift its 20-month suspension of nuclear and missile tests to protect expected military drills between the u.s. and south korea. and lawyers for jeffrey epstein are appealing the judge's decision to keep him behind bars until his trial on sex trafficking charges. they want to reverse the judge's conclusion that epstein is a danger to the community and a flight risk. you are up to date that's the news update this hour back downtown to you guys, carl? >> all right, sue, thank you very much. boris johnson will become the uk's next prime minister after winning the conservative party leadership vote. wi willem marx is in london with more what a morning >> reporter: it's been quite eventful although not surprising, he was the clear favorite, having won a vast majority of parliamentary lawmakers' support ahead of this contest that involved party members from across the country. two-thirds of those that voted, almost 160,000 as a total, they
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plumped for johnson. and he said in his acceptance speech a couple of hours ago that he wants it first of all to focus on delivering brexit then he wanted to unite the party and then he said he wanted to defeat the opposition led by labor leader, jeremy corbyn. dud, he pointed out, was not a great acronym, dud, so he added the word energize and ended up with this. take a listen. >> i say to all the doubters, dude we are going to energize the country. we're going to get brexit done on october 31st. we'll take advantage of all the opportunities that it will bring in a new spirit of can-do. i thank you all very much for the incredible honor that you have just done me. i will work flat-out from now on with my team that i will build i hope in the next few days to repay your confidence. but in the meantime, the campaign is over and the work begins thank you all very much. >> reporter: now, i know you guys in the u.s. like to talk about the first 100 days of a new presidency the first 100 days of a new
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premiership here in the uk really take us from now until the end of october halloween, which is the current deadline for the uk to depart from the european union, and this is where investors and markets get nervous. because boris johnson has promised do or die, come what may, he will see the uk leave the eu on that date, even if that means it happens without a negotiated agreement, and that is where the pound has swung a little bit up and down today in response to his selection as prime minister he'll formally take control of the building behind me tomorrow afternoon once theresa may tenders her resignation to queen elizabeth. and from that point on, we should start to see the shape of his cabinet come together and the really hard work, despite parliament taking its summer break begin in earnest, guys >> willem, thank you for that. quite a morning. we'll watch that and the pound today. when we return, what apple's interest in intel might between for qualcomm bradley tusk will join us on set with that next, so stay with us. dow's up 78.
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well, the top tech spender on lobbying in q2, it is amazon, thanks to the cloud. aditi roy is in san francisco with more. adi aditi? >> reporter: hey, jon, it was close, but amazon edged out facebook for that top spot
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amazon web services is locked in a fierce battle with microsoft over the pentagon's $10 billion jedi contract. amazon spent $4.15 million on lobbyists in q2. facebook, $4.11 million. it was very, very tight. facebook has also faced some tough questions from policymakers about deep fake video and the launch of its cryptocurrency, libra. both of those companies appear to have set quarterly records for lobbying dollars third was alphabet, google, which was the top spender last year overall and actually decreased the money it's dedicating to lobbying from $5.8 million a year ago in the quarter to nearly half that amount last quarter. this amid reports that google recently fired several longtime lobbyists. microsoft and qualcomm rounded out the top five their spending on issues like data security, internet privacy, and competition as government scrutiny on those topics intensifies. during the quarter, top tech companies like facebook, amazon, apple, and google were also in the news about potential government probes, from the ftc
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and doj. just last week, those companies also faced lawmakers during congressional hearings on anti-trust matters and while the amount these companies are spending on lobbying is small compared to their large cash hoards, they're significant in the world of political lobbying jon, back to you >> all right, aditi, thank you for more on that, let's bring in bradley tusk here with us at post nine. good to have you >> thank you >> so when i got to the valley about 20 years ago, no company was spending nearly this amount on lobbying in washington. it was sort of like, let washington do whatever it's doing. is this smart and is it effective? >> so, smart in the sense that it's essential they can't not play the game because 20 years ago, they weren't the biggest companies in the world, and now they are, so this is the position they're in. effective is a really good question, though because the days where -- you know, like, i know a guy who knows a guy and that will solve your problem, those don't exist
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anymore. so just throwing money at lobbyists and throwing money at the inside game isn't really the bay campaigns work today if you look on the political side, whether it's trump on the republican side or warren or buttigieg on the democratic side, people who get traction are able to really connect with voters, as grassroots or social media. and so i think if you're just playing an inside game and just keep spending more and more on lobbyists, you have very diminishing returns and just to expect that to work is unrealistic. >> when i look at facebook and they're one of the top spenders, part of that is campaigning for libra. it doesn't feel like they've had much success there we've spent the last few weeks hearing all of this backlash from lawmakers what should they be doing? how should they be gaining support for this cryptocurrency? >> they have to win the trust of real people. all of their problems come down to the fact that their users no longer trust them. that's what get politicians worried, is that they think the voters want them to do something about it so whether it's privacy or antitrust or now libra, they're all caused by the same thing and it's fundamentally -- look,
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i'm an investor in crypto and i believe in it, but i'm a venture capitalist and i'm supposed to know what this stuff is. most people aren't familiar with what -- they can't separate bitcoin from the block chains. but i think what facebook didn't do is recognize that there's a dearth of understand of what crypto is generally. so libra kind of went out there and people have been confused the entire time. >> but they can't get to the people without getting to the lawmakers first, right because this thing will never get off the ground >> but they will run a -- i think to get the lawmakers onboard, they've got to get the people onboard the idea that you just start on the inside with washington, you just start with the politicians is an outdated notion at this point. and i think facebook has to be able to convince users here's why this makes your life better here's why this makes your life easier and if you can do that, then you can start mobilizing those people and politicians -- look, i spent 15 years working directly in government and politics before i went to vc look, they will adapt to whatever position they need to adapt to win the next election that's one thing you can always bet on but you've got to be able to move the voters first and facebook hasn't done that. >> i'm reading right now in an interview with the ceo of
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clorox, why they continue to advertise on facebook. there's been no degradation in their engagement or in their targeting. as an example, if you consider libra an advertiser, facebook will do the same thing and engagement will work, right? people won't be interested >> yeah. the notion of libra working long-term to me makes total sense, but they've hit this immediate political roadblock and they've got to overcome that, because as deirdre said, if you can't do that, you can't launch libra in the first place. so, yeah, there probably is a pretty strong value proposition to facebook users to having libra. it makes a lot of sense. but they've got to demonstrate that and just spending $4.4 million or whatever the number was on lobbyists is not going to cut it >> would a break help them in a way, aren't they hurt by the fact that the facebook general screwup is connected now to the facebook messenger for kids facebook which is connected to their entire to get this currency thing -- i mean, those things aren't necessarily connected -- they could break them up and call them something different. >> look, they could break them up, but i think really the one thing that facebook should do is just treat people a little more intelligently in the sense that
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facebook always wants to make this case that, yeah, you can share your cat photos and connect with your best friend from the eighth grade and we'll protect all of your privacy and we'll never monetize your data it's a company, right? it's a transaction if you want these things for free, they have to be able to use your data to sell you things maybe they can have a product where you pay and they don't have your data but fundamentally, when facebook treats people a little bit like do it idiots, people get that and it upsets them. and i think the first thing they could do to solve all of these problems is just be pretty clear as to what this is all about >> bradley, i know you worked very closely, you worked for uber and airb&b and for these companies when uber was still private. how are the challenges different for the huge big tech public companies right now in terms of their scrutiny and getting regulators -- >> yeah, we're looking to eff t effectively disrupt an existing industry and figuring out, can we take on this giant with taxes
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or casinos once you become the giant, the ball game changes entirely but look, if you're the investor, it works out really well from an economics standpoint, happy it happens but you have to anticipate an entirely different world coming at you and i think, you know, to the point that 20 years ago, these companies weren't talking about washington and now they are, is good but i still think it took a lot of them longer than it should have to appreciate the need to take politics seriously, take regulation seriously, take media seriously and they're paying the price for that >> yeah, now turning to apple. reportedly in advanced talks to buy intel's smart chip modem business what does this mean for qualcomm our josh lipton is in san francisco to explain josh >> so, jon, tim cook could be ready to make an important acquisition here apple is now reportedly in advanced talks to buy intel's smartphone modem chip business the modem is a critical component. it's what allows devices to connect to cellar networks this deal valued at $1 billion
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or more for patents and staff could apparently be reached in the next week. both companies declining comment. but longtime apple watcher ben baa haener of creative strategies says that such a deal makes sense for apple. $1 billion is a rounding error for a company that boasts a net cash position, at last count, of nearly $113 billion. and he says it gives the companies the necessary patents, ip, and talent to help develop its own 5g modem instead of just relying on a single supplier, qualcomm, for that key component, especially helpful given the history of bad blood between those two tech giants. but he says it speaks to a broader trend, as well apple bringing more chip design in house the iphone includes a custom processor. the company has designed similar parts for the ipad, the watch, and air pods what does this all mean for qualcomm he says that apple building its own modems could weigh on future qualcomm revenues. but on the other hand, remember that apple and qualcomm has that six-year license agreement and a
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multi-year chip set supply agreement. and even if cook pulls the trigger on this acquisition, int remains to be seen whether apple can really build a scaleable 5g modem in house back to you guys >> all right, josh, thank you. bradley, it's a continuation of a story that we've seen from apple ever since they bought p.a. semi. they had been about os and hardware together. now they're about deeply integrating that hardware. assuming they do this and continue the trend, what does it mean for the tech ecosystem and companies like the one you invest in. >> i think what it means is when you have a business that relies basically on a third party, another company being your main customer, you've got to always worry about what happens if they take this thing in house i'll give you an example oftentimes, people come to me and pitch that they're going to do some new thing around taxi and they come to me because i was an uber investor, right? and my question is, why can't uber just do that. if they can show me why they didn't, it's a good investment but generally speaking assuming
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the way things are is the way they'll always be is really dangerous. and that imagimagic isn't theren consumers the way it used to be, so they've got to find a way to do things different. so it makes total sense what they're doing. but if you're qualcomm or a brand-new start-up, if you're completely reliant on someone else, you've got to really worry about that >> so are there lessons here -- right now we talk a lot about content. there are a lot of distributors now, disney, netflix, et cetera, ramping up original content operations eventually, does that start to hurt hollywood >> well, look win me, i mean, r now, there's a ton of money being extent it's really good for everybody. but if you look at netflix losing like "the office" or maybe "friends" as well, same point, whether you're qualcomm relying on apple or netflix relying on "the office" and the amount of time my kids have watched "the office" on netflix has driven a ton of viewership alone, that's always very, very risky. and i think fundamentally, in any of these things, if you're
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trying to build a really big, successful company, you've got to be willing to break new ground you've got to be willing to disrupt things and if you can dona't do that ad always relying on someone else, eventually you're going to take something back >> so you think there's anonmized log between netflix doing original content and apple going vertical on chips? >> i think ultimately everyone does what's in their economic best interest. and apple says we can save money if we can develop the chips ourselves instead of having to buy them all from qualcomm and netflix initially said, we can have shows like "the office" and my 13-year-old and 10-year-old watch it like crazy, but now all of a sudden, people are pulling it back, comcast, and that's why they have to develop their own programming and they're doing it but to your point, it is expensive, and some of it works really well and some of it doesn't. >> bradley, always good johaving you here >> thanks for having me. >> nasdaq is coming off the best day in a couple of weeks we'll talk more about today's biggest tech movers. first, though, dow's up 60 rick santelli, what are you
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watching >> of course i'm watching the yield curve and i'm watching the details on the budget agreement that was reached over the years, i've done a lot of shouting. jobs, jobs, jobs the president will like that one. also went, stop spending, stop spending, stop spending! obviously, nobody likes that one. we'll talk about it after the break.
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i'm scott wapner here's what's coming up, "halftime report" at the top of the hour good earnings from some dow
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components send stocks higher, but are the numbers good enough to keep the rally going? we'll debate that with morgan stanley's mike wilson who will be here. plus, influential banking analyst drops the hammer on a regional stock ands is stinking today. we'll trade that sector and see who else might be at risk. and david petraeus with us on the markets and geopolitical risks. we're talking iran, russia, north korea, and anything else we'll see you at noon. carl, see you in about 15 minutes on the half. >> it's good to have you back, tanned and rested, scott we'll see you soon let's get to the cme group and get the santelli exchange. good morning pb rick >> good morning, carl. we have an ecb meeting this week our fed will meet tuesday and wednesday of next week it will result in my opinion of a sure 25. beyond that, i don't think i'll venture a guest personally i don't think we'll need the 25, but they're the central bank, they're an independent body. but i do think a big portion of
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this -- i hate the phrase intellectually defensible, meaning, oh, certainly we could look at where we want inflation and where it's been, even though it's kind of been stable, it's just not exactly where weapon want it and i look at the calibration of 2% pretty much a global calibration and it doesn't make sense to me you calibrate that to 1 1/2, it's a much more realistic target when you pair it with the logic of what growth rates are and what they may be or deteriorate to in the future but 3s to 10s. let's look at a chart. here's a year to date chart. it's getting ever closer to a noninversion, closer to zero i think with the ecb getting ready to lock and load and what china and australia and japan and the uk are doing, de-globalization is being fueled with easy money and stimulus and low rates and more stimulus and more debt and more deficits, less growth. it doesn't sound like a great formula, but it certainly impacts the long end of our market, period
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i don't care how you slice it, you can look at yield curves all day and night and you're not going to change the fact that other central banks policies alter the complexion of our yield curve. and you can follow the logic that ultimately that's way it's supposed to be, multi-nationals, how much of the s&p our economy is through selling overseas. i get it but at the end of the day, lowering 25 or 50 maybe may straighten out the curve, but it's a losing battle if the ongoing stimulus of other policies and other economies continue unabated. now, i almost have ran out of time, but something great happened in 2011 we had a ten-year budget control act. we capped discretionary spending and maybe that isn't the greatest thing to cap. basically the budget that looks like it's going to be passed by everybody and signed by the president, pretty much lops off two years of that. consider in 2007, we had a budget deficit, $161 billion
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in '08, it was $1 trillion and '12, $1.25 in '14, $1 trillion plus in '16, $1.4 and '18 and beyond, looks to be all over $1 trillion listen, i understand tax cuts and certain stimulus may help the economy have sustainable growth we've wasted a lot of money along the way, but at the end of the day, we do need to think about other generations other than ourselves and stop spending and fiscal discipline ought not to be repealed deirdre, back to you >> rick, i won't argue with you there. thanks for that. still to come, an upgrade and an initiation this morning for snap ahead of its quarterly results we'll tell you what to expect from the company after the bell, next and later, why amazon wants to help you buy your home. we're back after a quick break ♪ here i go again on my own ♪ goin' down the only road i've ever known ♪
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here, hello! starts with -hi!mple... how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out. that was easy! glad i could help.
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at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. welcome back amazon doesn't want to just fill your house now it wants to help you buy one. diana olick is in washington to explain. diana, i suppose it was only a matter of time before amazon reached into the space >> no question, deirdre. amazon and realogy are providing a portal to agents and offering $5,000 worth of free amazon home services and products. potential homebuyers can now go on amazon's turnkey portal
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they are then taken to a realtyy page where they're contacted by a realogy agent. then amazon home services steps back in with $5,000 worth of free services like painting, cleaning, hanging your tv, as well as products like the ring doorbell, of course installed by amazon it's a strategy designed to booth sales for both amazon and rea realogy. >> we need to evolve the consumer experience of the transaction. it's not just about helping people get into a house with the right agent. it's about the power of amazon home services and a fully equipped smart home be ready for them when they're ready to move in >> realogy's stock surged on the stock this morning
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newcomers in the market, like r redfin and others, rely on high technology i did ask schneider if the plan is to put realogy listings on amazon his answer, "we've never had that conversation with amazon. the program launches in 15 major markets today including seattle, dallas, chicago, and right here in d.c back to you. >> thanks, diana snap set to kick off earnings for the big tech names this week. julia boorstin is in l.a. with what to expect julia? >> reporter: well, john, investors are hoping that snap will show that its new features are growing its user base as well as its ad revenue in focus, snap's ad relaunch, reality features, and expanded content for their discovery platform, all of which were
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featured at developer day back in april expectations are high, snap shares are up 161% year to date. they're moving up today ahead of earnings on two new analysts' notes, rosenblatt saying average revenue per user is ready for lift job and could double by 2023, saying benefits could carry into 2020. sequel just upgraded snap to buy, saying, quote, we are increasingly optimistic about snap's growth prospects. the company continues to expand its advertiser base fostering engagement with premium monetizable content. a key number to watch in these earnings to see if snap's turnaround is working is daily active users
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analystsanf stagnating user growth revenue is expected to grow 37% in the quarter while snap's lost is expected to narrow to 10 cents per share. no matter what, the stock is likely to move with the options market projecting a 14% swing in either direction guys, back to you. >> thinking of that stifel upgrade and the goldman upgrade. julia, thanks. dow is up 40 points or so. we're back in three minutes. ♪ lower carbs. lower calories. ♪ higher expectations. ♪ the light beer you've been waiting for has arrived.
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we had a great quarter, i think the big story is this is another quarter of growth on an an improving trend of momentum we're now getting multiple years of good growth rates, really the numbers are probably more like a five multiyear growth is a sign that we're getting more consumer-centric, more innovation and market-led and faster and more nimble with our bottling partners bringing together increased momentum across the global business
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system, it's very heartening for everyone who works in the coke system >> coke up there with their revenue forecast hitting an all-time high going back to the ipo in 1919. >> lots of earnings this morning, we've got some big names. >> buckle up for visa, chipotle, snap tonight let's get to the judge carl, thanks i'm scott wapner front in center, the earnings rally and whether the reports are good enough to keep stocks climbing it's 12:00 noon. this is "the halftime report." >> announcer: what earnings recession? the latest results coming in strong and forecasts look bright. will earnings from big tech keep the rally going? one week until the fed meets will it be a 25-point rate cut, or 50? and will it be enough to fuel the economy and the markets? iran's tensions. north korea and the china factor retired general davi

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