amazon spends more than $8 billion. they spent more than $8 billion less year in advertising and promotional activities, but that growth is something to think about. is it in terms of one-day shipping, is it prime-day related, or are they trying to fight back? emily: it's interesting given that we were talking earlier about google's cloud business and how it is still in third place, though the cloud business in general is continuing to grow and is certainly not a zero-sum game. what do you think the slowdown or the disappointing numbers have to do with? competition orf because of amazon-specific issues? >> i don't think it is amazon-specific issues so much as competition. microsoft cloud business is up 60% recently. we know that business is on fire . we do not have a lot of his ability to google members. numbers. now amazon is competing with two giants, i think that absolutely could eat into the top line going forward. emily: what about the advertising business which has slowlyowly growing, becoming a third-place conten

so amazon was important. facebook to me, i was looking at intel. i'm always focused on the semis in general they're very much global -- truly global players they are often forward indicators of global growth. they sell to all countries so for me seeing the improvement outlook from some of the semis it was so negative for most of this year. finally seeing some positive news come out of the semiindustrsemiendu industry they have become a proxy for u.s./china trade talks and trade relations. the semiconductor etf is already back to all-time highs off those. >> yes >> you spoke about looking forward. are there earnings reports coming up in the next week or two that you think you will be hyper focused on because it could provide more of that thesis on global growth or the health of the global economy >> finishing up the big industrials coming through next week and i would say facebook being another one that will be a big one. and though google had a good report, i'm still concerned about the regulatory overhang that they have any of those companies, how

>> reporter: hey, jon, it was close, but amazon edged out facebook for that top spot 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

going from amazon or other retailers. price blink shows amazon branded or exclusive products, the fire tv stick, echo dot and echo show, they're getting the most attention again this year by page views nerd wallet said that's not surprising prices will are lower today than they were on black friday 2018 if they're amazon-owned products, it's amazon controlled pricing. amazon shares are up half a percent today. a analysis of the past four prime day events shows a month later 100% of the time, amazon shares are higher. by an average return of 5% perhaps foreshadowing what we'll see for amazon shares a month from now back over to you >> court, thank you. meantime send it over to mike san toll i who is back with his market dashboard >> thanks. pick up on the amazon conversation, something i'm calling eating the competition they say you shouldn't go to the super market hungry. maybe that applies to titling charts, too. here's the theme kids feasting while parents starve, that's another kind of haves and have notes story starti

all along i think amazon should be more concerned than ulta. why? because mary dillon runs a tight ship in the best loyalty program in the world look out amazon, ulta is the real deal. harry in colorado, harry. >> caller: jimmy, boo, boo, boo-yah from the white peak mountains of colorado. wondering about your take on chewy the management, back up the truck or -- >> can't back up the truck because it's too expensivexpens. i was very impressed by management when we met very impressed i think they are doing a lot of things right some said how do we know amazon can't beat it? the guys, i actually once i asked pet owners what do they use? haven't found a sole that doesn't use chewy including us retail is back, etsy, lululemon and stitch fix found ways to win and charts can make you go higher much more "mad money." a company that works with visa, bank of america and you probably never heard of it. i'll reveal the name and what would have been pop's 97th birthday, i'm reflecting on things he taught me about business and your calls and rapid fire of to

yes, amazon is formidable. you know, nobody disputes that but i think what you are seeing is bright spots in other retailers which have high table stakes and are making inroads. >> an example would be target. somebody else? >> you know we are speaking ever the new ones to the market if you think about companies like revolve, you are seeing where high customer economics, high lifetime value where repeat purchases and gross margin give you a long-term value that customer exceeds the cost of customer acquisition and they have a long runway. >> influencers could replace marketing budgets? >> it is working your go-to-market strategy could be very different and very digital. >> you used to run hudson's bay company, of course that's a retailer. it is a department store we got an interesting call today out of goldman sachs and they are downgrading ralph lauren they are worried about the department store space and sort of that wholesale model with some of these brands do you think that's warranted? >> i think that the t

in terms of amazon, regardless of what happens this quarter it's not the end of the amazon story. in terms of azure, look, it was the slowest growth they have had in the cloud in the last three years i believe, but that's a -- that's because of the size of the base has gotten big, so i still think they can be there and still perform. i don't think the market needs to perform to your point, but i think they will perform. alphabet is the one that i'm worried about because they have had some growth issues even though the growth expectations are very muted, below 20% versus 26% we're used to i shaved a little last week. i own a little amazon. i'd buy more if that got crushed. microsoft is still there, and i bought a little more after the quarter actually i think it's much more predictable earnings stream in microsoft and more analyzable than amazon or the others so i'm happier. >> it was a first-quarter disclosure that have slowdown that really got alphabet, right? >> yeah. >> and that's partly why or a big reason why it's been a lagard compared to its big-cap peers? does the valuatio

why is amazon suddenly caring? reporter: it is that they are beginning to get pressure from politicians, scrutiny from d.c. europe. it is bernie sanders today, but tomorrow, it could be both ends of the political spectrum. it is their growth. they are growing 20% topline per year. about one million employees throughout the world if you count temporary workers. . walmart, about 2 million. you can see a day when amazon becomes the largest employer in the world, and that will have pressure. emily: on one hand, we talk about the lack of workers to fill technical roles. on the other hand, there's an explosion of warehouse jobs, given what amazon and walmart are doing, and a decline in traditional retail jobs. what are the dynamics happening at the ground levels that has led amazon to do this? reporter: by some measures, it is the tightest labor market in half a century. you have companies complaining there's a shortage of the types of workers they want. of course, some management and economics experts would respond, are

shelton when we return, it's been a 25-year run since amazon was founded. what can we expect from the company's next quarter century we'll discuss. >>> good day, everyone i'm tyler mathisen in today for scott wapner on the "halftime report" today, are the bulls offside on the fed after today's solid jobs report? we'll discuss that one plus, we will debate a serious warning from one top wall street firm, advising investors to get on the sidelines quickly we'll tell you who it is and why they think that. and where the investment committee hit and missed in the last three months. we've got the quarterly report it is all ahead today at noon eastern on the "halftime report." deirdre? >> tyler, looking forward to it! now, today is a birthday for amazon, turning 25 it was on this day back in 1994 that jeff bezos filed the paperwork to create what was originally called cadabra. now it's a household name, amazon the next quarter century, though, is likely to look a little different today today the uk's competition regulator says it is reviewing amazon's recent inves

amazon down by 2%. alphabet, sometimes the options markets get it right, they were pricing a move up or down of 6%. stock up 6.25% after the earnings release. >>> intel reporting its second quarter results. that is another big one to get too. jackie deangelis joins us with those numbers. what do we see, jackie? reporter: connell, intel soaring because we have a beat top and bottom line. revenue 16.5 billion, surpassing the 15.7 expectation. earnings per share $1.06. that was well above the 89-cent estimate. where intel tripped up last quarter was on the guidance. it gave weaker guidance, even though beat on top and bottom line. that was a problem. this quarter raising the full-year revenue outlook, up 500 million from april. so investors are looking at that in a positive light too. before the earnings came out we saw headlines regarding apple acquisition of intel's smartphone modem business. that is in fact happening. that will happen for a billion dollars. apple is getting a majority stake in it. after

at the amazon conference, you feel like amazon is leading the world in cloud. at google, you feel like they know they want to. likecrosoft, they feel they know they can and they focus a lot on the incredible reach of every single person in the world and how they can tap them with some sort of cloud service. it is hard to ignore china in that context. emily: if you cannot ignore china, what would the impact of the trade war be? this seems not to be subsiding, so if tensions remain, what does that mean? >> microsoft's strength in china has been around the cloud services. it was early in the market. amazon caught them fast. the market in china is for companies that want to go global or access the cloud services for the offerings they are providing outside china. so that has the potential to go strong, regardless of any iron curtain that might fall. emily: microsoft felt the antitrust pain in the 1990's with big antitrust hearings, but they have been largely out of the spotlight with the recent raft of hearings with amazon, google, facebook, apple all in the spotli

people are not going to buy a uy a device or amazon -- by google or amazon device and run apple services. 1.4, 1.5le has the billion unique users, the problem is that they are not taking advantage. what they still don't have is some sort of subscription-based service for purchasing an iphone. i think until the services are up to snuff, there still is this device-centric approach. one more point on this. apple gets 90% of its revenues almost from hardware devices. i think going all in on services at this point is too early. emily: all of that said, johnny apple's chief designer who has been there for 30 years is about to leave. he was incredibly involved in the apple watch, in the airpods, and some of the biggest hardware hits apple has had since the iphone. laura, does that concern you? device-centric question. doesn't bother me at all. what i care about is revenue per user and value in the ecosystem. are they adding news, movies, tv? those increase stickiness and lifetime value. watches, which creates stickiness? increaseshat stickiness to the 900 million users who are rich and global.

and i think it's interesting on amazon, i only worry about the top line amazon spends so much money, and i will say this, i have a lot of positions in private companies that sell consumer goods and services in america, almost in every state now, and about 30% to 40% of our sales are now on amazon, and there's good pros and cons to that, but we really want that same-day delivery. so, if there's more capex going into that, i'm very happy with my position in amazon. that's going to be a game-changer for a lot of providers. same-day is a big deal, because it lets you get an advertising spend and get a direct measure to how impactful it is in regional markets, when you can deliver the same day >> we have got another earnings report out, and it's starbucks kate rogers has the numbers. >> very strong q-3 for starbucks here, beat on every metric we'll take you through eps 78 cents adjusted compared to 72 cents the street was expecting. revenues $6.82 billion versus estimates of $6.6 billion. that's up 8% year on year. the company also says that's an all-time high for revenues global comps up

exhibit a, amazon. it crossed the trillion dollar threshold this morning amazon didn't become this unstoppable behemoth because jeff bezos is brilliant, which he is. it got here by leveraging scale. amazon is dominant because it's so big they use that scale to get better price from the suppliers to pass on to you. we have antitrust law because when you get big enough, well, no one can compete against you bezos saw how he could use amazon's scale to dominate retail he didn't stop there he figured he could do the same thing by creating cloud computing. aws one of the largest businesses growing at a 40% clip we had the head on the show recently, he told us how the position scaled which is the dominant player in the cloud which is true. it allows them to innovate and keep prices down and compete with the competition i urge you to look at that interview. i thought it was mind blowing. i thought to myself, darn it, that guy is real smart amazon also knows the secret to maintaining scale is keeping work force

amazon is upset because they want a piece of the contract >> what is their beef with amazon here? they're too big, they can't do it >> they feel they had an unfair advantage. >> that's the origin of the issue here let's turn to the earnings and we'll come out later today what are you looking for >> well, it's the cloud. >> azure, right? >> they are moving the customers hardware into the cloud. we're looking for that to continue the cloud continues to grow. the legacy business is seeing a one-time upgrade because of end of support, windows 7 one of them a quick migration as a result of that we're looking for a very good quarter with microsoft >> that will pull forward? >> only 4% or 5% of sales. they're going with a 10% tax instead of 8%. that will help. >> when you look at microsoft, what sort of growth -- if we're assuming cloud is going to grow and be a bigger part of their business, what kind of growth overall in revenues are you projecting and what kind of margins will we be seeing? >> so cloud has been historically a lower margin business they cannot hire the people to keep u

. >>> amazon's second quarter misses on the bottom line as its profit streak comes to an end sending shares lower in extended trade. >>> don't miss our interview with renault's ceo as the french carmaker cuts its full-year sales guidance on a degradation in demand. >>> no clear direction so far in european markets after that key announcement from the ecb about forward guidance, the introduction of quantitative easing down the road and what seems to be an almost certain rate cut in september in terms of the individual markets across europe, though, you can see the four major indices in europe are trading slightly higher. the ftse 100 in london about a fifth of a percent higher. similar story in germany we have huge amount of earnings going on at the moment the cac 40 is slightly above the flat line. in italy, where we've been hearing from the two deputy prime ministers about the future of the economy, you can see the ftse mib is in negative territory. media performing well as is telecons technology in europe bouncing slightly higher, up 0.4% the retail sector often facing some challen

. >> announcer: coming up, amazon's prime day isn't just about amazon anymore how others are cashing in on the company's big day. plus, one billionaire investor says google should be federally investigated why? and dozen his role on facebook's board have anything to do with his call >>> and coffee without the coffee beans this is "the exchange" on cnbc. . they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ . >>> welcome back to "the exchange," everybody that time of year again, amazon's prime day is in full swing. it is a 48-hour discount bonanza that promises a massive number of sales and new prime members for amazon but this year, competitors are throwing their hats in the rick we will explain that with lauren thomas who is cnbc.com's retail reporter and courtney reagan welcome to both of you what's different about prime this year and why is prime so prime to amazon? >> so prime this year is longer, longer th

amazon tweeted it was the biggest 24-hour sales day in amazon history, at least day one. we are still waiting on final numbers. there were some shoppers complaining that they were seeing technical glitches. there was a spike in searches -- spike in service for canceling amazon prime. so, presumably some of those people bought some things and wanted to cancel. what is the verdict so far, 36 or so hours? brad: sitting back and watching prime day, you have to marvel at what a marketing event they have concocted out of thin air. they created a holiday season in the middle of the summer. a holiday season brings with it a lot of problems. you've got porch pirates. you've got disappointed customers. all sorts of things, the frenzy. overall, you have to sit back and admire the company for bringing itself to a peak season in the middle of the slowest time of year, right? they have created a frenzy where otherwise it would not exist. they not only have done it themselves, but brought the rest of the online retail industry with them. you see everyone else offering sales as well. can

what does this mean for amazon then? spencer: it is tricky news for amazon. they have enjoyed rapid prime member growth. once they lock in a prime member, they can count on that for more sales through the year. the typical prime member in the u.s. spent a little more than twice as much what i nonprime member does on amazon. prime, even though it is a big tale of deals, the revenue they make is not as important as a new prime member sign-ups because that is where the revenue keeps coming year round. the indication that people who were not prime members are simply joining for a brief period to get the deal and backing out is bad news for amazon's prime member recruitment strategies. paul: what are people buying anyway? some of the purchases do not sound terribly glamorous. spencer: it is not much different from previous years. big emphasis on amazon's on gadgets like the echo speaker, fire streaming stick device, e-readers. it is typical from previous years. some kind of lingering favorites like the instant pot that is selling well and some laptops and electron

we are seeing coalition's between amazon employees -- coalitions building between amazon employees. see the employees by the banding together to make the voices a little louder. emily: we will be following it. , thank you for the reporting. u.s. women's team was not the only winner of the world cup, with watchers 20% higher than the men's final. and in the netherlands, nearly 90% of those watching tv tuned in. go, team. that does it for this edition of "bloomberg: technology." our globalck out breaking news network tictoc on twitter as well. this is bloomberg. ♪ manus: this is "bloomberg daybreak: middle east." how the strong u.s. jobs report will factor in. goldman sachs says they are relying on the wisdom of the crowds. cuts, u.s. interest rate and the removal of the turkish central bank governor rocks the lira. , the islamic republic threatens to push uranium two 20% purity.

now she is taking on amazon. we will talk about the latest on europe's battle with silicon valley, next. ♪ >> they are hosting a number of businesses but also competing against those businesses in the very trade they do. now we are looking into the use of data to see if this is done in a fair way or will there be a case for us? emily: that is european union commissioner margrethe vestager. after five years battling big tech, the antitrust chief will step down from her post later this year but not without dealing one more blow to silicon valley. she plans to open a formal investigation into amazon within coming days. she has hinted for months that she wanted to escalate a preliminary inquiry to have amazon using sales data to undercut third-party markets. joining us to discuss is brad stone. how big of a blow could this be to amazon? brad: in the short-term term, probably not a huge blow. google is currently facing, think over $9 million in eu fines. it has been appealing them so that continues. this is the begi

amazon did miss on earnings, revenue was ahead. first time in five quarters that amazon did not post a record profit, taking a hit from shipping costs the thesis on amazon's print is that they really care about one thing and that is increasing gmv and getting it to people quickly. >> so the cost rose 36% on shipping that was a big jump from the 20% in recent quarters moved to one day shipping. they said they saw better customer response. revenue growth of 20% was better than expected. so investors are going to have to decide whether that top line growth was good enough 37% aws, that's the cloud revenue growth was, i guess, a little light, a little lighter than it has been first time under 40% but it still is the dominant player here in cloud. >> by far, doing $8 billion a quarter now what we know from alphabet is $8 billion a year run rate for their web services or cloud-based company that's accelerating, though. listen, the standout thisalphab the standout in the early going here, re-establishing the fact they can do above 20% whe

amazon. do you feel amazon miss treats their workers? >> i can't speak about whether or not amazon miss treats workers but the conditions in my company are becoming more and more burden some as amazon increases the pressure of the operations. >> what does that mean, in your case, because we've heard from workers here who say they have to pack a lot of goods in 16 minutes but as a pilot what does that mean for you? >> that means we have a staffing problem with the contracts that we have today we can't recruit enough pilots to stock these airplanes and amazon has really ambitious growth plans, and just getting the airplanes staffed and crewed properly in order to serve amazon is becoming a problem. >> so they're asking a lot of you. i'm just wondering do you feel that you're being paid enough to meet those expectations? >> actually we're losing pilots because we're not paid enough. if you compare the jobs we do to a company like ups or fedex and amazon clearly put themselves into that segment,

guy had amazon as the bad. facebook is good so my good would actually be amazon my bad would be facebook which makes a good "fast money". here's why amazon is good. they focused on profitability over the last four or five quarters much to, i think, at times disappointment because people were finally looking at this company as a growth company that stopped growing how do you have this multiple. ultimately i do think they will start to give you north of 20% neutral growth and i think that's really the issue. when i look at facebook, despite the fact that it's been and maybe because of it's been such a great run for the stock the realities around the regulatory environment the libra coin is not a game changer for them revenue wise any time soon their expense margins continues to go through the roof that would probably be my ugly if it wasn't for google which i do think is a great company and agree with karen the problem with google right now and what makes this quarter ugly not the company and not the valuation, n

amazon spent more on shipping to ramp up the amazon prime service. the first time in two years that the company has missed earnings expectations still, stock is only off by about 1.5% 19.44 is the last tick >>> google parent alphabet beating estimates on the top and bottom lines for the latest earnings report. that's giving the stock a big boost. it had continuing dominance of internet search and that stock is up by 8.2%. you heard what mark mahaney said here washington doesn't matter what comes into this. it's additional taxes they have to pay frankly, that's what the stock is reflecting. many of these stocks are reflecting that. they don't think -- >> the fine is now a tax >> where does it go though >> the money the tax? >> well, actually, i don't really know where taxes go either but the fines -- all these fines, where do they go? does it ever do any good >> they do a couple things they oftentimes pay for some of the enforcement action -- >> here's $5 billionto do an investigation -- >> if you have a department of justice, you have to pay these la

is it going to be a net win for amazon >> you know, we think it will be obviously amazon is showcasing not only great deals, they're showcasing their music they've been spending all week showcasing whole foods they've built a big infrastructure around this prime day, and we think it will be very successful for them. >> is there any indication that this drives new consumer spending, ed, or simply, well, i need a pair of jeans in a month so i might as well get it now because it's on sale and it's kind of a zero sum game. >> we think it does drive new business it creates that spontaneity, that need to buy now and people obviously tend to buy stuff they don't need. ultimately, you know, this is a very quiet time and we think this drives incremental sales across all of retail. >> you've got a $2,100 target on amazon obviously we're optimistic does this matter for amazon? do these 48 hours or so matter to the stock, or is it just part of a longer term, more macro trend? >> i think it's more of a big macro trend, but i think the big fly away with amazon is emphasizing to people it's important

sales are not actually amazon direct they are third-party retailers, in many cases using amazon's fulfillment. it's not just amazon's platform alone giving some argument that this isn't quite as cut and dry as the treasury secretary presented. take a look in shopify it has a $36 billion market cap. that has tripled in two years. and its business is really allowing businesses to compete without being on amazon necessarily, though as part of the latform, you can also operate on amazon. don't forget about etsy. they have an $8 billion market cap. that has quadrupled in two years. amazon was competing directly with etsy. and you know what, they are still doing just fine. one area that has popped out for amazon anti-trustwise is again that third party retailing platform there have been some complaints that amazon has a lot of data about what customer demand is for those third party goods. can then use that against its competition that might be an angle that the feds choose to pursue but we haven't even talked about cloud, kelly you know, amazon has not really tied the retail and cloud businesses c

emily: amazon opened a celebrity store a year ago. now they have all of these deals today tied to celebrities. they are starting to offer special products. lady gaga will offer an exclusive beauty product line only on amazon. how big of a deal is that? >> there are two things amazon has been trying to push into. fashion has always been an achilles heel for amazon. they have tried to go into basics by getting into and non-fashion categories. they picked up bigger business than macy's doing that. some of this is to get into the fashion accessories business. they are starting to realize the millennial crowd, they're going to start looking at different ways to attract that crowd back to amazon. channely has been a that has been added for a while now. emily: what are the trends you're falling one -- following on this particular prime day? over 48 hours. slightly more than last year. what is your take? >> prime day has typically been the biggest day of the year for amazon. this year, they expect that to be the same. one thing which has been

of these other businesses that amazon hasn't been successful at advertising. can amazon continue to be as innovative and go into as many businesses, guloseri rgrocery, o >> jason, am i a horse's ass don't answer that question that's a separate issue. you see where i'm going. you can look wback at media companies, conglomerates over the ages, and see that history tells you they rarely stay in tact zpl it's a fair point. there are you know all these software analysts would love for that to happen >> you bet >> aws business and we would be kickoffing the retail. the e commerce side. amazon, we think is going to try to keep their business in tact for as long as they can and remember, netflix got the first competitor walmart, early customer. big competitor, so until you start to see a netflix, a walmart say you know what, we are not doing business with this xwaen, then there's what would be the other reason? so we don't think it happens in the investable future. at least right now >> see you after the bell. >> one tiny issue with your idea these are founder control

amazon is lagging, off 1.9%. net sales looking good. -- operating income will be $3.1 billion, the estimate was more than 4 billion. alfa bank -- alphabet was killing it. they will be buying back shares and beat net sales and profit. a nice move in the other revenue. intel, athen you have big chip maker. they are guiding higher for the third quarter and the full year. they beat on second quarter revenue and starbucks reported fastest cell growth they have seen in about three years. that is largely because of the higher traffic and they are boosting full-year outlook to about 282 per share. that is from a range of 275. taylor: we are going to stick with these earnings. i want to bring in bob o'donnell, chief analyst at a consulting firm. thank you for joining us from san francisco. i want to focus on amazon, because those shares are declining among what has otherwise been positive news. we were expecting a margin hit, given we have been investing in that one day prime. investors seem more caught off guard then we

that disadvantages amazon. their shareases later in the season as consumers don't have confidence of getting there products on time like they do with amazon. that compressed season will be to amazon's advantage. was an analyst for the marketer. a tech giant visits the white house, the white house host the biggest tech companies to talk about fallout from the trade war with china and the ban on while -- huawei. this is bloomberg. ♪ emily: white house officials said they would send a delegation to china read by robert lighthizer after a high-level meeting in washington between the trump administration and ceos from google, broadcom, intel and qualcomm. the meeting was geared towards easing a ban on sales from china's huawei. >> i think this is a very dangerous meeting. huawei is not an independent actor. it is an arm of the chinese intelligence agency. us doing trust that business with them will not have negative consequences. i just read the washington post this past weekend and huawei was working with a shell

has amazon destroyed retail? the head of the online second quarter results, we will debate that very question stay tuned you are watching "squawk box" right here on -- cnbc these folks don't have time to go to the post office they use stamps.com all the services of the post office only cheaper get a 4-week trial plus postage and a digital scale go to stamps.com/tv and never go to the post office again. who used expedia to book the vacation rental that led to the ride ♪ which took them to the place where they discovered that sometimes a little down time can lift you right up. ♪ flights, hotels, cars, activities, vacation rentals. expedia. everything you need to go. >>> if you look at amazon, although there are benefits to it they've destroyed the retail industry across the united states there is no question they've limited competition. their areas where they've really hurt small businesses. >> that was secretary steven mnuchin right here on "squawk box" yesterday blaming amazon for the decline of american reta

stocks, mostly amazon. so this is a play, just so viewers know, this is really a play on amazon >> it is it is. when you take the three products, you multiply the holding of amazon by three so you get a significant exposure to that stock which in the short-term has done quite well >> that is want. what is need >> need is consumer staples. >> toothpaste? >> exactly >> paper towels. >> that defensive play like cycle performer play. it's the consumer is going up sort of holding back but they'll keep buying toilet paper and toothpaste so you have the full staples a good balance sheets, good net income and dividends they don't pop as much lower beta to the market >> we have netflix earnings out today. netflix is a name everybody knows. a lot of people out there may have invested in it. what products do you have that would highlight a name like a netflix? if you're going big -- these stocks can move big. rolling the dice in a big way, is there a way to play netflix >> 3x communications is tak, you get exposure to

how much of that growth is driven by amazon web services. that's one part of the business that is a huge focus for people. it seems to be less about the retail operations, nmore about growth and cloud >> when you talk about profit, that's certainly the cloud that's amazon's profit engine that enabled it to make so many risky bets and go into new businesses interesting over the last few quarters, we're talking more about advertising. it's in the other revenue category it's been growing very, very quickly and taking on, you know, the duopoly that is google and facebook so it will be interesting. that's a high margin business as well we'll see what happens there we can't get away without mentioning regulatory scrutiny amazon typically plays it quiet. doesn't respond or talk a lot about this i wonder if they can get away with it this quarter with the scrutiny ramping up. >> deirdre bosa, thank you very much >>> joining us now is joel kalina, head of technology and media training over at web bush securities we heard what happened with regard to a

amazon restaurants. immediately grub hub stock caught fire and multiple analyst told us this is a major positive they are looking for after all, if you can out last amazon, got to be in great shape. stands to reason not so fast. i think the buyers are getting ahead of themselves. they were never a major player to begin with. one less competitor, of course they still got plenty of other rivals and frankly, you can read amazon's decision not so much as they gave up but how about this? as an indictment of the whole industry you have to remember grub hub's margins are under serious pressure for sometime and spending a fortune to fend off door dash, post mates and everybody else that piled in the business that's not a good sign, people in april we stopped by grub hub's head quarters to give the ceo to tell his us side of the story and willing to talk. i asked him if all the ad spending was worth it. here is what he said. >> so you think about it this way. you know your ltv, lifetime value of your customer onc

all of this was hosted on amazon servers using amazon web services. lyft has a $300 million contract with them for the next three years to pay for that. on top of that, google owns 5% of lyft and has a board seat. it's obvious that google and amazon are very deep within this economy. when you look into the filings, you see how concretely they are kind of the infrastructure behind how these companies work. >> in some ways, it is a blessing and in some ways it is a curse. you focus on amazon and google, and from the blessings side of the equation do you see this as , a good element that these companies have so much riding on , whether it be financially but for future revenue streams from these ipos? >> i don't know, caroline. there is good and bad. the benefits of cloud computing is that it allows startup companies, companies that are want to go public eventually or are going public to avoid infrastructure cost. cost you can treat your i.t. needs as variable costs rather than big fixed costs. you don't need to build up a large i.t. department to scale u

as i said, amazon up $8.40 to $2,019. amazon not set to report earnings until later next week. can't wait to see that. let's get to citigroup. citigroup kicked off the big bank names, second quarter earnings season this morning before the bell. the bank reported better than expected earnings and revenue for last quarter. now, you can see the stock is responding at the moment positively, up higher, but there was some concern that the fact that it might have a little trouble with some of the margins and trading business might ding other banks. speaking of other banks, 25 other financial institutio, jpmorgan chase, goldman sachs, wells fargo, all set to report this week along with tech names like ibm, microsoft, and netflix. we're going to be sweating it out here on "the claman countdown" but 56 s&p 500 names are set to report this week. 80 s&p companies overall have warned, though, that their second quarter financial results will be weaker than initially expected. this is hitting companies from alphabet google and apple to pfizer and adobe, micron and netflix also on the list. wi

it could be amazon amazon has made a lot of enemies. there are a lot of complaints about they're blocking access to the marketplace, unfair picking of winners and losers when it comes to their marketplace. >> okay. >> day of the week it's what's been tweeted lately and which politician wants to pick on whom. >> we have to leave the conversation there it will continue though. thank you very much, guys. >>> still to come, the stagecoach is ready to roll. wells fargo results are next by the way, here are the futures right now. take a look at what's been happening after we've already heard from three dow components. dow futures picked up. we were in negative territory down by 25 points. this morning at 6:00 a.m we're indicated up by 35 points. s&p futures up by 2, the nasdaq up by 3 and "squawk box" will be back [ dogs barking ] what about him? let's do it. [ sniffing ] come on. this summer, add a new member to the family. hurry into the mercedes-benz summer event today for exceptional offers. lease the glc 300 suv for just $419 a month at

amazon workers on strike. it is prime day but that is not stopping employees at one shipping facility in minnesota, from walking off the job about one hour ago, calling for better working conditions. more job security, higher wages. we are live on the scene with the breaking headlines. >>> a new warning after a massive blackout crippleed heart of new york city. what officials are saying today. how the mayor of the city, who wants to be president by the way is defending himself for being thousands of miles away. >>> the first hurricane of the season to hit the u.s. is making its way north where we are he can track barry's past. residents begin cleanup efforts. ashley: so much to go at. fox business team coverage. jackie deangelis at the new york stock exchange. edward lawrence as always live at white house. susan li at a amazon fulfillment center warehouse in shakopee, minnesota. we begin with you, jackie. reporter: even though these were small positive gains on nasdaq and dow, hitting records psychologically s

deidre. >> melissa, put simply amazon is spending more and earning less but it is amazon so it is a return to old days of growth over profit. one day shipping costing more than the company initially estimated. >> it does create a shock to the system we're working through that now, and we expect we will be working through that for a number of quarters but when the dust settles we will, you know, regain our cost efficiency over time. >> he added that the response to one-day shipping has been positive and volume has picked up also on the positive side, we did see top-line revenue growth pick up to the 20% year over year level some headwinds cloeing growth in cloud computing, facing more competition from microsoft and google remember, key is the race with microsoft for the $10 billion government jedi cloud contract e market expects them to have 9% of the u.s. ad market at the end of the year. on the regular torr regulatory, surprise here. they have a longstanding policy of not commenting on regulatory matters. when pressed during the media call he said that amazon's guidance does not include a

can we say that prime day is doing what amazon wants it to do >> yeah. i think in certain ways amazon is winning i think one area where it really does have leverage and what shineses through on prime day is its massive membership base. that's this loyalty aspect of the prime membership, these people that pay $119 a year to get things like free shipping and whatnot. walmart can't compete with that. there's pros and cons to being paying prime member. we see those shoppers on average, a prime customer, they spend more, so that's very valuable to amazon i think those are the people that are really turning up over this 48-hour event, those paying prime customers. >> those are paying prime customers. what about people new to prime will this get more people to join up? >> amazon for the five years they have done -- this is the fifth year of them doing the prime event. each year they said we added more and more paying prime members. they use today as a tool to add more and last year was the first time the company disclosed how many of those members they have, wh

. >> nobody knows amazon like brad. he is the person to dig into jeff bezos's next attempt to slice into retail. uber might want to take a page out of jeff bezos ' book. carol: this is bloomberg businessweekcarol: ♪. jason: welcome back to bloomberg businessweek. i am jason kelly. carol: i am carol massar. still ahead, businessweek talk. solutionus, a special section called prognosis, meeting health care issues head on. carol: it has been 15 years since the first moon landing. how we got there. jason: we begin in the features section. the company that reinvented retail are not done. this is called amazon go. major cities in america, you may understand it. we went to the guy that literally wrote the book on amazon and bezos. >> there are 13 of them now. san francisco, seattle, chicago and new york. they are adding them slowly. it is best described as like a convenience store where you can pick up lunch or breakfast, a smattering of grocery store items. the big innovation and the reason things -- amazon has been working

so, i don't see them outspending apple or amazon. so i don't think original content can do it alone. what i have said for some time, i think they should invest money in buying an existing content provider that has a library and a fan base and some following, similarly to how disney bought fox. i think that is much more likely. the other thing that people talk about less but will play a significant impact in terms of time spent on netflix is the growth of ad-supported streaming services like pluto tv, recently acquired by viacom, and others. i'm a big believer in 2020 that netflix has to launch some sort of ad-supported tier that they can maybe feature the original content library on. emily: interesting. what will you be watching for on wednesday when the company reports? >> a couple of things. i will be looking more at the international number. i think that is an area where they have more wiggle room in terms of the first mover advantage. in those markets, they don't have these huge global international companies they are , competing

amazon is describing this as one of the biggest investments of its kind. that iscts a company between the tightest labor market and have a century and a political pressure on amazon from figures in both parties. and rising activism by amazon employees who are not content with the conditions there now. amazon is always in the crosshairs for putting retailers out of business. how much of this is getting ahead of some negative publicity or catching up to political pressure? is trying to position itself as part of the solution. amazon would say that they are helping employees who want to rise into other positions within warehousey, including workers who want to do other things. and workers who may want to move on to another type of job somewhere else. they find working at amazon more attractive if the career ladder is made that much easier to climb. that is how amazon is describing this. they are not saying this is about automation. will beainly it perceived as an part about how jobs are changing and the need to prepare workers for tasks that this company and

all of this was hosted on amazon servers. lyft has a $300 million contract with amazon web services and google has 5% of lyft and a board seat itself. so it's obvious that google and amazon are very deep within the digital economy, but when you look through these files you really see how concretely they are kind of -- that the infrastructure behind how many of these companies work. >> and in some ways, this is a blessing and some ways it's a curse. mark, you focus on both amazon and google. and from the blessing side of the equation, do you see it as a good element that they -- that these companies have so much riding on, whether it be financial or from that future revenue stream from these recent i.p.o.'s? >> i don't know, caroline. there's good and bad to that. the benefits of cloud computing is that it allows startup companies, companies that have eventually want to go public, or are going public to avoid a lot of infrastructure costs. you can treat all of your i.t. needs as variable costs rather than big fixed costs you d

jason: i love catching up with brad stone on amazon. he can go deep on the amazon go story but then we get to spend a little extra time with him. check that out on our podcast. carol: and you can find more stories on businessweek.com. jason: and check out our daily show. carol: more bloomberg television starts now. ♪ ♪ emily: i'm emily chang and this is the best of bloomberg technology will bring you all of our top interviews from this week. tech on the hill, all under scrutiny this week. representatives from amazon, apple, and google, all on the defense. plus, netflix needs to get stranger. subscriberge after a plunge -- dip.