Cofounder, welcome to you busy day, good day to have roger on the set another record setting day on the street biggest gain for stocks on tuesday. Rally being driven a lot by tax reform optimism. Bitcoin stealing some part of the story surpassing 11 k less than 24 hours after breaking 10 k. It has backed off that price were learning nasdaq is reportedly planning to launch Bitcoin Futures in the first half of next year. Thats according to dow jones. There is a lot to tackle roger, bitcoin news rortation between sectors as people watch this tax bill advance. Whats the lead for you. To me the bitcoin thing is a phenomenon at this point its really hard to know what to say. What do you do when the thing is going up 10 a day, whole asset class going up 10 a day, youre obviously not doing this on fundamentals theres a lot of enthusiasm here to me what really matters is where does it land what role is it going to play in the economy going forth, because its clearly worked brilliantly as a tradeable commodity now the question is, can they make it more than that can they make it into something thats an exchange. Who is they important question. Im involved in a company where there has been a lot of malicious attacks on their Software Bitcoin is the way perpetrators maple ta maintained their anonymity clearly commercial uses are not the ones youre looking for if you want this to become a big deal i mean, ive never seen anything like this. Does it remind you of anything else . No. Because its a whole new asset class. In that sense, no, ive never seen. You called eight commodity earlier. Its not just commodity, technology, currency. There are a lot of things going. But bitcoin is a commodity obviously underneath it you have a technology that has hopefully a lot of applications. You know what it reminds me of, dotcom in the late 90s just dotcom there was the internet underneath it, like a real world changing technology, and there were some dotcomes actually worth something, amazon. Talking about those. There was pets. Com, web band im getting my facebook feed blown up with every day people asking what about bitcoin right as im seeing the price go up. I worry for people getting in. In that sense it looks just like dotcomes, but because its a new thing, there isnt any infrastructure past experience to evaluate how far is too much. Just like dotcomes. Yes, but they were stocks mechanisms for doing trades and those kinds of things were inside a framework we all understood there were places you could go to either get out of the way or to hide out. You know, i look at this thing, and i may be wrong, john, but from where i sit, this is its own phenomenon so at this point i would make no bet at all about what happens next, you know its gone a lot further than the bears would ever have imagined i think its probably gone further than some of the bulls would have imagined. You know, as far as i can tell, its like the market is going to make a choice here and im not going to pretend like im the one who knows because i sure dont. Even though 2 of the population odni bitcoin, this is something you think is important enough for us to be talking about . I look at it because everything on wall street is at the margin looking over its shoulder and wondering what bitcoin is going to do when you see Goldman Sachs and nasdaq all putting their strategies to try to embrace this thing. Figure out derivatives to play in the market. That is a big deal. Is it a big deal because its going to provide momentum or a big deal because frankly if theres more of an efficient market in this thing and people are able to predict where its going to be and short it, it could put some downward pressure, besides the upward pressure in scarcity. Theres a third thing that i think is the real goal of those two organizations, which is bitcoin right now is completely decentralized. Before we go on, lets get sbos into 20th century fox admission. Its important, perspective from the outside looking in around any allegation, more investigation than the company that certainly weve lived this for the last year and a half the fact set of these allegations, whether theres been harassment or not can be very different in very different cases, which the headlines dont always show. So a harassment case or claim against one person, one situation versus someone else might be a completely different situation. It also might be much more difficult for a company to act on presumably here in nbcs case they have had actionable information they were able to move quickly i think youve got to commend them for that. Its a trick sign to see the Companies Moving that quickly to eradicate, if thats ever possible, we hope it is, Sexual Harassment in the workplace. With fox news, for instance, it took us 13 days from the time we had the first we learn of the first allegation with roger ailes until we walked him out of the building im not sure when nbc first we dont know when nbc first heard the allegation but 13 days by historical standards removing a ceo of a business i think is a pretty good track record. And with bill oreilly, it seemed there was a private settlement he was allowed to continue have things changed around that. What happened for us is that, again, have you to look at the facts. The fact set around roger ailes and bill oreilly appeared very different and still are factually different. With with roger ailes what we were able to do, go in, hire an independent law firm, sorry, outside law firm to work for us, work for us and go in and investigate all the allegations, which included speaking to the women involved, corroborating their stories, getting firsthand corroboration from when the harassment claims happened, really very rigorous investigation where we were able to talk to our employees and gain the fact that we needed to act upon that. With bill oreilly, it was very different in that they were private settlements that happened in the past the company had never had a complaint. The private settlements included anyone not talking about it. So we had a complete inability to dig into the story and find out what had actually happened once, however, these things became public, and we were aware of them, what we were able to do is change the contract if there were any further allegations that arose, we could fire him for cause immediately, which is what we did. And fox and more generally is it now no longer okay that someone could have a private settlement where there are gag orders on the other side and still stay at work is that the companys business yes thats what it should be you should not have situations where we do as well this is the disappointing, we have very strong hr departments, global head of hr. The local hr departments in these situations dont talk to local management basically straight up to the Senior Management ultimately if the situation looks serious, my brother or myself we also have hot lines throughout the company we have a number of anonymous hot lines for complaints or for people if they want to go on the record with us about a complaint. So these are important mechanisms that you need people to trust and to use so that we can then act on that if people dont use that, its very hard for the information to filter up that we can take advantage of. Lets take about other recent news i met an executive who worked with you and the family and company for a long time. Henry, i think the fundamental things, the headlines and these are juicy media stories, its so important, a very good year because it is completely unacceptable for men particularly were seeing powerful men to have and allow or engage in harassment in the workplace. The fact that weve gone through this sort of cathartic moment, not just the media but we see through all of society and business and elsewhere i think is a tremendous thing. I think we come out of it as a community far, far stronger. Here here other news, saw a friend, former executive of the company he said, i never, ever thought that the murdochs would ever consider selling anything. How here were reading you may sell half your crown jewel, the company, whats changed . Talking about our children. We both have 13 years old. My 13yearold was telling me the other day the one thing hes disappointed with going into middle school was the school quartered gosse yard gossip. A lot of rumor and speculation gets out there that arent necessarily true the advice to him and myself, lets not feed that speculation. Thats been a london standing policy of the company. Were not going to talk about stuff bubbling out in the media and for the hollywood hallways but the reality is, what this has caused, speculation we might ever sell a part of our business, this has caused a debate in the media. When i look, ive said on stages the last couple years. Absolutely there are some scale businesses in media today, which will be the losers Going Forward in a Digital World thats the case. If you havent invested in your programming and channels, you havent invested in sort of distribution platforms, you are unlikely to get on the new Digital Services and youll struggle we dont believe were in that situation. We can demonstrably point, maybe the only company growing, large media growing because of our mix of younger cable channels. We feel very well talk about it more in a minute. We feel very strongly where were positioned to grow the company. And yet, it is the job of analysts and others to evaluate schoolyard gossip, as you put it one of the very strong media analysts said about the reports that you might sell half of 21st century fox. This makes immense sense so if we go the other way on that, if you dont sell them, the analyst will say it makes less sense can you shed some light on what hes seeing . Two reports. So reports are youre considering selling, sky, satellite control pay tv in the uk, national geographic, fx, film and tv studio, hulu, keeping fox sports, fox news and Fox Broadcasting hypothetically, what would be the reasoning there . Why would that make immense sense. Again, im not going to comment on exact speculation, but whats happening you are the reason the analysts are saying in the industry is if you look at whats happened w h digital as cable universe declining, around overall and traditional cable, 2, 2 1 2 if that continues, obviously cable affiliates are one of the key drivers for the big american companies. Little bit left for us because we have a Big International business but u. S. Business is a very important area of revenue so whats happening, though, the new digital of the youtube, tremendous service, hulu live service, dm thats loachlan murdoch commenting on termination of matt lauer on nbc, declining to speculate about asset sales. He says the speculation itself has caused a debate around scale in the media speaking of media social snap down snapchat writing oped for axios, and he slams social media rivals for fake news rough illusionized the way people share and consume content. Lets be honest this came at a huge cost to our fax, minds and entire media industry. Thats the same day they roll out a new redesign this is speigle reviewing the changes. Were separating social from media and reorganizing snapchat around relationships to make it personal we hope it feels more familiar, inspires you to express your self with your friends and explore content you love. Roger mcnamee still with us on set youve been critical with the way they have altered the flow of information is this a first fix. I think its a step in the right direction. First of all, i think its a really smart, strategic move for evan spiegel to focus on, try to drive a wedge on this issue. Facebook and google are extremely vulnerable because of filter bubbles and this notion they manipulate the thts of their users the way they present information. In fairness s. N. A. P. Is not free of blame s. N. A. P. Streams exploit the same basic problem in order to sell ads, the strategy is to addict your audience once youve addicted them, you want to find ways to manipulate their behavior. In fairness, thats the Media Business everybody who is putting something on tv or on a phone wants their audience to want more of it. The difference is that on smart phones the people who have personal data, who can essentially program individualry for 2 billion members have advantage and power to do great deal more harm than broadcast network can do my simple point, its a matter of degree jump but degree matters. When i look at s. N. A. P. , you know, i hope this is the beginning of them defending themselves more aggressively they are in a position to get benefits from the government because theres no question that facebook and google are doing things that are contrary to the public interest, right, thats now been validated by a lot of data theres at least some evidence as revealed by pro publica facebook in particular has been resistant following through on its program toss reform itself i think if spiegel starts to stand up for users this way and really is committed to that notion, again, i dont think fake news is a real problem. Its a system like Everything Else its a place to start and its a place he can start. Is standing up for users whats best for business is that really what isnt that you what want, if youre a snap investor. Yes, take care of your consumers but youve got to make money, figure out a way to make this platform profitable. Youre right. The issue for facebook and google they are becoming stock toxic. Facebook in particular risks being viewed like a tobacco company. It addicts people, harm. Vulnerable to youtube kids, vulnerable to things on facebook. Snapchat have we already forgotten how snapchat got popular . Snap streaks are one of the biggest offenders on that very issue. So he does have issues around this, but as a shareholder i want him fighting back against these people, taking whatever weapons oes he weapons. Hes david against goliath hes going to get crushed if he doesnt use every weapon available. I dont know if this is going to work but its better than sitting back and letting facebook copy everything its hard to judge the price action because its such a bad day for tech in general. It is but its the right move no matter what the price tells you today, strategically hes got to get aggressive, hes got to get very public he needs to separate himself from the other guys. By the way, google needs to do the same thing relative to Facebook Google took one point million 150,000 youtube kids videos down the other day in response to the protest there. Google can find a way to separate itself from facebook, then all of them look relatively better strategically as a shareholder, you want alphabet, you want these guys to separate themselves from facebook because facebook right now is still behaving very badly. Roger, its good having you. Always a pleasure to be here and fun to listen to lachlan sit there and talk about what a day. Have a great day. Thanks very much. Appreciate it. Thanks for joining us. Janet yellen meanwhile on the hill for whats likely her last congressional testimony as fed chair. Lets get to cnbc economics reporter Steve Liesman on what shes saying steve. Hey, jon. Janet yellen and valedictory being praised, vocal disagreements on both sides as often. Want tax cut proposal which she would only do to the point current taxes need fixes and capital is a good idea for the economy. Democrats want to continue dodd frank which she is mostly doing, saying it would be a mistake to roll them back. She does support easing them for small and midsized banks. Economic committee on why Interest Rates should continue rising. We do think its important to gradually move our policy rate toward what ill call a neutral level which would be consistent with sustainably strong labor market conditions. We want to do this gradually if we allow the economy to overheat, we could be faced with a situation where we might have to rapidly raise rates and throw the economy into a recession. On the economy yellen noted it seems to be taking up steam but she said she hadnt seen a lot of ways for Inflationary Pressure if theres a difference if fed chair nominee powell and yellen its how far they are willing to go with dodd frank financial regulations. Powell seems to want to go further than yellen indicated she would. They both were asked about the deficit. About they both said u. S. Deficit on unsustainable path. Seems congress likes to ask fed chair questions and they dont necessarily listen to things they are saying. Given these tax proposals, it certainly looks that way, steve. Thanks so much meanwhile major announcements from amazon at aws reinvent in las vegas, thats where i caught up with aws ceo. Aws the most profitable unit at amazon seeing huge growth. I asked jassy about the scale, can they become the biggest on the planet take a listen. I do think its possible. Its not really the goal i have or the team has for itself we dont ever really talk about it that way. But our mission is to enable any developer or any company to be able to build all their Technology Applications on top of our technology app, Structure Technology platform. It has the chance to be a really Large Business i think if were able to accomplish the right type of Customer Experience and continue to build what customers ask us over time as the market moves more and more toward cloud, i think we have a chance to be the Largest Enterprise Company in the world. Largest in the world perhaps. With the adoption of the cloud, the question is are Companies Going to move completely away from their own data centers, this hybrid cloud, private cloud thing . Does that have legs . Here is what jassy had to say . I dont know if its ten years. Could be ten years, could be sooner, could be a little later. Ten years is a reasonable estimate yes, i think in ten years having your own data centers is going to be a little like comparing to mainframes, they are still around but not a major part growth segment of tech ecosystem. Thats a shot across the bow to dell trying to sell equipment onto businesses, campuses and saying you only pay for that you use. You dont have to pay the whole amount up front. A shot across the bow to microsoft, oracle and others trying this hybrid approach. You dont want to move all to the cloud, well help you transition, have our equipment, use our platform on your campus as well. But notice what he said about the potential size of aws. Everything is in the crosshairs here for amazon, as we talked about in the last hour, building applications and services on top of that, which can certainly increase profitability and doing more m a as well. People act like its new. The unit is not new. What is new is the ability for investors to use the size and growth of the unit to help establish valuation for amazon at large thats whats happened in the past couple of years. It has. Now i think investors are still trying to wrap their heads around the potential size and growth rate particularly when it comes to profits of this unit. They are still focused on the infrastructure angle now they have to start thinking about software and services, because said looking to go there. So much for amazon today. Also, fund out cyber monday is amazons biggest day in history, did top prime day, even though 30 hours. Spoken like a true retail reporter. Weve got to get that in somewhere. All right, guys. More on bitcoin as the currency makes new record highs and stocks do the same thing as we head to break, lets look at shares for chipotle looking for a new ceo. Founded in 19934, up by 3 squawk alley back right after if youre on medicare, remember, the open Enrollment Period is here. The time to choose your medicare coverage. Begins october 15th and ends december 7th. So call unitedhealthcare to learn about. A plan that could give you the benefits youre looking for. Its the aarp medicarecomplete plan insured through unitedhealthcare. What makes it complete . 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With 40 years of medicare experience, unitedhealthcare offers more than great benefits. You can count on us to answer any questions, help schedule your appointments. And with renew by unitedhealthcare, our health and wellness experience, you can earn rewards for making healthy choices. Open enrollment ends december 7th. To learn more about the only Medicare Advantage plans with the aarp name, call unitedhealthcare now. Or visit us online. We make it easy to enroll, too. So call or go online today. [sfx mnemonic] im willing to swallow the individual side which to me is not what it needs to be to get the business side as long as were not increasing deficit. We know well not be able to go forward until we get 50 people satisfied thats what were working on nbc announcing it has terminated today show host matt lauer citing inappropriate Workplace Behavior varie variety, executive director Debra Birnbaum good to have you. Thanks for having me. Its awkward for us were trying to cover it as a news story even though hes a colleague of ours. Is variety working on this we had been hearing rumors for a while. It really stepped up after the first story broke with Harvey Weinstein. Weve been working on a story. Nbc knew about that, got ahead of the action. What we have to work with is the statement from the head of nbc news can you share anything at all what youve recovered . We are still putting it through the process. I can tell you as the memo indicated, this wasnt an isolated incident, unfortunately. And debra, tell me what the environment has been like post weinstein. Im getting questions about why there are so many accusations coast guard out now. My sense is perhaps women, other victims who felt like they wouldnt have been believed in the past are now feeling like now people are listening now people are believing and perhaps feeling that they have an obligation to add something to this conversation is that the sense you get as you and your staff are reporting this hour . Definitely. Absolutely thats what we get were getting many women contacting us. As weve seen before, when women come forward with stories they wouldnt be believe with men in positions of power look at the white house and see how that played out. But with the Harvey Weinstein scandal and things that came out subsequently, women felt empowered to come forward. They understand to be believed and stories to be heard. I think thats why were seeing so many stories now. This is really just the tip of the iceberg. Theres honestly more to come. Debra, if youre a media company, if youre an executive, what should you do to prepare for iceberg thats coming. Do you hold meetings, have discussions, ask for more information in advance i think you actually have to look at your policies, talk to Human Resources and make sure they have created an environment where women feel empowered to come forward and not going to be reparations for them, careers will be saved. I think what weve really seen in a lot of instances does it really come down to men in positions of power saying do this or youll lose your job, youll never work in this town again. The companies have to look within themselves to make sure women feel like this is a place where they can come forward, tell the story and wont have to lose their jobs or wont have a negative impact on their careers. I think obviously there are a lot of men out there really worried right now about how their behaviors are taken. Companies looking at themselves to make sure they have the right policies in place. Finally debra, weve seen so many changes in talent across the spectrum, morning broadcast, prime time cable have we learned enough at this point to determine what changes in ad revenue may have happened or may be happening because of these talent changes thats a good question. I think were just starting to see the ramifications of that. Looking at shows like transparent really important for amazon, house of cards for netflix and today show is important for the respective network. We havent seen the advertisers go away. Interesting to see what happens with viewers if transparent returns, house of cards, and the news programs that are so important to their network weve only just seen the beginning of this. Debra, we appreciate you sharing whatever you can with us today. Thank you very much. Debra birnbaum executive editor for tv. Back to headquarters. Sue herera has a news update for us sue. Good morning. Here is whats happening this hour british Prime Minister theresa may meeting her counterpart during a visit to baghdad. The uk government announced in september that an extra 300 troops to Anbar Province to help train iraqi forces. Pope francis meeting in myanmar after he addressed a huge crowd in the predominantly buddhist nation. He urged the long suffering ethnic minorities to resist revenge for the hurt that they have endured espn is eliminating 150 production and technical employees. The layoffs, which were announced this morning in a memo to employees, does not include on air talent. Espn laid off 100 employees in april. Disneys Marvel Studios releasing much anticipated avengers trailer this morning. The film set to hit theaters in may. In the trailer, the films villain tells avengers, quote, in time you will know what its like to lose hes played by josh brolin that was my best imitation thats the best i could do the news update this hour. Back downtown to you guys. I feel like i should break into an evil laugh but i cant pull that off either. Youre not evil so you cant do that. Probably wouldnt work. Thanks, sue herera markets are closing in the uk and across europe, mostly higher for a second consecutive session. Financials had their best day since late september following yesterdays comments by fed chair nominee powell on easing Bank Regulations volkswagen one of germanys big gainers after ceo projected record sales for the year, closeout 2017. The pound, twomonth high on the dollar against reports uk has, in fact, reached an agreement on brexit divorce payment to the eu which some say would be worth 50 billion pounds well have to wait and see. Yeah. As we head to break, looking at shares of luxury retailer tiffany, the stock slipping despite a beat on top and both bottom line. Talk to investors, not only is bitcoin here to stay, eventually it will hit 1 million per coin squawk alley back after this alerts wouldnt you like one from the market when it might be time to buy or sell . With fidelitys realtime analytics, youll get clear, actionable alerts about potential Investment Opportunities in real time. Fidelity. Open an account today. Markets coming off the highs of the morning, nasdaq on pace for the worst day since about august 17th. The dow and s p did set record highs this morning meantime bitcoin crossing 11,000 for the first time just a few hours after topping 10,000 more on this, lets bring in formula capital managing director and chess master and Spencer Bogart guys, good to have you with us. Thanks for having me. Bitcoin poorly misunderstood. Were trying to understand the phenomenon its become whats your overall take, price action change, future of its use in American Business so thats two questions i think day by day, who knows. For bitcoin, they are adding 100,000 new customers a day. What do each one of those 100,000 customers do, they buy bitcoin. Thats driving demand up on a daily basis. Overall long time, 250 million crypto currency, but 200 trillion dollars for demand for money. If bitcoin is solving the problems of paper and currency, which i believe, youre going to see that 200 billion start to move up to 200 trillion. This price action, who knows day by day this price action is certainly not unreasonable and will continue to go higher. Just to follow up, back in august when bitcoin was around 4,000, you wrote, correct me if im wrong. Were in a hype bubble doesnt mean they are bad, shouldnt by but weve seen this story twice before in the past 20 years, et cetera. Yes there are so many bogus crypto currencies out there 95 of these alternative currencies are probably scams. Bitcoin is not one of them bitcoin is legitimate. Its the biggest one, been around the longst. Just like every innovation scammers and ponzi schemes get in the game. Thats happening have you to be careful the boit coin trend is not going to stop. Spencer, you obviously believe in bitcoin, clearly. Do you think we need derivative bitcoin products to help legitimacy or help others be able to play in bitcoin, futures, etps, Exchange Rate of products what do you think about those ideas. We hear a lot is bitcoin in a bubble reality is Institutional Ownership is 0 at this point. We need familiar like futures, etps to put it in a context traditional investors can touch. On retail side less than 2 own bitcoin, but they say they prefer to stocks. Lets just add, jpmorgan, jamie dimon was trashing bitcoin a few weeks ago. Now they Just Announced they are going to help their clients get into Bitcoin Futures, which is a derivative product certainly they see theres opportunity there. Thats a huge Retail Investor base thats going to Start Playing around with bitcoin with derivatives. Do you need it to be transactional for more Retail Investors to get in, to want to get in, to understand it does it need to be a currency . I agree with you completely notice amazon just registered three or four domain names completely related to crypto currencies, largest retailer in the world. They are going to start accepting bitcoin and everyone will follow after that. I completely disagree i dont think it needs to be transactional. They see it first, think crypto currency payments, buy for digital goal people dont like depreciating assets. Amazon will not start accepting bitcoin. It doesnt make sense for them they dont like to spend bitcoin. Nobel prize winner bitcoin is successful only because of its potential circumvention, lack of oversight, so seems to me it ought to be outlawed what is the risk of real regulatory pressure for complete legality. Lets not forget what large entity wants to make large transactions around the world in secret the u. S. Government. Believe it or not, the u. S. Government is heavily looking into how they can personally or institutionally use bitcoin to spend. There will be regulation, so many scams as you point out. Regulations are going to protect people bitcoin itself is a trend thats going to continue. Spencer, tell me what are the fundamentals that you look at with bitcoin this is a piece, one of many pieces i cant figure out. Besides demand, which can go in lots of different directions, especially if the public rushes in people get scared for a certain reason like they get excited what are the fundamentals driving bitcoin. Thats fair any time we have math or Economic Uncertainty people rush to that risk off trade, gold, bitcoin. Bitcoin has been a benefactor in that respect i think the transaction value is another important metric out there of how much value is flowing over the network on a daily basis. How much are people trusting the network with how many billions of dollars. I still cant figure out why it would be a surprise if bitcoin dropped to 1,000 per bitcoin as quickly as its gone up to 11,000 from 1,000. It would make sense from demand. Even if it happened, bitcoin lost 85 of its value today, it would still be up more than 40 on the year. And if a longterm trend is going to much, much higher prices, shortterm volatility is not going to matter. Its longterm trend here thats important. The fact it does solve huge fundamental problems like infinite minting, forgery, privacy. Many problems bitcoin solves on fundamental level that investors and governments will need. Finally we covered dimons comments heavily when he called it a fraud john mcphee, for whatever its worth predicts a Million Dollars by 2020. Do you have targets . Ill say a Million Dollars by 2020 as well easily. Seems reasonable. Not putting out targets. Seems reasonable as with Technology Shifts lets think about what young people are doing. 32 of people say they prefer bitcoin to stocks. 42 of millennial males say they plan to purchase in the next five years were barely in the first inning. Lets say theres 15 million millionaires around the world. All their Financial Advisers are going to say, hey, buy a bitcoin. You need some exposure theres only going to be 21 million bitcoins minted ever in history. Thats going to also drive demand. James, spencer, were going to keep covering it. Lets do it. Thank you very much. Thank you. Still ahead jons exclusive with amazons most profitable unit down a touch more to up 52 points rick, what are you watching . Im watching the pound. Im watching ftse. The british markets are acting reasonably well. Is there a breakthrough on brexit, there seems to be. Were going to discuss another side to brexit, status quo versus change, after the break im scott walker coming up today top of the hour on halftime report, todays big tech rollover, chip stocks, highflying sector about to fall out of favor with investors. Well discuss and debate taking on congress over the provision weve told you about and the tax plan that could hurt investors. What that firm just did to try to protect you the battle over roku sure to get fiery. Short seller versus analyst who says the stock will go to 50 a live debate. At t shareholders with a rare chance to hear from ceo Randall Stevenson today exclusively on halftime starts top of the hour carl, well see you in a bit. Sounds good, scott. Thank you very much. Get to cme group and Santelli Exchange hey, rick. Good morning, carl. When it comes to brexit, june 3rd, 2016, 10 years from now the brits are going to look back on that and either have a very big grin or be a bit unhappy i think its going to be very binary, either big grin or big frown. I personally think it will be a big green. Lets see what the market thinks the reason were talking about this, unlike the words voiced by the head of the bank of england mark carney yesterday morning that things just didnt seem to be working out with regard to brexit and divorce papers, a uturn occurred. It certainly seems they are penciling in what will ultimately put forth some movement on the whole brexit scenario come this december, which is just right around the corner lets look at twoday pound versus the dollar. Pound definitely looking pretty good as a matter of fact talking about on cnbc all day, best levels since 28th of september on closing basis look at twoday pound versus euro very similar. Twoday pound versus yen, very similar. Now, it isnt all rosy news. If you look at the day before the brexit vote, the 22nd of june and pound versus dollar, the pound hasnt recouped. If you look at whats going on with the ftse 100 since the 22nd of june 2016, its doing pretty well is it on ties like our market, no but higher for the year and much higher for that day. Ultimately what this is a lesson is is the road less traveled ten years basically after our credit crisis response, we now saw janet yellen this morning move the markets a bit shes very excited about the economy. Hey, its u. S. Economy and its 10 years counterfactuals are a tough thing. Its hard to go back and say if youd done this a little different, that a little different, thats why im so excited about brexit because you know what, this is the living counterfactual this is about acountry who too the road less traveled, voted for something that was not good in the here and now. It upset the status quo all for the notion of change even though its a tougher road and everything about the brexit vote made life tougher for a while in the uk, ultimately the macro view of their economy might be infinitely better and it will be a case study of how to attack various problems make it easy, give up the downside for less upside or do what you think is right economically for the picture. Jon fortt, back to you. Thanks, rick. Coming up, the ceo of amazons most profitable unit, Amazon Web Services making some key announcements today. Were going to discuss the stock impact, plus what he told me exclusively about working with jeffez quk ley is back after this the markets change. At t. Rowe price. Our disciplined approach remains. Global markets may be uncertain. But you can feel confident in our investment experience around the world. Call us or your advisor. T. Rowe price. Invest with confidence. Stocks up the highs of the day after setting new records this morning the nasdaq having its worst day since guaust 17th. Squawk on the street will be right back Amazon Web Services reinvent conference is under way and Ceo Andy Jassy is delivering his keynote. I sat down with jassy and asked him about working with jeff bezos. Is a years ago before he started aws, jassy was bezos technical assistant. Take a listen. One reasons why hes not the same today as he was when i first started working with him, you know, in that chief of staff role 16 years ago is that hes an incredible learner himself. I mean, hes really he has strong views, and he comes in with views, but hes a really good listener to the people in the room, and he is able to evolve his opinions. Lets discuss the amazon announcements weve gotten so for with tech analyst Michael Graham michael, good morning. Good morning. Stocks not performing so great today, but a lot of people wondering how much amazon is going to push into Machine Learning and how important that is and what they really need to say and push in order to give people confidence that theres more growth ahead. What do you think . Yeah. We are seeing a bit of a rotation out of internet stocks and tech stocks in general today, and amazon is participating in that. You know, i think the really interesting thing to come out of the aws summit this week is more what wasnt said than what was said you know, we got some product announcements, but i would characterize them all as, you know, incremental. Nothing really earth shattering in the product announcements there were good customer wins that were announced but the biggest takeaway that we had that there werent any big price cuts announced, and thats really important because this Cloud Services market is in some ways a threehorse race between microsoft, google and amazon, and both microsoft and google by our estimates grew their cloud businesses more quickly than amazon did in q3 you know, amazon is a lot bigger than both of those, but the idea that amazon can sort of power through this market without a lot of price cuts is important michael, a couple of things jassy said that caught my ear. One was that hes planning on doing a lot more m a, though they havent done much in the past, and, two, that we should expect to see them layering on some software and services on top of that Core Infrastructure product, and i would expect if those were patterned after some of the competitors that could add profitability on top of what they have already got. Do you have all of that in your model already, or is that something that tweaks how you look at aws . You know, for the most part we look at the margin structure at aws as being, you know, highly leveraged its a fixed cost type of business, and when and when revenue does well, all that incremental revenue tends to fall to the bottom line. The aws operating margin in q3 was pretty strong at 26 which is what were modeling for next year also. You know, thats a huge profit margin compared to amazon in general. We estimate that aws is going to be over 60 of amazon profits for the next several years, so when amazon talks about doing some m a and layering in some more software services, you know, its really just incremental revenue. They spend the money on the aws infrastructure, on the sales effort to go ahead and get that penetrated into customers, and then if they can layer on additional sales, you know, upsales or crosssales to new types of products to those customers, its really highly profitable and should make, you know, our longterm margin estimate seem, you know, fairly conservative and if youre an investor who wants to invest in cloud growth, quickly if you can is amazon your top pick, or do you expect, as you mentioned more growth stockwise from the other cloud players as well as just profit and revenue wise you know, we look at aws as something that helps amazon. I still think amazon at its core is an ecommerce business evolving into Household Services business. All right. But, yeah, its important. Had to do it quick. Got to leave it there. Michael, thanks for joining us on amazon. Lets go over to the half. Back at hq and welcome to the halftime report. Im scott wapner our top trade this hour, the tech wreck and what todays big selloff in that sector could be telling us about where the market could head next with us for the hour today, jim lane ial, steve weiss, Pete Najarian and carrie firestone, the ceo of arias Asset Management and michael farr, and we to want to be