Back over to you thats going to be a topic of more importance as we get through the back half of the year ylan, thank you. A move to crypto now, especially facebooks libra. The president took to twitter to say hes not a fan of bitcoin or other cryptocurrencies adding, quote, facebooks will have little standing or credibility. Libra a major topic on capitol hill during the fed chairs testimony. Take a listen. We agree that libra raises a lot of serious concerns. And those would include around privacy, money laundering, consumer protection, financial stability, and those are going to need to be thoroughly and publicly assessed and evaluated before this proceeds now weve got mark cuban sitting down with deirdre last night, saying that facebook is out over its skis. Im not a big fan of what theyre doing there. I think its a big mistake not so much because of what will happen here in the United States, but what will happen globally theres going to be some despot in some african country that gets really upset that they cant control their currency anymore, and thats where real problems start to happen im not a big fan of what theyre doing. I think theyre way ahead of their skis on that, but its only in the talking stage right now, so well see what happens lets bring in syria sreenivasan joins us to talk about this should they be worried i think the facebook folks should be worried. Because theres so much buildup of resentment, questions, concerns about this. And because facebook has other issues in the media right now, this is just adding to it and making it more complicated what do you think their next move is going to be . I think that they have to show that they are not the only player in this you know, there are going to be a hundred other partners, and that they are in control of the various issues that have come up sri, theres been so much bashing, so let me just play devils advocate here. Should we be more worried if facebook wasnt the one doing this we talk about how big of a network it has, but you look at chinas ten cent and we chat they also have 1 billion users. And so, some say that this could usher in a new era of banking. Whats the downside, if facebook or an American Company doesnt do this . The fact is if they dont, someone else might be the one who kind of gets the lead on this but i think the timing of it is awkward for everybody, because right now, there is too much other noise at the moment. Awkward, to say the least, certainly. But i mean, is that missing the point here that someones going to do and it its better off to be one of our Big Tech Companies in the future, this will be something that well look back at a moment and say, this may have been too early, but it will definitely n fhappen i had somebody really smart point this out to me this morning, this idea that, i mean, i think with the cuban that theres really no government thats going to make it easier for people to compete with their currency and basically take control of their Monetary Policy and when you put it in a context like that, of course, you would have somebody like President Trump coming out and talking about things like banking charters absolutely. And youve seen with President Trump just last week, he was complaining that the dollar is too strong today hes saying, hes boasting about how strong it is so even america cant happen whats happening with its currently, imagine what happened with the others. The white paper did come with the list of partners its not clear to me why they havent made that more of a centerpiece, right i think the way that they have handled it is that theyre the leader through 2019 and when it launches next year, everyone will be equally there. And facebook doesnt have a bigger thumb on the scale, is what they say. Is it going to launch next year how optimistic are you with this much pushback, and you even had the fed chair saying that there needs to be a lot more assessment of what it would do if i could make tech predictions, i would be very rich and not here. So its very hard to tell at the moment all right were going to watch it closely. Obviously, its been quite a week for libra meantime, eavesdropping devices. Google disclosing today that it pays contractors to listen to customers audio recordings by its digital assistant, while apple is disabling that socalled walkie talkie app on the watch, after a glitch was found that allowed people to listen in on users calls. All right, lets take the google part first, is this really a mystery to anybody, that these things can be listened to no one should be shocked. These companies are taking our recordings and they need to listen to them so that they can transcribe them better and teach the machines how to get smarter at the voice technology. So they shouldnt be surprised, but its still hard to hear when thats happening do consumers care i mean, are they becoming immune to these stories weve heard so many of them, is it going to have any real effect on the amount that consumers actually purchase and the amount that they use it i dont think it will have an effect, because over the years, we have learned that when consumers are faced with convenience and security and privacy, theyll always choose convenience. Remember 15 years ago when gmail launched, people were worried that it would read to your email to serve up ads of course, that made g maimail better and no ones complaining now. Do you think thats really the case, or do you think given the fact that theres a bigger, broader discussion happening right now and critical lens on these Tech Companies and these ideas of privacy regulation that maybe thats changing. Well, we hope that people will take steps to be more careful online but its a real slippery slope, i think. We have four, five devices in our home and i also learned that you have to be careful when you go on vacation we were in a rental home, and they had alexa, we used it all the time and realized every question that we ask is being recorded and sent in theory to the owner of the home. So even if its not your own device so, you know, anything we were sort of asking questions of it, they know you actually brought devices here today lets talk about this and why you actually did bring them. I brought in two of the smallest devices one is the alexa echo dot here from amazon and the other is a google mini. The reason i brought them is that there is a failsafe way, apart from not owning one, to make this safe from anyone listening to you without the wake word, as they say in this case, right here, there is a button that you can press that will not turn the microphone at all on so youll have to turn it on to have but then that defeats the whole purpose. Exactly this speaker that you can talk to. Exactly same thing here. Question, if there was a facebook model right there beside you, if they had developed their own. They have something now it isnt the same, it hasnt gained the same pollutpularity,o you think this would be more of a hot topic . I think if that facebook product would have been more successful, we would have seen more concern about that, because of the minute that facebook is in at the moment, thats the problem. Knowing as much as you do about digital innovation, obviously, theres some friction here on voice assist do you see it slowing down adoption really meaningfully over time . No, no. I think that it may not pick up as fast as we think, but it will definitely be a default way of the way people communicate were talking about all of this technology in the home right now, but as you see more and more Smart City Technology roll out and now theres brewing debate around facial recognition and that being used by governments, i guess, how much bigger does this become . And how do, you know, countries like the u. S. Begin to establish these rules of road . And its something that everyone has to be concerned about. I have seen in india, airports are developing boarding pass lists entry, because just the facial recognition so other countries, which may not care as much as about these privacy questions will end up ahead of us. And youll be just able to walk into an airport the way you can, in these new amazon stores, for example, you know . Right sri, weve got a lot to handle in the years to come thanks good to see you again. Speaking of amazon, its highly anticipated prime day is really only a few hours away at this point, set to kick off at the beginning of next week and Courtney Reagan is back at hq with more on what we can expect hi, court. Hi, morgan. Its better than ever, its the fifthever amazon created shopping day it will go for 48 hours, 12 hours longer than last year. 18 countries, thats one more than in 2018, a million deals, including new lightning deals. Those items will be in shorter supply for a shorter period of time now, core sight projects prime day could generate 5. 8 billion in global sales. Thats up significantly from the 900 million estimated for that first 24hour prime day. The goal for amazon, not just to generate sales, though sign up new members. Thats key cowen and Company Estimates there are about 63 million u. S. Households that are currently prime members with 10 of nonu. S. Households indicating, ye yeah, theyd sign up in prime to take part of the deals whether youre a firstparty vendor or a marketplace seller on amazon, playing on prime day is a must. Brands that participated last year saw three to four times their average daily sales on that day and twothirds of the products with a prime day traffic lift actually saw it last for the following two weeks as well. But, commerce iq is warning a number of Companies Based on their past 30day supply on amazon, supply could be short of demand on prime day. So just some of those companies that commerce iq is warning, unilever and face care, garnier and makeup, nestle and conagra, and coffey and tea, post general mills, and even amazons owned whole foods in the cereal category infa mil and baby food, johnsons baby products, samsung and lexmark printers among others shortages could help the hundreds of other retailers offering competing deals prime day last year, one of amazons biggest digital days of the year and Adobe Analytics says u. S. Retailers, the big ones, could see sales surge 79 compared to an average monday, tuesday, in july back over to you courtney, it feels like every year, prime day gets a little bit longer, just wish they would give us more data around it. Isnt that the truth . Thank you for that, courtney. You got it. Still ahead here on squawk alley, breaking up big tech thats only going to give those companies more power thats what mark cuban told me last night well discuss, next. Hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. Welcome back to squawk alley. Ai for the rest of us. Thats how ceo fallon fa teemy describes her company, node, which just received another 16 million in funding from the likes of will smith and mark cuban. I smoke with fallon and cuban last night about node and what separates it from its competitors, particularly the big tech players so all the tools that these Big Companies are putting out there are really for a data scientist. Theyre all these lego blocks to help piece together a solution every organization in the enterprise will still need to figure out how to acquire data, clean data, normalize, set up data architecture, and then figure out how to actually build models that drive the business outcomes they care about and figure out how to scale it in a personalized way for their end customers. Aside from node, i also got cubans take on everything from facebooks libra, which we just chatted about, to the election to the tech lash out of d. C. He spoke to me at length about antitrust and about why breaking up these companies could only make them stronger i dont see it as an antitrust problem at all. No one has to use facebook you know, theres alternatives for search you know, just because theyve been able to develop a lot of big Customer Base doesnt mean its antitrust. And so, no, i dont think its an issue i do think facebook has got a lot of issues in terms of privacy and use of data, but we always have to remember, the law of unintended consequences people talk about facebook not wanting to make Data Available to others. To me, its scarier at facebook or google or others keep all the data to themselves because that gives them a significant advantage. So we have to be very careful on how we approach these issues so should that be regulated then because you said that theres alternatives to facebook, but the most popular alternatives are instagram and wechat i mean, snap, yes, but the numbers arent there i no, i mean, facebook usage in the United States is declining. The average age of a Facebook User in the United States increasing yes, they have instagram, but instagram is a completely different type of tool its not a news source there are so many different alternative sources of news. Apple is making a bigger push there. Theres Third Party News sources. I dont see that as a risk factor at all. I think, you know, people dont really understand where things are going. I mean, to get back to node, people dont understand Artificial Intelligence and its impact people are afraid what the future impacts are going to be and so they just take it out on well, lets just break up these big f. A. A. N. G. Companies thats not whats going to solve it and again, when you break these companies up, you actually give them more power. Because theres nobody else out there thats small, thats going to step in to their place. Youll just have a few more companies doing more of the same thing, but only having the protections of the antitrust regulations. Right and i want to move on from this in just a moment, mark, what im hearing is they do or dont need to be regulated and who does that who does it is a big question, but in terms of relation, i think we have to really, really be careful. The law of unintended consequences will smack us upside the head in ways we dont expect you try to stop facebook from selling data or put valuations on data, which i dont even know what this accomplishes, now all of a sudden theyre forced to keep the data to themselves and having facebook with all their own data and not sharing it, having google with all their own data and not sharing it, having microsoft, et cetera, with all their own data and not sharing it, thats scary, because that gives them an incredible competitive advantage. And even if you broke facebook into multiple companies, facebook, instagram, oculus, each of those entities is so big, they would still have such a significant data advantage and also protections, because now they just followed whatever was prescripted to them, youre not going to solve any problems. Youre just going to create more problems im still more laissezfaire, where beyond privacy privacy is a separate issue. But beyond privacy, we need to just encourage development and we need to encourage innovation, like node. Ai, because thats how were going to compete the concept to me that facebook is the endall, beall product for news sources or saving pictures or sharing with grandma is crazy same with instagram. Theyll be preempted at some point. Its inevitable. So, guys, cuban talked a lot about being very careful regulation could have these unintended consequences. But i think a lot of folks, especially lawmakers, might wonder, if youre too careful, you risk letting them grow even bigger and bigger. So the big question, and the point i took away from that is we still dont really have clear answers on who regulates and how that happens yeah, sfwreits interesting, he mentioned apple in that conversation, as well. Theyre also under the antitrust lens because of scrutiny right now because of the app store. And he seems to be he mentioned facebook, seems to be a little bit more focused on the consumer piece of this, but there is the business argument as well against some of these other companies like, for example, apple and facebook and google you know, in terms of advertising dominance, in terms of being able to get their apps out there, et cetera and i just wonder i just wonder if thats going to end up being the area where you do see some of this increased regulatory scrutiny. Its amazing. I asked him about big tech and he zeroed in on facebook, which is sort of what you hear a lot of folks do these days, right . And you mentioned apple. They i feel like theyre not brought into the conversation as much when they do run the app store. And theyve really made it a strategy and you see the marketing. I see it in san francisco, you know, saying, we protect privacy, really as much as i see advertising for the iphone these days his point about competition is interesting, but when these companies are this big and they can buy competitors pretty easily, it does change the equation but its great to get his thoughts cubans a deep thinker it was interesting, he was sitting beside one of his latest investments, node, which is very interesting. Ai is a service company. And he says, i dont think it matter ifs yous if youre goink them up, because no one small enough can actually get it and i thought that was a little bit interesting, too how do you create a landscape where these startups arent just acquired, but compete exactly good stuff from social media to media, other Silicon Valley execs are in idaho for the alan and Company Conference this week Julia Boorstin has been in sun valley for a few days and has the best from day four hey, julia well, carl, the consensus of a number of ceos here, both in the media and tech space, is that regulation is inevitable for the tech giants, but they also all agree and they tell us that getting regulation right and actually benefiting consumers will be very tough now, i spoke to sam altman he founded the startup incubator and is now founder of open ai and tells me that hes really concerned that new laws could unfairly advantage the Big Companies that it can afford to pay for new regulations. And that its very key that regulation comes soon. A lot of companies have gotten so big and so powerful and so intertwined, but i think when i talked to most of them, they sort of actively want regulation lake were all sort of in uncharted territory. And i think either we figure out how to regulate more quickly and more effectively than we have in the past, or we end up in a world where at some point, we have to do it in a very clumsy way. Reporter with facebook, google, and amazon sending executives to testify on capitol hill in hearings next week about antitrust concerns, former twitter ceo, dick kcoslo says hes concerned about conflating antitrust with privacy issues and thinks those two issues and concerns should be kept separate its not just the fact that companies are big that should cause them to be regulated the size of the company doesnt have really any impact on the kinds of things it might be doing. Its those specific things that companies are doing with data. The way theyre managing it. All the tech giants are here, jeff bezos, satya nadella, tim cook, Mark Zuckerberg, sheryl sandberg, and i hear Mark Zuckerberg is hosting his annual Karaoke Party tonight in town. So these media moguls arent just talking business, theyre also getting a little bit of vacation hopefully not singing the blues. I had to i just had to, julia thank you, your reporting has been great this week Julia Boorstin out in sun valley as we head to break, dow hitting another record high this morning, coming off its first close ever above that 27,000 mark here are the names driving the index even higher this morning weve got more squawk alley after a quick break. Ntral. Its so important to us that verizon is supporting military families. When i have a child deployed, having a Reliable Network means everything. So, when i get a video chat, and i get to see their face, its the best thing in the world. And ive earned every one of these gray hairs. Military moms, we serve too. vo the network more people rely on, gives you more. Like military plans with a special price on unlimited, 100 per line, and big savings on our best phones when you switch. Thats verizon. But were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. Still nervous about buying fuhoh, la new house. Meones is it that obvious . Yes it is. You know, maybe youd worry less if you got geico to help with your homeowners insurance. I didnt know geico could helps with homeowners insurance. Yep, theyve been doing it for years. What are you doing . Big steve . Thanks, man. There he is. Get to know geico and see how much you could save on homeowners and renters insurance. Your daily dashboard from fidelity. A visual snapshot of your investments. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. Welcome back european markets set to close. Leslie picker joins us with a breakdown of todays action. European markets losing some steam late in the session, but still mostly higher, European Industrial production for may came in above expectations factory output grew 9 10 of a percent versus expectations of a 0. 2 rise. That data offsetting declines over the past two months, softening some concerns over a prolonged slowdown, though production was still down half a percent year over year automakers are among the leaders in europe, with daimler, a notable underperformer after the Company Issued its second profit warning in less than a month, saying its fullyear profit would be significantly below last years. Elsewhere, the lira is under pressure this morning, after turkey took delivery of a Russian MissileDefense System in defiance of tariff threats from the u. S and finally, europe taking a softer approach to iran, with dow jones reporting that leaders are likely to put off a decision on whether to take action against the country for twice breaching the nuclear deal this month. Guys, back over to you leslie picker, thank you. Lets get over to sue herrera now for a news update. Hey, sue good morning, morgan. Good morning, everybody. Heres whats happening at this hour President Trump announcing that labor secretary alex acosta will resign this following acostas handling of a 2018 secret plea deal with jeffrey epstein, who was accused of sexually abusing dozens of underage girls President Trump had nothing but praise for acosta. He was a great labor secretary, not a good labor secretary. Hes done a fantastic job. Hes a friend of everybody in the administration and i got a call this morning, early from alex. And i think he did a very good job yesterday, under a lot of pressure, he did a fantastic job. China says it will impose sanctions on u. S. Businesses selling arms to taiwan this after the state Department Proposed the sale of 2. 2 billion in arms to the selfgoverning island. Beijing says that the sales constitute a serious violation of International Law and britain announcing that it is sending a Navy Destroyer to the persian gulf, as iran demands the british navy release an Iranian Oil Tanker seized this week after gibraltar. Britain says that its moving up the timetable for the larger hms duncan to relieve the hms montrose, which is a frigate operating in the persian gulf. So those tensions continue and that is the news update this hour guys, i will send it back downtown to you. Carl sue, thank you very much. With highend Real Estate Sales skplolowing in the most expensive cities in the world, developers in luxury markets are looking for some creative ways to lure in High Net Worth home buyers our robert frank explains. Reporter one Way Developers in l. A. Are upping megamansion curb appeal is by adding eyepopping amenities. This Hollywood Hills home upped the ante with a twostory wine elevator broecker Mauricio Umansky shows us how it works. You can access any bottle of wine from downstairs or upstairs right next to your bedroom and the pool includes a subterranean surprise. We have a peekaboo window and you can see the pool from the gym as well. And check out this party pad in l. A. To grab the attention of a super rich bachelor, developer don bowland built not one but seven cocktail bars. One, two, three, four, five, six, seven reporter and designed a 12foot waterfall that cascades down theroof into the 80foot long infinity pool it lured in infamous instagram and marijuana entrepreneur, dan billzarian who bought the place for about 65 million. And a simple garage just wouldnt do for the developer who built this 88 million estate in l. A. This is one of the coolest driveways in america, and not just because of the mercedes spinner. Reporter broker aaron kerman showed us this jawdropping tenton car lift and the subterranean sparking spots down below. So far, hes had no takers do not missing brandnew episodes of secret lives of the super rich tonight right here on cnbc beginning at 9 00 p. M. When we come back, snap gets an upgrade over at goldman today. Heath terry is the analyst behind that call he will join us right here at post nine in a moment. Shares of snap getting some attention today, moving higher on the heels of this upgrade over at goldman. The firm says it does expect user growth to outperform following the new android app, the launch of some games, these nuz le new lenses joining us to discuss is the analyst behind the call, Goldman Sachs lead internet analyst, heath terry is here at post nine heath, good to see you welcome. The stocks had a move. You think theres more we do think that theres more sof obviously, we wish we had done this earlier but in addition to allmentionede android app, snap gains, we see a lot more happening behind the scenes in their ad tech stack. Advertisers are starting to see a lot more value and utility out of advertising on snap this integration theyve done with shopify which has opened up some ecommerce channels, ultimately means the ad inventory they got from all of this new usage will get monetized at a higher level. And at the end of the day, thats what matters. Youve got some charts on downloads, looking much better are we done with executive departures and inhouse drama . That certainly helps. And thats one of the reasons that we sort of held off on doing this sooner, is we wanted to see some signs of real stability there. But i think youve got a new cfo in place that clearly is committed to being there youve got a Management Team around some of the operations that brings some real experience, that we think, you know, can help carry snap into a new level of maturity. You also upgraded stitchfix why . For us, a lot of it is and weve talked about this before, we want to own as much in ecommerce as we can right now. You look at the retail store closure numbers that are happening in the u. S. , thats going to be a big benefit to any Company Involved in ecommerce. Thats a big part of why were as positive on amazon as we are. A lot of those store closures are happening in apparel, department stores, and footwear. All areas that benefit stitchfix. So to the extent that you live in a part of the country and youre losing access to a lot of your apair options, stitchfix actually becomes pretty powerful weve also done a really good job recently of launching new products around mens and kids were launching in the uk. And their algorithms, the underlying piece of it that makes sure you get what you want has also gotten better you mentioned amazon. How big of a deal will prime day be for the country next week its a big deal from a marketing standpoint and a Customer Acquisition standpoint just to drive some attention in terms of numbers, it doesnt really one day is not going to make it or break it for amazon more importantly for us is the fact that theyre putting 800 million into sameday delivery, which means youre going to be getting your products faster, it opens up a whole new part of the wallet for them. And youre seeing, again, these Retail Store Closures benefit them in a pretty meaningful way. Is amazon the best ecommerce play when you look at the earnings, their online store growth, krem Revenue Growth has really been slowing down are you interested in that because of ecommerce or the other things theyre doing, because advertising and smarthome . Its a combination of all of that we actually think that that retail number for them is going to accelerate in the second half store closures, sameday delivery, easier comps i dont think that thats something that consensus is expecting at this point. So if that growth reaccelerates, it should benefit the stock. You could see the same thing in aws. Weve made the case for a while that depending upon how you look at the numbers, you can justify amazons valuation, just off of aws by itself. And then the advertising piece, which started to slow in the Fourth Quarter of last year, were starting to hear from some of our checks with advertisers the suggestion that theres some real acceleration happening there. Lets talk taxes. You have digital taxes france this week, now the uk, looking into implementing its own digital taxes. A lot of that will be on these Big Tech Companies that are american how does this play out and how much of a risk is this to these companys financials like everything, its all about the details. If youre facebook or a company with 40 margins, this actually isnt that bad 3 of revenue on a 40 margin business means about a 12 tax rate if youre talking about a company like amazon that has 5 margins, then youre talking about nearly a 60 tax rate. So we dont think that this is going to go through in the way that its currently been proposed obviously, the Current Administration in the u. S. Is trying to affect the way that this is going to protect, but its a clear part of this bigger trend around regulation in making sure that companies are paying their fair share. We started the hour talking about libra and so far the bruising its taken from several sides this week. How important is it to facebook and what kind of gauntlet is libra going to face . Yeah. I mean, in the big picture, not at all because early theories is this would supplant certain other Large Businesses for them, in the long, longterm yeah, but you look at how hard payments actually is, right . And facebook has been working on payments for a long time ultimately, they ended up partnering with paypal amazon has been working on paypal for a long time, nothings happened google has gone through this three or four different times. And i think its just unrealistic for us to expect that any one initiative, even something thats as widely supported as Something Like libra is, is going to have that big of an impact, especially on a company thats already as big as facebook is i feel like weve been talking about that for years, why sort of big tech is going into payments, but not in a huge way. Now facebook has taken that plunge and you can see how much its opened the company up to scrutiny could libra end up hurting facebook i do think it opens up a door for regulation, right . The most regulated part of our economy maybe outside of health care is Financial Services and areas like payments. And this gives a completely separate part of the government almost on a global basis an entry into regulating the companies that are involved in it first half of the year, many of these internet names, tech names have been some of the top performers we got earnings season kicking off next week in earnest, including some of the names you cover like netflix and ebay. What do Second Quarter earnings look like for this group and how does it set us up for the second half of the year . We actually feel pretty good going into this earnings season. And obviously, when youre talking about a space like er internet, theres going to be a lot of dispersion. Netflix kicks it off next week we feel really good about the numbers going into print there largely because content editions have been so strong. And youve got a very strong content slate going into the second half. Consensus right now is looking for 28, 29 million net subscribers, we think that will be closer to 34, 36 million. And thats what we see driving the stock. Especially given the flow through that youre going to see on profitability there thats going to be a big day. And well talk about them and disney for the rest of the year. Thanks interesting call today heath terry of goldman still to come on the show, jayzs joint effort with Cannabis Company caliva. Well explain after break. Im scott wapner with a look at whats coming up on the Halftime Report today. Another new record for stocks thanks to fed chair powells testimony. Now earnings are front and center will they be good enough to keep the rally going . Well try to answer that question plus, weve got more than a dozen names. One firm says theyre likely to outperform in the months ahead we will reveal that list and trade it on the desk and a new stock from Pete Najarian that could be about to move based on its options action it is all ahead at noon on the half deirdre, well see you in a little more than 15 minutes. Look forward to it scott, looking forward to it, as well. Lets get over now to the cme and Rick Santelli for the santelli exchange. Rick good morning and thank you. Remember, if its earnings season, its Rebecca Corbin, corbin advisers. Welcome. Lets start out right at the beginning. Tell me who the respondents are and the date of the survey inside the buyside survey, we surveyed Global Institutional investors, we had 84 respondents managing 2. 4 trillion and our survey ran mid to late june of this year. The big question on everybodys mind, so well start macro, what do they think about the economy, globally, domestically so the economy in their eyes slowing. Global growth slowing. So its really a tale of two cities we have slowing growth, which is the negative but on the positive side, we have a low Interest Rate environment, a strong consumer, and the vast majority of investors that we surveyed do not see that were going into recession in the next 12 months. Now, having said that, can we drill down a little bit specifically on earnings and equity valuations . Sure. So earnings is going to be a challenge period 53 of investors actually expect earnings to come in worse than consensus. Were going to see 41 expect deceleration, quarter over quarter. So were absolutely in this deceleration period, but they seem to have gotten their heads around that. So, coasting, so to speak absolutely. When youre coasting and youre making investments, normally you want the companies youre investing in to do Different Things with their cash is there any notion of the preferred uses of cash and liquidity . Yeah, with 62 of investors describing the economy as losing steam, the vast majority of investors Want Companies to pay down debt. Thats the number one, followed by reinvestment. And i think its important that m a, which had been very significant in previous surveys is now the secondtolast, right in front of dry powder but it really isnt surprising they dont want you to remodel a house and buy new furniture, you know, if the income is questionable, the outlook of ones job is questionable. Sure. So in remodeling, conservative cash. That makes perfect sense now, wherever i think about cash, i always think about Interest Rates are there any specifics in these respondents minds regarding how these companies should deal with Interest Rates or their views on Interest Rates Interest Rates are absolutely significantly priced into the market in what respect lower. Yeah, lower Interest Rate market, absolutely they are expecti ining one to to rate cuts by the end of the year, so thats priced in as well we could spend hours just talking about that, because its the demands of investors, domestically and globally that are putting these Central Banks in very uncomfortable positions. Finally, your respondents are global, so kind of rank which part of the globe they laike best the best part is india. Theyre not subject to tariffs were seeing a lot of strength in india, obviously, the reelection of modi, probusiness thats the number one economy thats going to grow over these next six months. In terms of other places, its pretty down beat europe, youeurozone, pretty do beat the european investors are slightly more bearish on u. S. And other counterparts china, also slowing growth, and of course, the latin american markets are fits and starts. Real quickly, in the time we have left, trade in tariffs seem to be a big thing on anybody talking about Business News these days you contrast that now with input costs. Can you ridiculous, are input costs rhyming with the notion of the fear on trade and tariffs . We have seen really outsized concerns around input costs over the last several quarters. Companies have done a pretty good job with regard to handling the input costs, passing on the costs, cutting costs so actually, margins for the first time seem to be stabilizing versus decelerating. Thats really incredible. Because everybody, of course, wants to weigh in and its a lily charged situation with global trade but businesses are dealing with it, margins are holding and in a slowing growth environment, Companies Need to be focused on margins. Thank you so much, Rebecca Corbin see you next quarter morgan, back to you. Rick santelli, thank you. When we return, cant knock the hustle jayz partnering with Cannabis Company caliva stay with us, the dow is up 129. At fidelity , its just 4. 95 per online u. S. Equity trade. Welcome back to squawk alley. Im not a businessman, im a business, man. All right, that was my attempt jayz announcing a Multiyear Partnership with californiabased Cannabis Company caliva joining us now is caliva ceo t, dennis omalley. Thanks for joining us today. Tell us a little bit more about what this partnership with jayz will entail and what you expecta business standpoint. Thanks so much for having us. We are so excited to be partners up in a multiyear agreement with mr. Sean carter as our chief Brand Strategy he is obviously a Creative Genius and a cultural icon and weve had so much respect for his past success in businesses so we are really looking forward to mr. Carter really helping caliva take our brand to the next level weve been known as the number one brand in california and we are certainly making no small plans. So we look forward over the next couple years to really working with him and bringing the brand out on a national basis. You mentioned that you have no small plans what are those plans and how does the partnership speak to how you will get those plans executed absolutely. So today we are really known as one of the number one brands in cannabis in california weve had the top selling flower in the state, top selling vape pens, and we continue to seek to be the most trusted name in cannabis in california but we obviously have aspirations to go beyond california into other states over the next couple years and we really believe that mr. Carters Creative Genius and his ability to really have the pulse of what a Cultural Movement is will be able to help caliva do that we really believe that people are looking for Plant Based Solutions to be able to really change out their Natural Health and wellness options to live a better life and were very passionate about bringing that to everyone nationwide obviously a lot of consolidation in your space. Im wondering if you have any thoughts on bruce linton being fired from the company that he created. Does that make you think differently about a potential Merger Acquisition with a big cpg player or otherwise . It doesnt make us think any differently. We at caliva are an independent company and we continue to look and seek to be an independent company. And we are growing organically extremely quickly. In regards to i would say others in the industry who have been out there both in canada and before us, we have a lot of respect for what they have built, but were focused on building the most trusted name in can that business akan thcans our growth trajectory is extremely fast and were just trying to come up with our own growth and focused on that i want to get your thoughts, melissa lee just released an investigation taking a look at the black market in california given the fact that you do have all of thoo ledgis legislative p and high taxes and it has not hurt the black market within that state, what is for you as a legal purveyor of cannabis, what is the cost of doing business there and how much of a risk is that black market to future business i think that you bring up a really good point. California specifically is a very tough market. It is the largest Cannabis Market in the world. It is almost 35 of the entire u. S. Market. And it is really tough to compete and win here not only is the black market there but for a legal market, taxes are high, regulation is behind trying to keep up with the amount of change that is why we believe at caliva our growth in terms of outperforming the market, were very proud what have weve accomplished and what were moving forward with. In what we call the fun for you market, which is really subject to the flower black market, our prices of flower have gone up versus down because we find discerning consumers who are looking for a trusted brand and trusted service and tested product have sought out indoor floor. Were number one and i think our business continues to outperform the market but absolutely the black market is a major city. Regulations and taxes are a major issue and it is a tough market to compete in dennis, im curious because i think you said that jayz actually approached you guys how did that happen . Yeah, mr. Carter could have his pick to work with any Cannabis Company in the world. And he chose caliva. And we are very honored by that. We have a lot of responsibility to be able to make this partnership into what we both believe is something that is an absolute game changer in the industry so when his team reached out to us, we were searcertainly thrild at we saw that our values were aligned, it gives us a lot of confidence of the success of this partnership moving forward. You mentioned strength of flower are you seeing any concerns about smoking combustible weed when vaping is such an alternative . Overall i think it is a great question i think that the fun for you market as we see it today and as shown in taxes is actually going down that is why you are seeing caliva invest a lot into the health and healing markets so our best selling product today is actually a best selling pain lotion. So you will see a lot of the Product Development and move forward basis is helping people with pain, sleep, anxiety and then energy and recovery there is no black market for pain lotions so you will see a lot of different form factors, whether loeg lotions or beverages, in the coming year. Deny ghis owe mnis, thanks f us and monday dont miss our special vaporized, is vaping a cure or a curse . Thats nd jy th10 imoayul15, 00 a. M. Eastern its amazing. Oh is that traviss app . Its pretty cool, isnt it . Theres two of them. Theyre multiplying. No, guys, its me. See, im real. Im real he thinks hes real. Geico. Over 75 years of savings and service. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. We have an update on the estimated cloud competition weve been following oracle losing its legal challenge after a federal court denied their procetest of the joint enterprise defense, ruling in favor of the department of the u. S. Saying oracle did not meet certain criterias so it clears the way for the department of defense to award either Amazon Web Services or microsoft, this contract as soon as next month. Which is viewed as really something of a scene setter for what is expected to be even more significant Defense Security and intelligence work as the federal government continues to rely more heavily on the cloud. This is one to watch big earns weings next week lets get to the judge thanks. The powell push for stocks as major averages hit new records again. Big question now, can earnings keep the rally going this is the Halftime Report. Record rally s p down, Consumer Staples and tech hitting new highs and value at new highs, that trade coming up. Plus well hear from Key Companies next week like jp more began, netflix and honeywell will earning