Transcripts For CNBC Squawk Alley 20160404

Wont even start production until late next year. Now while its a good headline number, all those deposits, of course, are refundable. But jon, a lot of discussion about how many they can make, how quickly. How much money they have to make them, no matter what the orders are. I view this as an indication of interest, not necessarily of demand. I mean, this is a 35,000 car in a way that a starting price with 7. 500 off if you get that federal subsidy. But the first one to roll off the line that people are waiting in line for, they might be 55,000 cars. Its not like these people went through credit checks to make sure they can actually afford that. And if they have to give the money back because they cant afford the car, so what. You look at luxury car sales in 2015, bmw, 346,000 and was number one. Thats getting close to these numbers. So can they even make these this many. Can all these people afford them . Lots of open questions here. But very interesting interest. Jessica, they almost need the two years or yearandahalf lag time. This is a company that despite how far it has come, still needs these indications of interest. We got a tweet from musk over the weekend, said, definitely going to need to rethink production planning. Absolutely. Still trying to wrap his head around this. And musk is a showman too. Lets remember, this is great pr and impressive number. But right now, its just a number. That they are milking for good pr value. Theyve got to make the cars, as jon said. This is a company that has a track record of, you know, missing deadlines. I mean, cars are tough products to make, for sure. Its complicated. I think there are a lot of open questions. And we wont know for a while. I think were going to keep hearing a lot of enthusiasm around the number. But also, they definitely most likely have to raise more money to feel this as well. So, again, a lot of questions. Is there a feeling that people believe in the companys prospects more in the valley, because either more people have them or charging stations are more common . There are is a ton of enthusiasm in the valley for tesla. Absolutely. Theres enthusiasm around the world. I was just in china for a month reporting. China is excited about tesla. But theyre also very excited about a lot of the competition, as well. Its early in this game. You mentioned they would need to raise more money. Obviously, running a capitalintensive business. We saw them sell more shares. Elon musk himself bought a lot of this. Would that need to happen again . It could. They have a ton of options for how they can raise money. But i think that thats an important question, right, to speak to the demand point. You know, tesla is a company, kind of operates on the brink sometimes. And so theyre going to have to retool a lot. As elon himself is admitting. If this thing is this excessive, it might be. The wall street journal did point out in tw 2015, cash flow was negative 2. 2 billion. So is netflix. Right. But they dont have to make cars. But original content also expensive, so point taken. This is the ultimate no doubt about that. Next, injectionca, this week the information is holding its subscribers, some in new york city. One of the big topics, of course, Mutual Fund Investments in startups. Companies like snapchat, drop box, have reportedly been marked down in recent weeks. You going into this summit with trepidation . Will people be talking about valuations in a bearish sense . Absolutely. There is a lot of caution. And still a lot of concern about this mutual fund in private tech issue. Were still seeing the ripple effects of these funds, like fidelity, marking down their stakes. And were starting to understand a little bit more about why theyre doing that. And it is some caution about the companies. But now im starting to hear that entrepreneurs are having second thoughts about whether they want mutual funds in the companies now. And part because theyre going to be having, you know, some public data out there, as well. And theyre kind of saying, you know, why go through all this bother. So thats a new thing thats crept into the conversation lately in the valley. You guys wrote about that specifically, pertaining to snapchat earlier this year. But they went back to the well. Raised more money from fidelity. Obviously, at the end of the day, money is money. Absolutely. So getting fidelity in a later round, particularly when you can see an ipo, makes a lot of sense. But some funds want to do a rounds, b rounds and thats a tougher sell for entrepreneurs. Jessica, this still feels Pretty Healthy to me. This didnt the drop in valuations didnt turn into an avalanche. It seemed like we reached peak negativity in mid federal government february. You look at fit bit, better. Go pro. Even groupon. Thats the public side for sure. But it sort of reflects, doesnt it, how people feel in startup land in a way. People seeing bargains and not quite thinking everything is going down all the way. I think there are questions. I mean, were still in an ipo dry spell, right . So sure, we can be bullish on uber and snapchat for now. But there are still Big Questions about when are these Companies Going to get out, if they even want to. Many dont. I agree that the great ones are going to continue to find capital. Its there. Were seeing huge venture funds being raised now. Founders fund with the big one reasonable. So the capital is still there. But not for the ones where the revenues arent there. Which is a good thing. Slack just last week raised a bunch of new money. 3. 8 billion valuation. 30 higher from last year. They had been seeking 5, though. Slack is a great example. The capital is still there, but they had to temp down their lofty expectations a little bit. Stock markets 3 from its alltime highs. Is there a sense in the valley that people in private assets, dodged a bullet . That jon references in february . There is a little bit of relief, i think. But still a lot of nervousness. Particularly, you have to remember everything was getting funded 12 months ago. And we saw five on demand, you know, dry cleaning companies or Something Like that. Now theres one, right . Thats probably a good thing. But it does affect the mood. It does affect what a lot of entrepreneurs are thinking. And vcs need their returns, too. A lot of fund life cycles coming to an end and thinking, okay, where is going to be my 10x to make my fund. So still some anxiety, even though there is a reprieve. The big shakeout of Companies Closing doors, have we seen that yet, or is there still more pain to come . Micro shakeouts. I dont think were going to see we have seen some trimming, some cutting back of burn. I think theres much more to come of that. Were nowhere near through that. But again, i dont think its going to be an avalanche. Nothing falling off the cliff. Right. Controlled chaos, i think we can all handle. Congratulations on everything. And good luck tomorrow night. Thanks. Jessica lessin with the information. Meanwhile, were keeping one eye on the markets, trading in a narrow range today despite closing at the highest levels of the year for the dow, nasdaq and s p as well as m a headlines. The dow currently down by a third of 1 , as is the s p. The nasdaq down by a little more than that. Shares of ge falling at bernstein. Shares up 27 over the past year, but bernstein taking a bearish take on the industrial sector and a few names within that ge among them. That stock down 2. 25 . When we come back, shares of facebook slipping on worries over the first quarter. What you need to know. Plus, before buying oculus, Mark Zuckerberg stopped to talk. And the biggest data leak in history. More on the panama, and when we continue in a moment. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. We are watching shares of facebook this morning. Analysts at Deutsche Bank saying the companys q1 results could come in light but positive about the stock long term. Taking a look at the broader markets, though, the recent rally in stocks has left some wondering if the market is bumping against its ceiling. Our senior markets commentator, mike san totalliy is with us to explain more. Mike, were specifically talking about 2100 for the s p which we had no problem breaking through in 2015. But it seems like this ceiling in 2016. Why is that . Actually, kayla, you discharge bumped through it many times in 2015 but never got far. A percent and a half, really, above 2100. I went back. We spent six months crossing and recrossing that 2100 line between february and august of last year. In fact, we did it 48 different days. Thats onethird of all trading days during that span. We actually crossed this line. And never really got a whole lot of mommy it tunnel past it. Whats interesting now, as we set sit less than 2 , is we almost at the same valuation, based on forecast operator learnings as we were one year ago. So arguably, were kind of stretching up toward the upper end of that valuation range that has contained stocks for a while. So thats kind of the negative, kind of selling opportunity type argument. I guess you could play the other side, which says, hey, a year ago, we had the same valuation. We were about to get three straight quarters of negative earnings. We didnt know that at the time. The bear market in oil was accelerating at the time, and, of course, went to depthses we didnt foresee. And also the fed was more of a wild card than now. So maybe were in a somewhat better fundamental position to weather these levels. Although in the near term, mike, we have Morgan Stanley out this morning saying dont try to be a cockroach this time around. Dont try and make it through the rubble for what we are about to see in the markets. Do you agree with that . Do you think that nearterm we have a lot of weakness coming as we go into earnings . I think i dont know that we have a ton of weakness in terms of how the market digests earnings. We definitely have an extremely negative preannouncement season. We have most companies basically saying things are not looking as bright. I wonder to what extent the market has already kind of figured that out. There is some risk, i think, in some of the cyclical sectors like the industrials getting some down grades today. The stocks have run up and its unlikely the earnings reports will be all that bright. The big question, i think, during earning season, how much has the market figured that out already and is ready to turn to other things. You know, one other feature, kayla, of this rally that we have seen is really the defensive nature of the leadership. If you look at the consumer staple stocks, my joke is that this years fang would called food, soda or soap, because Household Product Companies trading at expensive levels and Everyone Wants a buy for the dividend. So its a different market tone, even if its a similar level and a similar rhythm to the market. Yeah. A lot of discussion this morning, as well, about breadth, mike. Laszlo ber eveny looking at percentage of s p names. Is the market anticipating Something Like a top, because of what breadth is doing . I dont know that its necessarily. I think the conventional wisdom, you look at a chart and say wow it seems smart to be a couple seller than a buyer. And this is set up like in november when we got to 2100 in november. Everyone was talking about yearend rally is going to continue. Seasonal strength, were out of the woods, had our correction. I feel like now people are more cautious, maybe less invested, more defensively positioned. I think thats a net positive. Maybe we see how an initial pullback plays out. And then take it from there. So the valuations of the fang stocks obviously carried the market in 2015. Facebook is the only one in that bunch that is positive so far this year. Do you think that the market and investors should be going back into those stocks because they have been beaten down or do you think the food, soda, soap names will continue to carry us forward . I dont know that they have been beaten down. Youre right, facebook is that one standout. Of course, apple is not one of fang, but that is also a standout. Kind of interesting, because it doesnt have the towering valuation. I do think that Growth Stocks stocks that represent higher Risk Appetite should probably start to participate a little bit more than the defensive stuff if this rally is going to continue. It reminds me, you know, in 2012 we had that really nasty selloff in 2011. You had a recovery into the beginning of 2012, another Election Year and also very defensive. People were kind of reluctantly participating in stocks by buying stocks that look like bonds, which is kind of what theyre doing now. Then broadened out from there. I think you would want to see it broaden out maybe into some of the higher growth. Whats interesting is, why did fang perform so well last year . Because the world said, we are scarce of growth. We dont have growth everywhere we look. We have to buy up the names that have some of that organic growth. This year, everybody is saying the world is scarce of reliable yield. So were going to buy those stocks that have that reliable yield. So it really is a different orientation, be again, even if the index level looks familiar. Great context to have as we begin the second quarter. Always appreciate your insights. Mike san oily at headquarters. Before buying oculus, facebook ceo Mark Zuckerberg stopped to talk and get advice from our next guest. Jeremy bailenson head of stanfords Virtual Reality lab and literally wrote the book on Virtual Realitys impact. Hes going to join us in a moment. You can stream it all. Eans like that Anthony Michael hall movie where he fights with the girl. The one where he gets rejected by the girl. Even stream the one where he creates the girl. With unlimited data, you can stream all the Anthony Michael hall movies you want. I wonder what hes up to these days maybe hes shopping in an at t store . Get unlimited data and your fourth line free when you have at t wireless and directv. Plus, get up to 650 in credits to help you switch. Poisoning not only our youth, our people. When i won new hampshire, the people of new hampshire, every time i went to see them, they talked about heroin as their biggest problem. They didnt talk about the military. They did mention the vets a lot. Were going to straighten out the situation for the vets. Because the vets all over our country all over our country, the vets are suffering. And frankly, we take care of Illegal Immigrants than we take care of our vets and its going to change. But i said, unless they become president. Because well do things that will be good. Number one, im going to renegotiate trade deals, and theyre going to be fair. And well make deals and have the greatest negotiates in the world. Carl icahn endorsed me. So many unbelievable endorsements. We have the greatest in the world, greatest business people. We dont use them. We use political hacks to make these massive trade deals with foreign countries. And we dont want to use political hacks any more. Its over. Weve got to use our best. We have to use our finest. And we dont do that. So thats going to start happening. But with nato. So nato, we are paying a tremendous amount of money for nato. And its not fair, folks. Its not fair. And i would get together and ill say to the countries that havent paid, and theyre paying not their fair share, and they know theyre getting away with murder. But why should they do it . Nobody calls, nobody talks to them and says, you know, were defending you and youre not paying. I want them to pay up. And i want them to pay delinquent. Because for years they havent been paying. This isnt like it just stopped. For many years they havent been paying. I want them to pay dlelinquende. And if they want to leave nato, thats okay with me. And frankly, if it affects nato to the point where were not going to have nato, well come up with something else, dont worry about it. We just have to do it. You always have to be able in dealmaking, you always have to be able to walk. You have to be able to walk. So i took a lot of criticism. They said, here was the headline. Donald trump wants to dissolve nato. Thats not what i said. And i said and this isnt the washington post. This is others. I said, donald trump wants to have people pay. Donald trump wants to adjust for terrorism, which we have to do. Donald trump wants to do all of the things that i explained. Donald trump wants to get all of the back money thats owed to us by all of these countries who have had a free ride or close to a free ride. And donald trump wants to make the United States rich again and great again. And wants to help other nations. I want to help other nations. But we dont want to be the fools. We dont want to be the dumb patsees that we are all over the world. Because thats whats that is donald trump on the campaign trail in wisconsin ahead of tomorrows primary. Of course, he has been making comments about the country being headed for what he calls a massive recession, saying it is a terrible time to invest in stocks. If he makes any other comments on the economy, we will bring them to you. Which candidates are best for the stock market and regulating banks, business and wall street. We probed just that. And Steve Liesman back at headquarters with the cnbc all America Economic survey. Yeah, kayla. We also have an answer to whether or not americans agree with donald trump on investing in the stock market. Lets go there first. Well get to the other things in just a second here. Look, were approaching sort of record numbers or record low percentage of americans who think this is a good time to invest. All adults down 31 , a decline from the prior quarter. And you can see one of the lower percentages weve had. And our financial leap. That means if you have 75 no,000 of income and 50,000 or more in the stock market, theyre down 49 . Rare for this group to be below 50 . And that is approaching or equal to the low we saw in november 2012 when we had one of the fiscal cliff outbreaks we had. Lets take a look at the other issue here of stock ownership. 53 of the public owning stocks. Thats sort of towards the high side. It goes up and down between 49 and 53. Lets go to the issue of breaking up banks. 36 of the public says the government should have the power to do so. 55 said the government should not interfere in the size of the banks. Interesting political breakdown here. When we look at dems, 54 think the government should interfere and republicans, 47 . Look at the democratic support for not interfering. Thats what brings that number up to 55 . Pretty bipartisan right there. Okay. Now, which candidate is best for drum roll, please. The stock market, 31 for trump. 17 for clinton. 32 say none. Regulating the banks, 26 for trump, 16 for clinton. 25 for Bernie Sanders right there. And how about regulating business . Again, trump beating clinton, 25 to 18 with none doing quite well. And you can see sanders beats clinton right there. So some competition for the Democratic Front runner from her left when it comes to regulating business. One other thing i want to show you here. Which is an overall clinton and trump are pretty even steven when it comes to overall issues on the economy. 2424 on u. S. Economy. 2121 on wages. 2122. So jon, while we see clinton beats trump in headtohead contests, when it comes to Critical Issues on the onomy, the two are pretty even. Jon . Very interesting, steve. And perhaps it speaks to how the candidates marketing of themselves is playing out. Steve liesman with those survey results. Meanwhile, facebook into consumer Virtual Reality, oculus rift shipping now. Not all have received it yet. How far away are we from Virtual Reality becoming mainstream for consumers . And whats it going to take to get there . Jeremy bailenson, director of Stanford Universitys virtual interaction lab. His work reasonable quoted by the Supreme Court in outlining effects of immersive media. Engineer jeremy, great to have you. I want to get straight to questions of ethics and morality. Ive tried a number of different headsets. Now we worry about the impact of bullying in social media. Given what we saw a few days ago with twitter sort of corrupting microsofts tay and what were dealing with now in encryption rules, could we end up with a society where there are whole realistic virtual spaces encrypted and we dont know how people are interacting and what the impact is on them . First of all, thanks for starting with such an easy question. Lets get right into it. So Virtual Reality is an experience. You put the helmet on and you are immediately transported. You feel like youre there. So what i like to say is vr puts a game factor on any other media experience. Youre not watching something. You are doing something. So from an ethical standpoint, any experience you could do at the touch of a button, you can now be in vr, you could be traveling somewhere else, in a violent video game. You could be in a military simulation. If any programmer can dream it, you can live it. And the brain treats it as real. So are you making any kind of judgment, a. , on whether thats a good or bad thing, and b. , on whether we need guidelines, protections, rules on how this is rolled out . At least so that people know what theyre getting themselves into . So we absolutely need guidelines. And do i think its a good thing . This would be, jon, like me asking you, is the video feed that were getting now is this a good thing or a bad thing . You can use it to tell amazing stories. And you can use it to show horrible images that are counter productive. Virtual reality is a medium, like any other medium, about what we do with it. Do we need guidelines . Absolutely. The tag line im developing so ive been studying Virtual Reality for close to 20 years, as its becoming mainstream, what i think about is you should do things in vr you cant do anywhere else. But you should never do something you wouldnt actually do. Huh. We already break that rule when it comes to video games, right . Firstperson shooters really popular. And most people, hopefully, who play these wouldnt actually do that in real life. Are you saying we need to be more careful in vr than we are with other types of media . First let me be clear that we do not yet have too much data on violent video games inside vr. My personal opinion from having spent a lot of time here is i actually dont think people are going to want to play violent video games in vr. Right now, you can play these games and you can play for three or four hours a day and you can still fundamentally be a decent person. When the way you are shooting somebody is you actually hold up the gun and the blood splashes on your chest or you have a knife and youre actually feeling tendons pop in the neck, i just dont think people want to do that. It just feels too real. Jeremy, in terms of industries that will be disrupted by vr, weve gone through the list of real estate, we have talked about travel. Car manufacturing. Obviously, sports. Does one industry need to lead this into mass adoption . I mean, people make jokes about porn guiding the internet into its heyday. Who needs to do it here . So the one you didnt mention, which i think is the huge elephant in the room is social. So right now, think about the amount of time we spend on skype, texting, email. We know that people like to be around virtual others. But the reason why we still fly across the country is to get this virtual handshake, this you really feel like youre facetoface with someone. Ive seen a couple companies in the valley, one in particular, called high fidelity, where you it just feels like the avatar is in the room and you can feel their touch and you know, literally, we call this social presence. It solves the need for travel. The reason why this is a home run financially is because everybody else has to create content. Youve got to create all the 3d models and the story and the narrative. With social, you just build the architecture and then the people just talk. So the content creation has taken off the table. Well, jeremy bailenson, im glad weve got people like you thinking deeply about this stuff. I hope your faith in human nature bears out. Jeremy bailenson from stanford, thanks so much. Thanks so much. Up next, its being called the biggest data leak of all time. What you need to know about the Panama Papers. Plus, european markets just about to close. How did the markets fare across the pond . Well have that for you after a short break. Ave medicare parts a and b and want more coverage, guess what . You could apply for a Medicare Supplement Insurance Plan whenever you want. No enrollment window. No waiting to apply. That means now may be a great time to shop for an aarp Medicare Supplement Insurance Plan, insured by unitedhealthcare insurance company. Medicare doesnt cover everything. And like all standardized Medicare Supplement Insurance Plans, these help cover some of what medicare doesnt pay. So dont wait. Call now to request your free decision guide. It could help you find the aarp Medicare Supplement plan that works for you. These types of plans have no networks, so you get to choose any doctor who accepts medicare patients. Rates are competitive, and theyre the only plans of their kind endorsed by aarp. Remember these plans let you apply all year round. So call today. Because nows the perfect time to learn more. Go long. Megan is home doing yoga. Last saturday, she was shopping here. [ indistinct shouting ] bulk from boxed didnt only save megan 33, bulk from boxed saved megans saturday. [ pop, screech, doorbell rings ] boxed bulksize shopping delivered easy with no membership fees. Download the app and get 15 off your first order with code bulk. Good morning, everyone. Im sue herrera. Here is your cnbc news update at this hour. The first group of migrants to be deported under a European Union plan to limit the amount of migration to europe arriving in turkey from the greek island of lesbos. Some 400 nonsyrians migrants and refugees were scheduled to arrive. Paul ryan meeting in jerusalem, the first nation ryan has visited since becoming speaker in october. Both saying israel enjoys the support, both in the white house and in congress. A volcano in central mexico exploded monday. The eruption reaching a height of more than 6,500 feet. That volcano lies just 50 miles southeast of mexico city. And protesters camping outside the office of Duke Universitys president a fourth day. Demanding the firing of three administrators, including one accused of using a racial slur against a parking attendant. They are also calling for a 15 minimum wage for all campus workers. Dukes president met on sunday with the protesters. Youre up to date. Back downtown to squawk alley. Thank you very much, sue. Lets bring in simon hobbs to count you down for the close, which actually happened already. Three weeks of losses in western europe. We have got gains. We still have got gains, though we are off our highs if you took a weighted average. Friday into today is when the ecb doubles down on its qe and you see the bond markets continuing to rally as a benchmark. You can have a look at whats happening to the tenyear german yield, moving further into negative territory. Actually Senior Member of the ecb suggesting acting forcefully and will continue to act forcefully. There is more ammunition if they think Inflation Expectations are continuing to deteriorate. So you hear basically 13 basis points. Remember the low we got in april of last year intraday was five basis points. So were still positive but coming awfully close to those lows. The big move is today on the stock market in europe. The four French Telecom operators. Remember there was a deal on the table to take those four to three. That is basically broken down. Theyre not making money because these guys iliad came in as a lowcost competitor. Martin wig, the billionaire, trying to sell his 10 billion euros to orange, which is 23 controlled effectually by the socialist government in france and couldnt do a deal. Huge amount of falling out about Voting Rights moving forward. So you can see the way in which those stocks deteriorated throughout the session. Meantime, with a Strong Political bias, the imf is having to defend itself against an accusation through wikileaks that it was essentially prepared to push greece to the point of default by leaving the negotiations in order to get the germans to give them debt reduction. This is the letter the headline of a letter that le guard sent to the greek Prime Minister denying that is the case. She says a negotiating tactic is simply nonsense. Back do you guys. Thank you, simon. And a massive leak of documents, known as the Panama Papers, has revealed offshore holdings of dozens of politicians and public figures around the world, raising questions about corruption and financial disclosures. Eamon javers is in d. C. Theyre comparing this to the Edward Snowden leaks and wiki leaks in 2010. Its called the Panama Papers incident. It broke around the world yesterday. A consortium of investigative journalists starting in germany broke a series of stories through the day yesterday. Heres what we know so far about the Panama Papers. About 11 million documents are leaked as a part of this overall leak. The documents come from a panamabased law firm called monthsic phenomenon saka, helps Companies Set up shell corporations and also allegedly helps them set up situations where they can have anonymous members of the board of directors or false members of the board of directors to help hide assets for global folks around the world. Were looking at reports now that 12 current or former World Leaders maintain the offshore Shell Companies as a result of the information thats come out of leaks just so far. Russian leader Vladimir Putins name is not mentioned specifically in these documents themselves. But his close circle of advisers and friends is mentioned, and theres an effort here to track a lot of the money that is close to the people who are close to vladimir putin. We have a statement here from the law firm itself. Heres what they say. We have not once in nearly 40 years been charged with criminal wrongdoing. Were proud of the work we do, notwithstanding recent and willful attempts by some to mischaracterize it. So guys, one of the Big Questions in this is going to be who leaked this information, and why . Is there an Edward Snowden here of Global International finance now . Back to you. Eamon, so much discussion today about the coverage of this story. Or the lack of it. Do you think the world is guilty in some part of snowden fatigue, leak fatigue . I think thats part of it, carl. Part of it is also just the way in which this story got out there. Remember, it was a german newspaper that received the initial leak. They worked with the International Consortium of investigative journalists. That group chose select media participants to pair with on this story. So they gave those folks a severalmonth heads up. And they were running at these documents for a long time. Checking them, vetting them, making sure they were real before they all popped their stories simultaneously. Now a lot of the other media organizations that werent part of it are going to struggle to catch up here. I bet youre going to see a whole bunch more stories over the coming days, carl. And especially, eamon, just given the scale of this leak, 11. 5 million documents, it will take a lot to get through them. Thank you in washington. So what does the Panama Papers leak reveal about where the worlds wealthy have parked their billions . Robert frank has more on that. Robert, what do we know . Kayla, thes about of dollars stashed offshore by the worlds wealthy have helped support everything from Miami Real Estate to fine art. Press reports say 29 billionaires use offshore structures involving monthsic, the panama law firm. Very few of these billionaires are named. But forbes saying many appear to be from russia and eastern europe. Whats interesting is that no american billionaires were u. S. Clients have been named so far. U. S. Assets, they have become a favorite destination for some of that money. The miami herald reporting yesterday that 19 foreign nationals created offshore entities that purchased Miami Real Estate, and eight of those foreign nationals have been linked to corruption or tax evasion or embezzlement the in their home states. Half all real estate purchases in miami are all cash and overseas buyers bought 6 billion worth of home in southern florida last year. So thats about a third of all local spending on real estate. Offshoring is perfectly legal in many cases but has helped support the art market. Reports say russian billionaire dmitry purchased more than 2 billion worth of art, including a famous he bought for 118 million, the piece sold by steve cohen. His trusts were already disclosed last year and were created for a Estate Planning purposes, were legal. It shows that growing scrutiny of this offshoring could lead to more calls for regulation and add additional pressure on both the art and real estate markets, which right now are a little fragile, given the financial markets. Back over to you. Good stuff, robert. Thank you so much. Robert frank back at hq. When we return, bill gates investing in a company trying to bring reliable wifi to cars, trains and planes. More on that. But first, Rick Santelli, what are you watching today . You know, im watching the markets this week digest last weeks important data points on the jobs scene. And boy, here we are. Not a lot of volatility. Is this the way all of 2016 may be . Its possible. And it might be waiting for fiscal policy, but one thing is for sure. Investors rejected the old norm of coming back, and thats the topic for the day. Hi. Im pamela yellen. You may have read my bestselling book the bank on yourself revolution. 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Thanks very much, jon. You know, maybe we should all have come to the final conclusion, or at least change our hypothesis based on what we have seen yeartodate for the markets. I think it was clear that when the december tightening of 2015, january completely rejected coming to a new norm. Okay . They dont want excuse me. The old normal. They like this new norm. They dont want to recalibrate. And that rejection continues to show up in a lot of ways. If you look at the total return for a tenure, remember, it settled a few basis points under 230 last year. Here we hover at 177. Total return yeartodate, a couple of tenths under 5 . Now i know that were in positive territory, and there are dividend issues out of two of three of the major stock indexes. The nasdaq still light in negative territory while the s p and dow lightly in positive territory. So what can we learn or what should we change by this . As i talked to traders on the floor, its pretty simple. Basically, they say that what the fed has done, and you could argue whether its good or bad. But marginal companies are breathing because they have access to capital. Think the high yield market. Might have gotten messy, but has improved as of late. So if we look at the economy and the stock market, Monetary Policy kind of like a car, the front wheel drive, the only thing thats moving this car, the only way to transmit policy to keep this car rolling seems to be the stock market, a. , and to a lesser extent but highly correlated the weaker dollar. On the latter, the change in outlook for the fed has made a huge difference after the rejection by investors in january. So how can we look at whats going on and put it in a simple context . The music is going to keep playing by the fed. That we can agree on today than we could have just six weeks ago. And b. , that theres no way Monetary Policy is ever going to totally fix what many thought it could fix when we embarked on much of these plans and policies and strategies in 07 and 08. Its going to end up being fiscal policy. Its an Election Year. So most likely, youll get a rate hike at the end of the year after the election. But we cant really say what that fiscal policy is going to be. There is no way to tell. Listen to all the news, whether its on trump or its on hillary or bernie. Pretty tough. And much of the outlook of these politicians are differing. So whats the answer . The answer is going to be most likely hang youre unchanged on the year, watch treasuries refrain, and look for a boatload of volatility when we swear in new politicians. Because all of this will fall on their shoulders, because the fed has kept it together, but it cant make it better. Back to you, jon. All right. Thank you, rick. And cnbc and inc magazine kicking off in seattle today. Were live in the city, pro filing. Better weather than in new york, too. Hey, kate. Hey, jon. We have experienced unreliable connectivity on the go, and one startup is out to change that. Plus, they have come a long way since appearing on our cnbc disrupter 50 list back in 2014. Take a look. You cant see it, but in the top of this car, there is a flat satellite antenna out to revolutionize the world of mobile communications. The product was created based in redman, washington, and launched in 2012 by nathan coons. Tell us how the Technology Works in the car. Its doing what otherwise you would need a big dish to do, sitting on top of the car. They have raised 120 million so far from investors, including bill gates and is manufacturing in japan with sharp electronics. The startup is offering a leaner, more Cost Effective and reliable model that looks more like a solar panel. They have also had partnerships with toyota. In partnership with toyota, this fourrunner car just took a crosscountry trip, demonstrating the connectivity capability. The product aims to replace the spotty wifi connections available today on trains, in the air and more. The service is bad because of the spectrum available. So there is not a lot of bandwidth you can push through that spectrum. In space, there is a lot more spectrum. And our antenna allows us to capture that spectrum and use it. While the technology is not yet available direct to consumers, coons would like to bridge that gap. In the future, i would like to make an antenna where we will overlay and have a solar panel and antenna together so you can get something in the mail, throw it on top of your roof and have wifi with no other connections. Now, the first product is set to ship at the end of this year to be used in the maritime industry in 2017. We have a great lineup in seattle, kicking off tomorrow. We have billion dollar buyers kevin oleary, Greg Glassman and many more. So you wont want to miss it. Back over to you. Thanks so much, kate rogers, as iconic kicks off in seattle. As baseball season begins, a bit of controversy over how tickets are sold and new restrictions on how they can be resold. More details on that, after a break. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. According to tick iq which monitors, the average asking price for the cubs up 30 from this time last year. Now nearly 147 bucks. Red sox, tigers, yankees, close behind. Yankees taking aim at stubhub this season, now prohibiting prohibit at home tickets from being used to interyankee stadium. What does this mean for fans . Joining us at post 9, one of our favorites, ceo jesse lawrence. Good to have you back. Thanks. So how are the economics of the ticket business changing . Based on what the yankees and now the red sox are doing too . I think what teams have realized, theres more value in controlling the market in a way that gives them access to both primary and secondary. The red sox this year have sort of followed the yankees suit into secondary, which they did three years ago. The yankees this year are the division between primary and secondary, making people use digital is really forcing them to a back into the yankees ecosystem which a lot of people think is bad. But based on increased supply in the marketplace, could be a good thing. So the rapid inflation in secondary is sort of capped in a sense . Well, it introduces another the yankees dont sell out 10,000 seats every game. The secondary market has 5,000 seats every game. If you think about it as a holistic market, 15,000 seats. A lot. People think of the market second dear. Were thinking more about primary and secondary. The yaervegs have an ecosystem to draw fans back into lesser teams throughout the country maybe dont have the heft the yankees do. Do you think this is something that can be replicated or not . I think the yankees and red sox will be the first leaders, because the first movers, because theres more money there. I think over time, as the stubhub deal comes up with mlb, i think its in two years, you start to see teams picking and choosing the solution right for them. Its going to be different, really, for every team and every market. Is there anything thats going to shift the nature of the overall market . Because it seems like more and more, every day families cant afford that iconic trip to the ballpark. Is Technology Going to really turn the tide in any way, or might it slow down the price increases . I actually think baseball is one of the cheapest tickets out there. There is very few games in an mlb season you cant get in for under 20 bucks. So thats the good thing. The difference between primary and secondary in that context might be a few bucks. But i think baseball the big marquis games may be some price issues. If you want to sit down low, theres price issues. I still think baseball is one of the most accessible, if not the most accessible ticket market out there. What explains chicago . 30 is a rlot. Based on the postseason last year . Is that it. . Theyre favored to win the world series. Im trying not to jinx it, but yes. But you wouldnt thats not going to as contract league. Its more about specific teams that have proven themselves lately. Absolutely. So the mets were the second biggest increase. Not surprising. Still a lot less than the cubs. But number two in the market. Theyre actually number five in the market with 107 average price. There is a small sporting event this evening in houston, the ncaa finals for mens basketball. What do ticket prices look like coming out of the weekend matchups, going into tonight . This is actually the second most expensive final game we have tracked in the last six years. Only behind last year, duke and wisconsin. It seems the average price is 615 bucks. Last year a little over 700. It seems that North Carolina teams drive expensive tickets when it comes to final four. Not just any North Carolina teams. The tobacco road legendary in the name. Thats right. I would have a horse in this race. So im obviously bias. But are there any statistics that would indicate whose fans are going to be more represented in tonights games . We have seen more buying volume from unc fans. Its a bigger alumni base overall. The villanovas is pretty hungry. Been a long time. Thats a big event. Not as many alum in the villanova universe as unc. Wisdom in crowds, right . Well see what happens tonight. Come back soon. Well talk about concerts and Everything Else going on. Absolutely. Thank you, guys. When we come back for more on opening day and the ticket prices, catch mlb commissioner rob man fred on closing bell. Apple shares continuing their come back above the 200 day for the first time in a while. Thats in a moment. Apple shares moving above their 200 day moving average. Credit suisse saying the companys potential and annuity like revenue from services being underestimated by the market. Their target goes from 140 to 150. Theyre talking services doubling by 2020. They think average users spend goes to 113 bucks from 61. Apple everybody had a reason why the stock was going down below 106, below 100. Now that its up, you know, 111, theres no reason. Its just back up. Well, the journal last week said if apple is going to get groekt from anywhere, it has to be from Services Based on their performance of hardware. That would be a pretty big bet to make for a company that size. It has to be from services. Unless the i phone 7 is great in which case from somewhere else. We didnt delve into the Facebook Deutsche note today. Theyre calling for potential growth reset as q1 gets reported. Are you nervous going into that . These quarters for facebook to me matter a little bit less. It depends how they perform toward the end of the year and how these price increases theyve done in ads gets sustained. Well see if things get heated up earnings wise in a few days. Good to be back with you guys. Good to have you. To headquarters, scott wapner and the half. Guys, thanks so much. Welcome to Halftime Report im scott wapner. The weakening u. S. Dollar and why its the gift that could keep the rally going. With us today, joe terranova, Jim Lebenthal and rebecca patterson, chief investment officer. The story for stocks lately has been the dollar, dropping versus the euro and other currencies over the past few months. It could be a nice rescue for earnings, which are good about to be reported as well. Is this the surprise catalyst to keep stocks climbing . That debate beginnings now, joe. I begin with you. Dollar index