Transcripts For CNBC Squawk Alley 20170726

Good wednesday morning im Carl Quintanilla with jon fortt and sara eisen we have Jason Calacanis with his new book entitled angel. Nasdaq hits another record high. Were trying for backtoback days of record gains index is coming off the 43rd record close of the year one standout is going to be amd soaring after beating estimates in the recent quarter issuing strong guidance. That stock is on track for the best day since june 21st the best day in weeks here after an amazing run already. Yeah. First of all, thank you for having me. From what you have seen so far, i think 20 of the s p is already seeing strong numbers out there. From the internet point of view what were seeing, which is very Strong Demand that continues secular shifts, offline advertising coming online, you saw that in googles numbers they are expecting that in facebooks numbers it is strong numbers from advertising driving the demand. This is what we call jason, the sweet spot of the secular trends we have been talking about for most years i think it is fine to summarize it as yumyum for the tech industry. If you look at the growth in advertising, the majority of the growth is two players, google and facebook on a percentage basis, they are running this as smaller numbers in advertising i think that number is running now, google and facebook are going to run the table he said, what would we do with the computer power and then come up with the crypto currency thing to mime the coins, this is stupid and wasteful of energy but selling a lot of video cards and helping amd. Then you add selfdriving cars that people didnt anticipate. Then the gamers seem to, cant get enough of increasing the frame rate and getting bigger monitors so you dont need to play a game in 60 frames a second at 4k. For some reason the gamers cant get enough of the it. Amd is also a counter argument to all this mo nonnopoy talk because one of the tech monopolies with power is intel looking at nvidia, which we talk about a lot, and amd is a lot smaller than intel, but the fact them come back in pcs, they are not done with the epic server processors, thats coming out next as well thats for graphic and laptops it is really interesting theyre able to carve out the niche, somewhat again a counter argument to those saying that you need to break up big tech. I mean, when somebody really smart comes in leaving a company that is an upstate sometimes it makes a difference. Its the one product theory, one product can make it happen we saw it happen with apple and the iphone you see this over and over again. Somebody gets the fluidity of the Global Market that can happen, we all buy the product, and that includes business this is incredible and they are making billions of dollars in revenue. It happens so fast, the velocity of consumer and enterprise is extraordinary. Some of the secular trends that jason was talking about, bob, relate to a. I and the question is, how do you know when theres too much hop in a. I. For a sector like the tech stocks or whether it is a fundamental reason for them to go higher. You saw google talk about being an a. I. First company or previously being a mobilefirst company. Then you really have to tear up, what exactly is a. I. Is it improving algorithms, computing, machine to machine communication, how does that translate into the overall environment but not just on computing devices. Big parts of tam, if the companies can get it right, its a big opportunity for the companies. Jason mentioned the overlay of consumer and enterprise ive heard some people theorize that aws, while dominant now, because microsoft is so engrained in corporate i. T. Could make a run at number one do you think thats likely its still a nice market, you have google going after it hard, microsoft going after it hard, aws, if you would agree, is migrating more and more to Enterprise Clients to use that to get into a bigger Enterprise Client so i think it is very early in this race. Amazon has the lead for now, but microsoft and google have big guns. The question is, probably the most fascinating one and people watching the show have to ask themselves, its overhype in the shortterm but in the longterm it is underhyped whose job listening to this program is beating the top three go players headsup . If you went to work today and your job was literally harder than beating the top three players or three corporate player, then your job is safe. If your job was not that difficult, your job is going to be replaced in the majority by a. I. So attorneys are the perfect examples i have looked at seven startups that youre going to speak into your smartphone to say, i need a contract to do this. And all of a sudden it will spit out the contract and youll assign it and feel comfortable that the a. I. Got it right if you are an attorney listening to this if youre talking about people watching and shouldnt be worrying about their jobs. They should be worried. Watching who was in jeopardy a few years back thats how we do it in the technology industry. We boil the frog well meet you at go, but some of the jobs until later. So as this debate goes on between musk and zuckerberg, have you taken a side . Does this interest you at all . Its extremely interesting, i just dont know enough to debate elan trust me, if it was a zombie apocalypse, im making elan. Elan verse zuckerberg is laughable. Elan was the original investor and board member of deep mine, which was bought by google, and heres doing massive work on a. I. Thats probably largely unrecognized at tesla. And he also funded 50 million for open a. I theres nobody who is bigger expert, has a bigger view of a. I. Than elan musk. Hes applied it in four companies. And hes invested 100 million in other Peoples Companies to try to grow it elan is right. When i talk about the lawyer being replaced in 60 to 70 of the work being replaced, were sitting here nodding that it seems realistic. Im not nodding. What percentage do you think will be replaced by a. I. In ten years, jon i cant see a. I. Doing a good job at criminal defense. Okay, sure. So leave out the less third. My question to you remains the same, what percentage of an attorneys job 10 to 15 years from now is replaceable by a. I. . It will taken a eternity for me to answer that, so im youre taking the fifth commentary, were good were good a. I. s not going to do better than us. Im just wondering, to wrap it up, as we await the amazon results tomorrow, apple next week, at what point do you talk about bubble evaluation when seeing the companies combine, the bank stocks and apple, bigger than what, the economy of a place like the u. K. . Well, first of all, we just had last week our biggest ipo week of the year i think you had six ipos, 11 followones, youre seeing big demand for interesting ideas a lot of the Portfolio Managers are looking for incremental alpha going after the names not capitalizing, not only on the core business, but also the optionalty, whether autonomous, a. I. , vr, the large temps to go after. Portfolio managers are paying up for that also when you look at the larger companies, you want to tear it down a little bit because theres a lot of parts to facebook, its not just one entity, theres a lot of parts to google and amazon as well you need to tear them apart, not look at a raw p. E. Multiple. There are earnings coming out of facebook after the close. The company grappling with slow atgrowth and costs. Well get Company Plans for original content we are hearing they are working on a smart screen as well. I can tell you it is fake news on the speaker because evan spiegel hasnt launched a speaker yet so its impossible facebook would it makes no sense for them to have a speaker because the Component Parts of the speaker would be having a. I. , it would be having surge, having hardware dexterity. Its not the components they have and theres no natural connection to facebook at all, except maybe listening to your conversations, finding key words to retarget you on edge, which seems crazy, but something people are working on in the technology industry. So i dont think it would be an interesting product for them, nor do i think its happening. The background on this is, all the labs spit out stuff. Then something leaks and a blog, like a tech blog just says, oh, my god, or a gadget blog says, this is going to get us pay juice. It could be happening in a lab somewhere but not going to move the stock in any way bob, the message for so long has been facebook, alphabet, theres room for everybody but i look at the numbers and it looks to me like two years ago googles revenue was five times bigger than facebook now its three times bigger. It looks like facebook is going to turn in net income thats more than half of googles i mean, has facebook built a better google . Is it time to start asking that question well, the real interesting part is they hat to monotize the properties with billions of users. You start to talk about messenger and whatsapp theres a lot of room to run there. If they have hardware ambitions or other ambitions were not aware of, still large tams to go after. Should we be cautioning the fact that last year facebook told us on the Earnings Call that ad Revenue Growth is slowing meaningfully in the middle part of this year because they were going to take ads out of the news feed is that starting to happen User Experience is paramount and key. The real driver there is conversion its advertising roi as long as advertisers are getting the roi they want, they will keep bidding up on the ads that are there so you dont necessarily need to keep adding ads, but as long as you produce the roi in advertising, they will bid up the pricing. They are definitely pushing the envelope two point, one, people bidding on the ads on facebook are finding the costs getting too expensive and looking for all nerntives. Alternatives acquiring a company for 40,000 on facebook, i can go on the street and acquire a customer in 20 in the real world and humans. Not as targeted but it doesnt matter if the person signs up for the subscription or not. Did they buy the product literally putting people on the street selling product was beating facebook because there are so many people bidding up the inventory. If you look at instagram, the number of ads on there is getting annoying and people are mentioning it in social feeds. If you look at google and facebook, that dynamic is interesting because google took their eyes off the prize and they were looking at all these different moon shot products and then facebook and zuckerberg said, forget about the crazy ideas, lets run the table on advertising and build a better mouse trap to your point, its a better mouse trap with more targeting it has targeting so powerful its going to be removed, including the ability to target people based on race and this is something that is going to come up you probably have seen some of the stories about that maybe during the campaign they targeted specific minority groups that came out for obama during the campaign with antihillary ads that all is starting to unravel right now. Youre going to see facebook actually remove targeting, i believe, from their products because its become too creepy and too disturbing. That sounds like a slippery slope. Well, do you believe you should be able to target ads based on somebody being hispanic, africanamerican, white in society right now we do it by channel where people predominantly tend to view, even if you dont do it directly by race, they will end up doing it one way or the other. They will figure out a proxy for it. I look at jewelry ads, i dont know. About the video if facebook manages to crack video in a bigger way, the way they seem to be with these later initiatives, is that a significant leg higher given what googles been able to do with youtube its a huge tam, a huge opportunity. They are basically nowhere there yet. Theres been reports about them going to reprietary content, proprietary content. You look at cpms pricing that the brand advertisers pay for, whole buckets of advertising that facebook is not getting and maximizing this is a huge opportunity for them obviously, in googles results the other day, you saw the impact from youtube. Video is we talked about it here two or three years ago, the impact it would have and it will be the main driver now. The tv advertising is such a high cpm when compared to other advertising that its really making facebook go super nova. And they are probably 5 or 10 into the story of video. In fact, this weekend zuckerberg did a live stream of himself barbecuing, which is where that elan musk a. I. Comment came from so he really believes in this. And when you look at ceos and the founders and what theyre doing in their spare time and what theyre playing with, that is the ultimate tally. So when you saw larry and sergey at the conference getting all absorbed in google glass and, you know, moonshotlike projects, flying cars, larry page has two flying Car Investments outside of google. And these arent even moonshots. They are very distracting. And i think well be sitting here in another five years saying, how did google let facebook catch up . It is extraordinary that facebook is catching up. And really, if you think about m a, they have run the table on larry and sergey they have gotten demolished by suggester zerg the fact that they didnt get instagram or oculus and whatsapp is phenomenal. They gave up a huge portion of that to get whats app and it made google look pathetic Portfolio Management is a big part of the facebook story. Who is running google they are playing with glasses. They have 2. 0 glasses out who cares . You guys are great together thank you so much. Thank you great to see you. Thanks for the plug for the book that was big we should also mention in this conversation a number of major tech names are hitting new alltime highs today lets go to don chu with the latest the shares leading the s p 500 after beating forecasts on the top and bottom line, amd is raising the fouryear guidance ramping up production. Texas instruments also has Second Quarter numbers beating the demand for industrial customers. T. I. Is estimating Third Quarter profits among estimates. That stock among the leaders in the sector as well aside from earnings, a number of the tech names reaching record highs in trading today amazon is consumer distre discretionary. And record highs today, we should point out on the downside, you have apple and technologies standing out at the worst performing s p 500 stock those shares hitting 1. 5 low after forecasting Current Quarter sales and profits that missed some wall street expectations the negative results coming as its traditional immediate a Delivery Business under pressure this prompting price targets on the stock. Also keep an eye on facebook, guys, you guys mentioned it, the social Media Company reporting Quarterly Earnings after the closing bell today carl, right now the Options Market is pricing in what could be a 4 move, higher or lower in the stock on the heels of the earning reports, guys. Back over to you. Buckle up for tonight, don, thank you very much. When we come back, well go live to las vegas where the top Security Experts try to find ways to defend against the latest threats facing companies today. Elan musk has a new video showing a special feature of the hyper loop tunnels and then later on, how one company is hoping to revolutionize the farming world with the help from bezos when squawk alley continues. Welcome back to squawk alley. Executives, Security Experts and hackers are gathering at the black hat conference in las vegas this week to talk about the biggest Cyber Security dangers facing companies right now. Aditi roy is live from the very timely conference. Aditi, good morning. Reporter good morning to you, sara. Things are bustling here in las vegas at the black cat Cyber Security conference. You can see a lot of people behind me, they just opened those admission doors here moments ago where Companies Like rsa and fireeye have set up boo boots. When it comes to hacking, no one is safe, even the people attending this conference, possibly yesterday we spent a lot of time at the black cat Operations Center where we found a team of security pros, engineering pros working hard to make sure that the attendees at this conference stay safe from hackers this as experts are warning that the risks are more great than ever before. One study that just came out shows that the number of u. S. Data breaches so far this year get a half year record high of nearly 800 thats nearly a 30 jump from this time last year. Another recent survey also polled 600 of the top leaders here at the black cat conference, they found 60 of them believe that the success of this security infrastructure will probably happen in the next two years. That is manipulating power grades and the Nuclear Power plant. So why are they so worried 70 of those surveyed said recent examples of statesponsored attacks, so anything from the allegations of russian official hacking to north koreas possible involvement in the wannacry attack has really eroded their confidence in the Critical Infrastructure only a quarter of those surveyed believe the white house will have a positive impact on Cyber Security policy. So how do you solve for all the dangers . Security pros tell me that Companies Need to do a few things, do hygiene checks regularly of the networks, they need to bridge the gap between upper management and the i. T. Teams. Above all, the Cyber Security Industry Needs to hone in on addressing the shortage of workers, which some tell me is reaching critical levels guys, back to you. Aditi roy, thank you very much just one day after announcing the biggest global sales jump in five years, mcdonalds is expanding the Mcdelivery Service through uber eats its available today in 47 countries. We talked about how the Company Keeps the new ideas coming take a listen. We dont want the cycle to end. I mean, part of the challenge you have in leading Companies Like this is to make sure the future pipeline is Strong Enough that you dont end up in a cyclical thing we have a great time from 2003 to 2011, and i have a responsibility to our shareholders to make sure we keep innovating and challenging ourselves to make sure that the ideas dont dry up. Along with that new idea pipeline comes Customer Satisfaction and how to keep them happy with more. We try to bring all the features for customers to make this friendlier, more convenient and more fun and when you do that, they share a bit more of the information with you and our ability to be meaningful to customers is so much more enhanced when we understand their habits, their family sfruk structures so happy meals, we are about to launch a new happy meal, swengd notifications and let them know the new happy meal is coming up. And customers like the little touches. Or if the mcrib is coming back on the menu or something is launching tomorrow, people like the advanced knowledge and to be in the know. Mcdonalds, one of the top three stocks on the dow for the year along with boeing, which is ripping higher on earnings today. Phil lebeau is in chicago watching that and the impressive price action today hey, phil. You said it last hour, we have not seen a move like this for boeing shares since august of 2009. You pointed that out, peter who runs so much of our data pointed out this incredible move were seeing from boeing this is a company right now with a stock that is trading at the alltime high after posting betterthanexpected earnings and raising the guidance boeing beat this by a wide margin bringing in 2. 55 a share versus 2. 30 a share revenue a little under xchin expectations but not by much the focus of the Conference Call still going on is the impressive numbers when it comes to operating cash flow, 4. 95 billion is what boeings cash flow was in the Second Quarter most were expected 2. 5 billion. Why . Greater efficiency on the airplane unit. It is also raising the 2017 cash flow guidance by 1. 5 billion. By the way, Dennis Mullenberg told an analyst this will continue for the next few years. During the Conference Call he said to expect year over year cash growth throughout the end of the decade. Take a look at sharesapple boeing is raising its 2017 Earnings Guidance by 60 cents a share to 9. 80 to 10 going into today. Most on wall street were expecting them to earn 9. 39 for the year guys, i dont think i ever would have expected to see that type of a chart where boying is well outperforming shares of apple, at least todays move factoring into that, but in the last year, thats what we have seen between boeing and apple not to mention that todays move is almost a down gain phil lebeau, thank you well return to look at facebooks top earnings after the close. And well look at where foxconn will build their fstir stateside plant in squawk alley is back in a moment times up, insufficient prenatal care. And administrative paperwork. Your days of drowning people are numbered. Same goes for you, budget overruns. And rising costs, wipe that smile off your face. Were coming for you, too. For those who wont rest until the world is healthier, neither will we. Optum. How well gets done. Im courtney reagan. Heres the cnbc news update at this hour. The senate continuing the health care debate. Later this morning it will start voting on the repeal only bill, which it passed and then president obama vetoed in 2015 Senate Majority leader Mitch Mcconnell saying we need to pass it now. Certainly it wont be easy, nothing has been but moving beyond obamacare is the right thing to do. We have put a lot of hard work already into this. We have had important successes like we saw with the vote to proceed yesterday. We have to keep up the work now. So we can get this done. Uber is updating its policies to let drivers start charging a 15 fee to return lost items to passengers right now the rule applies in boston and chicago, but the policy will go nationwide by the end of august. And Novak Djokovic will miss the u. S. Open and the rest of the season with an elbow injury. He says the injury is the result of playing too much and requires rest to recover. Thats your cnbc news update for this hour. Lets get back over to squawk alley. Carl courtney, thank you very much well get the european close here happen right now. Seema is at post nine. Five years ago the ecb president mario draghi pledged to do whatever it took to save the euro it stopped the eurozone from breaking up. Since then the benchmark is up 50 . As for the currency, the euro is down 5 , which in a way puts into perspective the recent move we have been seeing in the currency well check out the euro hitting the highest level against the swiss it swiss franc. This sent the market surging commerzbank shares are getting a boost after a 5 stake in cerberus and autos now, daimler is seeing a drop in shares after a boost in sales and finally, ryanair is moving on a bullish note. Analysts therefore casting a drop in fares as the low cost airliner expands its fleet and lastly, we have to look at the miners, thats surge and copper on the back of the upbeat china data helping the miners. Take a look at bhp billiton up on a fraction of the day and angelo american up 2. 5 ahead of the Earnings Report tomorrow sara whatever it takes thank you. And a fed decision due out today at 2 00 p. M. Eastern as the president makes the comment on who the next fed chair could actually be and perhaps some surprises. Steve liesman is at the Federal Reserve in washington to lay it all out for us hi, steve. Hey, good morning, sarah. Theres a slight chance of a surprise this afternoon if the fed were to announce reducing the Balance Sheet now rather than as the market expects in september. Fed chair yellen said it could be relatively soon, but most fed watchers think the fed has no reason to surprise markets oddson bet is that the statement will signal Balance Sheet reduction on the way and begin in september markets will also be looking closely for the feds comments on inflation, which as you know, can continue to run below the feds 2 objective the feds statement in june said it expects inflation to rise, but some officials are more worried they want more evidence before hiking again. And the odds of a final rate hike is 42 . The odds of janet yellen keeping her job look to have improved someone told the wall street journal that the president has a lot of respect for Janette Yellen he said, i like her, i like her demeanor i think shes done a good job. The president also said National Economic Council Director to garrett cohn, that half of the respondents think cohn will be the next chair, followed by kevin warsh and john taylor. Just a quarter of respondents think she will keep her job before the president s statement. The president is expected to make his decision by the end of the year its a little curious because yellens term ends in january. He told the journal he thinks hell get confirmation of the fed chair quickly, but thats not been the case with his other nominees. Steve, thank you. Sure. And facebook, meanwhile, said to report earnings later today with the stock already up more than 40 for the year lets bring in John Blackledge and mark may, Senior Analyst good morning does facebook need a perfect quarter given how much the stock has run up and should we be investors be concerned, they have a way of bringing up cap exex or other things to bring down movements like this. Investors shouldnt be concerned. We raised our forecast for the long term given the user growth. I mean, facebook had more than 2 million monthly users. You have instagrams that are incredible it will be 900 million users by the end of the month or so it will be a good quarter. We are above consensus in revenue earnings we think it will be a typical quarter, they have had great quarters the last three years or so it will be a small upbeat to the ad revenue, but to your point, the stocks run 40 this year, but its up 10 the last month and they will probably talk about revenue decel in the back half of the month. Even a quarter a little better than we expect, maybe not too much upside off of it. Okay, mark, is the user growth alone going to be enough . Or do we need to see a standout metric Something Else video . Instagram . What so the user Growth Numbers in the quarter are obviously solid. We know that the core facebook app ended the quarter with around 2 billion monthly users thats up in the high teens year on year. But yeah, theyve got to follow that through with Strong Revenue results. The cell side is modeling for about 43 to 45 in ad revenue they need to do 50 for the stock to move higher in the shortterm the longer term, the stocks are Still Holding and its our top pick i think the narrative video they probably wont talk a lot about, but expect to hear more around messaging. They have made some steps regarding Facebook Messenger and whats app recently to start to monotize the platforms, which have a billionplus user themselves mark, i mentioned your note earlier because its interesting your model predicts 50 boost in ad ref new but you got off the correlation with alphabets core sights revenue. Can you talk about how you got so specific, and why a report that actually wasnt that widely received by wall street for alphabet bodes well for facebook well, part of the reason the google stocks sold off 3 on the quarter had to do with things below the line, below the revenue, things like expenses, the tap rate, but from an ad revenue perspective, google put up 22 ad Revenue Growth parts neutral. That was almost in line with q1. Really good revenue number and not surprisingly, google and facebooks ad revenue have been over 90 correlated for the last year and a half. They are capturing almost 10 of incremental ad spend so that shouldnt be much of a surprise if you play that correlation out, it would imply a very Strong Revenue number for facebook in the quarter of around 50 the street is modeling a pretty major decel in the quarter and google is encouraging. So from a top line perspective we think facebook will print a good quarter but a lot of that is baked into the stock here in the shortterm john, im wondering, are we far from the day when facebook and alphabet start being compared more directly i was bringing up earlier, google used to be five Times Facebooks revenue, now its just three Times Facebook is catching up in net income is that day around the corner . Yeah, no, were pretty were here, i think. If you look at it, the one thing i thought was interesting and kind of you to your point, facebook shares are up 2 this month. There are two drivers of that, one is defined by the European Commission on google, which was a month ago. And then the more important thing is the Facebook Messenger home screen app going global, announced a couple weeks ago thats the bigger driver i mean, you know, youre looking at, for Facebook Messenger, you had a billion and three monthly users. If you look at the numbers, core facebook does about 18 per user this year. So do the math, a billion and three messenger users, thats another driver to their ad business so youre layering in core facebook, you have instagram and messenger. And an audience network. They are definitely going headtohead in terms of the incremental ad dollars that mark mentioned. All right well see what is in the numbers. John, mark, thanks thank you john, thank you more on the news that we broke last hour. Wisconsin turns out to be the apparent winner of a major manufacturing plant. President trump expected to announce that foxconn, a majorap shop in the southwestern part of the state. Scott cohn is following this story for us what else do we know, scott . This is a huge prize that seven states were bidding on as many as 10,000 people could work in a plant that foxconn says could represent a major expansion of the u. S. Operations cnbc learned that wisconsin is the apparent winner. This according to a source with knowledge of an announcement at the white house today scheduled for 5 00 eastern time. Cnbc has also learned that Wisconsin Governor Scott Walker is d. C. Today. No comment from the Governors Office about why and, by the way, the apparent location in the southeast part of the state around kenosha and racine is in the district of House Speaker paul ryan. The speculation went into overdrive after President Trump told the wall street journal yesterday that apples ceo tim cook told him, his company is Going Forward with three big beautiful u. S. Plants, which mr. Trump said he considers key to the success of his administration now, apple has not confirmed those plans, but in any case, todays announcement is not that it is foxconn, we are told, an apple supplier, not apple. And by the way, foxconn supplies components for other companies as well. Now, thats not to say apple is not preparing to invest in u. S. Manufacturing. Heres ceo tim cook talking with jim cramer in may. Were creating an advanced Manufacturing Fund were initially putting 1 billion. Well be announcing the First Investment from this fund later in the month of may. This announcement today is not that as for foxconn and wisconsin, still no word on what incentives the state is offering. Unemployment in the state is just 3. 1 . Wisconsin, by the way, ranked 21st in our 2017 americas top state for business study just out, strong in education and technology and innovation, but weak in workforce. Partly because of the low Unemployment Rate as well as business friendliness. But apparently the state is friendly enough for foxconn. Guys thats quite a story today, scott. We look for details this afternoon. Our scott cohn good to see you back at hq take a look at this video of softbanks ceo at trump tower back in december hes holding up a sign here that says, softbank and foxconn commit to investing 7 billion in the u. S generating 50,000 u. S. Jobs over the next four years. We remember this video pretty well of course, this was before the inauguration when visitors to trump tower were almost a daily phenomenon but were beginning to see, john, sort of how some of that money is coming to market. Yes, these are important moments. It will be important to dig into the numbers, though, because theres talk between 1 billion and 3 billion worth of incentives local and federal going into this. The Milwaukee Journal Sentinel reporting some of those numbers. That would be an extraordinary amount in terms of tax breaks. So well have to really look into this and see what the communities end up getting out of it, having to put in, in order to get the jobs. Still, i would say its a big win for President Trump. Its a big win for Governor Walker a big win for House Speaker paul ryan, who is also its a big win for sure. And the American People and the jobs, of course. This is what President Trump ran on and its interesting that hes quarting foreign businesses as well maybe that will ease the trade tensions and concerns that hes talked about there its putting money in the u. S. Im just saying, it looks like a win off the top, but how much are you paying for the jobs taxpayers are paying for them. So lets see the numbers yes lets see the numbers when we come back, the company that jeff bezos is vetting to help revolutionize the food industry. Rick santelli, what are you watching today you know, im listening and reading all the articles about President Trump and his comments about low rates. He seemed to give low rates another shots out. And thats what were into lkbo aerhereakgog to keep our community safe. Before you do any project big or small, pg e will come out and mark your gas and electric lines so you dont hit them when you dig. Call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. To make sure that you identify where your utilities are if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. Keep yourself safe. Im scott walker coming up today, one of wall streets notorious bulls Jeremy Seagle is here with how long this record will rally stocks. Plus, should you follow into these trades well talk about that. And three big cap stocks that cnbc stock screeners say are vastly undervalued Halftime Report starts at noon eastern. Thats top of the hour carl, see you in 15. Scott, thank you for that. Well get to the cme group in the meantime to get the Santelli Exchange hey, rick. Hi, carl. Im going to read something that the president said it isnt the first time hes said it to the wall street journal. Everybody is talking about that interview. Well put it on the screen this regarding janet yellen. I think shes done a good job. I would like to see rates stay low. Shes historically been a lowinterestrate person listen, having low rates created by price discovery, by investors getting together, assimilating all the data points, strong data, rates go up, weak data, rates go down. And obviously Central Banks historically have nudged, used Interest Rates as ale too, i get it but we are many bus stops beyond the nudging phase where i personally have a problem is when the outcome becomes most important. In other words, the president doesnt seem to be saying, listen, i love when the markets look at whats going on in the world, they see weakness and stay low thats not really what hes saying what hes saying in my opinion, im paraphrasing, is in many other parts of his life before politics, i can understand that if you build things and use money to build things and you procure money from investors and banks, low Interest Rates is a big positive but when it comes to a president , especially one that gets elected because government sometimes puts its big nose in small areas, well, or their big nose in big areas, but it certainly seems that one of the threads of the voters that voted for him is Less Government this, to me, is one of the biggest infractions there is in terms of the market controlling rates and having the outcome be a certain way. He makes this statement as though having low rates should be the main header i disagree as a matter of fact, you know, when i look at sweden, switzerland, germany, japan, all these negative rate, i wonder how its going to end. And listen to these comments, i dont know, cheap shots, calling the shots, long shots, shots heard around the world, shots out and shots are at minus 66 basis point German Security instrument but to me, looking at that doesnt make me think its something we should ascribe to its something we should try to get out of sara, back to you. Well, you didnt say negative rates, you just said low rates, but we take your point rick santelli, thank you when we come back, the Company Jeff Bezos thinks could revolutionize the fresh food market we are not talking whole foods back in a moment shrieks in terror heavy breathing and snorting no, no. The running of the bulldogs . Surprising. Whats not surprising . How much money aleia saved by switching to geico. 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With amazon going after whole foods, Ceo Jeff Bezos is among highprofile billionaires shelling out 200 million to back the farming startup called plenty joining us from San Francisco is plentys cofounder. Good to have you with us good morning. Thank you for having us. Walk us through what your aspirations are here and how they dove tail with bezos. Our aspirations are bold and big. Weve been working to bring fresh food to people in communities around the world when people walk into a plenty farm, what they will walk into is about the size of a couple soccer fields and that small farm can produce as much as hundreds and even up to 1,000 acres of traditional fuel capacity. Yeah. How is what is the difference in traditional yield and what makes that possible . Well, when you walk into our farms, what youll see is you will see walls of plants growing sideways we like to call them kind of a cathedral for happy plants and so 20 feet tall and even higher and as far as the eye can see, youll see dense walls of plants and what that produces is yields of a traditional field capacity you walk into these farms and they smell fresh and clean and were growing food, you know, thats cleaner, fresher and healthier and without pesticides and research can be done outside. Matt, what does it cost to set up one of these farms . Can you do them in dense, urban areas . How does it work yeah. So one of the great things about our farms is that we can place them where people are. And so the problem today is the thousands of miles in the weeks that perishable fruits and vegetables spend in trucks and warehouses on the way to us. And so what we are working to do is to put plenty farms in communities around the globe so we can use 21st Century Technology to bring ag back to where it was a century ago when perishable fruits and vegetables were always local and fresh. Were growing Farmers Market Fresh Produce all the time and we have run out of the land now in the place where is its economic to produce these crops and so what were doing is bringing that capacity to people around the world and bring them better food while using a fraction of the resources to do so. Matt carl asked you about jeff bezos its interesting that his Company Amazon is plowing ahead into the grocery business with his purchase of whole foods. Any sense of his ambition there and how you may be able to combine this investment in plenty well, i cant speak for jeff at amazon, but i can tell you that what were excited about is the validation of what weve been working on for so many years. If you look at perishable fruits and vegetables, one of the challenges is that because we all know they are perishable and because that experience is so rocky in the store today because theyre spending thousands of miles and weeks in trucks and warehouses, you know, people have shown that online they are generally unwilling to buy perishable fruits and vegetables because they dont trust that experience in the store much less when they cant see it online so what were working to do is to help all of the grocers and retailers of the world to bring quality all of the time. Weve well have our eye on you. Please come back. Thank you ceo of plenty as we go to break, take a look at video from elon musk from instagram taking a full size sedan below ground level musk is as busy as ever. Dows up 104 most of that is boeing were back in a moment [ crickets chirping ] [ light music playing ] youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the c300 for 399 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. As the nasdaq hits record highs today, were watching a number of tech earnings on tap tomorrow, including amazon, twitter and intel. For amazon, eyes on the cloud as well as any color around the whole foods purchase twitter has been doing pretty well trading up near 20 bucks a share. Intel, some trouble in the Data Center Business lately, particularly when it comes to the enterprise versus the cloud. So all of that is going to be interesting to watch. Twitter down 3 back below 20 is raising eyebrows market cap for twitter, and the deal was worth 15. This really shows you how different the economy is today. Indeed. Lets get over to scott wapner and the half. And welcome to the Halftime Report. Im scott wapner rally and risk one wellknown market bull expects the stocks to keep climbing but is trouble lurking in the weeks ahead pete najarian, steve weiss, rich brown and rich saperstein. Lets begin with the rally the dow, s p on back to back earnings. Its more tha