Earnings which will include some hightech bellwether names later in the week. We have apple shares, they lost their opening pop despite top apple analysts saying first day iphone 12 preorders surpassed last years numbers for the iphone 11. That bodes well for the mini and pro max, who Iphone Models that have not taken preorders and ship four weeks from today a couple more big q4 products, the xbox series x and the Sony Playstation 5 will hit shelves verizon and at t this week morelikely with 5g comments Texas Instruments and intel all reporting. Mike santoli joins us now with more well get more of a Critical Mass of earnings hitting the tape the question is is the street going to be more impressed this week than last week in the opening rounds we had an 81 beat rate by the companies that reported last week yet the average stock move buzz down more than 1. 5 in the one day after those results. It suggests perhaps that a lot of investors would think a big beat rate was in the bag for this quarter with those big bellwether tech stocks, theres an interesting dynamic. One, theyre significantly below the highs from earlier this year but tech as a sector is a Leadership Group and has outperformed the overall market. And tech estimates have not gone up much but they have not gone down much. For apple, its logical that you would want to look at the iphone demands. So these big tech stocks have been rewarded for their steadiness, not necessarily because theyre accelerating out of this. Even netflix since about april, the earnings forecast for this year has been static static is great because earnings have been down in general 20 at the lows, but its a question if they can get an extra kick from the results here anything they can say about the expectations for demand going into next year mike, one company im looking at closely is ibm. First up reporting after the bell today giveni giving up all of its gains from that spinoff news well see if there are plans to invest more capital back into the business, but, mike, how much should we or can we read into ibms earnings as a potential precursor to cloud results this quarter i think that for the most part its the Financial Engineering piece as is so often the case with ibm that is in the foreground one of the objectives it would seem of the spinoff is to have the higher growth remaining business get rewarded for things like cap ex as opposed to gettig obscured to other businesses perhaps they want to transition the company into longer growth themes its not so much a bellwether in the moment but whatever they can say about bigger tech spending trends among Large Companies after this shock this year is probably going to be relevant. Ibm as a stock, its a difficult time for years getting out of its own way, even when its had decent quarters. Well see if maybe the spinoff news can create Something Different here indeed. Thank you. Joining us now for more on this tech environment, lowe tony good morning i know you are bullish on apple, iphone, 5g, but i think theres some Big Questions out there about whether the networks are really ready, whether consumers will be disappointed seems to me in the next four weeks theres a big Consumer Test in tech with these iphones and the early reviews and then major gaming consoles. We have not seen a refresh like this in about seven years. Do you think the consumer can hold up . These are interesting questions. First and for most, we have some big macro events coming up as well with the election, hopefully getting a control on the pandemic as well as the stimulus package i think all of those will also help to influence Consumer Behavior with regard to apple and the iphone, we have seen reports showing that the 12 sales look good so far for the models on prerelease orders i think the most interesting thing is that were at a situation where this is where the expectation would be for the socalled super cycle with regard to iphone and the refresh with strong consumer demand. But we dont really have a true killer app per se. I think well definitely see some new innovative features with the iphone with regard to camera and clarity then also the ability to leverage the 5g networks but the question remains is are these things enough for the consumer i think historically we have seen these exciting applications that friends want to show off to their other friends. That kind of spurs consumer demand its almost difficult to really show an advantage to a friend of the 5g network so well see personally im due for an upgrade. Im planning on preordering the max when it becomes available. On the other hand, game consoles are a lot easier to show off but i wonder this week of earnings what is most important . We get a number of semiconductor names, tecxas instruments, lam research, will that give us much insight into the pipeline or is it really more about software these days no matter what the chip folks are doing again, i go back to the comment around these killer apps it is really more in my opinion about the software on the consumer side and the business side i think the good news is that this technology on the hardware side has become so pervasive and so good we almost dont even think about it like the complexity has been taken away because of the great User Experience which allows everyone to focus on what it is were actually using the technology for you mentioned the pandemic, trying to get a handle on it broadcom over the weekend and over the past couple of weeks saying the fall and winter look troublesome, if the Current Trends extend. What do you think that means we have netflix this week, in terms of the streaming environment, is it possible for people to watch any more than they already are or subscribe more than they already are because they already have been home for several months to some degree you know, its interesting. Obviously the new subscriber growth is what really drives the share price. I do believe we have more head room with regard to netflix. Everyone will be at home it will be colder. Screens will be more prevalent than they are now. I see head room in terms of netflix growing their Subscriber Base many analysts think that maybe netflix was being conservative with regard to their projections for subscriber growth and a lot of the analysts are increasing estimates for new subscribers. I think personally ill be watching a lot of netflix for a lot of my favorite shows and that will translate over to other consumers as well. Certainly many of us. Theres a journal piece talking about how tech accounts for 40 of the s p, and thats actually a greater proportion than what we saw during the dotcom bubble peak i wonder if this concerns you particularly because your top pick s are in tech are stocks too dependent on the sector what happens if we see a pullback i think without question as Marc Andreessen said, software is eating the world. Were seeing the incorporation of technology not only in more of our consumer lives but in more of our business lives as well i think obviously the unfortunate side of the pandemic with regard to human life, a positive has been that it has accelerated a lot of the tailwinds that were already existing for things like being able to do remote work weve seen billions of dollars poured into infrastructure so that companies can actually have their employees operate extremely effectively in a remote setting weve seen things like netflix which we talked about. Weve seen things like inst instacart. All these things are already accelerated by the tailwinds i think longterm im bullish on Technology Just given where i see the usage going and the ability to really just fundamentally change peoples lives. Technology is so integrated into our lives these days my home, everything is a smart home you know, i cant imagine what i would do if i didnt have the ability to control things with my iphone or my computer or if i forget to turn my alarm on, to do that remotely i just think even the fact that were able to have this broadcast, you know, over zoom, we actually are seeing no slowdown in technology whatsoever i think even just looking at, again, going back to the pandemic, we have seen some Behavioral Changes i actually suspect that were going to see some new technologies emerge as a result of some of these behaviors that are going to persist yeah. Well see if the companies reflect similar confidence in their guidance as they report this week. Lo toney, thank you. Thank you up next, following last weeks social media backlash surrounding misinformation, are Mark Zuckerberg and facebook really ready for the election just two weeks from tomorrow squawk alley returns in two minutes. When i was in high school, this was the theater i came to quite often. The support weve had over the last few months has been amazing. Its not just a work environment. Everyone here is family. If you are ready to open your heart and your home, check us out. We thought for sure that we were done. And this town said not today. Gone is the hooded nerdy kid shepherding his company on to the main stage a new wall street journal article titled how Mark Zuckerberg learned politics appear today joining us is the author of that article. Your reporting painted an image of zuckerberg who took 2016 as a wakeup call and leaned into policy in a big way, cultivated personal relationships with policymakers, publishers, civil rights activists have we ever seen this level, this kind of engagement in terms of political and social reach out from a tech ceo before i think you see this a lot with tim cook at apple you see it certainly a little bit with jack dorsey at twitter. Its definitely new for facebook its new for mark, at least in the last several years a lot of these tech ceos belong to the camp of politics is something that happens on the other side of the coast. 2016 was a massive wakeup call and they realized they couldnt leave it to the policy teams there anymore. I guess it still remains to be seen, but in your research and reporting, do you think that zuckerberg and facebook are ready for the election, in a better position this time around while the issues are different than they were in 2016 they certainly have done more theyve hired thousands of people to vet content and to ensure that misinformation doesnt pget on the platform. They hired Fact Checkers and a lot of people to make sure they stamp out the same kinds of threats we saw in 2016 there are still a lot of challenges, new challenges like you brought up so domestic disinformation is a big problem. These are not russians spreading misinformation about the election but americans spreading misinformation about the election thats a challenge theyre still adapting to. Then theres, you know, they have competing goals they want to make sure they stamp out disinformation but also want to make sure that theyre being fair and neutral and nonpartisan as possible these two goals periodically clash. Deepa, you mentioned this shift happened after the 2016 election, but from my standpoint there were at least two shifts then theres been a difference over the past two years in how zuckerberg seems to have operated politically versus 2016 to 2018. Sheryl sandberg was out front in that first period when the Cambridge Analytica heat was on. She took a beating in the public eye during that period it seems to me over the past couple of years in a way shes retreated from that more direct engagement position and zuckerberg has come more forward. Is that what you found as well i think youve seen mark take control around the Cambridge Analytica crisis that felt like an existential crisis for facebook. It felt like they were suddenly experiencing a lot of different regulatory government scrutiny from around the world and both sides of the atlantic, and mark felt like he had to step in. If you remember around this time, that was his first congressional testimony. He was asked to testify for the senate and the house that was new for him hes done it several times since then you have a much larger engagement after 2018 that starts in the 2016 period with mark trying to understand exactly what the impact of his platform has been on politics. Then snowballing into what we see today. Should investors take away from this the idea that founder ceos like zuckerberg who like to focus on product and saw these policy and regulatory things as ancillary have perhaps shifted their view and now view these political issues and headwinds as core to product decisions and things they themselves need to take handson approach to . Absolutely. The government scrutiny is not going anywhere they have to continue to think about what the policy implications are of everything that they build. They have to think about the social implications of everything that they build the days of lets build it, put it out in the world, tweak it along the way, those days are largely over they have to put more thought into the products they build before they launch, which is a shift for these companies and a big part of why they have been so successful. Theyve been able to move so quickly and now the additional scrutiny has slowed them down. Back to jons point and what you reported as Sheryl Sandberg taking a step back while zuckerberg takes a more active step forward who else is zuckerberg leaning on i know he brought in the former deputy british pm. But weve talked a lot on the program about how these policies feel inconsistent and transparency particularly when it comes to fact checks is not all that clear so who is he leaning on did you find in your reporting internally so one person hes leaning on internally is joel kaplan, the head of global policy. A former bush aid and a republican i think joels guidance has been important for mark as the Trump Administration has worn on i think they i think there are other people internally on the same policy team that mark is talking to. Certainly hes relying on peter thiel. My colleagues and i reported back in december that peter thiel was a big driver or supporter of the policy to not fact check political ads that took got flack for a year ago. Hes relying on these voices that understand the right internally as you remember Sheryl Sandberg, huge democratic donor supported hillary clinton. So i think hes shifting more to the people inside his company that understand conservatives and the right. So theres a little bit of shifting back and forth depending on who is in power all right thank you so much for your insights great article. Thanks. Keep your eyes on draftkings today, now down 30 from the october highs when it was above 64 some wall street firms growing skeptical over the valuation of betting stocks like dkng and penn national. For more on th gato to cnbc pro. More squawk alley after the break. I had saved up some money and then found the home of my dreams. But my home of my dreams needed some work sofi was the first lender that even offered a personal loan. I didnt even know that was an option. The personal loan let us renovate our Single Family house into a multiunit home. And i get to live in this Beautiful House with this beautiful kitchen and its all thanks to sofi. Before we talk about taxsaudreys expecting. New . Twins and i get to live in this Beautiful House wed be closer to the twins. Change in plans. At fidelity, a change in plans is always part of the plan. Lets turn back to apple and other products a top Analyst Reports strong preorders for the iphone 12. The stock currently trading about flat the iphone kicks off this huge compressed launch season for tech products, unusual in 2020 we have this first wave of iphone 12s that ships friday, then orders for the 12 mini and 12 max those ship about a week affleck sh after election day when we get the xbox x from microsoft and the playstation 5 from sony and singles day all compressed in that period of time. Yeah. Even though the overall retail season, jon, people talk about it being extended starting earlier and going all the way into the holidays. Weve had this discussion so many times about the degree to which the consumer in aggregate has gone into this pandemic with more money, better fico scores we found out today more Discretionary Income more savings, and more time at home you put all that together, that spells an environment where you might actually spend more on a gaming system or a phone thats right. Weve seen the carriers actually discounting the 5g iphone 12 with an aggression that we have not seen in the past which suggests, hey, they want to get this into peoples hands, make the decision easier for them on top of those factors carl was mentioning and china is such an important piece in this story. We had gdp numbers out over the weekend. Recovering to prepandemic levels key for the iphone story as well, huaweis smartphones have been very, very popular in china, but since it was put on the u. S. Export blacklist taking a hit because they cant get those android updates or the google apps. It will be interesting to see what the response is over there to the ifshgs phoiphone 12, esps we approach singles day on november 11th look at alibaba shares, hitting a fresh 52week high in todays session. And financial tech giant, ant group, winning approval from chinese regulators for the hong kong leg of its blockbuster ipo. The company, of course, owned 33 by alibaba and controlled by billionaire jack ma. The fintech giant is targeting the end of the first week of november for its dual Hong Kong Shanghai listing. Thats right after the election. It is later than hoped for as for valuation, investors are indicating a valuation of 2 250 billion or above which would make it larger than all but one of our Big Five Banks in terms of market cap. Squawk alley will be right back s decision tech. Find a stock based on your interests or whats trending. Get realtime insights in your customized view of the market. Its smarter Trading Technology