Good monday morning. Post nine kicking off. We have tech reporter joining us. Good to have you back. A lot to get to. Tech stocks looking to bounce back from a rough month. Nazi in the green today, down three weeks in a row. Entering correction territory on friday. This is the first three week loss for nasdaq since january. If you werent facebook or amazon, it was a tough quarter. What happened . I mean pretty much as you said, every other tech company other than those two had troubles, for different ones, sources were different. We saw a number of Companies Still hit, ibm, intel. And different problems. Apple iphone sales have stopped growing. This is kind of a huge question for them going forward, whether to do anything else to boost sales for iphone and for the rest of the company for other product lines. Thats the big question for them. We will get to apple in a bit. External dynamics outside of tech, the dollar, if youre bullish, reversing course not reflected in q1. Theres a counter story going on. Let me read a list of stocks that are up almost 50 or more in the past three months. Splunk, up 48 , group on up more than 50. These are the dogs of the tech world. There was a bubble you could argue in these stocks popped a long time ago. People were focused on top tier. Those stocks had a little bit of a rebound. Certainly off the february lows. Theyre holding on to some gains theyve had in that period of time. What does that mean exactly for startups . I dont know. Whats your take. Is there some sense that pessimism of earlier this year was overdone or is that kind of another wave of fear settling in now that some stocks that were rebounding are starting to lose gains. I feel like things are slightly less pessimistic than four, five months ago. We have seen more Big Companies get funded. In general for startups in the valley, the mood now is there are some good ones that will continue to get funding and probably already have a lot of money, may not need funding. The ones with any sort of slight question about dynamics, if youre on demand Delivery Company and there are questions about unit economics, for instance, those kinds of companies are going to face a lot of trouble raising money. The list you mentioned is interesting. I think were seeing a lot of high highs and low lows. And for some companies kind of that atmosphere may have changed and people think those companies are probably a little too far down. Theres a lot of still a lot of opportunity for the Software Service companies, for example. Weve had i am thinking back, Roger Mcnamee ankara swisher friday argued we are in a pause moment, innovation, between hardware cycles. In a pause moment with ipos since square and service works. Does that make sense to you . Yeah. Especially on the technology front. People dont really know whats going to happen next. I think the tech business is always unpredictable, seems slightly more unpredictable now. Big companies build new products like apple watch and the kind of dont do well, Big Companies build off the wall products like amazon echo and people are saying it may be the next big thing. We are in a moment where sure things dont look like sure things and weird things are kind of doing well. Its difficult. Meanwhile, we have an interesting story from texas. Uber and lift plan to shuttle down indefinitely in austin after voters decline to support a proposition shielding drivers from stricter background checks. They say that will hurt drivers. Both companies stopped operations in austin, it is unclear whether it is temporary or permanent withdrawal. They think austin and lift are made for each other. I want to volunteer long term in churchs sunday school, i need to get fingerprinted. I should be able to drive around with young lives in my care . I dont know where the line is for these companies. My wife is out of town taking an uber late at night, i want her on the phone with me. She can get a picture of the guy and car shes riding in, there are a lot of stories as there would be with taxis about safety of this. I wonder whether this tilts cities in the direction of not messing with uber and lift, there are rumblings in north texas and other cities, or if some dig in and say wait a second, people voted. What does it mean . You have to look at this as a campaign on the part of uber and lift. The big issue, they dont want these kinds of rules spreading. I suspect this is opening and we will see what happens in austin. The real message to other cities, they dont want San Francisco and new york and l. A. Passing these kinds of rules. I dont know if it is these rules specifically or the idea of stricter rules generally and worry this might be some domino issue. They want to play hard ball here. They dont want these costs to escalate. Seems like fingerprinting doesnt seem like an onerous restriction. Not like these are a bunch of bureaucrats that decided this is what we want you to do. This is a popular vote. Majority of people that voted said yeah, we think you need to be regulated. Love you but get fingerprinted. Why wont they do it, draw the line there. Are we in an Age Tech Companies feel like we are the government, we make the rules. We will push back on anything that seeks to limit us. I have a feeling that could back fire. Apple, fbi, or i think everybody gets your point on that. Check out apple. After closing friday at the lowest level since june of 2014, apple is close to 14 down in the past month. Farhad, saying they need to try more moonshots. The slow search for precision and perfection may no longer be in apples best interest. Did this get anywhere zooing in the company . I dont know if it got anywhere in the company. I think what they need to do now, it is a slow process of changing culture slightly. I dont think they need to do anything radical but i think they should be faster in terms of getting new stuff out there. And they should be a little more experimental. We know theyre working on moonshots in secret, building a car somewhere. Theyre working on some tv service that if it works could be a huge change. But they have been slow on some basic things that could change how we use our phones. It is crazy siri doesnt work better than it does already. The stuff they put out, if it is not great at the start, they take a long time to fix it. I think they should be a little faster. Let me push back on you. Which of googles moonshots, real moonshots worked out. Youtube bought for 1. 3 billion when video wasnt huge, turned it into a juggernaut. Android they did well with. Apple bought pa semi, now designing chips in their phones. A huge margin booster for them. If you look at the economic value of that, it would be pretty big. And maps, all the companies they bought and percentage of ios that use apple maps instead of google maps, even though it started a disaster, you could argue thats the equivalent. Maybe apple is just a better steward of capital in some ways than google is. One of the difficulties here, youre right, is we compare kind of the Companies Like google experiment in the open, we compare them to apple which experiments in secret. We have a tendency to call google more innovative as a result. I think what you get with that approach, more free wheeling approach, i would say amazon is a better example, you get off the wall stuff. You get things Like Amazon Web Services which i dont think people imagined would be as big a business as it would be, but it came out of nowhere. And it is probably going to be bigger than the retail store. Those innovations you get as a result of doing things faster and with a little less persnickety perfection. It is difficult for apple. People make a big deal when something doesnt work well. It is part of their brand to be perfect. Thats the difficulty. Thats the great delineation. Bezos and amazon are willing to fail in public and thats tough for apple. Wont you agree historically . I agree. I think apples surprise trick worked better when it was smaller. Before it was making tens of millions of devices practically per week. Once i get to that scale and that number of suppliers, it is hard to keep a secret, that marketing trick doesnt work as well. Thats why we get the specs before the actual introduction. Farhad, good to see you as always. Come back. Thanks very much. And we want to check on the markets, trading lower. The dow down around 39 points. S and p are flat lining. Nasdaq up 30 . Tyson foods, the company saying it was pleased with results and what is typically the most challenging quarter of the year. Meantime a little under 20 minutes, Sumner Redstones competency hearing. Julia boorstin has more on that. Reporter good morning, john. In a couple of minutes, the judge will update the court on deliberations over the weekend on whether or not to dismiss this case against redstone filed by former girlfriend. After hearing testimony that he hated her, calling her derogatory expletives and he was happy with his daughter sherry managing his health care, the judge said he would consider dismissing the case asking both sides to submit briefs. They write in the interests of his privacy, dignity, legacy and family, mr. Redstone respectfully renews his request that the Court Dismiss the petition, and allow him to live out his remaining days in peace. Heirers attorney doing what is necessary and to understand why he said in his testimony. Of course it is not over. Why is he saying this. How was he brainwashed. What happened to him in six months since he made the decision, did he have mental defect when he did. Think it is clear he did, but at minimum we get a trial. Reporter we will be back as soon as we hear the judges ruling. It would be very unusual for a judge to dismiss this kind of case after one day of trial and three witnesses. But then again, it is a very unusual case. Guys, back to you. Thank you very much, julia boorstin. When we come back with apple shares down close to 15 in a month, time to be buying or selling . We talk to two top analysts. And donald trump leaving the door open to tax increases on the wealthy. Look at what he said. Check out lending club hurting after the ceo resigns, the board decided he violated Company Business practices. 65 off the offered price. 82 off. Worst day ever. [engine revving] the allnew audi a4 is here. Check out lending club stock, shares hit hard after the company ceo resigned after the board said he violated lending business practices. Kind of a complicated issue here. It is somewhat complex, seems to come down to a board of directors and whether it trusts the founder, ceo, apparently the answer was no. This is after review of loans. Theres Renaud Laplanche who is no longer the ceo. There was a package of loans being sold that was originated by lending club. It is not a question of the underlying credit quality of loans. Simply documentation associated with the 22 million package was not what had been requested by the buyer, which requires documentation of a different type. Apparently it began because of something that appeared more serious, about 3 million of 22 million in loans also had a change made in the application date for the loan. Again, it doesnt seem to get to the underlying credit quality, but what occurred is that was found a change in application day. Further review found this documentation differential from what the buyer wanted of the loans. And that led the board, seems to have questions with the ceo, and not to be given what it felt was full disclosure or the ceo not being completely forthcoming with the board. John, talking about a board that includes john mack, former ceo of morgan stanley. Mary meeker, and a fairly high level board that simply felt it no longer, if i can put it in my words, say trust its ceo. Thats often times a move toward dismissal, despite what doesnt appear to be something underlying that speaks to a problem at the company, at least at this point, theyll put off filing the q and not giving this guidance. How much comes down to in this environment these days if youre in the finance business, your credibility will get questioned perhaps in court. These things even if not going to credit quality could go to a case that management was not on the ball. Thats the point. Hans morris who is acting in seer yor capacity as a board member on the call, to your point, key principal of the company maintaining highest level of trust with borrowers, investors, shareholders and employees. The Financial Impact was minimal, but it went to that point that youre making given it is a finance company. I get it. Thank you. All right. Getting curious reports on impeachment process in brazil. Those curious reports are pounding the brazilian stock market. The etf, trades in the United States and the real. Etf is off more, double whammy. Stocks are lower and the realice lower. Coming from a reputable newspaper in brazil, somehow the acting leader of lower house anuld the impeachment process against the president. This is not confirmed by the spokesperson for the lower house. Initially reaching to people in brazil, there was confusion. In theory, the process moved away from the lower house and to the senate. We will keep watching this. It may be it has to go back to the lower house for another vote. The reason the Stock Exchange and etf move lower, there are reports that the impeachment process was anulled. The vote was supposed to happen wednesday. It looked like a done deal she would be out of office six months during trial. Back to you. Thank you, michelle. Up next, recode, our partner has a look or change in strategy. New recode editor dan farmer will join us. And familiar face leaving Donald Trumps transition team. Details in a moment. A new announcement from the trump campaign. John, we have Chris Christie, governor of new jersey who endorsed donald trump after losing to him in the primaries, named as head of the transition effort for donald trump, looking ahead. Chris christie is valuable to donald trump as an ambassador to the world of government because hes new to the world of government. Hasnt served in Public Office before. So Chris Christie is going to organize that. Chris christie is also somebody thats been talked about as a potential running mate for donald trump. Well see how that plays out. The other thing we have been talking about is the back and forth over Donald Trumps tax plan. Remember he proposed a plan with three rates, 25 , top rate for individuals, 20 for capital gains, 15 for businesses. Huge tax cut. When he spoke to Andrew Sorkin on squawk the other day, said he would negotiate it upward. Talked to chuck today on meet the press over the weekend and said this. The thing im going to do is make sure the middle class gets good tax breaks. They have been absolutely shunned. The other thing i am going to fight very hard for business. For the wealthy, i think frankly it is going to go up, and you know what, it really should go up. That was interpreted as donald trump proposing a tax increase on the wealthy, over the 39. 6 top rate now. Donald trump was quick this morning to clarify and say no, i meant i would negotiate up from 25 figure in my plan and he is accusing media of being unfair. But donald trump has to take responsibility for this, he needs to speak clearly about what his goals and objectives are. Because donald trump doesnt have a deep attachment to ideas and Public Policy goals, he is subject to being misinterpreted in the way he says he is now being misinterpreted. Donald trump, we will wait and see what he says in coming days, will meet with paul ryan thursday, the House Speaker who withheld endorsement for donald trump. Paul ryan cares about cutting taxes almost more than anything else in Public Policy as a means of spurring the economy. Thats going to be interesting fodder for the conversation between donald trump and paul ryan thursday. One of the disciples of jack kemp. Thank you so much. Recode is getting a redesign, relaunching their website. The new editor and chief joins us this morning. Great to have you. Congratulations. It is not just the logo, theres more to it. You want to talk about the evolution . Recode joined box media about a year ago. This week we pushed the brand new relaunch, completely redesigned. New branding by the guy who did the logo for oculus. Remove the slash from the name and we are embarking on a broader focus, too. You talk about websites used to Cover Technology as a thing. Right. Now it sort of bleeds through everything we do. Everything. Watch cnbc all day, it is mostly about tech now. It puts us in unique position as tech experts to cover more of the Business World with tech as a lens. We launched a transportation section. Tech completely transformed transportation, with uber, and changed the way people get around cities, look at tesla, hyper loop someday. Those are tech stories. Imagine how we cover future verticals and other topics like that, i think we find similar ways to do it. Recode started as text. Now podcast, audio, video, still have live events, including a big conference coming in a few weeks. What percentage of what you do is text and strategically, how much growth comes from writing versus other media . I would say journalists spend most time on text. Thats a big part of the brand. A few events a year. If i have to makeup a number, 95 of the of the time thinking text. Video is the future for brands like us. Theres a lot we can do with video we cant do as efficiently or creatively in text, showing things visually with charts or showing emotion through interviews, thats something the conference business does tremendously well. We transferred that to podcasts. Video is a natural growth point for us as well. Do you see yourself moving toward a wired audience where people are already locked into issues, or more of the layman, they appreciate tech, even though they cant tell you how a circuit would work. The core audience probably started in silicon valley. We want to please that core audience every day. Growth comes from consumers with some business or tech interest. At the least, we want to be sure everything we write can be understood, makes sense, has meaning to the people, to everyone. We dont want to be exclusionary.