tv Worldwide Exchange CNBC July 22, 2015 4:00am-6:01am EDT
sentiment. weak pc demand sending revenue down 5%. >> but they buck the trend. the turn around strategy pays off as it defies a slow down in china by targeting the high end of the market. >> welcome everyone to the show. shares in apple fell in after hours trade after investors ignore the quarter. they focus on weaker than expected forecasts for revenue in the fourth quarter and there were some other reasons they turned sour on the stock. iphone sales came in at $31 billion with shipments 3 billion
below estimates. they also bundled other devices. the tech giant would only say june sales were higher than april or may but the lack of detail left some analysts speculating over the success of the newest gadget. >> the earnings report is also weighing on tech stocks here in europe. investors are also shrugging off a 32% rise in second quarter profits from chip designer arm despite earnings being broadly in mind with expectations. simon cigar spoke to cnbc earlier about a possible apple takeover. >> there's rumors all the time but when you look at our business model we're providing technology to the entire semi-conductor industry. the range of customers is growing all the time. we have many oem customers now
and for any one company it's less expensive to license the technology than to buy the whole company. our value really is in the fact that we're an independent company supporting an entire industry and building an ecosystem that means that support becomes very cost effective for anyone that wants to use what we do. we believe that our business model is a great thing for the industry. it helps lower cost and independent company is the right thing. >> microsoft had a loss and weaker demand for windows. now the company also took a big hit from the stronger dollar. window sales fell 22%. the company is launching the new window's 10 next week. a lot of focus on whether the enterprise audience will be buying the window's new platform. yahoo!'s second quarter revenue rose 15%. that's the highest increase in 9
years. however the cost to acquire web traffic jumped sharply as they started paying them more money. you can see the stock down about 2%. >> let's talk a lot more about the tech earnings. joining us now is the managing director at cm research. great to have you on set once again. let's kick things off with apple. it didn't do that much wrong except for the fact that it's a victim of its own success and didn't deliver a blowout quarter. what's your take on the numbers? >> the analysts are wrong on this one. apple did broadly in line with what we expected and we see this as a buying opportunity. >> it's a buying opportunity but then some analysts say we didn't get the break down of the apple watch numbers and that adds uncertainty. should tim cook have given us more detail? >> communication this time was weak by apple. we should know what the apple watch sales are. we don't know whether they're 2 million, 3 million, 4 million. some analysts expected 30 million for the whole first 12
months but to me that's not important because we vnlthaven't had a full quarter of apple watch sales and it's just a breaker into the new market. the internet of things. >> i mean it won't account for a major part of the revenues the iphone is accounting for 2-thirds of the group's revenue. should we get too worried about what period am watch sales will do or won't do? are we not too hung up on that? >> we are. investors should look at it as an ecosystem company. a bunch of teams that they're leading in. >> i want to focus on the tablet division.
ipad sales lackluster yet when we look at microsoft's report they're up triple digits. does that tell us that apple is not doing a great job in their ipad strategy and microsoft is winning the race? >> as i said the ipad is one element of its ecosystem. the key is users are using ios as opposed to windows. now windows 10 that could be a total game changer and the reason is its going to be the world's first operating system that works on mobile and desktop at the same time and why is that important? it means that developers can write apps that work on both mobile and desktop. >> when you take a look at microsoft's earnings a big write down associated with nokia but tablets doing well. cloud seeing a big jump in sales over 80%. is that a big win? we know he's trying to focus on cloud yet there's a lot of competition in that space including amazon and google. >> cloud sales are doing well. they're in the direction we expect them to be and i expect
them to beat analyst expectations. >> despite competition. >> despite competition. pc sales are falling so windows has been hit but the key for microsoft is window's 10. we have a buy on microsoft because we think windows 10 will be successful. on the assumption that it does what it says on the 10. investors can be confident that any app will be across the entire ecosystem. microsoft and google don't have that. >> what was the biggest risks to microsoft's stock right now. is it the failure of window's going forward. >> it's the cloud. so can they they transition from their licensing model to a subscription based model and the way i look at the evidence they're doing just fine. we see the market underestimating the mobile side of microsoft. >> i wanted to get to that point
because we saw that huge write down and i wonder whether mobile will be part of microsoft's future. do you think they'll have to make another acquisition because the last one didn't work as we saw with the major write down? >> i think they'll continue to make acquisitions probably in areas like cyber security but i think window's 10 is what they have invested a lot in. we need to see how it works but if it works as they say it will it will be a game changer that could send the stock up quite a lot. >> finally your verdict on yahoo!. are they doing anything right? >> we don't think they have a vision. we don't think they have a strategy and apart from their holding company status we would avoid. >> taking a quick step back and looking at the technology sector we have been seeing the rally in tech stocks. but the point i was making yesterday, narrow leadership at the top. in fact there's just four companies that now make up 30% of the nasdaq 100's market cap. that's apple, google amazon and
facebook make up $1.7 trillion. is that narrow leadership a concern for investors out there? >> it's certainly a concern for regulators. for investors that will get narrower and narrower. in other words the big guys will get bigger and bigger. specifically amazon will come into the top five bracket soon. >> but at some point valuation will become a concern, no? >> of course but not anymore soon. >> you see the stocks continuing their run to the upside. >> certain stocks. so i see apple on a two year basis as a buy. amazon as a strong buy on a 2 year basis. google probably as a hold from where it is now because it's risen quite a bit and microsoft as a buy. >> thank you for joining us to discuss the big movers in tech. >> we want to hear from you on this. where do you think the tech titan went wrong.
e-mail at firstname.lastname@example.org. tweet us at cnbcwex. our personal handles on the bottom of the screen. they set the bar too high and they couldn't live up to the demands out there. >> what about you? >> i would have to agree with you. it's tough to always beat every single quarter and then one quarter we actually beat but the beat isn't as strong as the street had expected then you're going to get sold off a little bit and the shares rallied quite a bit. they're up 40% since the launch of the new iphone 6 cycle so that's impressive in the fact that the iphones are still selling so well even though they're nine months old. that's a very very good takeaway but we'll see. a lot of people say buy on the report yesterday. buy on the dip. >> the question is when you mention iphone six sales that's competition that you're seeing from the emerging market
players. great devices in china and india at a lower price point so when do we see that shift into these new players. that's something that apple has to waf out for. >> absolutely. the slue of disappointing tech earnings is weighing on markets too with apple suppliers in china and taiwan bearing the brunt of the sell. let's get the full extent of this with sri. >> that was a big catalyst and it dragged the major indices on wall street overnight and us lower out here but that was also another dynamic. we saw some investors on the australian market and in japanese equities bank profits because we have seen six fairly solid straight sessions of gains and for japanese shares so routine profit taking in both of those markets but let's just flip the board and show you the damage report because the apple halo effect really seems to be fading over here in asia. that was a big dynamic as we
were talking about and if we can flip we can show you what the shares in the apple ecosystem have been doing any moment now. we can put some greece on the wheels wheels. >> japan will be in the limelight next week. we'll hit the stride for corporate japan and we'll see how capex developments are going and how they're dealing with the weaker yen and how they're adjusting to abenomics and how corporate governance is doing as well after the toshiba. that's where we stand. back to you. >> thank you. let's change gears. let's talk about the bank of england. we're getting those minutes in about 20 minutes time.
ahead of that interesting comments from one of the mpc members. he says the time for a rate hike is coming and it's quote, highly likely that rates will continue to rise over the next few years. worth noting though that he's not one of the well-known hawks that have in the past voting at the boe meeting for a hike in rates rates. but still worth pointing out the comments. >> huawei bucking the trend with an impressive first half performance higher. 69% despite the slow down in china. this as the tech firm targets the higher end of the market. it's on track to meet shipment growth this year. >> we're not done with the tech news just yet. lg electronic shares jumping 15% at one point. google could be interested in taking a stake of the south korean giant but a spokesman from lg was swift to squash the
rumors saying the talk was pure speculation. >> all right and coming up on worldwide exchange falling asleep at your desk? well, listen up we speak to an israeli based firm looking to cash in on america's $3.5 billion sleep disorder market. another day and another headline about donald trump. find out what the presidential hopeful has done now to draw the wrath of washington. plus in the last hour in the last hour the full trailer for the latest james bond movie spector has been released. the reaction and reviews. don't go away. push your enterprise and you can move the world. but to get from the old way to the new you'll need the right it infrastructure. from a partner who knows how to make your enterprise more agile, borderless and secure.
>> welcome back to the show. quick look at european markets and were red today after a slightly negative close in yesterday's trading session. the stoxx europe 600 is off by roughly 3%. the bulls are fatigued after the nine day rally for the european equity markets. mainly disappointing tech news from the likes of am. let's show you the european markets one by one. we have got the xetra dax -- all right we don't have them just
yet. we have the xetra dax down by 0.2%. the ftse 100 is off by 0.8%. really weighing on that index as we just discussed but slight green for the ftse in italy up by 0.2%. let's take a look at the big stocks making headlines this morning morning. better than expected first half numbers. we'll speak to the ceo of the company later on in the show. the group warning competition is hitting the u.k. broadbay market. what's going on with your tunnel? >> it's a net earning of 39 million euros. that's to compare with a small
loss of 5 miles per hour euros a year ago. this is due to the traffic increase in the tunnel driven by the economic recovery in the u.k. and increased by 9%. this positive trend will continue through the second half of the year. it's targeting an operating profit of 555 million euros for this year and 580 million euros for the next one along with this earnings report she's asking the french and british government to pay back almost 10 million euros in security expenses. that's so the company had to obey because of the migrant crisis. 3,000 migrants leaving tents. some of them tried to board illegally train or truck to join
the u.k. blamed public authorities in france and u.k. for underestimating the migrant situation. >> stick with us. easy jet topping the stock 600 index posting it's best day of gains for six months after third quarter profits beat expectations. meanwhile the company upgraded it's full year profit guidance from 7 to 14% profit growth. moving on fresnillo trading lower. precious medals suffered with gold trading near five year lows and you can see the stock down 2%. sticking with medals bhp bhp billiton hitting the lowest level in nearly a week. they expect full year profits to get hit by write downs in it's copper trade. >> he is seeing reassuring elements coming from the investigation into ge's takeover
of alstom. if approved the 12.4 billion euro deal would be ge's biggest ever acquisition. stefen. >> i understand that the last exchanges have been some what positive. this was just a few days after the ge offered some concessions to the european commission last week ge submitted it without giving the details of what was at the table. that being said the ceo of the company e-mailed indicating a few months agatha he was willing to sell off some intellectual properties in order to get the green light from european authorities but say that concessions around the services business of alstom was not an option. did not give further details. also indicated that a french government remains cautious regarding the deal between ge and alstom and especially
pending this decision from the european commission. the commission is not likely to extend it until mid september so it means that we won't get any decision before the last part of december. so nearly two months to wait. >> i want to point out a quick economic me trick we were looking at today. french business sentiment and manufacturing improving more than expected in july. was that expected or are people talking about this number? >> the consensus was at 101 for july. we had 102 for july up from 100 in june from the french business sentiment so it goes into the right direction and confirms that the french economy is recover recovering. there's a lot of skepticism from the u.k. there's the labor market. we have the unemployment rate at the record level in france.
the government hopes to improve the situation on the labor market and actually last week the president confirmed that he would not run for re-election if the labor market would not improve by 2,017. >> thank you so much. moving on to some telecom news. at&t is closer to wrapping up it's deal to buy directv as they signal a green light for the $48.5 billion merger. it would create the largest u.s. paid tv company. the fcc set some conditions for the deal including requiring at&t to build out broadband connections to more than 12 million customer locations and share with regulators all traffic exchange deals it signs with content companies. >> egg mcmuffin lovers rejoice. the wall street journal reports mcdonald's may offer all daybreak fast across the u.s. as
soon as october. they have been testing the idea in select markets and feedback is positive. mcdonald's is also testing other concepts including custom burgers and healthy options such as breakfast bowls made with kale and spinach. a pretty good idea but is that going to revival mcdonald's sales? >> they need innovation. they need to revamp their menu and appeal to the more healthy conscious consumers out there but it's a step in the right direction but is it enough and have they already lost the health conscious consumer that's going to another one. >> the egg mechaniccmuffin isn't the healthiest choice out there. >> i was thinking of a great idea. i leave around 7:00 a.m. and go grab coffee. it takes about 15 minutes away from my prep for the show. why can't there be delivery for coffee? >> you should talk to them about
it. >> i'm sure there would be demand for them. >> it's cold by the time it gets there. >> maybe there's a thermos of some sort. i'm sure they can figure that out. it would be a great idea. i'm just saying and if they do it they better give me a stake. >> totally. >> let's stick with the food topic. chipotle beating forecast but the same store sales rose just 4% less than expected. chipotle warned it would slow to the single digits. it removed pork from a third of its restaurants this year after firing a supplier for not meeting animal welfare standards. last week it said it would start serving pork again and it should be in all stores by the end of the year. shares fell in after hours trade but we should point out over the last three months is down about
3%. so keep an eye on chipotle to see how it is today. >> did you see the guy eating every single day -- this guy looked fine and healthy to me. >> obviously there was -- they have done it for mcdonald's as well. you can mix it up. >> there's ways to do it. >> still to come on the show from russia with love we tell you about the greek prime minister's plan b in case talks with creditors break down.
>> weaker than expected iphone sales and are left speculating over how successful the smart watch is. >> apple stocks turn sour in europe falling more than 6%. chip designer arm also falling to the bottom of the ftse despite a 32% jump in profit. >> historic loss from microsoft also weighing on sentiment. the firm's write down on its nokia business and weak pc demand sending revenue down 5%.
>> the smartphone maker's turn around strategy pays off as it defy ace slow down in china by targeting the high end of the market. >> welcome back to the show. we're just getting the minutes for the month of july. 0 members cast a vote for rate lower than set in the meeting. 0 members were higher than that so what we have got is a 9-0 vote for the boe to leave rates unchanged at a record low of 0.5% and that was very very much expected in terms of some of the commentary the mpc minutes saying that financial conditions are likely a little looser than before. the committee will continue to monitor the greek crisis very
closely. set to grow by quarterly 0.7% in both the second quarter and in the third and some members leaned toward a rate rise but were held back by the greek crisis and this is quite important as the boe and mpc is becoming slightly more hawkish. some members saw the decision as quote, becoming more finally balanced. let's get some instant reaction. fixed income strategist at ubs. what do you make of that? >> that's what we were expecting but it's clear that some of the members are starting to get very close to the point where they're going to vote for a hike again. dprees greece was on their minds in the most critical time they were meeting. that to an extend receded perhaps. china is on their minds and the strength of sterling as they have said and that's going to be one of the big influences on some of these members. >> do you think this is the last month where we're going to see that vote? do you think in august we'll
pull back to 7 too? >> it's very likely so it would be consistent with typical historical patterns and this time next month we'll be expecting a 7-2 vote. the market will anyway. >> i want to talk about the impact of the currency because the recent appreciation has people wonder wlg that will concern the dovish members of the mpc. >> it has to influence all of them. to the extent they strengthened. they'll have different opinions on what the pass through will be but sterling strengthens something like 8.5% on a trade weighted basis since the start of this year. that's a dramatic move and it's come about because of expectations in interest rates in the u.k. diverging from its major trading partners.
and their prospects of doing that will be dented if sterling keeps strengthening so it's a big factor and i think mark carney himself mentioned it last night as a head wind. they will ultimately go gradually whenever they may start. >> many said that rates could rise by the end of this year. tow see the bank of england raising rates when productive and wage growth are big concerns when looking at the u.k. economy? >> a lot depends. that's the critical factor. if they keep strengthening such that even when inflation does pick up they stay in real territory then i wouldn't be at all surprise first degree they do at least vote on that first hike. what comes there after is a much more open question and they're determined to keep the market focused on the likelihood that any rate hikes in the future
would be gradual. that's to keep the currency under control and they're very uncertain about what they're hiking into if they come to that point. >> i want to come back to the currency. a day high verses the euro at 69. up half of 1% on the day. also it's making head way against the dollar on the back of the slightly more hawkish boe minutes hitting a day high of 15647. after they say the rates decision is more finally balanced than last month. they're really strong during the greek crisis and because the outlook for better public finances but then that's taken a backseat. now we're seeing a sell off. what do these boe minutes mean? >> when you look at 5 to 10 year gilts to a degree it shouldn't matter. if they time the cycle correctly it should be fairly immune from it further down the yield curve
in truth. shorter gilts will react and they will if for any reason expectations about the pace and extent of timing changes but for now this is a man tra repeated about rates will go up gradually toward a lower peak. it will be a more protracted cycle than in the past. and the front end is anchored by the expectation and the fact that the data is largely coming out in line with expectations. >> we're not seeing a huge reaction this morning. stick around for a little bit longer. fixed income strategist at ubs. let's take you back to the european equity markets and here's the picture. we're slightly under water today as we saw a slightly lower finish. ftse 100 off. the cac 40 off by a similar percentage. a very modest gain of 0.2% but look we have a pretty negative handover from the u.s. and asia on the back of the weak tech
earners and the chip makers are suffering today. >> there was the big move we saw on monday that caught a lot of investors by surprise in the gold market. a relief rally on tuesday but now we're looking at gold once again lower by around $7. at 1,093. we spoke to barclays just yesterday, a technical strategists about the next support level to watch. he was saying 1050. so keep an eye on the technicals as well as the fundamental story that doesn't seem to be helping gold right now when you talk about the fed policy also the stronger dollar. speaking of, let's take a look at the currency market. sterling has been gaining ground as we got more hawkish minutes from the boe. a lot of concern on the impact on the economy and the adverse impact that could have but sterling at 15607. the euro holding on to 109. a similar level it traded at yesterday and a quick look at how the u.s. dollar is trading ahead against the japanese yen
at 12377. let's get you up to speed on the greek story. the greek finance minister warned parliament it's crucial they pass reforms so negotiations on the nation's bailout package can begin. speaking as lawmakers began debating the latest package he said talks could begin as early as this friday. >> meanwhile a stark warning from the athens chamber of commerce. the vast majority of creek businesses are facing the threat of closure. but s&p is more optimistic. the ratings agency raised greece's credit rating citing the financing and loan programs. >> but reports suggest alexis tsipras himself had a plan b in case talks in brussels failed and involved russia. according to the newspaper the greek prime minister asked russian president vladimir putin for $10 billion in cash to allow him to print drachmas.
he sent the same request to iran and china but the answer was no. >> it's interesting, greece no longer in the first paragraph but it seems to be a lingering concern for investors. can we strus the greeks to implemented these reforms? >> we came away from the edge of the cliff but not very far. these votes that have to go through parliament the first one got through but with a significant cost to the government in-turns of their own mp's deserting or voting against them. there's more to come as soon as today and to get these measures through is going to be incredibly difficult. as you were discussing just now if they don't get them through clearly the problems we were having until very recently come back in force. if they do manage to get them through we'll proceed but it's a
very difficult situation with greece. >> this all may come back to bite us. what do you do with your safe haven flows or assets? a lot of it has been going into gilt and bunds and treasuries. do you still want to hold positions? >> as long as it's a very serious risk i think people have to stay overweight in safer assets. there's an understanding that to get this bailout, to get the ecb continuing to support the banking system everything has to be put in place but the problem is its one of the tiny little issues has got enough mp's to vote against it they may be tempted to push that to one side. if that remains a risk safe asset versus to remain overweight in people's port foilfolio
is still a bund. >> not gold? >> not in your space. >> thank you for coming in. fixed income strategist at ubs. >> coming up on worldwide exchange, if you rely on coffee or a power nap to get through the mid afternoon lull stay tuned for our next guest developing solutions to cure your sleep problems. that's coming up. more and more, data is visual. in fact, the number of mris has increased by ten percent a year. and a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. because it's so challenging a research project is teaching ibm watson to see. in the future, it could help clinicians spot key patterns quickly and precisely. ibm watson is working to make healthcare smarter every day.
sweet 16 ohio governor john kasich is the latest republican to throw his hat into the ring for america's upcoming presidential race. let's get out to tracy potts live in washington d.c. what i find is his most prior experience on wall street. >> yeah he has a pretty heavy resume. he comes into this with a resume as well. now he's serving as governor of a key swing state. many times we end the elections saying it's all about ohio. as ohio goes so goes the nation. so kasich is coming into this as a fairly serious candidate but not necessarily one with a lot of support. we have known or suspected for a long time that he was going to jump into this race. he has been included in national
polls but he's not not top ten at this point in the national polls which means he may not even make the debate stage in his own state in just a couple of weeks. there's so many candidates that only the top ten will get a chance to debate. the other six will have an earlier debate but not that big primetime debate that everyone is going to be watching. so the challenge for kasich is to raise his image among those 16 republican competitors. as he announced his candidacy he really hit the theme that a lot of republicans have been wanting to hear and trying to balance the budget and something he has done before. we'll be talking a lot about kasich as we head into this debate. donald trump is at the head of the pack and kaisch is in the bottom six which means we may not see him in primetime.
>> thank you for bringing us the latest live in washington. >> a war of words broke out between donald trump and lindsey graham. the senator from south carolina reportedly called the real estate mogul a rude word. so he responded like this. >> so lindsey graham says to me please, please whatever you can do -- you know i'm like what is this guy a beggar. he's begging me to help him with fox and friends so i say okay and i'll mention your name. he said could you mention my name. i said i'd mention it and he gave me his number and i found the card. i don't know if it's the right number. let's try it. 202 -- [ bleep ] -- i don't know three or four years ago so maybe it's an old number. [ bleep ] so i don't know give it a shot. >> that's a big no go isn't it?
>> this gets more and more interesting when it comes to the comments coming from donald trump. every day. >> apparently many reporters tried to call that number and then it went straight to voice mail but it did say it was graham's phone. >> who is his pr? it's interesting. maybe it works for him in favor. the polls suggest he is still doing quite well so people like his way of dealing with the press and the stalts he istements he is saying. bold and controversial. >> we'll switch focus to innovation and bio tech. america's sleep disorder market is worth $3.5 billion. the maker of home sleep test also develops devices to detect heart disease and is looking to establish partnerships a broad having teamed up with u.k. company medtronic last year.
studies suggest 100 million people worldwide are expected to have obstructive sleep apnea which more than 80% remain undiagnosed. what needs to happen to encourage more individuals suffering from a sleep disorder to seek help? >> thank you for having me. your description is very accurate. we have developed a very simple but very accurate. left effective home sleep testing which could enable potentially a very widespread diagnosis of this epidemic that has not only tiredness and focus and snoring type of issues that will be more life style but also neurological help for the patients you mentioned. >> what's demand been like for
your product. how has a recent partnership with metronic helped expand your product offering? >> well medtronic has been an investor in the company for a long tile. now also working with us commercially. we see a very large growth. for example in the first quarter of 2015. as you know we publicly listed so i can only talk about number wes have disclosed already. this device here have grown in the u.s. 54% and it's used widely by insurance companies. it's definitely covered both medicare and commercials. we see growth in japan in which we partner with phillips so demand has been picking up. we see both demand from the physicians, both cardiologists and pulmonologists as well as the push from the payers to move from a complex and expensive in lab test to this very simple though accurate home sleep test
that we sell and partner with doctors to get to those patients that needs it. >> what is the price tag for that, then? >> sorry. can you repeat the question? >> what is the price tag for your home test then? >> sorry. >> how much does it cost. >> the pipeline -- >> the price. no the price for that test. >> oh, the price. i understand. reimbursement in the u.s. is roughly $200 but it's fully covered by both medicare and commercial payers so although you know the payment to the physicians is a $200 roughly, you know it's fully covered for the entire population in the u. s., in japan, in israel. it's for much less than the price in both the health care
system as well as the physician realizing a fair profit from that procedure. >> a lot of the medical industries now moving toward the cloud. to what extent are you able to put the results of these tests in the cloud? to what extent can physicians and can peel access them in the cloud. >> great question. our product is both comparable with the standard medical record systems available out there as well as we have our own prior tear cloud which allows transmit hippa compliant and safe transmit of the data collected during the night for the patient through this device to the treating physician. it's comfortable to track drivers and train drivers. people on the road that can take the test. people that are busy and don't have access to care immediately and through our it cloud technology take the tested home or the cabin of the truck,
transmit the data back to the physician and within minutes you get a diagnostics back to the treating physician. >> i want to talk about what's happening in telaviv. it's this emerging bio tech and medtech hub but in terms of human capitol how do you employ the best people when you have many cities here in europe also trying to be a bio tech hub? >> i have been lucky. i spent the last 20 years working for johnson & johnson medical in the u.s. and i just returned to israel two years ago and it's fascinating how much both industry and, activities acadameia as far as talent support, education, worldwide resources and access to really good
technology that supports the industry. the medical device industry. i've been impressed by the talent we see here by the level of support we get from government government. it's been a challenge to find marking professionals here in israel. >> dealing with with tough competition from around the world. we'll see what happens. thank you for joining us and talking about your sleep apnea test. >> keeping in tech it wasn't all gloom and doom for those reporting earnings. barclays raised it's price target on gopro to $71 after it beat earnings expectations. >> gopro has been a roller coaster ride for investors since the ipo last july. it followed that same kind of pattern after it reported earnings. it poeed earnings of 35 cents per share beating estimates for 26 cents.
revenues also came in much better. the expectation there was for $395 million. now shares sold off initially in after hours trading as some traders noted how much the stock rallied in this report. momentum shifted positively after the conference call started. the current quarter sales would be between 430 and $445 million. that's better than the average analyst estimate for $401 million. also earnings per share between 29 and 32 cents. that's better than the analyst estimate and then there's gross margins. around 46% plus or minus half a percent and as a result shares reversed their losses and saw modest gains at one point during the after hours. gopro also said it sees increased revenues across all channels and geographic regions with europe and africa and the
asia pacific region as well. the question for investors now is whether the path of least resistance is back toward the highs of last fall or the lows we saw this past spring. back over to you guys. >> as don was pointing out solid earnings from the action wearable camera companies. >> now we got a little bit of music news for you. 50 cent's flashy life style is all smoke and mirrors. that's what the rapper who recently filed for bankruptcy told a man hat tan supreme court after he was ordered to testify about his finances. the g-unit front man whose real name is curtis jackson said that they were all an illusion. he said it's like music videos. owe see all these fancy cars but everything goes back to the dealership. speaking about his collection, 50 cent admitted he owns just
three gold chains which he has a jeweler refashion into a new piece when the occasion calls for it. >> wow, what a humble guy. >> only three. >> only three, exactly. >> i'm pretty busy at the moment seema because i'm watching that new trailer, the new james bond trailer. >> right. >> so far i have seen a very pretty woman. it's a little dark but look i'm not listening to the sound. so anyways, you should watch it yourselves. the trailer for the latest james bond movie speck to has been released online within the last couple of hours with daniel craig in the world famous spy movie franchise. he'll follow a krip stick trail from his past to uncover a sin sinister organization. >> there were so many teasers we now finally have a first full length trailer. a lot of action as we were pointing out so something to
look forward to. i'm more interested on who is going to sing the signature song. will it be adele again or maybe sam smith or eli goulding. >> there was so much product placement. it was hard to watch. >> distracting. >> really distracting. >> there's been a lot of reviews as expected the release of the full trailer had massive reaction on social media. here's a small sample of the tweet wes found. james bond is back. while ross says the new trailer made him want to put on the full tuxedo and head for a martini. >> she, quote, only rolled her eyes four times at this one. only four times. >> there's still something about james bond films that capture my imagination. >> this will be the 25th in the bond series. it's amazing, right? >> it will be a blockbuster. whatever they put out it always
does so well at the box office. >> you're right. they have a great brand name. speaking of movies big bang theory becomes the first u.s. tv show to legally stream on the chinese internet today. this after a new wave of regulation. however they have to submit full subtitles for censorship. that means only the 8th series can be shown with the first seven prohibited. interesting news there. still to come on the show apple's latest earnings report is the big talk of the town. also how to trade the stocks post earnings coming up after the short break. are you moving forward fast enough? everywhere you look, it strategy is now business strategy. and a partnership with hp can help you accelerate down a path created by people, technology and ideas. to move your company from what it is now...
welcome to the second hour of worldwide exchange. i'm seema mody. >> these are your headlines from around the world. investors digest weaker than expected sales and are left speculating over how successful the apple watch really was. >> apple related stocks turn sour falling more than 6%. chip designer falling to the bottom of the ftse despite a jump in profit. >> historic loss from microsoft weighing on sentiment. the write down on its business
and weak pc demand sending revenue down 5%. >> regulators give the green light to at&t's merger with directv in a deal that will create the largest pay tv company in the states. >> it's our top story. shares falling 7% in after hours trade as investors ignored what tim cook called an amazing quarter. they focused on the weaker than expected forecast for revenues in the quarter and iphone shipments and other reasons they turned sour on the stock too. iphone sales came in at around $31 billion. shipments just above 47 million units. that's 3 million below wall street estimates. apple also refused to break out sales numbers for its smart watch bundling results with ipods, apple tv and other devices. the tech giant would only say
june sales were higher than april or may but it's the lack of detail that left some analysts speculating over the success of its newest gadget. >> there's been mixed reaction to the apple earnings for reporters. while the iphone sales numbers are impressive the strong near term growth is largely factored into apple's current valuation. they also caution about the potential for slower smartphone sales going forward and maintaining it's hold rating. meantime the sell off in apple's after hours is because the street's expectations are too high. it adds it believes the am watch likely contributed more than $1 billion to earnings while other constructs constructs -- products declined. >> apple delivered a good quarter against high expectations. strong mac sales growth in a weak pc market as a strength but did lower the estimate on the apple watch and ipads continue to trend weak.
>> we have been asking you where did apple go wrong if they went wrong at all. the price of the iphone limits it's potential, however, g. hawkins makes the point that many companies would be happy to go wrong with a $49 billion quarter. bet in touch e-mail worldwide and on twitter at cnbcwex and our personal handles are on the bottom of the screen. we have an analyst coming up in about 20 minutes time and he pointed to the strengths of the emerging market. 20% of the sales coming from greater china. that's a 112% increase on the year. india 85% increase and he says apple is very well positioned to exploit the rising middle class. what's the big fuss about? they're growing. >> specifically in emerging markets and china. that was the big concern coming into the report. i was reading through the transcript and steve even asked tim cook about the impact in the
volatility in the chinese stock market and how that plays out for apple and he said yes you're right. equity markets have been volatile. this could create speed bumps in the near term but to put this into context which i think is important they're still up 90% over the last year. they haven't changed their fundamental view on china. as you illustrate the numbers suggest apple continues to be successful in this market despite local players and others offering great products at a lower price point. so it's amazing how they continue to command market leadership. >> as we have been discussing before the bar for apple's earnings always set incredibly high because it has such a well performing iphone franchise. 2-thirds of the revenues coming from the iphone and the shares have done well too. they're up 40% over the last three months. maybe they haven't done so much. a lot of analysts will probably
say buy on the dips. let us know what you think. do tweet in your thoughts on that as well. now the earnings report is also weighing on tech stocks in europe. the semi-conductor which counts apple as it's biggest customer is worst hit. investors are also shrugging off a 32% rise in q-2 profits despite earnings being in line with expectations. the ceo spoke to cnbc earlier about a possible apple take over. >> there's rumors all the time about it but when you look at our business model we are providing technology to the entire semi-conductor industry. the range of our customers is growing all the time. we have many oem customers now licensing technology and for any one company it's muchless less expensive to license the technology than the whole company. our value is in the fact that we're an independent company supporting an entire industry and building an ecosystem that means that support becomes very
cost effective for anyone that wants to use what we do. so we strongly believe that our business model is a great thing for the industry. it helps lower costs and an independent company is the right thing. >> the bad news for tech continues. microsoft reported a record $3.2 billion fourth quarter loss as it rode down it's phone business. window sales fell 22%. the company is launching the next window's 10 next week. yahoo!'s second quarter revenue rose 15%. the highest increase in nearly nine years however the cost to acquire web traffic jumped sharply as they started paying partners more money. >> it's weighing on markets with apple suppliers in china and taiwan bearing the brunt of the sharing. sri, when apple sneezes all the
suppliers catch a cold. >> you're quite right. but broadly asian markets stumbling along because of the stulable on wall street as well but it was an opportunity to take some off the table. so some give back now. routine profit taking for the nikkei 225 and australia. the nikkei and japanese equities and corr rat japan will be in the limelight in the middle of next week. that's when corporate japan hits it's stride with the earnings numbers. it will be interesting to see how corporate japan is fairing with the boj still in the game and question marks about capital spending, et cetera abenomics and so on.
let's give you the damage report with the impact on some of the component suppliers. taiwan feeling the hit here. losses of as much as 5% a reasonably good day. so the apple effect really quite negative out here with some of the ecosystem shares and the component suppliers. broadly another weaker day out here in asia. interesting tomorrow on the currency side especially in new zealand because we got an interest rate decision. broadly consensus pointing toward a 25 basis point cut. there's an outside chance and slim possibility that we could see 50 basis point cut but all expectations are pointing to the cut and strong easing bias in the language as well.
>> amazing to see how three to four tech companies can have such an impact on the global equity market. take a look at u. s. if you tours. shaved off about $666 billion in market cap. apple makes up about 11% of the market waiting so it has a big impact right now. a lower open by 47 points. dow off about 38. s&p 500 seeing a loss of just about 5 points. that's the picture on wall street but what about here in europe? well, we are down decisively on the day. the ftse 100 with a loss of around 54 points as we continue to see the pondund strengthen against the u.s. dollar. mark carney said we could see a rate hike sometime this year although some skeptics say how can you do that with wage growth and inflation and product
activityproductivity. well the xetra dax at 11,569. it's been seeing a rebound earlier this week. right now down about 35. cac 40 down 17 despite some better than expected business sentiment data out of france and a quick look at the italian markets which at this point, you could call it a bright spot. maybe not. up about 15 points or 0.6%. how are bonds looking. >> we saw a slight bid for treasuries on the back of the sell off in equities and the tech stocks and we're seeing further buying but a little bit of selling for the german ten year with the yield at 77.9 basis points. not much movement going on in the bond markets but as seema just mentioned we did have quite a jump in sterling not too long ago. roughly half an hour ago. that's when we got those mpc minutes and they were more hawkish than expected. let's show you what sterling was doing and we saw a session high
against the euro but also against the u.s. dollar. 15628 up by half of 1% on the day. the aussie dollar is lower after weak inflation number and as sri mentioned all eyes ahead of the meeting today 1% was the biggest for the u.s. dollar in about one month. it's quiter compared to the last couple of trading days. off by 1.4%. brent crude off by roughly the same and copper and gold also trending lower after they caught their breath yesterday but the address piet didn't last very long. >> let's take a look at the other top stories at this hour. >> at&t is closer to wrapg up it's deal to buy directv as they signal a green light for the
$48.5 billion merger. it would create the largest u.s. paid tv company. they are requiring at&t to build out broadband connections to more than 12 million customer locations and share with regulators all traffic exchange deals it signs with content companies. both down right now. >> fed ex is ordering 50 boeing 767 freighter jets in a deal worth $10 billion at list prices it's the biggest order ever for the 767 and more than doubles the fleet. the deal will allow boeing to extend production of the jet well into the next decade. >> coming up on worldwide exchange, in the last couple of hours the full trailer for the
latest james bond movie has been released. we'll bring you the reaction and the reviews and maybe the video as well. that's coming up. ♪ ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling. you left this on the bus... get it at the place with the experts to get you the right gear. office depot officemax. gear up for school. gear up for great.
♪ whoa what are you doing? putting on a movie. i'm trying to watch the game here. look i need this right now ok? come on i don't want to watch that. too bad this is happening. fine, what if i just put up the x1 sports app right here. ah jeez it's so close. he just loves her so much. do it. come on. do it. come on! yes! awww, yes! that is what i'm talking about. baby. call and upgrade to get x1 today. ♪ these are your headlines. tech stocks in the red as investors worry about iphone sales.
elsewhere, microsoft posts the biggest ever quarterly loss on write downs in it's nokia phone business and donald trump calls out lindsey graham as the race for the 2016 gop nomination continues to heat up. >> shares trading lower after second quarter earnings missed analysts expectations. they posted a net profit of 3.64 million crona versus expectations for over 4 billion. the company did maintain it's guidance for the rest of the year. joining us now is the ceo of telenor. good morning to you. it was twofold really. we had a lot of strength in the last quarter but weakness in the market. how did the quarter shape up for you? >> thank you for this. the story is just unique.
previously we have been talking about bangladesh as being sort of the prime story telling but that's two or three years. now we see the same happening and we're already at 10 million so this is is just phenomenal. we deliver what the government asked for. they asked for investments and connectivity and that's what's happening. >> the big story is apple's earnings and the lore than expected iphone shipments in the last quarter. you're a big player in the mobile world. what did you make of apple's numbers and is there less demand for iphones. >> icon sen trait on my own figures but the iphone is a fantastic device. no doubt about that but i'm not surprised that the competition
might be felt from another segment being offered out to china and when you hear about 400 million smartphones being shipped to the chinese market in 2015 alone then we know that there is significant scale out there and the competition is on. >> how are you doing in your market specifically here in europe? how tough is the pricing pressure still? >> i would say the growth story is particularly strong but we can add norway. it's a strong contributor. we have the growth in mobile revenues in this quarter alone and it's driven by more than 100% of what people consume from digital consumption and this is done on the strategy which we say is based on pillars.
we want to be efficient and modern looking operator and concern what customers are talking about and ship internet for all. we want to connect everyone. we believe that the local impact to society is so strong that connectivity to everyone is the real contributor to everyone. >> this is your last quarter as ceo. do you expect your successor to continue the strategy that you have started? ie more expansion into asia? >> my successor is coming from internal. he has been doing already the expansion profile. we the sole nonasian operator in the environment of this size so
our strat apology lies firm and we'll also take bets into the service side of the digital economy which have already done on financial services as the most visible one offering financial services and we've done classified investments together and we are looking deeply into things. >> john all the best for your future, your retirement. thank you for your time. >> another day, another headline about donald trump. find out what the presidential hopeful has done now to draw the wrath of washington. that's coming up in two. don't go away.
>> sweet 16. the ohio governor john kasich is the latest republican to throw his hat into the ring for the upcoming presidential race. he's a moderate and supported parts of obamacare but is also an advocate for low tax rates. he formally worked at lehman brothers where he was a managing director until it's collapse in 2008. >> meanwhile a war of words has
broken out between donald trump and lindsey graham. the senator from south carolina recordedly called the real estate mogul a rude word so he responded like this. >> so lindsey graham says to me please, please whatever you can do. what is this guy? a bigger? he's begging me to help him with fox and friends and i say okay and i'll mention your name. can you mention my name? i said yeah. he gave me his card. i wrote down his number. i don't know if it's the right number. it's three or four years ago. maybe it's an old number. 202 -- [ bleep ]. so i don't know give it a shot. >> let's get back out to nbc's tracie potts in washington d.c. despite all of trumps very controversial actions and words he still continues to poll
really well. >> well he does. in the latest big poll and this was before he made the comments last weekend about john mccain and gave out lindsey graham's phone number and may other comments in the latest poll he's at 24%. it's the biggest percentage we have seen for any republican candidate so far this cycle. and it is almost twice as much as the next most popular behind him which is scott walker and that's one of the reasons why he is is getting so much attention. people like him so the media is following dond trump and he's becoming more and more provocative the more air time he seems to get. now when it comes to his comments of late you heard what he said about lindsey graham. he made reference to rick perry saying he was only wearing his
glasses to look smart but his numbers say high. he stays in the top ten and donald trump will end up on that debate stage in a couple of weeks where as six of our 16 candidates won't. >> tracy, thank you so much for that. >> switching focus to earnings chipotle second quarter profit beating forecasts but the same store sales rose 4%. that was less than expected. the company temporarily removed pork from a third of its restaurants earlier this year after firing a supplier. last week chipotle said it would start selling pork again and it should be in all stores by the end of the year. shares fell about 7% in after hours trade. since then the stock recovered down about .2% in europe. >> egg mcmuffin lovers rejoice. you may be able to order your favorite breakfast sands witch at 10:00 in the morning.
mcdonald's may offer all daybreak fast across the u.s. as soon as october. the fast food giant has been testing the idea in select markets and feedback has been positive. they have also been testing other options. that's microsoft. that's not mcdonald's. anyway seema, coming up. >> speaking of another tech company, apple. it was an amazing quarter according to the ceo tillm cook. why the sell off in shares? we'll discuss that after the short break. don't go away.
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>> investors digest weaker than expected iphone sales and are left speculating over how successful their smart watch really is. >> dialogue semi-conductor in germany falling more than 5%. chip designer arlm falling to the bottom despite a 32% jump in profit. >> historic loss after weighing on sentiment. the firm's write down on its business and weak pc demand sending revenue down 5%. >> regulators give the green
light to at&t's merger with with directv in a deal that will create the largest pay tv company in the states. >> if you're just tuning in thank you for joining us. today will be the big focus on tech after imb and microsoft's numbers fell short of investor's hope. it was apple's turn to sour the move and we're seeing a tech fall out around the world. asian suppliers moving to the down side and even here in europe a lot of these suppliers react aing negatively to am's disappointing results. that's suggesting a lower open. the nasdaq has been hitting record highs thanks to the out performance in tech. the question is is the rally over after the series of dis disappointing results. here in europe stocks moving to
the down side. i want to talk about the underperformance in technology names. those are two suppliers of apple that are weighing on the europe stoxx index right now. a loss of 39 points. the ftse 100 down 54 points. we did get that slightly hawkish mpc meeting minutes and also boe governor mark carney saying we could see a rate rise in 2015. we're looking at a stronger pound and stronger currency not great. down about 54 points. commodities still a big part of the discussion because after a rebound yesterday we're looking at commodities lower across the board. some of that having to do with the stronger dollar. wti crude down about 1%. brent crude at $56.67 but yes keep an eye on gold. it is now down about .5% or $5. the price of gold which is held -- which if it does close
at 1,095 that would be the lowest level. keep an eye on gold at 1,095. >> let's get back to our top stories. shares in am fell nearly 7% in after hours trade as investors ignored what tim cook called an amazing quarter. instead, investors focused on the weaker than expected forecast in q-4. >> apple reporting and disappointing investors. for its latest results $1.85 on 49.6 billion. that was fwroethgrowth on the top line of 33%. as for iphones, 47.5 million iphones shipped. that was a jump 35% year over year but it was also basically in line with what wall street forecast. analysts had been looking for 47.3 million. as for ipads, 10.9 million units, mac 4.8 million units. also the watch. remember in that earnings report
apple isn't breaking out specifically watch shipments. it's just lumping watch into this so-called other category along with ipad apple tv and beats accessories. that did 2.6 billion in sales. gross margin at 39.7%. i have a chance to talk to tim cook about the results. he called that a run away success. he says apple continues to take share. he also noted that only 27% of the install base has moved to that 6 and 6 plus and what that suggests is plenty of upgrade head room. with the ipad that has been a source of disappointment for the street. cook telling me he remains bullish. talked about the new operating system and productive tools and the partnership with ibm and the watch exceeded his expectation. also more points of sale. more places to buy the watch. he didn't tell me where or when but it might have been why he
expects the watch to be a big holiday gift. finally to guidance apple is projecting revenue of 49 to 51 billion on gross margins of 38.5 to 39.5%. >> let's talk more about whether you should pie on the dip with technology media and communications analyst joining us on the phone. have you changed your bullish stance on the stock post earnings? >> hi seema and carolyn, thank you for having me this morning. absolutely not. i have not changed my bullish stance. a couple of things struck me. when you look at the metrics, asps were up 18%. everything was moving in the
right direction. remember apple still has mid teens worldwide market share and more importantly they're in the right markets. china now is about 26% of revenues. it grew over 100%. india is up 85%. those two in markets over the next 5, 6, 7 years will be instrumental in apple's growth. they're going to be returning based on whatever they have talked about. about 200 billion by march 2017. up to 10 person of their market cap and most important thing is samsung is not in a strong position. when you look at the overall market what bewe have seen is samsung going from weak to weaker and in that context what apple has is not only a unique product portfolio but a weak competitive landscape. absolutely not. stock is not expensive so we would be recommending investors to buy it on the dip. >> you're clearly a bull but you have to take note of the stock's performance. down about 7% in premarket.
that suggests that investors were disappointed by last night's earnings report. what is the biggest risk here? iphone sales going forward or the watch and it's ability to be successful in the wearable market. >> so seema, when we look at a quarter which is in my opinion a short-term way of hooking at it yes there's going to be around investor expectations. we're coming off of a blow up quarter last quarter so in that context in line slightly better results perhaps did disappoint but you have to step back and look at the story beyond the 90 day intervals and on a 1, 2, 3 year basis and in that context 75% of the revenues come from iphones. over 90% of the profitability is coming there. we're still in the initial stages. switching to the iwatch it was not very material to many of my
pier peer's numbers. it was more of a sentiment thing. we are seeing mixed reviews on that depending upon who you talk to but again you have to step back and look at it on a very long-term theme which is internet of things. wearables. i don't think we can make a case that wearables are not going to workout or apple is not going to be successful. it's a process. it takes time and we just saw a little near term dip. that's all. but there's no changes in the long-term story. >> i just do wonder though given that you have an out performed rating on the stock what's going to take the stock higher. a lot of analysts saying this morning that shares in apple are fully valued and one of the big catalysts in the past has been the capital return program but that has been laid out in detail over the next two years so we can't really get too many catalysts from that. so what else is it going to be?
>> well there's no silver bullet. it's still going to be the iphone. remember, close to 70% of the revenues come from the iphone. apple is mid to high teens in terms of its market share. can this go from 14 or 15% at market share to 25 or 26%? in other words that 220 million can that go to 350 million units? i do believe so. it's just a matter of time an again we have to look at it in the context of this being not only a pure hardware device but an ecosystem unmatched across the whole tech space so again i think we just have to be patient. we have to stick with the story. that's how we make money longer term. these short-terms are something that we see in every tech company but you have to take a look at the story a little bit from a longer term point of
view. >> patience is what he says about apple's stock. thank you for your time. appreciate it. moving on the trailer from the james bond movie spector has been released online with daniel craig starring in the 24th installment. it will see bond follow a cryptic trail from his past to uncover a sinister organization. it's set to be released from october and in november for the u.s. >> very excited about this. now as expected the release of the full trailer prompted a massive reaction on social media with the #spector trending worldwide. >> james bond is back while the new trailer made him want to pull out his full tuxedo and head for a martini. >> she only rolled her eyes four
times. there's still something about james bond films that capture my imagination. i'm sure it will do well in the box office. >> 24th in the bond series. it continues. i want to know who is going to sing the key trailer song. it was adele with skyfall. she got an oscar for that song. it's going to be ellie goulding. >> the big bang theory is the first u.s.tv show to lee fwallygally stream on the chinese internet. only the 8th series of the big bang theory can be shown with the first seven prohibited. does that make sense? don't you have to watch the first 7 to know what's happening in the 8th. that's usually the point. >> in order to understand the characters and the context and perhaps that makes a difference but we have been asking you
which sitcom should be exported abroad? get in touch with us here and we want your thoughts on apple. we have been getting your tweets on whether this is a good-bying opportunity given that it is down about 7% premarket. our personal handles on the bottom of the screen. >> which series do you think? >> some of the sitcoms with massive appeal like seinfeld and friends. >> those are old. >> they're old but they have massive appeal even outside of the u.s. i actually had a friend from india that learned english by watching seinfeld. >> i know that the korean shores do really well abroad. >> you're right. >> not in the u.s. yet but maybe that will come. so it's not just the u.s. exporting their shows but also south korea and others. >> absolutely. still to come on worldwide exchange a mega cable and telecom merger is closer to being wrapped up as u.s. regulators plan to sign off on the deal. more coming up after this break.
more and more, data is visual. in fact, the number of mris has increased by ten percent a year. and a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. because it's so challenging a research project is teaching ibm watson to see. in the future, it could help clinicians spot key patterns quickly and precisely. ibm watson is working to make healthcare smarter every day.
the fcc and justice department signalled they will sign off on the at&t directv merger. tom wheeler is recommending the five member commission vote to approve the deal and the doj says the transaction doesn't pose a significant threat to competition. at&t and the fcc spent weeks negotiating the various conditions for the deal which would combine the number two u.s. wireless carrier with the largest satellite provider. it gives directtv and broadband service beyond the wireless business. the company is also promising to count affiliated services against any data caps and will provide regular reports on network performance. they'll also seek to appoint an independent officer to ensure they're complying with all the
conditions. others faced stiff opposition. they called off their merger after the justice department threatened to sue. sprint dropped it's pursuit of t-mobile after they publicly expressed doubts over a deal. at&t and directv didn't face as much opposition since the companies aren't direct competitors. checking shares in europe today at&t and directv are trading lower. back to you. >> thank you for that. >> fed ex is ordering 50 boeing freighter jets in a deal worth $10 billion at list prices. they also have options for another 50 planes. it's the biggest order ever for the 767 and more than doubles the fleet. it will allow boeing to extend production of the jet into the next decade. shares of fed ex down .6%. >> meanwhile, u.s. and israeli
authorities arrested people in connection to the massive data breach at jpmorgan. it. >> authorities identified some of the hackers because the attack was not sophisticated but they don't have enough evidence to charge anyone for that breach. >> as we head to break, here are your headlines. tech stocks in asia and europe are in the red following apple's after market fall as investors worry about iphone sales. the first ever quarterly loss on write downs in the nokia phone business and donald trump calls out lindsey graham as the race for the 2016 gop nomination continues to heat up. worldwide exchange we're back in two minutes.
>> we are feeling the apple effect. it's down massively after it reported numbers. the xetra dax is down by 0.4%. only the ftse mib with a honest gain. >> interesting to see the impact that apple is having on the asian suppliers as well as the chip suppliers. could be potentially down when it opens. 48 points to the down side. dow down about 45 points and s&p 500 down about four. apple shares down 7% premarket and makes up about 11% of the market waiting on the nasdaq. keep an eye on tech and the impact on the markets. let's give you a run down of what to watch. june existing home sales are out at 10:00 a.m. eastern. they are expected to have
increased again last month but at a slower pace so keep an eye on the housing data. the earnings on slot continues. we hear from abbot labs, boeing, coca-cola as well as american express, texas instruments and sandisk. >> gopro swings second quarter profit as revenue jumps 72%. it was held by strong sales in asia especially china, japan and south korea. they generate more than half the revenue from outside the u.s. gopro shipped more than 1.6 million devices. shares rising 1.4% in after hours trade. up -- there you go. 45.40. >> international expansion working in favor for the team. switching focus to yahoo! second quarter revenue rising 15%. the highest quarterly increase in nearly nine years however the cost to acquire web traffic jumped sharply as they started
paying partners such as mozilla and oracle more money for users. revenue was nearly flat. yahoo! falling nearly 2% in after hours trade. >> let's talk about microsoft. the company reported a record $3.2 billion fourth quarter loss on weaker demand for windows. the company also took a big hit from the stronger u.s. dollar. microsoft took a $7.5 billion charge related to nokia. shares falling 4% in after hours trade at 45.40. from new york is the managing director of software research at fwrif finn securities. what's your verdict on microsoft. >> the quarter turned out as well as expected. three were in line or lighter but the businesses that did better are the ones we think are
obviously more porn. the consumer cloud business and corporate cloud business. they are upside in the xbox business but for the long-term it's less interesting to us than the cloud business which was almost 200 million more than we thought. so on the whole when you look at the set up for fiscal 1 we think the important long-term me tricks are moving in the right direction. >> but the problem with the consumer business where it has done better is margins are lower than on the business side of things. are you not worried about that? >> no the margins improved on the cloud business. they have been growing the revenues significantly to a billion 8 now in cloud business. that's office 365. that's their online business. so clearly the margins have been improving there year over year for the year as a whole versus the last fiscal year they were better. the window's business the sales to the pc companies we were looking for that to be to down
21%. it was down 22%. i don't regard that as a material difference and it's in a positive bottoming here with windows 10 likely to drive improving demand over the course of fiscal 16. >> you mentioned cloud as a bright spot. you did see a big jump in revenue. the question is is this growth sustainable giving the competition in the cloud space for the likes of google as well as amazon seen as the leader. many people saying giving the new entrance that we're seeing that this space will become co comoditized. >> they'll convert a substantial amount of their corporate system to clouds and the fact that they have added a million subscribers in the month to 15 million subscribers, that's good momentum and so we would expect the cloud business to have it's
first $2 billion quarter very quickly bringing along improving margins as well. >> do you think microsoft seen as one of the stocks that some of the older tech names appealed to -- older tech investors appealed to do you think now given the growth they're seeing in surface tablets as well as cloud that more growth investors are looking at the stock as a buying opportunity? >> that's appropriate. we have been recommending the stock for about three years now and our premise has been they have technology and brand value that under the current ceo they're making more of. i like that they're bringing their various technologies together. making that available through other brands including windows and their browser. i think that's a very credible strategy. it will drive more value. >> thank you. >> and we'll see it bottom again. >> jay, we'll leave it there. thank you for joining us.
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it's wednesday, july 22nd 2015 and i'm loving it as squawk box begins right now. >> good morning and welcome to squawk box right here on cnbc. i'm andrew ross sorkin. becky will be back tomorrow. we have a scary story out of the auto industry this morning. computer experts, if you can believe this they remotely hacked into a jeep on the highway and did it all with a laptop from the comfort of a couch. now the auto maker is offering a fix to a stunning vulnerability. the shocking new video. this is what everybody fears when it comes to all the come computers computers. >> it's a steven