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tv   Squawk Alley  CNBC  August 5, 2015 11:00am-12:01pm EDT

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♪ ♪ good wednesday morning, joining us at the far end of the desk, john broad, co-founder of aol ventures, kelly evans back with us, thank you for joining us, jon fortt at post 9, we want to begin at disney. shares getting hit after revenue missed estimates, and company nts noted some modest subscriber losses at espn as the company continues to shift to digital. take a listen to bob eyeing another joined us earlier. >> obviously the bundle delivers great value to espn and will
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continue to. the bundle is not going away. the bundle is still relatively strong when you look at it given all the competition in the marketplace and you look at what percentage the bundle represents, not just in terms of revenue, but in terms of how people watch television. it's still the dominant form of television viewing in the home. espn is fortunate that it is a brand that we believe ports w sl to any new platform. smaller bundle, over-the-top package of programming or direct-to-consumer business, we have invested over the years in the strength of its brand. and that gives espn the ability to essentially manage through whatever disruption is going on with the bundle or in television in general. or in media. it is one of the strongest brands out there. and if you want to have one brand, at a time, during a time of such change, i would argue it's espn. we view netflix as friend, not foe. there's to reason for us to beat
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netflix. we are taking advantage of netflix' great growth and i guess maybe could you argue we've helped netflix great growth. we're selling product to netflix that's off network, abc and other networks. we're fortunate that we have product like "how to get away with murder" for instance that netflix really covets. we're selling our movies to netflix. the output deal for our movie studio kicks in with the 2016 netflix slate and netflix comes forward as an aggressive buyer of original programming and we have great deal with them for marvel television. i would imagine we have opportunities to expand our relationship with netflix in terms of supplying original television. so suddenly, we have a huge customer out there, that is willing to spend and is actually already spending billions of dollars on intellectual property that this company owns. we view that as a positive, not a negative. i also as i look at netflix. i view it as a complement to
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what i'll call traditional television. not necessarily as just a disrupter of it or replacement of it. this is a great company. and when you think about abc, and you think about disney and you think about pixar and marvel and "star wars" and espn, no one has got in the rave of media brands like we do and the pipeline going forward is unbelievably rich when you think about the movies we have coming into the marketplace, starting with "star wars" in december of this year. we've got sequels to "finding nemo" called "finding dory" and "incredibles" and "toy story" and "guardians of the galaxy." our decision to buy our stock back at a greater rate in 2016 is tied completely to the confidence that we have in that array of businesses, in those brands. and the future of this company going forward. even in a world that is being
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disrupted by technology. because for most part, technology is proving to be friend, not foe. to this company and those businesses. >> covered a lot of ground with iger, regarding the bundle, jon, didn't talk much about theme parks. there's a concern that content creators everywhere are like the frog in the boiling water. the model is changing slowly, it's glacial and it will catch up to bite them. >> it's not so glacial. if you looked the comcast last quarter, for the first time ever, internet subscribers eclipsed cable subscribers. they lost 8,000 kab cable subs. and disruption is here it's upon us. i harken back to what bob said a couple of weeks ago, we're going to go over the top with espn. we're going to go direct to consumer. i think he walked back a little from that in the earnings call. i'd like to see him be a little more aggressive there. >> it seems like disney is positioned like none other.
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to benefit on both sides. like he said, espn is a must-have. if you're a traditional carrier. it's a must-have if you're trying to start this new over-the-top thing. and disney seems to be the last to leave the party, if you want to be the one who hook up with the host of the party as i learned when i was dating my wife. as others get out of the bundle, as espn stays in it becomes that much more essential. we didn't see "star wars" stream until a long time because they were making so much money off of dvd and blu-ray. >> i wonder if you go back to why espn is essential. there's competitors including the fox sports network. the nbc sports network. as companies offer skinny packaging, they'll continue to do so is espn doing what it needs to do to stay the number one value proposition? >> i don't think they're doing enough. i love the partnership with netflix. think they need to be you bit witnessous and i don't think they should is r bite the hand
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that feeds them. think they need to go direct to consumer faster. there's a big learning curve, a lot of trial and error. i will say one of the good things that i heard on the call, was that their deal with the cable providers does allow them to go direct to consumer any time they want. so i think that was a nice carve-out. >> or what, jon? if they don't go faster, is somebody else going to create another "star wars"? is somebody else going to create another espn -- >> people have tried. >> isn't there risking going too fast. react too quickly to a trend that doesn't move the way you think it's going to or take a hard left turn. >> i don't think in technology and in this instance. i think the sooner they can do it the better. in terms of competitors, i think kelly, you mentioned a few that could come in and start eroding some of the pie, i don't think they're going to eclipse espn any time soon. but i think nipping at the heels this is a concern. if you look at theme parks they're doing great. movies, "frozen 2" "star wars," they're doing great. but the concern is the media
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property and how they weather the storm. >> let's move to apple in the green despite a downgrade over at b of a to neutral. say iphone growth is decelerating, apple watch, apple pay, apple music will take time to accumulate in the marketplace. i think the headline in "u.s.a. today" is freefall, they've lost $100 billion in market cap. how big of a concern is this? is this a surprise that we're seeing a deceleration in phones? >> i think it's a short-term concern there are a lot of concerns here, you've alluded to the chinese fiscal issues, you've got going from number one smartphone shipper to number three in china. you've got the lackluster some would call it adoption of the watch and of music. you have a number of things that when you put them together, do lead to short-term concern. what i like is that tim cook in the call said we're going to double down in china, we're in 22 stores, we're going to go to 40 by the end of mid 2016.
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he's playing long ball. think that's the right strategy. >> i think the negative kind of sentiment on apple might be a bit too early. you think about the iphone user base is poised for a strong upgrade cycle. more than 70% of the base still has not upgraded to the 6 or the 6 plus. now in the u.s. you've got early upgrade plans that are going to allow even the people who have the 6 and 6 plus to get the next phone. so apple with its loyalty numbers isn't so much competing with android because it's game share on android the cycle. it's competing with older iphones. and that's not as hard a competition as it used to be. there aren't as many barriers to upgrade. my issue is more netspring once you catch up to the inventory cycle where apple expanded the weeks of inventory available, maybe there are some issues. right now it seems like the wrong time to me. >> jon have you wearing the apple watch? >> i've been wearing it loyally for the last few months. i'm a fan of the watch. i think it's you know generation
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1 product and importantly developers as they were developing for the watch didn't have the watch to play with and understand. ios 2 is coming out, you've got apple pay, i think there are good things on the horizon and i'm bullish on china in the long-term. >> apple set new expectations for how much money a company can make. how much money a company can be worth. how much they can have on hand. do you shake your head at the bar that's been set for them now? >> yeah. it's, it's a little unfair. but that's what happens when you're the best of the best. you just have to keep raising the bar for yourself. but i think they're terrific in supply chain. they're terrific in software. they can go that a whole bunch of new businesses. notwithstanding maybe the setbacks on the watch and apple music to start. and so again, long-term, i like the prospects. >> i'm thinking still about the comment we heard last hour from deutsche's analyst about how apple's momentum stock, i mean it's so big, usually we start to see these things become, the inertia of them, it's so hard to
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move the needle. with apple it seems like it jumps around like they just lift listed. >> they're not resting 0en their laurels, trying new things, going into new territories aggressively and in some respects they're still acting like a start-up, which is great. >> apple and disney have overlap in a lot of different ways. great to see you, thanks so much. jon brod joining us today. we want to check in on markets, because it's a rally day after a difficult start to the month. is dow is up 83 points, despite disney being in the red significantly. down 7% this morning. investors are also keeping an eye on the ism nonmanufacturing number. not just beating expectations, but hitting a 10-year high, one of the highest readings ever. shares of etsy hurting after earnings missed estimates. the company warning the third quarter could be impacted by 4-x issues. and lumber liquidators, down 19%
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after earnings and revenue missed expectations. the company continues to see a negative impact from allegations about the safety of its flooring products that were made in china. when we come back, shares of zillo soaring after earnings and revenue topped estimates. we'll break it down in a first on cnbc interview. another nice day for netflix, shares rallying to another all-time high. a top analyst will tell us how long the ride may last. and is your paypal or apple pay account vulnerable to hackers? we'll tell you new look. a chance to try something different. this summer, challenge your preconceptions and experience a cadillac for yourself. take advantage of our summer offers. get this low mileage lease on select ats models, in stock the longest,
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. zillo in the green this morning after an earnings beat yesterday. despite posting a loss for the quart and talking first on cnbc following those results, the ceo, spencer rascof. you're down almost 50% over 12 months. had you a big run-up before that you're talking about how the highest-performing real estate agents are spending more on zillo. but i wonder if there's a down side to that as some of the lower-performing agents aren't spending as much or churning off as far as your advertising.
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if you're looking to address the $10 billion market spending around real estate. don't you need everybody real estate agentwise to be participating? is there a way to address that? >> great agents provide better service to our 140 million people who use our service every month. we have been focused on having great agents advertise more. agents that spend $100,000 get them to pie more advertising, they make more. the total revenue from real estate agents is up 38% year over year. it's still so small relative to the total. about 500 million of revenue, on zillow from real estate agents' advertising and yet. we have about 72% share of all mobile-only users. think about it for a second. if you're a real estate agent and you want to reach 72% of people that are shopping for homes, using ohm their smartphone, you should be advertising with zillow group that disconnect will close over time. >> i wonder also, as you become
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a little bit choosery about where you place ads, you scaled back on trulio 0 to improve the user experience, do you need to diversify outside of advertising? are you going to become a s.a.s. provider for productivity in the real estate space now that you've got the attention of so many agents? >> we're in the midst of acquiring an interesting company called dot loop, the leader in paperless transactions, we've spent the last ten years in zillow innovating on the real estate search. helping consumers select a home. we think we can bring as much innovation to the actual real estate transaction yourself. all that paper pushing you experience when you bought a home or rented an apartment will move online. by acquiring dot loop. the leader in that space, we make a move in that direction. >> spencer, backing out for a second to the strength of the housing market. you know, how much liquidity in buying and selling is going on? we've seen prices spike. but you talk to a lot of people
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and they have a tough time offloading their property it seems like there's not a lot of bidders there, what can you tell us? >> it's very localized at this point. you know there's certain markets, certain ones that aren't. certain areas within those markets and price bands. at a high level what's happening now is rents are rising faster than home values. rents are rising about 4% a year, home values about 3% a year. one of the challenges is there's very limited inventory of homes for sale. so if you're a buyer, you're seeing this. there's not that much inventory. the reason there's not that much inventory because of negative equity. about 15% of all mortgage holders are upside-down on their loan. and that means they can't list their home. if they can't list their home, there's not much inventory. it's a great time to buy a home if you can find one. but there's not that much inventory out there. >> spencer, you're always the first to say that you don't pay attention to the shorts that you're running the business for the long-term. but the reaction to the earnings along some analysts is that the beat was due to a push-out of marketing spend into the second
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half. >> that was part of it. we beat on revenue. we crushed on ebita and we raised full-year ebita for the full year. the integration of the trulio agent add product is ahead of schedule. >> the rental ad product, real estate agents between the brands. we're keeping the brands separate to the consumer. and we have been saying that it would be by the end of the year that we would complete the integration and it's going to happen by the end of the third quarter. that's exciting for me and for advertisers, if you're a real estate agent you've never been able to reach an audience at that type of scale. within a couple of weeks, a real estate agent can call zillow group and buy media from zillow group which will serve on zillow and trulio and reach 60% of all people shopping for homes in the u.s. in their zip code they've never been able to reach that before. >> but not in the measurable way. now they can do it through online media with zillow group and that's going to happen sooner than investors expected. that's what people are going to
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react to. >> to put a finer point on something i think i heard you say. you said there's as much innovation opportunity in making these agents more productive as there is in the advertising side of the business. where pretty much all your revenue is right now. how much investment are you going to put into becoming a s.a.s. provider for this industry? >> well, there are lots of different ways to skin this cat. i think that the way we shop for a home has changed radically. the way we buy the home has not. now in some cases we're going to partner with other companies that are helping improve efficiencies in that part of the funnel. and in other cases we're going to provide the software ourselves, it will be a combination of partnership, acquisition and internal development. dot loop is a notable acquisition in that category. we connect with over 50 other software companies, where real estate agent who is use other software suites can have their zillow advertising connected to the software that they choose. we've taken a platform approach to that part of the category. >> well if you become vertical
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platform provider that will certainly be interesting to watch. spenc spencer rascoff, ceo of zillow. up next, how to stay safe from hacking. we go live to vegas for the biggest cybersecurity conference of the year.
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welcome back. so 10,000 hackers, security agents and government agents descending on vegas for the biggest cybersecurity conference of the year. one issue is the safety of online payments. good morning, josh lipton. >> it's a space that's going to balloon from $52 billion last year to $100 billion in 2017. according to forester research. we know apple, google, paypal are fighting hard for a piece of that massive pie. but despite racpid adoption, security risks still loom as a concern.
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the latest involves square. we caught up with one hacker here at black hat who says she was able to physically modify a square read soer that merchants could steal credit card information from customers. >> we found that the square reader has multiple vulnerabilities. the hardware one is attack hardware encryption bypass is what we call it, where you can turn the square read near a credit card skimmer, but it will still look exactly like the latest version square reader. >> now square says this hack does not pose a legitimate security risk, telling me our square register software contains a number of security precautions that protect cards that are swiped on unencrypted readers. if our encrypted readers are damaged, they will not work with square. square is not the only mobile payment app that has come under criticism. venmo, another smartphone app
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this year did make headlines over security concerns, though svenmo did act to improve security for its users. the cyberexperts don't believe any of this will ultimately impact the rapid growth of the apps, the ease and convenience of the services they say remain too compelling. guys, back to you. >> josh, thanks so much. we'll be following the conference throughout the day. meantime, the dow hanging on to a 100-point game. simon hobbs is here to count down the europe close. >> the gain we've had in the dow has bought european equity markets still higher. a good session, some markets up 1% on a single session. still earnings coming through in europe it's its too big banks that stand out. clearly top gainers, very unusually right at the top. societe generale coming through with a 25% gain in vulnerability.
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a lot of it in asia and china, seems to have done the job. unicredit in italy. they've got a stronger capital base than many expected, which allays concerns that they might have to raise more capital moving forward. that's positive for the stock. you see a lot of the automotive makers and the miners higher. the autos have been depressed because of what was happening in china. as a sector of the last three weeks, down 6%, 7%. there's an upgrade on renault in particular. and basic resources have rallied and continue to extend their gains through the session. the big miners -- i meant pirelli. pirelli has finally got got-ahead to be taken over by the chinese. government-controlled entity, so that particular deal goes through. world's fifth largest tire maker, now effectively chinese-owned. back to the basic resource stocks, the miners i was mentioning, we had an upgrade from liberum.
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moving from a sell to a hold. built on the gains through the session. they're doing relatively well. the other thing to say is it's the third day that the greek stock market is open. you see the continued crumbling of the greek banks, if they fall by 30%, they're halted for the rest of the session. day three and they're down another 30%. if you continue to erode and question how much the banks are worth as far as equity hold remembers concerned. that's not the focus of europe, that's why we put it at the end. back to you. >> thank you very much, simon hobbs. when we come back, sun run open for trading at the nasdaq, seeing a small gain. the ceo will join us. are the west coast ports at a turning point? our jane wells is our eye in the sky in long beach. hey, jane. >> hey carl. i'm at the ssa terminal. business is booming here after a horrific standoff between labor and management. have things gotten back to normal? how much business has shifted east? maybe permanently. later on "squawk alley."
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good morning, everyone, i'm sue herera and here's your cnbc news update. officials say shots have been fired for a second consecutive day near a military facility in mississippi. but no injuries have been reported. soldiers at camp shelby reporting shots fired into the air about 8:00 a.m. this morning. right in the same area where gunshots were heard yesterday. hillary clinton's lawyer says that the government is looking into the security of
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devices on which her private email was stored when she was secretary of state. attorney david kendall says they are actively cooperating with the investigation, which was first reported by the "washington post." secretary of state john kerry meeting with russian foreign minister sergei lavrov at the summit of malaysian nations in asia they met with saudi arabia's foreign minister to discuss the iran nuclear deal. a fast-moving wildfire has forced the evacuation of an entire small town in southern washington state. an estimated 300 people were forced to move out of roosevelt. while some barns and outbuildings were damaged, luckily, no homes have been lost and no injuries, either. that's your cnbc news update for this hour, let's get back to "squawk alley." we're getting numbers from chrysler this morning, our phil lebeau has some of that in chicago. >> carl, as we speak, a
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conference call with sergio marccione, the ceo of chrysler is being held where he's going over the latest numbers for the u.s. division only. last week fiat chrysler reported global results for second quarter. for the u.s. division, the profits slipped in the second quarter down to $598 million. revenue $22.6 billion. up 11% year over year and the adjusted net income came in at $726 million. there's a conference call going on, we're on that call. we'll hear what sergio has to say. always provocative comments, especially from a man who has been very blunt, carl in saying this industry needs consolidation. we'll see if he has anything to say in that conference call. >> we'll be listening, phil. solar tech company sunrun has opened for trading at the nasdaq, under the ticker symbol, run. shares are just under $12 right now.
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let's talk to fishes on cnbc, the sunrun ceo, lynn jurich. you have $300 million in new capital. how much scale will that offer? >> you know, the market has been pretty choppy. as you can tell so we're really pleased that we got our offering done. we got our capital raised, which will support our growth. and we're looking forward to continuing along that path. >> we're two for two this morning in a smaller ipos which are struggling to stay above their pricing, lynn. i wonder for you guys specifically, if this is because there's some scrutiny on the industry. and solar and the way it's kind of, solar is a service, the cost that is for a lot of homeowners who might be leasing these panels for 20 years and not seeing their energy bills drop. what anything to try to really make this economical for home owners across the country? >> it's quite the opposite. our home owners are saving significant money. on about 20% on average on their utility bill across 15 states
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now. so consumers love this they're adopting it very rapidly. think what you're seeing in the markets is there's been choppiness in the energy and in the solar markets. but the residential segment, the segment that we play in the fundamentals are very sound. these contracts offer customer savings as well as nice margins to sunrun and other developers. i'm very bullish over the long run. >> lynn, what is the elon musk effect on this market? i mean of course, he is in solar city, tesla is making these batteries that look to connect to the solar story also. your mod sl a bit different in how you bring solar savings to consumers. is it easier to explain because you've got a high-profile? or is it hard centre. >> it's easier. once consumers learn that they can save money and it's no up-front cost to switch to solar, they adopt it. the big challenge is just that consumers can maybe sometimes they don't trust that it's too
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good to be true or they never heard of it. it absolutely helps. i think we look at our competitors as lifting the entire market together. because the real competition is still consumer, not switching over if their utility. >> lynn, are you more of a play or new construction or renovation of existing homes? because we all know that in the new home space, i mean it's just everything has been in multifami multifamily? >> we play in retro fit. so existing homes. and in fact, just to underscore how much room there is for growth in this market. we've been growing, as have been other solar companies at close to 100%, year over year in customer growth. yet we're only 1% of u.s. households today. there's a long way to run. >> lynn, you guys are burning through a lot of cash, this is a capital intensive business. at what point say in the next six, 12 months, whatever it may be, do a lot of these solar companies, yours included, have to look at each other and try to get more scale or somehow be
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able to turn cash flow and ultimately earnings positive? >> we were cash-flow positive in 2013. so with strong growth and at quite a scale so we actually did cross that mark in 2013. so we really have shown that you can do it. and i think what the market is seeing now is we're accelerating our growth and so we're funding that with equity. but the margins again are sound. and it's an investment that equity holders want to make. >> lynn, what is so hard about convincing consumers? when i lived in california. i looked at getting solar panels, but the esthetics and then the business model always kind of stopped me. i thought maybe it would be better to own these panels versus letting somebody else own them. and between all of the complications i never pulled the trigger. what are you finding is the main thing that's keeping people from diving in? >> you know, we offer for home owners to buy the panels as well. we find it's really only about 15 to 20% of consumer who is prefer that. once they run the numbers,
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people find it's a better financial deal to have a company like sunrun own and maintain the system for them. once you factor in all that maintenance, that might come up over the 20 years, as well as any other kind of peace of mind you might get benefits from leasing it. we find it's the dominant method that consumers choose. >> lynn, it's sort of the wild, wild west out there in solar. appreciate you joining us this morning. and we'll see you again as these get more scale. how much more inroads they can make as a power source. the ceo of a company that's just gone public over at the nasdaq this morning, jon? >> thanks. and coming up, another day, another all-time high for netflix. shares up let's see, about 4% a top analyst will tell us if he's got a buy on it. but first, rick santelli, what are you watching today? >> i'm watching the macro aspects of things like the ism, nonmanufacturing survey. what do i mean by that? why do we look at data at all,
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why do we look at strong data, and going to lead to stronger economic numbers or stronger growth. we're going to dig down in that simple principle, especially in light of today's blockbuster nonism. understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
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tells us why he thinks the stock is selling off. where it goes from here. plus no fairy tale for disney stock today, we talk to one four-star fund manager who owns it. and what to do now. and is fitbit fit for our portfolio? we have your trade ahead of tonight's earnings, along with all of the other moves in today's action. jon we'll see you in 15 or so. after labor disputes shut down many west coast ports, some of the business shifted elsewhere. s that returned now that ports have gotten back to normal? jane wells joins us from the lbc. jane? >> jon, what a difference a contract makes. we're at the ssa terminal in long beach. volumes in long beach shot up 8% in june. next door in los angeles, up 14% to a three-year high. 40% of shipped goods come through here. 12% of gdp. some say there is a sea change. of volume going east because of the horrific slowdown last winter here. is it just a blip? >> the port complex is perhaps
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one of the most valuable assets in the u.s. >> l.a. and long beach are back. a bee hive of activity. unclogging the nation's largest container port complex after a horrific slowdown. is everything back to normal? >> oh, absolutely. yes. >> we're well ahead of last year. >> perhaps, but the port has seen its reputation sink after dozens of ships were parked offshore for weeks, during the standoff between dock workers and shipping companies. port leaders are now working to win back trust and not a moment too soon. retailers will soon ship for the holidays. >> we're still seeing issues with congestion, for a variety of reasons. so i think the ports on the west coast really need to work on solving some of those issues. >> there are still too few truck chassises and while truck turn-arounds are improving -- >> 25% of the trucks get stuck
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in port for more than two hours. >> still, in the end, the port is counting on being the cheapest and fastest way to america. >> we need to maintain that, we need to enhance that. we can't do that we can't certainly we can't take it for granted, because people will move their cargo elsewhere. >> all right. now some of that traffic has shifted east. we've got the panama canal expansion finishing. for that part of the story, morgan brennan joins me at "power lunch" for a coast-to-coast port smackdown. back to you. >> good thing that jane does not get vertigo. the dow is off of the highs, up 72 and the 10-year, 2.27. let's get the santelli exchange. >> hi, carl. it's been a wild week so far. i know we haven't had a fed meeting, but we've had an adp number, one of two jobs numbers that was a bit disappointing.
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the water cooler topic of the day is 10-year highs on a variety of subindices, with regard to the 10-year headline pop and ism nonmanufacturing. now if you're going to pick an aspect of the economy to be shifting from second to third, you would want it to be the service sector. i have nothing against manufacturing, which would all come together. but we do see the service sector, the biggest swath of the economy, at least depicted by the ism, respondents and of course the people who put together the survey and ask the questions. but let's rise above all that on face value, why do we look at data at all? why do we look at the ism data and then -- grab the telephone if we're traders and invest? and push the stock market higher, yields higher. even fed funds futures lower. which means maybe the fed moves closer on tightening? well the answer is simple -- because it is supposed to be a signal that gives us a notion about the direction of the
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economy. and it's not just the economy. we've learned that there's more to the economy, just look at the type of correction and the type of market and the type of quantity data that we've had since the crisis. i'm talking about jobs, productivity, gdp, wages, these are big things. when i see a strong ism survey, here's my question -- how is that going to change what are the headwinds for the u.s. economy? let's look at the headwind camp. what do we have? not enough risk-taking, not enough capital investing by businesses. long-term unemployed seem to be a forgotten species. things like regulations, tax policy. now i ask you -- does the ism and the perception of those interpreting that survey, directly make the difference to anything i've just described? in my opinion, the answer is no. does that mean that this is an important survey? of course not. but i think that we need to be more cognizant of the fact that the reason we look at data is
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because there's assumptions that for the most part, policy is correct and if it isn't, it will be changed. one thing we've learned, especially since the crisis -- and that is, it's hard to get things changed, many on the left, center and right from a political aspect are dug in pretty deep. the public seems to be divided as to not the issues, but how can we correct the issues? more government, less government. in the free market always takes a hit after the crisis. i leave you with the final thought. of course the ism survey is good. i would like to see a big jobs number on friday, with a very big jump in labor force participation. kelly, back to you. >> amen to that rick. thanks very much this morning. up next, shares of netflix still in rally mode, hitting another all-time high this morning, adding 4% on top of 160 so far this year, a top analyst weighs in. we're not rich, but we want to be able to
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let's get a quick market flash here. >> we're watching shares of first solar, the biggest u.s. solar company, soaring by 17%, near the best levels today, after company reported better-than-expected earnings and revenue. full-year guidance also better than analysts were expecting. a number of analysts have upgraded shares, cowan among them, upgrading the outlook on the stock in wake of the report from yesterday. so first solar, one of those solar names, probably dragging a lot of those other names, carl,
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up on the day so far today. back to you. >> dom, thank you very much. meantime as we mentioned, shares of netflix another all-time high, they settled off the high just a touch. rbc capital markets internet analyst mark ha haney joins us with more. >> pretty amazing move. we had initiation over at guggenheim. the news about japan. is this, is today's move all a reflection of what disney is saying about the bundle? >> well, if you're looking for a derivatives off of the unwinding of the cable bundle, it's, you don't need to look much further than netflix. that's been the case for the last two or three years. our thought is that that cable unbundling has been happening for quite some time. but we're starting to hit if we're going to hit an inflection point. which we are. netflix is the derivative and as a stock pinger what i like about netflix i think subads are going to be higher this year than last year and margins are going to go up. >> we've had discussions about
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how seasonally they tend to not respond to earnings as well in the back half of the year. but when you look, talk about upside for subs, is that an international player. or are we talking about core domestic market? >> both. they did have the miss last third quarter, last september quarter and the stock was trounced 25%. that creates the easy comp going into the back half of this year. it makes it more likely that subads in the u.s., the core market are going to be higher this year than last year. and you throw in a couple of international launches. the story on the top line gets better and the bottom line in the u.s. market, more subs mean more margins. so the stock should work high anywhere that environment. we continue to be buyers. >> mark i feel obligated to look for potholes ahead in the road for netflix when it's trading at all-time highs. bob iger was very happy with netflix and the billions of dollars they're going to spend on his content. does that become a problem at any point? it seems like it's better for netflix when there's not as much good stuff to go out and see. when we talk about disney's
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slate and universal having a record year, could that signal some down side for netflix going forward? >> possibly. john. i'm trying to look for potholes here. i think the biggest pothole i'm worried about for netflix, they're doing a series of international launches all at the same time, for a company run out of los gatos, california, it's a hard trick they're trying to pull off that many international launches at the same time. in terms of content. i think the bigger risk is behind them on this the bigger they get, the more leverage they have with the studios. not just disney that's happy with netflix, it's cbs and a bunch of original content companies, netflix is on its way to becoming their single biggest customer, they have more leverage. it's less of a risk. >> i'm sure the emails will start to come in from the shorts at this desk about the degree to which they're putting costs in the international category. i mean how much of the metrics do you truly trust and when does
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it get expensive? even if you do buy the bull case? >> well i don't, this stock is not inexpensive here. it's expensive and you have to be able to look at it on a sum of the parts basis and you have to be willing to go out a year or two to be willing to buy the stock here. it's shifted down in our list of buys. in terms of them moving costs from the u.s. to international markets, i've heard that short thesis. you can cut through that right away. look at the overall streaming revenue and the overall cog to get rid of the geographical mix shift. you can see they're showing more leverage against the streaming costs, it shouldn't be a surprise, these are largely fixed costs, you pay $100 million for the third season of xyz show, the more subs you get, the more leverage you get. the truth is that netflix gets more subs, that's more leverage. >> priceline, $1349, up 5%. did the bookings, did they suggest we get this kind of stock reaction? >> the stock had traded up
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yesterday. 3% going up. this was a beat and bracket quarter, a b & b quarter. we think street numbers next year are likely to come up. we think we got $70 in earnings next year and 25% earnings growth next year. this stock can rerate of all s&p 500 companies, priceline was harder hit by fx than anybody else, that will turn next year. margins are stabilizing, a nice set-up for the stock going into next year, we like it. >> you cover fang which is what's working best of the four letters in that acronym, is there a favorite for you right now? >> so, carl, i'm going stick with amazon on that. i just think, i like the set-up also for the back half of this year on that name. and we've had a turn in investor sentiment. so i, you know i'm not just riding it as a momentum play, think it's a good fundamental story. margins are inproving. it's at a fundamental inflection point that can't be said about google or facebook and probably not netflix. the real fundamental inflection
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story is amazon. >> amazon prime day might impact u.s. retail sales. >> normura. july sales. call it will disney effect, shares of time warner tumbling along with fox and our parent, comcast, we'll get the numbers. investment advisory service. d i can help you choose the right portfolio. monitor it. and even rebalance it. i've been called innovative. revolutionary. and just plain smart. i'd blush at the compliment if i could. but i can't. so. i won't. say hello at nbut your dell 2-in-1 laptoped gives you the spunk for an unsanctioned selfie. that's that new gear feeling. get this high performance
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time warner shares sliding this morning, the earnings call just wrapping up this hour. and cnbc's julia boorstin joins us fresh off the call with the latest. it turns out it takes money to launch hbo now. >> time warner ceo was bullish on the new stand-alone streaming service at hbo, saying he's pleased with how well it's been received, more distribution partners are coming and the company is investing in additional programming to support the service. the media giant says hbo will generate losses for the remainder of the year, but he expect the to be highly profitable over time. hbo is not cannibalizing their core business. >> as we predicted, and as our research indicated, we've seen less than 1% of hbo subs, leave
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the bund toll go get hbo now, which is exactly what we suspected was going to happen. so while it's very early. we feel good about it and we think hbo now will be very profitable in the coming quarters. >> what's weighing on shares is that time warner's profit forecast for the full year remains unchanged, even though this quarter's earnings topped expectations by a wide margin. that implies that estimates for the rest of the year are too high. carl? >> all right. julia thank you very much. what a day for those names. before we go to the half, the president is speaking at american university right now. he is delivering a speech on the iran nuclear deal. trying to build support for that. in front of congress and if any headlines happen, we'll bring that to you. dow off the highs now up about 40 points, we saw a gain in oil after we got some draw in inventories, that's faded. with that stocks came back in large. >> energy players have been desperate for a bid. the fact that it's faded won't
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do a lot to assuage them. on the tech front, etsy down 21% after earnings. on the other side, netflix. >> a busy afternoon. let's get -- >> let's get to scott wopner and the half. >> welcome to the halftime show, steve weiss is here with josh brown, pete najarian and look who is back from his european vacation, jon najarian. our game plan looks like this, mousetrap, why disney shares are getting slammed and whether the selloff is overdone or just getting started? earnings blitz, from fitbit to tesla, kate to ralph and all points if between. our experts have ever you need to know. we begin with the meltdown in america's most loved and widely held stock,


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