♪ foot on the pedal ♪ hotter than a boiling kettle joining us this morning, henry blodgett, ceo and editor-in-chief at business insider. as always, with us, kayla towshey and jon fortt who is live at that north side festival in brooklyn. can't wait to hear more about that a little later this hour. but we'll start with changes in the twitter c suite. the company c.o.o. announcing his resignation. joining us now on the cnbc newsline is cara swisher, co-executive editor, she broke the story this morning. and she can give us a fuller sense of what's going on here. >> absolutely. actually i wrote about it last night that it was coming. there's a lot of issues with twitter right now including its stock price which has been in decline. obviously growth issues that wall street's been worried about that's causing the stock's decline. and also product innovation. and this is the guy that was in charge of all that stuff. there was a lot of pressure and for a number of other reasons that just built.

and i think they felt that the ceo needed to be much closer to all those things. >> kara, i'm amazed at the market's reaction here, which was originally to sell off a bit on the news. and i emphasize a bit. now the shares are up 4 1/2%. >> i think they feel that there needed to be some executive changes there and you've got to bring in people that are really focused on growth. primarily ceo dick costelo who needs to have a chance to at least tell a better toir to wall street because they've had some real successes in advertising and they have some hynde mind sharing doing interesting deals, it just hasn't been able to gel together and part of that has to do with the management structure. >> kara, the failure of deals to gel together is an interesting facet of this story because there were some rumors a couple weeks ago that twitter was in talks to potentially buy sound cloud, the music company. and he was thought to be leading some of those discussions. and i'm wondering, do you think that there was anything to do with maybe those talks falling apart, that deal not coming together and not being the right

deal? is there anything in the m & a land that could have been leading to this too? >> yeah. i think there was a sense, that deal didn't work out and that was led by him. i think that -- deals don't work out all the time. but at the same time when all these things are put together, he also sold a big bunch of stock. there was a story in the "wall street journal" where they called him co-ceo, which i don't think went over really well with the board. there's all kinds of things. he was a great cfo. he led a very successful ipo even though the stock is down. it was a rather successful ipo. and i think it's just these things tend to build on each other and i think this has been building for a long time, which i said in my story last night before this happened. i think one of the issues is these internet companies move very quickly and he wasn't making the kind of partnerships and deals and friends across the internet that were necessary. one deal that was good is this nielsen twitter tv rating system, which was interesting. he bought blue. he was integral to buying blue plan, a social tv analytics firm. he did a lot of good things. at the same time things move

fast in the internet space. >> kara, henry blodgett. great to connect. great story last night. is this going to help on the product side? twitter's big weakness for the last several years really has been the failure of the product to evolve fast enough and really appeal to a mass market audience. they've tried a lot of things to do that. they brought back jack dorsey. they removed jack dorsey. dick has been involved. is this going to fix, that do you think? >> well, they hired daniel grass and he was well regarded. and i think we just reported that he's been reorging his organization. they put him in direct, under dick cots lowe immediately, taking over the product organization from ali when daniel was hired, which is a big indicator of trouble there for the c.o.o. so i think that daniel has got to -- there's a focus on dick and daniel here to be able to take the product to a new level. and i think that's one of the big issues, is so much of the internet has evolved. look at what's app, just suddenly came out of nowhere.

those are areas that are in twitter's wheelhouse. so they have to really evolve the product beyond just being a great place to tweet because -- and make it attractive and on board people. that find twitter to be a valuable product, and part of that is product innovation, obviously. >> kara, there's still some questions this morning about the level of involvement that row ganni will have going forward. a filing said he'll be a special advisor to costolo but then he tweeted good-bye, it's been an amazing ride, something to that effect. i'm just wondering, this is clearly being optically managed but what sense do you get about how involved he'll be in the company going forward? >> i don't think at all. this is not our first rodeo, is it, henry. the strategic advisor is a term for he'll be around to call but not involved in any way. he's checked out. very smart strategic person, especially around wall street stuff. so maybe they'll tap him for something. but he's gone from the company essentially. i mean, it's like leaving for personal reason kind of thing. >> kara, what are you working on

now? we'd love to know. >> i've got a great story coming up, my yahoo story. but i've got to get back to yahoo because i don't want to keep her waiting too long. no, i'm waiting on what's going to happen because there's some question of whether the media unit, which is a critical unit, is being reorganized, and if some of the executives might leave there. and some other stuff that's going on. there's a lot of moving parts here. so there's lots to follow. >> and kara following them before anyone as always. thank you so much for being here this morning. kara swisher from re/code. those shares of twitter on a day when the market's generally under pressure moving up 4 1/2%. >> surprising reversal there in early trading. we want to get you a check on the rest of the markets as well. right now still under pressure as kelly just mentioned. you're looking at the dow after four days in record territory, selling off 59 points into the red. the s&p and the nasdaq seeing a slight gain -- slight downward pressure as well. the s&p down 7 points. nasdaq down 17 points.

of course we have mixed retail sales data. we had a slight uptick in jobless claims. there's a bit of data that's leading to today's trade. we also want to look at shares of lulu lemmon. that stock down big, better than 15%, hitting a three-year low after lowering its outlook for the rest of the year and the earnings call the ceo made an interesting comment about some infighting on the board saying our parents are fighting and it's awkward. a lot of mishaps going on at that company right there. also take a look at the transports. slipping as the airlines are under pressure. the dow transports down nearly 2%. that after crude oil hitting a nine-month high after some flare-ups continuing in iraq. delta and jetblue all in the red this morning by nearly 6% for most of those airline stocks. and speaking of markets something, news from the nasdaq. seema mody is there up town. what have you got your eye on today? >> an ipo mobile going public on the nasdaq. priced at $9 a share, mid-point

of its range. first-day pop up about 20% on the day. a quick word on what mobile iron does. it's a silicon valley-based mobile data management can management company which enables employees to bring their own device to work. a big trend we've been seeing these days. >> seema, thank you. that joins two others, now the four ipos so far trading this morning. at least three are positive. coming up on cnbc's disruptor 50 list. last year's rent the runway continues to have success in the e-commerce space. is it enough to make the list this year? the co-founder will join us in just a bit. plus if you believe the rumors google is about to buy this company for a billion dollars. the founder of twitch on those rumors and why people are spending time watching other people play video games. and amazon's spotify killer? we're going behind the company's new push into the streaming music business. you're watching "squawk alley." we're back in two. white chocolate lovers don't like dark chocolate. milk chocolate lovers don't necessarily like dark or white.

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♪ welcome back to "squawk alley." henry blodgett is with us today along with jon fortt who's at the north side festival in brooklyn, new york. we want to begin here with amazon. the company officially unveiling its prime music this morning. this is a streaming music service. it's available for free if you're an amazon prime member. prime music will have a library of more than a million songs, no ads. it includes artists like daft

punk, bruce springsteen, and madonna. but those 1 million songs still a lot less than spotify and other subscription services. henry, especially it sounds like there's not going to be a lot of new music, they're not going to have universal. is this about streaming music for amazon or is this about amazon prime at $99? >> this is about amazon prime and amazon mobile. they likely have the smartphone coming out next week that will fit nicely with kindles. it's giving you something else that you get effectively for free with your prime membership. it's not intended to kill anybody else. and it's not as good if you you stack it up next to spotify. but it's just more in the amazon prime bundle, giving you value for that $99 you're paying them. >> is it enough to move the needle, jon fortt? is anyone out there talking about it? >> i think it's enough to keep the needle from moving backward. remember, amazon just hiked the price for prime. when you renew, this sort of helps the story, helps psychologically when you're thinking, well, why should i pay more for prime now? well, i'm getting a little more

if i want to listen to music from the '90s, for instance. they've got a lot of pearl jam in there and some dave matthews band too. people like me actually like music from the '90s. so that might work. >> yeah, exactly. >> i think a lot of us do, jon, but they didn't have an agreement in this with universal music group, which means no kanye no, jay-z, no katy perry, no lady gaga. so you have a lot of very popular artists with a lot of these mobile users that aren't going to be on this product. also so far hasn't really come out one way or the other. but some analysts have taken to twitter. daniel ernst of hudson square saying amazon, so far i'm not feeling the beat with prime music, and he copies the apple hashtag, beats and pandora. people are saying this is not going to be a killer of neglect, it's be going to kill pandora, it's not going to kill spotify, not going to kill itunes even though you will have a library because there's not that much there. >> jon fortt? >> yeah. from the beginning, table stakes was you have to have all the major labels to really be

launching something serious digital musicwise. that was the big breakthrough with itunes. so for them not to have that, this is not about moving the needle forward. nobody's going to abandon a service they already like for this. but if you've already got prime, you feel like you're getting something extra. >> henry, let me ask you this about amazon. the sentiment around can't has turned decisively on wall street. it was a company people understood in value but it was too expensive. this year it sold off. people just don't seem to think it has as much of a positive story to tell i guess. why is it catching up with amazon here now? >> well, this stock has always infuriated people because they don't make money, folks who hate that hate that. they're going to come after it. the investors that they have look at the huge investments that they are making in things like the kindle, the smartphone,ar amazon web services, and saying look, those things are costing billions of dollars. so if you look at the core business they're probably in good shape. we trust jeff bezos to make good investments. but psychology can turn very

quickly. and the psychology broke when a lot of these high momentum, high multiple stocks got clocked in the spring and it's broken down. it's coming back now. should be some excitement around this market. >> but investors with the alibaba f-1 have now seen an e-commerce company that rivlings amazon that has better numbers, they have margins, they're in as many areas as amazon. they'll in a couple months have to choose between these companies, and amazon just doesn't look like as good of a fundamental story when you compare it to alibaba and you see a company that can do this and actually bring it home on the bottom line. >> that's a fascinating point. speaking of amazon make sure you check out david faber's documentary. "amazon rising" is coming up jund june 29th at 9:00 p.m. eastern. and by the way, we're also going to have some thoughts from julian robertson on it later on "closing bell." uber raising a lot of eyebrows with that massive $18 billion valuation. henry blodgett has some interesting numbers on those revenue figures at uber and whether this valuation, henry-s justified. >> the valuation was staggering. everyone was right to say whoa. what is going on there? >> bigger than whole foods.

bigger than -- >> that's right. >> bigger than of a sxavis and combined. >> that's right. but we've seen many companies in the internet sector deserve those valuations ultimately. just some of the scuttlebutt in the market about what the numbers are at uber and what the ceo travis galanik has said publicly about doubling every six months. san francisco's already 300 or 400 million dollars. they're in 130 cities. and what i've heard is most of the revenue they have now is coming from five. so if you believe these five are leading indicators to what's going to happen everywhere else, the numbers can get huge fast. and what he's said publicly, again, is we were actually priced at multiples below what some of the public market -- >> the biggest risk quite obviously summed up by what was happening across europe yesterday. now for uber is probably regulatory. >> they are taking a big regulatory risk here by launching a type of product that directly combats a government-regulated industry. that's what it does.

but i think the fact that they're willing to do it helps some of their competitors lift because uber has the heft to take on some of these markets where as lift or get taxi, some of these other services -- >> jon fortt. >> -- are ridesing uber's coat tails. >> i'm guessing people are using a lot of uber to get around out there. >> yeah. of course. and i don't find this valuation necessarily staggering. look at twitter. the public markets are valuing it above $20 billion. remember, uber is just as much a software and service company, services company as it is about the black cars. and they are the leader in their space, unlike a twitter, for instance. i think you've got to think about that, about their strategic assets, about where they're better than their competition and their potential if you want to invest in this company eventually. and if we get that chance, which everybody expects, rather than just looking at the app and the car that pulls up. that's the key here. >> speaking of uber, here's a sign of just how entrenched this company has become so quickly.

here's some of my conversation with legendary investor julian robertson about the company. >> i'm a big fan of uber. and i think google owns 20% of uber. no one ever thinks of google when they jump into an uber. but i think it sort of shows the advances they can make in this automatic-type machine economy that we will eventually end up with. >> so do you use uber? >> oh, yes. >> really? >> mm-hmm. >> how often? >> well, whenever i can't get a cab. >> which he said was fairly often. the interesting point, though, is that remark was spurred originally by his holdings of google. big holding for him, henry. should people look at google as an uber proxy? there's a lot of other things going on. jon fortt just made the point that you might have to wait a little while before the general public can otherwise get involved.

>> google's too big to be a proxy for uber at this point. but it's a nice asset for them to have in addition to all the other assets they have. >> jon fortt, last thought before you go? >> i'm shocked that it's that hard for julian robertson to get a cab. i know sometimes it's been hard for me to get a cab in new york, but i would think, you know, a cab would stop for him. that's my final thought. >> i would think he would have a driver, frankly. >> yes, exactly. he's out there flagging cabs. >> thank you for now. jon fortt, we'll see you a little bit later. let's send it over to dominic chu. >> for the record i also have problems finding cabs in new york city. chipotle, mexican grill near session highs. raymond james analysts are increasing their price target for the shares to $625 from $560 backing its outperform rating as well as saying it thinks the stock has room to grow on continued comp performance and improved margins. now, as a result it raised its earnings expectations for the second quarter and the full year. you can see those shares there up about 1 3/4%, kelly, toward

session highs. back over to you. >> thank you very much. founder of twitch. why 45 million people want to watch someone else play video games. also rent the runway making the cnbc disruptor 50 list last year. but its return trip in the cards. the co-founder will join us a little later on. and we've got our eyes on capitol hill this morning where house speaker john boehner is expected to make his first comments on eric cantor's loss in the republican primary just a few days ago. we'll take you live to washington as soon as that begins. "squawk alley" will be right back.

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♪ welcome back. video game conference e-3 still under way. so who better to talk to than a company targeted to gamers? our next guest was rumored to be acquired by tech giant google for a billion dollars. let's get a closer look at the

company. justin kan is the founder of justin.tv which spun off into twitch tv. and it's now the world's leading video platform and community for gamers. he's still currently on the board for twitch tv. also partner at ycom. you've done so much in your career. welcome. it's great to have you here. >> thank you. it's great to be here. >> so first of all, is google your new parent company here? >> i can't comment on that. but twitch is the one independent company that my co-founder emmett shear has done a great job of building up and supporting our community of over 45 million monthly viewers, viewing gaming content. >> did you say you're still independent? >> there's -- i can't comment on any acquisition rumors at this time. >> totally understood. just wanted to make sure i'm not mishearing things. how much is the company worth? let me put it this way. why and how are we talking about a billion dollars for a service that allows other people to watch people playing video games? this is something that spun out of justin.tv. you guys sounds like were amazed

as anyone at first by the success and demand for this kind of streaming. >> yeah. when it started off, we were totally unprepared for kind of the wave that we were riding about watching video game-related content. i think the reason why people are really interested in the company right now is that they're surprised when they hear that, you know, we have so many people, over a million people broadcast gaming every month. we have over -- on average the engagement around that content is extremely high. we have about 45 million people who tune in around the world to the content, and that equals about 13 billion minutes of video watched every month. so the engagement on a per user basis is really high. people are tuning in every day for over an hour. >> justin, there are reports that at peak hours twitch is actually the fourth most -- or the fourth highest trafficked streaming site on the internet behind netflix, google and apple. i'm just wondering, at a time when we're all debating net neutrality and the fcc is looking at it right now, would you be able to pay internet

service providers to have people be able to stream this more quickly? where do you come down on this? >> i think net neutrality's extremely important and one of the things we rely on is like a free and open internet so that anyone can receive our content anywhere in the world. we have built out a significant infrastructure with twitch and one of the big assets of the company is our network engineering team that's built out over 15 different data centers around the world. but we're still a very small company based in san francisco, just over 140 people. and we really rely on the free and open internet in order to create -- get our content in the hands of viewers around the world. >> but would you be willing to spend money to ensure that quality of streaming if it came down to that, would you have enough money to do that or is this a case where it's basically david against zblieth? >> i think it's the latter. we definitely depend on, you know, being able to have a margin at our current costs and most of the money we take in we pay out to our broadcasters, who

are oftentimes small teams of just a few people creating content. so really in order for us to pay them we need to be able to maintain our current infrastructure cost. so it's really the case where our business can be severely impacted negatively if there's a change in how -- you know, what happens with the bandwidth around the world. >> justin two, quick questions. one, just for those of us who are still a bit startled that people eagerly spend this much time watching other people play video games. what are they really watching? are there hits that account for most of the viewership, or is it a long tale? and the second question is what's the model? are advertisers moving in to reach this demographic? are you charging people subscriptions? what's the business model? >> so people are watching all sorts of different content on the site. there's everything from e-3 going on right now. twitch is the official broadcaster of e-3. so we're having a record week with people watching that. people watch entertaining broadcasters who are just, you

know, small independent people creating fun content around gaming. they watch media like reviews of games. a lot of publishers and developers are on the site, and they broadcast previews of games and development. and there's a lot of content around e-sports, which is people playing games competitively. the model on the site is twofold. we have advertising where we share part of our advertising revenue with the content creators. and we also have subscriptions where some of the content creators charge for their content. >> and justin, so this spun out of justin.tv. you have a unique window, then, into what the next big thing may be either from that or from being at y combinator. what can you tell us, what's going to be the next big thing to hit this space? >> as a partner at y combinator we look for all sorts of different ideas and new companies, new technologies. i'm really excited about the internet of things and hardware kind of -- software that controls hardware that's like used on a day-to-day basis. i'm also really excited about drones. i think that's going to be a cool platform for doing things in the real world.

so those are two areas that i'm -- >> you said drones. drones is a platform? >> drones is a platform. >> okay. justin, we will be watching in so many ways. thank you for being here this morning. really appreciate it. >> thank you. >> justin kan. many thanks to henry blodgett as well of business insider for joining us this morning. you guys worried about this drone thing? >> worried? no. it's exciting. >> going to embrace it. absolutely. >> i just can't get my head around it. let's bring you simon hobbs as we count you down to the close across europe. simon? >> relatively flat overall on european markets today. let me take you through the individual sectors. it's interesting that airlines have fallen. yesterday of course we had the profit warning from lufthansa. overnight aer lingus also followed through with its own warning. but it's only when airlines in this country started falling you that saw issues into negative terth for the second day. morgan stanley went underweight on anglo-american. and that's pressured the minus, there in negative territory. anglo american down 3% as well.

morgan stanley was also cutting its view on where we are with iron ore prices. the french telecoms have also been active as those echoes suggested. talks have broken down on the french government still trying to push everybody together. bnp paribas, the news coming out in the last 24 hours that the c.o.o. or co-c.o.o. is going to step down early as still the debate or discussion continues about that huge $10 billion fine behind the scenes. and a lot of talk, guys, in france about the negative aspects of this. christian neuer, the governor of the bank of france suggesting the use of the dollar around the world may actually fall if you continue to have this very aggressive push, this very aggressive finding of european institutions by u.s. authorities. >> something that u.s. institutions are now used to for better or worse. >> the europeans don't have to deal with it. for the scale -- for the finds relative to the scale of what's going on. and also threatening stability. they may have to go through

capital raises in order to pay the u.s. government. >> we will see, simon. for now thanks so much. we also want to move over to washington, where any moment now house speaker john boehner is expected to brief the press and talk about eric cantor's surprising defeat in the republican primary. john hearwood is live in washington. the gop scram toblz figure out what's going to happen july 31st. >> they are scrambling and i do think one of the things we'll hear from john boehner is his determination to help calm things by remaining as speaker, running for re-election. you know, there's been a lot of discussion and speculation that he might decide that he'd had enough of congress at the end of this term and you would have the presumption was that eric cantor perhaps with a challenge from paul ryan would be the next speaker. now i think because there's so much disarray on the republican side john boehner feels the need more urgently than he did before to stick around and provide some stability. so i think we'll hear john

boehner make that point. >> john, this was very surprising when it happened. but now we've heard some commentators come out and talk about how maybe the seeds were sewn ahead of time. joe scarborough on "morning joe" talking about how when eric cantor came on air he had not entourage bigger than any governor. jim cramer saying he was the representative of "squawk box," not a representative from his district. do you think that some of the signs were apparent now that we're looking back in retrospect? >> well, sure. once you have the election results, you can look back at things and say, well that is correct presaged his defeat. he didn't know that at the time, and we didn't know that either. so i think that's a little bit of monday morning quarterbacking. but when you look at the range of factors, you've got discontent with washington, you've got discontent with party leadership. you've got issues like immigration that dave brat was emphasizing, and you've got the fact that when you're in the congressional leadership you're traveling a lot, you're on television a lot, you're not doing the things, tending to the

grassroots in your district in the way that more junior members do, and that was a problem for eric cantor clearly. >> john, curious what you make of the announcement today by jeb hensarling that he's not going to pursue the leadership. >> i think that jeb hensarling could not beat kevin mccarthy. he also had a divided home base in texas because pete sessions, his colleague, was talking about running as well. and so the fact that you didn't have a unified push from texas and the fact that kevin mccarthy has been working this very hard to line up the votes dissuaded jeb hensarling and persuaded him to stay at his committee. >> and john, if it is kevin mccarthy, and we'll find out on thursday, what does that do if anything to change the dynamic for the house -- or for the leadership generally of the republican party here in congress? as we wait to hear from john boehner. >> pretty much nothing. ideologically, kevin mccarthy and eric cantor, his fellow

young gun, as the trio along with paul ryan were known a few years ago. they're very ideologically similar. kevin mccarthy is a more genial and outgoing guy than eric cantor. sew might be so he might be a little more skilled at making people feel good than cantor did. cantor was burdened by the suspicion that he was always maneuvering to either force john boehner out or replace john boehner before too long. and i think kevin mccarthy has a different personality that projects somewhat a more affable vibe. and i think that may serve him well. >> yeah. curious also what the house financial services committee leadership will do now, what people here need to be aware of in terms of any changes legislatively or in terms of priorities in the months ahead that may be coming. >> well, the one thing they don't have to worry about is legislation because we're not going to get important legislation out of this

congress. the way the house has drifted, the fact that you've got a democratic senate at least for now and the fact that you've got a veto pen in the hands of president obama until january 2017 means that the prospects for big things happening on taxes, on housing, fannie and freddie, other things like that are very, very dim at this point unless something fundamental changes the dynamic. we'll be doing well, kelly, just to keep the government open and to raise the debt limit again, which needs to happen again in the spring of 2015. >> march 2015. i know, and that highway bill too caught in the crosshairs. john, thank you. i think we're going to take a quick break here as we wait to hear from john boehner of course. coming up, will rent the runway make a return trip to the cnbc disruptors 50 list? the founder about to join us live from the north side festival in brooklyn, new york. "squawk alley" will be right back, with the dow up 50 points. , , and i loved every minute of it. but then you grow up and there's no going back.

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here's house speaker john boehner at the microphone. >> -- and thank you staff for their service to our conference. and thank them for their service for our country as well. there's no one around here who works harder or puts more thought into advancing our principles and the solutions that we want to enact for the american people. i look forward to him continuing to lead our floor efforts here over the summer. as for the future, let me share a little bit with you what i told the members yesterday. this is a time for unity. this is a time to focus on what we all know is true. that the president's policies have failed the american people. his administration can't get our economy back to real growth, and he continues to endanger our troops and citizens with his failed foreign policies. at this point the administration

can't even provide basic services to our veterans. we need to elect a congress that not only has the will to stop the president but the power to do so as well. every day we're showing the american people that we've got better solutions. today we'll act on two more jobs bills that will help small businesses invest and grow. unfortunately, senate democrats continue to sit on their hands and failing to act on the dozens of jobs bills that are sitting over in the senate. but guess what? so long as the american people continue to ask the question, where are the jobs? we're going to continue to be focused on this one issue. i said on tuesday that the transfer of five hardened terrorists has made americans less safe. and i mean that, and i'll stand by it. when asked last week whether the freed terrorists could return to plotting attacks on americans, president obama recently said, absolutely.

well, i don't think that's but half of it. this exchange has encouraged our enemies and increased the risk to our military and civilian personnel serving around the globe. those who would argue the opposite i think are incredibly naive. one of our citizens' greatest protections was knowing that the united states does not negotiate with terrorists. and that issue now, that principle that's been compromised. america's willingness to make deals with terrorists, that's the new obama doctrine. back in january i urged the president to get engaged with what's going on in iraq. this week we've seen big cities in iraq overrun with terrorists. the obama administration's failure to reach a status of forces agreement continues to have serious consequences for iraq and american interests in the region. and the administration's failed policies in syria, libya, and egypt and its failure to

implement a broader strategy for the middle east is having a direct impact on the situation in iraq. the united states has and will continue to have vital national interests in iraq. but the progress made there is clearly in jeopardy. the president is celebrating our exit from iraq as a hallmark of his foreign policy agenda. but our focus should be instead on completing our mission successfully. and i would urge the president once again to get engaged before it's too late. >> [ inaudible question ]. what has happened in the electorate in the past -- where you have -- that come out of nowhere. your side benefited greatly from the tea party in 2010, part of that volatility. but to what do you attribute this, where it seems like if the wind blows -- >> i'll let the political

pundits describe and figure out what happened in that election. every election is different. i went through a primary process myself. you have to understand, the american people are being squeezed by obama's policies. the economy's not growing. incomes are not growing. we're not creating enough jobs. and in 2/3 of america they're saying oh increase in our wages but their food prices are going up, their gas prices are going up and their health insurance costs are going up. so there's a lot of frustration that's out there. and they look to washington and wonder why we can't -- we can't resolve these issues. they're hard to resolve when you've got a president who won't engage. >> do you -- >> there are things you did in your primary -- obviously you had at one point a four-way primary. were there certain things you felt you had to do -- >> i ran my race in a way that i

thought i should run my race. but i'm not going to analyze that race down there. >> do you want kevin mccarthy to be the house majority leader? and also, how important is it do you think for unity in your conference to have a red state republican at the leadership table? >> well, i do think that the members are going to make this decision. we're going to do it next week. i'm sure some will argue it's too soon. some will argue it was too long. but it's important we resolve this issue in a fair amount of time so that we can do the work we were elected to do. and so the members will make the decision about who the next majority leader is. >> but it's a big deal for you. you talked about how important it was to have eric cantor at your side. do you want kevin mccarthy at your side in. >> i work with all 4 r 434 members of congress before. i can work with whoever gets elected. >> issue at hand in mr. cantor's race was that of immigration. a lot of people are saying now that immigration reform is dead because your conference will not move out of fear of what

happened to mr. cantor. is immigration reform dead this year? >> let me first debunk the first thing. i don't believe the first premise of your question. secondly, the issue with immigration reform has not changed. the president continues to ignore laws that he signed into law, violating his oath of office. he did it again with the release of these taliban five. and i reminded the president again yesterday that every time he does this it makes it harder to gain the trust of our members to do the big things that need to be done around here. >> are you worried about immigration as an issue in 2016, then, if it's not going to happen this year? >> the president's going to have to demonstrate that he can be trusted to implement a law the way it's -- >> you said the people who think this bergdahl swap was a good deal are naive. the chairman of the joint chiefs of staff signed off on this deal on the metric of national security. do you think the chairman of the joint chiefs of staff is naive and the secretary of defense

himself, a veteran -- >> they are dead wrong on this issue. releasing these five people, negotiating with terrorists is a principle that we've not violated. and now we've violated it and we've put americans at risk as a result of it. >> mr. speaker, what message do you believe that voters were trying to send washington in this election in virginia? was it a message at all? >> no. i'm not going -- >> no message? >> i'm not going to analyze what happened in this election. they're all different. so i'm sure at some point people are going to handle what really happened. >> but surely you must have a takeaway in terms of dealing with issues like immigration. if eric cantor can be branded that he is supporting amnesty, how can your party ever move forward on an issue like this? >> we don't know that that is the issue or was the issue in the election. >> it's one of the issues, though, don't you think? >> on iraq do you think the u.s. should be launching air strikes? and if not what should the u.s.

do? >> well, i think what we should do is to provide the equipment and technical assistance that the iraqis have been asking for. i don't know enough of the details about the air strikes to comment whether we should or we shouldn't. but it's not like we haven't seen this problem coming for over a year. and it's not like we haven't seen over the last five or six months these terrorists moving in, taking control of western iraq. now they've taken control of mosel. they're 100 miles from baghdad. and what's the president doing? taking a nap. >> an angry-sounding john -- i'm sorry. an angry-sounding john boehner there. the speaker of the house comment only briefly on the loss suffered by his majority leader eric cantor days ago in a primary election. john harwood joins us live from washington with more. john, this is his weekly press

briefing. we could have expected him to touch on some of the issues he did such as the prisoner transfer he's not happy about, the situation in iraq, which is quickly deteriorating. was anything learned with regard first of all, though, to this specific issue about the leadership of the gop? >> nothing at all. what you saw from john boehner was an attempt to try to voice unifying themes within the republican party by way of attacking president obama, saying that you know, the problems with bergdahl, that was a bad decision by the administration, problems throughout the region in the middle east are problems of the administration, problems with the economy and health care are obama's problems, and even ascribing the discontent that brought down eric cantor as a result of barack obama's policies and the fact that people are being held back. so it didn't give us any insight into his view of where his party is going. but this understandably at a time that the republican party is facing some divisions, he was

trying to cough those over and get a discussion onto a more unifying terrain. >> john harwood. and before we leave it, john harwood, because this is so important as to what the u.s. does or doesn't do in iraq right now, what do you think is happening in terms of a galvanization in washington right now? >> i would be very surprised, kelly, if the administration ends up ordering air strikes. this president has made a cardinal principle of his foreign policy that he was going to end that war, that we couldn't be there forever, we couldn't run what was happening in iraq, it was for the iraqis to decide, and it's getting ugly now. there's no question it's terrible what's going on. but i believe that the administration ultimately will decide it's not within our power absent some much more destabilizing set of events that would pose a direct threat to the united states. i think they're going to keep their distance as much as they

possibly can. >> okay. that was john boehner saying the focus should be on finishing our mission in iraq, as he only briefly addressed the leadership change that's imminent for the gop. for now thank you, john harwood, out of washington this morning. we've got plenty more on these markets. and let's see. our own jon fortt joining us with a special interview when we come right back on "squawk alley." with all the opinions about stocks out there, how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity.

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alley. rent the runway was one of the disrupter 50 in 2013. we've got the new list coming up next tuesday. for now we've got the co-founder of rent of runway, jenny flies, here to talk to us about your company's progress and where you see things headed. thanks for joining us. >> thank you. >> i want to start off talking to you about mobile. you guys launched a mobile app on ios less than a year ago. how is mobile doing for you guys right now? >> it's really taken off. it's over 40% of our traffic. we have both a mobile site and a mobile app. the team has been hard at work to continue to innovate it. we've also been featured in the apple store for about six of the ten months that we launched. >> part of the reason why mobile web is big for you guys is because the app is on ios, not an android. any thoughts of doing an

android? >> yes. stay tuned. it's definitely something we want to do as well. >> you're a fashion company with a technology soul, you were telling me. there are few companies in new york along those lines, guilt being one of them. how do you view the competitive landscape and the proposition that you make for renting versus buying? >> i think we are a pretty unique company for most out there. in fact, we don't really have a direct competitor. our proposition to consumers is there are certain dresses, items in your life that make sense to rent rather than buy. it would be something that's orange or trendy off the runway. you'll wear it once, stand out, steal the show, but you don't need to own it and you're unlikely to wear it again. >> how often does your typical consumer rent from you in a month or a year? >> we have consumers that rent as much as 20 times a year. i wish i had their social lives, don't know exactly what they're doing. then we have many customers who are renting two or three times a

year. >> is that one of the metrics you track? you want people to rent more? is it your goal for people to buy another formal dress? >> it is. once people rent three or four times a year, we're part of their normal decision-making progress. once they have an event they start to think about it more often. >> tell me about new york and the scene here. over the past two years you guys have hired quite a few engineers. i think you were telling me your engineering staff has tripled from 20 to 60. you have a high percentage of female engineers. your head of engineering, your vp, is a woman. how do you find female engineers for you here? >> i'm from new york, i lived here my whole life. i'm incredibly proud of what happened and how entrepreneurship has blossomed here. it's a community where you know everyone so i find i'm at a conference here and i run into

so many people and everyone is really helpful and supportive of one another. the engineering community has also grown. there are far more engineers attracted here, a lot more talent to choose from. with all the startups it's competitive. we're always looking to grow our engineering team. as much as we have grown it, there's still so much roof m too that more and more. >> we're looking at changes of palhar paypal. you're telling me that people brows on mobile but they tend to trance act on the desktop. >> we have an onmni channel experience. i think it would definitely help that experience and let people trance act on mobile but it would help our store experience. we have three stores where we've launched retail locations. you can go in, try only the dresses and brows. it's a hybrid online store

experience. the checkout options there i think will be powerful. >> fantastic. jenny fleis. she would like to see some advance in mobile payments. kelly? another business in such a short period of time has become ubiquitous in this part of the country. don't go anywhere. steve is back with squawk alley in two. ♪ ♪ ♪ great rates for great rides. geico motorcycle, see how much you could save. e

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welcome back to "squawk alley." as mentioned, steve is here with a rapid update to our economic forecast. >> thanks very much. we have the incredibly disappearing growth from the first quarter continuing to disappear. average of economists and their outlook for q 1 tracking negative 1.7. that's another tickdown. we have ticked down a full 1.7 percentage points. nobody is positive on the first quarter. the second quarter after the retail sales report and the buzz inventories number, unchanged at three and a half percent. deutsch bank continues to be optimistic. average the two together and first half growth not tracking any better than one percent. back to you. >> steve, thank you. we're watching markets. the dow is up about 50 points. another negative session for the

nasdaq as well. >> traders are staying it's not a volatile market. it's okay for a day. >> looking at a couple of different names this morning, in particular, lululemon in focus. you guys hit on that today. twitter up four and a half percent after its coo departs. >> yeah. recalibration is what the market is expecting, especially with e marketers numbers out where it was saying international numbers are going to grow, u.s. is not. >> let's take a quick check on amazon. we were just talking about them launching a live service, trying to justify the $99 prime price tag. >> we haven't seen any reports out this morning. people are traveling. they're not racing to say this moves the needle, so you look at this stock, down two percent. >> on a day where if we have to talk about one area of focus, it's energy. now we're seeing that sector resume leadership for the year.

in fact, energy ipos have performed better than tech ipos this year. >> that's not surprising given how much focus that's on asset specifically plays. we'll see how they eventually trade once the situation in iraq, we get a little more clarity. >> great point. we just saw rent the runway a few minutes ago. the entire disrupter 50 list will be unveiled on tuesday. we've got lots of great programming coming up around that. as we hit noontime on the east coast that does it for us here on "squawk alley." the let's send it over to the mast money halftime report. >> here's our game plan today, downward dog as lululemon hit a three-year low we debate whether the stock can get upright i time soon. can the stocks that have been beaten