we look forward in engaging with them as we do with all their investors. july 16 mr. pelt is one of our keynote speakers. back to you, carl, for the rest of the news this morning kate, thanks very much. good morning. it is 8:00 at face book headquarters. 11:00 a.m. on wall street. "squawk alley" is live. ♪ welcome to "squawk alley." the g.m. compensation fund being laid out. supreme court decisions. a lot to talk about in tech.

joining us is roger mcnamee. john ford joins us this morning from silicon valley. good morning, guys, and good to see all of you. first up, facebook under fire this morning. messing with the accounts of nearly a half a million people as part of a massive experiment. for one week back in january of 2012 facebook's data scientists changed the news feed so that some people saw an abnormally high number of positive or negative posts. facebook says the study proved happiness or depression could be brought across. we are wondering if we are their lab rats. >> that was a quote by journalists covering this, lab rats. it seems to hold true when you think about being a facebook user and this is a company that capitalizes on the data it collects from its users. things you put into your status bar, news feed. they capitalize on making this a seamless transition, embedding

ads in way it is user would seemingly not know that they are there. i'm wondering the more that users start to realize that facebook is using them for their own ends, i just wonder how detrimental you think this will be to the overall this has been the issue with all free web services from the beginning. keep in mind, when you don't pay for a service, that means you are the product. right? i mean, that's the explicit tradeoff here. i think facebook actually over the years -- it is now 10 years old, has done a really good job of responding to negative feedback when they make a mistake. i don't think there is any question that this experiment was mistake it was a mistake at several levels. if you look at it, it wasn't really very successful. statistically, yes, it says there was a change but it was so small that -- really not a big dealing from a benefits point of view. it was not worth all of the

troubled stage of the study. really importantly, they use the -- tools incorrectly. what they think they found out wasn't even true. so i look at this and i go, look, guys, this was a mistake. form it was two years ago. one hopes they learned some lessons and got a lot smarter. this is not facebook specific problem. it is a problem of all free services on the web. people have to make hon money to somehow. i actually applaud facebook's more recent actions where they have given much more control of the things you see, the ads that are shown to you and how your data is used. over time, face book has to be smart about this or you are right, it will be an issue. good news is that this is not something that happened last week. it happened in 2012. everybody at facebook acknowledges that it was a mistake. >> john, this pattern, though, of making mistakes, apologizing, making another mistake, apologizing, some consider endemic to this company. is this fair or not? >> i think it is fair.

it is necessary. this is a company that's breaking new ground and it is a new type of medium. the two issues i see here, i guy with roger, for the first -- i'm not sure if facebook learned what it sounds like they may have learned from this. i'm not sure emotions are contagious. maybe what we express is contagious. if you hear somebody just got bad news, you are not going to go tell them, hey, i just had a great day today. maybe you will suppress your positive posts if you feel like the people around you aren't having such a good day. it does not necessarily mean that you are feeling negative. maybe you are just not being accurate in what you are expressing. i think the main issue is when we go to facebook, we expect it to present a somewhat accurate representation of the world. we expect it to tell us the truth about what our friends are doing. even though they say they are filtering things, facebook says they filter based on what is most interesting and relevant to us. we sort of believe that. in this case, they didn't. it is a trust issue with facebook that's different from other sites that do testing to see if we like that headline or this shade of blue. when facebook manipulates the

content i think they need to ask the users' permission. >> if you are going to be making a user depressed there are better months to try that than january. everybody is already depressed. it is january, the winter. when is it worth it for a company to do this? it will be interesting to see that debate. >> "the times" this morning said at any given point they can show you 1,500 potential posts and you see about a fifth of those which is -- an interesting filtering process. the author of that study has written an apology and the subsequent -- for that and subsequent backlash saying, in part, having written and designed this experiment myself, i can tell our goal was never to upset anyone. i can understand why some people have concerns about it and my co-authors and i are sorry for the way the paper described research and anxiety it caused. research benefits of the paper may not have justified all of the anxiety. >> i think it is interesting is

that over the weekend, it was defended what facebook was intending to do here. hey, media in general toends manipulate our emotions. a lot of the people who participated in the study itself at the ground level seem to be apologize. >> let's talk stocks. second quarter comes to a close today. as it is shaming up to be a good second half for tech? some think the answer is yes. upgrade yag he to overweight this morning. alibaba expected to go public later this summer. go pro rallying again. up 25% since going public on thursday. almost 9% today. as the quarter closes what was the best performing mass dakota 100 name of the year? that would be apple. up a little more than 15%. roger, must have thoughts on valuations across the board at this stage. >> yes. you know, i really think we are in decent shape going into the summer. in the sentence news flow out of

tech has been remarkably positive not withstanding the policy changes in china that closed off portions of that market. i actually think this is going to be an amazing summer for cnbc because as you point out, the ipo market is healthy. there will be a flow of really interesting new companies. i think the alibaba transaction alone is going to being a topic of conversation for at least a month or would. simply because it is such a big deal. obviously it has a profound effect not just on yahoo but on potential competitors like amazon. i think that, you know, the way i look at it, the fundamentals in the market are fine now. e externalities scare me. the trade world with china, you know the u.s. decisions on economic policy which are biting us in a few places. the market itself looks okay to me here. >> hold that thought. i want to get to phil lebeau in washington who has ken fein

berg. >> i'm joined by ken feinberg. give me your perspective in terms of how many families do you believe you will hear from who will take part in this fund? >> i think we will hear from a huge number of families. the notice program is going out to over 3 million people. if the accident involved a death or a physical injury in a designated g.m. automobile where it could have been the ignition switch, those claim apartments should file a claim. the program is voluntary. >> two families are here. laura christian, whose daughter died in a vehicle accident. what did you say to the families? >> i said i would very much like to meet with them and get their perspective on the program, hear what they have to say about their own individual claims. very, very sad. it was an opportunity to meet with a few of the families you don't want to put a cap in terms of how much people might

ultimately receive from the fund, whether it is $5 million, $6 million, $7 million, why not? >> a cap is an arbitrary figure. it would be -- i think disingenuous to have a cap. what did the individual particular i am, whether it is a death claim, physical injury claim, what did that person -- what would that person have made over a lifetime but for this horrible accident? what about noneconomic pain and suffering is? the individual cases vary from case to case to case. an arbitrary cap would be a mistake. general motors doesn't require an arbitrary cap on the death and catastrophic injury case zpls general motors indicated that they heard from 3500 people, some with vehicles and other vehicles, saying there was a death or injury. of those 3500, how many of you think ultimately will qualify for the program? >> i haven't got the foggiest idea. those 3500 people -- that's a

rough number. we don't even know if they involved general motors automobiles. file a claim august 1 or by december 31. let us review your claim and let us give a considered individual treatment and if you are eligible, we will pay the claim. that is the objective of the program. >> you made it a point to say up here, g.m. may not like what you come up with in terms of a claim. doesn't matter. you are going have to pay it. do you think there are parts had a general motors does not like? >> oh, i'm sure. we negotiated parts of this protocol with general motors for weeks, months. and i'm sure general motors in some respect was have wanted something different. just like i think the plaintiff lawyers that i spoke with representing families. they would like something different. the center for ought motive safety. i chose the best i could from everybody's submission to me and this protocol is mine and mine alone. >> there are going to be some families. we heard from them today. lance cooper is on the air saying some families will opt out. they want punitive damages and

want g.m. to feel the pain. what do you say to those families? >> if you want punitive damages, opt out. i can't help you. but before you opt out first, come into this voluntary program, let me calculate your claim, and let me tell you what you can receive under this program within 90 or 180 days. the punitive damage litigation is years of litigation. before you make that decision, lance cueinger er is a wonderf understands this, let's first find out what you might receive under this. >> what's the difference between this program and the 9/11 fund or the b.p. fund, in your opinion? >> the main difference and real challenge is some of the accidents involved in these automobiles are so old, over a decade ago, the car is gone, you don't have the automobile around, it will be much more

difficult to conclude whether or not it was the admission switch that failed in these accidents. but we will work with the claimant in that regard. >> ken feinberg joining us on cnbc as he discuss it is g.m. victim compensation plan and right behind you, some of the families of those victims who are going to be, i think, answering some questions for us. thank you very much. i will send it back to you. >> phil, thank you very much for that. phil lebeau covering the compensation plan in washington. roger, i turn it back to you to finish the discussion on tech evaluation. i don't need to fill new on pro. a lot of viewers wonder why a company that makes camera on a stick deserves that. >> i don't know that it does or doesn't. i learned long ago the market is entitled to decide what it wants to pay for my stock at any point in i'm. the thing i will say is that we are operating in a time where the -- underlying economy is not growing. the last quarter was dreadful on gdp. things that are growing rapidly

are going to attract a lot of sxint the case of go pro i think there is a line of thinking that they can become a content company and not just a camera company p. if that were true that would change the way you have to look at the company. whether that happens remains to be seen. >> four cautionary words, i think. sell on the news. we are in a period now of promise in the tech cycle whether it is companies that are ipo'ing based on what they are promising to do, whether it is google pointing to products we expect to see later in the year. very often if apple will have a sell-off it happens in the back half of the year once you get the product. sometimes it rebounds after that. but these valuations are getting rich. i think people at least need to be careful. even if overall valuations look healthy compared to what is in store for the back half of the year. crazy things can happen when the products arrive. >> bankers say don't worry until you see investors buying these

stocks. and not doing any homework when they are buying. that's not happening yet. but dependsing on the deteriorating quality of the companies it could start happening. >> that's a good one. >> maybe the end of the road for the streaming service, aereo says it is closing down. now that aereo is done what's the future for streaming content online? roger, your thoughts on the decision, what it means for innovation and where aereo goes now? >> i think the first thing to recognize is copyright law has been abused to protect old plan choices. the supreme court had an opportunity here to open a small window in it, recognizing that broadcasters receive for free the airwaves over which they broadcast. the notion that aereo may have taunt to simply share it with another technology, it not only wasn't crazy, it might have represented a very small but forward-looking way to reduce the scope of copyright law.

the supreme court predictably did not do that. it protected the incumbents. i wonder, my big question here in five years, we look back on this and the broadcasters feel about this decision the way that the record labels ultimately felt about shutting down napster, sometimes small changes allow people to adjust easier. i just think this is too bad. the fear is that this will affect other web services. i certainly hope here's not the case because at the moment, protecting the old interests isn't going to serve anybody but the owners of those old interests. >> the line in the dissenting opinion is getting alet of play, even days after it has come out. if the line from scalia he talks about universal saying wherp within one vote of declaring the vcr illegal back then. what would have happened if the vcr never had been around? would that have stifled innovation how consumers are able to watch and record their own content?

i wonder if you think this moment in time really means anything for innovation and for -- the environment in washington and just the way the west is thinking about building new companies knowing that the supreme court can come down at any time? >> i think that the supreme court, again predictably quashed innovation almost every chance it had in recent years. we live in an economy that's very, very supportive of the status quo and established ologopolies over trip tripship. the thing that's happening in new york and the silicon valley is really happening at a small scale inside of an economy that's largely dominate bid very old ways of doing things. copyright laws are one of the ways they protect the old franchise franchises until snag happens to change that, we will limit growth. i don't know if we will limit

innovation but we will limit growth. >> what's interesting, though, guys, i mean, they could have just taken this opportunity to shut aereo down completely. maybe the brand doesn't die altogether. >> we have been trying to read those tea leaves for a few day. >> this is not about aereo. it is about the much larger construct of whether something broadcast over the air should be available to anyone anywhere. it seems to me there was a legitimate way to argue, yes, for that position and, obviously, you can look at copyright laws. it is writeen and say no, that's what they chose to do. this is a policy matter. i think the supreme court right now is exercises far too much control over our politics and over our economy simply around ideas that strike me as being at best unhelpful. >> technically this decision now goes back to the second is -- that's what it is supposed to do. we will see if they are willing to actually then reconsider it. >> roger, such a joy having you

again. by the way, i want to on mention moon alice a lot of gigs coming up this we can. including a big fourth of july show on the "u.s.s. hornet," is that right? >> that's right. we are playing for the veterans at alameda harbor. we will be all over the bay area and encourage people to see where the dates are and come see our shows. >> we will see you next time. have a great week. >> you bet. >> a couple hours into trading, we want to get you a check on the markets. down slightly. dow down by 23 points. s&p down by a fraction of one point. technology rallying this morning, though, after being added to the focus list over at credit suisse. micon one of the biggest gains. shares are up 40% so far this year. broader nasdaq opened a 14-year high this morning. take a look at shares of mannkind. fda approval for an inhaleable diabetes drug. it comes three years after the fda first requested additional

studies on that drug's effects. carl, the market not liking chicago pmi. not liking pending home sales this morning on the last day of the quarter. >> absolutely. when we come back, social media advertise sing growing. one name stands above all the rest when it comes to generating ad money. we will tell you which one. seven years after the launch of the original iphone, what does the future hold for apple? we will answer that part of the question in a brand-new ad. ibm super computer watson is a "jeopardy!" champion but can it cook you dinner? we will try. interesting becaus.

we haven't really had much in the way of data to profit does. i'm wondering what you found. >> just on the terms of the proof, we asked about 1700 had been marketers, as far as we know this is one of the broadest surveys that has been done. we did it in conjunction with ad age. we asked those marketers to rank order for an online advertising platform in terms of ori. single most important metric. no problem, no question was google. coming in close, number two, facebook.

similar to what we had seen six months ago. i think that's probably the best evidence that to date social media advertise sing working at least for marketers. >> what was the reason why you think that advertising professionals are starting to say that it is more effective to advertise on social media? we all remember during the facebook ipo when gm notoriously came out and said we are pulling our money from facebook. we have no proof it works. now it seems the tide has changed. what are they citing as the reason for that? >> part of it, i think, is reach. with 1.3 billion users, monthly basis, 800 million users on a daily basis, facebook and some other ad met works, social media networ networks, youtube, witness the person there are very large platform miswhich to reach a large number of people. facebook has done a lot of things in the last two years we think to improve the level of services, reporting, tracking that they offer to advertisers. they allow advertisers to slice demographics in real-time better than most other advertising

channels. those are at least two things that they have done. that mass of people they have and the fact they are providing better services both of those have led when we have seen in our surveys it has gone from 56% budget increase to 70%. we haven't seen a cresting yet of advertising budgets going to social media. >> anything that you learned through this study that we can apply to companies like pinterest that have yet to amp up and shown prom nice the data as far as how users are interacting on those platforms? are they more or less likely to actually make money on those platform nice time soon? >> the way you phrased the question i think is the right one. i think what's been proven over the last two years is that users, and you me, as long as we are not being -- as long as we are not being studied for our behavioral shifts, that we are willing to tolerate that. especially if they are well targeted within our social communications within you and i sharing pictures with each other

and our friends of our kids, et cetera. advertisers are finding that he is are being -- these are effective chant else and showing news that way communicating aye balls, if you will, that can be monetized. p should work for p interest and instagram, too. they don't curvely sell ads. that's a huge opportunity for facebook and should work for tumbler as well. >> it is an interesting note. i'm sure we will be looking back on it when earning season starts. thanks again. >> thank you. when we come back, believe it or not, today is the seventh anniversary of the release of the very first iphone. we are going to show you how apple celebrated that anniversary when "squawk alley" continues. if you have moderate to severe rheumatoid arthritis, like me, and you're talking to your rheumatologist about a biologic... this is humira. this is humira helping to relieve my pain. this is humira helping me lay the groundwork. this is humira helping to protect my joints from further damage.

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let's close the gap between people and care. ♪ today is the seventh anniversary of the very first iphone releases. apple is celebrating with a new ad. ♪ i'm living a life of dreams

♪ i'm living the life of dreams ♪ ♪ with people all around me ♪ i'm living the life of dreams ♪ ♪ i'm feeling hopeful >> a device that changed so much in seven years. but in many ways it has stayed the same. of course did it not roll out perfectly. there were a few glitches at the time steve jobs had to come out and apologize for but at the time apple hoped to sell 10 million phones for one person the market share. >> mission accomplish. >> i would say. i don't know where you were that summer but i was working in print. covering the release. i interviewed whoopi goldberg and spike lee. they were the first people in line outside of the store in soho to get the phone. >> that's interesting. we are all taking note because of all the names on the nasdaq 100. apple is the biggest gainer of the year so far. you may not vehicles expected at the end of last year which was just miserable. >> as john said, it tends to taper off towards the back half

of the year. we will keep an eye on apple. we are watching markets in europe set to close in a few moments. for that we want to bring in simon to show you what's move. >> yes. speaking of living the life of dreams, a look at western europe. negative. inflation day that came through today, stuck at the headline level of 0.5%. there is an ecb meeting thursday. this is a four-year low for inflation that keeps being dragged down at the med line level of the core isn't that bad. europe is closing out not just the session, not just the month but, of course, a half year. what's really interesting now if you can pay u.s. stocks to your mean stocks is that you have these underperfect formers. here you are up 6% on the s&p. the stock is 600 in europe is just up 4% and the main reason for that is during the course of june, the markets headed in different directions. europe is now negative overall as you can see heading down. the major reason -- one of the major reasons for that is the losses we have had on the banks.

barclays, shortly -- i don't know, interest in now, as soon as europe is closed we may get an announcement on the fine, bnp paribas fine. we will go to new york and the whole question of whether they will be locked out of dollar transactions and whether they won a six-month reprieve for that to start in january. there is a bank run in bulgaria they are trying to sort out to the east of europe. in portugal they have a problem with the main shareholder in the largest bank there as well. you are beginning to see the banks move in sympathy. remember when kbc, weand credit agricole were moved together, we are seeing it again today. the airlines, started off with bank of america and merrill lynch downgrading easy jet to a sell. effectively a sell. it is an underweight because they are worried about overcapacity and inability to grow the business, grow earnings. during the course of the session, they dragged down air

france-klm and iberia. time for a holiday. >> thank you, simon. general motors opening up with the compensation fund for the victims of the defective ignition switches. $ing for $100 million for families of the victims. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. hi, credit report site andour

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♪ ken feinberg announced the g.m. compensation plan for the families of victims killed due to the ignition defect, he says it is totally voluntary. >> if you want punitive damages, opt out. i can't help you. but before you opt out first come into this voluntary program and let me calculate your claim and let me tell you what you can receive under this program within 90 or 180 days. the punitive damage litigation is years of litigation. >> cnbc news line this morning, ken rhymer, the stepfather of a g.m. victim. en and his family are represented by an attorney whom we had on earlier this morning. ken, good morning to you.

your stepdaughter, natasha and her friend were killed in october of 2006. do you join this plan or not? >> i would say will are guidelines of this plan, you know, gives out right -- just at face value, i'm apprehensive about what they have to offer. it is kind of difficult to put a value on a person's earnings. she was 18 years old. and just four years out of graduating high school. and it is not that her -- would have affected us but i guess i don't know how you put a value on something like that and the loss of life, punitive damages, are -- you know, way beyond a million. again, we will have to look at it as we have discussion was our attorney. >> as feinberg said this morning the money is a poor substitute for loss. our thoughts are with you and your family. part of the problem that feinberg laid out is unlike other times he had to give money to victims through a plan, 9/11, b.p., in many cases the car

itself, and this -- for instance, it is not around to lend aid to the investigation. how is that going to manifest itself in your case? >> i think we have fairly good evidence. the accident report which had the black box data. i have a copy of that which i got from my wisconsin state parole. g.m. has copy of it which they received in 2007. three months after the accident was finalized the accident report. the evidence is pretty -- you know, it is out there. we have a good, strong, you know, paper trail of evidence showing that the ignition switch was found in accessory position and it happened either just as it was leaving the road or shortly after. we have substantial proof that shows that. >> mr. feinberg seems to be saying his committee will have the ability to sift through claims relatively quickly.

90 to 180 days is the quote we gave us. at this point your family and other families have already been grieving and have already been in contact with the company for years at this point. i'm just wondering now that he put a date on this and put a fund together, what are some of the advantages that you are thinking about potentially participating in that versus just waiting it out and continuing with a loss that you already have against the company for wrongful death? >> we have been into it for 7 1/2 years already. you know, the accident happened 7 1/2 years ago. we accepted that -- we didn't have the ryans or answer why the accident happened. now we have an answer. this is about would young girls that lost their lives. if it takes months or a year out our lives as family members that's least we do to make sure these two young girls didn't die in vain. >> feinberg said if you want punitive damages against g.m.,

then this fund, this plan, is not for you. how much of that do you desire? >> the whole idea is that -- they consciously made the decision not to correct the error and because of that, it is going to be more than -- you know, you can't put -- it is a dash to put a dollar amount on the loss of a life but it means more to us than just, you know, what they are offering at face value now. it was my wife's only child. that's a lifestyle change for her. it is not only just a loss of a child but it is a loss of being a grandma. it is a loss of being at your daughter's wedding. there are so many other things, that's the punitive damages, i believe. i don't know how you can put a value on that. not ever being -- being able to be a grandma. >> mary barr was asked last week about whether or not the employees who have been terminated by g.m. will face criminal investigation or lawsuits. are you interested in pursuing that avenue or not? >> i'm seeing a couple of other

ones recent, b.p. would -- also implicated in e-mails. more information is still coming out. i think i would leave it up to -- i would leave it up to nishta and whatever the gentleman of justice, need for criminal action in regards to that. i won't -- i'm not necessarily, you know, going to stand in the way but it is like -- if that's what has to happen, that works for me. >> finally, one more. the volucas report is pretty detailed and obviously concludes that senior management, that there was no coverup per se just -- just a lack of communication and a heavily -- do you believe that? >> at face value, yes. i mean, it is -- they paid for the report and so they got the report and it didn't implicate a lot of the higher-ups. again, recent information, some of the hire-up has knowledge on it. a coverup, if you know there is a problem and you don't say it, bring it up or mention it, i

would say, yeah, that's a coverup. >> ken, thank you for your time. appreciate your coming to the phone. >> you bet. >> take care. >> talking about the g.m. compensation plan. we are also nearing the end of the session for the supreme court this summer where we get a lot of breaking news this morning. we wouldn't update you on the decision just issued by the high court. just about an hour ago involving hobby lobby. the court ruled certain corporations can claim a religious objection to the obamacare mandate that covers contraception for employees. this marks the first time the high court ruled for-profit companies can hold religious views under federal law. the administration will have to weigh different options for providing free contraception to women covered under objecting companies health plans and it is unclear, carl, if other parts of the lay will be relevant in this case. of course, contraception has been the hot button issue for a lot of the companies. >> let's head over to bertha coombs for a market flash here. >> we are watching allerkan.

it is for adult patients that have an artificial lens implant or who are scheduled for cataract surgery. the stock is currently trading down. just over 2%. >> all right. thank you very much. when we come back, rick santelli, what are you watching? >> kayla has me on a whole new trek. free. whether it is free contraception or free social media, is free really free? "the wall street journal" talked about a bunch of people on facebook not very happy being lab rats. the other issue, as we come toeptd of the quarter, valuations, stock levels against economic levels against interest rate levels. all right after the break. [ male announcer ] some come here

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that and much more straight ahead on "the halftime report." >> let's hop over to the cme group and check in with rick santelli. >> thank you. the dynamic of companies buying back their own stock, being a very important input into the level of stocks is now really growing to the point where everybody is aware of it. the only thing that many investors and watchers aren't aware of is the timeline for how long it will last or how it will play out. i reference another story by e.s. browning that was in "the wall street journal." on the screen. biggest gains. inside job. the companies purchasinging their own shares represent the single biggest category of stock buyers today. we have been on this for a while. it does not make it so your stock valuations aren't kosher because, of course if you are long and cash out, you go to the currency exchange, you will get greenbacks for your profit. the real issue is that trying to put the whole thing together to

come up with a timeline, to make sure that your position gets the most out of the profit side is, again, before dynamics change and everything always changes. at this point we had professor john taylor on, there are some that believe the whole financing relationship like repos, central banks owned some of the best income paper, financing used to leverage which helps stocks, may be running its course. this article demonstrates that companies are buying their own shares and that is a variable. how long can it go on? art cashin, the sage contributor for cnbc, talking about that would affect p/e rash wroes and measurements. as the band plays on, remember, make sure you put your initials on that chair for when the music stops. facebook in 2012, of course, trying to garner information. here is what i say being the father of tree that use

facebook. fee or free, okay. privacy is worth what you pay for. i have always wondered, okay, here's very generic numbers for facebook. total monthly active users, 1.3 billion. wirt, receive knew were about $6.1 billion. indeed, with this many users we are not looking at all the daily and mobile users. what about a subscription? as my kids get older the notion of privacy, like when you are young in general, things that should be important to you aren't but as you get older, you see the error of your ways. do we want to see our own privacy issues and social media out there because they are worth something? or pay $2, $4 a month to get them out of your important information? i believe that latter die namic is going to change social media and i think there are people out there thinking that isn't too large to get into the game at this point in time. back to you. >> rick, thank you very much. rick santelli. when we come back, you are

looking at a specially branded "squawk alley" barbecue sauce designed entirely by ibm super computer watson. we have questions for you about barbecue sauce. head to cnbc.com/vote to join the conversation. we will begin our questions right after this break. he thougd of the conversation. she didn't tell him that her college expenses were going up. or that she maxed out her card during spring break. when the satellite provider checked his credit, he found out his daughter didn't pay her bills. but he's not worried. now he checks his credit report and score at experian.com, allowing him to keep track of his credit and take a break of his own. experian. live credit confident. for that moment, where right place meets right time. and when i find it- i go for it.

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what special ingredient

makes perfect burrito or fish and chips? there is no perfect answer, but watson will try anyway. director of the watson group is here along with a new barbecue sauce that watson made exclusively for us. steve, welcome. great to have you. >> i was just asking how this all got started. you were saying after the jeopardy news that we're all familiar with, the idea was to try to do? right brain stuff. >> exactly. we've all seen how watson introduced the concept of cognitive computer. it had to read a hugement amoun text and produce answers. the idea here was to see if we can go beyond answering questions and help will humans be more creative, can they help discover new insigh sightsights wouldn't have otherwise chosen and we chose the vehicle of food because everyone can relate to

food. >> so how did you figure out the way watson would interact with these recipes and what sort of intelligence watson could provide? response to that? >> watson read the database of 9,000 bon appetite recipes and from that learned what xwree ingredients typically go together, what comes together to make a particular dish. and then it generates up to is 00 at a time new inventive on the spot never before seen recipes. >> i love spicy food, so i suggested lemon grass as an ingredient. how can you monetize it, to really let people see the value in this technology and get companies vertical industries to pay for it? does this show you're any closer? >> absolutely. even with this specific food

project, we've gotten inbound interest from the companies in the food and flavoring industry, companies in the consumer products area, quick service restaurants and in retail grocery. so we have a lot of companies interested in partnering to federal government is o figure how out they can be more creative. >> so what would they be using this for? >> this technology is a partnership between the chef and the system to think outside of box and come up with creative ideas that you haven't thought of. very much like what we do in other industries. when watson is working with a medical practitioner, physician, to think about a treatment plan for a picture, the idea is for to inspire the physician to discover maybe connections and what has worked and not worked in a treatment plan in the past. but the ultimate decision maker is that physician, that financial analyst or in this case that chef. >> we're asking viewers now would you eat meals crafted by a computer. 68% yes, 32% no.

have you tried these? >> i tried the barbecue sauce. >> my favorite food is french fries. i was told watson could not create a recipe with french fries in the barbecue sauce. so we have some french fries on the side. barbecue sauce is a little tangy. >> it has ginger and some lemon glass in it and it's thai inspired tomato based. and we also have fried lemon grass sprinkled over. so really unusual kocombination that the human chef may not have come up with, but ultimately created by the chef. >> created by a human. that's what viewers wanted to confirm about that. >> exactly. >> carl having some issues over there. >> a little spicy? >> 68% is really high as far as people who would eat a mile prepared by a computer. wonder if this is a little bit

of the rosy effect. isn't that the name of the robot in the jetsons? we're a little used to that. >> the partnership with the institute, people are very willing to try these dishes in-entire espired computer. but it's an analog of many other industries. financial services, retail, manufacturing. watson can help the professionals discover new things they haven't seen before and be inspired to come up with new creations. but again, decision paging authority always rests in the hands of that professional. >> steve, thanks for coming in. we'll give these a try. when we come back, a good day for the nasdaq touching a 14 year high this morning. we'll tell you what is leading the way.

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welcome back. the nasdaq hitting a 14 year highthanks to the resurgence in tech shares. it did record its first weekly

decline in nine weeks. valuation is a concern. lastly momentum is back. tesla, one of the best performing stocks on the nasdaq 100, up 17% in june. our thanks to jon fortt for joining us from silicon valley today. as we hit noon, let's go over to melissa and check in with the half. >> lots to talk about today especially what to do in the second half of the year. traders will outline what their first moves for the second half will be. welcome to the halftime report. game plan, go, go, gopro. the hot new idea up 35%. is it already too late to get this. call of the gay, yahoo! up. why the stake in ali baba is und undervalued. and how to lose $110 million. antoine walker knows all too well. but now he's helping other athletes avoid the same financial mistakes. he'll join us live. plus meet today's starting lineup.