going there themselves, but others have said it's just not safe. a lot of tragedy, a lot of unimaginable pain from the members of the families that we're speaking to. detectives have gone to each of these families and taken dna samples in hopes of helping to identify remains. so there is some hope that they will eventually get something. but a lot of frustration that they haven't gotten anything yet. we're seeing memorials without bodies, funerals stalled and nothing but questions as to when this is going to get resolved. carl? >> katy, just an incredible story. i think it was "the journal" this morning that said those families suffering iniquities rarely seen. our thanks to katy tur in amsterdam. if that weren't enough, more violence in gaza over the weekend. we want to go back to nbc's martin fletcher who has joined us all morning long from tel aviv. hi again, martin. >> reporter: hey, carl, my friend. the fighting here is growing and

intensely at the same time as it does appear to be some movement towards a potential kind of a cease-fire. secretary of state john kerry, the u.n. secretary-general on their way to cairo, as is mahmoud abbas, they're talking about the possibility of what they're calling a humanitarian cease-fire to last for 48 hours. that would be the beginning. and then to take off from there to extend it further. but in the meantime, the israelis have said they're actually intensifying their fighting in gaza and hamas is intensifying their rocket fires which they're still, despite the tremendous pressure they're under from air, sea and ground, still continuing to fire rockets into israel. so the fighting's getting worse while cease-fire efforts do appear to be gaining some momentum. now, the elephant in the room, if you like, is that hamas has claimed to have kidnapped or taken -- to have taken hold of an israeli soldier.

that they're holding him inside gaza. they have displayed -- his identity, the dog tags and the israeli ambassador of the united nations said this is not true. but there's been no response officially from the israeli government. so that's playing itself out now. that would be a significant success for hamas. one of the things they've said they wanted to do is -- and they wanted it for a long time is to kidnap an israeli soldier, more civilians. and apparently in yesterday's severe fighting in the northern part of gaza during which 13 israeli soldiers were killed, about 60 palestinians were killed, hamas claims that they were able to take hold of an israeli soldier. they've got his dog tags. that doesn't mean he's alive. he could be dead. either way it's putting pressure on the israelis. the israelis continuing their main goal of looking for that secret network of tunnels which they've sworn to discover and to destroy. that's where we are at the

moment, carl. intensified fighting, potential cease-fire progress. carl? >> and certainly situations like that, martin, have historically altered the equation. we'll keep our ears open. thank you very much. nbc's martin fletcher in tel aviv. the dow is down 114. we are awaiting the president to speak on the south lawn regarding ukraine. we've lost dow 17,000. of course, gaza is just one more piece of the story. joining us here at post 9, our own jon fortt, daily mail north america john steinberg and art cashin. cramer was on this morning and said the market might have gotten a little complacent on friday. that because of what's going on in the world, you really do need 1% or 2% to, in his words, shake people up. is that what this feels like? >> you can see the nervousness even as we're awaiting the president. you alluded a yield of the ten-year. it is now at a low of the day. you can see that nervousness is still built in there. i think people don't believe that this will disappear as

rapidly as it looked for a brief period on friday to be. i think the market was generally oversold in a couple of cases. we saw things bounce back. the russell and all of the things that had been picked on in that monetary report by the fed. and so they got a bounceback there. >> right. russell, people are watching high-yield corporates now. things that you would expect to sell off first now leading to something broader, we will see. certainly back-to-back 1% moves after 62 days without. i mean, yellen said we didn't appreciate the volatility to come. i don't think this is exactly what she was expecting. >> i don't think she was hoping for this at all, but i do think you're dead right, it looks like volatility's beginning to build up. and people are getting a little sensitized. again, to beat a dead horse, it's the idea of contagion. is any of this going to spill out and begin to affect other things? hopefully we get some clarification from the president. we'll get a look where this thing is going.

>> what do you say to people who say this is terrible. >> that is true to some degree, but again, we're talking about things like far more onerous sanctions for russia. will that impact the european economy? some say yes. some say yes greatly. and others are dismissive, as we discussed a little bit earlier. but i think it can affect bristol meyers' earnings. don't forget that the s&p gets nearly half its earnings offshore. so this is -- globalization has finally taken hold. there aren't many places to hide these days. >> we've been talking about ge, by far the worst component on the dow. we don't need to tell anybody how much money ge gets from non-american locations and markets. meantime, the russian market which art alludes to was down 8% last week. you'd think that would be the worst week in a long time. it's actually the worst week since march because they've had such a rough time over the past few months.

>> they are. and they are at a relatively low level. i mean, if things were fair and normal, their market would look very cheap. they're among the lowest multiples that you find around the globe. but that's because there is so much potential volatility built in there. >> as we await the president at the white house, let's turn to our own eamon javers in washington. good morning to you. >> good morning. i can tell you that these remarks were scheduled within the hour. these remarks were not on the president's official schedule release this morning. remember, the president taking a little bit of heat from his republican opponents here in washington last week for not varying his schedule on thursday when you had sort of twin foreign policy crises explode around the world. today the president adding these remarks. i can tell that you we did hear just this morning from british prime minister david cameron, and he talked about the thing that art cashin was just mentioning, sanctions. let me read you cameron's comments. he said i am clear that the eu will be ready to take steps to sanction advanced industrial

goods and action will follow if there isn't a radical change in the way russia behaves. so obviously a lot of business community focus on this question of what the u.s. and western response will be here to this apparent shootdown of the malaysia airlines jet. and then also, a broader geopolitical question here of what happens in the ukraine, whether the ukraine's territorial integrity is going to stand in the face of what the west sees as russian aggression here. at the same time, you've got the microlevel dispute here over what happens when the wreckage of that plane and the bodies, and as you heard from katy tur, just a very heartbreaking scene there for the families who have lost loved ones on that flight. they don't have the opportunity to recover their families. so a lot going on here in washington. a lot of audiences here for the president to address in just a moment. >> certainly after sending secretary kerry out to all five morning shows on sunday, you might expect the president to at least echo some of what he said. we will see. we're going to cover that when the president comes to the

microphone. we will try to get to netflix which reports tonight. apple and facebook later in the week. we'll get to that with jon and john in just a minute. don't go away. chocolate is very individual. white chocolate lovers don't like dark chocolate. milk chocolate lovers don't necessarily like dark or white. before we couldn't really allow the consumer to customize their chocolate. we needed a scalable cloud solution allowing them to select what they are looking for. now there is endless opportunity to indulge. customization is made with the ibm cloud. the ibm cloud is the cloud for business.

welcome back. a triple-digit move on the dow to the down side as we await the president to issue his statement on ukraine. meantime, our michelle caru caruso-cabrera at the news desk. >> to echo what eamon was

talking about earlier, david cameron coming out just in the last couple of hours and calling for even tougher sanctions on russia when the president was asked about that on friday, he talked about the fact that they had just put some in place the night before the crash. so the question is now, based on all of the statements that we've heard over the weekend where the white house is now clearly willing to say that they believe that the russian separatists or the pro-russian separatists were sponsored by russia and likely got this equipment from there, are they willing to go even farther? the conundrum, of course, carl is that any sanctions that are truly meaningful will also be detrimental to the countries that impose them, right? if germany is going to impose harsh sanctions, the german business industry will suffer likely as a result. if the united states were to put on sectoral sanctions on a certain sector like oil or banking, we have many u.s. and european-based oil companies that are doing work in russia. what do you do in that

situation? and how much pain in particular is europe willing to take? they've talked very tough, and there has been a big turnaround in positions from countries that before were not necessarily willing to go along with the sanctions. for example, italy has now come out and said okay, maybe we need to impose sanctions where they were very reticent before. the president of france as well talking very tough. so we'll have to see. we can expect, i would assume, a ratcheting up in the pressure. the question is does he go a step further with sanctions. and remember, we have an event in which we could see further sanctions. there's a foreign ministers meeting tomorrow in brussels. david cameron referred to that very specifically, saying that should be the first step here, if putin doesn't change his approach, according to cameron, where they should begin to consider sanctions. so that's one of the key things that we're waiting to see. >> you're absolutely right, michelle. and we're talking about those european economies. art, specifically france and germany where industrial production is missed for a few months. investor confidence is starting

to erode. i'm looking at the dax, down almost 4% now. you can see why they would be hesitant to jump on that bandwagon. >> it is a very clear vulnerability that's built in there. that's what we've been talking about, if they impose new and far more onerous sanctions, as michelle pointed out correctly, there is a natural backlash in that. and the european economy is not all that strong. so it raises a question. you have to find some way to get putin to do what you want. but do you necessarily wind up punishing your own economies to do it? >> michelle, over the weekend, secretary kerry obviously brought out all that evidence. but in the end, art, he said we are not drawing the final conclusion here. what happens if the president comes out and says we actually have? >> well, that would be far-reaching. i think the markets would react to that. and i think they probably would pull back because that would make heavy sanctions all the more likely. but i'm not sure -- as we left things friday, part of the

debate was who was supplying the weapon that might have been used? and we don't know if that's fully resolved. >> we continue to see them setting the president's lectern there. we think we may have him perhaps in a few moments. again, this was originally scheduled for 10:50. we'll take a quick break, i believe -- nope, we're going to go to eamon javers in washington who may have more. >> carl, the little bit i have to add is we just saw the papers for the president being placed on the podium. we're told that's going to be the two-minute warning. that's all the warning we're going to get here for the president. you guys were just talking about the economic and diplomatic components of all this. and i think your last question really touched on one of the pieces of this that we haven't talked about yet, which is the intelligence component. the u.s. has resisted here, saying that putin was directly responsible for this, even though they have said that russian separatists likely fired this missile, and it was likely equipment provided by the russians. what they haven't said is that putin was the guy responsible for that call. and obviously, u.s. intelligence will be going over every shred of evidence it has to figure out

whether there is a direct link or whether this is simply a case of vladimir putin having stirred up russian separatists and a lot of hostility in that area of the ukraine and then being sort of unable to tamp it down when he needs to. clearly this shootdown of this airliner does not serve vladimir putin's goals here. it's putting more pressure on him and the russians. he would have preferred it probably if this hadn't happened at all. the united states going to go out there and do everything it can to see if it can prove whether or not he was involved in that call to shoot it down. >> dianne feinstein saying u.s./russia relations are back to cold war levels. a little historical perspective on how markets operated broadly during that time? >> well, everything had almost had a significant sign of contagion in those times. i'm hoping that would have been an overstatement because if we get back to almost that nose-to-nose routine, i've been

at this a long time. i'm back to where the cuban missile crisis was, and these are hopefully completely different times. >> the dow is down 110 points. we'll see how it reacts over the next few seconds. the president is on the south lawn making a statement on ukraine. >> good morning, everybody. i want to make a brief statement about the tragedy in ukraine. before i do, though, i want to note that secretary kerry has departed for the middle east. as i've said many times, israel has a right to defend itself against rocket and tunnel attacks from hamas. and as a result of its operations, israel has already done significant damage to hamas's terrorist infrastructure in gaza. i've also said, however, that we have serious concerns about the rising number of palestinian civilian deaths and the loss of israeli lives. and that is why it now has to be our focus and the focus of the

international community to bring about a cease-fire that ends the fighting and that can stop the deaths of innocent civilians, both in gaza and in israel. so secretary kerry will meet with allies and partners. i have instructed him to push for an immediate cessation of hostilities based on a return to the november 2012 cease-fire agreement between israel and hamas in gaza. the work will not be easy. obviously, there are enormous passions involved in this and some very difficult strategic issues involved. nevertheless, i've asked john to do everything he can to help facilitate a cessation to hostilities. we don't want to see any more civilians getting killed. with respect to ukraine, it's now been four days since malaysian airlines flight 17 was

shot down over territory controlled by russian-backed separatists in ukraine. over the last several days, our hearts have been absolutely broken as we've learned more about the extraordinary and beautiful lives that were lost. men, women and children and infants who were killed so suddenly and so senselessly. our thoughts and prayers continue to be with their families around the world who are going through just unimaginable grief. i've had the opportunity to speak to a number of leaders around the world whose citizens were lost on this flight and all of them remain in a state of shock, but frankly also in a state of outrage. our immediate focus is on recovering those who were lost. investigating exactly what happened. and putting forward the facts.

we have to make sure that the truth is out. and that accountability exists. international investigators are on the ground. they have been organized. i've sent teams. other countries have sent teams. they are prepared. they are organized to conduct what should be the kinds of protocols and scouring and collecting of evidence that should follow any international incident like this. and what they need right now is immediate and full access to the crash site. they need to be able to conduct a prompt and full and unimpeded as well as transparent investigation. and recovery personnel have to do the solemn and sacred work of recovering the remains of those who were lost. now, ukrainian president pore chenco has declared a demilitarized zone around the

crash site. as i said before, you have international teams already in place prepared to conduct the investigation and recover the remains of those who have been lost. but unfortunately, the russian-backed separatists who control the area continue to block the investigation. they have repeatedly prevented international investigators from gaining full access to the wreckage. as investigators approached, they fired their weapons into the air. these separatists are removing evidence from the crash site, all of which begs the question, what exactly are they trying to hide? moreover, these russian-backed separatists are removing bodies from the crash site. oftentimes without the care that we would normally expect from a tragedy like this. this is an insult to those who have lost loved ones. this is the kind of behavior that has no place in the community of nations.

now, russia has extraordinary influence over these separatists. no one denies that. russia has urged them on. russia has trained them. we know that russia has armed them with military equipment and weapons including anti-aircraft weapons. key separatist leaders are russian citizens. so given its direct influence over the separatists, russia and president putin, in particular, has direct responsibility to compel them to cooperate with the investigation. that is the least that they can do. president putin says that he supports a full and fair investigation. and i appreciate those words, but they have to be supported by actions. the burden now is on russia to this is that the separatists stop tampering with the evidence, grant investigators who are already on the ground immediate, full and unimpeded access to the crash site.

the separatists and the russian sponsors are responsible for the safety of the investigators doing their work. and along with our allies and partners, we will be working this issue at the united nations today. more broadly, as i've said throughout this crisis, and the crisis in ukraine generally, and i've said this directly to president putin as well as publicly, my preference continues to be finding a diplomatic resolution within ukraine. i believe that can still happen. that is my preference today, and it will continue to be my preference. but if russia continues to violate ukraine's sovereignty and to back these separatists and these separatists become more and more dangerous and now are risks not simply to the people inside of ukraine but the broader international community, then russia will only further isolate itself from the international community and the costs for russia will only continue to increase.

now is the time for president putin and russia to pivot away from the strategy that they've been taking. and get serious about trying to resolve hostilities within ukraine in a way that respects ukraine's sovereignty and respects the right of the ukrainian people to make their own decisions about their own lives. and time is of the essence. our friends and allies need to be able to recover those who were lost. that's the least we can do. that's the least that decency demands. families deserve to be able to lay their loved ones to rest with dignity. the world deserves to know exactly what happened. and the people of ukraine deserve to determine their own future. thanks. >> president, are you considering sanctions or other actions? >> that is the president, not taking any questions on this. a couple of different points here. first off, calling for that cease-fire in gaza, saying that the secretary of state will meet

with allies there to go back and push for what he called an immediate cessation of hostilities. on the ukraine, his focus clearly on the crash site, talking about the inequities that are being dealt the victims. the reports of bodies that have not been treated with respect. his point that russia has influence over those separatists and were in his word, what exactly are they trying to hide? eamon javers is in washington. your take? >> carl, a couple of things interesting to note that he didn't say there. one was no announcement of any new sanctions here from the united states of america, and no attribution directly to vladimir putin for the shootdown of that plane. simply saying -- the president simply saying vladimir putin has influence over ukraine and ought to exert his influence to make sure that at least the investigators have a chance to get to the crash site and that the violence there stop and they be allowed to do what they're doing. but a couple of things we didn't really expect him to say, he didn't say including the question of sanctions and

putin's personal responsibility here. >> perhaps one of the more provocative lines was that the costs for russia's may have will continue to increase over time. thank you for that. the dow didn't move much on that brief statement, bob pisani. >> i think the key point here, carl, put up the s&p, is that as it became clear that there was not going to be any announcement from the president or a statement on sanctions, we actually came off our lows. the s&p was down almost 12 points at one point. and as the president began speaking and it became clear to everyone, no sanctions were going to be mentioned, no additional sanctions would be mentioned, we came off of our lows. all ten sectors have been down all morning. energy, a little bit better because of halliburton's earnings but all down about the same, about 0.6 prosecute says. pr 0.6%. so the decline has been very even. the volume has been on the light side. europe has generally been weaker as well. another rough day for the russian stock market, the rsx. there is the etf. essentially sitting at the lows for the day. and put up -- i think we have a

one-month chart there. we've been down almost 8% since this was announced. there's that decline on thursday. the market's been moving down in russia since then. germany's down another 1.2%. that is now starting to raise eyebrows. there's a three-month chart. this is the lowest level since may. it's one thing for the russian stock market to decline. it's another to see breaking trend lines for the german stock market. that has raised a couple of eyebrows today. finally not a lot of companies extremely active in eastern europe. epam being one of them, of course. we've talked about that many times, a software company involved in central and eastern europe. there is a one-month chart. you see sitting at its lows for the month. carl, back to you. >> thank you very much, bob pisani. when we come back, we'll get back to the markets. by the way, the 30-year treasury yield, now its lowest level in a year. we'll talk about netflix reporting tonight. apple and facebook later in the week. and europe's about to close. we'll get simon's take on all of that when we come right back.

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welcome back. apple set to report quarterly results after the bell tomorrow. ubs analyst steve upping his price target on apple from 100 to 115. let's bring in steven this morning from new york. steven, good morning to you.

>> good morning. >> sounds like you think people aren't necessarily appreciating the potential for margins here. >> well, that's right. we expect that the gross margin both in the near term as well as fiscal '15 could be a bit better than expected. today we have a survey out with our friends at consumer intelligence research partners who indicate that there's a strong mix shift toward the higher end of the phone line as well as a little bit more toward the ipad line for the air. so we do think that's going to help gross margins particularly in the u.s. as we get into next year, we think some of the drags like higher warranty expense, high fixed-cost absorption will begin to run off a little bit. so we're about half a point above the street for gross margin next year. >> stephen, it's jon fortt. any time i see a bunch of analysts start to raise their price targets on apple, i get nervous because the timing hasn't been the best. usually as we get toward the fall, that's when the stock gets vulnerable. so why is that not happened here? is it because of the larger iphone? is it because of something else? >> you're right, jon.

typically you kind of buy it going into the announcement and then sell it on the announcement. that's been pretty much true the last couple years. but the announcements have been pretty incremental in terms of new technology. first of all, the iphone 6 is going to appeal to a lot more people. arguably, one-third of the market, apple can't get to right now because it doesn't have larger screen phones. and our survey today, it does appear more people than normal are holding back, waiting for that product. second is you will have a new product category we believe with the iwatch. now, we're relatively conservative in our forecasts there because we think everybody needs a phone. not everybody's going to want to wear a watch on their wrist. nevertheless, we expect it's going to be additive to earnings with 40% or better gross margin. finally, there's potential for new services. apple's sort of been thinking about new services for a while. we're not sure when they come. but between a new iphone 6, new products, we think this time's a bit different. >> steve, you think they're going to get out there with a 5.5-inch fablet.

apple has increased orders 30% to 40%. what makes your channel check different from a week back that said they're having problems? >> i think different channel checks are suggesting different things. not all disagree with ours. we do think the company struggled a bit with the display. but we've heard that they've got some workarounds. so our best information as of today is we do think the 5.5-inch will be roughly on time. we're not looking at anything significant. we do think the demand is very strong. and again as you mentioned, it appears the orders are shifting a bit toward the 5.5-inch. >> and you think the guidance will have very little of the iphone 6 in it because they're only going to have about ten days of september after the launch, is that right? >> i think that's right. you can look back at what they did in previous announcements. and it was a contributor but not a huge contributor. so i think people will take the guidance, you know, watching for any signs of what's going on with the new products but take it with a grain of salt since i expect the company's going to be relatively conservative. >> if i'm envisioning a headline tomorrow night, apple down on

surprisingly weak september guidance because of some product timing, you think investors are going to ignore that? >> i think the stock could go down a little bit. at the end of the day, it depends on the new products, are they going to be in demand? will they have reasonable gross margins? we believe the answer is yes. and therefore we'd be buying on the weakness. >> steve, it's a good note. we'll see what happens tomorrow. thanks for your time. >> great. thank you very much. let's bring in simon here, see how europe closed today. >> there's a lot of red on the screen across europe as you can see. we've extended losses through the session. tomorrow the foreign ministers of the 28 members of the european union will meet in brussels. it looks like they'll be driven towards biting sanctions against russia for the first time. and it comes back to that question of solidarity. remember, we spoke about it so often during the european crisis. at the heart of europe now in the netherlands, it had 193 victims on that plane. 80 of them were children. and the anger at the way that those bodies had been treated over the weekend is now spilling out politically.

so that the germans and the french may have to come on side with the united kingdom in imposing sanctions. the issue isn't the sanctions themselves. jpmorgan has a note out suggesting if trade is affected, that's not a great deal for the european union. what is an issue is if putin reacts to those sanctions by imposing sanctions of his own, as he has promised to do against europe. and that means gas supply to germany which even as things stand at the moment has a relatively rock yo economy. if you look at the map, interesting to see that both italy and germany are those worst affected today because they have the closest economic links. as far as the corporate news, let me run through this quickly. the swiss lender is higher today. it's come out with results as it beds down the merrill lynch wealth division, there are abundant expectations. more importantly, it said it's going to settle its case with u.s. authorities possibly within months. you see quite a decent spike there, up some 8%. tesco is higher after a

disastrous three years. its ceo is stepping down. and it would appear, according to multiple reports, that rupert murdoch's fox is attempting to unload assets across europe, pay television assets in order to help fund potentially that bid for time warner. so you see that sky deutscheland is higher. it would appear that fox is selling its 57% stake to b sky b. it's in negative territory. they could do the same for the italian platform and ultimately begs the question whether presumably murdoch or fox would sell out of b sky b itself. they could raise somewhere in the region of 13 or $14 billion it has said through these transactions if they materialize. back to you. >> he did say financing really wasn't dependent on anything big. when we come back, more on the market. reaction. david malpis who lowered his second half expectations and of course more on this busy earnings week in a moment. ♪

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scott, meantime, anything coming up on the "half"? >> coming up, we have billionaire investor bill ackman. the war of words between him and herbalife with the company calling the pershing square ceo the worst of wall street. ackman's fighting back. we'll also get his comments surrounding allergan and vail yant as he pushes for a takeover of the botox maker. a huge week for earnings but traders are split on which are actually strong plays right now. they're going to battle it out. all that and much more straight ahead. carl, we'll see you in about 20 or so. >> it is a big week for earnings. apple and microsoft tomorrow. facebook, amazon, xerox later in the week. john steinberg, jon fortt. you want to walk us through netfl netflix? >> it's all about the subscriber number, looking for domestic subscribers at around 550,000, 600,000. all the upside that i'm hearing about from analysts has to do

with maybe enough of the international growth has not been baked into estimates. and as high up as the stock has gone, still up near its all-time highs. it's really the growth that people want to see, carl. >> and i'd love to pair that with a story today in "the wall street journal" that verizon is putting the cap for uploads equal to download speeds. i think that pairs nicely with the fact that there's an article out today saying what makes netflix so special. it's basically the same as hbo. i think they're both going to go over the top. you're seeing them become data companies. so i don't think it's a question of whether or not netflix is special or more or less special than hbo. i think it's a question of whether or not the stock is expensive. and i think it's very hard to come up with any conclusion other than the fact that it's incredibly expensive. >> a little more difficult to read this quarter because of the price hikes. will we be giving subgrowth a bit of a break if it comes in light? >> yeah, i think so th. i think that does make it tough to read. the fact that netflix has traditionally performed a little

bit better than people had expected, sub skriscriberwise a they gave a point last quarter for the first time, does that mean they'll be more line with expectations than not? i think all of that will play out. >> "orange is the new black" coming out in this quarter as well. let's fast forward a little bit to tomorrow. when is the last time apple and microsoft came out on the same night? does that happen a lot? >> it does not happen a lot. it does happen. >> that's going to be crazy. so your thoughts? which will you pay more attention to? >> definitely apple. i think the question is iphone. the number out there consensus is around 36 million, but the wild card here, i think, twofold. one is the impact of the iphone 6 on current iphone sales. will it be a bigger impact than usual on consumers holding off on buying iphones because they expect a bigger one? or is it just, well, you know, the ones who want a bigger one weren't buying iphones anyway and people who like the current size will buy even more. the second is inventory

drawdown. a lot of times before there's a new phone coming out, apple will like to draw down current inventories a little more up to this point. if that happens, apple could be on the lower side of the range that it gave. could maybe miss that 36 million number. a lot of these analysts who have been raising their targets will be disappointed. >> what's amazing, they've added so many carrier relationships. they've actually been able to maintain the numbers. we'll look for a number that's in line and then the conference call, any tea leaves around what's possibly coming in the next quarter, anything about guidance which has the slightest bit of a hair raised on it which could mean the new iphones. that will be what i think moves the earnings. >> do we still need to worry about ipads being a laggard? >> no one cares. the number was weak. no one cares. >> the only reason ipads matter is if they surprise to the upside in a particularly big way. to the downside, they're not going to matter that much. it's all about the iphone carrying the margins because as i foiphone goes, so goes margin.

ipads could provide upside. max could provide upside. remember they came out with that lower priced imac toward the end of the quarter. i'm not sure if any of them would have made their way into this number. there could be some little benefits if the iphone catches up, but if the iphone doesn't, then that's going to take the lead. >> on microsoft, before we run out of time, sometimes when a company restructures right before the print, people think oh, they're trying to load it so they can go in and explain bad news by saying well, we're already on the case. >> yep. >> is that what's happening at microsoft? >> what's interesting, one of the notes i read said it's going to be a very confusing print with all of the restructuring and the algos might get it wrong, i think there's bound to be more computation than anything. you're nodding. do you agree? >> yeah, i think that's right. guidance is important. i think people's expectations have been set based on intel's earnings being good. the pc is holding up. microsoft has been hedged pretty well in the way it structures the windows business as well. so the numbers shouldn't be bad.

the question is how goodwill the business division numbers be based on how well the enterprise is performing, perform pretty well for intel as well. so i think that section, the business division could have the impact. >> we'll revisit those two names tomorrow as well. but a lot to think about this week when it comes to tech and broad markets. of course, markets trading a bit lower across the board. the conflict in the middle east escalating. the tension with russia, of course, and the president speaking a few moments ago. on the cnbc news line, david malpass is the ceo of encima mobile. it doesn't sound like you see great things for the second half. >> carl, i think there have been real disappointments in the just the last few weeks. obviously a rock incursion and instability as a problem, ukraine is a problem. and on the u.s. front, the fed really has changed course in terms of its normalization. so i'm worried about a u.s.

slowdown coming at a time when europe is already slowing. i think europe will be a link in this ukraine problem. >> david, in the past when we've seen some of these geopolitical shocks, we've seen some of the higher valuation stocks, in tech, names like netflix, facebook, king, grubb hub get hit. in this case, today that's not happening. those stocks are the better performing ones on my tech list. now, is that because the more value plays have moved up so much, or is the market just reacting differently this time overall? >> well, i think we've got a lot of kind of arbitrariness in the market. interest rates are at zero. and so it's very hard to know the proper valuation. if this works, you know, if the world doesn't crash, then you get a long stream of growth. and so those plays that you talked about might be more valuable than people think. i think it's just very hard to

factor in the risk. you've got the interest rate at zero. and so nothing is operating normally. and at the same time, europe is falling weaker and weaker. i think italy, portugal will -- are in recession or near recession. and germany looks like it's slow. so those are troublesome given what's going on in russia and ukraine. >> david, how do you think the market read the president's comments? because now dow is back up over 1700. obviously it's down for the day, but it seems like the market didn't think that sanctions are going to be imposed, or doesn't see us moving towards that. what is your read on that small move? >> yeah, in the short run, i think the market doesn't want to see the u.s. be aggressive in this situation. so doing very little is probably preferable from the market's standpoint. the problem, of course, is that leads a vacuum globally not only in europe but also in south china sea, for example, where

china has been outstanding its fear of influence. so you shouldn't use the market to judge the effectiveness of a given policy. we should use the idea of will this work for the long term to make europe stronger in terms of the growth -- an engine of growth. the u.s. can't keep lifting europe up the way we've been doing. >> so it sounds like, david, if recession in europe is your best case, that you're clearly going to want to avoid at least equities that are exposed overseas, but what do you do in the meantime? just pile back into treasuries? >> yeah. so i think yields very low, and so the challenge is with the fed -- we don't know how the fed is going to normalize, whether it's going to do that over the next two on years or the next eight years. and so that creates this big uncertainty. so the real effect of it is

small businesses aren't invested. so i think it's, again, hard to measure your investment climate when the rates are at zeer. we've got to wait and see what the fed does, what the effect of some interest rate increases are and then make a big asset allocation kind of decision. >> and there's still some who believe that the end of the taper and even the first rate hike's going to be a nonevent. that's a tough story to tell. >> i'll go further. it will be a positive event, same as the taper. remember when people talked about the tapering. they said oh, that will wreck the world. >> yep. >> the fed went ahead and tapered, and everything did better. >> david, it's good to talk to you again. we'll see you soon. >> thanks. bye. >> david malpass this morning. when we come back, would you still get summer wednesdays? tomorrow's hump day in a perfect world. the argument for a shorter workweek in just a minute.

let's check in on the nasdaq. courtney reagan. >> good morning, carl. the nasdaq also seeing red just like the broader market. certainly jgeopolitical tension. no matter what you are investing in, but some of the day's biggest laggards include monster beverage, trip adviser, auto desk and mattel. monster beverage getting a downgrade from morgan stanley as analysts there worrying about slowing u.s. sales growth. and that's a pretty broad statement and enough to pull

shares notably lower. some other notable positives because it certainly isn't all red down here at the nasdaq. baidu, netflix set to report earnings after the bell. seeing if we can hit 50 million for the first time and also looking for the impact of that price increase on new subscribers. did it hit hard, or are we taking it in stride? and then if you can take a look at gopro, a number of analysts initiating coverage there today. two buys, four holds. raymond james saying the name has become synonymous with action cameras. that's a good thing. but with hardware makers like this, anything can happen. so there is a bit of at least cautiousness in gopro today. and lastly, take a look at shares of gilead. while they have pulled back, it's notable to say that they did trade at all-time highs at one point today. for now, carl, back to you. >> courtney, thank you so much. courtney reagan over at the nas. working for the weekend might be a little easier if

carlos slim had whis way. he called for the introduction of a three-day week, offset by longer hours and a longer requirement designed to improve people's quality of life. slim is putting his money where is his mouth is, instituting a voluntary four-day workweek at one of his own companies in mexico. you're not doing anything like out of the "daily mail," are you? >> no. why is it always the most successful people telling everyone to work less. i'm sure he's been working three-day workweeks as he became the world's richest man. >> yeah, i'm just happy for a three-day weekend every once in a while. like those with young kids at home, like sometimes you need to go to work. >> need a reason to leave the house, absolutely. >> every once in a while. no, i don't know. you look at europe and how their economy's doing and productivity and kind of the long siestas that they get, i'm not sure i want that. >> i also think when he's talking about people working 11-hour days, it really is about

this work/life blurring-time thing. i assume he assumes you're going to be checking your e-mail. it's like summer fridays. >> we americans can start by just taking all of our vacation. we can't even do that. >> it is hard to do. when we return, a tech giant making a play for the 7,000 pay phones in new york city. and we continue to watch this move on the dow which got a bit of a lift after the president spoke. big interviews coming up on cnbc. wapner with ackman, 12:30 eastern time. don't go away. my motheit's delicious. toffee in the world. so now we've turned her toffee into a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would make money doing what i love. we created legalzoom to help people start their business and launch their dreams. go to legalzoom.com today

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in case you missed it, google is among several tech companies considering a plan that uses pay phones to give new yorkers free wireless internet access. new york city held a meeting to plan new uses and designs for the more than 7,000 pay phones in the city. the project calls for advertising, wi-fi and phone services according to a city document. google, cisco, ibm and samsung were all there. interestingly for whomever ends up with the contract, the phones can have fees. the wi-fi needs to be free. we got google earnings out already. facebook is up on deck later in the week.

what do you think we'll find there? >> what's amazing is all the analysts' projections for facebook are showing the number of accesses every day over the in be that access every month at an all-time high. over 70 odd percent. they keep getting engagement going up. people think average revenue peruser at an all-time high at a time when they're on undermonetized. >> even zuckerberg last quarter said that metric that jon mentioned surprised him. >> yeah. yeah, i think -- well, 2.8 billion is the revenue number that we want to see. mobile growth is going to play in big here. and anything they say about instagram really being ready to monetize now, there's a lot of buzz around what they could possibly do if they really started cranking up ads on instagram. so i think those kinds of things particularly in the mobile realm that they say about the future are what could move this. >> the only issue is what do you do in a quarter where everybody is so positive.

it seems like if any metric is a little lower to the downside, it seems like it's going to be a problem. i think ultimately, though, they hit the numbers, it barely moves. that's more or less what happened last quarter. >> everyone's positive except janet yellen. >> and also the social media sector, there's two stocks, twitter and facebook. >> they're the one that's not really a social stock. they're kind of the big guy and they have the benefit of being compared to twitter. twitter is kind of reshuffling management ranks trying to figure out a different story to tell. >> when she made those comments, i said which stocks is she talking about? >> if you're wondering, then she's talking about you, right? >> amazon will be later in the week. i imagine it's going to be the same story every quarter. jon, how much rope do they give bezos to give to travel on his little adventures? >> i'm watching the media line. we want to see close to $5 billion in revenue there. it's a historically weak quarter. the weakest one for media. but everything they're doing with hardware should be moving the needle.

>> and the amazon web services line which goes into that other bucket where they've had substantial growth. >> cutting prices again. eventually it will be free. i assume eventually the price cuts over there are just ridiculous. guys, thanks a lot. great hour after, of course, the president speaking. and the dow has managed to reclaim about half the losses. wapner has a big show coming up on the "half." >> yeah, dow's coming back. welcome. here's today's game plan. ackman unplugged. for the latest on allergan and valiant and his new presentation on herbalife. global flash points, geopolitical turmoil showing no signs of cooling. we're covering the continuing reaction through the global markets. spartan race. obstacle racing, the fastest growing sport in the u.s. and we want to know why. so one lucky trader will tackle our course outside cnbc's global headquarters. that's a little later. let's meet the starting