♪ here i am doing everything i can ♪ ♪ moving on to what i am ♪ pretending i'm a superman ♪ i'm trying to keep ♪ the ground on my feet ♪ it seems the world's falling down around me ♪ good morning. i'm kayla tausche. carl quintanilla is off today. that was "superman" by goldfinger, some late '90s. joining us, jon steinberg, jon fortt is with us. guys, we have a busy hour to get to. first up this morning, president obama has an important message to ceos. in an interview with "the economist" magazine, he says they should quit complaining about regulations and show greater social responsibility. let's take a listen. >> the complaints of the corporate community with a grain of salt. if you look at what our policies have been, they have generally been friendly towards business

while at the same time recognizing there's certain core interests, fiscal interests, if you look at what's happened over the last four or five years, the folks who don't have a right to complain are the folks at the top where we have made less progress than i would like. >> on the cnbc news line this morning is carly fiorina, former chairman and ceo of hewlett-packard. carly, good monday morning to you. >> good morning. thanks for having me. >> i imagine you have a lot of thoughts on these comments, but the main gripe from the president seems to be that the public and private complaints of ceos are very different. he says when he meets privately with them, they talk about wanting to advance policies that his administration has gotten behind. but then publicly, all they care about is their tax break. what do you make of the comments? >> well, you know, honestly, i think this is unfortunate, this set of comments for three reasons. first of all, president obama does plenty of complaining himself about anyone who dares

to disagree with him. last week it was republicans. this week it's ceos. and honestly, i don't think it's very credible to say never mind what they say in public. what they're telling me in private is something different. it's well known that our tax structure and our tax rates are unkmet tif. uncompetitive. secondly, this set of comments is particularly unfortunate because the president either doesn't understand or doesn't care that the very complex tax and regulatory structure that these ceos are complaining about hurts the middle class most. and it hurts the middle class most because small businesses and main street entrepreneurs can't deal with that complexity. a big business may complain about it, but it can hire the accountants and the lawyers and the lobbyists to try and manage through it. small businesses can't. and in fact, it's very clear that small business owners and entrepreneurs are in trouble right now. more small businesses are failing. fewer starting and entrepreneurs say that too much regulation is

their biggest issue. so obama's policies are actually hurting the middle class. and finally, i find it very unfortunate that again either he doesn't know or he doesn't care that these ceos and their companies are investing a lot in their corporate social responsibility programs and that corporate america is making a huge difference when it comes to education, economic development, support of small businesses, entrepreneurship. and he just dismisses all of that. it's a very unfortunate set of comments. >> carly, is he really dismissing it, though? you're right, of course, but doesn't he have a point? look at the stock market over the past six years. look at the expanding wealth gap, the top 1% have done really, really well. so yes, he complains a lot. and everybody's got the right to complain. but of the full spectrum of american society, it seems like the ceos of companies have the least room, don't they? >> well, the ceos of companies are complaining about policies that hurt business development, business expansion and

employment. and they're exactly right in that. secondly, you're absolutely right. the stock market has done great. why? in large measure because the federal reserve's policies of printing money have made the stock market the only game in town. why? because equity owners, whether they own property or own stocks, have done very well. who's done very badly under this administration's policies? small business. main street. community banking. president obama's policies are hurting the folks that he claims to be helping. and all these ceos are pointing out is a fact, which is we have the least competitive tax regime and structure in the world. and it's costing us jobs. and the epa regulations that obama's administration is now proposing are going to hurt energy production in this country, kill jobs and communities, particularly in coal country and do nothing to change the impact of global warming. >> carly, which you think about the possible complaints he could be referencing, you know,

inversion, the nonglobally competitive tax structure, dodd/frank, what to you is the most visible complaint that's out there right now, and what do you think is the best solution? >> well, i think, look, let me just start by saying crony capitalism is the combination of big business, big government and big labor all being able to handle big complexity. and so what's happening in this economy is yes, big businesses are understandably complaining about an environment that is no longer competitive globally. but in fact, big businesses are doing far better than small businesses. dodd/frank, just sort of a classic for example, whatever you think of it, i happen to think it didn't address the problem. but basically what that very complex regulatory structure did is make ten banks too big to fail, five banks too big to fail, record bonuses being paid

all around, and meanwhile the community banking system is struggling consolidating, moving out of communities. that's important because the community banking system supports main street entrepreneurs, sole propry toreships and small businesses. >> and the president, carly, to "the economist" saying that the affordable care act, dodd/frank, these are regulations that many businesses are citing for red tape and greater expenses. so it's certainly something that on both sides of the aisle, there are a lot of thoughts. we could debate this all morning, but unfortunately we have to leave it there for now. but we appreciate you coming to the phone this morning. >> hey, thanks for having me. have a great day. >> you, too. carly fiorina who is leading some outreach for the gop, we should add, former chairman and ceo of hp. we also want to switch gears for a moment. disney and marvel film "guardians of the galaxy" took in $94 million over the weekend, posting the best august launch of all time in the box office as well as the third best launch of the year. this comes as disney gets ready

to report earnings tomorrow. "guardians" just the latest hit from marvel following other comic book hits like "iron man" and "the avengers." jon, you're especially impressed with the acquisition of marvel, pixar, lucasfilm. some analysts were doubting these when first announced. >> the way you can tell, nobody had heard, except for the hardcore comic book geeks, of "guardians of the galaxy." it's a bunch of aliens and a talking raccoon. and they did $94 million at the box office. now, recall disney paid -- i think it was $4 billion for marvel. they paid $4 billion for lucasfilm. just over $7 billion for pixar. a lot of times acquisitions don't go right. but marvel has proven, through being able to do not just an initial blockbuster but then sequels and even going back to the catalog and making hits out of obscure titles that they really know how to do this. this is really good. >> obscure is basically the

understatement of the century. i mean, i thought the raccoon, when i first saw it, was that character from "firefox" which was a video game i played in the '80s. they did $94 million. and they did a great advertising campaign around this. they put it out there. they kept saying marvel, marvel, marvel, showing some characters. and then people went and saw it. it shows how much is in that catalog to jon's point. >> disney is going to be one of the most closely watched media names of the quarter. i'm wondering, do you think these studios will be the gifts that keep on giving, jon fortt, or do you think we'll start to see some weakness? we are in the third quarter. so something like "guardians of the galaxy," we won't see it manifest itself in this quarter's earnings. >> i do know that as they're rolling out the "star wars" movie they're filming now, they've already said there's a "guardians" sequel coming in 2017. longer term, this is a company, even though it's had quite a run, that's got an amazing

pipeline. >> don't forget about the parks, a significant amount of revenue. that's an indicator of consumer discretionary as well. the new wristband s are out. people have actually heard of those characters. it should be good. >> all right. finally, is wall street trying to kill the bloomberg terminal? reuters reporting that a group of wall street firms led by goldman are close to buying a stake in perso. the reason they're all looking for an alternative to the bloomberg messaging service, banks trying to cut back on costs. and those terminals run about $20,000 a year. i mean, these are really expensive machines. you not only can message pretty much everyone in the financial community that has one, but you can also execute trades on the back of those messages. >> a lot of people are on a $1500 a month terminal. not everybody needs all of the richness of the terminal. so this is a way for banks to significantly cut their costs.

the big issue here is i researched the product over the weekend. it allows for private and off-the-record communication in addition to normal archived communication. it will be very interesting to see when banks and hedge funds, will they keep that functionality in there. because there's such a feed for compliance. there really is no off the record in anything other than voice communication for wall street. >> we were having the debate this morning on "squawk box," jon, there are several other messaging platforms that have big companies, big investments behind them, yahoo! messenger, aol instant messenger that have been around for decades that financial types have been using in addition to bloomberg terminals because they wanted something else. and they have failed to take off or gain the same popularity. and i'm wondering if you think a start-up like this with a band of brothers, jpmorgan, morgan stanley, goldman sachs has reported putting some money into this, if you think it would really take off. >> i think there's a shot. i think the key is it's open source. so it's going to take a while for the right security protocols to get built in for everybody to feel comfortable with that. this potentially opens the door

for others, for your thompson reuters to also move in on bloomberg's territory. they can kind of pick away at various pieces of the value proposition behind a bloomberg terminal. so it's interesting. it's kind of linux-like in what it did to suns' servers back in the day, but this isn't going to change joefovernight. >> maverick capital is said to be investing in this. if you put a bunch of buyers and sellers on the intermediaries and say everybody is on this, you've got to use this, that's going to work because if people are end running and using aol instant messenger or phones, they're going to get in trouble in this regulatory environment. it's a big different than a consumer where 1,000 flowers need to bloom. >> a technology like this only works when you have everybody on it. so it's really about getting everybody in finance on this, right? >> you could have a set of counterparties on it. if a bunch of the big banks and funds say we're going to use this for our trading and communication, they'll use it for that. already now one of the things we've been seeing is people have

a lot of different messenger apps on their phone for consumer purposes. people use snapchat with their kids. what what'sapp with their work people. that fragmentation has already occurred. >> we'll see if this deal ends up getting inked. certainly would be interesting for such fierce rivals to actually come together on a topic like this. meanwhi meanwhile, a check on the markets. we're off the lows on the session. the dow down as much as 42 points, now down about 19 points. the s&p you can see is down by a traction of one point. the nasdaq also down slightly as well. procter & gamble, chevron leading the losses for the dow at this pour. we have had had a few earnings to report this morning as well. even amid the lack of economic data. shares of michael kors which you're looking at right now slipping this morning. the reason being forecasts for the current quarter coming in below estimates. luxury goods maker did report profit above expectations but not enough to reverse declines in trading so far. that stock was up as much as 13%. but investors have concerns as they've made their way through the report. cardinal health also slipping to

the down side this morning. that after reporting fiscal fourth quarter revenue that fell largely due to an expiration of a contract with walgreens. michael kors and cardinal, two of the biggest losers on the s&p right now. we just want to give you a check of those stocks. speaking of the markets, last week was a tough one for tech stocks. the nasdaq falling more than 2%. are we in for another volatile week for technology? we'll try to find answers with the nasdaq in the red. plus, new details about a security breach at a major restaurant chain. should you be worried? if you can't beat 'em, copy 'em. behind walmart's new strategy to look more like amazon. will it work? we'll discuss that on the other side of this break. "squawk alley's" back in two.

welcome back. tech stocks looking to start the week on a positive note. groupon which reports its quarterly results after the bell tomorrow seeing gains of nearly 7% this morning. other momentum names, facebook and amazon, also positive. apple moving lower. the broader markets coming off their lows this morning. the tech-heavy nasdaq trending positive once again. with this new month, can we expect a new tech outlook? let's bring in managing director and senior research analyst specializing in internet with piper jaffray. so gene, we are in august right now. and expecting some big things in september and then on through the rest of the year. what are some stocks that you think are important to watch this month?

>> i think you said it exactly right. it's all about september at this point. so anything you're doing in the month of the dog days of august, it's in positioning for september. and the two most obvious ones are apple with their product announcements likely starting in the middle of september and probably going throughout the rest of the year. and separately is yahoo! around alibaba. the good news is these are identifiable catalysts. they're significant events. the difficulty here is factoring how much of those are already priced into the stock. but i think those are the two most obvious ones. and then there's some e-commerce-related things on the side for a little later in the year. >> gene, walk us through what could happen with the trading with yahoo! and alibaba. how about the arbitrage between those two names work once it goes public? >> i think that's probably going to happen. i think you're going to see, fending on what the pricing looks like, i think as soon as the deal prices, i would expect that people are going to be selling their yahoo!.

i think that whatever the range that they start at, they're going to want to probably inch that up. so i think that once the ipo starts that process, people won't start selling yahoo! at that point. but i think once that prices, i think you're going to see some pressure on yahoo!. i think there's an opportunity between now and that point to own yahoo!. >> jim, there's been some fleeing to the old tech names like microsoft and ibm. saying these are some of the only fair valued tech stocks, at least some of the cheapest tech stocks in the market, especially when the momentum selloff occurred and especially when there was a flight out of some of these social media names. how much longer do you think that some of those old tech stalwarts will start -- will see inflows? or do you think that that cycle is over? >> i think we're coming to an end, whether it's this month or in six months from now, i think ultimately it's going to come back to growth. and that's the difficulty that those old companies is face is yes, they're low valuations and

they return cash to shareholders. there's some virtues about that. but at the end of the day, if you're a tech investor, you really want to own growth stories. and those companies just don't have the growth stories. you look at companies like amazon, for example, which has been out of favor but coming into the back half of the year with the holiday, it's companies like that that have been these really strong companies that have fallen out of favor. i think the momentum's going to shift back to those type of companies. >> gene, say a little more about that. how do you differentiate between these companies with really good growth potential and the companies that have just had valuations that have gone out of whack because people are buying a story that's probably not going to materialize? >> the difficult part is trying to figure out what's the sustainability around these businesses. and i think that if you look at just the real blue chip type of growth internet companies, those are the ones you want to gravitate to. when they blow up, people get nervous. but they're the ones you that ed to buy. this is thinking about google a year ago, apple a year ago, netflix. companies like linkedin.

i think you really need to look at which. cans are going to be around in the next decade. and when they fall out of favor, those are the ones you've got to jump on. those are the opportunities you've got to jump on. i think amazon's in that camp right now, and i think linkedin is in that camp as well. these are strong companies that are going to be around for a long time. >> gene, in terms of jumping, you like yelp here after getting crushed last week. why do you think that? i mean, with local business listings only at 80,000, active local business listings, isn't it still a relativeny niche thing that other people could supplant? >> that was a disappointing number. and people question what the longer-term growth is. the reason we liked it -- and we put it in a category that's not a ten-year company. i think they'll be gone in two years. the reason is they have local content, and that's become increasingly important in the mobile world. and we measure that against google's local content, and they continue to gain space between themselves and google. and so that is unique. and ultimately, that's a

critical asset. for 4 billion or $5 billion, that's a no-brainer for withes that want to improve their interest in local. that's why we like yelp. >> going the got zagat and angie's list. betting on the right ones is where the money's made. thanks to gene munster. >> thank you. with that the nasdaq is moving slightly higher. back to dom chu for a market flash in retail. >> we're looking at walgreens which is moving higher. the company is naming a new chief financial officer formerly of kraft foods as it nears a key decision on whether to buy the rest of the uk drugstore chain alliance and possibly, possibly maybe move its headquarters overseas. now, it bought a 45% stake in that company a few years ago. and that stock, you can see there, currently up about 1.5% on the day's session, kayla. back over to you. >> the resolving door keeps spinning. thanks. when we come back, stocks mixed so far, but lately the markets in europe have been the

leading indicator for how we trade here. we'll get you the european close and all the market action there. we'll have those details in a moment. "squawk alley" will be back in two. thank ythank you for defendiyour sacrifice. and thank you for your bravery. thank you colonel. thank you daddy. military families are uniquely thankful for many things, the legacy of usaa auto insurance can be one of them. if you're a current or former military member or their family,

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europe for the last several sessions has been the tail that's been wagging the dog so to speak at least here in the u.s. markets. we want to bring in michelle caruso-cabrera as we count you down to the close in europe which will happen in just a few moments. michelle, what are we seeing today? >> of course, the biggest news out of europe this morning is the bail in and the bailout of the bank in portugal. the shareholders are going to get wiped out. so are the junior debtholders. we're showing you how shares got hammered last week. the senior debtholders, they're going to be preserved. but if this situation had

occurred next year, the senior debtholders would also be gone, too, when the new banking law goes into effect. that's next year. so this is the beginning of the process where they tell bondholders in europe, look, you've got to pay attention to which banks you invest in. meantime, they need to use more than $6 billion in what is ultimately taxpayer money, but ultimately when the selloff of the assets of the troubled bank happens, it's expect that that money's going to get paid back. we're showing you the german and swiss markets, the worst performers. germany in particular hit by increasing concerns about what impact russian sanctions will have the german economy because there's so much trade between the two countries. switzerland, private banks, et cetera, you can make the connection about the concerns there as well. britain's share index halted a three-day losing streak on monday because of hsbc. very beaten-down shares after first-half results -- after the first-half results, the shares of hsbc rose at the highs of the

session, and that accounted for nearly half of the ftse 100's gains at one point. the gains, despite a 12% drop in pretax profits in the six months to the end of june to only $12.3 billion. that was just below analysts' forecasts. lady and gentlemen, back to you. >> thanks, michelle. stocks have been up and down this morning. right now basically flat after the dow, nasdaq and s&p all fell by more than 2% last week. so do traders see a deeper selloff on the horizon? the one and only art cashin weighs in next 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

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because everyone deserves a great night's sleep. know better sleep with sleep number. welcome back to "squawk alley." two hours into trading, the dow is notching slight losses. the s&p and the nasdaq have come back. they are slightly in the green. that's after major moves to the down side last week. with more, let's bring in art cashin, director of floor operations at usb. art, good morning. >> good morning. >> after the worst week for equities since 2012, it appeared this morning that the portuguese bank bailout was going to lift us higher. then what happened? >> well, it did. let's look at the contrafactual. i believe that if they didn't bail out the bank, we might have had a complete washout monday. i think we would have had a very heavy selloff. that having been said, i don't know that the markets feel

secure that everything is resolved. they're looking at the german market still being weak. and one of the reasons we had that dip between ten minutes to 11:00 and about 11:15 was there was a feeling that germany might begin to spiral out of control. so the focus on the sanctions and the european economy began to pick up. germany appears to have closed weak but not terribly and that's allowed us to creep back. >> of course, geopolitical issues not off the table. we got news of a redeployment of israeli military forces. we have a step-up on behalf of crew yan in the eastern part of the country. and now we have news that isis militants are capturing three towns in northern iraq. >> three towns? >> which are these are the market watching if not all of them? >> well, i don't think the market's fullier interested the isis thing yet. i'm very concerned about it, and i think it could turn into a religious civil war all across the middle east, if it picks up.

they now control the largest dam in iraq. they can shut off power to places, shut off water to places and perhaps flood them. and now that they've made a move into kurdistan, things could get actually pretty messy. that's what i'm going to focus but also keep an eye on the financials in europe. >> art, when you look at labor and labor participation coming back a little bit in the last set of numbers, how much do you think that weighs on the market that now more people are going to try to come back into the labor force, driving up unemployment? >> well, i think everybody's going to look at it. the big debate is will janet yellen be moved? i mean, she's laid out certain criteria about -- >> she already said that criteria is not relevant anymore. >> i know, things are moving -- forget what i said. but i think the markets -- if they don't go by at least some of the criteria they spoke about, what will they look to? either we have no standards or they're going to be some adjustment in those standards. >> are we being vigilant enough,

art, or are you worried about complacency in how the market's trading right now? >> well, i think it has begun to look very complacent. i think we'll learn a little bit more now. what has happened is when the markets have stopped going down, when they stopped plunging or almost in free-fall, that's when the buy the dippers come in. so we'll get to see later today and tomorrow, do they come back and say there it is, another summer rain, it's all over, nothing to worry about. that would trouble me because i think there may be more here than meets the eye. >> dog days of august are typically have historically been some of the worst for the markets. >> since going all the way back to 1988, august has been one of the worst performers. this is a difficult seasonal time. actually, august and september combined are not that relatively good markets. they're renowned for making tops in august and september. all the way back to 1929. >> and you're watching 1910 on

the s&p as the pain point. >> that's the support level with a backup back at the 1900 figure. as i say, geopolitics and what's happening outside these shores may come back and haunt us again. >> art, thanks so much for putting this into context. always appreciate it. we'll see you soon. >> my pleasure. >> absolutely. we do want to look at some individual names moving this morning. seema mody is at the nasdaq with more. seema? >> hey, jon. technology led the broader market selloff here at the nasdaq. we're trying to see where the buyers are coming in now. and we're looking at amazon which lost about 2.5% last week. rebounding in today's trade. chinese internet player baidu. priceline also in the green. for the most part when it comes to tech, that's what traders are telling me are the big focus are the tech companies that have reported earnings, 73% have beat street expectations. one of the higher bet rates for the quarter. that according to thompson raters. this week our attention turns to

symantec. expected to post earnings of 42 cents a share of revenue on $1.67 billion. social media, that will also be a focus. facebook and twitter delivered strong results. will groupon and zynga be able to impress? we'll get that answer as both report this week. jon, back to you. >> we'll definitely be watching that. coming up, the internet of things is more vulnerable than you think. a new study by hp explains how bad things might be. plus, personalization and a lot more. how walmart is borrowing from rival amazon to build its new website. "squawk alley" will be right back.

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coming up on the "halftime," we're asking the traders which retail names are on their shopping lists right now. then, "guardians of the glablgcy" set box office records this weekend. how can you play it? we're pulling back the curtain on stocks involved. and get ready for some football. this season every player will wear two chips on his shoulders that track every move he makes. we talk to the ceo of zebra technologies about how his product will change the nfl and why his stock is up a whopping 50% this year. all straight ahead on "the halftime report." joining us here at post 9 to hit of some the other tech stories this morning is slava ruvin. new changes coming to walmart's website in its bid to compete with amazon. some changes in personalization, some other things that are very amazonesque. what do you think about this

move? >> i mean, i think it's a step in the right direction. for the last few years walmart's been trying to really beef up their online presence. they've already been practicing in canada a little bit to be able to experiment with personalization and change the website for a tablet and mobile. they're seeing good results in canada, already increasing mobile conversions, up 98% and also overall conversions. 20%. they're not going to roll this out till probably next year. up by think this is a huge step in the right direction. a company like ours moves really quickly in weeks or months. somebody like walmart it takes longer. >> but on the last quarter walmart was really beating the drum of innovation saying we've hired 1,000 people in silicon valley. we're going to start developing new products. are you impressed that this is the first to come out of that? >> am i impressed? i think that a very large company is moving a giant ship. so i think it's important to them in moving forward. i think they are hiring good people and looking to make the right moves. i think they're very much in the valley trying to have an internet company mentality as opposed to a big company trying to be on the internet.

zploo now, it's really showing in the numbers. they guided to flat, same-store sales for the coming quarter. q1, they had the excuse of the weather. they don't have that in q2. and goldman downgraded to neutral at the end of july based on the fact that the online is really now starting to take share. they view amazon groceries as yet another attack on walmart. they really are under so much pressure thousand that people have seen coming for a long time, i think. >> we take for granted how quickly techtechnology. if you're in boston and you want to see patriots jerseys, walmart doesn't know to sell you that when you're getting your other goods. instead of having six clicks to check out, it's going to be one click. it will have an impact on conversions for a massive company like walmart, it will move the needle. >> we'll see if it does. next up, the internet of things might not be as safe as you might think. a new study by hewlett-packard found that 70% of devices are vulnerable to hacking. this is something that john chen over at blackberry is trying to

beat the drum on because he wants to sell security into the internet of things market. what do you think? it's a market just really starting to take off. should we be freaked out in >> internet of things is a good buzzword. i think it will be here for the next 20 years. we heard on the nfl internet of things. they're putting chips on players. for they this reminds me of when online banking and e-commerce was starting in the mid-'90s. everybody was saying fraud concerns. we they deliver? it takes time. there's three things happening here. there's the hardware, there's the software and then there's the brands. people will want to find trusted brands. there's going to be a lot of software to be won over because there's going to be standardization across all these internet of things. and in terms of hardware, right now there's a combination of hardware and software. probably you're going to separate the software from the hardware. >> but it's a little different because when online banking was coming-of-age, yes, it's terrible to have someone hack into your bank account and for anyone that that's happened to, it's terrifying. but the worst that can happen is that they steal funds from you. you go to the fdic.

there's insurance on most major banks. and you can get that back fairly easily. when we're talking about the internet of things, we're talking about household appliances. we're talking about cars. we're talking about thermostats. things that affect the way that you live and the way that you feel and your health and your home life. i mean, what is the safety risk of a hack on something like a thermostat? >> there's no question there's going to be more vulnerability. according to a cisco report from before, we're talking about ten years ago. you had one connected device for every five people in the world. ten years forward in 2020, there's going to be five devices for every person in the world. and in developed countries, we're talking 100 devices per person. i think there's going to be a lot of security companies making a lot of money on standardizing all this and getting all those firewalls the with a i they did in online commerce and banking. >> i think there's two gaps. unencrypted networks where it's floating on wi-fi. and passwords. they're really the huge issue right here. there are so many ways for people to get them.

people use passwords in all the same places. it's a huge problem that google and other companies are looking to solve. i think once the passwords go away and we have alternatives, a lot of this will go away. that will coincide with the internet of things. >> the hp report said 80% of companies responding failed to require passwords of sufficient complexity and length. i mean, this is such a basic consumer tenant. we've lived with passwords long enough. do you get the sense that biometrics or double verification-type modes are becoming standardized enough that that will be the norm? >> it's really interesting because on one side everybody wants as much privacy and as much security as possible. on the other side, no one wants to do double verification because they down the want their phone in their hand. i think it's important to focus on the consumer. it's no surprise that google went and bought nest because that's their entry into using their brand and privacy and all their settings to move into internet of things. >> one of the things that freaks me out about internet of things security, one is the ability for

people to know when you're home and when you're not. can you imagine people selling here's the block of time when you rob this house. the other thing is video. if you've got video cameras all over the place, there are things happening in your home you don't want broadcast to the world, there's blackmail potential. >> time-out. do you have an an tried or apple phone right now? >> i do. >> they know when you're home and away. check your settings. default what your home and work is. >> what type of security companies are being funded right now? what trends are you seeing and what grass-roots support is there so far? >> one of the latest things is robotics. a year ago we had a first-ever personalized drone. it's a robotic dragonfly. imagine having your own drone while you're getting coffee, you want to check if your dog is still outside. >> don't say the word "drone" around this one. he'll get in a tizzy. >> the big risk is not even the security. it's when they become self-aware. that's when we'll have the real problem. >> terminator comes to life. >> you've got a new app for

indygo, go. >> last year you featured another robot from the jetsons. it was featured right away as soon as we launch in the apple itunes store. it really helps mobilize the experience. also taking away clicks. it takes advantage of all the mobile features. technology is moving so fast that you can't just say you have a good website. you really need to optimize for that specific experience. >> higher engagement. what's the benefit? >> it's only been a week. we've already got more downloads than we expected in the first week for sure. >> when you think about mobile payments, we've discussed apple wanting to go into that. andro android. as someone on these platforms, who do you think will move the needle for you the most if they integrate payments and make it more easy? >> i think payments, everybody's been saying they were going to solve it for 50 years. and recently you have google moving with google wallet a couple years ago and now trying to add a dollar sign on to your e-mail experience. i think the world is a big place. there's a lot of currencies. obviously there's crypto currency, so it's all getting exciting. >> ever the diplomat.

>> i know. just pick one. who are you more excited about, apple or google? >> i think indygogo's app is pretty cool. >> this. i tried. i tried. >> slava rubin from indygogo, thanks. kayla, it's a rough day are to the offshore drillers. this after deutsche bank downgraded noble corp, transocean and diamond offshore citing deterioration in the market. here's how all three are trading. you see to the down side, a noble selloff is a bit misleading. it just completed the spinoff of its offshore unit today. the shares are only down about 2% if you look at the overall -- the transaction, if you will. again, not 14%. just 2%, kayla, because it spun off one of its bigger operations, paragone offshore as a separate company. >> we'll keep an eye on the sector. when we come back, "the new york times'" support of marijuana is growing into the world of advertising. we'll explain how that works in

a moment. first, rick santelli in chicago, what are you watching today? >> reporter: well, we're going to, of course, be watching ten-year rates. we're going to be watching a bit on the foreign exchange side. and maybe most of all we're going to try to garner exactly what's up with the dollar. the big number for today, 57.6. you want to know what it is? you have to come back after the break. what if there was a credit card where the reward was that new car smell and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at buypowercard.com my motheit's delicious. toffee in the world. so now we've turned her toffee into a business.

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yelp for weed? "the new york times" has run its first-ever full-page marijuana-related ad for start-up leaf lee which is an online resource for consumers to rate and review different strains of cannabis. the ad focuses on different ways medical marijuana can help treat a condition with the text "just say no" underneath. it comes after "the times" ran a series of editorials in support of marijuana legalization. so, i mean, is this just going to be the norm now? >> well, i think it's very exciting. i would have been nervous at "daily mail" to run a marijuana ad because i would have thought it would have scared off other advertisers. and the fact now that "the new york times" has done it and they're such an established, credible institution, i think it opens up the floodgates to run marijuana reviews and run advertising adjacent to it. it makes the industry a lot more hayne stream, i think. >> didn't "the new york times on i "scare off potential advertisers saying you should legalize? how does this ad scare

advertisers any more than that would? >> yeah, i think both are bold on their part. i think launching any kind of marijuana review section, you'd attract certain advertisers, but you'd have other mainstay advertisers. by starting with the editorial page which i think brands know is a bit different, they'vesed into it. at that level of scale and establishment, you get to do things that up-and-comers are not so entitled to do. i'm glad they've sort of opened the floodgates. >> how long before we start to get a digital profile of pot users? digital should allow us to do this pretty quickly. if you visit leafly. >> we use com score graphics. i'm able to go through and see of our visitors which are dads that live in the midwest and enjoy threei iflying drones. com core nielsen would be the ones to start tagging people as pot enthusiasts. then you'd be able to target them on your site. >> the ceo of leafly, the

company that put out the advertisement on "squawk box" this morning saying that it was a competitive rate it paid to "the times" for the ad that this is the bebeginning of more to come. >> i'm sure they paid full rate card for that. you're not getting any discount when you're advertising pot. we want to get to rick santelli at the cme. over to you, rick. >> reporter: talking about foreign exchange after what you were talking about just doesn't seem like the kind of transition i'm used to. but we'll run with it anyway. listen, whether you vapor, nicotine, or whether you smoke pot, if you're buying both of those, especially from a foreign country, you're doing better than you did just a while ago. yes, the dollar is doing better. and today when i was talking to bob mcteer, former dallas fed president, he did bring up, though, a couple of key points. if you're watching the dollar, to be careful of. our big number today was 57.6. and what this is, we've talked about it before.

this is a breakdown of the dixie, the dollar index. and here's the percentages. 57.6 is the european side. the euro. 13.6 is the yen. you could almost gauge 11.9, almost 12% is the pound. then we go to canada. 4.2 swedish krona and the last is the swiss franc. it's like a mirror image. but it doesn't mean it isn't important. and to understand why there's improvement is very significant. so let's start with the flawed index first. look at a 20-year chart as i'm talking of the dollar index. boy, we used to be at much higher levels. now we're kind of bouncing around the bottom. i understand that. but there has been improvement. and let's look outside of this group, actually, to see other improvement that bob mcteer brought up.

let's consider south korean wan. now, this is the dollar versus the wan. and you see up on the right, yes, we're down on the year, but it's done better of late. let's look at the mexican peso. dollar versus mexican peso. same dynamic. look at the right. so the point of this is, we could look at and evaluate the dollar in a lot of ways. remember, you can't take a currency in isolation. it has to be compared to something else. and i contend that the end of zero interest rate policy and the end of quantitative easing is the reason. and as it dawns on more that there's no escape hatch here, in my opinion, no matter what metric you use, the dollar's going to do even better over the next 6 to 12 weeks. back to you. >> all right. thanks so much, rick. the dollar's been doing well as it is. so we will see if that's the case. when we come back on "squawk alley," severe drought conditions in california have pitted neighbor against neighbor and created a new phenomenon. and it even has its own hashtag. drought shaming. that story up after this.

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the storm does little to change the drought situation, though, and many californians are now shaming so-called water hogs. jane wells is live in l.a. to explain. jane. >> reporter: kayla, yeah, it even rained a little on beyonce at the rose bowl this weekend. now, all of california is in a severe drought. and more than half of it is in the most extreme version of that. so now there are all kinds of water regulations coming up. and you see these billboards popping up with a character called lawn dude suggesting watering twice a week. this as they finally reopen sunset boulevard after losing 20 million gallons in last week's ucla flood. residents can be fined $500 for watering your lawn. how bad is it? people are drought shaming their neighbors, and there's even an app for that. >> i'm really big on the drought. this is actually a post that i did just outside of the country club. >> people clearly don't know that california's in a drought right now. >> reporter: mike bud is using a

new app calls vizsafe, a platform for things like accidents or crimes. but reporting water violations in california has become surprisingly popular. pictures showing up, they're geotagged. and the company says its user base has more than doubled in the last month. do you feel bad ratting on your neighbor? >> i wouldn't call it ratting. i mean, i don't like that term. because i've asked my neighbors, and i've asked people around to actually, you know, they need to cool it. you need to stop wasting water. i was publicly shamed myself because i was washing my car. and my friend said, hey, you're doing it in the middle of the day. you're wasting all this water. droughts can last decades. and we don't need another dust bowl going on again, so i'll rat some people out if it means others don't have to go through famine. >> reporter: i downloaded it this week. it goes off like crazy. people are posting. later on "power lunch," we'll talk to the create either of the app. and you can vote now on whether or not you think this is a good or bad idea at cnbc.com/vote.

guys? >> all right, thanks for that, jane. i wonder if there are rewards for the snitches, but i get you'll get into that later. just a few moments before noon. a check on the markets. leaders on the nasdaq baidu, amazon which gene munster really likes, tesla to the downside. p paychex and illumina. let's go to melissa lee. >> here's today's starting lineup. stephanie link, josh brown, joe terranova, and mike murphy, the ceo of rose cliff capital. right to our lead story today. that would be retail. shares of kors on he werings with ralph lauren and kate spade also reporting this week. we're looking at the space and hunting for the most fashionable and profitable retail stocks. we want to bring in courtney reagan who covers the beat. courtney, i feel like this is not a surprise. >> yeah, it's not a terrible surpri