♪ welcome to squawk ally. joining me john steinberg. always good to have you. after a weekend of flying drones, pretty good market, a and a lot to talk about in tech. first warner brothers, now disney. amazon reportedly stopping pre-orders for disney movies after an apparent contract dispute. amazon used this tactic earlier in the year with warner brothers.

this comes as they remain in a does his dispute with a long list of author, urging readers to e-mail jeff bay soeezos and e dispute. trying to wribring the public i. >> the main takeaway is they're bashing george orwell it seems, that he was against paper backs or something. look, i want to clarify, i think i in a way misspoke last week when itched steve jobs had a totally different tact on this. 99 cent songs, $9.99. but i fear for then part of the

message they' are sending to users is we don't necessarily have everything. so check somewhere else. >> to a seasoned advertiser, what matters is the court of public perception. if you're the one that doesn't have the stuff and you're in the fight, whether you're the cable network that blocks the channel or you're am made ston, you're the one ultimately in the court of public opinion pays the penalty. and amazon will be looked a at a gone on that list. >> am azon is not refusing to sell all titles once they come out. even warner brothers, it was still over pre-orders. forester says this is a golden opportunity for other retailers to take share, but how big is the print order market? >> i agree. it is an opportunity to other retailers. the question is, does e-commerce start on the internet or amazon? amazon has 20% for 30% of the

global e-commerce market. so they may think it's just not there, they may not position now shy go to walmart or google it. >> it's an issue of bringing in the public. sha not like trying to get your kids to get involved if you're having a dispute with your ex? >> i wouldn't do that. a lot of people like to fight cases in the public. they leave things to the press. that's expect differencely what they're doing here. >> amazon needs to reframe it pretty quickly. right now it seems like amazon versus comment, not amazon versus disney, but i want this stuff, i want to read this and there are authors out there, movies out there that i can't get on amazon. >> but they are two different product baskets. margins are so low. so books are its bread and

butter. >> they want the prices lower because they don't actually make the margin on this. they make other things, as well. so for them drop the price from $12.99, $14.99, they will make up the money on the other sales. >> maybe they should dracreate album for books. try to get them to introduce more media into these to make them more valuable. there is margin. things where i'd want to pay more for the book. that is in the author's interests, but maybe not in amazon's. could be a problem. >> you need to go into are marketing. next up, al ally back about a removing brands on its site. they were either fake or discounted. ali baba reportedly said it would take down those products if burberry did open its own

shop. apparently did it for a number of other lines, too. >> this is one of those lessons just because it's legal doesn't mean it's right. in china it is legal for second party vendors to sell items without the authorization of the brand. in the u.s., that is a frowned upon practice. so just because they can do it in china, as they're trying to gain credibility here in the united states, trying to win over investors, and the s.e.c., you'll want to look like you're putting the cakcamkibosh on counterfeits. >> gray market is when a retailer gets stuff and sells it. ali baba is saying we'll get rid of all the gray market stuff if you join their high end place. it's definitely a use the market

force. basically pay up and open up a store or other people will sell their stuff. i'm not sure of the legality, but it's certainly very strong army. >> it's interesting fto see tha when they do open up these stores, it completely wipes out the other vendors. they had a graphic that said armani, ralph lauren, gucci, they saw the number of unauthorized secondhand svvendo go up. >> they actually take them out. that's the point the article was making. >> comes down to customer experience. no matter which way, if you need to get it surfaced, if there is a warranty involved, you want to get that through some of the great marketers. and that will hurt ali baba if too much are up for too long. >> simply alli baba's interests as well. >> and having that mega

transaction volume number was also in their interests. getting that number to the point it was at was huge for them. and it will be interesting to see whether this has a really negative effect on how much they do in shear transaction volume with a lot of these severals now off the market. >> very big s-1. next up, some news that your former company investing $50 million into buzz feed. valuing the company at $850 million. buzz feed says it will use the money to make several changes including new content sessions, motion pictures. chris dixon will join buzz feed's board. a lot of people wonder why they need the money. or about they need it. >> i read about this in the paper just like you. chris diks on wxon wasse an ear investor. and i couldn't be more happy for

the company. more capital allows you to accelerate the growth. >> the statistic that i was amazed by in this article was the fact that 75% of buzz feed's kept is delivered by social media. we see the articles popping up but 75%, do you think they can replicate that? >> i don't think if that stat is accurate. so that is the first thing. i think the company is going in so so many different opportunities, especially with the sale side. they brought in greg coleman. greg is absolutely the best in the business. so i'm excited for my mentor now to be a buzz feed. so i'm excited for their ad revenue. >> ambitions here in move veries essentially are interesting. they brought in michael shamburg, produced pulp fiction among many other feature length fil films. biting or more than they can chew? >> absolutely not. i think we're seeing a convergence with everything. when you look at all of the

different large media companies now, video will ultimately be over the top and i think 5, 10 years from now, you won't have channels. everybody has an opportunity for video right now and if you build a brand and you have an audience, you have the 1 some odd million that we have at daily mail, you basically have the opportunity to at that tita ta take the video mantle. >> if you look at what the content platform will look at, where do you see it going? >> i think the idea of the 22 minutes, it's 22 minutes because you need linear commercials. and think you've already seen

somebody like vice using almost a longer 27 minute format on youtube, so nothing like that, as well. >> something that concerns me, they seem to be so piece meal. people just throwing a lot of video out there, trying to get hits than that has to shift. we have to federal government out exactly how it works to engage people. >> i think you can look at a formal dramatic type pilot or a real time piloting which is something buzz feed has done. for example edp video good d.in did a couple. true facts took off. so you have the act to rethink what it means to pilot contents. true facts took off. so you have the act to rethink what it means to pilot contents. true facts took off. so you have the act to rethink what it means to pilot contents. so you have the act to rethink what it means to pilot contents. true facts took off. so you have the act to rethink what it means to pilot contents.

so you have the act to rethink what it means to pilot contents. >> good to see you. thanks. gee oopolitical tensions ha been calmed and the dow up 54, s&p up 11, nasdaq 37. and kinder more gogan announced will join a transaction worth $44 billion. kme currently up 7% on that deal. meantime shares of king digital slipping.ie currently up 7% on deal. meantime shares of king digital slipping. currently up 7% on th deal. meantime shares of king digital slipping. a lockup expiration creates heavily dilution and shares could be overvalued. king digital down 3%. >> when we come back, another online company moving in to retail. the ceo tells us about the big move. plus hawaii on the way to recovery after the major storms pass through the air.

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weekend hurricane julio passes just north of hawaii over the weekend on the heels of tropical storm iselle. let's see what we can expect the

rest of the summer season. president and ceo of hawaii airlines joins us first on cnbc. good morning, mark. >> good morning. >> we assume you've had a busy weekend. you were the first of many airlines to waive passenger change fees as these storms approached rae. i'm wondering how many customers did take advantage of that policy and what was the cost to hawaii. >> well, we're tallying up the final costs. we don't expect to be material. in a businesslike ours, each passenger's ticket revenue goes to the bottom line. irritating from a financial side when these things happen, but safety comes first. we never have any hesitation. but at the end of the day, i think it will be very small single digit millions and not material overall. >> these were the first tropical storm to approach hawaii in more than two decade, but experts say there could be many more to

come. do you expect this to be the first wave of many? >> well, that's always hard to say before we've had el nino years several times in between the two decades that you referenced. and so it doesn't necessarily mean that we'll be hit by other storms. the odds are that we're not. but we are windchiatchful and w plans to help mitigate the impact. we have canceled about 10% of them on thursday. >> hawaii is a vacation for many americans. we heard from priceline's ceo earlier and he was talking about the strength of consumer pocketbooks and the willingness of consumers to straftravel. i'm wondering what you're seeing as travel for the economic indicator for the american consumer. >> we've been quite positive. we participate generally in what

we refer to as kind of three geographies. flying people between the islands, but of interest to tourism, we fly people from the united states to hawaii and from around the pacific rim to hi. and in all categories, frankly, we've seen demand hold up and be quite strong. these are good times for the airline. >> i'm wondering what uhe syou' seeing out of california. my understanding is hawaii gets tourism from there. is that reflected in the trends you're seeing, as well? >> yeah. as i say, i think things have been -- demand has been quite good. and although these things will be judged perhaps a little better in hindsight, there is some sense that travel is now in a different place in terms of the priority of people's wallets. it used to be even through the

global financial crisis, we didn't see a whole big slowdown. obviously it's a good thing. >> before we let you know, other ceos have been critical of the export import bank and debates over its funding. richard anderson of delta said the current policy favors international airlines disproportionately. have you weighed in on this debate? >> yeah, we certainly are one of the plaintiffs in the same suit alongside delta and the pilots association. we agree with richard's sentiments. essentially we're using good faith and credit to guarantee loans to some amps that have much better access to capital than perhaps hawaiian airlines enjoys. we're not happy about that. >> mark, we'll continue to follow that story and others. but we are glad that the sforps

were n storms were not as severe as expected. we'll leave it there. take a look at the market. session highs with the dow p some 65, s&p, 1944. if the dow can slow higher todatoda close higher, back to back gains. haven't done that for almost a month. pharmaceuticals continuing to move higher. stock up some 77% just over the past week. you can see shares up again about 15% on the session. back to you. when we come back, secrets of apple's internal training program revealed. why the tech giant teaches its employees to think a lot like and the company's move into brick and mortar. s if

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. these days you you can major in pretty much anything, but taking a class in apple university, that's for people wanting to major in apple. profiled in the new york sometime,s training provided by apple to apple employee was created by the late steve jobs to he heducate workers about it business history and the tech business. the "new york times" spoke to three anonymous individuals who had taken these classes. the most common gospel, simplicity. why have 78 buttons when you

just need three. >> some who have used the apple remote might argue it's nice to have a few more. but it's interesting. they used picasso's take on the bull, simplicity as a way to teach that, as well. steve jobs' attempt at immortality one might say in passing his thought process along and the company's essence along. >> one thing they didn't teach is not the to talk to the "new york times," although you wonder maybe it's an effort to open thethe kimona is touch. >> they say we tried to talk to a lot more people, but only three would even feel comfortable enough talking on an an monday mus basis. >> doesn't seem like tim cook threatens quite as much as steve jobs did. so, you know -- >> some speculation in the article about whether there

could be music classes once the beats deal closes. that could be an interesting development. but of course no confirmation. >> maybe they will serve begin ch gin and juice. >> do the puns keep coming? >> a little throw back reference.and juice. >> do the puns keep coming? >> a little throw back reference.juice. >> do the puns keep coming? >> a little throw back reference. >> apple $95.96. remember we were getting close to 100 just a few weeks ago. but once we got news of the september 9 date, stock rebounded just a touch. we will see what the fall brings. >> nasdaq up 2% in the last two days. >> meantime, let's get over to simon hobbs for the european close. >> head of nato may be suggesting that there a high probability they could intervene. but the news on friday suggesting the military exercises were over means you had a strong technical rebound here on the markets.

a lot of -- it's a very broad based rally across western europe. at the helm of that, you've got the russian connective plays that we were talking about about some of them falling so heavily on friday. largest salmon producer, bank out of austria, look how the airlines have bounced. on the one hand, there was the fear the russians would prevent them flying to asia over siberia. basically diluting air france stake without them having to put up any capital, as well. so that is another reason why they're higher. interesting that the italian bank continue to be treatment h. extremestrea extremely active. so a lot of green on the screen today. but it could be a tough week for

europe. see how the germans are in negative territory. spanish positive off a much lower base. the news is that on thursday, we will get german gdp and it may show that there is a contraction in the largest economy within the eurozone and of course france still in difficulty. so that may turn out to be the major theme of the week. >> thanks so much. stocks are rallying this morning. despite those continued tensions in iraq. ukraine and more. is now the time to start getting defensive? you're look at the best two days for the s&p in about six months. investor roger mcnamee will break down his strategy and why he's a little defensive. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution,

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ba ball. but i have like everyone else, i have a risk profile. when you look at the middle east or ukraine or the ebola or the ridiculous stuff that the republicans have been doing in washington, the rate of chaos is increasing and that makes me incredibly nervous. it changes how much exposure to the market i want to have. and so what i've been doing the last week or so is reducing my exposure and moving a portion to t-bills. not because i think anything will happen tomorrow, but because i don't understand how you can have so much chaos in the world and still have prices going up every day. >> so what is the substantial

portion in the t-bills, what are we talking? >> maybe a third of my personal portfolio. to be clear, i have moments like this. every few years, something happens. and sometimes i'm right, sometimes i'm wrong. i'm just saying i think this is a really important time for people to ask themselves a question of how confident are they in the fundamentals of things they own and how confident are they that there is a happy ending this year for the economy and the stock market. because courts.com had a terrific article, just laying out statistics. how long it's been since the last real correction, which has been many years. and how many different things are going on in the equity markets that suggest investors are quite complacent. and i'm hear they are. i've really enjoyed the market this year. i'm taking quite a lot of money off the table here.

and enjoy sitting from the sidelines for a little while while the dust settles. and it may turn out is this much ado about nothing, but if the world goes the other way, he'll feel better. >> you have the growing core husband core reduce of people calling for a correction, but others saying we're finally getting to the point in the spending cycle correction, but others saying we're finally getting to the point in the spending cycle. where companies employ money back in to the business because confidence on the corporate side is getting better. what do you think about the disparity? sentiment? >> that's exactly why markets are hard to understand. i think people are more confident, i think things in the tech sector look terrific.

but at the same time, you say to yourself what happens if ebola gets on a plane and goes to euro europe. what happens if putin does something that we don't expect that really stairs peopeally ca. it's the external factors we're supposed to worry about. and again, this is my risk profile. the guy at morgan stanley may well be right. i've been wrong before about this stuff. i'm just saying that for myself, and as someone who speaks to many people on cnbc, it wouldn't be right for me to get up here and pretends like i'm not more nervous than i was a few weeks ago. i'm much more nervous than i was. maybe i'm wrong, but i'm nor nervous. >> we appreciate the honesty. moving organizatin, facebook gee heat. they sell users they have to download the app. many users are unhappy with the change and in fact messenger has

an awful one store rating on the app store with over 17,000 reviews. is that material to anything? >> i think it will turn out not to be. but let's be clear. i don't think that makes this decision a good one by facebook. i think they're doing this for practical reasons. i think that the complexity of the core facebook application is just huge. and messaging had become burdensome. so i think is thithis is incred convenient to facebook and probably in the long run better for consumers, but in the short run it's terrible and think they have handled it poorly. that said, it's thoinoise. >> and when i first saw it, i was like forcing you to do something else, i don't know. but then i downloaded messenger and it's actually a really good app. i think they ever been hurt by the fact that it's separate and

they're forcing people for use it, and something is going around that facebook messenger is kind of creepy. but it's just basically how android works. >> android is creepy, right? and so you do have that issue. i think if you're on ios, it's a terrific messaging app. in a world where there are lots of messaging apps, all of which are flouawed to one degree or another. mobile ads are doing fantastically. that will be another huge thing. they are just beginning to monetize instragram, they will be monetizing their own products increasingly over time. that fundamentally is huge. and the issues in facebook are much less about messaging than they are about it's really complicated business to run and i'll bet those people lose a lot of sleep trying to keep the thing from just falling apart. and this stuff is not easy.

but to me, that's not what i'm concerned about. i'm still a huge fan of facebook, i'm still an owner. my issues are totally about a market call and wanting to be less exposed in general to the market. >> roger, just one final note on facebook. customers have always been less than thrilled with every single update to the site. >> they hate change. >> how do you gauge when something is just a blip on the radar like a random product update versus something that is a real crisis for the company and potentially one that would see its user base start bleeding out? >> i think that it's a great question. in my mind, if it doesn't affect the news feed, it's not really an issue. facebook is the way people communicate. the company it reminds me moos most is the at&t before it was broken up. it's the way everybody communicates with everybody

else. the messenger piece is a small part of how people communicate. i don't think it will turn out to be the one that drives everybody's behavior. if i'm wrong about that, then i'll be be wrong about the stock. but i do think the issue here is that people depend on facebook. it does something really valuable. and i don't see how this changes that at all. >> messenger is extremely important. more than 200 million years at this point, i believe. if they can grow that, it will be good for them p. >> and if it's a separates product, items a whole new advertising opportunity. all those things on the plus side. but nothing that really matters. >> roger, thanks so much for the time today. >> my pleasure. when we return, online retailer ed eflt joining others by moving in to bricks and mortar, but not in the way you'd expect. the ceo is here. in india we have 400 million people who don't have electricity

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stock you need to own. all trade ahead on the half. we all know about the trend of brick and more are ttarmorta things moving in the other direction. now a look at how vurnlg irtual storefronts are getting real. >> some things shoppers want to touch and feel. which is why a range of online retailers are making a big push into physical stores. to help women find dresses and places for women to process, essy is launching after bay it take testing, connecting 1500 sellers with boutiques around the country. they are charging sellers a one

time fee and 3.5% transaction fee. >> it's really been a game which i thinker for us as a store owner. it really has been able to increase our availability to cool products. >> simple online platform allows her to officially browse vendors who can't afford to travel to trade shows. alexander ferguson says parts pay thing in the wholesale beta has helped boost annual avenue revenue more than 40% fp. >> instant gratification is always nice. but i think being able to see the product really adds a lot of value. >> essy won't reveal how much business its wholesale program has done, but says there is an add benefit, it's helped in-informatiin in-store shoppers discover what they have to offer. >> julia, don't go for a par. the ceo is joining us this morning.ar.

the ceo is joining us this morning.far. the ceo is joining us this morning. chad, great to see you.tofor a . the ceo is joining us this morning. chad, great to see you.ofor a f. the ceo is joining us this morning. chad, great to see you.or a far. the ceo is joining us this morning. chad, great to see you.r a far. the ceo is joining us this morning. chad, great to see you. a far. the ceo is joining us this morning. chad, great to see you.far. the ceo is joining us this morning. chad, great to see you. they always seem to do the left turn. did you see this coming? >> it's not a reversal in strategy. even with the growth of online shopping, most consumers still buy what they buy off line, so we really warranted to help our sellers participate in that off shrine hoppinged a help consumers find things they can't find anywhere else. >> two years in beta sounds like an awfully long time. you must know how this will go. >> you never know exactly, but we have been testing for quite some time. i have since the beginning of essy retail buyers have been buying and find things. so we're closing the loop that has been around. >> etsy had $1.35 billion in

reta retail sales, but you can give us a sense of how big wholesale was in the beta test and how big you think wholesale could be looking at this year and next? >> as you said in the segment before, we're not releasing numbers on wholesale. we're just getting started. but i think when you see that the majority of purchases by consumers still happen off line, we have high hopes. >> you're indicating wholesale can be better so some proper du than other. more the items that you don't have to wear. and you're vetting which sellers can deliver the minimum volumes they would need. does it make you more of a distributor and an enabler for the smaller market of makers? are you less a retail are now?

>> we're not -- i think we're not just a retailer, we're also a platform.years ago, you could sell on etsy. and now you can sell to retail and ten to run your business selling direct. so it's just an expansion of the strategy. >> had been personally contacted by nordstrom and got to directly sell their products without having to get etsy a cut of that. you went from a wholesale program that was free from sellers and now a 3.5% cut of everything that they give to stores. is this attractive for sellers? >> definitely. what we notice is our seller, every the ones doing a good bit of business on wholesale really wanted it to be easier. they didn't want to have to travel to trade shows, some of

them couldn't afford to trade shows. so what we really see here is an expansion of opportunity and just like the consumer marketplace, a very fair price. $100 to get started, 3.5% of every sale. so most are incredibly excited about it. >> i'm wondering what is net for etsy. you're growing quickly, but also a b corp. so how does that impact your perspective on the future. >> well, we're not focused on going public. we want to continue building a very strong business. the b corp idea is to generate social good and economic opportunity while running a business. and that's what we're really good at at etsy. headline really is helping

artisan di artisan designers to continue to be successful. >> macro question, people say consumer soft but gas prices will help. low interest rates will help. do you thank is the standing die that himmic right now? will. >> i think from where we sit at etsy, we watch it but not incredibly closely. kinds of itemses we sell are things you can't get anywhere else. so for our sellers and for people buying on etsy, even in times when money is tight, the things on etsy are so special, they choose to keep buying. so i think we're fortunate in that way. >> good to see you again. please come back. >> thanks. let's send it over to dominic for a market flash. >> watching sharing of go-go. the stock moving lower of a it

the company said it effects full year earnings to come in at the low end of its forecasts. the stock down about 6% off its session lows. stock down about 40% year to date. back to you. also volatile morning for priceline. shares now higher after trading in the red earlier this morning. did in-est have to t have inves something to change their mind? now up 3%. in new york state, we're changing the way we do business, with startup ny. we've created tax free zones throughout the state. and startup ny companies will be investing hundreds of millions of dollars in jobs and infrastructure. thanks to startup ny, businesses can operate tax free for 10 years. no property tax. no business tax. and no sales tax. which means more growth for your business, and more jobs. it's not just business as usual. see how new york can help your business grow, at startup.ny.gov

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priceline out with earnings. simon joining us with highlights. >> profits are up 32% at price line about, you two big deals that he opens will capture the imagination of investors. in fact pcln stock was initially down as forecast future earnings below market expectations. but explaining why he's spending half a billion to cement his partnership with a chinese player. he says paying for up to 10% equity stake will ensure it can sell its large inventory of hotel rooms to the chinese public.

sfwh. >> we have a great relationship. we've been working with him for two years. we built a lot of trust between the two companies. they will bring a lot of chinese customers to our business around the world. and they will also offer inventory to you will of a our foreign customers who go into china. so this is one of those kind of relationships i like to call them almost like second cousins that we have a 10% investment that we're looking at. and we're excited to keep moving this partnership forward. china is not necessarily easy market for western internet company, but we've had a lot of success there and expect to have more can going forward. >> the other big acquisition is open table for which he's paying $2.6 billion in cash. there the latest is that now 45 restaurants here in new york will soon be allowing you to pay your bill directly at your table using your smartphone via the open table app. those restaurants include those

in tribeca. it will be launched in 20 more cities before the he hend of th year. including seattle, lanatlanta a philly. you can pay the bill with your phone and leave without having to wait for the waiter to come collect your tread card. so we think this enhances the overall experience. we think it's great for customers and restaurants and ultimately great for our business, as well. >> to be honest, the biggest price is to translate open table into all the foreign language there is it already operates around the world. and even travelers arriving via a kayak or bookbooking.com reservation. >> pretty good day for the

nasdaq. dow close to session highs. all the big winners next.

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>> and carl, a lot of high flyers leading nasdaq. tesla, best performing stock on the nasdaq 100 old cap tech getting big. we see sell off in high tech names due to concerns over the prospect of rising rates, but intel up about 6% over the past one month, although writing today that it is unlike intel will penetrate i don't understand the iphone 6. king digital shocks getting crushed, candy crush has already peaked and has not gotten the same reception that candy crush and farm heros got when released. >> thank you so much. microsoft launched a new app over the weekend. snip it allows to you track and for him your favorite celebrities. it's only available on the iphone for now. although unclear as to why the tech giant is going into the celebrity subscription business other than it's the only thing

americans seem to want to read right now. >> it's a very kind of unballmer thing, too. may be switching some things up. >> i thought the name of the game was productivity. is th this is the antithesis of that. >> interesting market day shaping up up as we mentioned. best couple days for the s&p since february. today dow could have back to back gains for the first time in almost a month and people were looking for s&p 1935 to hold. that's the ten day moving average. technicians seem to think very short term that was a key level. >> and nasdaq best two days since the end of may.

morgan stanley note makes waves. finally getsiting to a point of cap x expanding. >> and a deal bigger than all energy u.s. m&a so far this year. >> $70 billion for that total ent enter surprise value. >> and the judge is back. >> welcome to the halftime show. we do begin with the markets. and stocks are picking up right where they left off on friday. gaining yet again. raising the question today of whether this correction is either over or nearing an end point. here is what big bear mark farber told cnbc. >> i think the rebound