apple headquarters in cupertino. 11:00 a.m. here on wall street, and "squawk alley" is live. ♪ and welcome to "squawk alley." joining us this morning at post nine, mike span toli. senior columnist at yahoo! finance, and with me, as always, jon fortt, kayla tausche. a lot to work on. first up, apple is activity invoef gating reports nude and revealing pictures of celebrities including jennifer lawrence and kate upton hacked through the i cloucloud saying

takes user privacy very seriously. jon fortt has new information on all of what has been obviously a huge story over the past couple of days t. is. not clear that all of these photos came from icloud. one security consultant i've talked to thinks that kate upton's photos might have come from drop box and once you've got user names and passwords, some people re-use those things. they're multiple possible sources, and these photos appear to have been collected over a period of time. you can tell that because we became aware of this on sunday through a post to a sort of ruckus message board. before's that a post on a non-ib. another message board where people trade in kind of smutty images for days. they had been posting about certain stolen photos. a special area in that board called "stole." as of this morning, one of the anonymous posters in a non-ib said clear it out. getting a lot of attention

because a celebrity hack and the heat is on us in essence. that whole area has been cleared out. so it could take a long time to figure out exactly what happened here. it doesn't appear to have necessarily been one big attack, directly on apple servers. it's more likely this was a user name and password-type hack somebody carried out on individuals over time, and it's going to take a lot of information from those people to figure out what really happened here. >> interesting to hear this could be something that touched drop box as well. i think that, yes, this is very -- it's an important development. it is very embarrassing for these celebrities for theirs to have happened, but for companies fighting over enterprise customers. if you're a company trying to decide where to keep your proprietary information look at the cloud and looking at some of your private servers, how do you decide where to actually keep this or whether to engage with one of these companies? >> what i keep trying to figure out. before the market opened, trying to fig if it was a business

issue. to be hoppest. seemed like an opportunistic back door thing. not something that necessarily pointed to structural invulnerabili invulnerability. not like a target credit card hack because people don't feel their stuff it that valuable. to be honest. people will wake up, are my photos shareable? does anybody care? >> the reason the business issue, because of byod. bring your own device. people are not only bringing their own smartphones, android or ios into the enterprise, bringing services like gmail in and putting sometimes corporate information on the services. we seize thee hacks all that information is vulnerable. >> bring in on apple, senior editor of re/code reporting on the story all weekend long. good to have you back. good morning. >> borng. >> what is apple's response here? >> so far activity investigating the statement we reported yesterday you just shared with viewers. i think therapy in the process of getting their head around

what actually happened. wouldn't surprise me if he heard from them again later today or tomorrow at the latest. when they know more and explain what happened, what didn't happen. where there's evidence, where there's not evidence smplts it your sense icloud deserves to be at center of the conversation right now? >> apparently it does insofar as we know. but we don't have enough evidence yet it terms of what actually happened. what jon shared about drop box is new to me. it may have been a collective attack. multiple people shared different information from pictures gathered from different breaches and attacks of different natures, all sharing what they have in one big place all at once. a lot more information will come in, probably within the next few hours. >> arik, i wasn't aware of an underground economy of icloud rippers, icloud hackers.

not just i had clocloud, try toe a mobile device and suck all of the photos and other information off of those devices that people might have on them, and trade in those. it seems like a case where apple, because it is one of the primary mobile platforms is now in the position microsoft used to be in. they might not necessarily be less secure but the bigger, more obvious target? >> they absolutely are. they're visible. not the biggest in terms of individual devices. that would be the android, but in terms of a single ecosystem, a single coherent ecosystem that is certainly high-profile. apple one of the largest companies in the world. everybody pays attention to new device release. the profile is high. microsoft was the big target in the '90s and early part of the last decade. and continues to be. but apple is, you know, kind of largely immune to the probings

of hackers partially because on the mac, the target service wasn't so big. iphone is different. >> absolutely. of course, while the investigation continues, raises a lot of questions about how vulnerable the cloud is. bringing us to this morning's squawk on the tweet. maybe it needs a better name. what would you rename the cloud? tweet us at "squawk alley" and we'll get your answers later in the hour. stay with apple. the company reportedly striking deals with visa, mastercard, amex turning the iphone into a mobile wallet. apple expected to unveil the latest iphone along with a new wearable potentially at an event in california a week from today. re/code's has been all over this. have we been able to narrow down the number of players they're working with? >> we know american express for sure. i know other organizations have been reporting visa, mastercard. it would make certain amount of sense. apple has been a really strong kind of a quiet giant in payments for a long time. people have given apple their credit card information for

itunes for more than a decade now. so when you add it up, it actually stores more credit cards than amazon. so why it hasn't tried to leverage that into a much more significant player, i've theorized about this nor years. it's a matter of time. >> analysts on wall street, arik, talking about it for several quarters saying this could be the big value play for apple if they can get into this space. but i'm thinking, the company that this really hurts is paypal. we saw ebay shares sink this morning. paypal in pole position to be the de facto mobile wallet. what's the future for that company if apple partners with all three major credit card companies to be the consumer payment platform? >> that's left to paypal. already a strong distribution movement. largely associated with its ebay owner. i don't know of a lot of people using paypal. it's been active to try and add payment services to the phone

and they have their own add-on device and so on. i don't know it's really caught on. i don't know it's really caught on or other things like square caught on as strongly as some other people thought as well. i think it's apple will bring its juggernaut name and mobile platform into the game and people may take with it. we'll see. >> i mean, honestly, one of the reasons maybe it hasn't caught on, nobody's dying for a mobile wallet. they like the idea of it but i don't think people are saying, gee, i really wish everything i could funnel through my phone, with apple the inkem bent a default, won't have to download a paypal app. seen people with store-specific stuff? paying with your phone. right? >> yeah. >> square valued, $6 billion. bezos trying to jump into the game. is it crowded or not? >> humongous opportunity one that absolutely everybody sees. that's the issue. >> apple will not take over this market, though. remember, apple is focused on ios devices. high-end market but not

everybody. trying to do person-to-person payments and the other has an ain droid phone, apple's not your solution. that might be where the money is, not the whole game. >> the other reason why consumers aren't dying for the product, they still have to deal with the bank. the word wallet might be a misnomer. none of the tech companies actually has the regulatory green light to store your money. they can only be a pass through until one of them gets that, you're not really a wallet. >> just a layer. all it is. the advantage of paypal forever. you don't have the to keep repeatedly sharing your card. stored centrally. also the limit. >> one last question on the event next week. street is split whether we get a wearable to look at or an invitation to a wearable event later in the fall. what does re/code know? >> we've basically report add wearable is coming with a maximum price of about $400. also reported that it will be demonstrated and announced at that event next week but not sold this year. won't be sold until 2015, which

is, of course, consistent with what happened with the ipad, and the iphone before it. apple demonstrated the iphone early 2007, didn't sell it until the summer. demonstrations of the ipad, wasn't sold. partially because they need third party software support. a big thing. let the developers work with it, more politicianapplications and more attractive. >> and uber's network of drivers lacks proper commercial permits to pick up passengers. facing fines up to $250 euros and employees jailed up to six months for violations. uber plans to appeal the decision and will continue operating in germ dany in the meantime. the number of fires aren't just in this country. dozens of cities and municipalities and in cities and countries. >> not necessarily bad for uber. not saying, uber you're out

entirely. saying there's a regulatory hurdle and uber is better positioned than competitors to get over that hurdle in part because it's got lots of fans. so this is good if you're bullish on that company. >> i would say another reason it's good for uber, they would be disappointed because it's such a destabilizing force as its corporate mission, if germany did not say, wait a second. slow down here. to be honest. >> i think the fallout it could have, turn away drivers. one of the punishments for drivers is six months in jail if you're caught doing this. not to mention, not just a germany problem. in hoboken over uber acts and pulling uber riders out of the car leaving them on the side of the car and hauling those off. >> hoboken is the germany of new jersey, though. >> a thought on uber? >> the ceo of uber thinks it's nothing less than a social movement. in president obama first

campaign manager, plouffe. it's almost politically intwined with the governments. a social movement. if it's popular they will defeat the hurdles. >> don't lack confidence. please, come back soon. joining us from re/code. waiting for kara swishers profile in "vanity fair." >> right. we want to also check on the markets on this first trading day of september. we did get positive data this morning. the best read on ism manufactures data, pushing into the green slightly. dow up by 5.5 points. nasdaq 1. all eyes on the ecb later in the week to see if we get news of quantitative easing. talked a lot about apple at the top of the show despite that bad news, shares of apple still in the green this morning. stock trading at rits highest level since september 1980. another all-time high.

currently 103.60. and sector perform at rbc. a name we haven't talked about in a while sitting just below the $7 markup 2.5%. saying it upgraded the company following a drop in shares to what it considers a more reasonable value able. and oil and gold down almost 2%. exact reason isn't clear because we don't have news, of course, on some of those safe haven plays we see the markets go up to where they are, carl. you often see a read in crude like you have there and gold. and the major hack of the icloud, we told you about at the top of the hour. don't worry. there's way to make sure what's in the cloud is protected. new all-time highs. anything that can stop tesla from rallying higher? more on that in a moment. netflix meets fashion. a first cnbc interview later in

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forget selling may, wall street heads back to work, sell in september might be the mantra. dominic chu explains. this hasn't been the case the last few years but might this year. why do you say that? >> hit the nail on the head. a bull/bear debate raised. lay out both scenarios. over the longer term, decades,

since 1950, the s&p 500 as an index is down half a percent on average for the month of may, or for the month of, rather, the month of september. that's the reason why everybody's talking about the september swoon. if you look at the overall picture, the bulls say maybe that's not always the case. okay? over the last five years, just the five years, the s&p and dow both up on average 2% for the month of september. so just since the end of the financial crisis until today. the technology sector in general has been an outperformer. talking more about that, "squawk alley," we want to talk about the tech sector and tech stocks that really make up the entire market here. so the s&p 500 tech sector is up 3.5% on average every september over the last five years. what bulls are clinging to now. if you look at the overall picture for just the tech sector and the stocks that make up that tech sector, the story gets agents moa little more appealing for

investors. the reason, a lot of stocks in the s&p 500 tech sector are up a decent amount during the month of september. a name like google. split, of course. average, the last five septembers up 7% this month alone. a decent move. over at accenture up 9% on average just for the last five septembers, and then look at yahoo!. the single best performing tech stock in the s&p 500 over the last five septembers. it's up about 12% during that time. so, yes, there is a seasonality to september, but remember, there's also just two stocks in the entire s&p 500 tech sector that have been up every single september for the last five years, and those are sandisk and ibm. they may not be the most stellar performers. ibm underperformer. sandisk outperformer, but up, carl, every single september for the last five years. back to you. >> a great statistic, dom. thanks. dom chu at hk.

shares of tesla hitting another all-time heim this morning. a big $400 target coming today helping fuel the rally. tesla aggressively expanding. especially in china. electric carmaker installing 400 charging stations in that country. what could derail that company if anything? with us, good morning to you both. >> good morning. >> craig, begin with you. cramer this morning said it's probably the best run stock he's ever seen, and that in the future, everyone's going to be saying, i had to cover my tesla short. do you see signs of capitulation there? >> well, frankly, there are so many pop catalysts on the hoar rines, it's completely insane to short this stock. that's like -- got all the catalysts in model s. around the giga factory and potential announcement of other models and others things we don't yet anticipate. no reason to be short this stock here. >> why not be more aggressive on your target, then?

you know, our target is always under review. stock run quite nicely over the last series of weeks. people are starting to digest the 100,000 unit annualized deliveries in fourth quarter of next year. all i can say, it's under review. i don't see a reason the stock can't continue to work higher. >> brad, how do you model the factor, the dynamic of cult in this name? >> there's always going to be some element of that, i think, in an evangelical story like tesla. as craig alluded to, this 100,000 annualized run date. when we look a closer look at math and growth trajectory that could put this company on in 2016, set up that the market was underappreciating this opportunity and the new highs are more reflecting that. >> and brad, actually, just to get, project farther out.

tesla bulls, half a million nunts 2020, what the bulls are focused on. argue how cheap batteries will be. how do you bake that into your forecast? >> we've obviously looked at modeling out through 2020, but felt like under normal sort of a time horizon as we look at high growth tech, even looking out to 2016 is somewhat more generous than we look at for other high-growth companies. we're looking at the tangible data points coming up over the next two, three quarters and feel to the degree the company can continue so to speak blocking and tackling and meeting expectations at the market, the market would have to increasingly appreciate that. >> finally, craig, part of the note is about why their rivals and competitors have been unwilling or unable to full commit to this business. do you see that changing over the next three to five years? >> i don't see anyone following

a strategy that i consider long-term viable. i think that all the other cars on the road are really interesting test cases but have to get smart around the battery. frankly, tesla is half the cost of most of their competitors today, and they have a road map in front of them to cut the cost in half again. how are these guys going to catch up? it's going to be a long-term run for tesla. >> yeah. we'll continue to watch it. unbelievable action. especially today. thanks for your time. >> thank you. >> thank you. coming up, netflix meets the world of fashion. but is it worth your money? the ceo of rent the runway is here a little later on this hour. plus, talk about a great catch. amazing footage of a drone falling from the skies, and the owner trying to catch it. yikes. up next on "squawk alley." day begins with arthritis pain and two pills. afternoon arrives and feeling good, but her knee pain returns... that's two more pills. the evening's event brings laughter, joy, and more pain... when jamie says... what's that like six pills today?

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cnbc.com/techcrowd. of course, this is our first techcrowd where the companies are actually raising money on their own and not using cloud funding platforms. coolest cooler, on the show last weekend, ended over the weekend,s 13dweekend, $ $13.3 million. the best ever for us. >> in case you missed it, check your drone's battery before you take it out for a spin. check out this video from a drone's perspective right above a lake. all right? it's hovering, and then it starts to lose some battery power. and eventually -- you'll see over time falls right into the water. the owner, you can see him here on the shore starts panicking. doesn't want to lose that piece of machinery. make as move for the boat, but then runs right into the lake and good for him. he grabs the drone just in time. steinberg has nothing on this guy. >> no. could have ended a lot worse

than that. you have to say. thankfully, over the water. yes, droerns are expensive, but, man. >> about $500 a pop in cases? >> yes, but it's a drone. >> at least it's not in oncoming traffic. >> don't lose your mind. markets across the continental europe and the uk about to close in a moment. tight trading range ahead of that. of course, very important ecb policy meeting which comes thursday. the euro did fall to a one-year low against the dollar amid speculation the ecb might announce stimulus measures. ray ban sunglasses maker moving lower. the company's ceo stepping down after a decade on the job. at odds over the direction of that company. i love nor take, quick, on what draghi will do, if this is put up or shut up time? >> expectations high. exactly how aggressive is the language going to be about whatever it takes. >> we'll find out pop of course, get through our own jobs friday

number as well. >> quite a big week to come back. to short one but busy as they always are. >> mike joining us from yahoo! finance. when we come back, called 9 netflix for fashion, but is it new unlimited rental service really worth your money? we'll ask the ceo of rent the runway in a moment. plus, investigators trying to figure how hackers got into the i hcloud and stole picturesf jennifer lawrence and kate upton. how vulnerable the cloud is. maybe the cloud needs a better name. what would you rename the cloud? tweet us @squatalley. answers coming up later this hour. you want to cut through the noise of an overwhelming amount of analysis. [ all talking ] you want the insights that will help you decide which ideas to execute and which to leave behind. you want your trades executed in one second or less,

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welcome back to "squawk alley." i'm jackie deangelis. commodities crushed today as the dollar index hits a 13-month high. start with gold prices seeing a more than $20 dip today. traders saying geopolitics are not enough to offset the strength we're seeing in the dollar. also the lack of physical demand, and, of course, the capital flow we are seeing into equities market. key technical level breached intraday. 1265. oil down almost 2% today on the day. the dollar having an impact there, but technical pressure increasing as well. we triggered stops with the initial drop this morning. then dropped more from there. that momentum increasing. traders saying the rationale here, the fundamental picture is we are oversupplied in the market. iraq, libya, seem like

manageable situations and also china demand is being questioned now. kayla, back to you. >> thanks for that. call it a sign of the sharing economy boom. rent the runway allows women to rent designer clothes online has seen orders increase more than 120% year over year, and the e-commerce site is beta testing a netflix-style unlimited service for accessories and hand barges. joining us exclusively, jen hyman, co-founder and ceo of rent the runway part of cnbc's 2014 disrupter 50 list. good morning. >> good morning. >> we know the sharing economy is popular. what is it about your customer that makes them want to rent unlimited numbers of clothing items per month? >> well, who wouldn't want to have whatever you wanted in your dream closet? and if you think about the closet today, 50% of the stuff in it of any american woman is worn two times or less. so there's an efficiency. you buy things you don't really wear them. it gives you access to a closet on rotation.

>> is this really about social media. the more you post a photo of yourself wearing something on facebook or instagram, you can effectively wear it fewer times? >> that's 100% true. always a thrill around wearing something new, and how you feel when you walk down the street when you just ripped the tags off something. now that you're posting on instagram and facebook, everyone's effectively become their own brand and can't repeat outfits in the same way. >> you guys have to solve for dry cleaning. delivery ahead of a special event. you have so much data to sift through. even though we call it netflix for fashion, a ton of infrastructure has to go behind this. you see demand soar to the point where people are renting unlimited items per month, how much does it cost you to meet that? >> well, we've just actually had to move into a warehouse that's 160,000 square feet. we're fulling vertically integrated meaning we run the entire dry cleaning, seamstress

repair. >> 250 seamstresses? >> would dough. soaring over the holiday season. >> brick and mortar. opening a new store i believe on fifth avenue? >> tomorrow. >> tomorrow. why did you need to go into hands-on retail? >> i think that it provides a new type of experience for a customer segment that might be more afraid of rentering the first time online. provides a service experience where she can come in, try on 25 dresses and accessories with a styleist and know that things will fit her. >> my wife just used rent the runway for my 20th high school reunion. >> amazing. >> had a pretty good experience. my question is just around demographics. how do you get people to continue renting? what's the average number of rentals per month? and how do you think about the price band anywhere between, you know, your $45 rental or $80 represent rental? people moving up or down as they rent more or less?

>> changes depends on the type of event you're going to. it you're going to president obama's inauguration, where we dressed over 80% of the women, willingness to pay was very high, it's a once in a lifetime occasion. going to a party on saturday night, dinner with your husband, you might want to pay more of the competitive h & m zahra price point. we price along the spectrum and people are renting for an increasing diversity of occasions. >> any room down the road for a men's business to be of any sizable volume? >> i think of course there is room. but we've just strached the surface on women and this unlimited business we've launched which is really around unlimited accessories and handbags, and kind of having a cue receiving three items at once. keeping they are for as long or short as you want is really -- if shopping was created today, it's the modern way to do it. >> how do you keep people from going to the same event in the same dress?

something that couture has been able to figure out. i actually rented the runway and saw a lot of people not wearing my dress but a lot of the other dresses? >> we can pinpoint exactly who is renting, what event they're going to. often women will actually tell us the event they're going to and they're inputting the date. we can prevent those kind of fashion disasters from happening. but we actually carry a much wider portfolio of dresses on our site than even a neiman marcus or a sachs. the likelihood you'll rent the same dress is lower than if you go into a department store. >> 80% of the inauguration. mindblowing stat. keep your eye on rent the run wray. thanks for coming by. when we come back, how long until the spaceship is ready for liftoff? new video of apple the spaceship headquarters in a moment. first, rick santelli, what are you watching today? >> of course, watching as thursday fast approaches central banks meeting and the word

bubbles. seen it everywhere, but i think this time, maybe the word bubble actually has an appropriate application when it comes to central banks and qe. and i remember the old days. before they will drones, there were called radio control airplanes. that was a while ago. we're going to talk about all of that, after the break.

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if energy could come from anything?. or if power could go anywhere? or if light could seek out the dark? what would happen if that happens? anything.

coming up at the top of the hour, one-time bear makes a big call. why s&p 3,000 is not so far fetched. joining us live. and raising a price target on apple and giving tesla the highest priced target on the street. analysts here with calls of the day. plus super investors richard pazina. while bank stocks could double. see you then. >> thanks, scott. talking about the hack of apple's p apple's icloud. what happened? how can you make yours safe? we have answers with julia boorstin. >> we don't have definitive answers. seems to have been a straightforward password hack. iphone vulnerable because of unlimited password guesses. apple says that's not the case and not unlimited password guesses if using a verified apple i.d. security experts say this type

of attack could have been prevented with what's called two-step authentication, which apple and other services offer but don't require. a demo of google's two-step authentication. sending a code to another device to use in addition to a password effectively blocks hacking soft twhair can repeatedly guess passwords. what next for jennifer lawrence and other celebrities who want to prosecute? it's investigating and the fbi is addressing the matter. we'll wait on the legal ramifications. two years ago a hacker sentenced two years in prison for hacking celebrity accounts and producing photos. strongly encourage two-step verification. that means more password headaches for all of us. kayla? >> yeah. and gives fuel to the fire of those calling for faster biometric or voice password integration. for now, certainly a big

headache for everyone affected by this. jon? >> clarifying something about apple, how it handles those things. what some hackers have htried t do. what e-mail is associated with a hacker i.d. not necessarily giving them a chance to crack it's password but can find out, oh, this e-mail is already in use. therefore, this person is on icloud. >> the treasure-trove of information these hackers have been able to access makes phone hacking look somewhat juvenile, doesn't it? >> yeah. talking outdated modes of hacking only with us for a few decades if that. >> yes. thanks to julia for that update on that story. bringing us to this morning's squawk on the tweet. maybe the cloud needs a better name, since it's vulnerable. what would you name the cloud? tweet us. we'll get to answers in a few minutes. apple billing a new campus in cupertino on that 175 acre site. one enterprising youtube user took a drone out for a spin over the construction site with a

gopro attached. apple said construction is expect to the be completed in 2016. campus ii home to more than 12,000 employees and contain hundreds of cherry, apricot, plum, apple and olive trees. >> hopefully the landscaper won't be fired for those weeks. >> and keep existing campus. have employees both places. both are right off of 280. one exit away from each other and they do have a pretty detailed model. i think it's in infinite loop one. one feiinfinite loop showing wh it will look like. maybe set up counter -- once you get detail, actual, buildy johnny ives den, i expect to see blueprint. >> looks like the pentagon.

rick santelli with the "santelli exchange." >> hi, carl. it really is an unbelievable trade when you think about it. so many websites are, and blogs, completely jumping in on the story. a good story to jump on whether zero heads talking about the bubblicious notions what's going on in the fixed income market. southern european paper specifically. let's kind of run through the gambit. historically, central banks have had an issue with bubbles. look at the tech wreck in 2000, alan greenspan by lowering interest rates certainly dug a very quick off exit ramp to what could have been a more problematic scenario. remember when we went through the credit crisis, a lot of involvement by those that weren't directly involved in the issues. unlike the tech wreck. if you own tech stocks, you were just out of luck. a good audit trail. exchanges new who owned it, who

didn't. margin issues and actually considering everything, it went pretty smooth. look at whether in the industrial revolution or the computer revolution, or the internet revolution, they all ended up in bubbles but it makes sense. back to the story, alan greenspan dug a road quick. low interest rates opened up the housing market to be a piggy bank. indeed, almost in a seamless handoff kind of overt what could have been a bigger problem. only do delay it. the current scenario isn't bubblicious. the bubblicious aspect of interest rates so low in a southern european economy, doesn't square with output, employment, their gdp, this is not indirect. this is completely directly by design. as a matter of fact, it's inherent for the central bank of europe to deal with what it believes is the medicine for its problems which is most likely buying time. but the problem arises where if there's any hiccups on this

relative value trade, you really freed to be careful. thing koss reverse quickly. i haven't been bearish on interest rates, the price moving lower, raising yields, all year. as you look at this chart to leave you with, that's a chart of the ten year notes. remember, it was august that we took out that 244, 245 from may 28th, tested again on the 17th as low yields. three basis points is the rule. 245 plus 3. 248. if we settle above 248, most technicians would say, boy, you better hurry. because the market might start breaking faster than you could look up bubblicious. back to you. >> the fear, rick. breakaway rise in the yields. we'll see what happens. thanks for now. when we come back, excitement brewing on not just any tuesday morning in california. >> whew! >> that's a crowd of people who lined up over the long weekend, no less, lining up for the opening of a dunkin' donuts in california. we'll tell you why that's such big news, up next on "squawk alley."

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built for business. ever wanted to control internet devices and app way simple command, like, if this, then that. fan astronaut enters space, then send me an e-mail. if my teenager opens the liquor cabinet while away, call me. a stapup app does that and raise ed $s

$30 million. joining us from san francisco, lyndon, great to have you with us. >> pleasure to be here. >> you call these recipes. walk me through how this works and how they're triggered. >> sure. so if there's a company here based in san francisco, we help people make simple connections between the services and devices they use every day. so those connections follow the format if this, then that. if something happens, then do something else. just like you let in with excellent, led in with excellent examples. if it's going to rain tomorrow, send a text message. if i'm on my way home from work, send a message to my spouse or entire family that i'm on the way home. these, what we call recipes, they're at easy to set up as clicking a button. we make it really, really easy for people and pokes ha sfolks it so far.

>> how many recipes triggered all day? >> over 50 million. sending massive amounts of information back and forth between the services and devices. >> lyndon, i am wondering if light of this celebrity photo hack, it seems that some of their photos were sent to the cloud without them really realizing that maybe they had okayed that at some point. is it possible these recipes if people aren't paying attention, to get out of control and end up doing things people don't intend, and how do you -- what countermeasures dos you have to make sure that doesn't happen. >> sure. you mentioned something critically important for us and i think any service on the internet, and it's this idea of control. people should always feel like they're in control of these service and devices. they need to understand how they work and oftentimes that's really difficult, given how fast things are changing. so something we take really, really serious is, how do people understand what we're doing, understand what we're capable of

doing, and feel like they're constantly in what we call creative control over these things? and a big part of that is trust. do they trust us with that information? do they trust that the recipes they've set up are going to operate as they expect? >> lyndon, how do you keep companies from writing their own recipes for their own users? for instance, we just showed one of the recipes. if i post a photo to my instagram, then copy that file into my drop box folder. what is keeping drop box or instagram from letting users personalize these to-do lists? >> right now nothing. we're perfectly fine with that. we believe over a long enough time period the shear number of ways to connect, devices that might wan to save to dropbox is more than any one company will be able to support or integrate with. our real focus is on helping people understand how to make

these simple connections. once you understand how to connect your instagram photos to your dropbox account, then you can do it with any other two services and devices. so our focus is really on the long term. >> lyndon, we hope you'll come back. interesting concept. interesting to see how it plays out over time. >> of course. thanks for having me. >> from san francisco. elsewhere in california, dunkin' donuts opening its first location in southern california today. the first of what will be 200 dunkin locations across the state. can dunkin' succeed? starbucks, jane wells, reigns supreme. you're there with the new opening. how's it going? >> lots of red sox shirts and patriots sweatshirts. the line around the block. how long have you been waiting? >> 3 hours. >> 3.5, 4 hours. dunkin had a few one-off concepts now rolling out its traditional stand-alone stores,

and what it is, allowing a lot of east coasters to come order their regular. they're 4 and 4 or light and sweet. >> whew! >> dunkin'left california over a decade ago after performing poorly. it's returned with a franchise-only model. better distribution, better partners hoping to convince lative west coasters who run or starbucks to run on dunkin. depending on rabid fan whose spent the night. >> starbucks is bitter and burnt and dunkin' donuts is a piece of home. >> delicious and affordable. >> now, dunkin' shares have not been "hot." a lot is riding on the west coast expansion with two stores. this one and one's in modesto. three more by the end of the year. up to 20o bin 2020. >> 60 grand, you could take

approximately a half a million to open up one of these, and we expect to do double that in sales. >> part of the growth story. they need to prove that they can be successful on the west coast for ultimate opportunity to really make sense. >> now, how crazy are the fans? snapped this photo of a woman who spent the night here. had her dunkin'tattoo. there is a starbucks down the street. smallest line i've ever seen there. we'll see in the days to come. dunkin' going after convenience stores. guys, people who want to spend $2 for a couple of coffee, use a small, medium and large and not use words bike -- >> dunkin l.a. close to session lows. lost s&p 2000 as well. 1998. something to keep your eye on. >> that moved mid-hour.

certainly watch forge the catalyst there. when we come back, investigators trying to figure how hackers got into the icloud and stole pictures of jennifer lawrence and kate upton. raising questions how vulnerable the cloud is. maybe the cloud needs a better name? what would you rename it now that we know it's so vulnerable. tweet us at "squawk alley." your answers are coming up on the other side of this break. whenwork with equity experts who work with regional experts who work with portfolio management experts that's when expertise happens.

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what would you rename the cloud? the storm, and also cloud 9, as in the german nine. >> twitter brings out the best in our viewers. >> that does for "squawk alley." and senior manager, joe terranova. and mike brown, stephen weiss, and our top story today, a big call on stocks by one of the best known strategists on the street. morgan stanley's adam parker, a one-time bear saying that after five years and nearly 1500 points, the raging bull run is far from running out of steam. predicting the s&p c