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welcome to "squawk alley" for a wednesday. joining us, dennis berman, business editor at "the wall street journal." our jon fortt live at a spotify event in new york city, he should have some headlines for us in a moment. kayla tausche back home at post 9, good to have you back. first up, we could see the apple watch in stores very soon. according to 9 to 5 mac during his trip to china, ceo tim cook promised the apple stores will start carrying the watch by june. since its launch the apple watch has been sold exclusively online. and tim cook confirmed the apple tore watch's launch will begin in china and he said the launch could not be going up any better. a busy man. >> of course the watch going great, he's got it on celebrities' arms, we're still talking about it i think the

test comes when there's a true mass release of the watch. i would expect in the first few weeks, it will continue to be sold out and will continue to be a hot item. i think the jury will still be out, will this with a mass adoption product or a specialty product. i don't think we'll know until around christmas time. i still think they've been masters, as apple is always is. masters at creating hype and expectation. but i'm not totally convinced that everyone is going to want one of these yet. >> matters at creating hype. maybe, dennis, but not so masterful in the delivery of the devices. in the beginning, the fact that it will be available broad entry retail, does that signal that maybe the company has a grasp on what inventories should look like for this? >> people were upset with them about the mode ort mechanism inside the watch that wasn't working so well at scale. i don't fault them for that. building these hugely intricate devices at scale is not easy and so you have to give them a little slack on that. i think in a way keeping

scarcity on the item has helped its image in the first few months of its launch. >> i think it's actually, whether by design or fiat, it's worked pretty well for them. >> still, a lot of people guessing how much of the installed iphone base they can sell a watch to, dennis. are you, are you on the skeptical or optimistic side of that number? >> the lame uninspiring answer, carl, is probably somewhere in the middle. i don't think it's going to be a flop. but the expectations certainly in the market and analyst community is basically everything it rolls out is a huge success. i'm going to fall short of that. i'm going to say it's going to be somewhere in the middle. which doesn't necessarily make for good tv. but that's where i put it. >> what a week overall. kayla, icahn in his open letter, melanovich at ubs, upping his forecast for iphone sales. >> and it's not going to be a tv company. but at least if you're going to

be a phone company, you're going to be a company which at its core has an extremely strong -- i mean strong is an understatement to say that the iphone business is strong, dennis. but do you think that the company can keep the momentum going? we are now turning our eyes toward the holiday and what the company can do with what appears to be maybe an incremental update at this point to the iphone 6. >> i think they're going to do just fine. that carl icahn letter was weird and a little bit out of character. writing like a stock analyst with his prediction of a $1 trillion company. i loved it, it was great theater and you have to respect what carl says, but i think they're going to do just fine. i don't see any problems ahead. you know whether the apple watch is a 10 on the success scale or a 7, in the scheme of things at least in the financial perspective, i don't think it's going to matter at apple. >> the stock still struggling, trying to get ahead of 130, which we're on at the nodes right now. yahoo shares seeing a nice gain

after falling over 7% late yesterday it comes after an irs official says the agency is considering changes to its rules governing tax-free spinoffs. that could impact yahoo's plan to spin off its $34 billion stake in alibaba. because it's filed its request with the irs already this year. it does not expect any changes to affect its plans. but striking, dennis, that even that relatively mild news, i don't know, took 7% off last night. >> the market has been so keyed in on this point about the tax efficiency of the whole transaction. when we saw marissa mayer at "the wall street journal" a few weeks ago, she was pretty confident that giving all the body language that the deal would go through. but if you look at what the irs officials said. he talked about i think he used the term plopping a hot dog stand on an asset and claiming it as an ongoing business. as it relates to yahoo, i think he's got a perfectly legitimate complaint. the yahoo small business unit is going to be the quote-unquote

operating business for $34 billion of alibaba stake. it's a bit absurd. so perhaps yahoo will scoot through on this one. but as a general matter, these sorts of very clever spinoffs, i think it's a fair point for the irs to be looking at. >> the bulk of that company or that unit as we know will be the 384 million shares of alibaba. even though hewlett-packard's spin or split and ebay and paypal's split are different transactions because they're spinning off businesses. those stocks are taking a hit today. hp down 1.5%. there's news about a potential sale of part of its stake in china. it's interesting to think about the fate of some of these spins we're in the middle of. these aren't going to close until later on this year. whether any of these could be in jeopardy. what do you think about hp and

ebay? >> those are real businesses, the separation of the computer business from hp and the computer pay from paypal. i don't think there's any dispute about those being real businesses. the irs should be looking at some of the reit transactions in which companies are sort of separating all sorts of different transactions, different assets, be it prisons or restaurants. and calling them reits. so i'm surprised the irs hasn't gotten more active on the reit side of things. >> you'll always be an m&a reporter, we know. not a great day for etsy. shares sinking in a bay was following the first quarterly report as a public company. the company posted a loss seven times larger than the year-ago period. we talked to the ceo about how much attention he pays to the stock price back when the company went public. here's what he told us then. >> i'm not focused on the stock price today. we're focused on building value for the long-term. continuing to serve the community and continuing to build this great company. that i'm really proud of. so not really focused on the

stock price at this moment. >> we'll see if that still holds true today. stock is at 16.35 kayla. ipoed around these levels, although it closed the first day at 31. >> i think the street is spreadty surprised, not only did it post a loss that was expected. but that the loss was seven times what it was a year ago. it seems like a pretty big jump. but dennis, i'm thinking back to a piece that "fortune" did in the last couple of weeks, where they talked about how the ipos we've seen this year have been less profitable than in years past and riskier and with smaller companies. and i'm wondering if you think etsy is an example for how risky the ipo market is sat this stage. >> i think it's an interesting point and relevant. i've got a provocative question for you all. if you were to guess what ebay's forward earnings trade at, say 2017. it includes paypal, what would you guess, carl? i hate to put you on the scott. >> we'll ask the questions here, dennis. >> i'll give you the answer,

it's about 12 times forward earnings. and let's say that etsy has the wonderful capacity of turning into an ebay can. it be as good as ebay and trade at 12 times? that's a big question. right now it has no ebita. it's basically trading infit. you get my point. for etsy to trade at 12 times earnings, it would put the market value at 12 billion. i think the quality is diminishing in risky ipos. this shoppifi ipo will be a good referendum on that. the question is this -- is the end game really an ipo for the vc investors and not the beginning for the public investors? i think that we, we need a reexamination of some of these companies that are going on right now. there were something, but perhaps not as much as the market is rewarding them right now. >> the s-1 spells out a lot of these risks clearly.

churn on the number of sellers. marketing costs are going to increase, hiring costs are going to increase, profitability is a long-term target. >> and that profitability is not a priority. as we've seen with many of the companies. expect that the investor will get used to companies that burn a lot of cash. they exist for their ecosystem. and for their merchant and not necessarily for the investor. which is the reason to take pause. >> a lot of people looked at their strong dollar excuse, with a bit of really? i mean they weren't talking about that in to a large degree on ipo day. >> no, no, they weren't. and i think this is a really interesting moment for these companies. they have the potential to really dominate the world and i would put spotify in that category. but they require huge, huge amounts of capital if they fail. they will fail spectacularly. spotify loses a lot, a lot, a lot of money. so it needs a lot of money. it will be an interesting moment, even a few years from now, whether the companies that built for scale can survive at

scale. >> dennis, always good seeing you. you can talk about anything, it's always amazing. >> love being with you all. >> see you soon. let's check the markets, the dow is trying to notch its fifth straight day of gains. it just eked out some positive numbers, up by about six points. the s&p is close to the flat line as is the nasdaq. we'll keep an eye on those mixed markets right there of course all eyes will be on fed minutes that come out this afternoon. meanwhile, shares of target really bucking the trend here. up by just about .75%, after first quarter profits topping estimates. same-store sales also rose by 2.3%. jim cramer called it the taylor swift of retail this morning. and check out the bankts as well, jp morgan, citigroup, barclays and rbs set to pay billions of dollars in fines and plead guilty to criminal charges of manipulating foreign exchange rates. six banks were fined in total close do $6 billion.

carl, attorney general loretta lynch said it was the biggest antitrust find the agency had received in history. >> the scheme apparently going for five years, starting back in 2007. when we come back, seven years today, roku released its first ever device to stream netflix straight to your television. since then, streaming has come a long way, the ceo of roku will tell us what's coming next in an cnbc exclusive. still waiting on major news from spoti spotify. a to have executive will break it down for us. and alibaba's jack ma talking about the importance of female workers at a summit in china. cnbc was one of the only broadcast outlets inside. we'll tell you what he said. automotive innovation starts... right here. with a control pad that can read your handwriting, a wide-screen multimedia center,

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alibaba executive chairman jack ma hosting a global woman's conference in china today. speaking at the event were big names from the u.s. like arianna huffington and actress jessica alba. jack ma did speak at event talking about his family history and female teachers in his life. take a listen. >> when i was a primary school student i had a such terrible experience because my grandfather was not considered a good guy before liberation and after liberation my family was

terrible. people looked down on us. my teacher said jack, you're good, you're better than people thought. be yourself. forget about your family you know history and this. be good. so they give me the confidence. >> to be sure, alibaba has a fairly good track record with female employees, compared to others, 40% of its workers are women. and about a third of its 30 executive partners. and when the company went public here at nyse, five of its eight bell-ringers were women. carl, it shouldn't be news that shouldn't be a dramatic statistics. but with the spotlight on tech companies and female hiring, it is. >> yes, i'm, it occurs to me that ma himself is a former teacher and probably comes with a certain sensibility that makes him a little more open-minded than others in that country at least. maybe in this country, too. >> it comes on a day when we're talking about a fact that jeff bezos appointed a woman to be his technical adviser.

maria renz is in the shadow of re/code. we're waitsing for headlines from the major spotify event in new york city. top executive from spotify is going to join us to break it down late they are hour. why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with a conscience? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you, it's everything to us. the xc60 crossover. from volvo. lease the well equiped volvo xc60 today. visit your local volvo showroom for details.

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from real-time imaging to tracking biometrics, drones can improve the performance of cops and detives on the moves. seema mody is live in barcelona with more. >> i want to you imagine that you're an undercover agent with a target. but the whereabouts of the suspect is hard to nail down because of traffic, weather or location. experts here at the critical communications conference say that drones can be a powerful tool used in these situation does secure real-time mapping and provide facial recognition

capabilities. so let's give awe scenario. here's how it works. an agent can be in one of motorola's connected cars or on the beat. deploy the drone and once in flight it can use hd video and facial recognition software to identify the suspect and stream the video over lte back to the dispatch center or even direct the officer to the suspect's exact location through a heads-up display. that's the use of a larger drone. but there's also motorola testing out a smaller drone. if you can see right here, two live scenarios they're testing it out in. one is a cop when they're hunting database a suspect in a house, they can throw the drone around the corner and watch the real-time feed on his or her phone. another scenario is a firefighter that can fly the drone up to the window of a burning house to see if there are any victims inside there are a lot of test use cases that are drones are being tested with. with that said, there are a lot of challenges including competition.

many players trying to do the exact same thing. the second is regulation headwinds, given the use of drones and third is the cost. these devices are not cheap and it ultimately comes down to how much the government wants to spend on funding these type of projects and the infrastructure that's needed to improve public safety. the experts i spoke to say that these devices are very promising and they hope over time these devices will create and build actionable intelligence that will improve public safety. carl, back to you. >> interesting, seema, you can imagine all the opportunities for first responders and the police as drones get better and better. seema mody joining us in the beautiful city of barcelona. simon hobbs at post 9 wrapping up europe. >> it's difficult for europe to make gains at the moment. they're capped by events clearly time running out for greece. we have an ecb meeting which i presume is under way. we need some judgment from them on lifeline support for the

greek banks. in the meantime the german finance minister has given an interview to the "wall street journal" in which he's refusing to rule out the possibility of a greek default and moody's has said that actually freezing greek deposits at banks is highly likely scenario. of course tomorrow we have the meeting between the greek finance minister, the greek prime minister, angela merkel and francois hollande. in the meantime we could learn more about patrick drahi, a french moyer operating out of luxembourg, he's bid for part of the u.s. cable asset of southern link here in the united states. it's said according to david faber that he's approached time warner cable at further consolidating the industry in this country this is altice, the vehicle he's using, that he controls. that's the dutch quote. it's dutch and french. so there you go. the other side of it is john malone has given an interview from this country in which he's

suggesting that the assets of advocate phovodafone would be a fit. he's not saying they're in discussions with vodafone. but vodafone is a top gainer up 5%. liberty global in this country up about 4. the big settlement coming through from the new attorney general on the foreign exchange investigations, is interesting to see that many of the banks have risen today, rbs, ubs is a top gainer. despite the fact that the fines there across those four or five banks total $6 billion. and of course, an admission of criminal liability. i put burberry in here within the uk. the luxury goods maker falling 5% as they come through with results and soft figures, guys, back to you. >> seem been, thank you very much. we're getting breaking news at hq. we turn to michelle. we've learned that the cuban intersection in the united states has been able to open a bank account. the reason this is news is it's been one of the big hurdles for trying to reach some kind of

relationship or some kind of agreement when it comes to reestablishing diplomatic relations with the cuban government because of their placement on the terrorism list, we expect them to be removed in the next couple of weeks. they've been unable to get a bank account. that's meant that they've had to bring in piles of cash, pay bills in cash, et cetera and have found it frustrating. the name of the bank is a small bank in florida, stonegate. one of the board members of the bank confirming they've opened a bank account for the cuban intersection. it comes on the day that roberta jacobsen who is testifying in front of a foreign relations committee about this situation and day ahead of what's expected to be the final meeting between the state department and represent i have beens from the cuban government where perhaps we get an announcement about the reestablishment of diplomatic relations. small bank in florida, stonegate opening up a bank account for the cuban government. back to you. >> countries in the news literally every day. in one form or another.

thanks. when we come back, the ceo of roku on the future of streaming and the audience who's doing it. plus spotify confirming voirks jon fortt settle at the major event in new york city. stickers. ree what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.

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i'm sue herera with your cnbc news update this hour. i's leader, ayatollah khamenei says he will not allow inspectors to enter the country's military sites, nor will they be given access to iranian scientists under any

nuclear dpreemt with the world powers, he made those remarks while speaking to military commanders at an academy of iranian revolutionary guards. a nine-story residential building in southwest china collapsed following a landslide today. trapping at least five people. the building was reduced to rubble as emergency crews worked at the scene. a laceration hazard has prompted electro lux to recall some kenmore ranges. and industrialist david koch and henry kravis donate $250 million to research hospitals in new york city. very generous donations, that's your cnbc news update this hour. back to "squawk alley."

some breaking news on spotify today, our jon fortt is live in midtown as the show is going on as we speak. jon, good morning. >> carl, it looks like we're looking at a significant shift right now in spotify's strategic focus. moving toward a more programmed direction. with, with video in particular. so taking on youtube a little bit more. taking on radio. here's what they've said. the ceo daniel eck got on stage and brought on rishl king, who is in charge of platform and experience, talking about customized playlists for your time of kday. the idea like radio to keep you listening. they brought in some comedy central folks, saying there's going to be video here. video on some programs like nerdist news you'll view op spotify three hours before they appear anywhere else. that's significant. because we've seen youtube

trying to bring on creators, video creators to put their programming there. spotify clearly trying to use their, their user base of more than 60 million users to draw not just music listening, but broader content. now the bigger business background here, i think is that they're talking about this huge repository now, supply of content, music, all music is going to be background music, some might argue that might diminish the value of it you're likely to see the battle continue between jay-z's title, between apple's itunes and ha they're going to roll out with beats and now spotify trying to amp up the supply of content they deliver to the 60 million subscribe subscribers, the 15 million paid subscribers as well. >> whenever a new watch or phone comes out. we look to the developers who are partnering with that company. in this case, vice, comedy central, how would you characterize the strength of their partnerships? >> i ran outside after i heard

about vice and comedy central. to get ready to bring you this news. i want to see what more they have to say. what other content partners they're bringing on board. and also how they address this issue that we're hearing from the recording industry more and more, we want you to amp up the number of paid subscribers you have. not give away quite so much for free. how are they going to balance that message that the recording industry where their base is, what they want to hear, with all of these new features that they're trying to bring to users. carl? >> jon, i have another question, what is the pitch for the spotify user on video? are they trying to become a stand-alone video destination? or is it more of a nice to have thing for users that are already on the platform? >> kayla it sounds like they're trying to become this digital content platform thaw stick with all day. even when you don't necessarily just want to listen to music, if you want to get news on your commute, if you want to check in on some of your favorite comedy video content, they want you to stay on spotify for all of that.

not jump over to youtube. not jump over to itunes or what apple's platforms might offer. but stay on spotify for that hip hop culture experience, whether it's music or something else. >> jon fortt, we'll come back to you as some of the details become more clear. thank you. seven years ago today, streaming giant roku unveiled the first device to stream netflix to televisions, flash forward to today now even spotify is getting in on the game. anthony wood is the founder and ceo of roku and joins us this morning from our one market studios in san francisco. anthony, welcome back. good to see you. >> thanks, great to see you and happy streaming day. >> happy national streaming day. i've got a roku box in my home. i talk about this every day at work. i cannot keep up with how many news events there are in streaming every day. what is the most important thing to you right now? >> well, you're right. there's a huge transformation

happening in the industry. the world is moving to streaming and it's creating a lot of opportunity, a lot of transitions, you know, roku is focused on a few important things, one is delivering the best experience to our customers on a great value to our business partners as well. so for example, we've recently launched the roku tv. which to manufacturers, that's starting to roll out in retail and nationally. and the roku 2 won five stars on the cnet, from cnet, ranking it the highest streaming player in the country. >> anthony, one of the criticisms that i've heard from people who have roku is that they want to go back to the traditional bundle because the offerings in live sports and live news aren't as robust as they can get elsewhere. i know you guys are working on building that up. how far are we away from the time when a stand-alone cutting the cord type product will be able to offer all of those products, the traditional tv

will? >> well i mean streaming obviously use is booming on roku for example, our stream every year grows over 70% year-over-year, so it's very popular. we have a mix of customers, a lot of customers that are so-called cord-cutters that don't have traditional paid tv. we have a lot of customers that do use pay tv. you can access paid tv programming like hbo go on your roku player. so you know we have both kinds of customers. but i think in terms of like the kinds of content that's kmomg common to streaming. there's more and more content coming to streaming every day. we're adding four or five new channel as week on roku. some of those are big channels like sling tv recently launched which is a traditional bundle. a paid tv bundle. although a lighterweight bundle than most paid tv services and it has espn, which is a sports channel. there are other companies that have announced nationwide, you know so-called virtual mvpd

services, so those kinds of traditional packages are coming to streaming. a lot of streaming customers really just embrace netflix and amazon and hulu and the sports packages like mlb that you can get direct. one of the great things about streaming is it offers a lot of choice to customers and they get to pick what they want to pay for. >> nielson said last month or end of april they were going to start tracking viewing data, audience demographics across roku devices. how has that gone? and have advertisers altered their strategies as a result? >> so nielson obviously is the currency that advertisers and programmers use to exchange and pay for ads in the industry today. and it's widespread on traditional tv. the reason we're working with nielson is to make it easier for our streaming partners to publish and sell ads on the streaming platform and get paid for that. so you know, it's really no

different than the traditional measurement. except it's on the streaming platform. and you know, if you look at supported content on roku, it's the fastest growing segment. streaming started out with ad-free content on netflix and amazon prime. hulu is a mix of ads and paid. bau lot of movies and tvs that didn't have ads. a lot of content on roku today does have ads and ad-supported content. one of the big things we focus on is supporting our partners business models and allowing them to make money in the streaming world. >> anthony, roku is turning seven and there have been reports that the ipo is the next stage for the company. earlier in the show we were talking about how the rewards for companies that have gone public in this market have been less clear. i'm wondering if your thoughts have changed about how favorable and ipo would be for roku and whether that's in the plans. >> you know, we always say we

can't talk about future financing plans and you know, our focus at roku is to be the platform for tv. and to power as many tvs in the world as we can. we aspire to power every tv in the world. that's our goal. >> anthony, i got to ask your reaction to the news we got out of the "wall street journal" this week that apple had been working on a television for ten years, pulled those plans, but still has hopes to reinvent the apple tv box at least when they play in june. when we get the developers conference. does that affect you? and how? >> well in terms of tvs, there's, it is a tough hardware business to sell tvs. it's a very price-competitive market. it's a tough nut to crack in terms of making money. can you see it in things like the shift to television brands moving towards chinese brands for example. i think the big thing is there's a revolution happening in tv. tv is changing, streaming and the internet are bringing the same kind of change that the

internet has brought to other industries to tv, it's creating winners and losers. and new opportunities for customers. and so one of the ways i think we'll see that is the emergence of a handful of software-based platforms that will deliver a better experience of television for the user. but they'll end up being licensed. that's a big focus for us, licensing our roku tv platform. in many ways it reminds me of the early days of pcs, there were a bunch of different pc manufacturers and they wound up licensing windows over the long run. think the same dynamic is happening in tvs, you know, so this year, for example is the first year that more than half of tvs sold in the u.s. are internet capable tvs. and most of those tvs today are sort of home-grown solutions, they're not as good as roku for example. so a big goal for us is to improve the quality of the experience on tvs by licensing our platform to all tv manufacturers and we're making a lot of progress on that. we have over 20 different models of roku tv that will be on the

market this summer from five different manufacturers. >> i think consumer was welcome standardization of any kind, anthony great to have you. we'll see you next time. anthony joining us from roku today. we do want to get to cablevision, julia boorstin has the quick market flash this morning. >> m&a in the cable space sending shares of those companies higher. time warner cable stock up about 4.5% on its acquisition talks with french company altice and shares of cablevision, which put itself up for sale also skyrocketing higher. now up about 13% on merger speculation. the cable company getting a boost after pursuing rival verizon vios. carl, back over to you. >> thanks a lot. when we come back you heard the news from jon fortt a moment ago -- spotify launching video streaming content. top spotify executive will join us a little bit later on this hour. first, rick santelli, what are you watching this morning? >> well we're going to have some fun today.

not many traders that i deal with on a day-to-day basis believe there's a june tightening. but ira harris, my buddy. might be changing my mind on this. why? you'll have to tune in after the break. you're going to like this one. fe financial noise financial noise financial noise [ male announcer ] your love for trading never stops.

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can help light a way forward. so you can make your move, wherever you are. and start working on your next big idea. ♪ coming up, the ghosts of 1999, is etsy's earning disaster a sign of bigger problems lurking in the market? plus target hits the bull's eye with towards earnings report.

we talk to the company in a cnbc exclusive intervoo. airline stocks losing altitude. pete najarian is flagging some unusual activity he sees in one of the most widely held names in that space. that and much more straight ahead top of the hour. kbiz we'll see you in about 15 minutes or so. >> we'll be there. >> meanwhile los angeles voting to raise minimum wage to $15 an hour by 2020. what's being called the most significant victory so far to increase minimum wage across the country. kate rog certificates back at headquarters with a closer look at that. kate? >> kala, that's right. the move is certainly a major one in the fight for higher wages. the los angeles city council agreed tuesday to draft an ordinance to raise the current minimum wage of $9 to $15 an hour over the next five years. the ordinance will be voted on next month and the los angeles mayor eric gars eti said he would sign it into law. the hike could give as many as 800,000 workers in the city a

raise. but small businesses in los angeles says with fewer than 25 employees will have an extra year to comply. according to advocacy group business for a fair minimum wage, the move is likely to pressure other big cities like new york and washington, d.c. to take similar action. the federal minimum wage still stands at 7.25 an hour. adding to momentum, the wave of corporate names adding to the action, walmart, target, tj maxx and mcdonald's and facebook unveiled a new plan to hike their wages for contractors and vendors in the yoors to come. higher wage opponents organized by the service employees international union are keeping the pressure on. they're protesting today in oak brook illinois outside of mcdonald's headquarters ahead of the company's annual shareholder meeting. >> kate rodgers looking at the

local share price. let's get to the cme group. rick santelli and the santelli exchange. >> good morning, carl. i love trading floors and the reason i love them and granted they're not as vibrant as they once were, but that's okay. there's still a lot of synergy. a lot of talk. everybody is debating, is a hike in the cards? is it june, is it september? many traders have written off june as a rate hike, but ira harris, we've had him on many times, in his blog made an compelling argument that goes like this, in order to understand exactly what's going on, let's think san francisco fed. it wasn't that many weeks ago they pull a t-shirt out saying data-dependant. within the last 24 hours, all of a sudden the seasonalities are important. they've been ignored in jobless, the unemployment, lots of seasonality there. and listen, that's okay. maybe that's what they pick. but it's curious. because unemployment, whether you believe it or not, it's real, with regard to labor force participation.

that's moving in the right direction. if you're looking to test the waters for normalization. the inflation or lack therein using government calculations, also in a place they can live with. the one fly in the ointment of course is the weak gdp. here's the way the argument goes, okay? come over to my board. june 16th and 17th is the fed meeting that has a press conference. the next fed meeting, july 28, 29, no presser. now some believe you have to have a presser, i'm not sure. but almost doesn't matter. here's the key, when do we see our advanced read on q 2 gdp? july 30th. here's the thing. whether the seasonality is a real issue or not, or whether it's something that will give a nice pick to the notion that if you're going to raise rates, and you think that the atlanta fed whose record han great as they actively manage a program on the fly trying to gauge gdp and even with yesterday's better housing data so far they're thinking .7 is what the q 2 looks like, it

will be hard to raise in the face of q 2 being under 1%. july 30th, so the story goes that maybe this is on the table. not because they really want to raise rates or it's coordinating with the economy or the economic activity right now. but the notion that ultimately we're going to have to drain reserves. you know, kids have fire drills, zero interest rate is the good for the type of operations they need toe do to drain reserves. maybe a one and done is in the cards and maybe it will actually happen at the june meeting. ponder that. thanks for the idea, ira. kayla, back to you. >> get the evacuation plan ready for the june fire drill, rick santelli in chicago with the santelli exchange. we'll take you to the spotify event. where the company just announced video. even fly. we build it in classrooms and exhibit halls,

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welcome back to "squawk alley." i'm jon fortt here with spotify chief revenue officer, jeff levick. number of announcements you guys had today. a shift in probably what spotify is to a lot of people. you're becoming in a way a music publisher. working with artists to create tracks specifically for running. tracks that change tempo. you've got video that you're doing original video along with partnerships with others. what does this signal about what

spotify intends to be in the next two to three years. >> spotify is already a destination where 60 million people come every single day to listen to music and spend a large portion of their day with us. what it signals is we want to find ways to enhance the experience and provide more content for all different parts of the day when you're using spotify. whether it's the morning, afternoon or evening for us to have the content that you want to see at those different times today. >> artists and some record companies are having a concern about what this technology affects on music really is. when the supply of music that you have for any given moment gets so immense and you start applying algorithms to it. what does that do to the value of any individual artist or song? >> there will, what we found is that actually increases more listening. so the more we can actually present more music in the right kind of music for the right moments it really means is that we're actually increasing more listening. since we were founded seven-plus years ago, we've had 25 billion

listening hours on spotify. more than half of that has happened in the last year alone. >> that's a lot of listening. what about the economic value? remind me the programmatic advertising effect. there's a lot of viewing, but as the viewing increases, the value purview can tank. and that can be a challenge for the industry. what's happening to music? we talked about wiz khalifa and 150 rounds of listening. >> every time someone plays a song or there's a stream on spotify there's a royalty that's cued up. so every time that happens, whether it's a million or a 100 million, there's a royalty that goes back to the artist. the more listens, the more money goes back to the artists. >> everybody has their interests in this. jay-z has started title. a competitor to spotify. trying to charge even more than spotify charges for the tracks. how interested is spotify in redefining how the business of music works and how various

artists down the chain from the songwriter to the actual performer get paid? >> as the creator of the streaming industry and as the global lead anywhere streaming, we're very interested in making sure that the ecosystem remains very healthy and continues to grow. that's really what we're showing today is we want our users and fans across the world to spend more time listening to more music. interact and engage with more artists and let the industry expect to grow. >> expecting to see new offerings from google at google i.o. we see music and content offerings, also apple from wwdc and some of the stuff they're doing with beats. what's spotify's pitch to work with you versus those others when it comes to exclusives, when it comes to first availables to the artists out there? >> it's none an either/or, it's both. consumers for us, we want consumers to listen to music wherever they enjoy listening to it. from an artist's perspective, they care about making sure

their music reaches their fans. >> you see a value in being first, you've got a window where hours before can you view content say from nerdist news anywhere else, spotify has it. so what's the pitch to do spotify versus other platforms, either in terms of engagement or loyalty that users have? >> we've got 60 million users, growing every single day. we have an average of 155 minutes a day time spent on the platform if you want to make sure your content connects with your fans, spotify is one of the places you want to be. >> are we going to see customization like music that changes based on your pace or heartrate or wearables? >> it allows to us create more personalized experiences with the content so one of the things we're demonstrating today is that going forward, the spotify that you have or that i have will be very different and no two versions of spotify will look alike, they'll all be personalized for you. >> lots of changes. jeff levick chief revenue

officer at spotify, back to you. hard to know what spotify is doing in terms of valuation, but pandora is off 2.5%. we'll keep our eye on that. planning your next vacation, why spacex hopes you have mars on your mind.

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the tallest peak and volcano in the solar system and phobos and damos, the planet's two moons. elon musk hopes that spacex will soon be transporting people to mars. >> the comment we always get from viewers when we cover this is why not try our moon first, tried and true. >> baby steps, baby steps. what's not taking baby steps down, shares of the airlines. a filing by southwest says they expect to increase capacity, 6% to 7% by 2016. doug parker on with cramer last night saying look outthe airline industry after a long period of not expanding capacity looks

like it's finally coming. that's going to mean a fare war eventually. >> going to mean profit margins could come down as well. transports are feeling it all 20 components of the dow transports are lower today. >> the dow theorists will be frustrated. that does it for "squawk alley," let's get back to headquarters and the half. carl, welcome to the halftime show, let's meet the starting lineup. steven weiss is with us along with jim lebenthal. josh brown, pete najarian and mike santelli with yahoo finance. on target, after the retailer beats and raises, we hear from the company if an exclusive interview. competitive edge, sports biz expert rick harrow on who won the nba lottery and why the patriots back down. we begin with a question asked many times on this show. but today perhaps the most solid piece of evidence to date. that there is in fact danger lurking in one part of this market -- how exactly is it