happy friday morning, welcome to "squawk alley," joining us, jon steinberg, ceo of the "daily mail" and kayla tausche is still out. jon fortt is here. the first republican debate, surprise surprise, donald trump front and center. >> this country right now owes $19 trillion, and they need somebody like me to straighten out that mess. >> you've called women you don't like fat pigs.

dogs, slobs, and disgusting animals. your twitter account -- >> only rosie o'donnell. >> trump was the most-mentioned candidate on twitter. just over 30% of all mentions, followed by ben carson, rand paul, mike huckabee. the debate was also great for social media in general, facebook sponsored the debate and its logo was everywhere. the #gopdebate still a top trending topic on twitter. we know that ratings likely set a record for partisan debate. 16-share, people were anxious to see this and talk about it. >> you know who the winner was last night in addition to trump, obviously? it was fox news, we're going to talk about the media implosion of all the stocks in the past week. the fact is that fox owned a ton of mine share and whether they were the network delivering it over the top or over a cable system. they were as prominent a winner as facebook last night. >> i think facebook in the social media realm won from my perspective. i had kind of a weird view of

this. i was on a plane listening to it from a sirius xm stream, my wife was texting me, i was on facebook and twitter. the interaction from my friends on facebook was deeper and more significant. on twitter everyone wants a quip. everyone is trying to be funny. but for something like this, facebook seems to have an environment where it plays well. and when you look the morning after you've got headlines on all of the various debate participants. it's not as ephemeral. that's a win. >> on the note that came out this morning from sun trust, what a loss it was for twitter. this should be a moment that twitter captures with at twitter logo and this many years in, why are they not able to execute on this? >> i was thinking to myself earlier today, if this had been a year or two ago we would have walked in here, seen the number of impressions, that would have fed some energy into these names, specifically to twitter. which remains up a penny, right? >> and actually every single

media, i was watching our own site, how quickly we were putting them on facebook and i was looking at "huffington post" and fox, and it seems like everyone else was capturing it, but twitter, there was a bunch of quips but no real ownership of the actual debate. >> sometimes digging out content, people are posting gifs, trying to make a joke and celebrities as well. we know that. >> feels like they need another layer on top of twitter. twitter is good infrastructure it's been said before. it's not the product for this sort of thing. it's hard to engage unless you're leading a conversation and everybody can't lead a conversation. >> and we're always talking about the product execution issue and you ultimately this was a day where lightning, four live events, to have lightning live in the 2016 election. every media company is getting ready for the 2016 election. >> we mentioned television, that brings us to media stocks, starting to recover after a rough week, our julia boorstin

has more from l.a. >> investors freaked out about cord cutting this week. but the numbers may not be quite as bad as the double-digit sell-offs would indicate. bob iger's comments about modest selloffs at espn kicked off a panic. but said that nielson's estimate of a decline of three million subscribers was misstated. ad sales are pacing up and digital distribution he said would be a win. fox shares are down double digits so far this week. the ceo said even if the total industry loses subscribers, he fully expects fox total paid subscribers in the u.s. and globally to grow. cbs shares rebounding yesterday on earnings. and details on how much money it will make from selling cvs and showtime straight to consumers. time warner shares are up, posting modest 2% cable subscription fee growth. the company saying subscriber declines have been small and not material, while going straight

to the consumer with hbo now is adding new revenue. the stock that lost most this week, viacom is in the worst spot. targeting those millennials who are unlikely to ever subscribe to cable. putting them in a weak negotiating position with distributors. on the upside. morgan stanley analyst ben someoneburn said the market may be improving. but the wild card is whether and how fast those subscriber declines, the cord-cutting declines accelerate. back to you. >> that's the metric to watch. julia, thank you for that. a lot of implications here. people are trying to make some parallels to what happened to music a decade ago. but the bottom line, are these programmers now in a position to want to negotiate more with the net eq because they see what's coming? >> i think we're looking at this wrong. we talk about cord cutting. we're not cutting all the cords. broadband cord is more important than ever and certain media player who is have built really strong brands, you look at some

of the things that disney has in its portfolio. we're just talking about fox news, whose ratings have been off the charts. these players seem like they're in a stronger position to me, in this era. i think we're going to see this bifurcation where certain players seem stronger and the broadband owners, comcast who owns this network and those who know how to manage brands and have tent pole franchises like a marvel, a lucas film who aren't going anywhere, they'll make more money. >> i agree with jon. what's interesting, when you look at what iger said, he said netflix is good for us, we're one of their largest sellers of content. you need to differentiate between the location and the house. in real estate it's location location location. i think in media it's about the house, the house, the house. what is the content? if you've got great content, if you've got great brand, like fox did on the debate, you should be able to sell it to other people. with that said, the numbers were really bad.

i think that the stuff julia said understates the case. bernstein is talking about 1% to 2% erosion in stocks, when you look at the domestic advertising on television, viacom, with domestic advertising down by 9%. discovery, flat. cbs down by 3%. 20th century fox ad revenue. tv advertise something messed up. >> are you arguing that was more of a factor this week than the fear of the cord going away? >> i think that people had in their models, 1% to 2%. they thought that espn and disney was somewhat insulated from the self-attrition, i think the terrible domestic tv advertising numbers what were blew people away more than the cord cutting. >> that got lost a bit i guess you could argue in all the cord bundle discussion. >> we talk about the shift to digital for the last year or two. >> we have. i would say on the content side, though, the wild card to look out for is if your apples, googles and facebook start

pouring real money into doing original programming, apple is doing it with beats one and draedra dre's new album coming out. if they really start to invest, think we could see more disruption in the space. that's the wild card. >> it's a lot about the terminal values, of these companies, ultimately more value will be destroyed than is actually refound. we saw it with the newspapers, a lot of the revenue he went away and never made it to digital. as the networks go over the top, the revenue will go away and disburse and it won't be available to them in digital. >> people think back to when cable was in its infancy. that was a hard corner to see around. arguably as hard as this one is turning out to be right now. >> look at all of the new people in cable. discovery wasn't there when cable came around. the voxs, hopefully the "daily mail's", we'll take the revenue away from the incumbents. >> i think the "daily mail" is a

shoe-in. don't you? thanks jon, jon steinberg of the "daily mail." let's check the markets, dow is down almost 92 points, monster beverage moving higher. weak sales numbers, but the stock did turn around as the company detailed new distribution partnership with coke. hershey's this morning, a weak outlook for sales, especially in china and the biggest mover in the s&p is nvidia. the trend of weak results from the semis seeing some strong sales for chips largely used for pc gaming. they're able to buck that trend. people upgrading to play games and run high graphics. >> interesting story. >> gaming is a strong trend along multiple fronts right now. traditional pc as well as consoles. when we come back our next guest invests in a lot of tech companies but said he's finding better ideas outside the sector. plus john mcafee is in trouble with the law again. and massive implications for

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it's been a volatile earnings season for tech stocks. the next guest says he's seen opportunity in big data. paul meeks is a senior analyst and director for institutional

investing with solterna capital. you were bearish on certain parts of the tech sector. a couple of months ago and certain parts have gone down. but you're bullish on others. tell me where are you negative? is it security -- is it aspects of cloud in and where do you see opportunity? >> i think the most troubled areas have been and will continue to be some of the old hp era, 1990s client server pc-driven areas like semiconductors, storage and hardware i don't think any of those stocks, even they might appear to be bargains, are investable. what i try to do is identify some of the new themes, you called one of them, big data analytics. the problem is everyone else has the same idea. you have to wait for them to come in and recently within big data analytics, tableau software and splunk have come in. >> it's hard with a company

that's small, splunk, it's got a lot of competition to know what kind of value to put on something like that, isn't it? >> it's an excellent question, you can't use the traditional price/earnings ratio. even if you use that figure prospectively. what you have to do is identify the technology, make sure that they have something special. and i think particularly for tableau software, they have something special. also you have to have a very big t.a.m., total available market and i think that's the case with these applications. >> what kind of consolidation are you expecting in the big data and cloud space? and when does it hit? i talked to number of ceos in tech who are watching amazon, who are watching google. who are even watching facebook. saying at some point one of them might pull the trigger and start to try 0 integrate certain of these companies that have margin in the space. is that something you expect to happen at a certain point and is it too soon to make a call? >> i think it's too soon to make

a call on those companies. the problem is that both tableau software and splunk are too expensive even with a recent drop in price for some of those other companies but some of the 1990s vintage company, if they don't consolidate and embrace the theme, they're going to be in trouble. >> paul, what do you do with a name in the net space like facebook. where you have so much evidence that it's dominating its space and yet the price remains high? at what point would you get interested in buying at these levels? >> facebook is the biggest stock in my portfolio. and i actually am interested in buying some more at about the 90 handle. so it would have to come down a couple of bucks, but you're absolutely right. every time they announce it seems that their lead is growing larger and i'm still excited about their growth. it might be a little bit expensive. but on any dip and a dip might be market-related, not facebook related, i'm a buyer. >> how do you feel about sam zon? is. >> i'm not interested in amazon. i do give them a lot of credit

for what they've done with amazon web services. however, i think that particular play in infrastructure as a service, you might get a better valuation with microsoft than amazon. >> despite the operating margins that they just turned in? >> it's interesting that years ago, everybody thought amazon was an ecommerce play and i bet a decade if now you're going to say amazon is a an amazon web services play and oh by the way, they have an ecommerce services, too. >> paul have a good weekend, lots of interesting movement in the space for sure. >> yes, sir. up next, food delivery has come a long way from just calling your neighborhood pizza guy. now the space is getting very crowded. we go live to san francisco for some bubble watch. we'll be right back. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it.

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you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? welcome back. the lunch hour is approaching, time to start thinking about what to eat.

you can have almost anything you want delivered these days at any time. but is the food delivery space getting too crowded? josh lipton is live in san francisco with more. josh? >> well jon, just this week i used insta card for my groceries. and tonight i'll probably order dinner from montree. i could have chosen post mates or door dash. it's this overcrowding in the food delivery space, that has some vcs here seeing signs of froth. and the latest casualty is good eggs. it's a food delivery start-up which just announced it's closing operations in all cities except san francisco. in a blog post, the ceo said the single biggest mistake it made was growing too quickly. before figuring out the challenges of building out a new food supply chain. >> the reality is there's not going to be ten successful companies in this space, it's going to be kind of one, maybe two that are going to sort of own the market. those going to be the ones that figure out their unit economics

at the kind of city level and then are able to scale up. so with investor capital. >> but online food delivery is an estimated $70 billion market. and that's why vcs have already invested $750 million so far this year. one such vc is trinity ventures. they're believers in eat club, which delivers lunches to companies like tesla and netflix among others and while trinity's ajay shoep ra acknowledges froth in the market, he can't ignore it because he says the opportunity remains too big. >> josh, it's friday, friday night. you better not be getting montree, i want to you go out and have a good time. >> i'm taking your advice, you're right, i'm on it. >> so said the two guys with no tie. thanks a lot, josh and jon. europe going to close in a little under ten minutes, simon is here a little earlier than usual at post 9. >> it's a notably more negative

bias to what's happening in europe as a result of the payroll data we had here. cementing the belief for many in the market that perhaps there will be a rate rise from the fed in september and many within the equity market. actually challenging the view that the rate rice would have been later. it's a broad-based decline that's erupted in europe. the data wasn't too good from germany. the industrial production data falling. a lot of the data recently hasn't been very good. did mean that jp morgan cut its gdp forecast for the second quarter which would get from germany next week to 1.5%. the spanish data is rip-roaring, the industrial production figure that came today. the big focus is interest rates and where we're going. the bank of england of course yesterday became more dovish. there's a whole debate as to whether or not the bank of england could more readily move and raise uk rates if the fed is doing that here or does do that here, when we get through to september. think we were just showing sterling there.

that's because sterling is the main break on the bank of england acting at the moment. according to what they said yesterday. ubs just contrary to what i just said. sectors that are moving, it's interesting that some of the big broadcasters around europe are taking up the negative downdraft that we've had here from disney, from viacom. this is italy's, germany, the uk and france, all of those major broadcasters in negative territory, not just a cutting of the cord argument because the bundle isn't so big in europe. it's about where you're going with advertising rates and the competition with digital. also interesting to see despite the fact that oil is breaking down on the strong dollar in the wake of payrolls, some of the oil majors around europe are still in positive territory. they were off to the upside right from the go today. and a lot of the global miners are also higher despite continued weakness that you see on commodities. so some contrarian moves on

what's happening in the commodity market with the equity market as you can see. the big news going into the weekend for everybody around the world, is the payroll data and the idea that the fed could move in september. guys, back to you. >> simon thank you very much. when we come back the board tells you all you need to know about media. disney, viacom, time warner, fox, down 10%. will that get worse before it gets better? kara swisher will weigh in, dow is down 120, the third lowest close of the year right here. with only one component in the green. hello. i am technology that is changing investing forever.

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i'm morgan brennan with your cnbc news update. a suicide truck bomb exploding in kabul early in morning, killing eight people. 198 people were injured, including ten children. the bomb went off at a market in the center of the capital and all of the victims were civilians. french authorities say a woman kidnapped in yemen last february has been released. 31-year-old isabelle prime was working for a bank when kidnapped. and italian police say some of the 700 migrant who is survived the cap sizing of a fishing boat off the libya coast told investigators that about 200 people likely perished, because smugglers kept them inside the hold. 26 bodies have been recovered. and lexus may be changing wait it sells cars.

beginning next year, about a dozen lexus dealers in the u.s. will set prices on new and used cars that are not subject to negotiation. if customers don't like the price, the salespeople must let them walk away. that should make the buying process a lot faster. that's your cnbc news update. let's get back to "squawk alley." thanks, morgan. the buzz from last night's heated gob debate still going strong. our john harwood is in cleveland, with more reaction. hey, jon. >> donald trump was at the center of the stage even when he wasn't on it. >> in the afternoon debate, former business executive carly fiorina grabbed attention by going right after this. >> i didn't get a phone call from bill clinton before i jumped in the race. did any of you get a phone call from bill clinton? >> when the main event started, a fox news moderator challenged trump to pledge loyalty to the gop.

mr. trump? >> he refused. drawing a quick but harmless attack from rand paul. paul tried again when trump paid single-payer health care. >> the republican party has been fighting against a single-payer system for a decade. i think you're on the wrong side of this if you're still arguing for a single-payer system. >> i don't think you heard me. you're having a hard time tonight. >> yeb bush was more careful and polite. but didn't damage the real estate tycoon much, either. >> the one thing he did say about me, however was my tone and i also understand that. but when you have people that are cutting christians' heads off. we don't have time for tone. >> trump's own message was simple, instead of a traditional politician, the country needs him. >> the this country right now owes $19 trillion and they need somebody like me to straighten out that mess. >> others like scott walker and marco rubio focused on their own messages before the large primetime audience. it may have paid off most for

home state ohio governor john kasich who was energetic and upbeat after just recently entering the race. what the caution from most candidates indicated was that they don't think it's the time for them to try to take donald trump down right now. they're hoping instead the calendar does it when people begin going to the polls in early 2016, the hope of these candidates is that they will look at donald trump and say that's not somebody i can see in the oval office, reporting from cleveland, john harwood. sticking with the debate. social media exploded in reaction to some of the comments made by the candidates. joining us on the phone is re/code's co-executive editor kara swisher. happy friday to you. what did last night tell us about the levels of engagement that we're seeing across that space at large? >> well, trump is interesting. i think a lot of it the stuff on social media was all about trump. the megan kelly questioned him about how he talked about women.

went crazy across -- a number of other things he said. it was mostly about his insults of other candidates, or you know being horrified that people are attacking him. things like that. so i think he attracted enormous amount of attention on social media. some of the others got some stuff in. but in general it was all around trump. >> kara, what are we learning, if anything about engagement in social media around events like this? twitter handles it in a certain way. facebook handles it another way. what have you noticed after the debate is oval, the level and types of engagement on both platforms? >> i think it's just entertainment, honestly. i don't think this is a real debate of the issues when you're talking about idiotic things donald trump says about women and megan kelly, thank god for megan kelly for pointing it out. it's all designed to create not much light, but a lot of noise. and so i think it's not -- i don't know if there's real debate about the issues going on there. i didn't see a lot about the actual issues, it was sniping

back and forth, which is perfect for twitter. facebook was clipped. just like for jon stewart's last show. people are being entertained by these things. i watched most of the debate on facebook or twitter or whatever i could find clips rather than the whole thing. it was kind of interesting. how people pick and chose the stuff they wanted to watch. >> yeah, i said last night, it's the sick burn #sickburnera of american politics. as we look at the mentions, trump with 30% of all mentions, carson second with less than 12. i wonder whether you think mentions at all are a signal of anything. is it just awareness is it popularity? a mix of both? >> i think it's mentions that you say stupid stuff. >> carson saying that he got all the mentions, that hillary clinton wasn't running. what an idiot. you know what i mean? it's just an echo, i don't think, it's not true political debate. it's politics is a circus in a lot of ways whaflt are they going to do with trump? they can't do anything but try

to bring him down. which is what i guess it seems like fox news was trying to do. but it looked like an elf is not such a bad thing on twitter. he did such a fantastic job looking like an oaf. he's getting attention, that's whey craves. i don't know it if i was a gop candidate what i would do. i thought marco rubio seemed very smart. jeb bush was fine, but they didn't get any attention. >> things that nixon and kennedy never had to worry about. >> can you imagine them debating about nixon's -- 5:00 shadow? or it would have been idiotic. >> that's what it would have been. kara, a terrible week for tv. a great week for the future of tv, that's how re/code made the headline as media companies had their worst week in a long time. kafka had a nice piece about what the week means, what the implication is for an apple product late they are year. what's your take? >> i think it's how people are watching television. it's not a question whether people are watching content. some shows have never been more

popular. everybody was engaged in the jon stewart thing last night for example. but everything was online. it was in clips in pieces, it's how millennials and others are watching. even i saw a presentation by steve burke about the watch and how millennials, it was dire, it was very disturbing. where are people watching? they're not doing the traditional espn, that's why disney and time warner got hit. the question is how are people watching, what are they watching and how do you deliver the content? it's not, they're watching content, it's how they're watching content. traditional tv watch something just declining, no other way around it. >> but it occurs to me, remember when we used to talk about user-generated content. it seems like we don't talk about that. the youtube stars, who kind of rose during theouser-generated content era. they've been become stars in their own right. they're not like the rest of us. in that sense that's a win for traditional content creators in a way, isn't it? >> it's a win for content.

really good content. it's not a win at how they watch it you have an entire system set up on selling advertising and on watching traditional linear television. it's very disturbing. if you're trying to do that. and the declines are clear, 8%, 9% a year in any way. but they're not, the stuff people are watching on demand, people are watching in clips, people are watching on amazon, there's so many outlets for people and they're very facile at it and it's not traditional tv watching. it's still tv watching. the question is, who is going to win in this area? who is good at it. who is facile and who can make money at it a lot of these things aren't proven monetization models the way traditional television has been for so many years. espn, which is considered a juggernaut, really disturbed people to see that. and they're part of secular trends. >> i remember asking the head of a big media company a couple of years ago if there was ever going to be, if passive tv viewing as we know it right

where you come home at the end of the day and you just turn on and see what's on. if that is tenable in an era where algorithms are suggesting content for you. do you think that's literally, that's our parents' generation, good-bye? >> i don't think even they way it that way. my watches "orange is the new black," she's 80 years old, but she likes it it's great to be able to watch what you want to watch when you want to watch it and she gets it. it's no not an age thing, it's how people watch. i didn't turn on the tv once to watch the debate. i watched everything on my phone or on the tablet or on the thing. but i still watched. the question is how, how do you monetize that in a way that it used to be monetized? and that's a big question, there's a big industry built around a certain business model that's declining. >> fort's take is that you're going to need fatter pipes, meaning more high-speed connections. there's an element of growth in all of this transition. >> it's not that people don't like to watch.

people always like to watch. it's how they like to watch or how they like to engage. you have this combination of debates to me were perfect. people were engaging with twitter and engaging with facebook. watching it on facebook. you know, i literally know everything about the debate and i didn't turn on, i was watching it from my phone. doesn't mean i wasn't watching. i didn't see one ad when i was doing it that's the question, how do they monetize for a consumer like me, watching that way. >> finally kara, you had an interesting night last night. >> yeah. >> you were painted by an artist. >> yes. >> you want to explain this? >> i was painted on. there's a great l.a. artist, she does these things done at the science museum in san francisco. they were painting me and a guy who is head of innovation at jawbone. what they do is they try to create, try to do kind of a scientific kind of painting. they paint you and put you in a setting, so it looks like it's choosey painting.

the photograph itself and it's pretty wild. it's a pretty wild thing. they had to paint my face and shadows and colors and stuff like that so i bought clothes, they painted on me and it was sort of fun, it was a night for adults at the explore tore yum and all of these science experiments -- explorexplorator. it took a while to get the paint off, it's still in my ears and parts of my face, but totally worth it. i'm an artist iic muse right no what can i say? >> kara, enjoy the weekend, you always make fridays worth it. coming up, john mcafee running into trouble with the law -- again. his exclusive interview with our own jane wells in a moment. but first, rick santelli what are you watching? >> the jobs number. i'm sick of this. you know, goldilocks, goldilocks, 215,000. are you happy with 215,000? not at all. >> we need to root for the bears! not the football bears, but the

bears with regard to little red riding hood and i'll tell you why. whether it's goldilocks or little red riding hood, we want jobs to be hot, hot, hot, not cool, not too hot, not too cold. ♪ ♪ it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank.

jane wells is in l.a. with highlights. >> it happened last weekend near mcafee's home in the small town of lexington, tp tennessee. he said he took xanax for the first time and he was driving with a gun in the car, driving impaired. one british tabloid said mcafee claimed he got into a shoot-out with police, that's not true he was joking, the mr. is agree. mcafee thinks he could be facing felony charges, although he was released on his own recon zans.

why was he taking xanax? he said his wife made him. >> my wife is sort of put out because i've, i'm up and down all night long looking out windows and things, i mean people do think i'm paranoid and perhaps that's a paranoid act. if you believe the stories and believe that the government might still be after me, that's a stressful situation. >> the malesian government might be after him over a murder there. we spoke to him at vegas, he said that cybersecurity industry he pioneered is broken. one solution he says is to have one hacker for every programmer and test each line of code as it's written. not after the whole thing is done. and as for those reports the russians may have hacked an unclassified pentagon email system? >> when the pentagon says, an unclassified system? i can guarantee you that the, ha the classified system has also

been breached. i can guarantee it. this is just the way the world works. >> more on cnbc.com about the arrest, whether he's armed and on xanax now and a joke about a sex tape. guys? >> jane wells, bringing us the best parts of that. thank you so much, jane. let's get to the cme group this morning with rick santelli. >> that's a tough one to follow. you wonder who is crazy when you listen to the excuses how the government gets hacked. let's say this is a baseline. the smartest economists in the world call this just right. yeah. it's just right. 215 k, is goldilocks. it's just right. well, that means i want to be up here where it's hot. you know sometimes we forget -- as we get delved into the economics, the dismal science, the academics, all of it. in the end. we're talking about humans

getting jobs. it's not about oh, it's just right. we want it always to be hot. that's what makes us great. you know, when do we get happy with being average? with being just right? like i said if this is goldilocks, i'm rooting for the bears. now let's get to the marketplace. what do we see today? remember, just because traders are doing something doesn't mean that they have the fed's ambitions and actions correct. it's about capital preservation. so let's go through a couple of things. if you have a yield curve, okay, so you have your 2s, your 5s, your 10s, your 30s. if interest rates on the long end go up more, that becomes a steepening curve. but exactly the opposite is going on. the short rates, like 2s are going up faster. like 5s, are going up faster. so you're getting a flattening yield curve. and the reason that gives you a sense of the federal reserve is because like anything, if i want to reach out and touch you, i

have a chance if you're a couple of feet away. i have no chance if you're a couple of miles away. so the one-year, the two-year they're within grabbing distance. so the gravity of what the federal reserve may do. that's why you're seeing this. there's a good reason. also if you look at fed fund futures, if you look at november and december, their prices are going down. when the prices go down, in essence, the effective t-bill-like yield goes up. and that means that they're also thinking, maybe a tightening is coming closer. but how can i moderate that discussion and put some balance in it? i'll tell you how -- intraday, we've seen two-year notes, the day before yesterday, almost at 76 basis points. today it was flirting with 74. yes, we've snugged up. but in the end, it really hasn't closed above 74. and that in my opinion would be the next round of this race to pay attention to. because that might go from hey, i'm kind of getting out, preserving my capital. to new people coming in saying

there's money to be made because the fed really is going. carl, back to you. >> what a day to parse that issue, rick, thank you so much. rick santelli coming a couple hours after the jobs number. when we come back. uber's top lawyer on a massive case that could decide the future of the sharing economy when "squawk alley" continues. e. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on everything i buy for my studio. ♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? seven out of ten power outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm, they're combining micro weather forecasts

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uber is involved in a massive case in california that could help determine whether drivers end up being classified

as contractors or paid employees. after three hours of argue mgts, no decision was reached. the lawyer representing uber had this to say before yesterday's hearing. >> this case, three individuals want to represent 160,000 individuals who have driven, using the uber app since 2009. what that would mean is they would control the fate of all of those other people who aren't before the court. and we've submitted 400 declarations where drivers say, they don't want to be deemed employees. they don't want this class action to go forward. don't want what's happening in the lawsuit to happen. >> the judge pointed out those 400 declarations equated to a very small portion of the uber driver force and weren't selected scientifically. the next hearing will be november 19th. an issue not just for uber, but for lots of others. ysz. and as the battle for uber

heats up, the legal advice demands are growing for the sharing economy. our next company helps connect consumers with lawyers. joining us is avos ceo and founder mark britain. mark, what is your take on this particular issue and the significance it's going to have for a wide swath of companies, not just on-demand driving service, but also companies delivering food, doing odd jobs, et cetera. >> or even legal services like avo. we have to start with the idea th that? these new type of business models provide tremendous service for the consumer and tremendous flexibility. the flexibility is so key. you know sometimes we call this the sharing economy. or the gig economy, it's because the service provider can plug in or unplug at any time that

they'd like. so while uber and i thought the general counsel said it quite well. they deck tate certain quality control elements of what the service providers do. but it's not same level as employer control. >> so your point is that the service provider. because of the flexibility they're given, doesn't really have a standing to request the kinds of things that a traditional employee would? >> well you have to think about, i mean for the uber driver, i mean they can also at the same time be driving for lyft and delivering for post mates if they're a lawyer, they can be answering questions on avvo while they're doing it. so you know there's this tremendous flexibility. if you think about the employment relationship, you dictate when and how and where your employees do their jobs. how they do their jobs. and that, there's a tremendous high level of control. and when it relates to uber

drivers or in our instance, our avvo adviser product, lawyers answering questions through our product, we don't have that same level of control. yes, we dictate, i mean let's just say for cnbc, if someone, if you had an electrician in here today, that needed to work on some software, whatever it may be, they can't walk in front of this screen. they can't disrupt this broadcast because you have a decorum, you have quality control elements that you enforce. that's all uber is doing. that's all we do at avvo. and by reinforcing that quality control, not employer control. >> so how much do you worry about this becoming a football as we head into a much more heated now, political cycle? is this, do you think this will got distance and become an issue. or is this something that's just filling the time? >> well when thunk about, if you watch the republican debate, we have a lot to talk about in this country. but we're talking about the reason that this is lifting as

an issue, is because the consumer is getting so much benefit. we're changing the ways that whether the consumer, the benefit that they get or the service providers, the flexibility they have in being able to plug in and make money on the side, this is something that our our communities, our economy has never really seen before. so yes, as it rises and becomes more important, yes, let's talk about it i'm thinking we have some other social issues that are possibly more important as well. >> this is a pretty big one. every time i get into an uber or lyft car, i try to talk to the driver about what their experience is generally they want to keep the situation flexible. they're not looking at it as being a long-term situation. they're looking for another career. but what if this becomes dominant? this is a growing area in the economy. don't there need to be some protections, it used to be a great job to be a lawyer. but if you're on call just sort

of minute by minute. instead of on retainer, isn't that a tougher job to have? the key is to cheer it on. because we're delivering so much value, and yes, these things are getting bigger. but in the same way i talk about the contractor coming into cnbc. the only that uber lyft, post mates, avvo, any of us have done is is make the contracts more accessible. you're using them more often. the idea that because we're giving them more business and making them more accessible, then it somehow flips into an employment relationship -- i'm a bit biased, but i'm challenged in that thinking. >> well not the last time we're going to visit this topic. we hope you'll come back, good to see you. >> thanks for having me. when we come back stocks in the red decisively. close to session lows, dow down triple digits, we'll walk through some of the biggest

losers, in just a moment.

can it make a dentist appointment when my teeth are ready? ♪ can it tell the doctor how long you have to wear this thing? ♪ can it tell the flight attendant to please not wake me this time? ♪ the answer is yes, it can. so, the question your customers are really asking is, can your business deliver? right about these levels would be the third-worst close for the dow this year, we're down 114 points as we see virtually every component in the red.

biotech has had a tough week as well. the etf there down. and cable vision down more than 4%, despite an earnings beat and twitter another new low. jon, 27 and change. even as we get word that anthony nodo. one of the few senior execs to be buying shares, did file that he bought shares this week. >> should note that groupon also hitting another 52-week low, down more than 6%, small stock but important to watch a number of them having trouble. >> week to date, the names you would be not be too surprised, green mountain, keurig green mountain, one of the worst performers as a whole. along with the media names, viacom, fox, disca. winners for the week so far, nvidia continues to surprise, netflix even though is down a touch today, exalta, merger

speculation and priceline and clorox, a couple of consumer names that have managed to beat the tape. we'll see, august has not been kind of to stocks, it's shaping up that way. >> especially etsy down 35% this week. >> yeah. one of the worst of the week. anyway have a good weekend. let's get get to helicopters, scott wopner and the half -- headquarters. let's meet the starting lineup. jim lebenthal is here along with stephanie link. josh brown, njohn najarian and strategist richards, and the bear market why some say the chances of that happening is the highest since 2007. calls on kors, one firm says buy, another says sell, which one is right our experts cut through the noise. we begin with stocks. the fed and your money, they jobs report l