good morning. it is 8:00 a.m. at amazon headquarters in seattle, 11:00 a.m. on wall street and "squawk alley" is live. welcome to "squawk alley" for a monday. roger, good morning to you. kay la is live at one market in san francisco. john ford's with me here at post nine with the dow down about 28 points. another high-profile ipo on tap.

ferrari is likely to start trading wednesday. the company would have a valuation of nearly $10 billion. meantime, the broader ipo market still struggling. according to digicel, that's more than any full year since 2012 when 92 were delayed or pulled. i know you're watching this train. you say it speaks to a larger issue at play. >> it does because i think the uncertainty in the marketplace really has a big impact on ipos. because by definition, they're new. so investors have less information. they have less experience with the companies. so you want to see for health of the market the ipo market be cautious. obviously, when they're willing to take anything, that's a sign of a mania. i think this is a very healthy sign about the public market in

general. you can understand why ferrari will do better than albertsons. with all due respect, it's a retread. it's been public and private, public and private. in a very, very tough business that's extremely cyclical. ferrari sells the top of the wealth spectrum. those are the people doing best in this economy. it suggests to me if you were to put a mirror under the nose of the market, there will be plenty of steam on it, which is i think very possible. >> everybody's heard of ferrari ever since grade school when you were playing that mash game about what kind of car you were going to have. there have been others that are not performing as well. box is down. that in the past year has plateaued. what does that signal for the smaller companies that might be wanting to ipo in this environment? >> i think, again, i look at this from the health of the public market.

if i'm a public market investor. i want to see that kind of discipline. i think that the public market does make mistakes. it does take companies and then change its mind. and sometimes it does that erroneously. as it did with facebook. which went down dramatically after its ipo. only to recover and then, you know, be the best performing stock on wall street for the last couple of year. the way i look at this is that this select activity is going to protect investors and therefore i think protect market trends. i view this as a positive for the public market. obvio obviously, it's a negative for the people trying to bring things public but that's not our problem. our problem is what do we do as investors to protect ourselves? if you're sitting there saying to yourself does it make you feel better or worse about the stock market, it makes me feel better about it. >> all right. >> roger, we're also trying to figure out exactly what this means for the health of the private market too. we had gold man sack's co-head

of investment banking who said some companies need the currency of being public and they need to reorganize organither parts of capital structure. should we read from that private capital money is in the process of drawing up? >> i think that's a great question. i think if you will it suggests that all is not well. if you look at the ones from the ibl market, it's really easy to understand why. they're capitalized with debt. generally speaking, market rate debt. which means if the fed raises rates early this year or later next year, that's very, very bad. so i think what goldman sachs says is probably a warning relative to the lbo side of it. on the unicorn and technology side of it, i think the story is really different. and there, there have been people hiding, you know, in plain sight in the private market, you know, with valuations that look like public companies that, in fact, the

public market would not pay. you know, these companies may have great prospects and some of them may turn out to be amazing, amazing success stories and permanent parts of the economy. there was a story in the "financial times" over the weekend from the truly fantastic venture capitalist michael moritz pointing out an awful lot of these unicorns really are not set up for success, and that their -- the valuations you see in the private market probably will not be realizable in the public market, maybe not ever. as i said, if you're a public market investor, and i think most of the people watching this show are far more engaged in the public market than they are in lbos or venture capital, this is a very healthy thing. you don't want to see people, you know, create things that are baloney and then selling them to public investors. >> yeah, fascinating piece, talking about that false sense of security. really quickly, we showed a graphic just to be clear,

ferrari is expected to price tomorrow night and trade on wednesday. let's get to theranos. after the journal last week raised serious doubts. today, there are a couple more pieces casting further doubt on the business model. including one from a former apple executive who has used the product in the past. roger, you think they are related to that whole ipo discussion we just had? >> i do, because the company has had a private market valuation that has been reported as high as $9 billion. and "the wall street journal" article suggests that perhaps the technology doesn't actually work. i have no specific information here. i don't know one way or another. but i think there is a silver lining here. theranos' ceo is a young woman who has had an enormous amount of press. i actually think it represents progress. if this does turn out to not be a real company, it's real

progress we can see women benefit from the silly games men have been playing. i mean that sincerely. i think that, you know, i hope it's real. i would love to see something where you can take one drop of blood and actually do a full analysis on the spectrum. if it turns out not to be, you know, it's just another in a very long list of sad stories of the investment business. you know, buyer beware is a really, really good point. when you see a company with a board of directors that consist of former secretaries of state and former defense secretaries in a medical product that has no relationship to what those people did, you have to scratch your head and go, mm, that's interesting and different. is that good or bad? i don't know. >> trying to figure out -- >> go ahead. >> trying to figure out how to navigate the channels in washington. that's maybe one thing you can

read away from the composition of the board. just for a company that distributes in walgreens that appears to be mass market without giving us much data to work on, should there be a different level of disclosure? everyone is saying we don't know that much about the business. we haven't seen much data in response to "the wall street journal" article. why is that the case? if you are in a company like walgreens, direct to consumer, shouldn't we know more? >> here's the way i look at it. which is this company in many ways constructed a business model designed to fluster the regulatory process. that in a way it's like uber. in that there was a regulatory process which assumed companies would be organized a certain way. they would sell equipment directly to service providers or directly to customers. and in this case, theranos decided to operate its own system. as a consequence, found itself in a gap in the regulations.

they've exploited that very effectively. uber did the same thing and produced an extraordinary business. it may be theranos is going to do the same thing. but the regulatory framework does not have the right setup to monitor what the company is doing now. that may turn out well or it may turn out badly. it reminds us there are really important regulations that exist out there. the government does play a really important role in protecting consumers. and in this particular case, they've slid through the cracks and we'll see whether that produces a good or bad outcome. it's no guarantee it produces a bad one. >> i think the same thing is true of daily fantasy. you've got these innovations. it's very hard for regulations to keep up with the pace of tech. finally, roger, amazon is suing more than 1,100 people it claims are publishing false, misleading and inauthentic reviews on its website. back in april they went after a group of websites who sold fake

reviews. this appears to be an extension of that. amazon telling us it cannot comment on active litigation but, man, did this get some play last week, roger, going -- big morning show, big broad national story. >> i think it's really important. i mean, trust is one of the things i think is breaking down in our whole society today. and, you know, there have been so many bad actors out there. i'm really glad to see amazon coming down hard on this stuff. it's, you know, when you're a global marketplace, as amazon is, trust is absolutely essential. and there are clearly people gaming the system. it's really good amazon is not only taking this seriously but bringing a hammer down on them. and i just hope they keep at this and, you know, root out all of the various games being played on consumers. again, to kale la's point a moment ago, this is about trust. and you'd love to see each vendor do it for him or herself.

when they don't, you're going to need regulators to do it. >> i think we're seeing this interesting trend right now that i would call anti-social. it's in fake amazon reviewings. it's in bad yelp reviews that really aren't about the quality of the food in the place. it's in online comments which are falling out of favor. it's in twitter controls who are making the service inhabitable for -- >> blocking tools -- >> yes, companies that have the best technology are able to rise above that and create environments that are healthy and social, but i think we're seeing some others that are not able to do that and they're really suffering the consequences. >> that is such a great point. you see this in all spheres of society. we had a couple of presidential debates in one of the parties that were simply that exact issue, running amok. and it's occurring everywhere in society today. i think it's beautiful, that companies like amazon are stepping up and going, wait a minute, we're going to take

responsibility in our own space. i think we've seen apple do the same. i'm sure that's true in parts of the economy i don't pay attention to, that there are others doing the same thing. i think it's really, really important at this moment in time to do so visibly and say this is not acceptable. >> roger, always good to get your point of view. we covered a lot of ground today. roger joining us there from out west. we'll check in with kayla in a little bit. dow's down 35 points. morgan stanley getting hit today after profit and revenue missed estimates. the company says volatile world markets did lead to a cutback on trading. shares of weight watchers surging after oprah winfrey takes a 10% stake. that's a 75% gain there on wtw. more trouble on yahoo!. another top executive leaving the company, this time for square. a big week for tech earnings. amazon, google alphabet. what should we expect? and very few things can get a legion of "star wars" fans to

tune in to "monday night football." disney has probably found the answer. we'll talk about that. here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year.

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tech earnings are taking center stage this week. ebay, amazon and alphabet, google's parent company, all set to report quarterly results. so what can investors expect? let's bring in colin sebastian, senior internet analyst at robert w. baird would joins us here at one market.

colin, first, we're going to have to get used to calling google alphabet. that's hard in and of itself. what are you watching for specifically with regard to the growth internet space? >> yeah, really, we expect more of the same. a high level. each of these companies has strong secular growth drivers whether it's in retail or media advertising and enterprise technology. but more specifically around the short term, certainly the holiday period, q4 is the big seasonal ramp for all these companies. they'll look for commentary around the state of the consumer around the holiday spending. >> we'll gotten so much news from these companies in the weeks and months leading up to these reports this week. we know roughly what google's structure will look like going forward. we have information about what amazon web services will look like. how much of that is baked into the stock performance after each one of these companies trades? >> well i think to some extent there's a better understanding

on street about how large amazon web services can be. each quarter that goes by, i think we all reset our expectations higher. as there's still meaningful growth there. significantly large market. for google, we still await the specific disclosures. however, i think what we'll end up concluding is that desk top search is not as large for google in terms of revenues as is likely embedded in the stock. so we do see upside potential left in google from those disclosures. >> google seems to be the top pick across the street but there is question over how much core search can still carry for the rest of the business. especially now that it's expected to write the checks for some of these cash burning moon shot-type businesses. to you think we're going to get surprised there? >> i think there's a high level of spending for the moon shot businesses. i do think we're going to get a lot of clarity on the revenue diversificatio diversification. the reality is with the disclosure the company alphabet

will be able to hold accountable the speck thattive parts of the business, more than they ever have in the past, and that's a positive. >> i'm wondering about the role of two particular things in this tech earnings season. one is top line growth given that we're before the holiday season quarter which tends to be the more important. but are people going to be watching that year over year number because of concerns about growth? and then currency. are we at the point where people have adequately factored in the impact of currency or is that going to be a wild card too? >> well, i think for the most part currency is less of a head wind and so that's a positive. we can see the results more on an organic basis without the impact of currency. in term also of overall year over year comparisons, if we look at e-commerce, if we look at social media, online advertising, we're seeing very healthy rates of growth in spite of some lingering issues within the core consumer market. so traditional retail versus e-commerce for example.

there's volatility around quarterly earnings. in general, use that as buying opportunities for those stocks. >> what about ebay in particular? you mentioned the consumer. ebay had some industry reports out that same-store sales may have been slowing going into the fall. are we going to see a troubled ebay when it reports? >> we've seen that data as well. i think towards the end of the third quarter, they may have weakened a bit. i may qualify my comment around all the big tech consumer companies. i think ebay still has an opportunity as a value stock for investors. i think near term, business fundamentals are still seeing a bit of a head wind in terms of growth and especially relative to their competitors. so ebay likely is going to not look as good as its other large cap competitors. >> how should we be reading the executive departures at yahoo!? on one hand you could say there's about to be a

transformation for this company if in fact the alibaba spin goes forward, goes through. on the other hand, you could say maybe they're losing faith in the core business going forward. what is it? >> i think there's always temptation in the valley to pursue some of the more interesting prese-ipo companies. i think yahoo! has probably suffered more than any other company from that. any other large company. and so it's not a surprise on the surface. whether it points to some incremental challenges at yahoo!, i don't have the answer to that. but yahoo! you know, certainly the case is still left to explore where they will fit. >> colin, it was big news when amazon took over walmart in terms of market cap. now it's got a 41% lead on walmart's market cap. i just wonder at some point is there a point at which amazon does not deserve that premium? >> i think we can justify the

premium not only because of where amazon sits in retail. there's still 20% the size of walmart. which tells you there's a massive precedent for ongoing growth in retail. even an enterprise technology with web services. this is a $300 million marketing opportunity for amazon. that's certainly part of the depreciation for amazon. then you have media, certainly other markets that are still left for disruption. we still like the stock on a longtime basis. >> would you buy amazon? >> yeah, we like owning a basket of these stocks. facebook, google and amazon in particular. the core and underlying trends are still very positive. and despite the quarterly volatility, we think owning all three is a good position heading into the next year. >> colin, thanks for giving us some perspective. john, over to you. up next, a long time ago in a galaxy far far away, actually

a little bit closer than you think. more on that in just a moment.

welcome back. it is a big night for star wars fans. disney is expected to unveil the official trailer for "star wars" the force awakens. this is bigger than the night before comic con. that's tonight during monday night football on espn. remember, disney released a short trailer, kind of the teaser, earlier this year, added about $2 billion in stock values just that day. disney also unveiled the official poster for the new film. preorders for opening day tickets also expected to go on sale tonight after the trailer airs. carl, why is luke skywalker not on this poster? >> i'm looking at a tweet this very second that asks that question. where's luke? >> i mean, did something happen to luke? and why does kayla keep teasing us? it's a long flight, i think i might have time to watch the

"star wars" movies. >> i was going to ask who is luke. >> actually, claire danes, of "homeland" was interviewed in "the times" over the weekend and in the q & a as an aside mentioned she's never seen "star wars" so i thought of kayla in that very moment. >> you're in good company. >> that's kind of become this hipster thing to say. i've never seen "star wars." like that makes you special somehow. i think you ought to see it. >> disney's nowhere near the 121 it was at prior to those concerns about espn starting to work their way to the fold. >> relatively mixed performance from europe as you can see. main focus will be the european central bank meeting on thursday. a hint of qe but not enough to move the market. where, you may ask, are they meeting. they're meeting in malta, which is down here. that will be another island that makes news during the course the

week. remember last week we had a senior member of the central bank talking up the possibility of qe? he's been walking that back steadily through a number of interviews suggesting it's too early to determine what the long-term trends are notably of course on inflation. as far as today's market action is concerned, the effect of the china data on metal prices. already the fall in metal prices. one of the top gainers is deutsche bank of course with its huge restructuring coming through the investment bank there splitting in two. a lot of staff going. i just wanted to demonstrate to you the pain that shareholders are feeling in deutsche bank compared to, for example, goldman sachs or morgan stanley. the spread between those is absolutely immense. as finally they bring the changes there. another top gainer today. frankfurt is outperforming. amongst those reporting earnings is metro, which earns about 140 department stores across germany and, indeed, elsewhere.

they say they're positive on what can happen through the christmas season. that's lifted their stock as you can see. one more in london. they're painting the town red or sort of that kind of thing. waiting of course for the chinese premier to arrive tonight. the uk absolutely -- look at thatp red flags. absolutely laying everything out for the chinese premier. trying to increase britain's business with china. he's even going to stay at buckingham palace with the queen. which i can't remember ever happening. in addition to addressing both houses of parliament. you could argue the uk is behind its competitors in doing deals with china. of course that's not what the british prime minister would have you believe. david cameron talking about a golden era of cooperation. which seems to mean a power plant in the uk and some deals with bp in iraq. >> talk about the world tour. guy's been everywhere. >> saving the best for last. >> no idea. >> people want him. >> yes. when we come back, another top executive jumping ship over at

yahoo! raising doubts about marissa mear going forward. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor.

good morning, everyone. here is your cnbc news update. a u.s. appeals court is upholding key parts of two gun control laws in new york and connecticut. the bans were put in place

following the 2012 mass shooting at sandy hook elementary school. vice president joe biden may finally put the presidential rumors to rest. sources tell nbc news biden could announce within the next 48 hours if he will run in 2016. big ben needs some big repairs. the famous clock could go silent if nearly $45 million worth of work is not done and soon. the long list of problems include masonry cracks and the clock's mechanism itself. a new study says no amount of alcohol is safe during pregnancy. the american academy of pediatrics says alcohol is the leading preventable cause of birth defects. that's your cnbc news update this hour. back to squawk alley and you, john. >> thank you very much, sue. let's check in quickly with kayla, i believe. do you have an update for us? >> we're going to be talking

about the top yahoo! executive who was formerly heading the companies effort. she was leading the process to spin off their massive stake in alibaba. we have news this morning she will leave to go to square to run square capital. i did some reporting this morning. she will actually be on the leadership anytimy at the company. she will be closely working with jack dorsey, with the company's cfo. sarah fryer formerly of goldman sachs. this is a very well-known private equity maven even before her time at yahoo!. she is very skilled with a balance sheet. she is very well known on wall street as well as here in the valley. i've actually learned her first day at square is today. her last day at yahoo! was friday. she's wasting no time getting started. it will be interesting to have yet another veteran financial executive at a company where, john, you know, we've been talking about how it needs to

double down its ranks to get more executive experience, especially as it plans to go public. >> now so does yahoo!. yahoo! needs a deeper executive bench. let's bring daily mail north american ceo john steinberg into the conversation. john, we've been talking about yahoo! for a long time here. marissa mayer has taken hits for seeming to be not that interested in the advertising side of the business, for being very interested in product. now she seems to be losing a lot of top executives at the company. i mean, is she basically out of time now? >> i worked with her in 2001. i did a start-up at a holding company she was part of. she's absolutely excellent. she's very highly regarded. a huge loss for yahoo!. a massive win for square. there's no turnaround at yahoo!. there's no turnaround. the information, the very good article, as quickly as unicorns rise, they can fall. mahany has a piece out, display

revenue. there's no turnaround. yes, i think she's out of time. >> an ongoing tally of all the talent left in the past few months. i think up to 12 or 13. which strikes me because part of their early push in marketing was how much retention they were -- how many advances they were making on retention. >> but the product is what the product will be. it really isn't fair to just criticize marissa about this exclusively. ultimately, they're not going to stumble into inventing snap chat. because the product is what the product was when she took over 3 1/2 years ago. she can't make an amazing product that's going to attract people. >> nobody says steve jobs couldn't take apple and create an iphone and turn that company around. he was the driving force behind that turnaround. it is the shining poster child of turnarounds. >> it's the only turnaround. it's basically the only turnaround. anyone can ever point to. she basically joined a company with a lot of traffic with a

decaying product that wasn't innovating. luckily, she stumbleled into alibaba. i think there's value in yahoo!. there's private equity chop-up value in yahoo!. they've got finance, they've got sports. everything else should be sold off i think at this point. >> i don't want to compare it to walmart but there's another behemoth that's been around for a long time that needs to make massive change to fend off disrupters. similarities there? >> i think there are similarities. >> also, it would take a very long time to render them completely obsolete. >> it is the innovator's dilemma. when you've got a giant revenue stream that indicated you got a steward and you got to invent something. it's much better when you've got no pressure on your back, no revenue, to just invent something. that's why pinterest was able to invent pinterest. no pressure of turning around a giant ship when they did those things. >> what does it say when jackie is leaving the shop to join half a ceo with jack dorsey at square

who's also splitting the job with twitter of course? >> i think one of the big questions going forward is whether jackie reses is taking the job as head of square capital or contender to take over as ceo. no answers on day one for her at square. certainly that's something that people on wall street are going to be talking about, measuring as the company goes public. i know that jackie and other people who have worked for marissa have a ton of respect for her. when you think about the larger lexicon of companies in silicon valley, there hasn't been a successful turnaround. that was the stake when marissa joined yahoo! years ago. how possible with any executive to turn around a company that's been left in the dust. that seems like that's the story that we might remember about this company. >> i will tell you her role. she is the ultimate flex player. at yahoo!, she was head of hr

but did the m & a deals, did all the reconfiguration. she's number two. she's the operator. i think you don't need to worry so much about what exactly they classify her as on paper. >> one of your favorite toys, droen drones. the federal agency wants to soon require owners to register their devices in hopes to finalize rules before christmas. now, we know you've had your share of adventures with drones. family members, close calls. is this a good thing? >> it is a good thing. on the show i've commented i'm not so worried about amazon operating them as i am about individuals. you're constantly hearing about near misses, crashing into streets. it's very dangerous. i think the idea of people registering drones is a good idea. i don't know what will happen once you register your drone, how they'll keep track of them. the individuals are the danger point here. >> i assume -- so you believe this will be a commercial -- largely a commercial tool? >> yes.

largely an amateur -- largely an amateur regulation. pho the question is will the mini-drones -- remember, the two big companies in this space to watch are dji and parrot. parrot is public, it's traded in france. dji is prepublic, it's a unic n unicorn. will have a restraint effect i think on how quickly these businesses fail. >> that makes me think of the go pro, below 30 once betweagain t. a name that could use another product. >> the other product is 360 degree cameras and drones. if you've got to put your name on some list and go through a government process to get a drone, it's going to be a lot fewer people. also, how do you buy a drone for someone as a gift? when you open it out of the box, do you have to go and register? how do they even put this into practice? it's baffling. >> harder to buy a drone than a gun. >> i didn't want to say it. people have made that comment on

twitter, yes. >> clearly drones are more dangerous. anyway. john steinberg. thanks. when we come back, plenty of drama for draft kings as the daily fantasy sports website continues to defy the state of nevada. we've got the latest on that. first, rick santelli what are you watching? >> well, watching a lot of deflated faces here in chicago after a rotten sports weekend. but not so rotten necessarily for china. 6.9% of a larger economy still isn't a bad thing, is it? tune in after the break and we'll discuss it.

coming up on the halftime show, with a third of the s&p set to report this week, we're trading the names set to mean the most to your money. the analyst who says he's found the next great big cap juggernaut. we'll have that reveal. and can ferrari rev up your portfolio? we'll see you in about 15. >> draft kings defying nevada regulators by continuing to operate in that state. the daily fantasy sports company is valued at more than $1 billion. still accepting entries into its contests even after the nevada gaming control board told draft kings to quit operating maidly. nevada wants daily fantasy sports to be considered gambling and not a game of skill. these states coming fast and furious. >> trying the uber strategy of

ram it through. >> maybe they've collected enough money to fight it in court. in the meantime, let's check in with rick santelli. >> the fantasy game issues, i'm sorry, i have to jump in, just helps me think about what's going on in illinois. if you win the lotto in illinois, they haven't paid out the 25 grand or larger winners since may. because they have no budget. and that's just part of how the whole thing has been put together. they still sell tickets. they still run commercials. i'm sorry, but somehow i can't help thinking about those two issues and look at private sector versus the public and think how much difference is there really. well, let's get back to the markets. a lot of hoopla. well deserved. with regard to paying close attention over the weekend to china's gdp growth. i've always been of the notion that data in china is probably suspect. so you probably pay attention to

general trends. but in the end, i'd feel pretty confident that it's going to be a very long process of deterioration. can't imagine the powers that be in china, should things be deteriorating at a faster pace than wear're aware of. two things jump to mind. if you're part of a doomsday trade. whether it's what will happen to the chinese economy. one of the main issues is what motivates investors to allow the doomsday scenario to play out. and the answer is zero. investors are not going to be complicit in pushing that trade to its eventual end. there's going to be inertia. always going to be an interpretation on the part of

investors on some level with the global fundamentals to look at everything half full. i think that argument really plays into so many different sectors. whether it's stocks. we've all been in discussions, including myself, as to how -- what's the potential downside for u.s. equities? well, keep in mind, there still is really no other place. if you look at two-day charmts, trying to handicap what the markets think of the gdp, the crb's down. not a lot. and the dollar's up, as one would suspect. that's probably a back into the parking spot because the dollar index based on trader's perceptions of the other charts i've pointed out are inclined to go long. maybe the best chart to pay attention to is the august chart of the shanghai deposit. certainly doesn't look like a market very nervous now. if you're looking for a good buy in china, it might take a long

time for that good buy because of the good buy to some of the best fundamentals. i think in that, lies the notion that we have a long time line for activity that may be middling but invest aers money still needs a home. >> we're going to talk security, the old-fashioned kind. keeping the home of the future as safe as it can be. we'll talk to the smart phone company trying to upgrade your front door. when a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. thankfully, mary miller banks with chase for business. and with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. chase for business. so you can own it.

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smart lock maker august releasing several new products alongside the second generation of its flagship product the august lock. the august smart keypad and doorbell cam have been added to the family along with august access allowing partners such as ship, post mates and sears to access august owner's homes to drop off deliveries. joining us now is jason johnson, the ceo and co-founder of august, alongside co-founder eve bahar, behind such things as glow box and slish hash. since you are the product brain

behind this, let me just ask you, how different is this second generation of the august lock now that we have home kit, we have a broad com chip. does it feel different than the first one? >> our second generation products is really an expansion of what we did. we started with a smart lock. and now we're moving into the outside of your home. the smart lock is on the inside. and our doorbell, our doorbell camera and keypad are on the outside of your home. and we designed them to be very low profile, you know, compared to installing a camera which is expensive and unsightly, you know, on the outside of your home. this is sort of discrete, low profile. we think people are going to love the way it looks. >> jason, are the doorbell camera and the keypad, are these accessories to having a lock or do you see those selling as stand-alone products? >> the doorbell camera definitely works by itself. you can see and speak to visitors at your door. you can choose to then let them

in remotely. so there really are two separate products. the keypad is an accessory to the smart lock. if you don't have a smart phone and your battery is dead, you can use the keypad. >> visitors let in remotely. sears are some of the partners for this. on what planet do people want to let strangers into their home while they're not there? >> possibly the planet that five years ago, if i asked you to let somebody pick you up in their personal car and drive you to the airport, you'd be like, i'd never do that. today you do. you trust the secure system to build that relationship. the august access system has the access controls to give that comfort, to give that information about who is that delivery person, when are they arriving, how long are they there, when are they leaving? if you have a doorbell cam, you can see them coming and going. >> who has the liability in the situation like that? is it the vendor, ship, post mates, is it august, is it the homeowner? >> it's a combination.

each, you know, both august and service providers, we have an obligation to perform what we are delivering with our service. and together we have to make sure we take the right, you know, the right processes to deliver a secure experience. using vetted employees. using, you know, the identity elements you can use. just as you do with the transportation services or the vacation rental services. >> i'm interested in your take on the development of the smart home trend. i think when google bought nest, a lot of people, myself included, expected this to take off more quickly than it has. have there been mistakes that some other companies have made in how they have attacked this market? and do you think you're taking a unique approach with these products? >> i definitely think we're taking a unique approach with these products. you know, the thing i would add to the conversation is that you see who is at your door. you have sort of full visibility on who is, you know, who is

coming and going from your home. and, you know, the fact i can answer my doorbell from work and i can say, hey, this is a delivery person, i know this delivery person, let me unlock the door for you, put a package behind my door and go. this is the kind of practicality to the smart home. which is very different from the sort of neato, you know, tech devices that we've seen coming into the home. this is every day use for every day people who, you know, just simply want to do more. they want to be able to have control. and have sort of full -- give full access, you know, to all these new services and these new companies that are coming on. >> but have there been mistakes up to this point? we saw home kit, and i home software rolled out earlier this year. i expected to see more product that people would latch on to faster. why hasn't that happened?

>> well, i think like in any -- in any new field, it takes a little time for first, you know, the right products to come to market, the right integration between products. i think a lot of products are stand-alone. and their use is not something that really want to have on an ongoing basis. i think the difference between successful companies going into the home or not is twofold. one, you know, they need to design something that is very easy to use and not everyone in the home wants to use. not just a techie person who installed it. >> right, but now we have more products out in the market. we have consumer whols are becoming more educated. getting more divorces to work with some of these products. jason what do you think it is? house hold creation? is it slowing? what sort of economic wins would help the smart home trend get a second leg her? >> definitely those products

saving people money. the thermostat has been a great device. those that are saving people time. having to drive home and let in a repair person, right, from like a sears home services. who has time to do that? we are busy people been we have so many things juggling. all these great new on demand services. new things like post mates. you want to get something delivered for the dinner party you're hosting tonight. those things can really save you time. >> you guys are busy people too so we appreciate you coming here. thank you so much. >> when we come back, chinese smart phonemaker making a big move into transportation. we'll show you the latest product in just a moment.

the chinese smart phonemaker just launched a hover board of sorts called the 9 bot mini. take part in an investment in scooter company 9 bot last april which acquired its american rival segway shortly there after. self-balancing scooter features a knee high handle for steering. the scooter can travel about ten miles an hour at peak speed. where's steinberg when you need him? >> i don't think you'll be bending down to steer with that

thing though. that must just be a handle. otherwise the wipeouts would be classic. >> bring it on set. ride around the trading floor. >> i'll do almost anything on tv. >> that does it for us here. dow's down about 12 points. let's get over to headquarters, sco scott wapner and the half. >> all right, welcome to the halftime show. pete here along with josh brown, joe terra nova and mr. steven weis. the markets reacting ton those softening china gdp numbers. some numbers from morgan stanley that were a miss. let's talk about that right now. josh brown, so what's your take? we got the softening china gdp numbers. market doesn't seem to be reacting to quite heavily. morgan stanley was a miss though. you also have some pretty good analyst notes out today that are moving some stocks around. >> i'll give you the sunny side