good morning. squawk alley is live. ♪ good tuesday morning. welcome to squawk alley. kayla is out today. we're joined by recode's managing editor. it's good to have you back. stocks selling off after five days to the upside. session lows right now. dow is down about 137 and the

s&p losing about 20 points back to 1981. first up today volters heading to the polls in mitch, mississippi, hawaii and idaho today. john harang gewood is in washin tonight. >> we have four states voting today. we have michigan which is the big one. mississippi in the south. idaho and hawaii. that will come in very late and we have both front runners in this case hoping to preserve their momentum. the other alternatives trying to do something to interrupt it. if they don't donald trump and hillary clinton will be the nominees. first of all let's look at our survey monkey poll nationally. hillary clinton expanded her lead into double digits. she is favored by a large margin in the state of michigan and mississippi. she is doing extremely well in southern states with african american voters. on the republican side you have donald trump in double digits over ted cruz, marco rubio and

john kasich and these numbers, 39 and 20 reflect what we're seeing in the state of michigan. now john kasich is hoping to come up late and both of the other candidates are hoping that trump's margin comes down to the point that they can build momentum heading into next week on march 15th when we shift a winner take all contest. ohio where john kasich wants to compete and florida where marco rubio vows to compete. we'll have to see if anybody get ace bump in the road tonight. early signs are they're not likely to get one. >> we'll see what the results are. interesting night ahead of us. thanks for that. it does bring us to the intersection of politics and technology. some of the biggest names in tech are getting involved in the 2016 election. according to the huffington post, tim cook, elon musk, sean parker all attended a forum

trying to figure out how to stop donald trump. also mitch mcconnell. house speaker paul ryan and the list goes on. bill crystal who lead this charge over at the national review but this is speaking to where tech is right now? >> i got to actually pour cold water on part of this. trying to do some leg work on this this morning. talked to someone familiar with this meeting. it's tricky because the american enterprise institute plemeeting supposed to be off the record. but i'm hearing that tim cook was not part of any specific conversation about donald trump at this meeting. there's a lot swirling around because of this report but tim cook i'm hearing is not part of any discussion about donald trump. that's important because of course donald trump had said some things specifically about apple and the iphone encryption case. of course this is politically sensitive. trump had called for a ban on

apple's products but i'm hearing that tim cook was not part of the discussion. >> the washington post puts a story on the front page about tim cook's activism going back to his hometown and trying to find the roots of it. >> it does raise a question, trump is a front runner so far and people are now looking at well what would happen if he really were president and if you look at the tech sector, trump's policies both stated and implied around tech are still fuzzy. we're not sure where he stands other than he doesn't like that apple or any other company making it outside of u.s. boarders. if you don't make it in america you can't sell it in america or we're going to tax you that much more. fine but american workers get paid more. it's going to cost more then or if they're made overseas you're going to tax them more. i don't know if that makes economic sense necessarily. >> trump has taken steps in recent weeks to modify his

immigration views to something that would be more palatable to the valley. has that not had any effect? >> i think a lot of people in the valley, all of these names that we're talking about are very skeptical of a trump presidency in terms of what it would mean and it allows sort of more skilled labor to come into the u.s. and a lot of tech companies use it. it can and has been abused but i don't think that it's a catch all that everyone using it is somehow abusing it. people are still unclear what it would mean. it's as much a big question mark with tech companies. what he would do and how he could make it more difficult for them to do their business. >> trump is speaking to a big part of the country. i think you could draw big broad brush strokes. they're not in tech. is that fair to say? >> and if anything, a lot of u.s. trade policies tend to favor, right now, intellectual property, right?

getting those things and selling them to other countries and making it easier to sell manufactured goods to us. his policies, trump is talk more about the low skilled wage labor type jobs. he is speaking to that base. his trade ideas look more toward the industrial idea versus the information idea. >> which is the whole path to states like wisconsin and we'll see about michigan tonight. that's going to be a big tell if that audience is truly reseptember tif. >> but that's not the direction the country is headed in. we have been trying to transform from an industrialized base to information and high skilled labor base and i think that hasn't been fully figured out but that's something that our politicians need to really address and bring forward and i haven't seen anything from trump's side speaking to that matter. >> yeah. also speaking of apple at least co-founder echoing apple's arguments at last week's congressional hearing. this is what he said on conan last night. >> once you create it hackers

will get into it and what if china says apple you have to give us a back door so we can get into any phone, even your government officials iphones and inspect them any time. that's wrong. security is an important thing. millions of people's accounts get exposed every day. >> so we have craig writing op-eds and general counsel going to the hill and now veterans of the company on late night talk. >> he is a little bit of a loose cannon. he's by no means part of apple's messaging machine. he goes off the reservation but he makes of course an interesting point that many others have made that if you break encryption and it gets out there and china demands something similar for their citizens then you end up with the u.s. government of course using plenty of encryption for government officials for their own purposes but rank and file citizens like you and me exposed and is that really the even actuality that we want to end up with.

>> and i think the other thing it exposes is from the government side is that they're trying to own this precedent, right? they have been able to access stuff in the past. they have asked apple and other companies we need access to this particular phone. why they're trying to make such a public display out of this one is still a mystery. they're losing the public relations battle on that front. what woz has been talking about and a lot of people in the valley is its not just unlocking one phone. it's not just one criminal's phone. you make us do this it compromises the entire system. that's sort of the benefit and hurdle of technology. once you do it one way it effects everything at once. >> which is why i thought it was curious that he criticized the specific case. said they picked a lame case and he believes there's little to no information on this phone. that's not the point. >> i think they picked a great case. everybody knows this guy was a terrorist. everybody knows that he killed people. so in that sense the initial outrage about apple not doing

everything it could played into the governments hands. i'm not sure that they're losing the pr battle. apple is doing a good job trying to get ahead of this one. the question is how skilled are they going to be in attacking and lobbying in essence congress to make the kind of law on encryption that's going to benefit apple and the rest of the tech industry going forward. what happen with the supreme court if this ends up there? >> and as we talked about on the show before is that apple traditionally hasn't been great in d.c. they haven't had like a big presence in dc. either a lobbying presence or working with legislators. this is one of the things where the law hasn't kept up with the tech and it's as much on silicon valley to sort of figure it out with government as it is for government to come up with good solutions. >> do you know what we haven't talked about in awhile? unit sales. margins. this has totally blanketed any discussions. we're in a cycle where it's not

news every day but isn't that striking though? we don't talk about their business so much as we do their legal proceedings. >> we're in one of the periods where we know the iphone is going to be flat to negative. most likely negative and we're looking forward to the iphone 7. i bet you we're talking about that a lot more come summertime. >> now is not the time for the numbers. >> my mistake. >> we better wait for the 7 to come out before we get to that point. >> thanks for coming. >> of course. >> we do want to check on the markets. right now trading down the dow is down about .6%. the s&p down slightly more around 16 points to 1985 and we have the nasdaq down about the same amount. slightly less. about 33 or 34 points. meanwhile shares of shake shack falling after same store sales guidance came in below estimates. however earns and revenue did top expectations. >> when we come back, more growth fears over the second

largest economy in the world. one of the top china experts in the business on what you need to know plus a major slow down in vc investment could mean big trouble for a lot of companies looking to go public. we'll tell you who stands to benefit and dangers to the world economy continue to rise at least according to the deputy managing director. he's with us to explain in a cnbc exclusive in a molt. out on the town or in for the night, at&t helps keep everyone connected. right now at at&t, buy one get one free on our most popular smartphones. no matter how you hang out, share every minute of it. buy one get one free on our most popular smartphones. and right now, get up to $650 in credits per line to help you switch to at&t. i have an orc-o-gram we for an "owen."e. that's me. ♪ you should hire stacy drew. ♪

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just how long can we expect growth for the world's second largest economy to continue. joining us from london, the managing director and vice chairman of asia pacific at jp morgan chase. thank you for joining us. >> thank you for having me. >> so about the health of the chinese economy, it was interesting to me real estate was also down in the most recent trade and i believe we have had a prominent mayor warning about increased leverage, about reduced down payments. is the overall economy even at the consumer market shaky? is that reflected in some of what we're seeing even in real estate. >> there's the property market as an example. they're booming in beijing, shanghai, shenzen but in lower

tier cities there's a lot of oversupply so there's a lot of leverage in the system. gdp has been growing but debt has been rising at a faster pace. you also mentioned the trade picture. today the export numbers were quite disappointing. however we'll have to remember there are some seasonal factors. the month of february was very short because of chinese new year. the market was shut for the entire week during chinese new year so if you smooth out the seasonal factors i think going into marchand april the data should look a little bit better given that china's leadership just announced a lot of policies to boost the economy. >> speaking of which, going into the weekend, a lot of people said maybe one day they'll get off of this obsession with the gdp target. it's more of a political tool than an economic tool is going to arrange a sign that that will take on less of this overdose of importance? >> well, you know, there's less obsession now with the actual

growth rate. i think there's more emphasis now placed on the quality of growth. so they're going to arrange, as you said, from 6.5% to 7% during the five year plan which begins this year. so i think that going forward there will be a lot more emphasis on where the growth is coming from. is it from the service industry? is it from private consumption? i think people need to differentiate between the various sectors in the chinese economy rather than just focussing on the one number. the headline gdp figure. >> what do you expect the impact of all the turbulence to be on the entrepreneurial mind set in the cities in china. we have seen companies that are growing quickly. we have seen the rise, especially in tech of this entrepreneurialism in software and in entertainment and gaming. is that taking a hit at all as we hear that it might be in silicon valley with this turbulence? >> well, actually,

entrepreneurship in china is alive and well. lots of companies being created every day. especially in sectors such aztec nolg, the internet, entertainment because there's a huge market for it. and during the mpc which is on going now in china the premiere announced a lot of tax cuts for small and medium sized enterprises. for the past many years we had liquidity for the large state owned companies but not a lot of credit for the small microcompanies so in the future hopefully the environment will be much more conducive for entrepreneurs to serve communities, to serve citizens in china that are really experiencing rising wealth. they're demanding a lot more. they want more technology. they want more consumer products. they want more games to play on their hand held devices. they want more travel so those are the bright areas. basically the service economy and entrepreneurs that serve the

middle class. >> finally, you do say that their stance on physical policy is proactive. you're looking for more reserve requirement cuts throughout the year. how worried are you about the lay offs in the steel and mining industries. the numbers are staggering for someone in the states. what does it mean for a country the size of china. >> you're right. in terms of the physical policy they have increased the physical deficit from 2.3% last year to 3% this year. some of that money actually will be going toward social welfare provision. helping laid off people find new jobs. but if you think about the size of the redundancies, in fact, it's not very large. they're talking about 500,000 lay offs. but remember back in 1999 when he was in charge he laid off 30 million people from the state owned enterprises so this time around i think the leadership is going to carrie out reforms at a much more steady and slow pace

because they don't want social instability. they don't want too many people on the streets all at the same time. there will be a lot of job retraining. there will be a lot of social welfare provision so i think that number one priority as we all must know is social stability in china. >> all right. wow, that's putting it into context. 30 million. thank you so much for joining us from jp morgan. >> thank you. >> up next, a cnbc exclusive on the health of the global economy. the deputy managing director of the imf is going to join steve live when we come back. you don't want to miss it.

thank you very much. thanks for joining us this morning. >> how are you? >> you had very strong words in

your speech and a strong warning about the global economy. i want to know how far you go here. are you warning that there's a potential global recession that we're on the doorstep of? >> i don't think so. we still see growth recovery happening around the world but with a weak baseline and i think and the reason i am calling for action is that with the risks near at hand it seems like a good time to try to strengthen prospects for growth and diminish the vulnerabilities to risk right now. >> we had it from january and showed a down fwrad from october. are you suggesting the next time that the imf guy come backs to this in a month or so that there will be another downgrade of the global economy.

but right now we're sticking to our baseline. >> is in your comments also that the imf was not satisfied with the g-20: that global central banks and authorities are not working together enough to combat the risks. >> this was a meeting in shanghai. quite a successful meeting that everyone recognized and i think agreed with our assessment about where things stand. europe and japan go further into negative territory do.l the central banks, the major central banks need to be coordinating policy. >> the bigger picture for me is a three pronged approach. you do need monetary policy to hold up inflation expectations and keep the economy on an evil

keel but to avoid that monetary policy being zero sum, simply diverting demand away from others and not contributing to global growth and that can happen through making physical policy more growth friendly and emphasizing the kind of spending that would contribute to growth or where there's physical space actually making the posture stronger and countries around the world are seeing declining prospects and it's important to see structural reforms that will be helping in the medium run but to taylor those so they're not adverse to the short run as well. >> a lot of u. s. presidential candidates have been out there emphasizing the down side of free trade. the lost jobs, the lost wealth

here in the united states. the imf has always stood strongly for free trade. do you worry when you hear the rhetoric here in the united states that we're heading toward protectionist policies. and it's at least a zero sum and those kind of policies should be avoided which is exactly why we're advocating the three pronged approach that i just described. >> david does the imf stand behind it's warning last year to the federal reserve that it's not raising interest rates. and the fed layed out a approach to have a state dependent

monetary policy. we believe they stick to their guns which is to look at the evolution of the economy and look at the data and mandate and follow that. >> thanks for joining us this morni morning. it's been a long cold winter for the market. the dow is down 96. don't go away. ♪ he has a sharp wit. a winning smile. and no chance of getting an athletic scholarship. and that is why you invest. the best returns aren't just measured in dollars. td ameritrade.

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>> good morning once again everyone. here is your news update at this hour. dispu disputing a claim that benjamin netanyahu cancelled a planned visit to washington. the white house knew he was considering not coming in march because he didn't want to come at the height of the presidential primaries. official sas a mud slide was most likely the cause of last night's commuter train derailment. nine people on board were injured. it was raining heavily when that derailment occurred. north korean railway workers staging a rally to protest the sanctions against the regime. the effects of the sanctions can already be felt within that country as prices soar amid supply shortages. >> family of the victims of flight 370 holding a small memorial event to mark the second anniversary of that plain's disappearance. the group prayed and lit candles for the 239 passengers and crew on the ill fated flight.

that's the cnbc news update this hour. back downtown to squawk alley. it's hard to believe it's been two years. >> absolutely. thank you very much. europe is about to close here. almost uniformly red. >> absolutely. you have seen western european stock markets follow wall street into negative territory so you stand with the red on the screen as you can see. we had phenomenal data come out of germany today. and it's now merging from germany. jp morgan is suggesting that from that month alone if that were to continue from the year that the german economy would be growing at around 6% a year. of course it won't and there will be give back but it does take it off the argument and the dovishness of what the ecb might do on thursday and effectively that's what we're waiting for. today is the turn of the bank of england to come before lawmakers in the united kingdom. the governor is being drawn into this heated debate about whether

the u.k. should leave the european union. one euro skeptic and they argue that the governor is making speculative pro eu comments which are beneath the dignity of the bank. the language is careful and saying that the boe will not make a recommendation on whether it should exit the european union on the june vote. >> if you come back to the markets the major dynamic through the second half of the session has been the increased move downward that you had on a number of the mining stocks and glencore has an accident to one of its mines in congo where the latest count is two dead and five missing after a big retaining wall collapsed there. you have seen recently billion dollar settlements within the mine collapses or dam collapses

in south america. finally one stock that has held it's gains through the session is burberry. it's in an interesting position that being aware that somebody operating is taking a 5% stake though maybe they sold that down slightly and not aware why they might have done that so they're asking questions of whether to potentially to take over given how poor the performance. and it's kind of lifted unusually some of the other luxury good manufacturers. if you can call ferrari a luxury goods manufacturer. apparently you can. back to you. >> you can. thanks. we're still only a couple of months out of 2016 but the ipo pipeline is still frozen as pressure on the markets scared off companies have going public with unicorns experiencing pressure maybe getting their horns sawed off. where should investors look next. the co-founder chairman and ceo. thanks for being with us this

morning. >> thanks for having me. so kathleen smith from renaissance was just on talking about hope for 2016 yet. that we haven't seen an ipo drought like this in several years and usually when it is broken we see good gains for investors. are you hopeful that in the springtime frame we will start to see some companies going public? >> i do support some optimism. what's going on now is a good thing. a lot of the companies may have gotten ahead of themselves and what we saw with the public technology stocks and bio tech stob stocks pulling back 20 or 40% they're lagging in adjusting the devaluations and burn rates. you're going to see a lot better upside in those stocks how they adjusted privately and they'll see a nice rise when they go up: it's been going on longer than it should be. it's the same across the aisle too i'm assuming.

>> we're required dividend paying stock. one of the things that makes it unique is we offer tech and life science investment but while you're waiting for that additional appreciation for stock we're required to pay out 90% of our earnings. we pay about 11.5% today. we're seeing a lot of folks gravitate toward looking at yield especially as rates remain flat out there. >> what do you think the requirement is going to be in the next wave like 2016. is the likes of a drop box going to be able to pull it off where marketing cost might be high relative to profitability? there's a lot of spending still on growth or is there going to be more attention on companies that already seem to have their model maybe a bit more mature and figured out? >> an example of a company being mature is obviously facebook when they went out and people

misunderstood it on the mobile side. the most important thing with going public has to do with the ability to sustain growth. what cost is that growth going to be sustained at. are you going to go at a 50% year over year growth and what is that bottom line cash burn rate that you're going through. you'll have to fund through that at the public market. that's finding the proper balance in terms of cash burn and the capital raise and not missing earnings after you go public. >> is there still the appetite for the high cash burn to sustain growth. >> i think that there is. i think that there is if the companies can show that they're make meaningful process. it was actually doing something to build out it's mobile application. we saw the inverse of that of course with square. when it has a high marketing cost and has yet to get some traction out there for example. >> the election, we started the hour with a discussion about tech executives and the

political cycle. is that inhibiting investment, do you think the summer will come to a stand still because the race is so opaic at least for now? >> we have concern on the election and the party that may actually win or not win because it could have implications and you can have actually an inverse impact on recruiting of talent to silicon valley that creates new enterprises, spawns u.s. development and grows american enterprises. that can have a negative repercussion. >> is the issue that you can't find the people at all or the cost of hiring them would be greater than before. >> the issue right now that we're seeing is there's a lot of stem cell education going on in this country. we're not seeing enough engineers graduate from u. s. universities and the ones that do migrate back to china and india and what have you so we

need to see a greater degree of education going on and stem educating getting more engineers back in this country. >> critics point to a case like disney where they brought them in and it looks like they laid off workers and had them train their h-1b replacements that are being paid at a lower rate. candidates like trump say i'm in favor of immigration but legal immigration. fair use of immigration systems like that and this argument between immigration or illegal immigration or has the message been immigration bad and a chilling effect with silicon valley? >> i think that it is being indiscriminate. i agree with that. i always say i can't opine on what disney did or didn't do.

i can say they're a critical part of the component and the reason we're importing more and more engineers is we don't have them in the country. i don't think anyone is more adverse to do the job. >> the debate is going to continue. hopefully some of the abuses in the system get cleared up along the way. thank you for being with us. >> thank you for having me. >> when we come back this morning, a major shake up sending the stock lower today. what you need to know and what we were told this morning on the air. first rick, what are you watching? >> all right. everybody get your long shoes on or your boots because we're going to be going into the weeds a little bit on negative rates in the repo market, fails in the repo market and we'll look toward the history of music to give us guidance. how do you connect all of that? show up after the break. [vet] two yearly physicals down.

martha and mildred are good to go. here's your invoice, ladies. a few stops later, and it looks like big ollie is on the mend. it might not seem that glamorous having an old pickup truck for an office... or filling your days looking down the south end of a heifer, but...i wouldn't have it any other way. look at that, i had my best month ever. and earned a shiny new office upgrade. i run on quickbooks. that's how i own it. >> is the commodity bounce sustainable? plus shake shack sinks on poor guidance. josh brown likes the name, josh brown eats the name. but is he staying with the trade. and nordstrom called to sell today after stephanie said it was a buy.

who is right? i couldn't resist the josh brown thing. >> just save a shake for me. meantime shares of united continental falling amid a mayor proxy fight. phil has it this morning. >> quite the news making event this morning coming from two investing firms that have a prominent stake in united airlines. they're putting forward a board candidate list of six potential members including the former continental ceo. they want six board seats on the united board. here's the former continental ceo talking this morning about why united's board needs to be updated. >> they should be in the first place. united has the best employees, the best fleet and the best route system. i heard your data but these are

racehorses and they need to race. >> he says that he can provide some of that literature to shake up united airlines. for its part the airline says a proxy fight could distract the company from executing on oscar's strategic plan. he has been on the job six months but in reality he has not been in the job for most of that tile because he had heart replacement surgery. by the way he comes back today today work at the airline next monday. he's been involved in management meetings and strategic decisions over the last month and a half or so. how does united perform relative to its competitors? look relative to delta and

southwest. they have lagged mightily and if you talk with people in the industry, carl, people will tell you this is an airline that should be doing much better. the question is why is gordon and the two investment firms now waging this proxy battle. where were they over the last three or four years? well before oscar munos came in. they say this is not about oscar munos. it's about the airlines board. where have they been that they now decided to step up? >> a key question. he says he doesn't want the job for very long. we'll find out more in the weeks to come, phil. thank you very much. back at hq. let's go over to the cme group. rick has the santelli exchange. >> it's an upside down world. not only in terms of treasuries but everything going on with weights. with southern economies. we love short shorts. everybody wants to be short

treasuries. there's a lot of fails in the repo market and we are going to go into the weeds a little bit. i told you that we would go a little bit into the weeds. according to everybody that i talk to that familiar with what's going on in the repo market traders are willing to pay to get their hands on it. they're willing to take a minus 3% fail rate penalty. they want to be short. they love their short shorts. now having said that, let's look at a couple of charts. let's look at a one and a two day chart of tens. do you see what rates are doing? they're going down. there's a real shortage. usually shortage means that rates, well they should go down. everybody wants them but at the end of this is a willingness to short these tens.

think about that it's an interesting development so i think that the beetles song is also appropriate here. everything means we should look for rates to go lower so, you know, to quote them everybody remembers him and cool hand luke don't they? i'm dating myself. what we have here is a failure to communicate or fail in the repo market. take it either way but at the end of this and this is what i'm getting to you have the ecb and mario draghi talking about going more negative to cast a wider net in the security's available to buy. so there's demand, demand, demand. look at portugal's rates today down. boone rates down, and then look at the fail rate and the notion of what traders are willing to do. how does all of this look? scrambled eggs made with a little dirt. a little sand. it isn't going to taste very good. the trappings of what the central banks are doing is

causing a lot of different give and take. pull, push, yin yang in the markets. how will it turn out? i can't tell you. but one thing i can tell you is that i look for treasury rates to be in a bit of a range for quite a long time. if we get over 225 or below 162 those things may change. john forte, back to you. >> rick santelli thank you. up next, you might be a little late to the game but kanye west declaring the cd is basically dead. tweeting i was thinking about not making cds ever again. only streaming. so how much can artists, kanye included actually make from streaming alone? a closer look when we come right back. man 1: [ gasps ]

man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried?

man 1: you are the ceo. it's not just security. it's defense. bae systems. >> kanye west saying he is ditching cds and streaming. what does this all say about the streaming space and changes in the music industry? jeff is nyu professor and chairman at the clive davis institute. it's great to have you. >> thank you. >> the times piece today, you get this band, not widely known like taylor swift but able to hit number one without spotify.

what does that mean? >> it signals that artists and labels are beginning to use windowing services as a means of testing the waters. it's like the teenagers sneaking out of the house to push the boundaries with their parents. they're doing the same thing with the streaming services in order to did he recall what works with a marketing angle and what they can get away with. >> you have kanye saying maybe just streaming and no cds but that wouldn't make sense for adele or taylor swift. taylor made a big deal of 1989 of having these liner notes and she did really well so this isn't exactly the end of the cd is it? >> it's not the end of the cd but independent artists for years have abandoned the notion of physical cds. this is nothing new. when it comes to ckanye you nevr know if he's the boy that cried wolf or a strategic marketing plan and you can't use international super stars

because the rules don't apply to them. adele sold 10 million physical cds so whether or not she uses it, it's not effecting the bottom line. it's not effecting kanye's bottom line. >> if i'm a musician starting out today do i pine for the old day where is the economics were different. >> you do but there's a lot more opportunity now than ever before for new artists to be heard on multiple platforms and surfaces and physical or digital or whatever it may be. >> you went through this weird era where the cd was the thing that people bought or the tape or whatever it was and then experience other things. are we now in a era where people go to a concert or something else and maybe the physical music something they buy. maybe it's a t-shirt. maybe it's something else. is the live show becoming the main purchase? >> the live show has become from a financial standpoint the main purchase. certainly from the fan and for

the artist, the price of tickets and t-shirts is through the roof. that being said i they the streaming economy is here and it's here to stay. once it scales, once we get to the 50 or 100 million users in order to make money we'll be in a much different place. from the beginning the economics haven't worked. if you think about streaming services they're no different than a credit card company who take 2 or 3%. they're taking 30 or 31% which is why nobody is making any money. >> a lot has been written about serious in the past couple of weeks. years ago no one thought this thing had a chance. now it's everywhere. leveraging the automobile. they keep their costs low. have you been impressed by them? >> i have. they have been able to pivot from being a satellite radio service to partnering with cars and helping the consumer figure out how to best use their platform. that will be the key. you'll see the streaming services in the future begin to introduce new services. they're talking about a

marketing division and video streaming as well and they'll need to go into different areas in order to continue to be meaningful. >> as they raise more money. the music business, it's never been more fascinating. i'll tell you that. >> it's the wild, wild west. >> yes. >> good to have you. welcome. when we come back, groceries, movies, fashion, and now live tv. more on amazon's next big project in a minute.

tomorrow on closing bell kayla will sit down with jack dorsey for an exclusive interview. no doubt questions about square and twitter which has had a little bit of action in the price. >> got to have questions about both. >> meantime, antitrump groups expected to spend up to $20 million before next week's primaries in ohio and florida. we were joined by the head of one such super pact. we reached out to the trump campaign for response. romney and his team, some of who are behind this pac funded by out of touch establishment elites failed the american people four years ago and nothing they do will stop mr. trump from running for president to make america great again.

finally, amazon diving even deeper into original content by taking it live. the show style code live will premiere tonight and be a 30 minute show dedicated to fashion and beauty. it's set to feature we wore what fashion blogger daniel burnsustain while it will feature megan trainor and others. the show won't have advertising but viewers can purchase products mentioned on the show. what's next? >> this live video thing might have legs. we should look into that. >> yeah. >> you can do well in live video. >> amazing. speaking of which, fang, as we call it, doing exceptionally well given the overall price action in stocks today. >> but some shift it feels like in some of these growth stocks that have begun to rebound today. gopro is down almost 9%.

others not doing well include logitech which is down 3.5. so a little bit of a shift versus what we had seen in previous days and just all the stocks beaten down. big day tomorrow. kayla has jack dorsey at 4:30. let's get back to headquaters. ♪ >> carl, thanks so much. welcome to the halftime report. our top trade this hour, the spectacular surge in commodity stocks and whether the rally is sustainable. joining us for the hour today, joe, steven, and pete. stocks are giving back some today and at the heart of the sell off the trade everyone is talking about from oil to iron ore, copper, and almost every other commodity that rally since mid january lifted stocks all across the sector. a run that lifted theke