♪ ♪ that's the theme for "it's always sunny in philadelphia" a little nod to the dnc. good tuesday morning. welcome to "squawk alley." is it always sunny in philadelphia? hard to say. a lot of tension this week, and calls for unity marking day one, or john harwood is there with the latest. >> reporter: sometimes it's ease are to forget how much our country has changed and how rapidly. just eight years ago president obama became the first

african-american elected president. in her speech to the democratic convention last night, michelle obama didn't forget. >> i wake up every morning in a house that was built by slaves, and i watch my daughters, two beautiful intelligent young black women playing with their dogs on the white house lawn. so don't let anyone ever tell you this country isn't great, that somehow we need to make it great again, because this right now is the greatest country on irt. earth. this country will make history again tonight when hillary clinton is nominated by the democratic party in the roll call this evening, and you can bet her husband will not neglect to point that out. he's the keynote speaker tonight. democrats will try to keep up the momentum tonight that michelle obama kicked off last night.

>> john, thank for you that. john harwood is in philadelphia. joining us this morning keith boykin and michael barnes who served as a political policy adviser in the bush administration. good morning to you both. >> good morning, carl. keith, it's been argued that sanders could have caused more trouble than he did. how much tension got released out of the room because of what he said? >> i think it was amazing, not just what bernie sanders said, about you what michelle obama said, what elizabeth warren said. some of the biggest stars in the party came out to support hillary clinton. it was effective. the nice started out sort of raucous. there was a lot of contention and chants for bernie bernie bernie, but by the end of the night the party seemed more united and ready to fight than i think a lot of people had

expected. i think it was a successful first night. >> we had the catharsis. there were a lot of it tears from people holding bernie signs. did he wait too long to embrace the mainstream of the democratic party after saying over and over again we're going to take this to the convention? is this disunity going to last? >> i think the disunity will last and is not the problem of bernie sanders. it's not the problem of the clinton campaign. we know voters are eager to vote for someone. but since she's proposing the status quo, there's not that. there's got to be more of an effort to shake up fear among people about what's going to ha many in a world of trump. that's not occurring. the only people that might have touch on that is absent from some sort of agenda, there's not going to be a lot to motivate

people to get out in november and she's going to be in big trouble as a result. as the calls -- when sarah silverman was up there, when she was speaking to the bernie or bust people that didn't seem to play too well. in end, i think it turned out to be a positive, because no one else could have said that. i think a few seconds ago i say bill clinton walk onto the platform behind me. i confidently believe he will give a speech that will be very uniting for the party. i don't think all the bernie people love bill clinton, to be honest, but i think in the end he has a unique ability to communicate beyond the breach

and reach out to people who don't always agree with him. president obama on wednesday, along with joe biden will be able to give another speech to really bring home the mental before hillary clinton speaks on thursday. so i think it's a powerful lineup. >> biden is behind you. >> oh, it's biden. on. paul manafort tweets tweets that last night 208 mentions of clinton, the 6 mentions of trump, zero mentions of isis. is that a problem? is that an error? >> i do think so. i don't think that this convention needs to be one that necessarily invokes a sort of fear that the republicans tried to invoke for their convention, but there has to be an acknowledgement that many americans are uneasy, and this is based that we feel unsafe at

home, but also the violence in the community, where kids been being shot in the back for no reason whatsoever, and economically people are not doing well. we're seeing that the democrats are playing to their base of support among the mainstream establishment, but not making an appeal to any of the millennial that had been supporting bernie sanders or those republicans who don't want to have to vote for the donald trump, so absent an effort on -- donald trump is likely to win in november. >> can i add something to that real quickly? in response to what you said earlier, i think there has been an agenda, and i think elizabeth warren and bernie sanders laid that out quite effectively last night. on raising the minimum wage, for example, on the issue of expanding health care to include the on public option. on the issue of trade where hillary clinton has come along with her opposition to the tpp,

which is important, and for college-age students and young people the issue of affordable college education, or -- all of those issues, that's not the status quo candidate. that's a candidate of change. >> it wasn't the establishment that was talking about it. it was the first night you got sanders talking about it and warren, and they're done. the issue is there was a theme last night trying to convince american that is americans feel great. america is great, of course, but we don't feel great. there was a lot of cheerleading suggesting that we do, and the failure to recognize that the majority of us don't feel great is a big mistake on the part of the democrats. >> of course, the platform does reflect the input of a lot of those pop makers, so you can't also argue that it's input in other ways, but i'm curious of what you make of the continued fallout of the e-mail trove.

mark leibovitz in the times had a wall tongue in cheek self-congratulating is about the damage control and how quickly they put the issue to bed, but i imagine there's a lot of bigger conversations happening on the ground there. >> well, i'm not one of the people who thought the democratic party handled it the best way. i don't think debbie wasserman schultz was even considered to gavel in or gavel out after the whole controversy erupted. she was booed away from her own contingent, but i think the party moved beyond that. nothing was talking about e-mails last night. no one was concerned about what happened with debbie wasserman schultz. she was not a factor. they were talking about donald trump and hillary clinton. those messages i think were both

very effective, and i think the party will continue to be focused on that the remainers of these days here at the convention. >> as we await president clinton and his tense democratic convention speech tonight. apple will report earnings after the close, but investors are not optimist ec. stocking -- our josh lipton is in cupertino to talk about what we might expect tonight. hey, josh. >> as you mentioned, investors have been selling apple. you can't blame them for their concern. today the street does think you're going to be apple turn an eps of 1.39 on revenue of 42.1 billion. that would represent drops of that% and 15% respectively. apple sold 40 million iphones in the quarter. that would mean a decline of some 17% as apple deals with tough comparisons and users wait for that new iphone 7, but how

much of that bad news is already priced in? that stock is down nearly 30% from the all-time high of 135 reached last spring. it's now trading at about 11 sometimes projected earnings, that's a -- r&b betting that -- an attractive valuation are going to support the stock. for traders out there, our partners at kensho that when apple misses, it always loses. it has dropped about 4% on the four times it missed expectations, but when apple beats, it's a coin flip. if you look at this chart, rising on average just about 1%, some 66% of the time. of course investors aren't fog kissed on one day's move, more focused on the iphone 7 expected this fall, and whether that will return this franchise to growth. guys, back to you. >> josh, we'll be watching for

that after the bell. some news meanwhile, on david iron morn. kate has the latest. >> >> a couple interesting point. first of all he's bullish on the stock chemours, cc. they started buying that late last year. macy's another stock that he exited at about a price of $32 at a loss, apparently doing it too soon. that stock is up since his exit point, and was one of the biggest losers in the second quarter. finally on brexit, he thinks it won't be by itself a significant economic effect, though it allowed his gold position to do pretty well. he says essentially the uk economy is simply not big enough to create a major international issue here, but he does think it

may have the effect of having the fed delay any sort of tightening steps. >> kate, thank you for that. when we come back, an exclusive with paypal's ceo dan schulman, or a top tech fund manager joins us with some picks, and a wild ride for underarmour today. the market took a tumble about 15 minutes ago, dow is down 100 points in a hurry. "squawk alley" comes right back. "squawk alley" comes right back. ♪ steady as she goes

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pay pal is embarking on a long-term partnership with visa. here to talk about that and much more is dan schulman, kreismt off of paypal. what a treat to have you in the studio. the market sold off your stock immediately after this announcement was made. what do you think they were interpreting it to mean? is that a misinterpretation? >> first of all, we had very strong results. our revenues grew 19.5% on an fx neutral basis to 2.65 billion, exceeding our guidance and annualist estimates. earnings were at the high end of

our guidance. transactions were 1.4 billion on our platform. we added 19 million net new active accounts in the last year. we have 188 million people transacting 29 times a year, that's up from 26 a year ago on the paypal platform, so strong earnings. in addition to that, we also announced what we thought is a transformative deal with visa as well. i think investors were trying to interpret what that means. >> so one of the questions they were asking is, what does it mean that visa has exclusivity. how much volume does paypal have to do with visa in order for you to get paid for your part of the partnership. can you answer any of those questions? >> some of them. this is a transformative deal not just for paypal, but for visa and their issuers as well. instead of us battling each other in the marketplace, we're going to be allies in pressing

forward on digital payments. that's important. digital payments is a $100 trillion market. that's the addressable market. with a t, 100 trillion. for us to come together, it's how do we address those customers? >> it's a powerful alliance, but you want on the call, it helps you avoid targeted action from visa. what were you worried about? >> well, there are three things this deal does for us. first it allows us to access visa tokens. that is a technical term saying it's easier for us to move into the in-store environment. if you think about that $100 trillion addressable market. it's the online, mobile piece of that. in store is still 90% of the dollars right now. this gives paypal access to the

in-store environment. second, it allows us now to partner with visa and their issuers. that's a big deal. we are great allies together. they can give us a lot more customers. we can drive a lot more mobile and online volumes to them, and finally it gives us cost certainty. there's a lot of rhetoric going back and forth about visa and paypal becoming more enemies than friends. this takes away that. we are not collaborators in driving digital payments going forward. >> what about apple and samsung? you talk about that retail point of sale. if i've got an iphone and applepay capable, what will make me choose paypail maybe over an android it's ease why aring to neutral, but you know, when it comes to retail, a lot of apple's customers are the ones

who are buying a lot of stuffs. >> it's interesting. the key to payments is that you magically need a two-side i had network to be successful. it's not enough to just have consumers. if you have merchants but not a lot of consumers, then consumers gets frustrated. what we have now is 14.5 million merchants on our platform. we have 188 million active accounts on our platform. that gives us that scale tremendous advantage. payments is an incredibly hard industry to crack into. not only do you need the two-sided network, but you need great risk, and compliance, there's platforms across the world you need to adjust to and comply with.

very few people have been able to crack into the payments instrument. if you look at the announcements, it seems like almost one every day, either one operating system or one type of device or one retailer, there's a lot of confusion. >> are there loyalty programs mixed in as well to make that work? >> no. you need a great value proposition, and that's what we have. when people use paypal. they typically convert at 87%. so when somebody starts a transaction, they convert it 87% of the time when they use our newest initiatives. the next closest is in the 50s, so that innovation, that focus on customers is what really gives us an advantage. >> everybody you are talking about is focused on what pardon of the world? is it volume being driven by north america? u.s.?

>> that is the interesting thing. we have almost half of our retches from outside the u.s. every region, if you look at the volume they're driving, is 20%-plus in terms of the volume. our actual your ven-mo was up, and that's being used by millennial. today you are anouncing it's out of beta, but how toss the businesses to yew venmo. that is the beloved way that mill len yams move their money. as you mentioned, we did $4

million last quarter, up 140%. in order to get more functionality, we're opening it up from a peer-to-peer service, for a user to be able to shop at different merchant yew the ven mo account. we've been piloting that. first we took it to a million customers, then 3.5, now we're opening that pilot to a full launch for the entire venmo base. we're very encouraged. we have an initial said of merchants. >> when i read your earnings record and listen to your earnings call and see the analysts who are participating, it's a lot of internet analysts and tech analysts, bur you're talking about things like consumer credits. do you need to be covered by bank analysts? are you more of a basic?

>> we're covered half by financial analysts and half by tech. it's thinking about and reimagining financial services. i think we're going to be more change in the next five years than we have seen in the last 30. that will be driven by technology. the explosion of mobile, the digitization of money, and that's true tailwinds for our business as we look forward. we have a lot of conversations on that front to have, dan. i hope you come back to see us. >> thank up very much. dan schulman, the ceo of paypal. >> up next, a lot of reason to sweat if you're an underarmour investor. we'll talk a look at why, after the break. guys, what's happening here? hey nicole, this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh. alerts on anything at all?

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out with earning today,

mostly in line with estimates. here are the highlights. on the plus side, where do you get 28% revenue growth. underarmour posted that growth in footwear even more so, and international even more than that. clearly stef curry is helping to grow this business right now. here's a quote from the ceo -- the steph curry line has continued to strengthen the brand. now, what might be plagues investors, earnings were hit by the bankruptcy of sports authority. margins also disappointed, coming in a bit below expectations. they continue to narrow, as this company spends a lot to expand especially internationally. there's a growing concern that ath-leisure may be a fad. you heard that from the lululemon ceo last week.

>> that bubble will pop, and the people that are not in it for the right reasons will go away. and the trend of the lifestyle of being athletic and mindful will stay. that's the market that we lead and that we're really passionate about. >> underarmour announcing a partnership with kohl's, and plank also says they're moving into the another f.a.o. schwarz building, an iconic place -- also the most expensive. it was reported it was going to cost $20 million a year. it's also a very heavily shorted stock.

>>. >> i like how plank said he wanted to grow -- >> appeared it will be next to the apple store. is some of this concern really about costs it's also close to the nike flagship store, and nike was in contention for the space as well. interestingly underarmour did not have a flagship store in new york. this one will be much larger and clearly costly to build. let's bring in simon hobbs as europe will close in 30 seconds. >> the big news for europe is we're counting down to the stress tests that will be released for the banks.

last night you got commerce bank preannouncing and saying the ratio has actually fallen. it's not really surprising. french telecons have moved lower today. you'll be aware that orange is competing with three other competitors. so they're down. the much more interesting is what is happening in london. a number of big london issues have moved lower. properties down there, and cautious outlook. and of course bp missed on its earnings. through the session. the home builders in the united

kingdom have also moved lower. there you see at the end now they're down some almost 3% in part. martin wheel gave a speech after brexit saying he didn't think it was necessary. he will now vote for a coal when they come through with that policy decision. the pmi data that maybe indicate that had the uk was going into recession, that might be why these guys have fallen during the course. coming up, both apple and twitter set to report earnings. should you be buying or selling ahead of these numbers? a closer look in just a moment. there are many things you don't want in industrial strength- like cologne. morning! but there's one thing you do. (gags) it's called predix from ge. the cloud-based development platform that's industrial-strength strength!

a texas judge has dismissed the last remaining charge against two california antiabortion activists who made undercover videos of themselves trying to buy fetal tissue from planned parenthood. five russian canoeists including the olympic champion have been banned from competing in the rio olympics for doping. the canoe federation said russia would also not be allowed to enter boats in the four events they would have raced. remember the ice bucket challenge? the the $220 million it raised has led to an point

breakthrough. scientists at the university of massachusetts medical school have discovered a new gene that is responsible for the disease. check this out. a photographer capture a lightning strike last night on the empire state building. while getting that shot might be unique, lightning strikes apparently on the building are not. they get hit about 23 times per year. that's your cnbc news update for this hour. now let's get back to "squawk alley." >> thank you, brian. a big week in the off for tech earnings. we'll hear from apple and twitter, both in focus after recent struggles. joining us is brad slingerlen. portfolio manager, that has apple as the number two holding. both of you joining us from california. good morning. >> good morning. >> brad, i want to start with you. we saw from qualcomm days ago

that the premium tier remains under pressure, but china is doing pretty well. so my question is, are investors underestimating the possibility that apple could do okay on units, but underperform on revenue, because the iphone se could do better than expected? >> sure, the quarter-to-quarter is always different to pin down. last year china was a big driver of apple's growth. based on what they said, that was slowing down. if you look more broadly, apple has been losing market share for several quarters now, in particular to samsung and the broad are android ecosystem. so i think china will be a key focus for apple over the next couple years. >> and i believe you suggested that apple should break itself up. i'm trying to figure out, based on the value proposition of

apple being integration around software, hardware and services, how could you possibly break it up? >> look at the way google realized it was in trouble, and it put the main business into one unit, and then it would alphabet, which are doing the radical r&d projects and are able to release projects. apple is that it has no new products. the iphone is now nine years old. yeah, they made it bigger, they made it smaller, they added new processors, and so on, but that's their last product. this old model of a monolith that releases massive products everybody five or ten years doesn't work anymore. so this is why they should rethink the way it's strushed. >> speaking of things being toast, i believable that twitter is toast because of the lack of user growth. is there potential up side in

these content deals they've been doing, the revenue side of the business, does vr once in a while swoop in and rescue the lack of user growth? is there a potential for outperformance? >> there is a potential. short term you can play a lot of games. you and i are both on twitter. you know in the last two, three years, the participation of others have gone down. twitter is not being used as actively. people may watch other people, but they're not participating, it's also not growing in users. so i'm not optimistic about twitter overall. >> brad, i know that twitter is not one of the holdings that you guys have, but where does it fit into the ecosystem the way you see it? who is mainly blocking twitter, do you think, from it's ascendancy?

they community indications have proven to be very fickle. >> i think we can look no further that can being scored -- to verizon which once had a value of over $100 billion. we see the rise of instagram, the rise of snapchat and declining engagement. i think consumers are really tapped out. the interesting thing in pokemon go, is that as people play more and more, they have actually spend less time on social networks, including twitter and other sites and other games. i think we're reaching a saturation point where it's becoming a bit more zero-sum. >> so you think that pokemon go will create a mind-share drain? >> maybe not pokemon go

specifically, but i think what it showed is we're spending as much time as we possibly can already. s and when somebody comes along inevitably to take our many attention away, it's going to have to take away from something else. we're running out of the minutes a day. snapchat is said to continue to gain adherence. those don't seem to be suffering from engagements, do you think that we are running out of the attention to spend? >> yeah, we are, but if you look at facebook, they were probably one of the best investment they possibly could have made. we all thought it was crazy at the time, but to them everybody

rerecovering around whatsapp that's become the social media circle. so user tastes are changing. we'll have hundreds of millions, more coming online, they'll be on mobile, on the newer social media. it's snap did the chat, it's messenger, it's what's appear and they'll be playing virtual reality games, and there will be future games. the old gets left behind and the new keeps coming. this is the way the world moves right now. >> brad, any hope for twitter in this content, streaming sports to revive its -- there. >> i think it's an issue of attention. as the network grows, it's easy, but's the network effect under winds, engagement declines, there's very little you can do to offset that.

i think these content deals fall until that category, where it may not be enough to reverse that effect. >> we'll listen for tilledbits. gentlemen, thanks for joining us today. up next, amazon drone delivery is one step closer to becoming a reality. rick, what are you watching today? >> you know, maybe i'm the only person watching, but it is the first day of a two-day fed meeting. there's the dnc. last week was the rnc. we had the conventions, but we're going to talk about data and why there are so many crickets with regard to the fed, but maybe today's auction like yesterday's will give you different clues, all after the break.

today on "halftime report", the host of "mad money," jim cramer is here. he weighs in on everything from apple's moment of truth to the state of retail. he's also going to critique or traders ease portfolios. oil is until pressure again. also the prospect of a market rotation. we are talking about sectors showing signs of stress and sectors that could be on their way up. carl, we'll see you in about 15. >> thanks. it sounds great. dom? shares of driving assistance

mobileeye down a bit. on the earnings call this morning, it announced a pamp with tesla will not continue beyond current product plan. tesla cars use the technology as part of the autopilot feature. this comes at a time when tesla's autopilot is facing that screwed any from regulatorregul. the stock is on the move and tesla is a big part of the story. thanks for that. rick has "the santelli exchange." >> good morning, carl. i love fed days. i haven't missed a day since 1979. i have seen them all. today in particular, when i look at what's going on financially, let's start at something from bard clays that i like to pay attention to both investment

grade and high yield. on the investment grade, look at a one-month chart, see the presents coming in, that's a sign of risk on, strong appetite. look at the five-year chart. look at high yield, same two charts. the only conclusion you can come to, looking at what's going on on stocks, even down 80, the stock market is still at 18,4. not too bad. the data has been bert. how dao we know the data has been better? citi quantified it. citi's economic surprise index, i'm really liking this. they send out the research. i did my own rendition. this starts in january 2015. you can see the up side is where the action is at. and they on to list what we all

remember. whether it's ism, jobs claims, university of michigan, today ace consumer confidence, instrumental production, house, we had house been data today, housing data on existing, permanent, starts. granted that today's number is -- not bad. not bad. but if you look down back over to '05, it was 1.38 million. that doesn't matter. the fed isn't handy capping improvement in economy or data dependent, and many of the -- will start going back to '07 and '08, blah things became so nasty. i look up at the board, we have a five-year option i'll be handing in about an hour and 20 minutes. the data-dependent aspects like

everything. they get reconstituted or left out in a parking lot somewhere. recent price structure most likely augers for a move. the fed isn't moving. they're probably not going to move this meeting. many don't believe they'll move in september, and november's meeting is just days before the election. i understand there's always issues, but there are always going to be issues. data dependent is pretty self-evident, pretty hard to argue with it. coming up twitter's earnings will mark one year of results from the ceo running the show. what is next for team jack and twitter? that's up next on "squawk alley." rockle #1)

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as twitter gets set to report after the bell today also marks one year of results with co-founder jack dorsey at the helm. julia boorstin is in l.a. with a closer look. >> reporter: jon, investors scrutinizing whether jack dorsey's plan is working. analysts project twitter allowed two monthly active users ending the quarter with 312 million. just 8 million more than where twitter ended a year ago when dorsey returned as interim ceo. even if twitter hits the top

ends of its projections, 21% revenue it growth to $607 million, that will be the company the lowest revenue growth rate since going public. analysts expect earnings to grow 38% to 10 cents per share. we can expect plenty of commentary from dorsey as well as the cfo about the company's streaming video sports deals including one announced yesterday with major league baseball and the national hockey league and commentary how that could help drive engagement on the platform. we can expect analysts to probe about whether changes to make twitter more successful are drawing new yewers or growing engagement. since dorsey returned last july, stock down about 48%. though it has gained 13% in the past month. now, twitter's played such a huge role in this election cycle investors are anxious to see if the twitter buzz translates into user growth. carl? >> i'm wondering if you expect the company to try to help, our

psh inve push investors away and into something else? >> questions whether they're try to focus investors towards enga engagements numbers or logged out of users. heard a lot about twit hear all of these people accessing tweets without logging in. they're trying to move away from reliance on the logged in user base, and we'll see. we should expect a lot of commentary about that, but we'll see what the company says. there's a lot of speculation that it could be a takeover target at this point, and so we'll see what kind of guidance we hear from dorsey about what the next leg of growth will be for this company. >> yeah, carl, if they couldn't make something out of these nba finals, being as extended as they were and tweetable, boy. i don't know what's going to move engagement. soccer? >> the olympics? >> perhaps.

>> an event. yeah. see what happens after the bell. when we come back, amazon drones, a step closer to reality. the latest on that, after a short break. [announcer] is it a force of nature? or a sales event? the summer of audi sales event is here. get up to a $5,000 bonus on select audi models. (smash!) like an administrativeyou don't assistant.dustrial strength- your 3 o'clock is here. but there's one thing you do. it's called predix from ge. the cloud-based development platform that's industrial-strength strength!

amazon saying it is entered

into a partnership with the british government to explore drone delivery. using drones for deliveries by the year 2017, would go with britain's aviation regulator to test technologies not yet permitted by the u.s. an important sign of confidence in britain after its vote, of course, to leave the european union. amazon one of the other big names reporting earnings this week. of course, we'll get apple and twitter tonight. and then the mcdonald's call continues this morning. steve easterbrook saying a number of things. one, pokemon go is doing great things for the business in japan, not necessarily committing to rolling out a similar initiative in the u.s. talking a lot about higher ticket because of breakfast, despite the comps in the u.s. missed expectations. >> and fourth quarter of positive comps in the u.s., something to hang your hat on if you're an investor long term in this stock. still, missed estimates there.

>> remember when we wondered if u.s. would ever get back to positive comps? a lot of wait there a lot to be hiding under the breakfast plate. who would have thought? justify different ways of doing breakfast. that does wonders, i suppose. most important meal of the day. >> and look at texas instruments. which is up sharply and leading much of the semispace higher as well. third quarter net income, saying 81 cents to 91 cents a share. raising some guidance, and also just positive earnings across the board. 4 cents ahead of street forecasts, profit, and hiring auto motive communications chips. bright spots there. >> for a while dow down about 100 points. at the time two-thirds was just 3m and mcdonald's taking about 40 and 60 points -- two-thirds of those points mcdonald's and 3m alone. verizon not doing well. disney, another drown grade, second be in a couple weeks. peak earnings at the studio. between guidance out of the

likes of caterpillar and research calls, troubleship today. >> see what we get from apple. not just results also the guide. curious about the average selling prices with the se in the mix. >> big night tonight. time being, over to headquarters, scott wapner and "the half." all right. carl, thanks so much. welcome to the "halftime report." i'm scott wapner. look at the stock market, a big reversal underway this hour. the culprit seems to be mcdonald's. the golden arches not so shiny today following u.s. comp sales, disappointing the street nap stock off sharply raising questions whether the overall market is also in need of a big pullback. joe terranova, stephanie link, pete najarian. and an international group, cio with us for the hour today. so is a specialguest. jim cramer, host of "mad money." >> thrilled to be here. lovery