♪ john forte and sarah is sticking around. it's good to have you this hour. joining us this morning from stanford, the new york times columnist. great to have you this morning. welcome. >> thank you. first up tim cook taking a trip to china as the company announces it will open an rnd facility in the country. cook met with a senior official from the chinese government and is touring in china today. meantime this new report says apple will start advertising the

7-on-september 9th with a release date of september 23rd interesting couple of weeks. you had the interview in the washington post and they have been in the cross hairs of the trump campaign but that's not discouraging them from making another step forward into china. >> yeah. i mean, they have to. they have to -- you know, they depend heavily on growth in china. that's one of the big things cook has pushed and he has done, you know, he was sort of the mastermind of this turnaround in china over the last few years and that turnaround has sort of run aground in the last year or so. it's unclear if this is all apple's fault. some of their sales slow down is because of greater problems in china but the other thing is, they have been hit by competition from low cost phones and this has been what looked

like their achilles heel for awhile and it's unclear if they can change that around they need to make their phones more attractive at the price that they are. >> they're doing worse on a year over year basis than apple is. part of apple's sales decline is an inventory adjustment and maybe just in terms of the growth of the middle class that's all gone and more of a mature cycle going after middle class growth and the lte roll out. isn't there the possibility that people ringing their hands like they did over samsung it's just not going to happen? >> that's possible. this year will be difficult because the 7 is not that different from the iphone 6 and 6s so it might be difficult to tell how sales react to this but

over the next couple of years if we notice a turn around in china, smartphones generally but not with apple that will be a problem. this is a long-term play for them. this is like a huge part of the future of the company so i don't think we should look for immediate signs of any changes. >> it's been on a roll here. up 13% since last quarter earnings. a glimmer of hope in the earnings. also we learned that warren buffet and if that's wrong where does the growth come from? or is it actually a value play? >> for the next few years we can't expect the growth that we

saw in the past because the smartphone market around the world is at a steady state. it's saturated and new people will get smartphones but at a much lower pace than in the past. >> they are looking at services for growth and subscriptions and other things that people pay for. they have the wealthiest people in the world doing their product and it will be a new product sometime in the future a car or something like that. a collection of differ wearables but it won't be immediate with the phone i think. that's over the kbroeth growth with the phone is over. >> another story this morning, according to a report, sis coe will lay off 14,000 people. they are expected within the

next few weeks. and letting some steam out of the kettle. >> it's a combination of both of those. a lot of the older tech companies are in. hp, microsoft to a certain extent. they have to get new skills, enter new product categories. and that requires different types of people. this is a lot of people so i think not all of them are going to be replaced with people different skills. and these are the really difficult choices and you don't

expect and and you're still showing profits so that you can reinvest in areas that you do think are going to grow but aren't proven out yet and as you said it's similar to the situation a lot of different companies are facing. sis coe hasn't faced it in this crucial way before they have done little adjustments but now the feeling if you're going to do a big adjustment approximate you're going to avoid getting left behind. and the googles and facebooks don't have those slower growth areas. >> yeah, i mean, this is the classic problem in the tech industry. you put a lot of money and what kind of service goes away.

and might kill you. and if they make this transition well. and early and in a big way. small incremental things along the way. >> you mentioned earlier we have seen this out of intel. and august 2014 the company versus 4,000 jobs. 1,300 in july 2012 and then 6500 in july 2011. we are talking about years and almost 20,000 job cuts at this company and it's not alone to be fair but when does this cycle end? haven't these companies

transiti transitioned yet? >> no, they haven't it was built for how they were architected and there's a shift toward that. in those period of times they also acquired business and also rolled out of the server business and it's done quite well and if you're a company in this position you want to do the cut in a big way and not have to keep cutting because they're devastating impacts on morale if you end up on that lay off traed mill. >> more on this story tomorrow. finally a great read. your latest piece talks about the alternate universe that is instagram and snapchat as you say, an environment blessedly free of the news. who would have thought that's what we would value now?

it's very different than the facebook of 2008. what is interesting about instagram and snapchat, they released a new feature called stories last week which is similar to what snapchat had for awhile. what is interesting about these networks is because they're based on your closer friends and pictures mostly, they are mostly free of the news and it's a really wonderful experience. we're getting kind of -- with these networks back to the roots of like what people wanted in social networking in the first place. many years ago before it was taken over by time lines and feeds and links to news articles. >> how much of this is political news fatigue? in other words we exit this cycle and how much is the year we're in. >> it's probably the year we're

in and my demographic. i look at news all the time and these networks are a haich fven me. the people that use snapchat all the time probably have no interest in news and may not have this problem. snapchat tried to offer a kind of news. there's a lot of celebrity news. there's a lot of stuff that might be interesting to younger people that's on there. they cultivated relationships with news companies. it's hard to find elsewhere so it's a different kind of news environment and it's actually really exciting. it's offering a different web and services that we're used to. but snapchat is more and more into news like yours and mine. i don't know. i hear you more on instagram to an extent but they want that engagement and they know that

news, maybe not political news but news is a way to get it. i'm looking at snapchat now i see buzz feed and i see cnn. people, mtv, all kinds of things, especially about the olympics that they're trying to push at at us. >> it's difficult to find much about donald trump or hillary clinton on there. there's some about the election but a very different kind of news atmosphere. one of the things that happens with the network, the reason that people don't think of book as much for sharing personal stuff anymore is because it's so big and it's hard to know who is going to see it. that is sort of the curse of all of the networks and they have to try hard to keep it personal and small and intimate while growing at a huge pace and trying to get everyone in the world on them. >> it's tu. follower count is not as important on some of these alternate sights and platforms. always good to see you. thank you so much. >> good to be here. thank you.

>> let's get pack to rio. andrew ross sorkin joins us there live. hey andrew. >> hey, carl. we do have break news for you on what is a developing story now a brazilian judge ordering ryan lochte to stay in brazil as police continue to investigate what you might recall was what we thought a robbery that took place on saturday night and conflicting reports at the time. his mother saying he was held at gun point and then officials saying it didn't happen and then him coming back and saying it did happen. he talked to billy bush about it on the "today" show and now there's reports about the police questioning whether it happened at all. lochte is already in the united states. so this is not going to apply to him but this is casting a little bit of a cloud over what took place over the weekend.

the whole question about security here and it is a developing story as it continues of course. separately we wanted to bring you business statistics here. team usa merchandise is a hot seller. rio 2016 sales are up 100% year to date compared to the london games in 2012. the top sellers, a nike hat, also a dual usa brazil pin and nike team usa logo t-shirt. one is coming into question on social media. it is an official american flag and works better because of the small sizes.

>> it's not just the fans that like to be decked out in athletic gear. in today's ask the athlete we asked who has the best uniform. >> the best uniforms are basketball. >> gymnastics, they're pretty. >> probably the swirms because i know how difficult the suits are to get on. >> mine doesn't have the best uniforms. we have the worst uniforms. we look like we're in bath robes. >> i like cycling. indoor cycling and the helmet and all the uniform. >> volleyball. they're sexy. but maybe too sexy. >> i would say yeah gymnastics. they have -- it sparkles. >> water polo because we are

almost naked. that nice isn't it? >> one of the athletes as you just saw there was ryan lochte and carl you were just here and saw the competition in person. did you have a favorite eun forl you want to weigh in on? >> no, i like the way you worked your way around the beach volleyball discussion earlier this morning on squawk. have we figured out why they wear that weird tape? >> yes. we have. it's some kind of athletic thing that keeps the muscles together. that's what i have been told but i don't know enough about it. >> i watch it on tv and i'm going to pick the gymnastics leotard. $1,200. doesn't get prettier than that. >> pretty cool. >> we'll talk to you soon. >> we'll bring you more news. thanks. >> meantime, edna is pushing back on claims that it threatened to quit obamacare if the government blocked a deal

for the company. bertha is live following this one for us. >> that's right. >> they were responding to requests from the doj as part of the process that included a request to outline how a decision not to approve the deal might impact the company including it's participation in the affordable care act. the move to with draw from the obamacare exchanges if not in retaliation for the doj blocking the deal that is what lead to the ultimate decision. the spokesperson saying that drove us to announce the narrowing of our public exchange presence for the 2017 plan year. interestingly in that letter that was dated july 5th, they

have outlined that if the deal didn't go through and they had to look at what their exposure was that they would probably cut back on their expansion. they had looked to expand to as many as 20 markets and only do ten markets in. effect they decided only to do four. >> back to you. >> thank you so much. when we come back, a major shake up for donald trump's presidential campaign and target putting the blame on apple for weak sales in q-2. we'll take a closer look at those claims and then steve wozniak on the company that's the biggest disrupter right now when squawk alley continues in a moment. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments

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we'll talk about whether the acquisition and recently named new ceo whether that can boost the semi-conductor stock. he is the ceo of cypress semi-conductor. >> thank you for having me. >> a new young ceo at a company that was run by an iconic guy for quite a period of time. where do you see yourself and your generation taking this company at a time of a lot of volatility in semi-conductors. >> well, you said it right and i

have cypress 3.0 moving forward. it's an error of change and more connectivity into the new growth markets that were in automotive, industrial and you just called it. the iot business we just acquired. >> if you're going to remain independent and there's a lot of m&a activity going on now. what's the driving principle? what are you trying to put together that's going to keep you ahead of the pack? >> if you look at the history of cypress, we have a lot that i'm here to really unlock and deliver to our shareholders but also our customers so regardless of a lot of the m&a activities we are looking at driving growth, driving value crew wags and the value and the growth

markets we focussing on. and they have been focussing on growing and focussing on some markets growing faster than the general trend. >> you already mentioned the buzz word. investors want to hear. how far away from actually seeing results of that and is there room for all in this space? is there that much growth in this category. >> a lot of the companies are working on iot. you need to look at complimentary technologies that come into the play. and for example with every iot and every radio there's a microcontroller next to it. we provide that as well. and deliver value in solutions

and in software so that's where -- the capability, really of iot is more of a capability that targets automotive. you know, cars are connected cars today and all are under the iot umbrella. that's the growth that's going to fuel it. >> so a couple of quick questions. how is the expansion, integration going? there's a number of cuts associated with that and roll for tj rogers in the future. you're sort of talking about it or has that been decided? >> the merger is behind us. i'm very happy to say we had a very good track record of closing and delivering on those we committed at the time of the merger and now we're operating

at a single company and just to touch on the acquisition that's also hit the ground running. we have taken it the day afterward. very excited to do that. tj and i are always in communication. he's a technology expert. he's highly interested in the technology. cypress being a technology company. him and i always have contact. >> all right. just a few days in on the job. thank you for joining us here on squawk alley. >> my pleasure. >> a lot of discussion about the whereabouts of ryan lochte and some of the usa team swimmers as we get now a statement from the rio court. let's get back to andrew ross sorkin in rio. andrew. >> a lot of discussion against and the u.s. swimmer gold winner

saying he was held at gun point and lochte has already left the country and local police arrived at the olympic village and has to meet with ryan lochte and james feigen and collect their passports in order to secure further system from the athletes. we were not able to make the athletes available as additionally we do not make athlete's travel plans public and cannot confirm their current location. we'll continue to and he has already left the united states and a statement questioning what exactly he said and whether this took and security video showing some of these players late in

the evening with their watches and wallets. lots of questioning being asked. this is an on going story here and an important one because it raised all sort of questions about security in rio given a gold medal athlete being held at gun point. a hot of talk about it. we should also say he denied it originally and then came back and said it happened and now police suggesting -- we don't know if it's true or not but we're going to continue to follow this story as it progresses here and bring you the news as it happens, carl. >> up next, a major shake up for donald trump's presidential campaign. what it means for the rest of the general election when we come back on squawk alley with the dow down 60 points.

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with more. good morning, john. >> good morning, carl. the last few weeks have not been kind to donald trump's campaign. he has fallen behind nationally and in the battleground states and appears to have decided he wants to spend the rest of the campaign doing things that make him feel good that is to say he resisted the coaching from his campaign chairman to adopt a different persona, a more disciplined persona. he said yesterday i don't want to change. i don't want to pivot. my campaign is me. the moves he made today underscore that. but hasn't run a presidential campaign has been brought on as the campaign manager. her role is to travel with donald trump and the first campaign manager said she makes donald trump feel calm when she is around. so that's one role she is going

to play also she is going to do television interviews. the top executive at breitbart news. it's a far right news organization that indulges in the same kind of rhetoric that donald trump has used about immigrants for example. it's been at war with the republican establishment. most recently promoting the primary challenger to paul ryan t house speaker and it adds up to whatever it means for the trump campaign and few strategists think there's any significant chance he could turn that around and catch hilary clin clinton. it's likely to accelerate the move from resources from the presidential campaign to republican donors trying to prop up house and senate candidates and hold their congressional majorities. the trump campaign is now so far off the rails i don't know anyone who could make a case for investing money in the

presidential. that's what we're going to see from republican donor and whether he is back to being trump strategy. that may proceed on a separate track. >> is this likely to move the needle. >> all the republican candidates on the ballot have a problem. they have significant chunks of their base that love donald trump and what they want to be their base for a majority that can't stand trump so they have tried to stratel that liay i'm republican nominee but not getting too close to him. we have begun to see some members make the argument that elect me so i can stop hillary clinton. that's an argument that presumes

he is not going to win. so it will be more subtle than formal but i would expect more and more republicans down the ballot are going to be separating their fortunes from the top of the ticket. >> thank you for that. europe closed and for a wrap up on that we go to seema at hq the uncertainly is keeping investors on both sides of the atlantic on edge. weak sales in russia and ukraine due to the depreciation in the ruble. closing lower more than 5% and then there's the u. k. car insurance company following interest rates since the u. k. referendum has effected it's

solvency ratio. sources telling reuters they have not yet signed a nondisclosure agreement and that talks are difficult between the two companies suggesting that they may have hit a stumbling block. we're looking at shares down 1.4% and down by around 2%. meantime in the bond market you focus on portugal and it's ability to stay eligible after ratings agency dbrs warned it could elude the investment grade status unlike bonds in portugal selling off sending yields higher. investors continue to assess the damage of the brexit. so far the economic data hasn't been disappointing. the number fell in july. you're seeing a little bit of stabilization in the u.k. currency. at the same time a lot of

european leaders, mateo renzi and his counter parts in italy are pushing the u.k. prime minister to push forward the brexit agreement pointing out the longer it takes to generate a frame work and undermine your efforts to push forward with reform but as we know break ups are hard to do. >> yes, thank you. >> up next, target pointing a finger at apple for weak sales in the second quarter. the stock is falling more than 6%. we'll tell you what's behind that apple finger pointing in just a molt. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim.

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good morning. i'm sue herrera. here's your news update at this hour. officials now say more than 40,000 homes have been damaged and 11 people killed in some of the worst flooding in louisiana history. 30,000 people have been rescued. more than a foot of rain has fallen in some areas since friday. dramatic surveillance video from a deadly accident at a gas station in savannah georgia. an suv hits a gas pump after being struck by another vehicle. the driver of the suv was killed. two people inside the gas station escaped unharmed. the first two cases of the zika virus have been confirmed in poland. officials say one of the patients visited the dominican republican and the other columbia. a beautiful but dangerous sight in hawaii. the lava is flowing again from the volcano drawing a big crowd.

officials though are warning people to stay back and they're recommending visitors wear long pants, shirts, hiking boots and gloves just in case. that's our cnbc muse update this hour. back downtown to squawk alley. back to you. >> i won't be chasing any volcanoes any time soon. >> no. >> shares of target are tumbling after the company cut it's full year forecast and warned on further weakness in today's earnings report. it's at the bottom of the s&p 500 with lows. lowering it's out put in three main areas including apple products. target ceo stating listen to this, sales were well below the results. we would expect overtime, first sales of apple products plunge 20%. target is working with apple to improve performance for more on target and retail in general. joining us is the retail analyst. thank you for calling in.

>> thank you for having me. >> how do you explain that weakness, specifically from apple. is that an apple problem or a target problem? >> i think that target has the challenging with drawing traffic and stores and broadly speaking across a number of categories. i think what we we heard from the company on electronics and apple specifically reflect the fact that the company made meaningful investments over the past year and a half to really beef up that business. so i think ahead of a new iphone launch and newness to come later this year. i do think this is still more of a traffic issue relative to being an apple problem. within target. >> i wonder if apple is going to call out traffic numbers on its

report. saying here you haven't heard about weakness whether it's apple or electronics with the big department stores or mass retaile retailers. >> electronics is a weak category overall and the government data over the last few months would suggest there is a downturn trend in that category over the summer months but i would argue that target is losing market share and that the results that we'll hear from walmart tomorrow won't reflect as meaningful of a decline in the same category. >> paul, shouldn't target have seen this coming? a year ago it was a new design and bigger phone and everybody had to get a new case and pick some other stuff up as they went to target and other places to get that. the 6 tps s is the same size. you can use your old case or get one from a friend. target should have known that, right? is the issue that there aren't

other products like 4k tvs to drive people to target online. >> there's not enough offsets to take on that should have known was coming up this time of the year. it's beyond other areas and items within electronics like tv. target was counting on a better performance out of its grocery business which they have recently reset in a number of stores yet the top line was down this. and the partnership in cvs and trends have been challenging there so it really speaks to broader weakness across the entire box. >> target shares now lower for the year. thanks for phoning in again. >> when we come back, gopro's big move into virtual reality.

a closer look at that in just a moment. kubo: wow. narrator: so grab your loved ones monkey: don't even. narrator: and explore a world of possibilities. kubo: it's beautiful. narrator: visit discovertheforest.org to find the closest forest or park to you.

>> coming up today on the halftime report apple is up 16% in the last three months but that run is not done. he's with us live. see how high he thinks it can soar. mr. wonderful may be changing his tune on the stock as well. kevin o'leary has a lot to say about other opportunities in the market and he'll take your questions as well. tweet us for that and unusual activity in gold. they're on the case as usual.

see what they see john it's all at the top of the hour. we'll see you in about 15 minutes. >> looking forward to it scott. starting today go prois going to begin selling it's newest product a six camera rig for shooting virtual reality content and boy is it expensive. josh is in san francisco with the low down on that and more, josh. >> it includes this medal housing that you can see here and software that can allow you to capture stitch and obviously that's pretty pry sis for your average consumer but it could make more sense for professionals like film makers that want to experiment with vr content so it aligns the cameras and sinks them and only has to

program it. he tells me that the om know is important as a potential marketing tool. the more likely consumers will be just yesterday they announced that all in one vr head set can show virtual reality index which packs publicly traded companies with exposure to vr is up nearly 20% this year and gopro itself has been on a recent tear up more than 70% in the past three months after that better than expected earnings report and ahead of new products in the pipeline like the new camera and drone it could also reflect a short squeeze. leading film makers are using the onmi so the hope is that

this device leads to cool gopro content which could help that recent good buzz keep going. >> stocks had a bit of a run here. >> even without the cameras the rig itself is $1,500. this is not even a -- there's no electroni electronics. >> let's get to rick with the morning exchange. >> listen, down here the conversation really has mostly been about fx. so what is effecting the fx markets? and one of the main markets many people talk about in the end but let's go through the bullet points here. experimental policy seems to be the number one answer for the strange movement in some foreign exchange markets whether it's

trying to fix what has been deemed structure issues it just doesn't work and, you know, you repipe the financial system only to tear it out again which is what we will learn coming up in a week the other issue is dollar denominated debt. we know that the collateral damage has been emerging marktds and the dollars going up in value but some are issuing their debt in their own currency. sometimes when you make adjustments because of the last confrontation in the marketplace you may have created a new issue because everything is changing

and real unique structures. let's look at charts that bear this out. let's look at a one year chart. if you look at a one year chart, what a move. hard to when you look at it a ten-year chart, maybe the explanation is more moving people, logistics. wow, did we build in after the crisis some big downside to address the upside that is now at a median level. but my favorite chart is the next one. from '96 to '06 before the crisis, look at how much less volatility and range we had on the varying side from the dollar-yen relationship so i think much of this will continue. but be careful, a lot of the markets, whether it is fixed income or fedex, it is not driven and they are commodity and they bring in speculation and a wild ranges. sara, back to you. >> love that. only one who shows my enthusiasm

for the dollar yen charts. rick, thank you. when we come back, steve wozniak weighing in on the presidential ae -- election and the company that is the biggest disruptor out there. should be good. coming up next. you're here to buy a car.

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disruptor? here is what he said. >> tesla is probably the one i think of personally a lot because -- a lot of what elon musk does is driving toward that future that we could have that is so much more beautiful and not restricted by the ways things were done in the fast and he's built the first successful car company in the united states since 1927. and the first electric car you could drive anywhere you want and own it and feel like i'm an owner and go where i want to go just like in a gas car. that changed my life a lot. >> he also talked about the election. how silicon valley feels about donald trump. >> silicon valley is one of ten counts where more than half of the countries speak nonenglish at home. we have to be accommodating and they've helped us grow and be what we are. so, um, trump's been unfamiliar

with, and unkind to, a lot of technology companies in his comments and his speeches and he's willing to jump out of them. he said, let's make america great. right now, the probably one thing that makes america seem the greatest other than the past is companies like apple. >> i think his political views have been pretty well telegraphed but i have not heard him talk about tesla in those glowing terms before. >> it is definitely a disruptor for the 1%. i'm not sure that most ordinary people have felt tesla's disruption. i think maybe amazon personally more for the middle class, most people changing the way you shop and the things you can enjoy maybe a little bit more than elon musk. >> on the presidential issue, silicon valley not giving as much to donald trump and we saw that when meg whitman shifted her donations. and while hillary clinton has

raised 25 times more than trump from tech industry, she's raised half of what president obama raised at this point four years ago and so she too has an uphill climb. >> and i took a poll, most influential company, walmart, apple or facebook and amazon and apple was far and away the most popular name in that poll. we'll see what that means. a lot of retail names moving, urban, the best day in almost four years. more on that in a moment.

keeping around the markets, oil is not cooperative. having lost a marginal gain for the morning so far, that is why the dow is perhaps down to 80 points, close to the lows of the session. we are not done by a long shot. bullard today and cisco and limited brandts tonight. >> and we have the interview with the jcpenney ceo, the three biggest losers in the s&p are target, lowe's and staples, all earnings related stories and the interview with chuck robbins, cisco is weighing on the dow and

the biggest loser in percentage terms. >> this is a time when cisco could be a bell weather for a large tech, particularly enterprise, with the cuts, even though it is not recently. >> we'll see if finally for the first time in weeks back to back losses for the major averages. for now, over to the judge and the half. ♪ >> carl, thanks so much. welcome to "halftime report." i'm scott wapner. apple rally, that stock up 10% over the last month and word this week that warren buffett berkshire hathaway buying more and his stake worth $1.5 billion and raising the question whether the biggest company on earth is truly back and a must-own name fon your money. with us for the hour is steven wise, josh brown and jon and pete najarian. and berkshire is loading up and others are getting out and who is right.