good morning, it is 11:00 a.m. at viacom headquarters in new york city. "squawk alley" is live. ♪ ♪ ♪ ♪ good friday morning, kayla

is out, but john, mike, and me, post nine for the hour as the dow's trying to repair early damage down about 30 points right now. the big story though, some of the redstone coming out on the battle for viacom. >> sources tell us the deal is in place bringing to an end nine months of legal battles. sumer in and his daughter are coming out on top. the settlement posted three lawsuits under way without putting to test the mental competency which has been called into question. the sources tell us viacom's ceo will step down immediately and coo tom dually will become interim through the end of september. he is not exactly losing. he'll receive a $72 million severance package, and that's on top of $491 million he's brought home in compensation from his past decade at viacom. now he is among the most highly

paid ceo's despite the fact that viacom vastly underperformed the s&p 500 and sumer in red media giant cbs. he has until he steps down as executive chairman on september 13th to prevent his proposal to sell 49% of paramount to the board, a plan that somewhere near redstone has vehemently patrol posed. what's next now? this agreement will help remove some uncertainty that's been hanging over, but the pressure is on now for the company to find a new ceo since tom dually has been the right hand. joined viacom's board back in 2006. they have been speculated about as an ideal choice, renewing speculation and viacom potentially recombining with cbs. the sources tell us lawyers are working out the final details of the deal, which is made in principle last night. we also expect an 8k to be filed some time this afternoon that might include some more details,

carl. >> julia, thank you for that. we're going to turn to ricoh's executive editor who joins us on the phone, guilty or not guilty to you. >> good morning. s. >> i'd love youle to discuss some of the management dynamics, dually and they've been a package deal for so long. how can one leave and the other remain? >> because chaos happens all the time on wall street for those that don't perform, carl. if you've watched all the different deals to get rid of people essentially. this is typical. if i was a shareholder, i'd be furious. this is the cost doing business. and people who underperform get paid, i don't know, $72 million for underperforming and more than that because he was paid hundreds of millions for the year and badly managing viacom. >> and it's not unique to the east coast, we remember castro at yahoo -- >> yep. >> got in an exit package that's not too bad.

given the environment in 2016, certain populist -- i wonder if there's, i don't know if it's a different lesson we've seen in the past. these payouts for performance that's best questionable and happening for quite a while, right? >> yeah, but why do they keep happening, it's ridiculous. you don't need a more perfect example of the rate that's happening across the country and whether or not it's correct or not. it's still -- you see numbers like this, and someone who underperforms for a decade getting paid, you know, $600 million. it's just, you know, he says i'd like that deal. i wouldn't like that deal. i wouldn't like to be paid for stinking up the joint, but that's just me. >> kara, once shareholders swallow the fact that he is being paid this much to leave, but at least we have resolution, right? we have some -- >> i guess. >> the hostilities, now what? what's job number one strategically for the interim ceo an the eventual full-time

ceo to try to get things figured out? >> oh, all kinds of things. this company's been underperforming for years, meanwhile the equal company at cbs are doing great because there's a ceo whose been outperformin people think, as julia says, they'll combine it or run it parately. he'll be a coat, ceo, with two companies. and, and we'll see from there. all media companies are under huge lenge. here they are playing the ridiculous board room games, and meanwhile, other companies are moving into their area. and so they really have to move quickly because media stocks are troubled, as they have been, and there's all kinds of challenges, and so someone needs to be focussing on these challenges. the real problem is thousand manage a media company in the 21st century. >> that said, looking at year -- i mean, i know the market's up for the year, cara, there've

been buyers of the media companies considering them well-priced, is that misguided? >> no, i mean, they are. they're really interesting assets. there's all kinds of obviously there's always a price for something, but here's the company for ten years, that could have been really dominant position of buying. i just find it -- i shouldn't get so offended -- and i'm not surprised. i wish i would be surprised, but director's of companies would not allow this to happen. >> there's been this trend it seems to me of media companies either trying to bulk up in general and join up with other media companies or vertically integrate and take some advantage of distribution that way. given viacom's history, trying to appeal to kids and young people, the ones getting stripped away, especially quickly by the likes of snapchat and instagram and others, which or some other advocate perhaps makes the most sense for viacom do you think at this point and

you can figure out the right strategy. >> i think they'll unite with cbs. i think that'll be the first move. and then we'll see from there. i mean, there's a lot of very big buyers, and tamts, there's only -- so big as these things can get. i don't know which company would buy it. steep price to buy a company. i suspect it's an indication with the existing properties under this umbrella of national easements. and then we'll see what sherry redstone, emerged victory here after being on the outs for so long does with it. >> finally cara, a lot of discussion about -- we talk about the media companies having trouble going after younger audiences, this week also brought the end of pivot tv and the end of the new york times now app. even those that are specifically targeted for those audiences are having tough sledding. >> well, they're just not good products. that's okay. good for you. you know what i mean, they tried them and they didn't work.

you're going to see that over and over again, and that says snapchat's working, a lot of stuff is working. we'll see where it goes. it's working and being met with interest from young people. i mean, you know, i'm not trying to be insulting, but somebody dumber could figure out if the that his life depended on and didn't. his life figured out on it. i think some of these things aren't going to work. new york times now app -- it's hard to do mobile apps. it's very difficult. i don't know, it's a difficult thing. and i used the new york times app. new york times now app was inadequate for a long of people's uses. i used it and i didn't like it. >> before go, cara, you did an interview with the harold. the headline, why is silicon valley afraid of a kara swisher? >> that's familiar. >> you went into the themes you've repeated in the past and that is this ongoing worship of the so-called tech titan, didn't

you? >> yeah, exactly. it's the same thing. and sometimes all this is going to happen for them. it already is. you were talking about castro getting $100 billion for not performing, you know, a big package for not performing. there's a lot of stuff that you have to really watch out for and we should be watching performance and how people do. and not everything's going to work, obviously. but you know, doing victory laps when you had not a success is something that's starting to emerge. and so, you know, the meme, i don't think anyone's scared of me. i think it's getting to australia, that particular meme. you know, they're not fearful, they're not fearful, but they just said, hey, this sells for this, it's not a victory, i'm sorry, i don't think that's scary, it's truthful. it's scary to people, it's scary. i don't know why it would be. >> we didn't even touch gawker today -- >> gawker, oh sad, sad. >> in the days to come.

good weekend, we'll talk to you soon. >> thanks, carl. >> kara swisher. we to want check on the markets right now. the dow is up off it's lows, up about 100 points earlier. modest losses about 0.2%. nasdaq looking to put in another positive week which would billion it's longest since 2010 if it did so is up marginally. foot locker moving higher after earnings beat estimates. retailer saw better than expected 4.7% increase in same-store sales. and shares are also moving on earnings, seeing a nice game after those profits top expectations, a company also raised it's full year profit forecast. see the stock up more than 8% right now, almost 9%. when we come back, national finance chair for mitt romney's campaign says he's now voting for hillary clinton. we're going to take a closer look at the resignation of paul manafort. plus moving higher on beating earnings. raising the guidance, c 'going to join us in a cnbc exclusive

and live to rio for the latest on the ryan lochte story in "squawk alley" comes back in a moment. ♪ there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be. got a quarter?

paul manafort resigning as the chairman of donald trump's presidential campaign as trump visits baton rouge today. we are live in washington with the latest. >> yeah, carl, that's right, big moment of change here for the trump campaign. donald trump himself on the

ground in baton rouge just within the past hour. he is touring flood damage there and republicans want to make the point that presint barack obama, who is on vacation, is not paying enough attention to what's going on in louisiana. ian as that is happening, news that paul manafort, the campaign manager, is out. here is the statement from donald trump on his campaign manager, i am very appreciative for his great work in helping to get us where we are today, and in particular, his work guiding us through the delegate and convention process. meanwhile, the trump campaign really starting to try to act like an old-fashioned, traditional presidential campaign now. airing television ads in a number of states. here's the ad that donald trump is putting up in four states, this ad hitting hillary clinton pretty hard. take a look. >> in hillary clinton's america, the system stays rigged against americans. syrian refugees flood in, illegal immigrants convicted of committing crimes get to stay --

>> contrast between hillary clinton's america and donald trump's america. now look at the contrast between hillary clinton's ad spending and donald trump's ad spending, by comparison, state by state, what you're seeing, florida, ohio, pennsylvania, and north carolina, all big spens here by donald trump, but then look at that column for hillary clinton, and you see that she is spending more in florida, more in ohio, more in pennsylvania, and more in north carolina. grand total, 5 million for clinton, 3 million for donald trump. so the clinton campaign has a lot of money. they are used to being a presidential campaign, we'll see if donald trump's whose campaign so far has been about twitter, television attention, media frenzy, and big rallies. if he can make the script to more television-paid advertising mode going all the way to november 8th or it's just a blip and he'll go back to being donald trump before too long. >> we're going to be watching those handful of states, thank you very much. staying on the campaign trail,

former mitt romney business associate and romney presidential campaign staffer david pending an op-ed on cnbc.com this morning. it's titled, i've been a republican since 1980, but i'm voting for hillary clinton from the column. trump is the most dangerous major party presidential in my lifetime. joining thus morning is the investment manager, founder of president of the campaign, thank you. >> thank you and good morning. >> i'm trying to decide whether to be surprised giving the speech romney made months ago now. has this decision been a long time in the making? >> it's been a hard decision to make because as you said, i have pretty consistently voted republican for president since 1980 and i spent six years volunteering as a fundraiser for mitt. so it's not something you do easily. but, i've thought about it the, i thought about it as a father of three adult children, i've

thought about it as a citizen of the united states first. and as a republican second. and i think it's the right thing to do. this time. >> what do you say to those that argue that the policy are closer to their political heart and they can tolerate the behavioral issues that they have trouble with, what's wrong with that? >> well, i think the issue is really about temperament, personality, and character, more than anything. we are electing the most powerful person in the world. my children are god willing, going to live until well into this century and god willing they'll have children too. i have to think about things like that. i have to think about as jennifer garner says, what's in your wallet? you look in your wallet, and you see money with heads of george washington, abe lincoln, you look in your pocket, thomas jefferson, and you see fdr, and

if you look at mt. rushmore, you see teddy roosevelt. i don't see donald trump on the money. i don't see him on the coins. i don't see him on mt. rushmore. i don't think he has a presidential personality, i don't think he's fit to govern, and to me, that is the most important thing. i spent 38 years knowing mitt. i think i know what a presidential character looks like. >> maybe you can explain the prague in atism in your politics. excuse me if i'm reading this wrong, it seems like up until about nine, ten years ago,out mostly donated to democrats not to republicans when you look overall at local contributions as well. so, you know, your politics seem to be a little bit more sin tryst than people might expect from someone who's voted republican for president since 1980 as you say. >> the most important thing for me is to pick the right person for the job. you're exactly right. usually that has meant for me

since 1980, voting republican at the presidential level. move down the ticket, you make your choices all the wait down. this. year in fact, one of the things that i think is kind of unfortunate is that so many people in the business community seem turned off by trump, that may may not be voting for republicans down the line. and that would be unfortunate because i think there are some real benefits to having branches of government in the hands of different party zblns david, of course we'll hear from viewers who argue just because you decide that trump is not fit does not mean that clinton is. so what possible pro-clinton argument can you make? >> i'm comparing the personalities in terms of stability, decency, compassion, inclusion, as opposed to name-calling, scapegoating, victimizing. when trump says that a legitimate american hero like john mccain is not a hero, when

he comes down on the gold star parents, when he comes down on people who are different in terms of ethnicity or religion, those are not things that hillary clinton does. those are not presidential things. so there are huge differences. a president has to be a leader, just like a ceo has to be a leader, they have to build a team, lincoln built a team of rivals from his rivals from the presidential campaign and governed wisely and well. i think hillary has the team-building capability, the toleration for diversity and disagreement that donald trump has not shone. even today's news about the latest turnover. it's always something. it's always something with the trump campaign. every day, there's a new insult, there's a new change, there's a new 180. that is not stability. that is not presidential. >> and are you prepared to spend the next four years wondering if your judgment was right on benghazi, or e-mail servers, on

the clinton global initiative? >> we are always looking over our shoulders. and we are always thinking about that. one thing i would say in response to that question, is that i think bill clinton was a moderate person in his views. he did what he called drink angulation, i think hillary clinton will do the same thing. i am simply more comfortable with her experience, her temper meant, hero ability to hit the ground running than an erratic and ungovernable personality who feels to me more like a game show host than a president. the job of a game show host is to entertain. the job of a president is to govern. those are two completely different things. and so far, looks like about 60% of americans agree with me. >> final question before i let you go, david. percentage likelihood that romney himself follows your view. >> mitt is -- has been making some positive comments that i've

heard about gary johnson and bill weld on the libertarian ticket. i'm also hearing there's a man named evan mullen who is going to be running in ten or 11 states. i don't think that mitt is going to vote for a democrat, but i also am pretty sure he's not going to vote for trump. he will pick one of the two alternatives and who knows. utah may be in play for the first time since 1964 and nevada may be in play too. >> david, we appreciate your time and of course direct viewers to your op-ed on cnbc.com. thanks so much. >> have a good weekend, thank you. >> thanks. and up next, the latest on the ryan lochte saga. we're live in rio in just a moment. so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face.

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new developments this morning in the ryan lochte saga. andrew joins us live from rio on a week where he probably didn't expect the news flow to be quite in this direction, andrew. >> reporter: i did not, carl. i didn't, but the soap opera

coun continues. finally now ryan lochte apologizing in a statement. it was released in digital form on instagram just a short time ago. let's show you what he said. he said specifically i want to apologize for me behavior last weekend, how i describe the events of that early morning and for my role in taking the focus away from the many athletes fulfilling their dreams of participating in the olympics. he went on to say, quote, i should have been much more responsible in how i handled myself and for that i'm sorry for my teammates, fans, fellow competitors, sponsors, and the hosts of this great event. i'm proud to represent my country in olympic competition. and this was a situation that could and should have been avoided. i accept responsibility for my role in this happening and have learned from very valuable lessons, guys. as for his teammates, we should tell you earlier this morning, two of lochte's teammates involved in the incident, gunner

bentz and the other arriving back in the united states. a fourth team member and he's the last to remain. he appeared in a rio court where an agreement was reached early this morning. he must close to $11,000 to a charity here in brazil and he'll get his passport returned as a result. we should tell you and i want to show you video. yesterday i spoke with jeremy bloom, he's somebody whose known ryan lochte for quite a long time, he said strong words about what should be done next. >> if it comes out that he was completely fabricated and made up, scott blackman should ban him for life. he should never be able to compete for the united states again. if it's true. zplr these are certainly not the headlines that the ioc expected to come out of the rio games. and a couple of quick notes as you know, lochte does say he wants to play in the olympics in 2020 in tokyo.

there's, of course, the question about his sponsors and in terms of just the response thus far if if you go on to instagram or on to twitter, but instagram specifically, you can see the comments not clear that this apology, non-apology some people say, is going over well and whether people are really going to accept his words at this moment just yet. >> yeah, well thanks for the reporting, andrew. great stuff out of rio. quite a story, quite a story. not what we expected at all. >> meanwhile markets are closing in the uk and across europe. we are back in headquarters with that. >> posting their biggest weekly losses, mid-june. the broader market now down in five of the last six sessions. reflecting concerns about a possible u.s. rate hike. also had that hawkish rhetoric comes from various officials. italy down more than 2%, in fact, check out the italian banks where the focus remains, the ceo and former chairman of

the italian bank are reportedly being use accused of market manipulation and false accounts. a 2% decline in the trade. another italian bank down 6% and if we switch over to germany. some of the big auto names, a bearish note from goldman sachs. they're siting concerns and writing there are multiple question marks about earning stainability, bmw downgraded to neutral from buy. now the underperformance in these auto stocks and energy pushing the german dax still in bull market territory. angela merkel begins her tour next week, she'll meet with four countries, 15 government heads to construct a coordinated response to the brexit, make sure to watch for the headlines. in the meantime, the euro, witnessing the best run trading at a post-brexit high of 113

against the u.s. dollar. and if you stick to currency, the notable rebound in the pound this week. predicated on the better than expected economic data as people get inflation, employment, retail sales. the immediate aftermath of the brexit hasn't had a huge influence on the uk economy. at the same time, there's still growing expectations that the bank of england will ease further. bank of america this morning putting out a note been it sees another cut in november from the governor in the big bank of england. lastly, we've been highlighting the big move in bond yields across europe, portugal remains the outlier where we are announcing yields spike once again above 3%. very sharp contrast to what we're seeing in jeremy and france. john, back to you. >> boy, how times have changed when 3% yield for portuguectugu debt is a spike. when we come back, look at applied material stock. that's moving higher after

raising guidance for the current quarter. ceo of applied materials joins us in a cnbc exclusive next. when "squawk alley" returns. w'. 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 and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.

good morning once again everyone, i'm sue herrara, here is your cnbc news update at this hour. the u.n. relief agency say that they are ready to go back to syria now that russia is backing a 48-hour ceasefire in the city of aleppo. the u.n. suspended operations

yesterday after fighting intensified. food supplies and medical services are immensely strained for the roughly 250,000 people believed to be trapped inside eastern aleppo. the red cross is calling the disaster in louisiana the worst to hit the u.s. since superstorm sandy. the agency expects to spend at least $30 million on disaster relief. at least 13 people have been killed and more than 40,000 homes damaged. gop nominee donald trump is in baton rouge today. after years of delay, london's subway system will begin this weekend with 24-hour service tonight. it's being dubbed the night tube. right now, the expanded service is only on the central and victoria lines on friday and saturday nights. the increased service is expected to boost the city's economy by some $100 million a year. and nasa astronauts board the international space station have their work cut out for them today. they're installing a new docking port in anticipation of more private spaceship traffic.

it's expected to take at least six hours to complete, but what a view. and that's the news update this hour, back downtown to "squawk alley," john. have a great weekend. >> you too. and applied materials reporting record earnings after the stock is up almost 50% since the start of the year. joining us now in a cnbc exclusive interview with the ceo of applied materials. gary dickerson, and thanks for being with us. >> thank you. >> congrats on the report. you say that number of different trends that are fueling the rise here 3d nand, led screens, augmented reality and you make the case that this can continue. my question is more around that. china's been a wild card for a lot of companies when they see the american company doing well lately. it seems uncertain whether they're going to throw any regulations at you. how can you be so certain that all of these trends will

continue to the point where you'll be able to predict performance in several quarters ahead. >> this is an incredible sad time. the technology world is demanding new solutions. so what we see is that smart phone companies are driving differentiation. and going forward, you'll see an increase in adoption in organic led displays. also an increase in silicon content, increased ban width, higher performance, and longer battery life. we're also seeing an explosion of data from social media, 4k video, and internet of things. and also, really exciting new markets where companies in silicon valley are making increasing investments in virtual reality. augmented reality, smart vehicles, artificial intelligence and deep learning. and all of these markets really are driving higher performance computing, advanced memory, and

better displays. it's also driving big influxs in the semi conductor and the display industries, bigger than we've seen in decades. did. >> we're out of time -- >> the fundamental technology underneath all of this is materials innovation and apply ed materials in the leader no merles innovation, and that's why we're delivering record results today, and we are better-positioned than we've ever been in the history of our company for long-term growth. >> i do get it, and you guys have a long history of providing the tools and materials that are needed to produce this innovation, my question though is about being able to predict the direction of these things. we saw what happened with solar panels, that was a much more treacherous market than people expected, vr and ar is still developing with. the nand market, granted just getting off the ground, but it can be volatile. >> sure. >> what gives you confidence in

those particular things it and the continuing trajectory? led is great for the smart phone market has been flattening out growth wise over the past couple of quarters. >> yeah, i think the great thing for applied materials is really our position. this isn't in the industry story. this is an applied materials story. so let me give you an example. in the memory business, we see an explosion of data, and there is no question that memory demand is going to go up in the future. what really has changed in the semi conductering business is a huge influx going to smaller yes only drinks to 3d scaling. materials enabled scaling. and that is the biggest change that we've seen in decades. applied materials is the company that is enabling that transition and may remember, and we're still in the early innings of those -- in that transition. another one is in displays, organic led displays, the

consumer experience in the smart phone is a key differentiator. >> and with e will see going forward, significant adoption of these new organic led displays going forward again it's materials innovation that is enabling that adoption, in this new memory and in these new displays going up by a factor of three. so, again -- >> wide materials is an incredible position. >> so what trends would you say you're most closely tracking when it comes to this? i mean, you've named a number of things, ar, vr, which is still small, 3d nand which is going to be huge because we know how much is being used throughout for consumer and enterprise. led is going to be big as well. as we track your broad potential and try to imagine it over several quarters, is there one of those categories that's going to be more important than the others? >> i would say near term, we're

in the early innings of some big multi-year waves. organic led display adoption is going to be huge. and applied in a unique position relative to that particular wave. the memory trend also -- this is the biggest change that we've seen in decades. we're in the early innings of that wave, and applied also in a great position. you also mentioned china. our business has doubled in china in the last two years. and applied has the 32-year history in china, incredibly strong position with domestic and multi-national companies. and china has announced they are going to invest over $100 billion and there's no question that market will still grow and applied is an incredibly strong position for this wave also. >> well, very impressive earnings you delivered and a sunny outlook as well. the stock up nearly 7% so far in trading. thank you, gary dickerson, ceo of applied materials for joining

us here, have a good weekend. >> thank you so much. when we come back, what's a sold new. robert franks is looking at a new trend where classic luxury cars are getting younger and younger. don't go away.

coming up top of the hour, halftime report, outrage over the exit package. many argue this was not a ceo that brought shareholder share value. which do bring the most upside for the stock? the professor has done a lot of

work on that. questions, going do to go through his list and name names as well. forget about data. we have the ceo of a company selling pictures of outer space to investors giving them a big leg up. see what they see today on the halftime report. noon eastern, mike, we'll see you in about 15. >> all right scott, we'll be there, thanks very much. meanwhile, classic cars continue to get younger, unlike the rest of us. robert frank is live in pebble beach with more, hello, robert. >> yeah, mike, with more and more today's rich in the 30s and 40s, the cars are getting younger too. dozens of cars from the '80s, '90s, thousands being sold. super cars two or three years old. all eyes are on the first two ferrari's ever to sell at auction. there's this black one being sold, this could be sell for $4 million. it retailed for 1.6, just two years ago. and then there is a red one being sold.

the question is whether the red is going to sell for more than the black or which is the win per. now yesterday, we actually took a ride in the red la ferrari that bonds is selling. the red is going to win the race ppz. >> people want what they can't have. it's probably the best thing. and ferrari is famous with that. you had to be someone to be able to get the privilege of buying a car for the 1.4, $1.6 million. >> now here at mecum, they're selling the holy trinity of super cars, a laferrari. now this green car, which i call the green lantern is actually -- could sell for more than $3 million. it was the first p1 ever delivered in the u.s. come over here, you've got to check out the interior of this car because i have never seen anything like it, even on a super car. that is a lot of green.

guys, back over to you. >> unbelievable live shots all morning long, robert, thank you for that. look at that smile. robert frank joining us there. let's get to the group, rick santelli and the santelli exchange, hey, rick. >> hi carl. well, listen, many participants in the marketplace have their own views of central bankers and specifically our fed. but no matter what your view is, we all know what's coming up, jackson home. and i have an opinion on jackson home. i think jackson home's main topic should be, get the u, and again the n, out of unconventional. we need to see more conventional policies. now, one could say, ah, it's semantics. normalization, unor non-conventional. it isn't definitely just about normalization. unconventional basically means experimentation. feds models haven't really done

what they're supposed to, issues of negative rates throughout the globe and the fed isn't unique in this. think about it, think in the unintended consequences that have occurred. negative rates are supposed to accomplish something, one of the somethings is not increasing savings rates or buying saves in the states of japan, stashing cash and the counterintuitive notion of negative rates being accompanied by a rallying currency. the problem with unconventional is that one when you are there, you can't go back in time and use models or use comparisons or economic strategies for times that were conventional or normal. just doesn't work. and the second issue that isn't going to be at jackson home, but it's what everybody's thinking is can the fed, can central bankers in general get their credibility back? to me, that's as easy as it comes. less talk.

now, i would probably say less talk followed by more action, but even if it's just less talk, that's a good thing. you know, i know that they're moving into all sorts of new digital media, listen, that isn't going to make a difference. you could scream it, scream it in six languages. the market is rejecting these policies. now, one of the things that's being talked about, targeting a higher rate of inflation, like 3%. let me get this straight, going backwards in time. 1.2 gdp, .8 gdp, 2.6, 2.0 going back six quarters. i hear 2.6 less growth. learn to calibrate, come on, central banks. you can't target 2% or 3% when you have 1.5% growth. it makes no common sense. john, fort, back to you. >> all right. calling it like you see it. we appreciate it, have a good weekend. >> when we come back, the secret behind snapchat's success what rivals like twitter and instagram are doing about it.

jeremy lou joins us to discuss. we'll be right back. you're here to buy a car

the launch of instagram stories and yesterday's twitter downgrade by evercore, indicated the real threat known by snapchat. cuts in innovation with filters videos now ads is heating up the fight for users and ad dollars. joining me, manager and director

and early snapchat investors and also chief of the information. good morning to you both. >> good morning. >> good morning. >> define, if you can, what snapchat's secret sauce is? they've done so many things. is it the ability to help people tell stories in ways and with tools that really appeal to the things that human beings just like to grasp on to? twit hearne been able to do it yes, but instagram is taking a stab at it. >> yes. a little of those things, jon, but most important, part of popular culture. that really is kind of the thing that has separated snapchat from a lot of other aspirational messaging and social networks. when you become part of popular culture, when you become something that people want to use, want to talk about, whether it be for the stories, for the messages, store the discover, for the lenses, so many aspects

of it that in their entirety have become a homescreen app for hundreds of millions of people. >> jessica, twitter was certainly part of the popular culture, but seems to have hit a growth wall. what do you see as the main challenge for others who are trying to compete with snapchat in allowing people to communicate through video in a way snapchat seems to have latched on to so well? >> well, snapchat has wonderful positions, but a competitive market and we have to remember this is a company that's still, snapchat still has to prove out its business. it's growing very quickly. all signs reported in the information more than 300 million in revenue, very steady growth, but you have instagram, youtube and you've got all of those new upstarts that might come up. i think it's an exciting place to watch and i do think instagram ask going to get a little mojo back with its snu

sto new stories lunch. >> to follow-up on snapchat the mission, seems they really want to maneuver fast, stay a little ahead of the competition, experiment with things without necessarily having to deliver those neartime results. thinking of twitter, soon as they went public, all about monetizing and user growth. is this an incentive for snapchat to remain private as absolutely long as possible, do you think? >> i think there are strong incentives. i also think as i've writ than snapchat will be ahead of the curve on the next group of ipos, because i think it doesn't pay as much attention to what silicon valley does, being based in l.a. absolutely snapchat is enjoying being a private company. one example we reported this week is an acquisition of a company called verb in the search space. 75% was stock, when you've got a currency that's highly valued in the private markets you're going to spend it. and snapchat's been doing that with a little bit of an

acquisition spree. >> jeremy you say you're not going to talk that much about verb itself, but i'm curious. how inquisitive do you vi snapchat will be from here on out give than naysbofacebook uss to fuel continued growth in ways it couldn't have on its own? >> so the company doesn't really talk about future-looking road maps, but you can look backwards and see some of the successful acquisitions the company has done in the past that really have kind of helped fill out this, you know, this role as kind of a core home screen app for its users, and you know, the lens' product so incredibly successful came through an acquisition and the emoji a successful launch for the company, also to acquisitions. i think they'll selectively use opportunity to use functionality

and high-quality teams as it makes sense. >> right. certainly doesn't seem snapchat will be disappearing anytime soon. thank you jeremy liu from light speed venture partners and jessica lessen from the information. have a great weekend, guys. >> thank you. >> thank you. when we come back, the 2017 nba all-star game officially has a new home. more in 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!

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the nba announcing new orleans will host the 2017 all-star game. the news coming after the league decides to pull out of charlotte, north carol because of the discrimination bill discriminating against the lgbt community some believe. and the men's team continues to do well advancing to the semis. >> nice to get back to talking about what athletes are doing in the field of play, and looking forward to that all-star game, and can't help noticing amd is up 10% so far today. amazing that they're regaining those 2012 levels that we haven't seen in quite a while and applied materials well as well. >> applied materials after breaking to the upside out of a 15-year range. trading at 2,000 peak price.

finally after 15 years, momentum. >> next week, of course, jackson hole along with some earnings, best buy, toll broeb brothers, hp, medtronics, dollar general. a lot to get to in the coming days. enjoys weekend. over to scott wapner, the judge, and "the half." guys, thanks so much. welcome to the "halftime report." i'm scott wapner. our top trade this hour, viacom bombshell. word outgoing ceo felipe daweum is leaving. and following the money, julia boorstin. >> reporter: scott, a number of pretty shocking numbers in the last chapter of sumner redstone and fip illpedauman's leaving viacom. expecting him to be paid to step down