headquarters, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ welcome to "squawk alley" for a tuesday morning. jon fortt is live in san francisco. joining us inside.com founder and ceo jason kalakanis. the nasdaq hitten another all-time intraday high. really the story of this summer's rally. i wonder what you think is

behind it. >> we have a pretty amazing resurgence here, and that didn't happen. and what we're seeing is the big companies in tech, and we thought what he was going to go away are all printing large amounts of money. and many of these companies have 500 million to a billion customers using multiple products, and so with all this cash, all this your data. they're going for it essentially. in prinding money, but also in doing massive research. we're living in the age of massive advancement unlike anything we've seen. >> isn't much of this the story of pessimism overdone? >> apple saying that's -- google

has done then on the other side go pro has expanded. you look at a few other companies like that, groupon, which a lot of people had given up for dead. there are still sawed ideas here that have legs, even though they may not have taken over the world the way some people hoped. you're talking about the conglom rants, call it 20 to 100, and you have multiple lines of business. and what we'll see over time, they'll either end multiple or become part of those biggers companies but that it's hard to

find where the broad secular growth in tech is going to come from. >> this has always been the question, but we do now that if you know where the investment is, vr and ar, massive investment, and google. then google is really, really spending money on a.i., and then you look at self-driving cars, autonomy, and just transportation in general. they couldn't get the price they wanted, but you do see a lot of investment in transportation from tesla, which now they're saying, elan is saying we're not just going to make cars, but ride-sharing. >> and they weren't trying -- a little money -- they hired

catalyst. were they trying to sell, what was going on? >> if you hire george and frank, you're trying to sell for the highest price possible. so let's call it what it is. they a new ad-free streaming service, half of what apple, pandora and spotify charge for similar services form the catch the service will only work with amazon's echo. jason, over their skis on this one or not? >> i think it's a good -- it's the first time, you know using voice commands for his computer actually works and works delightfully, so adding a music

receiving to it, first essentially free. the big model is to make no money, but to build market share. i think it's going to work. it's a great product. if you don't have it, it is the absolute best thing you can buy for somebody for christmas. >> a lot of older songs, which guys like me can appreciate. >> yeah. >> but if you're paying four to five dollars a month for essentially newer stuff and mo popular stuff, but it can only play on echo, how does that mesh with the other songs you might have? you're talking to the ececho, isn't there the chance they're getting into the weeds a bit here? >> it cements a bit like that. you can have spotify and put it on your mobile phone. there might be some partial information that we have that

makes it feel confusing, but the high order of bit here talking to your computer, you no longer look like a dork. it used to be your computer didn't know what you were saying and you didn't get the actual payback. i'm sitting with my daughter and my 7-year-old says what does it work mean? and i say alexa, indefatiguable. so if you look at what people are excited about, ahmet startups are thinking about machine learning, and talking to computers and uses that voice interface, so many of the startups are not thinking the apple watch. they're thinking about talking to computers. >> we know that you've been bullish on alexa for some time, but on this music product specifically, if you're an artist and you're currently in negotiations with amazon, which this story has the obvious caveat that finalized negotiations with artists and publishers are not done yet,

what do you want from amazon? what do you get out of the having a cheaper service available just through am zone alexa? you have to really love music and listen to it. and what if this is the first cart we're seeing turned and they put it on echo and say, hey, by the way, would you like to put it on these other devices? and i think spot fill is one of those companies we could see get bought by amazon or an apple we

have had re his reports talks of apple-tv. are they on the right path? >> yeah, you know, listen, i'm rooting for twitter. i'm a fan of the service. i think many people in the technology business -- i think he's -- you know, because he's running two dpees simultaneously he's not see twiller keep pace. and it maxed out revenue, which is why the stock is just absolutely been crushed and it's probably going to get bought. the piece i wrote is basically there are some common-sense ways they could solve harassment and use real names. they have to execute better, and

the product execution at twitter is kind of a d, it's a minus. >> it seemed like a bunch of really good ideas to me, a frequent twitter user, do you get any feedback. >> i don't like to talk out of school, but i have a lot of inside information, but i don't trade public stocks, but i had a lot of great people come back to me. when somebody tweets to you it blurs it out. if the account was known for harassment, and saying this could potentially have harassing information if there was a derogatory or offensive word, you would have to click it, and it would unblur. click it if you want to see it. that takes away the edge of opening up as a celebrity, all these precious snow flack celebrities and hear that their movie sucks. what do you expect in they have to help those people. those people are the interesting unique asset that twitter has.

theft celebrities, journalists, politicians are on there all day. if those people get driven off like leslie jones was briefly, they lose their core assets. that's one of the dangerous things about these smaller single-digit billion dollar companies in the valley. if they have one revenue stream and one product they could get knocked out, like aol or yahoo!. so twitter is on the precipice, and they need to get focus the. >> we are going to talk to dick costolo later. >> they should have kept him. that's my viewpoint. jason, thanks, good to see you, as always. >> my pleasure. middle eastern while, let's look at the markets and crude which had been negative throughout the morning on the bam of a goldman report rather than a freeze, but now has turned positive, quoting opec sources that say iran is sending

positive signals it may support some of the action, some joint action to prop up the oil market. of course no commitment from iran on the record there, but certainly enough to earn oil into positive territory. when we come back, shares of best buy surging to 15-money highs. we'll talk about that. television legend norman hear will join us for the next emsolve of "bing." and the little start-up that could, how a cloud storage firm ignite is taking on rivals with some surprising success, in a moment. there are many things you don't want in industrial strength- (smash!) like an administrative assistant. 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!

best buy surging. the retailer joins targets and warning about slowing mobile same, particularly iphones. and colin gillis from gbc. alan, i'll start with you. the stock is up 16%. does that just show you how low expectations were?

does this show that they can compete against amazon? >> i think amazon is not worried about best buy results right now. but you know in the broader sense you are seeing some competition picking up, but there's massive tailwinds in that space. one was talking about the advancements in the app e-xhert experts say that shipping is faster, the reviews are decided. what seemed to be a friend toward the time of technology

things like home -- and is it your sense that those two things, the things that bebuy has -- in technology might be leaning toward a ren sauce overall. >> i think -- when we are at early stages in the life cycle of any product cycle. before they're willing to shell out the dollars, but in the early stakes of product development they're in an advantageous position. >> for the last four year they've cut costs by about 1.25

million best buy will have to have the advent of new technology. hopefully with the new iphone coming online. that would benefit the top line. >> until then, colin, with what tv prices have been doing, the closer that comes in, the more you run into the henhouse and then it's trouble. i'm always said if i was on -- how could we led this be happening, with amazon, the walmart of e-xhert, why can't they pick up more shares, so see if that gives them fuel on the

space. >> as far as bebuy is concerned, they are the last man standing in consumer electronics. do you think they can make -- they talked about servicing the customer and building the relationship, solves the needs, and so i think that is a hook for them in their physical space. we're actually seeing the online people try to build on the a physical presence as well. >> we think that's adjust. but best buy needs to show the street some top-line growth. i think you'll see the multiple expand in tandem with that. >> we'll see if we get that in the -- our thanks to both of

you. >> thank you. >> when we come back, he was the brain behind hit shows like theever sons. now tv legend norman hear is our next guest on bing, plus dick costolo will give us an exclusive. in just a moment. 6

glee legendary tv producer norman hear is taking his talents to netflix. he's rebooting "one day at a time" in a 134-episode arc streaming next year, but helear urging people not to watch it on their phones. here's what he told us. >> do you watch shows on your phone? >> no, no.

>> i can't imagine watching a great performance on a phone. >> why not? >> children do children's things. i don't think it's very adult walking around looking at performance on a cell phone. >> you're about to see how one day operates. >> they'll be able to bing 13 right away, and i can't believe that some people will watch it in a long each. >> just not on their phones. >> oh, please god, now on their phones. >> he says there's no time like the recommend. >> you say we're in a golding age of television even though we're awash in television. so are the most successful shows

on think. >> i see it, i think it's just a good as anything as i have ever seen. this happens, i saw something regally told me -- the way it usually goes is you mean you're not watching. -- the night manager it's perfectly terrific. this goes on all the time. and way back, you know, eight years or so now, there is "southpark." the new carmichael show which was new last year, and "black-ish" they're fabulous. so this -- for the two reasons.

for me it's the golden age. >> season two of bing is streaming now. fascinating that a guy who is 94, managed to create a new era for himself is still hesitant on that one thing we know we all do, which is watch tv like this. at the same time i was quach st. thinking about the carmichael show, and then he names all these shows. i mean, the guy is on top of it. so, hey, i've got to defer to his wills com. he's clearly sharper than i am. >> i wonder if he's against taking pictures with your ipad. 6. >> we'll see, and we'll see how

this project does for him, which i believe goes live in january. we're going to talk to the one and only morgan freeman in a couple weeks, and his partner on "madam secretary." we'll talk about apple, shaw shank, even some stock names. >> turning them out, giving the people what they had. >> exactly. >> why pokemon go fever may be losing some of its hype. his take on the tech, after the break. announcer: are your children in the right car seat for their age and size? it may be too late to check when you're on the road. [blaring car horn and skidding] fortunately, you're on the couch.

good morning once again. here's your cnbc news update at this hour. he will meet with the heads of state later today. tomorrow he will travel to turkey. former fox news host andrea tantaros filing a harassment suit against roger ailes and other top executives, including william sheim. fox has said she made up the allegations as a ploy in a contract dispute. a pickup truck barreled into a tennessee jewelry store on friday, throwing customers to the ground.

>> it wasn't a robbery. miraculously nobody was seriously hurt. rescue crews had to bust through a wall to free a man whoofs stuck between two buildings in pittsburgh. he tried jumps between the two buildings roofs to impress his girlfriend. he fell three stories into the space. as you can see he was wheeled out in a gurney four hours later. next time just buy her a ring. back downtown to "squawk alley." >> usually a gh absolute, sue. thank you. we're counting down to the cloud. >> a strong seg, economic news interestingly enough, a big reason for the positive sentiment, came in at a seven-month high. there are a range of opinions,

but chief big said, quote, the august flash pmi indicates that the eurozone remains on a steady growth past with no signs of the economy being derailed. so once again the brexit fears subsiding. however an extension of qe beyond the march of 2017 is still on the table, but the likelihood of that being announced in september has dramatically decreased. however, a less proactive central bank does beg the question whether yields in europe will stay depressed. up sharply after the first half profit rose 29%, that news

helping lift other names in the sector. all having a positive session, volkswagen also on the rise after a contract dispute was resolved. conflict disrupted production at more than half of volkswagen's plants and affected 28,000 workers. shares up nearly 2% in today's trade. kayla? >> thanks so much, seema. meanwhile, we're also watching shares of tesla. that's good enough to drive of stock up about 1.5%, comes a few weeks after it laid out the master plan, which vowel multiple different tiers and plan to introduce similar power, too. are we seeing cracks in the

private market? >> revealed today that bed, bad and beyond bought it as a price tag of $30 million. dick costolo is the former ceo of twitter and joins us to talk about the state of tech and media. great to have you back. good morning. >> good morning. great to be here. i'm in a lovely field in the marin headlands in front of the golden gate bridge. you're literally -- if that live shot is a accurate, you're hovering 500 feet in the air. >> technology is a fascinating things. >> what do you make of how that collides with the reports about lift having trouble finding a buyer? >> i would classify the mood as pretty came and patient. despite the market dynamics that

you're talking about this the public markets you still have some very robust private companies that could be public at any time and awesome platforms really take their time. so i think that generally speaking with the indicational exception here and there there is always specification cases where people have concerns about individual cases or specific

thesis around a company that they believe in. i understand that and get that, but i think generally speaking, c-round and a-round valuations are a lot more reasonable again. you have companies with news about drop bock that was on the a while ago. twilio just coming public. that has let everything ultimate out here you're a partner now with -- and invest partner, as you are asked for guidance and mentor some of these executives, what is the biggest piece of individual you're giving them?

scaling your business changes, and you have to think about all the dynamics of the business differently. the way you think about financing growth, the way you think will your architecture. >> it just always changes as you go from ten people to 100, 100 to 1,000, and so forth. >> and ceos, who understand that they have to migrate those different orders of magnitude are more successful. i think jeff lawson has done a fantastic job of doing his best. they have a lot of work to do, and you know, seeing that he's reaping the benefits of that. >> it's always delicate to ask a

ceo about his -- but they should have kept dick around, as he said the product offering is lacking. >> listen, i think, and i've said this before, jack is one of the most thoughtful leaders and calm, ethical great people in the world. he has a very, i would call it, very uncluttered mind as contrasted to mine which looks like a garage in the ozarks that hasn't been cleaned since the carter administration. i think the world of that guy. i think the team is great. they have made some awesome hires. i think a bunch of those folks on the team are people i brought into the company. i have every confidence they'll do what they need to do. >> dealing with trust issues,

safety issues, after leslie jones and what they announced last week, weeding out some terror-related accounts, are they on the right track? >> i think the quarcht of accounts indicated to me as someone outside looking in that they're machine learning algorithms, and model that they are training are getting better. they have a lot more clarity about what needs to be done there do you miss life as a public ceo? >> the answer is no. >> i mean, we all recall the travails and successes ultimate. what do you miss about it, if

anything? >> i mean, it's very simple for me. >> i miss all those people. those are some of the, you know, best friendships i will ever have in my life. i'll remember investmently the experiences. i miss those folks deeply. a lot of fragment station, whether or not sports are truly immune from cord cutting as a practice. are you taking any lessons from nbc posted the last couple weeks? >> i don't think sports are immune from cord cutting. i think you saw bob iger in the last disney earnings announcement make comments about some of the over-the-top offering like sony view i think

they're some of the smartest people in the world on this topic, so i don't think sports are immune from it. i think phones, so i think you'll see tensed. >> viewer d. two-plus years, seems re. >> announcer:ed as well. >> it's the blue sweater. >> we look forward to talking more often. >> dib costolo. why it might be game over for pokemon go fans in a moment.

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there are many things you don't like coffee.strial strength- but there's one thing you do. you guys okay?! it's called predix from ge. the cloud-based development platform that's industrial-strength strength! coming up stocks are near -- why one strategist says the correction could soon be in the cars. one senator is attacking mylan labs. will it bring a new sell-off. best buy on a tear. one reason for the surge. it's also today on "halftime report", noon eastern time. >> kayla over to you. meanwhile, augmented reality app poke mon go swept the world with millions of people trying to capture the virtual characters on their smartphones. now there are signs that fad

might be starting to slow. >> the app's daily active uses are down 35%. daily downloads are down 30, according to app-toppia daughter, and the amount of time spent her day also on the decline. this news sending shares lower, bolster by pokemon go. the company's stock is is about a 63%. so far it has boosted sales of nintendo and poke mon maker from june to july in unit sales. and pokemon ruby for the console. the decline is actually a great thing for social apps.

it's the declining trends should aswaj investor concerns about the impact of pokemon go on time spent. anthony also points out that if appoint mon continuing to decline, it does call into question the long-term viability and whether it can garch lasting traction with loser, it was so all-consuming. no fad that hot can last. >> julia boorstin, thanks. let's get over to the cme group for the santelli exchange. >> thanks, carl. price discovery. price discovery is what markets are supposed to do, but you don't need to be an explorer to find the price today, because in many ways, in an oversimplified face, the new normal that

continues to get less volatile and the yield terms continue to get flatter. i had a friend who have an air travel controller. he described his job as moments of terror surrounded by hours of boredom. in the marketplace nothing is ever boring, but boring gets translated into a range. moments of terror, well, they get reassigned more of a junk difficult fusion. in other words markets are going to be less volatile, because the price has less to do with traiting, over time the markets are going to be less volatile. we can see it happening. these are the discussions that have been on trading floors for years. look at most of jill and august for the s&p 500. now, a flatter yield curve isn't a horrible thing, but it's a horrible thing, especially

considering that part of the dynamic, negative rates mostly on the long end and short rates, the potential, the threat the logic that normalization will occur. if you're in the lending business, flat isn't good. if you're looking to borrow money. except the flatter it gets the harder will be for many to even get the credit at all. all of these issues will continue to haunt us. how do you trade them? you look at twos versus tens, and various sovereigns versus the u.s. they're already doing it. does that mean it's over? nope. many of them can make money. carl, back to you. >> rick, thank you so much. when we come back how ignite is taking on big cloud firms

with surprising success, in just a minute.

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at the marine mammal center, the environment is everything. we want to do our very best for each and every animal, and we want to operate a sustainable facility. and pg&e has been a partner helping us to achieve that. we've helped the marine mammal center go solar, install electric vehicle charging stations, and become more energy efficient. pg&e has allowed us to be the most sustainable organization we can be. any time you help a customer, it's a really good feeling. it's especially so when it's a customer that's doing such good and important work for the environment. together, we're building a better california. there's box, dropbox, google, next guest tipped at possibly the next cloud ipo. ignite delivers content solutions for the cloud and on premise. lots of companies ranging from i kia to the nasdaq and the ceo

joins me. >> good morning. thank you. >> about a year since emc spun out simplicity, took it private. lots of action again, at least starting to gear up in the ipo market. which way are you guys going to end up? ipo or end up with private equity houses? how does it pan out? >> hard to foretell. right now our focus is hands down execution. to put this in perspective, since our inception we raised only $62.5 million, with the last coming in november 2013 and we haven't raised money since then, but we are expecting to be operating cash to break even within this year. so the plan here is for the jex next 18 months, focus on topline growth, we've always done. look at what the next stage of growth for the company will be and ipo is definitely one of them. >> a lot of focus on steal lately. part of the reason linked in

needed to team up with microsoft. you have not chased scale throughout the life of ignite. didn't do the premium model because of the costs associated with it. that's left you with an interesting position. now do you scale at this point without that kind of spending, and is that part of what you're going to be weighing over the next 18 months? >> absolutely. sort of goal to our company's growth strategy. it's never been an rapid growth at any cost. what eve seen in private and public markets, people putting more on the bottom line. a path to profitability? and at the same time you're not expecting to be a small profitable but a lifetime play. the balance between wanting to grow responsibly but grow to scale are one of the exit options or interests on being a public company is definitely undercouraged. >> talked about this soon for quite awail. are you there yet and what are

the costs associated getting there right now? >> as i stated earlier, expectations, operating capital breaks even. being profitability. probably a couple quarters out for us. but within this year or fisk's calendar being the same q4 question expect to break even. fundamentally what allows you to be in that situation, other than the cost of provision is sales and marketing expense. something we've watched carefully and done in a way which appeared unconventional in the last several year, but now we appear to be more pragmatic and more appreciated than ever in the past. >> how important is a sales force at this stage to get your message out, versus your well capitalized competitors? we've got kind of an enterprise season coming up here in the fall with dream force, with, you know, oracle, open world coming up. how important is that period of time to really connect with others in the enterprise ecosystem to get your story

told? >> absolutely critical. in fact, a dream force in a sizable way and at the gardner symposium, buyers congregate there. the awareness and brand is definitely key. leveraging these opportunities recently we had an event happen, we made to the gardner leaderboard, which puts you up on the map. the name of the game for a company of our size given limited resources, funding, how do you build awareness and build a brand? and, therefore, the sales execution model without spending oozals amount of money? you have to leverage opportunities like this. >> all right. vineet, the ceo. an interesting environment to operate inside. thank you for joining us. and when we come back, what twitter's former ceo said about the currency of fund-raising in the valley. "squawk alley" will be back in just a couple.

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private companies that could be public at any time, and awesome platforms like snapchat and uber and airbnb, taking their time and content to move along in the private markets. i think generally speaking with the occasional exception here and there on some of these companies that were unicorns at one time and have come back to earth a very calm sort of patient collection of thinking out here, and no rush to do anything one way or the other. >> interesting insight from dick. talking about the challenge of scaling businesses from chapter to chapter. said sports are not immune to cost cutting. said jack, he thinks the world of that guy. >> and says he has a clear head compared to his own brand which is like a cluttered garage in the ozarks. interesting, misses almost nothing about being in public company ceo, despite the fact he's advising a lot of companies who may one day still be public. >> able to walk them through

what to expect. jon forward, are you watching? we'll have our eye on tesla at noon california time, as elon musk says an announcement of some kind is imminent. already the twitter sphere speculating what it could mean. what if it's increased range? we'll see what that might mean for the stock and the company. >> the guy knows how to use social media as a ceo, doesn't he? the stock reacted quickly to that tweet, and it's a company, of course, that has a big valuation. there are big hopes around it. he has -- unlike many other companies, been able to capture sort of the keynote ethos steve jobs started and use it as marketing fuel for his company. it's going to be interesting to watch. if only for that reason. >> yeah. but that noise you hear is all the tesla analysts scrambling to get back from vacation to pay attention to whatever he's about to announce. >> meanwhile, keep your eye on the home builders today. the xhb up almost 2% on the new

home sales number, which, again, was the best since october of 2007. along with toll brothers earnings, pretty good, even though some urban companies not on par with the rest of the companies. >> system watching for s&p to hit a new high. >> over to headquarters and's "the half." welcome to the "halftime report." i'm melissa lee if nor scott wapner. dow and s&p near all-time highs and the russell 2 thoix s000 at 52-week high. in almost 20 years, is this the calm before the storm? one top strategist thinks and will be in a few. on the desk, we'll get you in a second. first, shares of tesla now are on the move. let's get straight