marriott's ceo shares his vision for the world's largest hotel company. tomorrow. good morning. it's 8:00 a.m. at twitter headquarters out west. 11:00 a.m. on wall street. "squawk alley" is live. ♪ ♪

good thursday morning. business insider ceo henry blodget. good to see you. >> great to be here. >> a rally on our hands. the dow and the s&p wiping out their losses for september. the industrials are leading the s&p. once again, henry, we're at a stage where the fed acts, people who doubted their resolve get faked out, and a rush to buy again. >> great to see a successful ipo. always more fun when stocks are going up. i think from a high level as we've talked about in the last couple years, valuations are high. at some point if the economy keeps doing what it's doing, chugging along, inflation keeps coming up, that will raise rates more aggressively. i don't think the outlook is great from here for a long time, but it's -- >> in terms of equity valuation. >> i think so. unless you think something has fundamentally changed with the rate companies can increase

profits, which ultimately drive the market, over the next ten years, valuations are such we'll have very low returns from stocks on the order of 1% to 2%. you can have a big run in the meantime and then a big drawdown. you don't know when. valuation doesn't help you with timing, but stocks are expensive. >> the fed in the meantime has bought itself at least a few months because november there's no press conference and of course it's close to the election. that gives you december and a few months to figure out what to do here. meanwhile, yields are ultralow, companies are buying back stocks. if you want to put money into this market, where do you go? >> that's driving investors. money is free. you can lever it up, looking for some return. that's what's driven securities prices of all kinds so high recently. obviously it's happening again. >> in tech, though, there seems to be a huge divergence to me in terms of valuation. some companies you would think would be getting a much tougher time perhaps, the likes of a cisco or an intel that we know are challenged by trends toward

the cloud, et cetera. they're doing pretty well on a historical basis while some other companies like your ans, for example, they're actually doing pretty well, people think they won't do so well in the future, and their valuations are a bit different. on a broader market basis, i see what you're talking about, but there are opportunities for investors to make some judgments here. >> absolutely. look at the run of microsoft, for example, incredible. amazon, unbelievable what that stock has done, facebook has had an incredible run. certain stocks are working incredibly well. >> microsoft is buying back $40 billion in stock. tech companies have cash to burn. are you pleased with the way they're using it? >> this is the other thing that's happening. you're seeing so many buybacks and relatively few companies going public that are bringing in new supply that the actual share count, equity available, is either not growing or shrinking, and you have this huge pool of money that's looking for it. simple supply and demand. >> have you seen the long-term chart of the number of listings,

the number of public companies over 0 years? >> unbelievable. >> it's like the whole stock market is being taken private in a way. >> go back to the 1990s, so many companies now when you go public you are four or five years after when you would have gone public in the 1990s. a lot of people have got scarred with the 1990s when companies were saying, that's good, i want to be protected. on the other hand, a lot of public market investors have missed out on some bonanzas, companies like facebook, if you were willing to take the risk, you could have gone much earlier, like amazon, a $400 million valuation. it was teeny. >> a lot of xaeps we thought were supposed to go public are getting bought instead. more buyouts than companies minted as unicorns. is that a good thing? >> i think so. enterprise, for example, there needs to be consolidation in that market. there's not enough growth to sustain 15 large companies so one way to create growth is to put companies together, helps you get through it.

oracle has done a fantastic job with, that consolidating industries. >> youtube, twiter, and facebook making news, ramping up the hate speech on the new flat forms. youtube's new heroes project to offer rewards to user who is flag inappropriate content on the site. and then this morning, twitter suspends the account of "usa today" columnist and insta pundit producer greg reynolds after he tweeted, "run hem down," referring to protesters blocking a highway at north carolina. and that has created its own backlash. once these companies start politicianing as they are being pressured to, it's going to upset some people. >> absolutely it's going to upset some people. silicon valley in particular has a real issue with being in the media or content business. they just want to be a platform. they want to stand back. they don't want to have anything to do, take any responsibility for the content. unfortunately, in case of twitter, for example, that has led to a very unpleasant

environment. we don't want to get involved. we want to have people be anonymous. there's just so much mean, nasty stuff. and far worse on twitter. facebook's been much better because they had real names. but then there are all sorts of censorship problems and are they leaping one way politically or the other, are they taking down art because it happens to include naked people or historical photos. it's tough. snog perfect. there's no simple fix. but it's something silicon valley in particular is very uncomfortable with. >> it seems like silicon valley, facebook, twitter, youtube in particular being pulled into that space they never wanted to be in, which is being real content producers and editors. i wa they wanted to be that platform but now you have people calling on them to police content. it might be terrorist messages. might be threats coming out. in this case, it seems to me if greg reynolds had been some random person tweeting "run them down," not so much an issue. because it's greg reynolds

perhaps this gets more attention. people tweeted much worse stuff at leslie jones than greg reynolds has tweeted. perhaps the perception from twitter is this guy has a platform, if he says run them down, what if somebody does that and says i heard it from greg reynolds on twitter. >> a difficult problem. it's not so much content production. silicon valley does not need to be in the media and content creation business, but they are now the world's biggest content distributors. cable networks have been distributing content for years, magazines have. they've gotten comfortable with this. some of the stuff works for us, some doesn't. >> is twitter's move any different than a cable news channel saying we're not going to book x or y because their speech is extreme? >> no. and on a cable news channel it would be obvious. of course you make those decisions all the time about what you're allow on your air, what's appropriate or isn't. silicon valley has not had to do

this. it's only relatively recently they've been thrust into the role of fwg world's biggest media distributors now and actually have to make these decisions. it's tough. >> the difference to me the these companies are relying on their users to flag this content. the cable executives are making those decisions. they're not asking the viewers to tell them what is inappropriate. i want to pull up this tweet from bingaham applebalm, with a flurry of anti-semitic comments. he said i was wondering why twit sore so effective at preventing the nbc's footage of the olympics but not this. that and other accounts have been suspended but it took him flagging it for them to do that. are they trying to escape the responsibility of this relying on users? >> twitter in particular has done a lousy job with this. people have been complaining about hate speech and trolls on twitter forever. they have not acted aggressively perhaps because they don't want to disrupt the growth of the business or what have you.

but this is something -- it is a problem twitter has to sol. >> we had a former ambassador yesterday say twitter compared to youtube has been pretty good. >> youtube comments are horrific. >> even the access to extreme video clips, terror-related clips that google and -- >> they usually get on them relatively quickly, but they are often uploaded and available briefly. they act pretty fast. >> one day later at the hero's program. >> yeah. talk about intractable questions. henry, thanks so much. >> great to be here. >> henry blodget. when we come back, pricing problems at amazon. the company is under fire for not offering all its users for the lowest possible prices. reporter who broke that story. you've heard about the leaning tower of pisa. how about the leaning tower of san francisco? doesn't have the same ring but it's real and causing major headaches. later on, house majority leader kevin mccarthy joins us to talk about the election, the economy, and silicon valley.

you know what, guys? there's a lot of tree branches and dry brush over here. we should probably move the bonfire over there.

[smokey whistling a tune] i'm guessing smokey liked that idea.

- i was diagnosed with parin early 2013.lly it took awhile to sink in. we had to think a little more seriously about saving money for the future and for the kids. - the income of airbnb really helped to mitigate the stress. - but we have that flexibility of knowing that if you know things get worse, we have this to help keep us afloat. - so that's very, very important for us. amazon giving itself and its vendor partners an edge by not including the price of shipping on its own products when listing them. joining us is the reporter behind that story, julia england of republica, our own courtney

reagan joining the conversation as well. julia, how did you decide to delve into this issue, and what exactly did you find? >> hi, there. thanks for having me on. we are doing a series about the impact of algorithms on our lives, basically computers making decisions about things for us. and truthfully, the amazon algorithm is incredibly important because it's a $100 billion company and if they choose to shoot sales to one vendor or another, that can make or break a company. so we chose to look at the algorithm they have to choose with company is the default seller. when you go to a product on amazon, you might not realize there are hundreds of people trying to sell it to you and amazon's algorithm picks the one vendor to show to you. >> this is an actual algorithm that is ordering them in a certain way, not just because you're not logged in as a prime customer, it's sort of giving you mash-up of all the products.

>> right. we did our testing logged in as a nonprime member, so this is all what it looks like when you're not prime. although we did check, it looks the same when you're prime, it doesn't seem like there's a difference. >> courtney, i'm torn here, because on the one hand, this seems similar to a retail store end cap, where if you -- as a supplier, pay marketing to the store, you get better position in it. i mean, on the other hand, people might expect better pricing to get priority. then there's the shipping issue. sometimes the cheap estroven dor is going to take a week to ship something whereas from amazon or fulfilled by amazon it might come in a couple days even if it costs more. what's the fair way do you think for amazon to be transparent about how it's ranking things? >> this is a tough issue because of the way their business model works. as you know, they own some inventory and ships some inventory. it also has inventory it fulfills on behalf of

third-party sellers. then it has third-party sellers that amazon never sees or touches that inventory whatsoever. there could be identical products of course listed by different sellers, and so then how they're ranked and how they show up as we're talking about comes through in an algorithm. i don't know how to say what's fair, but i know that in a test that we did, a very small-scale test earlier in august, we saw some interesting things with pampers diapers. if you take a look here, nonprime members saw a price that were actually much higher than what the prime members saw so that prime members were given the lowest possible prices, and it says exclusive to prime members. so then we were forced to choose from a third party seller with significantly higher prices. that's what we found as interesting. >> but people pay a lot of money for prime, and isn't is business's right to offer a premium product for people who are willing to pay for it?

>> i think what you're tribing about the end cap and it's totally true that am sonl has the right to do whatever it wants. it's its store. but amazon has been very clear and consistent saying this algorithm is very objective. and jeff bezos said repeatedly we're willing to lose a sale if we can get a customer a better deal. they've made a lot of promises about how object they've algorithm is and what it takes to win it. the things they say to win it are low price, good customer service, fast shipping. they don't say actually the best way to win it is to be amazon or fulfilled by amazon, which is what our test found. three-quarters of the time when a product was more expensive but did win that default position, it was amazon or fulfilled by amazon partner. this is a question more about what they say and what they do as opposed to whether it's right in sort of the abstract. >> i 100% agree with that. and sort of our observations

from, again, our small-scale tests, too, was that you seemed to get preferential product placement service, prices, shipping, if you are a prime member. your screen tended to look a little different and/or you are given those fulfilled by amazon products, which are often cheaper right at the top of the search. >> customers keep buying the stock just breaking through $800 a share, so we'll see where it goes. >> it's true. >> our thanks to both of you. let's get over the dominic chu and get a quick market flash on another big e-commerce giant. >> alibaba hitting the highest since december of 2014, the stock up about 2% in early trading, tracking for a second day in a row of positive gains. today's move comes after analysts raised their price to 125 bucks a share, implying a 16% upside from the preopen price. the firm expects alibaba's margins will rise as investments peak. the shares are about 11% away

from their record highs in november of 2014. i will say this, john, it's already surpassed its average thee-month trading volume and it's only 11:17:18 eastern time. >> a good run. thank you, dom. still to come, some are calling it the linkedin for the 1%. how relationship science is not only connecting you to people they know but want to know. shutter fly bouncing back almost 2% after losing more than 12% yesterday on news that amazon is launching its own digital photo printing and storage businesses. it already had the storage business. we'll be right back. cdw brought i.t. orchestration to printing, dramatically increasing print security with enterprise printers by hp. which is great, unless you're a corporate spy. unsecured printing makes your network vulnerable. enterprise printers by hp help prevent costly security breaches that can compromise your network and reputation. so i'm stuck spying the old fashioned way. hey.

i'm not spying. secure printing by hp. i.t. orchestration by cdw. but the best place to start is in the forest. kubo: i spy something beginning with..."s" beetle: snow. kubo: no. beetle: snow covered trees. monkey: nothing to do with snow. narrator: head outside to discover incredible animals and beautiful plants that come together to create an unforgettable adventure. kubo: wow! narrator: so grab your loved ones

monkey: don't even. narrator: and explore a world of possibilities. kubo: come on, this way. narrator: visit discovertheforest.org to find the closest forest or park to you. what's that? the number of units we'll make next month to maximize earnings. that's a projection. no, it's a fact. based on hundreds of proprietary and open data sets folded into a real-time, actionable analytics model. nine. eight. three. five. two. you're not gonna round that up?

you don't round up facts. powerful analytics driving decisions for the world's most valuable brands. hewlett packard enterprise. our next guest company is

sometimes referred to as the linkedin for the 1%. will opening themselves up make them competitive? the founder and chairman of relationship science, neil, thanks for joining us. tell us how much are you opening up this database now and what are some limits to that? i imagine some people in it don't want you too open. >> sure. we cover day to an about 5 million people and sort of fill the data gap between wikipedia and linkedin, decision-making people. we let people come in and look for profiles and currently we're letting people see ten profiles of people or organizations, at which point they can become a subscriber. >> what core problem of social networking would you say you're solving? it seems to me when you get into hundreds of millions of people, the scale of a twitter certainly of a facebook, you get unique types of problems arnold deindy

individual wags. is this person who they say they are, are they acting like a known person, are they being a troll? do you avoid that with relationship science? >> sure, and obviously those companies fill a void in the market but there is a universe of people not active on social networking sites. we don't rely on anybody to join, to contribute information, to friend another person, to accept it. we collect the information. so we're aggregating information from hundreds of thousands of sources and collating it and creating these very complete, thorough, detailed profiles. but then we go to the next level, which is we estimate who likely knows who and how. and so for the universe of decisionmakers, whom i think a lot of the audience of your show is trying to get to know better, build relationships with, that's who we cover. and that's a gap that doesn't exist on linked in or wikipedia in many cases. >> is it an sennial layer on top of some of the social networks we see today? some of what you've tone is you've verified certain identities and you're doing the

work that sometimes doesn't get done even in real social networks. people connect to people they don't know because they get asked. we're trying to figure out who's connected even if they're not explicitly connecting themselves. do you think that turns you have as a broader issue? >> previously i helped build a company called capital iq which i founded. we wove together day in in a clean and precise way so we tackled a problem that was previously almost unsolvable, to your point of reconcilings, is this the right person. we're expert in that. we've spent the last six years & extraordinary amount of capital to map people that is unavailable elsewhere on the web. that's what we're trying to do, get things done, and the question is who do i need to get to and how can i do that is something everyone is doing in an offline way.

we have a great set of investors, some entrepreneur, and when they saw the early stages of the product they said that was my competitive advantage. you've systemized it and i can see how other people want that. so, yes, we're filling a core need. >> one of the basic types of human contact just introducing yourself as become a science. thanks for joining us. >> thank you. >> the millennium tower is home to san francisco's elite, but it is sinking and the lawsuits are flying. josh lipton has that story. >> the tower is located in a trendy neighborhood and residents pay millions of dollars to live in this skyscraper. for that they get a fitness center, indoor pool, screening room, and a wine cellar. hall of fame quarterback joe montana owned a 1,400-square-foot residence

there. which he sold to giants joufltder hunter pence for nearly $2 million. the late legendary venture capitalist tom perkins bought the penthouse for nearly $9 million, but since its completion in 2008, the 58-story building has sunk 16 inches. it's also tilted at least 2 inches to the northwest and now politicians here want answers. >> whether it's one building or more than one building, insofar as as we live in a zone of seismic activity, we made to make sure that building is not a hazard to surrounding buildings in the middle of downtown. that's what elected officials are supposed to do. >> hoe's holding a public hearing. calling officials to testify about who knew what when.

the transit authority says the developer is to build. it dug a hole next to the tower. the public agency building that transit center counters it's the poor design that is causing all these problems. that the tower's foundation is not supported by piles that reach the bedrock below. it will not surprise you lawyers are on the case. four law firms filed a class action suit representing the residents seeking $500 million in damages. that hearing at city hall kicks off at 1:00 p.m. eastern. >> our josh lipton in san francisco, thanks so much. >> it's been quite the year for applied materials. ceo gary dickerson joins us next to talk about the secrets behind their success. first, hillary clinton making a surprise visit to the set of

"between two ferns." >> this has been a lot of fun, mrs. clinton. we should stay in touch. what's the best way to reach you, e-mail? audi pilotless vehicles have conquered highways, mountains, and racetracks. and now much of that same advanced technology is found in the audi a4. with one notable difference... ♪ the highly advanced audi a4, with available traffic jam assist. ♪

everyone thought i was crazy to open a hotel here. everyone said it's so hard to be a musician, but i can't imagine doing anything else. now that the train makes it easier to get here, the neighborhood is really changing. i'm always hopping on the train, running all over portland. i have to go wherever the work is. trains with innovative siemens technology help keep cities moving, so neighborhoods and businesses can prosper. i can book 3 or 4 gigs on a good weekend. i'm booked solid for weeks. it takes ingenuity to make it in the big city.

we believe everyone deserves a great night's sleep. (announcer) i'm at boll and branch,eks. so we created the perfect sheets. 100% organic cotton. we made it our mission to perfect every detail. until finally, the softest, most comfortable sheets you'll ever sleep on. try them for 30 nights and get $50 off your first set at bollandbranch.com, promo code: tv.

good morning once again, everyone. i'm sue herera. here is your cnbc news update at this hour. the world trade organization ruling that the eu has continued to provide massive subsidies to airbus even after the subsidies were declared illegal. it's a victory for rival boeing who has long claimed about the uneven airfield airbus has over it. the syrian army targeting fortification of opposition groups north of hamas city in central syria. this after the cease-fire brokered by the u.s. and russia collapsed. hillary clinton's campaign has disclosed it has paid more than $636,000 for its use of air force one. this includes a july 5th air force one flight from washington to charlotte with president obama for their first official joint campaign event.

and a fistfight erupted between candidates for the georgian parliament during a political talk show. they started insulting each other before getting into the physical fight. elections are scheduled for next month. that's the news update this hour. back downtown to "squawk alley." carl, back to you. >> all right, sue. thanks so much. europe is closing as we speak. steadily in the green. sima? >> all of europe up over 1% so far today led by france and germany, which are both up more than 2%. miners among the big winners led by glen corp., which is higher by about 5%. energy as a whole as you can see posting outsized gains. of course it's been a week dominated by central banks. the ec b's economic bulletin today showing the governing council of europe will remain alert and ready to act with all instruments available. this was a more hawkish fed and bank of japan announcements. those aren't the only policy

meetings that took place this week. interest rates were kept on hold and said the probability of a rate cut has reduced. norway is one of few countries that has been able to avoid negative interest rates despite the challenges that it has faced with the drop in oil prices. we're looking at the norwegian currency, the kron, at a two-week high against the dollar. meantime the german ten-year this back into negative territory. some analyst sas the boj's decision to cap could make u.s. and european credit more attractive. also want to point out danish conglomerate a.p. miller. shoulder like the news. the stock is higher by thr than 3%. of course a sign of the times given the downturn we've seen in the global shipping industry. john, back to you. >> thank you, seema. applied materials holding an analyst day yesterday, announcing optimistic growth expectations and new opportunities in technology.

joining us now, cnbc exclusive, the ceo of applied materials, gary dickerson. thanks for being here. >> thank you. >> raising that three-year target, you've got a high-flying stock right now, opportunities and oled and 3d and all sorts of places. i'm wondering some of the work you've done in the past three years to get closer to customers when they're formulating their r&d, how is that playing out in some of these games you're seeing now? >> well, as you said, applied is setting new record and we're really in the early innings of some multiyear inflections. we're seeing the biggest changes we've seen in decades in memory technology, the semiconductor industry. being enabled by materials innovation. applied materials is by far the leading company in the world with these new technologies. we're also seeing a big change in display technology going to organic l.e.d. for mobile dice devices. again, that's enabled by materials innovation.

>> when you're getting closer to your customers, when they're developing their plans for their next products, how has that process changed and how is it playing out in the results we're seeing and this you're proje projecting in the next three years? >> great question. we've moved $500 million in r&d into our r&d within the company. we've reduced general administrative expepss. we've moved money from other lower performing businesses into areas that are inflections for our customers. so we focus on inflection-focused innovation at applied materials. >> how do you define the inflection? >> well, going from, again -- going to organic l.e.d. display where is you have a thousand times faster refresh rate and much lower power. you need new materials to bring these types of technologies to market or a bendable, foldable, flexible displays. and our relationships with our customers and understanding those inflections is fundamental to our success. >> where do you expect your technology to have the biggest impact over the next three years in terms of what the consumer is

going to hold in their hand? there are implications for vr and ar, smartphone screens. people expect apple and others to move more aggressively into oled. what do you expect? >> display is a great example. >> the near future you'll see a tremendous adoption of organic l.e.d. displays into organic mobile devices. that's one area we see a big change. i think in the future you'll see bendable, foldable, flexible displays np in the semiconductor side, there are drivers for higher performance computing and certainly an explosion in terms of memory devices, all of those trends will be enabled by -- or infleks will be enabled by applied materials. >> talk about 3d nand. we recently got more memory, more storage in the latest iphones. >> yes. >> a lot of people were looking for that. a lot of this is also going to have enterprise use in data center, particularly for cloud. where will that have the biggest

impact performance-wise? >> from an applied materials standpoint, the biggest change in decades in memory is happening right now. so instead of shrinking in two dpengss, the industry is moving in a third dimension, in a vertical dimension. that's all enabled by materials -- materials innovation from applied. i'm actually very optimistic about the future for memory devices. many applications driving the cloud, you talked about vr and ar, maybe the current versions of those kinds of devices are not super exciting, although pokemon go, i think there were 500 million people downloading that application in eight weeks. that's going to drive the cloud and also there are a lot of smart devices that will drive zero latency, high-performance computing and memory for the individual. >> you guys of course making the tools that will enable all of those experiences if, in fact,

they come to pass. gary dickerson, ceo of applied materials. thanks. >> thank you so much. >> when we come back this morning, house majority leader kevin mccarthy will join us to discuss his efforts to win over some of silicon valley's top entrepreneurs. later on tesla, rolling out updates to its controversial auto pilot feature. our phil lebeau is there with the latest. cnbc and ink magazine presenting the iconic conference in boston today. the biggest names and successes in start-ups coming up. your chance to participate with john jacobs answering your questions. that conversation begins in a few moments at facebook.com/cnbc. y gary, what are you doing? oh hey john, i'm connecting our brains 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.

mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. got a quarter?

(smash!) like an administrativeyou don't assistant.dustrial strength- your 3 o'clock is here. but there's one thing you do. it's called predix from ge. the cloud-based development platform that's industrial-strength strength! 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

and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. coming up on "the halftime report," your next play now that the fed has punted. stocks are ral lying today. excuse me. should you buy in? even i'm choked up at the rally. two more heavyweights believe the market is about to drop. the debate is on at noon eastern. pete najarian believes a big move is coming in the energy space. kayla, help me out. i need some water. >> i have some here for you, scott. you have a few minutes till the show starts. see you then. it's no secret that the gop's presidential nominee isn't the most popular candidate in silicon valley, but despite donald trump's criticisms of apple, mark zuckerberg, and jeff bez

bezos, republicans in congress are still working to woo the tech industry, working on three bills as part of kevin mccarthy's innovation initiative. congressman, great to see you. about this package that you guys are going to be taking up today, part of it is more favorable tax treatment for things like stock options that are give b out as compensation to these employs. of all the economic initiatives that congress could be taking up right now to juice our economy, why was this aun at the top of your list? >> this is just part of the innovation initiative, things that we have been doing all year. this is about job creation. remember this, gazelles are the terms we call companies that grow a 20% a year or double every two years. they make up 4% of new start-ups but they account for 70% of all new jobs. how do we expand that? how do we create more jobs? innovation also saves money in government. take, for instance, just two bills we have up this week, i.t.

reform by congressman will herd. government spends $80 billion on i.t. 80% of that is spent on maintaining legacy systems. and if we reform government and i.t., it makes it more efficient, more effective, smaller, and costs less. then when you think of new start-ups being able to attract the very best of employees, well, they could be a private company, but if you own less than 1%, why shouldn't those employees getting a piece of this, but taxes make them not wanting this. so tax deferring until they go public or seven years gives them the option to have ownership and attract more people and have a piece of the pie. that is good american dreams of what we want to make here. and that creates more jobs. >> certainly there are tens of thousands of people who are employed by these companies who would certainly benefit from that. and i understand that's part of the innovation initiative. i'm just wonder with things that

are so crucial, like zika funding, like a potential supreme court appointment, i'm just wondering why congress at large isn't taking up some of those issues rather than things that would seem like a no-brainer. >> you know what, that's a great question. and, you know, zika funding, congress took that up in june and has passed more than $1.7 billion for zika. that's a great question for a senator. congress has no say over who gets appointed at the supreme court. so, again, another great question for a senator, congress had been acting, and that's the part. we can walk and chew gum at the same time. and if we want to create jobs, growth will solve so many problems in america. we should start looking at not the problems of just a week ago but what should america look like 50 years from now? we can make that happen. innovation will create more jobs, make us more efficient and more effective. >> congressman, we talk a lot about removing regulation, the

guests we have on our show often sitecyte that as a very important thing. given in the past few days we've seen news out of mylan, news out of wells fargo where a number of people on the street feel like, well, here are some cases where we actually need regulation, i wonder if you pinpoint anywhere within tech when you say, well, actually these are some things that we might need to keep our eye on and regulate more, perhaps lightly, but regulate more. >> regulations are important, but you have to have common sense. when you look at the epipen problem, there's two problems here. one, the company, and one the regulation of the fda. because that's a generic. but you know what, they've got a patent on the procedure of putting it in, the pin. but because of fda and the slow movement of that, they get a monopoly on this and you're not allowing a new company in. this is where regulation is holding back. in my own family we need epipens, and the cost has gone up. but fda's regulation has stopped

innovation which would bring greater competition and bring that cost down. so, yes, we need it, but we need government to work effective. >> meanwhile, congressman, we're less than 50 days before the election. you were among the republican leaders who were among the first to actually support mr. trump, even before speaker ryan came out and did so. but even since then, party unity has been elusive. just this past weekend, reince priebus of the rnc need to get on board. if they're thinking they're going to run again someday, i think we're going to evaluate that process of the nomination process and i don't think it will be that easy for them. you said there's a better way for the party to unite than by punishing republicans. what is it and why hasn't it been tried yet? >> i come from this party not because i'm born into it but because i believe in the principles. i supported donald trump because i said from the very beginning that i would support the

nominee. i keep my word. the other process that i look is that lincoln was right. a house divided cannot stand. i believe people unite around ideas. the presidential campaign should be about a vision. and that's why in the house we have a better way, tax reform, new health care, poverty. we've had five decades of a war on poverty that has just locked generations into poverty. a new foreign policy. that's what a debate about a presidency should be about and not about personalities. so you know the things that i can affect are ideas. i think ideas are stronger than any one person so, the more that we're able to move those, the more we're able to put that into the arena and have the american people decide, that i think that will unite the party. our party should have the very best ideas but not be afraid about being challenged about them. >> house majority leader kevin mccarthy, thanks for joining us this morning. >> thanks for having me. hillary clinton making an untraditional stop on the campaign trail joining actor and

comedian zack galifianakis on "between two ferns." nothing was off-limits, including donald trump. >> let's talk about trump. >> oh, let's. >> when you see how well it works for donald trump, do you ever think, oh, maybe i should be more racist? when he's elected president and kid rock becomes secretary of state, are you going to move the canada? or one of the arctics? >> i'm going to stay in the united states. >> and what would you try -- >> try to prevent him from destroying the united states. >> whether it's trump and clinton on fallon, now "between two ferns" as we head into this final chapter of the election, politicians are going to try to go broad, try to get a laugh, try to boost their favorables ahead of their election day and early voting. >> comes down to whether people feel like they could have a beer with the candidate. let's end up with these moments. we do see little insingts into their personalities in these cases. i think there is value. >> there are questions over when a candidate is going on late night and joking about policy

rather than having press conferences and talking squarely about it. >> part of the media struggles as well. when we come back, tesla releasing an update for that controversial autopilot system. phil lebeau is in palo alto talking to some tesla owners asking if they think the system is safer. first, rick santelli, what are you tornado watching today? >> i'm watching the ten-year note get very close to a 160 yield, one basis point away. why is that so important? i'll give you one word -- august. what does that mean? come back after the break. we'll discuss it. : the best plae to find adventure... kubo: come on, this way. narrator: ...is in the forest. 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. it's a very specific moment, the launch window. we have to be very precise. if we're not ready when the planets are perfectly aligned, that's it. we need really tight temperature controls. engineering, aerodynamics-

a split second too long could mean scrapping it all and starting over. propulsion, structural analysis- maple bourbon caramel. that's what we're working on right now. from design through production, siemens technology helps manufacturers meet critical deadlines. i think this'll be our biggest flavor yet. when you only have one shot, you need a whole lot of ingenuity. announcer: don't let salmonella get funky with your chicken. on average, one in 6 americans will get a foodborne illness this year. so, learn the right temperature to cook each type of meat. keep your family safe at foodsafety.gov.

let's get over to the cme and check in with rick santelli and get "the santelli exchange." hi, rick. >> reporter: hi, carl. everybody is still talking about the fed, but they're doing more than talking. they're trading the fed and they're trading the ecb and they're tradinging the bank of japan. i mean, generically all stock markets are doing better, and generically all yields on key sovereigns like the jjbs, the uk, treasuries here, boons overseas are all moving lower in yield. boilerplate, isn't it? now let's look at an august 1st start for treasuries. obviously we all remember how all but basically one or two sessions settled in the 150s.

what's changed? prior to yesterday the notion that there was a lot of fed he speak out there. i can think of stanley fisher with steve liesman right before jackson hole officially began that created a bit of a stir. what's active, what's not active with regard to raising rates is anybody's guess because of the subjectivity involved. if the key boilerplate is 2%, that arbitrary 2%, their synonym for stable prices remains, it is going to be very difficult in the near term to hit that trigger and all the consequences of zero weight policies and negative rates overseas are going to take their toll. one thing seems for sure. the events are over. we should revert back to the rates we were trading in august. look at the august 1st start for the s&p 500. cheerily shy of 2200. both charts whether it's the

treasuries, because they're about ready to test 160 are or the s&p cash as it hovers. does that shock anybody? when everybody discusses on this trading floor exactly what koroda is trying to accomplish pegging zero on the lopping end with zero on the tens means you have to be negative on the short end. i can't answer that. one thing i can say, most traders agree, it just makes the neat guy look that much more attractive. it's the same in every language. carl, back to you. >> rick, thanks so much. our rick santelli. tesla is rolling out a krcritic update to the highly criticized autopilot feature. elon musk says the system will be three times safer. what do actual owners think? our phil lebeau is in palo alto,

california, with the latest. >> reporter: hard to know what tesla owners think about the software pushed earlier this morning. i've been told not to ex inspect it to come through for a couple of days on the vehicles. here are the changes in the software update. it improves the vision of the road. in other words, the vehicle will be able to see thanks to the onboard radar maybe two vehicles in front if there's sudden brakinging, it will navigate highway interchanges, and enhanced warnings to keep drivers engaged when they're in autopilot mode. we had a chance to see that yesterday and there are clearly greater enhancements visual as well as audio. this system was pushed out in a software update. this will be the safest on the road. those who have been critical will be watching very closely. >> it's extremely important to get right because tesla is alone in the ability to drive the vehicle with the people having their hands off the wheel for an

extended period of time. >> reporter: if you take a look at shares of tesla, the autopilot system is still the subject of an investigation by the national highway traffic safety administration although it's unclear how that probe will be impacted by the changes that are being implemented by tesla and the reason, it was a part of the first version of autopilot or the previous version of autopilot. they have split with tesla. they're not working on this current version. we're going to go out and see what kind of reaction we get from tesla owners who have this software download. >> a key variable of that stock. thanks for that, our phil lebeau. the dow is coming off the highs up 112. the s&p, 2174. we're good. okay... what if a million people download the new app? we're good.

five million? good. we scale on demand. hybrid infrastructure, boom. ok. what if 30 million people download the app? we're not good. we're total heroes. scale on demand with the number one company in cloud infrastructure. hewlett packard enterprise.

[ala♪m beeping] ♪ ♪ the highly advanced audi a4. ♪ 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!

you might have noticed the stock market has come off its highs. resistance around the 2180 level which is where we topped out. watching the dollar, of course, for a week low against the yen as the fed held steady yesterday and the uncertainty will at this point through the debates on monday and even farther along the next couple of weeks.

>> 2180 is almost exactly where the majority of wall street strategists have their year end targets. >> one stock i'm looking at flying high, go pro-up 9%. a short squeeze perhaps. >> perhaps. let's get over to scott wopner and the half. ♪ all right, goes. with welcome to "the halftime report." i'm scott wapner. the post fed playbook. stocks are surging today so what happens now? should you keep buying stocks even as there is a warning of a pullback. with us steven weiss, the brothers najarian and senior economics reporter steve liesman. do you buy stocks today because of this? >> no. >> you're cautious? >> well, judge -- >> why not? other people obv