good morning. it is 8:00 a.m. at salesforce headquarters out west, it's 11:00 a.m. on wall street and "squawk alley" is live. good friday morning. welcome to "squawk alley." jon fortt with me at post nine along with sara eisen, who joins us for the hour. sara, good to see you.

kayla tausche out today. a lot to get to in silicon valley, but our first story will involve deutsche bank, germany's biggest lender. company ceo john crien trying to reassure his staff. but shares is jumping back, up almost 8% after jumping to all-time lows. our wilford frost has been joining this story from the beginning and joins us from the floor with more. >> reporter: so let's revisit those basics once again. it really explains the story well. as we know, capital, that's assets less liabilities. liquidity is percentage of assets in cash or cash equivalents. deutsche bank has lots of liquidity, but a worrying lack of capital. yet, yesterday, it was liquidity fears, predominantly that moved the market. and many analysts this morning coming out to highlight the strength of their liquidity position, hence one major reason for the bounceback in shares today. capital, though, remains a massive issue. and that's actually what has understandably driven the 50% share price decline this year,

as a whole. in the short-term, it all rests on the possible doj find ties to mortgage-backed investments during the financial crisis. the leak of the $14 billion potential figure a few weeks ago, the main share price driver that we've seen for the company this month. now, a small boost in that area this morning, when john cryon confirmed the sale in the stake of their chinese bank is still potentially on and could be confirmed soon. that would be for around a fee of $4 billion. all-important bits of capital for them at the moment, of course. one other thinged you wanted t touch on is the chance of a government bailout. overestimated in my opinion, stateside. having just told italy they cannot bail out their own banks, for germany to do so would be the biggest public example yesterday of the idea that italy is run by germany for germany. italy could applaud it in the short-term, mean they could then

bailout their own banks. but big political grief from the likes of italy and greece would follow. so merkel does want to avoid that at all costs. rallies, of course, today eases the pressure somewhat. >> wilfred, thank you for that. we'll keep our eye on deutsche, talking about it nah moment. to the broader markets, today marks the final trading day of the quarter. tech has been the hottest game in town, sectors outperforming the broader indexes by as much as four times. twitter stocks leading the way. weighing in on the strength of the technology sector, though, business insider ceo henry bijen joins us, mark mahaney, who's upped his price target on google's parent today. guys, good morning to you both. >> great to see you. >> good morning. >> usually over the past few decades, when there's a gain at the end of the quarter, q3, s&p continues the gain into year end. does deutsche derail that? >> deutsche is certainly a big concern to watch.

it's a huge bank, very interesting discussion about germany bailing it out. obviously, if it came to that, they would have to bail it out. there would be no choice on that. but it seems like it's stable, as long as customers don't start yanking their assets out. hopefully it doesn't derail it. and certainly it's been a great move in the tech sector. >> mark, speaking of the tech sector, we've seen some downgrades of google in the past few days. one of them, underweight. you obviously disagree, why? >> we think it's still the best roi, advertising roi engine, platform on the internet today. our surveys of a thousand advertisers continued to confirm that. i think people underappreciate a few elements near-term and long-term. near-term, we think street numbers are probably too low. there's too much of a concern of a deceleration in the back half of the year. we're starting to see mobile search pricing start to rise. we think that will help with the growth rate. and long-term, we still believe that youtube is an underappreciated asset based on a lot of survey work we've done in multiple different countries. we think this is a $10 billion a

year revenue run rate business growing 30 to 40%. we think that's underappreciated in the long-term for google. >> mark, some little companies have had a really nice run this quarter. look at twillio, which recently ipo'd up 89% over the past three months. groupon is up better than 55%. but also some sizable companies. amazon is up some 17%, i believe. google's had a nice gain as well, we were just talking about that. was that because they were undervalued heading into q3? or are things getting a little bit too heady overall right here? >> well, i'll make two points. one is that fundamentals across the internet space, for the leading companies in the internet space have never been stronger. amazon's fundamentals are the strongest i've seen in 20 years that i've been following the company. that's the same, probably, with google. it's the same with facebook. so we're seeing very consistent, but even strengthening trends amongst these names. it's impressive for them. now, in terms of the stocks,

yeah, we think that the sentiment here is about as are bullish as i've seen on the large-cap internet stocks, and 2, 2 1/2 years makes us less bullish. we look for outliers, there are not many left. and i think google subpoena somewhat underappreciated. numbers go up and therefore the stock should go up. >> that backdrop that mark just painted, henry, may be one reason the tech sector is vulnerable to whatever happens at deutsche bank. yes, there's no exposure from deutsche bank on some of these techs, but these companies are exposed internationally to places like germany. and if there is going to be some sell-off and some snapback, how much is tech exposed? >> it's certainly exposed. some of them are expensive, but a lot of them are not. looking at google, looking at mark's price target earlier, there's a reasonable multiple going out there. you don't have to have heroic performance from here. it's not a momentum stock, so there's certainly a lot less vulnerable than they were, unless the fundamentals start to deteriorate. and to mark's point, it's hard

to see where that happens with google, at least. search is still a great business. youtube is gathering a huge amount of the money that's moving from television, so not a lot of risk there. >> who has the more reasonable valuation, google or amazon? >> amazon's a tough one with a lack of profit. but talk to the smart folks who own amazon, and i've been a long-term shareholder, not because of what's happening now, but they will say, they have always run that company where they're reinvesting every dollar. and when you take a reasonable valuation on the revenue they have, the valuation is reasonable. especially with the new business which has been fantastic. >> in q4, we've got the presidential election, we've also got the holiday season. how do you weight those two when you consider the valuations of some of these stocks? and how much does the state of consumer have to do with how the likes of facebook, google, amazon, and apple do? i know you don't cover apple, but you know, just putting it out there? >> john, i think what's implied in your question is these are

consumer-facing companies. amazon, google, facebook, kind of leading the franchise is the netflix, too. so what we see in major trends in the consumers are going to affect these names much more than what happens with enterprises, although some of these companies have that exposure. they're really consumer front end companies. and fundamentally, their strongest quarters almost always are the december quarter prints. amazon usually has a seasonal rally at this time of the year, precisely in anticipation of a big fourth quarter. but they can still make mistakes. last year, amazon had problems in the fourth quarter. they missed gross margin estimates. the stock corrected. so there's a lot of expectation that will build up for a reasonable reasons, which is, that is the big spend quarter for most of these companies with that consumer front end. >> i'm just looking at some of the laggards, henry, on the quarter, in the tech world. salesforce.com, crn, finds itself in an unusual place, down about 10% this quarter, to mark's point. do you want to be looking for some of those that could play catch-up? >> let me just ask mark on twitter.

carl mentioned it had a huge run. is twitter finally going to get bought this time, or is this the last gasp hope, where we have a scrum of folks look at it and then it sort of disappears from the radar screen? >> so that news broke last friday. that was a -- that was a surprise to us, having upgraded it -- i'm sorry, downgraded to it a sell that morning. it looks like the company took us literally on that call. i think this action by the company is, you know, there's a little bit of desperation. i think they're coming at this from a very weak hand. this is a company that's attempting to sell, i think, before it's very clear it has growth. we could not find positive data points related to twitter. look, there's a unique asset here. it could fit strategically with a few businesses, but i doubt at these kind of multiples. i don't think there's going to be much of a bid going on here. what i see is a company looking to sell while it can. that's a sign of weakness. >> guys, as we're talking, nutanix has opened, opens at

26.15. priced at 16. the talk was 13 to 15, coming on the heels of elf the other day, this is a pretty good sign for the ipo market. but specifically, this time for tech and cloud, henry. >> always exciting to see. it's great that it's open. there are a lot of companies that had to shell when we had the breakdown earlier in the year. there's great to see there is some market acceptance. >> and considering nutanix was a company people were worried about its valuation being lower than what had -- its private valuation was a couple of years ago, for it to then price above the range, which brought it out from under water, and then trade this strong right off the bat. a lot of people are going to pay attention to that. >> this is also a long time coming. they filed the ipo last year. they got set back by a bunch of market volatility, and after yesterday's stock market was sort of iffy as to what would happen today. up market and certainly an up ipo. >> good things come to those who wait, sometimes. >> mark mahaney at rbc, henry blodgett, have a great weekend. >> thank you. when we come back,

salesforce ceo mark benioff crying foul over the microsoft deal. we'll hear what karen swisher has to say about that. mark andreessen ways in on everything from today's ipo environment to the election. and a rough day for the markets overseas. we're going to count down to the european close, although the dow now at session highs. needs about 100 points to break even for the month. back in a minute. ♪ 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.

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salesforce attempting to throw a wrench in microsoft's acquisition of linkedin. the company urging u.s. and european authorities to probe the deal on antitrust concerns. marc benioff's dreams of a twitter takeover, karen swisher join s us from one market in sa francisco, on the phone. kara, glad to have you this morning. so, i mean, this sounds like it would have been a great play 15 years ago, but anti-trust concerns for microsoft, taking over linkedin? what's he really up to, you think, marc benioff here? >> well, i find this one bizarre, because, you know, the deal's already passed in the u.s. i think he's aiming at the eu.

and i just recently interviewed margerie bestiger and one of the things she talked about is who controls these massive amounts of data. and the race is on among all of thiz acquisitions and acquisition rumors like with twitter and others. so i think maybe he's doing a shot across the bow on the twitter deal, possibly that he's not probably going to get compared to the other possible buyers. i'm not really clear. it seems rather odd. it seems that it might just slow down the deal in europe. and then they would have to make certain promises. but i agree, i think it's an unusual attack. and he'll be -- if he did get his hands on twitter, he opens himself up to the same exact arguments from others. it's kind of interesting. >> a lot of people have a lot of data. facebook has a bit of data itself, so does google. that would seem to work against the anti-trust argument on data. but given that and given the fact that salesforce is among

the worst performers of the quarter, among the tech companies i track, and yet benioff's name keeps coming up in acquisition conversations, at least it was, does salesforce, for some reason, need to do a deal? does it need to be a scale play for them at this point? >> you know, i know them pretty well and i find this super unusual. i mean, he likes to get attention for himself and dreamforce is coming up everything and, but i don't think that's the reason. i think he definitely needs some sort of deal to try to bring in more heft to itself. it's a little -- it reminds me a little of cisco. it just kept buying to increase revenue and increase size for many years, with all of these crazy acquisitions, one after the next. so he's definitely a smaller boat in the huge ocean, with enormous ocean liners. so i think he's trying to beat himself up. the problem is, when he goes for these deals like linkedin or

twitter, you know, once he opens the interest in it, the others have to get in. google or facebook, even, or microsoft have to look at twitter now. you know, to sort of create a race for twitter along with bankers, sort of fueling the flames. and so i think that's behind a little bit of it. he's got to keep up and keep up with it in some way. >> all right, well, kara, have a great weekend. great talking to you. thanks for joining us. kara swisher of recode. >> still to come on "squawk alley," have a look at deutsche bank's shares. that's the adr that trades here at the highs of the session, up almost 13%. we'll talk to kate kelly with the latest on that and especially what's going on inside the hedge fund world. and nutanix, we just showed you the biggest d.c.-backed tech ipo of the year just started trading, wow, up a whopping 80%. we'll have a first on cnbc interview with the ceo, coming up. and we are less than ten minutes from the close in europe. it is looking to be a dramatic

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keep your eyes on shares of deutsche right now, extending their earlier gains. a moment ago, up about 7.5%. right now, better than 12% on this report that it will soon announce a settlement with the justice department. deutsche is declining comment on that. kate kelly has more on what has been a volatile week for the ba bank, germany, and even overall markets. hey, kate. >> hey, carl. that is definitely putting it right. and deutsche bank ceo john cryan has been looking to calm the markets and employees, a little bit more about that in a moment. but the week started with concerns as to whether deutsche bank would need a bailout or more accurately an a bail-in from germany and other regulators in yooirp based on even earlier reports that

prosecutors in the u.s. might be looking for as much as a $14 billion regulatory settlement, tied to mortgage securities fraud. seeing that as a huge win, some hedge fund clients had reportedly begun reassessing their relationships with deutsche bank and we learned a little bit more about this midday yesterday. in deutsche bank's so-called prime brokerage, which lends stock and cash to hedge funds, some funds welcome like capula investment management, dialed back their capital managements, and based on reports, other used their upper hand to demand nor favorable commercial terms in their dealings with the prime brokage. within other parts of deutsche bank, others had been asking trading counter parties for relief from the credit risk they get in whenever they get into a bilateral contract agreement with deutsche bank and derivatives and other securities that might expose them to counterparty issues with deutsche bank. the hope, of course, is that if in the unlikely event of a deutsche bank default, they were exposed to that credit and had their capital wiped out, they

could avoid that and some other party might step in, instead. this is the kind of thing we see in the financial crisis. anyway, back to john cryan, who this morning sought to reassure employees, saying in an internal note, that our bank has become subject to speculation, ongoing rumors are causing significant swings in our stock price. it is our task now to prevent distorted perception from further interrupting our daily business. trust is the foundation of banking. some forces in the markets are currently trying to damage this trust. that and a little bit more time to digest the headlines seem to be helping, guys. among other things, bank analysts, and to your point, just a moment ago, have published estimated justice department settlement figures that are far lower than the report $14 billion that u.s. prosecutors might have been looking for. >> and it's a good reminder, kate, that while deutsche bank shares have been in decline pretty much all year, it was that announcement by the doj that they were going to go after deutsche bank for $14 billion, that really caused the latest wave of anxiety. but this has a long backstory,

doesn't it? >> it certainly does. i mean, we are talking about activity that dates back many years. and really, the justice department is trying to sew up some of its remaining issues with some of these european banks. barclay's is another one in the mix, not quite on the front burner, based on the reporting i've seen. and as you know, sara, this caused wild movements in the stock prices here, jpmorgan, bank of america, bank of america, huge of exposure result of the their countrywide acquisition. i remember standing outside of jpmorgan a few years ago waiting for jamie dimon to walk into work and question him about what at the time was an enormous settlement being discussed and a lot of people considered it unfair, because, of course, they had bailed out bear stearns, among other things. they do move on from these regulatory judgments and i think they like to remove the overhang, in terms -- and when i say "they," i mean bank management, directors, and ultimately shareholders. but for a bank that's already

embattled and faces some concerns about their balance sheet, maybe not dire, but legitimate, $14 billion feels like a lot of money to some shareholders. >> indeed. kate kelly, thanks for that story, that we're going to continue to track. and venture capitalist mark andreessen weighing in on the ipo market at a event in san francisco last night. take a listen. >> the tech industry and venture capital are much more aggressive in this decade than we were before, at creating and funding companies that aren't just tool companies, that don't just build computers and routers and servers and disk drives and so forth that you sell to businesses and consumers. a lot of the best companies in the last five years are companies that directly enter markets, incumbent markets, in other industries. that is encouraging or suggestive of an idea that we in tech and venture can create and build companies in many more industries than we used to be able to. >> in a way, that's apropos of nutanix industry today, though

the industry it's entering is data center and cloud and kind of disrupting some of the players who were there already. also interesting, we have to look at marc andreessen and listen to him actually talk, because he's not tweeting. >> i miss him on twitter. it's been, what, days? >> it's been days on twitter. but on facebook, it's been months. interestingly enough, he was cross-posting from twitter to facebook. i went back to may and couldn't find a facebook post that he's done. so maybe he's just taking a break from -- >> in fact, he said, time for a break. he'll be back. >> from facebook, too, though. >> yeah, i think just in social -- i think he will return. >> his absence is noted by many. >> yes. >> when we come back, homeland security secretary jeh johnson says hackers are trying to break into state and local election with some measured success. we'll get his comments, coming up next. and europe coming back as we count to the close. dow is up 189. deutsche up 12. back in a minute.

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good morning once again, everyone. i'm sue herrera. here's your cnbc news update at this hour. federal investigators have pulled is one of the black boxes from the wrecked commuter train that barreled through a train station in hoboken, new jersey, on thursday. they're struggling to extract the second one. they're hoping to speak with the train's engineer today. one person was killed, 114 people injured in that crash. dozens of pakistanis staging

an anti-indian rally in karachi as tensions rise between the two nations over the disputed region of kashmir. pakistan has sharply criticized india over its clampdown in kashmir, following the killing of a popular militant leader in july. dunkin brands will partner with coca-cola to launch a line of cold coffee beverages in the u.s. it's the first push by dunkin to enter the ready-to-drink coffee market. it will debut early next year. and new york city's iconic carnegie deli will close at the end of the year. the family who owns the longtime eatery known for its massive pastrami sandwiches wants to license the brand and sell the products for wholesale distribution. so you still have a little time left. that's the news update this hour. let's go back downtown. carl, back to you. >> sue, thanks so much. markets are closing in the uk, blessed ly, and across europe. let's get to seema mody at the hq. >> what a session it's been. european stocks recouping some of their earlier losses, hitting

session highs as deutsche bank bounces back on those reports that it's near a doj settlement. germany, though, the biggest bank at the eye of the storm, witnessing their best day since 2011, after plunging below tenuten ten euros for the first time ever. john cryan defending his company saying swings in the stock price are due to ongoing rumors. but it's not just the stock that is in focus. the cocoa bonds, the riskiest bonds sold by deutsche bank hitting a record low, just highlighting the level of concerns around deutsche bank's capital position. despite, though, these concerns, the problem surrounding deutsche bank, the european banking sector, check this out, still up 10% for the quarter. that's just puts into perspective that despite the challenges we've seen in the european banking sector, still higher for q3. and meantime, the european stock 600 index finishing q3 with a game as well, up about 4%. we'll see in the next few hours whether the s&p 500 can match or even surpass its european counterpart. but, of course, at the center to

have the debate on whether germany will provide financial support to deutsche bank is chancellor angela merkel, who is already dealing with a number of challenges including the ongoing brexit negotiations, how she handles the wrapping up of the volkswagen scandal, refugees, the influx of refugees, which, of course, has already cost her some votes inside of germany. all of this happening ahead of the german presidential election in 2017. and for the first time in angela merkel's career, she is facing an uphill battle to secure another term. and sara, some of these factors could potentially influence her decision making around deutsche bank. that, of course, according to from strategist on that side of the ocean. back to you. >> we'll be watching the polls in germany into next year. seema, thank you. seema mody with the close. we'll stay on the latest with these deutsche bank reports and the stock move, the risks for the entire sector. let's bring in david benamoo, chief investment officer at axman internal investments, choice short shares of deutsche

bank, but long some other european banks. and our very own michelle crews a cabrera joins us back at hq. david, you've been defending the sector and their backstop. why don't you feel that way about deutsche bank? >> well, the issue on deutsche bank, just to be clear, is not a solvency issue. deutsche bank is not going to go bankrupt, i mean, anytime soon. the issue on deutsche bank is mainly profitability. deutsche, i would qualify it as a, let's say, a dinosaur. it's a bank which was iconic in the early 2000, which grew big, because regulation was pushing that before. and stayed big. they didn't adapt to the standards. so today they're just paying the price. so basically, we went short on deutsche stock in february 2016, not -- mainly because of

profitabili profitability. we were sure they would suffer a lot due to restructuring costs and also litigation. that's really the point. >> i guess the question is, if they do reach a deal with the department of justice for a lower fine than $14 billion, does that alleviate some of your concerns? because that has certainly sparked the latest wave of selling. >> yes, but let's say it will be much, much easier to understand the situation in '08, but that this will not be over, because deutsche still has a lot of things to do. so i think it's clearly a stock in which you could turn neutral, let's say, probably in three to six months, but not before. and they have to -- and then let's say you could really step in the stock only if they start to deliver on the plan. and you will need probably 8 to 12 months to see that. so it's much too early. >> michelle, a long way to go

before we get hard numbers on any would-be settlement, but it definitely alters the politics of a rescue in germany, does it not? >> oh, for sure. the number is key. the how much is the d.o.j. going to fine them? and until we know that number, we can't really tell how this plays out. the bigger the number is, the more you'd have to punish -- if the number is very huge, you'd likely have to punish shareholders. almost positively. and just how badly? and would you have to move up through the capital structure and actually hurt some of the bond holders? the smaller the number is, the less likely that is. and that makes angela merkel's life a lot easier politically. she doesn't want to have to be seen as backstopping this bank, but she could. there's rules that allows it. the way the european banking system works, ever since sip re resz, remember that drama, no more taxpayer money until you start moving through the capital city. there's a lot of layers there, though, before, in theory, the

government would have to step in. you have to wipe out 8% of total assets and you wouldn't have to get very far, even if the number is as big as we've heard reported. >> david, given that this deutsche bank situation is just adding more uncertainty to the markets overall, we've got elections in the u.s. coming up in just a few weeks, how do you view q4 volatility wise? and what are some of the potholes that we have to get around before you'd feel great about the quarter? >> well, it's going to be very bumpy, but before answering that, let me come back on one point on deutsche, just to understand clearly the situation on deutsche. deutsche, for the moment, as 10.8% of capital. it's a bank which will need to increase tier 1 capital by 2018, because it's a globally systemic bank. and to do that, before doing any capital increase, they can sell off assets. they are, you know, going to

sell their stake in the chinese bank. they're going to sell deutsche bank, so they have a substantial room of maneuver. having said that, going back on the volatility issues that we may face, you have a few things happening, especially also in europe. you have the referendum, which is going to be probably key to see how the prime minister has maneuvers to help the distressed banks. so that's something which is going to be, let's say, key. and of course, you have also the presidential election in austria, where we're going to see, let's say, a bit of political instability, for sure. so it is going to be -- i mean, politically, it's going to be bumpy. >> but mr. beniman was making a very good point earlier on, he

is short the stock, and he doesn't think the bank is going anywhere. it's still going to be standing. could be painful for shareholders, because they may have to increase their position, based on the size of the fine, and but ultimately, he thinks the bank survives. >> not to mention the domino effect we'll see on other banks. thank you guys so much. we've got to leave it there. when we come back this morning, a first on cnbc interview with the ceo of kn nutan nutanix, a company making its wall street debut today, being well received. and homeland security secretary jeh johnson says hackers are targeting the u.s. election system. his comments are next, but rick santelli, plenty to watch. what are you watching today? >> oh, many i goodness, there's so much to watch. watching the bounce in deutsche bank, listen to conspirator

traders talking about the phone call between angela merkel and the president. but most of all,type thinking about pandora's box. it's open a bit, but it's opening wider and it has to do with janet yellin. want to know what it is? you have to come back after the break. enables you to turn the equity you've built into the retirement you deserve. with over 20 years in the mortgage business, lendingtree allows you to compare free reverse mortgage offers with no obligation. just go to lendingtree.com or call now to get started. live in your home and get the steady income you need. enjoy your family. your home. your life. lendingtree. when banks compete, you win.

coming up today on halftime report, is deutsche bathe deuts scare overblown? morgan parker right here on set. also with us, mohammad el erain,

and the best strategies for q4 on this last day of q3, and a very bullish call on a big name chip stock. all in about an hour. >> thanks, scott. homeland security secretary jeh johnson says that hackers are taking aim at state and tloek tl local election officials with measured success. talking on "morning joe" this morning. >> we are seeing, also, it's important to make this distinction, we're seeing also efforts at hacks into the systems of state and local election officials. and one of two of those have been successful, into the online presence of state and local election officials. exactly who did it is also still under investigation. >> but at this point, can you 100% guarantee that you're going to have a clean, electoral process, or has it been compromised? >> it's never a clean -- >> when have we ever had a -- >> from a cyberstandpoint, can you say, definitively, going into november 8th, that these

voter databases -- >> can be protected. >> there are -- well, there are cyberattacks, cyberintrusions in this country, virtually every day -- and -- >> sam, your not going to get an answer. >> it's going to be a major topic of discussion coming up at this upcoming cybersummit we're throwing and partnering with the aspen institute and m.i.t. for the cambridge cybersummit on wednesday, october 5th. for more information and to register, go to cnbc.com/cybersummit. truly concerning words. i mean, you talk about all the things at risk, the grid, infrastructure, but election results, just another level of worry for people in country. >> and when you look at these hacks at yahoo! aol, over time, a lot of what these hackers try to do in these spear fishing attacks is get into people's personal e-mail and extract whatever information they can about their employment, as well. that's an area i think officials are increasingly looking at.

it's not just hillary clinton, it's not just colin powell and others. when you have, you know, we're both personal and public creatures, many of us. and so, when you have that convergence, the data doesn't make a distinction. hackers are after it all. >> meanwhile, we're watching this market holding on close to some highs, up 171. let's get to the cme group and get to the santelli exchange with rick. hi, rick. >> hey, carl. as i look up the board, i see a 159 in ten-year, important level at the top of an important range. but really what it means, at least for today, there's an all-clear. there are many lessons to be learned from deutsche bank. and i'm not really talking about the ones that you, the viewer or listener on the radio may be thinking of. my lesson is, central banks. now, i'm not here to say they've had bad intent. i think all central bankers truly want to help. but, please, don't help anymore, okay? let's think about this. so they're bailing out the

system after the credit crisis. and what we've had since are years and years of digging more help, finding more help, looking for more free help. easy money. how's it really helped anything? i'll use the same analogy i've used for year. you can't wallpaper over termites forever, okay? deutsche bank has plenty of issues that we don't need to get into, but one issue that's going to affect not only deutsche bank and the european banks, going to affect the japanese banks, the emerging market banks and our banks is the fact that the more negative interest rates prevail, the worse profitability is going to be. but it can get worse. and i'll tell you why. do you think the swiss national bank or the bank of japan or even with regard to corporates, the ecb, the other two are stocks. central banks buying into markets? you really think that's a good idea? let's huge deutsche bank as an example. let's say the stock at deutsche bank keeps going down. the cocoa bonds keep converting

into equity. everybody keeps blowing it out. what if the central banks all get together and decide, well, okay, we don't want that to happen. let's buy deutsche bank, or any other company, or when a company is in trouble, we'll buy that, or get the political highlight points like election times. you want to keep everything pretty clean, make sure nothing goes down sn. is that the world we really want to live in? here's where i'm going with this janet yellin recently, and it's all over every blog and every tongue of every trader, is considering the costs and benefits of doing things like other central banks. maybe buying equities. maybe buying corporates. it's a bad idea. it's not only fact of who gets to pick and choose, it will completely and utterly, in every possible way, destroy any value in the market place, completely. out will be a useless investment. what good is it without price discovery, without people getting together and using the markets to either add to risk or dispense of their risk, to actually get a large group of

individuals, whether in a group or on an electronic platform, toed by an offer and come up with a true price reflecting the fundamentals of whatever they're trading. a backstop by central banks is not only horrible and the final joke here is, is that in order for janet yellin and company to do any of that, they would all go and have to get permission from congress. i will just leave it at that. think about that congressional hearing. back to you. >> all right. thank you, rick santelli. and when we come back, talk about making an entrance. nutanix making its wall street debut today. check out the action, up about 85%. first on cnbc interview with the ceo is next. we're drowning in . where, in all of this, is the stuff that matters? the stakes are so high, your finances,

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>> welcome back. one of the largest tech ipo's in 2016 opening for trading at the nasdaq today. take a look at that chart. the stock is up 86% at the moment. joining us now first on cnbc is founder and ceo of nutanix. welcome, and congratulations. >> pleasure. thank you. >> is this what you expected? >>. >> not really. i mean, obviously the end of the day we respect the fair market value all i want is a healthy stock. looking for the true health of

the stock ichts, where it lands. >> after everything we've been through this year and last with all the valuation concern and, you know, there were concerns that you had the effect of a down round here based on what your valuation was. in 2014. what do you think is going on here? >> think they've done well informed decision making. at the same time there's a lot of mob tendency about, you know, marketing companies and talking about the unicorns and the death of the unicorns, and there's a lot of that yin yang that goes on. >> analysts say that you're the

real deal. you're in the magic quadrant, people that will do well in cloud. i have to ask, explain the dell relationship. it looks like they account for around 25% of your sales. they've been a partner of yours. now that dell includes emc and vm ware, they're a competitor of yours. how do you expect that to play out? they say they're going to continue working with you because the customers want you, but on the other hand, there's the concern that you'll no longer have that most favored nation type status. >> two things. one is that 25% number is wrong in terms of revenue. that number is less than 5%. in terms of buildings, you know, the number is not as high as 25. it's less than 15. i think that's one. obviously we have a lot of respect for dell, and dell vice versa has a lot of respect for nutanix as well.

if anything, they've actually chosen three computing partners. operating system software vendors. there's vm ware. there's microsoft. then there's nutanix. i respect what dell has done in the last 15, 20 years of delivering choice to the market and respect the customers' choice, so we hope to actually see more of that going forward as well. again, going back to what the outsiders see, everything being a zero sum game, it's not as simple as that. >> i wonder what your take is on investors' expectations for profitability, how that has changed over time, and how you as an executive treat cash flow and investments differently than you might have five or ten years ago. >> yeah. i mean, every year we've actually put more guardrails in our business. like this last fiscal year that ended in july of 16, fiscal 16, and we were operating cash flow positive. then every year we reply for

guardrails and say growth is something that's actually more measured. it's growth at all costs. i think the market keeps us honest. obviously they realize that there could be a lot of wasting in the naem of growth. as the company grows larger, we have to be mindful of what wasted means, and i think it's going to be a healthy balance between, you know, taking care of our customers and employees and partners, but also making sure that we have some sort of checks and balances. >> i mean, clearly sales growth isn't a problem. at least lately. revenue jumping 84% in the last year. for those that aren't familiar with what you do, can you just explain how what you do is different thn other cloud companies and who your biggest competitors are in a very, very hyper-competitive industry? >> obviously the -- it's computing. the total address market is to compute and storage and systems management and operations management software.

we build in cloud operating system for the enterprises, and then we're able to ship it to the enterprise so there are a notion of the cloud meets with a customer or to forcing them to come to where the cloud data centers are, and that notion of going and meeting with a company is with the same kind of elegance of what the public cloud architecture looks like and gelling really well, especially if it's over 5,000. the architecture is built on commodity servers. very similar to the way google, facebook, amazon built their own data centers. then you go for the value of pure software. our thanks, ceo of nutanic. >> on pace for its best day in five years. we'll talk about that in a minute. cdw brought i.t. orchestration

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>> watching shares of deutsche which obviously is in firm control of the market's mood

yesterday and today. up 13% on reports of who knows what. we have very little to go, on and that makes it more frustrating for both longs and shorts. i think someone was pointing out the range. low to high the last couple of days. somewhere in the neighborhood of 16%. it's just been an amazing 48 hours for german banks in general. >> clearly, there's a headline sensitivity here to any reports and news and we'll wait to confirm all of it, of course, but it is interesting to see the u.s. banks rally, getting some relief. they're the best performers in the s&p right now. john, oil prices are higher, which we haven't hit alday. wti just crossed above $48 are a barrel. energy companies and financials have been closely linked. you're also heading into what economists say is a fed rate hike. some of the head winds that have been plaguing the banks for a long time are starting to subside. now if we could just get through this deutsche bank issue and wait for some sort of resolution, or whether we find out how serious it is. that could be the key to financials in this market.

>> valuation tech stocks don't seem to be taking it on the chin. they've not just had a great quarter, but they're having a great day. amd, which isn't high valuation, but it has been volatile, still up better than 3% today. >> we'll kick off the month of october on monday. have a great weekend. let's get over to headquarters and the half. ♪ >> welcome to the halftime report. i'm scott wapner. top trade this hour, the deutsche bounce. why stocks are rallying back today, and whether concerns over germa germany's biggest, most powerful bank are overblown. with us for the hour today josh brown, steve weiss, jim, rob with us as well. he is with ubs private wealth management. one of barrons top 100 advisors. also on set today is adam parker. he is morgan stanley's chief u.s. equity strategist with us for the hour. rob, good to have you back. our own michelle caruso cabrera is