good morning. it's 8:00 a.m. at amazon headquarters in seattle. it's 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ breaking rocks in the hot sun ♪ ♪ i fought the law and the law won ♪ ♪ i fought the law and the law won ♪ ♪ i needed money 'cause i had none ♪ welcome to "squawk alley" for a wednesday morning. i'm carl quintanilla with jon fortt and kayla tausche at post

9. terry is here joining us. we tackle samsung first this hour. warning about third-quarter profits, slashing them by a third as the production eats into their bottom line. apple, meanwhile, is up 20% over the last month and up several days in a row. cole windergart hasnote on apple called "evidence on iphone strength." good to have you back. >> hi, how are you? >> how much strength are you assigning to samsung's difficulties? >> we already thought the iphone 7 would do quite well. in addition to this, the way i think of it, the note portfolio specifically we think maybe does 20 million units a year. we think apple can capture at least half of that volume going forward because this product's now going to be halted. there is a longer-term issue that will be more beneficial and currently underestimating expectations, which is you think of the high end of the smartphone market, 350 million

units a year. it's a two-player market. and what we have found in the past is when market share shifts to apple, the market share gains tend to be permanent because their loyalty rates and retention rates are very high. remember, they're in the 90s. so, what you could see is a structural change in market share going forward. >> samsung had made changed at the top of the division, trying to gain share from apple in the premium space, and that's clearly at greater risk of not happening here. to what degree do you think this is a product-specific problem, and to what degree do you think this is a symptom of a larger, corporate problem at samsung that might be much more difficult to fix? >> well i think it's an execution problem. i think it's widely known in the industry that the next iphone, not the iphone 7, the one that comes next year, calling it the iphone 8 for argument's sake, will be tucked with new features. samsung the speculation is accelerated to get this out early and misexecuted on.

that's the problem. when you're asking consumers to spend $800 on a mobile phone -- >> but is this just a great company that rushed something to market and anybody would have screwed it up because they tried to do something impossible, or is there fundamentally wrong with something with samsung, the way they're structured, their leadersh leadership? >> it seems to me it's a rush problem because they're the seventh generation of entering the market on this high end and this is first one we've had. i think they were trying to rush, especially on the feature side, ahead of the super cycle we expect of the iphone next year. >> what can the company to do protect market share at this point? we always see discounts, companies trying to keep people in their product or ecosystem with a voucher of some sort. we haven't seen that here. is that a possible ingredient? >> i'll they'll try anything. kulwinder is right, there's a short-term and a long-term issue. this is their core business, so a mistake like this has a major impact on earnings projections, and that's bad. by the way, the timing with,

google's timing with their phone could not have been any better with the pixel, because i'm sure that will help them gain market share. but i think the bigger issue for samsung is the longer-term issue here that's underneath all this, and that is, increasingly, smartphone penetration is less about feature functionality of the actual hardware and more about integration with software and services in the broader ecosystem. you made the point about retention. once you're on the apple platform, the iphone platform and you're used to it with all the different features, it sort of sucks you in and it's hard to switch back. guck le google is going to attempt the same thing with google assistant, google maps, gmail, all of these software and service functionalities that group together that work bet with the equipment, makes it an ecosystem that makes it a lot stickier. and i think that ultimately will be samsung's bigger issue in the long return. >> kulwind binder, a viewer sai

"this gives android users a chance, a reason to jump into apple's ecosystem," which he argued they always wanted to do, but at some point, you have to admit the sum costs you've spent buying android phones. do you buy that some. >> i think the evidence is to the contrary, that the retention rates are so different between android and the iphone. iphone is in the mid-90s and android at best is mid-70s. i think the switch now would be relatively permanent. there are some switching costs, but remember, many android users are single product users that tend to have an android phone and several other types of platforms out there. so, that actually makes the crosses a little less in this case. >> it will be interesting to see the market change, if, in fact, it does. thank you so much. credit suisse talking samsung and apple. app amazon is launching

music unlimited. it will cost $80 a year for prime members, non prime members $10 a month. while owners of the echo, $4 a month for a version that only works on that device. amazon already has prime music, but that only has about 2 million songs. the new service has tens of millions of songs. terry, they haven't discounted the notion of maybe doing exclusives in addition to the standard catalog. >> yeah. listen, i think amazon's play here is a big benefit and a trojan horse for consumers. for less than $50 a year i get any song i've ever wanted in the past or in the future? that sounds to me like a bargain. ultimately here, this is another one of these examples of these plays by the big four, right? amazon, facebook, google and apple. they're looking to garner, you know, again, a trojan horse service that's kind of like a no-brainer, priced as a no-brainer, for massive user persistence. and the key word here i think is

persistence. they want you -- they viewed that music is one of these services, apps that's like a utility. it's like e-mail 20 years ago, where everyone's going to want it. and ultimately, it's going to be hard to charge for it at market prices. >> but amazon, john, is the everything store. i mean, it hardly has the sex appeal of apple and the itunes marketing machine that we've seen. i'm wondering what you think amazon's brand will be in music, if it's going to be thought of as more of the columbia house of today, where you get 12 cds -- >> half of our audience doesn't even know what you just said. >> i personally don't care about the brand of the retailer when it comes to music. and i think what's brilliant about what amazon is doing here -- if you're a prime member and you sign up yearly for this service at 79 bucks a year, that's $6.58 a month. that is significantly lower, one-third lower, plus a little bit, than you're going to get from apple, spotify and the others. so, amazon, because it's got

millions upon millions of people as prime members now pushing that into a shared wallet play for the consumer. we normally see this in the enterprise, but now amazon's doing it with the consumer. they want to do it with groceries, too, down the line. it's potentially really powerful. >> are they having to find ways, though, terry, to justify prime? the fact that you have to buy this separately outside of prime, but you get a preferred price. you get 80 bucks a year. >> oh, i think it's related. they're doing well with prime memberships. and i think that's been an excellent, you know, strategy for amazon. but think about this, right, it's going to be very, very difficult for an independent music service play to compete against these large players. apple at least priced their additional services to market pric prices. amazon is not doing that. they're subsidize taking to get this massive, ubiquitous scale. and think about it, if spotify is already losing several hundred million dollars a year, what does this bode for them as other big giants get into this and use music as a trojan horse?

>> last thing. i read, someone this morning questioned whether or not an echo is advanced enough to really accept commands for a specific song. do you think that's going to be a problem? >> i'm sure that there are engineers at amazon working to improve echo as we speak. i mean, i think it's a little crude, but with the competition from google assistant, which looks a little bit more refined, i am most certain that amazon will make that thing work great. >> and amazon doesn't want you buying the echo-only version. i think that's just a little bit of an enticement to upgrade to the full version. hey, if you've tried it, give it a try. you really want this on your cell phone, don't you? bring this in the car. pay us a little bit more, and people will. >> terry, thank you very much. terry kawaja luma partners. meanwhile, we get the fed minutes this afternoon and we'll see how divided the fed was at its september meeting.

some tech earnings stories we're keeping an eye on. cybersecurity firm fortnet tumbling after cutting its guidance, blaming a poor macro sales environment. also, ericsson with earnings that significantly missed targets. fortnet is down about 12%, ericsson down 20%. and germany's biggest bank is selling an additional $1.5 billion of debt to raise cash, general corporate purposes. stock is just about flat. carl? when we come back, more on tech stocks with the so-called dean of valuations. where he sees the market right now. plus, profiting from tesla and the growth in electric cars. a company with charging stations across the country and a lot more on amazon finally launching amazon music, another area of expansion for bezos, should apple, google and pandora be worried? in a moment. audi pilotless vehicles have conquered highways, mountains, and racetracks. and now much of that same advanced technology

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sprint is preparing to raise $3.5 billion by selling and leasing back about 14% of its wireless airwaves. the company has significant debt obligations and says it's raising the needed cash to fund the business. it is the third time sprint has done something like this in the last year, although the first time that it's actually mortgaging its airwaves. stock is up 1.5%. it's off the highs today, jon, but you can sell and lease back just about anything if you think it's worth something. >> yeah, indeed you can. and both campaigns amping up the rhetoric with just 27 days from

the election. chief washington correspondent john harwood joins us from d.c. with the latest. john? >> well, jon, they are amping up the rhetoric, but one of the challenges over the last few weeks is going to be who is the fight really between? is it donald trump versus hillary clinton or is it donald trump against both parties? donald trump last night went on "bill o'reilly" and went off on some of his republican critics like john mccain, also paul ryan. he said that members of the establishment, like house speaker paul ryan, need him a lot more than he needs them. take a listen. >> because he was begging for my endorsement. people are calling, his friends are calling -- >> i know, but be the bigger man. >> then the first sign of a little bit of difficulty, he unendorses. >> all right. >> i wouldn't want to be in a fox hole with a lot of these people, i can tell you that. >> but mccain's a brave man. he's a brave man. >> by the way, including ryan. especially ryan. >> i got that. >> now, hillary clinton, on the other hand, was campaigning in florida with al gore, who, of course, lost the presidency in

that disputed election in the year 2000. the former vice president was touting hillary clinton as the champion of action on climate change, and hillary clinton used that point to make a contrast with donald trump. >> so, let's remember, let's remember what's at stake. i'm running against a guy who denies science, denies climate change, says it's a hoax created by the chinese! >> now certainly, you can expect more of the same over the next four weeks, and we have one more debate left. that will be in las vegas on october the 19th. going to be very interesting to see what strategies the two campaigns come up with for that session, guys. >> all right. thanks so much, john harwood. it is definitely crunch time. coming up on "squawk alley," the dean of valuations. are tech stocks flying too high? plus, baby boomers and cars. why a revolution in self-driving cars may be a boom for a certain generation. that's when "squawk alley"

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check this out, intel out with a new ad campaign, featuring none other than swimmer michael phelps. take a look. >> faster. faster! faster. faster. >> ooh. >> now, the idea behind this ad campaign, intel saw michael phelps hunched over a laptop during the olympics. it was obviously an old laptop, and they figured, man, if the fastest swimmer in the world is using an old laptop, maybe we should use him to try to get people to upgrade. and it comes at a time when gartner's just out with numbers showing that for september, it doesn't look good in terms of pc units, down almost 6%. but in the u.s., it's just about flat. and actually, laptops are up. so, i guess the idea here is target the u.s., target laptops,

maybe there is some strength with inventories being low heading into the holiday season. people might actually go ahead and upgrade. >> and maybe generate buzz with a familiar face to a lot of people that you're trying to sell those products to as well. >> not a lot of people don't know phelps at this point. >> although we're still waiting to see the pine brothers throat drops commercial that ryan lochte has been worng on. >> oh, really? >> his sponsor. but we'll of course wait for that. now to a new trend in tech aging. as self-driving technology becomes more of a reality, it may not be millennials that stand to gain the most. aditi roy is at the aging 2.0 conference in san francisco and has that story for us. aditi. >> reporter: hi, there, kayla. some of the biggest names in tech are here to showcase innovations catering to the 50-plus crowd, which, by the way, accounts for $7.6 trillion in annual economic activity. that's according to the aarp. and among the companies that are taking note of this booming senior market, google. while it's unclear when google's

self-driving cars will go to market, jennifer haroon, one of the executives of its self-driving car program, says that when it does, seniors stand to gain the most. >> turns out, here in the u.s., about four out of five seniors live in more suburban, rural communities. many, unfortunately, don't have public transportation. so when they do have to give up those car keys, it can be really isolating. and we think self-driving cars can help expand their world, even if they can't physically drive. >> reporter: in fact, she says that the company has had older americans ride in its self-driving cars to get their feet back. and in cities where google's testing out self-driving cars, it holds community meetings, and among the place they publicize those meetings, senior homes. while she says older americans represent a key degraphic, getting seniors to adopt self-driving technology could be a roadblock. according to a recent study from the m.i.t. age lab, only 12% to 15% of americans over the age of

65 said they would use autonomous cars. haroon says that the key is educating seniors about technology, even getting them to use it and try it out. and by the way, guys, google is not the only big tech company that's tapping into this growing market. both uber and lyft have also announced programs in recent weeks that cater to seniors. back to you. >> yeah, aditi, i guess this is a tough one. i mean, a lot of seniors feel uncomfortable with brand-new technology. i've had requests to program unnamed seniors' vcrs and dvrs over the years, for example. a self-driving car seems like a much bigger hurdle. >> reporter: absolutely. and the key is, i think it's a psychological hurdle from, you know, just talking to people, is that just psychologically it's hard for people, anyone, to kind of change their ways and also to get behind the car and give up that control and let the machine kind of do all the work. haroon told me that the way they're trying to overcome this is getting more seniors into these prototype cars and letting

them use it. and she says when they do, they're finding a lot of positive feedback and seniors getting excited about the possibilities of the freedom they have from it. >> aditi roy, thank you very much. fascinating. imagine the social change that would happen if all of that got worked out. when we come back, if twitter's sold, what will the price tag be? our next guest calls twitter a company in need of adult supervision. don't go away. where, in all of this, is the stuff that matter the akes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises gornments and the fortune 500, and, can deliver insighterson toerson, on what matters to you. morgan staey.

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good morning once again, everybody. i'm sue herera. here's your "cnbc news update" at this hour. powerful images from the battered syrian city of aleppo show rescue workers pulling a boy from the rubble of an air strike. government opposition activists claim eight people were killed during yesterday's attack on rebel-held parts of that city. owners of new prius cars may need to take them back to the dealer. toyota is recalling 340,000 of the electric vehicles manufactured over the last year due to a possible parking brake defect. toyota says it discovered a design problem with the cable connecting the side brake and the rear wheels. an oregon surfer is in serious condition after being bitten by a shark. the rare attack happened 80 miles northwest of portland at indian beach. and it's not just people, animals are also being stranded by rising floodwaters in north

carolina. a team of rescuers plucked more than a dozen puppies from this shelter in lumberton, which, of course, is one of the hardest hit areas. you are up to date. that's the news update this hour. let's get back downtown. carl, back to you. >> sue, thank you very much. sue herera. europe and the uk going to close in about three minutes. looks like some mild losses to end the day. seema's here. hey, seema. >> carl, that's ligright, europ stocks dropping lower, dragged down by the technology sector, which has fallen 2% due in part to ericsson tumbling to a multiyear low after they issued a profit warning amid heightened competition. this comes after ericsson's recent management shake-up and announcement 36,000 job cuts. the stock falling more than 20%. the other big mover is in the currency market. the uk pound reversing its downward trend, now on track for its biggest gain in months after prime minister theresa may supported the decision for

parliament to weigh in on the brexit debate, easing concerns about a hardlined approach to negotiations. earlier today, the prime minister spoke about the brexit talks while addressing the parliament. listen in. >> what we are going to do is be ambitious in our negotiations to negotiate the best day for the british people, and that will include the maximum possible access to the european market for firms to trade with and operate within the european market. from the uk to the banks, deutsche bank dipping back into the bond market late yesterday for another $1.5 billion in cash, this after last week's $3 billion deal. and barclays also in focus. it's continuing to shed noncore assets by offloading 260 million pounds worth of loans to italy's ibl bianca. the stock moving lower. now, we're seeing a bit of m&a in europe, but we still haven't seen a resurgence in the ipo market in europe. uk gym operator puregym and real

estate officefirst canceling their respective listings due to unfavorable market conditions. it's a setback for bankers and venture investors. some say the brexit has had an impact on deal flow in europe. carl? >> seema mody back at hq. thank you very much. when we come back, more on the markets and tech valuations in particular. a relatively flattish session here, as art cashin just told traders to await the next political bomb. it's been over eight hours. back in a minute.

coming up at the top of the hour on "the halftime report," king dollar. we'll debate where its recent rally is the most important thing for the markets. where you invest on a stronger dollar idea. plus, samsung hitting hard over the fallout over the galaxy note 7, but one firm says now is the time to buy the dip. we're going to find out why. and we've got your earnings game plan. a look ahead at the stocks that could beat and the stocks that could miss. that season all coming up on "the halftime report." let's send it over now to carl. >> thanks very much. now back to dominic chu for market flash." we're watching the dow transportation index. it's underperforming the broader market, so you've got the names weighing on the sector, kansas city southern on the rail side of things, american airlines, norfolk southern and ch robinson as well, all down about a percent or more. the index is up 7% year to date.

you'll notice also, kay larks the ishares transportation etf ticker, iyt, not a heavy trading day so far. it trades 277,000 shares a day. back over to you guys. >> thanks so much, dom. meanwhile, the technology sector continues to outperform the broader s&p 500 this year, but are there dangers in treating tech as a single sector? this according to the master of valuations. professor of finance at nyu stern school of business, aswath damodaran. what do you mean? we know every company's getting into technology, but it doesn't necessarily change their valuation. >> there was a time when you said tech, you really meant high growth, high risk, high pe. i don't think that's true anymore. if you look at the tech sector, it's now 20% of the market. and you break it down by age, the older technology companies are behaving very differently than the young technology companies. in fact, i had break them down to old tech, middle-aged tech and low tech, because they're

behaving very different ways. >> which ones would you invest in, because old tech has been in favor, at least through the summer until the end of august because of their dividend yield? >> yeah, i have a little bit of each. i have apple and microsoft in my portfolio, which i think of as old tech. i had ibm until recently, which is really, really old tech. and i had twitter in my portfolio until recently, and that's a young tech company. at the right price, i will buy any company. at the wrong price, i will not buy any of these companies. and one of the reasons young-tech companies can come on to your radar is when there's a surprise, people just dump the stock. so, you can actually get the young tech companies at a reasonable price if you're willing to be patient and wait. >> what's a good example of that? like a yelp or a zynga or, what's a -- >> i mean, i'll give you my favorite one. i remember when facebook was 6 months old. and people just said, this is the end for facebook. i remember the stock hitting $18 and people just dumping the stock. and so, there's almost a face in

every young growth company where you can latch on. where you've got to be careful is some young tech companies are on the road to doom. i mean, you've got to be able to differentiate those where the price is down but the value is still up. and those with the prices down, you think there's no way to go for them. >> what about when a stock doesn't act its age? amazon could easily go into the old-tech batch with some others that you mentioned, but its valuation is high because its growth has been outstanding. it managed to be new again with the cloud and some other initiatives. so, did you get that one right or does that sort of fall through the cracks? >> there's a fountain of youth, at least in legend, that some companies seek after, right? we know the legends -- apple on the verge of death, steve jobs brings it back. ibm in the '90 and grossner brings it back. >> adobe? >> and those are the exceptions. i think the problem is, if you invest for the exception, you're always going to get burned. so, will there be companies like those that slip through the life cycle radar?

yes. i'm willing to give up on those, because if i go after companies that i think would reinvent themselves -- yahoo! in 2012. all the talk about the new ceo, she's going to turn it around. i think it's really difficult if you're a tech company to reinvent yourself. the exceptions, in fact, prove the rule. it's tough to do. >> at twitter, the old ceo was supposed to turn it around. and obviously, we've seen how that worked out. is 10 years old for twitter a mid-life crisis? is that retirement age? and at what level would you buy that stock? >> life cycles get really compressed for tech companies. what allows them to grow really fast can cause them to decline really fast. and that makes actually management even more critical of a tech company than an infrastructure company, right? if you have bad management at a tech company, you can basically climb the life cycle in four years and climb it down in four. and the way i describe twitter is the company in search of adult supervision. it's always been the case. before jack dorsey and after jack dorsey. it's a company that really doesn't seem to have the mat. and the fact that they mangled

the one exit strategy that was working potentially for them, that somebody would buy them, they have managed to mangle even that. so, that makes me -- i mean, i bought twitter too high. i bought it at $26. i hoped -- >> the ipo price. >> no, i actually bought it after it came back to $26 because i did not think it was overpriced for a long time. said there's a chance here. but every quarter that i watch twitter, i'm less convinced that this management team can pull it off. so, i actually had to sell at $22 because i finally gave up. i said, you know, i can't take this. >> how do you value samsung in a situation like it's in right now, a product that in and of itself doesn't do huge volume, but we can see even initially with this report for q-3, a third of profit getting sliced off because of this debacle. do you value it based on being a consistent performer over time, or do you suppose the dynamics are shifting away from it and throw that out the window? >> i think that depends on whether you think this is a mistake or a pattern. if it's a mistake, they just

overreached, they wanted to get the galaxy 7 out there really fast and screwed up. there but for the grace of god goes any company. it could have happened to apple. it just happened to happen to samsung. if that is your perspective, then i think you need to put this behind you and say, they're a mature company in a low-margin, high-volume business. you can value them as such. they're going to return to that. they're never going to become a high-growth, high-margin business. so, i value deutsche bank three days ago, same scenario. is this a shock that they can live through? and there the shock is much more real because the regulatory guys can come in and shut them down. in the case of sam saung, i think they will recover, but i think it's going to be a long ride back to a low-margin, high-revenue business. >> when you look at companies like deutsche bank, samsung, wells fargo, mylan, at what point do you say this selling has been overdone, the bottom has been put insofar as the crisis is felt? >> i think you have to be realistic and objective, which is tough in the midst of a

crisis. you've got to step back from the noise of the moment and start asking, what is the basic business? what is the story for the company? has it changed? sometimes it works out, sometimes it doesn't. i mean, i remember after jpmorgan's london debacle, looking at the bank saying, this is a bank -- i mean, it's not as if jpmorgan is the exception. any bank could have screwed this up. so, i think that that becomes -- it's as much an art as it is a science, deciding where you want to let go of a company and where you want to enter a company. >> quickly before we go, what price do you think would be an appropriate enterprise value for twitter? >> i think that as a stand-alone company, i used to think it was worth about $26 to $30. i think it's closer to $18 to $30 right now as a stand-alone company. what you have to hope for is you find a company with an overconfident ceo with delusions of grander that can turn twitter

around, and that's why i think salesforce is such a good match for them, right? >> we're collecting data points on this. aswath, appreciate it. news alert in the bond market, $24 billion in three-year notes up for auction. a few moments ago, rick santelli has been watching that. hey, rick. >> yes, it's a doubleheader for auctions! here's the first. $24 billion 3-year notes. the yielded auction, 1.045%, so 1.045%, the highest yield at an auction since january of this year, which makes it second highest. all the metrics were average, i gave it a "c" as in charlie. cover a little higher than the 10 auction average. the indirect spot on ten auction average, directs a little light of auction average. so it becomes a "c." maybe it garners us some information on what investors are thinking. i'll be back in about eight minutes to talk about that, but in about 85 minutes from now,

we'll be doing $20 billion of 10-year notes. jon fortt, carl, back to you. >> all right, thanks, rick. on the clock. we will get back to you soon. and unexpected changes on the board of delta air lines. our phil lebeau has that story in chicago. phil? >> reporter: hi, jon. richard anderson has been a driving force at delta since the company emerged from bankruptcy back in the 2006-'07 time frame, ceo and then executive chairman since february. well, he has retired effective yesterday. he is no longer a part of the delta board, electing to step away. according to people i've talked with at delta and in the industry, this was expected, though i should point out that a lot of people, if you would have said to them, hey, if richard anderson's not going to be involved with delta, if you would have mentioned that a year ago, given how vocal he has been and what a presence and driving force he's been for delta, they would have been surprised. but take a look at shares of delta under anderson as ceo. he more than doubled the money for investors, up 142% under his

tenure as ceo. but delta right now finds itself, like so many other airlines, trying to convince investors that the growth has not ended, that there is growth to come. we'll find out what the third quarter produced when we report on their earnings tomorrow morning. and you do not want to miss our interview, exclusive interview with delta ceo ed bastian. that is coming up tomorrow morning. we are going to be at delta headquarters talking with ed not only about the third quarter, but also about where delta is right now as it tries to reignite investor enthusiasm for the airline stocks, which guys, we've been talking about this for quite some time. they are not loved right now by investors and haven't been for some time. >> we'll be watching tomorrow morning, phil. for now, phil lebeau, thank you. meanwhile, tesla's elon musk says he's unveiling a new and unexpected product next week. coming up, the companies profiting from the electric car revolution. and later today, as earnings tick into high gear, an interview with the ceo of csx.

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built for business. dow's trading at the 90-point range but has gone slightly higher. bob pisani is on the floor with what's moving. >> good morning, kayla. and the same issues that dominated the market yesterday still do today. we have a stronger dollar, we have higher rates, we have generally lower oil, and election jitters as well. and you can see this in the fact that we don't have the market

leaders moving today. take a look at the main sectors. remember, utilities, real estate investment trusts, they have been laggards recently, but they're leaders today. and health care, tech, energy and banks have generally been the market leaders. not really the case today, although banks are still fractionally positive. some of those banks sitting at 52-week highs. i think the thing is that overall the market's holding up, although a lot of jitteriness going into earnings season because the preannouncements of companies like honeywell and alcoa have been on the disappointing side here. twilio finally came in with twird-quarter revenues and earnings forecasts. they went public in june. this is a communications software company. they're talking of revenues of roughly $$70 million. the street has $65 million. adjusted lost per share 3 to 5 cents. so, a little bit better than anticipated. stock's only down modestly. but remember, twilio was one of

those classic moonshots. they went public at $15 back in june and you can see there, they got as high as about $70 and has been turning down in the last several days, last couple days have been tough on ipos in general. in fact, look at some of the big ipo names reported recently, nunanix, coupa software. this is just this month, although i want to point out that all of them are still trading above their initial price. but when the market gets under little bit of pressure, you can see it's the big ipos that have had big moves on the up side, kayla, that tend to get sold off along with the rest of the market. back to you. >> thanks so much, bob. meanwhile, here's rick santelli with "the santelli exchange." rick? >> thanks, kayla. we just did the 3-year auction. everything was average. did we learn anything? well, it is the second highest yield at the dutch auction. so, what does that mean? is the fed or is the fed not going to normalize?

we had one rate increase in ten years, basically, last december. will they do it again? many were looking to this auction to answer that exact question. i'm not sure it was answered, but one thing i can tell you for sure, there wasn't a lot of sponsorship that would dictate it's the top of the range and it's going to rally, making your position as you buy into that via the auction more profitable. it wasn't as though they're looking for a spike. i think the uncertainty, actually, speaks volumes. we'll have 10s coming up in about 60, about 75 minutes. now, the way i look at it, i like krispy kremes. do you like krcrispkrispy kreme? i like ho-hos and things that aren't good for me. they're high calories. so, the title is easy for me, all the calories with all the enjoyment. that's the fed. strong dollar -- best prices since early march. higher rates. whether you look at 10s, 3s, bunds, gilts, everything's sort of moving higher.

and you talk about a batch of sovenz with different fundamentals, but they're all basically still moving together. look at the drift of the queasy stock market, whether it's the s&p or the dax. it's not falling apart, but there's no doubt it's a bit queasy. look at the average ranges of the last seven days and then look through the periods of august and september when they were so, so quiet. so, what am i getting at here? just do it. just do it! just do it. because if you're worried about the higher dollar, it's here! if you're worried about controlling rates, they're moving! if you're worried about the impact of stocks, they get it! it's all out there. make the bt use of the market dynamics in your favor, federal reserve, because whether you get to enjoy the doughnut or not, all the bad things you're worried about are ending up in the bulge anyway. carl, back to you. >> rick santelli. rick, thank you very much. our next guest operates the world's largest open electric vehicle charge network. cars from bmws to teslas can

charge from any of these stations, and with tesla potentially unveiling a new car, a new feature, electric vehicles could expect to see another surge of interest. pat romano is the ceo of chargepoint, and he joins us today here at post 9. this is now your play as to what comes next. >> we've been around for a long time. it's a 9-year-old company, believe it or not. the infrastructure started out mostly government subsidized to put a little bit in place before automakers started coming to market with their vehicles. cars come into the market. >> geographic disburgs. is it still a west coast -- is it a coastal story? where is it filling in the fastest? >> it used to be very much just

a west coast story. it's really accelerating very quickly. our east coast region sales are growing at a faster percentage than our west coast regional sales right now. you are seeing a lot of equalization in if the states with lower population in the north -- northern parts of the country, central northern parts of the country. you are still seeing lower penetration. we think that's just a matter of time. >> you think there's only one state that i didn't see a station in, and that's north dakota. why is that? >> because wherever there's electric vehicles, you need charging stations, and there's not much population in those states, but there's always a few early adopters that are -- >> not because there's a lot of oil there? >> not because there's a lot of oil. >> i'm intrigued by this new weightless feature that you have where somebody is plugged in at an electric charging station. somebody else can tap their card

and then the first person gets an alert. hey, you're almost full. switch it out so somebody else can use it. it's increased the usage by might you go the new jersey route and use human attendants that can switch the pump for people? >> so i think for fast charge or for hotel applications, you might actually have an attendant in some applications that may make sense. for general charging at work or charging while you're shopping, you are primarily going to leave your car there, and you don't know exactly when it's going to be full, and especially at work where we want to give employers a very cost-effective way of putting in charging for their employees, we want to make sure that they get more than one car a day through those chargers. i think it's appropriate for those applications the attend yarcht nonweight list solution appropriate for a hotel or maybe

even a d.c. fast site. >> for those that don't have ev's and a lot of us don't yet, i guess -- >> or v's. >> or v's. for us fast charge is an important part of our business, but it will always be a minority of the stations. most of our stations are around town and at work. over 40% is workplace. in terms of cost, because of renewables, utilities are trying to incent use when they have renewable generations. quite frequently, it's actually while you're at work. it's not when you are at home. depending on the state you live in, what your utilities generation profile is, home or work will be in some proportional balance. >> i know your business isn't dependent on government subsidies anymore, but how are you looking at the election and

are you agnostic at this point, just running your business? >> i think no one change is going to make -- this change to electric drive, this horse has left the barn. people want to do it. it's obvious that we need to combat climate change. clearly the clinton -- future clinton administration would hold better prospects for energy for alternative energy and subsequently electric vehicles, so we are a bit biassed in that direction, but i think if either candidate wins, it's still going to be a trend that's going to continue to grow pretty heavily. >> finally, we talk about tesla's production. can they make enough? i wonder which automaker or what event needs to tip everything so that the curve truly goes al algarythmic. >> i think you saw what tesla introduced a car. you g400,000 preorders.

you just saw the elasticity. the minute there are cars like the chevy bolt, like the tesla model 3, and like the 12 cars that were announced at the paris auto show, you're going to see, i think, an enormous shift in that -- >> i think we're in it. we're definitely feeling it already. in fact, if you look at the statistics, you know, last few months we've seen massive growth in purchase rates in august and september on electric vehicles. we had a 16,000 unit month in if just september. >> it's going to be fun to watch. pat, please come back. good to have you. pat romano from charge point. >> thank you. >> and coming up, cyber security stocks having a rough october. squawk alley will be right back.

>> this is interesting. cyber security in the spotlight, and the stocks in that space are under some pressure. this is the kensho cyber security index. it's given up alof its gains over the last month. the biggest drop coming in the past week. barracuda, john, which actually had decent quarter above

expectations this morning. >> yeah. these stocks can be pretty volatile, and they can also move with the news. not sure how long this depression in these stocks is going to last. i don't know how much stock to put in it. pun intended. >> so much talk about cyber attacks in the election, that the basket is still down in the last month. >> absolutely. meanwhile, we continue to watch what has been a muted session. we got the auctions underway. we're going to get the fed minutes in a couple of hours. art cashin, of course, who joined us this morning in the nine, taking about relative support here even though he was looking for more support at 2,140 yesterday. as he said sort of on headline watch for things coming out of the campaign, which some argued today was one reason for the instability yesterday. >> and goldman raised its chances for a rate hike in december based on politics. up to 75% as trump slips in the polls. interesting. >> now, one group of stocks doing a little bit better today. recent ipo's got kupa now up

6.5% on the day. they were down. now they're up. that's how it goes. csx tonight after the bell. day's rest. then get ready for the onslaught of bank earnings on friday. that's it for squawk alley. let's get over to brian sullivan and "the half." ♪ i need a dollar, dollar, dollar, ♪ ♪ that's what i need ♪ hey, hey ♪ i need a dollar, dollar >> you need dollars. we're going to leave you can cents. welcome to "the halftime report." scott is out. i'm brian sullivan. apologies in advance. your top trade this hour, king dollar. is the recent rally in the greenback the most important thing for the markets and your money right now? if so how do you invest around it? with us for the hour today, says joe terra nova, jim levinthal, john and pete najarian. kate moore, chief equity strategist at black rock. much to get to this hour. we begin with the greenback. the dollar index extending recent gains again today is now hitting its highest level since