millionaires forecast the economy and investing driven largely by their politics. democrats were nearly twice as likely to say the economy will be weaker next year. guys, back over to you. >> optimism about taxes would have been held if it was a trump win and dems took the senate. >> that's right, a different equation. seems millionaires are like the rest of us in the sense of good polit politics. just a quick note, nyse's arca platform will require suspension of trading. we're checking that out, we'll let you know if we find anything further. we're hearing, though, it involves a software update that's being rolled back. >> those glitchy software updates. dow is up 62 points. less than 100 points away from the dow 20,000 and we'll send it to you, carl, to pick up the coverage for "squawk alley." >> thank you very much, sarah and michael. good morning, it's 8:00 a.m. at apple headquarters out west, 11:00 a.m. on wall street, and "squawk alley" is live.

>> good monday morning, welcome to "squawk alley," john ford, kayla tausche joining us. steve case, always good to see you. as sarah sad, we're back within 100 points of dow 20k. our top story, though, is about u.s.-china relations moving deeper into the gray this morning, possibly putting pressure on future trade in question. in beijing with the latest on that, younis? >> china's foreign ministry

tempted to ease tensions over the drone, saying the militaries were in direct talks to negotiate the handover of the drone. the ministry also cautiously attempted to defend beijing's actions, saying china's navy had a responsible and professional attitude to identify and ascertain this object, if you discover or pick something up from the street, you have to examine it. that was a very different tone than what was coming out of state media, which both defended beijing's actions strongly and mocked donald trump. they called the survey ship a serial offender spying against china. the official press more broadly attacked donald trump, calling him emotional for tweeting that beijing should keep the drone. the nationalist global times said trump's tweets add fuel to the fire and said trump is not behaving as a president and has no sense of how to lead a super power. trump has indicated that he wants to become much more aggressive on the south china sea, and that's been reflected

in the choice for secretary of state, rex tillerson. under tillerson, exxon has teamed up with vietnam to explore oil in the south china sea, and that's drawn protests from beijing. now, analysts i spoke to said beijing is also showing restraint that they believe if trump were to carry out his aggressive stance and turn that into official policy, that beijing would also take stronger action. some of the ideas are that beijing could recall its ambassador or potentially cut diplomatic ties. the state media appears to be trying to steer trump away from confrontation. the china daily said trump should take president obama's advice and think through what the consequences are before upending longstanding policy. eunice yune, cnbc business news, beijing. >> thanks, we'll turn to you on

this one. do you find the rhetoric here notably hot, and do tech companies need to worry about being collateral damage if it gets worse? >> i think both. hopefully the rhetoric will cool down. president-elect trump won by running a disruptive campaign, including the use of twitter, and also president obama is still president for another month, so probably we should have one president at a time. i think the key focus really should be on driving innovation. we're seeing a globalization of entrepreneurship, not just in silicon valley, but all around the country and world. having a good relationship with china and other countries, obviously, is important for us now that we live in a global, interconnected world. >> steve, is the market, you think, just completely and perhaps even erroneously discounted? china is a big deal. we've got this underwater drone issue. we've got the collapse of tpp, which was expected, but without anything necessarily replacing

it as far as u.s. engagement with the rest of asia, china stepping into the breach there, kind of the icing of u.s.-china, at least rhetoric around relations post election, yet the market is heading higher and folks are kind of slurgi ingshr off. is it perhaps more than a little hot? >> well, i'm not an expert in foreign policy. i try to focus on innovation, entrepreneurship issues. i have to comment in terms of the right way to deal with these kind of diplomatic issues. i think part of the reason president-elect trump won is because there's a lot of people in the country that do feel left behind, left out, particularly the middle of the country. the focus should be on that and how do you create more jobs. i think one way to do that is to drive more venture capital. last year 78% of venture capital went to three states, california, new york, and massachusetts. so we need to invest more in ohio, pennsylvania, michigan, places like that if we're going to create jobs in those places. i hope that will be the focus of

part of the president-elect trump's administration, really try to make sure american dream is say live and well for everybody all across the country, not just in places like silicon valley or new york. ultimately, that's got to be the focus, creating jobs, jobs, jobs, in the heartland. >> part of that story, steve, does have interplay with china, as the trump administration is going to seek to bring jobs and capital back from china. i'm wondering how much economic lever the incoming administration feels it has over china and whether that gives cover diplomatically. >> i don't know what their leverage is, but you have to be sensitive. china is an important nation, also happens to own a lot of our country's debt, so we have to deal with these things with sensitivity and recognize innovations are happening in artificial intelligence, robotics, including in china. we need to have a great relationship and the issue, whether it be the e-mail issues around hacking and the russians or issues around robots essentially and drones are basically reminder we're living in a more interconnected world,

what i call the third way, internet of everything, and the issues around the intersection between innovation and policy both within the country and around the world are going to become much tougher in the coming decades. we have to have a more integrated view of these things and how to connect the dots. >> steve, you've written recently about progress being made in some areas. you talk about different emerging areas for start-ups, vibrant start-up communities, you call them. is there an unknown capital we've not talked about enough yet? >> we're beginning to see crowd funding starting to help, regional microfunds pop up all around the country, we're beginning to see national investors in california and new york pay attention. my investors are revolutioned, main focus, we invested in companies, i think as more investors realize there are great entrepreneurs building great companies across the country, more capital will flow. i suspect president-elect trump

will put policies in place to encourage more capital, because that was part of the issue everybody heard loud and clear in this election, how do you create more jobs in more places? start-ups are the major job creators. we're only backing them in san francisco, new york, and massachusetts, we shouldn't be that surprised if people in the middle of the country, you know, cities are feeling left out, left behind, because we're not seeing the same focus on job creation and backing of entrepreneurs there. that's got to change. hopefully that's a priority for president-elect trump. >> it would seem every piece of regulation that came out of this outgoing administration is replaceable going forward. what do you think happens to the jobs act? >> well, i think it will continue to move forward. i congratulate president obama and the then-republican led congress for passing something that did legalize crowd funding, hadn't changed since 1933, so 80 years, so they updated them. basically, took several years to put the rules for crowd funding in place.

i think they were too complicated. hopefully they'll get simplified and a focus, if part of a deregulatory agenda that president-elect trump clearly signalled, part of that focus will be on making sure more capital flows in more places all around the country. anything that can do that, tax incentives, simplifying some of the security roles so it does level the playing field, everybody has a shot at the american dream, i think, would be welcome. >> certainly a lot to juggle, steve, as we look into '17, we look forward to talking to you a lot in the new year. thanks so much. >> thank you, great to be with you. >> steve case joining us from washington, d.c. this arca issue we've been showing you at the bottom of the screen resuming after a temporary suspension. we have an update. bob? >> arca had resumed, been halted briefly between 10:50 and 11:05, 15 minutes, for a technical glitch. it's up and resumed trading. nyc arca is the electronic

trading platform of the new york stock exchange. normal trading there, so what happened was over the weekend they did a software upgrade. these are very typical, happen with all the exchanges. there was a glitch that was identified and they decided essentially to roll it back to the status quo software system they were using before and they've done that and implemented and everything is back to moving to normal. arca, by the way, exchange traded fund, they trade on the electronic platform, so that's what was affected the most. goodb so trading was fairly uninterrupted because there are many, many different venues you can trade these on now, so one of the, i guess you could call side effects or benefits of the expanded trading system we've had in the last ten years when you can trade on different venues and platforms. anything more i'll let you know. back to you. >> thanks so much, bob on the

floor here. watching disney, as well, as you possibly know by know, rogue one dominated the box office this weekend, putting disney on their u.s. one list. julia joins us from los angeles with a look at that. hey, julia. >> that's right, this weekend's performance of rogue one proved the potential for stand alone star wars spinoffs and the franchise to sustain annual films, grossing a better than expected in north america, second ever december film to open with more than $100 million. also the third biggest opening of the year. globally rogue one brought in over $290 million and it hasn't opened yet in china and south korea. disney shares moving higher today, reiterating a buy rating in $125 price target. now we'll have to see how the film holds up against "sing," "passengers," and a slew of other holiday films, which is

key not only for disney's bottom line, but the brand's longevity. despite a more competitive film slate, the expected film's solid reviews will ensure strong performance through february. the analysts project the film will gross more than $1.2 billion, generating more than a billion dollars in revenue for disney. with shares still under pressure on concerns of the health of espn, disney's studio is showing continued strength. disney had five of the top ten grossing films of the year. rogue one does not open in china until january. it's holding off to avoid overlap with "the great wall," which is the biggest china-u.s. coproduction yet, grossing $70 million in china, then opens here in february. carl? >> julia in los angeles, thanks. did you see it, john? >> still haven't seen it, probably won't until christmas and new years, childcare issues.

this is big, carl, this is two solid star wars films in a row. star wars as a franchise, rare to get two solid films in a row. this paves the way for things at the parks, merchandising, my goodness. >> wire was writing it doesn't need to redeem the saga, just needs to feed it. i think by that measure, this is a blowout. >> yes, indeed. i think we can all agree. well, some of us can agree on that so far. when we come back, coming up, the catalyst that could push us to the next level. then why apple says it has a case when it takes on the eu to the tune of about $14 million. later on, how the postal service are pulling out all the stops when it comes to the 2016 shipping season. more "squawk alley" in a moment. [engine revving] ♪ ♪

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the post election rally marching on. the dow up 60 points. joining us now is managing director at rbc capital and steven wood, chief market strategist at russell investments. you cover the banks, but we have you here because the banks since the election are up 22%. on basically no news, just expectations. at what point would you say, okay, it's all fully priced in here? >> i think what we have to look at, though, over the next two years if the incoming administration can deliver on these plans that they've proposed, the opportunities for

banks, the bank industry's earnings are still considerably higher. it's not just lower tax rates, it's less regulation and higher interest rates, which will drive these numbers even higher. >> maybe you have debt issuances peaking, mna running hot, commercial lending overheated and this morning we had steve nuysman who basically foresaw the financial crisis saying dodd/frank is a good thing. are we overthinking how much good there is to come for the banks? >> i would say that parts of dodd/frank are very good. the capital and the liquidity parts of it are very, very strong, but overall, the regulation is really held some of the banks back. you're right about on the capital market side, the dcm side, debt capital markets next year will have a less of a filling year than this past year, but equity capital markets should be stronger, mna should be strong, as well. >> there's been this rotation, banks, health care, of course, the early leaders, now you have

technology that's catching up a little, real estate is one of the gainers today. but the rotation is based on rhetoric. how do you play that? >> i think you go back to fundamentals, it's an excellent point. when we look at the economic cycle, looks okay. looks okay to 2017, we think the market fundamentals are getting ahead of themselves. we've been believers this year the equity markets are expensive in the u.s. they've getten more so without a change of fundamentals post election, so i think it's time for investors to be more global. don't get trapped in u.s. stocks for cash. you can keep your risk and global equity exposure the same, but compose it differently. sell into the rallies, use that to fund an overweight to europe equities, japanese equities, so we think the risk tolerance should be relatively stable, but evaluations are becoming problematic in the u.s. >> how do you prioritize which banks are most levered to

deregulation? because it's not all the same. >> that's correct, carl, they are not the same. most of the benefit will come from the banks under $250 billion in assets. this is the area i think you'll find that most regulators agree maybe we move them out of c car is one area, the stress test, so i think we'll see some benefits to the biggest banks, not much, but it's really the banks under $250 billion, which i think will then lead in 2018 to massive consolidation. >> steven, you talk about stocks being expensive. are you just then looking at fundamentals at earnings heading into 2017 to decide perhaps when they stop being expensive, are you giving any credence to this idea of optimism around decreasing regulation? >> we certainly are. there is, you know, when we look at the markets, momentum sentiment, they make a difference. in the short-term they are powerful dynamics and we're not oblivious to it. we're not saying panic or doing anything radical. we're saying given evaluations

which in the medium term they become more and more compelling. so into these improving sentiment and momentum characteristics, that can be an opportunity to take advantage of longer term characteristics, evaluation. right now europe probably 11, 12 times forward earnings, united states is pushing 20 sicklically. every measure the u.s. is pushing valuation tops. also multiasset. doesn't have to be just equities. real asset strategies, alternative asset strategies. you're going to have to take a strategy perspective in a low return environment. >> there's been a comparison drawn to brexit and how the market reacted to brexit. wasn't the doom and gloom the forecasters said it was going to be. to the election here in the u.s., but the difference is, over in england they are in an easing environment, their currency fell and here the dollar strengthened and our fed is getting more and more hawkish by the day. what's that mean? >> precisely. so the bank of england is going

to be flat to more accommodative. the european central bank is going to be very accommodative for a very long time. we're raising rates, the stronger dollar is going to create a headwind in earnings. nothing necessarily dramatic, but use these rallies as an opportunity to take profit. >> we'll leave it there. thanks to both of you, appreciate it. and quickly before we head to break, let's get back to meg at headquarters with a market flash. meg? >> the small biotech getting early fda approval for cancer drug, stock up 15% before being halted for volatility. this approval or decision wasn't expected until february, so it's coming quite early for clovis. back to you. >> all right, thank you, meg. and when we come back, e-commerce on black friday, cyber monday, and the entire holiday season is pushing shippers to the max. what they are doing to meet that rising demand on time. later, apple officially

challenging the eu over the $14 billion supposed unpaid tax fine. the details and possible fallout are also next. we'll be right back. hey nicole. hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head. i'm still the same old gary. wait, you forgot your french dictionary. oh, mucho gracias. get help on options trading with thinkorswim, only at td ameritrade.

well, we have less than a week until christmas and shippers are pulling out all the stops to make sure your gifts get there in time. let's check in with morgan brennan who has a behind the scenes look at one of the biggest shipping days of the year. morgan? >> reporter: hey, john, that's right. both, you could probably say both. so anyway, this is for ups, fedex, and the u.s. postal service, all three are scrambling to get an avalanche of packages delivered over the next couple of days. this is likely to be the busiest day for ups. it's going to be one of the busiest for fedex, both of those companies anticipating to be handling about double their average daily volume. it will also be the busiest mailing day for the u.s. postal

service with the most package deliveries expected on thursday. so how are they doing so far? ups and fedex are about on par with their on time delivery performances from last year for the deliveries that are day definite or guaranteed by a certain date. it has been the case largely for the past two weeks and best news all three carriers anticipate double digit growth in holiday volumes versus 2015, so so far ups and the postal service telling me they are on track to meet those growth forecasts, which are call for 700 million and 750 million pakistanages respectively between thanksgiving and year's end. fedex has been more tight lipped, but expect an update tomorrow when reports earnings after the bell, but with days to go until christmas and hanukkah, the big question that investors are going to be keying in on with these carriers, particularly with u superstorm sandy and fedex, is weather they can get the packages delivered

on time and done so without costs climbing more than expected, especially if we see any kind of last-minute spike in online shopping. that has been a dynamic that has affected those companies, pressured their performances in year's past. we take a look at shares of ups and fedex, they are trading higher today. we're here right now in one of the busiest post offices in the country, and i can tell you there's been a lot of post coming through here, as well, including a lot of folks dropping off packages. guys? >> we're going to find out soon if they are behind or not. thanks so much, morgan brennan following the shipping season this morning. when we return, apple vowing to fight back against the eu's demand it pay $14 billion in allegedly unpaid taxes. roger mcnamee joins us to talk about that and the next steps in apple's legal challenge. and mark cuban has a message for the president-elect, it's all about robots. we'll explain when "squawk alley" continues.

hi, everybody, i'm sue herrera. here is your cnbc update at this hour. the death toll from alcohol poisoning in a siberian city has risen rather to at least 48 people. the victims consumed a counterfeit bath lotion containing deadly methanol, prompting local officials to declare a state of emergency. the russian government has called for tighter regulation of the alcohol market. iraqi forces were attacked by isis drones in a part of

mosul that had been reclaimed for the militant group days ago. iraqi soldiers were shooting at a flying drone dropping small explosives. a northern california highway littered with boxes and packages after a postal service rig flipped near san francisco early this morning. the driver suffering major injuries. investigators don't know what caused that wreck. and female doctors may save more lives than their male counterparts. researchers at harvard university followed more than 1 million elderly patients hospitalized with a medical condition. those treated by female doctors were 4% less likely to die and 5% less likely to be readmitted to the hospital within 30 days. that's the news update this hour, let's get back downtown to "squawk alley." carl, back to you. >> sue, thanks so much, sue herrera. meanwhile, we're going to countdown to the close in the uk and across europe. a mixed day. hey, seema. >> that's right, modest news as we kick off the final trading week before christmas, but today's big story out of europe

is not stock related. a french court has ruled that imf chief christine lagarde was guilty of negligence in a case involving her term as the country's finance minister in 2008. she approved a 400 million euro loan to a business magnet involved in a sale with adidas, but she has avoided jail time since no sentence was handed down. a spokesman from the imf is quoted as saying the fund's executive board will meet shortly to consider the most recent developments. the french government says it still has confidence in lagarde, despite the ruling. so we'll continue to keep a close eye on that story. meantime, in terms of stocks, moving slightly higher, hitting its highest level since february of 2014. further cementing this belief that europe's economic recovery will strengthen in the fourth quarter. banks, interestingly enough, are pulling back today as city just in the last two hours

downgrading deutsche bank to sell on evaluation concerns. keep in mind shares of the german bank up 72% from its september lows, and speaking of banks, once again under pressure here, investors have expressed displeasure with the bank's bridge loan accord as it looks to raise $500 billion in capital before the year end. lastly, we just want to point out some turkish assets on the move, reporting that russian ambassador to turkey was wounded in a gun attack. the lira is plunging against the u.s. dollar. we're also looking at etfs under pressure, as we speak. we'll keep you up to date on that story. carl, back to you. >> thank you very much. meanwhile, apple launching a legal challenge to the eu's demand it pay $14 billion in allegedly unpaid taxes. apple made a statement this morning, "it's been clear since the start of this case there was a predetermined outcome. the commission took unilateral action and retroactively changed the rules, disregarding tax law,

as well as global consensus on tax policy that everyone has relied on." the eu claims the company amounts to illegal state aid. ireland is also challenging the ruling. let's bring in roger mcnamee and farhad manjoo. good monday to you both. cramer made the point this morning, not about the money for apple in this case, it's about principle. what do they do here? >> it's a tough call. apple is now simply in the cross fire of the battle over globalization, if you will, and the eu is having a hard time keeping its member countries in line. in ireland in many ways is the poster child for the eu's success and so this conflict, i think, is particularly politically dangerous for the eu at a time when there are a lot of countries like britain and others who are looking to exit or at least change their relationship. so to me i think this looks like a lose-lose for everyone

involved. i don't see a good outcome. i don't think at the end of the day it's going to make that big a difference to apple, but it is going to make a difference how trade works around the world. >> normally a case like this, okay, if the eu is getting complicated in terms of tax, somebody else benefits, but the u.s. is kind of complicated now when it comes to how tech companies operate. we just had the tech ceos, that meeting at trump tower last week. who wins in this global game of chess that we're seeing? there's china with tpp trying to forge new relationships with the countries close to it, and asia, is this a net benefit for china? >> it's too early to tell. for me there's going to be a new equilibrium and whether it's centered to china, which seems a likely, if not most likely event, or whether it's something else, we don't know, but the disequilibrium is better for everyone. the period of time we adjust to whatever comes next is going to

result in less business for everybody and that's -- the longer that lasts, the worse it is for everybody. from a u.s. perspective, we were the biggest beneficiary of globalization, so the end of globalization is bad for companies based in the u.s. who are not able to reposition themselves more effectively, and it sure doesn't look like u.s. companies can repot to china successfully, so from a perspective a u.s. investor looking at u.s. companies, the best outcome seems the least likely one we get back to a comfortable globalization strategy. >> farhad, in a world where the tide is turning towards antiestablishment, anticorporation, i'm just wondering how apple ended up being the good guy in this. >> i mean, we'll see if they end up being the good guy. they are pushing against this ruling pretty hard, and, you know, they have the -- >> farhad, just one second. we need to break in with some news here, we want to bring viewers up to speed on another story this morning, top

executives from platinum partners arrested this morning in connection with a $1 billion securities fraud case. you are looking live at the eastern district of new york. we want to listen in. >> director of enforcement for the s.e.c. today we're announcing the arrest of seven individuals associated with a new york-based hedge fund called platinum partners. the defendant, mark nordlick and coconfident david levy, are both charged together with three other co-defendants with carrying out a $1 billion scheme beginning in 2012 and continuing through this year. nordlich and levy are also charged with, together with two other co-defendants with a scheme that defrauded public bond markets. now, the schemes are described in an eight-count indictment that was unsealed a short time ago. director will also discuss the

filing of a civil complaint by the s.e.c. and their parallel investigation. let me start by giving you some background on the defendants. nordlich had primary responsibility for the fund's investment decisions, and evaluation of its assets. levy, who functioned as second in command, also drove investment decisions and managed the hedge fund's investment in black elk, an oil company that was one of platinum's largest assets. platin platinum's president and managing partner of platinum's premier fund, the platinum's arbiters fund, or ppba. ppba's chief financial officer, and joseph mann was a platinum employee who worked in their marketing department. these defendants have all been charged for their participation in a $1 billion investment scheme. in short, these defendants

defrauded platinum's investors by falsely betraying that their flagship hedge fund, ppba, was thriving when, in fact, it was not. and by overvaluing its assets when in reality the assets were doomed and the fund was a sinking ship. nevertheless, between 2012 and 2016, platinum collected more than $100 million in fees from the fund based on their inflated valuations. now, the defendant daniel small comanaged platinum's large investment in a company named black elk, black elk oil, along with levy, and is a member of black elk's board of directors. co-defendant jeffrey scholes worked at black elk as chief financial officer and later as its chief executive officer. small and scholes are charged together with nordlich and levy with the second scheme, which was a scheme to defraud holders of black elk's bonds. >> attorney for the eastern

district of new york, robert capers, discussing charges brought this morning against the ceo and a few employees of platinum partners. if there's headlines out of that, we'll bring them to you. carl? >> roger mcnamee, we were listening to that. we are in an era of talk of deregulation, is that a warning of those who want to take handcuffs off things all financial? >> how many warnings do we need? we had wells fargo. to me, you look at the scale of these things and we've had, you know, in silicon valley we've had venture funds that turned out to be ponzi schemes. to me, regulation in the financial markets is a public good. it is a smart thing to do. and i'm much less worried about the margins of the various people playing in it than i am about the duty of people whose money goes into the system and i don't know anything about platinum partners, but boy, that

looks like a really brutal indictment and one that, frankly, you do not want any deregulation that allows that kind of stuff to happen. >> we're going to be reading through the indictment, you can bet, throughout the course of the day. meanwhile, turning to the president-elect continuing to share his thoughts on twitter over the weekend, discussing everything from china to u.s. relations with russia, farhad, you've talked a lot about trump's twitter habit over the past few days. did this weekend bring you anything new? >> no. i mean, it seems like he's going to continue to be outspoken on twitter and use it as a political tool the way he has. there's been this question, i think, about whether it presents any danger to individuals. there's this -- he has tweeted at individual people, at chuck jones, the union leader last week, he tweeted at a college student last year, and this gets a lot of his followers sort of riled up against these people and they've received, you know, harassing phone calls and others. i argued that even though he has done this, twitter's rules are

so vague and has enforced them in such a haphazard way, it would be not at this point opportune for twitter to, you know, suspend his account. but that could happen. the rules do apply to him. >> that would -- yeah, that would be problematic, i think, for all sorts of reasons, roger. >> to me, the issue we've got going on here isn't just about twitter. it's obviously about facebook and google. google has this issue where if you search under is the holocaust real, your top things come from holocaust deniers, which are clearly completely wrong, and to me, silicon valley has always operated on the notion that technology will do good simply because it always gets better. in truth, we found in the recent generation of technology that that's not always the case. and that algorithms, in fact, don't do a particularly good job of acting in the public interest. and i don't know what's going to happen out of this. i don't know whether we're going

to see regulation, i don't know whether we'll see the companies step in and recognize they do have a responsibility, but i think this whole issue with twitter and trump isn't just about trump, it's about, you know, all the other people who have been on there, who have essentially taken these platforms and use the them in ways they were not intended to be used in. >> like negotiating foreign policy. >> exactly, bingo. >> i think they just haven't recognized, a lot of these companies haven't recognized the power of their platforms. they think of themselves as silicon valley tech underdogs, even though they are some of the largest companies in the world. i think that they have not recognized sort of their power to completely change world events, whether it's the american presidential election or isis or brexit or, you know, any number of other international incidents that, you know, social media has played a huge part in. >> farhad, i think it's also true that it's very convenient for these companies to take the position you just described, because it absolves them of

responsibility to think of themselves as still the youthful, energetic, optimistic companies that they were when they started. but they are now at a scale. facebook with 1.8 billion members, there is, in fact, a real obligation and i think it's fair to suggest that the notion they are allowed doovers for unintended consequences, that that has limits and all of them are at a scale they've reached it. >> a lot of people wonder who the real monopoly is these days. i love it when you two guys are together, thanks so much, roger mcnamee, farhad manjoo joining us. when we come back, in an effort to boost returns for the galaxy note 7, samsung releasing a software update today. we'll explain. dow is off the highs, up 22. rick, what are you watching? >> well, i'm looking at 254 yield, realize the high yield close of the year so far is a whisker under 260. what's fascinating about that is last year's high ten-year yield

closed for the entire year was 248. we're higher than that. does that mean something? it may. tune in after the break and we'll talk about what that is.

let's get the santelli exchange. >> when you look at a chart going back to september of 2014, you'll see a level right above

260, 262 to be exact, the exact day is 17th of september. that's very significant, because if you go and follow the charts, the highs for 2015 were 248. as i pointed out, we are currently trading at 253. now, this is called an outside year, and one of the guests we had on today pointed that out, and i find it significant, because normally that should mean there should be more upside. now, whether that's true, whether that's not, 2013 will afford us many clues, because 303 was a significant top, and we have never closed above it since. why is that significant from 2013? because if we look at how the e deconstruction of the biggest bull market in history of bonds are ending, it's ending by unraveling history. in other words, the first big hurdle was the close of 2015 at 227 and that proved quite elusive, but we jumped up there,

and i call that one in october, because there was powerful forces that caused a double bottom around the 130s, so it was time to start looking for history to give us levels as the market deconstructed back in the normal trading. the other big area was from june to july of 2015, and we've talked about this, where you had three major tops in a row in a concise point in time, about a month, 244.5, 246.5, 248.5, and you'll notice how we've been hovering there. let's summarize, as we deconstruct, we're going back to many significant tops in the past and now we are trading up through them or pausing by them. 227 hurdle number one, the 240s number two, and we actually clicked off the 260 area. so the way i would like at this is, the wild card for your closes are the 240s or 227 or thereabouts. anything above that is bullish, but here's the key, for 2017, the most significant yield

violation will be a settlement above 303. my guess is, we will spend lots of time there, and depending on which side 2017 closes, it could give you many on the expressway normalization with many out there thinking 4% and 5% handles are possible. kayla, back to you. >> we'll be watching. rick, thank you. coming up on "squawk alley, the challenges behind securing the internet of things. one company revolutionizing the space is coming up next. first, samsung officially rendering that flagship smartphone the galaxy mark 7 useless. it will disable the phones charging ability. once the battery is gone, the phone will no longer turn on. the company reporting that over 93% of galaxy note 7 owners have already returnsed their smartphones. r.i.p., galaxy note 7. r.i.p., galaxy note 7. we'll be right back.

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stream all your entertainment! anywhere! anytime! can we lose the 'all'. there's no cbs and we don't have a ton of sports. anywhere, any... let's lose the 'anywhere, anytime' too. you can't download on-the-go, there's no dvr, yada yada yada. stream some stuff! somewhere! sometimes! you totally nailed that buddy. simple. don't let directv now limit your entertainment. only xfinity gives you more to stream to any screen. >> whether it's a political party, the threat of hacking is becoming more prevalent than ever. joining us now alan, president of sig-fox north america. thanks for being with us here at post nine. >> good morning. great to be here. >> so if i understand it, sigfox is sort of like a new wireless carrier for stuff instead of just being for people's devices. i mean, i remember 15 years ago in silicon valley there were these laptop cards with a

special network you can get on. wi-max didn't work. why is the internet of things different? why can you create a whole new network that's going to work differently this time? >> we all use it every day, and we'll continue to use it. when we talk about connecting these billions of new things around the world, well, frankly, they can't afford cellular or when you are deploying these things for ten or more years, they really won't work with conventional technology. this is a technology that enables really the masses, the unserved market that want to participate in the benefits of i.o.t. but haven't been able to play because of the limitations of technology. >> and how sig-fox tackling a security? we had a dynatap that a lot of people know about. internet security cameras that were unsecured, went out on the internet, and took down just massive businesses, caused all kinds of trouble. millions upon millions of dollars worth of digital damage. does the structure and the setup of your fet work prevent that sort of thing? what's the solution?

>>. >> our devices get that really long battery life, and the 9.99% of the time, they're not even connected. there really only connected when they have something to say. then they go right back to sleep. these things you're talking about are really always open to be vulnerable. >> we become all too familiar with the data swept up by the traditional mobile carriers. whatsoever data comes into your network? what do you do with it? >> it's all the small pieces of data you never would expect. we're talking about connecting millions of agricultural sensors. all of a sudden you know exactly how much water to put on and how much fertilizer at the right time. low value assets. there's three billion palates in the world that you can never afford to connect with conventional technology, but if you can, all of a sudden some companies lose 10% to 30% of these a year, so not only do you know where they are, but you

know what happened to the stuff on them in transit. temperature, humidity, vibration, and so wouldn't it be great to know what happened to that egg from the time it left the chicken all the way to your omelet? >> maybe not. i don't know. >> in erterms of vulnerability, it's not about the -- who cares if i have my ac set at 75 or 65? >> well, says it possibly could be. for instance, if is someone home? is this a great time to break into your house? >> there's the will to do that at that kind of micro-level? >> i think there's the will to exploit any opening, and so the trick is to engineer what you are doing assuming the worst, but the other fact of the matter is you are willing to pay a lot more for that security when it's the vice president's pacemaker versus agricultural sensor, and the trick is to match the security to the threat throughout the ecosystem. >> thanks for joining us. >> all right. thank you. >> more "squawk alley" in just a moment.

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>> dow off 50 points from the high. some of the reports that the russian ambassador to turkey has

been making the rounds. we'll see if we get more clarification on that. pretty busy week for a week that is often light on news. >> commentary from janet yellen a little later on this afternoon in a speech, and usually a low volume week. >> microsoft up $30 since that. >> let's get over to headquarters and scott wapner and "the half." welcome to "the halftime report." i'm scott wapner. our top trade this hour, rally watch. marching towards 20,000 today. what happens when we actually get there? what should you do with your money? with us for the hour today joe terra nova, steve swies weiss, and also with us on set is jim cramer, host of cnbc's "mad money." why don't you set us straight on where you think we are right now? i heard you say this morning stocks want to go higher. >> right. >> got to go with the flow. you think they're going to glide up? >> i think that people are