>> it goes down. >> interesting. so you don't believe that the money will just seek a new home no matter what. very interesting. brad tank, thank you. and squawk alley is coming up right now. >> thank you very much, rick. good morning, it is 10:00 a.m. at best buy headquarters, 11:00 on wall street and squa"squawk alley" is live. good thursday morning. welcome to "squawk alley."

business insider ceo is joining us this morning. a lot to get to with henry. first off, shaking off the amazon effect, shares of a number of retailers moving hire this morning, but all eyes are on best buy, 52 week highs after glowing past estimates on the top and bottom limenes. and sears and williams sonoma getting a best on earnings. henry, this is interesting because so much obituaries have been written because of amazon. some people are arguing are finding ways to move around it. >> some are, no question. it's not like stores will disappear. the great irony is as this is happening, amazon is starting to open stores. but clearly this is just earth shaking behavior within retail and there are just different formats that are working. >> i think i figured this one out. digging through some of the earnings reports and transcripts, i think it's programs the home remodeling trend and the late federal

refunds. you take a look at best buy's report, online sales were up, but home theatre was up about 5%, appliances were up hfr of will sorry, entertainment was up 11%. home theater and that stuff was also up strongly. william sonoma, kitchen remodels, you got to have new stuff in the kitchen, as well. so sears -- i mean why else are people going to sears other than to buy affordable appliances. 245 all started to make sense and it doesn't flow through to clothing. you're refinancing your house, you won't buy a new wardrobe. >> with the tale of winners and losers in retail and we're seeing it broken down by today the goercategories. jon mentioned home improvement. any other themes stick out to you? >> discounts stores are doing very well. walmart, ross. doesn't seem to be the condition of the store, it's the price. and almost the ones that are caught in between the department stores that have been crushed. >> i do think we should give

best buy, i looked up the digital comps online. 22.5% higher. so they are in-vegsing to carl's point online and it is working. the question is can they move the needle enough so a bigger portion of the sales are coming from online versus the stores. >> they can. and it won't be either ther/or. there really is a purpose for having a showroom or talking to somebody, that is not going away. it will just get more specialized. >> and that is happening. 13 respect about of domestic sales at best buy were online, that is up from 10.5% a year ago. so they are gaining at least in their universe share of online as being what is driving the growth. >> meanwhile amazon's not far away from $1,000 a share. the company doubling down as henry said on brick and mortar opening a new bookstore in new york city. this is the seventh such store around the country. morgan brennan is on the scene talking that.

good morning. >> reporter: good morning. that's right, so we are inside the brand new bookstore from amazon. located i should note in the same shopping complex that once housed a borders. so this is the first of two locations planned here for new york city. and as you mentioned, it is the seventh brick and more information store for amazon in the u.s. so far. so this location just opened unofficiallymoreinformation ston in the u.s. so far. so this location just opened unofficially a little over an hour ago and a fair amount of foot traffic here. but a lot of media and a lot of amaz amazon employees here to answer questions. even a wall street analyst. so we've been talking to some of the folks who are here looking to buy books and so far the reaction is very positive. number of people getting books, they like the way the displays are curated. so experts say that this is yet another way for amazon with these bookstores for amazon to lure more consumers to sign up for prime memberships.

prime members get some pretty steep in-store discounts. but the other piece of this is that this is another opportunity for amazon to put its spin on how goods get sold. case in point, all of these displays are data driven. you can see this is called page turners. andis specifically titles tied to how quickly kindle users are reading them online. so you have a number of displays that are focused like that. also they sacrificed a lot of inventory just to have all these books forward facing for easier search and review. and of course you can get all the information you need on the annual amazon app. >> and we should point out the valuation here is poort partly tail, but also the cloud. in ten years ago, nobody saw amazon webster visits which has evolved into this tremendously profitable fast growing

business. but i think if you look back 20 years, we're right at the 20th anniversary of going public, saying what did they get right, great team, big markets and just a commitment to continue to in-vels aggressively in the long haul, sacrificing short term profits do it. if has paid off. >> i'm glad morgan gave us reporting about the data there because it looked like just a barnes & noble. but that seems to be such a piece of what they are doing here and how you ponder the future of retail on this day where are amazon opens in columbus circle. >> and this is one of their experiments. another experiment in retail that will have no employees in the store, this is no trash decisi tradition traditional. but they are using data about what people are reading now. amazon can use that and just inform the sales. >> it's so clear looking at the

store that this is not a bookstore, it is a prime store. this is different from amazon's warehouses which are laid out for efficiency. you don't turn the books face out if you're looking to be efficient. you can't fit as many books on the shelf. they are looking to show people you get disdoncounts with prime here is how you can use the echo. note, it was 16 years ago this week that apple opened up its first retail store and now all of these technology companies are moving towards selling services in stores. apple as we would. the game even in it tech retailing as changed. >> meanwhile we'll watch amazon as it moves closer to 1,000. facebook is reportedly signing new media deals with bus feduz and others. according to the report, videos will range gobetween 5 and 30 minutes. facebook set to pay as much as $250,000 for the longer scripted shows. they talked about maybe moving

all of it back a bit on the calendar, but how aggressive would you characterize this attempt to -- >> i thinking it's very aggressive. i think what you will see over time, thel take more of the tremendous profit that they are generating and share it with content partners who produce great stuff to keep people on facebook and enjoying it. and they are clearly doing that request the shows and effectively they are saying netflix works. that is long form. youtube work, that is longer form than the feed video, we want to see if we can be helpful to our users in that, too, and capitalize on that. so they are going to build that into the app and we'll see how people do it. but it's fun to work with them. they are very data driven. >> does that mean you're working with them? >> if not, yes. >> scripted content. >> who should be most scared of this announcement, is it the traditional tv companies, a snapchat that is also looking to get in to original programming or an alphabet google? >> at this point, this is

opportunity. long term the tv industry has a lot to overcome. so profitable now, but over time ratings are likely to decline, people will move to media like this. but snapchat is doing cool stuff, so is youtube, facebook. it is sgrus ultimajust ultimatee opportunity. >> you have to believe in something, don't you? if you were chasing what facebook said was hot at any xwechb moment, you were making exploding watermelon videos and then going live with nothing in particular to say. and now they are getting around to more traditional forms what looks like more traditional division. if you were trying to chase facebook, no qua you have any idea what to make. >> they are doing a great job at trying and learning and itd rating. and even live for example, we work with facebook and we all do and now the program is shifting. and the rubber bands around the watermelon as a tremendous gimmick, everybody watched it, but people are consuming lots of

live stuff. it's just not all going to be live. there also is a lot of on demand stuff and also what they are doing now, this is more produced longer form stuff. they think there is a home for that, too. >> do you think live came with an overpromise? >> no, they approached it in the right way which is let's try it and they twrid it and now they are itd rating and they would continue to do that and ultimately there is a place for live. there is a place for short form, medium form, longer form. it will all mix together. >> fascinating evolution of media. finally, it's not just the major averages we're watching. bitcoin as you probably know is surging, it broke 2700 for the first time ever. it's doubled in the month of may. why are you smooilin13450i8 in ? >> i've been trying to talk about this story every day. and if you ask bit quocoin quoi enthusiasts why it's rising, you will get a lot of different answers.quoin

enthusiasts why it's rising, you will get a lot of different answers. abo japan has been an interesting source for bit tcoin because it was legal payment back in april. you also have a lot of incremental events. twitter says it's the reverse of the shanghai comp. who knows. >> i have a crack pot theory. ransomwa ransomware. i think they probability bought a bunchcoins ahead of time and then said pay us this bitcoin because it drives in demand and they ghash two cash ways. >> this is absolutely perfect for a speculative bubble. there is no intrinsic value. and if anybody is persuading you that it should somehow be related to some gdp or gold, put down the cool and i had oig and

back. >> there are uses for it, but i think if you are trying to track some fundamental, you look at the transactions per day. which are steadily increasing. it's very volatile, but over the last five year, steldadily increasing. more people that you can probably keep on hand, you will need more of it, so that will drive demand up. but you can't say like it will literally go to a million. no reason why not. and the logic of folks buying it and speculating in about it, you know back, it is all it can lose is 100%. i could make 10 x, 100 x, 1,000 x. all possible. so i'll take that trade if i'm willing to lose 100%. >> venezuela has been in trouble a long time. bitcoin has more than doubled in just the past six bikeweeks. >> i remember five years ago around the table of tech execs, they were are like henry, bitcoin, and they showed to me and it was trading at that time 30 and everybody was like i

know, it's much too high, it was only 10 a fewweeks, bubble, bubble. some people got the religion. now here we are at -- >> so you're bullish on it. >> it has a use as a way to effect abouteffectively transfer money. >> anonymously? >> well, there is a rock with t record with the block chain. but the problem is we could settle on another one.with record with the block chain. but the problem is we could settle on another one. people could decide it's not great and the price collapses again. but there is a fundamental use. >> and it is moving on tech. places like fidelity have invested in a lot of bitcoin venture funds. in fact fidelity said that its employees can use bitcoin at the company cafeteria to guy lunpayr lunch. but others like ripple have gained even more.

>> bitcoin the meerkat, we'll find out. >> and we're going through all the bubble cycles and this will eventually crash and everyone will say we were such idiots. >> they will say that any qway. thank you. when we come back, the president is meeting with nato leaders. we'll get a live report. it's been 40 years since audiences first travelled to a galaxy far, far away. and then amazon 997.09. we'll watch that. it's an important question you ask, but one i think with a simple answer. we have this need to peek over our neighbor's fence. and once we do, we see wonder waiting. every step you take, narrows the influence of narrow minds. bridges continents and brings this world one step closer.

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across our entire network, to more companies, in more locations, than centurylink. we do business where you do business. ♪ ♪ in the nasdaq today, appian going public. prices at 12. raises $86 million. stock right now up almost 24%. let's get over to dominic chew for a quick market flash. >> karls of staples sharply higher.uew for a quick market flash. >> karls of staples sharply higher.w for a quick market flash. >> karls of staples sharply higher. for a quick market flash. >> karls of staples sharply higher. private equities server for staples as a world company, this follows a reuters report stating that the buy outs were in talks to possibly look to buy staples. sycamore still in the running. staples says it does not comment on market relative humidity or or speculation. but the shares you can see 4.5% up to the up side.humidity or or

speculation. but the shares you can see 4.5% up to the up side. president trump delivering remarks at nato's new headquarters in brussels this morning. hans nichols is also on the scene for us. so what can we expect after hearing from president trump? >> reporter: it's clear that president trump expects more defense spending from nato countries. that was crystal clear. i couldn't tell if we were listening to the president of the united states there or queens landlord telling his t tenants rent was due. you said three or four times that country needs to get to the agreed upon 2% level from 2014. what does that actually mean in terms of spending? take germany. germany is 1.25% and they spend about $40 billion per year, i'll do it all in u.s. dollar, $40 billion per year. if you want to get that up to the 2% threshold, it would be a defense budget of $60 billion a year. compare that to the defense budget submitted on capitol

hill, it's $600 billion. so we're still talking much smaller number, but clearly trump wants to see more spending. he did a little bit on article v. he didn't goexcaplicitly endors, but you can take it at appearance to mean that he does indeed believe in the doctrine of common defense. a lot are nervous about how they will be perceived. that is not donald trump. that was not a man that is worried about impressing his european counterparts. it will be a very interesting dinner that they will have when all 28 leaders sit down tonight. >> i wonder, hans, how much they will acquiesce to him on the defends on spend gd and some in the differences on terrorism and intelligence sharing and other key issues. >> reporter: on the spending issue in a lot of ways what trump is doing, he's blocking and tackling for defense ministers that are in coalition

governments that want to do more spending themselves. and even where you have straight party rule over say in germany where the cbu is in charge, the defense ministry wants to spend more. so they almost get top cover from trump and there has to be an internal conversation. now, whether or not trump's public support for it is going to actually complication those efforts, that is a different matter. but he was very firm on russia saying that the threat from russia, not a potential threat, but a real threat. and i think a lot of member from the eastern side will take that home. >> take itnichols, thank you fo joining us. and as we head to break, watching shares of amazon hitting all-time highs this morning. 998.31 was the high. just two bucks and change away from hitting $1,000 a share. "squawk alley" is back right after this. at fidelity, trades are now just $4.95.

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40 years ago today, the

first star wars hit theaters. we break down the record breaking numbers. >> and obviously the 40th birthday of the very first star wars movie when i it was released. and no matter what else has came after that, the original one is still the best. take a look at some of these numbers. in adjusted numbers for inflation, so based on today's money, $45 million is august ll cost to make the first movie. lowest of any of the movies after that. and that $3 billion in box office revenues in today's dollars, by far bigger than any of the movies that have come after it. and the roi, you can't beat 71 times return on investment. not 71%, 71 times the production value. so nunl of tone of the moves ev, they ever cost more to make and made less in box office revenue. and roi has been a lot less. but when you put it all together, the entire franchise has made $13 billion in the

theaters, and of course as we know, when it comes to star bti wars, it's not just about theaters. $30 billion to $50 billion, that is everything else. costumes, toy, merchandise, all the stuff that keeps things sold year in and year out. and if you're disney, the value of this franchise is mostly in that everything else. they will have new kids watching year in and year out. my guess we will be doing this story ten years from now at the 50th birthday and you will see even bigger numbers but probably that first movie will still be the biggest compared to anything else coming after that. back to you. >> careful, viewers will start fighting about whether empire is better. a fascinating look. speaking of changes in contents, we sat down with sherry lansing from binge, former head of two studios and subject of a new biography

leading ladies. we asked her about the current golden age of television. >> there is sometimes like i'm rushing through dinner to get home to watch the episode. and thank god for tivo because i can watch it later. i have to say i think my ipad is my best friend now except for my husband. but i probably spend equal time with my ipad which is pretty dangerous. so in many ways i think it has never been a better time for somebody who wants to make content. because if you're producer or a director or an actor and you want to make something, you can do it. when i was growing up, the only way that i could make a movie or a television show was to get somebody to give meet money. today you take your iphone and you can shoot anything you want and then you can put it on youtube or wherever you want and you can be discovered. >> so where does that leave the studio business? >> they will be fine. >> by making franchise after

franchise? >> well, yes. and as we all know, there was "la la land" and "moonlight." still good movies being made. they will continue because you can't go out and make a big specific effects driven movie by yourself. and so some of the character movies are still being made by the studios. though i have to say television has taken that over. >> interestingly she green lit titanic and forerest gump. and i said you made these spectacle type movies. isn't it unlikely that titanic would have been a ten episode series on netflix. and she said no, it could have easily been ten eps. >> her points about mobile both as a means for consuming content and creating it seems to be key. maybe you can't create something with quite the polish that you can with professional equipment, but with a mobile phone now that buy at the store, you can show what you're made of.

creativity isn't getting anymore, i don't know, higher in supply. >> i was also thinking of the facebook news that we reported, the report that facebook is getting into original content if it will pay $250,000 for, you know, signing these partners with vox and other media. that is the netflix model and amazon model. so yes, nothing like the studio, but it's interesting that in the gold en age of television that she supports, you're seeing those costs rise for original kept at high levels. >> yes. meanwhile economists are upgrading their gdp forecasts after the data we for the this morning. let's get to steve liesman for finally another rapid update. >> yeah, the update is a downgrade because the data this morning was pretty lousy. we're down to 3%. still a good number, still a strong number, but minus 0.4% after a lousy trade. here is what we're looking at, 0.9% for the first quarter.

now tracking 3% for the second quarter which is down four tenths. and i'll tell you who is where, moody's came down big down 0.6, 0 3.7. morgan stanley at 3.2. barclay at the bottom 2% for the second quarter. so we're looking for the big comeback. it is still a decent bounce back, still average 2% over the first half of the year. but not as strong as we had hoped for. back to you. >> steve, have we been seeing as many adjustments as we have in past quarters? >> no, because i was looking at it, one, two, three, four, five pieces of data have all confirm confirmed where we started. so it would be at the estimate of the economist, but this trade data along with the wholesale -- along with the inventory data we got was substantially weak and it caused to shave about half a point off of it. so keep your fingers crossed. 3% still a good number. we'd still average that 2% over

the first half. about b durable goods tomorrow we'll watch. and then we come back tuesday from the holiday, we will watch closely the personal income and spending data because if we're going to do three, consumer has to do three for the economy to do three glp . >> so taking the numbers in context from what we for the from the fed yesterday, where do you think -- >> so that is a brilliant question. >> -- members are on the rebound and comeback in about light of weak inflation but better than unemployment numbers. >> it would be appropriate to raise rates soon if the economy does what we think it will do and yet there was another section of the minutes that also said that they wanted evidence. i think the evidence is still there. if it we're going to do a 2.5%, 3% gdp number, be and i should mention stunning claims numbers this morning. the job less claims numbers are below 240 for the fifth week in a row. so the economic activities data

is really the question mark. if we can do 2.5 to 3, i think the fed is a go, decent jobs report for the month of may as well in early june before the fed meeting. and wield e'll be watching the consumer data that would give the green light to hike again in june. >> steve, thank you. good stuff. when we come back, awaiting comments from speaker ryan. we'll see if he weighs in on the house health reform bille and that latest cbo score. we're watching shares of amazon getting ever closer, 998 or so and change. s hey, the future, what's her problem? apparently, i kept her up all night. she said the future freaks her out. how come no one likes me, jim? intel does! just think of everything intel's doing right now with artificial intelligence. and pretty soon ai is going to help executives like her see trends to stay ahead of her competition. no more sleepless nights. - we're going to be friends! - i'm sorry about this. don't be embarrassed of me, jim. i'm getting excited about this!

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. good morning. here is your cnbc news update. president trump meeting with nato leaders in brussels. afterwards he talked about the fight against terrorism and told nato members that they must contribute to the cause. >> nato members must finally contribute their fair share and meet their financial obligations. 23 of the 28 member nations are still not paying what they should be paying. rocket lab launching the maiden flight of its battery powered 3d printed rocket. the launch is an important step in the commercial race to bring

down financial and logistical barriers to space. a group of researchers announcing positive news for l.s. patients. they say a medicine for treating leukemia is actually affective against the lou gehrigs disease. further testing is needed, but they hope to develop a treatment for that disease. that is the news update. back downtown to "squawk alley." i want to go straight to capitol hill. speaker ryan is taking questions at his press briefing. >> i know he has his own version and i'm sure he will have more to say. but there is no call for 24 no matter what under any circumstance. the people of the state of montana will decide today who they will send to congress. >> if he wins, will you -- >> if he wins, he has been chosen by the people of montana who their congress will be. i'll let the people of montana decide who they want as their representative. that is not our choice, that is the people of montana who choose that.

jake and then chad. >> if you have the choice whether he's a part of your conference, that is a choice that you will make, is this the kind- -- >> i don't think this is acceptable behavior, but the choice will be made by the people of montana. chad. >> we have sent the health care bill to the senate. waiting for the cbo report. you got and said it was good news. why do we hear so many rank and file republicans basically beating the living tar out of the cbo? you are the budget committee chair and i understand -- >> by the way, i've seen both parties beat the living tar out of the cbo for years. i think what it is is the $23 million claim is -- there is a lot more to it than what that sounds like. what i'm encouraged by is the fact that cbo said, yes, we hit our bunch about either target

and then some so the bill is in d compliance with reconciliation.d then some so the bill is in compliance with reconciliation. and the cbo says we can drop premiums. we can give states flexibility to get premiums down. look at what happened in missouri and kansas. we see a law that is collapsing. we see a new study that just came out from hhs saying premiums have doubled in america because of obamacare. people can't afford this. and so what cbo just are told us is the reforms that we put in this bill will help lower premiums. and so i'm very encouraged by that. but i think what members are frustrated with is what is behind the cbo analysis about who gets insured and who doesn't, if you leave it up to a person's choice, be then they will make a choice. if the government will stop forcing people to buy something that they don't want to buy, then they won't buy it. and that's basically what cbo is saying. and i think the lack of clarity

on that point is what has members frustrated. [ inaudible question ] >> i just answered the question. >> deficit reduction part is important. your side embraced that. but then the 23 million, it's oh, no, no. >> i just explained it. >> following up on the cbo report, it did find premiums on average would go down, but it also found that in the markets that employed the waivers, they believe that there might not be any premium access, any access for the -- >> obviously let me explain what it means so -- >> and premiums would go up for older and sicker patients. >> if a state takes a waiver, then a state in about order to get that waiver has to have a risk system in place. we have experience with this where i come from. we had a risk pool. maine had great experience with it, they had risk sharing. so a state has to have a risk are system in place and that risk system is specifically designed to make sure that people with a catastrophic

illness, somebody who has a pre-existing condition, also gets access to affordable health care. and what we have learned through experience is if we target resources at the state level and at the federal level to help make sure that we subsidize catastrophic illnesses, what you independe end up doing is lowering the premiums for everybody else. that is so much smarter. what obamacare tried to do is force younger healthier people to pay way more for their health insurance than they otherwise would have paid and that would cross sub cititisi would have paid and that would cross sub cititisdize everybody. guess what? it didn't work. and as a result, the health insurers are collapsing. blue cross/blue shield is pulling out of missouri and kansas. aetna is pulling out nationwide. iowa has nothing left. there is no plans left in iowa because obamacare collapsed. and it is collapsing. and so what we're saying is let's just be smart about this.

what do we want? what do we all want? we want everybody who doesn't get health care from either medicare or medicaid or from their job about 11% of americans, we want them to get access to affordable. and we think the smart way to do this is don't force young families to overpay for their health insurance because we're finding out that they are not, they won't just buy it. let's let people buy insurance that is price competitively, f give people more choice, let states be innovative and let's direct support directly to the people with catastrophic illnesses. let's sub sidize those with severe ill nlss so they get affordable coverage and they don't go bankrupt if they get sick. and then by doing that, we free up the mar kit place for everybody else. that's what the waiver is all about, giving states the flexibilitykit place for everybody else. that's what the waiver is all about, giving states the flexibility and that's why i'm comforted by the cbo report which shows yeah, we'll lower

premiums. we have to get premiums down and we have to make sure people with pre-existing conditions can get the affordable coverage. >> so you're disagreeing with -- >> speaker -- >> -- premiums would go up? if. >> i just answered the question. >> yesterday the treasury sect called for about a clean debt ceiling by august. the how many freedom caucus rejected the idea but also wants something done by august toed a the deficit. where do you stand on this issue? >> we're talking with our members on this. every treasury secretary says this and every treasury secretary needs to say this. so i expect nothing less from a treasury secretary. they all should say that. they all do say that. and we'll be talking with the members and the straikts on had on how to resolve the debt ceiling issue. the timing is what i think is the news worthy thing. receipts aren't quite what they thought they were and that's why secretary mnuchin is moving the time table up. >> last question.

>> mr. speaker, beithank you. specifically on the cbo, the language that they used when it comes to premiums, if says despite the additional funding, the sicker americans would face extremely high premiums. how do you ensure you the sicker americans with pre-existing conditions that they won't be priced out and it won't become unaffordable? >> here's what it doesn't quite fully get or state. states foot their own part of this as we would. this is what the analysis forgets which is we are for the first time ever proposing to put billions of dollars from the federal government for risk systems in states. whether it's a risk pool, reinsurance mechanism or risk sharing. what is important to note, states do their own part of this as well. so in wisconsin for instance, we had an assessment on all the health insurance plans. we had an agreement among providers that we would -- they would have certain fee schedules that they agreed to. and i think maine had an

assessment on all their health insurance plans. the point i'm trying to make, you don't look at the risk share or risk pool idea federal alone, are remember the states will also do some of the lifting. the states -- my state will have an assessment on plans if they choose to do that, they will have an agreement with providers. so we will have federal resources and state resources which taken together will improve the situation. we had a very successful risk pool in wisconsin. our insurance commissioner came up and testified as much. it was very successful. and it doesn't have a dime of federalle spendi spending. so what we're saying is let's do even more of that, let's have these states put together their own risk are systems like they had successfully in the past and let's on top of that add federal financing so that it's even better. that is the point we're are trying to make. >> so just to be very clear about this, you're saying the states will be able to afford to do enough so that the cbo's projection of extremely high premiums -- >> yeah that's the whole point

of the risk pool. take a look at the wisconsin with model. look at what all the other on states did. you have to give the states the ability to customize solutions in their areas. the health insurance system provider network insurance system in wisconsin, a whole lot different than it is in new york. let alone new mexico, texas, california. or maine. give these states the ability to custom size support and now we think it's a lot smarter to subsidize the care for people with catastrophic illnesses. 1% drive 23% of the cost. so let's sdwrjust as a society e at the state and federal level, we're going to cover those costs, we'll put resources in about there because if we do that, we do two things. peace of mind for people with pre-exists condition and catastrophic illnesses, and innovation at the state level 10 it can be done the right way so it works in that state, and you

lower premiums for everybody else because the insurance does not have to cover that catastrophic illness, it can cover the basic health insurance needs and you stabilize those insurance markets. which by the way look be at what we're looking at right now. not only is this an unstable individual insurance market, we have a collapsing individual insurance market and that is why this is a rescue you mission. thank you very much. house speaker paul ryan defending some of the questions that were raised from the cbo scoring of the latest version of the health care bill which now heads to the senate emphasizing the lower premiums, also playing down the 23 million uninsured which graced the front pages ever every major newspaper this morning saying that it will be about choice. and going back to the gop talking point that obamacare is failing. and this at least represents a choice and they are not telling americans what to do with their health care. >> a little bit of a logical challenge that i see in here though, speaker ryan saying don't make younger healthier

people pay higher premiums to cover the sicker. the federal government will do that. who is the tax base? it will be younger healthier people. also this idea that states can can somehow make up the difference. state autonomy is great until it's not. we see what happened with local autonomy with puerto rico. so we'll see how that goes. >> it's definitely 3d chess trying to drive down premiums, fund these high risk pools, be and protect pre-existing conditions. very hard to do even under the current law. we'll see if the hill makes any progress on that. right now we should mention markets off the highs. dow up only 51 as oil is now back below 50. lowest since may 19th.

coming up on the halftime report as stocks hit new record highs, we'll debate whether the rally is in danger of over-heathing or about to go into overdrive. plus the call from top retail analysts making many investors take a new look. and we're also talk being amazon as it closes in on $1,000 a share. and the activist in-investigation tore with us after a big boost from are his battle with buffalo wild wings. looking forward to it. meanwhile shares of flash store arage firm pure storage soaring about 7% this morning. the company continuing to see demand for its product driven heavily by artificial intelligence platforms and reporting a smaller than

expected quarterly loss after the bell yesterday. joining us now, their ceo. scott, good to see you. >> thanks for having me. >> so it looks like your results are driven not necessarily the mega scale cloud providers, the amazons, microsofts, et cetera, but those a little bit further down. you say that your storage can both do a big job and do it quickly. how long does that have legs? >> oh, we think it has legs for many years to come. the segment clouds 4 through 1,000 we talk about for the software as a service market, the consumer internet market outside of the big three is very large. by some estimates it's growing faster than the big three public cloud providers. of course we have a business enterprise an we're also powering a lot of the data-driven analytics that's being done for prediction in the market today. >> we've seen enterprise hardware sales really take a hit over the past few quarters if

you look at intel's data center results, a number of other firms reporting that a lot of buying coming in from those mega scale players, but the more one-off businesses buying tech not doing what it used to. do you have reason to believe that maybe we've hit a bottom in that and you'll continue to see better sales in that segment from here on or are you an anomaly? >> no, i think you look at the data market, right? data is growing extremely quickly, especially the proliferation of data from cameras and sensors. we're helping our customers put all of that data to work, whether it's tuning up a manufacturing process, doing a security risk assessment, running simulations for race cars or rockets or drugs. these are critical problems for businesses, and this is a $35 billion total addressable market and we are uniquely well positioned to do the cloud work and the big data analytics. >> scott, how would you characterize, i guess, the

ongoing price war and how far that would go over time if we continue to see discounts by competitors? >> so, it is a competitive market in the enterprise. i would say the markets in the cloud opportunity in the big data analytics opportunity, those tend to be a bit more green field and not as competitive. once customers try our technology, it is so profoundly differentiated that we no longer face the same price pressure for repeat purchase business after we get the initial deals. i think, again, this growth of data and the need to provide value from the data creates a huge market opportunity. >> scott, how tied are your fortunes to cisco? i think you said 70% of your business was flowing through partners that you're using to help sell your product. cisco, of course, a big one. they used to be tied up with emc, now they seem to be going to you. are they a big deal as far as driving your product?

>> we are indeed getting help with cisco, and especially cisco's channel partners. we share a lot of partners in common with cisco. those cisco partners tend to favor the cisco gear over the dell emc alternatives and so a lot of work done in conjunction with emc, we believe we're shifting over to pure and that, again, is a big tailwind for our business. >> all right, scott dietzen, the ceo of pure storage. quite a day for the stock on that positive earnings report. thanks for joining us. >> thank you. as we head to break, take a look at oil prices, they are plunging down 3.5%, just breaking below $50 a barrel again. the energy sector is the worst performing in the s&p right now, this after opec ministers signalled they will extend those production cuts for another nine months. whether that was baked in already or disappointed the markets is certainly weighing on the price. we'll be right back on "squawk alley."

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listen, so many things in our lives are front page news, big blogging news, big news on cnbc. the one thing that i think at least in my world is the biggest news continues to be how central banks, not just ours, all of them, are going to exit what has been the grandest, largest, i'm not sure if it's a good or bad experiment, to try to keep the world going during and after the credit crisis. so what we continue to learn is how the fed's going to reduce their balance sheet. we are witnessing the handoff from qe, quantitative easing to qt, quantitative tightening. but exactly how will the fed slice the qt pie? that's really what we want to know. look at a chart. this is a 20-year chart of tens minus twos. pretty amazing chart when you think about it. in 2010, we're almost at 300 basis points. at 2000, we're minus 50 basis points. that's a widespread.

i don't know how it's going to turn out, but there's little clues that there are rumblings of a bit of nervousness about how it will turn out. the first one is all this talk about 40, 50 and 100-year bonds. normally this wouldn't be big talk because it would just be a slice, a little mezzanine of securities in the grand portfolio of things. but when you think about it and you can think about it with respect to your own life, with respect to your mortgage, whether it's fixed or floating, do you think rates are going up, rates are going down. if you thought rates were going to go up, especially if the curve were to invert or flatten more and you're issuing predominantly cheaper securities because the rates are lower but you have rollover risk, well, in the end you might want to do more 40, 50 or 100-year bonds. if you don't think the deficit is going to get under control, you might want to do that. remember, when it comes to debt, it's not necessarily the servicing of the debt in a macro vision, it's the servicing of

the debt if you have to keep issuing lots of debt, which means you're not going to balance the budget. now, with respect to and let's get back to this handoff. many believe, as i do, that the balance sheet issue is the long good-b good-bye, meaning it's going to take a long time and mitigate some of the nervousness. i don't disagree with that, i just get nervous when all three central banks have the same playbook. carl, back to you. >> thank you very much, rick santelli. we're watching the markets here. energy sector now on pace for its worst day pretty much almost to the beginning of the month, may 4th, when it was down 1.9. it's down 1.2. transocean, chesapeakchesapeake argue if people thought 12 months was the production cut. >> amazon is nearing 1,000 a share. i'm watching google. alphabet is what the company is called now at 990 a share, less than 1% away from $1,000 itself. it's worth $200 billion more than amazon. >> i'm watching the montana

election today. you know, it came up in a lot of investor research notes and strategist research notes as an early proxy for how president trump is doing. he won the district by 20%. after that alleged body blow, which paul ryan definitely condemned earlier, i don't know, that sort of throws out the dynamic. >> we'll see how the vote goes today. and the afternoon session, let's get to the headquarters and "the half." welcome to "the halftime report." i'm scott wapner. are stocks overheating or simply about to go into overdrive? with us for the hour today, joe, steven, the brothers are here. let's begin with the market. stocks once again reaching new highs today. the s&p, the nasdaq doing just that. pete, what's your take on this really debate in the market about whether we're about to overheat. >> right. >> or we're going to go into overdrive? >> i feel the overdrive is my direction.