that does it for this hour of ""squawk on the street". we send it downtown for "squawk alley. >> thank you for that good morning. it is 9:00 a.m. in aspen, colorado it's 11:00 a.m. on wall street and "squawk alley is live. good thursday morning. welcome to "squawk alley." joining me, john fort from the aspen ideas festival with special guests later in the hour watching the markets here, down 43 the big story is meal kit

delivery service blue apron going pub tlolic today. we talked about the ipo and the future of online grocery >> people care about quality that's why, quite frankly, online grocery as a share of offline grocery is a challenging thing. there have been tons of players trying to bring online grocery, you know, penetration up historically that hasn't been successful quality is so important. and because we run this virtualicly integrated supply train and involved agriculturally and manage our own food manufacturing centers and distribution network is one thing that allows us to offer higher quality food at better prices and grow the overall online share >> joining us this morning, good water capital co-founder eric kim as well as ydavid seeberg g to see you both. david, we know the challenges that they're coming to market with not just the revised pricing more aggressive and also the

idea they somehow got amazon a couple fridays ago how do they deal with that >> they got amazon look, it's all about getting to scale n my opinion, i see challenges for them getting to scale. i think the dominant players in the space are going to realize the opportunity here and jump in and be able to take advantage of it so they're spending a tremendous amount of money now to acquire customers. they need to get the scale very, very quickly that's what this model is predicated on. it's really that simple. i look at whole foods. the acquisition by amazon and whole foods, amazing acquisition. i mean essentially they can come in and compete in the space like kroger is going to as well, offer a very high quality product at a discounted value for what they're selling it for. and just completely take over this particular part of the industry so i look at it and say i really question if they can get there it's only going to be a matter of time before we can tell and their success is predicated on scale >> eric, i wonder what you would

even define as scale for a company like blue april ron. what i mean fwha is when you look at the business and exactly what is required for them to execute, it's not particularly virtual, right they have relationship with farms. they're sourcing produce, they're putting it in box anes d delivering it. it's kind of after a certain number it's free money so how you would think about the business dynamics here >> yeah. i think that it's helpful comparison is blue apron or e- commerce companies or the snapchators facebooks of the world. e- commerce companies like blue apron are selling wigets how profitable is each sale you're doing there is a lot of hype around blue apron but as just mentioned, it's about how do you get to scale and scale efficiently? they went from a positive operating profit of $3 million in q-1 2016 to a negative profit

of $52 million in the same quarter this year in 2017. now a tloost is driven by the fact that it grew marketing expenses 138% but revenue only grew 42% in that same period so in this very competitive dynamic, now with amazon and whole foods coming in, it's really about getting to scale in not a virtual world but through physical goods that they have to package up they have to make profitable not just on the first purchase from a gross margin perspective but over six months they have to pay back the marketing spent and make this a lifetime value, positive customer over that period as well >> yeah. we asked eric whether or not there was a sense of urgency not just because of amazon but some of the other competitors if the space, companies that are not public yet like sun basket s consider y. they went so aggressive on the pricing to get this thing to market do you think is the dynamic where you're driving and you see a yellow light and you have to gun it to get through the

intersection >> i think they're gunning it here there's a couple reasons why as mentioned, it's a $1.3 trillion market only 1% is online right now. of that only two billion is for meal kit delivery at this point. so it's very -- relatively naysent market the reason they're going public is so they can get their story out. there they have one million customers. you have to compare that to amazon that on prime alone they have 80 million customers plus or minus it hasn't been report the exactly by the company yet our calculations are that amazon prime is about 80 million. they need to make this a mass market phenomenon. i think it really does come back to are they able to zmal are they able to retain customersen that ipo really is fueling the marketing costs. if they don't go public, they'll run out of money they really had to raise this money to continue to support the company. the cash flow has been negative for the past couple years. so it's going to be a couple more years until they turn a

profit so they really needed to go public at this point >> david, what's your read on this deal in terms of what it says about investors' appetite for startups, for ipo ss? there's a lot of price discipline on the low side so what do you think it seays fo the market as a whole? >> look, i think there is a lot of skepticism especially on the technology side on where these names are going to come public you see a lot of the private transactions look at uber as an example and the price of lyft accelerating uber coming in based on the challenges they're facing from a manage ment perspective. there are a lot of questions around the valuations of the private companies. there's a lot of unknown variables. in this particular instance, i really say scale is important. and price obviously is super important. i look at blue apron and say they're doing a lot of the leg work getting visibility out

there. this ipo obviously super important to get visibility out there amazon, whole foods, they come in and eat their lunch in a period of time and they're going to benefit from this increased visibility in the sort of packaging space and i think coming in and just take over. the dominant players win in this case i don't think a blue apron will be super successful once they really start to get the amazons of the world get involved. >> if that's true, eric, then who stands a chance, really? when you talk about raising $300 million is great obviously we know it's a small amount compared to amazon's war chest. who can build scale to the degree david is suggesting is necessary? >> well, it's funny. or somewhat eye ronnic that companies like blue apron are probably inspired by amazon's scam tom get into e- commerce, that they saw lots of offline sales. the 1$1.3 trillion of offline sales. if you fast forward today versus three years ago, four years ago,

five years ago when the company started, now they're not just competing against off line players, it's actually competing against very example amazon that probably inspired them to get into e-commerce to begin with. they're still with even with this lower pricing, they're strayeding at a huge premium to grocers, grocery companies right now trade about 0.7 times 2017 sales. blue apron at the new pricing will be dhauouble. that e-commerce players trade at three to five times. i think they have a distinct advantage versus the traditional grocers. i think the ones the company that is going to give, you know, amazon a run for its money are actually the walmarts or the costcos or some of the more traditional offline players with large brick-and-mortar scale that then can use the omni channel approach to compete against amazon and use some of the technology enable ment that they're seeing blue apron happen i think sets blue apron off as a

potential acquisition candidate for the off line players that want to get to scale and compete with amazon. >> the battle of giants continues. godzilla versus mothra we'll see where it goes from here good to see you both eric and david. >> thanks so much. >> we want to get a check of the mashlg markets. the nasdaq giving back gains from yesterday you see the tech stocks down 1%. the nasdaq as a whole down more than 1%. bank supz better than 2% the dow is down 56. >> in other tech news, it's been ten years since the iphone made the debut. shares of apple up more than 700% let's bring in john fort who is live at the aspen ideas festival and joined by a special guest. >> thank you walter isaacson, president of the aspen institute joins me here the ideas festival has been going on for a couple days now a big theme and topic is article

efficient artificial intelligence whether you're talking to siri, an android phone and talking to google you wrote the biography of steve jobs did he foresee this? >> one of the interesting things is ten years ago when he does the iphone, he had first resisted the notion of apps from third parties or outside companies being put on and it was around i think middle of 2008 that he finally gets pushed because somebody -- steve was a very stubborn person but he listened. everyone around is saying you have to allow apps onest major revolutions wheef is this notion that an uber or an air b & b or anybody can put an app or an iphone and there have been two things driving. that one is artificial intelligence where sort of the apple learns what you want or talk to it via siri or amazon echo the other sthing this notion

that we can connect peer to peer as opposed to having to go through a big corporation. that's what uber is all b i think the iphone in its very first year of having third party apps, meaning apps other people could put in, i think it's a $2 billion kmechlt you disrupted how cities do transportation and how we do hotels, how we do so many things. simply because we have an iphone it has a gps there is cloud in which people can store consumer data. and there's sort of an intelligence in the machine. >> we talk to peter orszag, former cbo director earlier this morning. there is also the chance that this phone could disrupt health care take a listen. >> what this object and things like it has done is moved us into a much more mobile distributed i.t. system including in health care, for example. so you can now get much more

health information on your phone and it can also help your doctor interpret how you're doing from the health perspective compared to a decade ago. there is more health information presumably on your phone today than was in your medical record 10 or 15 years ago we're only at the forefront of what will happen as these technologies evolve further. >> a big debate here is will thb a good thing or a bad thing? this artificial intelligence surge into society getting any closer to answer here's with people talking big ideas? >> couple things talk about what peter just said, you know, i think health care has not yet been distributed as much as it should be health care and kindergarten through 12th grade education are the two industries that need much more disruption i have my auctioner, the hospital system in new orleans

that has all of my dat yachlt and it starting to work. but it's still very hard for me to have medical records that transer if i think you have a privacy issue. but for me that, is overblown. i think we really do need to be able to share our medical data around and if i had a system that would say count me in, i'd say, yeah, count me in take my data and use it to help other people figure out what works and what doesn't as for the bigger revolution as to whether artificial intelligence will cost jobs or create jobs, i'm in the optimist camp we're sitting in colorado. the governor just spoke, talked about the 2.3% unemployment rate, the lowest of any state in 40 years that's because they have a surge in technology here so even though ever since they created the loom in england, people thought technology would put us out of work, the data doesn't show that. >> do we need guardrails on this highway though when we're

talking about moving quickly in this direction of artificial intelligence you're optimistic. i wonder, are there certain protections that need to be put into place do we need certain canaries in the coal mine to triger in case things are going in the wrong direction? >> yeah. i do think though that it's dangerous to put too many regulations and guardrails and i think you need have a lot of transparency one thing i would do if i could wave a magic wand, and we talked about it with this is on cybersecurity and on anonymity online with howard schrow, one of the inventors of the internet >> there's a problem inherent in the network. you know where every packet is supposed to go you don't know where it came from you had a ransomware attack it's hard to know where that came from. i think if you have a secure internet, we have to get over

some of the privacy concerns and say people who want to should be able to opt in to an awe thenlt indicated secure internet where every package you send is encode wtd origin, not just the destination. >> the pc had the rise in the late '80s. the smart phone didn't really rise until the mid 2000s are we expecting another smart phone like revolution too soon or might it be a decade and a half from now before we see it >> we talk about this all the time i'm often on the show saying what's the next big thing? and that is google glass or the watch. it's not even quite, you know, hello alexa, put on my play list i'm in the city planning commission in new orleans. it will change how you design cities we haven't in ten years almost

to the month since the iphone had anything that totally transformed our lives. >> it's ten years to the day january 29th >> wow. >> 2007. >> i was there >> you were probably there thank you for joining us, walter, as always. mike, back to you. >> all right, john that can go a little while longer before my life is transformed. when we return, we'll bring you the latest from the global sib area tack as the virus continues to spread to 60 countries. first, take a look at rite aid wall greens cancelling the floon bite company, opting instoed buy nearly half of rite aid stores you see rite aid there down nearly 25% wall greens up marginally. people thought this deal was a needed rescue of rite aid's business mo "ua aeyrit te this.

. companies around the world continue to strug frl this week's ransomware attack which spread to 65 countries joining us right now, charles carmichael with a cybersecurity securities group and ed strauss, founder of the cybersecurity firm strauss freeberg. gentlemen, thank you for being here ed, what do we know based on what we can tell about the motivation of this attack? it is about financial motives?

it is about disruption >> you know, that's one of the key questions. even though there is a financial kpoen nent terms of payload looking for r looking ransomware that, may not have been the main purpose if you look at the geographic impact where they hit and start to reverse engineer the code, it looks like the disruption payload was more significant than the ransomware payload associated it with so that tells us the objective might have been different than financial. >> any guesses just watch the world burn or disrupt logisticors what >> one thing you have to be careful of it is may nobt one thing. these are sophisticated adversaries. so there can be a kpoen hasn't it makes it look like randomware so you think of it that way. >> that's highly evolved at this point? >> it evolved to that point, whether it happened here requires more analysis stepping back and looking at the

features we just discussed will help us more intel generally jenltly determine what might be. that includes input from law enforcement and intelligence communities. >> clarlz dharles do, you agree that assessment? >> i do agree with ed. what is clear is we're seeing what appears to be the first wide scale attack against the economy, the ukraine it was fairly targetted in the sense that a tax software organization, they're update process was poisoned most organization that's do business in ukraine were impact bid this so from my perspective and from my perspective, it appears to be a disruptive attack against organizations that do business in the ukraine and something that's really trying to impact the way of life out there. >> and what is that mean for how companies should respond i mean whether they do so in a

one off basis or try to get the authorities involved. >> there is a combination of trying to get the authorities involved the reality is there is a number of organization that's were impacted in the ukraine as well as outside the ukraine and europe and the united states that were likely impacted from a collateral damage perspective and what they're trying to do right now is trying to get back online so they can tint business operations so i think those victims need a really focus on recovery i think nonvictims really need to focus on preventing something like this from happening to them >> and do you think any of this i mean not just this one but the past few that we got inhibit the migration to thing os online, stuff that hasn't already been done or could be done in the future >> i don't think it will inhibit it i think it will cause them to be more careful looking at a more wholistic approach and understanding that you can't just tell the i.t. department to make you safe because it's impossible. they have a big part in

preventing anybody can be hurt. even if you have an interdependcy on another company and they're victimized and you depend on them, now the risk profile has to be sophisticated enough and the analysis sophisticated enough to try to manage that kind of risk >> the new definition of counter party risk. >> exactly charles, you know, whenever we get one of outbreaks, we hear about best practices, what companies should have been doing all along and raising this stuff to a board level s that all you can really do and basically play defense in a very generalized way? >> i look at -- i don't think we're doing enough from a defensive perspective. i think, you know, a lot of people that hear about the types of incidents and for the period in time in which it makes the news, people talk about it they try to feel like they're doing something about it but i really do believe there say lot more we can do from a preventive perspective an outbreak like this could have been mitigated through a number of different techniques and could have definitely reduced the impact to the organizations that had to deal with this

>> all right charles carmichael and ed strose, thank you for your time. >> we'll send it out to john at the aspen institute event in aspen. he'll talk with the all state ceo tom wilson first, we are continuing to watch blue apron this morning. goes public earlier at post eight. priced around 10 currently $10.60 more "squawk alley" continues.

good morning, everyone here's your cnn nbc news update. president trump ridiculing the looks and temperment of msnbc's mika he called her crazy, criticized the show for poor ratings, and said she was bleeding badly from a face lift when the two tried to meet with him at mara lag

yoe. the tweets received large con temperature nation from both sifdz the aisle. msnbc said it is a sad day for america when the president spends his time bullying, lying, and spewing petty personal attacks instead of doing his job. >> rupert murdoch's attempt to land the major media was a set back 21st century fox's $15 billion takeover of sky needed to be scrutinized by competition authorities. now that could mean a delay that would force fox to pay a special dividend for failing to get the deal done on time. and a new report from blue cross and blue shield shows a 65% increase in doctor prescribed opioids between 2010 and 2016 and medical claims for opioid abuse spiked 500% during that time period. you're up to date. that's the cnbc news update this hour back downtown to you, carl

>> sue, thank you. get the european close >> all right so european stocks extending the daily losing streak to three now on track for the worst day in nine months. sectors most sensitive to higher interest rates are taking a hit on hawkish comments from central bankers. now the euro jumping you can see the highest levels of the year surpassing $1.14 that surge began tuesday when the ecb president's remarks on inflation were interpreted as opening the door to scaling back stimulus today you also got some data showing euro-zone economic sentment rise together highest level in almost a decade so some movement there taking a look at the european bond yield which has been surging as of late, the german ten year, the german -- again, german ten year, italian ten year can you see there moving in trading to day some of europe's biggest banks are among the bright spots in reaction to the u.s. fed clearing capital return plans for our big banks here hsbc getting an extra boost

after being upgraded by morgue an stanley to an overweight rating and we finish here with h & m. the fashion retailer getting a lift after second quarter net profits beat expectations. but h & m also saying major markets such as the u.s., china, and switzerland remain challenging. the stock down 17% so far this year so now let's send it back down to aspen for john fort back over to you >> thank you, dom. live here at the aspen ideas festival joining me now the chairman of the u.s. chamber of commerce and all state ceo tom wilson tom, thank you for joining us. >> good morning, john. >> so two days ago the chamber put out a statement in favor of the senate bill on health care >> yep. >> why >> well, first, what are businesses objectiveson health care s care the first and most important is we provide insurance to 177 million americans, 60% of americans get their insurance from our businesses.

we have to continue to do. that as it relates to the government provided portion of that, then there are a couple things happen. the affordable care act is not sustainable today. it needs to be revised i think everybody agrees with. that we do think as well there needs to be a good transition plan so, you know, we're where we are. we want to go some place else. this plan has about $112 billion of transition money. it's over like 2024. i don't know whether that is the right people or the right amount of money the dwlad there is a transition plan in there is a good thing. the other thing we like is there is more choice in less taxes in this so this gives people the choice to choose whether they want to have a mandate goes away and lowers taxes and given that americans spend one-third of the working lives paying taxes like we think anything less is good for the customers, good for the employees, so we like that part of it. the issue really is the 15 million under the cbo thing will

not have insurance next year and what i don't know is apparently a large number of those are because they choose not to do it because the mandate goes away. so we need to sort out what that number is, what really happens so if it's 12 million of the 15 million, just choose not to buy it anymore because the government's not making them then we're talking about a three million person issue. >> does it matter? because the whole argument is there should be incentives that make people want to get it so does it mat wler they're choosing not to versus unable to as long as they're not in the system that's a problem. isn't it >> well, it's a problem if you're in the system and you can't afford your cost for your health care. >> right. >> if you're a millennial and you're 26 years old and you want the extra $200 a month to do something else and you are willing to take the risk on your health because you're in good health, then maybe that's a problem for them we believe people should have choice so i think we need to sort out how much impact does the reduction of -- elimination of

the mandate really have on the number and the cbo should give us that number >> you famously as ceo of all state raised the minimum wage to $15 an hour which a lot of folks across the country, seattle most famously, have also push ford $15 minimum an hour minimum wage at the same time, there's this concern that's being talked about here at the ideas festival that artificial intelligence is going to come in and knock out the low wage worker. are you concerned about that because if the minimum wage is $15 an hour, won't it be easier for ai to cost those people out? >> first i think we went to $15 an hour because we believe that the -- if you pay the right amount of money you'll get the right people we're in the service business. good people give good service. our turnover has gone way down we had too high a turnover it wasn't that we needed to pay -- get the right people working for us because if you're paying people

$12 an hour and they really want to make or should pay 14, they don't stay with you. we change that to work for us. as it relates to artificial intelligence, i think you're right. i think it is headed our way the pace of change particularly in the service business is going to be faster than it was in other industries and we need to get on it so our view is that the purpose of business needs to be expanded so we've been arguing the last fall i wrote stuff for the "washington post." >> that was pretty controversial. you were arguing that businesses don't just exist to make a profit a lot of people disagreed with you. >> milton freeman z when you disagree with a guy that won a pulitzer prize, you get there. but i think society expects businesses to create jobs. and our job is to create dignity through work and so i think businesses we need to embrace this because this is a great opportunity in artificial intelligence. i'm not looking at it as a

negative but at the same time, our job is to help people find more jobs. we actually just created, we're in the proservice creating a group that works on job transition and creation. and so we can help our employees figure out how they cope with. this we've always done that so if you work for us, we used to do tapes and stuff. >> so you're helping them to do stuff that software can't do >> we're helping them build their skills somebody thohas to help our employees, people in america cope with artificial intelligence. >> what skills >> we will to let some claim professionals go because we now use digitization to resolve cost on cars. it's easier. we don't have to pay somebody out to look at your car anymore. and one of the people said to me, you know, i wish i got on this sooner because i would like to work in cybersecurity i'm like we're short 120 people right now in cybersecurity had we gotten ourselves organized, and i hold myself accountable for this three years ago, maybe he would have been in

cybersecurity. >> you mentioned cybersecurity is the chamber active enough specific enough about what businesses need to do to prevent losing data in some of the types of attacks that we've seen over the past few weeks what are you dmog that arena >> the chamber is trying to bring people together. the chamber can't make companies do anything. the chamber is doing work. a number of the financial services organizations are bringing people to work. companies like ours and others, we're working with the government to try to make sure we're aware of these things. that said, none of us are safe and i talked to one of the admirals who said you're either a company that's been hacked and now it or you've been hacked and you don't know it. so it's an enormous thing. we need to do it to protect our country. because it's cheaper and more effective than conventional warfare. it will come our way >> tell me about your confidence that the agenda of this congress and this presidential

administration particularly when it comes to tax reform is going to get done in a foreseeable amount of time i don't know whether you're time horizon now is end of the year, middle of next year, when do you feel confident, if you feel confident that tax reform will get done >> first, let me just start with do we need tax reform? and the answer is yes. >> right. >> we've been -- it's like built up wax on a table. you keep putting more and more wax, eventually you have to take the wax off. we have to take the wax off. i think we need to -- one of our philosophies should be not to try to drive the economy through tax policy you know, we know that centralize economy -- economic plan doesn't work. look at rush yashgs ussr we try to use our tax code to do this we need to clean up that. confidence the ability to execute on is not so sure on one you know well, better than i, the disparity, lack of respect going on in washington and in the business community, it's complicated too

there are people who like the municipal bond deduction like financial sstss get who don't care so much about the r & d tax credit >> right. >> people care a lot about the -- so what we need to do is business community and we want to in the chamber is trying to could dois let's bring everybody together tell us what you really are to have for your business to be solid. let's work on a transition plan. but let's all not get hung up on keeping my last five cents that i'd rather not give back to the general pool so that we can get a lower rate. >> i do read into that that your confidence and congressional execution is trending down not up based on what we've seen thus far? >> it will be real hard to be positive about it since they had trouble getting things done. that said, you know, i think the good news is with all the trouble going on, you start to see signs of people talking about rallying together. you talk about individual centers, individual congress people, there seems to be a slight crack in the dike what i would like to see them do

is rather than avoid the conversation and acquiesce to somebody else and assume they're wrong, they need to listen to each other they need to understand each other. most importantly, they should respect each other. >> timeless advice tom wilson, head of the u.s. chamber of commerce and ceo of all state. thank you so much for joining us >> thank you. >> carl? >> all right thank you very much, john fort watching the markets here. dow is down 106. very quickly, the worst day for the dow since may. meanwhile, chicago mayor make something interesting comments on elan musk and transportation in his city. we have more from chicago. >> carl this is an interesting storey a couple days ago the chicago tribune reported that rahm emanuel's administration is having discussion with elan musk's boring company, the tunnel company he believes he can bore tunnels quicker, more efficiently and would like to talk with the it is yif los angeles, perhaps chicago, other cities and at the time a lot of people sthaed is interesting. well, to day our lizly picker sitting down and talking with

rahm emanuel for a story she's having tomorrow on the finances for the state of illinois. also asked him about the conversations between emanuel's staff and elan musk's boring company. here's what the mayor had to say. >> i read about elan musk who i know from my white house days, et cetera, and other type of interactions talked about a kind of a deep tunnel for an express rail service. so i sent my -- i talked to people around him. i sent my -- they were accepted and sent my team out there to -- a group of people that work in the transportation, public transportation technology. they came back impressed we are working now on a date by the next three or four weeks we've got some dates we're going to narrow down and come look at what we here in the city of chicago has. >> so there you have it. the next three or four weeks some representatives from the boring company will come here to

chicago and take a look at whether or not there is fizz built - fees built between building a tunnel for high speed rail i find it interesting that rahm emanuel says, look this was fairly impressive with what we're seeing in los angeles with the boring company we have not seen much more than pictures and a few tweets from elan musk. otherwise, it's all been sort of, hey this is what we would like to do with very little actual proof of what can be perhaps that will be changing here in the city of chicago. >> yeah. might be easier for you to get to o'hare in the coming years. >> please! please >> when we come back, we'll go to brooklyn and get the latest the martin shkrelli trial. financials trying to prop up the index. but a lot of other things especially tech have gone red. >> i can't wrap my arms around

boring company coming to chicago. listen, considering our financial straits, they should try to dig under some banks. that's what they ought to do we're going to talk about how interest rates moved up rather dramatically this week the sovereign vintage especially what it may mean for the future of rates

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on the halftime report, financials are on fire those stocks higher. the banks getsing green light from the fed to return cash to shareholders our traders will give you the best bets in the sector. goldman sachs's commodity chief has a big call on oil. he said we may be finally near a bottom and your stock call of the day, the second best performing stock in the s&p 500 this year, slapped with a sell. all that and much more when "the halftime report" gets under way at the top of the hour >> brian, thank you very much. a lot of stuff for you to kick around on the desk you see the markets mostly red it is tech stocks, especially

large cap stocks leading the way down financials are up in any pronounced way it does seem as if the upside in yields and a little bit of a profit taking effect is corrective action in the big cap text is animating things you see small caps outperforming large caps there you see the nasdaq down another 1.5% basically yesterday's bounce more or less undone in today's morning action let's get over to rick santelli in chicago for "the santelli exchange". >> thank you what an interesting week you heard all the commentary regarding interest rates as i'm speaking hopefully you're seeing a chart of our ten year notes. because over the last couple of days if not the last couple of months we've talked about how right before the friday before to be precise, the fourth of november, until a little bit after the election the 14th of november how much so many markets moved including interest rates. basically from the 170s into the

228 to 235 camp. why is that important? because the first impulse if you look at the move and we described this many ways, the first move impulse is to 226 as can you see, 227 there for a pivot on that chart, you see 229. a settlement bf 227 is significant. also while i'm speaking, you want you to look at one week charts of some of the biggest sovereigns around the globe whether it is boonz up 20 plus basis points on the week ten year up is 15 basis points on the week. but you'll see the same in france, italy, spain so what does it mean well, we all know as me as a commentator, investors out there watching, all the managers that at some point the benefactor of the markets is going to have to exit the crisis type programs that were put forth. how is it going to play out? i don't know we still really don't know but mario did open it up

what i would suggest is it's not going to be a linear scenario. we now as observers of the market should say check to the highest central banker because watching what is going on, it's going to be interesting over the next several days and weeks to listen to the feedback of central bankers. that's going to be key listen, speaking of fed, janet yellen a couple days ago made a comment. i don't mean to pick on her. she's pretty confident we're not going to see another crisis in our lifetime and we all certainly hope she's correct. but anybody who is a fan of ludwig and the us aindustryian school of economics may go to the wire because their answer to that was the following and i'll read it to you before i tell who you said i had "stability of the economy is greater than it has ever been in our history. we really are in remarkable shape. the united states is at the peak of its foremanance and history there is never a time in the united states when you had this level of prosperity and the way it spread over the last 10 or 15

years is unprecedented i certainly do give credit to allen greenspan for. that i think monetary policy is responsible for it that is late december of 2005 by the conservative god milton friedman goes to show you sometime even the legends don't quite get it right. mike, back you to. >> no, they don't. rick, thank you very much. and as we head to a break, take a look at some of the major financial stocks surging this morning. bucking the market trend round two of the bank stress test seeing everyone pass with no capital plans objected to for the first time ever. be sure to stick around for "closing bell" later on today when james gorman will join us teiehe cnbc exclusive inrvw. more "squawk alley" right after this

20th accept try fox. >> thanks, carl. we hit this around 9:30. real briefly i think this requires a little bit more explanation this morning because on the face of it it may not have looked as a positive for 21st century fox to have a deal to acquire sky deal, but it does appear to be helping it move closer towards that goal it could still take a while. let's tell you what the news was. the secretary of state for cultural sport said she is, quote, minded to refer the fox offer for sky to the competition and markets authority. now if that occurs, that could

require another long review for the deal, but most importantly perhaps, the secretary of state also said she considers there are no concerns about broadcasting standards which would justify a reference to the cma. it's on other areas that she might want to reference it that means that fit and proper tests that had been a kerp for sometime for fox as to whether they would pass it, that's no longer an issue. they pass, that's not an issue off com, their version of the fcc signs that what they are faced with is the prospect that they haven't made enough offerings to the regulatory authorities in the u.k. in terms of preserving the independence of sky news they've already said they wanted to have an independent sky news editorial board with a majority of independent members who would appoint sky news those undertakings don't appear to be enough

over the next ten days twenty first century fox will make more undertakings focused on that area of concern. perhaps they can do enough, that's ways to support cma so it doesn't get referred and they can close the deal more quickly. if they don't do that, then you've got a lengthy review that takes place from this new authority. not new, excuse me, the competition markets authority which means the deal may not close until -- well, it could be as long as a year from now guys thaerks kind of where things stand as you see, being viewed as a positive overall by the marketplace because that fit and proper test is no longer a concern. it seems to be much more one of editorial independence of sky news and timing for 21st century fox. >> a lot of media mna still in the wings. >> we'll get some good stuff i'm hoping, carl. when we come back it is the ten year anniversary of the apple iphone we'll take you through the highs and lows and look back on the industry that changed the industry a t wld ckn mitendheor

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it is the ten year anniversary of the apple iphone. josh lip ton is out there in san francisco with more. hey, josh.

>> reporter: carl, ten years ago steve jobs first unveiled the iphone >> an ipod a phone. and an internet communicator an ipod, a phone, are you getting it >> take a look at this original press release from apple announcing that the iphone was going on sale on june 29th, 2007 the device cost $499 and would be available at apple's 164 stores ron johnson, who was then apple's retail chief, called the iphone a revolutionary new product, but even apple's executives could never have foreseen just how really transformative this product would become apple has now sold more than one billion iphones generating $734 billion of revenue the iphone fundamentally changed

apple as a business. the mac and ipod accounted for 78% of apple's total revenue in 2006 today it is the iphone that dominates apple's product line representing 63% of total sales. apple's market cap sits at $750 billion. that is roughly ten times what it was at the iphone launch. the anniversary comes at a critical time for apple with iphone sales experiencing coming off their first year of decline. guys, back to you. >> fascinating look at industry that changed a lot and continues to change, josh. appreciate that. josh lip ton out west. we started the morning, mike, talking about apple and valuation and the degree to which the market still expects it to come up whether it's an iphone or something else entirely. >> yeah. obviously unfair on some level but also in a weird way kind of a back door honor. i do think this year the market started to come on board with this idea that even if it

doesn't create something brand new every few years that we never expected before, there's enough of a single business and you can respect the profitability of the ecosystem. >> teklehaimanot doing the market any favors. >> no, the big cap techs are the big thing moving to the chief down side. not enough of the money making that's why you have the index down. >> watch the afternoon session and liquidity. let's get to brian sullivan and the half and thank you, carl and mike and welcome to "the halftime report" everybody. i am brian sullivan. scott wapner has the day off a big day for the banks. they are getting the green light to increase dividend payouts and share buy backs. joining us for the hour, john najarian, josh brown who by the way was named number one most influential advisor by investopedia. >> thank you to