twitter headquarters in san francisco. it's 11:00 a.m. on wall street and "squawk alley" is live ♪ good thursday morning. i'm with jon fortt and sarah eyesen business insider hedgery blodget. it is a tale of two social networks twitter shares dropping as they added zero new users and then there is facebook hitting all time highs joining the half a trillion dollar club. the company blowing past

estimates thanks to surging mobile ads on the news feed platforms. the company is now turning attention to monday he tiesing messenger and what's app. >> we're starting to put some ads in the product just to see the basic parameters on how that performs, how people like the ads or don't how they work for businesses and just try to get an understanding of that. so we're starting to run that across the world >> all this, of course, is the market is hitting record highs the nasdaq is on pace for its best month in about a year due in large part to the tech names. on facebook itself, let's start there. we've been talking about monetizing the acquisitions for years. it is finally happening? >> it's incredible that it really isn't happening at scale yet. they're just starting with instagram. they have the other huge platforms with what's app and messenger. we don't know how well they will

monetize instagraem, highly visual, great video platform we and others are seeing huge usage in consumption of videos the idea that facebook should be able to generate very major revenue out of that seems reasonable. >> one of the signals i heard in the call was surprising to me is mark zuckerberg saying that they're not moving as fast as he would like on monetization in facebook messenger normally he hangs back and says it will come in time interesting bit after gregs there from him also the contrast between alphabet's story and facebook's story. with google, you know, we heard cost per click coming down because of mobile. kind of acting as a head wind. but there are more clicks. facebook on the other hand, saying that monetization of clicks is actually going up and they're going to sloet number of ads that they're putting into the news feed. so the pricing strength that facebook is seeing versus google, very interesting >> very interesting. i don't think it's that relevant

ultimately to them capturing more dollars, whether which lever is going up, whether it's more ads or more pricing facebook has been historically very cheap for marketers so there is a lot of head room on the prices. one of the big questions now is what happens to the television money? a lot of huge advertisers are seeing the ratings drop, especially among our younger generation they want to move -- they don't have the proof of concept yet that you get the same impact on facebook and other social networks but when facebook can close that loop, that's a huge opportunity. >> how do they get to a number above two billion users when twitter can't even grow any from the much lower base in a quarterer? >> it's just staggering. i think the other thing that jumps out on facebook is their operating profit margin is ridiculous i mean it's silly. and the company is now just starting to make invest ments in content. it's always been publishers or producers post up if you want. they're now going to start to invest they had so much room to do that you look at what netflix is

spending, $7,3.5 billion facebook could spend that and still be profitable. they'll be able to develop a lot of content. >> a reason for the explosion in the price today is because investors were prepared for less optimistic expense guidance. is that true >> well, look, one thing that facebook has done very intelligently since the ipo is it occasionally take the hit and reset and say, look, we can keep hiking the margin but we think it's a mistake because we think there is so much future opportunity. we're going to spend now i think they should be doing more of that and people react instantly stock goes down. but look at amazon amazon has been doing this since day one. continuing to reinvest you don't have to maximize profit when you built a business like facebook and others have. >> meanwhile, we're going to cover twitter in a little bit. >> i just got off the phone with david take loshgs the c

david taylor, ceo of procter & gamble there is a fight for a board seat on the company. something that p & g is against. here's what david taylor told me "i will continue to listen to nelson as i listen to all shareholders." i asked him given the track record and the experience in consumer companies yshgs not add him to the board here's the direct quote from david taylor he says, "there's noggin kremental that pelts has offered. i want to prevent anything from derailing the work we're doing we have a rigorous selection for board membership the fact that he has good advice doesn't mean we just add him to the board. i pressed him, why not taylor said, "what pelts tends to do is bring a number of folks with him manage ment would have to spend a lot of time briefing them to have a group come in to be a shadow management team to p & g is not what we need right now. taylor went on to sashgs "i respect respect peltz but we have to move on and we have the right

plan and portfolio." taylor says that is being shown by the troults dresults today. reaffirming the outlook. we talk a little bit about the portfolio. taylor said two trouble spots that he specifically wants to address, diapers in china which he needs to get turned around, he says, and gillette which they are already taking some pricing on trying to lower prices, be more competitive he said it's about a 9 to 12-month story on gillette i asked is there a greater urgency to get the results turned around given what's happening with the activist invettor pushing for a board seat here's what taylor told mechlt he said, "we were already moving fast i feel peltz is pushing on things that i'm pushing on as well this is the plan we laid out at cagny, the big consumer group vent earlier this year he said i respect nelson peltz and i will listen to him there's evidence now that we have the plan and the portfolio and they do not see any reason to bring in someone who they do

not see as having any big new ideas to entertain on to this board which they pride themselves on this very rigorous process and in terms of putting it on. and experience i mean, he says if you look at the people on the board, consumer, retail they got ceo and management experience this is going to be a fight. we'll see if investors back peltz, the stock underperformed over the last ten years and this past year but taylor and the manage ment team and the board feel they got the right strategy and today's results are starting to show that it's baring fruit. >> one reason they even have the call today they argue, is because of improvements and accounting. >> they moved it up a few days. >> exactly. >> now they have to persuade enough shareholders of that and the public and the team. there is no company in history that i know of that welcomed inactivists on the board immediately. >> but is this sort of an odd situation? it is subtle it is friendly

peltz doesn't want to replace management and break up the company. he doesn't disagree with the strategy he just thinks they need to move faster and more efficiently on cost cutting and sort of getting the companies within p & g more lean and agile and growing and they feel that they don't need that extra advice on a board level. they're happy to have that engage ment as a shareholder he owns about 1.4% of the company now. we're talking about a $230 billion stock. >> and he's also already likely had an impact. the fact that he addresses it like this. >> it's going to be costly the proxy fights are not cheap they're going to have to start mailings, invest ment bankers on both sides so this is going to play out and then the meeting is set for october. we'll see if they adjust the timing on that >> good to seat ball hit the other way. thanks, sarah, for bringing that us to. turning to the president, the administration announced that fox con will invest $10 billion to create a new manufacturing facility in wisconsin creating at least 3,000 new jobs.

this was a big win for the state. people of wisconsin, for the white house. there's been some dissection of the incentives given to foxcon what do we make of it? >> it's good news. sure, it's a nice pr event it's what lots and lots of companies have been doing for dozens of years. carmakers have been building cars here. that's good. so it's quite different from what candidate trump was promising which was huge tariffs. we have to keep out foreign companies. we have to support u.s. companies. it is an international kmchlt but it's great this is what globalization is all b and if there is a good insentive put in place for foxconn to be here, maybe they'll start making iphone sometimes day. i don't think that's what this factory z. >> at least they'll bring robots over to make iphones this is probably a great thing but i think we got to see the details. and this is $3 billion worth of incentives, all state tax breaks if foxconn hits certain targets.

the wisconsin economic develop ment corporation hasn't done the best job in actually keeping track of whether companies keep their promises, right? so we'll see if all of these incentive packages get paid out. they're not freechlt they're coming out of the potential tax base wisconsin has to vote on this the legislature has to vote on it. i think people just really need -- it's not a job is a job is a job there are costs here people should pay attention. >> this is one thing where i think a lot of democrats just completely get it wrong about taxation here. it's like it comes out of the tax base if the factory were to be built there and they were t generate all the revenue and pay the tax. if the factory isn't built there, there is no tochax it doesn't disappear you pull in jobs, those folks have more money to spend that creates tax revenue this is something that more states should be doing >> the largest green field project by a foreign company in u.s. history

we'll find out what means for the state and for apple's margins down the road maybe. >> yes this one is an apple from what i understand >> trying to make they keep their promises >> very important. >> make sure they keep their promises. >> thanks. >> great to be here. >> thank you, henry. >> shavers paypal hitting all time highs they record a second quarter beef and boosting the full year guidance let's go out west with a special guest. >> good morning. that's right p paypal shares off fresh all time highs and i'm joined by paypal's ceo. thank you for being with us. >> good morning. it's a pleasure to be here. >> just before this you were talking about when you first signed with visa and the effect we saw in the stock prices, investors didn't love it now look at. this 18 months later, 24 partnerships with apple to visa and now bank of america last night. on the earnings call, more are on the way i can't help but think of two major retailers that you don't colonelly have partnerships with, amazon and costco. you said previously you've been

in talks with amazon where do those stand are we going to see an amazon paypal partnership in the future >> i think in terms of the philosophy that paypal has right now is we are very open to partnerships as you mentioned, some 12, 18 months ago we announced our first partnership with visa. and that real yishgs ly, we toop back and said in this environment that we're working, is there a way to be cooperative and work together as allies with other players in the ecohim? really it's a war on cash. we all want to advance digital payments there is clearly a macro secular shift towards digital payments the environment is more benign than it was 12 or 18 months ago because as you said, we've now partnered with 24 different major technology or oem or wireless carriers. so it's a very different

environment for us in fact, this morning mastercard announced that we are actually now working with mastercard in asia pacific so we just keep coming in terms of the partnerships. i think we bring a lot of assets to partners and you'll start to see that continue to play out. >> i'm curious though, since you've been talking with amazon, do they share that sent. that cooperation benefits everyone across the states or do you think they'll go it alone and make their payments footprint a lot bigger >> i can't speak specifically for amazon but i will say in our discussions that we've had with multiple partners, whether it is google or facebook or alibaba, there is a desire to look at what are the assets that each of us bring to the party? how can we combine them together to create innovative, unique consumer experiences taking advantage of what we both bring? and combining our platforms together and that's that seems to be the

way that most of the ecosystem is going right now. >> okay. got it let's turn to one of your products, venmo, very strong results yesterday. more than doubled your payment volume for the app in just a year impressive numbers again this is the free service it does affect paypal's take rate that is a percentage of the transaction. with such, you know, explosive transactional growth, does that make it more urgent to figure out a way how can you make money throughout app very hot payment space >> as you mentioned, venm. so a tremendous application. it is beloved by millennials it's a verb right now. everyone says the venmo them and it's exploding in growth as you mentioned, growth grew to will $8 billion. that is 103% growth year over year i think it's seventh or eighth quarterer in a row of triple aej digit growth on that what we said on the call is that we're going to monetize venmo by

expanding the capabilities we spent the last year thinking about the user experience. because venmo is much more than a p to p service it is really a social payment phenomenon you link it into your social feeds and retailers are so excited to be able to move into the millennial market because not only will somebody buy tapping on a paypal button with the venmo account but then put it into the feed so i might say that i bought something from store or you're my friend. i really liked it and then you'll be inclined to go and do that as well so we have a lot merchant interest in it and customer feedback from venmo users to keep expanding the proposition for venmo. >> so growing the ecosystem. let's get back to jon fortt. he has a question for you. >> good morning. i'm wondering about the integration of paypal into apple pay and sam sung pay which you announced. what percentage of transactions

from apple pay and samsung pay should we expect to end up going through paypal what is your target? >> we don't have a target in terms of percentage of transaction that's might go throughout services. what we do expect is that it will drive significant volume. but not just significant volume, but if you think about samsung pay, we're tying into their card emulation technology which is the technology that is used at most merchants that accept cards. so working with samsung pay and android pay and announcement with google, it allows paypal users to work within those wallets and be able to trance act in new contacts. they can now move into the instore environment. partnerships like that allow us

to expand the context in which paypal users can shop and experience managing and moving their money. >> dan, thank you so much for being with us this morning i'll throw it back to you over at the stock exchange. >> thank you, david. >> thank you very much when we come back, new comments from p and g ceo david taylor. we'll tell what you he told sarah a few moments ago. jeff bezos is in and out world's richest man. we'll get details on that rise to the top and twitter losses are accelerating we'll talk about the quarter and when user growth may reaccelerate when xa"squawk all" continues. you always pay

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shares of procter & gamble on the move today. they are higher on the heels of an earnings beat the company in the midst of a proxy fight with nelson peltz who wants a board seat davidtaylor just speaking to m moments ago saying that he respects peltz, he'll continue to listen to advice as a shareholder but the company doesn't move on. here's the quote i picked up from taylor. "there is noggin kremental that peltz has offered. i want to prevent anything from derailing the work we're doing the fact he has good advice doesn't mean we just add him to the board. for more, let's bring in senior vice president at sanfor

bernstien. do you support knell nelson pel do you agree with the board? >> i think the stock action today says it all. it's a very minor move in the stock. minor improvement based on the quarterly results to be fair one quarter certainly doesn't make a turn around i think to be fair, dave taylor tried to push the envelope forward. does he say and he said in the earnings call that he needs outside points of view i think peltz's history has shown outside points of view and i think that might be something that p & g needs on the board. >> so this argument that he's not bringing any new remarkable ideas, we've got a rigorous board process and, therefore, you can't just come on when you have advice, not to mention the fact that taylor told me peltz tends to bring a bunch of people and they don't want a whole new

shadow management team to distract them. >> i think if you look at what p & g is doing, in and of itself is not brand new, interesting ideas. so they talk about trying to grow a category. they talk about trying to leverage the scale we're not seeing that they talk about innovation and bringing new markets to the product that consumer finds irresistible, you look at the facts and the dollars and cents and the results of this quarter, they took down prices in manufacture the key categories like grooming, like oral care and others and in the other categories, they didn't take up as much as the peers. so i'm not sure they're putting into action a lot of the words that they're using could they be in a transition point? gosh, i sure hope so >> the flip side is that we did see a lot of the productivity savings and the sg & a cuts translate into a big bottom line

beat and we did see some real bright spots in the portfolio like beauty and health care >> i think that's all fair so from a cost cutting perspective, really great job. you know sh they should be doing more they should have been doing more i think some areas they cut costs. that is concerning to me when the whole world is trying to figure out how to do that better this stuff they've been doing. they have to continue to do. but the question really is around pace. i think they should do more certainly shareholder today is also suggest that they should do more >> yeah, what you are hearing from investors on that front how loyal? ien into is a company that paid steady and rising dividends over the years and has a very loyal, i know, fan base in cincinnati my hometown. and p & g's hometown as well what do you hear from investors in terms of the share price underperformance and how much appetite there is to get nelson peltz on the board

>> so we hear a lot of frustration if investors, from alumni, from current and recent employees. not because p & g is a bad company at all not because dave taylor is not a good guy he probably is it's just frustration that p & g should be doing better for instance, the target is to be in the top third of pure companies. that's how they get paid that's what they're talking about as a target for themselves as a management team why not just the top third if they're the best they have done much better than the top third. so you hear a lot of frustration and a lot of hope that things are headed in the right direction. but again, a lot of frustration about the progress so far. >> well, they certainly are going to be under pressure to continue to prove it with the results, ali we'll leave it there thank you for joining us with color on one of the big stock stories of the day we'll see how this plays out >> thank you. when we come back, shares of twitter remain under pressure.

close to session lows. down almost 13%. we'll talk to dick costolo and the competition. whoooo.

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good morning, everyone i'm sue herrera. here is your update. south korea says there is no imminent sign of another missile launch by north korea. seoul's defense minister said in a regular briefing that they are closely tracking and monitoring any prove gas station by pyongyang. rescue and cleanup operations have begun in northwestern china where flash floods killed at least six people the heavy rains which began on wednesday prompted the evacuation of some 70,000 residents. ford is recalling about 117,000 vehicles because bolts in the seat, the seat belt or perhaps the seat buckle may fracture the recall involves 2014 pickups, 2014 e series vans, 2014 and 2015 ford escapes and 2015 lincoln suvs. most of the vehicles are in the u.s. and you can check the website. amazon's ceo jeff bezos has overtaken bill gates as the richest person in the world with a fortune above $90 billion.

that's according to "forbes" magazine amazon stock opened up 1.6% this morning adding $1.4 billion to mr. bezos net worth. we'll have more on that this half hour. you are up to date that is the news update. back downtown to "squawk alley." sarah, back to you >> thank you and now let's send it over to seema mody at hq with the european close >> hi, sarah investors have a lot to chew on. trying to make sense of the currency yes, it hit 1.17 yesterday after fed chair janet yellen spoke today it's down by .5% against the u.s. dollar. still analysts at unicredit raise the forecast to 1.20 by the end of this year 1.25 by the end of 2018. that, of course, prompted discussion about whether the european equity rally can continue what can keep the stock market alive according to analysts, earnings take a look at the big names i have reported to day

nestle, weaker than expected earnings as the world's largest food company continues to deal with pressure and danone seeing growth in the baby food division diageo, strong numbers there they're up 6%. strong profits they did see softness in the united states. perhaps a ramping up of competition in the beer market especially from millennials and them being so fickle let's talk about deutsche bank germany down by the biggest german bank. that beat the street but some concerning comments from ceo john crion who said revenues are not as universally strong as we would have liked that stock down almost 7%. let's also talk miners anglo-american, really surprising the street with the rise in profits and a reinstated dividend after suspending the payouts in 2015. some analysts say this is a sign of a turn around for the broader uk -- broader mining industry.

keep in mind this miner produces about one-third of the world's rough diamonds in the world. we'll also hear from rio tint yoe and glen core in the copping mop. speaking of glencore, they are buying rio tinto's call assets glencore, largest exporter of sea trader thermo cool this will help expand the p presence in australia. thank you very much. twitter shares sinking this morning as the company reported that flat monthly active user growth and the most recent quarter. the c.o.o. on the earnings call talking about live video which is obviously a focus area for the company. >> we have gone head-to-head with a number of our competitors with the same exact content streaming at the same time and we've been able to compete our competitors whether it is in sports or e-sports because we have a different audience that is highly engaged with this content already and has an interest in it

that helped us deliver our advertising product is also differentiated with midstream video ads as well as preroll ads. >> that is noto, the coo that card said cfo then there is facebook hitting all time highs as ad sales, mobile and user growth continue to impress the street. we're joined by the former twitter ceo dick costolo, get his take on the competition. good to talk to you. good morning once again. >> thanks for having me back >> the bullish take is that revenue down 5 is better than the prior down will 8. that somehow that represents an inflection point do you think that's true >> well, i'll tell you the thing that jumped out at me from the earnings announcement was that the comment that daily active users are up double digit growth for the third quarter. so the question, and i don't know the answer to this question, but the question is, if the monthly active users are flat because they're churning weak users, people who show up once a week or once a month, in

favor of new users who are coming and highly engaged, they're daily active users, that bodes well for a revenue obviously, you're highly engages users are coming back more and more and seeing more potential advertising. so that comment and they didn't say the specific percentage growth or the specific number, but that comment that daus are up double digits for the third quarterer in a row is a threat that i think is interesting and something to pull on with the company. >> yeah. dau up 12 year on year as you said for three quarters in a row. that said, u.s. mau, quarter on quarter, forgive all the acronyms here, averaging 68 million. you must be a little curious about the stagnant quarter on quarter and maus in this country. >> yeah. i guess again that the question i would ask and i don't know the answer to it anymore, i used to,

is that those monthly active users are, you know, they're measuring people who come -- a person comes on march 1st and doesn't come again at all in march, there is still a march mau. a person comes every day in march is a march mau the question, when you compare it to this daily active user growth is are the users you're churning out or losing, are you losing inactive or weak users who come once a month in favor of new users or who are coming and highly engaged if that's the case and the trend, then that is very encouraging. obviously what anthony is describing there in that clip you just played is the company is trying to carve out this strategic beachhead that they can defend around live video that's based on really mapping nicely to twitter being what is happening right now sort of live content from around the world. and, you know, the strategic question that remains to be seen is that going to continue to drive dau growth that then results also in overall mau

growth >> i know twitter hates being compared to fn i can't help it. you look at what facebook says about instagram stories and what's app stories and growth beginning to monetize versus what seems to be not much going on with mentions in twitter with, you know, their kind of version of stories you look at the growth in facebook messenger versus the direct messaging within twitter. and then those stagnant overall monthly active users numbers what is the narrative that the bullish twitter investor can latch on to with these very different growth trajectories? >> so two thing there's. one, first of all on the facebook front, facebook is a juggernaut i mean their ability to deliver the efficient results for advertisers while also simultaneously dampening the

potential impact that emerging competitors can have with features like instagram stories is impressive. there's the only way you can describe it. i think the challenge in that world is for people competing for the digital advertising dollars to carve out a strategic beachhead that is defensible and twitter is where people go to find out what is happening right now. and it's been very resill yenlt in th -- resilient in that regard when i took over as ceo in 2010, immediately when i took over, there was a kafr article on one of the big business magazinesst death of twitter and it had the bird being strangled and exploding and dying in 11 different ways, and it's proven to be a remarkably, very resilient company. the question is can you leverage that resilience in that beachhead to grow the business and grow the advertising pie by

getting more live video dollars as anthony mentioned midstream and prerolling dollars, et cetera >> what about the president's use of twitter the most powerful person in the world is using it as his primary communication platform, he says, with the american people what's the impact of that? after the election we did see a big bump, nine million active users. that seems to have leveled off why can't the company figure out sort of how to grow the base given how relevant this is right now from the president of the united states? >> yeah. i mean listen, i can only tell you anecdotally, it always was the first thing i checked in the morning. now i check it before i brush my teeth to see what is, you know, what in the world is happening so i don't know the answer to. that again, i would go back to my question would be are the new users that are coming in and are those responsible for this dau, daily active user, people that come to the platform every day,

are they responsible for this double digits third quarter of double digit dau growth? that may whab you're seeing. there i don't know the answer to that. >> but the theory, let's assume for a moment that we're on the right track, that converges with live video in other words, a highly engaged daily user is more likely to stick with a video that is live than not >> i would have to imagine that's a logical conclusion. you could come to. if people are coming to the flat form every day to see what is happening in the world right now, you can quickly jump to how that makes sense to tie into here's live video feed from what's happening in the world right now whether it be financial news, whether it be sporting event, et cetera. >> well, it is -- i'll tell you this it is something that investors and certainly the financial press cannot get enough of some of these questions regarding twitter and all social media in general it's fascinating we really appreciate your time

as always. thanks, dick >> yeah, thanks for having me. >> dick costolo joining us out west and data this morning, changing expectations for economic growth. we should get an official read on that tomorrow our steve liesman has that back at headquarters. steve? >> yeah, we want to give ut official cnbc rapid update which is a collection of all of the tracking -- not all of them, many of the leading tracking forecasts on the street for gdp. it is up as a result of this morning's data the trade data, the inventory data and also the durable goods data raising the outlook for second quarter gdp to be reported tomorrow morning by .3% to 2.9% which is towards the middle of the range it's been in the range among estimates, 2.2 to 2.3 they're keeping a strong estimate at 2.6 to third quarter. the first quarter was down to 1.4% leading pack is stephen stanley at 3.3%. morgue an stanley at 3.2%. atlanta fed at 2.8%.

all of them went up by two to three tenths and goldman sachs, uncharacteristically at the bottom of the pack there at 2.2% we'll see tomorrow how accurate the estimates are. the tracking estimates include the incoming dat yachlt trade inventory was good durable goods not so good. back to you, carl. >> steve, thank you very much. steve liesman. when we return from buy onic man to the world's richest man, we'll get more on jeff bezos and what his amazon holdings have done dow up is 59 rick santelli, what are you watching today >> you know, post fed, not a lot of action to trade on the fed statement. but the yield curve is doing something interesting. we're going to talk about that after the break. ♪

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the warning from howard marks that's that has everybody thinking about their next move and robert shiller saying why he is lying awake worried about the market and how high can facebook soar in how low twitter can fall and what is going to happen with amazon after the bell. and new names from short seller john fictorn who is with us on the halftime report. we'll see you top of the hour. we're only 15 minutes away >> we'll see you then. scott, thank you let's get to the cme group rick santelli has "the santelli exchange" as always. >> you just heard steve talking about growth, we're going to get our advance look at second quarter gdp.

everybody is kind of excited and whenever we think of gdp, we think of central banking policy, we think of the yield curve and we think of an economic signal the yield curve slat ening mean recession, steepening does it mean growth in sn listen, i don't think we can read that into it anymore. but the yield curve is telling us something as you see that one year chart on your screen, we hover around 95 basis points with a low of 80, you look to the left of your chart, it held an important bottom at 74 the steepening probably is due to the fact that janet yellen and company probably are not going to tighten a lot more this year so that has changed. it's reflected in the long end there. and the short end so short end rates coming down a bit because the two year isn't as aggressively looking at fed tightening but it could be a combination of the long end thinking about balance sheet reduction which more than not you probably steepen the curve and raise long term rates all makes perfect sense. but let's go to a longer term

chart. so here's the three year chart we're 94, 95 we bottomed at 80. it has been a pretty large long move we spent a lot of time mshgs thought we would violate 70s and it would be a big signal that we were going to see recession. will we see one? i can't tell you but if you're just trying to trade, there might be some really good opportunities. because if you believe that the balance sheet issues is the next major issue of pro active fed policy, only three things can happen, actually the first is bill gross outlined it yesterday on the power lunch show after the fed he said the amounts are small. 6 to $10 billion a movement it's going to take a long time considering how many trillions they accumulated so size is a big deal. i agree with that. but there is kind of a one a to. this many believe the fed is communicated this so it's already kind of priced in,

nothing to worry about but i think two or three will make the money i think you have to watch the ecb. you heard me say this before it may be priced in, they may be massed by on going activity that we ceased and other central banks haven't. and then finally, maybe it's action you know, lights, cam rashgs acti - camera, action, get ready for your close-up. markets learned that central banks take long periods of time in everything except easing and creating liquidity that has been rewarding for investors thank stocks and how they've been acting. so maybe markets are not well behaved like we said in number one. maybe they just need to actually see some fed selling or lack of buying when these securities mature back to you. >> let's see what happens toward the end of the year. rick, thank you. as shares of amazon hit new all time high this is morning, a new world's richest person is

crowned. our robert frank, of course, is back at hq on this story good morning, robert. >> no one in history has become as rich as quickly as jeff bezos. base yoes who started amazon 23 years ago selling books from his seattle garage is now worth over $90 billion officially take over the title of the richest man in the world from bill gates who is now worth just under $90 billion. now he, of course, jeff bezos has been a billionaire for a long time, over 20 years, with a net woj of $1.6 billion in 1998 when amazon went public. but the recent gain is just unprecedented. he owns about 68% of amazon. so every dollar in amazon share that goes up adds $80 million to his wealth now he has gained $70 billion just over the past five years and more than $45 billion in the past two years so about $60 million a day for two years. and he's one of only four people to hold that richest man title since 1998 along with bill

gates, warren buffett and carlos slim jeff base yoez very likely to become the richest man ever at least measures in pure current dollars. if amazon hits $1,17 a, so not too far off, jeff bezos will have a 12 figure fortune of over $100 billion guys, back to you. >> that is wild. >> i'm sorry those numbers you're citing, trying to write them down as quickly as i can, robert stunning stunning creation of wealth in a short period of time thanks, robert frank when we come back, the white house taking aim at amazon over its tax practices. the president of americans for tax reform grover norquist will weigh in dow up is 65 points. don't go away. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place

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been found to be a monopoly. treasury secretary mnuchin taking a similar, toned down approach during a senate hearing yesterday. take a listen. >> i am encouraged that amazon is now charging tax i believe on their own sales but not the marketplace. not sure i understand the consistency on that, but, you know, i respect the state's ability that there's an awful lot of money that's not being collected. >> joining us now, grover norquist, president of americans for tax reform and karen mills, harvard business school senior fellow, former small business administration administrator welcome to both of you grover, i'll start with you. i'm a little bit surprised that you are in favor of this idea that ecommerce companies should collect sales tax equally from everyone talk a little bit about your reasoning behind that. >> i'm not sure that you've correctly stated my position

>> did i not please clarify. >> i support the supreme court's ruling that states can tax economic activity in their states, but not if you buy something from another state if you buy coca-cola from another state and drive into the state, there shouldn't be a sales tax on that. if you buy something that's shipped in amazon is now paying taxes in the 50 states on its sales because they have a physical presence they're building warehouses and stores in all 50 states. when you have a physical presence, you pay sales taxes. if you're physically there, you pay income taxes but there has been a move by incompetent states to want to export taxes out of their state to businesses and individuals in others states and they should not do that. the goal is not just sales taxes, they're very clear, they

want to export corporate taxes they want to say, hey, bezos, you sold something here, we want a piece of the action. we want a piece of your corporate income or even your personal income, which would really put all 50 states at war with each other. you should only have to deal with the state where you can vote to throw the mayor out or the governor out or the state legislature. you should not be taxed by states where you have no say in their government so bezos actively opposed to taxing internet sales when he was just in one state. he'd like to hobble his competitors by making them do what he now does that's corporate welfare it's not a good idea he had a principled position to begin with if you're in 50 states, you pay sales taxes in 50 states, but if

l.l. bean in maine should not be paying sales taxes in texas. >> karen, what is your take? would it be so bad for internet retailers to collect sales tax when people buy from wherever given that people very rarely end up actually calculating and paying out those taxes themselves as they should. >> well, i can't really comment on the issue of the internet sales tax, but there is a big issue about whether amazon in its position is a good thing or a bad thing for small business owners you know, whether or not they're on the marketplace or they're collecting taxes and as with many things amazon, there's a good news and a bad news story, which is that amazon now provides so much reach in small business owners, they can't get it any other place so they really want to participate

and get this, and taxes is really sort of a secondary question if you're getting the sales, you can afford to pay the taxes, but the question with amazon is are they doing some other practices that make it difficult for small business owners? are you putting your intellectual property in danger? they get knocked off by others the second thing is it's good news that you got an order from amazon but it's also bad news because if you're the big hit on amazon prime, how do you get the cash to support that amazon has done a billion dollars in small business loans. that's where they're going to be important in the small business economy.

they have nothing on amazon because all of these small businesses, they know exactly how much they're selling they kno where'w when? >> squawk alley continues in a moment i have a motorcycle! wonderful. ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ geico motorcycle, great rates for great rides.

we got through the morning amazon, intel, starbucks, electronic arts, mattel and those are just headliners, john. >> the cloud going to play big into both amazon and intel intel on the data center side. >> looking at facebook shares, up 5%. there's the setup. see what amazon does next week. let's get to the judge in "the half. welcome to the halftime report i'm scott wapner our top trade this hour, the warning heard round wall street. why howard marks is growing more cautious on stocks saying it is better to sound the alarm bells now than after a serious correction is underway. >> since we never know when risky behavior will result in a market correction, i'm going to issue a warning today rather than wait until one is upon us sure this warning is likely to feel premature and perhaps it