welcome back to "squawk on the street." crude is declining more than expected natural laggers are valero and hess as well that does it for this hour of "squawk on the street. let's go downtown to nyc good morning, it is 8:00 a.m. at the disney headquarters in burbank, california it is 11:00 on the east coast. and "squawk alley" is live ♪

♪ good wednesday morning welcome to "squawk alley." i'm john quicarl quintanilla tensions between north korea and the u.s. continue to escalate. kim jong-un threatens to release a missile on the u.s. base guam, but the u.s. threatens that they will see fury like no one has ever seen. good morning, good to see you both >> brian, do you think the change of the market has changed over the medium term here? >> i think they do a little bit. especially if you look at the performance of the s&p 500 since july 19th.

for all intents and purposes, it is august. we have had other potential negative headlines hitting the market in september with respect to the debt ceiling and the fed and a potential taper tantrum, but it doesn't derail the longer term side of things. we're still steadfastly bullish in the 20-year call for the bull market to remain in u.s. stocks, but things have gotten frothy here the way that the market responded, i mean didn't respond to positive earnings and positive macro, kind of tells you overall, even before this geopolitical firestorm this week, that the market was ready to stall and that's what we are more prepared for on the near-term basis. >> i thought the lesson recently of august was that there's no such thing as a quiet august we had the chinese devaluation in 2015. the brexit fallout last year, brian, you mentioned earnings, how much of this is about earnings disney is dragging down the dow, priceline and trip advisor are weighing on consumer discretionary, the worst performer right now in the s&p

how much is north korea? how much is earnings >> well, i think right now in the near-term basis, sara, it is north korea. i'm so glad you brought up the august side of things. i remember ten years ago in 2007, i was working at another firm called merrill lynch, and we were told, wink, wink, to cancel vacations in august because it was so busy and then, of course, we knew what happened in august of 2008 or september of 2008 so you're right, august has been kind of the rock and roll month in terms of market timing with respect to pull-backs. but on the near-term basis, we have had such concentrated performance, not just in four or five stocks, everybody wants to pick on the feds, but not acting as traditionally, you have people in consumer discretionary owning anything but retail that inflated some of the stocks that you just talked about you have consumer staples and disarray, especially considering the weakness we saw in costco.

and we have utilities still hanging on to near all-time highs. and you have started to see the market want to try to rotate into areas like energy, energy is kind of picking up over the last couple of weeks we, in fact, have called for the technical rally in both canadian and u.s. energy stocks and even telecom in response to performance. so the market kind of wants to rotate, maybe this geopolitical quote/unquote storm may be the tipping point. >> mike santoli, when you look at the way stocks are moving so far this morning after all of this north korea bruhaha, disne is down almost 5%. seems like a bit much, even for disney, which tends to move after earnings on travel-related stocks what do you think? >> i think the pick-up in

volatility shows you there's a little bit of a hedging instinct out there. it is a minor pull-back in the indexes. in terms of the earning stocks, i think that's the way the earnings season has played out good results, double-digit growth was kind of baked in heading into the earnings season the surprising thing is that the indexes have held up so well on the news and i agree with brian, that you have seen below the surface, a little bit of fatigue. i mean, i think of something like a quarter of s&p 500 stocks are down at least 20% from the high only about half of all stocks are in the 50-day average. that's happening below the surface. the headlines out of north korea are like maybe, finally, this market will seize on some excuse to have a real pull-back it's ignored all the possibilities for a long time. >> this could be used as an excuse does it elongate whatever dip we might have gotten already out of earnings season?

>> i wonder. i honestly think people are going to say, if it's quiet on that front for a couple days, it was another bullet dodged. then you have to see if the credit market will get shaken up if there is something else that causes this very kind of calm sort of self-maintaining level for these markets, it basically is, as we were talking about, the rotation has been this, it's been this kind of perpetual motion for a while now that being said, it has not approached all-time highs this time around with a lot of energy and force and enthusiasm it's just almost like begrudging, okay, path of least resistance is a little higher every day. >> the number of days with this has been long. mike, good to see you. thanks, guys when we come back, disney taking on netflix saying it will launch a streaming service of its own. what that means for content coming up. plus, why investing in facebook and google, quote,

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julia boorstin is here to bring us the latest on disney. >> reporter: disney buying majority stake in bantix to launch a new espn service next year, which will include so,000 live sporting events that are not traditionally espn. >> this move capitalizes on a few trends that we have seen on the sports side, first of all, live sports continue to be very, very popular 94 out of the top 100 tv shows in 2006, the united states were suppo sporting events, for instance. then espn is still a strong brand. we have seen a fairly significant increase in media-based consumption on services that are over the top or direct to consumer services so we felt that it was time for us to take a bigger step in that direction. >> disney's stock is sinking on

revenue that missed wall street's expectations. netflix shares are suffering on disney pulling its film from the streaming service starting in 2019 as disney launches the own disney brand and content app that here. aikers says they are evaluating the possibility of launching star wars apps and prepared to potentially break espn free from the bundle >> this lays the groundwork for the company to do a number of things, it provides us with all sorts of optionalty we haven't had before you know, it's one thing to say you're going to be in the business of being direct to consumer or over the top it's another thing to do it. and to do it, you need a really strong technology engine >> reporter: no word on how much disney's streaming services will cost, but iger says they will price them to reach the maximum number of people sara, over to you. >> julia, thank you for the set-up for more, we'll bring in inside.com founder and ceo, jason, you just heard julia say

that iger describes this as a major strategic shift in the way we distribute our content. wall street doesn't seem too impressed just yet what say you >> well, we talked about this last year that it would be an incredible opportunity at some point for disney to be able to collect credit cards and e-mail addresses and go direct to consumers. they were, of course, selling their content to netflix and other services and that was a good model, but if you look at what happens long-term, when you put an intermediary like netflix in between you and the content, and that intermediary decides, hey, we could make content, too, and they are highly confident at it, and amazon decides to make their own content, then all of a sudden you're losing the end consumer you don't have a direct connection to them and it's a major risk factor for the network. but espn owns the greatest ip in the world, the greatest collection of ip -- >> espn. >> i'm sorry, disney and espn

have the best content in the world. so disney with espn, with marvel, star wars, pixar and that whole connection including the disney assets of the original movie, they have an incredible, incredible collection when they go direct, it will be easy for them to get tens of millions of people to subscribe to that service. >> will it be very easy, though? i'm wonder, you have espn on the one hand, but then you've also got marvel and lucas film. and then you've got disney jr. type stuff it doesn't seem like all of that fits under a single subscription so do you have to sell them each separately and do you end up with subscription fatigue unless there's something like a cable bundle that authenticates for all of them at once? >> no, i think that disney is the one company that could produce a top three offering so they will be right up there with amazon and netflix. because if they were to just give, as an example, everybody

who got the tens of millions of people who go to a theme park, if they each got a three-month or six-month subscription with their ticket purchase, they would get to tens of millions of viewers. if they took every marvel comic book or every action figure sold for the next star wars films and included a three-month or six-month cost, customer acquisition would be zero dollars. i believe they can create tens of millions of dollars with the zero acquisition cost and immediately be the number two or three player in going direct to consumers. >> all right so then what is the impact on netflix and how many more of these defections do you think they can survive >> yeah, so they have escaped velocity when you start to get to 100 million paid subscribers and you have a team that produces world-class content then i think netflix and disney and amazon will be in the dogfight the people who will lose in this, people maybe who don't have a big enough library of viacomm as an example. or maybe even people who haven't

entered yet like google, facebook and apple their window might, in fact, be closing to come into the original content space because disney realizes that they made a huge error in giving away the keys to the kingdom. and now they have to take the keys back. and it's going to be a dogfight. if you look at netflix, they have, what, a sixth of a revenue of disney but they're priced at half in terms of market cap. so the question becomes, is this going to be another facebook/google-like situation where google put its head in the sand and didn't watch facebook catching up in the rear-view mirror or is disney going to attack and start producing massive amounts of online content? and espn has unique opportunities here espn is a collection of a lot of different sports as we all know. if something like poker becomes extremely popular, they could with a direct to consumer offering have a poker channel and do it with a level of professionalness that other

people can't it will open up new opportunities for them and their challenge will be when the nba decides, nba is a global sport, we're going direct to consumers, which obviously they do with league pass. if league pass gets too many subscriber, it will be a direct to consumer world. and this idea there will be intermediaries is going to go away. >> i think i would be more in favor of "toy story 4" and the "frozen" sequel than the poker channel. but we did hear that you got your hands on the new at the scene tesla model 3. >> i'll speak about myself in the third person, but i get access to a lot of things. and let me just say, yum yum elan has created -- oh, my god, it's a yum, yum, yum, yum, yum i've been driving it and it costs the same as a

porsche and prius. all the people criticizing elan for the last decade to say he's not going to get it done, they -- wow. the model i have, of course, has all the features, it's tries the prius, but the model available in the next year will be costing 35, prius level. but if elon has a big line of hamburgers, this is a wagu hamburger at a shake shack price. it is an achievement unlike anything in the history of technology it literally is up there with the iphone it drives like a porsche it's incredibly fast the technology is amazing. it's rock solid. >> so are people going to be able to get their hands on them, though, is the question? nobody questions that tesla makes drool-worthy cars, but i have heard service complaints for some people who have the car. love the car, but don't like the way they handle service. and the question of whether they can make it up those two things combined, if they're having trouble servicing the small number of cars on the road now, how are they going to

be able to make this many and then service the ones, even if they do get them out on the road >> yeah, this is like running out of ketchup and napkins at the very popular hamburger joint. they can solve that problem. if you can make a product this good, you can solve the service problems listen, i own all four cars. every car is a couple months or weeks late every car they have had to tweak here or there. elon is a complete perfectionist and really wants -- he cares about customer service in a deep way. so things are always a couple weeks late and then he always overdelivers. and we were sitting here five, six years ago when he was producing one or two roadsters a week saying he'll never produce 100. now he hit 100 and can't produce 10,000 betting against elon musk is betting against the future of humani humanity it is an incredibly stupid thing to do because millenials do not want to buy -- >> this may not be such a bad bet. >> well, actually, yeah, given that trump is going to blow up half the planet. >> okay, okay.

>> if we don't go into world war, this will be a successful car. >> all right, you're cut off thank you. the rest of the 450,000 who put in orders have to wait longer than you did to get the car. >> they will get them and will be pleased, trust me >> we will see still to come, why silicon valley vc's legend says google and facebook helped to create a monster. and later, a cnbc exclusive with mark hurd and john donovan quk lecld.out ou "sawaly" is back right after this

the dow is down 67 let's goat et to rick santelli the santelli exchange. >> foreign exchange, if you're looking for treasury volatility, it's had its moments, but it's like a 3% handle if you look at what the vix is

telling us about equities, you understand that. but fx is the big equalizer, so to speak trying to get all the crazy dynamics that change, that is the be pro you don't want currencies moving like commodities it makes it hard to run a business, especially when exports and imports are next to impossible having said that, i find that it is interesting the next three charts are pretty obvious that last night we did see involvement there, whether on treasuries or the dollar/yen. the euro/yen, you see the crosstrades. and you see the king, the king always, but i haven't talked about it as much because i'm trying to isolate the euro, dollar and the yen with this flight to safety this is the swiss/franc, if

you're nervous you run to the swiss. it's all about foreign exchange. it was a great op-ed in the journal. a weak dollar doesn't make a strong economy how does it help u.s. workers to erode the value of the currency in which they're paid? that's basically the title of the piece by john tammy. if the dollar is in decline, americans will, at best, be exports more in return for fewer imports. it would be hard to conceive a more impoverishing policy. i'm sorry, but i kind of agree with that, okay? because at the end of the day, i have done this many time, it seems as though it's in our wallet and it's up for everybody to tinker with, from central banks, of course, to the notion of other countries but in the end, we don't seem to pay much attention to what we should pay more attention to bottom line here is, we know multinational likes to export. and the weak dollar is in a conventional wisdom fashion considered good for them

so it's kind of investor class versus working class, i get it there's always winners and losers in life, but at the end of the day there used to be a line, i believe in strong dollar policy no, i'm pretty much prepared and qualified to be treasury secretary. because that was the line from mr. reuben uttered many times, john snow. in the end, i think it is the best policy. at the end of the day, just because multinationals are doing better and the stock is going up, doesn't mean the average american's life is significantly better sara, back to you. >> i don't know. we export a lot of what the american workers are making in some of the rustbelt states. i can take the other side of this, you know, rick >> we import a lot of the pieces that put them together it really is a complicated story. >> absolutely. rick santelli, thank you good topic, as always. straight ahead, elevation partner roger mcnamee says early investments in facebook and google helped create a monster find out why, next there's a denture adhesive that holds strong until evening.

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good morning, everyone i'm sue herrera. secretary of state rex tillerson aarriving in guam on a refueling stop on his way from washington

to malaysia. he does not believe there's an imminent threat from north korea to the u.s. or to guam >> i think americans should sleep well at night, have no concerns about this particular rhetoric of the last few days. i think the president, again, as commander in chief, i think he felt it necessary to issue a very strong statement directly to north korea french authorities telling nbc news the vehicle attack on soldiers in a paris suburb is a terrorist attack the suspect, a 36-year-old man of french/north african origins, has been arrested. he slammed his bmw into a group of soldiers injuring six kenya police engaging opposition protesters in nairobi as violent protests erupted across the capital it follows the allegation of election fraud they were seen firing tear gas at protesters this morning that's the news this hour. i'll send it back to you

>> all right, sue, thank you let's get to michelle caruso-cabrera with the european close in less than a minutes' time >> you can see weakness across most of europe the rising tensions caused by north korea affecting a number of markets we'll start with the swiss/franc today making the biggest gain. a whole 1% move. the swiss franc, traditional sachb safehaven. by definition, the country has large impacts. richemont and nestle were all hit hard today and investors buying german bonds today were hit hard, so when they buy the yield, the price goes up.

and that helps the struggle on banks in germany and the french banks listed here, deutsche bank and commerzbank can lare lower. a classic safehaven trade below 109 yen for every dollar so the gold miners rally in part because of the weak dollar, but they raise the price of commodities and also because gold itself is another safety trade. so take a look at the polymetal and randgold novo nordisk specializes in diabetes care. up 8% after raising growth targets for the year carl, back to you. michelle, thank you very much michelle caruso-cabrera. disney leading u.s. stocks lower this morning, and investors are watching growing political tensions with north korea. joining us this morning from palo alto, always good to check in elevation's co-found er,

roger, good morning to you >> good morning, carl. how are you? >> i'm good. you have been cautious for the last year or so, i can't imagine how you feel now that things are getting a little spicier between us and the north koreans how does this change your thinking, if at all? >> it just makes me -- it keeps me up at night and, you know, i don't -- i've been alive for 61 years and i've never seen anyone conduct foreign policy this way before and i think this is an experiment where, you know, if it doesn't work out well, the consequences are horrific. and i just don't think we should be running experiments like this >> we're clearly not doing this alone, right i mean, the security council has other players, including china and the argument has been made today that we haven't yet put pressure on them like we did iraq or even iran. do you think there's further hope for diplomacy and should the markets be taking

their time >> i'm just a tech guy, okay so what do i know? as a citizen, i look at this and go, i wish we could be more temperant about the things we're doing. the kind of language that trump is using are just not helpful. and, you know, all i know is that we're taking a situation that is, i think, in a historical context, very normal and making it seem extremely abnormal and i don't think that helps anybody and certainly doesn't help investors in the market or citizens >> it's clearly not helping the major indices today. you panned this op-ed in "usa today. i invested early in google and facebook and regret it i helped create a monster. you basically called them a menace and say the fault lies with the ad model, that it is up to consumers to create any change what drove you to write this

>> well, so when i invested in facebook, in particular, where i was very, very active, you know, it never occurred to me that anything bad could ever happen from people sharing photographs and stories about family and, you know, in reality, facebook and google are great companies filled with great people and i don't think they are consciously doing bad things i think what happened was they each adopted an advertising-based business model that essentially encouraged engagement ten years ago, your world, my world, were all about information scarcecy it was a great time to be in network and programming of any kind the smartphone changed everything essentially by making access to the web, am piwe shifted from im scarcecy to attention scarcy and in the battle for attention -- >> this is john here allow me to be skeptical,

because by the time you invested in facebook, you must have seen where google was going i mean, clearly they were getting very deep into our gmail, into maps, into every aspect of our lives. and facebook had the potential to do it so i'm a little skeptical that you really regret making those investments. >> well, to be clear, i regret what has happened from them. i was extremely proud, i still am very proud of the investments. and john, let me just finish the point i was making when you asked the question, which is that for all intents and purposes, battle for attention has essentially caused everybody to have this insight that if you're trying to maintain attention, if you're fighting for a share of 24 hours in people's lives, the big issue is you have to keep escalating. and the way -- it turns out the way science, theyfigure this out, the way you keep people's attention is you either scare them or you make them angry. and so this whole issue of

filter bubbles, which was not an evolved concept ten years ago, you know, and it's a much more sophisticated thing that people do now they use the techniques that you use with one-arm bandits in order to create addiction. and that addiction has consequences and the whole point of this op-ed is not to point a finger at facebook and google and say they're terrible, it's, in fact, to get everybody to stop for a moment and say, i think we should have a debate and we should ask the question, if the nature of the business model is to create addiction, what does that mean for children what does that mean for adults what does that mean for politics and all these things because these systems are open anyone can use these systems to manipulate public opinion. because the ad models essentially encourage this exploitation of people's emotions and, you know, we saw it in the election, we saw it in brexit, there are lots of people doing bad things every day on these

platforms. because they're totally open, they're not policed, i think we aught to have a debate i mean, we do not allow children to spoke cigarettes. we do not allow anyone who just feels like it to take opioids. we do not allow all kinds of other harmful things to be done. frankly, the stocks are still going to be great stocks i'm just suggesting, hey, wait a minute, when we started out, it was not obvious that this was going to happen. these are enormously successful companies. frankly, the stocks, i think, i would just like to have a debate and have everybody step back and and the question of, is this something we really want because the companies can afford to do this differently >> it does appear that's starting to happen, roger.

they put out a piece just this week about the world and named a lot of these, listed a lot of these factors that you have been hitting through. and the point of the piece was that these big tech companies are going to be coming political targets on the left and the right. senator elizabeth warren and steve bannon both cited in that piece. the question for investors is that a real threat, this idea of anti-trust monopolistic regulation coming in the united states to some of these companies that are right now, roger, still beloved by consumers? >> well, sara, i think you're exactly correct. from where i sit, i literally see no threat to them at all we have -- since 1981, we have an anti-monopoly rule of the united states and reducing the level of regulation. such that today companies have all the rights and privileges but essentially none of the responsibilities so companies are allowed to

disrupt this we saw in europe the possibility, they are allowed to run experiments across the population for monopolistic people without any responsibility for what happened i don't think these are likely to be enforced in the united states any time soon we saw this happen against google for monopolistic behavior, which is the largest penalty assessed and the investors literally shrugged it off. so i think that this perception, at least in my mind, that these companies at risk are seeing the need to regulate, that's why i think we need to have the debate, but i don't have any sense that as an investor we need to worry about all these guys they control their own destiny that's why when we had this conversation, i keep saying, to me, market risk is the only risk they face. because they are too big for us. they are too big for regulatory

risk and they still are grabbing share of the advertising pie and that suggested the stock >> if you can go back to the early day, it would be perfect visibility you would see that investment again. >> well, i would try a lot harder and a lot sooner. the margins suggest they are underspending relative to protecting their audience from outside actors doing bad things. i tell you, the people at facebook and google are good people and respond to things when they are brought to their attention. but the companies should be accountable for what they do as a consequence, these guys don't feel like it is their responsibility to fix all these problems i understand why they feel that way, but i would like to ask the question, maybe going forward we should change that >> yeah.

>> sure. they are aware of the debate >> these are good people they are just as addicted to the likes from wall street and from their audiences as the audience are to the likes that they get from sharing things that make them angry or afraid that is human nature, i get that >> it's a provocative piece. everyone should go read your op-ed. thanks again >> there is a book called "move fast and break things" that explains the economic theories that got us here and there's a brand new piece of fiction called "after odd. it's a novel but it's all about what happens when a social network with the ai network becoming best friends with all the users of the network, which is sort of where we are on facebook now it's hilarious but deeply

revealing. >> roger mcnamee, thank you for joining us out west. a cnbc exculusive with mark hur and the at&t communications john donovan. don't go away.

i'm scott walker coming up on "halftime." big names are positioning for a bigger pull-back we'll debate whether you should be as well

plus the top-ranked media analyst is live with us on whether disney's new streaming will be a win for the stock or if it's simply a sign of desperation. and the unusual activity that we see around energy stocks we will reveal it at noon eastern on "halftime." john, see you in 15. we'll be watching it, scott, thanks oracle recently announced a strategic agreement with at&t to move the carrier's database to the cloud. a lot more, too. joining us now, mark hurd of oracle, and john donovan of at&t communications welcome to both of you mark, you're in dallas with at&t this is a cloud deal which makes me wonder how much of oracle's cloud infrastructure is going to depend on this >> hi, john. yeah, we're really excited about this part of what john and i architected in the deal that we discussed with the ability for

us to bring all of our capabilities in the cloud and much of that we're bringing to at&t's premise so we believe this to be a real core differentiator in the market and with the customer on premise. that's part of the deal we struck together. just part of it, though, john. >> right you were at&t's chief technology officer in a previous role dealing with fun stuff, like scaring up a network to deal with the iphone. congratulations on getting promoted into a lower stress job. what were two of the biggest concerns that you had to really have answered before this scale of a cloud deal with oracle? >> well, thanks, john, i appreciate the congratulations i'm excited about the opportunity. well, the biggest challenge i have, of course, is negotiating with mark hurd no, i think there are a couple of things. if you look at -- our

organization by scale is extremely large, no surprise there. we have 40,000 databases and, really, the pace that the organization operated was really predicated on the largest of those databases. we have 2,000 databases that are over 8 tearabytes when we went through the organization, it was really all about what can we do ourself and then who can we trust to do all the things we couldn't do internally and natively. and we went through a rigorous process. and we concluded at the end of that that as mark said, they rearchitected themselves around this so we were very confident this was the right choice for us. >> john, if you look at the public lists, amazon and microsoft are ahead of oracle in just public cloud and

infrastructure as a service. why couldn't they win this deal? >> well, we looked very hard at all of the options in fact, we do use microsoft and amazon in certain cases where we have certain use cases but the density of our data is tremendous we have a lot of legacy environments we have things that are vintage last year and we have stuff that is vintage last century. and that's a really complex environment. and so at that kind of scale, it's just really important that you not only have the facility that you need, the technology that you need, but you also need a partner that can help you with professional services. and some of the other things that allow you to comfortably move from an existing environment into a new one >> mark, i remember as ceo of hp, you used to talk a lot about share of wallet as a key measure. how much of a customer's overall i.t. spending are you capturing?

how do you expect this cloud deal to expand your share of wallet as at&t >> well, i probably won't get into that so much. normal we just pre-empt any conversation about details of the deal, but that said, obviously, this is a big deal for us we didn't, john and i made a decision probably a year ago that we would, instead of going at this transactionally and going at this tactically, that we would really try to architect something that would be something that we could bank on each other for a long period of time so this is a multi-year arrangement between the two of us we wanted to get a lot of whatever friction could be in the relationship out of the relationship and really focus on what john described, which is taking the technology, taking the data, taking the database infrastructure and bringing it to a modern next generation infrastructure so we have taken all that you might think of as traditional friction between two companies like ours out of that process

and really having our teams working together, heads down, really architecting this next generation architecture. >> john, i want to ask about jobs i hear that you at oracle are working together on re-training some people for this new era are you as a result of this and how extreme are the new learnings that the workforce is going to have to do in order to continue to have a job >> that's a great question, because a few years ago, when we sat down at at&t and we looked at what we needed to do as a company, it was clear to us that we needed to deepen our skill set. and we put a comprehensive program in place that would allow people to have opportunities to retrain themselves, to work their way into jobs of the future. and so if you think about this, with one of the more relevant pieces of the things that we're doing with oracle is today we have 70,000 trucks on the road, that are dispatched every day. and we give our customers

four-hour windows. and some of the inherent capability that data is going to provide for us and the platform, oracle's platform for workforce management is going to allow us to take into account traffic patterns, delays on prior jobs, and really use machine learning and artificial intelligence to comprehensively overhaul how we dispatch those trucks. and so if you think about the jobs themselves, the technicians, their jobs are going to be very much the same but the people who dispatch and do the business management around that, their jobs are going to change dramatically and it's important for us as a company that we not only provide a vision of where we're headed, but that employees get the opportunities and tools to make those shifts so they have jobs of the future. >> john, to follow up, what about the employees in i.t the people who were managing the database when you had ownership of it. what happens to them that's a middle class tech job that is being squeezed by the

cloud. >> well, they'll remain. this is not about labor efficiency this really is -- when we look at the total cost of ownership, the amount of data that we have and the number of jobs that we have in, you know, managing, cure ra curating and analyzing that dat are growing. this is really more of a make by decision we at at&t, we're blessed by at&t labs, so we have a tremendous technical capability, but one of the things we always evaluate is, is it most prudent for us to build or buy and in this case, the decision to work with mark's team and do that allows us to take the people that are working on those databases and start to do other things with them around uses of database and inherently, using that business, using that data for their business >> mark, finally, i think it's fair to say, this is your flagship cloud deal so far what are the signposts you're going to give investors, so that people can gauge how well you're

doing for at&t >> yeah, well wing, first of all, john, i think, yes, it is a flagship deal. anytime you can partner with a company like at&t, a partner like john. and i want to emphasize, the two of us worked a long time trying to make sure this was right, not just for the deal we cut, but for a long period of time. to get this right. we also, because of the nature of what we're doing in database, it opens up a whole suite to john's point of applications, that we can bring, as well, like workforce management, and other applications that provide analytics and artificial intelligence, et cetera. so this is going to be very exciting you know, we'll continue to show guideposts along the way but the real thing we've got to do now is between the two of us is get together and do the work we've described. this has a chance to not only be a flagship relationship, but be a flagship way that databases in the next generation architectures are used, and certainly, frankly, this is our

best reference, as we go forward. we talked about that, as we began the deal >> you notice that mark said we've worked a very long time. that's what i meant about the negotiating challenge. we were hoping we were going to work for a very short time, but it took a very long time >> as those things sometimes go. gentlemen, thanks to both of you for joining us here on cnbc. mark hurd from oracle, john dovafrnon om at&t. >> thank you, john dow's down about 50 points "squawk alley" will be right back there's a denture adhesive that holds strong until evening.

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market's working its way out of a bit of a hole now down 44 points, close to the highs of the session we're back in a minute

market down 46 points.

obviously, a lot to work with today as we've got disney and some more media earnings after the bell tonight >> but it's not a complete sell-off disney is shaving, i would say 26 points off the dow. but we're seeing groups like staples, industrials, health care, all positive in the session. so let's see if those north korean tensions really weigh and some of those weaker earnings, too >> yeah. let's get over to wapner and the "half. >> and welcome to the "halftime report." i'm scott wapner our top trade this hour, bracing for volatility, with stocks falling on concerns about north korea, should you be positioning for more turbulence ahead? with us for the hour today, jim lebenthal, josh brown, steve weiss, pete najarian, erin brown is here as well. she is the head of asset allocation with ubs asset management let's begin with the market stocks lower this hour, both north korea and disney, playing a role in the pullback today, specifically the dow, of course, with disney there.