performers in the s&p 500. leaders include semiconductor stocks all up between 2% and 3% the sector still down 1% for the week so far. but still outperforming this year up by 20% year to date. that does it forthis hour of "squawk on the street. let's send it back downtown for the start of "squawk alley." back to you. >> dom, thank you very much. good friday morning. it is 8:00 a.m. at snap headquarters in venice, california it's 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ happy friday to you. welcome to "squawk alley."

we're at post 9 at the new york stock exchange jon fortt is off today joining us out west is general partner paul holland a lot to get to with paul. good to see you, man first up, we talk snap reporting earnings after the bell dispinlted disappointed on revenue and growth stock is down this morning and currently trading down almost double digits, down 11% earlier today. a lot of discussion about daus not that they just missed but that instagram is able to add so many more to stories in the first half than snapchat has what did you make of the quarter? >> well, paul, i think the snap story is fascinating and complicated at the same time i think you've got people here in the valley that are sort of snap owe fish nad yoes and cheerleaders you have folks that are more on the facebook corner. i think what you thought a year ago, maybe even a year and a half ago, you really thought snap had momentum and had a chance to overtake facebook in part of its core audience.

i think that whole strategy is very much in doubt now part of it has been, of course, instagram in particular is able to copy many of those popular features that snap had pioneered. i've got three teenage daughters. they're all heavy snapchat users. but they're heavy instagram users also it's an interesting time for snap going forward i think the analogy is going to be facebook? well, will it rebound or twitter and sort of struggle along as people worry about this daus and about the usage? i think that's an open question. >> yeah. a company hated that ing that a. is the smart business decision to step on the gas, start spending even more money where they can or try to save some dry powder >> well, i think you've got -- there's a couple ways i would look at. this one, first, just kind of closing out on the stock part of it one of the things that people

sometimes forget is that the employee lockup is coming off. and when that employee lockup comes off in, most cases, i think even the case of facebook, when they got to that period, it will depress the stock for some period of time i don't think you need to overrotate on that point you need to see what the long term trend is going to be on the stock. so i think that's part of it but then the other side of it is, yes, they have the huge war chest they built up very smartly over a period of time. and as you saw on the spending, they're spending triple from last year. so i think they're willing to step on the gas as it were to be able to get out there and to be able to really establish their dominance in that key marketplace where they've been so strong now. i think one of the things that's going to be very interesting to see the balance in terms of what they're spending is going to be as it relates to their core north american market and as it relates to international markets. that will be a fascinating thing to watch over the next 18 months >> it's been fascinating to also watch the evolution of evan stiegel before they went public.

everyone described him as a product genius then after the first earnings call, he was described by some investors as air ganlt, playing down the competition, playing up the fact that they wanted to be a camera company and then last night he took more initiative at least on some of the advertising goals. how would you describe what we're seeing in terms of the leadership of everyone stiegel now in a public company? >> sarah, that's a great point there were even rumors back when the snapchat was getting the advertising efforts started that they were having some kind of balky times out there with the major advertisers. they had initiatives underway that just didn't seem like they really took off on that perspective. clearli, th clearly they got through that phase and they got to a place where they have a sustaining business and they have the phenomenal youth demographic to play into. but i think that characterization is an interesting one, partly, one, because i think there is a real chance that unlike a facebook where they brought in others and

handed over business operations to cheryl sanldberg, a global quality executive to do that, in the case of snap, i think they were really counting on their fanatical users and continuing innovation around product. perhaps we're going to see some of the evolution of evan just as we see with many young ceos as they grow over time and learning more than just kind of the areas that are core and most comfortable for them but i do have to say this is kind of a two edge sword the way snapchat can come roaring back is innovate yet more fully around the product. and, yet, at the same time, they'll have this pressure to say okay, look, you have to make this a more mature business. so it's -- they're coming into a complicated period in their history. >> yeah. fascinating to watch whether you're investing or not. paul, we're going to switch to uber stay with us we want to send it to our reporter who has more on benchmark's lawsuit against travis kalanick this morning >> benchmark led the movement to get kalanick to resign

now they're trying to get the seat on the board and cut him off from uber entirely this is a remarkable develop ment uber is benchmark's single most valuable investment up until now this tension has been playing out through leaks but now it is all out in the open. within the nearly 40 page suit right here, benchmark accuse kalanick among any m. things of a selfish power grab, hiding information critical to the lawsuit. benchmark is one of the early investors. this is an investment that according to the lawsuit has translated into a 13% stake of the company. last valued at nearly $70 billion. they have he massed tremendous paper profits for the vc firm but the average holding duration for a vc investment is around seven years. benchmark is getting close to that with uber and has been looking to cash in on some of the profits. now additionally, kalanick accumulated 35% of uber's common

stock which gives him an outsized influence in company votes. and just to add another layer to all of this, a source tells me that uber's valuation has fallen by billions in secondary markets, perhaps giving benchmark more incentive to cash out from another funding round soft bank could be one solution under the right circumstances. benchmark has also asked for a preliminary enjunction which if granted would take kalanick out of the ceo search process completely >> wow that's a lot of the news this there. thank you very much. paul, we're reminded of what gurley tweeted a few weeks ago saying travis would be very few entrepreneurs have had such a lasting impact on the world. this is a serious separation, isn't it >> yeah, it's certainly a surprise from my perspective i spent most of my operating career working for various partners over there at benchmark. i have all the respect in the world in them as a firm. i think uber is a phenomenal company that executed amazingly well it's unfortunate when things

come to. this given that it's a pending lawsuit tshgsz probably not appropriately for me to try to comment on specifics around. that but if you look at just the tension between boards and founders, when you get into the conflict type situations that you're seeing there, this is a fairly common phenomenon and, you know, you hope to be in situations and i've been pretty fortunate on my boards for the most part have avoided this kind of drama it is a smaller scale. but it happens at times. and there's many, many billions of dollars at stake. there are different visions for how companies should be run between the founders and sometimes between professional investors and professional manage ment that comes in. i think if you look at a company like a google, i think that's a company that handled that very, very well over a long period of time, you know, they had a terrific professional ceo that came in and worked with the company for some period of time. and now the founder, larry page, is running the company with sergei brynn i think there are ways can you do this and work with your board

and for reasons that i don't know because i'm not close enough to it, that has not been able to work out for them. >> is it clear to you, paul, that this conflict has much to do with the strategy for uber in term of exactly how the business should be run as' posed oppose should be leading it from a cultural perspective as they look for a ceo, there are big directions as to the direction this business should take >> yeah. again, skipping the specific case here because i don't want to get involved it in with them, the -- when it comes to these type of situations, what i see happen is that the liquidity angle is overreported. people read things like the 7 year holding period and things like that look, we've had companies we funded financial engines back in 1996. it didn't go public until 2010 and we're absolutely thrilled with the company it's done great all along the way. obviously, we love it when things go quickly. but at the same time, we're here

to try to build enduring companies. i know that's what the entire board is trying to do in their situation, try to get that to happen i just think you run into these situations where it's mostly about a clash over control and it's a clash over who's going to run the company oftentimes what happens when people talk about venture capital is you have one major decision to make as a venture capitalist on a board which is who's going to be the ceo? who's going to run the company and sometimes it comes down to that >> you keep saying this is common and especially having a big investors clash with a founder, have we ever seen though one board member outright sue another board member for fraud? >> you know, i'm not a historian on the law i'm kind of a broader historian on the valley as you know. i can't remember a case like this but that doesn't mean that it hasn't occurred over time. >> yeah. >> i suspect there probably has been something given that there literally are hundreds of thousands of funded companies over the last 50 years

>> yeah. sometimes turns contentious. paul, you were an early investor in netflix we talked about it several times. it's a big week for streaming and content news disney said they would pull movies and shows from the streaming service. when he discussions that desk all week about what means for netflix, how far along they are in the race to make and withhold content for themselves did you see disney as being important? >> i don't think netflix has any single serious threat in my opinion. they've done such a strong job and as you recall, my partner mike shoe that made the investment in netflix in 1999 on behalf of foundation capital we've been very close to the company throughout and the management team there and i work together our first start-up, pure software. but if i look at what's going on now, certainly i don't -- vini haven't spoken to people at netflix about this they're not surprised that a big

company like disney wants to go their own way and i'm reading that the major properties will actually stay on the netflix platform for a while i think it's part of a much larger trend that you're right, we spoke about several times here you know, four or five years ago i had friends in media and they were looking at netflix as sort of the greater fool. they said these guys are going around they're buying all of our properties and spending all this money. this is great. well, you know sh there's no free lunch at the end of the day when netflix is doing is pursuing a strategy of creating their own content. now, of course, now that we've seen the strategy work out brilliantly. so diz i one disney is one of the latest there are 24 separate media properties that started their own approach to on demand subscription service i wish them luck i wish all of them luck in terms. that woinlt want to compete with ne netflix if i had any choice. >> and, of course, they said look, this is why we've been so big in original content for so

long everyone sought general direction things were going. of course, the bold case for netflix is that as subscribers grow, if it goes from $11.5 billion in revenue today or fit doubles, the original content costs are not similarly going to double. there is going to be economies of scale it is very profitable. i wond fert fear though is new subscriber signups are so contingent on new content? in other words, it's a bit of a treadmill. it's hard to get ahead of, do you worry about that for netflix? >> i wouldn't worry about that for netflix. kinlt think of anyone in my universe that is going to change their subscription as a result of any one studio or player coming or going on to the platform so i don't think that aspect of it is the case if i look at netflix as an invettor, i'm looging at the more wholistic elements of the company. are they succeeded on original content? check. are they succeeding on the

international connection i don't really follow the public information on this, if i understand it correctly, they're getting close to where it's 50/50 international and domestic that's a thing if you recall five or six years ago, netflix was severely criticized for having such an immature international business so my judge ment for whatever it is worth is when the netflix management team puts their mind to something, they pig it oufigu and execute and come out number one in the space. >> they worked their way out of corners before as we've seen, paul thanks so much you covered a lot of ground. what a week for tech paul holland. >> i appreciate it thank you. >> when we come back, we'll dig into snap's numbers, take up what that company may be really worth. the quote destructive monday openization of the internet by google, facebook and amazon just one argument against all the power right now in silicon valley plus, more on the selloff, dow though, coming off the worst day since may. marketed up 52 on the major index, we're back in a minute. at fidelity, trades are now just $4.95.

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. >> carl, an interesting and maybe important comment from dallas fed president speaking in arlington, texas, he's saying that it's okay to be patient on rate hikes because the mutual rate, where the fed is going, is closer to 2% than to 3%.

now the significance of this is janet yellen in testimony earlier this summer said the fed doesn't have as far to go as we thought. but nobody really put a number on that robert kaplan saying it's closer to two than three is a significant change in the sense that median long term rate for the fed in their own forecast is 3% and there's only one person that is 2 1/2%, serve above tlachlt is a sense that they have to all come down in the outlook for how far the fed thooz has to go in e rate hikes ka kaplan wants o see more progress before raising rates again he wants to reduce the balance sheet soon we have to monitor this as to whether or not the long term rate for fed oeflz and where they think the funds rate is going it closer to 2% than 3%. sarah? >> i ghaes would have implications for how many times they raised rates and how fast thank you. >> and fixed income markets and the sense where the two year ought to be correctly priced. >> our steve liesman following

the fed. for more, let's bring in mike kiesel, managing director of global credit at pimpco to talk about this market. we've bun talking about how calm the credit market has been clearly it's reacted to the heightened volatility this week. do you see any big signs of cracks in the credit market that stock investors should be paying attention to >> well, i think one thing, sarah, and, you know, we have been at pimco derisking throughout this year as the credit spreads have tightened. we've been taking risk off the table. there's been a tremendous amount of issuance this year. there's been $847 billion just in the investment grade. so there is a lot of m & a deals hit the market and so what's happened is you had a lot of splupply hit the market we have taken our foot off the accelerator and held back. what happened with north korea, obviously, there's been a risk off move this week part of the widening and credit spreads has been that.

and also just a significant amount of supply that's hit the market over the last month >> so, mark, yeah, i guess the credit market certainly being tested in a supply/demand front as you say i wonder when we all keep referring to credit spreads being tight, being very little margin in corporate debt over treasury debt, if in fact it's not quite as tight as it looks just because those treasury yields are so low. when you have a five year treasury at 1 p.75%, is a margi of 100 basis points on top of that really all that tight do we have to adjust our sense of what tight and wide are >> yeah, carl, that's an excellent point. the tech anybodial marketplace, there's been 180 dwlr billion of inflows into high quality bonds this year. that's actually 50% higher than all of last year so so there's tremendous inflow

into income into u.n. bond markets. so that's what's driving it. if you look at our rates, the 2% to 3% treasuries, you look at pimpco's high quality corporate funds, they're yielding 4% to 5% believe me, japanese investors find u.s. credit very attractive where their yields are zero, german yields are zero foreign flows continue to support our bond market. if you started at the beginning of the year, the spreads between treasuries and boonz and treasuries and guilts, we're near the wides we've seen of 10, 15 years so what happened is the u.s. bond market at a relative basis looks quite good and so money is flowing in and to your point, our yields actually look pretty attractive on a global basis. >> mark, we've been talking rates for the past few minutes but just looking at balance sheet normalization, some tried to argue this week that there is really no monetary argument for normalizing any time soon. that it's more of a political

effort by the fed to get people or congress off of their back. are you willing to go that far >> well, i think central banks have been looking for data and justification to normalize balance sheets it's not popular these large balance sheelts a balance sheets all over the world. there's been significant pushback in the private sector, particularly from insurance companies and banks. but good news on one front is that i think the private sector has healed we've been in expansion now for eight years. so because of the global economy as much more healthy, central banks can taper. they're going to have to do it very gradually though. because essentially there's very low inflation. so i think the stronger global growth will allow the fed and other central banks to eventually taper the balance sheets but look for rate hikes to be very benign given low inflation. and what steve liesman is talking about earlier is really pimco's view the new normal is the 2% rate

and 0% real rate is roughly what we're going so eto see look for the fed to revise down their forward fed funds rate projections over the next year i think that's why these rates probably in the u.s. will stay relatively range bound >> yeah. breaking the low 220 again here on the ten year. mark, thank you for joining us today. >> thank you >> mark kiesel of pimco. >> we're going to talk if big tech is too powerful facebook, amazon and google have cornered culture and undermining democracy. they'll tell us why after the doup24k. w is you always pay your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it?

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tech companies including facebook, amazon and google are in the line of fire. critics say they have too much power. that's its message from the book "move fast and break things. how they cornered and

monopolized democracy. it's good to you have with us. >> great to be with you, carl. >> your book got a huge recommendation from roger mack in a my on our air yesterday or the day before and argues what he was arguing too. that is that these companies have a lot of money, a lot of power and artists, i guess, in your view have paid for it for a long time. can you explain? >> well, i mean, what's happened for musicians sh for instan, fof you're a musician and had a very popular song and could get a million down loads on itunes you could make $900,000. you get a million streams on youtube, you make $900 so what's happened is the domination of the big platforms, google, facebook, youtube, have essentially forced the money for artists, journalists, everything out of thesystem

there is relebtless push into that space and basically wipe them off the map what is happening is i would argue that there's going to be less innovation because these dominant giants are basically clearing the field and that's obviously what happened three weeks ago in europe when the eu decided that google was favoring its own recommendation services over those of companies like yelp or

others and fine them $2.7 billion >> are you arguing that the companies -- they don't appear to be doing anything illegal or violating any anti-trust monopoly type of law, are they it doesn't hurt consumers? >> you think about this. google has 88% to 90% market share in search advertising. you can set the price -- it is the basic gatekeeper anybody who wants to access any corporate -- corporation wants to sell or advertise everything on the internet. facebook has 75% of mobile social between facebook, instagrap and whatsapp amazon dominates the e-commerce space and essentially if you're a book publisher, amazon dictates what price you can sell

at they force prices for producers lower and lower. this is happening across the economy. so the question you have to ask yourself is there a market solution to a situation where one company has 90% of the market i argue that's a monopoly. i don't think there say market solution if you ask viewers would they invest in a start-up to take on google in the search advertising space, my guess is they would say no >> you know, all seem true at the moment for sure, jonathan. if we were having a conversation 20 years ago, we might be say g microsoft, yahoo and walmart in similar tones. i just wonder if the only real hope is not that somebody directly takes on these companies but in a sense new markets have to pop up >> the question is the kid at snapchat thought they could really compete they're having a really hard

time just not only investors are bailing out but advertisers are moving more advertising to instagram from snapchat. so i would argue that this is not a level playing field. the other question you have to ask yourself if, the internet is a winner take all business, which is what larry paige and peter deal and jeff baezos believe, is this a marketplace they think that anti-trust is an anti-situation i would argue clearly that the three antitrust suits that happened that led to the formation of silicon valley made for innovation in 1956, at&t was sued and had to have a consent decree which allowed force bell labs to license for free all of the

patents to any other company and that led to the formation of texas instruments, intel, semiconductor, motorola and then in the '70s, ibm totally dominated the main frame business and refused unbundled software and hardware. the government sued them ibm eventually agreed to unbundle that led to two young kids name paul allen and bill gates to make the software and that led to microsoft and then finally, microsoft itself wanted you to have to use internet explorer if you used windows. without that decision by antitrust that freed you to use any browser you wanted, any search engine you want, we would have never had google. so antitrust action leads to innovation >> we're going to find out if we're at a similar moment now. the book is called "move fast and break things."

jonathan, we hope you'll come back, thank you so much. >> thanks so much. >> whether we come back, we'll talk a little more snap by the shares are still down after earnings last night. what is the social media company really worth dow down -- tuly uso 2acalp me8 point. back after a short break

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i think about my own kids. they're the reason that i want to protect our community and our environment, and if me driving a that truck means that somebody gets to go home safer, then i'll drive it every day of the week. together, we're building a better california. good morning, once again, everyone i'm sue herera here's your cnbc update. reporter is getting a tour of anderson air force base in guam

amid the threat from north korea. spokesman saying the continuing presence of bomber planes on the base deters adversaries. >> multiple aircraft here are part of the continuous bomber presence we have the kc-135 our air refuelers and the b-1 bomber back there that provides our strategic deterrents out here in guam which is pack-fs, number one priority able to fight and we have these aircraft >> u.s.-backed syrian fighters advancing from eastern and western parts of raqqa have reportedly met up for the first time in weeks. the kurdish-led syrian democratic forces have captured half of the city since it began in june. and take a look at this. a driver was seriously injured when the bmw she was driving fell seven stories from a texas parking garage the austin police department releasing the video of the july

13 incident. narrowly missing a chevy tahoe it is a miracle she survived they managed as you can see to pull her out of the car. she stepped on the accelerator, they think, instead of the brake. so, you are up to date that's the news update this hour carl, back downtown to you >> sue, thank you so much. let's get the european close here it's going to be one of the worst if not the worst weeks of the year sima >> that is absolutely correct, karma. stocks witnessing their worst week in nine months. let's breakdown the moves for you. ftse 100 at a three-month low. spanish closing down 6%. broader european stock down 1% this as geo politics and tensions with north korea continue to escalate german chancellor angela merkel says germany will be intensively involved in any nonmonthly tri solutions but an escalation of the rhetoric is the long answer. let's look at the german dax it's off its lows for the day but still off 7% from the recent high

some of the laggers include tiller oil, and petro fax, some of the big oil and energy names. currency, softer inflation in the u.s. resulting in the dollar weakening. also morgan stanley calling for the euro to treat and parity with the pound next year flight to safety pushing the yen higher now at an eight-month high a similar story in the bond market with a german ten year yield now yielding 0.83% elsewhere volkswagen and tata motors have ended talks on a potential merger that according to a reporters report. guys, back to you. >> sima, thank you very much as we have been discussing this morning snap getting crushed down over 11% and down more than 50% since its highs right after its ipo. less than six months ago. what does the company need to do and what is it really worth? joining us now to talk about that is brian white snap analyst with drexel. you made the case this quarter's

results may not be quite as bad as we're saying relative to the konsence us because you think the kons census numbers might be too high what does the company have to do to prove itself and win back any benefit of the doubt from the street in >> yeah, i think this is really self-inflicted wound they are not giving any guidance they grew 153% top line this quarter, and yet the stock reacts this way. it's really due to expectations. you know, going into the quarter we said we think they'll beat our number, but miss the street. i think it was a solid quarter >> you know, it's still, what is it, 14 1/2 billion dollar market cap. people are trying to connect the dots between where it's valued right now even after this decline and what the potential can be is it just about kind of the same strategy they've had for a long time and assume advertisers are going to come rushing back in a bigger way? >> well, they continue to do a few things number one, they continue to inrow vat. there's a lot of new tools and products that have come out over the last three to four months. there's a lot of new stories and

shows that come out. if you look at shows it double quarter on quarter more original content. also they expanded their geographies. advertising geographies, ten countries were added, hong kong, israel in the quarter, now they have 39. so i think there's a lot more growth there again, i think it all comes down to expectations. they need to have expectations for the street that's the biggest issue here. >> daily active user growth slowed to 7 million added in the quarter. that is a.m. not a solid quarter at least for snap the last year and a half and also when it comes to the monetization of those 197 per daily active user was a lot less than most people were expecting. i get your expectation point, but also less than the company was setting up for in previous quarters >> so, it's a great point. dau is kind of the achilles heel in the story it came from 173 million we're at 174 million street i think was 175 the big issue is this is a company, when they go to a market, you need to have a very

high-end smartphone and a 4 g network otherwise the app doesn't work so, you can't go everywhere in the world, right if you go to india, they're in india, but most people can't use the app and they're not technically not in china, but they can be. alley ba ba are 5% investors today they use google cloud. they need a china cloud and they can ramp in china. i can see it in the future dau is not like facebook everyone in the world can use it not everyone in the world can use snapchat >> thinking bat to be ipo, the whole metric was going to be engage: do you think that was a fair expectation for the street? we're all talking about daus right now. >> it's a great point. they told the street one thing, but the street wants to think about it like facebook it's not facebook. this is a 105, rpu this quarter. facebook was at 473. you can see the opportunity to

expand the arpo. longer term you can get the user group. you need to open the areas they can't use the app. that is exciting longer term in the near term it's all about ramping arpo >> thank you, brian. we'll have to see if they can come back. when we come back, rough retail for jcpenney, biggest loss in 50 years rick santelli, what are you watching >> what a week we had important data, lots of geo politics and of course we had some big corrections or at least big in the context of the last couple of months. but the real thing i'm going to talk about in the santelli exchange today is after all that, i have a couple suggestions on how traders can relax. after the break. trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.

i'm scott wapner here's what's coming up. 40% of the index in a correction is your best bet to stay the course in stocks and buy the pull back. plus what nvidia's earnings mean for the larger tech trade. and snap, crackle and drop, with snap hitting a new low today, media insider ross levinson joins us live from l.a he's going to discuss the company what to do now, all of that top of the hour on the half carl we'll see you in just a bit. >> all right, thank you, scott scott wapner let's get to the cme group and get the santelli exchange. hey, rick. >> good morning, carl. it really has been an interesting, a bit wild week for

many different reasons if we look at data, we all know that there's enough horsepower in so many areas of the market, not big horsepower, maybe strong v-6. how's that no highly horsepowered v-8 with regard to data, but it didn't turn out that way with regard to the inflation day we had yesterday and today. also, corrections, we had some long winning streaks with record highs in all three of the stock market indices we did see it was a bit of a correction is it a big correction, a hiccough, long lasting today's action would auger maybe we've seen the worst of it with friday in front of weekend you never know finally, geo politics, so many things going on there and the biggest question of all, what is the true impact and how long does it last in the market place? with all this, everybody's got to be pretty stressed out out there, so i have a suggestion on how everybody who trades reads the news, or just has a

portfolio can relax. you need to watch a great movie, and not just any movie you have to watch a movie that had lots of oscars associated with it. so, as i talk to traders all week about all the things that gave them a little bit of adjective regarding markets and what they read in the newspapers this week, we did a top five list of highly oscared movies they might want to curl up to this weekend and coming in number 5, for people worried about midnight raids on manafort or whole general notion of the grand jury being called with respect to the ongoing investigation, maybe the best movie is "the sting." second, central bankers, you know, central bankers kind of rule the world in many ways. we're not sure necessarily how it's going to turnout. we just know that the current situation seems untenable in big picture. maybe the best movie would be ""la la land". finally, our own fed they don't really want to tighten. they kind of like the set up,

but they know they need a little bit of insurance things are starting to change. so, the movie for your fed watchers might be "high noon." stock marked, i'll tell you what the middle of this week and yesterday, there were people walking around, they were truly per expiring here's a suggestion. "gone with the wind." how's is that? and finally, the number one answer, everybody was nervous about geo politics what do you think, kim jong-un, the whole notion of north korea, this was the unanimous vote, "one flew over the cuckoo's nest hope everybody relaxes this weekend. we can do it all again starting monday morning back to you. >> that is a good list rick, thank you. when we return, beauty ceo will join us exclusively on the stock price.

more scott walk more sqwau alley after this.

health beauty reported they can beat estimates the stock trading right around where it opened in its ipo price last year a. little higher than that still it has been weak thisyear. we are joined in a c nbc exclusive with e.l.f. ceo tarang amin thank you for joining us >> thank you for having me. >> you posted a 7% revenue growth but there were some complaints afterwards that you did not raise guidance, tell us a little bit about what you saw and how

you interpret the stock price reaction >> yeah, you know, we don't really pay that much attention to the day-to-day stock price. our approach is we put out really strong guidance we are busy executing against it i don't that many companies with that revenue guidance. that's what we have done that's what we are executing against. >> is the point that are you making is you are managing to grow market share in aly soi slowing overall category, is that right >> absolutely. i think we grew share to 4.4% of the market up from 3.8% last year it is ability our overall consumer model and winning to the key in this category. >> give us more on the category. on the conference call you said it's going through a bit of a slow spot. we also saw that in the macy's call, for instance they called out beauty as a particular weak spot i know you are not in macy's, but what's happening with beauty trends right now >> yeah, if you looked over the past couple decades, color

cosmetics is one of the great categories, women love the category, they love the new products, the level of engagement is incredible but you will have periods from time to time where you may have a little soft spot so we saw that in late 2013, beginning 2014, where the category was flat for a couple quarters it came roaring back at the end of 2014. over the last couple years, it's been really strong we seen a couple categories, where it has been soft i would tell threw is no consumer fundament also. in fact, for us, it's a tremendous opportunity to continue to take share we appear to the core makeup enthusiasts of the category. for women, they love everything about it and we continue to give them high quality, new products, at an extraordinary value and that's a winning formula in the marketplace. >> i know the cheaper price point has certainly attracted a younger demographic. you recently announce thad wal-mart has chosen you as a key

priority brand what does that mean, exactly >> yeah so we have been if wal-mart a few years we are almost in all of their doors. what they have seen is, this great consumer that we bring in, this jung diverse makeup enthusiast, plus all the new products we bring them they really love they can see it outgrow their category so every time wal-mart goes and touches their store. e.l.f. gets a prominent placement. it's a brand that can grow their category so they've awarded us with 20% more space this year, as did target many of the same dynamics in terms of the consumers and the products we bring, including a different modem. if terms of going to market and starting an e-commerce company, our ability to take innovation, lawnch it online we have two or three launches a week, go to our retail part iners with items validated and proven they really, really appreciate it >> you've emphasized a couple times, makeup enthusiast is your customer s. that a self-limiting

this inc.? is there many or is every woman a makeup enthusiast? >> yes that's right well, we have, you know, makeup enthusiasts represent about a third of all women who use cosmetics. but they represent over half of the total category dollar sales. so they're incredibly engaged consumer and the great thing about us is we know how to engage them. we do things like our beauty scape event. where we get up and coming beauty influencers they're our best advocates in the telling products and how great they are and our ability to continue to engage them it's quite differentiated in the marketplace. >> finally, you mentioned, we talked about wal-mart and target as we want characterize the pricing pressure that's coming from some of those retail artners. >> well, you know, for us, i've we heard in the market there is pricing pressure we don't face it as much, mainly because we have such and extraordinary value in the

marketplace as it is if you think of our average unit retails are usually under $4, so we're such a relative value than anyone else that i think they appreciate our efficiency in going to market and having these great products at this great value. >> thank you for joining us today on earnings and the broader beauty music tarang amin is the ceo of e.l.f. beauty. >> thank you for having me. >> more ""squawk" ali" aftsquawr this

the markets are up the ten year is falling back pimco's chief officer making comments if north korea were to deteriorate, you could see treasuries here rally sharply. they say the cash balances are above average and have s&p puts. >> definitely a cautious tone, the ten-year yield back to its range. the soft inflation data is not working either okay, you have tech stocks, the deflationary boom stocks. >> you have to put it in the context, too, of it being august, which is a historical month, a volatile one and the market has gone up so far so fast and was looking for an excuse to pull back.

north korea appears to do that right now. >> next week is busy as you pointed out with major retail earnings wal-mart, target, t.j. max, coach, which has been doing well, michael ckors up 20%. >> people are crowding into the practicend. >> and out of the department stores. >> have a great weekend. let's go over to the "halftime report." >> and welcome to the "halftime report." i'm scott wapner the vix surging this week and 40% in the category, is your best bet to stay with stocks or take profits joining us is our panel. also with us from lake joseph, ontario, kevin ilowery, o share's etfs