welcome back to "squawk on the street," i'm dominic chu discretionary stocks leaned higher for the s&p 500 general motors giving that sector the biggest boost so far today. also check out yum brands, best buy, under armour, as well that does it for this hour of "squawk on the street. let's send it down to "squawk alley. back over to you >> thanks, dom good morning, it is 8:00 a.m. at netflix headquarters in los gatos, california, 11:00 a.m. on wall street, and "squawk alley" is live. ♪

happy friday and welcome to "squawk alley" here at post nine sara eisen and andrew ross sor again. >> the u.s. economy losing 33,000 jobs in september, with hurricanes having a major impact on hiring, while employment, unemployment rate, did see a slight drop, all as stocks continue to hit historic highs with the s&p 500 looking for its ninth straight positive session. it's in the red right now, but let's see what happens throughout the course of the day. for more, diane schawn, and ryan levet, senior investment strategist welcome to both of you diane, the market may be the bigger story here coming off this amazing stretch that we haven't seen the likes of since 1997 sixth straight record closes for stocks does the weaker jobs report, at least on the headline number, do

anything to derail the story of better growth and higher stocks? >> well, i actually think the stock market's probably reacting to the fact they think the fed may now delay a rate hike at the end of the year or in january. i still think we're going to get that rate hike, but i think there's this sort of sense out there that, you know, perhaps this data makes it a little more easy for them to have easy money forever. i think it's also important to note that the uniqueness of the storms, they are already pushing up construction costs quite dramatically i've talked to builders all over the country and materials costs, particularly lumber, has surged at the same time 70% of all builders, single family home builders, did not have enough workers prior to the crisis, so it's really going to -- all the activity is going to show more in inflation in the shelter area, which is not exactly welcome inflation for the u.s. economy. it's not where the fed wants to see the warming trend. >> i'm surprised to hear you say that about the fed the dollar's at the three-month high, treasury yields are higher, and the odds for

december are, like, 98% for the federal reserve. >> i actually think the fed is going to raise rates, but i think people are looking forward and thinking that this is not going to be as much of an issue going forward. i think there's still a lot of complacency about what monetary policy looks like going forward. they are expecting gradualism forever when we're on the verge of really a significant regime change at the federal reserve board. i think i now put in an extra rate hike for 2018 in response to higher interest rates going forward. that is not priced into the market the markets are also very much counting on a tax cut now. >> we finally saw some movement in wage growth, but unclear how much of that is, again, because of these hurricanes. how much do you factor that in when you're making investment decisions based on these numbers? >> i think we do want to -- the move in the wage growth has been a trend. we've been on a gradual rise up in wage growth, so that's a good sign, good news for the consumers and households

this is what we've been waiting for for a long time as the labor market has gotten tighter. the federal reserve may raise interest rates in december, but they do need to proceed with some caution we're still only at 2.30 something on the ten-year, we don't have a lot of room before we flatten the yield curve so at this part of the cycle, what we're focusing on is where does growth exist. growth is reasonably good in europe, reasonably good in the emerging markets, so we're focusing strategies there, and within the united states, focusing still more on growth. if you get stimulus, then you'll shift more >> brian, is the story now a bet solely on the fed, or do you -- how much more multiple expansion can we really have, and what are comps going to look like a year from now >> that's why the story about the dollar is so important, because when -- if the dollar is weak to stable, then corporate earnings should continue to look good in the united states, which companies can grow into their multiples. if the fed gets too tight and

the dollar starts to depreciate significantly on expectations of higher growth that we might not deliver -- >> you say grow into the multiples. you don't think the multiples have room to move higher from here doesn't this feel like -- >> we're high compared to average. we're reasonable compared to other alternatives stocks are still into bonds as they have been for some time here, so i don't think that valuations are necessarily a very good indicator of short-term performance for the market might point to an intermediate longer term time period, but doesn't mean this cycle is coming to an end >> diane, you spoke about a regime change on the federal reserve board. what sort of implications does that have for the markets? >> well, this is something that's not priced in the markets. it could happen very gradually given the appointments that we've seen, but the deregulation in terms of who's being chosen, they are favored for deregulation, financial sector is personnel driven, they are picking people who are likely

going to be deregulating and not enforcing regulations from the fed's perspective as much as they have in the past, but what that means going forward is also it's no free lunch all the people that are in that category and that are currentl being looked at are really tend to be people also want to raise rates more rapidly and reduce the balance sheet more rapidly i don't think it's going to happen to the latter part of 2018, but i think it's something the market has not gotten its head around yet. i also think it's important to understand some of the ripple effects, although puerto rico is not included in the national economic data, i would take issue the wage data was boosted billow wage workers falling out this month, wages have decelerated recently, something that concerns many at the fed, but we are going to also see likely this very large migration from puerto rico, into the mainland, which will show up in the data over the next several months that will be a lot of low wage workers showing up in states and it could be quite significant numbers, and i think that's something it causes inflation,

because they need shelter jobs, schooling, health care, but until they are absorbed, they don't get jobs and they are also adding to the labor force. something needed and, i think, will be absorbed but that's going to be another distortion coming forward in the next several months >> brian, given that we were just talking about shortage of, yes, materials, but also labor at a lot of these places could an influx of low-skilled workers from puerto rico actually be a plus in the medium term? >> well, sure. i think we want to be careful when looking at the inflation numbers that we're not looking at transient things and setting policy based on transient things, shortage of materials. it's precisely why the fed is looking at a core personal consumption expenditure than a headline cpi number. but the reality is, we're still in a -- we're still in the same situation that we've been in for a long time in the united states, which is reasonable growth, not significant

inflation, and as long as that persists, we should expect the markets to continue to trend higher and market volatility to not be substantial >> all right, we'll leave it there. good discussion, guys, thank you very much, brian, and diane. always on the jobs day when we return here on "squawk alley," is netflix running away from the other stocks early netflix investor and foundation capital investment paul holland joins us with the latest in the streaming wars and the stock moves. and a quick programming note, be sure to tune in tuesday. we'll be live from cincinnati with p&g ceo david taylor, an exclusive, as soon as that proxy vote, highly anticipated, becomes official more "squawk alley" coming up. post nine is sponsored by fidelity investments at fidelity, 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.

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welcome back to "squawk alley. with us now to break down some of the day's top headlines, paul holland. paul, thanks for being with us happy friday first, netflix sharpening its fangs. the streaming giant up 5% yesterday, even after announcing an increase in its subscription prices and the wall street journal saying netflix is breaking away from the fang stocks, outpacing the pack 85% in the past year. paul, foundation was an early netflix investor you've worked closely with reid hastings in the past

is this company's potential more like a comcast, because they bill directly, they have this direct relationship with the viewer, or is it more like a disney and what has to go right over the next few quarters for this valuation to make sense >> well, i think you're asking great questions around that. i would actually have you think about this differently i don't think they are like anything we've seen before, from that perspective so think about -- go back to 1999 when my partner made the investment in netflix when the company was, obviously, very tiny at that time what we're looking for are, size of market, strength of the idea, and then the strength of the team so what we saw was a math market, the entertainment market, i don't know how to estimate that, is it a trillion dollars? we said this notion of disintermediating the current players and creating a direct connection to the consumer over the internet was going to be a very exciting idea, which, of course, was the original thought

of the company, then we looked at the strength of the team, as i mentioned before, i think it's the best management team on the planet, best ceo on the planet, so you combine those things and i think you're seeing a lot of reasons for the breakout that we can talk about, but it's that fundamental nature of the quality of this investment and then where it's gone has been extraordinary. >> but at some point, paul, do they have to pull an amazon and start a different sort of relationship with third party content, sort of in the way that they used to when they were the next blockbuster and that was the big hope for them? or is the model just really, you think, going to continue along this original content line >> so, i ask people when you think about netflix, i'd say because people tend to look at it and say, wow, look how much it's appreciated over this time period, i think of it this way, start with a clean sheet of paper. forget about where they are today and simply say, okay, what is the size of this market worldwide, and then what percentage of that market does

netflix now own with the approaches they've taken into the market, and look at the trend line of what percentage of that market that they've owned over the last, say, ten years. of course, the trepd line is strongly up to the right and you have to come back and argue to me why that trend line's going to change. why is something going to change when they've been number one, most aggressive, most ambitious, and achieved the most in terms of that. from what i can see, the market's larger than people estimated and their approach to it has been far the most superior >> well, one argument could be that the cash burn is great and they are spending so much money on original content. what did we learn this week, $7 billion potentially. and that's worked as long as they continue to add worldwide subscribers, but if that slows down or doesn't live up to investor expectations, wouldn't that stop the stock in its tracks >> so, sara, it's a very good point. that point has been a debate point around the netflix stock for a long time. we helped take the company

public back in 2003, and i don't remember if you remember this, but the market cap at that point was $350 million at that time the argument netflix kept having was you're spending too much on marketing, you're spending too much money, and reid's argument back was, you don't understand the size of this market. you just don't understand the size of this opportunity and if you go back to john's original point we started this with, what's different about netflix compared to the other fangs? it's a subscription service, it's pure heroin, it is money coming directly into the company. it's not a let's float this out there and run some advertising, see how we get the hit rates, see how we can optimize that, how the advertisers work around us, whatever it happens to be. it's a direct relationship with the consumer, it's a fantastic one, and one they have continued to exploit >> paul, when you think long term for the stock to be worth what it is today and perhaps what it's worth in the future, are you betting they either have to scale back how much they are spending on content or at least for it to not grow the same way?

are you a believer all this money they are spending on content is working as efficiently as it should >> i'm definitely a believer that the strategy they've taken around content so far has worked well the point i would have you and other people who think about the netflix stock think about is just the scale of the market opportunity. so think of it this way, foundation capital's invested in about 200 companies over the course of our history. netflix is on the way to actually equaling or exceeding the value of all the other 199 companies we've invested in that time period. and the reason is, the scale of this market opportunity, the strength of their solutions, and the strength of their management team as long as you have that, then you're just going to continue to grow there's no inherent barrier to them to grow i don't know what their proportion or their portion of the global market for entertainment is today, but i bet you it's pretty small and if i'm betting, which is what we do at some level, do i think they are going to have a chance to grow substantially from where

they are today in terms of portion of that market i think they will. >> well, congratulations on that call, by the way next up, big tech facing increasing political pressure. facebook, twitter, google, all asked to testify in public hearings before both the house and senate next month for their role in russian interference in the 2016 election. paul, tech pressure seems to be the new valuation conversation we're having a lot, but what do you think are the most likely legal or regulatory outcomes from all of this and what could the downstream effects be on some of the companies you're investing in? >> so, like many of these things that occur, once they hit sort of page one and they become part of the popular consciousness, they tend to be overstated from the value of the companies themselves so, yes, facebook and google and other folks will face political pressure because, of course, they have become essentially the mouthpiece of people's opinion

they've become this marketplace of opinion, and it's extraordinary. obviously, all the things that have been brought on by the ability to be able to communicate thu the internet have been an amazing blessing and at times also a difficult curse, so when i look at something like this, what i guess will happen is we'll see lots of press coverage, lots of concerns, gloom and doom around this could happen, that could happen at the end of the day, those businesses are very, very healthy underlying businesses, and as the internet penetration begins to grow across the country and across the world, i see a tremendous amount of growth opportunities for them. as they grow and mature, i mean these are companies sort of in theiradolescence at some level when you think of them some of these companies are less than 20 years old. as they grow they are going to have to become mature when they think about regulation, these are just part of the growing pains the companies go through and i see nothing unusual in that >> paul, i remember a time when it felt like silicon valley and

tech writ large could largely avoid, ignore, washington. with the exception of microsoft here and there, there wasn't that much lobbying going on. how much has that changed? >> well, i think it's changed quite a bit. i think it's changed for the reasons that we've cited here, the public consciousness, the things that tend to happen around the internet, both in terms of commerce and also free speech now when we saw just the perversion of the entire election process, which is so dispiriting for people, and then they want to look and say, okay, what are the reasons that happened, how can we make this better in terms of going forward in the future, the way i've always looked at it being out here for the last 33 years and an amateur historian on the valley as a whole, we generally just don't want to be bothered like, please just let us keep producing these companies that are hiring all these people and creating all these new opportunities. but at the end of the day, there's a tax of sorts that has to be paid, and part of that is you have to stay within the regulatory guidelines and stay

within the civil guidelines. >> it's a price of success when you get those big wins, suddenly you're a part of it. paul holland from foundation capital. thanks for joining us. >> thanks, everybody and coming up, artificial intelligence often blamed as the cause of fake news, but can it be the antidote? but first, the fall of harvey xu hasenn, the latest on the sealarsmt claims against the infamous producer. more "squawk alley" after this ♪

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welcome back to "squawk alley. check out costco, right now down by more than 6%, near the lows of the session it's leading the consumer staples sector lower this morning and investors are concerned over a drop in some profit margins, despite a profit and sales beat overall also check out, of course, what's happening with the entire sector there so, andrew, costco indicative of certain stocks in the marketplace. we'll see if the competition stiffens up in groceries

back to you guys >> thank you, dom, appreciate that mean time, "the new york times" breaking stories on decades how accusations against harvey weinstein. our own julia boar stin joins us with more. good morning >> good morning to you, andrew the weinstein company's board convened for an emergency meeting of the company's future after harvey weinstein has been alleged of decades of sexual harassment "the times" reported he's reached six arrangements with women, including one with actress ross mcgowan this article describes misconduct, eight women, including ashley judd, showed stories of weinstein appearing in a state of undress or asking for a massage. weinstein said he'd sue "the times" for publishing a story saturated with false and

defamatory statements, but weinstein, who's taking a leave of absence, undercut his lawyers' denial and statement saying, "i appreciate the way i've behaved with colleagues in the past has caused a lot of pain and i sincerely apologize for it." weinstein defined specialty films in the 198 0es, then after selling to disney in the 1990s, pulp fiction, good will hunting, shakespeare in love, among others winning in the box office the studio has also suffered from a string of disappointments. many sources telling me that women are speaking out now because of weinstein's power has diminished as the industry has moved away from his category of mid budget specialty films and television and streaming shows have risen in prominence back over to you >> before you go, couple quick questions. we have brian lowery from variety on "squawk box" this

morning and he talked about potentially fallout at disney. do you think when you go back long enough there's any liability on the disney end of all of this. >> well, you know, he sold miramax to disney, then left miramax and now it's a totally independent company, so it sounds like disney probably wouldn't i'm no legal expert on this, but it's been many years since either he's been at miramax or miramax has owned disney >> right, and just to connect the dots, in terms of we know, obviously, weinstein's company is a privately held company, however, there are other investors in that company, right? >> yeah, there are a number of investors. the key thing to point out is the weinstein company is partnered with a lot of other companies in terms of distribution if you look at big box office numbers, you know, they distribute their own films here in the u.s., but partner with a lot of foreign distributors overseas, so we have connections with a lot of different companies, but they are,

themselves, a privately held company based there in new york. >> julia, "the l.a. times" describes weinstein as a man who can make and break careers whose power has sometimes seemed infi nit and resulted in numerous oscars just curious what the reaction is to the story out there. >> you know, i was talking to a number of hollywood folks last night, both executives at studios, as well as independent producers, and i think that harvey weinstein is a larger than life character in many ways, but i do think that his prominence, his power, has diminished in recent years and part is just the trends of the movie industry if you were a rising starlet 20 years ago, he had the kind of power that few people had to make or break a career now things are different television is a lot more powerful than it ever was before you could have a role on a netflix show, produce a netflix show or amazon show and get exposure in a way that you

couldn't even ten years ago. so if you look at how powerful the films were, times have just changed. >> julia, is anything going to change from this i was shocked to see the story, but not shocked at the substance of it. almost a cliche now, the idea these producers in hollywood go around and do this sort of thing. is there something about this story that's going to lead to some kind of change? >> well, you know, this is just one example of many stories about sexual harassment that we've seen we saw with roger ailes at fox, seen a number of these stories coming out of silicon valley, so i think the question is whether women will just feel more comfortable in general this is not, you know, isolated to the movie industry or even tech this is, obviously, everywhere, and you have to hope people feel more comfortable coming forward and men start behaving differently. >> julia, do you think ultimately the weinstein company or harvey weinstein can come back from this one of his great talents was in

taking these independent films because of the good will he had with hollywood, his ability to get oscar buzz, to create all of that sort of award buzz in part because of these relationships, is there a way back? that's why, you know, certain directors and others came to him with their films >> yeah, i think you're right. look, harvey weinstein has come back many times. i did a story on cnbc about ten years ago about the financial troubles that the weinstein company was having in its early years, so he's had many waves in his sign curve of success, so i think he does certainly have a chance, but what's most likely to happen is he'll probably get pushed out of his company and his brother bob weinstein, who's co-chairman with him, will likely run it with some other executives, and they'll try to maintain, you know, the momentum, making these lower and mid budget movies and partnering with foreign distributors, but it seems harvey weinstein will

be pushed out, based on at least the reaction we've seen so far >> yeah, and have a big legal fight on his hands, too. julia boorstin, thank you for joining us to discuss this big story out of l.a. today. now to sue herrera with the news update. good morning >> good morning, sara, good morning, everyone. here's what's happening at this hour the trump administration and the department of hhs are finalizing a rule to change contraceptive coverage they will exempt entities with religious and moral convictions from the contraceptive mandate places like little sisters of the poor will no longer have to provide contraceptive coverage former arizona sheriff joe arpaio is speaking out following a court decision earlier this week to accept president trump's pardon he thanked the president, but says he never asked for the pardon and has not spoken to the as not spoken to the president in months. carolina panthers quarterback cam newton apologizing for a remark he made to a female reporter on wednesday.

he said his word choice was extremely degrading and disrespectful to women >> after careful thought, i understand that my word choice was extremely degrading and disrespectful to women and to be honest, that was not my intentions. and if you are a person who took offense to what i said, i sincerely apologize to you >> the parent of danlin yogurt cut ties with him because of that remark. let's get back downtown to you, sara, back to you. >> so weird. what was his intention anyway, sue, thank you when we return, that exclusive interview with imf managing director christine lagarde, including her take on bitcoin and regulating big tech. >> clearly, revenue needs to be contributed by those companies where it is contributed,ow i ht is defined, how intellectual

property is going to be used

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imf managing director christine lagarde laying out her policy agenda. i got a chance to sit down with her for an exclusive interview yesterday, asked about the increasing regulatory and political pressure on big tech everything from taxes, to fake news under the microscope. i asked whether companies like google and facebook actually deserve more regulatory scrutiny >> i think the way in which they

operate and the value that they generate the activity from needs to be looked at, and i hope this can be done in cooperation with them you know, value that is driven by data, information, consumption, that we volunteer in a way without really us knowing about it determines the value of what they can offer in terms of services, and, clearly, revenue needs to be contributed by those companies. where it is contributed, how it is defined, how intellectual process is going to be used as a basis to allocate revenues and base taxation on, all these things are being -- need to be reinvented, and i hope that dialogue takes place, rather than, you know, harsh, adversarial debate >> have they become too powerful >> competition law is there to

actually deal with it. >> i wanted to also ask you about your comments which made a lot of waves last week on bitcoin. said could ultimately give central banks a run for their money. so with countries like china and korea this week cracking down, is that a mistake not to embrace it >> you know, what the chinese authorities have decided is to just ban the initial offering of bitcoins, and i think they've done that on the basis of the analysis that it was at least strongly dominated by, you know, speculation and ponzi-like schemes. which is certainly showing that they are paying attention. you know, when you look at a country like kenya, for instance, where transfers, where tax is being paid totally digitally, when you look at the way in which, you know, some civil servants are paid also totally electronically and without leakages in the system, as is the case in some of the developing countries when i look at my own country, where, you know, all

transactions between my com patriots and the treasury department is all on now digital support, i think there are massive changes taking place at the momentwhich everybody need to be attentive to >> would you ever buy any for yourself >> no, i didn't, and it's too expensive for me at the moment >> christine lagarde headline, bitcoin is too expensive at the moment, but seriously, her comments about the new digital economy and payment system and phrasing that off of the question about whether central banks and governments should embrace bitcoin, to me, is a very powerful statement from the head of the international monetary fund, especially in light of some other recent comments from big bankers completely dismissing the idea as a fraud >> jpmorgan thinks it's a fraud, bank of america thinks it's a terrible idea. we talked to a senior official there. goldman sachs may be trying to create a market or mining it or

who knows what the plan is everybody is coming on a different side >> she really raises an important question, though, around how taxation needs to change in this digital era you've got huge companies like google, facebook, they don't make stuff like old manufacturing companies, everybody knew how to tax those. who has the convening power to bring those companies and others to the table so they don't end up saying whatever proposal the eu has or u.s. has, whom ever, is unfair. >> i think also the point on privacy is related in that it has to be looked at and it has to be, i think, her point was in conjunction with the companies and not just regulators starting to put new rules and stricter sort of laws around this >> right >> let's try to figure this out. >> yeah, taxation not the only thing changing in this digital era. in the wake of the shooting in las vegas, tech companies are coming in for a lot of criticism for spreading misinformation can artificial intelligence put an end to such fake news

josh lipton is at one market with that story. josh >> that's right, john. so the massacre in las vegas once again highlighting a serious issue here, false information posted on facebook and google's platforms on facebook's dedicated safety check page for the vegas massacre there was a misleading article alleging that the suspect was an anti-trump liberal. facebook manually removed the post then there was google, which included threads from a message board that identified the wrong person as the killer google tells cnbc it's investigating ways to improve its algorithm. in order to weed out misleading and offensive content, companies are beefing up a.i. efforts. one way to do that, by the technology over the past five years we've seen big tech busy picking up a.i.-focused startups. google has been the most active acquirer with 12 acquisitions under its belt facebook has bought five, while twitter has purchased four

mark zuckerberg says his company isn't just focused on algorithms he's also hiring people. 3,000 on top of the 4,500 he already has to help fight offensive content and building tools to make it simpler to report problems with posts same for google. earlier this year the company said it would hire significant numbers of people to review questionable content and it would build new tools powered by the latest advancements, it said, in a.i katherine boyle of general catalyst says a.i. can't put an absolute end to fake news and damaging content altogether. there will also be bad actors, often sophisticated ones, but a.i. can help to contain the spread of such information, but only when used in conjunction of human editors and fact checkers. guys, back to you. >> i think we're going to continue to have that debate josh, thank you. coming up, a new report on big tech's online advertising. but first, rick santelli, what are you watching today

>> you know, i'm watching response in the market, maybe not equities as much, but definitely in the fixed income area after the data. a lot was about average hourly earnings on a year on year basis they are up 2.9%. the best since '09 i'm scratching my head i want to figure out where that came from and we're going to have ken rogoff on in a bit and maybe 'll pln w atheexaihoth number got so powerful

well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade. not rebalancing your portfolio. focused on what you love, not how your money will last through retirement. we make it easier to plan for retirement with day one target date funds from prudential. look forward to your 401k plan.

welcome back to "squawk alley" this morning. new note on internet advertisers and it is not looking good for snapchat and twitter i want to bring in mark mahaney to break it down for us. mark, great to see you help us try to understand your take and as i just said, why it isn't going to be so great for snapchat and twitter >> okay, thanks, andrew. their dollar allocations to different advertising platforms, their intentions, future intentions to spend and roi perceptions and with twitter and sena snap chat, those came out weakest, and then mixed signals in terms of advertiser intentions in terms of spending more or less, both actually saw a decline, particularly snapchat in advertiser interest and spending more on the platform, so if snap doesn't reverse that, hard to see how the stock or the

fundamentals would work. >> you look at snap right now, what's your price target on that company? >> look, we have a buy on the stock, we stick with it, you know, one quarter -- one six-month trend resolve doesn't change a thesis for us, but if we were to solve this for a couple of quarters, that would cause us to downgrade the stock. it's been a good lead indicator, very negative for a substantial period of time on twitter and that came through. twitter is the only company that's showing revenue declines, obviously, something wrong there. our advertiser survey got ahead of that. flip side, if you look at facebook and google, the advertiser results are incrementally more bullish and positive, especially on roi, where we know pricing is going up if roi perceptions are relatively neutral, that's a good position for facebook to be in that means pricing can rise, but advertising see compelling roi there. very bullish for a facebook. >> mark, did you see anything in the survey results that suggested advertisers are paying attention to this political

blowback and some of the attribution issues with these ad platforms? do they care at all, or is it just other things, the bottom line they are focused on >> i think it's the bottom line, john i remember 12 months ago we were debating whether the controversy over facebook metrics and they had to rereport some metrics, whether that would push off advertisers. we didn't see it we haven't seen it no change in advertisers perceptions of roi on these platforms or intentions to spend and they keep allocating more budgets, so i don't think there's -- i'm skeptical we'll see a real advertiser change in mind because of the political blowback >> mark, if you could own google or facebook and you could only own one, what would you do >> facebook. i don't think there's any question about it. it's cheaper on a growth adjusted basis survey results are incrementally more positive on facebook, and they've still got the great unmonetized assets so does google with cars, but

that's five to ten years out with facebook you may have really something five years out. those are the messaging platforms, this what's app they have survey for the first time we looked at amazon and that was one of the big surprises that's really rising as an advertising platform watch out for that one >> okay, mark mahaney, appreciate it, thanks so much. >> thanks, andrew. >> you bet >> mark mahaney actually answers the questions, i love that >> he does coming up, former imf economist ken rogoff is going to join rick santelli for a special santelli exchange. stay with us that's the beat of global markets, the rhythm of the world. for most, the cadence of today. to us, the pace of tomorrow. it's people and machines uncovering opportunity. cloud computing providing endless capacity. blockchain making transactions safer and faster.

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going to take you over to the cme now and rick santelli with the santelli exchange rick >> like to welcome my special guest dr. rogoff he owes written and done so much research on really northern things like debt, but before we get into that i would like to ask you, doctor, you saw the number today i know it's hurricane-affected i know that we're between a household and the other you is vais things are had a little crazy, but what jumped out at me was the huge jump in month-over-month and year-over-year earnings, especially at 2.9. that's the best since 2009 any thoughts generically on the report and specifically about earnings >> it's hard to know if there's some technical issue having to do the with you are who inca and a something else on the one hand i would like to believe this we've all been puzzled beyond belief that it hasn't happened

until now, but i'm not sure that this is real i don't know that we can see that for another couple of reports. wouldn't go dancing for joy yet. >> all right you know, when is it comes to things like productivity and groves and how all of those issues are affected by debt, you weren't a real popular guy after your book is different during the last administration. you're really popular now. it seems like both sides of the aisle politicize everything whether it's the debt ceiling, whether it's extensions, and specifically about stimulus that creates debtor policy that creates debt you're very apolitical, i appreciate that. is debt dragging all growth down, and can any country, specifically the u.s., reach a case velocity especially with such a huge debt load? >> interest rates have come down more than the cbo or anyone

envisioned years ago and if they stay down you can sustain more debt the u.s. borrows relatively short term if you integrate the federal reserve i would feel a little better about it if they stretched out the maturity of the debt, the duration of the debt i don't think it's a short-term crisis, but we're, you know, certainly on a fast train to get to 100% of gdp net on debt, and, you know, it's not that easy to turn around if interest rates do go up. i don't think it's a big short-term problem, but over the long term it is, and, of course, the high levels globally, particularly in europe, probably are a drag on growth >> okay. now, to that end, you brought up interest rates of course, anybody, all your viewers out there, whenever you've had debt and to service the debt and the interest rate increases if you have a floating debt where you pay a lot over libor or some short rate, we understand that can be painful, but it seems as though the

management of rates lower certainly masked for many how many debt was being created. now that rates are going to potentially move high, and we'll have to wait and see, and there may be less managed rates by central banks, this is a real conundrum because servicing the debt is going to eat up a lot of the discretionary parts of the budget that are getting smaller and smaller every year >> well, there's no question that the biggest risk period in the global economy today is that something, it's not going to just be central banks, pushes up the inflation-adjusted real interest rate. if it's fast growth, the areas that are getting the fast growth will be fine, but there might be places like say italy, which hasn't grown for a long time or some emerging market, possibly china, possibly japan, which is going to have a problem with this markets don't detect any big risk i think even the central banks

have been going down and down and down on their estimates of what real interest rates are, but it's a risk. it's in every asset. it's sort of the mother of all risks at the moment. >> all right final question, we don't have a lot of time left, and i've been really excited to ask you this question do you have any preferences or notions in any direction about the next chairman of the federal reserve and how important do you think that person will be in the grand scheme of trying to reverse and get more normalcy back in the marketplace? >> well, i think the fed has been doing a fine job, first of all, but i don't know what's going to happen next i worry the most, not about the person, but about how independent the fed is going to remain you know, will suddenly the fed chairman be like rex tillerson where they are getting stabbed out all the time, feeling undermined will trump file people in in the first appointment he made, you

know, was in randy quarles was encouraging, but, yes, i worry about the dynamic between the fed chairman and the president the people being discussed though are pretty reasonable and keeping fingers crossed. >> excellent dr. rogoff, thanks for being my guest. always a pleasure. sara, back to you. >> thanks, rick. does the nfl have an attendance sflob why the widespread national anthem protests are having an effect on ticket sales. more after this.

welcome back to "squawk alley. widespread national anthem protest having a big effect on nfl ticket sales and attendance. our own eric temmey is here and has the latest on the story. >> reporter: after the last weeks of controversy we so a 2% decline in ticket prices going into week five of the nfl season compared to week five last week. think about it, the first three weeks double-digit growth and week four was basically flat, up a little bit, when they were kneeling and here we are in week five down 2% so it's the first negative move in ticket prices we've seen the whole season. >> and we're ascribing it to taking a knee. >> it could be a knee but could

be bad matchups and bad teams in the big markets like the giants, could be the weather, but this is a clear trend it's gone down in a straight line, and that's the big driver so far. >> how much does it fluctuate? were you able to look back historically and see whether this is typical? >> you take a look last year and would you see a double-digit increase or decrease depending on the week because that's matchup related and you didn't see something last year where it went straight downhill. >> what about rateings what's the update? >> ratings have still been soft, still down single to double digits depending on the time slots. >> are we hearing any kinds of changes on the owners' side? >> the owners don't want to fight the president. it's not good for president and you're seeing that with ticket prices and attendance. they might get everyone to start standing the rest of the year. >> is there anybody winning i wonder in this situation the president's approval ratings not skyrocketing ticket sales for in stadium, the ratings, everything seems to be going down. >> i don't know if there are any winners. maybe the media talking begun it. >> talking about the story. >> talking about the story. >> eric, thank you

a quick check of the market, guys looks like we're talking a pause after what was a pretty incredible winning streak, the best since 1997, six days of record high closes. >> i'm glad to be with you on this -- on this day. >> fun having you. >> fun to see both of you. >> got the whole crew here. >> you're too tall for this shot for me. >> that ends it for "squawk alley" and now also at post nine, scott wapner with "the half." and welcome to "the halftime report." i'm scott wapner live from post nine at the new york stock exchange on this friday. our top trade this hour, rally watch. why stocks continue to climb higher and whether there is any end in sight for this record run. here on set with us today josh brown, stephanie link, jim lavanthal and erin brown is here, head of asset allocation with ubs and also with us from minneapolis is peter najarian. beginning with the markets, the s&p coming off an eight-day win streak, slightly lower today, it as you can see