good morning it's 8:00 a.m. at apple headquarters in coopertino, 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ good monday morning. i'm carl quintanilla at post nine at the new york stock exchange kara swisher is with us to talk about tech at large and specifically apple, kara shares of apple under pressure on a report that company is

cutting the first quarter iphone production in half that is according to japan's nikkei news service which says apple told suppliers about the plan citing slower than expected holiday sales. we've been down this road before, kara regarding the nikkei and unnamed sources difference this time is it's going into some pressure on the stock already. but how seriously do you take this >> well, i don't know. i think we'll have to see. i think the question is if these phones are too expensive we talked about this before. this screen on the phone i think is the focus of the article. this screen that is just much more -- a big component of the price. and whether this phone has rolled out globally. i mean anecdotally, a lot of people -- i have the iphone 10 but a the love people i know oment opted for the 8 because it is cheaper, they like the format. i think what is most interesting is they may not keep making them after september in this fashion. which would mean a failure of the iphone especially if it was, you know, they hit will below 20

million in the article versus 40 million phones sold. still a very big seller of phones but not what they expected and not the turn around like the new fresh look they wanted >> kara, we have to point out nikkei and the supply chain rumors in general have been a really poor indicator of what apple is going to report or even what is going on at large in iphone production. and tim cook even warned, hey, taking a look at one little sliver of information doesn't necessarily give you a broad look at what's happening in the iphone ecosystem i look back a couple years ago and the 6s came out, the stock went from $120 to under $100 a share on the kinds of rumors didn't recover until july of the next year. turns out wasn't so much to go on >> absolutely. that's the problem with apple. there is this whole bunch of suppliers that sort of they get affected by whatever apple does. it just cascades from one to the other. and so there's obvious

nervousness on behalf of the suppliers in terms wlof what is going to happen and what apple is going to do from the screens they're going to use and components they're going to use. so you'll have to wait and see what apple says about these things the nervousness about this phone, i think, is very obvious to a lot of people they're not sure what to think about it so you probably seeing an overreaction here. and at the same time, you know, i think people are watching very carefully to see if this phone does as well as apple had hoped it would do. >> kara, i realize there's a lot of focus here on the iphone 10 and for good reason, especially when you look at the hefty price point. if people are opting to buy eights instead of ten's, shouldn't the focus be on margins? >> yeah, i think apple had very strong products this year. the question is which direction they're going in a the love the accessories have been very popular, the watches

as we talked about before are not as popular i think the focus is this need for apple to keep innovating and introduce new concepts and new things i think with the price point, now they've done this before by removing things from laptops and things like that they thought people wouldn't get used to and people do get used to. i mean i think it's the shift in the design of the phone which is probably got a lot of people focused really heavily on this particular phone and whether people are going to shift over from their old paradigm to the new one. with apple, they usually do. they usually do because people follow apple products. and so we'll see >> speaking of apple products, kara, of course the home pod is now available for purchase we'll see it in stores soon. some of the reviews this morning, walk around in the room and you never feel like you're leaving the sweet spot wired says on a first list, not enough punch for the price have you tried it? what are your expectations around this late arrival >> i have. right now i have the echo in my

house. i have two of them actually. i have the google home i don't have the apple home pod. i plan on getting one and then i'll be fully monitored so all the companies can know exactly what i'm doing in my home at all times. i think they're a little late to the party here how much functionality do they have and how much use -- you know, i think om doamazon that'e an amazing job getting ahead of these companies and google put a lot of marketing might over this i don't know if you saw all the ads over christmas it will be a tough market. apple has to differentiate themselves by high quality, better -- just better, essentially. they've done that before again this is a very typical apple play they don't come in right away. they come in afterwards. the question is -- i haven't used it so i can't say it. these things have to be a lot better if they're going to beat an alexa >> all three in one house? that's like trying to call your kids isn't that dslike alexa, siri,

google >> i don't know why i can't call them names like barbara. and maybe jon fortt, can you get me the recipe for or something like that. that would be really nice. yeah >> my life -- my wife would like that too >> kara, don't go too far away social media companies under fire today after this explosive report in the "times" on the business of fake followers our julia bore ststin is watchig this story >> kathy ireland to ray lewis, even a twitter board member. behind those inflated twitter followers, a company that sells to 200,000 customers now twitter announced they overestimated the monthly users by millions for three years shooting back that it estimate

that's no more than 5% of the monthly active users are false or spam acts the tactics united by devumi violate our policies and unacceptable to us we're working to stop them and any companies like them. this is prompting the new york attorney general eric schneiderman so launch an investigation into devumi. even mark cuban with nearly eight million followers on twitter weighing in on twitter saying it's time for twitter to confirm a real name and real person behind every be account and for facebook to try to get far more stringent on the same i don't care whether the user name is but there needs to be a single human behind every individual account now despite this report, twitter shares have moved higher this morning. they're now up about 2.5%. this follows on gains friday on reports of a new video sharing feature, lessened concerned

about the coo departing. analysts tell us that some chatter last week about m & a could also be driving the shares higher back to you. >> all right shares are closer to 25 once again this morning julia, thank you kara swisher, any chance that cuban's recommendation gets put into practice? >> you mean mark with just eight followers rather than eight million? i think this issue has been something that we talked about a lot. the abuse of these platforms, twitter most particularly in this case, bots being used and abused and being useded to show grow growth that isn't there and people can pretend they have more followers or market things. this is an on going problem that we talked about again and again and again this "new york times" piece is great you get more specificity about who these people are and how they operate this has to come off their platforms. this is not a way to do business i think twitter knows this so do the rest of them

these, as i've said before, it becomes a cesspool of marketing, of all kinds of things it just doesn't help their business i don't know if they have any choice not to do such a thing. same thing with facebook they have to control their content. they have to better manage their platform and better anticipate problems same thing with youtube and same thing everywhere around the internet this is a real problem >> kara, isn't it a bit manchester city that twitter -- -- isn't it a bit interesting that twitter says that they're shocked. anybody can see on twitter, i'm not paying for any followers but probably 10% at least of the followers are fake i can tell by the pictures and the odd stuff they tweeted in the past if anything and then facebook when they started off, they were all about real identities. you saw them back away from that gradually over the past three or four years can they really act like they're reclaiming ground when they

clearly gave this up on purpose? >> you know, i mean that's the thing. it's all been about growth it's been about growth and showing growth to wall street. that is the game they're playing. no the quality businesses. and they do have quality businesses and they can't -- i think -- i can't imagine a good business reason to allow this to go on. you know, it's sort of like in the old days, fake newspapers circulation where they drop off newspapers and then throw them out and things like that this is not a new thing. by the way, this story is not new. everybody knows the problem of bots on twitter. everybody knows of the problem of anonymousness on line and writ goes. it goes from what happened in the russian meddling in the election or plain old marketing, just a marketing mess on these things actual marketers trying to attract clients or people to use their products don't want to be part of it because it's such a noisy, spamy awful place i just -- this is a critical problem for these companies to take responsibility.

i sound like a school mom all the time i've been doing this for a year now. they have to take responsibility for the platforms and act like they're media companies whether they're media companies the old school or new school or whatever they cannot tolerate this even if it means short term problems around growth. it's just -- it doesn't make any sense to build a business on this kind of stuff >> and quickly, kara, i know we have to wrap this conversation up you mentioned wall street. does wall street need to get away from paying such close attention to those user metrics? >> they are key. i mean, you know, they got -- they're all lying to each other about this it's just fine this they want to lie to each other. these are not -- this is not the way to build a business. and so if you want the sustained long term business that attracts advertisers of quality, this cannot continue. and, you know, it doesn't end. its into n its not just russians, it's isis and spam it's a user experience that is poor it's not just twitter, it's the

entire ecosystem of these communications companies, the social media platforms and at some point they're going to get regulated or people just are going to stop using them and that just doesn't seem to be a long term outlook that they need to have in order to continue at this point, i think. but that's just me the school mom talking. >> we've been saying this for a while, kara. >> we have >> we'll see how much developed. it's good to you have back talk to you soon >> thank s a lot. >> now to the deal news of the morning. green mountain and dr. pep wi pepper-snapple agreeing to merge. we have more with david faber. >> $103.75 the special dividend going to be paid to dr pepper

shareholders and they'll own 13% of this combined company for its part, they're owned by jab is going to be merged into that company you'll get a share of newco if you're a current dr pepper investor jeb will control this investment they're taking the leverage ratio, that is debt on the company, and talking about $600 million expected synergies by 2021 i did ask bob gamcourt, the current ceo, he'll be the ceo of the combination, exactly wlhat the benefits are in terms of that synergy numbers are specific to how the product will change >> if you think about how bench brands are born, they're born in small outlets, vending convenience. they buy one bottle at a time. that's hard to do. you need a very, very sophisticated distribution system thats exactly what dps has so we're able to match that with

our strength which is in that decisional grocery >> and they are talking about simply wanting to be where the consumer, wherever the consumer wants them saying that this deal was in the initiative was undertaken from a consumer speshgtive, particularly, of course, given coffee is growing and carbonated beverages are not. people close to the deal who helped construct it tell me tax reform did change their view on that again, given where we are right now. they do expect the deal to close in the second quarter of 2018. and, again, you'll have 13% of it trade publicly but largely creating a private $11 billion beverage giant both with the machines and in the cold case and in a lot of different ways >> can you break this down a little bit more if for me how much are we going to see some of the difference brands

that are not tied to dr pepper snapple particularly enter the fray >> they're not part of the deal per se but they will use the distribution system to some extent is the way gamcort seemed to indicate to benefit them to get into stores that they're not available in and competing with the likes of starbucks prepackaged coffee drinks, for example. so there will be some of that. but you're right, there are a lot of beverages under the j.a.b. tenlt, penara the most recent. >> is this classic format for the j.a.b. playbook? is this a way that we may see penara in some form come back into the public market but still remain under control because the concern as we heard from ron shake last week is that activists were thinking too short term and that was forcing the hand of -- >> he's very outspoken on that

j.a.b. are really long term. when i speak to them, they don't ever indicate an there in selling. they're just about continuing to buy and build. i don't know if they'll use this again. but they certainly are creative an approach to a certain extent. here it does give them a currency they can use for further deals. it also allows a company that owns 14% or will own 14% of this combined company to sell that stake down without causing too many problems as well. whether or not they'll do it for future deals, i don't know >> biggest deal of the year? biggest u.s. m & a deal? >> i think so. it's been a good start although it's funny. a lot of bankers were a bit nervous a couple weeks ago, carl wondering how the trajectory of the world would go we kept waiting for tax reform we got it. now how does it affect values? how do i perceive it at this point if i'm a seller or buyer we'll see. yeah, it's the biggest we'll see how the momentum or

whether the momentum carries through. >> thank you, david. our david faber this morning by the way, dow down 141 is the worst day for the dow and the s&p 500 sense september 5. and we have the vix above 13 and we'll bring up up to speed on the steve wynn sexual misconduct case. and sensitive military information is revealed on fitness trackers we'll go live to the pentagon on those concerns and greg walden, demanding answer from big tech rorngecdi security flaws he'll join us in a few minutes so stay with us.

got a bunch of major tech companies set to report this week on the heels of the busiest week in earnings amazon, facebook, apple, just a few of the names getting ready to report. for more on what to expect from the tech sector, bob peck, head of global internet investment banking at credit suisse joins us bob, welcome, first of all taking a look at this list of tech stocks that i talked about. over the past six months, i'm surprised by the top three at least in the kind of internet space that moved higher, match group is up 85%. square is up 75% grubhub, 64% all more than netflix. is there anything to parse in there about smaller tech stocks and what they've been doing? >> interesting to talk about where we're going, you want to see how we got here.

look at 2017, the s&p 500 up 20%, nasdaq 30%. i.t. was up 40% and then f.a.n.g. was up 50%. what is driving a lot of that is a couple things. one is the strong global economy. number two, strong fundamentals at these companies and number three, investors looking for the investable ideas that are public that they can invest in. if you look over the last five years, you had about a 20%, 25% shrink of publicly investable dwladz give y ideas that give you access to big data, a.i., all the very big important trends going forward so a lot of pent up demand by investors in this sector and around these themes. >> do you think the absence of that is what led to a big jump in crypto? >> i do think that the absence of the investable ideas has investors looking for the incremental alpha. so they're looking for anywhere they can get exposure and the larger ideas that are investable for long periods of time is really attractive. >> so where would you consider the investable ideas to be right

now? >> i think a couple that i mentioned already, i think a.i., big data, autonomous, whole sharing economy quite honestly that is taking old economic models and breaking that down. you can see that whether it impacts the housing environment, the hotel environment, the car environment, even things such as retail, participating in that as well a lot of old economy models are disrupted by the new tech trends. >> we've been in the idea that strength begets strength for a couple years now that's part of the f.a.n.g. concept that these big companies have bet well in this era. but back to my original point about match, square and grubhub, they're the no the names you think of when you think about autonomous or ai that, stuff, if you're betting on those things is there a trend that invest dwroinvestors are mising >> f.a.n.g. was up 50% last year alone. i think investors are looking at the mid caps and smaller cap

companies, particularly ones that are executing on the plan and have large tams to go after. >> if we're truly in a rising rate environment for good this time, and if today's action is sort of the reflection of that, where does tech stand? >> yeah. that's a great question. the underpinnings will drive the fundamental. one, the global economy being strong will be very important. number two, the actual company performance. they're pure fundamentals will drive this and you'll see a pent up demand for ipos as investors look for additional ideas to participate in the large trendsz >> we're going to learn a lot this week. what do you expect, if anything, to hear on the macroenvironment, whether it's the impact of the tax reform that a lot of the companies are taking a hit up front or investment whether it is overseas o ar here at home >> if you look at the companies that reported so far, the earnings moves, the revisions to

the earnings are up 10% or so. so i look for the companies to address the impact of the tax reform on their earnings going forward. and probably follow a similar trend. for companies that haven't reported yet, their earnings revisions are up 3% or so. so look for a the love foclot o that i think you'll see focus of e-commerce and advertise right now, a lot of big drivers for the large companies. >> a lot of major cloud names reporting this week, too bob peck from credit suisse, thank you for joining us. >> thanks for having me. the fallout over intel's chip flaw continues. how is energy and commerce committee chairman greg walden has led the effort to get to the bottom of how the ship chip make area handles that ise.su he'll join us next was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches?

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intel under fire this

morning. the company informed china based customers of the vulnerabilities before they informed the u.s. government top of executives at apple, amazon, amd, google, intel and microsoft how long they knew about the flaw and why they chose to keep it a secret. let's bring in house energy and commerce chairman congressman greg walden. mr. chairman, good to have you with us. thank you for your time. >> thank you, carl >> sort of an explosive report in the "journal" if they did tell these chinese technology companies before telling the government do you know anything beyond this >> you know, we're digging into it as we speak if they dshid, it's very troublesome. they have ties into the chinese government which means the chine chinese government knew before the united states. you wonder of all the sectors that are out there who were kept in the dark about this and maybe justifiably so until they got the fix in place but if a foreign government

knew, did they do something or could they have exploited there? it is troublesome. that's why we sent the letter. that's why we're following up today on "wall street journal" story. this matters to all of us. cybersecurity is incredibly important. data breaches happen all the time our job is hold people accountable. we want to know what did they know, when did they know it, what did they do about it and who did they tell? >> you send letters to apple, amazon, google, microsoft, arm, have you heard back from any of the companies yet? >> we're beginning to. we don't have definitive answers back you get verbals first. but clearly the industry once they discovered it and they did discover it as far as we know began to try to do the fix credit to them that they're trying to hack their own equipment and look out for each other. that's important the question is how do we deal with the information after we get it how did they deal with it after they get it? what are those protocols how does all this happen

we went through this with he n equifax. they had pretty flawed systems there to protect consumer information. some of which you just can't fix stupid you can't legislate brilliance in the sectors so we're going to go after it until we get answers >> congressman, tell me how you think this is supposed to work it seems like this is different from equifax in the key way. it seems a stretch to expect tech companies to pro actively inform the government of flaws, security flaws in the product when the government has been known to exploit those flaws for their own ends if they're going to tell the u.s. government wouldn't they have to tell every other government on the planet where they do business in order to maintain their own credibility >> i think the big question here is we all also know that in many cases organizations, businesses that are based in chinahave direct link if not partnership with chinese government entities so when you tell them you run

the risk and i think a pretty obvious one that you're also thereby informing the chinese government and so i do think there are partnerships that occur between the united states government and companies where they share information back and forth to protect each other and ultimately the american consumer, yeah, i think americans should come first in this debate. and i think that intel needs to answer these questions and hopefully we'll find out it was all a fair enough effort >> over the next couple of months the eu's general data protection regulation takes effect this is a huge overhaul in terms of personal data privacy rules on that continent. does incidents like this soared -- like this add to the fuel of something like that legislation to take place here in the snuchlt. >> u.s.? >> we are all concerned about data security. it's an issue wherever you are

in the world those are matters we're looking into as well we also know commerce flows back and forth ubiquitously ais kro t -- across the world in today's internet environment we need to be collaborative on this in this case if true, i think "the wall street journal" reporting is very disturbing about what may have happened here we need to get to the bottom of it and get the answers >> mr. chairman, i hope you'll come back and update us as that proceeds good to talk to you. thank you for the time today >> good to be with you as well >> now some breaking news on vm ware and dell. alex sherman is live at headquarters >> there's been a lot of reporting the past couple days on the various different path forwards for privately held dell technologies oe technologies owned by michael del and silver lake. sources are telling me that it is possible that dell will consider a reverse merger with vmware which is publicly traded. in essence, dell would become a publicly traded company by

selling itself to vmware that will be another route forward for dell as opposed to pursuing a traditional ipo which has already been reported in the past several days by various different outlets. that is still a possibility. all of the possibilities will be discusseded at a coming board meeting for dell we don't know which one of these is more likely in fact, sources are saying it's early in the process even this reverse merge we are vmware. it would allow dell to become a publicly traded company by selling itself to vmware without having to go through the process of listing itself. of course, vmware shareholders may not be so happy about this outcome. another alternative that may happens is that dell buys vmware thus taking that company public. the vmware shareholders would get a big profit from that it would allow dell to go

public >> thanked, alex when i talked to michael dell back in may, he basically said that he wasn't interested at all in taking dell technologies public so if they were to do anything like this, it would be a complete reversal of what he was saying, buying out vmware, that would be a different issue >> right and the backdrop on all of this is the on going migration to the cloud and challenges that pudz on dell emc. just as an explainer >> yes and there are more components to that than that to dell technologies as well you know, secure works they have a lot of different pieces at play but these are just discussions we'll see what they come up with >> alex, when is the meeting >> it will be in a few weeks and they're going to discuss various different options including, by the way, to jon's point, other acquisitions of company which would maintain dell as a private company and dell would simply be the buyer in those deals you know, dell is a larger company than vmware as part of this reverse merger.

in essence, what that would be doing, what the other various option was not be doing is it allows silver lake a quick out silver lake could then sell the shares of vmware or this new merged company on to the public market and allow that private equity firm to mondetize. steve wynn facing sexual misconduct allegations as he steps down as rnc finance chair and his company's board launches an investigation into the charges. we've got the latest plus, what it means for the future of the casino empire. shares are down another 7% today. more "squawk alley" after this

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hi, everybody. i'm sue herrera. here is your cnbc update the german government reporting diesel exhaust tests on animals. it comes in the wake of a report by "the new york times" that a research group funded by auto companies exposed monkeys to diesel exhaust fumes from a late model volkswagen in 2014 vw's supervisory board is calling for an immediate inquiry. the sane river in paris peaked 13 feet above the normal water level. xpikt it expected to remain at that level for 24 hours

the floods could last a week pope francis says companies have a responsibility to fight anti-semitism and the virus of indifference that threatens to erase the memory of the holocaust. the pope's comments came in a speech to an international conference and here at home, the irs will start accepting tax returns today. the official deadline isn't, of course, until april 17th the sooner you file, the sooner you'll get that refund it is also a way to prevent identity theft by getting your return in before criminals have a chance to send in a fraudulent one. that's the news update let's get back downtown to "squawk alley. carl, back to you. >> all right sue, thank you very much seema mody is in post nine with the european close. >> hi, guys. stocks off the highs chip sectors led by apple supplier ams surging after boosting sales guidance and reporting the revenue more than tripled in 2017 now ams rebounding after taking a hit last week on a downgrade

tied to concerns about weaker demand for the iphone x. fellow apple suppliers and sd micro rebounding as well so tech one of the best perform willing sectors. take a look at pharma. interesting m & a activity in european pharma. sanofi agreeing to acquire ablynx the global bond selloff also continues. take a look at the german five year yield touching positive territory for the first time since late 2015 on this expectation that central banks will begin unwinding stimulus. and this expectation of this unwinding that has resulted in the euro gaining momentum against the u.s. dollar. yes, slightly lower today. but still up 3% for the year take a look at the uk pound. higher by 4% in 2018 though some analysts saying the trajectory could being complicated by uncertainty around uk politics

140 for the pound. back to you. >> thank you and some controversy meanwhile over fitness trackers making news this morning are the devices and apps revealing sensitive military information nbc's ha ns nichols has the latest. >> there is a global heat map that is pout out where you can compare and compete with fellow runners or bikers. the issue is that a lot of u.s. military personnel use it. they've been using it and not turning off the settings when down range, when they're in places like the kandahar airfield or a secret base in syria. once this 20-year-old student in australia figured out he can drill down, they realized they were learning a lot about what is happening inside of the bases potentially compromising what we say here operational security. so the pentagon is reminding everyone to turn off your settings they're working with strava. they're pledging to work with

the pentagon it's really a reminder not just about how many bases we have scattered throughout the globe, where they're doing and what troops are doing inside the wire it's a reminder of these cell phones that we have in our pocket, the smart phones that can be security risks, not just for potential enemies say isis or the taliban in afghanistan but smarter state actors and that is really where the conversation is changing here. they're more concerned about the chinese, russians and potentially the iranians when you talk to analysts about this than they were about the specific location of say a u.s. base in niger or somalia guys >> hans, are they really leaving it up to individual to make sure their settings are off it seems like there has to be a more granular way they can make sure that sensitive location data isn't being broadcast >> strava can wipe the map of the sensitive zones. so there are a couple bases in niger that we didn't know about. what they're doing in the pentagon is reminding soldiers

down range, soldiers, sailors, marines, turn off your settings. don't make them public don't use this the issue is, look, physical fitness and training, pt as they say here is such an intergral part of the military when i was in afghanistan a couple months ago, all up and down theair fields you see runners getting miles and apps like strava allow them to compete with themselves and each other to say, hey, my splits on this came in at negative splits. i was doing 6:20 miles, what were you doing you have the competitive mentality, especially with soldiers down range. and they maintain that competitiveness and they've maintained they kept their strava apps on that's the issue here. we'll see where they take it next guys >> that's a good explainer, hans good to have you on the show, hans nichols of nbc news president is attending the signing in, i should point out, of swearing in ceremony of the secretary of the department of health and human services alex caesar

>> thank you very much see you tomorrow night >> are you going to brief senator schumer? >> we might. >> and we were hoping to get some q&a out of the president. didn't happen this time. i was unable to hear exactly what he told the cameras the last moment. >> question about senator schumer. it didn't appear he gave much of an answer. >> i'm sure we'll hear more from him tomorrow night with the state of the union address >> dow is off the session lows down 88. getting a pretty bullish readout on the conclusion of the nafta talks this round more "squawk alley" straight ahead. rick santelli, what are you watching >> i'm watching higher yields and have a little technical discussion about where the next resistance levels may be l tethbrk. from the market when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

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$250 off the solution you choose from hair club. - if you want to look better, and if you want to feel better about yourself hair club is the way to go. - [narrator] call now. coming up today on the halftime report, top of the hour from the new york stock exchange, investing legend mario gabelli in the house we'll see where he is putting his money at work with stocks near all time highs. plus, top ranked apple analyst with me on halftime after new reports weak iphone demand will lead to production cuts. he asks the question, what does it mean for the stock? he'll answer for you as well and a new round of big changes for bill ackman including fees and new investments. we'll discuss noon eastern we'll see you in a few >> scott, we'll see new a few. wynn shares under pressure as

the harassment allegations against steve wynn continue. he does resign over the weekend. let's bring in the author of the winner is who joins us on the phone, long time gaming report for the journal as well. good to have you on the phone, kristina binkley >> happy to be here. >> analysts sell side, investors trying to gauge what would the risks here be as this investigation proceeds is it to bookings in the near term is it to shares if wynn, for whatever reason, decides to start to liquidate his substantial stake? what do you think? >> well, i cannot imagine he's going to be liquidating his stake. it is his personal night player to have a smaller stake in that company. if you look at the twitter, there are a lot of people tweeting they're cancelling reservations my guess is they're seeing a hit already in terms of people coming in and staying there. we have seen what happened to the stock. this is completely unprecedented

in anything i've ever witnessed, the behavior of a ceo that news reports about it would hammer a stock like this. >> in light of that point you made, in light of the point that regulators seem to be circling the company right now, you have the board investigating, lawmakers distancing themselves. is there any scenario in which steve wynn does not depart this company? >> you know, i'll be honest with you. it's hard for me to imagine that but i've also never witnesseded anything quite like this where, i mean, this whole past six months has been very new and ceos at companies are sort of the last bashes, all started with hollywood and has taken playing in other spaces. so, you know, part of my brain that says, you know, maybe he pulls this out but given the deluth that is happening here, it comes down to how much evidence there is and what these women say and tell

investigators. >> kristina, steve wynn turned 76 years old over the weekend, i believe. was there a success plan in place already that you know of that might be accelerated? >> well, i mean, there is. i think it's a relatively weak i think it's a relatively weak one. it's a company that was built around his personality and his ideas and his drive. there's never been anybody sort of in his family, people used to think some of the pascals, from his ex-wife elaine's family, might take over. that just disapate edisapated. there's an executive in there now who seems to be the likely person, but i don't, i don't know that the board has decided that i think it's sort of by default. who else would there be? >> there's the issue of the boards looking into this, then there's the corollary, which is

the reviews by gaming regulators in nevada and in massachusetts we did get a statement from the massachusetts gaming commission earlier this morning even if he does stay, which he may well do, how much is it risk regarding the developments they have it's a massive plan they have in massachusetts. >> yeah. and of course that's a big part of revenues for the future i think something like 70% of wynn has come out of mccow now so that's a different regulatory environment. in the u.s., losing, excuse me, losing a license is killer but it's also very unpredictable. some states have more teeth than others nevada board were to take his license, it's hard to imagine that he could survive in any way. >> chris >> we appreciate your time thank you very much.

author of winner takes all on the wynn story wynn shares are now negative for the year to date president's making some off comments about what to expect about tomorrow night's state of the union. take a listen to this. p>> how's the state of the unio coming >> well, it's going to be b good we worked on it hard cover a lot of territory including our great success with the markets and with the tax cut. it's a big speech. important speech for many, many year, they've been talking immigration and never got anything done. we're going to get spg done, we hope it's got to be bipartisan because the republicans don't have the votes to get it done. hopefully, the democrats will join us or enough of them will join us so we can really do something great for daca and for immigration. but it's going to be a very important speech on trade. the world has taken advantage of us on trade for many years

and as you probably noticed, we're stopping that. we're stopping it cold and we have to. we have to have resip row cal trade. it's not a one way deal anymore. so we have a lot of things to discuss and we'll be discussing them and i hope you enjoy it and thank you all very much. see you tomorrow nigts >> we will see him tomorrow night. the president's state of the union tuesday evening. five key issues according to the white house. e con, trade, infrastructure, immigration and national security >> got a nice preview there as well as we head to break, take a look at the dow ou82ois.ti dn w, but sllow abt pnt stay with us you always pay

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let's get to the cme group where rick santelli has the santelli exchange. >> thanks, john. now that we've gone past everything that the charts thought was important, at least leftovers from 2017, we've taken out the 263 level. there are some tricks. everybody understands you're going to have resistance before the 3% if we look at the fact we had a 263 high from march 2017, we settle at 241, that leaves a difference of 22 basis points. add those on to 263, you end up getting a level that's 285 want to mark that down that's going to be some resistance to pay attention to

but there's a bigger issue here. in december, the last day of december, 2013, we traded a yield close of 303 other than that one single close, you have to go back to july of 2011 to find a concerted effort by the ten-year market to have any significant trading above 3% so everybody is looking at 3%. is it really that important? i say yes. let's go to the white board. all right, quickly, ten-year versus 30-year there's going to be some tricks with the 30 year 263 was the high for 17. that spread was 58 now if we look for last year, 241 versus 274, that spread from 30s to 10s as shrunk a bit if we look at the markets today, you'll find a spread of 24 basis points we take that important level we have, which is 295, where did

295 come from? it's where we're at right now. we want to get up to 321 because i think the it's going to be very important, the 321 is the only maturity high that's not yet tested what's the difference? ta difference of about 26 basis points now if we look at 321 and figure the spread's at 21 basis points, where does that come out to r for ten-year notes, the magic 3% that's the level to pay attention to 285 is the small stop along the way. carl, back to you. >> getting there lit by little getting some readout as these nafta negotiations, this round at least comes to an aend and kayla is watching it it's been a white since we've seen one that sukts flexibility. >> i would describe it as cautious opt michigan chigan mi m. no written statement, but think dade duck about talks progressing and the top u.s. trade official said that the

u.s. views nafta as very important agreement that they are committed to moving forward, but he wants to see major breakthroughs for the next round. he's not happy with how slowly talks are progressing. this coming as there are speculation that talks could extend into 2019 because of political events in mexico we'll see where they go from here the next round is late february in mexico. carl >> all right, thanks for keeping us honest on that. dow's down about 94. going to be b a busy day tomorrow we mentioned state of the union, but mcdonald's, pfizer, aetna, hog, ea, tomorrow night, so busiest week of earnings season underway >> we have no dirt of market moving news today. state of the union, you've got the tech earnings later in the week the fed meeting then jobs on friday >> yeah, it is higher this morning. ahead of the those and both chip makers, the controversy over the

whether the u.s. government should have been told. >> all of fang except for netflix netflixes? thursday night is the big crazy evening. over to post nine with the judge has taken residence for the morning. welcome to the halftime report live today from post nine at the new york stock exchange. our top trade this hour, the rally, rates and your money. how high yields are poised to climb and what happens to stocks really if they keep moving higher with us for the hour today, joe, jim, steve and a very special guest, mario is here he's the chairman and ceo of the gabelli funds. stocks are pulling back as you know just a bit. much of the focus does remain on interest rates, which are climbing to the highest levels that we've seen in years