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♪ it makes me wonder why i'm still here ♪ ♪ is. good friday morning. welcome to "squawk alley." i'm carl with john fortt and morgan brennan starting today is officially co-anchor on this program. it is good to have you, given how much amazing work you've done covering all kinds of sectors. we are glad to know you are going to be at the desk every day. >> so thrilled to be here. like the best team in television so thank you for having me. >> with you here it is, morgan brennan. watching the markets today, as the sell-off continues, dow down 138, session high up 163 as the banks got sold on jpmorgan and citigroup's print.

first up thebattle between bezos and trump is heating up. the president formed a task force to study the finances and operations of the usps the executive order ten days after he went after amazon on twitter for making the postal service its delivery boy claiming the postal service is losing many billions of dollars a year due to its financial arrangement with the e-commerce giant. joining us this morning, stephanie meta at fast company with us and kevin delaney editor and chief. happy friday. >> thanks. >> people are trying to do some rigorous work on the structure of this deal and whether or not -- who is getting the short end, if anybody. what do you think? >> well, i think that it's been revealed that the united states post office loses money on first class mail and the packages historically have been where the profit is. so i can understand why people want to dig into this deal and understand it better my feeling president trump better be careful what he wishes

for. amazon is into the far off from the ability to create its own private delivery service and if amazon goesaway, you know, it really does spell trouble for the u.s. postal service. >> volume goes away. >> cramer's point was they can't wait to get out of this and they have a million ways to deliver ex-postal service. >> if you look at what amazon uses the u.s. postal service for, 75% of it is what's called the last mile. so this is the postal carriers and trucks on our streets that are already there to deliver the what's called the monopoly service for the postal service which it's required to do. there's an efficiency of piggybacking which should be a profitable commercial package business there's little evidence that the postal service has a bad deal with amazon, given that. and, of course, amazon, would be happy to use another carrier or as we know, build out their own last mile. >> morgan, it seems to me like if you want to make amazon even stronger, one of the things you do is attack their relationship

with the postal service because who you really hurt is the postal service ends up raises rates is the third-party sellers shipping their stuff into amazon system you also hurt folks like ebay and etsy who are reliant more on the postal service than amazon is people need amazon to take their packages and more efficiently handle them, am i wrong? >> i think you're right. that's the situation of the postal service i don't think anybody, myself included who covered the postal service and economics of the postal service doesn't think maybe a review would be warranted given the fact they have been losing billions for a better part of a decade a lot tied to the decline of first-class mail but to the fact that due to a law in place, the postal service has to pre-fund health care funds for retirees and that's something that is going to have to go through congress and get changed in congress in terms of, you know, streamlining and helping the postal service, so it does shed light on the fact that there are reforms that can take place

there. even the postal service said it could use that in terms of amazon and its relationship with the postal service, amazon and e-commerce in general, the volumes are growing so quickly, there is a capacity crunch. everybody needs the postal service, they need ups, fedex, they need xpo logistics, some of the other companies starting to take on more of these deliveries you're right, longer term, if you do see amazon begin to build out its own infrastructure and shift more volumes to other carriers that's potentially bad for the postal service. >> not going to be easy given the trucker shortage we have, despite all the talk about autonomy and self-driving trucks, wages are going to climb and shipping costs are going to climb. >> yeah. but i think what you can also see there are shifts in our economy that are happening now and there is a trucker shortage. we're seeing actually freeing up of labor that's been involved in retail and so amazon is in a position to actually look sort of wholistically across the economy if it wanted to do that

and mobilize some of the people maybe who are working within its warehouses today and particularly as it automates the warehouses further with robots and actually deploy them, that last mile. it's already going up to the last mile for the vast majority of what it's doing it's not hard to imagine them going further. >> it seems like if you really want to target somebody for ruining the postal service's decade or two it would be the likes of facebook and e-mail, right? because we used to send letters to each other before there was e-mail and now you don't so much have to send flyers, marketing brochures, direct mail, because you're using targeted advertising on facebook if you're a business and that's how you're doing your profiling. >> yeah. 100% it's the loss of direct mail i mean in my business, we used to ship a lot of magazines via the postal service and now people are getting their information via websites on-line. so, you know, the u.s. postal service is definitely the victim of a lot of broader tech know

longcle trends e-commerce has been helping them to morgan's point this is a very complex organization and the retirement and the pensions and the workers and the insurance, it's a big complex machine and it's kind of classic trump to just say, they made a bad deal i know deals, they made a bad deal, let's renegotiate the deal there's a lot of complexity there. >> we tend to hear that a lot on all sorts of issues. tesla's ceo elon musk speaking out as federal investigators are looking into a deadly crash last month involving the company's autopilot system in an interview with cbs musk addressed the safety concerns. >> it's important to emphasize we'll never be perfect. >> autopilot will never be perfect? >> no. nothing in the real world is perfect. but i do think that long term, it can reduce accidents by a factor of ten so there are ten fewer fatalities and tragedies and serious injuries and that's a really huge difference

>> tesla's financial troubles have been in focus as the electric car maker has been burning through cash while struggling with the production of the three musk did say the company will be positive and cash flow positive in q3 and that did send shares higher, although a lot of discussion this morning, guys, about whether this violates formal or informal disclosure laws regarding guidance and whether it will actually happen or just talk. >> what elon musk tweeted recently is car biz is hell. what we're seeing interestingly is that he's struggling more with the business of producing cars than he is with the business of sending rockets into space and sending them back out again. and that's for obvious reasons there's a huge difference in volume, so you have just a few customers and relatively limited number of launches with space and you have ultimately thousands and ultimately tens of thousands of cars that you have out there. so what we're seeing now is that

musk is struggling with the production, he's struggling with how to deal with some of the safety issues, and that's raised some of the cash questions. >> what do you think is the bigger issue right now for him going -- scaling this, the three specifically, or getting the ntsb off his back and the negative publicity that could potentially bring about? >> well, i think that the production issue is ultimately the bigger issue for him i mean the ntsb is a self-inflicted wound he has been very pugnacious, very truck cue lants on this issue. there is a way to work with regulators and i sort of feel like, you know, he's decided to, you know, take on the ntsb before that he was taking on the highway safety organization and the 2016 investigation, you know, he's got lawyers,he's go regulatory teams, they should work with the regulators and work with the authorities on this and then he can focus on production by the way, why is he driviaroud with gayle king saying i'm

sleeping on my couch and not getting enough rest and stressed out. it seems unusual how hard he's working and stress he's under and yet spending a couple days with "cbs this morning" trying to show how hard he's working. >> going back to your point about rockets versus cars, it really sort of seems to me from that interview that it's sort of a tale of two companies here we have a filing that was out and space xx is not commenting on it, but that spacex has raised $507 million in new funding, values the company at $26 billion. investors clearly want a piece of the action in spacex. that's the company that continues to be private. and i just think it's interesting because there's been questions about where does he spend his time, how much, at which company, which new idea he has, and in this interview, he basically said i'm sleeping on the couch at the factory >> and that makes sense in a lot of ways. actually, we are learning that the car business to ramp up commercial scale is more complicated than the space

business a lot of technology spacex is supplying was demonstrated in the 1990s, their principle achievement is to make it cheaper, fairer. competitors have not been competitive actually they've been big quasi monopolies it's been forward for spacex to attack this compared to tesla where you have volkswagen and toyota and hyundai and others making advances and where they're having to push the technological limits arguably in ways even more significant than they are with rockets. >> i will call it elon musk needs a tim cook steve jobs used to make this grandiose pronouncements and couldn't always deliver the product on time and in good quality. one of the best hires he made when he brought tim cook in who knew operations, and he could deliver on time. i don't know why we're doing this with elon musk, he makes grand pronouncements of how many something he's going to deliver

and he misses and we forgive him because he's brilliant when you get to a certain size you have to do what you say. >> we need a low gist micks master the way cook was designed to be. >> he has that at spacex in a way that, you know, gwen is the face of the company, did a ted talk this week, there is someone else besides elon who is associated with spacex i don't know that that's the case with tesla. >> right. >> good to see you congratulations on the new gig at fast companies. >> thanks. >> great seeing you. stefanry in and kevin joining us as we go to break. >> as we head to break taking a look at stocks despite the losses the s&p 500 is still on track for its best weekly gain in five weeks. right now, though, the dow is down 86 points we'll talk about bank earnings next and later shares of zillow sliding after the company announced a new business venture. the ceo is going to join us to explain that move. more "squawk alley" after this

whether it's a big thing, small thing, or something unexpected, pnc will be right there when you need us. because when it comes to your finances, if you focus on today, tomorrow has a way of working itself out.

you know what's not awesome? gig-speed internet. if you focus on today, when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back to "squawk alley. jpmorgan and citigroup and wells fargo moving lower despite beating on earnings today. the banks pushing the markets lower. the dow down about 100 points. for more let's bring in chris, senior research analyst at oppenheimer and wilfred frost. thank you for joining us today. >> good morning. >> wilfred, want to start with you. you've been breaking down these numbers and listening into the conference calls

if you had to sum up jpmorgan, city, and wells fargo, what would the big headlines be >> headline beats for the big three, pnc's eps was more in line strip away a few one offs the numbers look less attractive and then there was the odd comment on individual calls that also took way the gloss from the earnings, in particular, on pnc's calls, i wasn't on but analyst reports suggesting there is increasing pressure for deposits, ie, yes, we're getting a benefit on the top line as rates go up but starting to see pressure on the bottom line as well a bit more competition that took the gloss off the results a little bit in terms of the earnings calls >> and chris, what is your take away on earnings today why are the stocks trading lower? net interest margin story, something else >> i don't think they should be trading lower. i thought the numbers were just fine you know, our theme has been and i think it's borne out in the first quarter numbers, that in a

rising rate environment, all you really need for double-digit earnings growth is low to mid single digit growth. the rising interest rates give you a boost. what we have in the quarter for the companies that reported this morning, we had about 3% loan growth, but that translate into about 5% net interest income growth, and since they kept the expenses down to the low single digits that translated into about 6, 7% pre-tax net income growth the charge offs and credit quality numbers were flat to down, so that was good and then you had the share buybacks adding from 3 to 7% in terms of share count reduction you're at a point here where you have stocks trading at less than 70% of the multiple of the s&p 500 that are on a clean basis doing double-digit earnings growth >> so given the moves lower in

the stocks are you a buyer right now? >> i definitely basketball a buyer. our favorite names are citi and bank of america. but, you know, i think the group generally continues to be under valued i followed these stocks for a long time, the balance sheets are better than they've ever been the results are stable there's every reason to expect double-digit earnings growth and, you know, if investors don't bid them up the companies will get to buy back more shares i think they're in a good spot. >> wilfred, i know you've been following everything that's been unfolding at wells fargo for the past couple years and seems to continue to be some uncertainty around the regulatory probes that continue there. what were the updates today? >> so we got a line in the earnings that they could possibly be due to settle a $1 billion fine with the cfpb and occ. originates to the issues of auto lending and mortgage interest rate fixing and that was sort of

reported a week ago. there could be a fine as much as a billion. we don't know if it will be that much but that's the offer that wells fargo is deciding on an ongoing pressure for them going forward and while chris rightly said that overall we didn't see expenses rise for most of the these banks, wells fargo still that pressure for them, it's still coming through in their numbers, expenses are up 3%, the efficiency ratio, the ratio of expenses to revenue still above its target and seeing a little pressure on wells fargo in that sense and one of the reasons why they're under performing more than the rest of the group. the other thing i would say for the banks across the whole, clearly as chris says, the numbers are impressive on a headline basis but expectations were strong. yesterday the bank stocks were up 2 to 3% and they're pulling back today but there were some numbers that weren't quite as impressive as people hoped trading, for example, up year on year for citi and jpmorgan but not as much as people expected interesting to see morgan

stanley outperforming today. best part of trading was equities, their strongest and again a theme coming out there, not suffering as much as the other banks today. >> chris, along the lines of what wilfred was saying, how much does it concern you when you see results that to you look pretty good, but the stocks don't respond, is that at all suggest that perhaps there's a lot of good news built in and they don't have that much room to run, even with some previous results? >> no, i think there's room. i've been covering the banks on and off since 1985 and in general, they trade between 60 and 80% relative p/e they spent most of their time in the like 75, give or take, percentrelative to p/e you're still down 68, 69%. you know, so these are still well hated stocks and you know i think people always look back to the most recent recession, whenever people worry ain't the marke

be -- about the market, they look back to the 2008/2009 experience and if there's trouble in the economy it's going to come in the banks i just don't think that's going to be the case this time i think these companies have really de-risked their balance sheets more than i've seen any time in covering the companies. >> we will leave it there and thank you for joining us chris and our own wilfred frost. >> thank you and still to come, this week has left a lot of people with a lot of questions about exactly how personal data is handled on facebook and by facebook. we will discuss with the former ceo of myspace remember them? and later, the bitcoin high and we're not talking about the price, a look at how cryptocurrencies are fueling america's addiction to opioids more "squawk alley" in a moment. >> vo: these neighbors are starting right.

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mike santoli joins us with more. >> big tech, bent but didn't break in the recent bout of volatility in the markets. we talk about fang a lot and they have been leaders but what's interesting, too, all of tech has managed to be a leadership group i have a chart up here the fdn is an exchange traded fund, dow internet fund, close to fang in the way that it trades that is up substantially this year you see it's not just that obviously, the semiconductor index, as well as i put ryt in there, the equal weighted s&p tech sector. every stock gets an equal weight, substantially outperforming the s&p 500. people infatuated with the long-term growth story remains so a lot of cute ideas about the seamless rotation going to happen from big growth tech to value stocks, financials, industrials, others, hasn't happened yet and it's time to wonder if the facebook hearings represented some kind of peak

panic on the regulatory front. facebook stock bottomed, not in the hearings, but when facebook agreed to have mark zuckerberg testify. on that day, was when people said okay, maybe this is now a management vote. all those things are in play it's not able to keep the whole market afloat. today looked like it was going to give it a shot and everything but tech going down market didn't work yet. >> it certainly looked to me before that, like facebook really wasn't -- didn't have its arms around the issues talked about sending two deputies to europe, mark zuckerberg even cagey about whether he was going to engage with lawmakers anywhere on the globe directly, maybe now there's a sense they've gotten ahead of it. with those charts that you showed, there's still some pretty major swings happening in the tech stocks, gotten higher than they are off their highs. >> without a doubt that's the interesting moment they're at going into earnings is, are you going to have that perception, well, they're at a discount where we would have been forced to buy them in

january or just look, we've kind of priced in years worth of growth already, and i'm not sure if we can get excited about these numbers when you have facebook -- facebook keeps saying, spending a lot of money, hiring a lot of people, so if there's any color on how that affects margins longer term maybe from facebook specifically and alphabet as well. >> fun to watch as we get deeper into earnings season thanks mike santoli europe about to close for the week nice gains let's get to dominic chu back at hq. >> so carl, european stocks ending the week with some modest moves as you can see here, fractional gains and losses for most of the continent. the broader market posting its third positive week in a row for the first time in almost three months despite concerns surrounding the geopolitical and trade situations we've been talking about for some time. meantime a report out of the eu shows the eurozone's trade surplus with the rest of the world widened in february, due in part to a sharp drop in imports. we've' seen a session for the euro in today's trade as you can

see here up and down, now on to volkswagon another big story, at maker confirming it has named vw brand chief dies as its ceo. during a news conference at volkswagen's headquarters the company announced changes including organizing itself into six business areas plus a portfolio for china as well. dies said he would consider assets as well ousted ceo mueller had taken the top job at volkswagon after the company admitted cheating on the u.s. emissions test back in 2015 the stock has erased losses since the beginning of that scandal. speaking of changes at the top, the london stock exchange announcing it named long-time golden sachs executive david schwimmer as its ceo, set to join in august back over to you, carl. >> all right dom, thank you very much when we come back this morning, as we mentioned earlier, shares

of zillow sliding. the company announcing it's getting into the business of flipping homes spencer, the ceo, will join us next take a look at major averages off the session lows, also off the session highs, crude futures i ve on geopolitics as well. wtat 67.5. more "squawk alley" in a moment. mr. stevens? this is your new name. this is your new house. and a perfectly inconspicuous suv. you must become invisible. [hero] i'll take my chances. at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

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japan, three of the 11 tpp nations, welcoming president trump's request to rejoin the partnership. australia's trade minister saying there is little interest in renegotiating the current agreement. >> we welcome the united states coming back to the table, but i don't see any wholesale appetite for any material renegotiation of the tpp >> britain's prince philip leaving the hospital in london where he received a hip replacement. the 96-year-old waving to well wishers through his car window during his departure six opposition politicians and the foreign minister in albania have been suspended because of that. following yesterday's scuffle in parliament opposition members threw flour at the prime minister while the foreign minister responded throwing water at the politicians. they could have baked a cake all they needed was a few eggs all right.

that's the news update this hour back downtown to "squawk alley." >> john. >> yeah. it's better with milk, but point taken. >> yeah. >> we are watching shares of facebook slowing, trying to bounce back after a rough couple weeks. this as a top executive at the company tells "the wall street journal" users generally have not updated their privacy settings in recent weeks and facebook doesn't expect any significant impact for all of this controversy to its ad sales. joining us now michael jones, the former ceo of myspace and ceo of science inc welcome. >> thanks for having me. >> so let's talk the real impact of what we've seen happen with facebook over the past few weeks. it's an extremely important distribution mechanism for so many of the portfolio companies in science and across l.a. and silicon valley what do you think is going to happen next that's different from what's been happening to this point. >> a lot of the issues that we're seeing discussed today is

around what facebook was doing back before 2015 where they were allowing the user contributing data into facebook, to then connect to an app and that app was then pulling additional data around the users friends and using it for other purposes. they've rectified a whole bunch of that. the question now, as users are understanding that facebook is collecting this data will they give up the entertainment value and the utility value of using facebook for more privacy. >> so no, they won't or at least you would think if they were going to, they would have started to do that already. facebook's telling us they won't. do you think we end up adopting some version of what europe is doing with data regulation, gdpr, suggesting maybe block chain, which you guys in science are big on, might be some way to solve this problem >> well, the way we look at it is, today when you interact with the websites or mobile applications or social environments you're leaving the digital footprint, the shad dove yourself all over the -- shadow

of yourself all over the internet and trusting companies to do the right thing with that data one question becomes in the future if we realize there will be a representation of ourselves in the data and we need to use this and all these services that we're connecting to, is there a better method. and a lot of people are looking at the block chain saying gosh, here's a system where my data can be encrypted and i could grant access and revoke access from different companies, i could use that data and then the companies could still give me a great quality of service but they wouldn't have to have copies of me sitting in their data base. and so it's looking at a new type of architecture that might solve for the kind of upcoming future privacy needs that we all have as citizens of the digital world. >> do you think existing social media companies like facebook could and should adopt it or is it going to take new start-ups to do that >> i believe if you have the right solution out there that's fast and it won't impair or hurt facebook's business, they'll use the right data platform to work with europe may force changes in the way that these companies are

holding and managing user data, if somebody puts out a great solution, i think these technology companies would love to youf load the liability of sitting on all this data and complicated communications with the users on how they use this data in elaborate terms of service. yeah, if the solution comes out through a block chain start-up, new type of company, i think the large companies would love to adopt it. >> whether it's that or whether they say do something more pedestrian like change the default settings, what's the danger of the return on investment for some of these ads going markedly down, something that would suppress demands for ads on facebook. >> i think the only thing that suppresses demand for ads on facebook is if people use facebook less. >> you think it's a pure dau issue. >> i think it's a pure dau issue. when i think facebook, facebook is a company we have facebook.com, we have instagram and they have other products like whatsapp basically giving them immense reach to users. their value is going to become

from advertisers of brands to those users and those ads get better if they have data to work from they would love a solution to not sit and own that data. if they could use a product that gave users control over that data but allow for a great ad experience they would be super open to it. >> given the conversation we're having and you are an active angel investor, is this changing or dictating the way you're going to make future investments? >> we do look now at companies leveraging facebook at facebook data to grow and we have a lot of caution around them because it feels like it's a growth chanel and a growth strategy that may not be the right one going forward. we don't have that many companies that rely on that any longer and then from a future investment perspective, we look at companies like civic, like spring roll, like different companies building block chain solutions that allow for data protection and privacy we think those are interesting sectors to invest in and choosing to invest in the two companies and multiple companies doing identity protection and

verification >> mike, bitcoin has lost more than half of its value the value of a bitcoin has dropped by more than half since december now, it is the brand that people think of when they think of cryptocurrencies how is this depressed or volatile environment in bitcoin depending on how you look at it affecting the people who you're working with who are actually trying to build companies, economies, on top of cryptocurrencies and block chains >> today, it impacts it a lot. because if you imagine when people decide that they want to put capital into cryptocurrencies, they certainly start with buying bitcoin. and then after they have bitcoin they might look at other products or other tokens in the universe to put capital into when the bitcoin price drops then they see their overall net value drop and a lot of the subsequent products that are built within the ecosystem drop in value now, as we've seen in the last 48 hours, bitcoin's price has started to regain its growth again and that could be because we're coming to the end of the

tax season and people are getting through understanding what they owe relative to the cryptocurrency gains, you will see a flurry of investment back into the cryptocurrency space. >> mike jones, a lot to watch between crypto and data on social media thanks for helping us through it. >> thanks for having me. >> out in l.a. >> when we come back zillow taking a big hit in today's session, the company announcing plans to get into home flipping, a business some see as risky shares down about 10%. we will talk to the ceo next stay with us polk county is one of the counties

that you don't think about very much. it's really not very important. i was in the stone ages as much as technology wise. and i would say i had nothing. you become a school teacher for one reason, you love kids. and so you don't have the same tools, you don't always believe you have the same... outcomes achievable for yourself. when we got the tablets, it changed everything. by giving them that technology and then marrying it with a curriculum that's designed to have technology at the heart of it, we are really changing the way that students learn. and i can't wait for ten years from now when i get to talk to them again and see, like, who they are. ♪

i'm brian sullivan tech stocks, goldman sachs, says soar now that facebook is starting to recover and good bank earnings but the tock is not -- the stock is not responding how come noted market watcher tom lee, got extra bullish. halftime report starts at the top of the hour. >> brian, thanks so much meantime shares of zillow down 10% this morning the real estate company said to test buying and selling homes directly saying it will purchase homes in las vegas and phoenix, renovate them and aim to flip them within 90 days. joining us first on cnbc, zillow's group ceo is with us. >> thanks for having me. >> viewers have long memories, spencer, and the face of it, the sounds worrisome because of what we all went through some years

ago. why isn't it >> well, the market downturn of 2008 is something we know about. nobody understand housing data better than zillow we think there's a huge opportunity here after testing for a yore year in a marketplac model, we're ready to be an investor in our own marketplace. because what we know is that home sellers welcome a hassle-free experience selling your home without decluttering your garage or taking the kids out of the house for a showing, getting an instant offer for the price of your home appeals to sellers we're entering that market and think we have huge advantages because we have access to the huge audience of sellers and buyers and that's why we're doing this. >> spencer, open door has gotten pretty big doing this and they came out with this tongue and cheek welcome zillow seriously statement reminiscent of apple's statement to ibm back in 1981. my question is, and i imagine a lot of investors would like to know this, what is it you're not going to do? what are the guardrails that are

going to be on this new business of yours, going to make sure you don't get into too much trouble keeping homes in inventory on your balance sheet >> well, firstly we're working with premier agents and differentiates how we're approaching this from other premier agents in the space. we pair our offers with an offer from a premier agent to sell the home in a traditional way and premier agent advertisers working with sellers can bring the listings to us and we will make an offer on those listings as well. we've done this in an industry friendly way that's why the reaction has been welcoming. i think the advantages we bring, our network of advertising real estate agents, housing data, brands, access to sellers and buyers, position us really well as compared with competitors >> spencer, morgan brennan here, good to see you. >> thank you. >> two questions for you, are you going to take on debt to buy the homes and what happens if you don't flip them in 90 days

>> we will take on debt, buying these homes like any home buyer would with debt, it will be flown recourse debt, protected by the houses and just to size the scope, what we announced yesterday is that by the end of the year we will have between 300 and 1,000 homes held for sale at that point now as with the business builds, we'll evaluate the right capital structure, debt and equity, to see how to address the opportunity, that's how we're approaching it this time. >> what do you say to investors and viewers who say, zillow is trying to inflate valuations or artificially accelerate sales cycles is that not the case >> well, i do think that we'll be able to create incremental transactions people basically stuck in their houma th home that would love to buy another home but couldn't sell their home this could provide the ability to unstick people from their home consumer benefit, advertiser benefit. it's a big opportunity for us as well. >> despite what we know about

inventories around the country, still people who can't move it >> there are so one of the reasons that people don't -- there isn't more inventory because there isn't more inventory that sounds odd but people don't list their home because there isn't a home available to buy. so there's kind of this like standoff in the real estate market because of lack of inventory, they don't list because they can't buy if new liquiditity is introduced to the marketplace by a buyer that could help unstick inventory. >> spencer, are you potentially going to become a landlord as well rentals are part of the zillow model and if you got a bunch of inventory in the market shifts is that something you thought about or might be prepared to do >> that's a great question that's not the plan at this time for now the plan is to buy, renovate quickly and sell. we think the advantages of access to sellers, access to buyers positions us for that no at the present time we don't plan on being a landlord >> spencer, we're going to watch it closely and as always, we appreciate you coming on to explain it good to see you. see you next time. >> thank you >> spencer rascoff at zillow.

>> former house speaker john boehner joined a cannibis company. the business of medical marijuana and how it impacts the opioid epidemic, that's next whether it's a big thing, small thing, or something unexpected, pnc will be right there when you need us. because when it comes to your finances, if you focus on today, tomorrow has a way of working itself out.

you know what's not awesome? gig-speed internet. if you focus on today, when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. former house speaker john boehner joined us earlier this morning, he has joined the board of a medical marijuana company take a listen to what he said.

>> congress, over the last couple years has pretty much stopped any real enforcement of a federally funded institutions cannot touch this, can't do research, most every university takes federal funds, they don't want to get very close to it yet banking system is scared to death to take the money, so there's a lot of cash rolling around and so it's time for the federal government to take another look at this. and i think descheduling this drug allowing for the research, would be very helpful to the american people. >> boehner was a longtime critic of legalization in the past. he said he had a change of heart because of the opioid crisis, which is something ylan mui has been looking into. nice to have you >> i hear so often from people who become addicted to opioids and fentanyl in particular, which is even more powerful than prescriptionopeioids and it all started with a back ache, with feeling some sort of pain. they're prescribed some of the prescription drugs and they

moved on to something harder as they felt they needed the more powerful rush just in order to feel normal. what wleerer finding is the lethal drug fentanyl begins in journey on the dark web, where criticals can conduct their business freely, out in the open, and asked to be paid in bitcoin. accessing this is pretty simple. all you need is a special browser. matthew is a cybercrimes special agent at the department of homeland security. he showed cnbc how easily the network can disguise his identity and location. >> a series of relays basically, which are different computers that the traffic is going to bounce in between. >> is that what makes it private? >> correct >> so people don't realize that we're in fairfax, virginia the dark web looks a lot like the open web sites operate like ebay, but they sell illegal goods instead. drugs are clearly displayed and

sellers even have star ratings their preferred method of payment, bitcoin >> this one, there unit price is .475 bitcoin that's about $4,680. he only accepted bitcoin >> while every bitcoin transaction is public, no one can see who owns the crimes. that makes it appealing to criminals. but demand for bitcoin and fe fentanyl is so hot, dealers are spilling into the open web, even offering discounts for payment in bit koinch. >> we need to continue to be diligent welcome back one of the ways we do that is through our border enforcement security teams. we're on the ground at the mail facilities >> facilities like this u.s. postal inspection station at new york's jfk airport, where customs and border protection estimates 40% of all fentanyl mail seizures go down. customs officers have to search all of these packages either by hand orwith one of the dogs over

here to find the fentanyl that people have bought online, usually with bitcoin or another cryptocurrency and have shipped directly here to the united states from overseas they put the packages through an x-ray machine. if they find something suspicious, they can open it up right here to see if there's a white powdery substance inside then they take it to a detention center where they test it, scan it, and figure out if it really is fentanyl. two years ago, customs found seven packages of fentanyl so far this fiscal year, they found 150. >> the majority of them are coming from china and hong kong. >> these products you're finding are bought online? >> absolutely. using the dark web >> what kind of fentanyl are you seeing come through here >> the fentanyl that we're seizing here is about 90% pure, which is a couple grains will create an overdose for you >> now, online drug buyers have also used traditional forms of payment like credit and debit

cards and paypal, but bitcoin is popular because it provides more anonymity, and law enforcement tells us that makes their jobs harder >> interesting in this case, the financing helps the illegality of it, but the marijuana business wants to become more legal. >> bitcoin, if you use your bitcoin and get it through a currency exchange in the u.s., it is regulated. currency exchanges in the u.s. have to comply with bank secrecy laws, et cetera, but so many people doing this illegal a using overseas currency exchanges, sites that allow you to swap out your bitcoin in order to conceal who actually is holding this currency. >> when i see that stand-up of you in jfk, and you're talking about the screening process for the packages, that's expensive to take those packages, stop, screen them, go through that entire process the technology involved in that,

and it sort of strikes all kinds of additional questions for u.p.s. or fedex or other carr r carriers drivering the packages. >> it was surprising how labor intensive it was to search products by hand at the u.s. mail facility. the reason that's happening is because so many packages that come through the u.s. mail, through the postal service, don't require advanced electronic data that tells you it's coming from, what's in the package. private carriers to sleth that type of information, and there's legislation on capitol hill to encourage the postal service to do that. >> really good stuff an important story thanks ylan mui with us at post 9 as we go to break, take a look at the major averages. down 76. s&p went positive for the year before pulling back. currently 2659 more "squawk alley" in just a minute hello. give me an hour in tanning room 3. cheers! that's confident. but it's not kayak confident. kayak searches hundreds of travel sites to help me plan the best trip. so i'm more than confident.

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bob iger made news this week vote magazine talked to the disney executive about life as the ceo of a large media company, also his would-be presidential ambitions said he was in the process of seriously exploring a run for the white house when that fox deal sealed his fate wasn't exactly a hard hitting

interview by any stretch, but he did say coming from the patriot in me, growing up in a time when we respected our politicians not only for what they stood for but because, as we move on to the next screen, what they accomplished i'm horrified add the state of politics in america today, and i'll throw stones in multiple directions didn't really move the shares, but an interesting look at the psychology >> it was oprah who was trying to get him to run, saying she would hand out pamphlets i don't know, does oprah have a good track record in getting people to run for president. >> you run for president, no, you run for president. >> she does, of course so interesting with all the talk around oprah she was out there drumming up candidates >> we're watching that earnings season kicks off today with the banks get ready forthex week monday, i think, we'll see b of a, netflix after the bell, and then we move on to i think seven dow components 52 s&p companies by the end of the week things will really take off. >> netflix is abig one,

especially because of how important data is to them. >> stocks up 60% so far this year >> and upgraded by deutsche today. target goes to $350. almost $100 increase on their target for netflix >> so enjoy the weekend, and of course, the weather in the northeast. let's get to brian in the half >> yes, carl spring has sprung. hi, everyone welcome to halftime report i'm brian sullivan, in for scott today. he's lying on a beach somewhere, i hope, anyway we're big on the banks very bullish note from tom lee and his tech about to go on a tear joining us today, we'll call it the cubs versus the yankees. jim, steven, and josh, playing infield for the mets and for the cubs, we have john nujerian and jeff in from chicago. the killer ceo right now, the mets would win the fight, by the way. i want to point that out >> beginning another 100 years of