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♪ good friday morning. welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt at post nine on "squawk alley. long-time ceo, chairman amerituameritu emeritus good to have you. >> good to see you again morgan, it's a pleasure. >> halfway through the year, tech is a huge story as we close out the first half, netflix up over 100% as you know with names like twitter and trip adviser also leading the pack. john, i wonder if you had to put together a playbook, even conceptionally on tap for the second half, what would it look like

>> if you look at the numbers for the first half of the year, i think there were close to a little bit over 100 ipos, 81 on the nasdaq as an example i think you're going to see about the same number in the second half of the year. it's a good year for ipos. you're starting to see the unicorns pick up speed the u.s. isn't as dominant as it was just four years ago. we used to have 61% of the unicorns we now have about 40 a number of companies, four of which i'm involved in already a unicorn or getting close the growth is amazing, carl, 50 to 100% a year i think the pipeline of good ipos is there. my worry is that we're not getting enough start-ups we need to get the number of ipos 300 to 400 a year so i'm optimistic on tech.

you're going to see some shakeouts. people forget that the transitions occur, whether it' in mainframes, mini computers or the internet or service provider technologies, et cetera. so the faangs are a good investment fast forward five to ten years, it will be interesting to see how many are still on that level. >> we're not seeing a lot of new money going to new start-ups right now. is this a reflection of the fact that unicorns are staying private for longer >> no. i think there are two different areas, morgan. unicorns are staying private for longer, including regulations we put on ipos and making big bets without having to explain every move they make every quarter there just isn't enough pipeline coming in. there's plenty of money. but the number of start-ups are at a 40-year low as we talked before, morgan, other countries like france in the last four years have gone

from 140 high-tech venture backed investments a year to 740 at a time the u.s. is decreasing i think we've got to become a start-up nation again. we are no longer number one in innovation in the world. bloomberg has us at number 11. i think this is a national issue that we must become a start-up nation again and realizing continuing to do the right thing for too long gets you in a lot of trouble. >> john, what do you make of the current enterprise environment for public companies take a look at many stock chart this is year, including cisco's, and it starts to look pretty choppy then recently some concerns over cloud growth rates perhaps moderating is that something that will be an issue in the second half of the year >> it's important to know that i want comments specifically on cisco, that management team to run and we do a smooth transition three years ago and very proud of the transition in terms of the business, enterprise companies i'm interfacing to -- i probably talk five or six a day with my

start-ups, all feel pretty good about the economy. they are going to spend money on tech as we discussed before, i think that was jon that asked the question or carl, every company will become a tech company all these companies are looking to how to reinvent themselves. cloud-enabled and intelligence all the way at the edge. i think it's a good time for tech start-ups and many of the enterprise companies are looking to tech start-ups to help bring them innovation i'm cautiously optimistic for the second half of the year. assuming we don't get into trade issues or anything like that, i think we'll have positive start-ups. >> you told a room that 40% of the businesses in this room will not exist in a meaningful way in ten years. if i'm not making you sweat, i should be, you said.

is that vision intact a few years later? >> i think it's more than intact it's happening at a tremendous speed. you all see the disruption as well when i said that about four or five years ago, people said, john, you're usually pretty good on the trends but this time i'm not so sure i agree. it actually may be too conservative the fortune 100 knows that what gets a company or country in trouble is missing market transitions, not innovating. not having the courage to change doing the right thing too long i think that number will be conservative and you will see disruption happen faster look at the market cap evaluation it took amazon, what, 21 years to pass walmart? i was on walmart board and we saw them coming but they moved so effectively with technology it took tesla 14 years to pass gm it took uber seven years to pass tesla. 21, 14, 7. the next transition is 3 1/2 to 4 years. it will be very disruptive at the high end.

>> i'm curious you mentioned that experience on the walmart board. when you see someone like amazon coming, how tortured are the board discussions about what to do, how to disrupt yourself, even if it costs something in the short term >> the answer is they are coming with increasing frequency. the automotive industry went through the exact same thing it isn't so much torture you have to play off the chess game established companies, regardless of how good they are today, if they don't reinvent themselves the next five years, they will get left behind. every board room in the u.s. will be looking at who are the disrupters the traditional competitors won't be the ones that get you it will be a new business model, a new change, much like what you saw amazon do, moving into a new marketplace or apple moving into a new area, et cetera. so it's something that is increasing i think the boards have to spend more and more time on it i guarantee you that the senior leaders of these countries are. >> speaking exactly of this. amazon yesterday helped to wipe

out $17 billion in market value from eight other companies and with announcement it's moving into local delivery and online pharmacy start-up pillpack this is an extreme example of exactly what you're talking about, john. we've been having discussions about whether, at least the short-term market impact was exaggerated, whether it made sense to you whether this reflects disruption in the short term or whether it's going to take amazon years to do this in scale. >> i think it's a perfect follow on question to what we just said the changes of amazon competing with walmart and other companies took decades the changes that occurred with tesla and gm took a decade and a half the last change with uber took seven years. to answer your question, it's going to occur quicker than people think that's why the market has trouble reading it if someone misses a market transition, if one of their

peers, particularly from outside their traditional competition moves with a different business model it can take them a long time to recover. and the person who moves first can gain huge market share rapidly. it won't show in the next quarter but it will in the next one to two years. >> etsy is still around. best buy is still around amazon doesn't bat 1,000 as an investor, how do you accurately assess the risk from an amazon moving in to a category and not panic >> well, i think panic never does any good. my parents are doctors they always taught me the tougher the situation, the calmer you have to get then you have to deal with the market transition. if you're focusing on a competitor, you're looking in your rear view mirror. you have to focus on what's in front of you what's the disruption? you either disrupt or you're going to get disrupted this doesn't mean it won't raise all boats with technology, but

if companies don't think about disrupting themselves, if they don't have the courage to make the change -- when i think about investments, i think about my 14 start-up companies and i know that some of them won't make it. i look for ceos who are going to disrupt. i look for the market and transition they're focused on. i like to teach that and wrote a book about it as well. >> john, finally, you mentioned the trade discussion that lingered over the market this year the administration would argue we brought you tax cuts, repatriation, we're trying to protect our ip in countries like china. that should be a good environment for start-ups and a good rirn fenvironment for tech entrepreneurs. do you have any problem with that >> it's a good start it's important to remember it's just a start we have to make it much easier to do start-ups. we need to make it muc burdensome to do an ipo.

we do have to take care of issues in china. the underlying issue is that it's not a win/win between our two countries anymore. and there's a lack of trust on both sides so i think our ability to focus in on what is the fundamental issue that we have to change and then how do we do it in a win/win where our two leaders sit down and solve it. and the same thing with tech start-ups and ipos we've got to realize that the numbers are not good and don't feel good at 200 ipos this year when we need three to four or maybe 500 to generate the jobs we need in the future. we have to realize our global peers are out executing us i give good marks to the administration and congress in terms of getting a better tax environment. we have to move faster on regulations and become a start-up nation again. 40-year low in start-ups that's unacceptable. we've got to get this engine going full bore again.

>> john has a new book called "connecting the dots" and we look forward to talking to you about that at a future date, john have a good weekend. thanks for the time. >> my pleasure available for you any time have a great day. >> john chambers getting a news alert from the world of the nba eric chemey has this news. >> lebron james is not opting in for next year, making him a free agent. he could go to any team in the league, changing the entire balance for this league and the entire business for this multi-billion dollar league all in the power of that one player. so that's something to watch over the weekend. >> thank you. >> what if he went to the golden state warriors just kidding when we come back, speaking of california, they are cracking down sweeping data privacy bill could be among the country's toughest. we'll talk about that. tesla went public eight years

ago today. we'll take a look at how the stock has done and the lack of profits over that time profits over that time dow is up 281, close to session pit's the pace of tomorrow. dow is up 281, close to session with ingenuity, technologies, and markets expertise we create the possible. and when you do that, highs. nasdaq. rewrite tomorrow. welcome to holiday inn! thank you! "squawk alley" is back after thisday inn. "squawk alley" is back after save up to 15% when you book early at hollidayinn.com need a change of scenery? the kayak price forecast tool tells you whether to wait or book your flight now.

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tesla has grown to include thousands of employees but profitability still alluding musk and his investors phil lebeau joins us

phil >> that has not stopped people from buying into tesla shares. we first interviewed ilon musk eight years ago, he predicted it wouldn't be long until the company did achieve profitability. >> we had an incredibly positive outcome from the smartest investors in the world ♪ welcome, everyone, to the model 3 unveil we have an amazing product to show you tonight. >> reporter: the key to tesla's program here in kuaia, the solar

power into two tesla power plants. >> welcome welcome. >> i want to tell you about everything this car can do it blows my mind i think it will blow yours half a million model 3s and 100,000 combined vehicles and many more, if we can do it. >> so what happens tesla stock done in the eight years? four stocks have outperformed them over that timeframe, nvidia, netflix, align technology and number one stock since tesla went public, abiomed. tesla is still chasing profitability. they believe the key will be getting that production rate

over 5,000 model 3s per week we'll get those production numbers early next week as far as production for the second quarter. >> phil, it's pretty amazing when you outline the share price and how much that's grown and yet still chasing profitability. >> in interviews and comments from elon musk he would say yeah we can get the profitability this is the primary reason why the bears, skeptics and those who do not buy in to elon musk and tesla repeatedly cite this as an example of why they believe this stock is over valued. >> phil, thank you phil lebeau. another day, another tech ipo with backers, including jeff bezos. domo going public. we'll speak with the founder and

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welcome back to "squawk alley. domo going public. we're joined now by ceo josh james to discuss the company's plans. thanks for joining us today. >> thanks for having me. >> shares are trading up since your company started trading publicly coming into this offering today, very healthy dose of skepticism from wall street due to financials, revenue growth seems to be slowing down, industry peers. you're burning through cash pretty rapidly i imagine this is something that has come up in conversations with investors leading up to today. what have you told them? >> the important thing is what you're doing for your customers.

we literally have fortune 50 ceos running their businesses on their phone using domo sometimes when you do innovative things there's skepticism but you keep pushing through we've got great financing done, great group of investors and we continue to focus on the investors and make some great software. >> what's been your response to the head of this and the ipo filing up wards of $2.5 million was spent onyou and your family members. >> i'm not worried about the media you can't have comment with because you're in your quiet period when you're running a fortune 50 retailer and you have real-time data, log in as ceo 15 times a day sometimes, we feel there's a good utility we're providing our

customers. this is a milestone. my last company is doing over $2,000 in revenue for adobe. there will be some disbelievers. we have to go out and prove them wrong by focusing on our customers. >> let's talk about the dynamics and intelligence business market it's really competitive. microsoft is in there, a public company, a big competitor of yours. and there's downward pricing pressure, in part because of tableau's new pricing. how do you compete in that market where your approach seems to have been to offer premium features built for mobile, invest in r & d when competitors, who are bigger right now, are putting that downward pricing pressure on you? >> i'm glad you brought that up. my last company, when i took it public, we have five times r & d than we had for that company this say really big problem. if you look at the market there's 75% disapproval rating

before we came along we're sitting here with our enterprise customers who have 95% retention. it took a really, really big platform that was required to deliver a solution that literally right on your phone you can see everything about your business. i would challenge anybody to think about that how many people really know everything about their business in real time right on their phone, billions of transactions, it doesn't matter? we can give you realtime data access to that that's an experience that other people who maybe take a tech approach, we're focused on cxos. we have customers with over 10,000 users it's something that the world hasn't seen yet. we have to be patient, plot forward and do a great job for our customers. what we're seeing from our customers is amazing things that we believe no one else can touch. >> josh, we just had a conversation with john chambers a moment ago his argument was that we need to make it easier for entrepreneurs to go public in this country

you're one of the very small subset of ceos who have taken more than one company public are you sensing friction in the process or no? >> it's always hard to create a company that provides utility for customers to scale i mean, it's challenging at the same time. america is fantastic you can go and get money, find believers. can you find employees and give them stock opgs a options and r. you can find people that want to believe in the future and the best way to show them what you're doing with customers and people get on board. that's what motivates our employees. you mentioned some of the bad press. it doesn't really bother me. i've had naysayers my whole life we have employees that look at what we're doing for our customers. and it's been galvanizing for us it's kind of a show me country and we're saying watch us. >> but what do you say to early investors when your company was valued on a private market at $2 billion and it's now trading at just over $500 million publicly?

>> sorry i mean, there are ups and downs. i don't know anything that is just smooth up and to the right. thankfully, you know, this isn't a transaction where everyone is selling their shares this is a transaction where we raised more money. balance seat is enough to get us to where we'll break even and those investors are still believers. some of those investors bought more stock it's just an opportunity there are ups and downs but these are pricing events, financing events what really matters is what does this thing look like in 24 months, in five years? i hope i'm doing this for another 30 years and running a $50 billion revenue business. >> speaking of, enterprise marketing and enterprise sales forces are really expensive. >> yeah. >> so how do you grow in this really fragmented business intelligence market against some multi-tool players like

microsoft, s.a.p. and/ora krc o. >> we had to figure out the right approach to go to market biggest thing in enterprise, you need your customers standing up and saying this is what i'm doing. this is how i'm running my business i had a ceo of one of the largest groelarge est global banks say to me, do you want to know why i love domo i said yeah. he said because it makes me god left kn god-like i was like what? but that's what we do for his business instead of getting data once a quarter, like everybody on earth does, we can give it to him in real time down to the frontline employee and that's something that the world hasn't seen yet. >> josh james, thanks for joining us today ceo of domo. >> thanks, guys. seema mody is here at post nine seema? >> stocks in europe are higher unemployment rate falling to a

record low 5.2% plus some optimism around that migration deal. migrant centers across the eu as well as asylum centers in africa to stop migration. overall it's seen as a positive, a step forward the euro right now higher an 1.16 against the dollar. the euro's own currency is down 5% in the past three months. the u.s. dollar, though, may fall going forward if other nations like europe continue to impose new tariffs that could actually help european growth. so, one story to continue to watch. point out weaker currency hasn't helped european stocks out perform this year. steadily outperforming the s&p 500. stock down 2% so far in 2018

and some sharp declines in turkey, russia, greece, germany, coinciding with this elevated trade fare so far this year. next quarter, politics will take center stage july 16th meeting between president and russian president vladimir putin in helsinki, finland. we're still waiting key positions in the ministry of the economy to take place and a potential bank of england rate hike that is expected the pound in the meantime continues to decelerate. back to you. >> we'll finally start talking about politics. >> thank you, seema mody let's get to sue herera for a news update. >> thank you, jon. thank you, everyone. here is what's happening at this hour a maryland newspaper attacked by a gunman thursday has kept its promise and put out today's newspaper. this morning's edition featured

in-depth coverage of the shooting and the objeituaries o those killed the opinion page was left blank. reaffirming the alliance with japan, general mattis met with prime minister shinzo abe. >> extend personal respects to you, mr. prime minister, and he stands firmly alongside you as we denuclearize the korean peninsula. >> dirty canal water appears to be the source of a national e-coli outbreak linked ed ted romaine lettuce. five died and several others became sick. e-coli was found in the canal water in the surrounding area. that is the news update this hour

back down to "squawk alley." i'll send it back down to you, jon. >> thank you, sue. is a bigger tech battle with china on the horizon we'll talk to one wall street strategist on why he thinks the trade war has been years in the making and erwi bthe lle no winners "squawk alley" will be right back

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welcome back to "squawk alley. chief global strategist, and the author of "rise and fall of nations: forces of change in a post crisis world. thanks for being with us you put this battle with china over intellectual property and access with markets in an entirely different arena than what's going on with trade and the rest of the world. tell me how important is it that the u.s. change the dynamic over the next ten years >> well, i think this is the single-most important aspect of this battle that is shaping up between u.s. and china so far, we thought of deglobalization in the old sense, values on trade, goods and services and also possibly on immigration but technology really determines the long-term development part of a nation. this is where i think that this is very hurting china.

i was in beijing last month. you could make out the nervousness, which is growing out there about the fact that the u.s. is redirecting its energy now towards the tech side because china has built up this incredible tech universe in terms of these great brands that we've all heard of, ten cent, and how it's locally done out there, the entire social media and everything and yet many of the inputs, the chips, software, the design, sthaer still importing from places like the u.s. they're still vulnerable if the supply chain is going to be disrupted by anything that the trump administration does. >> these companies in the u.s. really want access to chinese consumers and chinese companies, chinese market in general. can they afford a hardball style approach >> well, i don't think they can.

i think so far the market reaction is sort of revealing to you as to who is more vulnerable in this entire tech battle that's happening here is the irony that the chinese are much more concerned about what the impact for them is going to be here in the u.s., we have much more concern about the daily market reaction. china is definitely feeling more vulnerable, given this battle that's taking place. but in the u.s., i think that the dynamic is stronger, which is one possible reason why the trump administration backed off from some of the harshest measure measures, which will be speculation at the beginning of this week to something which is less sort of restrictive that was announced on wednesday one reason for that, i think, was the fact that wall street was so nervous about what was really going on in this battle i think this hardball stance in terms of who can afford china, has the will to fight this battle, is much more vulnerable.

where the u.s. is much more sensitive to what's happening and the market reaction. so, therefore, that sort of tempers what could otherwise be their upper hand. >> you wrote something in this new york op-ed that jumped out to me. we had so many trade experts on our air saying that the u.s. has been going about this wrong because we didn't enlist our allies to sit down in these talks with the chinese you wrote that the trump administration is still considering further measures to restrict tech-related investment flows to china and many western allies have taken similar steps. you call out germany for the actions that's been taking, australia, the eu, new data protection rules aren't just about giving consumers more control of their information but also guarding against the spread of a china-like surveillance state. reading this, it sounds like you think our allies are very much on board with the stance we're taking with china. >> yes i think that quietly, they are

and i think that is revealed by their actions. you know, forget even the allies look at the domestic politics in the u.s., which are otherwise so polarized. if you read the editorials and other commentary coming out of what politicians are saying, when it comes to china and the stance that the u.s. is taking with them on trade, you would find there's much more uniformity and consensus regarding that that shows up even in trump's poll numbers they're much higher for the way he's dealing with china than they are in general. there is this common perception out here as china of this rising power and there are some people who think that it is rising by not playing the fair game and something needs to be done to slow china's rise. i think that latent sentiment is very strong and that's what the trump administration is also tapping into the question is, does it really have the willpower to fight this battle, given the fact that the

markets get very skittish very easily when this sort of trade talk and especially when it comes to tech ramps up and then seems to sort of back off. otherwise on this issue of just sort of doing something about china in the west and within the united states as well, the domestic politics is, i think, relatively united on this issue. one of the very few things on which you get consensus out here. >> yeah. meanwhile, there's some pieces being written this week about debate within china and whether or not xi has bitten off more than he can chew within 2025 is that true >> they are going down that path but didn't expect that to happen so quickly can it get there by 2025 possibly it can. it's taken the lead in many things from drone technologies to ai.

so china is doing a lot on that front. when i was in china, it is amazing that a decade ago i would go to china and they would keep obsessing about how to secure their commodity supplies. that was their tie-up session a decade ago today the entire conversation has changed. it's not about commodities anymore but how to secure our technology supplies and stuff. i think that also reflects about tech right now and how everybody wants to secure that i don't think this is about biting more than they can chew but in 2025 that's a long distance to go and china feels vulnerable as we saw in reaction to the ban and how china was so keen to get that reversed. i think this is more about the fact that how you get to 2025 rather than sort of being ambitious about 2025. >> quickly if you can, what are investors supposed to do about companies that have a decent

amount of chinese exposure when you see this big conflict that's inevitable on the horizon? >> i think that, you know, this is one reason as to why. i'm on the investing side, as you know this is one reason why we're questioning some of the sort of tech investments in general. tech has been a sector of the world, including china, including here, it's been a favorite sector. i do feel that this is one growing risk to that tech trade as this battle intensifies. >> right. >> it's not so much about the exposure to the chinese market as such but the fact that there are these sort of gathering clouds regarding the tech sector as well because of what's happening in this trade battle and, as i said, this is -- >> right. >> -- deglobalization by a thousand cuts. it's not as if you're going to wake up tomorrow and find out oh, my god, something has changed. one by one these things are

accumulating when we look back at it, we will say aha, that all these steps led to this era of deglobalization, which is under way. >> a lot to think about. rushir sharma, thank you. >> thank you nike posted its first sales increase in north america in a year and announced a new four-year, $15 billion buyback program. first report since the corporate culture scandal this spring that led to the exit of about a dozen executives shares are currently up about 12% right now. and i think a lot of the sentiment from the street, guys, was that this was, all the way around, almost a perfect report that could have come out of this company. >> yeah. >> it's interesting how quickly investors and sentiment shift with a good report, right?

we've seen it happen before with facebook there's all this concern about culturally what was going on with data. a good report. well, there's still concern but it shifts a little bit to the back burner. we'll see longer term if leadership at nike is able to address those issues, which will be important to their longer term success. >> executive departures haven't always resulted in pain. when we come back, a lot more on the rally today. dow is up 263 as we finish out the quarter, month and the half. as we go to break, a plug for "squawk on the street. just about 15 minutes left, bid on a chance to come down to the exchange, meet the team. the lulu & leo fund. to bid check out our twitter feed or go to charitybuzz.com. look for squawk on the street.

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of the hour. >> thank you let's check in with rick santelli good morning, rick. >> happy friday. conventional wisdom is usually founded in substance the problem is too many conclusions are drawn and we tend to get a little lazy on big, conventional wisdoms. several of them actually have come into play regarding trade i've heard several times over the last couple of days, experts from all over the world on trade. and many disagree with this current administration's style and effective program to accomplish what it's trying to accomplish now i'm not saying i agree or disagree one thing i can make an observation on, all the experts in many areas have never brought home the bacon, as smart as they may be think north korea. think some of the cracks that have developed in long-term agreements, whether on trade or other issues with other countries. just the very structure of

globalism. think of another conventionalism. multinationals and the u.s. greenback. suffer greatly when the dollar improves and imports get cheaper. we always concentrate on the export side. here is my issue really, really, it's the path and pace of appreciation that matters because it affects the cost of hedging and a variety of other issues that can be dealt with, with respect to the dollar take the lessons of february with regard to volatility. you see the vix. you see what it did in february. you see where it is now. you see how stocks have suffered the reason they suffered is because the strategy was low volati volatility pack your portfolio with stocks. now that seems to have exploded to some extent it's the volatility. it's not only the uncertainty. it's the fact that countries can manipulate currencies. it becomes weaponized sometimes, especially at a time where there's a global retreat on sink

r -- synchronized growth. our competitions are export-driven economies. whether you agree with trump's aim for trade or not, an uncle just by the way the deck has been handed out seems quite likely with dollar, what's wrong with the average person getting to buy more imports at cheaper prices with a stronger dollar? conventional wisdoms are good, but there's a lot of nuance to a strong dollar and how harmful or helpful it is to the u.s. economy. morgan, back to you. >> rick, thank you rick santelli in chicago as we head to break, stocks having a strong morning. the dow and s&p both up to close out the first half of the year the dow is up more than 1% s&p up almost 1% plus, why are there bargain prices for marijuana in california and why regulation is a part of

that story coming up next

there is a state-wide clearance sale on weed new stringent regulations on what kind of marijuana pot retailers can sell are going to affect that is leading to a frenzy to sell off nonlab-tested product before the july 1st deadline in california aditi roy joins us from berkeley with more. aditi. >> i know, i'm kind of at the epicenter of all this. there are stores selling at much as 80% off we're at a lab that's doing testing, and this lab has seen a

ten fold increase in the last couple weeks for their services. and the reason is, as you mentioned, regulation that takes place this sunday, and it requires that all cannabis products throughout the state at licensed retailers be extensively lab tested as a result, we're seeing a frenzy trying to off load all of their inventory. most of that supply has not been tested we went to green cross dispensary where they're having discounts as much as 80% off store owners are also bracing for supply issues, though, next week the reason, labs like this one are getting so inundated by demand, but many labs are seeing delays in getting that pot back to retailers to put back on store shelves after being tested there are currently 31 state labs for testing throughout the state of california. compare that to more than 400 licensed retailers many labs are seeing an increase in turnaround times and as dispensary owners waiting for tested products to come back,

owners are worried about shore shelves being empty next week. >> i have someone full-time on the phone all day long right now looking for these compliant products you know, we're not -- we're a little picky we're not going to put just anything on our shelves but we're looking for quality compliant products, and it's a lot more difficult than people think. >> he adds that the regulations might be some of the smaller mom and pop operations get driven out of business, resulting in california's cannabis industry really being controlled by more corporate bigger companies back to you. >> aditi, i realize there's a frenzy to sell all this marijuana with new regulations coming into play, but has there been a frejz frenzy in terms of buyers stockpiling in terms of discounts of 80% >> we talked to customers and it got them definitely in the door to get these sales there is a limit to how much product each customer

individually can get so that's obviously, you know, there's a limit there, but people are definitely taking advantage of the sales that particular store, by the way, said they have lines out the door as a result of their store. >> just in time for the fourth of july. going to be a lot of -- a lot of smoke. just saying. >> a fire sale smoke sale >> indeed. adreety roy, thanks. >> the nasdaq and tech stocks outperforming so far in 2018 we'll get more on the divergence we have seen in ocstks in the first half of the year dow up 220

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what a first half of the year it has been, with the nasdaq and the russell outperforming. s&p up just about 2%, splitting from the dow hasn't diverged from the dow for a full half since 2009 not a big surprise given the trade discussions we have been having for the past several months banks and semis did bounce off some pretty important averages we'll see if they hold, though, because the results of the ccar have not meant every bank is sup today. >> as we look forward to the second half, thinking about ipos, john chambers was with us talking about that speaking of ipos, domo now up

around 21% from where it opened. so lots of controversy around that stock, but not enough to keep it down >> yeah, just note, dow transports have been the underperformer so far this year. i suspect we'll have more conversations about dow theory it could get all wonky >> we'll have a good weekend let's get over to melissa lee and the half welcome to "the halftime report." i'm melissa lee in for scott wapner we talk about all this money pouring into financials. the sector leading the s&p 500 today after the fed said most banks are clear to hike dividends and buy back stock here to debate it, jim lebenthal, josh brown, and jj, also with us, from lake joseph, canada, the one and only kevin o'leary, chairman of oshares etfs we have 13 straight days of losses for financials going into ccar we have them in a rally mode