from sun valley, on creating a modern media company the challenges and rewards ahead. an exclusive on "squawk box. good morning it is 4:00 p.m. in london. 11:00 a.m. on wall street. squawk alley is live ♪ ♪ good thursday morning. i'm carl -- interesting market day as the dow is up 166 s&p 2789

we're watching inflation data. of course the president making his first visit to london since taking office. we'll talk to steve sedgwick in a moment in the meantime, mike, in terms of market action, volatility is down a touch here. what do you think? >> it is i mean, it's been a pretty good strategy or tactic to buy the one-day selloffs on incremental trade headlines. coming in yesterday, s&p was up 3% in four days. you had a logical point to pull back today is recouping most of that. it's not necessarily a full change of the story in terms of what got us to these levels. once again, big tech, growth stocks, not affected by trade or doing a lot of the work here it makes sense to me also, yesterday afternoon, the selloff in oil got very messy. you were down 5% it started to look disorderly and you found footing there. maybe it's keeping people from thinking there's something else going on in terms of forced

selling. >> any broadcom effect in terms of anything might be for sale? no rationales for anything >> i don't see that extrapolation happening. ca hasn't been explicitly for sale ever. ca kind of similar financial metrics and market selling bogm. >> you might kick off one of those hey, why not, see if ceos ask for forgiveness rather than permission and try to do these deals. i don't see it reallygetting there. >> quite a disparity in action between ca and broadcom shares today. we mentioned the president in the uk steve sedgwick is there with the details. good morning, steve. >> carl, it's frenetic activity at regents park, one of the nicest areas it london we have a ring around the president who arrived about 2:30 local time to the ambassador's

residence. this is a winfield house he's using that as his base. marine 1 came down he'll be taking off in a few hours' time to go to the palace. one of the most famous palaces in the united kingdom. home place of winston churchill. that's the start of his official activities here. there are a lot of protesters here in london as well we've been speaking to a spokesperson for stop trump coe legs i said, he's democratic i cally elected. it's all right for him to be here. >> he uses that authority to kick down and to punch down on the most vulnerable people >> that was him talking to me earlier. the president has an -- he'll be using marine 1 to get around he will not be using the on the ground cavalcade to avoid this vast amount of protests we're

expecting starting at 5:30 local time a huge coalition of interests really coming together to make mass protests here in london very big one on the streets of london tomorrow, 2:30 p.m. they're expecting tens of thousands if not more to be on the streets of london down from portland place just north of trafalgar square in westminster, we have this controversial trump blimp which will be tethered between 9:30 a.m. and 11:30 a.m in terms of the president's official agenda, he's got a dinner tonight with dignitaries, hosted by mrs. may, the prime minister, as far as tomorrow is concerned, he's got an engagement watching joint uk and u.s. military. i can't disclose that to the public checkers is the prime minister's official country of residence. that will be a key, very important for mrs. may we've been talking about her and how difficult a position she is

in politically she'll be hoping on wins on trade and defense as well. mrs. may mentioning in brils br. will be supporting the u.s. and putting for british troops on the ground in afghanistan. the president is going for tea tomorrow afternoon at windsor castle before going to helsinki. he'll go to scotland for a bit of golf. >> thank you, sedgwick talk to you in a little while. all kinds of headlines on tariffs, nafta, kayla tausche is monitoring that for us. >> we're going on an hour of the secretary of the treasury being questioned on capitol hill every single member of congress that is on the house financial services committee has had a question about trade here's what the treasury secretary said about business uncertainty. >> for cnbc, does a survey of

cfos of major u.s. companies and 65% have reported that they fear u.s. trade policy will negatively impact their firms over the next six months how does the administration think about business uncertainty as it calculates its trade poli policy >> mr. chairman, i can assure you that the president is very much focused on economic growth and i can also assure you that i am monitoring the situation very carefully. >> we have not yet seen any negative impact, although as you've said we are monitoring carefully the impact on uncertainty on investment. >> there is a negative impact on one company in particular. harley davidson. the secretary was asked about that situation in particular and the president asked harley davidson after the company made the announcement that it would be shifting production outside the u.s., the president asked

for the company not to do that he didn't know what the end result of that conversation was. but interesting that that happened finally, i also want to let you know he was asked about retaliation, specifically from europe he said that they are very focused on blunting the impact of retaliation and said that there's a meeting at the end of july between the eu and the u.s. here in washington where that will be the topic of the day guys >> all right thank you, kayla >> now let's get back to the impact on markets. mike san toll i is with us mike, the dow is mostly higher only two be components >> a lot of the trade talk for the gegeopolitical frick shons, there has to be -- you have to see emerging markets melting down and some kind of rupture in the capital markets that really impacts portfolios in the way investors think about risk

i don't think you've seeb that on a sustained basis right now maybe people are trying to look on the bright side and sort of not flinch in advance of whatever the impact might be of tariffs. when it comes to the relationship with allies, the market doesn't see anything really priced in at this point th a big picture, very long-term. if it's going to be an unwind of what started as commercial -- getting stronger, companies can become more global, if that's going to be reversed, it's going to be so slow and tectonic, the market won't be focused. >> one group where we're seeing a difference is defense stocks we're seeing a bounce there. aerospace and defense, etf up after selling off yesterday. some of this part of the broader bounce in industrials and the brorder market in general today. with that being said, you had a couple of analysts come out with notes ahead of earnings basically suggests that this group performed well in the next

round of earnings season on the heels of nato and the focus on increased defense spending and that this push to get all the nato members to 2% of gdp in terms of that defense spending really interesting note this morning, roman schweitzer saying that from his calculations on the alliance's own data, $117 billion annually, that would be the increase, a 38% increase from 2018's levels if all of the members were to get to the 2% level. that, in terms of the fact that it's 20% of total spending on equipment, that's the additional guideline that, that would mean an additional 23 billion on r&d, hardware purchases that coupled with the fact of a number of headlines and pieces of news around ongoing missile defense demand is pushing these stocks higher. >> it's rare to have a tailwind of demand that's really not going to be particularly susceptible to economic changes over the course of six or seven

years. that's the way the market is viewing this objeviousl obviously, you can't bake all the numbers in, but in terms of the direction the money will be pushed higher. >> it seems like the market is shrugging off the inflation data over the last two days. >> i think that's a fair call. i mean, obviously, the short-term treasury yields have already been near at highs, that's been pricing and the fed will be doing plenty more. i do think people are trying to say, well, maybe this is statistical effects of weak numbers a year ago nobody really thinks escape velocity 2 and 3% for cpi is in the offing that might be the area of surprise if we look more likely on that front. >> mike, thank for your thoughts mike, santoli. comcast, cnbc's parent company upping the bid after 21st century fox increased its offer for the company.

we're joined by julia from sun valley idaho the week's best live shot, i have to say. julia? >> morgan, it is beautiful in sun valley just today, british regulators gave fox the long awaited expected regulatory approval of its sky offer. this opens the door for fox in concert with disney to make a countser offer to comcast now winning a bid of $34 billion which it made last night up from the roughly $30 billion offer comcast made back in february now, all the players are here in sun valley with disney's kevin mayor, heading into the conference this morning. ceo bob iger is here, but he's managed to avoid the cameras so far. rupert and lock lan murdock are here the next shoe to drop may be out of the uk when the british takeover board announces the price it takes for the -- should

the deal for fox go through. this is due toy a british rule it ties the value of sky to the investor of fox. i caught up with barry diller. he's the chairman of expedia along with a hollywood veteran he's been in the industry many years. heading into the conference this morning, i asked him what he makes of all of this consolidation. >> do you think more media consolidation? >> it's inevitable we've been seeing it for 75 years. why stop now >> will tech companies start to buy media companies? >> not really. i don't think so the gulf is too wide >> i also asked diller if iac was interested in buying groupon. that's rumored he said i don't know but he didn't rule it out. we'll have much more from sun valley over the course of the day. we'll have an interrue with liberty international ceo mike freese coming up in closing bell guys, over to you. >> julia, thank you.

it's been a lineup julia boors sten in sun valley she has an interview with randall stephenson tomorrow morning as well. so dry always love hearing from barry diller fantastic. moving on to broadcom, this is the tech story of the day broadcom making this $44 and 50% share in cash per bid for ca technology got a lot of analysts shrugging going, what are they doing here? the reason is broadcom is a chip company, all kinds of chip they made this unsuccessful bid for qualcomm that made a lot of sense to a lot of people. aside from qualcomm and the u.s. government trying to become this mega chip player but now ca, very different here is a player where more than half of its revenue in the last fiscal year was in the mainframe business the lion's share of its profit also in the mainframe business if you're reinventing itself for

the cloud era, trying to take this mission critical enterprise software play and help customers migrate from mainframes to the cloud with the same level arguably of security of accuracy insight into their data. they've been pushing this hybrid cloud idea so what is broadcom really up to here well, a couple of possibilities. maybe broadcom is trying to recreate that big box enterprise tech giant, like hp and ibm and dell were trying to do 15 years ago. or maybe it's buying ca for the cash flow. to fund other acquisitions take a look at what ca reported as free capture last year. $3.2 billion broad ccom has been inquisitive they want it for healthy cash flow they will sell off pieces of this that they don't necessarily

want we don't know. because they really haven't done a conference call to explain this but lots of ears to the ground in this. trying to figure out exactly what hock tan is up to ca had stabilized the mainframe business they were saying that it's no longer a negative. no longer a headwind to them i guess if you're a buyer with an eye like private equity, that looks like cash flow that looks like a good way to fund future acquisitions and expansion. broadcom has certainly been all about that. >> crazy question for you. the timing of this deal and the fact that they do seem to be such different businesses and there's a lot of head scratching on wall street around this today, how much do you think that is tied to what we saw in terms of the results or the at&t time warner decision from the court? >> i think it's totally different. i mean, i think there are similar dynamics at play perhaps an enterprise software as what we're seeing in media and distribution i think what we're seeing in

enterprise software, a lot of people getting -- the idea there will be sensors everywhere you need to vertically integrate a lot of processes if you're broadcom, you're probably looking at high value customers like government, like airlines, like financial institutions those are the types of customers that ca also has so the customer list is valuable plus the cash flow is valuable everything else can maybe sort itself out we'll watch that 18-month low for broadcom. that's the worst price action ever in its history. when we come back, tensions rising between the u.s. and china. microsoft's president, brad smith, speaking out. >> nobody should trust the technology from either country we need to keep in mind that china, as big as it is, the u.s. as important as it is, together we only account for 24% of the world's people we need to serve the 76% of the world that doesn't live in china or the united states that is frankly, the key to both

countries' success joining us next microsoft's chairman john thompson we'll monitor on the hill. squawk is back in a moment are you ready to take your wifi to the next level?

then you need xfinity xfi. a more powerful way to stay connected. it gives you super fast speeds for all your devices, provides the most wifi coverage for your home, and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. all-time highs as tech valuations continue to soar. the macro environment remains tenuous with global regulatory shifts, competition and the current trade war with china how are tech leaders going to

navigate all that? weighing in now on an exclusive, john thompson the chairman of microsoft and venture partner at light speed ventures john, great to have you on with us welcome. >> thank you nice to be with you. >> so, when you look at this escalating trade tension with china and the possibility that it could cause questions about the security, viability of technology coming out of both nations, what do you think is the ideal end game to this >> well, ideally we do need to figure out how to balance the trade between the two countries. no question about that however, when you think about the tariffs that have just been implemented, they will be carried on the backs of u.s. citizens those of us who buy and sell things every day that seems to be a bit off, particularly when you compare that to what's happened to salaries for the average u.s. workers. u.s. workers will carry the cost of this trade war that's going

on and yet, we haven't seen them do anything, poe nengsly to grow the salaries of the u.s. population that's not a good thing. bad combination. >> yeah. want to talk to you about microsoft as well. you have been chairman through one of the most interesting periods in its history it's hard to believe, but just a few years ago, activist investors were prodding at microsoft, wondering what would change strike that yes joyce and his performance has surprised a lot of people. tell me from the board's perspective, from your seat what, did microsoft get right and what surprised you perhaps that you didn't see coming over how the company has changed over the past four or so years? >> well, that's a great question i think sat i can't has done an amazing job. i don't think any of us would have forecasted the recovery or the rebound of the company to

the level that it has rebounded back in 2012, let's say or 2013. when you look at what satya has said, he said the marketplace is shifting to the cloud. we have to make cloud first a reality. being in the cloud is not just about windows. it's about being about the platforms that many, many users currently want to take advantage of so this shift was an important shift. quite frankly, the fact that we had a strong on prim presence, allowed us to help customers migrate to the cloud in a meaningful way i think satya has done a great job and the company is in much, much better shape. the onething that's truly amazing in this transformation has been the cultural shift within microsoft there's much more camaraderie and openness and more openness with customers and partners. that sentiment has changed the way the market perceives microsoft and has helped to

underpin the growth of the company over the last few years. >> john, tell me, what do you think is the most important driving theme in technology right now? you're in a unique position both as a chairman of microsoft, one of the biggest, most profitable technology companies, but also as a venture investor looking for things to disrupt big companies. is it artificial intelligence, is there another way of articulating the disruptive force that you see coming that's most important >> well, quite frankly, one of the reasons i joined light speed was to have an opportunity to monitor this inevitable change that's going to occur in our industry one of the big technology platforms or initiatives is around a.i. and machine learning and applying that technology to existing application platforms that allows us to improve productivity substantially while many people talk about the impact it has on jobs, the

reality is technology has had an impact on jobs around the world for the last 25 to 30 years. so we will have to adjust to this a.i. and machine learning will become an important element of every technology platform over the course of the next 10 to 20 years. not unlike the web did 20 years ago. >> john, morgan brennan here you mentioned jobs i wanted to get your thought on another governmental policy. microsoft president brad smith was on cnbc a short while ago and mentioned moving jobs abroad because of u.s. immigration policies how could that play out? what would that look like? >> well, i'm not sure. i didn't hear brad's interview by the same token, any time there's a trade war, any time there are restrictions that occur country by country, it puts a u.s. company at risk as it tries to operate abroad we have just announced a restructuring of our european business, but that's more about microsoft as opposed to the

regulatory environment that's gone on around the world i think we're going to have to be careful and monitor this over the course of the next six to 12 months, because quite frankly, growth in our business is about global growth, not just in the u.s. >> john, it's interesting, in recent weeks there was a push for microsoft to cut off contracts with i.c.e immigration and customs enforcement over the political stuff going on lots of disagreements over how to handle immigration and such it seems to me there was a time when, if you were selling software, customer bought the package, that was the ends of the transaction. they went and installed it they moved on. now in the cloud era, when you're providing a service, it seems like you have a continuing in hand in what the customer is doing. how do you balance the company's values against what a customer might be doing with your

software that perhaps doesn't a align with those values? do you have to treat it differently or is it a matter of explaining the relationship differently? >> i think this has been both an emotional ishe emotional issue for many people and pragmatic issue. at the end of the day, we're a country that has to execute well around the world if we don't do that, we don't grow as a country. my sense on i.c.e. is that many of the issues there relate to the immigration debate that's gone on day in and day out at the end of the story, we have to make sure that we do the right thing to balance between growing the economy and quite frankly, accommodating workers that need more work. >> from microsoft's perspective as a provider of technology, not just to the u.s. government but to governments around the world, to what degree should microsoft be held responsible or feel responsible for the policies

that governments execute using that software? >> well, at the end of the day, we open -- offer an open platform that platform that runs on the cloud service for microsoft is, in fact, controlled by microsoft. the on prem presence of software we cannot control. you should expect that the cloud platform from microsoft will conform to a set of regulatory policies and standards that are acceptable around the world. that's been the nature of microsoft's business for many, many, many years i would expect that, as this cloud revolution evolves, we will show the world that we are a straight down the middle kind of company and execute in that vein >> john, i'd love to get your take on the state of security in technology you're the ceo of semantic for quite a while. we find ourselves in the environment where you can no longer count on just having a

barrier around the perimeter, along the outside and keeping the bad guys out you have to be able to track what's happening inside a corporation, inside the firewall and figure out where bad actors might have already infiltrated what is the next trend in that arena technologically that we ought to be paying attention to and how do you distinguish between a security company that has a sustainable advantage and one that's just chasing the flavor of the month? >> good question well, security has been one of the top venture investment areas for the last five or six years i've actually looked at quite a few companies since i joined light speed. the simple answer is, the security problem is going to continue to challenge us but when you think about the application of a.i. and machine learning and a number of other technologies like data graphs, two to the security technology

platform, you can come up with new solutions that will make customers more secure tomorrow than they are today. candidly, i've seen about four or five interesting young technology companies in the securities base over the last two or three weeks and all of them are thinking differently about security rather than it being an end point or a firewall or some other component. they're thinking more holistically and how they can orchestrate insights across the various products that most large enterprises have if you were to look -- >> can you give me names >> no, i won't some are in stealth mode but one in particular called net scope is one that i think everyone ought to take a look at i'm not promoting light speed here, but the company is doing exceptionally well >> all right john thompson, chairman of microsoft. venture partner at light speed former semantic ceo. we covered a lot of ground thanks for joining us. thank you. an a day when microsoft

shares are hitting an all-time high one trade group sounding the alarm. one could impact the tech sector we'll bring you the details next "squawk alley" will be back after this simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done! tripadvisor. visit tripadvisor.com

tech stocks leading the rebound. amazon an all-time high. could tariffs be a headwind for growth quote, saying we urge the president to delay this unnecessary escalation before more workers are harmed and instead make a concerted effort to build a coalition while he's in europe and negotiate with china to achieve tangible commitments. the ceo of -- dean garfield is with us along with ellie wheeler here with us at post 9 good to see you both. >> good morning. >> thanks for having us. >> thanks for having us. >> there's a report out today, they say escalating trade protectioni protectionism. supply chain effects could have an out-sized effect on a few

companies. two named by name are intel and texas instruments. is that sort of the way the industry is feeling? >> well, i think it includes tech but extends beyond tech the supply chains for all companies are incredibly internationally integrated china is central to that the president's tariffs will certainly have an impact on those supply chains. more importantly, will have an impact on consumers and their wallets. when you get to $200 million in tariffs, it's hard to be surgical the impact will be broadly felt. >> it's still a small percentage of the economy overall what's the concern if there is any in silicon valley, for example. >> sorry. >> i was asking ellie. >> go ahead. >> again, i think it's too early to tell. i think people are trying to shift through it to dean's point, it comes down to consumer spending for a lot of it. if you're thinking about a lot of the consumer companies that supply chains are, maybe they're

manufacturing in china, maybe components from china. it's really wide ranging and pretty complicated trying to supplies all that out and understanding how their costs are going to be affected and if consumers are going to spend less that will be more of a reverberation for a lot of our companies than a specific line in this particular measure. >> just sto start digging this further, dean, there was a report in new york times this morning how rare earth could be crucial in the trade war highlighting the fact that so much of the rare earth's materials, that the world depends on, particularly the tech industry, whether it be smartphones or renewable batteries and electric cars our mind and coming out of china, what if that became a part of china's retaliation towards the tariffs in the u.s are you hearing that from companies you represent? >> yes, absolutely the concern is twofold one is the cost increases that may result in the united states that will be an impact on

consumer spending. and then second is the retaliatory impact of china. the 200 billion is greater than the trade with china so the likelihood is china is going to look at other approaches for having a reciprocal impact, including limiting access to the market or limiting access to the kinds of minerals that you just mentioned. >> ellie, so is there a plan b that is being developed among the startups that you talked to, whether it's supply chain-related when it comes to china or whether it is other markets, emerging markets that they're looking to get to? are those sorts of strategies starting to emerge >> yes, they are but i would say that has preceded -- the strategies were already being developed. that's partially because costs in china are rising, actually. so it's not necessarily always the cheapest place to manufacture.

and having multiple sources and multiple countries, especially in this macro environment is generally an intelligent thing to be exploring, if not necessarily already shifting some of that manufacturer or some of that development that has been in the works for a lot of these businesses. but you'll see it accelerate if this is obviously going to be impactful for that particular business. >> dean, one last point. there's a big conference of semi equipment makers out west this week some of the speakers have said, maybe for example, semi equipment, sales are halted to china. that will be a near term hit maybe it's worth it in the long run if it means protecting our ip is there a cohort saying that out loud >> there's no doubt that the president is right to put pressure on china to change its practices. china has abused its privilege of belonging to the wto. the key here is to recognize

that the end goal is not tariffs, but to get china to change practices hopefully, that will be the next step in the engagement, which is sitting down at the table and delivering something tangible for the american people. >> dean, ellie, we'll watch it closely. big implications for tech and others as well thank you. >> thank you knew let's get to sue gerer a, for the news update sue? good morning john. good morning everybody in a speech to the economic club, house speaker paul ryan is crediting the gop's tax plan with improving the economy which is central to the republican pitch to voters ahead of the midterm elections. >> tax reform is working it is improving people's lives it's the entire purpose of why we're here to be clear, it's not the singular reason for this boom. but it was vital to ensuring american preeminence in the 21st century. >> members of the thai navy

s.e.a.l. team who helped rescue the 12 boys and the soccer coach from the flooded cave rushed to their base and received a hero's welcome. they were thanked by the fleet commander. the brutal murder of an african american teenager which galvanized the civil rights movement is getting another look from the justice department. 14-year-old emmitt till was accused of whistling at and grabbing a white woman a jury acquitted two white men of his murder. those men later confessed to that crime that's the news update back to squawk alley, john >> thank you, sue. president trump in the uk as prime minister theresa may facing brexit turmoil amidst a series of high level departures. re ht lle xtn "squawk alley.

president trump making his way to the uk as prime minister may faces a loss of confidence after turmoil surrounding her brexit policy led to a series of departures sat down for the first interview with the uk foreign second jeremy hunt. he asked how theresa may is holding up >> this prime minister has been through many, many tough weeks and people always underestimate her resilience, but she is one of the toughest, strongest

people i've ever met i have to tell you, i've been with her for the last couple of days in brussels you wouldn't know she's been through a tough week at all. she's been amazinamazing. >> she introduced to you president trump and president trump said he was a friend of your predecessor boris johnson. how did that introduction go >> it went pretty well he was kind enough to say he had heard nice things about me i had something to live up to. but if boris johnson was a great patriot and a great believer in what it is possible for britain to do on the world stage, and i am exactly the same. i am passionate about a britain that is strong and confident and really stands for the values that britain and america stand for across the world, freedom, democracy, the rule of law the kind of things that have been here since 1945, that we've been lucky enough to grow up in, the biggest period for peace,

freedom and democracy. we want that to continue. >> do you regret the expected level of protest against the president for his time here in the united kingdom will that make it harder for you to impress on him the messages you want to get across >> not at all. because, you know, what brings britain and america together is that we are the strongest believers in the world in democracy and democratic values. yes, we have lots of leaders who visit london from countries that aren't democracies and we have to explain to them, yes, we do allow these protests yes, there will be people waving flags you don't like we don't have to explain that to president trump. he understands why that happens and those are his values as well >> when russia -- when the -- were poisoned in the united kingdom, was that outright attack by russia on the uk what message would you like president trump to take to president putin?

>> it was a very aggressive thing to do and totally unacceptable these were appalling chemicals that were used and we've already lost one british life as a result of it the reaction from the united states was extremely robust. it was extremely robust across europe indeed across the world. that's why the summit that president trump is having with president putin next week is very, very important and indeed, the united front that we saw at nato at the end of the summit, very, very important president putin needs to know that the west is united and standing for what we believe in. >> how hopeful are you to convince the president that once they're out of the eu to exclude you from the tariffs he's currently imposing on the european union. >> i'm very confident we'll be able to get to that position we share so many values with the united states.

alongside the united states, we have been the country that has championed free trade across the world more than any. but we do understand the president's view that free trade has been fair trade. and it has to be on the basis of deals that work for ordinary americans and sometimes you need to reset the dial and so he can be very confident when it comes to the united kingdom, what we want is fair competition and borders that are as open as possible when it comes to buying and selling each other's products >> will, an important and timely interview. what's your take on the prime minister's -- with the conservative party after a few days. >> i'll start with the prime minister's position, which since monday has stabilized. but in the last 24 hours has weakened fractionally. the brexit is tabling some

amendments to her withdrawal bill not as far as a vote of confidence that's kind of the position she's in i'd say the big take away from the interview is resounding support for the president. there may well be protests while president trump is here in the uk but they won't be coming from the government itself. still to come from that interview, john, coming up, are jeremy hunt's views on brexit. he was a remainor. he now is a lead supporter he outlines his hopes for brexit both in the short-term and in the long-term. >> looking forward to more thanks great stuff. as we go to break this morning, cnbc's delivering alpha conference is wednesday, july 18th big names you don't want to miss mes.l bring them to you in a few wrachblt we'll be right back there's this. a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.

here's what's coming up. as we brace for bank earnings, will the numbers be good enough to jump start the sector >> plus, the big call on big winner netflix is now the time to hit the pause button and kevin o'leary is with us he'll eltell us where he thinks the market is headed we're ten mments away. we'll see you then >> and just as we get the emmy nominations regarding netflix, we're looking forward to it. >> when we come back, the untold story of facebook's early days you need to hear to believe. "squawk alley" will be right back are you ready to take your wifi to the next level?

then you need xfinity xfi.

a more powerful way to stay connected. it gives you super fast speeds for all your devices, provides the most wifi coverage for your home, and lets you control your network with the xfi app. it's the ultimate wifi experience. xfinity xfi, simple, easy, awesome. the surprising and untold story of facebook's early days, our next guest's book, valley of genius, takes a look at the roots of sillicon valley from atari to apple and facebook. congrats on the book thanks for joining us. >> great to be here. >> you have pretty sensational juicy tidbits here in this book from, and the way it's laid out, it's directly from the of founders and thought leaders and

innovators themselves. what was the story that surprised you the most >> about facebook, it's when i came across an early patent or rumors of an early patent, and it turns out that when they just after they moved to silicon valley, just after zuckerberg's finished his sophomore year, he came out as like a summer project to do this company and have a lot of fun. and we know the story. it all took off. but one of the things they were working on was not a social network. it was a keg they had a keg that could recognize who was coming up to it >> smart keg >> a smart keg and then, you know, tell everybody, hey, so-and-so is at the keg. and it's because, as it turns out, early facebook ran on beer. and it was pretty much an all night party.

every night. >> and of course, zuk,accordin to your book, had quite the first business card as well. i wasn't expecting a business card like that from him. >> it exists it's true. >> we can't say it on air. >> we can't say it on air. you'll have to read the book to find out what it says. >> what do you think most people don't get about the valley, what it takes to succeed there, what it feels like to fail there? the types of people that work there. >> i think people don't get that the creators of the valley, the engineers, are really see themselves as artists and utopians and every time it just gets wrapped in this pile of money and squelched and turned into something not so cool. and it happens over and over from atari, all the way through to the current day

>> and of course, just - >> just more money more money now >> every company has got to change, but the question is, how do they manage to grow up but retain that spark tat made that special? >> exactly, and i think the answer is they need to discover their own history. they need to celebrate that kind of utopian spirit that was there, you know, much more prevalently back in the day. you know - >> what's the day? like hewlett and packard in the garage, what >> i start 50 years ago. i start with atari that's the first consumer facing silicon valley company it's the first to have like that young kind of brash ceo who was wild before that, it was, you know, making projects or little products for the war machine little components. so that's the first real modern silicon valley company and you know, his protege was steve jobs, and steve jobs

always talked about bicycles for the mind and now, we're not making bicycles for the mind anymore. >> yeah. >> and we gotta rediscover that or else we're going to lose everything and really, we may lose what makes the valley creative and really is that thing that powers it ultimately. >> we have to leave it there it's a great book. and thank you for joining us to talk about it. adam fisher, the author of ens.ley of giu >> halftime is after the break ♪ come on. come on, squirt. (dog barking) whatever your financial goals are, a u.s. bank wealth management advisor can help make them a reality. talk to one today. u.s. bank - the power of possible.

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welcome to "the halftime report." i'm scott wapner our top trade this hour, bracing for the banks with key earnings kicking off tomorrow will the sector which has come back to life lately help restart the rally? here to debate that is joe, steve, jon, and rob of ubs private wealth management, one of barron's and forbes top 100 financial advisers also with us from lake joseph, canada, is kevin o'leary, mr. wonderful is the chairman of o'shares etfs, a