♪ ♪ good tuesday morning welcome to "squawk alley." i am carl quintanilla with morgan brennan, jon fortt at post 9 of the new york stock exchange a big rally under way. close to session highs, surging after a good start to earnings season the big question is are stocks still cheap and is now the time to get in. joining us, mark may, who upgraded netflix ahead of earnings due out after close brian white. good to see you. thanks for coming in get your take on netflix to

start. few price cuts in the past 48 hours. what do you like >> i like that people are cutti cutting targets. you step back, reassess ratings, recommendations, looks like an opportunity to me. this kind of market environment i think investors are looking for assets like netflix, a great value they deliver to subscribers. high subscription renewal rates, lots of pricing power. what i like about the earnings story from here is losses peak and we see leverage from content investments netflix has been making for three years that's the story i like to see, a doubling of earnings, real earnings story going forward in the next two, three years. >> rising rates a reason for some target cuts don't see that as risk >> i think it is factored in at these levels that's our view. valuation looking attractive at

these levels. >> brian, does netflix need perfection in the earnings report in this environment or has stock fallen enough that pretty good will be good enough? there have been some quarters you need to see not only the international subscriber numbers but also domestic outperform what some had at one point thought was a saturated market. >> i never look at netflix as a trade in to the quarter, absolutely not i think what we saw last quarter was probably the biggest miss of any company i've followed in terms of top line numbers. 17% miss on net subscription ads. i think the story generally is positive a lot of content they're doing a great job with margins. subscriber growth is strong. they overestimated what it would be last quarter. i think it is a great secular story, i never play netflix for a quarter. >> mark, you put out a note today about amazon and specifically about those

proposed rate increases from u.s. postal service last week. shipping costs, how should we think of that with the fact that they're looking to increase rates at the highest level since the '90s. >> we estimate 30% of amazon's outbound shipping is sent through the postal service, remainder through fedex, ups and other regional carriers. you apply 10% price increase they propose on average, lookin at a billion in incremental cost for amazon it is a big number however, amazon has a lot of things to offset it by theyjust raised prime subscription fee by $20 in the u.s. that alone adds 1.5 billion in additional revenue in year one, that alone covers the postal service fee increase there are a lot of other things they can pull levers, passing them along through higher fees which they have done in the past without impact on business it is a big number

could be a big impact. amazon has a lot of levers to pull. >> at the same time, adobe with guidance last night, reasserting its leadership semis not really buffetted by morgan stanley do you think tech is on four legs >> it is time to go shopping i look for strong secular trenl trends, internet plays, cloud, ai i don't necessarily look at more commodity areas as attractive. a lot of them will prove to be value traps. >> what do you mean commodity? >> anything hardware related when you take a look at amazon here, it is a great by apple is a phenomenal buy. it is the robert jordan of the tech world with privacy issues out there. then look at the smaller emerging group, twilio they made an acquisition last

night. great buying opportunity, down 10% today. and i think this opportunity, especially if we were just two major cloud conferences and the spending levels are very strong now, so if you're playing in these areas that don't have strong secular trends, you don't see that if you play in the cloud, play in ai or ar, there's attractive opportunities here. >> mark, is there a global down side in that when things go well, you talk about these are global companies, look at the growth overseas. right now in terms of markets, the u.s. has been outperforming other markets. the dollar is strong that should have impact on earnings has maybeglobal trade turbulence dampened demand and might we see that in results >> focus on amazon and netflix, names i have written on more recently, share a couple of common themes.

one is international for this is fairly nascent and new business. amazon is only in about a dozen countries. three or four represent the bulk of their international revenue they have a significant runway for new countries that they launch into recently we know for netflix, they recently went global, global for them started about three, four years ago. less than 5, 10% penetration in a dozen international markets versus 30, 40, 50% penetration in the u.s., canada, uk. they're more established markets. the company has a long runway to grow, should grow secularly through cyclical down turns. >> before we let you both go, you talk about international, google, coming out and making the most public comments about the possibility of going back into china do you think this company does it, what are the risks if they

do >> we wrote about that earlier this year, thought they were going back into china. it is an enormous market opportunity. the narrative for google now is very negative. they have privacy issues around the world. they dominate search it is not like amazon where they have less than 1% of retail market, they dominate search so can be considered monopoly they turn away opportunities like the cloud project and looks like we don't want to help the u.s. military but we're willing to help the chinese government the narrative couldn't be worse for them right now >> i'm not a big fan one truism in internet is almost all u.s. internet companies fail in china seen it over and over again. and the second reason is i worry about cultural rift inside the

company. seems like there are a lot of vocal opponents of this inside google for these two reasons, i think it is a bad idea. >> the relationship between tech and the government is getting interesting. good to see you. as we head to break, look at shares of cannabis companies tilray, canopy growth. continuing wild swings as canada is set to legalize recreational marijuana tomorrow we look at the companies to watch later this hour. and this afternoon, don't miss the exclusive interview with goldman, sachs new ceo david solomon on "closing bell" 3:00 p.m. eastern. a lot more "squawk alley" still to come. your company is constantly evolving. and the decisions you make have far reaching implications. the right relationship with a corporate bank who understands your industry and your world can help you make well informed choices

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...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. dow up 327, close to session highs. s&p, 2785. takes you above the 200 day with cushion to spare that number is 2767. vix below 20 a lot of technical levels being watched as bulls try to muster a rally. we'll see as art cashen said, whether it can survive the 3:00 p.m. selloff we had yesterday when gains couldn't hold. >> we did. earnings is the story today. health care and tech stocks rallying it has been another volatile

session. right now so far looking like we are hanging onto gains for the dow, two out of three days >> weird who knows what this is about having a max conference. the stock was down heading into the news they announced photo shop for ipad and other things. today it is up 7.5%. go figure. >> we'll watch it. a lot still to come after the bell, netflix, ibm we will take a short break back in a moment don't go away. we started making wine in 1948... [sfx: bottle sounds on conveyor] one bottle at a time. today, we produce nearly 20 million cases a year. chubb has helped us grow for the past 30 years... they helped us prevent equipment problems during harvest and provided guidance when we started exporting internationally. now we're working with them on cybersecurity. my grandfather taught me to make a wine that over delivers. chubb, over delivers.

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u.s. companies poised for high rewards in the cannabis market canada is set to legalize recreational marijuana beginning tomorrow which names stand to gain the most >> in order to do business in canada, u.s. cannabis companies have to form partnerships with companies across the border

since marijuana is federally illegal in the u.s. and can't import or export the product the biggest u.s. winner could be constellation brands which acquired 38% stake in canopy gloat for $4 billion this year and molson coors is joining a corporation to develop cannabis drinks in canada down the road other companies benefitting from legalization is med men, made the biggest acquisition in history. it has a distribution partnership with canada based cronos group they also invested in lowell brands, a company in california. the ceo of lowell brands says he is talking to a number of canadian companies that might be interested in partnering on a distribution network with him. grow life is a san diego based company that provides cannabis growers with materials and equipment. the company recently opened a store in calgary, is expecting surge in demand. here in the u.s., a lot of

companies are worried about losing out on that opportunity and are speaking up about it a california based company has taken out this ad in "the wall street journal," urging president trump to make marijuana federally legal. some industry insiders while excited about canada's legalization are managing expectations, reminding us the market in canada is projected to be smaller than that of california alone morgan, back to you. >> thank you aditi roy. volatility in pot stocks as canada legalizes recreational marijuana tomorrow is spurring a boom in the legal cannabis industry joining us on canada's decision and what it means for u.s. cannabis companies, ceo of columbia care. thanks for joining us. >> thank you for having me. >> as we discussed, you have canada legalizing recreational use, tomorrow is being watched around the globe it is the second country to do it, by far the biggest developed

country to do it focus has been on recreational in terms of this but how do you expect it to effect medical cannabis? >> i think the two are one in the same there's intentional effort to separate medical from recreational a lot of people use it for self medication purposes. what it does, it accelerates the debate in the united states. obviously canada is making the decision, has to have an impact on what the u.s. federal government does. >> in terms of what columbia does, you focus on medical marijuana, correct >> we have a portfolio of pharmaceutical quality medical products but a number of products that are medically oriented that can be used in a variety of settings. >> what do you think of the regulations in canada, how do you expect it to play out? >> look, i think it will be good for canada but i think what the united states has the ability to do is leverage off the state level programs to use data to drive policy decisions and ultimately

we have more of a fully integrated model in the united states our company touches patients, we're not just a wholesaler manufacturer we can create products based on needs of patient and inform the political debate at the local, municipal, and state level >> why do you think it will impact what the u.s. does? >> there's enormous energy between our cultures, countries, economies, and i think the quote from earlier segment says it all. we're trying to make america great again, we have to have policies that foster growth of the industry it is the largest cash crop on the planet the u.s. has the most sophisticated operators in the space, even though we have federal prohibition. no reason not to have the leadership. >> have you heard anything from the administration that leads you to think that will happen? >> it may. congress is taking a lot of steps. for example, the states act doesn't require herculean change

to policy, it reaffirms legitimacy of state law. no reason to go through enormous change when we have the ability to take steps and be methodical. >> you think prohibition law makes sense to how it happened. >> makes the biggest sense. >> what's the biggest risk so many things seem to bring broader acceptance there can be a couple of headlines that get people thinking another direction what keeps you up at night >> i think the risk is we move too quickly and i think it is important to have a balanced approach you need to have enforcement and people that express concerns about roll out of a controlled substance. and there's nothing wrong with that we want a healthy industry that grows. you see the valuations the market attributes to the companies. organically, the businesses should be doubling in size year

after year, let alone m and a activity. >> what do you think of valuations when you look at publicly traded cannabis stocks, they have been volatile, but in general, lofty expectations in the market does that make sense >> the growth rates are staggering every time a new state opens a market, you open a new population served by the programs self serving that the valuations are inexpensive. but the fact is there's top line growth and margin that can improve over time. >> we'll talk to the tilray ceo tomorrow on the 9:00 a.m. show as it goes legal, do you expect lines like inventory concerns, supply chain, bottle next? all of that? how many new customers, 8 million in one day >> potentially more. potentially more i think the difference that the united states because the states led the discussion, these states create closed systems to

maintain economic value in those states even if there's a federal change, doesn't mean the door opens for importers. states are being very careful about that when you take a market like canada, about the same size as florida, that's great but it is not that valuable compared to the rest of the united states. >> when you look at recreational marijuana use, all the deal making happening with beer companies, liquor companies, potentially tobacco companies getting into this and partnering up, do you think we'll see more of that on the farming side? >> i think you will. -- on the pharmaceutical side. >> i think you will. i think this is one of the most important innovation opportunities for the pharmaceutical industry and some of the most significant unmet medical needs. >> thank you for joining us. >> thanks very much. the dow is up triple digits, up 357 points. puts it on pace for the best day

in two months. united health, visa, microsoft leading. we heard from blackrock's larry fink, weighing in on state of the markets following last week's selloff. >> the u.s. economy is still strong can it weaken going into the fourth or first quarter, if interest rates continue to rise, sure if you like equities, when everything felt great, you have to like them more today. the market is actually adjusting to the fear. the market is adjusting to the uncertainty. maybe we are in peak earnings, maybe we're not. the equity market overall is cheaper than in january. >> all right bring in cnbc senior markets commentator mike santoli for his take on what the market is doing. >> jon, i guess you have to agree with larry that the market is adjusting, it is just that the adjustment is sometimes fitful we are with the s&p 500

basically where we were nine months ago, right at the beginning of january we crossed this line we're at now a few different times. as a matter of fact, look back to january 12th, larry fink said something similar about the economy looks great, global growth, and the s&p was 2786 almost where we are now. i think the push, pull, every time the focus is on good corporate performance as it is today, the market can get a lift also, we are stretched to the down side, couple of rally attempts the last couple of days have been kind of halfway. today looks like a fuller appreciation of how oversold the market was we'll get back into the zone where we maybe have a greater test in terms of real buying interest once we get out of the oversold condition >> 2790 here, mike on monday on squawk you were talking about friday and the bounce you said it was impressive but not perfectly convincing

is this? >> at this point, the burden of proof goes higher once you lost as much as you have, done as much damage to the charts now. i think that's where we are, we are in chart land, trying to figure out where the buying demand is at higher levels i think this is constructive last thursday's low is plausible as a trading low i don't think the compound issues the market has been fighting through have necessarily gone away. as a premise we knew earnings would be good. i think on a given day can take the lead on what we're doing i would like goldman, sachs up more on well received numbers. one small example. >> sounds like you have been wrestling with yourself over whether or not credit is a decent tell here you have been challenged on twitter by others that say it didn't give us clues at important points in the past. >> yeah, it is fascinating to

hear on one hand, it has been a beacon you can look to credit markets and say they're not flaring up now, not giving us a signal that corporate cash flow is in jeopardy, that the economy is about to roll over that tends to be a security blanket for stocks even if stocks kind of sell off and pull back, ultimately it is supported by the real economy and credit markets i wonder if it is telling the full story what the stock market is contending with in 2000, it wasn't mainly a credit flare up that got everybody concerned. corporate performance was rolling over, but symptoms were too extended in 2007, certainly that was th main warning sign. i don't think you want to write off the credit markets as a sign, but when treasury yields go up, means cost of risk free money is going up, cost of corporate credit goes up with it right now, bbb corporate credit, lowest investment grade is at a higher yield than in

two-and-a-half years, even though people are not demanding that much greater spread you can still have a good credit market, and still have it more expensive and little pinch felt by risk assets like equities >> all right >> mike santoli, thank you almost half past the hour. let's get a news update with sue herera at hq. >> good morning, carl and everyone here's what's happening at this hour as saudi arabia continues to face questions over the disappearance of journalist jamal khashoggi, president trump tweeting he has no financial interest in saudi arabia or russia for that matter he added that any suggestion i do is more fake news end quote. defense secretary james mattis arriving in vietnam today for a visit. he told reporters he and president trump have never discussed the possibility of mattis leaving his job >> i'm on his team we have never talked about me

leaving and you can see right here, we're on our way, we continue doing our job the university of connecticut is offering a class this spring on growing marijuana. the course titled horticulture of cannabis from seed to harvest is one of the first classes of its kind in the country. it will be an introductory class with no prerequisites for it we'll see how popular it is. that's the news update this hour back downtown to you >> thank you, sue. let's get to seema mody for the european close. >> strong start for european markets, rising, taking queues from wall street italy benchmark posting the best day in five weeks after the country's cabinet signed off on budget plans for next year, confirming a plan that will lower the retirement age and could lead to a fast rising deficit. the approval kicks off debates with brussels over the coalition's plan to ramp up

spending let's drill down on specific sectors. auto parts among best performing groups after audi reached an 800 million euro deal with german regulators for its role in diesel cheating scandal. you can see that index up 2% and other european car makers moving higher on news what a difference one day can make ceos of three major banks are the latest executives to pull out of the upcoming conference, due to unexpected disappearance of jamal khashoggi. finally, financial times reporting turkey set to return to the international borrowing market with sale of a new dollar denominated bond, as investors dip their toe back into the turkish market a story to continue to watch jon, sending it back to you. >> thanks. and the s&p rebounding in a pretty big way this morning, up

1.5% after coming off its seventh negative session in eight. and look at tesla, up big after a judge approved musk's sec settlement it is currently at 270 bucks a share, up 4% long way from 420. lot more "squawk alley" to come. 'saved money on motorcycle insurance with geico! goin' up the country. love mom and dad' i'm takin' a nap. dude, you just woke up! ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ ♪ i'm goin' up the country, baby don't you wanna go? ♪ geico motorcycle, great rates for great rides.

dow up 358 obviously stocks are surging near session highs, following a strong start to earnings season s&p the best day since april 10th tech bouncing back in a big way, up more than 1% after three negative sessions in four. joining us, denise chism and portfolio manager. good to have you with us it has been said to declare we have a turn, you have to look at return to growth over value, u.s. over international. are we getting these >> i think nothing changed in the past week. i don't think many investors judge how they have done for the year looking atl last week's performance. you see leadership by the same sectors that are growth oriented, information technology, health care consumer

and earnings we have been waiting for them, certainly vindicate whether these multiples and growth rates are what we believe them to be >> all right denise, do we count what's happened in the last week or two as it is the 62nd panic attack in the bull market >> i think what you see most years, 60% of the years since 1960, corrections happen when you see very quick sharp corrections, there are higher returns and higher odds on go forward basis. what it means statistically is that more often than not quick sharp pull backs happen in bull markets more than bear markets to that point i think leadership trends tend to persist through it >> we've had a lot of discussion in the last couple weeks in particular about the idea of rotation out of growth into value. based on comments you just made, sounds like you think that's not necessarily happening. has the bar been set low in terms of coming into earnings?

>> i think folks have been calling for rotation information technology has been leading since 2014 growth has been leading the market since then as well. if you see the performance to date, growth continues to lead even last week when we had the pull back, russell 1000 growth outperformed value folks would find that somewhat surprising comes down to fundamentals, earnings growth, top line growth ultimately need to see pricing power, end market strength, and ultimately these stocks react to earnings results which is great to see today you're seeing the moves on the higher multiple stocks adobe moving higher because the top line excessive 20, 30% doesn't come easy. i think we're seeing that. >> what types of companies do you expect to perform better as we head through q4, whether it is an industry or whether it is geographic mix in terms of where

their customers are? >> i think mostly at the sector level. what's interesting, while you talk growth versus value, one of the unique things in the market has been the narrowness of sector performance usually you don't see sectors outperforming. that's a rare signal it usually means the market is set to broaden i think it is likely to broaden to cyclical, so it may not just be dominated by technology there might be more irons in the fire for sector investors going forward. >> denise, just to dig into that more, where would you suggest investors put their money, is it into other areas, cyclical parts of the market where they could see the returns? >> that's right. look for additional charts but i think the economically sensitive sectors, industrials, consumer discretionary, financials and to a lesser extent health care

which is traditionally defensive sector do have the best blend of both these economic back drops of being cyclical and fundamental probabilities with valuations of return potential seeming to be the right risk reward for now. >> one last question on earnings so far this morning, 82% had beaten, high judging from averaging. surprise 4.4% is kind of low are we getting the up side the analysts hadn't counted on >> i think so. again, we're really early. last week only had 6% of the s&p 500 report this week 15%. minimal, simple. but so far so good i think what you're seeing is reaction to the earnings and guidance that's what people are looking for, is there validity in this scare or are companies that are more secularly oriented and have growth levers they can push through no matter what the

environment is is valid. i think you're getting that. i think earnings will continue to tell a better story. >> wait for more evidence tonight with more big names. thank you so much. good to see you. >> thanks. and some sad news to get to. paul allen, co-founder of microsoft passing away yesterday at the age of 65 from complications from non-hodgkin's lymphoma reaction pouring in from the business and tech world. microsoft co-founder bill gates same i am heartbroken by the passing of one of my oldest and dearest friends. personal computing would not have existed without him jeff bezos adding he was relentless to the end. my heart goes out to paul's family and friends and tim cook our industry lost a pioneer, our world has lost a force for good. paul allen announced a couple of weeks ago that the non-hodgkin's lymphoma had returned. he was continuing to deal with

that and sad news came yesterday in the afternoon i believe new york time >> i always thought it was poetic he got the trail blazers, he was one ushered in that era of personal computers, changed our lives forever along with bill gates. he will be missed. >> he will. we are keeping our eye on netflix, set to report earnings this afternoon it is currently trading, bring the chart up take a look at shares of adobe, that's up as well. hjor indexes rally. weave "squawk alley," more of it after this break.

let's get over to chicago and the cme. rick santelli has the santelli exchange rick >> thanks, jon i would like to welcome peter bookfar. thanks for joining me. let's get into it the 12 of 13 of the recent jolts had a 6 million handle every read this year, i thought that was good. then they revised last month to 7 million handle today's number was even higher boy, it is unreal the job openings any thoughts >> the labor market is solid, leverage is shifting to employees as evidenced by the huge demand for labor, but lack of supply, and we're seeing higher wages

i think that's not necessarily captured in average earnings but weekly earnings and unemployment cost index >> when i think about treasury international capital flows, tick data we get later today, i'm always very happy to have you on because the recent trends of china over the last year and a half, two years, they have not been the types of buyers they used to be why don't you give us an overview of china's behavior. >> it coincided with decline in their reserves, they're recycling less money there into u.s. treasuries. it is not that they're selling u.s. treasuries, they're just buying less. japan on the other hand has been outright selling month after month after month, so you combine the two, they certainly have reduced holding of u.s.

treasuries foreign holdings as a whole has been shrinking as a percent of marketable securities. >> japan make room in the garage for their own domestic purposes i guess. let's switch to europe the bavarian elections were like a cream pie in the face of the merkel coalition it was ugly. she has been weakening from a political vantage for awhile now. and we have brexit coming on can you tell me how much a weakened germany will push into europe already wide variety of issues from economies to what's going on with lack of real significant plan by mario draghi or successor. >> interestingly in today's german zew number, one of the factors they cited for decline was uncertainty in german

politics it is possible by next spring merkel is no longer the leader of germany and we have somebody else that will lead into who is going to run european central bank when draghi leaves end of next year there's belief it will be a german if merkel is weakened, not sure who replaced her, maybe it won't be a german that runs the central bank and maybe it will be somebody else. >> italy, no conversation on europe would be complete without it italians say 2.4%, that's lower than the u.s but the point is there are major growth assumptions when you model anything, the assumption, those details, that's where everything goes haywire. central bank programmers, hope you're listening final thoughts on italy? >> 2018, growth is estimated 1.2%, due to the budget to accelerate to 1.5% the problem is if you don't get there, you don't get that revenue, then we have a problem because the problem with italy

is nominal gdp is growing less than the cost of money there their ten year yield is above the rate of nominal gdp. they're in the spiral where they see perpetual rise in debt to gdp ratios unless they can reverse it >> one final question, i'm going to put you on the spot this divergence, when people asked me about 2018, i said divergence would be the word-of-the-year i think that's coming to fruition my question is can it exist, if the rest of the world isn't growing as fast, is it a matter of time before we slow to the lowest common denominator? >> unfortunately that's the case we cannot depend so much on overseas growth. in the statistics, exports are 15% of growth, but we're all in this together, particularly rising interest rates that cause the slow down and tariffs on china, we're deeply involved and

integrated with that >> peter, nobody does the markets like you thank you very much. morgan, back to you. >> rick, thank you rick santelli. take a look at the nasdaq, up 1.8% with tech stocks surging this morning more "squawk alley" after the break. place, the xfinity xfi gateway.

and it's strengthened by xfi pods, which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. stocks surging this morning at or near session highs across major indexes. nasdaq gaining more than 1%.

see it there, 1.88% after posting three negative sessions in four. tech is leading the rally, the sector gaining more than 2%. joining us, now the ceo of a cloud data company george, good to see you. >> good to talk to you again, jon. thanks for having me >> it's great to have you especially because there's so much talk about data these days and the global market for it when you look at the impact of trade tensions, china tariffs on capital spending, but yet the market surge right now, is your sense there's still all of this demand built up across the board to handle big data >> i think we look at it over a long-term period of time we see this next era of growth will be a digitized era of

digital products and services and the use of technology and data to make businesses substantially better we see data-driven companies increasingly outperforming those that can't use data as a strategic asset. we help our customers use data for success, and that's why netapp is succeeding >> but when you look at the geographic areas and demand these days to the extent you've talked about it already, drill down and talk about how the transition to 5g is affecting the demand for equipment to handle data. how different markets that perhaps didn't build up as much during the 3.4 and 5 >> they are incredibly data

intensive. i was out in japan and korea this past week, and in some of those markets we are working, for example, with automotive companies that are increasingly instrumenting their cars with a lot of sensors that send data back over public networks and they are using artificial intelligence together with netapp data management technologies to make their cars much, much higher quality and autonomous vehicles. that's an example in the median entertainment segment. we clearly see the use of rich media and content that can be delivered over a variety of over the top mechanisms and dream works, a company that makes the world's best animated films, and my kids tell me that i'm cool because i get to work with dream

works. these movies are incredibly data rich and intensive and dream works, for example, delivers in more ways over the networks of the future and they're working with netapp to accelerate the rate at which they can make better movies for their customers. >> dream works owned now by our parent company comcast i'm sure there are quite a few there at least who would agree with you i wonder about valuations. we saw a discount perhaps on some names in the market the past few days. today that sale appears to be ending, at least in part but at the same time i've seen some large technology companies, adobe being one of them, for example, stepping into the market and buying whereas they held off are you on the hunt as much or

now as you were a year ago >> we're always on the lookout, jon, for ideas that fit with our strategic road maps and have cultural as well as financial fit with growth portfolio. we made acquisition that helps our customers build really clever cloud-based applications using a technology called containers it's the hottest thing in software development and we're working with genomics companies, for example, to build precision genomic information that can help digitize buyology and tailor information and even drug creation to your specific genetic composition. they use large amounts of data, and these really portable application frame works to leverage innovation across all of the cloud providers like google and amazon and microsoft,

and our technology in combination with them. they have to meet the specific criteria for what we're looking for. we think there are lots of creative ideas in the mark >> containers very hot george kurian, ceo of netapp, thank you. >> thank you, jon. good to talk to you. the rally continues today. the dow up 345 we're going to talk about some of the movers and what we might see after the bell

as early as the first half of next year, that's what "the wall street journal" is reporting this morning on the potential ipo of ride hailing giant uber according to the report several banks have approached uber with proposals which value the company at as much as $120 billion. just to put that in perspective, more the market caps of gm, ford, and fiat chrysler combined still doesn't turn a profit. >> it's bigger than sales force. sales force's market cap right now $110 billion s.a.p. at $123 billion that puts it in some pretty

heady territory, particularly market cap wise. it's on paper now. >> goldman and morgan stanley made these proposals, these pitches, and sort of buried in all of that number was the timing, the first half of '19 as we begin to get a sense of maybe some of these high-flying private players will race to get to market, we'll see, after waiting for so long. and, of course, netflix is set to report after the bell this afternoon a lot of eyes will be on that stuck. a big drop-off after last quarter's report when they missed >> it's domestically and internationally it does seem like international is the growth story and the thing that everybody is expecting in terms of more user numbers we'll have to see what happens here especially because of the last report. >> ibm, of course, the other big tech name. a crazy stat, prior to last year stock traded lower on the ten

consecutive q3 reports prior to that a decade straight and then a reprieve >> emphasis on the blue not so much on the big. they have some growth happening. we'll see if they can turn it around >> 366 what a rally we put together let's get to the judge i'm scott wapner are surging, the best day in two months and in just about four hours what could be the most important earnings report of the year, what netflix is likely to deliver and why your money could be hanging on the outcome. it is noon and this is "the halftime report. is netflix about to help f.a.n.g. stocks bite back? and is today your best chance to get in on the action the debate is on plus, earnings surge big names beat across the board. will this break the down trend for stocks