good morning it's 8:00 a.m. at qualcomm headquarters in san diego, 8:00 at cupertino and "squawk alley" is live. ♪ ♪ ♪ why can't we be friends why can't we be friends ♪ ♪ why can't we be friends >> good wednesday morning. welcome to "squawk alley." i'm carol quint nail, morgan brennan and jon fortt. the song sets us up for a discussion about apple and qualcomm the billion dollar stare down

between the two companies, of course, now over agreeing to a settlement late tuesday afternoon. qualcomm's ceo steve mollenkopf sat down with us earlier on "squawk on the street" and david faber is back with us at post nine to talk about that conversation and how these guys manage to work together now. >> yeah. of course, it was an apt song we did lead with. mollenkopf made it clear they want to be friends and they are friends and would not spend a good deal of time answering our questions in terms of what happened to change the tenor of the conversation, if there were even conversations, given how heated the rhetoric was from both sides you need only look at the opening statements yesterday in court in san diego in front of judge curiel to see where the two companies were coming from in their dispute over qualcomm's or at least what apple would say, qualcomm essentially double dipping, saying that you got to buy our chip send and although you also have to buy our intellectual property, because you don't get that with the chip

set, likening it to going to a kentucky fried chicken where they want to charge you $17 for the chicken but another counter to get the license to buy the chicken and come back and buy the chicken. i think you may get the point. the agreement yesterday, though, has lit a fire under qualcomm's stock price. some might expect it was somewhat unexpected and removed an enormous risk from the company itself we don't know a great deal than we knew yesterday, but we know there was a direct license agreement between the two companies and previously, by the way, it should be noted that license agreement was between qualcomm and the manufacturers of apple's phone, the contract manufacturers, not apple itself. apple will pay royalties to qualcomm there's an undisclosed sum being paid by apple back to qualcomm for previously owed royalties it hadn't been paying as the dispute has raged on we think that's in the billions of dollars, but we don't know for certain. a multiyear chip set supply agreement and all worldwide litigation has ended between the two parties. what does it add up to

the best we know is what the company told us late yesterday, roughly $2 a share in incremental earnings per share, as product shipments ramp. steve mollenkopf, though, is all about the future, talking about 5g, the product ramp there, what his expectations are, and where he is going to take the company in terms of a transition that they are in the midst of both at qualcomm and overall in the industry >> what happens in these end -- in this industry, you do not want to miss the transitions the transition, 3g to 4g, and 4g to 5g, are very important to maintain your leadership position and also it enables you to really open up and expand your business into new areas more so true on 5g than any other g transition and we wanted to make sure we were able to position the company to do that. we did that at the same time we brought a lot of other cost discipline within the envelope

as you know. we're very pleased to be able to do that. it was a good call to make, and i'll be honest, i'm very proud of the team to be able to execute on that in the midst of what probably looked like a lot of distractions from the outside. >> yeah. there was no shortage of distractions for this company through the years, whether it was broadcom's hostile bid, activist investors previous to that, the an next idea falling apart or overhanging it all the litigation from not just apple but countries around the world, our own ftc. the decision they made to increase investment in r&d a few years ago may have paid off giving them more leverage with apple as it knew it couldn't miss a 5g transition and not have a handset that competed with other manufacturers in terms of 5g. >> it's an amazing story, david. great scoop by you in the past i called qualcomm the tom brady of patent litigation and once again qualcomm pulls it out. right now trading 77.50, up 10%.

it's near levels where it hasn't traded in five years there's a big question here, though, and you asked of steve mollenkopf, where do they go from here? do they go back into m&a mode, despite not having an xp they seemed a few months ago saying we're going to focus on -- he was not saying that same line here, the world is their oyster again so we'll see intel, meanwhile, has really increased in market cap, beyond qualcomm, five years ago they were close, now intel is way ahead on that score, but intel also backing away from 5g chips for smartphones, leaving qualcomm not with a completely open field, but hey, if you want 5g smartphone chips and you don't want them from a chinese company, you're pretty much going to qualcomm right now. what do they do to expand their footprint and then how do investors look at this a lot of people, i think, as the movement over the past 24 hours shows, really missed the script in this and miscalculate just how strong qualcomm's position

was. >> it is, and yeah, the questions we asked were not necessarily all answered, carl, sort of we're sitting there somewhat frustrated in terms of getting least at least some sense what went on between the two countries given the vitriol that had taken place between them he was not willing to engage on that but he did give us a sense that at least yeah, they are perhaps the drama is behind them not just for this, but for so many other things that mollenkopf has been dealing with for years as the ceo of this company. >> right he did talk about the complexity of the agreements and that sort of leads you to the belief that there was something in a drawer somewhere waiting to be pulled out, right, and then talked about face to face we don't know. he wouldn't say. he did talk about 5g being quicker and more important than any other prior generational change. >> and the ramp actually he said will take place even more quickly than you might have anticipated for a variety of reasons. i think the conversation we're going to be getting from mollenkopf in the future is going to be about 5g, and qualcomm's key place in it and not just for the phones, but for

the internet of things as well and for the creation of networks where you have all sorts of machines communicating with each other which they see as a real opportunity. >> here's what i don't get i understand why apple is up 1% and qualcomm up 10%. why is intel up 4% right now >> well, it is going to be tough for them to compete in the 5g smartphone chips that's qualcomm's house. right. that's -- they were big in 3g, 4g, they already had the lead in 5g, it was going to be expensive for intel to get there intel now saying at least for that segment, they're still in 5g chips, just not for smartphones. they're not going to try to compete. that's money and investment intel will not have to spend there. back on the qualcomm side, we talked about it a bit, i feel like we haven't emphasized enough, qualcomm was almost destroyed or at very least disthe manled. this was almost another hp type story of it being picked apart you talked about china, you know, korea, japan, all the

jurisdictions we they were under fire and broadcom wanting to take them out, the son of the founder, perhaps looking to come in and do something. i mean from all different kinds of angles, they seemed to have the light at the end of the tunnel now you can never say with qualcomm because there's always another generation of technology and always people saying hey, they are making way too much money at this it's not fair. but maybe they get the benefit of the doubt the next time around they will pull out -- >> that they will persevere. people did not give them that going into this battle we talked about it yesterday when the news hit. they had a lot more at stake than apple did and what it meant if they had lost this not mention the anti-trust penalties if you triple it and white have been an interesting case reading the tripses from the opening statements would have been interesting to listen to both sides and see the witnesses. maybe the drama for now is over. we don't know what they're getting paid a phone yesterday in court there were

references to $13 a phone right now made by both apple and by qualcomm's attorney evan chess her. we don't know where they ended up is it somewhere around 7.50, 8 bucks a phone, which seemed to be the price point qualcomm was willing to accept according to press reports. we don't know. >> we start to get a better sense in the report of a june quarter because the royalty payments start to flow pretty much immediately they say they're going to get to around 2 bucks in eps per year once the 5g products have ramped and at least analysts can start to do try an gulation saying this is how much you're getting from the royalty side, this is how much you get from the chip side, you expect x to be the amount of the number of 5g phones that apple makes, you can start to get that. >> back into the number. >> yeah. people will start to back in at least in about, what is that, three months around there. >> something like that. >> good stuff, david. >> what a couple days of coverage david faber, on qualcomm

meantime we're watching shares of netflix trading well off the lows this morning. the company delivers an earnings beat, more paid subs than expected but the outlook that investors are watching with guidance decreasing, competition increasing, this is reed hastings on the earnings call. >> there's a ton of competition out there and disney and apple add a little bit more, but frankly i doubt it will be material because again, there's already so many competitors for entertainment time which is great for consumers and it's exciting for us. >> staying up late for us tonight, joining us on the phone from seoul, rbc's lead internet analyst mark mahaney thanks for the time. appreciate it very much while you're on the road. >> oh, good to be here >> the sub guidance here, is this classic netflix historically conservative guidance, or are they really worried about churn, timing of content, and eventually the onslaught at disney? >> carl, i think the latter

interpretation is the correct one. they are seeing elevated churn, saying it was similar, what they're seeing so far is similar to what they've seen during prior price increases in canada and the u.s. and the content rate is weaker in q2 than the second half of the year. the second half of the year you have the return of orange is the new black, "house of money" and "stranger things" season three that's what they think is going to lead to an acceleration for the full year. you had that in the match quarter. you're not going to have that in the june quarter if you have that for the full year and in the back half of the year we think the stock will outperform from here i don't think disney -- disney is an immaterial factor this year and probably in the future as well. >> mark, just to dig into that a little bit more in terms of disney and just increased competition overall,especially with those comments we just played from reed haigsings, should we be -- if you're covering streaming as an investor and watching a stock

like netflix, should you also be keeping a close eye on things like gaming? it's not just video streaming that's competing for consumers' eyeballs right now, right? >> no. i think you're absolutely right. i think the big, broad point here that sometimes is missed when we focus on competition on these companies, two points, one we've seen limited competition reed likes to talk it up disney has a very good ofrg. what we've seen from apple so far is pretty unexciting but we'll see. we haven't seen comcast, we haven't seen it. there are other players in the market the competitive may not be as great as reed makes it out to be the second thing is the broader point here is we've got about $500 billion spent every year on tv, on advertising revenue streaming revenue is less than 5% of that so you can have years of premium growth for netflix as they start more and more consumer spent time and marketers too, more and

more consumers will switch to streaming and disney can grow well in that market and so can netflix. >> mark, explain to me how netflix can be seeing some impact in price sensitivity from this price hike? on the one hand consumers are concerned about how much they're paying for subscription content, but on the other hand expecting not to see a material impact from the launch of this disney service in the back half of the year when they're expecting their subscription numbers to be better and apple's service in video and also in apple service apple arcade in gaming, all competing for subscription dollars. if netflix is seeing an impact from a price hike, won't they also see an impact from competition for the same dollars? >> yeah, you're right, jon they may well see it this is an unknown we're not going to really know for a couple quarters or a year or two with regards to disney. the key context here what netflix said last night they didn't see any change in gross sub adds

they saw elevated churn from current customers that were seeing that price increase and maybe were hess tagts or hadn't decided to renew with netflix or not. it comes down to the value proposition. what other point i lay out, netflix is spending $15 billion on original content -- [ no audio ] [ inaudible ] an offering that's going to -- [ no audio ] for your buck as you -- netflix as you get from disney you know, spending $2 more on netflix for materially more content and that's the scale, [ inaudible ] going to have. by the time disney has the 60 to 90 million which i thought were a reasonable forecast we think netflix will be well in excess of 300 million subs and those kind of price points that's a lot of dollars with which to buy more content which would get more subs. >> yeah. key points, mark i think you reiterate the outperform, price target 480 is

a lot higher or somewhat higher than some of the others on the street mark, appreciate it very much. safe travels mark ha mainly of rbc. a big show of "squawk alley" still ahead. paypal co-founder and early pinterest investor max levchin will join us at post nine with pinterest and zoom set to debut the nyse's former co-head of listings will sit down with us well. dow is down 4 points stay with us screening at her house. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪

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welcome back to "squawk alley. the ipo rush in tech continues with a pair set to test tomorrow "options action" and video conferencing service zoom expected to price later tonight, this, of course, follows a rough debut for fellow unicorn lyft. davidetteridge, leader at pws and former co-head of listings at the new york stock exchange joins us along with venture firm managing director eric hippo both at post nine. good morning to you both. >> good morning. >> eric, i'll start with you on the one hand, we mentioned lyft is trading 20% below its ipo price. on the other hand, you've had some pretty positive debuts from smaller names like jumia, et cetera how does that -- how doe that -- having a blonde moment how does that set us up for two more debuts tomorrow >> hard to say we're talking about companies

that are in a different field. zoom is a communications company. "options actio pinterest is an e-commerce company. as you mentioned, [ inaudible ] has done extremely well. you know we also have to take into account that there were some really great ipos, facebook, linkedin, etsy, which dipped sharply after the ipo and have done extremely well some of them haven't, blue apron is a good case i don't think there's too much correlation between lyft and the others for these reasons. >> david, i'll put the same question to you. >> yeah. you know, i think there have some things that are obviously similar, but some notable differences which eric touched on a little bit. i remember well truman said i want economists with just one hand because he's always saying on the other hand. this is a yes, and no answer to your question. yes, the one deal can color sentiment in the market for others that are broadly in this same bucket, so we're talking about large tech companies here, high growth, targeting largely

the same investor set. i think sentiment might be affected by prior deals, but there's enough distinction here in these two companies that you just referenced, very different markets, that they're targeting, ride share versus the curated content that the other one is targeting, and they very different business models as well one is ad revenue driven and the other one is not i think there will be distinctions that investors will draw between those and they should stand alone. >> eric, i want to talk about pinterest versus zoom. because pinterest gets a lot of the attention because it's a consumer focused company, there's an app on the phone, et cetera both of these companies probably valued at around $10 billion very different financial profiles in them in terms of profitability and visibility it's rare we get this kind of an a/b test on investor appetite for different types of ipos. what do you think it's going to tell us one way or the other >> well, i think, you know, the

focus always because of the popularity is on the b to c companies, the consumer companies, but the science businesses, software as a service businesses, which zoom is one of them, have done very well zoom is almost profitable. i think maybe slightly profitable still high growth. at the top range or at the range that they're talking about they would be valued at nine to ten times more than the last private valuation, whereby, pinterest on the other hand, might be able to squeak by and get value at exactly the last private investor valuation so kind of -- but pinterest is still going very fast, losing money, though narrowing their losses so i don't know if it's going to be the same investors buying both or whether there will be space between the two. >> it's interesting. we've had some come on set and argue that those coming to market need to establish a road map to profitability because the

market has had it with losses. on the other hand, others argue because global growth is so challenged, that investors are so hungry for secular growth, that they'll go directly to those names. what i do you think it is. >> i think you're right about it i think growth is an amazing -- i said this last time, amazing elixir for the market. what's interesting is how in certain cases they've been willing to sort of break what old rules of the road as it related to when they would see profitability. people have changed the definition of what profitability is is it, you know, adjusted ebitda, adjusted net income? is it free cash flow is it minus cap x in that way. depending on the sector they're willing to look at different aspects. if team going public and you're one, i will be profitable in year two and with certain companies they've been willing to buy off on the business models and forestall that and say we're willing to trust this management team they will deliver even if it's on beyond

the typical horizon for us. >> that's been used. high-profile companies say we're going to go cash flow positive by x date. >> yeah. profitability is the whole point of it, isn't it? what's notable, lyft is one of them, nobody is really looking at the path to profitability uber is going to be a huge test in that regard are they going to say, you know, within a certain period of time, within two or three years, we're going to get to profitability? they haven't said that yet. >> so many of the names that are supposed to go public this year have been private for so much longer than we've seen in the past, they're more mature companies, et cetera, do you think how they perform in their initial test in the public markets is going to set the stage for whether companies, i guess the next wave of startups, decide when they're going to go public as well meaning, is this the beginning of a trend of seeing more and more startups waiting longer and longer to do this? >> well, so most of the companies going public now have

been in business for like 10, 12 years or so, which is a much longer time than it was a few years ago where you would be private for maybe four or five or six years and then you would go public. as a result, it's the private investor such as myself, and i'm not invested in any of these companies, such as myself, because i'm more patient, will reap most of the upside and the public investors will be at the tail end of that i think it would benefit the public investors to receive those companies really well so that they would be encouraged to go public sooner so that public investors could also reap more of the upside as well as the private investors. >> i think you have to also remember that tech market specifically has been very active for the last couple fiscal years, doing more than ten a year of these unicorns, mostly b to b, and they've been up tremendously from their ipo prices even looking around the market now we've had four recent ipos all north of about 50% from their ipo prices notwithstanding

focusing on just the one that hasn't performed in that same way, investors are having a very good experience in the class of ipos. >> thank you for teeing us up for two more ipos tomorrow we appreciate your time at post nine david and eric. coming up, why shares of ibm are down sharply this morning after earnings, losing about two weeks worth of gains first take a look at worst performing stocks in the dow so far in today's session united health and merck with the aforementioned ibm "squawk alley" still ahead ey, sp to do the work we want to do. so we're digging out from all the work we don't want to do. ugh, getting rid of so much paperwork. oh, doug. i didn't know you still worked here. i called for help but no one came. [ laughing ] classic doug. okay, carry on. yup. can you call my wife? thanks. servicenow. works for you.

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welcome back take a look at shares of ibm down let's see, just over 3% this morning after seeing revenue fall short of the street's expectations. eps was better than expected it's now three consecutive quarters in a row of declining revenue year off year after seeing its 22 quarter streak of declines come to an end early last year. really a mixed bag here, guys, in terms of how that looks

on the one hand you did have the revenue shortfall. on the other hand, eps was rather strong. on the one hand they backed away from their strategic imperatives which had reached more than 40% of their overall revenue take, focusing more on cloud now cloud growth in the low teens, healthy, but, you know, at the same time, investors not really giving that one metric to continue to track quarter after quarter consistently really the next milestone we're looking for is second half of this year, red hat that deal. that closes as expected and ibm has said that is on track. how much does that change the narrative about growth when they condition investors now to look at cloud and way from strategic imperatives, does that red hat enterprise-based revenue really start to change the growth trajectory we will see. >> it's pretty incredible. i realize today's slide in the

shares, you know, after these numbers it slipped a little bit in the rankings, but still one of the best performing stocks in the dow year to date after years of being one of the dogs of the dow. do you think that investors and analysts are seeing this as a wait and see given the red hat acquisition? >> i think that's fair to say and it's only a couple weeks worth of gains given up. it's been a strong year for a lot of companies we'll see how it performance in the back half, especially given the number of different changes we're seeing across the tech landscape. we've been talking about subscriptions on the consumer side we've got a number of shifts when it comes to equipment and enterprise we've talked about qualcomm, for example, the 5g ramp happening there's a lot. >> this case, 4 x is a huge issue as well which we know is a big deal for companies to get a lion's share of the revenue outside of the united states. >> yeah. speaking of outside of the united states, european markets are set to close momentarily seema moody joins us now with a

breakdown of today's action. >> european stocks closing around an eight-month high following data out of china overnight. the hope is that this potential recovery in china will increase demand for european industrials, autos and products from retailers. on that note, in its latest earnings report french cosmetics giant l'oreal saw strength in china, but while the china story slowly improves, europe continues to disappoint. germany's economy ministry slashing its 2019 outlook once again today and now forecasting its weakest year of growth since 2013, citing slowing global momentum and ongoing concerns over brexit and trade tensions the government there cutting their estimate to 0.5% that's half the pace previously forecasted in january and down significantly from the 2.1% projection april of last year. italy is now the only european country projected to see weaker growth than germany this year.

so that is certainly part of the story here carl, china potentially improving but the impact on europe as well. >> indeed. seema moody. let's get a news update for this morning. let's go to contessa brewer for that at hq. >> here's what's happening right now. newly released documents from the state attorney's office in chicago show prosecutors were concerned jussie smollett was being overcharged ahead of the charges being dropped. state's attorney kim foxx who had recused herself texted her depu deputy that smollett was a washed up who lied to cops. the leader shot himself in the head before being detained by the police amid allegations he received an illegal payment from a brazzon construction company. he was taken to the hospital local news outlets describe him in critical condition. ivanka met with the vice president of the ivory coast yesterday. this focuses on women's economic development. that country's pledged to improve conditions for women as

part of the terms for an american grant a wine maker in hungary claims to be selling the most expensive wine at $40,000 a bottle the winery says it has a rich royal heritage that dates back to the 1500s that is the winery, not the actual wine. only 18 bottles of the $40,000 a pop bottles are currently offered for sale chump change if you're celebrating. back to "squawk alley" now where they're all rolling in dough carl >> thank you, contessa brewer. when we return, max levchin sits down with us at post nine. in the meantime major averages somewhat in a range. , p ckdounh hurting the dow wn 40s&ba to 2900

welcome back to "squawk alley. pinterest and video conferencing service zoom set to price ahead tonight ahead of their thursday's debuts. leslie joins us now with why no one is ever happy pricing an ipo. >> i've been speaking with sources who tell me both deals have been met with high investor demand and pinterest is pricing above the share marketing. zoom up this range this week and i'm told it's targeting a price at the high end of the new range or possibly above it $35 a share or beyond. those final pricing decisions won't be made until after the market closes today and ceos give the final signoff market conditions could change

between now and then that could impact how they choose to price the deal and whether it is higher now selecting an ipo price from the range a company has been marketing is far more of an art than a science and no one is ever happy pick a price that's too high, shares will drop, investors will lose money pick a price that's too low the company will have foregone money it would have otherwise raised and put back into the business on average you do see the latter on a proceeds weighted basis ipos have popped 13% on their debuts going back to 2001 in aggregate over that time frame, issuers have left $65 billion on the table by allowing their stock prices to soar and their debuts that represents 13% of the total amount of proceeds raised between 2001 and 2018 but does it matter in the long run if a company's stock price gains or falls on the first day? turns it out actually doesn't on a market adjusted basis. numbers krunchds at the

university of florida found first-day returns have little predidsibility for long-run returns for post-ipos. guys >> thanks. we're going to stick with pinterest and the rush of tech unicorns coming to market. joined at post nine by the ceo of a unicorn company himself, early pinterest investor as well, paypal co-founder max levchin joins us in another cnbc exclusive. max, great to have you back. >> thank you for having me. >> so let's talk about pinterest. they are up against giants like yelp was you were an investor there and you were the chairman as well. pinterest is looking to come to market at more than three times yelp's current market cap. boil down the challenge for ben silverman and team to thrive in this environment with all these big competitors for ad dollars >> i think competitively they've proven themselves to be relatively successful at this point you can't price in the $10 billion almost range and not have real revenue. the revenue reported was almost

$800 million it's a real growing concern. i think to the point of ipo pricing back in my day when paypal was going public if you didn't pop 100% on a day off you weren't a good company 60% day was a bad idea seems like things are a little more rationale and better these days think pinterest needs to keep growing and they are operating in a competitive market dominated by facebook and google. >> you are dealing in loans to consumers, a deal with walmart recently how important is an ipo for your future >> you know, i don't see ipo as an end i think it's an important means of giving investors and employees liquidity they deserve. venture capitalists need their time to recoup the gains hopefully and put it back into the economy. i see that as an important responsibility for a company also having public scrutiny is really important i'm a firm believer in financial services, but, you know,

ultimately i think it's the sort of thing you do when the time is right and don't want to rush it or overstate. >> how close is the time >> the only thing i can say it's not any time immediately soon, but as i said i believe it's an important thing to do, probably a few years away, but not -- >> have you been critical of companies that want the public capital, but want to hang on to private like voting rights, class structures, ownership structures >> i can understand the desire to keep control. i think as a founder and ceo many times over now, nothing hurts like someone telling you how to do your job and then figuring out how to scheme on the sidelines, what it feels like, scheming on the sidelines, to take over the company and push you out. >> you weren't here when we were laboring day and night. >> the emotional side of that is very real, but fundamentally that's what being public is all about. i'm a believer in one share one vote governance is a thing and i

think i wouldn't tell -- who wouldn't presume to tell others what to do, but we don't have anything like that at a firm and i intend to keep it that way. >> given the fact that you have been a repeat founder ceo and you are a venture investor, going back to the comments you made with some of the companies finally going public now, do you expect to see some of those dollars, some of those vc dollars fund into a next wave of startups and if so, what >> you know, the one thing that you can say about the at this point the global silicon valley there's no shortage of good and bad ideas. i'm excited about the gains to be immediately reinvested into exciting areas i'm forever excited about financial technology there's been from my point of view, an extreme dearth of innovation i think there's so much more to do, we're living in the age where -- >> why >> you are coming around to this idea that it's possible to have products that are on the consumer side where the majority of the revenue isn't made on late fees, where you don't have to get tricked so that bank can make the money

there's just a wave of cleansing that's coming to financial services and finally people are starting to wake up to that. >> all right it's funny you mention that, kkr has a big report out this week about how technology is -- in what degree it's been disinflationary across sector ps financial services it's barely perceptible. >> exactly that means that part where some blood letting we've not seen it yet. i'm bullish in investing in startups there's lots of other exciting stuff going on from ar to ai tremendous opportunities one thing that we can be sure of, there will be no shortage of craziy dreamers in the global silicon valley to invest in. >> apple has the apple card coming out later this year in partnership with goldman sachs they're trying to shake up a number of things including late fees, which i know you're also not a fan of you hate late fees is that important to the space overall, to have a company of that size moving in. >> absolutely.

>> are there dangers or opportunities that you see in particular from that kind of a high-profile move? >> i think it's extraordinarily valuable and important to shine the light. it is possible to do business without ripping people off stepping out and saying you do not have to make money on late fees, we do not have to do crazy tricks like deferred interest just to make a dollar and we have brands like apple now saying these are partnerships we can be proud of is a huge positive for the industry. goldman sachs is no slouch either the fact that they're stepping up to say that sort of thing is great. that's certainly creating more momentum behind companies. i see that as a positive. >> to bring this full circle given the fact that you were an early investor in pinterest is this a name you will hold on to long term? >> i generally tend to buy early and hold for a long time i'm a huge fan of what ben has done i hope so. i hope they have a fantastic ipo and don't leave too much money on the table but keep growing. incidentally, dip and grow is a well strategy so that not shus

be a reason to sell. >> like leslie said, nobody is ever happy with pricing. max, always great to have you here we're happy with that. thank you. still a lot more ahead on the tech ipo rush. but first, rick santelli, what are you watching today >> you know, i'm watching a lot of markets idling, whether it's the holiday or they're just at very important macro levels. so, of course, we're going to take a macro picture of some important technical relationships in the mart l tethbrk.keal feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

here's a look at what's coming up on the half hymn report the sector surge carrying new highs broader than tech too. we'll tell you which others are worth buying into as they also approach record territory. plus, we've got a debate on what to do with qualcomm after one of the biggest ever jumps for that stock. one trader says sell another says stay in we'll have a fight about that. pete najarian also has unusual activity on a material stock up 18% over the past three months and it is all, jon, coming up at noon, a little more than ten minutes away see you then >> i like this one, scott. see you then and for now let's get over to rick santelli has the santelli exchange rick >> thanks, jon fortt you know, sometimes the really big charts we should pay more attention to them. what's really interesting at this point in time is we have so many markets at such important longer term technical levels of significance and just think

about the ones that are obvious, you don't need a chart for the dow, the nasdaq, the s&p, all closing in on all-time highs. well, when that happens, all the other calibrations have something important to say let's go to one. our ten-year note, minus ten year bund yield i see 258, we have an eight basis points bund. here's the issue back in november of '18 we were the widest we ever were in about 20 years at 280. we've had a lot of congestion right around that 250 level, a lot of bottoms and we're hovering 250 now the point to this chart is, we all know our lower interest rates are definitely, partially affected by the low interest rates in japan and in europe and to some extent china and all of those pressures affect a relative value trade they make capital decisions by investors change well my point here is, since we're at 250 and we've been to

280, theoretically we could see 30 basis points more of this relationship in the form of our higher rates even though mario draghi might not have the problem dealt with you can't use that as an excuse should the global economy start to do better our rates in the spread can't widen because they can. dollar versus the yuan this goes back four years. but the interesting thing about this chart is, that every time you get anywhere near 7 where you have to flake out 7 yuan to buy a dollar, you see what happens here and you could even say, obviously, that this is a double top, even though unlike treasuries, this parp isn't necessarily known for double tops what i want to show here is right around the level we're at 670, you have lots of important areas and we've been congesting a long time. i'm going to show you a trick and maybe i shouldn't show you, because it will make you trade too well maybe high/low, perpendicular mid-point gave you pretty much where it was going to go

how does it look now, high/low, perpendicular mid-point it's aiming lower if the decision is hard to make, i'm not saying this works every time, the pressure subways maybe to lower dollar on the big picture. the dollar index, the reason index and the reason i love this chart, it goes back to 1980. but lower highs every time and as much as i like the dollar index, the assumption has to be it's going to stick around 100 for a while. morgan back to you. >> spreading market wisdom, rick santelli, thank you. up next, we test out the basketball app the likes of mark cuban and steve nash are backing. how our own eric did against the nba's best three-point champ, joe harris. mi aerhereutof that shooto congft t bak moving is hard.

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you're going to like this. our own eric chemi testing out the app home court backed by investors like mark cuban, jeremy lynn, steve nash and taking on the nba's three-point champion joe harris in the process. he joins us now with a closer look and the results of that shootout. >> reporter: it's game-changing technology that's turning amateur basketball players into the next sharp shooter home court is an app that uses high-tech computer vision and machine learning to improve shooting >> 49 degrees. >> reporter: available in a free and subscription model, the app tracks shots made and missed, launch angle, leg angle,

vertical, and reaction time using just an iphone no sensors, no high-tech equipment necessary. >> today, if you run, you're using your apple watch, your nike run app or you can track all those miles and stuff but for basketball that didn't exist. the first problem we wanted to solve for is how do we help people easily track their shots without having to do that manual work. >> reporter: home court has backing from leading nba minds like steve nash, jeremy lynn, and mark cuban home court is a top ten downloaded sports app in the apple store and it has more than a dozen college and pro teams using it including joe harris of the brooklyn nets, who this year led the nba in three-point shooting and won the three-point shootout >> okay. i feel good. i did play center on my sixth grade basketball team. joe and i went head to head to test it out. oh, i bricked the first one. joe's arc is flatter than my big arcs and his reaction time is much quicker than mine

>> you're 4 of 20, 20% >> i didn't even stand in the right spot the whole time. >> reporter: also notice how consistent joe's shots are every shot's arc tracked the same mine were all over the place >> we're in the age of analytics and technology any time you can put that to use to help you out, improve, get better, i'm all for it. >> reporter: joe plans to use home court at his youth basketball camp this summer. as for me, i need a lot more practice oh, that back board's really getting in the way >> the applications for this technology extend well beyond basketball the company's founder tells us they're looking at other sports but you could even apply the computer vision and machine learning technology to things like self-driving cars back to you guys >> so, eric, 4 for 20, you shot 20%. i mean, that's -- that's better than i would have done it's -- i think it's pretty impressive >> it's a starting point it's a starting point so if i were to keep practicing the idea is i would get closer to joe's

80%. there's a sixth grade girl right now taking 100,000 shots, doing a thousand a day and basically she can't miss there's a video and it's because she's using home court she's basically perfect like joe harris >> all right so you got something to work toward there in terms of these applications outside of basketball, when you talk about something like self-driving cars, how does that work >> think about what's happening here it's a phone and it's just using the camera it knows that i'm a person it knows where the basket is it knows where the three-point line is and it knows what the basketball is and it can track the basketball so imagine you want to figure out what's a car, what's a pedestrian, what's a stop sign, what's a red or yellow light, it's the exact same technology without using any sensors, just using a camera to figure it out that's the idea behind expanding the use of that technology >> that is fascinating, eric i mean, i think -- i couldn't have shot 20% from the line, morgan agrees, john, no way. >> yeah, maybe from the foul line >> from the foul line.

but that's technology. we're going to be talking about that more and more as we get closer to this new era great stuff, eric. thanks, eric chemi back at hq. obviously, we're in a range today as we battle around 29.01. we'll get to united reynolds tonight and las vegas sands and some other names let's get to the judge >> carl, thanks. i'm scott wapner, is the sector surge carrying stocks toward new highs the much talked about market melt-up is about to take hold it's 12:00 noon, this is "the halftime report. >> announcer: four sectors hit new highs or flirt with them who's leading? which stocks are set to take off? and what's the catch-up trade if you missed the mark on this rally? plus, qualcomm surge >> qualcomm wants to push through 58 >> he made the call yesterday and he's back today. how high can it go and why another member of the halftime investment committee just took his qualcomm profits and ran. and two