♪ good wednesday morning, welcome to "squawk alley." i'm carl keequintanilla with moa brennan who's back watching the fed decision this afternoon, the markets we're going to start with facebook and an exclusive story from the verge, it's titled bodies in seats. our next guest spoke with several of facebook's contractors at its worst performing content moderation site in north america breaking nondisclosure agreements those workers told of abuse, fear, severe uncleanliness and even death. take a listen. >> at what point did it become clear to you that you weren't going to be helping businesses on facebook?

>> probably the second or third day of training and basically we had an outline of what we were doing and none of it was business it was graphic violent, hate speech, sexual solicitation, sexual exploy takeitation that f stuff. i'm sorry. >> that's okay i just think about all the animals all the time >> so i'm supposed to go talk to this counselor about the 500 videos i've looked at today in nine minutes, and i'm supposed to be okay it doesn't make any sense. >> a spokesperson for facebook tells cnbc we work with our content review partners to provide a level of support and compensation that leads the industry there will inevitably be employee challenges or dissatisfaction that call our commitment to this work and our partners employees into question when the circumstances warrant action on the part of management

we make sure it happens. we heard from the contractor cognizant which runs the facility, saying cognizant strives to create a safe and empowering workplace for its more than 40,000 employees in the u.s. and their colleagues around the world like any large employer cognizant professionally responds and addresses general workplace and personnel issues in its facilities. our tampa facility is no different. cognizant works hard to ensure a safe, clean, and supportive work environment. author of that article casey newton joins us this morning >> thanks for having me. >> we've heard how hard this work is for a while. we've never quite seen it as close as you brought it to us. is it about the job itself is it about the support of the employer what's the -- what is the problem? >> for me it's two things. one is this job very difficult, absolutely, but one of the things i think this story gets across is that the job is much harder than it needs to be because the working conditions are so grim. i spent a lot of time writing

about bathrooms at these sites if you can't even count on a clean bathroom, imagine going back and trying to apply facebook's policies with a 98% degree of accuracy, otherwise you might get fired. i think it's a story about the working conditions. >> where are they getting the workers to do this how hard is it to recruit to do a job like this? >> right, you sort of hear some different things on this facebook pays at least 20% above minimum wage in all the markets where it operates. it does make it somewhat easier for them to recruit. the sort of folks who want to do this job, if you've got a better option you're probably not going to want to do it i can tell you that almost all of the people i've talked to, none of them have made it two years, and a lot of them are gone inside a year there's a lot of turn. >> facebook outsources in this particular case to cognizant why? >> well, they have a handful of these partners around the world. it's a competitive process they bid for it. one manager i talked to said

cognizant got a 200 million contract as i report on this story, this particular site is facebook's lowest performing in north america. they cannot hit the accuracy score that facebook wants. >> here's the thing i think is tough about this from a business perspective. you got all these people saying you need more human contact moderators look at all these problems here are the human content moderators and there are questions about whether they can handle it. my question has to do with regulation for physical labor, dangerous jobs we osha, right, occupational safety and health administration is there a regulator for mental health in this digital economy as there's more and more dangerous work >> certainly employment law applies. the eeoc has regulations around like what employers can ask you about your mental health you're allowed to ask for a reasonable accommodation if you're feeling threatened. >> how many videos of puppies getting bashed by baseball bats

do you watch before it's time to take a break or see a counselor? >> it's a perfect question and you've described the grand and disturbing experiment wherein i talked to the person who leads the team at facebook that question you asked keeps him up at night. he does not know how much violent content is too much to watch? >> what's the likelihood that the company doubles down on getting algos to do this work instead if this is too much for a human being to take? >> they absolutely want to get there. they believe eventually ai will be able to do it when you've already decided that computers and math are going to do this job someday you start treating the human beings doing it today a whole lot worse they're viewed as a speed bump on the way to an ai powered future, and i think it's creating a lot of problems for people doing these jobs. >> we just read some statements from the companies involved. have you already seen changes or any kind of reaction based on your reporting >> yeah, so facebook has said it wants to do two things we'll see if they do, i really do hope they do. one is they say they want to do

a better job screening applicants if you have an issue that might make this job particularly hard, maybe they'll find something else for you to do and they want to find a way to give people support and counseling after they leave the job. that is huge to me if you get ptsd because you do a job for six months i believe employers should be taking care of you after you leave. >> i might be scared of people who find this job easy frankly is there an academic underpinning for what happens to people when they see so many videos of child exploy takes, of animal cruelty, we're getting people immersed for hours and hours. how is their mental health after even if they're not depressed going on >> people do have different reactions to this job. i talked to some moderators who say look, to me it's just like a horror movie it doesn't disturb me for whatever reason. people can have good outcomes in this job, maybe if not amazing outcomes in this job the problem is we don't know how they're going to react once they start, and i don't think we have enough support around them before, during and after the process to ensure that their

mental health and wellbeing are being taken care of. >> one thing that struck me is they're not denying anything you've reported and are they -- i mean, breaking anda, how much is wrapped into that for example? >> i have so much admiration for the people who sprooke out who i break the ndas they want people to hear their story. >> did you walk away with things that you would -- not that you're a work safety official, but you must have had some ideas of here's how this job might be made a little easier >> absolutely. some of it is so basic, clean the bathrooms. stop these fights from beaking out at the office. create an environment where there aren't two sexual harassment complaints before the eeoc facebook says they are working on them. for me it's pay these people more screen them better on their way in, pay them after they leave.

i do think they would raise standards across the industry. >> is there any reason to think facebook might take this in house? >> i asked arud. he told me while they believe that would be very difficult to do, they do want to have that conversation there are folks inside facebook that wish they would i think we can all agree, if mark zuckerberg was sitting shoulder to shoulder with these people they would have a clean bathroom and they'd probably have better mental health outcomes. >> we're talking a lot about facebook but this is arguably a much bigger issue for youtube. twitter's got some challenges there too. they must, vimeo, all kinds of companies deal with people trying to post content are there best practices or is this kind of typical of what the companies are up against >> i think this kind of content moderation is still relatively new, so companies aren't always sharing best practices, although cognizant does moderation for twitter and google as well you raise a great point. i wrote about facebook and in these two stories, i want to tell the same story at youtube and twitter. you're absolutely right.

these issues are playing out across the industry. >> we spoke about much broader issues the journal does have a report about youtube potentially getting rid of auto play on children's content we're going to be searching for solutions that are not human-based because it's just incredibly demanding work. >> yeah. yeah, and you know, the youtube story shows these companies are realizing that they can't trust math quite as well as they think they can you do have to trust human beings, but you have to take care of those human beings. >> it's a story everybody should read. >> i really appreciate that. >> go to the verge and try to find it today. thanks very much. >> thanks very much. deirdre bosa sitting down with the founder and ceo of huawei in an exclusive interview. she joins us now with the highlights. >> reporter: not only is huawei facing a $30 billion hit to its revenues this year, but mr. ren said earlier this week smartphone shipments have declined 40% in the last month due to the export ban.

if huawei loses access to google's android operating system that decline could persist or worsen. i asked mr. ren what made him confident that huawei consumers would accept a different, still unproven operating system from huawei three times he refused to ans r answer. >> announcer: google is a great company. we respect them highly and we would not randomly replace the operating system we also have our own system that can replace it, and we will come back to normal >> will your customers accept that already in the philippines huawei has said it will offer a full refund if the device cannot run google and facebook apps what if more customers demand this >> translator: i think in international markets there has been some impact, but it's not that big because there are many functions in our smartphone that are independent from google's systems. for example, photography and other core functions are

independent of android systems, and google has provided to us an excellent ecosystem, which they have been bidding real law it will influence us but not too big. >> how can you be certain if customers are already saying that they don't want to use huawei phones if it does not have the android operating system how can you be certain of this >> translator: you can see that u.s. is the greatest country in the world. it has the strongest state power and now u.s. is attacking us in many places. >> regarding huawei's role in the trade war, ren didn't just play it down he flat out denied it. >> translator: how would i have the chance to be able to meet with them and talk such a specific matter, and in china, huawei is a very small issue and on the table of the u.s. side it is not even as big as a sesame, so it is not worthwhile to talk about our issues, and we will counter ourselves to address the issue. we still do trust the judicial system in the u.s., and we

believe the judicial system will address the issue. >> mr. ren, how can you say this you have 180,000 employees you are one of the biggest companies not only in china but in the world why would it be strange to talk to chinese gofrt government officials when you are such an important company to china and in the world >> translator: because we are fully capable to deal with those issues on our en why should i ask help? we have full confidence, and we have full capability to address the issues on ourselves. the sanction and also the entity lists that have been published for quite some time. >> reporter: huawei is a private company, and ren says he prefer it is that way so we may never know >> thank you and when we return, shares of adobe rising after posting better than expected earnings in q2 you can see it there well, that's facebook, but adobe is up 4%

plus a 25% increase in revenue year-over-year also. the chairman and ceo joins us exclusively next stay with us straight on like a tunnel for some way." "i've seen a cat without a gri, but a grin without a cat." hey, mercedes, end audio. change lighting to soft blue. the completely reimagined 2020 gle. with intelligent voice control and available third row. your adventure awaits. visit your local mercedes-benz dealer for exceptional lease and financing offers. mercedes-benz. the best or nothing. 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.

hey! i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass. . welcome back, shares of adobe up better than 4% this morning after an earnings beat that saw revenue increase 25% year-over-year in the quarter boosted by growth in its largest business segment, digital media, among others the company did issue weaker

than expected guidance but managed to do it in an upbeat tone and shares continue to hold their higher position so far this morning joining us now exclusively is adobe's chairman and ceo shantanu narayen good morning >> good morning, jon, thanks for having me on your show. >> always great to have you, especially after we got some numbers after earnings so i know you're going to tell us a bit about the quarter, but mix in there, tell me about global demand. in the chips and hardware, we've seen impact from global trade tensions are you seeing any impact on customers' willingness to spend on your software and services? >> well, you think about adobe, jon, i think we're in two absolutely sweet spots on the individual side, it's absolutely the golden age of creativity everybody has a story to tell and creative cloud is absolutely the one stop shop that allows

people to express themselves and on the enterprise side, the imperative around digital transformation is front and center, and given we have the best software to enable people to engage with their customers we continue to think that these are going to be front and center in terms of technology spend. >> so any impact from the economic uncertainty >> thus far, we've continued to see the momentum that we saw if the first quarter. we continue to believe that, you know, as long as digital remains front and center, adobe will continue to do really well. >> tell us about this q2 guide i understand that, you know, covered you guys a long time you're not going to raise your full-year outlook at this stage during, you know, q2 report, but what are you seeing that caused you to maybe wait things a little more towards the summer seasonality and be conservative

in the guidance for q3 >> well, jon, we've had a great track record at max we typically give color for the next year. we updated that in march as a result of what happened with the move towards section 606, but from our point of view we typically do not update our annual guidance at this time we'll give more color in september for the q4 quarter as well as at max give guidance for 2020, but as it relates to the fundamental business, when you think about digital media, arr and the entire creator space, we had a very strong quarter, over 400 million in q2, which is a record for q2. if you look at our targets for q3, again, they would be a record 360 million is what we guided to in q3, and so we believe that the momentum associated with everything that we're doing in the video space, everything that we're doing as

it relates to what's happening for new platforms like youtube continues to propel the business, great products like spark which are available for the education segment continue to see demand. on the acrobat side, the move from paper to digital continues unabated we think we have the best products in terms of creating pdf for the mobile era, and then on the enterprise side we grew the business 34% year-over-year on our revenue we've done a good job of integrating marketo and ma genermagento. >> you said on the call previously we used to look at print and web as a platform. now we even look at channels like youtube as a platform get a little granular if you will, give me some color on how that changes how you either work features, you gather data to figure out how adobe can gain share on a platform like

youtube? >> well, this fundamental notion that drives us, jon, in terms of the belief that everybody has a story to tell, we want to make sure that our tools and our services enable them to tell that story taking full advantage of whatever medium they want to display that on. mobile devices are different from how youtube is, which is different clearly from what's going to happen with augmented reality and virtual reality. the presence of digital in a car is so different from what you might see in retail, so we've been really rethinking how we deliver applications to make sure that we take significant advantage of the medium in which they're being consumed as well as the medium on which it's being created. when you think about how people are creating this content, you know, the fact that they're doing it increasingly on mobile devices and on tablets, thinking about touch, thinking about voice modalities, and it really

provides our products with this amazing cing canvas on which thn innovate. >> i hate to ask you something not strictly related to your quarter or the guidance, but this issue of deep fakes came up last week at the code conference and has got a lot of people's attention. is industry starting to think about solutions that will minimize the impact of these things and the way they might be intended to fool people around the world? >> yeah, i think what we are thinking about as it relates to that entire space is there's a responsibility that exists between the content creator, the technology provider of tools such as adobe, as well as the people who are distributing that content, and we have spent a lot of time and research ensuring that we can unequivocally tell you when content has been altered, but i think, you know, a three-way partnership between somebody who creates that content and then either digitally signs it or declares

it to be authentic, and then the distributor of that content who can leverage tools from companies like adobe to determine its authenticity is going to be required to make sure that that entire work flow all the way from content creation to content distribution can be done in a way in which fakes are not, you know, the order of the day so we play a role. we posted a blog on that in terms of what we are doing with artificial intention to truly determine whether that content has been altered or not, and we take this extremely seriously. >> it's morgan, i just want to get your thoughts on pricing and how you're thinking about -- i guess how you're balancing demand and the ability to continue bringing on more customers versus the ability to continually increase prices for your services? >> morgan, since the time we've actually introduced creative cloud, our number one focus has been value and getting more people onto the platform you have products like spark

that are available in a ubiquitous way certainly when we introduced five new products we looked at the pricing but our number one focus is actually getting new people to the platform, and that's what's driving it it's new customer acquisition. it's enterprise adoption, it's international expansion that's really driving the growth that we see a lot of people talk about s.t.e.m. and the importance of s.t.e.m. at adobe we love to talk about s.t.e.a.m. and the importance of arts and that's really the mission that drives us as a company. >> and finally, when you first expanded into digital marketing, a lot of people doubted adobe. not so many doubters around now. now it's experienced cloud you're going head to head with sales force among others give us your sense of what characteristics adobe's going to have to grow internally or enhance to win in the experience

space. >> let's start, jon, with consumers like us, and consumers like us are absolutely requiring that any enterprise that we interact with, that that experience be personalized, that experience be engaging, and that experience be digital first. adobe is the absolute leader in content management we're the leader in being able to create these mobile applications, and the amount of data this we're processing on behalf of our customers. and we've drawn the line in the sand it's actually the enterprises that own that data that is such a technology as well as data mote that exists for adobe. as long as we can continue to make sure that we enable our enterprises to tlideliver that engaging experience, to use artificial intelligence with all of the data we're collecting on their behalf, the first-party data, i think we'll continue to be great, and the opportunity is so large as it relates to digital transformation, it's not going to be a one company win it

is all but we love the position we're in we're the clear leader, and as you pointed out, we were the creators of both the digital marketing category and now an even larger category that we call customer experience management >> it is certainly an important one for investors to continue to watch, shantanu narayen ceo of adobe joining us from headquarters thanks for being with us the stock is up almost 4.5%. we've got a big show still ahead, the ceo of linkedin joins us. >> first, what to expect from slack's public debut tomorrow. we'll discuss the company's direct approach next aced. (henry) i thought it was unfair. when-- when you hear those words that you get diagnosed with cancer. (osamah) successfully treating it still remains one of the most enormous challenges facing us today.

we realized that, if we developed the technology that could take 2-dimensional patient imaging and convert it into 3-dimensional holographic renderings, we could enable surgeons to dissect around the cancer so we can precisely remove it. when we first started, we felt like this might just not be possible because computing power just wasn't there, but verizon 5g ultra wideband will give us the ability to do this. we won't rest until we see this technology being able to change lives. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

you need decision tech. the flexible class schedules d me tremendously. allowed me to go to work full time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through. but we're also a cancer fighting,

hiv controlling, joint replacing, and depression relieving company. from the day you're born we never stop taking care of you. welcome back to "squawk alley. european markets closing abroad, and seema mody joins us with a breakdown of today's action. >> stocks losing some steam after european markets staged one of their best rallies of the year yesterday following dovish comments from ecb president

mario draghi france and italy in the green. the questions for investors is what policy lever will the ecb pull reports suggest officials are divided over the next steps with a rate cut, a shift in guidance and more qe all in play. some economists say a fed rate cut today could speed up the decision if it threatens to boost the euro zone currency at 112 fweagainst the u.s. dollar. a lot of focus on the washington pushback to facebook's currency. it's worth noting that the response has been arguably stronger overseas in europe. french finance minister saying that it is out of question that libra become a sovereign currency it can't and it must not happen. markets fer ber, the german member said facebook could become a shadow bank this after the bank of england governor said yesterday the new digital coin would be subject to the highest standards of regulation so opposition certainly building, but tom lee says that libra does not need to be in

every country to be useful and that even if some countries ban it it will still be a success. we'll see. carl, back to you. >> interesting to get everybody's first take on that thank you. let's get over to sue herera and get a news update. >> good morning, carl, good morning everyone here's what's happening at this hour attorney general william barr meeting with european ministers in bu ka rest, although the reason for the visit has not been disclosed barr is expected to hold meetings today with the e.u. commissioners for justice, security and home affairs. a magnitude 6.7 earthquake that struck japan on tuesday caused minor injuries to 21 people and created landslides on the side of the roads. businesses began to return to normal today with trains gradually resuming their usual services and electricity being restored to those that had last power. south korea says it plans to send 50,000 tons of rice to north korea to the world food program as it seeks to help north korea with its food

shortages. south korea last week sent $8 million to the agency for programs providing medical and nutritional aid for north korean children and pope francis extending special greeting during his speech to hir roe sha and nagasaki students visiting in rome you are up to date that's the news update >> thank you very much. coming up after the break, the ceo of linkedin, what's changed for the company three years after that acquisition by microsoft. obviously some meandering action today, s&p pretty flat, and that fed decision coming up at 2:00. back in a minute ppens in golf and in life. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is

they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley.

welcome back, slack set to debut at the new york stock exchange, but it won't be pricing tonight. leslie picker is here at post nine on why investors are looking to the secondary market for clues on the pricing. >> that's right. if slack were debuting its initial public offering tomorrow, we would be learning about its ipo price today. instead slack is doing a direct listing meaning the company hasn't been marketing a price range to investors, nor will it be setting a price relative to that range tonight so to get a sense of where slack might trade, investors are turning to what its stock has done in the secondary markets or those markets where shares in some non-public companies can exchange hands now, slack discloses in the prospectus how its class b shares have traded over the last

ten months you can see that shares have soared in value. the volume weighted price in may represented, guys, two and a half times the price from just last august. slack says its shares traded as high as 31.50 last month which would represent a valuation around $17.8 billion now, over the last ten months slack's class b trade volume reached $356 million they say that represents decent liquidity for price discovery purposing making investors more likely to turn to secondary markets as an actual benchmark for the price tomorrow now the nyse is also likely to reveal a so-called reference price later tonight that should not be confused with an offering price or an opening price. this is more of a starting point for the market makers to begin building an order book tomorrow morning. when spotify listed last year, its reference point was $132, but the first trade was made at nearly $166 a share.

spotify ended its first day of raidi trading about 13% above its reference point. >> the prevalence of these secondary markets and the about for early investors to make some money before these companies actually go public, how is that contributing to what we're now seeing as a little bit of a rise of these direct listings >> it's a good question because one of the main purposes of these direct listings is to give employees liquidity. the problem with the secondary markets oftentimes is they just aren't as liquid as what we see in the public markets. there aren't enough people, enough buyers and sellers to come up with a price that people oftentimes believe is mostly reflective of the company at each day and time, and so this gives more people the opportunity to do that it's also more difficult to control in the secondary markets, i think, for companies, and as well as for employees a lot of these unicorn companies don't let their employees sell in the secondary markets if they want liquidity, it has to be under that kind of more controlled mechanism.

>> do direct listings open earlier on the day of than an ipo? >> in fact they open later, carl, i'm sorry to break the bad news to you. >> just curious. >> i know, i know. what i've been told is that it could be an hour or two later than a typical ipo we may be doing this again tomorrow >> thanks, lp. >> uh-huh. let's get to jon fortt on the floor with a very special guest. >> i've got jeff weiner, the ceo of linkedin, now microsoft owned and part of the reason why we're talking today. it was three years ago this week that microsoft announced its intent to buy linkedin for $26.2 billion. back then quarterly reports, i was looking back through it, revenue for linkedin was growing in the mid-20% to mid-30% range. most recent microsoft report linkedin grew 29% in constant currency three years later that's unusual that's pretty good. >> yeah. >> what's driving that growth now versus three years ago

>> yeah. we are very happy with the results since then you know, most acquisitions the integration can be very challenging. i think by virtue of the way things were set up from the get-go, it's really exceeding expectations, and this model of independence has really been working for us you mentioned the growth rates trailing 12 months we did $6.4 billion of revenue. that -- over that 12-month period is up 31% year-over-year shortly after the announcement within about a year of that time, about six months after we closed, the growth rate slowed to about 17%, so it's actually been meaningful acceleration since that time, and there's a few different factors behind that one is that we continue to grow engagement, a way in which members are engaging with linkedin we continue to invest aggress e

aggressively in the act ive job seeker experience, our messaging capabilities. >> and those translate into revenue how? >> it grows sessions sessions has grown 27% this past fiscal year, grew about 24% this last quarter these are tens of billions of sex sessions north of 30 billion for this current fiscal year, and that's a rising, it generating increasing advertise inventory, it generates more data that's a big part of recruiter product, our sales solution product more people we can reach with our learning products. the increase in engagement has been a big part of that. that's one two, i think we continue to improve our execution in terms of our go to market motion and our enterprise efforts a much better understanding of how we create customer value, greater focus on return on investment as a result across all of our enterprise businesses, the town solutions business, sales solutions, learning solutions,

we've seen bigger spend over longer periods of time, and then third is the macro environment, so, you know, certainly tax reform has helped. the economy's going well, and as a result we see increasing demand for these products and services. >> we talked a lot before the microsoft acquisition about linkedin as being driven by hr, by hiring people seeking jobs. i hear microsoft talking a lot more about sales navigator, about the crm enhancing capabilities of linkedin is that a bigger growth area for you now than talent is >> it's growing faster it's growing faster off of a smaller base the reason you hear more about that in the context of microsoft specifically is it's been one of those areas where we have focused our integration efforts as opposed to more of an independent approach so we have our sales navigator product which enables salespeople to reach out to source pipeline to connect with prospects and close deals more

effectively. and we've coupled that sales navigator product with a deep integration with microsoft dynamics and their dynamic crm offering, and microsoft has a specific go to market sales approach there, so that's one of the reasons you've heard a little bit more about that. >> i've covered microsoft par long time. a lot of microsoft executives want to be public company ceos you're a former public company ceo who's now a microsoft executive. why are you still there? >> it's going the other way. i mean, frankly it's a dream job. it was a dream job before i got to microsoft i was just having this conversation the other day, it's even more so now the ability to focus 100% on the realization of our mission and vision is especially in the current environment, this notion of creating economic opportunity for every member of the global work force, that purpose is something i'm really passionate about. i have the opportunity to work with an extraordinary group of individuals and to pursue our mission and vision alongside of

them is just something that we're all collectively very passionate about it's also, you know, operating within microsoft this opportunity to leverage their scale of a billion individuals using their products and services on a daily basis. >> give an example of how that's helped with your growth? >> sure. we've had an opportunity to leverage linkedin profile information and data seamlessly within the outlook experience and the office experience, which i think in addition to driving more traffic into our ecosystem also just raises awareness in terms of the power and the value of linkedin. that would be an example i think interestingly enough part of the reason for our success is this model of independence and the fact that being a part of microsoft not necessarily needing to focus on the immediate term quarter-to-quarter, to be able to focus longer term, three years out, five years out in terms of what we're trying to accomplish, which was very much by design in terms of the discussions sati and i initially

had on why we thought this would make sense it's a huge driver. >> got to ask a macro question, you get a lot of granular data from pretty much across the globe about demand any storm clouds on the horizon? >> dan roth, our executive editor was recently on cnbc talking about slowing for the recent month's data in terms of new hires. i wouldn't read too much into it just yet we saw a prior slowing several months ago and a number of people started to say is this marking a cyclical downturn, and then we immediately saw that turn back up i think there's a lot of noise in the system. i think between tariffs and the global trade worries, there may have been some slowing in hiring we continue to see strength where you might expect it. technology, i.t., software we're seeing growth there. we're seeing growth in corporate services areas like management consulting, pr, and we do continue to see a decline also where you might expect it,

manufacturing, agriculture, farming, and some pockets of retail. >> okay. jeff weiner, ceo of linkedin on roughly the three-year anniversary of your engagement to microsoft, now still happily married. guys, back to you. >> jon, thank you. great stuff. still to come here on "squawk alley," what sheryl sandberg said this morning at cannes lion. and later defense stocks back in a moment your credit card debt into one monthly payment. and get your interest rate right. so you can save big. get a no-fee personal loan up to $100k. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

you need decision tech. 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.

. we'll debate what happens to stocks no matter what the fed does. mark lazry with us for the hour today, he'll tell us where the investor credits are for the markets and whether he agrees with those who say a debt crisis is looming our panel making plenty of news as well ahead of the fed we'll have the list of new bias and sells from our gang when we see you at noon on the half. morgan, about ten away we'll see you then. >> sounds good, looking forward to it. mark esper names the acting secretary of defense by president trump. this following the withdrawal of patrick shanahan from the confirmation process what does it mean for the defense sector secretary esper who's expected to officially take over next week has a history in the government and private sector including seven years as the top lobbyist at raytheon

under his watch, the army has been aggressively overhauling priorities this is something the secretary outlined when i spoke to him exclusively back in march focusing on cost cuts, acquisition reform, efforts to more actively engage the tech sector including the creation of army futures command this is the service's biggest reorganization since the 1970s so in the proposed 2020 budget, esper has moved to cut legacy programs like the boeing ch 47 sha nuk helicopter, m 2 bradley fighting vehicle in favor of emerging technologies like ai and robotics as the u.s. moves to better counter future threats from countries like russia, like iran, north korea and of course china. the expectation now that he's going to bring that ethos to the broader department of defense, and lastly, carl, i think this speaks to what is really taking shape, a broader power shift in the pentagon right now from basically navy to army as secretary esper becomes

acting defense secretary and his military counter part army chief of staff general mark milley is poised to become the top ranking general, chairman of the joint chiefs of staff starting in september as well. up until december of last year, both of those positions were held by marines. this is one to watch because he has very aggressively made these changes in the army, despite some criticism, some pushback from lawmakers and the like, and he could bring that to the broader defense department and could be interesting at this time the military modernization versus pushback on defense spending. >> others have noted that shanahan was ex-boeing, and esper is ex-raytheon anything significant in that >> not so much secretaries per and shanahan as well, they recused themselves from situations involving any of their previous employers i think it more or less just speaks to the fact that in many ways you do have this revolving

door in washington, d.c. between industry and the government, but certainly it's expected to get some tension if he goes forward and, you know, with the nomination process to become the permanent secretary of defense. >> right, as we await utx. >> a lot of utx. >> yes >> in a few minutes, as scott said a moment ago, do not miss marc lasry beginning in about ten minutes. later, of course, just two hours away from a fed decision, a big one. full coverage straight ahead and a lot more "squawk alley." so don't go anywhere pointing to a rate cut . >> you manage one of the biggest

ultrashort term etfs out there talk to me about your position right now. >> we like the front end of the curve right now. sharp lower interest rate since middle of may. investment grade credit in the front end of the curve that is very competitive relative to longerterm products. >> we have a fed meeting, where do you think their focus is? >> the fed is likely to be dubbish at this meeting. they are not likely to be cutting rates but buying optionality in the july meeting. the g20 meeting is next week and positive news on the trade front. >> in turn, what could that mean for your portfolio >> it validates our positioning as it is right now if you think about being shorter on the curve and three cuts priced in, if the fed was not to stick to the script that we think they will and if they were more hawkish on rates backed up, we would look at that as an opportunity to buy a little more duration in here >> thanks, james

sitting down with "new york times" ceo marc thompson from evolve conference and she joins us now with the highlights hey, sarah >> hi, good morning, morgan. this is the first time we heard from "new york times" ceo since president trump just this past weekend turned up the critical rhetoric against "new york times" not only calling them failing this time but accusing them of committing a virtual act of treason on a story that they did. this all has to do with the story the "new york times" published over the weekend that details the u.s. increasing russian power grid and retaliation for russian election interference and moscow cyberwar fare "new york times" ceo told me he stands by the story and talked to administration officials within national security and

that what the president is doing is dangerous listen >> in the end calling journalists traitors or calling them enemies of the people is inevitably going to increase the risk of violence and hostility towards journalists and it's irresponsible and he shouldn't do it. >> he said he wasn't taking the treason charge seriously because they have the sources to confirm the story. also, when it comes to criticism of "new york times" thompson said, look, the president is fair to be critical. fair for him not to like a story. but to isolate journalists with this kind of language and i'll just read you the direct quote because it was pretty powerful in the room is, quote, frankly hostile, stupid and also dangerous thing to do. morgan and carl. >> sarah, sounds like he also addressed just the model, the business model of journalism the degree we need of physical paper, like i got on my desk here the data they need to collect

from readers and the data that they use >> yes, it was fascinating mark thompson actually came into the "new york times" at the end of 2012. the stock price was about $8 per share. there was talk about the death of newspapers and of "new york times. well, now, that stock is in the 30s. it is nearly quadrupled since he has taken over and he detailed the strategy of how they really became a digital first organization, which sounds like something, but he said he isolated the print folks into sort of a smaller office and he said we knew how to do print. we knew how to do the physical paper. what we needed to build was a digital organization it started with going on the pay wall and then leveraging the data they got from customers into those subscriptions, building out all sorts of digital businesses like, of course, the podcasts and the apps like the crossword puzzle really interesting to hear an

immediate leader which you don't see too much focus the organization culturally to really implement that strategic transformation into digital first. it certainly worked for them their business has never been better. >> evolve sounds fun big headlines out of there today. thanks meantime, still in a range dow is up 50 we're back in less than three minutes. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent. but it doesn't equally distribute opportunity, and paths are not always the same. i'm so proud of you, dad! man: i will tell you this, southern new hampshire university can change the whole trajectory of your life.

>> we know people care about their privacy and we know we need to give them the tools to understand this. it's your information. you choose to share it with your friends on facebook. you can choose to share it with businesses or not and that is up to you and we need to make it clearer how that works facebook coo sheryl sandburg facebook responsibility in protecting user data they take down a million fake accounts every day >> we talk about the dark side of that moderation work here shifting to nuance away from simply, i'm sorry. >> noting that facebook is

calling for regulation, but regulation they would like to see within but, yeah, just to bring this full circle, back to your point. starting this hour with casey and that story on facebook moderation >> meanwhile, we await the fed and it is going to be quite the afternoon. buckle up. let's get to the judge. >> i'm scott wapner. the federal reserve deciding this afternoon whether to cut interest rates or signal it will in the months ahead. so much riding on that move. it is 12:00 noon, this is "halftime report." decision day clarity or confusion we will start getting details in the feds thinking in two hours plus, one of wall street's most respected investors weighs in avenue capital's marc lasry is with us live see where he's putting his money. jim make