♪ can't touch this ♪ my, my, my music hits me so hard ♪ ♪ makes me say, oh, my lord ♪ thank you for blessing me ♪ it feels good when you know you're down ♪ ♪ and you can't touch this >> good thursday morning welcome to "squawk alley." i am jon fortt here with morgan brennan and david faber live at post nine of the new york stock exchange carl has the morning off well, tech stocks are in rally mode the sector leading 9 of 11 s&p sectors higher for the quarter, up more than 5%. for the year, the sector surging 26%. in the meantime, big tech is facing growing headwinds in washington from anti-trust and regulatory scrutiny for calls for social media breakups, an issue facebook ceo mark zuckerberg addressed last night. >> i can kind of get why

politically, saying that you want to break up the companies feels nice, right? it's like, okay, there are issues let's just take a big hammer and go do it but i just think the reality is, we want to be -- we want to make sure that the things that we do actually address the problems. >> well, joining us now here at post nine, bob pec, now chairman of global internet banking at barclays >> thanks for having me. >> congrats on the new job >> excited to be there >> so let's talk about facebook and social media writ large. because it's interesting facebook has done okay over the last quarter i think they're up something like 14% snap, meanwhile, which a lot of people had given up for dead, up more than 30%. so what's going on in the sector who's winning, who's not >> i think it's important to level set the general markets. the s&p is up about 17% give or take nasdaq is up about 20%, give or take yet the f.a.n.g. names as a group are up about 20% give or

take and i think year-to-date, snap is up 150% or so so you've seen strong movement what's really interesting, you're looking for investors that are looking for incremental alpha and growth, and coming back to tech particularly in an environment where you have interest rates coming down and get more value out of that when you think about the ipo environment, which is critical, you've had a good series of ipos that have taken place, really in q2 but you look at the performance of those tech ipos and they're up about 50% give or take. take up ride sharing, it's up almost 80% give or take. you're trying to catch up to the benchmarks for year end. >> what's your read on what happened for ride sharing? something about lack of profitability and clarity with the business model i don't think a lot of people expected both of those to do what they did? >> i think it comes down to the unit of economics. i think informerses want to get a feel for what the underlying unit of economics are. that would get investors more

comfortable. some of these other stories that you've seen, you had profitable companies coming out you have top line growth and profit investors really love those stories as well. but you can see by the performance of these ipos, it's extremely interesting. one thing to point out, if you look at the performance of ipos from the first-day pop currently, you're up about 1,400 bips, about 14 points. if you pull ride sharing out of that, you're up 25 points. these portfolio managers are really getting these incremental alpha. >> you just pointed out, if you see rates going lower, staying lower for longer, that incentivizes growth and that means tech stocks. but it also means potentially more capital in the private market so what does it do to the ipo pipeline >> absolutely great question you want to think about two questions there. it fuels m&a we're about $2 trillion, on pace for $4 trillion of m&a, which puts you at one of the best markets since 2014 or so you have capital going there for m&a. cheaper cash is a way to get m&a

done premiums have been pretty consistent these companies aren't overpaying, somewhere around 30% or so for premiums to your point on private capital, i think it's really interesting to bifurcate the private capital valuation with the public capital valuations. as i mentioned f.a.n.g. before, trades somewhere in the low teens before when you think about private valuations, i'll leave you with this anecdote from jeff bezos. i asked him, i said, how do you think investing and how do you think about milestones to see if where you're spending your dollars is right he said, i only really care about one thing. i care about the net present value of future free cash flow and i think that's obviously the value of affirm, obviously the value of a stock >> he's been saying that since day one, by the way. >> exactly right and when you think about the vcs and the private capital that's investing, i think that's what they're thinking about more. it's not what's the multiple on next year's numbers, it's how big can this be and how big can the profitability be when you think out a couple of years.

you'll see continued money flowing into private capital, but there is a nice set of companies that are coming for ipos for the second half of this year into 2020 >> when you put it that way, you can siee why the private market valuations on the ride share companies have been different than what the expected valuation would be in the public market. >> yeah. and take a look at something like slack so slack's private market valuation was half or at least two-thirds of where you are today. so it depends where the last rounds were done and what's sort of also baked into some of those valuations something like preferred rights and other things that are in there that don't make it apples to apples. >> what's the lesson of shopify? it is up 47% over the last quarter, just about neck and neck with ebay, now in market cap. a lot smaller than amazon, but this is a company in ecommerce, which, by the way, people talk about it, you would think amazon has all locked up. what are they getting right? >> i love the question there's a couple of reasons why. when people talk about block chain and crypto and all of that, they talk about

decentralization and what i think you're seeing now is a decentralization of marketplaces in ecommerce. you don't have to be just on ecommerce or ebay, and the rise of dtc is creating all of these new business models. particularly great unit economics that allows you to spend against that and grow these businesses shopify is enabeling all of these smaller businesses and powering this whole decentralization of ecommerce. i think it's a very big theme right now and you've seen a lot of companies benefit frit, including shopify. >> is that what facebook is going after, you think, with libra also because they've got a marketplace. they want to be in the midst of these transactions, so it's not clear exactly to what degree they want to be a retailer is that part of what investors should be thinking about with libra? >> i think that's part of the thesis and with the crypto and block chain people talk more about libra, what's really interesting, when you think about scale, over $2 billi2 bil people on facebook and what you can do with that scale, when you have some means of bartering attached to it, it provides us power that a lot of the smaller

marketplaces don't have. it's very interesting what happens there. partnering with facebook, it will be interesting to watch this one >> chinese or u.s. tech stocks, especially with these trade talks right now. >> the u.s. tech has done phenomenally, right? you mentioned some of the performance already, so up 20%, et cetera. the ipos up over 50%, et cetera. when you think about what investors are thinking about, on the negatives, they're thinking about trade, they're thinking about tariffs and regulation, all three of those, right? and they're coupling against that growth, fomo, and the incremental margins that are coming out of the u.s. they're balancing these things together and making their choices that way >> i have to ask about my pet area of focus, m&a you know, so often, people want to convince, well, apple's finally going to do something big, or you name it, fill in the blank, they're going to do something large, whatever company it may be, that is already enormous i would think with both the anti-trust focus and for any number of other reasons, that's

really not likely. >> it's a great question i can't comment specifically on apple, but what i can say, exactly, you just hit on it, what investors are thinking about. is because of the regulatory environment, is it a strictly larger m&a that could be done, particularly in those big f.a.n.g.-type stocks what's interesting, when you look at m&a, for the first time in recent years, north america or u.s. has become a greater percent of global m&a and tech and internet has recently passed all the other categories in ver verticals for percentage of deals being done in m&a. so you're seeing a focus of u.s. tech in m&a. >> software is a service >> absolutely, absolutely. >> how much is the u.s./china trade tension hurting to becomes like alibaba >> we hear it not hurting the u.s. internets that much how much is it hurting the chinese internets? >> i think it restricts it a little bit particularly to david's point on m&a, if there were some larger m&a particularly domestically in the u.s., i think you would continue to see m&a by those

chinese popularities internationally, but not domestically in the u.s. >> do we fail to appreciate the size and power of some of those chinese giants ten krent and alibaba amongst them >> those companies are phenomenal companies, they're big companies. i think part of the regulatory debate has to be around, as we hamstring or restrict u.s. large companies, what does that do to the balance of power internationally when you're competing against chinese companies? that's got to be part of the debate, as well. >> what do you see as the biggest existential threat to tech and some of these companies? >> i think the biggest threat might be how this regulatory stuff plays out and trade. when you say tech, hardware and semis away from software ultimately, stability of the economy. being able to see the economy chug around and interest rates go the right direction all three of those things, you'll see investors particularly focused on. >> are they ready for a slowdown the tech companies or would it blindside them as we've seen happen at times in the past

>> i think when you look at the topline growth rates, they're growing 30% plus as a group. there's a lot of growth there. what you see in scale in tech matters. and that's why you saw recent deals with crm and tabtableau. seeing companies come together >> bob peck, chairman of internet global banking at barclays we covered a lot of ground >> we did. thanks for having me >> we've got another big ipo to get to this morning. change health care set to debut over at the nasdaq bertha coombs is with the ceo ahead of the first trade bertha >> thanks, morgan. we've got three big ipos all in health care here at the nasdaq today. neil dekrenzo is the ceo of change health care thank you so much for joining us as you anticipate your ipo getting going this morning change was founded in 2017 and it's a jv between change and mckesson's i.t talk about the area that you're in, which is a hot area these

days it's data analytics, consulting, health i.t.. >> it's really taking the scale of a company like ours and the 30,000 customers, 700 channel partners, really a ubiquitous presence embedded in u.s. health care, and taking that data and helping payers, providers, consumers be more effective and improve the efficiency of health care >> one of the things that people have talked about is price transparency in fact, this week, the white house saying they want to push for that and actually require both hospitals and doctors, the providers, as they're known in the business, and the payers and the insurance to give consumers their actual net cost of what a lot of things, whether it's surgery or services will cost them that's an area that you all work in do you see that as an opportunity? this mandate coming forward? >> well, we've been very supportive of improving price and cost transparency and helping consumers be better health care shoppers we think it's important, though,

that it's done with the right emphasis also on the quality of care and doing it in conjunction with the providers and the payers who have this deep experience in the industry so it's something that's important, something we support, and something we're working with all of our customers on. >> how are your customers navigating all of the rhetoric in terms of potential changes? last night, we had the democratic presidential candidates talking about it, and some of the front-runners are saying they would like to wipe out private insurance, which would certainly be a wholesale change is this something that you talk about with your customers? and how would that impact your business >> it's important, i think, when you look at all the plans that everyone's talking about, they all focus on three things, improving access to health care for all americans, reducing the cost of the system, and also looking at a way that we can actually pay more on quality and not so much just on activity and that's really something that we've focused on with our customers for many years so no matter what reimbursement changes -- and we've seen quite a few even in the last five years, we think we're well positioned to help our customers do well in any of those

environments >> but is it causing caution in the business environment and investment, given that we are seeing so much rhetoric about wholesale change, certainly we've seen it in the equity markets, the health care sector has been under pressure since we've heard so much talk about regulation, whether it's drug prices or in terms of changing the way our insurance markets work >> i think it's causing the industry to look at companies like ourselves that can provide them the kind of data and information, to have more of these data-driven decisions to optimize how they operate under any circumstances. you understand it being more flexible and more agile, depending on where health care is going i think is a priority for all of our customers from what we see. >> a lot of your customers are insurers, you also have hospitals, as well do you find it being an advantage being a stand-alone company that provides these data analytics? a lot of your competitors are the likes of united health or cigna or cvs, which are within vertically integrated firms

>> i think our independence, but frankly, bertha, also our scale, 30,000 customers, 700 channel partners, we really have a view of the u.s. health care system, are embedded in it in a way that's really unprecedented in u.s. health care >> and talk about the process of coming public here obviously, you're an established company. it's not like a start-up coming public, but has the market been receptive? >> very much so. given the scale that we have and the fact that we now have far more digitized clinical data in the country, working through all the ways that you can take that and use it effectively on behalf of payers and providers, who have been very excited in the investors who have believed in our vision >> neil, thank you very much for joining us this morning and good luck with your ipo this morning. back over to you guys at the nyc. >> thank you, bertha and we should mention, change is just one of three health and biotech companies going public at the nasdaq today. adaptive and bridge bio also

debuting this morning over there, overlooking times square, both pricing above their range more on those first trades still to come. i did want to update an story we've been following this morning since we first reported that the howard hughes corporation, a diversified owne and developer and perhaps leading to some frustration on the part of its board, we reported it had hired centerview to explore strategic alternatives including a sale the company has not confirmed, putting ing ting a press releast saying in light of the recent media speculation, it confirms its board is conducting a broad review of potentials through strategic alternatives to maximize shareholder value >> and they said recent media speculation. they mean david faber's precise and accurate reporting >> thank you so much i couldn't have said that better myself the stock was up 29% before it was halted for news pending. all right. well, as we head to break, a look ahead to fans of "the office" scrolling through

netflix in 2021. >> no! god. no god, please, no! no no nooooo >> the executive producer of netflix's most-watched show and former president of nbc entertainment ben silverman joins us next. stay tuned (indistinguishable muttering)

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welcome back to "squawk alley. piper jaffrey out with a new note on netflix, saying that the stock has more room to run, expecting a 50% rally over the next 12 to 18 months this as netflix announced it will be losing its most-popular show of 2018, "the office," at the end of 2020 to nbc's new streaming platform joining us now is former nbc entertainment co-chairman and

executive producer of "the office," ben silverman ben, thanks for joining us today. >> thank you for having me >> okay, so as the ep of "the office," what do you think of this deal for nbc to bring this content exclusively in house >> i'm super excited for the show and i feel like it was underrated while it was on the air, so it's incredible to see it over ten years after leaving the air to be even more popular than it was. and i do give credit to it finding a new audience through the new distribution services. and i'm excited to see what comcast is going to do and clearly, this is a crowned jewel for their new platform >> yeah, ben, this seems to me like it's something of a gamble, a long-term gamble here. on the one hand, comcast, our parent company, as well, nbc will want to be as competitive as possible when they do launch this streaming service, so why wouldn't you bring a popular

series like "the office" back in house, but on the other hand, by doing that, sacrificing money to all of those third party distributors like netflix. how do you think about that trade-off? >> well, i do believe "the office" specifically is so by far and away the most popular show in the streaming world, that by owner of it, if you're serious at all about building your own platform, you have to go after the asset secondly, if you look at all of the economics and how these companies are all operating, there's going to be fewer and fewer assets to buy, as disney goes further vertically integrated and clearly acquiring fox and through the acquisition of 20th shows like "the simpson's" and "family guy" and look at warner brothers who own big series like "the big bang theory" and "friends" and will very likely end up through at&t, there's not going to be a lot left of these megacomedies that

people will be willing to watch again and again and again, and these comedies seem to be the most multigenerationally connective they're not only for us and our parents, but also for our kids and potentially future kids. so i think if they're serious, they have to go after it and the last thing -- >> well, ben -- >> go ahead. >> we know the value of syndication or the old model i grew up with "star trek" and "brady bunch" reruns that were on and that's where shares would get a lot of their value but in the streaming era, do we really know exactly what "the office" is worth to nbc as a draw to this platform? is it possible that the value won't translate? >> well, it's really interesting. also for us as the show creators, there's no question that the broadcast syndication offnet distribution is more valuable, because there was a participation in the advertising ratings. so if a show had massive ratings, you are going to get

oftan unlimited upside, whereas on netflix, the show was their number one show, they didn't pay a bonus for that they had a contract they had locked prior, and they took advantage of that and were able to compensate based on what they had agreed to prior to its arrival. so it will be interesting. for the platform itself, time will tell. our subscribers going to subscribe or in the case of a service, are they going to watch, because these shows are there. and i've got to believe they will they've demonstrated they would follow their shows wherever they go, and they have been i also would comment in general that big studios that had been acquired by the big platforms like the comcast acquisition of nbcu or at&t's acquisition of time warner, they inherently have a discount on buying these shows, because the only money that's going to leave the door is the money that's going to go to the profit participants

they still in the majority of these shows have the majority of the economics going to them. so if you're serious about your platform, you're buying these at a discount relative to anything else you would buy >> right and you've mentioned avod. we should mention, nbc will be an ad-supported streaming service. i'm curious about your thoughts about the future of netflix. i know you may sell programming to them, i don't know. but you get all of this content polled nielsen says 72% of the viewing on netflix -- and netflix says that's not the case, but doesn't give us the numbers -- is series like "the office," is library content. does it start to hit the value proposition for netflix when really all it's about in the future, perhaps near-term future, is their originals >> well, i think that all the studios gave them a big head start to train an audience to watch content differently. and where it's hard to get against netflix is how fast they went global and how much they

are going after the international marketplace. and that's the piece that when we think about re-runs of "the office," we're fixated on the american audience, but internationally, they're looking at other content, at greater volume than just the american content, and that's where netflix, i think, is putting real firepower and real energy with a giant amsterdam office they've opened up, a madrid office and studio, let alone what they're doing in the emerging world so it's going to be hard to bet against them in the u.s. market, i think they're going to face some challenges it's going to be difficult as disney starts launching stwarz and marvel series and comcast has "the office" and a different model with avod and at&t, it's going to be highly charged and highly competitive, and the audience will need to decide whether they need to recreate

their cable bundle a la carte with all of these new platforms. >> we should note, that netflix is or tweeted out that it is going to be releasing soon this new series with some of the talent from "the office" around one of my favorite topics, the space force. but you mentioned international, i think that's a key point we talked about that piper jaffrey note on netflix when we were introducing this segment. and part of the crux for their argument on why shares of netflix could rally as much as they could is international. are international subscribers, whether it is netflix or whether it is some of these other companies that are going to be offering these global services, are international as lucrative as domestic? >> well, the customers are if you charge them the same, so if you're going to change the same price point for the service around the world, each customer

is inhernlt worth more money when that person travels to another market, are they getting a better deal because of the way that the netflix service does travel with you, if you want to watch it on devices in other places so it will be interesting to see it play out. but less so than how those consumers are valued for them is the fact that they have such a speed-to-market advantage, and that the big companies like at&t are really heavily weighted in the u.s. market, as are most of the big platforms. even amazon, because of its giant business model of selling goods all over the world is not in every market the way that netflix can enter every market so quickly and i think on the other hand, comcast was brilliant to buy skye it gives them a technological platform to launch their service both in the u.s. and expand internationally. and it gets them into markets quicker than they would on their own, because comcast in and of

itself is an otherwise u.s. play >> ben, finally, the proliferation of all of these streaming services and warner isn't out yet. obviously, the nbc's ad supported is not out yet, disney plus is not out yet, what's your sense to what the consumer is going to do. at some point, they'll have to make decisions about what they want, and what they don't. >> we keep talking about it as both producers and content entrepreneurs and also consumers. and i think what we're getting to is a place where the services will be more robust and easier to use than what you are using presently or in the past because of their a la carte on demand any time thal travel with you, they'll work across multiple devices you'll have them accessible on the go, not only in your living room, but price point, i think, we're going to just be roadway creating the old cable bundle. so if you signed up for

everything from hbo to starz to showtime at home, it's most likely you'll be someone subscribing to disney and warner media and comcast services as well and as you add them all up, are they going to be cheaper or more expensive? and i'm doing my own calculus and i think they're going to be less expensive, but not by a lot now. >> ben silverman, great to get your thoughts. thanks for joining me today. >> thanks for having me. >> european markets closing in a second seema mody joins us with a breakdown of today's action. mixed, seema >> pretty much mixed across the board. take a look at the ftse 100, th uk stock market. the worst-performing stocks there are shares of glenncore. we're still awaiting more details, but you can see the impact on the stock now down nearly 6%. switch focus to germany,

chemical giant baee bayer in fo. revealing plans that suggest it's looking to settle a drawn-out legal battle over pesticides in the u.s. and shares are up over 9%. in retail, h&m shares are getting some attention sales of its summer collections are off to a great start, even though it reported a slight drop in second quarter profit and it does come amid ongoing competition with spain's cedzara and other fast fashion brands across europe. the europeans will be watching president trump's highly anticipated meeting with president xi as well as a number of other meetings, including germany's angela merkel and turkey's president, tayyip erdogan. that will also demand investor attention. let's get over to contessa brewer for a news update >> royal air force jets escorted an air india plane to london's

st stenstead airport after a security alert the flight traveling from mumbai to new jersey landed safely after being diverted it was parked far from the airport's normal operations. all 337 passengers were taken off the plane. by a 5-4 vote, the supreme court says federal courts have no role to play in policing political districts drawn for political gain the rule could embolden political gerrymandering when state lawmakers undertake the next round of redistricting during the 2020 census pnc mcleod pharmaceuticals are recalling losartan tablets a french wall found that she had a long-forgotten painting from french romantic artist delacroix. now in a french gallery, as the owner negotiates with an american museum to buy it. it wasn't listed as lost or

missing or stolen. it was, in fact, just long dormant. guys how about that treasure right in your house >> that would be nice, contessa. that would be very nice. i have no such treasures >> that you know of. >> thanks. big show of "squawk alley" continues next we've got senator josh hawley in just a few minutes one of the two senators behind d.c.'s push to put a price on your data. and later amazon's counter to delivery and how whiriteaid factors in we're back after a quick break johnson & johnson is a baby company. but we're also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

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simple, easy, awesome. go to xfinity.com/moving to get started. welcome back some new comments from the white house on president trump's talks with xi this weekend let's go back to kayla in osaka, japan, for those kayla? >> reporter: hey, morgan, this is the first official reaction from the white house in response to the reporting by "the wall street journal" that we at cnbc have matched that china's president xi plans to lay out or restate his terms for an eventual deal, but larry kudlow told reporters just a few moments ago that there are no preconditions for this week's talks. listen i don't believe -- i don't believe we have the sound bite ready, but what he essentially said is that there are no preconditions, that the u.s.

will be restating its own goals of structural long-term changes to the economic relationship between the united states and china, but certainly, the u.s. is going to have to answer to china's demands here and at least figure out whether it can still reach a truce and if they reach a truce, how long that would be and whether they would like to hold talks with china to try to meet in the middle on some of these demands farther down the line. guys, back to you. >> kayla, thank you. and now we are approaching the end of the first half and traders are breathing a sigh of relief that collapse in earnings that was so feared in december has not happened yet and there's no sign of an earnings recession in sight. it's not all good news bob pisani has more. >> and the important thing is we're closing out the first half of the year and looking at the second half of the year. there's good news and bad news

on the earnings front. no earnings recessions we're not having consecutive earnings declines. buybacks are really strong we may be as strong as 2018. that's particularly helping technology stocks. the bad news is earnings are fair to characterize as flattish you might think, that's not bad. we had a great year in 2018. but when you have stocks at these kinds of record levels, that's a little bit of a problem. here's what i mean when i say flattish here. for the four quarters here, we have 1.6%. flat here, flat here, and there's a lot of hope yium ther. you put it all together and get about a 2% earnings growth for 2019 with this included, i would said flattish is a fair way to characterize it. one big problem is it's the global slowdown and the trade and tariffs wars it's really hurt the technology sector, so if you would take a look, tech earnings estimates have been down all year, all three quarters and there's more hopeium here in the fourth quarter that things might start to turn around you heard yesterday, of course,

we were talking with some of the other countries out there. they're hopeful for a turnaround that's what we've been dealing with all year. there's the global slowdown? it's pretty simple, there's two key components, on the china talks, no new tariffs over the weekend and talks continue that's sort of the consensus right now, even if a specifics of a trade deal are not reached. number two is the fed. the fed will essentially backstop the market. in other words, once you have the fed having a few rate cuts, the earnings are going to lift gentle and we'll start to improve. the bull's points to what was happening in june, earnings estimates in the second half were going down in may through the month of may the minute the federal reserve started talking about the concept of maybe getting a little accommodativaccommodative decline in the earnings stopped in june and that's been supportive for the markets so far, the bullish census has been the one the market is going

with guys, back to you. >> bob, thank you. bob pisani big technology companies facing big pressure in washington, d.c. from anti-trust probes to regulatory scrutiny. now a bipartisan senate build bill could force companies such as google, facebook, and twitter tell users more about the dt data they collect and how much that data is worth the dashboard act was introduced this week by mark warner and republican josh hawley and senator hawley joins us now first on cnbc. senator, nice to have you. how are you going to go about forcing big tech to actually put a price on that data >> the law requires the s.e.c. to develop a valuation formula and big tech, it's based on taking our data, not telling us, selling it without our consent and turning a profit our bill says, tell the consumer what their data is worth and give every consumer the right to get that data back

>> do you think consumers who use this willingly and many who know their data is being used really care? >> i don't think that consumers do know that their data is being used, certainly not the extent of the data. facebook and google, they hold out their platform to the consumer as being free of course, it's not free we want to give them the power to know exactly what that data is worth and to say no and i've introduced a legislation that could allow every consumer to opt out of being tracked, to opt out of having to share their data with big tech >> senator hawley, this legislation would focus on, quote, commercial data operators and those are defined as services with over 100 million monthly users. a lot of the media focus and discussion has been around social media companies, but arguably, depending on what the specifics of those guidelines

entail, it could be other companies like airbnb and spotify and others that could be affected by this as well how wide is the net that you're looking to cast in terms of these regulations and who they apply to >> well, it's wide i mean, if it's over 100 million users, it is a significant net by the way, it also encompasses data brokers these are often companies that are in the shadows, that no one's really sure what they do, we don't know where our data goes once companies sell these profiles to the data brokers they're covered by our bill. they, too, if they have significant data have to give a valuation to consumers and they, too, have to delete the data if consumers say that i want my information back >> senator, there's a difference between a raw ingredient, a recipe, and a chef who knows how to make the amazing meal and my question is, data is the raw ingredient here. the biggest internet companies know how to turn that into a very profitable enterprise for themselves what if the data itself, my data

in isolation isn't worth that much unless you've got the algorithms and know-how on top of it? >> the big tech companies should have no problem in disclosing the valuation? i think they would be very eager to say -- >> are you okay with that outcome? >> what i'm okay with is giving consumers more information and giving them control. and that's why an important aspect of this legislation is the right to delete. it's the eraser button, if you would like it's the right for consumers to say, i want all of my data back. whatever it's worth to the company, i want it back. i don't want them having it. and under our legislation, the companies would have to give it back they would have to delete it and i think that's important >> senator, why would the regulatory oversight of this go to the s.e.c.? >> that's the natural agency, i think, that has the ability, quantitatively to help develop the valuation methodologies and to be able to effectively foe ly enforce this we need to have effective enforcement. we can't rely on self-reporting on the good faith efforts of the big tech companies there's not a lot of good faith there.

so we need real teeth and this bill has it. >> and is the intent here to eventually get to apoint where consumers are empowered to demand or get some kind of a payment back from the social networks and others for the use of their data? >> i think this is a step towards giving consumers control over their own property. data is property and this says that consumers ought to be informed what it's worth and they ought to be able to get it back and as i said, i have companion legislation that would also say in the first instance, consumers should be able to opt out of being tracked, opt out of giving it in the first place. so i really think it's about consumer control and consumer empowerment. >> you've also introduced another bill that targets section 230 of the communications decency act it seems designed to fight against what i guess you believe as more discrimination against conservative voices on these platforms, is that correct >> that's right. censorship, viewpoint censors p censorship i'm a constitutional lawyer. what we say in the first

amendment context, that censorship that favor speech for favor is called viewpoint censorship these big companies get a special immunity from government under section 230 and my view is that they shouldn't use that to s censor political speech. the they want to do that, they shouldn't get the special handout from government. it's a trade-off >> but one of the key criticisms is that they don't police their platforms nearly enough. whether it's youtube or twitter or facebook. and in fact, they should be held to the same standard that we are in some way, making sure that we actually spend the money to make sure that what is said is correct and that viewpoints that are far outside the norm are not necessarily things that are shared widely? >> and that's certainly one option we could repeal section 230 and treat these tech companies like every other platform or publisher, the way that your outlet is treated, the way that media companies are treated and journalistic platforms we could do that what i propose is a middle ground that these big tech companies can still get their special immunity and still

moderate content they can still get rid of violent language and stuff that incites violence, all of that, but they cannot engage in political censorship, on either side, on any side. >> senator, i just want to get your thoughts on everything that's going on with china right now. i know you've said, just recently, that you see us in a technological arms race with china. our own kayla tausche has been reporting that one of the asks from china ahead of these trade talks this weekend is that the huawei ban be reversed meantime, we've got the national defense authorization act. that legislation moving through the two houses of congress right now. how likely is it that huawei is not seen as a national security threat in the future >> i think it's highly unlikely that they won't be a national security threat. huawei is a significant national security threat. i would be opposed to anything that opens the door to huawei in this country i think that the administration has done thus far is absolutely right as it relates to huawei. look, they have built -- we know that the distance between huawei and the chinese military is

nonexistent. they're essentially the same entity functionally. we cannot afford the security risk of having huawei embedded in our networks, embedded in our data platforms and we've got to take a tough stand on it. >> senator, appreciate your taking some time for us. thank you. >> thank you >> senator josh hawley and up next, semihas be has on a tear, led higher by micron's surge yesterday the sector up more than 10% this month alone. more on that after this break. ♪ at cdw, we get that trying to simplify data storage can get very complicated. but cdw will assist your needs and implement a dell emc unity xt all-flash unified storage platform. it delivers speed and efficiency, while providing simplicity and flexibility. for unified storage platforms, you need dell technologies, and it orchestration by cdw.

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welcome back to "squawk alley. with u.s./china trade relations front and center, is now the time to get into semi stocks or get out? dom chu is taking a look at that back at hq >> there is no doubt that the semiconductor trade has been a massive winner over the course of the medium to longer term just take a look at one of the bigger exchange-traded funds that tracks the industry overrule that ticker, smh over the course of the past three years, the fund has more than doubled in value and that's more than double what the s&p 500 has done in that same time span but it's the more recent price action in chip stocks. as you can see on the right-hand side, that big dip and slight recovery here. that's been the concern. the industry has become a major trading and investing battleground when it comes to the trajectory and speed of

u.s./china trade negotiations. one way to look at that relationship is how closely the ishares china tracks to that they kind of move, not necessarily in lockstep, but pretty darn close. they move up and down together one thing, though, that may make the semiconductor bulls a little bit more comfortable is the recent pullback in valuations. where the semi back in valuatio the semi etf now trades at roughly about 16 times next year's expected earnings that's below the broader tech sect's forward price ratio of 91 and the s&p's nearly 17 price to earnings multiple. it's not often you hear computer chips and value trade in the same sentence but that may be one of the reasons why some are getting a little more bullish on that chip trade, trade aside, back over to you >> some interesting insights, thank you. after the break a $250 million round led by the like of light speed. the ceo and co-founder of business travel platform trip

actions joins us next on the company's $4 billion valuation don't go anywhere. the dow is down 20 and the s&p is up 8. -driverless cars... -all ground personnel...

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major indices are mixed today but on pace for their best month since january. nasdaq is on a tear of its own, on track for its 11th positive quarter. we're back in a moment

business or pleasure what if business travel could be

a pleasure tripactions announcing a funding round taking the valuation to $4 billion. tripactions works with over 2,000 clients including names like we work, survey monkey and more joining us ceo and co-founder ariel cohen. good morning >> hey, good morning really happy to be here and share the news with you. obviously it's an exciting day for the tripactions team. >> must be so seven months ago you had a $1 billion valuation. now $4 billion how could you possibly gain that much value in seven months >> it's all related to me and my co-founder four years ago really reflecting on us as road warriors an how hard it is to book your trip with all of the antiquated systems out there, but then, when you are on the road and something happens, your flight is getting canceled, anything like that, you're pretty much on

your own we've created this system that creates a win/win between the employee and the employer and actually that's why we are growing so fast, hence the valuation. >> how much of this is machine learning and arjt i. that you're relying on to do this? >> so you know it's the win/win i'm talking about starts with the user you need to win the user and get the user we were able to take a process that took 60 minutes to book a business trip to do that to 6 minutes. we can do that because of machine learning we will show you the stuff you want to book, what kind of flights, hotels, in the context of your employer and then the company, because everybody likes to use it, are getting all of, you know, the savings, reporting, know where the employees are and so on. machine learning is a big part. >> sap paid a lot for it in this space and they're supposed to be able to use machine learning too

to do this kind of thing why aren't they going to catch up to you guys >> yeah. i think, you know, we came to this entire space with a completely new fresh eyes, really came from the traveler's perspective, and this is actually why we win. this is why we go at a 5x rate year over year we basically flipped the model on its head. usually you sell to, you know, cfos and then the cfos are enforcing the usage of the travel platform. we are making sure that user, the travelers, like the system, really like to book through us i'll give you an example, i was in germany last week and my flight got canceled while i was asleep and our system caught it, rebooked it, rebooked me on a new flight so i could come back to my connection and get back to my home for the weekend. this kind of things are really, really hard to imitate if you're not focusing on the users to begin with >> all right

ariel, thank you quarter billion dollar round, 4 billion overall valuation. impressive great to have you with us. >> thank you so much and we head toward noon, the dow just about flat, the s&p slightly higher. guys, david, great to have you as always. let's get to the half. all right. i'm scott wapner, front and center, new reporting on whether a trade war truce is in the works and what that would mean to your money as the g-20 gets under way in osaka it's 12:00 noon this is the "halftime report." >> the moment the market has been waiting for, the g-20 and meeting between president trump and chinese leader xi. is a deal in the works today, new reporting on what china wants and what the u.s. is willing to give. if there is a deal which stocks and sectors are most likely to pop.