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>> good wednesday morning, welcome to "squawk alley," i'm carl quintanilla and morgan brennan. retail is a big story this morning. we'll start with tech stocks on the rise including facebook and alphabet two tech names in the top five of goldman's most important positions for hedge funds. our next guest notes that to see acceleration in online ad growth in facebook and alphabet is no surprise to see it in snap, twitter, and pinterest is notable joining us this morning on where goldman sees buy opportunities is goldman's lead analyst, keith terry. >> good to see you. >> thanks for having me. >> one dynamic has been reacceleration in revenue revenue in some of these names >> i think it is the most important thing. to see all five of the major online ad platforms show accelerating revenue growth tells you something bigger is going on this is coming amid all of this

uncertainty, right we've had a lot of concerns about brand safety, antitrust, lots of reasons for advertisers to pull back on that front, and to see this actually accelerate and go the other way i think tells you something about the power of those platforms. >> you cover amazon, you cover ebay looking at e-commerce, target, digital sales were up 34%. walmart, u.s. e-commerce was up 37%. sh shopify revenue up 48% are we going to rook balook bact this period as a significant sea change >> this is another step on the path we've seen these things where you get ebbs and flow. amazon's retail growth accelerated in the u.s. in the second quarter driven a lot by that one-day shipping that they put into place so i don't know if i would say

sea change anymore so than the last ten years have been a big part of that change. >> going back to online advertising growth in the second quarter and the fact that it wasn't just sort of the entrenched giants facebook and alphabet that saw the growth and saw the growth accelerate as quickly as you pointed out, how does that fit into these broader antitrust regulatory scrutiny discussions that we're seeing right now in general when you look at these numbers, do you see there is actually more competition out there than maybe is being discussed >> i think that's exactly what the big tech platforms want people to see in this, right they want to see that there are companies out there that are growing successful in two out of the three of those cases actually growing faster than facebook and google are growing. every one of those companies this you talked about on the e-commerce side of things growing faster than amazon is, so for them to be able to turn to d.c. and say, look, how can

we be a monopoly if walmart's four times bigger and growing four times faster than we are in e-commerce whether or not that's enough to carry weight with d.c. is a whole other question. >> comments out of delrahim, obviously the ftc, these state ags, what's the most concerning thing you've heard regarding policy risk? >> i think it's all of that in aggregate. it's the fact you're hearing this from so many different people if you had a single point of presence in terms of policy here, that's something that these companies could deal with. if they're dealing with 50 ajs, if they're dealing with dozens of different federal agencies that are looking at this and then multiply that for every single country out there, you look at what's going on in france in terms of the digital taxes they're dealing with, that's a nightmare scenario for these companies just in terms of being able to manage this. i think that's the real risk it's not that any one of these is necessarily going to be a big

problem. it's what it all means together. >> it's not enough to get you to change your ratings on any of these. >> at the end of the day, it hasn't done anything to change our behavior, right? we the consumers are all around us, we're still using these platforms. we're still engaged with them. we're still using facebook we're still using amazon until you change the underlying consumer behavior, that's what matters to us. what matters to these companies as far as their financials go. >> let's talk about content a little bit you cover netflix. which matters more to netflix in the streaming game as we get towards the end of the year, apple tv plus or disney plus >> i think certainly disney plus is going to matter more just because it's the bigger of the two platforms. you've got a lot more content there in terms of what netflix is going to have to deal with. but i think actually what matters more to all three of those is the other 80% plus of consumer's time that's still being spent on cable, on broadcast, on all of the video consumption that's happening outside of these ecosystems. it's not about netflix versus

disney it's about netflix, disney, amazon prime, cbs, all access versus the ad supported ecosystem that consumers are increasingly figuring out 22 minutes an hour worth of advertisements probably really not a great tradeoff for me, not when i can go out and spend 7.99 or 8.99 to odometpt out of that >> you did a deep dive on ipo activity and how this recent round have fared versus historical norms what is your take away from that, how does it apply to some of the big tech unicorns that we haven't even seen come public yet? >> what we've seen so far, and you've seen this in the most recent deals done at that scale with uber and lifyft is a lot o that value creation is happening outside the public markets, no surprise we all know this we've talked about it over the last few years increasingly that's showing up in the performance of these stocks after they go public. you look at the performance of uber and lyft just as examples,

but you know, really there are lots of others out there it just means investors have to be more selective. bidding up everything in the private market and then expecting that they're still outside in the public market as well, it's certainly going to work for some of these companies that have that kind of growth path in front of hthem you can't just take it on blind faith. >> reports that alibaba is going to delay this hong kong listing. try again in october how much unrest in hong kong specifically or general global anxiety is going to affect the way they raise capital >> well, you know, i think you look at what's going on in china broadly and the venture capital market is sort of a good gauge of the day-to-day of this. we saw venture capital funding down 7% year-over-year in q2 it's a flag on the kind of uncertainty that's being created at different levels that's impacting those kind of day-to-day decisions like alibaba. >> michael moore at sequoia had this column in the ft saying the

ipo is dead arguing that you can look atspotify, others who hav gone a different route and that it's actually better does it matter to the investor, the public investor who ends up with the shares from the other end? >> i think, againings it's going to come down to sort of the individual company some of these companies have to raise money as part of a public offering slack, spotify, obviously weren't in a position where they needed to do that. we were involved in the spotify direct listing and you look at how that stock has performed, and it's hard to argue that that was a bad decision for them. i don't think anybody would, and so i think increasingly you'll see companies that have the right set of characteristics to take that path, take that path, and at the end of the day, you know, it's an individual security decision for public market investors who have to decide whether or not the valuation versus the growth profile, profitability profile makes sense. the mechanism behind it doesn't really mean a lot. >> one of the other things you

point out is that vc trends, you're seeing shifts away from seed and sirius, why do you think that's happening if we do see more broader regulation across the tech sector in general, which yes, i realize that can dent the big tech companies but also really kind of endrench their dominance as well because they can counter that how does that trend continue to play out >> the mix we're seeing away from series a and seed rounds, it kind of does suggest we haven't found the next big thing yet. we go back a couple of years where you were seeing a lot of seed and series a rounds going into artificial intelligence and cloud related enterprise software and all these other areas that drew a lot of that kind of investment nobody really knows what the next big thing behind those are going to be. we're still waiting for those to pay off, and so we're seeing a little bit of a gap here we've seen it before, not to

suggest that we won't see something. it's the amazing creation of silicon valley that there's always something next coming skmr, so we're just in an in between period. >> just to touch on netflix again, saying it's going to drop to 87 from about 90 a few years ago, no surprise, disney plus, hulu and so forth. stocks trying to hang onto 300 how much do we need to worry about that market share is not going to mean a whole lot in all hoof th ultimately it's how fast netflix is growing in this if disney is successful, there's still that 80% pool both of those companies draw out of. disney's going to have a great offering from everything we've seen so far. it's not going to be a level where somebody says i don't need netflix anybody. >> good stuff, heath

you cover the world. see you next time. and the congressional budget office just releasing its update to the budget and economic outlook moments ago. ylan mui is in washington. >> the cbo is now forecasting that the deficit will hit $960 billion this year that's 63 billion more than previously forecast, and starting next year, deficits will average more than a trillion dollars a year over the rest of the decade now, one of the main reasons for that is the recently passed budget deal, which the cbo estimates costs about $1.7 trillion. on the flip side, that budget deal and the fiscal stimulus it provides is expected to boost economic growth in the short-term the cbo is now forecasting average growth of 1.8% between 2020 and 2023. that's above their previous projection the forecast for this year remains unchanged at 2.3%.

the cbo is lowering its forecast for interest rates it now puts the ten-year treasury at 2.9% over the decade that's down from its previous forecast of 3.7%, and it results in a reduction of $1.1 trillion in interest rate costs over the decade finally, on tariffs, the cbo has updated its estimate of the impact that tariffs are having on the u.s. economy. it now expects tariffs to reduce real gdp by 0.3% by 2020 guys, we will be diving into all of these numbers during a conversation with the new cbo director phil swagel in just a little bit back to you. >> we certainly will we're looking forward to that. as you just heard, cbo director phillip swagel is going to join us and later an old fashioned bl ar debate on apple "squawk alley" is going to continue in less than three minutes. - stand up if you are first generation college student.

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. welcome back to "squawk alley. let's head back down to washington, d.c. now and ylan mui who is with the cbo director phil swagel. >> thank you so much director swagel for joining us this morning and making the time. >> thank you, it's a pleasure. >> so i wanted to ask you about your updated forecast. there has been a lot of talk in the markets amongst economists about the potential for another recession. you guys have actually upgraded your estimates of economic growth why? >> so yes, we slightly upgraded our estimate of growth as

compared to the forecast we made at the beginning of this year, and that was based on data showing pretty strong spending, especially by consumers. at the same time, we see risks in the economy, and our forecast has growth slowing in the second half of the year, consumer spending we expect that to subside a little bit in terms of its growth, and then business investment as well and in a sense, that's the main risk to the outlook right now is business investment. >> so in the current economic environment, under our current fiscal policy, you don't see the possibility of recession >> so we don't have a recession at any particular point in our forecast we recognize there's a chance of a recession. at the same time there's a possibility that growth will be stronger than we forecast as well >> you mentioned that business investment has been particularly weak and potentially worrisome one of the things that you mention in your report is that tariffs are weighing on businesses, increasing

uncertainty, talk about how you guys see tariffs impacting the economy. >> yes, of course. so we have a two-page box in the report that was published today on exactly that, the effect of tariffs on the economy we see the direct effects affecting american families and businesses that tariffs raise the prices they pay, and in effect decrease their purchasing power. businesses are uncertain about future trade policies and that appears to be dampening business investment. >> i believe morgan has a question for you. >> sure. >> hi director swagel, thanks for joining us today in this report, interest rates ten-year treasury at an average of 2.9% over the decade. right now the ten-year-year-old is about 1.5% right now. we have increased talk that you could potentially see negative interest rates have you factored in what that would like if interest rates continue to drop in this

country? >> we see some effect of lower interest rates in our projections as compared to where we had interest rates at the beginning of the year in the last just date from cbo, right, we have long-term interest rates about 60 basis points lower than before, and that has a pretty big impact on the deficit projection now, it doesn't entirely offset the increased spending as a result of the bipartisan budget act, but it does have an effect if as you said, interest rates went yet lower one is the direct effect of lower interest payment for the federal government of course if interest rates were lower, we have to look at the economy and say why are they lower. probably growth would be slower than we project, and that of course would have effects on the deficit as well. >> and why do you think that the ten-year is going to be so much lower than you previously forecast are you guys also looking at additional fed rate cuts is it just because of a slowing economy? is it some combination of both >> it's a mix, right we certainly took on board the

fed rate cut earlier this summer, and then we looked at markets, and we said we have a pretty conventional view of the effect of interest rates, the effect of budget deficits on interest rates in the future, so the fiscal situation is challenging. i think that's a polite way of putting it, and over the long-term that will feed into higher interest rates. in the near-term market participants are clearly speaking that they don't see the effect of those and we took those on board in our forecast. >> john has a question for you also hi director, can't help but notice 20 years ago when we had a sustained period of economic strength, the u.s. was running a surplus. now we've had this period of economic strength still running deficits in your projecting that the total deficit is going to continue to grow what's the impact then when we eventually do hit a recession, how do you expect that to affect the debt and policy? >> no, well, of course cbo

doesn't make policy recommendations, where we provide analysis to support the congress, so i can't say what the policy will be, but i can talk about the effect on the economy on deficits if the economy were to go into a recession. again, we don't have that at any point in our forecast. we see the chance of it, but if it were to happen, that would mean lower -- lower revenues and higher spending. there's lots of spending that depends on the state of the economy, the safety net spending, and of course there could be policy action that the congress would take in that -- you know, in that eventuality. there certainly would be an impact you know, look, right now interest rates are low, and the treasury is financing itself at pretty low interest rates. it doesn't seem to be a concern of markets right now. >> one of the reasons that folks have pointed to for lower than expected revenues this year is that perhaps the recently

enacted taps law is having larger than expected impact on revenue. can you talk a little bit about what you've been seeing and how that's playing out >> so we've seen different effects on the corporate side, corporate revenues have been a bit weaker than we expected. it's hard to parcel out how much is a result of the 2017 tax act and how much is other effects. the changes in the data suggest that some of the revenues that might have been coming from the corporate tax are now showing up on the individual side, certainly pass through businesses are gaining income rather than corporate. so that's part of it and that's -- and that's sort of the sorts of things we're trying to figure out what's going on with revenues. >> and final question for you, do you think there is any appetite on capitol hill for addressing what you politely called a challenging fiscal picture, or do you think we're in an environment where folks are going to be pursuing either tax cuts or major new spending

programs >> so of course this is the part where, you know, the role of the cbo is to support the congress whatever the congress looks to do, we will support them we will provide the cost estimates. we will provide any analysis that's helpful for them. >> but also a warning that the picture could be dire. >> they're not going to be hearing policy recommendations from me. we're here to support them. >> thank you so much director swagel, we appreciate your time. i will send it back to you guys down at the new york stock exchange. >> the dow coming off its first negative day in four, but back in the green this morning, up some 260 points. here are the names leading the index so far in today's session, boeing, nike, and merck amg emon wel be right back.

the resignation of italy's prime minister dominating the headlines today in europe as markets are set to close there in about four minutes.

>> good morning, carl, i've spent a bit of time here the last couple of years, there's very rarely a moment where politics in italy is simple or indeed boring. one analyst i've spoken to the last couple of days called this the craziest and most inconvenient crisis in italian history and that's really to do with the arithmetic in the building behind me that's the lower house here in rome, and of course also the differences in opinions amongst amongst the many fiscal policies that are jockeying for policy. president is the man tasked for trying to find a way out of the current crisis he's talking to some of the smaller parties today and some of the larger parties tomorrow to see whether they can form a new coalition government here. all eyes amongst the investment commune on the relationship between rome and brussels and whether a new government will bring a new approach to the european commission, what happens one th-- perhaps one ths slightly less confrontational.

the impact that will have on italian bond yields is going to be center for many people watching this closely. >> the ftse 100 being the lone example, the lone underperformer i should say let's get over to sue her rare a herrara. >> the trump administration is rolling out a plan that it says will allow the government to detain families crossing the southern border indefinitely rather than the current practice of releasing them within 20 days it would effectively suppress a decades old court settlement which governs the treatment of immigrant children in government care in sweden, iranian foreign minister zarif accusing the u.s. of committing economic terrorism. he is referring to the u.k.'s seiz seize ing an iranian tanker off gibraltar at the request of the u.s. >> was clearly an act on behalf of the united states engaging in

economic terrorism against iran. and as i said, international law must be respected by all a small plane crashed into the pacific ocean, and it was caught on tape. the plane skidding along the water off half moon bay in california take a look at that. the two people in the ditched plane grabbed two flotation devices. they bobbed in the water for about 90 minutes before being rescued by the coast forward, and they are lucky indeed. that is the news update this hour i'll send it back downtown to you guys, carl. >> what a story, sue, thank you. sue herera still to come this morning, shares of apple are high, up 3% since monday what comes next? we're going to debate that with a bull and a bear in a moment. (bang) good luck with that one. yes! that's why i wear skechers slip-ons. they're effortless. just slip them right on and off. skechers slip-ons, with air-cooled memory foam.

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welcome back apple trading up more than 5% in the last week helping to lead the tech sector higher what's next for the stock? we're going to debate it, both a bull and a bear joining us now krish, we're getting kind of close to your price target on apple. >> kind of. >> closer than we are to june's. you're at 250 on apple june's up 150. what gives you the confidence that apple continues to go higher how much of it has to do with services >> sure, thanks for having me and i would argue that, you know, the upside is almost close

to 20 points to the price target, which is a pretty good upside for a megacap stock clearly services is a big piece of the pie when you look forward to the upside. down maybe 10, 15 or so, so i don't think there's going to be any much negative price on that side the positive comes from services, and it will be very interesting to see how they price the offering for the next few months i do think that will be a very important catalyst for the name. >> you're right, you're right, 20% is quite a bit you said on july 31st you expect apple to guide down in q4, i believe. the day after that the president announced these tariffs that made things look bad since then the president has pulled back on those tariffs does any of that affect your expectation? >> yeah, sure, there are two reasons we downgrade apple

one is we accept -- for the december quarter because continued weakness in sales. the second, apple behind the 5g cycle, so china going to be the large supply, believe apple will continue losing shares in china. i don't think apple 5g story will be next year. so i think in terms of tariffs, we don't think apple -- the reason we downgrade apple is because tariffs. i don't think it matters too much for our business, so we continue to -- even without tariffs, apple the iphone sales will continue to be weak

if the tariffs increase. >> krish, a lot of focus on this upcoming apple tv plus launch in the fall, and getting reports now that there's been a big boost to content spending, 6 bl billion dollars, how much should apple be spending on content if the company wants to make a meaningful push into this arena? >> yeah, i mean, clearly the numbers are in the billions of dollars. right? the question is what magnitude are you talking about. there were press reports about 6 billion. reading an analysis, came up with about 2.8 billion we also done like a standard matrix approach base on how much they need to spend, and you know, you can even think of like netflix kind of numbers running close to $15 billion the real question at that point, you know, what is the big opportunity cost for them? how many subs are you going to get? i think as the cost goes higher, the break even level for that business also goes higher. need more subs to basically

break even, but the bottom line is that content costs are going up, but at the end of the day, consumers are willing to adopt or pay if the content is interesting from their vantage point, and therefore we have it at 2.8 billion can we reach the netflix level of 15 billion, i think it is possible >> and jun, i know they get mentioned today in this journal piece on the softer pace of buybacks we realize their cash position is huge, but is there any tie between buying back fewer shares than you did a year ago or a quarter ago and the projections for the money they're going to have to spend on content in the future >> yeah, i think looking at apple tv, i think the base it's very small i think they're trying to monetize, you know, continue growth of apple tv they're trying to monetize that base i think it's going to take

multiple years for them to increase their tv installation base and also spend more money still have huge caps right now so i think they probably will continue i think there will be. >> and finally, krish, jun makes an interesting point when it comes to 5g. we had gene munster on yesterday, he thinks while the holiday season this year for iphone will be good, right after that people will be thinking about 5g coming the next year and iphone sales could be really disappointing. why isn't he right >> yeah, at this point the expectation is that the 5g phone is going to come sometime next year i would also argue if you look at the cadence of apple's phone releases it happens in the october time frame, and october is actually fiscal year 21 for

apple, not fiscal year 20. realistically it's not an fy 20 upside realistically into calendar 21 another part of the equation is that it's still very early in the cycle, especially in the u.s. if you own an iphone and i come and tell you that, you know, a 5g phone is going to be delayed by nine months to 12 months, chances are of the consumer switching over to android is de minimis, i would say there's a little bit of stickiness in the u.s., so i don't see 5g really as a big risk. >> i just wonder, i take your point. i just wonder do people hold off on buying any new phone at all, even if they don't switch, but the debate will continue, krish, jun, thanks. >> thanks. up next, two retailers with two big beats on earnings. a breakdown target and lowes quarters after the break frsz

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here's what's coming up at the top of the hour, the great american consumer still going strong plus, hedge funds rotating out of tech. which stocks the money is moving into now one major airline get k whackeds on a double downgrade. that's all at noon top of the hour on the halftime report. >> looking forward to it thank you. let's get over to cme now, rick

santelli. >> today of course the minutes of the last fed meeting which resulted in a quarter point ease, and i have to say that it's as though pretty much every corner especially those really big institutions with leveraged positions want more easing shocking, isn't it but in the end, there's a variety of reasons why lower interest rates are desired, and we're going to get to one different one at the end of this spot the latest cbo forecast, i think it's somewhat of a mixed bag and remember, i like the cbo as an organization, as an entity because it's supposed to be -- and for the most part it is -- bipartisan bipartisan actually is at the heart of the recent cbo report because the only bipartisan activity we ever seem to get lately is when they spend taxpayer money, and of course the reason that the new cbo forecast is resulting in a 63 billion addition to the budget

deficit now fast approaching 1 trillion of course is the bipartisan budget deal but the number would have actually been much bigger. they did say, and it is true, that it added some growth, that aspects of this budget will add some growth, but they also said something i found really fascinating, that their ten-year projection for ten-year note yields moved from 3.7 all the way down to 2.9. now, if you do a fast ciphering, that's, what, a down grade of about 27%, which really gets to the heart of what i want to talk about, and that is assumptions, whether it's econometric model like the fed uses or the cbo and how they result and come to their forecast numbers, there are some big assumptions, like what ten-year note yields are going to be. and i understand many didn't see this latest move coming. this isn't about pointing a finger saying you had it wrong,

it's about how much do you trust inputs in and output if one isn't accurate going in, it's just going to multiply in terms of the negativity of your results with regard to accuracy coming out but the real issue is is that this will result and the growth in a savings of about 1.1 trillion, which makes sense because the original number was like 1.7 trillion. when you factor the long-term horizon. the point of this is one reason that i never hear as to why lower interest rates may be good, because the treasury department would have to pay so much more to service the debt. that may be cynical, but such a glaring reason, don't you find it sort of ironic nobody ever says it out loud carl, back to you. >> good stuff, rick. as rick's talking, dow's up almost 300 here, two of today's biggest movers in retail target and lows surging after earnin earnings beats there's plenty to look at here,

court. >> these were strong quarters from target and lowes for sure, but the share reaction is almost startlingly strong target on its track for its best day ever target beat expectations for earnings by $0.20 on stronger revenues and raised its full-year forecast range by $0.15. that guidance weighs the strong first half of the year and the marketplace volatility and uncertainty going forward including at least tliariffs as they stand i asked the c oh, o on a media call as i've said for some time now we continue to see a healthy consumer environment there's been a reduction in fuel prices which we think is important for consumers. unemployment remains low and wages are growing. like walmart, target compaf 3.4% with strong store traffic and web sales up 34% its same day order fulfillment centers, those are the order pickup, driveup and shipt

options made up 40% of the comped sales growth. lowes also beating on all major efforts reaffirming its outlook that a day after home depot cut its forecast for the years, total comp sales grew 2.3% u.s. comparable sales grew 3.2%. this is 1/10 of a percent above home depot's u.s. comps. this is only the third quarter that's happened in five years. lowes called out strength in paint and pros sectors i spoke to lowes's ceo briefly who said, look, the retailer had quote fallen behind on some retail fundamentals so the focus now is on building the foundation and building strategic initiatives at the same time that will allow us to take market share. jon. >> all right, courtney, thank you. one company in the commerce space going the other way this morning is, that stock getting

crushed in today's trace, 12.5%. the ceo is going to join us on the other side of this break stay with us nts. at fidelity those zeros really add up. ♪ maybe i'll win ♪ saved by zero

currently down about 12% right now. joining us now to discuss is ceo sasha ponyak thanks for being with us today.

the reason the stock is down as much as it is, a number of analysts saying is that you identified instances of improper orders being placed on the platform and then canceled walk us through the review that you're implementing around this right now and what it means for your previously stated financials >> of course, and thanks for having me and i was just talking earlier and we see also about the results. but of course i will answer your question, right? so we identified when we became aware of the potentially sales practices, you know, we started a review which was before the ipo, and then -- and we stopped the review, and here we identified this risk, we did the analysis, put corrective action

in place, and as we do all the time, and here we have as we aspire to be very transparent and we have put into place a number of remediation actions to avoid such issues in the future. >> this first came up back in may. citron accused jumia of being a fraud and pointed out this specific issue at the time you said according to market watch, we completely stand by our prospectus we'll not be distracted by those who seek to create doubt now you're saying he's right why did you stand by the perspepe prospectus in the first place. >> no, i didn't say that >> you didn't say that >> no. i didn't say the end of your question when we became aware of allegations about those potential improper sales practices in our j-force

program, we started a review this was before the ipo, and i will emphasize that our review started complete independentcy from citron's allegations. we became aware of those before and even put that in our prospectus so we identified this ourself. >> i'm told that's a quote from the earnings call that you did say that entire quote, but investors can go -- >> no, i did say that quote but you said in your question, you said that citron identified that we identified that and we disclosed it in our prospectus, right? >> you're saying the issue of fraudulent audit orders being placed you identified in your prospectus >> i'm saying that when we became aware of the allegations about the proper -- the

potential improper sales practice, we started a review and this was before the ipo, and we included that in our -- and we started this completely independently from those allegations from citron. >> so sacha, looking at the rest of the numbers from your earnings today, talk us through the growth and the investments you're making where africa is concerned and what that means in terms of build out of logistics and a path to profitability. >> of course, as you can see, you know, we are focusing our financial strategy on growing the top line drivers, both the users, the active consumers and the gmv. and as we are doing this and you can see that we have grown those numbers quite significantly this quarter, we are able to drive an increase in money taxation you can see our gross profits grew by 94%, year over year, and

we are doing this while driving a number of cost efficiency in our p & l on sales and advertising and the gna and as a result, we are seeing improvement of our -- relative to the gmv we have engaged in a strategy which is a very strong balance between the growth and the -- and this is what we continue to do as well as the development of our payment platform which is a core part of our strategy as well >> china, of course, has been making a lot of investments in africa as well a lot of focus on the trade dynamics between the u.s. and china and how it's affecting the rest of the world. how is this playing out for you in terms of potential risks but also opportunities where your business and where potential sellers are concerned for jumia. >> yeah, it's a good question. i think we're seeing a lot of dynamism in africa in general from a consumer perspective. we have some goods which are

produced locally, and we have some goods which are imported in china and in the u.s and jumia is a reflection of the consumer habits of the african consumers. and here we, you know, we are watching very carefully we see what happens in this dynamic we are also really trying to -- the african sellers to also produce in africa so consumers can buy some products which are made locally and, yeah, i think so far, you know, we're still seeing a lot of dynamism in the marketplace. and e-commerce is still in the early days in africa so in africa, the online sales are about 1% of the retail when in china, it's 20% so we're still in this phase where a lot of growth and penetration of online sales are ahead of us. and i think, you know, we're watching very carefully but we're still, to some extent,

protected from that. >> sacha, thank you for joining us by phone today. shares of jumia are down about 15% right now. market is holding on to these gains. nice action in light of what we heard fr tgeomart and lowe's today. "squawk alley" is back in a moment

one of the questions of today, are buybacks starting to dry up bob pisani is here at post 9 to talk more about this piece in the journal. >> i think the answer is yes but it may not be such a big deal. $166 billion for the second quarter of 2019. if you look at the second quarter of 2018, $190 billion. yes a 13% drop the reason i'm not that concerned about it is the numbers of 2018 were so off the charts, so much higher than we've ever seen before that we're moving closer to normalcy. 2015 was the prior record. $572 billion 2018, $806 billion this is due to the tax cuts that we're talking 40% higher my guess is we're going to do $740 billion this year that's going to be the second highest number ever. remember something, may was a really rocky month a lot of volatility. generally the market was down. a lot of the buybacks are

somewhat discretionary they don't have to do it every day. companies can say, wait a minute, i want to hold back and see what's going on here that's quite possibly what happened and the likelihood the cash hoard went up for the companies. doesn't evaporate the money. just sitting in cash or they could deploy it elsewhere. i'd like to see more quarters where it's clearly going down dramatically, but i don't think corporate america has lost its appetite for buybacks. they believe it works. >> how much does this speak to the uncertainty we see on a broader level. those tax cuts and the impact it had in the markets but how much a fact there's just question marks about the future >> it's easy to step back in a month like may and say we'll try to figure out what's going on. a month like may is not a bad time to buy low. when you're not quite sure where the bottom is, you can just hold back i want to see more evidence. even at $600 billion, $700 billion, you're talking about less than 2% of the value of the stock market yes, buybacks are an important participant of the rally we've

seen i believe that but there's a heck of a lot more other people also buying out there right now. they're not the only ones. >> good perspective, bob, thanks overall today, action pretty good dow up 300 vix getting closer to 15 you see yields on the rise that does it for us. let's get to melissa lee and the half welcome to the halftime report i'm melissa lee in for scott wapner stocks in rally mood the stocks firing on all cylinders. it's 12:00 noon and this is the "halftime report." >> retail roars. target and lowe's soaring on strong earnings. should you keep betting on the american consumer? with spending still strong, are recession fears overblown? and what does it mean for the fed and the chance of more rate cuts shares of hawaii holdings clipped on a big downgrade what it's signalling about the airlines it's the call of the day the investment committee is ready to go. the