headquarters in cupertino, 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ ♪ good thursday morning. welcome to "squawk alley." i am carly fiorina with morgan brennan and jon fortt at post nine of the new york stock exchange stocks losing some steam, off session lows, down now about 175 points on soft data this morning. we'll be over the broader market action but we start with apple, rallying this morning.

josh lipton talked to tim cook last night after the earnings print and joins us this morning. josh >> reporter: carl, investors want to see iphone trends improving. that's what they got with the latest report. iphone revenue dropped 9% in q4, but revenue dropped 12% in q3. ceo tim cook telling me for iphone specifically we improved year over year performance even more compared to last quarter, and significantly compared to the first part of the year, and we are off to a really good start with the iphone 11, iphone 11 proand iphone pro11 max i asked about tariffs and trade tensions cook tells me he did not ship more iphones here to the u.s. to try to get ahead of potential new tariffs in december, nor does he plan to, as analysts know that means recent positive supply chain data points represent real demand. more broadly, cook is optimistic a trade deal gets done, saying i am still optimistic in the end

there will be agreement between the countries where it will not solve everything, it will be a better position than where we are or where we have been. speaking of china, i asked about removing the add that helped protesters track police. apple said the app was used to ambush police. some u.s. lawmakers criticized apple for the decision, cook telling me we have to make tough decisions. if the app would have been in the u.s. doing the same thing, we would have removed it in the united states as well. as for services, there's a big new one on the way, apple tv plus launches tomorrow would cook consider raising the price of the service cook telling me $5 is a starting point, in his words, we'll see what the future holds. back to you. >> we sure will. thanks. door see versus zuckerberg twitter announces it will ban all political ads on the platform as facebook announced big earnings beat. julia boorstin has more from los

angeles. >> reporter: dorsey and zuckerberg facing off. dorsey said he is stopping owl political ads. he started with a dig at political advertising, and defense it is key to free speech he said this isn't about free expression, it is paying for reach and paying to increase reach of political speech has significant ramifications that today's democratic infrastructure may not be prepared to handle it's worth stepping back in order to address and zuckerberg saying it is not a political decision, they'll be less than 1% of the company's revenue, saying it is commitment to free speech >> so over the next year of campaigns we're going to be at the center of the debate, anytime there's consent or policies on any of our services

that people believe could advantage or disadvantage their side this may lead to more investigations and the candidates are going to criticize us i expect this is going to be a very tough year. we try to do what we think is right but we're not going to get everything right >> facebook shares are trading up about 2.25% on earnings that beat expectations on every metric, revenue, earnings per share, user growth and engagement facebook gave stronger than expected guidance for next year with lower expense growth than anticipated. carl, back to you. >> julia, that sets it up nicely to dive deeper into facebook and apple, jim suz a, and mark mahaney. good morning >> good morning. >> mark, let's take facebook you went up to 270 on your target on the twitter thing, are we making too much of the political ad given the .5% zuckerberg

talked about on revenue? >> probably. i thought it would generate more revenue for facebook than zuckerberg indicated last night. i think he's sort of indicating less than a half billion in revenue for facebook i would think they could do 2 to 3 billion. i think it is an extremely useful tool for political advertisers. i'm a little surprised the number is that low given it is that low, we're probably making too much of it i think the point of increasing level of transparency. we have seen attack ads but usually transparency there's a way for facebook to amplify to see who is running that campaign, that would be useful for all people to know. >> why is jack doing his thing then >> i think it is almost immaterial for twitter so it is an easier call on twitter's part i think that's largely it. it is easy to dismiss ad revenue when it accounts for, if it

is .5% for facebook, it is probably .1% for twitter i think they're making the wrong call but that's a political view more than anything else. >> i was looking for reasons to be worried, concerned heading into apple's quarter, particularly with tariffs, would they manage inventories differently. tim cook blew that and a number of concerns out of the water given the really strong performance of apple that they just reported and the pretty strong guide, what's the bear case like? >> well, the bear case is left you look at what the stock chart did to stock price and valuation metric known as price to earnings, it is materially expanded so some investors are wondering hey, what's left still for the up side. we face head winds with tariffs coming in as you said, but also to be fair, iphone sales have

been declining year over year for four quarters in a row consecutively. you have to start to wonder about the installed base which tim cook mentioned is still growing, which is great, but at some point apple has to get back to growing its iphone sales. we think it may be in a few quarters from now, but simply put, the stock had a fantastic run, up over 50% year to date, meaningfully outperforming things look good but it is no longer a value stock like it was a year ago >> mark, instagram has been such a bright spot for facebook, such a source of growth comments from zuckerberg on the call last night that antitrust questions out there will be around the acquisition of instagram, how do you think this plays out, is this a situation where the most extreme scenario takes place for instagram, regulators say instagram needs to be spun off or broken up,

what does that look like for investors and for the company? >> that's probably a negative for investors. i think instagram is a key part of growth of the company, but if you step back, i think you saw accelerating ad impression growth, fastest in a year, 37% it occurred on core facebook i think investors underappreciate how much growth there is on core facebook, you layer in news, shopping, stories. there are three or four new growth drivers on facebook and by the way, you had accelerating ads, number of users on facebook in three of the four largest markets it tells you there's good sustainable growth at facebook here is instagram growing faster, maybe 50% faster than core facebook, has interesting commerce opportunity ahead of it as well. we like the combination. it would be a negative for investors if there was a forced did divestiture. >> you don't see some parts

being greater if it were split >> some of the parts logic, it assumes investors aren't smart enough to see the value of the different pieces and i think they are it only works if an asset is spun off that's materially dragging down profits. you could argue in the case of google with other bets, investments, i don't think you can argue that with facebook and instagram. i think instagram is just as profitable as facebook >> jim, seems to me that where apple is concerned sometime soon we have to pivot to the 5g story. will apple have software and services built into ios to make 5g a must-have if we figure that out, maybe we have a hint next year, perhaps it means a big upgrade cycle this time next year. is that the way investors should look at this, after the holiday season, the story turns to 5g and whether apple has something special? >> that's a very good topic to

talk about you think about the time line for 5g, you mention ww d.c., that's june of next year we think that will be more of a software developer conference, less hardware. importantly we do expect a lineup of iphones that are 5g in september of 2020. and with that, we will note that apple may not be first out with the newest phone having 5g, but they typically focus on the consumer experience to ensure its premium. what i mean by that is that the screen and the battery and radio frequency and connectivity is a premium experience when you turn back the clock and look at history, lte, 4g, 3g, apple was typically not the first one out with the new products a lot of first movers came out, batteries wouldn't last all day, they would drop cell phone connections, data would clock out. so apple typically is not the first to get there, but when

they get there, the experience is a very premium experience we do expect them to have several 5g phones launching september next year, and we'll look to see if that indeed increases the uptake cycle for 5g and iphone. we look positively at that for next september, 2020 >> all right both names are doing well in obviously what's been a tumultuous morning jim, mark, see you soon. thanks >> thank you so much a lot more ahead on facebook and apple earnings we ask business insider's henry blodget who had the most important quarter. and the fed cutting on the last trading day of the month. how are we poised to finish out the year we discuss with mike santoli stay with us next

dow down 172, reacting to soft economic data out of chicago pmi. mike santoli is here to talk about what it means. people writing about junk bond rallies ended for now. >> yeah. i think there was about a three week kind of embrace of risk and cyclical trade, the idea we'll look past soft numbers to get to unturn in the industrial sector. the numbers today, i don't know, i mean, i think people are trying to take them with a grain of salt given gm noise and boeing but we are at a point where some numbers have to actually get

better, can't be all anticipation for three weeks, s&p is up 5% into the fed print, and i think that you have the muscle memory, we sold off after the fed a few times. i don't see it as much more than that, being a little bit of a stutter step at month end, but there is a test for the idea that the cyclicals can work. transports are down big two days in a row it is getting to the point where the difference between it being a rebound and being a new trend is here. also, i will say modest up side in apple and facebook, giving very good quarters often get to the second half of earnings season, first half is better than we thought and by second half, everyone says got it, we knew it, we positioned for it. >> amazing, not everyone wants to report as early as they can if ism shows stabilization in the chicago side, it will help the case. >> that gives you traction for this case, absolutely. it is very telling that in july,

the fed cut, they said mid cycle adjustment, market hated it. now that's the premise everybody is operating under great, three quarter point cuts, history of that has been strong on forward going basis but as i say now you have to have numbers come through a little bit as opposed to positioning for that outcome. >> to put it in perspective, we did have what, three record highs for the s&p this week. and i realize it has been a narrow trading range in general, but when you go back to start of october, it was really volatile. the fact that we are poised to end the month higher, in particular, s&p up 2% for the month, how do you think about it >> there's not a lot to complain about. even the full year, two 6 to 7% pull backs max, the market bent but didn't break at all in august and now it is about people getting more comfort on seasonals, the idea that maybe

third quarter was the trap for earnings growth. short term, you're seeing sentiment and tactical indicators, people got complacent or happy very, very short term, but i don't think it is because everyone is really in neck deep in stocks now going into the year end. >> you make a point that the reaction to apple and facebook arguably muted looking back, reaction to amazon which was not positive really also muted, reaction to microsoft, got a bit of a pop, went above a certain level, you can argue that's muted too what's the read on that, when reaction to up side and down side in major stocks that have gotten us to this point near record highs. >> good point. the other faangs besides facebook had negative reactions but modestly or were kind of corrected after that i think the idea is first of all they're all well below highs, aside from alphabet. it is not as if people had tremendous hopes based on this number, it was make or break,

this would be the difference that's one take away also, you've seen smaller stuff, people walk away from it, smaller internet, grub hub, etsy, wayfair, a lot of stocks they're not the dominant platform >> i added shopify and etsy. jim's point this morning, we reverted to faang. went back to the big guys for safety >> i think that essentially you have comfort in those and in fact it is even more than choosing between them. the whole idea of faang as growing platforms that have kind of won means it is harder for other guys you thought had a shot to make their name. >> great insight as always. shares of lyft were up earlier, now down more than 6% we're taking you through that

quarter next and a bit of a reminder, euro close moved back an hour, just this week, due to daylight savings. catch more on today's overseas rs12:30 on the half. back in a moment it was sophie's big day.

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shares of lyft are down this morning, just shy of 6%. the company raised guidance, getting an upgrade at goldman. tom white has a buy on the stock, increased price target this morning joins us at post nine. tom, it seems like at long last there's easing in who can spend more incentive war between lyft and uber, but at the same time i wonder if the riders will dry up somewhat because it seems to be having that impact what's your take >> look, i think there are a couple things going on as far as stock performance this morning you know, the company sort of reiterated, echoed recent comments about moderating

competitive intensity in the u.s., and that's very good exiting last quarter, lyft was able to push through pricing optimizations to raise prices, that contributed to a nice top line beat in raise on the ebitda, it looked better than consensus, included sort of a nuance i think investors are balking at, insurance related adjustment that made the beat not look as high quality as it otherwise would. in terms of riders drying up, i think the interesting thing to watch there, what will happen with fare pricing the next several years. you have things like ab 5, congestion pricing tax in new york and other municipalities pursuing that, if prices generally rise for riders, does that bite into the number of use cases that ridesharing works for and what does it mean for the addressable market and growth runway for companies >> what's your bet on what

happens to driver churn with incentives drying up incentives aren't just for ridership but to keep riders going. i don't know which one they're easing up on more. could it have negative impact on their ability to keep the most valuable drivers on the platform as well? >> it could. on the flip side, you have things like ab 5 and pushes in other states and municipalities to provide more benefits, minimum wage or better to drivers. that could help offset potentially some reduced incentive activity but for the next several years until we get autonomous vehicles, these companies need more drivers, not less, if they're going to continue to execute on the forecast that the street has >> lyft versus uber. lyft is more pure play, north america focused, it is a ride share company. uber, more conglomerate with trucking and freight stuff, eats stuff going on which one has the better business model >> look, i think it is a question of time horizon in a

lot of ways. if you can be long term focused, there's a legitimate argument i think to uber's multi platform, multi product offering generating more liquid marketplace, having more drivers into the ecosystem because they can drive for ridesharing or eats maybe more habitual day-in and day-out use from consumers one app you have eats and ridesharing as well. in the interim, fighting battles on a lot of fronts in a lot of countries where there are private vc backed competitors pouring money into it. so it is a tough one for us to get comfortable with on the next 12 to 18 month basis as a stock over that time frame which is what ratings are based on. we much prefer lyft. >> all right we're going to interrupt there, go to d.c. we have breaking news on the steps of the house impeachment inquiry.

ylan mui has the latest. >> reporter: morgan, democrats have the votes they need to pass a resolution that would open up and formalize impeachment investigation into president trump. party leadership has been calling it a vote on process, but make no mistake, this is a critical test of the depth of support for impeachment within the democratic party so far only two democrats have voted against the resolution 223 democrats and counting have voted for it republicans, meanwhile, calling it a soviet style impeachment inquiry. no republicans have voted for this so far. practically what the resolution would do is set rules of the road for the next phase of the impeachment inquiry. it would set forth open hearings in the intelligence committee, allowing for 45 minutes of questioning for the chairman and ranking member of the committee, including staff. republicans can request to have witnesses appear or request certain subpoenas, and finally the intelligence committee would

compile a final report, send it to judiciary which would then be responsible for deciding whether to bring forth articles of impeachment. once the vote series is over, the house is on recess through veteran's day. we could see public hearings start after they come back back to you. >> easier way to explain the difference between this vote and the sort of formal authorization the republicans have been calling for for weeks. >> reporter: well, this, democrats say, is a way for them to take that criticism off the table by setting out a process by which this impeachment inquiry will occur democrats don't need to have a vote in order to move forward with their investigation republicans have been saying they haven't been setting out the rules transparently, publicly democrats say this is a way for them to do that. >> ylan, the fact that so much of this happened behind closed doors until this point, this vote moves to more transparency, why did it take so long. why was it behind closed doors

to begin with. >> reporter: one of arguments the democrats make is they want to preserve the testimony. they say holding it behind closed doors, they're able to ensure witnesses don't cross check testimony with each other, and they can conduct more intensive questioning, often led by staff, not by the lawmakers themselves, and that allows them to have sort of more specific interrogation processes. republicans obviously say this has been conducted in secret, this needs to be opened up now we're going to see that next phase of the investigation, what the public hearings look like. definitely going to be contentious, guys. >> ylan, i think i see on the screen three republicans didn't vote in this is there anything to read into that, was that expected? >> the vote is ongoing the gavel hasn't come down yet as i look on the monitor, even though time is officially up i wouldn't read too much into that yet we expect one republican, justin

amash, to vote with democrats on this, but republicans are pretty much unified on this topic. >> and finally, the fact this will be threaded through intel is not insignificant, right? >> well, i think the importance of that is ensuring there's not committee overlap. there had been some question about the multiple committees that have been involved in the investigations before the house took a step to do an impeachment inquiry. so this process is one that allows them to streamline who knows what when. but one of the complaints of the white house is that they will not be able to cross examine witnesses and have access to all of the testimony and depositions in the intel committee that they would once it reaches the judiciary committee. so lots of procedural questions on capitol hill, but certainly an historic moment. >> we saw the gavel come down a second ago thanks by the way, the president did sort of make a connection between this process and the

markets a few moments ago when he tweeted the impeachment hoax is hurting our stock market. the do nothing democrats don't care you can argue whether we're down because of this, because of chicago pmi, because of some of the chinese headlines overnight. >> rebounded a few minutes ago because of this, yes >> i think that pmi number and trade headlines, based on traders and market strategists you talked to today. we'll see how it plays out, certainly adds to the drama. >> as we sit at 27 k here. we said earlier, for the s&p, it is quite a comment how the last few weeks have been. this is the worst decline in two to three weeks, roughly back to october 8th. take a short break, keep our eye on this tape don't go away. the trend tracker live data board brought to you by cme group. robinhood believes now is the time to do money.

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the san bernardino value firefighters started battling the flames earlier this morning. south korea's military says north korea fired two projectiles, possibly missiles, into the sea between the korean peninsula and japan today. north korean leader kim jong-un has set an end of the year deadline for denuclearization talks with washington. hong kong police firing tear gas at protesters gathered at a subway station the demonstrators were there to mark two months since riot police stormed a subway car at a train station and beat passengers with batons and pepper spray. and things going from bad to worse for golden state warriors. star guard, steph curry, trying to cushion a fall during the game, but landed awkwardly on his left hand and broke a bone no word on how long he might be out. you're up to date. that's the news update this hour back downtown to guys on "squawk alley. jon, back to you >> best shooter to do it, you hate to see that >> absolutely. we're going to get back to

twitter and social media in general. jack dorsey's decision to ban all political ads on the platform business insider's henry blodget joins us at post nine. henry, you've got this comparison to facebook with jack dorsey making a move on twitter. i argue it is apples and oranges. how much can you target on twitter. there's even less certainty around who is real on twitter. and facebook, talking 2 billion plus people. twitter, nowhere near that yes, you can argue that jack dorsey is doing the right thing, but can you compare it >> i think you're right. facebook is bigger and more powerful what they do here will ultimately matter more cudos to twitter stepped up, did it now facebook, if they do anything, look like they're following. and it is a very complicated issue. you had people come out yesterday and cheer, others said whoa, what about emerging politicians that want to use it

legitimately, honestly, how do they reach people now. what is a lie and what is misleading, who is going to draw those lines. twitter did take an interesting approach by banning all ads. my question is how do you determine what's a political ad? especially when everybody can do it anonymously. >> does it have to do with who is paying for it does it end up being gdpr for politics, all of those that already had a bunch of followers and super pacs, get relatively more powerful and smaller voices that might have been able to raise money and do smart targeting don't have as much in. >> that's right. it is another issue. there is something to the idea you build a following, people follow you organically you're not shut out from it. but there's so much gaming of the organic side too it is hard to police but it is just a very interesting decision and it puts more pressure on facebook facebook, it is a much more complicated issue than people are saying again because what is

a lie and what is just misleading political ad and what's okay, who is going to judge that >> that's why jack made it a blanket ban. exactly what you're saying >> again, very interesting approach we're not going to do it based on what sheryl sandberg said that political advertising is .5% of revenue, they can sit it out, say let's try it a year, 2020 okay no political ads focus all energy on controlling the organic piece. we'll see. >> is that what you would like to see them do >> i think that facebook needs to own the fact that it is not about free speech. facebook makes very clear judgments that you can't have porn, you can't hawk drugs, you can't have vegetables that look sexual they're setting a lot of rules saying nope, i'm sorry, we're not okay with that, yet they're saying we are okay with you using our platform to lie and deceive people as a politician, we're okay with that, hiding

behind free speech so i understand it campbell brown came out yesterday, very strong, saying i am astounded that fellow journalists are saying facebook should be making the decision. i agree. it is tough. maybe there's a way to have a third party bureau do it, say you have to have an ad cleared by some third party as not misleading it is very complicated twitter's approach is creative no political ads. >> a lot of it is self inflicted for facebook, based on the call last night, it was like a digging in of heals on this. is this finally the thing that forces lawmakers or regulators' hands to look closer at how this is governed? >> regulators are taking a look. i feel like -- >> but keeps stalling. >> it is in increasably hard wh - incredibly hard. the joe biden ad from the trump campaign, everybody said there's a lie. you watch it, there's only one

statement in it that is factually inaccurate, it is creating an incredibly misleading impression that you think that joe biden bribed the ukranian prosecutor or whatever. again, is a third party bureau going to say this is a lie because the whole thing creates a misleading impression? it is hard as a regulator, how do you determine that >> what happens to the willie horton ad. it is wucone of those infamous . how much is about creating misleading impressions >> on a television network, not targeted to you because of what you liked in the past, pages you followed, it is not that >> and the problem with social media advertising is you have computers putting together a lot of different units, and you have tens of thousands of units as opposed to one advertisement that several executives can look at, say do we want it on the network, no, we don't. you can never review them all at

a high level that's where it gets sticky. you can already hear the fights if one ad is blocked, it is immediately going to be news they blocked that clearly left leaning decision, bias and so forth. >> and another layer of complexity, we're just talking about the united states. what about egypt, japan, the 140 countries that they operate in, the same issue will be in play >> that's right. going back to your question, the regulators are going to get involved it is too late the questionis what are they going to do and folks that i talk to who are close saying they're very worried about it. gdpr was an incredibly blunt industry, cost the industry six months in technology development. did it actually help it is not clear. >> the point of the willie horton ad, i don't think anybody argues it was fundamentally untrue, but it is still extremely controversial.

what do you do with it in the social media era when arguably on a targeted framework, it gets more weaponized than it was. there are rules on communication regarding elections, how close you can get to a polling location, other countries have rules around political advertising within certain time periods to the actual election do you think that we are capable of developing rules around how digital ads of a political nature can be targeted, specifically around targeting. >> the targeting, that's another interesting point on facebook which is again, facebook is drawing a distinction. you're not allowed to lie about when the poll is open, where it is, but you are allowed to lie about other things, that's fine. again, they are drawing distinctions it is not some blanket free speech, makes it very complicated. you're right on targeting, it is an unprecedented level of geographical interest based, community based targeting that we never had before.

these are all tough questions. this is what's going to happen if regulators get involved cudos to twitter for coming up with a blanket, creative solution, okay, none of that >> or a cop out. >> either way, candidates are still going to be able to share that material and ads. you're just not paying for it. all right. >> great to be here. >> more on today's triple digit loss, we're down 170 on the dow. rick santelli, what are you watching today >> you know, we're watching a flattening curve wasn't that many days ago, 20 basis points, now flirting with 15 flattening curve when all rates are dropping, not a good thing we'll discuss it after the break.

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interest rates have been off at 170 on a ten year note, high close was 180. had an inter day high of 186 not that many days ago, and fought rather resip tusly you remember the last cycle was 146. 146 on closing basis, 180. split the dirchfference, 163, 14 we are hovering at 170 that's the way many market makers are thinking. they look to see if it holds a mid point. if it doesn't have good support there, they'll look to revisit lows let's consider, fed pause in soft data, how much the yield curve has given back, people may say well, geez, from 20 to 15 doesn't sound like a lot, but it is, it is the psychological notion we don't want to go back to inverted. it makes fed watchers nervous.

and when you see a flattening with all rates moving down, that isn't the combination you want to see i'm not saying any flattening is necessarily something to hope for, but when you get more of a flattening because of what the long end is doing in a proactive way, that's probably better. the fact that it accelerated after the poor chicago pmi, throw up a chart last month and this month share something, they share a 40 handle also share the same comp.. december 15th was a big drop, the chart goes back to december, you can clearly see that's the zone we are hovering in, and the national number that will ultimately be super important as it has been in the past. tomorrow's jobs number, what a great way to get gps right? wrong. we have done a lot of research at cnbc, many of our contributors and some banks and their research have pretty much shown us that minus 46,000 for

gm workers, minus another 25,000 for cottage industries, a number that could have been 130, 150 is probably 65 to 70,000 camp, hard to define where it takes us. finally, i had so many sources emailing me saying don't underestimate, end of october is exaggerating the move, bringing memories of the last fourth quarter that wasn't kind morgan, back to you. >> rick santelli, thank you. shares of zynga rising xte ceo joins us first on cnbc n'go anywhere. hnson & 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.

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welcome back to "squawk alley. powering shares of zynga slightly higher. ceo frank gibeau joins now on a first cnbc interview frank, thanks for being here >> good morning. >> so, also better than expected current quarter guidance as well one of the things that investors do seem to be focused on you've been very engaged in dealmaking in the past year or so are you going to continue with that >> yeah, it's a active place in gaming right now for mergers and acquisitions it's now a global talent base for the making of games. in fact, the last two

acquisitions were in turkey and finland respectively we've seen the growth in the marketplace that our team is experiencing by finding franchises that we could add to zynga that would further accentuate our growth. >> apple arcade launching last night. you got the likes of microsoft and google do you see that as a challenge >> i don't i think there's more than enough room for everybody to find great market positions overall gains, it's about $152 billion business there's 2.5 billion to 3 billion gamers worldwide there's a lot of successful business models. there's a lot of very successful different types of platforms from phones to consoles to pcs so i think there's more than enough to go around. in terms of our business, this has been a record year for us. in fact, this will be the highest revenue that the company has seen since we ipo'd.

and we're growing through franchises and transitions that have been around like zynga post and word for friends we like to see the innovation. it's good for gamers and good for the industry >> hey, frank, we spent a lot of time talking about 5g next year as it applied to gaming. are there any changes in which the latency or changes in li latency? >> 5g is going to be awesome anytime gamers get more band power, they create more experiences. if you look at location-based gaming, the massively played games like club g and fortnite exploding all over the world as phones bring tommy together at high performance levels you're going to see an

incredible growth driver entering into gaming that will carry for years. >> i understand that i just want to understand if it changes the experience of words with friends? >> probably not a game like words with friends but if you look at racing, csr racing which is high-end ferrari and porsches, we'll get more high tech and you'll be able to download the game straight from the app. you won't have to go to the app store to get the gaming. 5g capabilities will open the ways to distribute the games and make them far more high performance for players. >> frank, based on what you're seeing so far are you any different in deciding how you play in services like apple arcade a bit higher-end, perhaps from a development-necessary perspective, but the revenue model may still be unclear

>> yeah, i think if you look at the games that are actually offered in apple arcade, they're not that different than what we're doing in free to play. fo fortnite, they reach android audiences. within apple arcade you have smaller development teams making games for now and they're distinctly different offerings i think both can find success. what we're learning from the subscription model there are things called battle passes or game passes that allow players to sign up for a game for a set period of time a lot of value and teachings that they get for a small fee is making it very popular from m a

monetization standpoint >> frank, what we're seeing in the gaming industry, a little more focused on e-sports, but in general, how is security and hacking to zynga >> look, games in general. they're a digital business and we live in a world where cyber attacks happen on digital company. recently, zynga did experience a hacking incident with our games. fortunately, we were able to detect it very early on and contain it and the information that we gather from players doesn't really reach to the level of social security or financial data, so for the most part, we lost a little bit of email traffic and email i.d.s for some of our franchises. but fortunately, we were able to notify the players let the regulatory arms know and then the investigation continues. so, we're pleased with our response and we take our players' security very seriously. but this is kind of a fact of life, if you run a digital business, there are hackers out

there that will try to go after you. >> frank gibeau, ceo of zynga. thanks for joining us today on the heels of earnings. >> thank you still stuck around, dow, 27,000, and we're back at 3030 on s&p d education. i see award-winning service, and a trade desk full of experts, available to answer your toughest questions. and i see it with zero commissions on online trades. i like what you're seeing. it's beautiful, isn't it? yeah. td ameritrade now offers zero commissions on online trades. ♪

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well, the earnings parade continues after the bell we get results from pinterest which is trading were it ipo'd. >> yes, a fun one to watch >> jobs numbers tomorrow to the judge >> happy halloween i'm scott wapner the trade war takedown, more evidence that the president's tariffs are hurting the economy. it's 12:00 noon. this is "the halftime report." weak manufacturing data and fears about a deal unraveling investors. where do stocks go in the final two months of the year getting more bullish on apple. $300 price targets a number one tech analysis tells us why an iphone subscription service may be