good morning it is 8:00 a.m. at apple headquarters in cupertino, california, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ good wednesday morning welcome to "squawk alley." i'm carl quintanilla with jon

fortt and leslie picker. interesting morning as we await the fed decision this afternoon. tim cook speaking with japan's nikkei while visiting some apple stores and ink suppliers defending the company's job creation in the u.s. and complaints the company has faced over competition cook saying, quote, a monopoly by itself isn't bad if it's not abused the question for those companies is do they abuse it. that is for regulators to decide, not for me to decide joining us to talk about this and a lot more, managing partner susan line and cisco's chairman emeritus, john chambers. good morning, guys. >> good morning. >> how you doing >> good. let's try to put these comments in some context. why do you think they're happening now out of cook, at least? >> well, i think they're happening because there's a general concern over privacy and over moves to increase privacy

at both facebook and apple products but i think for him, this was an interesting moment because it's the first time he's really tried to defend a monopoly he's not said they are a monopoly, but he's trying to create this image of the beneficial or benificent monopoly which is a way to stave off whatever regulation may be coming i think it's inevitable that there is going to be regulation. >> because we're in an era where big is bad in tech is that not true, john >> i think the technology large companies have misused their power. i think 90% of americans used to view tech was good today less than 50% do so i think it's an issue way beyond monopoly. both the democrats and republicans said antitrust is coming, monopoly is coming however, i am a tim cook fan

i think he's been more an example of how to deal with this, how to deal and be visible, learn how to work with government leaders regardless of political parties, china, u.s., india, and be very candid about the criticism and listening to it and adjusting where appropriate. but i think because of some of the mistakes some of these peers have made, you'll see some of the large companies really challenged on this it isn't the question are you the market share leader, whether you're an amazon or whether you're an apple. apple only has 13% of the smartphones. but do you misuse that power in terms of pricing, where you misuse is in terms of killing startup innovation and setting a pace others cannot compete with fairly. >> john, that's a lot of my issue with this conversation we say it's around antitrust but i think it is. it's around bigness. the argument for apple as a monopolist is the weakest argument i think across the board. yes, they're big, but even their smartphone market share is small. their market share and pretty

much everything they do, computers, is small. you have to go to talking about apple products as a market in and of themselves, make an argument that the apple has a monopoly is this really an assault on bigness more than it is about abuse of monopoly power? and if so, is that healthy for the startup ecosystem even >> three really good questions in the sequence you raised them, first is the companies largely brought it on themselves and you watched us during the '90s the top -- >> even apple? >> yeah, even apple. we worked very closely with washington, with the democrats and the republicans. and when they had legitimate concerns, we addressed them together and said how do we work through those issues but i think probably tim and satchya at microsoft have done the best job at trying to strike a balance between the two. part of it is the rebellion against big.

when the pendulum swings to an extreme, i think they do have to deal with some of these issues some of the companies didn't work it out together, you're going to see government get involved senator lindsey graham said that directly the other day does it hurt startup innovation? big time susan, you know them extremely well. >> i would say that where they do have a real issue around monopoly is apps, right? access to the app store. and they take a 30% fee on top of any subscription app that you see, which is why spotify lodged their complaint against them recently, because they can't compete with apple music with apple taking a 30% cut or a 30% tax on top of their subscription fee. so that's where i think they have some problems not in their share of market on computers or share of market on phones, but in their dominance

of the app market. >> but, john, the word "abuse" as it pertains to tech is in and of itself subjective there's no clear line on what constitutes abuse as it's written into the current regulation so how do you think that tech companies should be looking at this what constitutes abuse how do you think regulators should be looking at this? what constitutes abuse, in the words of tim cook? >> well, i think you have to take a step back the old word definition of capitalism is gone you've got to both make money but you better be socially responsible or you're going to get hit. second issue is it's crisis management 101 you don't hide be realistic how much was self-inflicted, how much was done by others, what you're going to do to fix it and what you're going to do along that line so you have to outline how you're going to do that very carefully. i use microsoft as an example, that went through the real challenges and they were valid in 2000. yet they learned from them dramatically if you watch as sachya is doing

that now, he's doing a very good job. i think tim is a good example of navigating it pretty well. it is be visible, recognize that people who are criticizing you have valid points and say how do you create a win for society and for yourself businesswise? >> john mentions lindsey graham and there is pressure on apple and facebook over access to encrypted data senators grilled the company's executives yesterday over their practices during a senate judiciary committee hearing. here's graham. >> i hope the tech community working with law enforcement can find a way to do it. if y'all don't, we will. >> democrats and republicans presenting a relatively united front as they invoke child abuse and mass shooting cases where encryption has blocked cases to key evidence graham even said whatsapp is a tool the terrorists use. i'm not sure how i take that being a user of whatsapp where is the line? >> i've got three different issues again the first is lindsey graham is

sending the message to the companies if you don't solve this issue and realize the legitimate requirements of law enforcement, we will solve it for you. and he doesn't bluff don't let the southern accent fool you this is exactly what the dems and republicans did two years ago with the social media companies. said if you don't move, if you don't help us solve it, if you keep stiff-arming us, we'll move within it. the counterargument is if you have security weaknesses or give all of your code out so anybody can get into your system, you can use any application to abuse it clearly there are some security issues with whatsapp that people are aware of that some bad people use. >> susan, this puts the government in this weird spot, this weird place, i think, because i'm not sure that i trust the government with this level of access and information. after all, a lot of the tools, the hacking tools that have been used, right, by hackers, by

terrorists even were taken from the u.s. government. >> absolutely. >> so if they can't even keep this stuff safe, why should we give them access why isn't the meta data good enough why do they have to read our private communications >> so you are not aflown being concerned about this this is exactly the issue facebook raised after this conversation i think that their point was that we can't give you special access that the bad guys can't get access to too. and they're really between a rock and a hard place because a recent poll, harris poll, found that only 22% of respondents were comfortable giving facebook their data, right? 78%, no way. and so they have to do something

to deal with this privacy issue. they got hit for it hard after cambridge analytica, after the 2016 election, and encryption is the way that they are trying to go at this to say, okay, we are going to encrypt this in a way that we cannot sell ads against your private conversations so on that level, i think we should be applauding it. it's definitely going to be a more positive move for the european union and for a lot of consumers. >> you bring up a good point because on one hand you have the government saying privacy is key here, we need to protect the data you've got the doj potentially reviewing the acquisition of fitbit by google for that very reason, so privacy is a central issue unless it pertains to law enforcement. so does not make the case, does that make the government's case more challenged as they try to

weave through those tenuous areas? >> i think the complexity is up three to four fold versus just ten years ago. however, the technology companies have to understand that if they don't move on this and work with government to solve it, government will regulate it. senator graham i know very well. i was co-chair of john mccain's presidential election. senator graham was there with him every night. what he's saying is we don't want to solve it for you if you don't work with us to solve the legitimate needs, we're going to do it we make it too complex at times. it's like should you be able to listen to a phone call the answer is no you go to a court order and say we're concerned about somebody doing something. the judge agrees, then you should be able to open it up take those basic principles. don't let everybody fool with the complexity and tell the tech companies to go solve it and if you don't, we'll solve it for you. that is what macron is doing in france and what modi is doing in india and that's what democrats and republicans are doing in

congress. >> so i think the biggest red flag for them right now is child pornography. this is going to become a really hot-button issue around privacy. the number of child pornography images that have been caught on facebook and other social platforms is staggering. and so this arguably is going to make it easier for pornographers to share stuff now, they say they're working on technology that would allow them to identify that kind of material before it actually gets posted, but that's years away. >> last comment and then we'll wrap it up >> okay. so what's important here is the unintended consequences when you make government regulation it's often aimed at the big guys, the $5 billion fine or things of that type. the ones that get hurt are your startups and my startups. >> totally. >> so you need to understand not the implications for the big

guys but job creation will come from startups. we've got to understand when we do regulations, what does it mean to the startups of the world. >> really good context on two big issues thank you, susan, john, good to see you both. up next, an exclusive with the ceo of bank of america, brian moynihan later, u.p.s. and cvs joining forces for delivery. we'll speak to both ceos and how they're defending against the growing threat of amazon a huge show still ahead. "squawk alley" is back after this quick break

welcome back to "squawk alley. let's get over to our wilfred frost, sitting down with a special guest. wilf, take it away. >> jon, thanks so much for that. as you said here at the goldman sachs financials conference. joined by the chairman and ceo of bank of america, brian moynihan. >> great to be here, good to see you again. >> we heard from you this morning presenting at the conference and some other banks are very optimistic about the consumer it seems. talk us through that you have some unique data about how retail sales is going in the holiday period. >> well, you have to start a little bit from the structure and the u.s. economy is two-thirds, 70% consumer driven. so if the u.s. consumer is doing well, we know the economy will do pretty well if you look at our spending just in general last year to this year, it's up about 5.5% to 6% and that's across $3 trillion of card usage, checks written, cash out of the atms.

it's a big dataset it's grown faster through the year if you look at the holiday spending, wednesday before thanksgiving to cyber monday, up double digits, strong. people are spending. so that's good news for the u.s. economy. so that helps sustain this long, long growth session we've had. even longer because the u.s. consumer is employed, wages are growing and they will spend. it's a terrific win in the sales of the u.s. economy. >> when you see the pickup has happened for the consumer, what do you think has driven that is it cyclical factors like rates being low or is it something structural that isment during this cycle, the middle class has grown in overall wealth >> at the end of the day what's driving it is the average consumer in america, about 150 million people work, they have a job. that job, they're growing in promotions and doing things. a teammate that started in 2010 for us at $50,000 has had 10% per year salary and wage growth per year

so they're making more money and spending it. so that's happening across if you look at the recent data, you're seeing a faster growth rate in the median income level than we've seen so far in this recovery so that's all good news but it's all driven by great employment, america's success in the worldwide economy. the ability to pay people more and that's what's driving consumers to spend they're not going to spending if they're worried about their job or getting paid. >> is the corporate sector weaker >> it's more muted you really have to think about triangles. the largest companies being in smaller numbers at the top we're the largest lendinger ee lender to small business in the country. the confidence level of those small, medium-sized businesses is okay. mostly because they're exposed to the u.s. economy. when you get bigger, you have the trade issues, you have to worry about china slowdown, europe sluggishness, japan

sluggishness, brazil, because you're involved in worldwide commerce our observation has been as you get higher up, the nervousness of what's going on, but they're still employing a lot of people, fighting to get people to do the work on the other hand, the corporate loan growth rates slow down largely because people are trying to figure out when does this all mitigate. >> we've got a fed decision coming this afternoon. as we sit here today compared to 12 months ago, we've seen the fed ease significantly in the time in between. given that optimistic view on the economy you just gave, are you surprised at the extent of their about-turn, of their pivot since 12 months ago? >> i think they made it clear in the minutes that basically they have to be there to provide this insurance policy to make sure this very long recovery and growth cycle stays in there. you know, if you look at the -- chair greenspan in the '90s and stuff, there have been times when you have to go in and help

because of the impacts of trade, the impacts of things that are sort of outside the united states so it's not an observation by me to say they have put the insurance policy and they have said it. now that they put enough in and i think they'll hold that's what the market says and that's what we believe in the company. >> we've seen some price wars in the online brokers and it's led to some consolidation. do you fear that charles schwab -- a beefed-up charles schwab is now a major competitor in a way it wasn't before to bank of america? >> it was always a major competitor we've been competing with them for years. the whole zero dollar trade came at people in a way that surprised me in 2006, we announced zero dollar trades. it's not a new concept that's the thing you have to think about. the way we do it is in ku conjunction with our broad partnership. largely we want people to bring

the whole relationship with us we are massively competitive and the growth rate of the customers is very strong, no attrition a great rewards program across all their products and services, so we tie it in the broader thing. we are not in a stand-alone, get a person who just trades we're into giving us your full financial relationship and we'll deliver the whole company for you. >> similarly in other areas of the tech you've invested in, it's really delivering on the numbers. you released some this morning is it in a position now where you think it is better than any challenger that's out there? >> it's better -- we believe our products and services are better than any challenger and any mainstream competitor, whatever characterization you want to put. we study everybody, see what customers need the different is able to get scale out of our investments so we have 35 million digital customers, 29 million mobile customers. the mobile customers did a billion and a half interactions with us and set up 600,000

appointments at our branches so you have to have high touch and high tech in the interplay 30% of our sales are digital if we invest a dollar per customer, it's $35 million dollars. so we can heavily sustain that competitive edge 65 million customer interactions, unique product, so we think we can be competitive with everybody we study the competition and have to be. >> given all of that, and scale has become so, so important. tech is a leading part of that if you were on the board of a regional bank, what would you advise them to do? how are they going to compete with the scale that you so clearly have >> i think the idea of scale being valuable in national brands, et cetera, are very important. when i started in the business as a businessperson in the early '90s as a strategist, the world said there's going to be some massive consolidation. it just takes time and alignment

of boards and strategies but the idea there will always be all kinds of banks in the united states, small, medium and large. the idea of being larger is being proven out not only by the largest but also the midsize banks who get more scale and the ability to get efficiencies. but what's really different is the ability to have a national brand. only in the '80s have you been able to have a national franchise first started. now you can have that. so our ability to go into denver, which we did four or five years ago and get to number eight position very quickly with $100 million plus an average branch size is because our national brand leads us. that's what competitors have to think about. >> you boost your minimum wage recently it was already due to go up from $17 to $20 by the end of 2021. you brought that forward to take place q1 next year why have you brought it forward? >> well, we have to be the best place for teammates to work and we have to have great talent because this is a war for talent

to do what we do we have 200,000 teammates and we make sure -- want to make sure we have the best people. so what we do is pay competitively across the board at the minimum level what we want to do is really bring our teammates up to the level, a starting salary, gets $40,000 plus a lot of people enter much higher than that but a full array of benefits, way above a living wage calculation when you add the costs up and the way they're calculated because we think that's the right thing to do as an employer. we think the challenges other people came up and matched our 17 but it's a competitive market out there. we need to continue to get the best people. we need them to see a career path and raise the minimum wage as part of that. it's part of being the best place for teammates to work. >> should politicians like senator warren who regularly criticize people who have accumulated vast wealth or criticize executive pay, should they acknowledge the changes you're making as well at the same time at the bottom? >> people acknowledge the

changes we make. you asked me the question about $20 and competitors moving up and matching our industry is an industry which has a good profit margin and, therefore, it can pay its teammates well then those teammates have great lives. 600,000 people we insure through health care and stuff, those are all good things. so the capital system is the system to help us drive the things we need in the world. we have to do what society needs from us and being the best place to work in these activities, the training, the reskilling, the hiring we do from colleges in the ten years i've been ceo, we've hired 15,000 college kids. think that the dynamism we've put in we've got to have great returns and do what society needs from us or else i won't be ceo anymore. >> on that note, you just said ten years. next week is the ten-year anniversary since you became ceo. do you feel like you've got another full economic cycle that you want to lead the bank through the next downturn and

out the other side how do you think about that? >> i get asked the question a lot. the first thing i say is you're trying to get rid of me. assuming people don't want to do that, i serve at the discretion of the board when i look at somebody like mr. buffett who is 88 and his intellectual drive and stuff, that's somebody -- >> 28 more years then? >> i'm not sure i've got 28 in me but we have a great management team, we work well together. we're having some success. we've got a lot more opportunity ahead of us. so my challenge is to keep the motivation up for myself and my team that's why we use the term nice start. we've accomplished a lot in the last decade but it's just a start. so i'll work as long as the board will let me. >> when you took over, the bank was $130 billion in market cap it's now over $300 billion has the easy growth happened as you get bigger, have you passed the optimal size for bank of america >> we are growing organically at a faster rate in terms of activity than we've ever grown at and that shows the power of a

company going through so much in the early part of my tenure and early part of the decade and restructure it now it just sits there and says how can we be better for every customer, every client, every teammate, every day. that's a wonderful place to be i'm lucky my predecessors did all the hard work to get us a franchise like this and my team and all i do is figure out how to drive it. it's wonderful to have the honor to lead it. >> always a pleasure to catch up congrats on the decade next week thanks for joining us. brian moynihan, the chairman and ceo of bank of america guys, i'm sending it back to you. as we go to break, check out shares of gamestop comps down 23. they cut their profit forecast for the full year. amazingly this only takes you back to about two months ago "squawk alley" is back in a moment (vo) the moth without hope, struggles in the spider's web.

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alley. european markets just closing. seema mody joins us now to tell us how they look >> two big events tomorrow, the ecb policy decision and the election draw your attention to shares of inditex, beating street expectations it saw profits jump 12%. the company says the rollout of a new technology, which includes rfid chips, says it is more efficient managing inventory at brands like zara the ceo says they have also become more strategic in where it opens retail stores, sticking to big cities versus smaller ones the strong earnings report comes as its key rival, h & m, continues to struggle with destocking and high inventory. tomorrow christine lagarde makes her debut as ecb president. economists will be keeping a close eye on her eurozone forecast for 2020 and whether she plans to continue where

mario draghi left off. she has already been calling on more fiscal spending by governments, a message that has been issued by draghi as well. back to you. from europe to atlanta, georgia, that's where our frank holland is with two special guests hey, frank. >> good morning, leslie. we're here talking about the partnership between u.p.s. and cvs. it's designed to help the carrier handle the increased number of packages during the holiday season 4600 of these drugstore locations are a place where people can pick up and drop off their packages it started in july and it's a small sample size but cvs says it's helped to increase the sales of its retail products the question now is will this tie-up between u.p.s. and cvs help it compete against fedex and walgreens as well as the potential disruption of amazon to answer that question, we're now joined by the ceo of u.p.s., david ab nechltney and the ceo

larry merlo. this is the first time you've been in one of these together. how do you see this having potential to increase profits for both of your businesses? >> well, larry and i met a couple of months ago and he told me about the concept our companies have had a long-standing relationship in fact all the way back to 1922 that's how far our relationship goes back. not mine and larry's personally. and so we talk a lot about what we can do for each other and how we can make our companies stronger working together. and he explained this concept. certainly wanted to see the firsthand and hear more about it it's been a very productive morning, that's for sure. >> it's really about meeting the unmet needs for our consumers. this is one of our concept stores that we call the health hub. you know, it's about access,

convenience, and it's more of a health destination in terms of helping consumers get more engaged around their health and as a result to create more healthier outcomes. >> great so does it make sense from a business aspect? where do you see the benefits for your individual businesses >> well, frank, you think about the fact that we're in 10,000 communities across the country today about 70% of the u.s. population lives within three or four miles of a cvs. so we listen to our customers all the time in terms of what does convenience, what does access, what is their unmet need to meet their day-to-day challenges you know, the partnership that we have does that very thing it makes access to products and access to care more convenient. >> david, you're also moving to seven-day-a-week delivery. does this help you with people dropping off and picking up here >> this is a big advantage for us health care is certainly one of

our strategic comparatives it's one that we're investing in heavily and that's why this relationship is so important but the access point where u.p.s. customers can come in and pick up or drop off packages as they're conducting their day-to-day life in the convenience of the locations along with the convenience of u.p.s. has just been a good partnership for us. >> excellent well, your legacy competitors, fedex and walgreens, have a very similar partnership. it appears to be very similar on the surface level. what would you say the differences are between your two approaches >> well, we have a tremendous amount of flexibility in terms of my access allows you to direct activity to the store that's closest to you. we think customers absolutely love that. that's the feedback that we're getting. >> what about for you, david >> what's important to us is to make sure that we take the

strengths of both companies and we look to where we can make it a better experience for our customers. if we focus in that regard, then we will have differentiation and it's the customer that will vote >> most companies are fighting off disruption in your case you're fighting off disruption from the same company, amazon. in your case amazon is projected next year, according to shipmate ricks, to double the amount it self delivers. and lou capital sees amazon pharmacy having the potential to take 8% of the market within the next five years. does this partnership help you fight against that level of disruption >> frank, again, as we've been talking, it's how do we meet the unmet needs of consumers i think from the relationship that we have, innovation is in both of our companies' dna we've got a great partnership here you know, look, we work very hard to make sure we don't leave any white space for disruption so as you think about tremendous

respect for amazon in terms of what they have accomplished. and whether you're talking about pill pack, we have those same products and services. you sit here and say who should be worried about the innovation? i would say it's probably the independent pharmacy operator, perhaps the regional grocers that aren't making the investments to meet those customer demands. >> and i think that the key for us is to embrace disruption and the fact that the market is changing our customers are changing e-commerce is growing. so we can't look for ways to fight that off, we have to embrace it when you think about e-commerce you can think about large etos, but there's a lot more to e-commerce than a large eto. we do business with 90% of the major retailers in the world, and that is a big part of e-commerce and then just hundreds of

thousands of small and mid-size customers. so our focus is on all customer bases and not just one particular e-tailer or one particular group but it's across the entire base. >> and we have some -- a question from one of our anchors right now. we're going to toss things back to them. gentlemen, if you just look in the camera >> larry, jon fortt in new york. i'm wondering if this becomes the new normal, how much are you going to have to change store design and employee training to have handling customers' property as part of what you do? >> yeah, jon, we started our health hub concept in houston, texas, earlier this year the feedback that we've gotten from the customers that we serve there has been terrific. you know, it's resulted in a more rapid rollout we're here in atlanta. we're also expanding this concept as we speak in

philadelphia, tampa, with plans for 1500 health hub stores by the end of 2021. and there is a different service model that goes beyond the role of the pharmacist, the role of the nurse practitioner in a mini clinic it includes services that we call a care concierge that is helping consumers find whether it's a product, a service, and actually help them on a path to better health. so we're off to a wonderful start. you know, it is satisfying, again, the unmet needs for consumer health. >> one last question, gentlemen. fedex and walgreens are also partnering on drone delivery can we talk about when you see that being commercially feasible, profitable is that a big part of your strategy going forward >> i can start that question we are the first company, u.p.s. is the first company that got the full faa part 135 certification. and we are the only company in our industry that has a business

that we're making commercial deliveries on a day-to-day basis. in fact, we already have 1900 of these commercial deliveries that we have made now, we're also working together on some very important tests that when the regulations are developed, that we believe that there's a lot of expansion opportunities and we will be very -- we'll be very much at the lead of that but this is not a future test thing like a lot of companies are talking about what they're going to do. we're actually doing this today with those 1900 commercial deliveries. >> larry, do you see this as an important piece of your business going forward, the ability to drone deliver prescriptions and maybe retail items >> i think it goes back to the notion of how does the consumer define access and convenience as we go forward. we see the opportunity that the drone has in terms of meeting customers' needs. >> excellent

we'll have to leave the conversation there larry merlo, david abney, gentlemen, thanks for joining us tossing things back to you >> all right, frank, thanks very much our frank holland. st f meninwk alley" continues ju aewomts woman: my reputation was trashed online.

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let's get over to the cme and rick stan teantelli for the santelli exchange. good morning, rick. >> good morning. the year-end funding in its

totality has vernacular that everybody uses that's in the financial markets. it's called the turn, the year-end turn. it's when institutions, large and small, traders, customers large and small make sure they have all the different financing lined up and taken care of as we go into holiday mode at the end of the year and come out on the new side of a new year this year has some particularly interesting issues on how the turn will turn out it ranges from don't worry, because usually when you expect or are ready for problematic issues to arise, they never do, versus the notion that if you don't see something coming, the light at the end of the tunnel may be a train coming the other way. but all those are just fancy word games let's get down to what really is going on we have restricted financial plumbing, okay what does that mean? that means all the various

systems used to direct aid and facilitate the borrowing and lending of securities, the apparatus that makes that work has less accessibility and output than the growth of everything that needs to run through that system and the fulcrum of that mismatch began after the credit crisis. you know, rahm emanuel, the ex-mayor of chicago, once inferred you never let a good crisis go to waste, meaning that when we are in crisis times, people that lead usually have much more latitude to do things they could never do under normal conditions and, boy, that is true whether you look at the volcker rule or all the issues after the crisis, we understand why they occurred, but they're going to have to change at the end of the day, the cost

associated with the intermediation of what goes on to finance securities has been taken over by the fed. at some point they're going to have to address the real problem. and the real problem is they're going to have to tweak regulations to find a way to match the growth and financing of securities with the growth of issuing securities carl, back to you. >> one more thing we're looking for answers on, rick, thank you. rick santelli. when we come back, just how popular is disney plus we've gosot me exclusive data that might give you a clue when "squawk alley" comes back. servicenow put our workflows in the cloud. this changes everything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead.

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i'm scott wapner "the halftime report" is live today on the trading floor of double line capital in downtown los angeles with the bond king, jeffrey gundlach we'll talk about where the money will be made in fixed income and beyond in 2020 and of course the man who correctly predicted donald trump's win in 2016 weighs in on the 2020 election as well. we'll do it all at the top of the hour carl, we are just minutes away now from this exclusive interview. back to you. >> all right, can't wait, scott, thanks. on the amazon front this morning, security researchers discovering vulnerabilities in smart watches for children sold on the website reportedly making it possible for strangers to override parental controls and track your kids. rapid 7, a cybersecurity firm, purchased three smart watches randomly costing $20 to $35, all

models offering location tracking, messaging features they share nearly identical hardware and software. the multitude of product offering has opened amazon to all kinds has offered amazon to all kinds of liability involving press coverage. >> this is the worst kids and tech and bad guys tracking your kids my personal philosophy how about the old days when in the '80 when i grew up when you can't track kids and you use street smarts and use a pay phone and even the tech that track your kids could backfire. >> how much accountability should amazon have for what is sold on their site you have things seemed to be cleared by the fda and turn out not to be and this is another example. should amazon be forced to take responsibility for those products or is it a platform

model and -- >> we're just a platform we can't control there are bill billions of items sold on our site. >> if you are selling anything to protect my kids, you can't go no, i didn't know it would open them up to danger. absolutely not well we have the popularity of disney plus. julia boorstin has those numbers for us. >> reporter: that is right reporting that disney plus has been downloaded to mobile devices 22 million times disney plus managed 9.5 million daily mobile users and ranks number one in the app stores since the app launch they do not measure use on smart tvs such as roku or apple tv and we don't know how many are using the seven-day free trial or

among the verizon wireless who get one year free. but utopia reports that disney has brought in $20 million in revenue from the app from monthly fees and people who signed up for year long annual contracts. the early success does not seem to be hurting mobile downloads or traffic to other streaming services but they are boosting new installation of hulu and espn which are bundled and streaming tool roku. the disney plus user base is smaller than netflix reporting over 60 million u.s. subscribers but on a per-user basis they report that disney had 6% longer average time than netflix and 8% longer session times than users of amazon prime video on mobile devices.

disney declined to comment on the data we'll hear the official numbers in the fourth quarter earnings but there are signs of demand for the service. google annual search trend report said that disney plus was the top trending search in 2019. guys, back over to you. >> julia plenty of momentum in the first month. thank you. when we come back. why elon musk said he's come full circle. quk le i"sawaly"s back after this fick break. don't go away. (upbeat music) - [narrator] at southern new hampshire university

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>> announcer: the "halftime report" out west with the bond team jeffrey gundlach and rates and

the rally on cnbc. welcome back to quack alley. you're looking at a picture of a 24-year-old elon musk fixing the window of a car. here he was nine months away from co-founding tesla his mom may musk tweeted that picture to which he replied i couldn't afford to repair so i fixed everything from the junkyard and that is me replacing glass. the circle is complete lol. it is nice to be reflective. >> somehow he looks 45 in that picture and the circle is complete similar to the quote from darth vader. >> now i am the master so bring it back to that disney plus wrapping it all around and tieing the show altogether. >> i think for that circle to be complete we need a side-by-side of him fixing the cyber truck. can he still fix windows now that he's a billionaire. >> guys, between boeing, home depot and oil, you would think

that markets might be down more than they are. big news coming in the next couple of hours with the fed decision and then powell's presser at 2:30. for now the dow down and the judge with gundlach in l.a. in the next hour. so gets get to the half. carl, thanks so much welcome to the "halftime report" live from the headquarters of double line capital in downtown los angeles. we're joined by the firm founder and chief executive officer jeffrey gundlach the markets, the fed and the president and everything on the menu in the next 60 minutes. we welcome in jeffrey gundlach thank you for having us once again. >> welcome to double line ged. >> this final fed day of the year >> yep. >> what do you expect today? >> i think i saw on cnbc yesterday there was a survey and the result was unanimous