Jap japans exports fell 6. 7 in june, much more than expected. They were looking for a 5. 4 drop tex tend the bigger surprise drop was a 5. 2 drop in importeds versus the 0. 2 decline economists were expected the nikkei was down by 2 . Hang seng off by a half percent. The shanghai down by 1 . In europe, red arrows there as well spain off by 1 . Lesser losses for the other averages check out the treasury market. You will see that the treasury market this morning is showing the tenyear with a yield of 2. 054 United Health just reporting moments ago. Posting Second Quarter profit of 3. 60 per share. That Beat Estimates of 15 cents. Revenue came in ahead of wall street forecasts the Company Raised its fullyear forecast well talk about this more with ana gupte. Netflix shares are falling sharply this morning the Company Reported a drop of 130,000 u. S. Subscribers in the past quarter on the Conference CallReed Hastings attributed the lower growth in part to its Program Lineup during the quarter. This is one where we forecasted high. There was no one thing if i think about three years ago, we were also light. We never really were confident of the explanation then we were 2 billion in quarterly revenue. Now were going 5 billion. Its easy to overinterpret the quarter membership ads okay. The slowdown comes as competition is set to ramp up in the coming months. Disney, apple, warner media and comcast Nbc Universal are launching rival services and taking content from netflix including two of the popular shows like friends and the office. The company is playing down those losses saying that will allow for spending on more original content we had greenfield on last week i dont think you were here. I wasnt. Hes a huge bull. On netflix . Yeah. Off camera i said why wouldnt you short netflix and go long comcast . Or disney. Comcast, you know what our revenue is 1 110 billion at netflix its 20 billion. One stock the market cap was like 1 170 billion, netflix. It used to be 30 billion comcast is moving higher, but nothing it hasnt quadrupled in the market cap. Its gone up disney has gone up, too. What was his answer i think we have it here i didnt say to do that spread on the air i did off the air. This is what i said to him then doesnt look so good now. I asked you off camera about valuations between netflix and disney or netflix and comcast. You think its okay. You wouldnt one is not overvalued versus the other because of the future . Consumer love and technology are hard and the Global Business the fact that netflix has people watching israeli originals its not undiscovered its a 1 165 billion company it was a 30 billion company when we used to talk sure. People hated it at 30 billion. People hated it at 100 billion is it going to a trillion its going a lot higher it is look, these things happen in step functions as you look out over the next few years, this is the beginning. Streaming is the future. Netflix is the future. Everybody will have streaming and high Speed Internet and Universal Studios and cable and networks and streaming you understand why the valuations are so similar between two companies where one is five times bigger than the other in revenues . I have a slightly different question this morning that relates to this. Is this the first quarter, if you will, where were starting to see we talked about it on the air the idea of generations of people who were very willing to turn off their service after they binge something that is new and fresh. One thing that reed talked about on the call yesterday was the idea that he didnt think they had the right programming during the quarter. They didnt have the crown. They didnt have Stranger Things. This goes back to the reason why ive been skeptical that friends or the office is what is driving subscriptions. Once you subscribe, its a great babysitter or extra, thats not why you have it. You have it because youre loving the bodyguard or whatever it is this quarter was weak quarter. The question is whether you think people are going on and off of these things. If they have a hot show next quarter, people will be back one thing nobody mentioned is this is the same time they increased prices in some cases the subscription price went up 18 . They got money. They can hire smart people to do shows. I can remember 15 year s a s ag were getting killed by what was the fourth and fifth networks there were like cw or something . You remember them . Yeah. For a while they were beating nbc. With all the wherewithal for designing you cant guarantee that you will have a hit is was when friends rolled off. I have nothing. Lets make it five minutes longer okay, jeff you remember that i do. That was not a longterm answer. Its amazing that same show is what were talking about. The valuation of netflix, does it go down and everything go up or will it be compressed down i doent schadenfreude were the Legacy Assets, all these things, they will eat your lunch. It feels so good that the Legacy Assets might have a little kick left in them the cord cutters, you could have your cord cut too, reed. How does that feel you have fewer subscribers in the United States. Take that. But longterm he had an extra 2. 5 Million Subscribers internationally. The streaming stuff is where its going thats what you say by the way, hulu, this is interesting, if you care about comcast, you care about the valuation of hulu, so you care about the valuation of Netflix Streaming is the way people are watching these things. Binging is how people are watching these things. I do think people are price sensitive. The idea they raised prices by 18 i think matters. Either netflix is a pipe company, then its commoditized. Theres no mote there. Or theyll have the best people figuring out new content im not willing to cede that to them versus ten other places that are trying to make great content. Ill watch amazon and ill watch hulu ill watch anything. I talked to a content provider last week he talked about how he was looking for 2 million from the old line guys they were giving him grief about it netflix offered 50 million for the same thing it costs money thats the question. If you continue to pay up will that be a game changer can you create this sort of virtuous circle where you are bringing in revenue . Obviously theyre doing it with a low margin if you can create that circle and spend more money on content, for better or worse you get a lot of good content. That makes it harder on everyone else back in 99, those annoying comparisons that faber used to do comparing the valuation of aol you could buy boeing, walmart, mcdonalds sooner or later it comes home to roost. I cant believe netflix can go from 30 billion to 170 billion and were supposed to say its going to a trillion. Im not saying a trillion half trillion no. 400 billion 300 billion . Not today. Not today well get to the budget battle in washington we have a new update this morning on the talks between democrats and the white house to raise the u. S. Debt ceiling. Lets get over to ylan mui negotiations between the white house and congress over a deal that would increase federal spending and raise the debt ceiling are running into roadblocks the administration is not on board with the timeline laid out by House Speaker nancy pelosi yesterday. She said they need to reach a deal by the end of this week in order for the house to vote on it before leaving for summer recess a senior white house official is telling me Nancy Pelosis comments are happy talk and they said that the two sides still have a way to go and there are three major Sticking Points. First, they need to identify roughly 1 150 billion in offset to make up for any spending increases in the budget. Theres no agreement on how to constrain future spending after any deal expires the administration is worried about poison pills in the spending bills that passed the house so far the reason these talks have become so urgent is that treasury could run out of cash in the first week of september forcing the government to default on its loans nobody wants that to happen, but hope is dimming that this can get involved in the next few days back over to you thank you very much well talk more about the budget battle with Steven Mnuchin, he will join us right here live in the 7 00 hour. Its an interview you do not want to miss up next, stocks to watch well talk about some big afterhours movers and well break down the Quarterly Results from United Health those results just out that stock up by 5 cents right now as we head to break, a look at the biggest premarket winners and losers in the dow. Is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. Every day, invesco combines ideas with technology, data with inspiration, investors with solutions. Because the possibilities of life and investing are greater when we come together. Plike. Zelle. To conveniently makesend money sier, to your babysitter. For overtime. Or pinacle, to tap into your organization in the office, on the go, or in the stopandgo. Pnc make today the day. Mno kidding. Rd. But moving your internet and tv . Thats easy. Easy . easy . Easy. Because now xfinity lets you transfer your Service Online in just about a minute with a few simple steps. Really . Really. That was easy. Yup. Plus, with twohour appointment windows, its all on your schedule. Awesome. Now all you have to do is move. That thing. [ sigh ] introducing an easier way to move with xfinity. Its just another way were working to make your life simple, easy, awesome. Go to xfinity. Com moving to get started. Ibms Second Quarter profit beat forecasts on higher margin but revenue for the fourth straight quarter as it continues to shift to the cloud. Cloud revenue did rise 5 , but that trailed rivals like microsoft and amazon and disappointed some investors. Ibm down about 1 now. Ebays Second Quarter results top estimates. More shoppers are flocking to the site the company also raising its Earnings Guidance for the year sending shares up more than 5 ebays ceo will be on squawk on the street today. That will be in the 10 00 hour. United healthcare reporting results. Came in with a Second Quarter profit of 3. 60 a share. Revenue coming in at 60 billion, well ahead of what the street was expecting joining us now is ana gupte. Analysts expect to earn 14. 70 to 14. 90. What do you think . Pretty good numbers overall. The street was basi bracing a beat the medical loss ratio is in line thats a good thing. Revenue is in line they raised by the magnitude of the beat i think theres probably room for more they just closed the divida medical group year, and that should be about 30 cents so since it just closed for the second half, you know, thats another 15 cents or so good numbers. You cant help but wonder if the company is feeling defensive when youre having democratic debates where 8 out of 10 candidates are raising their hands saying they would like to get rid of insurance the the entire industry is under siege. Definitely. They definitely could keep a lid on the beat, its possible given the favorable reserves they let fall to the bottom line. It was enough to satisfy investors and still not raise the red flag at this time. Last week the news was great on the rebate rule going away from the administration from the administration, exactly. We still have something coming from congress probably by the fall the Senate Finance committee and the house are working on a draft. This was great news particularly for united, they not only have the healthcare arm, but they also have optimum which has a big pbm attached to it pharmacy benefit managers and what would happen. Its hard to kind of see through this, try to figure out pli political risk, try to assess all of this when you look at great numbers but you have this existential threat to the entire industry yeah. Medicare for all is the big worry here at this point the debates on the second round will be on the 30 ths ath and 3. Investors in april overreacted there was a massive selloff after the united Earnings Call and the Bernie Sanders proposal. I think investors have digested that at this point most of the d. C. Specialists would tell you that the probability is close to zero of Something Like that going through. I think wall street calmed down on it. I think last weeks performance and the rally on the rebate rule ahead of the next round of debates, biden losing a bit of ground to warren and harris, it tells you that investors started to think this is not going to happen i also think money that was probably more generalist, not doing as many deep dives on the policy environment has probably been flushed out so we have a more specialist, more knowledgeable Investor Base what would you tell people to do i would say buy you have united, anthem, humana, they rebounded strongly since the april selloff. Then you have these deeper value names, cvs, cigna and centine. Im bullish on cvs theres a lot of upside still even just in the quality names ana, thank you for coming in. Appreciate it. We have more coming up new warnings this morning about the viral app that digitally ages your face have you seen this i did it yesterday. Boy well show it. Can we show it i dont have it ill show it. Take a shot. Of you now. Yeah. Here we go. Lawmakers are concerned about the connections to russia and privacy provisions in the user agreement. We have details after the break. Were changing whats possible every single day. , but what does changing whats possible mean anyway . Well. If you run a business, it means a lot. For starters, we provide you with Financing Options for your customers. That way, you can help them buy the things they love instantly and pay over time. And that turns them into serious fans. Hang on, theres more. Want Customer Insights . Weve got those, too. We use data to show you what your shoppers have already bought so we can tell you what they might consider buying next. And you can offer them the perfect products. That ceo gets it. From adding unique capabilities to your companys apps to bringing you loyalty programs, our financial and Tech Solutions are changing whats possible in all sorts of ways. So, how can we change whats possible for you . You should be mad at airports. 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That was a soft ball question, but it should have said shows like thats cool it was a great moment last night on jeopardy. Time for our executive edge. A word of warning about this mornings viral app that can digitally age your face and photos everybody seems to be doing it i havent yet. I just downloaded it, maybe i shouldnt have Chuck Schumer is calling on the fbi to review face app on the ground of National Security and privacy. The app was developed in russia and can store personal information beyond the photos you upload the dnc sent out an alert to the partys president ial candidates warning them against using the app. The face app team said no user data is transferred to russia. However according to the apps terms of service, users give the Company Permission to use their voice and likeness for commercial purposes and face app has the right to store that data even after users delete the app. The question is whether somehow theyre sucking other information off of your phone. The company put out a statement saying they were not it was only storing photos that you actually select and tell them to edit but when you do it, you have to give them permission to your camera roll or photo roll. I guess by the way, this is an argument for why the Apple App Store is a great thing and forget about all these monopoly arguments. I want somebody, hopefully, assuming apple is controlling this, so that any old appmaker cant start ripping up your phone. Apparently the reason there are as many restrictions on it as there are is because of apple and what they required these users to do. Somebody took a picture of me yesterday. We aged it made it younger, played through it. But were idiots the stuff we give away for free so we can amuse ourselves for five minutes collectively were idiots. Sure. I have a long list of things that prove were idiots yes daily. Agree yeah. Coming up, tech upgrades as well as downgrades to tell you about. We have the calls and the reaction on wall street and our newsmaker of the morning well talk china trade, the debt ceiling and much more with treasury secretary Steven Mnuchin. Thats coming up in the 7 00 hour as we head to break, heres a look at yesterdays s p 500 winners and losers through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing bus