Transcripts For CNBC Squawk On The Street 20151023 : vimarsa

CNBC Squawk On The Street October 23, 2015

Points. Oil is about the only asset thats not participating today. In our road map this morning tech trifecta, amazon, microsoft beating expectations. And jack dorsey taking onethird of twitter shares and dishing them out to employees. Futures up sharply as Chinas Central Bank cut Interest Rates. Lowered by 25 basis points. Reserve requirement reduced by 50 basis points and comes a day after a rally which included a jump in the dow hints of further easing by the ebc. Look the communist mean business they wont let this economy slow that much more. They are trying to change thing. Were getting hints consumer is spending more in china. Chinese stock market, we used to talk about it every singling day, had a nice rally. Europe, draghidraghi. He manages to get the dollar to soar on just talk. Hes the pied piper of higher stock prices. Last night some quarters that are thinning like the new york mets. I talked to mr. October last night. Saw him at a party. The actual mr. October. Daniel murphy. He gave reggie jackson. Designee gave props. Mr. October and i recognize this google, amazon, very real. Fabulous. Hes an investor. Hes very into it. He gave props to murphy. Well get to amazon, google, microsoft. Is this called a junk rally . On the one hand you obviously have a lot of frustrated bears. Then theres reports theres a lot of Short Covering to be done. People wonder if fang is truly back. There were sellers on tuesday and wednesday in facebook, amazon, netflix and google. And i got it from all side every where i went. Outside the exchange. In the cafeteria. Outside of work from cnbc. Is fang done . Done . What does done mean . Done. You mean like, like a merge which cut its distribution after having a 1. 40. Done is a company that has 72 billion in cash. Done is amazon reporting whatever number as a profit. Done is microsoft giving you a multiyear yeah theyre all done. Done. What is done . I love that frustration. As jim alludes, three of the tech biggest names up sharply. Googles alphabet getting a lift from video and internet advertising. Amazon and microsoft helped by cloud. We talked about cloud on last nights Conference Call. Take a listen. While Many Companies are offering commercial offerings theres only two driving enterprise platform innovation at massive scale. Amazon and microsoft. We push each other and we each have a unique approach. Microsoft has bet on a strategy to build a hyper scale public cloud as well as reinvent servers as the edge of our cloud. Microsoft is an interesting story. Which of the three is the most interesting . Amazon has put together profits in three of the last five quarters. About investment, amazon invested, walmart didnt. Now hes got a theme. By the way he buried the lead windows 10 is so good he wants to go zero, the cloud is winning. Hes got mobile, social. Mobile starting to do better. Im nominating google. Google used to be animal house. From what college . Faber college. It was a the google Conference Call used to be like are you and idiot to own our stock. Dont you understand what were about . Were about moonshots. Were about putting a man on pluto. Now they are about earnings, buy backs, brilliance, youtube break out. Search. Do you think they looked at them and said going broke, drunk and stupid is no way to go . I like to have lunch brought to me, okay. She would change that. She would say you get your own lunch. But that would mean going down that 100yard walkway to the contact if he terrifyia. This Conference Call report reminded me of the way when i worked at Goldman Sachs and come in to me and say how much money did you make yesterday for the firm . 2930. That sucks. To the quarter itself they saw an acceleration in the google sites in terms of search although youtube they havent broken i want out. Next quarter we get more detail when they fully transition to alphabet. Capital returns of course people point to as a great signal. Youre making that point. And the idea that slowing Revenue Growth is no longer the case because mobile seems to be growing even faster than desk top and the c pcs are coming up. Im having people out there talking 40 to 42 bucks a share. This was a cheap stock going in. Google price, heres the price increases by jeffries, by deutsche bank, where are you Goldman Sachs . This is an extraordinary quarter and i have to tell you its the first of extraordinaries. Whats the multiple you should put on that number 30. 30 . David its the Fastest Growing large cap stock. Bernstein were talking google. Bernstein has a 950 target, 22 times 17. Im just telling you the earnings are still not even being seen yet. When they get youtube right youre getting up well past 1,000 with your target if you use that kind of multiple on 16, jim. Yes. Okay. Fair enough. Obviously the argument here is we all misunderestimated the surge business. They say listen, search is really big. Yeah. It turns out ordering the worlds information is big. These companies are ambitious. Daniel yellen, dont take their earnings to heart. They are wiping out earnings of other companies. They are. David what do you think about ibm . Thats right. Ibm, emc, these companies that dont seem to be make it happen. K smart, sears. Pandora down 30 . People looking at youtube and they are ready to squeeze music in addition to apple. We havent heard from apple. Pandora they were like in total denial. They whistled right past. They had a poor quarter. None of these companies are bragging. Amazon Conference Call replains flat. Lets talk amazon. Im taking a look at the slides. People looking at the slides from the Earnings Presentation also encouraged. They do talk about free cash flow. They generated 5. 4 billion in cash flow in the last 12 months. Thats always where hes been focused on future free cash flows. But aws, ever since they broke it out that stock has broken out. I want a piece of aws. 8 billion run rate business now. Margins have expanded from 20 to 25 . You talk about ibm. You talk about whats going on there. This is microsoft seems to be getting it right on that side. Arent ws microsoft is really getting it right. Wow, thats amazing how much money, 500 million in earnings. As much as they are making on north american retail, aws. They have solved the problem of infrastructure. You know a loot of people are laughing at kevin saying hes spend go to much. Ill using this knowledge at under armour. Hes taking a page from the amazon book. Well spend, spend, spend and beat everyone. You know what . Hes right. You got to have an Investor Base that lets you do that. Not everyone does. Thats why people who get paid a lot of money and do those things four. If you can get an Investor Base that lets you do that you can succeed, at least and gives you a lot more room to do that. Walmart has craterred their earnings. They are not a technology company. Microsoft and amazon are the only two companies on an innovative scale. Now. Amazon is certainly one of the only companies that can innovate at scale. I mean, aws is an example of that. Can walmart innovate its scale in technology . I dont know. I got to tell you, sats call, i whsh he first started, it was like new haven before they could bring to it broadway. Now this will run for years like cats. That did run for a very long time. You know what . Were not talking about windows 10. Windows 10, the pcs theres so many read throughs about windows 10. Windows 10 is selling out. Theres a great line where he says i dont want it so you need us, i want it so you want us. Who orchestrated that line . This is a thing of beauty. Hemingway. Who are they beating as a result of that. Somebody was telling me for example dropbox, right . Because its included in david thats a it gets hurt by microsoft. Microsoft will be a 15 year high today. Google amazon will be record highs. At one point i got up this morning and i said to myself, i am not as smart as anyone who works at those companies. I just felt very defeated. I was patting. 315. Dont kick yourself like that. Youre good enough. Youre strong enough. And youre smart enough. These are nfl. Okay. Google is the patriots, okay. All right. Amazon is green bay. All right. And microsoft, were trying to figure out which is real the panthers, are the panthers real . Thats who they are. I got to say, i know, i know. Who is facebook which hasnt reported earnings yet but see its market cap eclipse 300 billion today. Who comes out . The cardinals. Carson palmer is real. These are nfl, theres a great piece about pa rrrity in the n york times. Theres two leagues developing. Theres the ibm league, no offense because they are sweet and this other league where, honestly, these guys got 840 on their s. A. T. S. Do they still have s. A. T. S . Yes. I dont want to be in the room with them. They will suck your brain out. Well get to a lot more. P and g biggest sales decline. Stocks still rising. We heard from john monthlier own squawk. You heard us about buy backs. Its about a give back. Well talk about that. Take another look at the futures. Amazon, google, microsoft by themselves will add 100 million in market cap. Hello, ken jennings. I havent seen you since that tv quiz show. Hello, watson. You can see now . I can recognize people, analyze images and watch movies. Well i wrote a few books, did a speaking tour, i. Ive been helping people plan for retirement. And i help doctors identify cancer treatments. Is that all . I recently learned japanese. Yeah, i was being sarcastic. I havent learned sarcasm yet. I can help with that. This bale of hay cannot be controlled. When a wildfire raged through elkhorn ranch, the sudden loss of pasture became a serious problem for a family business. Faced with horses that needed feeding and a texas drought that sent hay prices soaring, the owners had to act fast. Thankfully, mary miller banks with chase for business. And with greater financial clarity and a relationship built for the unexpected, she could control her cash flow, and keep the ranch running. Chase for business. So you can own it. Chase for business. [female announcer] dsave up to 400 on beautyrest and posturepedic. N, get interestfree financing until 2018 on tempurpedic. Plus, helpful advice from the sleep experts. Dont miss mattress price wars at sleep train. A free emergency key box with your plan purchase. Call today. From. Proctor and gamble Quarterly Earnings Beat Estimates but revenues missed as it posted its biggest sale drop in seven quarters. P and g expect growth in the Current Quarter as the Company Implements its turn around plan. That organic sales number is the sticky one. Beauty sales down. Grooming unchanged. Hearth decreased 1 . Fabric unchanged. Baby, feminine decline 5 . Buy the stock right now at 80. Its one of the most under owned. Everyone is saying give me one. Clorox at 123. Kellogg through the roof. Problem, to well down from its high. Let me go buy some. This is about underowned stock thats a big stock. This was a terrible quarter but doesnt matter. Half percent dividend yield doesnt hurt. David taylor new ceo will start december 1st. Did anyone listen to that 3 00 p. M. Call. Im sure but not here. The analysts were negative. They were critical. They were wondering when hes going to turn i want around. He was saying i am turning this around. Take a look at the numbers. And my back and forth with 3m the stock finished up six. Analysts are left in the dust. I like that quarter. Health and save haven fire him is very strong. Electronics is dropping. When he talks about how you have to change your game because of the terrain hes monster good. They underestimated in that Conference Call. That will never happen again. Up just like saying it. Like saying it over and over again. Okay, i do. Meantime twitter cofounder and Ceo Jack Dorsey looking to give back to the company he founded nearly a decade ago. Dorsey sweeted im giving onethird of my twitter stock to our employee equity pool to reinvest directly to our people. As for me id rather have a smaller part of Something Big than a bigger part of something small. Im confident we can make twitter big. I think thats the kind of morale boost they need. I tweeted immediately he crushed with it that. The last down grade to sell the other day, Morgan Stanley. I like what dorsey is doing. I think its good. I think its impressive. I think that guy from Morgan Stanley ought to do some tweeting, get in the game. He needs to get in the game. Dorsey is doing it. Impressive. Not something you often see. No. Palmer is on. He called jacks move incredib y incredible. Hes turning himself a friendly activist. Doesnt apartment board seat. But said ill be speaking out. Maybe hell do to twitter what he did to microsoft. In a good or bad way . Thats not good. Im just kidding. Steve is an old friend of mine. Classmate. Theres a lot of thing in place at microsoft believe me that satya got a good hand. I think that steve being involved is a positive. Why . Because he does not get involved in losing situations. You got anthony nuto. I think twitter dont you do that. Im talking about palmer. He doesnt get involved in losing situations. What was nokia. A winner. He was trying to take back that face making. I kmourp. Hes not coming on with us. Thats what i was thinking. Forget it. Move to espn. Maybe then. They can use a few bodies up there. Oh they are my friends. They are your friends. Is there anyone yet who is left. I havent attacked you yet. Were going get some emails. Comen espn is good guys. Its coming, you know who im talking about. Have you seen disney . Up 23 points. I know. Listen, these are 20 this year. I said buy it because he was in there buying. That will open at 114 today. Well get cramers mad dash. Get another look at futures. Way up on that surprise china rate cut. Maybe ge has a chance of cracking 30 this morning. Were back in a moment. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive its a mad dash for this friday. Six minutes before the opening bell. At t earnings would fall into a faber report. Today well make it a crime reporter. Thats only because we invoke the Faber College earlier. David it was a stand out quarter. Of cash flow that has to go to dividend because the cash flow shyer. Directv being sold at 2300 Company Owned stores, free cash flow. Looks good. It was still a hard quarter i understand because at one point they were talking about 44 pay out. Then talked about a 70 . A lot of analysts say its a difficult one. They changed the way, wireless they split that. They changed a lot the way they report certain parts of their business, jim and that seems to have thrown a lot of analysts off. I want to talk about it as a directv seller. Directv which is an incredible package, dont forget despite the hoopla about draft kings and fan duel people want to watch tend of nfl games, out of market gains ever games. The accounting may be difficult, for those worried about the dividend i feel better. Directv is going only one way. Come on. You think top of the cycle. I disagree. Long term. Im not saying its going away. Theres 2300 stores at t will start taking shares. I love those ads. The cable town. They are great. They are good. They have real actors. Very professional. All right. Were really not that funny but well keep trying. Back after this. [female announcer] if the most challenging part of your day is the staying awake part, sleep train has your ticket to a better nights sleep. Because when brands compete, you save during mattress price wars. Save up to 400 on beautyrest and posturepedic. Get interestfree financing until 2018 on tempurpedic. Plus, helpful advice from the sleep experts. Dont miss mattress price wars at sleep train. Sleep train your ticket to a better nights sleep awe believe active management can protect capital long term. Active management can tap global insights. Active management can take calculated risks. Active management can seek to outperform. Because active Investment Management isnt reactive. Its active. Thats the power of active management. Youre watching cnbc squawk on the street live from the Financial Capital of the world the opening bell in a minute. Keep your eye on s p 28. 59. Thats break even for the year. Well get there at the open. We havent been positive for 2015 in two months. Got to go back to august 20th when things got interesting. We made our way back. The question is now what . So many people got short. I keep thinking back to the days. I love karl icahn where he said its a house of cards. A lot of people waiting all in short and all covering and then we get a top until they are all done. On top of all that, surprised china rate cut says 7 is still their target for the year even though they just did 6. 9. Ge, north face, all extremely strong in china. Mcdonalds, plus 20 number, plus 28. Back to where it was two years ago before the bad pr. Theres the opening people at the big board. American farmland company, recent ipo over the nasdaq. Lm Funding America Specialty Finance company celebrating its ipo today. Its going to be a morning of big round numbers surpassed. Google above 700, amazon above 600 and jim facebook above 100 for the first time. I just continue to think that thats a Company Whose earnings estimates are way too low. When you speak to ceos about,000 reach the millennials which is what everybody wants heres a dollar facebook and then you get two bucks back. And they are not promotional either. All these coerce not promotional. Facebook is the least promotional of all. And has the northwest say. Not promotional in what sense they dont tell how great the Large Companies are saying listen we like you more than anyone else. They just say listen give us a call. Northeastward, they could be trumping, they usually give you and hour how many hours people are in front of facebook versus tv. They are not saying listen we won this. They say were just getting started. These guys live to compete. They are competitors. Interesting to note, its funny facebook and amazon market value right now almost id

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