1. 6 level. And the headlines are on your screen. Our road man begins with a slew of estimates beating goldman and j and j. Netflix, subscriber numbers come up short, stock down 13 in the premarket. And the latest out of the gop convention, over plaguerism and what to expect today. First up though as stocks aim for more record highs, we have four dow components, j and j, ask gold m and goldman. Despite the uncertainty created by brexit, we achieved solid results by continuing to serve our clients across our diversified franchise and managing our business efficiently. One thing weatility is an environment they can operate in. We had very good quarters at bank of america, jpmorgan, sp spectacul spectacular, and city, really good quarter. Goldman, we found out fixedincome trading bank of america had good fixedincome trading. Tell me something i dont know. Goldman doesnt have any equity business to speak of in terms of ipos. It suffers by comparison to a bunch of other companies i did not regard as fixedneck trade companies. The book value disparity is rather shocking as it is for bank of america, as it is for citi. This is goldman. It means the companys generating no real results, thats untrue. But i just caution what youre seeing is the stock that ran up in association with the other banks so it may not be spectacular. Down 96 k. I tell youall of these banks, people say how did the average wage go down last month . Given the fact that employments so good. A lot of white collared jobs were really lost in this business. When you look at all the branches that bank of america closed. We look at the compensation of goldman. Youre worried about your yeah. I dont want to say relative paycheck. People are still wealthy. A lot of this gets figured out in the Fourth Quarter . Yes. So you can look at 42 is where they are in terms of comp ratio, unchanged with 15, but that can change dramatically. Total staffdecreasing, 5 fewer workers at Goldman Sachs. Some of that was due to the lack of litigation expense, which weve seen finally starting to to stop. Right, bank of america, the mortgage issues going away, citi holdings, which had been all legacy. This was the quarter a lot of these banks put behind them the great recession, but in front of them s this notion that you just dont make as much money in banking. This is that kind of thing you get together with younger people and they dont want to go to these firms. Theyd rather go to a startup, or get a job with via, to name one. I thought it was via . No, i think its via. And help develop, you know, their Growth Outlook as opposed to, well work at Goldman Sachs. A lot of people get their news from nic, there was a Goldman Sachs guy left to create a successful start up. Its a changed time. When i got out of school, you wanted to be a lawyer because the business at goldman in brokerages was too crazed where you had bear markets going 81. Here, you had this incredible run these banks have had, and now you still make good money but its harder to get the job. Right. For them, the key is always attracting talent. Another key, before we move on, is buying back stock. 11. 1 million shares, average price, 1. 56. Of course is the key theme throughout corporate america. Look at the book. It helps earnings per share, too. And youll see bank of america in there buying aggressively. You saw a lot of banks buying yesterday, that reported last week, and i just think the Banking Group itself was very hated going into the quarter so its not as bad as we thought. Again, goldman had a run. Lloyd blank doesnt like to play trader. They just buy. Theyre not trying to get in there and figure out the best price. Weve still got to get through Morgan Stanley, amex. Amex was disappointing last time. Morgan sta Morgan Stanley was not a good quarter versus the previous quarter. That stock has been down, lisa, since the settlement was thrown out with mastercard. I think that this is visas the best of those. Morgan stanley really should try this could be a quarter where Morgan Stanley comes back. I think theyll improve from last quarter. Well vote tomorrow. Netflix is down sharply in the premarket. Company announced it added 1. 7 million new subs below its expectations over 2 1 2 million. On the earnings webcast last night, Reed Hastings talked about the impact of price increases on subgrowth. People dont like price increases. We know that. Its a necessary phase for us to get through, and then with theip creas creased revenue, were continuing to invest in better and better content. Thats what makes us feel very positive about the longterm and this is a shortterm phenomena. Apologized on that webcast for some of the volatility. He said its not easy on anyone. Volatility is never about good. Its always about bad, right . Its true. This was a baffling call. They talked about ungrandfathering, which is a word if you check that, that they created last night. Any time you know, of course we ungrandfathered him. Spell check wouldnt let me have it. This was when i say baffling, the people who didnt reup, were people who were it was people who were afraid of the price increase. Now, what this says is, ive always felt theres costco, amazon, you pay for the prime. People didnt pay for netflix going on. Right, they had more churn than may have been participated and they added fewer subscribers domestical domestically, and internationally, and as importantly, their guidance below the Current Quarter is below what much of the street and the investors anticipated. Its toriberrible. In terms of u. S. And economic. Us 160,000, and guiding 300 more . Next quarter is bad, too. I think people are looking for half a million. Customer loyalty, thing, fpr used that, rbc, multiple negative catalyst. Come on, when Reed Hastings says everyone the big picture is everyone is using internet video, Internet Television more and more, the rise of virtual mpd, which is streaming, all of these things building out the internet ecosystem, in ten or 20 years from now, every household will subscribe in netflix. Thats true. When a Conference Call starts when this was a disappointing quarter, im not going to say, nah, it was a good quarter, because it was a disappointing quarter, and im reacting to the fact they were, i felt themselves, not really understanding of why of the ungrandfathered of why people didnt take t. I think they didnt know. It was kind of like these retailers said there was a slowdown in may, i dont know why. I thought this was a quizical call. I think they are trying to figure out what went wrong here, i really do. So with the 60 to 90, u. S. To longterm goal is that still within reach . I think doable. Something happened here that people decided the content wasnt worth paying for. I dont know i agree with them youre grandfatherered at the lower price and you say, im done or youre ungrandfathered and youre, like, im done. I dont get it. I think its great. I would never in a million years say, im not paying the additional couple. How could you i mean, i dont get it. Its like imagine if costco, if everybody just said, theyre raising the prices, im not going to costco anymore. Would you do that . Bernstein today, competitive threats are more severe and Pricing Power is less than you think. Target, 62. Whoa. 62 . Thats aggressive, wow. Look, i i didnt like the growing pains as the thing, because, like, thats not growing pains. You really miss very big. Right. Then i start saying, okay, was content not what people wanted . Is it no longer cool . Its just about subadds right now, very similar to amazon, to a certain extent, and about obtaining future cash flows. They didnt have subgrowth. The adam sandler movies. They didnt have it or maybe with respect to there was nothing we talked about i did not, like, say to you, this quarter, did you see narcos . Im wondering if theres less buzz because i have to tell you, i was on that i went through the call twice, remember they do a letter then the q a. I read through it twice and the first time i said, i must be missing something. I have to go ask my kids about ungrandfathered. And then i realized when you make up a term to describe something that is a fear of like i was waiting for them to quote roosevelt. They had nothing to fear but price increases themselves. Thank you for that. You like that . I will yep, im going to go with that. A think a of people will use that as their mantra. I feel like copying a president. Speaking of political catch phrases, the rnc goes into day two. A lot of buzz under surrounding last night, including this controversy surrounding Melania Trumps speech. Good morning. Good morning. There were a lot of speeches at the republican convention, but Melania Trumps was the mostimportant one, because donald trump has a problem in particular, he wanted to use his wife to try to reach out, softens edges. It began the way they intended in theatrical style. Donald trump walks out in a haze of smoke, and introduces his wife and delivers a series of lines about the virtues of her husband as a family man. There is a great deal of love in the trump family. That is our bond and that is our strength. When considering the president of the United States. Barack and i now, it is true Melania Trump did not provide telling the kind of things only a wife can say about a husband in the performance. The problem arose later when people compared sidebyside, her speech with that of Michelle Obama and saw there were passages that had been lifted. Take a look at this clip. Barack and i were raised with so many of the same values, like you work hard for what you want in life that your word is your bond, that do you what you say youre going to do, that you treat people with dignity and respect. From a young age, my parents impressed on me the values that you work hard for what you want in life. That your word is your bond, and you do what you say and keep your promise. That you treat people with respect. Now, of course, passages like that arent terribly important. Melania trump is not a candidate. Unfortunate unfortunately, for the Trump Campaign, they have made it worse by insisting she hadnt borrowed those passages at all. Its almost wordforword from Michelle Obama. The republicans are hoping to get past this today, and shifting to the economy. The theme tonight is make america work again employ we. Well see if they can make some headway to make day two better than day one. Mcconnell, christie, well talk to john harwood in cleveland. When we come back, the latest for yahoo, and the chief economist will join us in the next hour, dow is going for eight straight, hasnt done that since a tenday run three years ago. More squawk on the street from post nine in just a minute. Dow shares seem to be down a bit. The Company Posted earnings nine cents a share, a bit shy of some forecast revenue above consensus. No great signs there of a turnaround at the core business. Bids for which were due yesterday after the earnings were reported. But make no mistake, speaking to people familiar with this process, the bidders themselves were well aware of the quarter and had incorporated their bids to account for what they already knew in terms of looking at the numbers from yahoo. And i can tell you, guy, at this point, five bidders did show up in the final round for yahoos core business. Now, it remains to be seen what the numbers will be, and as weve talked about so many times, real estate and patents may be part of one bid, not part of another. It remains somewhat unclear whether theyre going to end up perhaps picking a higher bid for core that does not include business for those and selling those separately. But there are five bidders, which is a good sign when you head into the final round of an auction, and trying to maximize the value youre going to receive. So well have to wait and see how that unfolds over the next seven to ten days. The team that is dealing with this, would love to have august to do other things. Right. To relax. And so i think thats going to be their mantra, to try and get this done by the end of july, lets call it, and then may move on from there on a lot more complexity, in terms of the steak we talked about as being the muchmore component of this. Every billion dollars for the yahoo core only amounts to lets call it about 70 cents a share, but the discount once the baba shares are traded at, once they are segregated specifically on their own, is much more important to the overall value being given to yahoo shareholders. What did you think about the number of layoffs . This company is a very small company. I know, its a small company. 8,800 employees. The tumbler acquisition, 365 million. I remember when carl did the original interview. They had high hopes for tumbler. There were times where, over shadowing yahoo, as the success story. Turned out to be far from the case. I think the businesses were hurt obviously by the auction. But i combat the subtext as facebook is a great company. Facebook is a great company. And you want to buy them. Because i think they e vis rated this company, and, mobile business, native, social. It is they went up against virtual buzz saw. At one point they talk about how the internet. If cheryl seedburg and g galfont, i think you would say, what is she talking about . Shes a very humble person. She wouldnt put it like that. Look sometimes you go up against a superior opponent and you lose. Well see. Now those bidders may see its been an undermanaged aboubusine and perhaps well give them an opportunity. There could be an opportunity there. It was kind of like a defeated team in the locker room Conference Calls. And you know, the cfo told a good story. They did a great job with the cash but they just got beat. Its okay. Sometimes you just get beat. Happens. Not the only news in social today. Twitter and the nba putting together a new partnership. Well get cramers mad dash and count down to the opening belgium. O one look at the premarket on this tuesday. Dont go away. Hello prashant bhuyan. Cofounder of the Fintech Services startup. Hello watson. Your analysis of social media and conversations on various trading floors, helps us uncover insights. Insights that help investors predict market closes, well before markets close. You know, your analysis has helped us improve our predictive accuracy by over 500 . 550. 2, to be precise, but we can always do better. I like your attitude watson. 550. 2, to be precise, but we can always do better. This is my new alert system for whenever anything happens in the market. But thinkorswim already lets you create custom alerts for all the things that are important to you. I guess we dont need the kid anymore. Custom alerts on thinkorswim. Only at td ameritrade. All right. Weve got six minutes until the opening bell. We had earnings from a Company Called ibm, another one called j j. Lets talk about that. This company is a small cab company. I say that because it has small cap growth for the largest one of the largest, greatest companies on earth. David, this was the kind of quarter that actually justified this move, and what theyre doing is theyre doing it through sheer intellectual firepower. A drug is working incredibly well for certainly malitigate nancys. And zerelco, a anticoagulant, and darzolex, amazing drug youre talking about these are thats for diabetes. Theres just drug, after drug, after drug, and ive got to tell you, when i look at this call and i see the number of people eye want i want to be sure about that darzolex. Multiple myeloma. Alex starofsky has been able to deliver on highgrowth pharma. Its up 25 of the year. Is it a bigcap Growth Company . Is that how you think about it . Yes, because these all combined, worldwide pharma represents an 8. 9 increase. Operational increase of 9. 7. Im sorry to read but i dont want to get these numbers wrong. Ive got to tell you, david, when you look at any other largecap pharma, including bristol meyers, theyre an excellent anticancer franchise. Embrovica is an amazing drug. The tylenol business Getting Better. Orthopedic, Getting Better than i expected. Now, can the stocks sustain this run . I think that when the smoke clears, this is going to be absolutely a terrific stock. Were going to take a look at earnings from ibm and United Healthcare among other very big caps when we come back with the opening bell. U recommend synthec over cedar . Super food . Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Ok. Sure. But are you asking enough about how your wealth is managed . Wealth management, at charles schwab. Announcer theyll test you. Try to break your will. But however loud the loudness gets. However many cheese puffs may fly. Youre the driver. The one in control. Stand firm. Just wait. [click] and move only when you hear the click that says theyre buckled in for the drive. Never give up till they buckle up. Youre watching cnbc squawk on the street, live from the Financial Capital of the world on a busy day tuesday of the rnc. A lot of big names coming in with earnings. Attention turns to the political and economic fallout in turkey as they cut Interest Rates. Housing starts down year on year, but no too bad. Im still looking for the days when we got bet not necessarily 2 million where we were during the bubble, but 1. 5, when we had half as many people in the country, and that says something about credit and moving out, getting your own house. Theres the opening bell and a look at the s p at the bottom of your screen. Empire, realty trust doing the honors over at the nasdaq, its bio therapeutics focusing on Rare Diseases and cancer. Interesting to point out j j developed these anticancer franchises themselves. I think thats important. A lot of companies bo