capitalist is sounding the alarm. almost 11:00 a.m. on wall street. "squawk alley" is live. ♪ and welcome to "squawk alley" on a busy week for tech. breaking news on gm. phil lebeau who has more. hey, phil. >> ken feinberg's office has announced the first round of claims that have been submitted tied with the gm faulty ignition switches. he have received 445 claims, filed since august 1st. of those 125 related to

deceased, people who passed away. the fine burg office has looked at those, the office has determined just 31 are eligible for claim payment and of those 31, just 19, 19, are eligible from the death claims for a payment. of 125 families that filed a claim saying we had a loved one who passed away in a faulty gm vehicle, the fineberg office has determined just 19 of those are truly legitimate claims that are eligible for a payment. the gm compensation fund has not paid out any claims. the fund will be taking applications for claims until the end of this year. we've reached tout general motors and general motors issued a statement within the last few minutes saying it will accept the determinations of fine burg and his staff for the compensation program. remember, gm's internal investigation linked at least 54 fatalities to the faulty ignition switches. gm is hoping that about 90% of

all of the recalled claims will be taken care of through this fund. don't forget ken feinberg, coming up first on cnbc a live interview coming up in a half hour, carl. but again, of 445 claims submitted since august 1st, just 31 of those have been deemed eligible for some type of a payment. guys, back to you. >> important few chapter for the company and for feignberg, thanks a lot. joining us, mike is back, senior columns nist at yahoo! finance and kayla tausche and john fortt. a lot to talk about today and all week long. a record day for apple. preorders for the iphone 6 and the 6 plus have been coming in in. i think we got numbers of 4 million in the first 24 hours. the highest number of preorders on day one for apple in their history. the iphone 6 hits stores on friday. because of the amount of preorders many will not be available until as late as october. jon, some analysts have tried to compare this to past launches.

this is bigger than all of them. >> by far. last time they did this structure where they did preorders and retail sales of the iphone 5 they did 2 million in the first 24 hours. this is twice as big as that. this probably means we have supply constraints coming for the first few weeks of launch. that usually means higher margins for apple because sometimes they'll stock the higher configurations which get better margins so this is going to be a really interesting story to model for wall street, for investors to figure out. okay, probably going to take a margin hit on the iphone 6. it has a bigger screen and new design at the same price as the 5s. we've got high demand and supply constraints so you're going to end up with a trend toward the higher skews which will be good for margins. overall, probably a good story for apple. >> david carr, great column in the times about what it is about apple that makes us rush to it. literally creeping on to our skin as he writes today. >> yes. >> does it result in a move in the stock some.

>> what's interesting to me is how the market seems to have kind of nailed it all around. right. the stock is barely up at all today. up a little bit. little bit of a rough day for nasdaq. a positive. but it's not as if this big kind of it first 24 hours worth of orders was a surprise to the market seemingly at least based on the action right away. >> the market said early on this will be an iphone event because so little was known about payments and about the watch and so little still is known about payments and the watch this truly is shown to be an iphone event and that is what is moving the stock because it's something that's a known quantity. it's a known driver of earnings. >> it's known. you can play out how it hits earnings over the next year or so. i think it matters. it's a positive tone coming away because all the other stuff is probably additive and you see analysts saying the more things become computers the more physical objects become computers apple showing they're going to be wherever that guess. >> we don't know how to model this one because we have two phones and because of the supply constraints here, china is

coming on later in the launch which should provide some extra if tim cook knew this was going to be a huge hit and made enough of these. keep in mind, two years ago when apple had a 2 million in the first 24 hours, in q1, 2013, the holiday quarter, apple did 47.8 million units of the iphone. try to imagine what's possible. >> yeah. >> if apple can supply all the demand. >> fund rate over the whole quarter? we'll see. i love the stat that the first iphone took 74 days to get to 1 billion. amaze stat. keeping with the tradition of apple saying nothing and then a bunch of stuff all at once, tim cook did speak to charlie rose over the weekend. >> they've come up with a phone. >> right. >> you don't see it in a lot of places. they have some tablets. but they're not a product company. apple's a product company. and so in the long term will

they become a bigger product? i don't know. you have to ask jeff what his plans are. but when i think of competitor, i would think of google. >> obviously some knocks on amazon and the fire which he said, you just don't see out there. >> he makes the point, apple is a product company which is interesting because they also rolled out apple pay which is not a product, it's a service. amazon and google are more service companies. so would he be as skeptical about apple's chances with apple pay as he is about amazon's chances with product? >> no. >> probably not. >> well also, google, is it a product company? right? he sort of wanted to kind of use that as a way of dismissing amazon but said google is our big competitor. google is not a product company either. >> it's not necessarily a prerequisite in tech. strong comments from top venture capitalist bill gurley on risks in an interview last night. gurley says i think silicon valley as a whole or the venture

capital community or start-up community is taking on an excessive amount of risk right now, unprecedented since '99 and kayla, his point is about, for example, burn rates, cash burn rates that would have been unacceptable five, ten years ago, people don't blink. >> the lure of the companies. in 2001 or 2009, you would never see influxes of college graduates wanting to go to companies that were losing $4 million a month but they don't seem to bat an eyelash at that anymore because they are still attracting record amounts of capital. the supply of money, carl, is something that we've talked about a lot on the show and how valuations are driven by so much money chasing these companies and not necessarily the underlying bottom line. gurley seems to be highlighting that and saying they're taking on more debt. the only way they can spend this money is to burn through it because they're getting so much of it and they need so little to operate. >> that becomes the coin of the realm. how fast are you implementing trying to get up to scale. this is wait economic cycles work. at some point in the lead up to

the banking crisis you always have the craziest guy makes the rules. it's the same kind of thing with tech, who's willing to invest faster at riskier prospects. to some degree i interpret it as the nostalgia for '01 and '09 when a venture capitalist could get bargains. >> let me try to bring it home. what should investors take away interest this? i think it's what are companies spending on? they're spending on digital marketing, commercial real estate. those are the areas that generally get hurt when this thing deflates. we don't know if it's a hard landing or soft landing. >> he does mention rents, the rents in the san francisco area. >> the first time he has been in a board meeting where they say our ten-year lease is our only option. the landlords are not saying that because they think prices are low. >> the thing i struggle with when he refers to 99, unprecedented since 99, in '99 you had more of this activity that was -- that had a public market cap on it, you did have hundreds of billions of dollars in public market cap that was kind of in these companies that

were in that mode. today most of the market cap, yeah, they might be in money losing companies or high revenue multiples but in category leaders for the most point? >> his conversation limited to companies how they're listed or not. you're going to stick around for the beat. i'm happy about that. >> we want to get a check on the broader markets which are mixed at this hour. the dow is up by about 9 points. the s&p has been unchanged for most of the morning but now in the red by three points. the nasdaq seeing the heaviest selling down by a full percentage point and that's largely because we are starting to see some shifts out of some of those large tech names as money managers try to make room for that giant alibaba ipo that's coming down the pike later this week. we'll talk a little bit more about that in just a few moments. meanwhile, take a look at shares of tesla as well, that stock down big in trading this morning. a report out today by morgan stanley says it agrees with ceo elon musk's recent statement that stock is a bit ahead of itself. morgan stanley does still say it's a believer in tesla strategy, but that sentiment is

enough to take the stock down by a leg of about 7% intraday today. it's not justs tesla. a weak day overall for tech. yelp, rack space, linkedin, work day, all slipping to the downside in a big way this morning and we are still seeing some moves in broader tech as we mentioned earlier as well. we'll keep an eye on the nasdaq for you throughout this hour. >> all right. when we come back this morning, alibaba is upping its price range and according to jack ma not just a chinese internet company. we have new sound from the alibaba chairman, days ahead of that multibillion dollar ipo. 2.5 billion for mine craft, $970 million for twitch, is gaming the next big area of growth for tech companies? we will ask the vp of games at amazon in a few moments. and we brought you the details of the first payments to victims from the gm compensation fund. at the top of the hour. ken feinberg will join us later this hour. "squawk alley" is back in a minute.

whenwork with equity experts who work with regional experts who work with portfolio management experts that's when expertise happens. mfs. because there is no expertise without collaboration.

bulldog: ibut my friends i are learning skillsnt! that can change a life. that's why mattress discounters good deed dogs is raising money to help train dogs like suzie to engage students in schools and special education classes. while ginger visits folks in the hospital offering quiet comfort. with your help, we can do even more! make a donation at mattressdiscountersdogs.com or any mattress discounters. mattress discounters good deed dogs helping dogs help people.

welcome back. check out shares of netflix, launching its service in france, followed by germany, france, luxembourg on successful days. the stock down by about 2.5%. this is just another one of those names like you said that could be the at least the feeling the ripple effects of the coming alibaba ipo and everybody trying to make room for that big ipo.

back over to you. >> that's right. we're going to see moves in many stocks in the tech sector this week but after strong demand alibaba is expected to raise that ipo price range today. that range won't exceed $70 a share but the move comes as the company continues meeting with investors in asia and europe this week. cnbc's susan lee has the latest on alibaba's road show in hong kong today. >> a homecoming of sorts for alibaba's management team as hong kong is the gateway to china which is alibaba's main market. so it with az hot ticket item in the city of hong kong. 500 plus from the investment community clamored into the ritz-carlton hotel for the lunch time address from jack ma and jack ma and the executive team had to bring the charm offensive because they were talking to a brokering community and investing community that felt they missed out on this alibaba ipo. this is a city they believe the knew the company better a gateway to china and where they

elicit their bb site. because of dual class share restrictions not allowed in hopping cong the ipo went to new york instead. the charm is what jack ma brought. he still believes in hong kong. alibaba that was missing out on listing here in the city and alibaba will continue to invest in hong kong as well. now, jack ma using this opportunity and pointing to its overseas listing as a way to try to redefine the company. >> not a company from china. we are internet company, happen to be in china. >> now as for allocation of shares, well we're not expecting much here in the asia pacific. a majority going to overseas investors. a lot of investors have been putting in the billion dollar orders hoping to get 1% of the allocation. those lucky enough to get one on one meetings with alibaba's management include the big hedge funds out here and the big fundies, but also i'm hearing sovereign wealth funds got a

chance to speak face to face and now the road show goes on to singapore where tomas seka from what i'm hearing will be able to get a aud grens jack. from hong kong, susan lee for cnbc. >> thanks to susan in asia. joinings us henry, senior research analyst for china internet and mobile. henry, good morning. >> good morning. >> the company has said that it wants to strike a conservative valuation. jack ma saying as much to investors hong kong today. do you think that they are too conservative at this point? >> yes, i think so. i think the pricing is too conservative. in china and also the gross potential and also the recent investment to all the emerging like mobile and entertainment. >> but that's one of the ways they can actually attract

significant money into this deal, pricing it at a discount to the likes of some of its competitors. i'm just wondering do you think that's the wrong strategy? that seems to be the best value proposition for a company looking to attract money away from competitors? >> i think that is maybe the right action to go, to attract investors also. we still believe the valuation should be between 230 and 240 billion u.s. dollars, about 30 times p/e of 2016 for physical year earnings. which we believe is reasonable. >> henry, when you think about the valuation, though, the company would tell you, well look, there's still room to run once we go public creating the value for shareholders in the public market for employees and for shareholders like yahoo! and softbank which aren't selling much of their stakes. i'm just wondering, why do you

think that the company should be pricing that ipo higher to capitalize on that valuation sooner rather than later? >> no. i think the -- for the whole china internet space actually for the first half of the year, pretty strong market and i think it's a good time for the company to really pricing to take advantage of the market and using the money to invest in the emerging drivers for the company in the long term. >> when a company is already this big coming out, it makes it difficult to think about growth prospects. if you're taking the pro-growth side on the alibaba story, why should we believe it can get so much bigger before we see it expanding outside of china? >> no. in china you'll see the markets there's room to go. just think about the consumption over the power over there and also the increasing internet

penetration and the mobile usage. internationally, we also believe huge room there, you may know the company make several acquisitions in the u.s. for the past year also. i think in the future, the international market is the direction that alibaba should really target and for the future, yeah. >> henry, what do you see as the follow on trade for softbank, for yahoo! to stocks that have seen the alibaba effect over the last year and specifically over the last couple of weeks? do you think that upside continues and if you're an investor in one of those companies, what would you do with your shares? >> yeah. i think the benefit from this ipo for yahoo! is going to continue. i think as i mentioned i'm positive on long term for alibaba group. i recommend investors to remain positive on the shares and make investment to alibaba group.

>> henry, you have a price target of roughly 100 bucks on alibaba. so quite some upside from where we expect that to price. we'll have you back and talk about it once we have it on the public markets. >> yeah. as i mentioned, the valuation for the company 230, 240 billions u.s. dollars, translating about 100 dollars per share, that is my value for alibaba share. but in the future i still see the potential is there in particular, i believe most of the investors underestimate the intrisic valley of alley pay, the leading on-line payment service in china. so i believe this recently restructured agreement between alibaba group and ali pay incremental $20 billion to $25 billion u.s. dollars to alibaba shareholders. >> henry from jg capital, thanks. >> mike, mark tweeted skipping

lunch have to make room for the alibaba ipo. >> i struggle with that kind of idea that we're literally mechanically having to sell things to raise cash to bid. not a lot of allocation is going to be out there in terms of u.s. investors. psychologically this sense we have a company that's going to be a mega cap on day one, it seems like to a lot of people a must own, one more reason not to buy something today, maybe reason to sell something. feels like a culmination of a lot of things. we've been anticipating this all year so the idea that now it's here, maybe doesn't seem like the time it's the start of a move for the sector. maybe why the weakness in the overall nasdaq. i don't know. there was news that almost half the nasdaq this year, down 20% high to low. below the surface a lot of selling happening. >> some say it's the convergence of big trends, liquiditity, china, the internet wrapped up into one. >> and culminating. great seeing you as always. >> when we come back, microsoft finalizing a $2.5 billion deal

for the maker of mindcraft today coming on the heels of amazon's $970 million buy of twitch a couple weeks ago. the vice president of a gaming at amazon breaks down both deals with us in a minute. she has a major deal with nordstrom and only 13 years old. design prodigy isabella taylor joins us later on ska. "squawk alley." . run the numbers on that. well, unlimited talk and text, and ten gigs of data for the five of you would be... one-seventy-five a month. good calculating kyle. good job kyle. you just made partner. our best-ever pricing on mobile share value plans for business. now with a $100 bill credit for every business line you add. my motheit's delicious. toffee in the world. so now we've turned her toffee into a business. my goal was to

take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would make money doing what i love. we created legalzoom to help people start their business and launch their dreams. go to legalzoom.com today and make your business dream a reality. at legalzoom.com we put the law on your side. i research. i dig. and dig some (trader more. search. because, for me, the challenge of the search...

is almost as exciting as the thrill of the find. (announcer) at scottrade, we share your passion for trading. that's why we rebuilt scottrade elite from the ground up - including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade, our passion is to power yours.

news in the world of gaming. microsoft buying the maker of minecraft for $2.5 billion on the heels of amazon $970 million buy of twitch last month. what's amazon's strategy in the gamie ining market? josh is in san francisco with the man behind amazon's gaming world. >> i'm here with mike frasini, vice president of amazon game. i need to ask you to start with today, about the big news. microsoft buying moyank, company behind minecraft, $2.5 billion.

what do you think it means for the broader trends and themes in the industry. >> when i look at that i look at the game and content and the cool thing about minecraft is it's a game you can play across devices, spans young, old, and really shows when you have creative new ideas in the games business and the experiences you can create are fresh and unique, do all kinds of things people never thought possible. minecraft is an example. >> we're at a video game conference in san francisco. a lot of interest in amazon's decision to buy twitch. how do you sort of see twitch's role with an amazon's broader video game strategy? >> sure. if you think about amazon is investing considerably in games. we've been selling games for a long time. we have a business where customers come to find, discover and buy new games. second piece is we have amazon web services which is game developers are using the amazon cloud infrastructure to run a lot of their back-end components of their games and then if you

look at amazon game studios, and then the last part is twitch. really we've already been making a lot of invests and twitch is another step in the same direction. >> can you see a point where amazon might use twitch in different ways? could it be the live streaming platform for different kinds of entertainment besides games? >> well i mean, who knows. i think the main thing is with twitch as we think about it, first and foremost, fantastic community, and we look at that community we want to make sure that twitch does -- continues to do what they already do so well. they've been growing really fast obviously and it's just a fantastic place to go and talk, you know. it's about socializing around games, watching game play. talk about games and non-games related as part of that community. the first step is like keep going and then over time will be looking for ways we can work with them to help them work faster in what they want to accomplish. >> last week apple announcing iphone 6 and they were excited what that's going to mean for

gamers. how do you think of the competition? what does fire phone offer the iphone 6 doesn't offer for gamers? >> fire phone has a number of different things. a premium product. it's a very high-end phone at a fantastic price. it's 99 cents on contract. and then the -- if you think about dynamic perspective, a big new area of what the phone offers in the technology offers, it gives you is a new degree of freedom. as you're playing a game you can interact with the game in different and new ways and we built a couple games in that vain. as a game consumer you're thinking how do i engage with this content in a way intuitive to me and allows the controls and inputs to go away so i can enjoy the experience and dynamic perspective is set up in a way that allows game developers had then game players to be able to have a new way to blue aplay mo intuitive to them. >> when we think about amazon we think about e-commerce, cloud

services, but you have your in house game studios in seattle. talk about what's going on in the studios? >> sure. first and foremost like we want to talk about the community we saw when we created these studios. basically, you have a couple of -- we saw two different ends of a spectrum in game development and in games made available. on one end you had the proverbial match three game or casino games, things like that, it up if games, word games, and then on the other end multihundred person teams making games over several years. we saw this opportunity in the middle where you could have a team of incredibly talented people have a lot of creativity and be able to take their game and they have enough resources to make a high-quality polished game but not multiple hundreds of people over multiple years where the financial investment so high you can't take risks. a big part of what we're doing, we want to enable a lot of creative autonomy, risk taking and bring -- do it through finding the best game developers in the world.

some of them work for us, some of them we find as part of independent companies. >> mike, of amazon, thank you for your time. guys, i'll send it back to you in new york. >> thanks so much josh lipton in san francisco. >> european markets about to close. bring in simen to tell us what's moving across the point. >> it's worth pointing out the week that the super cheap four-year loans from the ecb become available. we'll know what the take up is on thursday. probably the december issue we'll get more interest from. but that's an underlying theme through the week you should be aware of. we have rebounded above $97 a barrel on oil but oil is still a key focus for many, many people, partly because of the china figures that came out, lack of demand there. you see a lot of the oil services stocks in negative territory today because potentially they could bear the brunt of any cost cutting by the oil majorers as some projects are obviously at lower prices of oil become less efficient, less of a go. air france is in negative

territory there. canceling more than half their flights had this week because of a pilots side. this is ones french side of the business. be aware the brewers have been active. you had that rebuttal from the heineken family. we learned sab miller made an approach it take over high na can. they refufed them. the story is whether that is sabmiller's move on heineken is defensive against a bigger takeover threat from anheuser busch inbev. david faber reports they're not trying to raise funds for that takeover but the space, guys, is very active. back to you. >> thanks so much. when we come back, gm announcing the first payouts to families affected by faulty ignition switches this morning. the man running the gm compensation fund ken feinberg will join us with details on a first on cnbc interview in just a moment. opinions. there's no shortage in this world.

who do you trust? whose analysis is accurate? how do you make sense of it all? a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor. where the reward was that what if tnew car smelledit card and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at buypowercard.com

[ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪

gm's announcing the first payments to families as part of the gm compensation fund. phil lebeau is in washington with the man behind the fund, ken feinberg. >> thank you very much, carl. bring in ken feinberg. you announced the first statistics if you will in terms of the number of claims that have been filed and those that you've looked at that you've deemed as eligible. let's look at these numbers right now. people will find this interesting. a total of 445 claims have been filed since you opened up on

august 1 for submissions. but so far, you've only determined that 31 are eligible. let's clarify. you're not saying the other ones are ineligible. they're still in process, right? >> that's exactly right. we've received these claims. some of them are woefully inadequate, no documentation, no signatures, no correct addresses. we're not rejecting the claims. we're finding 31 will eligible and the remainder are currently being processed and working with the claimant to firm up those claims. >> what's interesting, if we look at the numbers again, 19 of the death cases you've determined these are eligible for payments for the longest time, general motors said 13 deaths. i mean they stuck to that like it was the truth and could not be discussed in any fashion. you've already surpassed that number in terms of looking at these cases and saying yeah, we think there are at least 19 cases. >> that's right. now gm in fairness to gm, they were looking at it from an engineering perspective. their engineers saying we look

at the switch, it was the cause of the accident. we have a much more lenient standard. was the -- does the evidence demonstrate that it is substantially likely that the switch was the proximate cause of the accident? that's an easier tort law standard to me. >> could we see the number of death claims go substantially higher. 125 have been filed, we're not saying all will be deemed eligible. we could see that number go higher. >> clearly the number will go up. it's speculation how high it will go. clearly based on the number of claims that have been found eligible and the number that are in the cue that we're looking at, the number will continue to rise. people have, as you know, phil, until the end of the year to file a claim. so we'll be seeing an increase. >> how many of these do you expect to make payments within the next month or two? >> i would think that 19 that we've deemed eligible, i would say that they will likely be paid before thanksgiving.

now one of the problems people have is, can the family agree on who should receive the money? we have a fair number of disputes where a child died, a young drover, the wife and the mother and father split, the mother says don't pay the father, the father says don't pay the mother. and we have to try to work those out. >> how much of their disputes are also about the amount? will there be much negotiation? will they say look i know you're offering hypothetically $4.5 million. we think it should be $7 million. >> i'm not interested in negotiation. the protocol that everybody knows, it's very transparent. we've laid out the formulas that we will use. these are the formulas. here are the calculations. if you want the money, sign. we have an arrangement. i'll send the money. if not you can sue. >> i know you don't want to betray confidences from the meeting with families. you've met with. >> about a dozenen. >> give me a sense of what those

meetings are like. when you sit down and talk and they go over these cases give me a sense of what the meetings are like. >> it has nothing to do with money. when families meet with me, when you know this from 9/11 and bp, when families meet with me they have two objectives. either one, they want to vent about life's unfairness. why did my son die, mr. feinberg? >> do they want to vent about gm? >> no. mostly they vent about life's unfairness or they want to validate the memory of a lost loved one. my son was a great student. he would have gone far. he was a wonderful boy. or my daughter was terrific. and it gets very, very emotional. as you look at these cases, you expect the first payments perhaps in the beginning of next month and so forth. general motors has estimated that they hope 90% of all claims will be cleared through this fund. is that a fair estimate or do you think you can get higher

than 90%? >> i think the goal, the test of this fund is to get higher. as you'll recall in 9/11, 97% of all families filed and bp about 92% of all families filed. >> so far you think? >> i think so far the claims are coming in. people are getting their documentation together. i would hope gm is correct, i hope we would beat 90% as we have in the other claim programs. >> you've done this through a wide variety of cases over a number of years. what has surprised you the most about this one with gm? >> the age of the accidents. you see here, we're reconstructing accidents that occurred ten years ago. the car is gone. the black box cate data is miss and we have to use circumstantial evidence, photos, police reports, to reconstruct the accident to show likelihood the ignition switch. >> estimate as to how many death claims you think we'll see with

this? >> speculation. i can't. >> higher than 19? >> of course. because we have some in the cue right now, so there will be more than 19. how many more, i think is spec clative. >> ken feinberg joining us first on cnbc, thank you very much. you heard the numbers and you also heard what ken had too say there. just because we only see 31 at this point does not mean that rest have been rejected. they're being reviewed and we could see this number go much higher. >> thank you for that. phil lebeau with ken feinberg in washington, d.c. take a look at the nasdaq today. you're looking at a loss of more than 1%. that's as art cashin pointed out three times the loss on the s&p this morning. tesla, the biggest loser. it was downgraded by morgan stanley, but there is a creeping sense among some he on the floor perhaps, kayla, there is some as carbon says a pre-alibaba setup maybe trying to raise funds to get a piece of the ipo or something else. >> or the fact that the valuations had gotten ahead of themselves, the momentum sell-off became the momentum

correction and we are seeing some air taken out of these stocks. there will be a rebalances of portfolios this week no question about that. >> absolutely. when we come back, microsoft finalizing the $2.5 billion deal for the creator of minecraft. we'll go behind it and see what it means for microsoft in a moment. rick santelli, what you watching today? >> we're watching yields but we always try to keep it simple. some of the easy technologies have kept you from being on the wrong side of the marketplace. think 245 with tens. that's changed. now we're going to shift a different part of the curve to give you the simple answer to where rates are going to go. what part of the curve? you have to come back to see after the break. location. location. (shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here, you're going to need an app that connects to all your systems. so they can bank, shop, do what they need to do, and you gotta do it fast. before the competition does. it's tough out here;

you better be on the right cloud. today there's a new way to work. and it's made with ibm. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.

coming up at the top of the hour, former yahoo! interim ceo ross levinsohn is with us on why the alibaba ipo is marisa myers' moment of truth and whether the offering will live up to all the hype. bob peck and herb greenberg duking it out over amazon's shopping list. one says they should buy best buy, the other says radio shack. they will face off. big deals brewing in the beer space. thank goodness most of our traders happen to be expertses on that subject. they will pour a cold one, trade the names, much more coming top of the hour.

carl? pop you a brew as well some. >> i'll be right over. >> see you soon, scott. thanks. over to the cme group rick santelli good to have you at your post. >> i was out last week if you're just tuning in or listening on the radio we had a settlement the friday before i left a week ago friday, that was above that 245 level which was significant. once you had a close above that level, expect rates to rise and, indeed, they did. let's open the chart up. look the at a four-year chart going back to september of 2010, five years and ten years. after you get good looks of both of the charts, my rendition of the charts and the next area you're supposed to pay close attention to. we like to keep it simple and a lot of technicians have methodology out there but what we're going to look at is very easy and it deals with a day. september 5th, 2013, on that

five-year if you looked at that chart, that four-year chart, the high yield we're getting closes to testing 185 close. the same corresponding yield for tens on september 5th of 2013, 299. we know at the beginning of the year we had our second test creating the double bottom at 3%. so we watched ten years until they closed above the 245 yield. now what's going to contain the market? it if you're looking to be short because the ten-year gave you the signal, when do you get out? well i would pay attention now to the five year. the five year is in control and if you don't believe me look at any research letter from any major investing firm out there or bank out there and they're telling you in front of today's -- this week's fed meeting, that you're best if you're looking for rising rates to short the five year and that is true. you can see it in the curve trades. but, until we close above 185 and today we much up intraday around 182, what you want to do is protect your short position,

but if it backs away from 185 probably want to be more conservative. but if we happen to go through this, especially within a first one or two tests we'll buckle up. because what that would tell us is, is that it isn't necessarily about fundamentals although they have improved. retail sales wasn't bad. empire was strong today. the feel good services are doing well. but in my opinion, when you have kind of the rent control mentality in the market we don't know what the fed is going to do. they could change their mind. but if they do, this should give you your warning. 185 and higher on the five year signals you're going to get closer to 3% in the ten year. you're all curve traders. back to you. >> i'll take it from there, rick. thank you for that education of sorts on this monday morning. when we come back on "squawk alley" what did you accomplish at 13? our next guest had her fashion line selling her collection to

nordstrom. she will join us on the other side of this break. guys! you're not gonna believe this! watch this. sam always gives you the good news in person, bad news in email. good news -- fedex has flat rate shipping. it's called fedex one rate. and it's affordable. sounds great. [ cell phone typing ] [ typing continues ] [ whoosh ] [ cell phones buzz, chirp ] and we have to work the weekend. great. more good news -- it's friday! woo! [ male announcer ] ship a pak via fedex express saver® for as low as $7.50. [ male announcer ] ship a pak via fedex express saver® it's monday. a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support,

we help you shine every day of the week. centurylink your link to what's next. with the top speedou compare of comcast the top speed of business dsl from the internet... phone company well, there's really no comparison. why pay more for less? call today for a low price on speeds up to 150mbps. and find out more about our two-year price guarantee.

comcast business. built for business. extra curricular activities help provide a sense of identity and a path to success. joining the soccer team. getting help with math. going to prom. i want to learn to swim. it's hard to feel normal, when you can't do the normal things. to help, sleep train is collecting donations for the extra activities that, for most kids, are a normal part of growing up. not everyone can be a foster parent... but anyone can help a foster child. seeing more selling pressure on the nasdaq, down more than 1%. i was looking at the top six losers all have gains for the past 12 months between 30 and 86%. so it is a lot of the momentum names that have done well over the past year getting hit the

hardest today. >> something you can expect to continue as we continue on the road toward the alibaba ipo this week. what were you doing at age 13? were you in the society attending college or debuting a line of your clothing at fashion week? chances are you were not. isabella is. her designs in nordstrom and joins us from her hometown of austin, texas. good morning. >> good morning. >> talk about the road from getting your company from just an idea and a bunch of drawings to a veritable business and getting that business to new york fashion week? >> it's definitely been quite a process. started out as a hobby i loved to do and i noticed a demand. i would get stopped on the street and people would ask me where i got something and it was always something i designed. that was excited. that's when i realized it could become a business. i got a website. started selling and now my fall line is in nordstroms which is very exciting and i just debuted my first show at new york

fashion week and it went very well. it's really exciting. >> quite a stunning rise and congratulations to you for that. when you talk about building your website and marketing your clothes how did you gain a following and how did you market and what social media did you use to get the word out? >> i've always been very active on social media. i started out using facebook but as i got older twitter and instagram, i'm very axtive on actually. just started a youtube channel and my channel is says bela rose taylor. that's exciting. another way to connect with people. >> isabella, it seems kind of silly in your case, but facebook, you're technically not supposed to be on it until you're the age you are now. as you look at social media, you say you want to be a global brand, and expanding that, how do you plan to use it? talk about pinterest, talk about twitter and facebook and what you see as the strengths of each? >> i think it's important like all social media, it really is my generation who's using all

these things. i think it's important to develop a following and just to connect with people and keep everyone updated on what you're doing. it's such a powerful thing. i think instagram is great you can share pictures. back stage and twitter, just staying updated on what you're doing, day to day. facebook is great for long her posts. so many different social medias, that you can use, and i think they're all so important. i think you need to have all of them to really get the full effect. >> isabella, we watched the stock prices of companies like abercrombie & fitch and american eagle and air row postal, seems they are falling out of favor with kids your age. what other retailers do you think are lacking and what niche your designs fill you feel your peers can't get elsewhere? >> one thing that makes me unique, i am designing for my audience. i am my own audience. that definitely makes me more unique as a brand. all these things are things missing from my wardrobe in a sense. i think that's one thing that maybe an older designer is

missing because they aren't their own market. >> isabella, your mom said you tried a lot of things but art and fashion always stuck. obviously you're over the moon great at those things. what else did you try before you settled on these two? >> i definitely tried music. i played the piano and violin for a while but i always was passionate about arm and when i discovered fashion i realized they were similar with color and texture and form, so to me, i really just fell in love with these ways to express myself. >> what's next after nordstrom, isabella? >> well, actually, just showed my spring line so my spring line i'm working really hard on that designing next fall and working on my youtube channel. >> well, we will certainly tune in to that. appreciate you joining us. congratulations on a swift rise up for your company. says bela rose taylor. >> thank you. >> when we come back microsoft shelling out over $2 billion for

the makers of minecraft. what sa tell la nadella's first big purchase means for the company. my name is karen and i have diabetic nerve pain. it's progressive pain. first you have that, that feeling of numbness. then you get the hot pins. it got to the point where i felt like, almost like lightning bolts, hot strikes into my feet. the pain was, it was... i just couldn't handle it, so my doctor prescribed lyrica. the pain has been reduced and i feel better than i did before. [ male announcer ] it's known that diabetes damages nerves. lyrica is fda-approved to treat diabetic nerve pain. lyrica is not for everyone. it may cause serious allergic reactions or suicidal thoughts or actions. tell your doctor right away if you have these,

new or worsening depression, or unusual changes in mood or behavior. or, swelling, trouble breathing, rash, hives, blisters, changes in eyesight, including blurry vision, muscle pain with fever, tired feeling or skin sores from diabetes. common side effects are dizziness, sleepiness, weight gain and swelling of hands, legs and feet. don't drink alcohol while taking lyrica. don't drive or use machinery until you know how lyrica affects you. those who have had a drug or alcohol problem may be more likely to misuse lyrica. [ karen ] having less pain, that means everything to me. [ male announcer ] ask your doctor about lyrica today. it's specific treatment for diabetic nerve pain. to hear more of karen's story, visit lyrica.com. right here. with a control pad that can read your handwriting, a wide-screen multimedia center, and a head-up display for enhanced driver focus. all inside a newly redesigned cabin of unrivaled style and comfort. ♪ the all-new c-class.

at the very touch point of performance and innovation. ♪ i know what my money is doing. of performance and innovation. i rebalanced my portfolio on my phone. you know what else i can do on my phone? place trades, get free real time quotes and teleport myself to aruba. i wish.

microsofting finalizing the $2.5 billion deal for minecraft. it's currently the second most popular paid app on the iphone despite already being out for nearly three years. the company says minecraft will remain available on all current platforms including sony playstati playstation. a piece in the journal last week that some minecraft followers think that the culture of microsoft could ruin the game and the following around it. do you think that's a risk? >> like the indy band that goes to a big label. oh, you know they're going to ruin it. but i think microsoft is looking at this not just as a money maker, $330 million in 2013, it is a money maker in cash flow positive, also potentially as a platform. that's how we got to judge this. are they able to build on this virtual world possibility in minecraft? are they able to let those people who are working in minecraft now perhaps even as kids into the windows ecosystem and make them productive. >> great post written by marcus person the founder all over

twitter today. talking about why he's leaving. if i ever accidentally make something that seems to gain traction, i'll probably abandon it immediately after selling it. >> he saids the word it's not about the money. which is pretty amazing. >> even though he tweeted it would be worth $2 billion if he ever wanted to sell it. >> yes. >> but that's a great story. we will see. cramer still believes it is a precursor to an xbox spinoff, something he would like to buy in jim's words. this sell-off on the nasdaq will get attention this afternoon. we walked you through the losers today but tesla, activision, trip, micron, celgene. if you made money in the past 12 months a lot of people are selling it today. >> some of the conventional stocks you would think would see air let out of them ahead of the alibaba ipo. ebay, amazon, ten cent which is traded in hong kong. cramer says watch out for mobile eye, gopro, some of the other ipo that investors bought they will have to reposition out of. >> yeah.

even salesforce, netflix, zynga, ebay. >> we're not through what's going to be -- >> it's monday. >> a volatile week with the fed meeting and the scottish vote and ipo. so we'll see. the great scott wapner will take us through the next half hour. >> thank you so much. let's meet joe ter nova, director at inver tis. stephanie link co-portfolio of jim cramer's trust. pete najarian option munster and josh brown of rit holtz wealth management. we could begin with the biggest ipo, alibaba set to post on thursday, trade on friday and new developments breaking about the pricing. kayla tausche has been the one doing the breaking. and she joins us live right now with the latest. kayla? >> she's getting ready but her reportin