. it's 8:00 a.m. at google headquarters in mountain view, california, and 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ ♪ ♪ welcome to "squawk alley," joining us is jon fortt, kayla tausche has made her way back from a couple of days off. good to have you back on a busy day. the dow down almost 200 points, every component is in the red. the lowest close here would be since january 30th. s&p back below the 200-day moving average, after oil saw

its biggest inventory bill in about four months. >> the problem is in the global slowdown, commodities in energy space, let's look at the s&p 500, carl is right. we're essentially sitting right near the lows of the day, let's not quibble about a couple of points and the weaknesses in energy and materials and the global industrial complex. let's take a look at some of the new lothat's a good way to look. a slight expansion in the global commodity space, so alcoa, another new low, a $9 stock and freeport is another $9 stock. it's been almost every day. but the dow is a little weaker than the rest. there's a numb of dow components at new lows. chevron among energy new lows, a dow component at a new low. conoco phillips new low. marathon a new low. a lot of the big names are either at or near new lows. amongst the dow, dow is a little weaker because a number of noncommodity components are at new lows.

walmart, 52-week low at $68. procter & gamble at 74, that's a new low. caterpillar is not far from a new low. dupont, no the far, intel also believe it or not, not doing very well this year, either. also weak, this is one of the reasons you're having some of the big sectors that are low here, multi-industry, the big global names, owens-illinois, rockwell, dover, illinois tool. the companies i cover that do the parts for aerospace and the parts for buildings are all weak again today. this is again the global slowdown story, not necessarily commodities, but global slowdown story in general. glencore does not trade in the u.s. they trade in london and came out with their half-year commentary. their cash flow was down 30%. this is one of the biggest commodity companies in the world. they talked about hedge funds

shorting the commodity space as one cause of the decline. we know the slowdown in china is the main cause. that stock has been in freefall since june. it is no coincidence, carl that june is when the notable slowdown in china happened. glencore is essentially down almost 30% since china really started sliding. so it's the global commodity, global slowdown story weighing on the markets. >> we'll come back to you later, bob pisani. as far as tech goes, apple playing defense this morning the a new survey from research firm music watch found that 48% of people who tried apple music have since stopped using it apple is refuting that number. telling cnbc this morning that 79% of people who signed up for the trial are still using the service. joining us this morning. 9 to 5 mac senior editor mark gemram who is having a pretty good week after the scoop on

apple tv. let's talk music, you say regardless of what the numbers are, it's no the great. if you're running a number with consumer satisfaction as high as apple's. >> these are not great numbers. let's start with the numbers they released a few weeks ago. after the first month of the service being out, on ios.4, they said apple music has 11 million users. which is the same number they said itunes radio got in the first week of its launch in september of 2013. and itunes radio didn't have its own software update, tv ads, billboards. so those numbers being the same for both services isn't great. especially because they're two completely different fields of the same category. so 11 million, i wouldn't call it a home run. >> is it possible that the truth is somewhere in between what music watch has and what apple says? depending on what you mean by not using it. maybe in music watch's survey they're asking people, are you using it right now, they hadn't

used it in the past week and they say no, i'm not using it. but to apple, they used it a week ago, apple figures hey maybe they'll use it next week so they're counting the user at still using it. is that possible? >> i 100% agree. what apple is telling websites that their 79% number, that you mentioned, if the user used apple muse nick a week. they don't specify how many songs they streamed, or if they just use the library feature. which preexisted on the ios app. it doesn't specific spes fi streaming on the radio. the big picture is the 11 million number that we've known since august or the beginning of august. that's not a great number. >> that's what people should focus on, as well as what are the numbers going to be after the free trials begin expiring in october. >> that's certainly going to be one of the most important points for this service, once the free trial rolls off at the end of

september. let's talk tv a little bit. when we had you on earlier this year, were you one of the first to point out that apple pulling back prices for the apple tv was a sign there was new hardware coming and you said the hardware is going to look appealing to the consumer. even if the programming is delayed. what should we expect? >> we should expect a new box. it will be a bit thinner, a bill wider, a bit more powerful with a new processor, more storage. inside the is the big deal here. there's going go to be siri. users will be able to search with their voice for different content across different apps. if you want to look up a james bond movie, across sony crackle, or the apple store or maybe some james bond theme songs you'll be able to do it with just your voice. there will be apps, which is big for content. the way apple is going to position the app store is to allow media companies and content makers to release and create their own apps to the

apple tv. it will allow content makers to release new types of content apps on their own schedule. historically apple tv has updated every few months with new content channels. now users won't have to wait for that because the companies will be able to release their content as they're ready. >> mark you've reported that this was for a while it looked like this was going to be more of a summertime release. that was delayed obviously until now. why now? >> apple has been working on this new apple tv, we've been reporting on this as early as fall 2013. they kept pushing it back for a number of reasons. ranging from initially wanting to launch with the new web tv cable replacement service. they were expecting to release it earlier in the summer and announce it in june at the worldwide developers conference. but the new apple tv is based on the new ios 9 operating system that's coming to the iphone and ipad in mid september. and apple has a new sense of wanting to follow through on these releases with a new focus

on polish and stability. so since the apple tv and the iphone are going to run the same operating system, apple decided to allow its engineering resources to focus on the iphone upgrade and then when they're ready, move on to the apple tv. so staggering the releases. >> mark, that's a concern i have, is engineering resources. because when you look at apple music, clearly there are some things they could fix there you look at the tv. if there are creating a new app store to have to support more developers, there are more resources there. there are other things that apple is trying to do. kind of revive the ipad. are they organized in such a way that they can really do the streamlining where they need to do it. and do the launching where they need to do it, and keep all the software working and get it bet centre. >> apple is a giant company on paper. about but the amount of people they have per team working on different features is quite small compared to some of the other companies, major companies in the fortune 500. but i think apple knows how to separate resources as necessary.

a good example that i sometimes give people is the apple watch. when they were making the apple watch, they didn't put the iphone or ipad team to work on the watch. they hired a new group of people, moved some stuff around and created a new team for that. when they know they have to make new teams and let resources sit in their own counterpartments, they know how to do that. >> mark gereman, owning the apple beat for us, mark is from 925 mac. the dow is close to session lows, 181, not a lot working. happy anniversary google. the tech giant went public 11 years ago today, a look at what the future holds for them.

almost every dow component in the red, except for home depot, which we know has had a good earnings report in the last day or so. but chevron, walmart, intel, unh, exxon, cat, dupont. you name it joining us, shelly palmer joins us at post 9, managing partner with landmark investments. happy anniversary google. 11 years ago today the company went public on the nasdaq, priced at $85 a share. jumped 18% on the first day of trading, over the next 11 years on a split-adjusted basis, up more than 1500%. here's a look back at what mark haynes had to say on ipo day.

>> larry page, at the nasdaq market site this morning. set to light the wall in just about 20 minutes. google finally begins trading today. we're one day closer to this not being a story. >> speaking of google, the company did announce a new router today, it will cost about $200 and is controlled by an app. it's funny. a lot of retrospectives today, shell, about google. the "times" ran an editorial that week in which they called the company scrappy. in their words. who knew, right? >> and all of a sudden last week it becomes alphabet and mom and dad says hey, kids, search isn't cool any more, we're going to go make electric cars and you guys deal with search by yourself. ultimately, i think the guys have done an unbelievable job and all of this alphabet talk i think you know probably isn't as harsh as it should be. >> what's your read on alphabet? what is your base case on why the company is doing this? do you think we will eventually see a google spin-out?

a reipo of that company? >> that's a great question and everyone is speculating about it people i know who are very familiar with the situation are scratching their heads, too. you could have just reported differently, you could have had tighter, you know, more interesting reporting. here, there's a message i think that's been really sent to the rank and file that says hey, mom and dad literally don't think search is cool any more, we're going to go be something else and you guys do search. jon, isn't that your read as well? >> yeah, i think they wanted to maybe give some people some responsibilities. the new ceo. titles they couldn't have had otherwise. i have a sneaking suspicion that they're in investment mode in some of what they see as growth areas and are trying to shake up the culture of the company and get some of the movement, outside of the brand. i'm interested in this google router. a friend of mine at google, not in pr says the genesis of the idea was the difficulty in setting up a router. particularly for your parents,

perhaps, if you're trying to set up wi-fi for somebody who doesn't live with you. >> do you remember the beginning to indiana jones, "raiders of the lost arc" he's going for the golden monkey and there's dead bodies everywhere and he just narrowly escapes? that's the router business. they can say all day long this sfwg to be easy enough for mom and dad to set up or grandma to produce pres a buttle. apple airport is as close to that as can you get. and it still require as few minutes. so google is going to have to prove to me that the just turn it on modes extends to oh, i need to router extend, i need a couple of extra routers in the house. any router will work if you just have to put it up and plug it in. when you need to extend it, get around a wall. you don't have good coverage in the living room, but you do in the kitchen. that's when it's going to get crazy. google, you said you're going to do it, i wish them the best. i like the fact that can you deal with an app and give it a

normal password. but the jury is out. >> xiaomi is also marketing a router, that's very simple, less than $30. much cheaper than what google is putting out there. what do you think the source of the ambition is do you think they're seeing a product that's complicated and it's low-hanging fruit to fix it? do you think this is part of their eventual goal to get more of the world connected to the internet? >> i would argue there's a couple of companies, google being the number one company who are causally related to the size of the internet and the amount of use it gets. the bigger the internet is, the bigger google gets, the more likely you are to use their products and services. i think it's totally on-concept what i don't understand is why google didn't just say, this is how it should be done, folks in the router business, go do this instead they're saying hey -- >> there's the question of data. they say they're not going to snoop in on internet traffic. they're going to see what type of device, rabid om device

across the home is connected to the network. to me that says they're going to know what home security system they're going to use. what phone brands are in and out of the house, et cetera. maybe that's not extremely personal information. >> if you add in nest and all of the others, i think this goes without saying. maybe it doesn't. a few years back. google took their 60 separate privacy policies and combined them into one privacy policy. on that day, big brother was born. i like google and i think it's a good day to mention the fact that hey, privacy isn't what it used to be. and the future isn't what it used to be. when you use a device now, any device, and it's ipv 4, the system doesn't know much about you. when ipv 6 shows up, part of the mac address, the machine identifiers will in the actual ip address. we're minutes away from everybody who can watch your traffic knows an awful lot about what devices are being used, where they are and ultimately your one hash little database

away from knowing who is using them so that may be why they're into it. i would hope not. >> speaking of privacy. a group of hackers who previous stole massive amounts of data from cheating site ashley madison appear to have posted gigantic amounts of data about its customers. the data dump could include personal information of 32 million users, including names, address, how much time they spent on the site. ashley madison condemned the hack saying quote, we will not sit idly by and allow the thiefs to force their personal ideology on citizens around the world. i'm at a loss to tie this to the public markets and actionable stock moves. >> this says something super important to everybody. we all have a number of attack services we don't understand. right? because we're all immature. no matter what site you went on, you went oh i'm going to locke log in. i'll give it a user name and password. a lot of people were lax about

the password they used. it's becoming super clear that anything that can be hacked, will be hacked and may already have been hacked. so today is a great day, no the to worry about ashley madison, but to take your i.t. guys and say where are we exposed, no pun intended and what do those attack surfaces look like? >> to that point, chris hayes at msnbc tweeted something striking a chord with people. he said forget ashley madison. replace it with medical records, your full income tax returns, your inbox. >> my suspicion is that the average person on planet earth would much prefer that the data you just described was released to the public than what ashley madison has released to the public. >> those other things have been hacked recently. they don't necessarily get the attention that ashley madison does. but the ashley madison hackers have to be the nicest hackers in the whole world. the nicest thing can you do if you've got this information is

release it publicly. because then its blackmail value goes right down the drain. because then everybody knows it's out there. >> talk about glass half full. >> they're incredibly nice. everybody who is on the site knows that they're exposed. they can do their clean-up. >> another bold case that's being mentioned, it's a great time to be a divorce lawyer potentially. >> let's face it a lot of things on the site, you can't verify. one of the thinks is crazy, is ashley madison is going to verify that that really was the stolen information so tony blair's name showed up, but it wasn't tony blair's email address. do you think the former prime minister was on ashley madison? it's a good movie script, but it makes no sense in real life. >> politicians never do anything like that. >> never. >> fire eye is up barely, but up in a tough take today, shell, always good to see you, shelly palmer. up next we're keeping an eye on the markets, the dow down 196 points, more than 1%.

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stocks continuing to slide lower this morning. ahead of fed mingts coming out this afternoon. bertha coombs is at the nasdaq with this morning's movers. >> we have the nasdaq into inn tune with the rest of the market. down about 1%. nasdaq 100 slightly better and the reason is that because of analog devices, analog devices earnings topped. its outlook was strong. it's one of the few standouts we have seen in the chip space and for a time today, that actually carried over and had a bit of a halo effect. the semiconductor index. was higher but now it's down about with the rest of the market pacing. a couple of stand-outs still. skyworks moving out, analog

devices makes that push technology in the apple watch. but boy, apple continues to be a drag here on the nasdaq. giving back what it had gained last two positive sessions. now the second session in a row to the down side. at a one-week low. it's kind of responsible for the most drag on the nasdaq 100 for six points, cue the down side. still up for the year, it is technically weak. below all of the major moving averages. ahead of the announcement coming in september. we just don't seem to get much movement for apple in terms of the stock being able to sustain any kind of rally. biotechs, which have been on fire this year right now we're on pace for a negative quarter. down for the quarter. after having had ten straight quarters of gains so it looks like folks are moving out of some of their winners, putting a little cash on the sideline as they try to figure out what the fed might do.

in september. meantime, did you hear the story about the royals coach? he got an apple watch, as a gift from mlb, and he's not allowed to use it in the dugout because they technically consider it a cell phone, which are banned by mlb in the dugouts. so even though it was a gift from mlb, he's not allowed to use it. >> i'm not sure that would have helped them. we're down 210 on the day. germany is down 2% as they close, simon hobbs. >> it's a rough day for europe as you can see. we were down from the open on china concerns. the wall street open and the move on oil has dragged europe further. we're extending losses. you've got two standout stocks today. carlsberg. has a new ceo and he's issued another profit warning, so carlsberg is down over 9%. and glencore x strata, i know

that bob mentioned it at the top of the hour, a big mining giant. saying that in the profit warning they have issued, the trading orangeses will not make up for the losses in diversity mining. i want to point out because of the sheer value destruction. the stock has more than halved over the last year. it's worth $36 billion. so that's the equivalent that it's actually lost during that period of time. a lot of those basic materials stocks are down again today because of china. important to point out what's happening in europe in contrast to this market this is how we've traded in europe here, compared to the s&p here. over the last two weeks. and you'll see now that europe is down over 5%. a lot of people that have gone into europe as the place to be for 2015, are finding that the fact that it is so internationally exposed, this isn't about greece any more, this is about emerging markets and currencies means they're suffering greater losses. in the meantime, the german parliament overwhelmingly approved the third greek

bailout. you see wolfgang scheubler. said there's no guarantee that the bailout will work. it means that the eu rescue fund, can disburse the cash to the greeks this evening, ready for them to pay the ecb tomorrow. guys, back to you. >> market down 217, the lowest close almost of the year. s&p below the 200-day, we're back in just a minute. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade, we looked for the best price, and the trade went through. do the other guys guarantee that? didn't think so.

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good morning, everyone, i'm sue herera with your cnbc news update at this hour. south africa's justice minister says he is putting pistorius's release from prison on hold until his case is reviewed again by a parole board. the minister says pistorius's move to house arrest, scheduled for friday is too early. he has served ten months of his five-year sentence for killing girlfriend reeva steenkamp in 2013. the government is inviting citizens do use yelp to review federal agencies. hoping the feedback will help the agency does a better job. taxpayers can weigh in on the irs and travelers can rate tsa screeners on whether they're doing a good job. republican presidential candidate mike huckabee

criticizing the iran nuclear deal says iran's intention was to quote bring death to america when he spoke at a news conference in jerusalem. he is visiting israel to meet with officials regarding the nuclear deal. democratic presidential candidate bernie sanders continues to draw big crowds on the campaign trail. more than 1,000 people turned out at the university of nevada reno to hear sanders talk about child poverty rates, universal health care and free college education. you're up to date with your cnbc news update. let's get back to "squawk alley." thank you, sue, let's get back to the markets, which are in the red today on the back of a surprise build in crude inventory and that's of course ahead of the release of fed minutes a little bit later on this afternoon. the dow, s&p and nasdaq all down more than 1%. let's bring in ben willis with princeton securities group. ben, is this your

run-of-the-mill data-driven selling, or is there something more that you're seeing? >> i think it's data-driven at the back end or to the lows we've been taking. but i think we witnessed a head fake. the u.s. market futures gave us an idea we weren't in such bad shape as europe and i think the european selling used the bids that we had in the united states to raise money somewhere else. it was european selling, i have no doubt. as you know, simon just pointed out, the pressure on the european markets going into the close just closed right now. added to the pressure worldwide. so that i think was the most important trigger. the inventory build certainly did not help the energy complex in any way. >> in prior sessions, the u.s. market has been able to shrug off the sentiment from europe and stage a rally in the afternoon. are we being set up in any way for that today? >> i believe that is entirely possible. now that europe is closed, we'll look at it and i'll have a better feel for it around 2:00. that's the way i would trade right now. you're seeing good buying opportunities if you are a buyer

today. that's the way we've been trading at princeton based on what we're seeing. but we broke all kinds of levels, we broke the 200-day moving average the with the idea that we're still in the trading band. the buy the dip verse not been chased out of the market. when you buy the dip, you haven't been greatly rewarded, but you haven't been punished. until you're punished, it will stay in place. >> we lost the nasdaq 2,000, we're not too far from a 16 handle on the dow that would get people's attention. >> it would on the s&p, the buy the dip mentality is around the 2040 level we keep hitting the resistance level at the 2100 level on the way back up. we have failed to break through it with any kind of significance. that's why i think we still stay in this band. the troubling place in the broader market is the russell 2000. a place where i i have seen institutional money investing, but not been going well. there's a great deal of pressure. the idea that the global economy, the strength of the

dollar is being impacted. the dow jones industrial average is being impacted because of china and the pricing of the dollar currency. so the safe haven should be in the russell -- that's not playing out right now and that has a lot of big money managers nervous. >> ha does that tell you about the fact that it's normally the russell and the high-yield indexes that investors look to as some sort of leading indicator as to where the rest of the broader market is going? >> it's disconcerting to me as a long-term investor. for a trading perspective, a lot of people don't pay attention to the russell. it's more for the long-term investor. the pension funds benchmarced to the russell. you thought you would have some safe haven. but part of the pressure i think you're seeing is from the biotechnology. there's a huge impact of buying the biotechnology in the russell 2000 itself. if you discount that, i don't think it's performing anywhere knee as badly. if you're benchmarked, you're easy to beat the benchmark if

you avoid the biotechs. >> what's the next piece of important data that will send things further one way or the other? >> i personally believe that the federal reserve is behind the curve. they should have naturalized rates already. that by actually letting them go to a hard line of a quarter, allowing banks to make money will bring the money that's sitting on the sidelines, you've been comfortable doing nothing with your money because janet yellen has been done nothing. i believe when you finally get the normalization that naturalization of interest rates that are not being manipulated by central banks. the markets will have a positive reaction. there was so much money lined up, waiting for the move that would take equities down. i don't think the trade is going to happen. >> we get bullish sentiment below 40, for the first time this year. is that not a signal to you that we're getting a bit of a washout? >> i hope so. it's a little late in the year. that's the problem i have with that. i would have liked to have seen it earlier in the year as an indicator. because i still am long-term

bullish. i still think the united states of america, the russell 2000 will be the place to have smart money. if you invested in the dax and others while they were up on the year. in dollar moves it's not anywhere near as good of a turn. ben buffett willis. thank you very much. we're keeping an eye on the market. rare good news for airline passengers and rick santelli, what are you watching today? >> you know we had lee hoskins, former president of the cleveland fed on today. he said the problem with the fed in raising rates was a communication issue. anybody ever see "cook hand luke" 1967. strother martin's famous line -- what we have here is a failure to communicate." but i don't agree, think what we have here is a failure to recalibra recalibrate.

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coming up at the top of the hour, it's all hands on deck today with stocks selling off hashed at this hour. europe, china, fed speak. another sharp drop in oil all on our plate next hour. plus, it's google's ipo anniversary. the stock is up 1500%, where does it go from here? we'll give you the plays and the new social app that's getting backing from sir richard branson and will i am. carl, we'll see you in just a bit.

now over to the cme for the santelli exchange. >> before we get to me and the santelli exchange, i know it's a little issue, i like to stay on the little issue. when we had july cpi read and i brought it out at 8:30 eastern we definitely had numbers arguably cooler than many had thought. when i look at cpi month over month it was up .1 of a percent. the notion of this being the lowest i'm not sure. when i handicap numbers and-day it kind of for a living we've had .1, we've had .1. we've had .7. this isn't necessarily a series that was being paid most attention to. although the net change, the absolute value net change has come a long way since down .7 since january. this was the one. yes, .1 equals the lowest. in order to be the lowest. you need to be zero or lower. small detail it gives you an idea of how people look and people i mean, investors are looking at the market and some of the emails i'm reading.

the word of the day is -- calibration. and whether it's china or whether it's the federal reserve, you know, lee hoskins today blamed much of the ills of the fed on communication. coach la cota's op-ed talked about the average person maybe altering their behavior because of the intricacies of how the fed looks at inflation, but i don't know, you know -- knock-knock, anybody there at the fed? anybody ever talk to somebody on main street? kind of a joe six-pack? i'm sorry, they're no in the weeds on this. they don't see the same inflation to start with and the percentage of inflation they see versus their income is a way different thing than the ivory tower academics. enough said. but on recalibration and on mr. lee hoskins, i liked his last line the best. here's a person who said coach lakoda's arguments didn't hold water. his final statement on the air was, nobody that has ever been in policy making will ever find

a good time to raise rates. okay? think about what that says. think about calibration. also think about calibration in the context of all this once again, how many times have we heard the notion in 77, how congress you know, gave the mandates to the federal reserve. obviously maximize employment and and stable prices. i don't know, stable? 2% is the arbitrary rate that we all put on it. but maybe if we have half the growth, and i really do think that pricing pressure is just a cousin of growth. if you have half the size cousin you're going to have half the size pricing pressures. so maybe they need to recalibrate that. but a better analogy. by far, a better analogy is the whole notion that if you have a pipe, okay? and let's get something a little bit darker here. let's say you have a main water line in your yard. and there is a blockage here, a

bad blockage. no matter how much water and pressure you put in, you're getting zero out. this is the fed. the blockage is not paying attention to what the fed is doing. this has to be changed by congress. talk to any businessman. what are they going to plan on for the future? why is it short termism? they don't know tax policy, immigration policy. but when congress finally gets to this and the blockage is clear. i can only imagine how we're going to deal with what really comes out of that pipe. jon fortt, back to you and that was the plumbing tip of the day, buddy. >> all right. thanks, rick. and some good news for airline passengers. i'm skeptical. phil lebeau is in denver. phil? >> a good reason to be skeptical. i've got a grain of salt i will deliver after giving you the good news this is the july cpi data when it comes to airfares domestic airfares in the united states down 5.6% last month. that is the steepest monthly

decline in airfares as measured by the cpi. in 20 years. and you might be saying to yourself. what gives, what's driving all of this? it is the ripple effect of low jet fuel prices and as you take a look at shares of the major airlines, united, delta, american, southwest. keep in mind they're all benefitting from lower jet fuel prices, meaning that they can be more competitive with low-cost carriers. now for the grain of salt. the cpi measures the prices in reservation systems. prices in reservation systems. it does not calculate baggage fees, reservation change fees, how much you will ultimately pay for many customers. many travelers, so yes, this is good news, keep in mind this is not a measurement of what a lot of people are doing when they're actually flying, because they are paying for bags, they are paying for reservation change fees and other ancillary services. that is it from the tarmac, here

at denver international airport. it's a beautiful day. >> it always is, thank you very much phil lebeau. >> that data does not calculate the fact that there's an algorithm. if you search for the same fare more than once it will go up. >> keeping an eye on the market. still in negative territory, continuing the slide. apple. firing back against a report that was not music to its ears. more "squawk alley" in just a minute. ♪ no student's ever been the king of the campus on day one. but you're armed with a roomy new jansport backpack, a powerful new dell 2-in-1 laptop, and durable new stellar notebooks, so you're walking the halls with varsity level swagger. that's what we call that new gear feeling.

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apple music's retention rate

is in question today. a survey by industry research firm music watch is finding that almost half of the people who tried apple music during the trial period have left the service, but apple says that's not right. the survey is not accurate. saying just closer to 20ports have left. and weighing in on this is apple's former chief evangelist guy kawasaki, guy, thanks for joining us. we had a guest earlier say that no matter which number you pick, the overall number of people trying apple music and sticking with it isn't that impressive. based on what one would have hoped apple could have done. what's your take? >> no one is more skeptical about what apple says. but if you look at the numbers, well the first thing you need to do is question the methodology. exactly how did they find these people? how did they ask them? is it a subset of people who are willing to answer the phone at 7:00 a.m. or answer an email? surely the consulting service

didn't get them from apple. did they know what they were asked? if you ask someone, are you using apple music. i have an ios phone, there's an app called music on it. i guess i'm using apple music. but that's not the question they're asking, they're asking if you're using the apple subscription service. then if the numbers are right, and what i read is that roughly, 50% of the people are not retaining, they're not sticking with it but of that 50%, 60% said they're very likely to start paying. when they have to start paying. so 60% of 50% is 30%. and i think if you ask most people, if you could get 30% of the people who are trying your service. start paying for it, once the free period is over, that is a remarkable result. i mean that -- god, i wish coy get that result in some of the things i do. so 30% retention? i mean -- imagine if people could watch cnbc for free for

two months and after two months people said i would be willing to pay. barry diller, reupert murdoch would be saluting you. >> don't give anyone any ideas. on apple music the stat that we're talking about the is the 11 million users, which our previous guest compared to the intro number of users for itunes radio in 2013. given how much the world has changed from 2013 to now. and the strength of apple's ecosystem. the question is whether you would think apple's base number of users should be far higher than 11 million. what do you say? >> that's difficult to say, too. you would think with the tens of millions of ios users, it would be higher. on the other hand, the way to do this is to really compare to eight-track or spotify or pandora. what kind of numbers are they getting? i think that 11 million number just in a vacuum is very difficult to interpret.

>> guy, it's still points to the larger question, though, and it may be anecdotal at this point. as you say. but the survey results. the stories of people's playlists getting lost. the delay in the television product. the worries about a sustainable user experience. >> people are beginning to say, these guys know hardware, we know that but when it comes to the services it's been a tough run out of the gate. what's wrong with that argument? >> i don't think much is wrong with that argument. apple has done extremely well with hardware as we all know. you could say it revolutionized music with itunes, but perhaps it has a little attention deficit. so yes, services are tougher. it's a tougher business than selling cool hardware. that's one of the challenges that apple faces, with all the skepticism. who among us is willing to short apple stock? >> well services are different in any case.

my experience, i am using apple music last i've gone back to using pandora some. my concern for apple is focus. if they're doing a bunch of stuff just okay, they've got beats one and have to figure out some interface things with apple music and now they're opening up an app store on tv and by the way they've got the watch software to work out and open up more. oh and don't forget about you know the home software and smart homes. do they risk losing focus, not doing anything extremely well, and ending up in situation like microsoft was in ten years ago when they had windows mobile. they had the zune. it was okay but not great? >> and don't forget the apple car that's rumored, right? just another piece of hardware. on the other hand, you know, just to kind of push back on you a little bit, if apple were simply macintosh and ios,

they're a one-trick pony. >> it depends on how you want to look at it. >> it's how good the tricks are that the pony can do. guy kawasaki, thanks so much for joining us. this rout in commodities continues. oil extending losses, new 6 1/2-year low. jackie de angelis is at the nymex with more. >> intraday, wti touching $4.74, we haven't seen this since march 3 of 1979, testing new lows. a 4.5% slide. we did get the inventory build this morning. plus 2.6 million barrels. there were other bearish factors hidden in the report. we looked at production numbers, we're seeing production continue to flat line. so no sign that we're seeing a meaningful decrease there and

imports rose, we've been watching imports for the last few weeks. it looks like the trend was to see a little bit of a decline there. the fact that we're rising again, not a good sign for the market. the problem is demand. traders are are telling me that as the summer comes to a close, if we continue with the production to the upside it's not going to work out in terms of that scenario. our bob gasoline down because of the anticipated slide in demand as well. the factors are bearish. i want to mention the last settle we had under $41 was march 2 of 2009, that's a pivotal support at this point. back to you? >> we're going to have a busy afternoon. when we come back, more on the market selloff. session lows, dow is down 214. we talk about it after the break.

there really has not been a moment all day where most of the dow components have been not in the red. dow is down 200 right now. but chevron, all the obvious plays are leading the dow lower as we have oil with basically 41, last by the way last close

for crude with a three handle was february 24th of 2009. if you remember what that period was like -- not good. >> very different time. incredible we're seeing the same price action for oil. even since we've been on the air. hd has taken a turn into negative territory. home depot was the only dow component. that was positive following the earnings report. we did get a slew of other retail earnings this morning. we should mention, lowe's, staples target, lowe's is up slightly. the only one of those batch that's up slightly. up by about .4%. because it did see same-store sales and revenue beat forecasts, staples said its current quarter would see sales lower than expected. target upping outlook, that stock down .75%. >> a lot of the young techs not doing so well. etsy down more than 5%, gopro more than 4. twitter, 3.5%. not the 52-week lows, but close. >> a.p. just tweeted out, 100 days away -- black friday.

100 days from now. the retail story will be with us for the -- >> weren't we just in back to school? >> we're still in back to school. >> we'll see what the action looks like for now, for now, headquarters and judge and the half. ♪ ♪ >> thanks so much. welcome to the halftime show, let's meet the starting lineup. steve weiss here along with joe terranova and jon and pete najarian. and our senior economics reporter steve liesman and heidi richardson. she is the head of u.s. investment strategy for blackrock's i-shares business. it's good to have you here today with us. our game plan looks like this, google anniversary, 11 years ago today, the stock went public, up 1500%. now our experts tell us where the stock could go from here. knock-knock, the latest new social app backed by sir richard