♪ ♪ ♪ welcome to "squawk alley," joining us, henry blodgett, the founder, editor and ceo at "business insider," what a treat to have you. jon fortt, kayla tausche on another busy day for the markets, down 247 at the dow, currently down 192. for a minute we had the worst s&p since july 8th. it has essentially gone flat for the year. we were negative a few moments ago. selling across the board, all the major averages down 1%. bob pisani is at the desk. >> we're near the lows for the trading range we've been in for a while, the s&p. 2050 is what you want to watch.

we've been in a range, 2050, to 2130 ever since february, when you break below that, that would be noticeable. we were standing on the doorstep this morning, sort of came off of that. watch the 2050 range. volume is heavy. this is not a light volume day. and neither was yesterday. consumer discretionary, look at the sectors, all down. a little less damage in the commodity space. financials and industrials down a bit. we're seeing the high beta names with weakness. particularly in the internet. space and the tech space. your zillows and twitters and facebooks and linkedin and netflix, down 5%. these are higher beta names that move a little more in the market volatile space. exchange-traded funds are having a heavy volume day. a hack that's cybersecurity heavy security volume. social media names, socl, that's the etf, they're all having

heavy volume on a down side day. a lot of people asking about walt disney this morning. bernstein is a downgrade that stock collapsed after earnings and was sitting near multi-month low. it's still up 7%. it's had such a spectacular year, even with the declines we've seen in the last few weeks, it's still up 7% on the year. the volume is very heavy. it's done 15 million shares already. disney normally does 10 million, 11 million. so already in half a day we've done a full day's volume in disney, because of the dollar down today. we're getting a less of a decline in energy stocks and we see there's the xle, the basket of energy etfs you can own, still down but less down that others in the market. speaking of lows, commodities, a rare day when you have aluminium and copper on the upside.

pretty small in the positive column. the 5-1 declining to advancing stocks. back to you. >> bob, thank you very much for that. let's turn to henry on some of these markets, bob makes the point that you're selling your winners, your netflixs, your amazons, your under armours, your nikes, is this what you've been calling for on the last year and a half? >> the stocks have such a huge window of a fair valuation, that everybody starts to get nervous, you can take them way down. bigger picture -- no one should be surprised this is the start of a major pull-back in the market. i know you're giving me the chicken little award justifiably for more than a year, talking about how we're in a period where stocks are more overvalued than any time in history. with the brief exception of 2 2000, and 1929, every cyclical measure can you come up with,

including warren buffett's indicator, the gdp-to-revenue indicator. it doesn't mean anything about what happens next. hopefully as we flashed up on the screen early on, it's only 1997, which would mean we would have three spectacular years to come before the bust. but you never know when things could break down, and this could be it. >> the dow is only 6.5% from recent highs, the nasdaq about 5%. s&p, 3.5% and there's been an expectation for a garden variety 5% to 10% correction. >> i hope that's what it is, let me be the first to say i have no idea whether this is the one. all i can point to is valuation. when you look at cyclicly adjusted indicator, earnings are at record highs in terms of profit margin, profit margins in the past have regressed to the mean. if it happens again, the stock market is very expensive. that's what i look at, worry about. it doesn't mean stocks aren't going to go up.

and by the way, there's nothing else to invest in. this is not a call to get out of the stock market. it's just a call to say let's tamper our expectations for long-term stock return. >> unless you want to buy treasuries. >> they're not going to return much. everything is incredibly expensive. >> the other side of the argument that things have to come down. you take a look at some names that are down today, like a twitter, it's down 40% for the year. looking at the markets as a hole, yes things have been going up quite a bit. but some growth names or speculative names have suffered immensely over the past 12 months. zulily just got taken down, sandisk, jive, all names that are down 30% so far this year. many of them down more than 2% today. >> the problem with saying it's down so much, it couldn't possibly go down any more -- is that twitter arguably nowhere near cheap if they can turn the company around and suddenly start having incredible profit margins like facebook and huge

growth in the future -- sure, this looks like a wonderful buying opportunity if they can continue to deteriorate? still worth $20-plus billion that could go to zero. there's no way of looking at it and saying, it's down so much you got to buy it. >> it brings us to the downgrade by bernstein of disney. saying the industry is going massive structural upheaval and valuation for media stocks need to be adjusted. the note compares it to aol and satellite television. here's bob eiger talking about the future of the bundle. >> the bundle is not going away. the bundle is actually still relatively strong when you look at a given, all the competition that's in the marketplace. and you look at what percentage the bundle represents, not just in terms of revenue, but in terms of how people watch television. it's still the dominant form of television viewing in the home.

espn is fortunate that it's a brand that we believe ports well to any new platform. whether it's smaller bundle. whether it's an over-the-top package of programming. or whether it's a direct-to-consumer business. >> we've had this discussion before, henry. why a stock like this goes from 120 to 101. why structural changes are suddenly unveiled in the course of days, not weeks or months. >> people have been talking about this for years. but in the last few results period, we started to get an indication, hey, we may have hit peak tv and started to pass it. and anybody who says tv is dead is hyperbole. it's not dead. but-day think we've passed its peak and it's likely to go into a decade-long period of secular decline. light newspapers did ten years ago. >> why are consumer products, movies, theme parks, those are all being ignored and people are assuming that disney is simply a

bundle company? >> can you go back to disney and make arguments on what the company is worth based on all assets. i think this is a call on the traditional television business. to support what bob said, the bundle is still relatively strong, but it's not the king of the world. you've got netflix, which is a better model for a multiscreen world this is going to take a long, long time. it is a generational shift. if you look at in aggregate, people watch a ton of television. if you look at 15-25-year-olds, it's much, much smaller. >> we're talking about so many different things, i don't know what traditional television is any more. what are we talking about when we say traditional television? isn't netflix the ultimate bundle. you don't get to say, i just want "orange is the new black," or "house of cards," you've got to pay the whole freight for netflix. there's a numb of tectonic plates moving here, high-quality content and fast broadband are the name of the game now.

>> you're exactly right. what is the traditional tv business? the concept of a tv network, which is a grouch shows that are shown in a linear time with ads sandwiched in between them and cable affiliate fees. that if fund a huge amount of tv's revenue over time. those are both under threat because of netflix' model. the pipe companies are in great shape. we need a big, fat pipe unless we get some wireless solution that makes that unnecessary. content, if you can make great content for reasonable price, you're in great shape. people are watching more than ever. but if you are a network or a model supported by affiliate fees, that is where there's going to be erosion going forward. >> in this bernstein report, they reset the valuation, the multiples for almost every single company in this basket except for fox. stays exactly the same. >> everybody loves fox. there are going to be exceptions. the point is analyst is making, a very good one. a big range about what they can

be worth. there are going to be bursts where people get excited about them. look at the replay of newspapers, for ten years after the dawn of the internet people said newspapers are screwed and the stocks wept up and up and so did circulation. then it turned, since then it's been a ten-year disaster. so you believe disney should trade at a similar comp to publishing? to aol? >> that's going to take a while before we get there. >> bob eiger is right, relatively healthy. facebook's co-founder dustin moskovitz weighing in. amazon isn't the only company burning out their employees. he says these companies are destroying the personal lives of their employees, and getting nothing in return. we should note jeff bezos is an investor in "business insider." i think it's interesting how many people have backed up the "times" piece, applauded the

"times" coverage and others who have said it was unfair and misguided. >> that's right. i think you have to strike a balance here. some of the anecdotes in the "times" piece are terrible. put employees under incredible emotional dreuress. saying how could you be so slow, your to answer emails at 2:00 in the morning. on the other hand, i think you have to recognize that when a company sets out to accomplish what amazon does or what facebook did in the early years, it's incredibly hard. the odds are against you enormously. it's easy to look back and say oh if i only i had exercised a little bit more and not worked that all-nighter. at some point you have to say what if we hadn't worked that all-nighter? would some other company be facebook? time and time again you find incredibly focused intense effort from a group of talented people make the difference versus other companies that are emphasizing work/life balance. it has to be a balance. >> and hindsight is 20/20.

but one of the points that dustin moskovitz is making in the piece is that past 40, 50 hours a week, your employees are less productive. one of the biggest problems with tech, is they see the research, they feel like it doesn't apply to them because the problems they're solving are too big and too important. what would you say to that? >> a lot of the teams are incredibly passionate teams and they don't think of it as me and employees, they think of it as we are trying to do something incredible and that is hard. and if you look at any high-performance, professional athlete. anybody who is successful at anything. incredibly rare to find the person who said i didn't work that hard. i set my alarm, i never busted my hump for it. >> the think thing that i thought was so special about dustin's piece, there's a difference between working hard and working smart. there's a difference between the san antonio spurs and the chicago bulls of yesterday. it seems like certain companies figure out how to have a high-performance culture that does not burn out employees and

dustin is suggesting with maturity he is looking back and said you know we could have done the same stuff, maybe done things better if we had managed ourselves differently. and facebook is doing that, you guys had a piece about maternity leave and paternity leave. >> and netflix has espoused this for years. take as much vacation as you want. b oouf still got to do a great job, it's not measured by the hours you're in the office, but it's measured by results, you have to avoid burn-out. it's easy to blow that on your own if you're hard-working and passionate about something. you have to regulate it. on the other hand, lots of people in the tech industry, this is their life. they're totally into what they do. they don't want to be doing anything else. i don't think we let the pendulum swing too far to hey, it should be vacation all the time. a little bit of work here and there. >> henry, you know how to bring it, good to see you as always. henry blodgett joining us. when we come back, 34

start-ups have gone bust this year. are more on the way and what it means for tech. the battle for the cloud continues, hp and sales force report after the bell. and we're going to keep our eyes on the markets. back close to session lows. dow down 220.

34 start-ups have gone bust

so far this year and there could be more on the verge. josh lipton is in san francisco with that story. josh? >> well kayla, the reasons for the failures have varied as outlined in a new report from "cb insights." companies usually die 20 months after raising financing. keep in mind that 34 failures is a relatively small number when you consider there have been more than 1100 seed and early-stage deals so far in 2015. we've been keeping track of some of the more high-profile figures in our start-up graveyard. most recently there was zirtual, the ceo said more money was going out the door than coming in. start-ups.ko, a zirtual customer bought the company. earlier this year, circa news founded after the company said

they weren't able to fund a critical round and secret shut down because the ceo said the company didn't represent his vision, even sew, the co-founders each pocketed $3 million according to re/code. while this list is certain to grow, the failures aren't necessarily scaring away investors. in q 2, vcs poured more than $17 billion into companies. the highest level in 15 years and guys i was just at y begin ators demo day where there were a lot of heavy hitters, from ashton kutcher to steve cohen gathered in search of their next big investment. >> they say so long as they have a couple of the big investments that pan out like a facebook, they can suffer the losses of the others so we'll see how this cycle ends up. coming up, hp and salesforce getting ready to report after the bell. and when it comes to the cloud, these companies are moving in opposite directions.

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getting some breaking news out of greece yet again. this one involving sip rutsipra. >> we're waiting to hear from the prime minister whether or not there will be snap elections in greece. this is a decision thousand now that they've got the $26 billion from everybody else, now that they paid the ecb, whether or not they go to the polls to strengthen his political base. perhaps before they actually have pension cuts or whether they wait until after they've had the first assessment of the greek bailout when they'll be discussing debt restructuring. that hour will come within the next hour to 90 minutes. i assume he'll do a live tv broadcast. it's not necessarily market-negative. he's so popular in the polls, he'll win a clear majority to govern and a better party majority by linking with other parties or coalition to govern

than actually he has at the moment to push the austerity through. unless he's going to come back and bite the rest of europe further down. don't be alarmed by that particular bit of news coming through. meantime, back to the major event in europe. it is this very heavy selling that you've had throughout the european session today. one leg down before we opened on wall street. another leg down further on. it's taken the german dax and remember, europe is more exposed to international markets than anyone else. germans are the great exporters, notably automobiles. the last nine sessions, you see we're down over 9%. so we're losing 1% a session. on the german dax, the london market down eight straight sessions, the third longest run of losses in london since they started the ftse 100 just over 30 years ago. let's look at london, you can see it in negative territory for that period of time. if you look overall as to where we are on european markets, this

heavier selling you have in europe at the moment means that the gain that you had on qe, at the beginning of the year from european markets has essentially been cut down now to a gain of there you go, a gain of that's not quite right. back to you guys. >> 8%, 8% is the spread. a big afternoon coming up for tech earnings with hp and sales force set to report after the bell. salesforce expected to report strong profit growth and hp is expected to narrowly beat analysts' estimates. salesforce is up about 28% over the past year, while hp has fallen more than 20%. they're also going in different directions, fundamentally because kind of what we saw out of amazon earnings. they broke out amazon web services nearly two billion business in hp's enterprise hardware business, two-thirds of

that is industry-standard servers, those are the things you don't have to buy if you're going to amazon. at the same time we expect to see strong bookings from sales force maybe around $1.6 billion. those are the numbers to watch. >> on the other hand you have hp nearing a november deadline to split its two businesses. you have salesforce, whose stock is currently priced at 90 times forward earnings. there's a little bit of the potential takeover premium baked in. what of that do you think is responsible for the fact that salesforce is up 26% in the last year. >> that's some of it, satya nadelia is keynoting at dream force late they are year. the rumors about the two of them looking to get together, hasn't happened. but more important, salesforce is kind of the amazon of the software as a service portion of cloud. they led the way. they have a certain kind of scale. they have a number of options whether they choose to be consolidated or ply a role in consolidating smaller players down the line. hp, despite the split, the pc

business has been under pressure. that's been under pressure. even after they split, it's hard to see which one of those two companies is going to be stronger. when we come back the selling here continues. the dow is down 197, all the major averages down over 1%. worst day for the s&p since july 8th. we're red for the year. with oil bottoming mid day, does that mean something for this afternoon? we'll talk to art cashin in a moment. 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. open an account and find more of the expertise you need to be a better investor.

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good morning, everyone, i'm sue herera and here's your cnbc news update. former president jimmy carter says his cancer has spread to his brain and he is at ease with whatever comes. he will begin radiation treatment today. at a news conference in atlanta, he said he thought at first the cancer was confined to his liver. and had been completely removed by surgery. but an mri later that day showed four small spots on his brain. missouri senator claire mccaskill says she will support the iranian nuclear deal even though it isn't perfect and no one trusts iran end quote. she said not supporting the deal would make the world a dangerous place. north korea trading artillery with south korea. north korea threatening to take more action unless the south stops anti-pyongyang broadcasts.

seven people were killed after two planes collided in mid air in slovakia. carrying civilian parachutists rehearsing for an air show. 31 others on board survived by jumping out with their parachutes. emergency service vehicles were at the site. that's your cnbc news update at this hour. back to "squawk alley." we are still keeping our eye on these markets. s&p 500 has gone negative for the year. we're seeing red across the board every single sector is in the red. tech and consumer discretionary faring the worst and the nasdaq is among the worst of the bunch. bertha coombs is live there with more. >> to quote a favorite old art cashin gem this market is tougher than a $2 steak. if you're long big cap tech stocks. net app today is one of a handful of stocks that is up in the nasdaq 100 after a sizeable beat on its earnings with strong

demand for the storage firm's cloud-based products. is a couple of others that are bouncing up are bouncing off of lows. large cap tech leading the decline. if volume is any indication of the real conviction, the nasdaq 100 trading at 80% of its average daily volume over the last 300 days, or 30 days. approaching its 200-day moving average. technically weak here and growth name like netflix, even as people talk about the netflix effect on broadcast tv, the likes of disney and others, bernstein saying that he the are going to be having tough times with advertising, it's retreating on strong volume. new low for micron as the chip sector remains very much in correction territory, down 10% for the year. and apple a new six-month low, below $112 for first time since january 23rd. but some of the momentum that we are seeing really is in the small caps. they are really showing strain.

not down as much today on a percentage basis, but they are negative for the year, down 10% from the recent june high, hitting the correction point along with the biotechs, interestingly we get the deal with valiant announcing its acquisition of sproud technology. and it has not given a boost to the biotechs. they're down in moderate volume. nonetheless you're seeing some of the high flyers coming under pressure, a lot of folks taking a bit of cash off the table. back to you. >> you mentioned art cashin, bertha thank you very much. he does join us at post 9 talking about the action today and yesterday. art, good to see you. you said a few moments ago, we held 2050, that was a positive for the bulls. >> i had said in my preopening comments that 2050, that was the low of last wednesday before we had the major reversal. so the low so far has been somewhere around 2150.

2051, and so we didn't get a really big bounce out of it. but i think they're feeling more secure. the other thing is, crude is behaving itself today. so that's allowing by the dippers to kind of nibble around a little bit. >> do you feel like this is the beginning of a breakout or not? >> not entirely sure. i'm concerned about obviously commodities continue lower. i think what you saw yesterday was initially a kind of celebratory short covering move. when they thought oh, september is out of the way, it will be at least december. they thought again, wet wait a minute we're worried about a global meltdown. the fed is not going to help us, that's why the stocks rolled over. >> you pull investors in july, they say their biggest worries are greece and the stability of europe and potential sovereign debt crises.

you poll them this month and they say it's about emerging market currencies and emerging market debt and the slowdowns in china. are the worries of today here to stay in. >> my great concern is the emerging market currency. some of these look like they're ready to go into freefall. and i think you're going to see some of them become very competitive. we might go back to where we were in the late '90s, that can spill over into here. for now it's more edginess than anything else. >> how does the volume look to you, it's august, typically lower volume. over the past couple of days the volume hasn't been that bad. does it add conviction to the moves we're seeing? >> yeah, unfortunately. because the volume is coming in on the down side. we're picking up as the sell-offs come in what happens there, jon, is that you know again if you can't sell what you want to sell. if you're in europe and you want

to liquidate something and you're having a tough time because the dax is down 2%, 2.5% and you own anything here in the united states, okay, i'm going to sell that instead. in that way it is contagious. >> you mentioned shanghai testing its july low. set up for friday doesn't seem to reassure things. >> i think you would have the coffee maker ready with an extra cup of coffee for tomorrow because it could be quite interesting. we're approaching key levels as we talked about here. the 2050 level for us. china, that level in shanghai that we discussed, is where they bounced the last time. what becomes curious here is -- can the government of china read charts? will they look at this as a key area? and will they go in and support the market? or will they say, this would be a good test for us to find out how real the selling is? can the market heal itself? it will be quite a flip of the

coin overnight. >> there's some worry, art that money that the chinese government is using to prop up the stock market, prop up the yuan is money that they could otherwise be spending on treasuries and perhaps they're backing away from the market. how does that play out? >> they have been backing away from u.s. treasuries. it hasn't had a major -- as you can see by the yields on 10-year and others. because people in europe and elsewhere are coming in to buy them. so but it can become a real problem for us. i'm equally worried about a place we don't see in the headlines, saudi arabia is going through reserves like crazy. and kazakhstan allowed their currency to go into free fall. because here they are, the major oil producer in that region. and now you go up and you look at saudi arabia, they want to keep the populace happy. they floated a bond issue.

just to get some money out. i would check over to page 16 and keep my eye on saudi arabia, too. >> last thing on pessimism. did you feel it was extreme or just that we've gone so long without a correction, about 5%? >> i don't think pessimism is extreme. i do think the level for nervousness is picked up. we learned the lesson in 2008 about correlation and connectivity. and you see these things going on around the world and you say is it beginning to spill over into here. i wouldn't call it outright pessimism. i think it's anxiety and nervousness so far. >> see what friday brings, art. >> let's get some rest, art cashin. stocks continuing to tumble. all major averages down more than 1% in trading, just about two hours after the open. but rick santelli, what do you have your eye on today? >> i'm looking at the long end

of the yield curve, 30-year bond. and there's information that it's trying to whisper to us. and it's price action, what is it saying? you'll have to tune in after the break.

> > . coming up top of the hour on the halftime show, the selloff

continues. what should your biggest worry in the market be? we're going to ask our panel of experts that very question. plus another downgrade of disney today, the second in a week. what's the deal here? has it really lost all its magic? our call of the day. and stephanie link makes a big trade in her own portfolio. looks to regain the top spot. not that far behind on the leaderboard, we'll tell you what she bought and why. kayla, see you in about 15 minutes. we'll continue the coverage of the big sell-off today. >> the debate ramgs over when the fed will make its first rate hike. recent data creating a new division on wall street. steve liesman joins us with the results of a cnbc snap survey. what did you find? >> we have the market divided with the economists, with the market thinking that yesterday's minutes were dovish and economists saying not. even within the economics community there's a big division. we surveyed 17 economists and we found 11 of them still on board

with the september hike. very few changes in there, folks. just six of them for december, sorry, five for december and one is out to 2016. we're in the process of doing a more formal survey. our broader panel of 40. here's some of the brain power in the september camp. the septemberists. morgan stanley, barclays, credit suisse, oxford economics, wells fargo, diane swonk at massaro, plenty of folks. here's the december camp. a smaller camp, still, goldman sachs, morgan stanley, hsbc and one over my other shoulder, steifel 2016. jp morgan says the solid july employment report probably pushed the committee closer toward a tightening and look what goldman says, almost all members they say quoting the minutes, needed to see more

evidence before they would feel reasonably confident that inflation would return to the committee's 2% target. how do you make a decision what the fed is going to do? i talked about it yesterday on the halftime report. you close one eye, you look at jobs, ready to go, you close the other eye, look at inflation, no time for a hike. carl? >> steve liesman thank you so much. let's get over to the cme group and rick santelli. >> before we get into the santelli exchange i like that analogy, look at it with one eye or the other. but my feeling is, is that many that measure the markets, regulate the markets, policy up the markets are kind of like this when it comes to the markets, not left eye, the right eye, they're both closed. this is not an insult. i just think that i'm surprised that in steve's survey of economists, that it wasn't 17 out of 17. economists tend to be hat in hand with whatever press release comes from the fed. i think the fed officials, not all of them, but most of them

don't have a market-intrinsic feel. they're not one with the markets. so this dynamic has many different alternatives. in the end, i think t.a.r.p., i think flash crashes and i think the market has a view here that doesn't seem to be in tandem with the kind of the tailors of the emperor, i think that in and of itself is going to make normalization is a bit of a roller coaster ride. i'd like to show a chart of the 30-year bond rates for the last year, 2013 to 2014, and the december for each. what i want to you see on the chart is that from day one as we started 2014, we didn't have one tick of heat, if you bought the market looking for lower yield. that was true for much of the curve. the reason i bring it up, look at the current chart, the chart from december 31 of 2014 to today. august 20th.

that chart i want you to really pay attention to. i'll tell you why. there's some very important clues, and the really simple, okay. now we're going to go to my rendition of the chart you saw. here's 30-year bond yields, they opened at 2.75. and then the interesting part is, other than just one day in march where it settled at 2.84, this was close to a touch, a settlement of 2.73, that from basically the end of april you have one side of the chart that was defined by 2.75 as yields moved up. and now we're basically defined as yields moving down. i'm sorry, my lines should be here. why is that important? i call that a transversal. it's very simple. nothing is more important than settlement. and they're prioritized, today's settlement to many is the most important input. but that is the lowest part of the priority. weekly, monthly, quarterly,

annually. this is giving you a benchmark of positions for the entire year. so the fact of the matter is, we've been toying, we got down to 275 and change. a close below this is significant. remember, outside of this, that's it. it's very digital. hot knife through butter if we close below it some traders will give it a basis point or two, slippage and acknowledge there could be stops to control us if that event should occur. jon fortt, back to you. disney, the biggest drag on the dow by quite a bit. could it get worse? this as stocks across the board continue to fall. the nasdaq down 1.7%. "squawk alley" will be right back.

disney shaving 35 points off the dow after a sleepness night at bernstein led to an epiphany. the company downgraded disney to market perform. saying the market is supporting tv businesses as structurally impaired assets. weighing in is jon steinberg, ceo of the "daily mail." they say look, the question we hear the most often is at what multiple should the sector trade. maybe it's seven times enterprise value to ebita. like with publishing, satellite tv. do you agree? >> i think it's over. it's only a question of when, right? it's a question of the timeline to when linear television and

television as channels will be gone. what bernstein does in the report is they do a sum of the parts analysis, they say that television, ad revenue and affiliate fees should be valued like aol dial-up revenue. they say it's a 7 to 8 times ebita. and what they get to is the stocks are roughly priced where they should be. they said disney should go from 106 to 114 and time warner, from 77 to 900. but basically it's in secular -- 77 to 90. >> we work in this industry, but bernstein goes so far as to say those who believe cord-cutting is accelerating should short all of them. or nevering. >> if you go to time warner cable there's an offer for $14.99 just for broadband. cable vision, this may not be their best offer, but there's $39.95 for broadband. if you get television channels now it's significantly more. if you're on a budget or your kid is graduating school i don't know why you would go get

television. >> does anybody think espn is just going to be free? all of a sudden. i mean either somebody is going to be paying $5 for the app ala carte or somebody is going to be paying $5 to show it to their customers and i don't know why people who sell toys to kids aren't going to want to advertise on disney's channels five years from now. all of a sudden the advertising business is just going to go away? where is it going to go? >> the bernstein reports says the future looks lower and less profitable than the past. if you look at the channel guide of the future, in the tweet that brian stealther tweeted out was vox, buzzfeed, espn, disney, some of the original content creators. >> what am i going to watch on buzzfeed? >> it will go into one guide. you'll be competing against players you never competed against before. that's what's going to happen to television. >> there are hundreds of channels i don't watch. >> viewing hours, tv versus

netflix facebook and it's like this and like this. >> if you look at where all the growth is right now, television kind of on an aggregate basis in decline. granted only a few percent a year. this was the third year the up-front was actually weak. >> you assign a publishing valuation to disney? >> they didn't put a valuation, but just on the television stocks. on the television component of the sum is what they put it on. on the consumer product for disney, he put 15 times on it as well. it's not like he downgrading the overall revenue or earnings the company. >> downgrading the stock, as we go into a football season 0 or "star wars" movie, is a risky proposition. >> everyone knew this was going to happen eventually. a debate over whether it's five years or ten years. when eiger came out last week, all these other objectives on their earnings and basically admitted for the first time they're seeing weakness in the ads and weakness in the actual affiliate fees and subscription numbers was wow. even if they're admitting it it must be a reality.

>> you think that august 5, 2015 is this watershed moment. >> yeah, think it's a watershed moment. think it's where people think things are going to happen quickly. they don't happen and they get lulled into the moment where it's never going to happen. just like with the internet. for a while when newspapers are going to be printed people said people will never want their news on the internet. they said the same things about books and music. >> you're talking to people who read physical newspapers every day. >> there's nobody under the age of 25 that's buying a print newspaper. i mean -- you'd be hard-pressed to find one. >> but they're reading the "daily mail" north america. you have a dog in this fight. who is going to make marvel movies aside from disney in? >> i think we all have dogs in the fight. i think people will still be getting cnbc, and espn, they'll be getting stuff they never got before. they used to never get their news from the website. >> there are hundreds of channels now that people don't watch. so in the future, there will be hundreds of channels from buzz feed from whom ever that people

don't watch. the quality content will still win out. >> and a host of incumbents will lose out. if you look at viacom, they haven't come up with a lot of franchises, there's an argument to be made that viacom will be one that doesn't cross the chasm because they don't have marvel or disney junior. they don't have these franchises. >> and i assume they'll start buying them. i assume there's going to be -- just the way comcast is investing in various new properties. >> the move that we're in a future where it's more disbursed and own a piece of the competitors. it's not unlike nbc becoming nbc universal and investing in cable. >> in the bernstein report, nielson and fox stay at outperform. what do you think those two companies have going for them as the landscape changes? >> they feel like fox has certain franchises like fox news are more sustainable with an older demographic. but ultimately it isn't that much outperform on a relative basis, from $29 to $38.

you're talking 30% upside on that, it's not overly compelling. >> nielson? >> i don't know why he has nielson as an outperform. >> we're trying to figure out exactly how this landscape continues shaping up. jon steinberg, we appreciate it. >> if you need a newspaper, take one. >> i definitely don't. i have a phone. why would i need a newspaper? >> when we come back, the market back to session lows, netflix down more than 7% on the disney downgrade. why is that happening? no student's ever done the full hand raise in ap calc. but your stellar notebook gives you the gumption to reach for the sky. that's that new gear feeling. this week, these office depot brand notebooks just one cent. office depot officemax. gear up for school. gear up for great.

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> we talked about some of the laggards on the s&p. netflix is one of them as people ostensibly start to sell what they can and obviously what's been an amazing winter all year long. micron, all of these downgrades, disney downgrade, but people are beginning to discuss at what price would you be interested in a name like a caterpillar which incidentally just went green after being in the red all morning. >> and caterpillar, chevron,

exxon have been the lag lgrds on the dow. they're not doing as poorly in today's trade as they have been throughout the week. >> we haven't mentioned apple. we hate talking about apple. but that name is also down quite a bit. more than 2% all morning. interestingly salesforce which is reporting after the bell also down around 2.5% all morning. so it's interesting, these growth names, whether they've been doing well this year are not are getting hit. s&p, it would be the third-worst august since 2010. because we have had, we're down 2% for the month on the s&p, but we've been down, we've been -- i know in 2011, down almost six, a tough month to get to. this is something we should be used to. >> august in 2011 was the downgrade of the united states credit rating. it was the first glimmers of the

sovereign debt cries nis europe. a lot to work with there. traditionally a month of thin volume, although not the story yesterday and today. >> we'll see what happens this afternoon. crude hanging in there, gold is up $20. let's get back to headquarters and the "halftime report." thanks so much. welcome to the halftime show, let's meet the starting lineup for today. jim lebenthal is here along with joe terranova, josh brown, jon najarian, rich saperstein is here, the chief investment officer for hightower treasure ris and a barron's top adviser. here's the game plan, mousetrap, another downgrade for dow member disney, dragging the stock lower. is the sell-off and sentiment justified? our experts