♪ good monday morning. welcome to "squawk alley." joining us is jon steinberg. good morning, jon. jon fortt out today. kayla tausche working double duty today. doesn't look tired whatsoever. >> makeup ladies do a good job. >> markets down 133. stocks down across the board but well off this morning's lows. you can see the dow at 16,526. it had been a busy session this morning, a wild month for the markets. the dow is 10% corrected intraday from the all-time high. meantime we have more to worry about with china, more with valuations, crude not helping today. >> the fisher comments last week

were amazing. i thought it was great how liesman pushed him and said you need these two weeks. he seemed to be equivocaequivoc. that's what today is about more than china. >> what do you make of the overall china story, though? it still sort of hangs in the background. there was a story in "the times" how consumers are actually delaying weddings, holding off on big purchases, staying put because they actually feel terrified. they're trying to see what information they can get about the stock market because they can't get it through official channels. all of that can't help alibaba, can't help other companies that depend on the chinese consumer. >> it's amazing. google doesn't care and facebook doesn't care. they don't operate there. all i know is tech and media stocks. i can't talk about anything else. for years and years and years not being in china was a bummer for facebook, such a bummer for google. now the companies that have

exposure, it's cutting the other way. apple is the one people are concerned about. pull up a chart of linkedin. they were talking withabout how can be in china. it's down. facebook and google are the ones that throughout this entire thing are a little bit down but they don't have china exposure. >> there's a school of thought out there that china is in the process of bottoming. i think it's -- hspc, housing there, bottoming out. infrastructure investment set to accelerate. obviously the markets have paid a price for some. people are not throwing the towel complete ly in on long-tem growth. >> they think there might be a floor around 3,200. this idea the government is going to stop its state-sponsored buying of shares spooks people a little bit. we don't know exactly what to make of it. >> and we don't know exactly what's going on because they are arresting journalist who is are critical of the market. >> hedge fund executives. >> this is the issue without having a free press. you don't know what's going on and, therefore, it creates even

more uncertainty. we don't know how weak the c consumer is. when alibaba reported, we couldn't get a straight answer out of them, how do they see it. >> the opacity of china has some wondering why would you be spending time there at all as an investors? >> a friend has been the one for years who has been saying everything there is fake, these fake factories, real estate developments that count towards gdp, and now we're seeing that opacity is really causing problems. >> you have to wonder, too, given the opacity, how little we know about exactly what the effect of a china recession would be on the u.s. economy here, u.s. data relatively strong. consumer confidence was in line last week. chicago pmi not bad today. i mean, it does seem like the u.s. economy is doing very well. we are still on this data roller coaster where you haven't hit an up peak for a while. you haven't hit a down peak.

the data is impressive. >> the huge gdp revision was a sign of confidence. now i think it becomes a little bit of a stock picker's market where you look at the companies that have a lot of exposure and those that don't have exposure. media and tech you can pick unexposed names here. >> speaking of which, next up, more clarity on the next version of apple tv. the fourth generation device expected to be priced around $150 to $200. should go on sale in october. the tv also expected to include support for siri but will still require a cable subscription to watch most content. "the journal" is reporting the next operating system will let people install certain apps blocking ads that generates about $70 billion a year. big headlines about the various factions that are fearing this technology. >> yeah, the miley cyrus quote in "the new york times" didn't get enough attention. the fight with nicki minaj got a

lot of attention. i'm probably the most disconnected host in history, the woman hosting something on mtv, the biggest show of the year. i don't have tv. i have apple tv. i'm so the 22-year-old that's, like, who's tv? that's pretty amazing when the star of the tv show on mtv, a network for millennials, says she doesn't have tv. this apple tv deal is a big deal. it will require youauthenticati. the fear is the update that comes down the line when they get their act together with the $40 quasi channel package. >> now that you mention that, viacom down about 45% year to date. that company was a little bit late in putting out some stand alone options for things like nickelodeon, like mtv. but do you think they need to get onboard, they all need to rush in to be part of this new apple ecosystem if and when apple does get that skinny bundle together to have any saving grace? >> i think their biggest problem is they don't have compelling and refreshed content. the company has been run by a

financier for how long now? and then you will have options and will go over the top just as hbo did, showtime did, as cbs does. it goes back to having content people want to buy and ultimately this network of networks doesn't have content geared to millennials. >> they point out this would be more expensive than competitive products for roku. the phone, force touch, coming to the 6s. 12 megapixel camera but not introducing a new 4 inch 6c. >> i think it's the tv we've been waiting for. it happens to not have a screen on it because everybody has a screen on the wall. i'm in the process of moving right now. i'm not putting in cable boxes. i'm putting in apple tv, chrome cast. i actually need to get cnbc and a few networks i really like and i'm able to authenticate and do that or pay for over the top. eventually when you don't have to do that and can buy correct -- >> are you saying you're cutting the cord? >> i'm cutting the cord.

>> you're more technically advanced than the average person. >> i look at how much consumption we have of netflix and other over-the-top content. i still need to authenticate, to be able to go into my verizon ios. i need one box somewhere. i think soon i'll be able to go with the apple package, the $40 a month apple package. i can't wait for that. >> miley cyrus and jon. two new music ads during last night's music video awards featuring the weekend and a cameo by travolta. check this out. ♪ we both know we can't go without it ♪ >> are you okay? >> yeah. that was the after party. >> i guess not a surprise apple is targeting this audience, right, jon? >> a lot of the jokes on twitter, was this commercial showing just how confusing it is to absolutely use apple music. that artist in the back of the car certainly seems baffled.

i think it's a great ad for what apple actually is. >> a lot of discussion -- i mean, we give viacom a hard time and the price is way down. as i said earlier off camera, the awards remain culturally relevant as a last bastion for mtv. >> we'll see what the ratings come out. in some ways someone said a lot of people were ripping on it on twitter. what do you expect? it's a 14-year-old franchise on a platform that millennials no longer go to to get the content. i watched most of the clips and the stuff and the web. i looked at vines and clips like that because i wasn't going to sit down and watch the whole thing. >> and i had an early alarm clock but i could get almost everything i needed to know what happened at the vmas on twitter. i could watch videos directly on twitter. i could follow the artists' tweets. yes, carl, i do think there's a bastion type quality to them, but you have to wonder how much long they're will last. >> twitter when i went on it did a pop-up and said follow the vmas on twitter.

i don't think that was a paid placement. that spoke of desperation for twitter that they would basically give a free ad for mtv moususic award. that should be a paid placement. that shouldn't be a free message. >> working in reverse. that does bring us to twitter rallying after being upgraded to buy at sun trust. a bunch of catalysts coming soon including a clarification on twitter's management and peck did say we were going to get news on that last week. obviously we did not. >> people are saying before labor day. will the market be happy with the triumvirate of president, williams being chairman, and jack being ceo. that could be a negative as well. one like from the peck report. twitter has recently started or is many to have partnerships we think could raise users and engagements in 2016. it's like deja vu all over again. how many times will we see this line that twitter could soon be doing things -- i read peck's

report. he's saying it's cheap. it can't get much cheaper. a 40% haircut to its peers. all the other stuff is just wishful thinking. >> while twitter is almost nearly close to having its ducks in a row, facebook hits a billion users a day. we haven't had a chance to get your thoughts on that, jon. >> staggering. i don't know how a seventh of the world's population goes on this every day. they do. the facts are the facts. it's mind blowing they could have that kind of daily engagement as opposed to downloads or monthlies. that's how you really know you have a product that's unbelievably sticky. >> i'm glad instagram got landscaped. a beautiful feature. >> long overdue. i no longer have to do that and this. i was on instagram and it struck me, they have both the time line, an unalgore and they have two different sides of the experience, i think. >> interesting facebook is still below 90 today.

>> and i get a sense you will have an influx of new followers. >> we'll see. thanks for taking the time. jon, good to see you. netflix losing a ton of hollywood movies and it's betting most of you will be more than fine about that. more than 20,000 people gathering in san francisco for vm world, the conference cloud experts cannot afford to miss. the ceo will join us with a closer look. one more look at the markets here. we're down 136, not far from session lows. we'll talk about what the markets may hold for the rest of the day in a moment. ♪ bleeding gums? you may think it's a result of brushing too hard. it's not. it's a sign of early gum disease... listerine(r) can help reverse... early gum disease in just two weeks. listerine(r). power to your mouth™!

major indices currently lower. last week's surprises were the norm before the market closed. can we expect more of the same? rich peterson is a market strategist with standard and poors capital. good to see you. volatile is an understatement, i think. all major averages down more than 5% for the month. set us up for september because we know history as our guide usually tells us that september is the worst month. what happens when august does this poorly? >> my colleague was saying give me a guide but not gospel. the fact is, the last ten septembers, the average gain has been two-thirds of a percent. we had a horrible september in

2008, the s&p down over 9%. then for some reason septembers have been negative 9% since september 2008. this is another year of trillion dollar activity. over $1 trillion in activity. there's only one time that we had a negative year or negative total return, and that was in 2000. >> although traditionally when you see that much m&a is marks the top of the cycle as the companies rush to take advantage of cheap credit and then the markets are bottomed out. >> that was like a concurrent number. you look at the flip side, my colleague bob kaiser asked what happens in the following year? three of the seven times the following year we have a trillion dollar year it's negative. the fact is you have companies that have a lot of cash, vag wagss are still at reasonable levels. lindsey bell said the four

12-month earnings are 16.2. that's the norm of the historic 15-year average. the economy is moving along, better than expected gdp numbers. corporate cash on the balance sheet at record levels. so you put it all together, a lot of concern but it's not a concern about the economy. it's more a concern about how china is. china instead of growing at 7% only growing at doubling in ten years if you compound it, it doubled in 14 years. oh, my goodness, right? >> we had some discussion today from oil analysts who think we're on the cusp of a wave of consolidation not just services, right, and year to date you talk about deals, energy has not been number one at the very least. health care. >> health care is number one with about $350 billion. financials number two at about $200 billion. energy comes in third place thanks to the williams company, $80 billion effort. and also deals last year with

kinder trying to do the recapturization of the limited partnerships. a lot of deals in energy. a lot of deals in health care financials. actually industrials surprisingly one of the record years thanks to the precision cast parts by berkshire hathaway. >> what about by deal count not just dollars? >> deal count, modestly higher. about 20,000 deals per year. financials are always traditionally the highest number. you have insurance, a lot of real estate, a lot of banks. we talk about banks, we had the biggest bank deal this year in terms of a bank buy another bank or u.s. bank buying a u.s. bank. that being bb&t buying penn national. that was only $1.8 billion. the fact is that's how we stand. >> although there still are lingering issues for financials, for energy in getting deals done for the banks is whether they

can get regulatory approval. we've seen some mid-sized banks not get their deals passed and then from energy there's the difficulty of negotiating a deal with oil jumping around all over the place. >> well, you know, there's always going to be issues. if not we would go on automatic pilot and the deals would take care of themselves. the fact you have volatility and the lawyers are going to structure things whereby they're going to protect the best interests of their clients. >> lawyers. that's one group that is definitely doing well. >> that's where it ends. >> we appreciate it. thanks. coming up, the next big hurdle for today's session has to be the european close. volatility often spikes and sets the tone for the afternoon session. we will bring that to you live in just a moment.

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america down 10%, faring better. the stock slipping after analyst mike mayo warned about possible consequences of a yes vote that would combine the chairman and ceo roles for brian moynihan. such a vote would be what he calls a reputational risk for the industry especially at a time bank of america already has poor oversight practices. mayo will make the case tomorrow morning at 7:30 a.m. eastern time. it will be interesting to see the contrast between what he is saying, what the bank is saying was just simply something that they thought was the right thing to do. in retrospect they have decided to give this vote to shareholders. we'll see, carl, what he has to say. >> when mayo wants to be heard, he generally gets heard. 7 1/2 minutes to the european close. >> it is negative as the session has been here so far today. one of the big themes is the

verbal intervention and talk about the possibility of extending qe or increasing the pace today. by the way, closed today for the public holiday. today we got inflation figures for the eurozone up 0.2% at the headline level and the main reason for that is because energy prices continue to fall away. the core is still about 1%. that's a debate for later in the week. interesting to see now as we close out the month of august exactly how bad the damage has been for the european market. it is, i'm told, the worst in four years. european equities down almost 9% as you can see, up much worse than the s&p 500 which is down six. on today's session, it's interesting the oil majors fell away again as brent traded below $49 a barrel. the one exception to that is any which is found -- this is the italians. they've announced supergiant gas field that they discovered off the coast of egypt. so that stock did well. you see how the others have fallen. other notable fallers today, some of the spanish and italian

banks fell throughout the session. down 2.6%. also a couple of mills in south africa, any of the french te telecoms reporting, these giant utilities there's a concern about where we are on the dividend for them after all the recent losses they've had. and then we finally take you to greece where, of course, you're now campaigning for that snap general election. it would appear, according to a host of opinion polls that we had over the weekend, that this guy's margin of victory in the election is looking pretty slim bearing in mind that syriza had a leave of about 15% back at the beginning of the summer. now these sorts of polls coming through, that's the lead for the conservatives, he can probably increase the number of seats the majority has in the parliament from, say, seven to eight or nine, but if you get a further deterioration on this, you may find that the election result gets more messy than investors

have been banking on. one of the major reasons, carl, why the polls are not stronger is because a lot of people are upset that he called the snap election. >> in an environment where there's a feeling greece is in crisis. there's a lot of emotion in greece at the moment. >> you can say that again. thank you so much, simon hobbs. when we come back, as china's slowdown starting to take a to on tech companies here in this country? we'll ask one of the biggest players in the cloud in a cnbc exclusive. we're still watching the markets. oil has almost erased all of its losses on the day. we'll see if that leads the polls on equities. 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?

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good morning, everyone. i'm sue herera. here is your cnbc news update this hour. one police officer was killed and about 100 others injured in clashes outside the ukrainian parliament in kiev following a controversial vote to give great er power to separatist regions in the east. the military conflict between government troops and russian-backed separatists has claimed 6,800 lives. illinois lottery winners have to wait for their payouts due to a budget impasse. under state law the comptroller must cut the checks for lottery winnings of more than $25,000. and because there's no budget, the office doesn't have the legal authority to release the funds. hundreds of thousands of people signed up for infidelity

website ashley madison in the last week accord iing to its parent company. that's after hackers leaked data about millions of its clients. and former maryland governor marvin men dell has died. he replaced spero agnew after he resigned. he was elected to two terms before he was sent to prison. that case was later overturned. mendel was 95. that is the cnbc news update this hour. back to "squawk alley" now. from the u.s. court this dispute between the nfl and new england patriots quarterback tom brady, a u.s. judge says there is no settlement that has been reached between the nfl and brady and the patriots, and as a result, i think the judge is saying he will issue his ruling no later than september 4th. you think you may be done with deflate gate but not yet amazing

given all the resources the court put towards trying to get these two sides to talk it out. >> yeah, and especially given that we are at the beginning of football season right now. you would think that it would have concluded before the season actually began. >> brady's had to miss three practices to attend hearings in new york city and, of course, no matter what the judge's ruling is when it's issued by september 4, a good chance it will be appealed, so the likelihood of this lasting well into the nfl regular season now becomes a little bit higher and there's always the possibility that if brady loses the appeal, kayla, that he might miss the back half of the season if this continues to go the way this is going. we may talk to drew rosenhaus later in the hour and the ramifications. >> new england patriots play the steelers, pittsburgh steelers. at least a final outcome here.

meanwhile, vm world kicking off today with major announcements on the future of the cloud. joining us is the ceo of vmware. it's great to have you this morning kicking off what is a major analyst and user day for vmware. several days, i should say. what should we expect to come out of vmworld this year if not a major product announcement? >> well, thank you, kayla. it's great to be able to join you on the show today. here we are in san francisco for our 12th annual vmworld conference and 23,000 of my closest friends and colleagues coming together for maybe the greatest geek show of the year. and as we come up with a conference, the key thing we've heard from our customers is this trend to the cloud is powerful but all of a sudden they have, you know, public cloud here. they might have a sass vendor,

private clouds, and how do they bring them all together for one logical view of their applications and services. and that's what we call the unified hybrid cloud and that's something that we'll be rolling out as part of the conference and able to demonstrate that logical view across the disparate regions. the intercontinental hotel group, the largest hotel chain in the world, taking advantage of this personalized service and accelerate their competitiveness. tribune media are taking advantage of this to secure their infrastructure in ways never possible before. so a great show. a great announcement. we're quite excited about it. >> for the consumer, patrick, a few of these solutions are readily noticeable to the naked eye. what's an example that we might be interacting with in our daily lives? a solution vmware has enacted in recent years? >> well, maybe two examples and i mentioned the intercontinental hotel group. what they're doing is being able

to personalize check-in, that you look at your room before you even arrive. you get there, you walk right past the front desk and straight to your room as you go to check in. things that just make that personal experience so powerful. another example that we were just able to do was with directv. the fight of the century, that was secured and delivered using our network virtualization technology. we're very often the technology behind the greatest consumer brands on earth today. >> two of the biggest macro concerns, patrick, for your sector have been, number one, china. number two, cyber security. how do you see vmware operating with those big picture concerns outstanding? >> in the cyber security area, some of our technologies and in particular in my keynote this week we'll be talking about what we call renaissance and security, the idea of network

virtualization allows security to be delivered as it never has been before, allowing us to architect secure delivery of capabilities, so that trend is one of the key things driving one of our fundamental technology developments that we're pursuing. obviously the overall trends with respect to china and internationalization, we as a tech company are very concerned about these things and invested heavily with our chinese counterparts, our international activities, but remaining very close to the u.s. government as we encourage them to find ways to move the industry together in a powerful way that enables us to take advantage of these technologies but without creating a fundamental trade dispute that would slow everybody down. >> yeah, on that point, these reports today that the u.s. is developing sanctions against chinese companies that benefit from cyber theft, is that bringing industries together or not? >> well, i would certainly hope that such things, you know, generally while the political processes are complex and not my area of specialty.

having been to china over 35 times in my career, deep partnerships with many in the companies there, we always think that engagement and finding ways to work together in partnership is almost always the best result for such issues. >> patrick, i have to ask you because i know a lot of our viewers are wondering what the vmware, emcc structure will look like a year or two years from now, are you going to merge? >> well, i can't comment on rumors and speculation but as we've said we're very convinced that the right strategy is a federation structure and this period of change and restructuring in the industry, being bigger and more strategic we believe unquestionably is the best thing for our shareholders and customers and we're quite committed to that path in the future. >> but the rumors and speculation are that it was your idea to promos a downstream merger to emc. is that true? >> well, i can't comment again

on rumors and speculation but, as i've said, we're quite convinced the federation structure is the best one for us as we go into the future and we'll be reinforcing that as part of the great conference that we're participating in this week. >> all right. patrick gelsinger, we appreciate your time this morning. >> well, thank you very much. and just great to be able to talk about the great things we're bringing forward to the industry. thank you again. >> all right. patrick gelsinger from san francisco. when we come back, some major hollywood movies are leaving netflix and the company says it's not worried at all but should investors be? rick santelli, we're watching these markets. oil has gone positive. what are you watching today? >> reporter: we're going to do a little postmortem and chicago pmi. fits and starts really describes it accurately, but here's a wild one. according to most traders i talked to, they think with the fed all roads lead to -- you're going to have to tune in to fill in the blank right after the break. no student's ever photographed mean ms. colegrove.

but your dell 2-in-1 laptop gives you the spunk for an unsanctioned selfie. that's that new gear feeling. all laptops on sale, save $230 on this dell 2-in-1. office depot officemax. gear up for school. gear up for great. a pretty violent swing in crude today, down $1.50. up $1.50. back to $46.40. we're looking for reasons as to why. this swing in oil is one reason equities are close to session highs. meantime at the end of next month you'll no longer be able to find "hunger games catching fire" and other high-profile movies on netflix.

hey, julia. >> reporter: carl, that's right. netflix announcing it's decided not to renew its five-year deal with epix. epix is a joint venture of paramount, mgm and lions gate. those films have also been available on amazon for the past three years. netflix whose shares are trading down this morning along with the rest of the markets says this is about shifting away from movies available elsewhere to focus on exclusives where adam sandler and hidden dragon movies in the works. ted sarandos, there were original films and licensing agreement with the studios. we are aiming to build a better movie experience for you. analysts weighing in saying this is not going to negatively affect netflix as losing starz was a negative.

netflix has shown the success of original content strategy. meanwhile hulu owned by disney fox and universal announcing it has signed up epix for its movies starting on october 1st. this as hulu steps up competition with netflix as well as amazon and hulu looks to grow its paid subscriber base beyond the 10 million subscribers it has now saying, quote, our subscribers have been asking us for more and more recent big movies. this is a landmark deal for hulu and mark the huge expansion for our offering of premium programming. of course hulu has a reputation of being about television rather than movies. this is all another example of hulu and netflix stepping up competition with cable television as more people are looking for alternatives as they cut the cord. carl, back over to you. >> thank you, julia boorstin, watching netflix, one of the great outperformers of the year.

we'll talk about crude for a while i think, kayla. this is an interesting move in the middle of the day. not inventory based. we had discussions about buffett and that stake in philips 66. cramer's argument is oil as a commodity will remain lower as he plays the refining margins at philips. this is interesting. >> philips' ceo has been commenting on how low oil prices would help the company's margins all year. and it has. it's one of the few companies that has seen its stock trade in positive territory on a year to date basis. >> with all of that, the dow is a stone's throw from the flat line after being down 150 plus. let's get to jackie deangelis at the nymex. what's going on? this is really interesting. the monthly production numbers for the u.s. are out from the eia and in some ways the market pays more attention to the monthly numbers than the weekly numbers because they're calculated differently. what i'm looking at here is a drop in production in the u.s. so we're at 9.296 million

barrels a day in june down from 9.4 million in may and the peak of .6 million in april. this is significant when it comes to a production drop here. and as we've been talking about the supply and demand dynamics when it comes to the crude oil trade, we've been saying that we've been waiting for a meaningful decline in supply and i would say that the market is looking at this as such, or at least the trend that we are going lower. that's why you have this reversal that happened right when the eia came out with these numbers. a session low of $43.60. now we have a high here, $46.64, a change of 3% for crude oil. back to you. >> jackie, i'm sure we'll be talking again very soon. jackie deangelis at the nymex, thank you so much. to the cme group and check in with rick santelli and "the santelli exchange." hi, rick. >> reporter: hi, carl. i might be the guy on the air when we go on air for the dow jones industrial average. fits and starts, it was one of

my topics anyway but not how the change has been all year when you look at it with respect to change but a bigger picture from chicago ism this morning, pmi, that exact line was used. fits and starts. what she was looking at with the relationship between order backlogs, production, and it really does all fit together because those managers are looking at the same data points, kind of trying to assess the economy just like we do here at cnbc. look at gdp. over the quarter starting around 2011, you'll see what i mean. fits and starts. so it shouldn't be any surprise in a world of trading, business cycle extension that that's what we see. and actually that's the topic i want ed to talk about today. i've read so many articles. we've talked about this many times on "the santelli exchange" that the business cycle is meant

to be three to five years. well, it's really long in the tooth. why is it important? the story goes back to alan greenspan who many thought was trying to eliminate recession from the u.s. economy or at least make them less intense. well, what he really did was he ended up giving us a condition where right now any type of recession at all, any type of business cycle closure we get is going to be viewed in a very negative light because it's an all or none scenario with central banks. but they really are bucking logic because the business cycle is going to hit. the logic is going to hit. the anvil will touch the ground and they always show up late in the business cycle, which brings me to the title. all roads lead to qe. this isn't my assessment. everybody i talk to that really gets down to being objective, i just don't think the u.s. economy's really in store in an election year for super negative rates, and i also don't see the fed really willing to raise

rates. so they take a little bit potentially with a slight rate increase, maybe paired with rates they're paying on reserves, the interest rate on reserves, but at the end of the day if there's any surprises, if and when, when the business cycle hits closure, there really isn't anything else to do, is there? all roads really do lead to qe. ponder that. kayla, back to you. >> thank you so much, rick santelli. up next, keeping an eye on the markets. big turnaround for the dow down 27 points. we are off the highs of the day but still doing much better than we were close to the open. oil, as we mentioned, also taking a sharp turn upward through that key $45 a barrel level. ♪ 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.

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take a look at the nasdaq today. all the major averages have been jumping in the past few minutes along with crude on that monthly output data. bertha coombs is at the nasdaq with the biggest movers there. >> reporter: at the beginning of august you probably got paid handsomely this month. the nasdaq composite down here for the second month in three. it's the biggest monthly loss in about three years since may of 2012. so still up for the year. small caps today have tried to go into positive territory. you can see the russell 2000 right now near the highs of the session, but the index overall is in correction territory, down

over 10% from its june all-time high. the gainers today are a lot of those beaten down stocks this month. green mountain coffee, american airlines among those mentioned positively over the weekend. even as the overall chip market has really been in terrible shape in bear market territory. it fell 5% for the month. interestingly some of those chips are among the leaders. up 13% for the month, active vision and convinced some people of its turnaround strategy up about 2%. the biggest dog in terms of sectors, biotechs in particular. biotechs the best performer down 9% on the pullback, just short of correction territory for the month. but certainly down more than 10% from its recent all-time high. still, biotechs are up 14% year

to date. a lot of folks continue to see those as a possible -- some analysts are saying maybe it's time to switch to the big pharma names. >> bertha coombs at the my mek, thank you so much. stocks well off the low of the day as the crude rally continues. dow down 199. we've almost erased all of that as crude has now moved $10 to the upside in one week. [ male announcer ] we know they're out there.

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we knew volatility wasn't going anywhere. not sure we expected it to show up in crude. pretty interesting interday spike up almost 5%. get this, kayla, oil was $37 last week. now it's $47. it is leading market. >> it is rare to see gas prices coming down as you go into the labor day holiday. a knock on effect for consumers though we are seeing the spikes in recent weeks.

>> we've been in other dynamics where a spike in oil would be a negative indicator on what the consumer will face down the road. not today. >> lower oil but as long as the stock market is stable, that's where you get the one-two benefit. >> meantime at more than seven months and counting could the deflate saga be nearing its last legs? roger goodell, seen there, and new england patriots quarterback tom brady there, both leaving federal court a few moments ago. brady, of course, suing the nfl over that four-game suspension. now judge richard berman announced during a short hearing that the settlement talks have failed to reach an agreement and that he expects to make a ruling in the next day or two. joining us this morning by phone nfl agent drew rosenhaus, the ceo of rosenhaus sports. drew, it's good to talk to you again. good morning. drew, can you hear me? we're going to try to get drew on the line because it's pretty

interesting business story developing between the league, between goodell, bob kraft, head of the patriots, who have long been good friends and close allies. they used to have mad love. now they have bad blood, kayla, so to speak. >> i would not have expected you to quote taylor swift while referencing deflate gate. it has led to critics to come out of the woodwork and criticize that they are so close, wondering how goodell could be approaching this situation with a clear and impartial perspective. >> we'll start discussing the qualifications to get an appeal which are many on the participate of brady if, in fact, he loses this decision, which we have no way of knowing if that will be the case. markets in terms of the week ahead, we're down 58 on the dow, three big events facing us in the next few days. some china pmi numbers which will be key given what we know about the chinese economy. thursday the ecb has their first

press conference since the volatility began. and then friday is the big -- that is the big one. jobs friday. and the degree to which that will be for september. the deutsch is out saying the month of august tends to miss in terms nonforeign payroll. >> you have a lot of people going back to school. so there certainly are some factors that weigh in in august. don't act like you're not exc e excited about the beige book, though. >> no, but auto sales have been a bright spot for the economy. factory orders, ism on thursday. one thing the bulls would argue the u.s. data has been tacking in their favor so they do have that. cramer's point this morning was data will continue to be negative out of china and if we get back to levels we saw tuesday, he's not counting monday's action because of the

flash crash last monday morning. if we got back to the lows where we lost all that ground in the last hour that would be a point he would begin to start nibbling names he thinks are long-term plays. >> after the recent pullback, goldman is actually leading the dow on the back of that upgrade. glenn shore says, look, goldman sachs is one of the key market makers, the key providers of liquidity in a market where liquidity has been an increasing concern and that they will be able to establish that market dominance. it will become more clear as we enter this continued period of volatility. >> american he can press, by the way, the only dow pospositive. month to date. for a while it was amex and home depot month to date. so far it's only amex. we'll watch those names as well. none of those are levied to oil unless you're looking at the broad term macro play.

this is the worst dow stocks are interesting. disney, walmart, pfizer, chevron. again, coming back to cramer, a name he believes was sort of a tipping point for the loss in consumer -- in investor sentiment, even if it was just on the march gyp regarding espn, that was a moment in which investors said we're no longer willing to pay as much for even the highest quality companies. >> i think investors will be pointing to august 5 on disney for a long time as that watershed moment the stocks started to turn downward, even a sterling name, a brand like disney, could succumb to modern day viewership trends. twitter as well. that upgrade by bob peck moving that stock. >> jcpenney, too, that's a buy. their view is the bar right now seems to be getting comps to go positive. but even if you assume 2.5%, 3% comps, they think jcp goes to

12%. good room for margins as they try to move jcpenney up the pricing curve. we lost drew rosenhaus. too bad. we'll keep our eye on the brady situation. we'll see you tomorrow. for now back to post nine and "the half." ♪ welcome to "the halftime report." i'm sara eisen in for scott wapner. let's meet steve weiss, joe terranova, josh brown, and pete najarian. our game plan looks like this. yield of dreams of the volatility that has left many stocks with massive dividend yield. what are the payouts? are they great for value trades or traps? the winners from the losers. #buy. analyst bob peck upgrading twitter ahead of the company's board meeting this week. find out what's makinging him so bullish on that stock. but first, the last trading day of