margins to continue to outperform even as prices come under pressure in china. among the biggest gainers today are u.s. steel, ak teal, nucor, and steel dynamics with that, down to "squawk alley. good morning, 8:00 a.m. at twitter headquarters in san francisco, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ >> good morning, welcome to "squawk alley. with me at post 9, mike santoli, john fortt out west, sara eisen

joins us from the imf fall meeting in washington. also kara swisher. kara, good morning to you. >> hi, how are you doing >> good. a lot to get to. our top story and the growing backlash against big tech. amazon is suspending roy price on allegations of mismanagement, sexual harassment, and allegations of his close relationship with harvey weinstein as rose mcgowan called out the amazon executive, saying price acquisitioned her in 2014. here's just a sampling jeff bezos, i told the head of your studio that harvey weinstein raped me over and over i said it, he said it hadn't been proven, i said i was the proof. i was ignored, deal was done amazon won a dirty oscar jeff bezos, i'm calling on you to stop funding rapists, alleged pedos and sexual harassers i love amazon, but there is rot

in hollywood "new york times" saying tech giants once seen as saviors, now viewed as threats. there's, obviously, a lot to unpack here, kara, but let's zero in on amazon to start with. how disruptive is this >> well, you know, they move pretty quickly and suspended roy price. they had already been -- he'd already been under investigation and seemingly cleared, and then the woman who made these allegations went much more public with the specifics of it and rose mcgowan tweeted about telling this executive roy price about what happened to her, and, of course, amazon struck a deal with the weinstein ompanies, s it just isn't, you know, i'm not saying it's not a good look, but all coalesced around one place, so the pressure was on on amazon to act and suspend and remove him. >> impact on the product offering amazon is trying to put together >> i think part of it has to do with that. there was quite a good "wall street journal" story about how it wasn't getting traction, so

part of it is performance, part is attention this is getting, so i think it all coalesced around what happened yesterday, especially after rose mcgowan made those tweets and the person bothered by roy price spoke up very forcefully and in great detail about what happened to her, which was appalling, of course >> and, kara, people, obviously, women speaking up in many industries, right, so sort it out maybe as a hollywood story and then it's the parts of amazon that touch hollywood, but it's certainly broader than that i'm taking from what you're saying that there's no indication from your end that there's something culturally at amazon that needs to really be looked into our fixed here >> well, i think people -- the next question is what kind of investigation did they do around this, why didn't they act sooner, why wasn't it under pressure i think it's a combination of things happening here, but once this thing started rolling, that's the really big question

that will be interesting, will people be begin to revisit stories, all the press begin to revisit some stories already that had happened in tech that were moved along if people are willing to speak out i think one of the issues we have is in many cases we've been working on stories and the people involved are not willing to talk about it and i think it gains a certain not just credence, because i believe them -- i believe these people it's more that these are voices of great detail, and i think if you read some of the things that the person who had been bothered by roy price talked about, it becomes rather problematic for a company to support that in any way. >> kara, are we making progress here as a society, or are we playing sort of this game of sexual harassment whack a mole we were talking about many of these same issues or similar issues anyway in silicon valley and the technology industry over the past few weeks and months. now hollywood, which has been a

hot bed of it for a long time, but i'm not sure i get the sense that there's this overall narrative where changes that are in the works to prevent this from continuing to happen. >> you know, i don't know. with a bunch of people last night, i'm in seattle right now and they are talking about it. it's, obviously, moving, the contagion is moving in as it should, by the way and i think it shouldn't take these women having to just go on the record to be believed. these companies should be doing these investigations and coming to determinations of their own and not because of public pressure do it, but because it's the right thing, because it creates a hostile workplace, because it creates a situation at work that shouldn't be tolerated, the kind of behavior that went on i'm not sure what it will take to change except more people speaking out and making it clear this is not just harvey weinstein is a monster, let's move on. it's that it's a systemic failure on the part of companies to deal with what seems to be -- you can't believe this continues, they allow thisto continue to happen and i think, you know, this roy

price thing is a very good example of that. amazon did an investigation, he was not suspended, and then the person who was bothered, who was a producer on a very popular show on amazon, spoke out very in a lot of detail and then rose mcgowan made noise so i think it shouldn't have to be women making noise to allow this to happen it's because good investigations should be done and good determinations should be made to fix these problems much earlier. and to believe most of these stories. like, you know, i think the question is, it's always been why do these women come forward, why didn't they take longer, because it's incredibly hard to do so. now they are, so we'll see what happens. >> yeah. and the impact, of course, not just on hollywood, but on technology striking, it's not just amazon twitter, kara, as you know, is also under pressure with activists, celebrities, journalists participating in this women boycott twitter event. our julia boorstin is going to

help us set that up. good morning >> good morning to you, carl it's one of the trending hash tags in the u.s. after rose mcgowan announced her account was temporarily suspended following tweets supporting women alleging harassment by harvey weinstein and criticizing men denying knowledge. one woman driving this boycott, software engineer kelly ellis, who happens to be in a class action suit against google, who's tweeted alleging sexual harassment by her superiors at google there are a number of hollywood names that have come out in support of the boycott, including chrissy teigen, john cusack, debra messing, jessica chastain, and mark ruffalo, among others twitter, who said mcgowan was suspended for tweeting a screenshot with personal information, someone's phone number, did say, "we stand with the brave women and men who use twitter to share their stories."

now, after they said that statement, momentum grew for the boycott and ceo jack dorsey tweeted out we need to be more transparent in our actions in order to earn trust and do a better job showing we are not selectively applying rules it's worth noting this call for a boycott comes as twitter's growth has been hurting. its monthly active user numbers were flat this year, stagnating, while instagram explodes twitter reports its earnings in less than two weeks. we'll see if the company reveals anything then about the impact of this scandal. back over to you >> thank you very much for that, julia boorstin kara, i guess first question is, do you agree with jack, and how do they start to build in some consistency on their standards >> you know, carl, for months i've been talking about the idea of responsibility here, and the responsibility over your platforms. i applaud he's saying they should be transparent, but i think i've heard this story

before twitter always comes out about being more transparent i wish they'd put systems and rules into place that work they've been justly criticized for issues around bullying the application of these rules seems happen hazard to me. i've seen lots of phone numbers on twitter, not all taken down they should have been paying a lot more attention with human editors to understand who they were taking down and how it should be taken down they could have taken down the single tweet and discussed it with rose mcgowan. again, this only creates -- this confusion only creates more confusion, and people have a lack of trust for the platform and so all these platforms, whether it's facebook or twitter or google, have got to think very hard, as i've said, about their responsibility they are not benign social platforms, that social media can be and is being weaponized and they have to do something about it and spend an enormous amount of time on fixing it and, again, you know i've been railing on this for months and months, but now the price is

they have to pay the price for not doing this >> kara, is it possible that controversy is actually toxic for twitter as a business? because on the one hand, you know, people get on their case for not being good enough at policing abuse on the other hand, you know, they take some action when somebody posts a phone number, they get slammed for that. we never talk about instagram, very rarely do we talk about a huge controversy on instagram. look how it's growing. >> yeah, because i get that, instagram is a more benign play. you know that, instagram is the safe, quiet place in a lot of ways, but the fact of the matter is, look, they've built these businesses on being the center of the world of discussion when you do that, you take the responsibility of what that means. it's sometimes not very pretty discussions, and so, i mean, unfortunately, in a lot of ways as you and i have discussed, twitter has become somewhat of a cesspool in terms of how people treat each other and behave, and they do have control over the

platform in order to clean it up and so does everybody. and so i think to say they are, you know, oh, well, it's so hard, is really not when they are making lots of money, not twitter necessarily, but all of them are, and benefiting greatly. to say that it's really hard is not something i want to hear, and i know i sound like an annoying mother about this, but they've got to clean themselves up these are wealthy people, big businesses they, you know, pretending they are not responsible is exhausting on some level to me and i think a lot of other people >> kara, knowing how much celebrities draw engagement, drive engagement at twitter, do boycotts like this have more impact at this company than it might otherwise would? >> i don't know about boycotts i don't know look, if people want to boycott, i applaud efforts of all boycotts i like boycotts, i think they are interesting. i think the issue is, i don't know who could bring pressure

except they are not creating an environment people want to engage with each other twitter is a great platform, but unfortunately the focus has been on the controversies and people saying really awful and vile things to each other so i don't think it helps that there's a woman's boycott on twitter. it's not great for the brand, doesn't help amazon, one of their executives got suspended for saying awful things to a woman. you know, it doesn't help facebook that it looks like the russians used and abused their system this is not good business for any of them. and so, again, like i said, it is what it is and they built what they've built and now they have to control what they've built, essentially >> kara, always good to get your take on it appreciate your time >> thanks a lot. >> enjoy seattle kara swisher joining us this weekend. john, over to you. >> all right, thanks, carl for all the social and political pressure facing big tech in recent weeks, not much in the way of selling pressure on the stocks twitter coming off its best day since june, snap also trading

near three-month highs the nasdaq hitting all-time highs today. let's bring in citi senior internet analyst mark may to dig into some of this. mark, how much of this is a headline issue that doesn't necessarily get to the core of these businesses sure, it looks bad for the moment, but overall, there's been growth at these companies is that what you focus on more than the headlines >> yeah, well, look, let me put myself in the head of investors as opposed to, you know, the victims in these particular issues right now and i think, you know, there are a couple of reasons why the stocks have continued to work, despite these headlines, and what are real issues i think one is that investors have seen this before. policing the internet is not easy business. but it's also not new. these companies, you know, google has been attempting to police its search business for many, many years

started out as a fairly open search platform, but quickly advertisers and other nefarious people tempted to game the system ten years ago, people involved in illegal activities like selling, you know, drugs online and -- and other, you know, quite illegal nefarious things are being advertised on google you know, google addressed those issues quickly, and i think at the end of the day it made google stronger. you know, i think that a lot of the changes that these companies are making don't necessarily get the coverage that the issues that created them do, but these companies do address them. i think most investors have seen this before and they've seen that these strong, you know, skilled players are able to grow through them and address them. >> so what's the real risk here? is it lost of consumer trust that eventually erodes the value of these platforms, or is it

government regulation, which could limit the business opportunity? >> i'd be more concerned about the former, but, again, i think at the end of the day these companies, google in previous history and facebook even today are taking very quick moves to address the issues also i guess my question would be what is the alternative you know, for people that have become accustomed to interacting with friends and family and really their online persona is very much, you know, facebook. where exactly are they going to go as an alternative so i think the bigger risk is probably the former, but i'm skeptical to really see an impact, yeah >> got you i also want your take on this facebook/grub hub news today not just grub hub, but they are

integrating a lot of food ordering services into what you can do on facebook sometimes this seems to have an impact, sometimes it doesn't facebook integrating netflix did nothing, even though both of those have been powerful platforms and interesting services how much does this matter? >> couple of observations. facebook is working with partners to enable this. right now their initial partner set does not include grubhub, but grubhub in the last year has been signing a lot of partnerships like this yelp, tripadviser, and google. i think the other thing to possibly say, 90% of all food orders, delivery orders are still made using a telephone and paper menu in your drawer, so i think that facebook enabling the ability of online ordering is very positive for this category as a whole, and i think that, you know, grubhub is a company

that very much, you know, is benefiting from increasing share of delivery and takeout orders being done online. >> all right, thank you, mark may from citi. the list of companies facebook working with said to include grubhub delivery, door dash, slice, olo we'll see how long that list goes mark may from citi, thanks for joining us when we come back, a changing media landscape worrying investors as some of the biggest media companies are gone then an early investor in spotify talks about the music streaming industry and spotify's role in it then the fed's next move and today's market records when "squawk alley" continues in a moment post 9 is sponsored by fidelity investments innovative ideas for serious investors. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts

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watching media stock this is morning, a few notable stories, including an investment group calling on 21st century fox to overview the board disney says it will cut 200 jobs at abc and some of the cable networks no cuts at espn, reuters says. some of the stocks are getting nibbled at today, mike >> yeah, little bit of tepid bounces at the end of a week that's been tough for these stocks it's sort of this build up it seems to me. whenever you have investors prime to view a sub sector as structurally challenged, the

accumulation of headlines, or people say nfl ratings aren't big of a deal, but they gather up, i think you have people very defensively oriented towards the group to the sense they look cheap. maybe getting there. >> although we did have an analyst today keeping his $85 target by the way, some minimal headlines, speaking of football, thursday night ratings from last night's game up 7% people starting to say, well, maybe there are some things. >> when you have a decent matchup. the key for nfl is local ratings, in-market ratings have held up well it's the national games like thursday night out of market games people have not always commanded a great audience >> see it if holds as we head to break, watching shares of netflix this morning, briefly breaking above $200 a share "squawk alley" is back after this

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music streaming and social media are continuing to

completely redefine the music industry spotify expected to be public in the not too distant future reportedly valued around $16 billion. earlier this week i spoke with early spotify investor, music manager, and venture capitalist troy carter for my fort knox podcast. i asked him how spotify and other streamers and the speed of distribution through social is changing his industry. here's what he told me >> i think what we've seen over the last, you know, five, ten years, is this sort of demock a ratization of process and distribution and i think it's good for creativity, i think it's good for artists, i also think it's good for consumers, you know, because you have more choices, and also just as music lovers, it takes us out of that sort of segmented and segregated

types of music and kind of opens it up for, you know, whether you like hip hop, rock, r & b, country, within the sort of new ecosystem of play lists, everything is sort of there for you. >> you managed lady gaga i believe somebody brought her into your office before she had her first album. she had most of the songs maybe together on it, had her look together, but before the first album, through her rise. also pretty recently you kind of helped meghan trainor do meghan trainor 2.0. how did the process change from lady gaga to meghan trainor based on how music and the way music is distributed changed >> i think we see a rapid acceleration in terms of reach with lady gaga, i think the difference was, you know, because we couldn't get her stuff played on the radio, we were using new platforms like

youtube, facebook, twitter to kind of reach audiences and bypassing gatekeepers. it took us probably eight months to a year to penetrate the world, you know, where ten years prior to that it would have taken us three or four years to penetrate the world, and with meghan trainor, i think we penetrated the world within two weeks. >> and it continues to change. it's interesting he said he had trouble getting anybody to play lady gaga at first meghan trainor similarly kind of redefining what we expect from artists. guys >> fascinating look at the music business, john, and a nice departure from the conversation we normally have >> podcast in just a couple of

weeks, youtube, if you get a billion views, as he has seen his artists do, not that it brings in a lot of money, but the exposure that it brings, the way you're able to gather people to concerts and events and make profit after that, that's the real key to making money in the business these days, carl. >> also interesting to see how this is going to be viewed, john you say about 16, or whatever, under $20 billion valuation, it's about 20%, more than that of netflix, which seems to me the obvious direct comp, but without originals per se and with a more questionable revenue stream behind it >> definitely. you know, netflix has become this brand into itself that big media companies have not been able to challenge in the same way, but, you know, along with spotify, you've got apple, you've got google, you've got amazon, all the others which don't seem as far behind with the built-in audiences and credit cards on file as it seems with netflix so we'll have to see how that

company goes out >> all right, john, can't wait for more fortt knox, of course, 2:00 p.m. in the meantime, europe's going to close in about 75 seconds. let's get to morgan brennan back at hq. >> let's take a trip abroad, shall we european stocks on track to finish today's session at a four-month high. the german dax hitting a fresh all-time intraday high it could close above 13,000 for the first time ever. we're just right there on the edge the index is up 13% so far this year it's handedly outperforming the europe's stocks 600. germany's buyer helping to lift the dax, that's in a $7 billion deal, you can see the move right there for bayer. the transaction will hope to convince regulators to approve its acquisition of monsanto, which you can see is up about 2% here in the u.s. for trading here today mining stocks are also among today's big winners. this is due in part than the

stronger than expected chinese import and export data the company is importing more iron ore from other places that is up about 7%. moving on to current sis, the euro pulling back from highs of the day, though it is still stronger against the dollar after spiking on release of this morning's u.s. consumer inflation data hovering around 118 right now. european bond yields spent most of the day lower on report ecb policy makers have agreed to extend their bond buying program into next year as for the political turmoil in spain, the watch is on to see if the catalan president will meet the prime minister's thursday deadline for declaring independence catalonia risks losing its autonomy if it decides to secede from spain, so certainly something to keep watching as we head into another week carl >> thank you very much for that. let's get to sue herera with a news update. good morning, sue. >> good morning, carl. good morning, everyone

here's what's happening at this hour susan collins says she is staying out of the governor's race, because she thinks she can do more good for the people of maine by staying in washington she made the announcement at a local chamber breakfast before a friendly crowd two-term republican governor paul la page cannot run again because of term limits the wildfires in california continue to burn out of control. these pictures are from the city of calistoga in napa county. 5,000 residents there have been ordered to leave that city the death toll has risen to 31 in the state, with nearly 300 square miles scorched. u.s. men's soccer coach bruce arena has resigned this after his team failed to qualify for the world cup for the first time in decades by losing to lightly regarded trinidad and tobago earlier this week arena called the loss a major setback for the men's soccer program. bruce springsteen made his broadway debut last night. he and his wife patty greeted

fans after the show. the show is running for a limited run at the 900-seat theater. you're up to date. that's the news update this hour back downtown to "squawk alley." carl, back to you. >> sue, thank you very much. we are getting some breaking news out of washington, as the president says he will refuse to certify that iran nuclear deal >> that's right, the white house officially releasing the president's decision here to not certify the iran deal, so what this means officially from the white house is the white house wants to stay in the iran deal, but not certify it under a separate piece of legislation that is advanced up on capitol hill so he's going to decertify the iran nuclear deal. his goal here is to amend the legislation up on capitol hill and put in trigger points for iran that if iran did the following things, then congress would impose sanctions, but the white house says they are going to push congress not to put new

sanctions on iran and not to get out of the deal overall. rex tillerson, secretary of state, speaking to reporters here at the white house yesterday said we don't disagree that iran is technically compliant with the terms of the nuclear deal itself and said we'll never do a deal this weak again. he also said he admits there are challenges up on capitol hill as the administration pushes for new legislation, saying this is not a slam dunk on the hill. we know it's not people have very strong feelings, and it was also similarly fairly circumspect about his expectations that the iranians would agree to a new set of talks with the united states he said they socialized this with the iranians a little bit and there is an expectation that they would talk, but no expectation necessarily that the united states and iran can come to a new agreement on some of the things outside the nuclear deal that the president continues to have a problem with those being iran's support for terror and also iran's ballistic missile program. it's not nuclear ballistic

missile program. those are two things that the administration wants to deal with outside of the framework of the nuclear agreement. they'd like to do new negotiations with the iranians and we'll see where that goes from here. carl >> we'll look from reaction in congress, eamon, but a lot of reaction from around the globe, including putin today. >> yeah, absolutely. the russians have said any threat from the united states is a problem. the chinese have said they think this nuclear deal is beneficial to the world, and they'd like it to continue. so, the nuance here is that under the legislation passed on capitol hill, the president is going to decertify the deal, which means that's that 90-day process, every 90 days he has to certify, so he's going to decertify, but not going to end the iranian nuclear deal itself. that stays unless congress passes new sanctions, so they are going to kick it up to capitol hill if congress decides to impose new sanctions, then that's the united states getting out of the deal and the iranians might bail

at that point themselves and restart their nuclear program. so now all the pressure is going to be on capitol hill and off of the white house. the white house is going to lobby the hill to not pass new sanctions, but to amend the u.s. law around this, to put the trigger points into place, so it's a very nuanced solution that gives the president much of what he wants. he wants to denounce this deal as the worst ever, which he's done, and say he's defecertifie it, but he doesn't want out of the deal necessarily, because the american side benefits from it, carl, in a big way the military doesn't want to give up on >> interesting how much nuance there is on national security, on health care, on immigration trying to thread some needles here over the past couple of months eamon javers in washington, thanks when we come back, there's a shark in the pits at cme kevin o'ary lllewi catch up with rick santelli when "squawk alley" returns

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let's get back to sara eisen in washington with another special guest. sara >> carl, good to see you i am here with jacob frankel he's a regular at these meetings he's the chairman of jpmorgan chase international, former governor of the bank of israel, and still very plugged into the world of central banking always good to have you here >> my pleasure >> another record high, s&p, dow, intraday records, that makes more than 40 for 2017. how do you interpret that? >> well, it is a puzzle, and the

question is, does it represent an assessment about where the economy is going, or does it represent the impact of policies that direct investments to the financial sector, and those are a very different kind of issues. if the markets believe that some of the measures that have been promised deregulations, tax reform, infrastructure investment, et cetera, if the market believes that they will be implemented, then indeed they should be reflected in better performance of the economy and it shows itself in the market. >> does that mean you think the underlying fundamentals right now of the economy and earnings do not match up with these record highs >> well, i'm also aware of the fact the extraordinary low interest rates have been in place for so long, has also some distortions. those interest rates are

diverting the resources towards the financial sector companies are buying back shares instead of investing in plant and equipment. there may be some disconnect between the financial sector and the real economy, and those are the scenarios, and it is up to policy makers to ensure that the policies are really validating what the markets are hoping for. namely, back to yet to impose the deregulation policy, do impose the tax reform, and do invest in growth oriented infrastructure >> and on the monetary side, you've been pretty vocal about the need to return to normal, to get out of the crisis mode, low interest rates do you think the fed is moving fast enough on this front? >> well, we are now about ten years after the crisis the u.s. economy is doing very well, relatively speaking. clearly markets have been performing extremely well, and

also output is growing >> just missing inflation. >> i'm not sure. inflation has to be looked at into the future. as it was said, it will be imprudent to wait until inflation actually shows the 2% target much of the inflation the next few months is already in the pipeline so, by all assessments we are moving in this direction, and some of the inflation that should have been and would have been reflected in wages and prices is reflected in financial markets prices so, we have really a little bit of an imbalance in this particular context the fed should normalize it is started and, indeed, i would be very surprised in a way disappointed if they do not have another step in december and it will not be the last one there is still a long way to go, and next year should also be so what is more important for markets is the trajectory that

the fed is projecting. not all the world is ready europe is still not ready. >> sure. we've heard that from bragg h . draghi >> he will have a period where central banks do not move in tandem with each other during that period it does not mean lack of synchronization it means that each one is reflecting a different phase in the cycle and we will also see, therefore, exchange rate changes. we should not resist that. >> right and a lot of money going into bitcoin. >> absolutely. >> quickly, you did mention some optimism, sounded optimistic about the tax reform prospect in particular so, do you agree that this would stimulate the economy, would it boost wages and job creation >> it is so much in the political arena. i listened this morning to secretary mnuchin. he was extremely reflecting confidence and clarity about the

plan deregulation is in place, and it is a big plus. tax reduction, especially on the business sector, seems to be in place, and it is clearly warranted. we need to bring some of the profits that are locked abroad back to this country they will stimulate investment and growth, so it looks to me that there will be only purely political games that will delay the right policies, and i very much hope it will happen i don't believe we are going to come back to growth rates of three-plus percent, but every one-tenth percent is producing jobs it would be a shame not to do it >> similar comments to what your boss ceo jamie dimon said yesterday on the call. always good to catch up with you, jacob, thank you. >> my pleasure, thank you. >> chairman jpmorgan chase international. back to you at the new york

stock exchange mike >> sara, thank you very much good perspective there on the global picture still to come, bitcoin surging to new record highs, surpassing two big banks in market cap. first, rick santelli, what are you watching this morning? >> you know, i'm watching all the data, volatility in the treasury options going down. the pit's looking for anybody to step in and buy some vol you know who they found? they found mr. wonderful >> i just bought switzerland i'm about to buy france. buying the whole country going in deep into the markets today. >> italy is on sale today. that's where ushyou should be aiming we'll be up after the break, by the way. and the international brotherhood of electrical workers helped make that happen. the ibew's outstanding union professionals have the skills and training to get the job done right. that's good for our customers and for our bottom line. ibew members are our power professionals.

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open an account today. ♪ i'm scott walker top of the hour, netflix breaking above $200 for the first time ever, so will it deliver on earnings on monday? our traders are going to look ahead before that big report and another record high for nvidia one analyst says it could go up another 30% from here. president trump scheduled to speak 12:45 from the white house on the iran nuclear deal we'll have live coverage on that and much more top of the hour, noon eastern, carl see you in a little more than ten minutes. sounds good, thanks. in the meantime, rick santelli and special edition of the santelli exchange. >> absolutely, thank you, carl kevin o'leary, mr. wonderful, welcome. we were only half joking before kevin went on camera, we were talking about volatility

and how crazy it is, how low it is, what does it mean. so, this pit really did experience a drop in volatility pricing and not only the weekend, but the kind of cooler than almost hot cpi today versus ppi yesterday. so, kevin, volatility is a big instrument to trade. your observations? >> so, hitting new lows, clearly what this is telling me as an investor is equities have more to go and i'm trying to decide between our domestic editions, because it does not move the same way large has i'm betting we're going to get tax reform if we got tax reform, i see another 5% upside, maybe 6% on the s&p 500. if i go small cap, down to the russell 2,000, i'm seeing 15%, 20% if we get this whole deduction in taxes, so i'm putting 20% of my own portfolios into my own index. i'm talking my own book, but it's a group of 339 small cap stocks i'm going to go with that. i think that's the next leg up in this market as for volatility, i've never

seen anything like it. nobody thinks we'll ever have vol again. complacency is rampant, and every day it goes down further as the market keeps going up this is getting really interesting. >> absolutely. and then when you add in all the growth, the unbelievable growth of etfs, and you understand that, i just think that as time goes on, the connection, etf is just a derivative, okay, so future is a derivative of cash, etfs are a derivative of a derivative i worry about liquidity. >> i do, but people often question, it's really about the liquidity of the underlying stocks inside the etf, so if they don't have liquidity, you have issues. let's switch from stocks and look at high yield or hyg. markets have been made for high yield securities that would have never been made if there wasn' such an appetite to put them in the garage of the hyg to have the portfolio to match the trade. >> rick, you've got to blame the fed for that

they are starving people for yields >> oh, my god -- >> but starving the entire population for yields, people are going to go to the high yield products problem is the bottom of the indexes are single c credits and when poo-poo hits the fan, no liquidity on single c. >> who's going to make

frenkel okay work this is getting really interesting. >> absolutely. when you add in all the growth, the unbelievable growth of etfs, and you understand that. >> yeah. >> i just think that as time goes on the connection -- the etf is just a derivative, okay, so the future is a derivative of cash etfs are a derivative of a derivative i just worry about liquidity do you ever worry about those things >> people often question it's really about the liquidity of the underlying stocks inside the etf. if they don't have liquidity you don't have issues. >> let's switch gears from stocks and look at something like high yield or the hyg >> rick, you've got to blame the

fed for that because they are starving people for yields. >> oh, my god, come on >> by starving the entire population for yield, people are going to go to the high-yield productsthe problem ishetoof osinceare single c and when things hit e poo -- >> who is going to fix themas? >> all scena as aderdo >> i youpoint on credit because thers no muc liquidity. e leatedut liquidity the bankn't put it on balae sheets anymore hey not making money trading. n't that say it all. >> there use be idity in banks put it ou let thg e din put it on, now 's g can't have it a thattrol that marketys thg.ink that's a healthy i would to more delegration. woue very good. >> heresy. you i'm with you. ints and bad points, n a potics, but obviouy deregutilayt elec in november. nd i optimistic afte boento ted cruz on "uawk listened to every wo y the probability of form by q 1 of 2018 is 75% and 's whe eity markets cont to p. this is pers opi of mine, but el blish smart y, kof hng in the ckgr getng all the go get republicans refoor o good thing for if they don't dever on tax whd in 2018 elections. don't disagree. thine outcome of tha ack here would be fferfrom i think thamer people undersnd that nothing geronger so one side to i think e outcome of thecoion d a lot differ might not strengthen the termay, every aces every admiration can debate it.re goi to stthen e questionhis is aimpot everyby wants to talk about bitcoin. you and i don't disagree that it can go further up to 6,000 the number one country that trades bitcoin nigeria. i have nothing against nigeria what are they doing in nigeria with bitcoin how come it's not accepted by the re test test test

as rick was telling you before the break, bitcoin surging to another record high today. its market cap tops $9p billion. it's bigger than goldman sachs and morgan stanley now the crypto currency is up more than 480% this year. we had a discussion last few moments about what it means, whether something with no intrinsic value, how high can it

go >> right. >> which to me means that we didn't know if it was a security, a currency, a commodity, whatever it is. what it's not is a company, and that's why the comparison to the specific company with, you know, future cash flow, look, compare it to gold the case on bitcoin is, whatever, $1 trillion worth of gold in the world, all that's ever been mind so bitcoin is still a small portion that have. >> what did you think of o'leary's comment a moment ago, that there's no rechores >> there isn't that's what it is, distributed system, right? >> is that supposed to be its own failsafe i don't know if that's assuring or not. >> well, watch the market other. talk about tom lee with a new take on equities when "squawk alley" comes right back. [vo] when it comes to investing, looking from a fresh perspective can make all the difference.

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tom lee has been famously bearish on equities for most of the yore, but today he has a new note, mike, in which he talks about the crunch on high yield. >> yeah. >> never materialized so he goes back to neutral on equities. i said on twitter he threw in the towel. he said it was more like being steam rolled. >> very good natured about it. he was saying routine 7%, 10% decline and did think high yield would have more of a panic very brief in march, but it's an extraordinary year nobody really pleau dicted we'd have the least volatile year in

50 years, a constant upward grind and phang big in hang in. >> tom is going to talk to scott on the half and the vix remains below 9.5. jon fortt, hope to see you back in a few days and meantime let's get over to judge wapner and "the half. heart, carl. thanks so much tom lee coming up in just a little bit welcome to "halftime." i'm scott wapner our top trade, netflix shares crossing 200 bucks for the first time ever. eight firms bumping the company's price target so will earnings on monday keep that stock climbing with us on set, josh brown, steve wyse, jim lavanthal and jim brown all with us for the hour let's begin with shares of netflix hitting a new record high today, now up an astounding