welcome back i'm kate rogers. markets coming off early lows, but health care remains one of the day's worst performing sectors after a jpmorgan analyst highlighted challenges for drug makers and specialty pharmaceutical companies regeneron, mylan, and celgene all lower on the day that does it for "squawk on the street," back downtown for the start of "squawk alley." >> thank you good morning, it's 11:00 in midtown manhattan where ge is holding investor day, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ welcome to "squaw

alley. i'm john fortt here at post 9 with michelle caruso-cabrera, mike santoli, carl quintanilla, and sara eisen have the morning off. general electric, meanwhile, slashing its dividend in half. the first cut since the financial crisis, and it's shaking up its core business shares sliding right now down more than 4.5% morgan brennan is at ge's investor day in midtown manhattan and joins us now >> ge cutting its dividend by 50% in what is from a dollars and cents perspective the biggest reduction ever by a company excludeing the financial crisis, but the street expected that that's not why shares are falling right now. why shares are falling, because of the guidance, so new 2018 eps forecasts, a dollar to $1.07 per share, free cash flow $6 to $7 billion, also disappointing,

lower guidance and as one analyst just pointed out to me, the $6 billion in pension funding next year is excluded from the disappointing eps forecast meaning, the numbers may be worse than the optics are suggesting so one key driver of that, the rapidly weakening results in ge's biggest business, power russell stokes laid out upstairs in this building to more than 300 people the challenges and how he plans to turn the business around, including cost cutting and a focus on services renewable energy storage, also saying gas powered generation will remain important, so that coming after john flannery saying ge will focus on its core businesses, power being one, but also aviation and health care. his plan, exit $20 billion plus in assets over the next two years, including as of this morning transportation, lighting, industrial solutions also plans to exit baker hughes. digital, something all

executives are talking about right now, but there are going to be changes. other big developments, changes to the composition to make it more performance oriented, also more equity based. the board is shrinking from 12 to 18, and as new cfo jamie miller is discussing with her audience upstairs right now, new changes to how the company reports its quarterly results. they are looking to make that more streamlined guys, back over to you >> thank you, morgan brennan let's bring in bob pisani for more on ge's shake up. this is a stock, looking for the bottom here, but seems to be so many different things that are changing, that they are discovering. it's unclear how this is going to work out. >> this little point here, $6 billion in pension obligations that are not covered by that earnings guidance, that's a problem. somehow that's got to be included, unless they are making no payments this year at all, that's an interesting piece of information. i think the broader question for those who cover the stock market as a whole, is this the start of

something? no, not right now. this is a bit of a one-off if you look at the reasons why the companies cut the dividend, number one, their earnings are moving down rapidly, that's the case with ge, or their cash flow has declined so much that they are having trouble covering the payment. and that is happening with ge and it happened with the oil companies. they all cut their dividends, but if you look at the broad market, none of that applies right now. we are at record corporate earnings right now, cash flow has been fantastic for these companies. in fact, the overall dividend payments are going to hit a record this year yes, bad news for ge, but i don't think it says a lot right now. >> guidance to a dollar makes it easy to calculate the multiple, right? straightened at $20, so 20 times next year's earnings is it justified in this market for ge to have that? >> still sounds high i'm telling you, that pension obligation -- >> they are going to borrow, i believe, to pay that >> it's a balance sheet hit for that reason.

i think the case you'd have to make if you wanted to say this now looks like the start of a potential comeback is $1 is a massively impressed number we don't know if that's a base line that seems it doesn't reflect the full earnings power longer term, so that's what's getting hashed out here. >> remember, they griped bitterly for 20 years that they never gave them an appropriate multiple, and the fact is that conglomerates had lower multiples. one time it was a great idea, they gave them a higher multiple, but that hasn't been the case for many, many years. ge and other companies have been victims of the idea there's too much in this box here, and so now they are seeing the results. let's divest >> morgan, remind us with this cash flow problem that ge has, do we feel investors have the full story on exactly what the source of that cash flow problem is so that we can say other companies in the sectors where ge plays won't have similar

problems >> yeah, it's a good question. so power has, obviously, been a big driver of that cash flow shortfall this year, and ge has certainly experienced this, but they are also not alone. you'll recall last week when siemens reported their earnings. they also talked about how hard hit their power business has become and very quickly, but just to put it in perspective, ge's cash flow this year is going to be $7 billion their dividend payouts more than $8 billion the fact the free cash flow forecast next year is $6 to $7 billion, not good. that's disappointing to analysts and investors right now, but that being said, ceo flannery did say to the crowd upstairs a little while ago that those numbers next year, while disappointing, are sort of where they are going from there. kind of insinuating that would probably be the baseline for ge. >> got it, thank you, morgan >> they are going to have to borrow $2 billion next year to cover the cash flow, the rest of the dividend not covered by the cash flow and if borrowing costs

go up, that's an issue >> yeah, thanks, bob, thanks, morgan all right, tomorrow, 9:30 a.m. eastern time, exclusive interview with ge chairman and ceo john flannery right here, "squawk on the street," don't miss it. and moving on to younger companies, uber clearing the way for a long-anticipated softbank investment was it going to be lyft or uber, well, it's uber with a truce reportedly reached in the boardroom spat between travis kalanick and benchmark capital softbank now expected to buy up to $10 billion worth of the ride-hailing giant joining us for more, kara swisher. good morning, great to have you. >> good morning. >> so, is this the point where uber investors can breathe somewhat of a sigh of relief it seems like multiple birds got felled by one stone here with softbank coming in, or are there other things lurking in the details? >> well, jake, this is uber, so

no the tender offer has to go forward and that's what everything hinges on if it doesn't work, they are back to square one with the lawsuit and everything else. so they've got to have successful tender offer, people have to sell their shares to softbank at a price softbank finds acceptable, so there's a lot of movement here until it's done, but if all goes well, they'll have it done within a month or something like that and it depends on whether employees want to sell, the ones that are eligible, and that's a certain group of people. depends whether the big investors want to sell, like google and benchmark, and even travis kalanick, so there's still a lot of uncertainty out there, but at the same time it's a real step forward for what people inside uber are calling the peace deal, essentially, to cause peace in the kingdom of uber, which has been fraught, as you know >> how much do we make of this valuation haircut? talk of uber being worth as much as $70 billion this looks like $40 to $50 billion. is this what everybody assumed at this point, or is there more

to it from that perspective? are employees going to be disappointed at this valuation level? >> well, it depends how many people sell and what they sell at if not enough people sell, softbank wants 15% or more of this company that's their bottom, 14%, 15%. if they don't get what they want, they have to raise the price. the question is, do softbank want to raise the price? they've said publicly they are not paying too much for it at the same time some think the company is worth $100 billion, so selling now is a problem. i've heard a bunch of the larger investors are questioning whether they should sell now or whether it's going to do better. at the same time, if this doesn't come off, they are going to be presented with the problems they have, the lawsuit, the problems between kalanick and benchmark, which still haven't gone away. there's still acrimony with both sides declaring victory yesterday, essentially but, you know, if they get to the right price, it's going to be around those prices

they are going to invest a billion at a slightly higher price, but the 40 to 50 range seems to be where it is right now. >> both reporting record breaking sales in china. alibaba alone announcing a $25 billion weekend. not only does that top its own record, that number is higher than sales on black friday and cyber monday in the united states last year combined by a long shot. kara, i mean, revenues are one thing. what has singles day become and what does it matter to companies outside of china, who are trying to play in china >> well, it's interesting. it's a coordinated effort. cyber monday and black friday are all retailers selling. this is a coordinated effort on behalf of one company, which also works with retailers across the company to improve their technology, their delivery, so

it's as if amazon was the one running all the sales on black friday and organizing all kinds of crazy spectacle have you been there? i was there a couple of years ago on the night where they have the shows and they count down and jack ma, who's the head of alibaba is the cheerleader in chief of this thing. celebrities everywhere >> nicole kidman was there this year >> whatever, it's someone every year, but what's interesting about it is the concept of involving the entire country's retail ecosystem and that's what's really interesting. and the question is, they talked about it, can they bring it here to the united states, or elsewhere, central united states is the next biggest market for them, and will they be allowed to and what will amazon do because they are so aggressive and interesting and entertaining, and they make a thing out of it, out of buying nike shoes, essentially, so it's -- i think it's fascinating and sort of points to where they can grow next and where they can

move their systems and their transactional ecosystem and whether amazon can do the same thing, or if they want to at all. >> kara, michelle here big story of the day for a lot of investors is general electric, they are cutting their dividend, et cetera. i'm wondering if that's on the radar screen at all in silicon valley, because they'd been running ads where they showed young college graduates telling their parents they are going to this tech start-up, going to ge, next we know they are cutting staffing at ge digital at this point. what's the talk at this point, anything >> no, i don't think they talk about general electric that much obviously, ge is an enormous conglomerate, and it makes jet engines, all kinds of things they've been pushing hard under immelt and he appeared at one of our events a couple of years ago talking about the digitization of ge. like any company, will they be able to take advantage of technology to effect what are technological businesses, but here in silicon valley, it

doesn't, you know, except for jeff immelt trying to become uber's ceo, there's not a lot of talk about it, although some companies are talking about how to -- google is helping retailers become more digital because of amazon, and so i think that's where it gets discussed, but not the way it does there for sure >> thanks, kara. good question, michelle. last year i sat down with jeff immelt, when you're talking internet of things, there are a lot of tech companies who want to play with the likes of ge, they might see the weakness as an opportunity to come in and play the savior. kara swisher, always great to have you, thanks for joining us today. all right, when we return, speaking of which, shares of general electric slipping on heavy volume thought all the bad news was priced in? think again. investors discuss the dividend cut and turnaround plan. plus, uber selling to softbank could the investment pave the way for an ipo

and more on those singles day results that absolutely smashed records. early baba investor joinus ensqwkll" turns.

taking a look at markets at this hour. the dow jones industrial average and s&p are breaking into the green, along with the nasdaq just barely coming off their first negative week in nine. tech stocks continuing, but you can see just like the rest of the market managed to go positive joining us now is scott wrenn,

wells fargo senior global strategist good to have you here. >> hey, michelle >> if rip van winkle woke up today, he'd think the world is falling apart, there's a recession coming, the markets, all the averages would be lower. but that's not the case anymore, right? what happens with ge, because it's so much smaller is ir reflective of what happens nationally, correct? >> when you and i started in the business, today would have been a very, very bad day for the stock market, but as you said, things are different, so, you know, for us i think you could probably attribute the last 120, 150 points up in the s&p 500 purely to hope that some kind of tax cut, corporate tax reform happens. we think something is going to happen, of course, that's not 100% probability, so there's still the possibility that nothing happens, which, of course, would take air out of the market, but this has been a very resilient market. >> how much is built in and how much would come out?

>> michelle, you know, 120, 150 s&p points, we could come off fast if nothing got done i think that's -- i think something is going to get done and, you know, really right now you look at it pullback historically hasn't happened in a while, but historically that can happen on not much haven't had one in a long time and certainly the tax hope out there would be a reason to take some money off the table for a lot of these players >> that's certainly true, scott, it would seem we're due for something like that, although you know the counterpoint to the argument that the market is really kind of hinging on a tax deal, which is that the kinds of stocks that have been leading the way for the last 150 s&p points are not necessarily the ones that would be the biggest beneficiaries. you had technology, something like 20% eps growth in the last quarter and tech has been the leader pretty much until recently >> tech has been, and certainly they are one of the lowest

paying effective tax rates for that particular sector, but, mike, when we talked earlier in the year and in the pullback camp, still in the pullback camp, you know, these more cyclical sectors, industrials, consumer discretionary, financials, they all pay high tax rates and they would be beneficiaries. when you and i talked earlier this year, we had been overweight technology for quite a while. we cut out of that, definitely left some money on the table, but we're fully invested here, and i think stock valuations are a little frothy right in here, but we're going to have to wait and see what happens with taxes, but certainly if nothing happens, 5%, 7%, it's going to happen quick >> scott, any fresh take on asia, given the president's trip over there and sort of reemergence of the tpp without the u.s. is that market looking better poised for growth or about the same as expected >> well, john,i think that internationally is a better

poise for growth, and really personally i think that if we saw a growth surprise, it's a lot more probable that it would happen internationally than within the u.s., so as we look at -- as we look at the index, developed internationals, emerging markets, those look better to us than the u.s. right now. and for most of our investors, they've been overweight with large cap stocks, great with large cap stocks like other retail investors, not just our clients, they are under weight about everything international and certainly emerging markets and developed international. >> got it. thank you, scott, good to have you on >> have a good day, guys when we come back, is a barbie buyout in the works hasbro making a takeover approach for rival matel we'll talk about that. nah. not gonna happen.

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alley. there are two key events for investors today. there's a big meeting in caracas, where the government called all bondholders to talk about a restructuring of the debt a lot of americans, however, will not attend because they are afraid they might violate sanctions if they do, because the guy in charge of the renegotiation is the vice president of the country, who is on the sanctions list by the department of justice because they believe he is a drug kingpin, that he's running a drug empire. so that's one problem. the other big event today is that the committee that oversees decision about credit default swaps, they are going to meet at noon venezuela has been late on several key payments, but they ended up making them but vice president gotten to the inbox of a lot of accounts on time, so is that a default or is it not? that's one of the decisions that the committee known as isda has to make. >> referee that says yes or no >> exactly, they have a meeting coming up at noon. we'll see what they decide

that's less consequential in terms of the bigger picture, which is what ultimately does venezuela do with its debt at this point >> russia seems to be willing to give them a lot of rope, though. >> this is interesting, russia announced on friday they had renegotiated their debt with venezuela, what everyone assumes that means is russia no longer has a right to nearly 50% of citgo refineries in the united states they had to renegotiate because the u.s. government was never going to allow the russians to own part of a u.s. refinery. we'll wait for details on that, too. it's part of the big messy pot of debt they've got. >> indeed, thank you, michelle now to seema mody back at hq with the european close. seema? >> stocks in europe on track for their fifth consecutive daily loss, a combination of disappointing earnings and the political situation in the uk. the british pound falling after it was reported 40 conservatives in parliament have agreed to sign a letter of no confidence in prime minister theresa may,

which means they only need eight more mps to begin a formal leadership challenge within may's party. meantime, the prime minister is under pressure from business leaders in the eu and uk to speed up brexit talks. may's spokesperson says she wants to begin in the next few months concerns about brexit talks weighing on uk banks, including standard chartered, barclays, and hsbc all down today. the decline in the pound giving a live to uk exporters, including astrazeneca, ynilever and bp edf, a french utility firm lowering its earnings guidance for 2018 due in part to lower than expected power consumption and a decline in capacity compensation in the uk that stock down over 10% john >> all right, thank you, seema and when we come back,

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pharmaceutical and government executive to be his health and human services executive philippine president rodrigo duterte singing a duet to president trump at the asean summit dinner in manila. he jokingly told the audience he'd done so on the orders of the commander in chief of the united states. microsoft's cofounder bill gates donating money to alzheimer's research he'll invest $50 million in the dementia discovery fund, with the rest being put into start-up companies. and french president emmanuel macron paying homage to the 130 people killed two years ago when isis militants attacked that city. he laid wreaths and observed a moment of silence at the country's national stadium and also a restaurant. two of the attack sites. back in 2015 you're up to date. that's the news update this hour

back downtown to "squawk alley." mike, back to you. >> all right, sue, thank you very much. general electric having its worst day since august 2011 after announcing its cutting its dividend in half and shaking up core businesses. shares down almost 40% for the year for more let's bring in herb greenberg, cnbc contributor. herb, good to have you here. thanks for calling in. >> mike, it's great to be here >> so, among the headlines here, obviously, is this dividend cut, but the dividend cut really also seems a symptom of kind of an accumulation at ge of opaque accounting and perhaps not having the real cash flows to cover the dividend and really to reflect what their stated earnings were. what's your main take away here on what this means in terms of a reckoning for ge >> well, you know, mike, i think of it more than just ge, because for ge, flannery gets big credits for swallowing the bitter pill. i like to talk about swallowing

the bitter pill. new ceo comes in, bitter pill swallowed, big reset now he can sort of, like, ignore everything else and move on from here and grow or go from there and i look at it and the first thing i thought of this morning, my goodness, he's cutting the dividend who else will say, hey, he's just giving me permission to do the same thing, so i start thinking about other companies you know, he's talking cash flow, bringing cash flow back front and center, because through this bull market all we're talking about is earnings per share and are they beating and the real question gets back to what lever are they pulling to meet, beat, or even keep a dividend inflated. and i think that sort of gets lost in the transition when everybody's tripping over themselves to buy stocks that are going higher, because within that they are a bunch of companies that, you know, there may be some issues and now you're starting to see the come up pence of these big companies that, you know, theoretically forever were considered safe hiding places.

>> that's true could be true, herb. i wonder, though, if other ceos are saying, wow, now i have permission to cut my dividend. seems they'd also want to do that and here is our new strategic plan going forward you don't necessarily want to send that signal you can't cover your dividend or don't want to in the absence of having something to give people in terms of a better outlook. >> well, sometimes you don't have something better to give them or you try to think it through. one of the companies on our list, for example, that we've been watching and writing about for the past year is kellogg no one talks about kellogg, but if you look at the cash flow situation at kellogg, you could argue if they weren't pulling certain levers, their cash flow is not necessarily what people might think it is, and they have a new ceo, they have a new cfo, and you listen closely to what the ceo is saying, and you say, what's going to happen next here it's clear this is a company hoping it would get from here to there when they thought it was

going to be a cyclical change and it ended up being a secular change take a look at kellogg and you look at the cash flow there, both of these companies paid dividends. look at the cash flow, what you really think the cash flow or quality of the cash flow is and you say, what's going to happen going forward? can they keep it going and unlike the old ge, there's no ge financial services, right, for these companies, so i think it gets tougher in this environment, especially if the end markets are being stretched. >> straighten 20 times next year's earnings. what do you think ge deserves as a multiple in this market, herb? >> you know what, michelle, i couldn't tell you that i don't know i'm more interested in the street is going to tell you that going forward. today, obviously, they are telling you that it needs to go lower. that's an obvious statement, but i can't give you a genuine statement on that.

>> herb, kellogg and newell are both brands you'd see at the supermarket, all changes going through retail and we started talking about ge is there any thread you see running through these companies that you're noting that have some cash flow issues, perhaps >> huge. and that's been one of the great trends that has, i would say, quietly rapidly emerging as any of the consumer products companies, many of them are being challenged by their own markets. look, i always tell our subscribers we could have this discussion ten years ago talking about private label, talking about companies going online to make purchases, and it's really now that those things in the consumer product world are really having a huge exact, and it's like codominos. like either they are living in denial or they were somehow, you know, caught flat footed, and i think when you -- but i think they are different than ge, because ge has been a monolith

going through this change for a very long time and i think that, you know, it was a growth by acquisition story in addition to everything else it had going for it these other companies are growth by acquisition, trying to, you know, scramble now and i think -- >> when it comes to consumer products, you're thinking more like mattel, basically, essentially. >> no. you could go down the list i think consumer packaged goods right now is in everybody's cross hairs, and everybody's trying to figure out what happens next and, you know, is there an exception to the rule and if there's an exception to the rule, you know, should it be an exception to the rule and i want to mention one other thing here, because as we talk about companies withtive de div without dividends, the one thing you always have to say, when i see a company like a ge, for years people would say they'd make it by a penny, always raising their dividend when i see companies bragging about, you know, we've been raising our dividend for, you know, 25 years, 200 quarters,

whatever number they want to throw out there, we've been beating the street, whenever you see that, to me that's a red flag because you have to say, how do they have the confidence to constantly say that, unless the underlying business is genuinely good you have to ask what levers are they pulling and i think in this market we're seeing this is becoming a discriminating market on a variety of companies and you're starting to see it. because while we watch these stocks hitting new records, i look at our lists and other companies out there, i like to say now, you know, jim always says there's a bull market somewhere. there's always a bear market somewhere. there's a lot of big companies whose stocks are going down. and i think people need to pay attention. some of these are big ones >> that counterpoint is more -- is less often repeated, herb i guess being skeptical of extreme consistency among companies is pretty good take away thanks very much, herb, for your time appreciate it. >> any time, guys. take a look at shares of

alibaba and jd.com, the shocking event known as singles day brought in billions. deird deirdre joins us with more stats. deirdre? >> last year's record was broke 13 hours into the event, went on to gross $25 billion over the 24-hour period that is comfortably higher than analysts' expectations and double last year's black friday and cyber monday combined. digging into some of the data, this comes from alibaba, 225 countries and regions with completed transactions that tells us singles day has gone global. russia, hong kong, and the united states were the top places buying from china by volume that is a criteria by which alibaba measures its sales more than 800 million delivery orders and 1.5 billion worth of payment transactions were processed. 90% of transactions on the day were made on a mobile device

now, 140,000 brands participated and one of the top ones were not chinese. nike was the fifth highest selling merchant adidas was eighth, the iphone was the top selling smartphone on the day, dyson, p&g, skechers becomes a huge opportunity for international brands another singles day record for alibaba, no surprise there, guys, but it did face much stronger competition from rivals like jd.com, which racked up $19 billion in sales on singles day and the lead up, that's a jump up from last year. for both, that likely translated into steep discounts for merchants and subsidies to stay ahead. we'll have to see what effect that has on earnings jd.com shares, as you pointed out, they are surging up more than 5%, but it did report a surprise profit this morning last quarter, alibaba now up by

0.2 of 1% after the huge rally, guys >> quite a day for both of them. thank you, deirdre for more on alibaba's singles day haul, we are joined by managing director and mitch green, lead edge capital partner and founder, also an early investor in alibaba. welcome to both of you yusef, the overall merchandise value here was beyond your expectations you say this day has truly gone international outside china. how important is it for it to go outside china? china's huge >> i think it's really important that over time it goes out of china, and i think this weekend's performance shows that it does resinate as deirdre said, over, you know, people from 225 countries have participated if you look at the growth rate, it has accelerated we were estimating from 29 to 30% growth, ended up getting to

39%. i would say the revenues will show even faster acceleration, because mobile, they are making more money when people actually transact on mobile relative to desktop, and that's what resinates with people in china and outside of china, particularly in southeast asia, where alibaba is becoming a force to be reckoned with. >> mitch, "wall street journal" headline ahead of singles day say it's losing momentum does that put it to sflerest >> i think it does 39% growth accelerating on already a massive base it's much bigger than the u.s. shopping holidays. i think it does put it to rest >> youssef, this stock, alibaba in particular dogged when baron's did a story about accounting and issues of accounting transparency. those over, nobody cares about that at all? >> i don't think anybody cares about that anymore i think they came out, broke out

some really important pieces of their business like ali cloud, they've talked about ali pay, ali pay is getting ready to go public over the next 18 to 24 months nobody is really calling us to try to dig more into the accounting transparency. clearly, there is a country risk, there are a number of risks. and even to go back to john's question earlier, international is not a slam dunk you have to compete with amazon and some local players becoming the next battleground for alibaba and amazon, but i think as of now those accounting issues are really not issues anymore. >> youssef, even if the accounting issues have been clarified to some degree, it's a question of how much you want to pay for alibaba. right now alibaba is about a $475 billion market value, amazon is at $550, six or seven times the revenue. what accounts to the fact

alibaba can trade at that kind of revenue premium >> remember, you have to compare apples to apples alibaba is a marketplace, so they are recognized revenues on a net basis, whereas amazon sells half of their business themselves, so they recognize on a gross basis. if you look at it, alibaba is a lot cheaper. alibaba is trading at about 20 times below its growth rate in terms of p.e., i think by our numbers trading around 27, 8 times. amazon, which by the way we love, is trading at p.e.s materially higher than that. >> mitchell, you were in early on alibaba, and clearly that's gone huge over the past couple of years, but what else are you looking at who else, perhaps in china, stands to benefit from the same sorts of trends we're seeing in alibaba? we've had a number of chinese ipos here at the new york stock exchange lately. any of those we should have our eyes on?

>> i think the big chinese company that's going to probably, you know, i think be going public in the next couple years that people should focus on is dd we are clearly biassed because we have an investment in uber, which uber owns a chunk of dd, but i think that will benefit very big from the whole rising emerging middle class in china we think you're still in the really early innings of alibaba's growth rates look at the company, $475 billion market cap is growing revenues 62% a year, and, you know, shows no signs of slowing down we think there's a huge runway ahead of it. >> mitch, youssef mentioned the whole issue of country risk and being located in china when you look at your chinese investments, they can give and take away. as we've seen quite a lot over the last year. what do you do or how do you think about that when you're putting money into a chinese company in terms of what

multiple you pay or what risk you're bearing >> so i'll answer that in a different way. i think in the next decade you will see alibaba generate $25 to $30 of eps per share which, you know, $600, $700 stock. i also tell people you might see it go to 100 before it goes to 600 or 700, and that's solely because of the china risk. i have absolutely no clue, been investing in china for a long time, and i can't tell you is the macro better today than it was six months ago or 12 months ago. all i know is you want to typically buy china when the world doesn't like china and you want to sell china when everybody loves china. so we're long-term bullish on china. there's, obviously, country risks, there's currency risks. we invest a lot in europe and there's currency risks there, as well, but it's just, you know, part of the -- if you want the kind of growth, if you want these 50, 60, 70% growth levels, this is one of the only countries in the world to get it

at scale >> well, investors do want it. thank you for bringing your perspective, youssef, mitchell all right, as we head to break, looking at shares of time warner, they are slipping in today's session. they are off by more than 2% on that note, much more insight in all the media m&a when barry diller joins us on "power lunch. "squawk alley" will be right back

i'm scott walker coming up today top of the hour on "halftime report," evidence the market is on the urge of a big move what every investor needs to see today. plus, you heard about ge's problems all morning on cnbc, now what industrials are set to go the other way and the one stock goldman sachs says to buy today. "halftime report" at noon eastern. john, see you in a little more than ten minutes from now. >> looking forward to that, scott, thanks. and as we head to break, check out bitcoin's wild weekend. i mean, after losing almost a third of its value, crypto currency crawling its way back it was around 7,700 back on wednesday. down as low as 5,672 boy, what a ride good lucout k there. up 10% today we'll be right back.

shares of hasbro and mattel on the move this morning hasbro approaching chief rival mattel to discuss a takeover the combined company would have a portfolio including my little pony, hot wheels and barbie. hasbro has been rallies on nice sales of disney themed toys including "star wars." mattel is in the midst of a turnaround it's been ongoing for a few years. it's interesting hasbro is a market value more

than half before this deal started, more than twice mattel. go back five years it was the reverse. mattel was bigger, hasbro has been on a roll with the license and transformers and other stuff. fascinating the two companies at one point a duopoly in kids play and now maybe they get together and they're still not that big a piece. >> a lot of weird stuff in toyland. heman is doing geico xhcommerc l commercials. and my little pony movie is bombing, gem and the wholograms bombed >> they tried to mine every intellectual property they had >> works for marvel. >> toys "r" us in bankruptcy so the overall industry just back on its heels, so see how this goes >> if you can't make great fresh content out of the stuff as disney has shown an ability to

do, it's hard to sell the toys >> i wonder if the studios would not really love if both these guys got together. secondary note >> perhaps we'll see still to come, walmart which i suppose is hoping the toys sell over the holiday season may have a new strategy to take on amazon what it is and why you might elhe pain. "squawk alley" will be right back

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more political pressure in the show me state. missouri's attorney general is going after google for potential violations of state's competition and consumer protection laws. alpha let is under fire in europe over similar allegations. yelp being one of the companies that brought that front and center we walmart has a new plan to take an amston. charge customers more to buy products online than in its stores the retailer has been quietly raising prices for food and household items on walmart.com part of the company's efforts to drive more traffic to its stores where it can better undercut amazon mike, amazon moves its prices around all the time so i'm not

sure how much this really speaks to something different there's no physical store for to you compare amazon's prices against. there's some food products, i stopped buying from amazon because they hiked the price once i started getting a regular delivery >> no assurance on that. from walmart's perspective if there's some product categories, we're not going to play the game of trying to be lowest price online because what advantage does walmart have to press, if any, obviously the ubiquity of the stores and the fact if you come in looking with the high traffic items the stuff you need all the time maybe you buy something else maybe that's official strategy behind it on walmart's part. >> the rollback doesn't work as much online as it used to. people aren't just looking for dollar savings they're looking for time savings. they want the item faster, reliably, they want a variety and amazon has played that game so well. >> it's basically how much do you value convenience over other things or the fact that you're

so in the habit of putting a basket of orders out there on amazon and willing to take what they charge. >> as we are looking toward the mid time of the trading day, got to take a look at roku that stock is -- >> wild. >> -- ripping higher, up almost 15%, this after earnings last week topped expectations i mean, it looked like a short squeeze but i don't know how much shorts there are to squeeze. it's still going higher. >> a tremendous short position but the volume of the stock has been multiples of whatever the short position could be over the last couple of days. clearly it's both momentum, it's this idea there's a derth of direct plays on the streaming video economy. you could buy net flix but such a scarcity of ways to play this shift and maybe that's what's going on, relatively small market cap >> look at google, i should say alphabet we mentioned google having trouble. stock up slightly but doesn't

seem to be hit that much by this action of course, the a.g. in missouri has some political aspirations, so that might have as much to do with this. >> state attorneys general are known for this sort of thing not too big in terms of investors. >> as we head toward the half, major averages pretty much at the flat line, but we'll see which way things turn as the trading day continues. mike, thanks for being with me here hand it off to scott wapner. and the half >> welcome to "the halftime report." top trade this hour the big move in the markets some charts are predicting a pattern that held true for more than 50 years. the question is, is is the calmest market we've seen in decades about to change? with us for the hour, joer erj, stephanie and pete stocks poised some say for a bigger move. eric is here