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welcome to "squawk alley." i'm carl quintanilla sarah and john are off interesting morning, rally is hitting the pause button this morning. earlier today on "squawk," berkshire's warren buffett weighed in on stocks and what he thinks is driving the market now. >> they are not value developed interest rates what has happened in the market has been very sensible nobody thought we would have these kind of sfw rates for a long time. additionally you have the tax act, which is a huge factor in act, which is a huge factor in valuation.'s the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated.

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>> they are not originally valued at interest rates what's happened in the market is sensible nobody thought we would have these interest rates for a long time eventually you have the tax act which is a huge factor in valuation. >> that's buffett on "squawk." we snuck a break in there working out technical issues dan niles founding partner of alphaone capital partners. good to have you back. >> morning. >> rising rates and how that changes the game for equities. those like buffett who say at least for now when you consider rates as the gravity to value, things look relatively cheap where are you? >> well, i mean, we sort of agree in a certain sense that certain sectors, if you look at bank stocks, for example, one of

the biggest overweights in our portfolios is the banks. they should benefit a lot from rates going up having said that other sectors of the market that have been on a vertical tear, some of those, people may start to rotate out of those areas such as tech into some areas such as banks that have been sort of beat up for several years. so i think it really depends on which sector of the market you're talking about having said that, valuations are high on an absolute basis. s&p trading at 22 times on a trailing basis the average over 10 years is 17 times. obviously rates are really low, which helps support that as rates continue to rise, then you have to worry about what's going to happen to the market multiple because a lot of this rally has been multiple expansion because rates have been so low. >> right so as we approach 26 and 263, is that a magic number? once we surpass last year's high, do these worries begin to

compound >> i think have you to look at the evidence on the market today a lot of tech stocks, very large tech stocks, semiconductors, for example, are getting hit really hard, 2 to 3% there's absolutely it no new, consumer electronics going on, a lot of those companies have said business is great. we feel great about 2018 but you're clearly seeing some of that rotation i'm not sure if 263 is the number, 27, whatever but the direction if rates continue to climb the way they are going, that's going to put some pressure. we're obviously having a really good day in our financials exposure today because of that you're going to continue to see that rotation into some sectors that lag tech is up, a lot of that is multiple expansion that's going to cause a problem for a lot of those stocks as investors go, really, i own a stock with revenue growth of 10% but it's up 50 they are going to start to look at other areas. >> yeah. although you're going to find people, dan, who say, heck, a

rotation in financials is hardly a bearish signal can you take macro takeaways from some of these moves >> that's an extremely good point. as buffett talked about earlier, there's two major -- actually three major things going on. number one, you've got the tax cuts one of the sectors that benefits the most is bank stocks. a lot of those, most of their business is domestic, loans, et cetera a low 30% tax rate that drops to 21%. a lot of big banks report friday as you've talked about we're going to see how much the earnings get jacked up second thing is obviously rollback in regulation there was so much stuff after the failure of lehman brothers a lot of that getting rolled back, making it a lot easier for banks to do business then finally if you get the infrastructure passed, that's really going to help as well i think most people believe some of that savings from the tax cuts and repatriation of foreign capital, that's going to go into

cap ex, that will help the banks as they make loans for those companies. so i think the big picture as you rightly pointed out, the macro is the big driver of bhaes going to happ -- what's going to happen this year following what you've seen in the tax code. >> i wonder if all that takes place will we get an idea of how they are hiding in these companies and benefit when growth is strong where do you think that goes >> i 100% agree with you earnings season, some really goo results will come out but i think there will also be some misses i think misses are going to be severely punished. as you pointed out, in a lot of cases you've got stocks going up as estimates have gone down. amazon is a great example of that i know we all believe they are going to take over the world i get tons of amazons a day.

earnings went down as the stock was up 56% so i'm not saying they are going to have a problem necessarily. but at 100 pe with estimates going down, with the stock up 50%, you know, you better have a great quarter. same for a lot of the other faang related names where the stocks have gone up way more than the earnings have gone up so i think you're completely correct. this is going to be a very interesting earning season for health god help you, you will get killed. >> we haven't gotten to apple. we want to get to that josh lipton is going to set up some news today. morning, josh. >> morning, carl batte batteryget a is heating back up. john thune has now sent ceo tim cook letters about performance of iphones with older declining

batteries saying, "even if apple's actions were indeed only intended to avoid unexpected shutdowns in older phones, the large volume of consumer criticism leveled against the company in light of its admission suggests there should have been better transparency with respect to these practices. senator thune wants to know whether cook's company has tracked consumer complaints about processing performance and if the iphone maker explored whether consumers who had the replacement value before it was reduced should be given a rebate apple acknowledges it did add a new feature to ios last year iphones with older batteries are throttled at specific times to try to make sure they don't get overwhelmed or shut down apple says that was necessary because of a very real technical issue. lithium ion batteries decline over time and have a tougher time handling power demands. some say apple could have communicated more clearly. it's not just senator thune,

remember in france the paris prosecutor's office has also now apparently opened an investigation of its own. senator thune says he expects answers from apple by january 23rd apple did not respond to requests for comment carl >> josh, thanks for that our josh lipton. dan, talking about this, apple has had a lot of news -- been reacting to a lot of news lately the battery issue, use of iphones in kids. but it sounds like your concerns are really more about basic iphone demand. >> yeah, i mean, they really are. this is one of the stocks that was our biggest long position last year going into their new products post that you've seen a couple of things. i think the biggest issue is there was all this talk about super cyclone iphone test. you can go through my interview, i was never a believer in the super cycle. if you look at what happened since they launched iphone x, you could walk into pretty much any apple store, verizon store, et cetera, and walk out iphone x

a week before christmas. so clearly probably demand did not come in as high or there was way more surprise. either way there's no spillover of demand into the march quarter. that's really where the problem is i think apple will have a great december quarter i think the numbers will be fine the problem is everyone will assume pent-up demand for people who couldn't buy the iphone in the december quarter before christmas and they would end up buying it in march if you can walk into a store and walk out the week before christmas, there's certainly not a demand problem expectations, which is where the market is of apple revenues down 20% sequentialally in the march quarter when the last two years they have been down 33 and 32%, i think they are too high. i think that's where the problem is then you throw on top of it batteries, the battery issue maybe instead of buying iphone you upgrade batteries like myself and family tried to do the last week. you know, that's going to take away some demand some people go, maybe it's a battery issue.

we don't need a new phone. there is some subsegment for $29 why don't i try that first instead of spending $1,000 for a new phone. >> dan, that's a key point as we anticipate unit numbers for the coming quarter always good to check in with you. thanks again for the time. >> my pleasure. >> republican member of congress spop lar among republicans big target of democrats because of how he went after administration is announcing his retirement today this is a prime pickup opportunity for democrats. if darrell issa ran barely won in 2016. this an indication there are about 30 republicans who so far announced they are retiring from the congress

a strong democratic year it's going to be in 2018 you look at early polling. they have got a big advantage. a lot of that is a reaction to trump. do about the republicans are pursuing, although it's consistent with the historical pattern almost always in american history the party that holds the white house has losses in the first midterm election and this darrell issa retirement is an indication republicans believe that's going to happen this year, too. >> thank you so much really appreciate you bringing that to us coming up, in fact, some reaction to news from billionaire hedge fund manager and political activist john thune, senator probing apple over batteryget ate, joins as well.

darrell issa announcing his retirement saying serving you

has been a privilege afterlife time joining us this morning former hedge fund turned billionaire activist, founder and president of next gen america. you might know he's investing $30 million to flip the house come november. your reaction to the issa news. >> i think the fact that the fact mr. issa has chosen not to run means he doesn't want to continue in the effort that the republican house has been pursuing, which is radical right politics i think it's impossible to know whether he thought he wouldn't be re-elected or he simply disagreed with the values of the, as i said, radical republican house but i will say this. it shows that the republican effort is losing some of its critical members if you notice on monday, another republican house member from

california ed royce chose not to run for re-election. you can see people deserting their team in a very surprising way. and i think it says a lot about the kind of momentum that they don't have and the kind of internal support, which they are clearly losing >> but tom, how does it differ from any other midterm cycle we know how these things generally go >> i think this is a different midterm. to me, we have such a stark choice in this midterm between two completely different value systems and views of america's future i think that you can see that the republicans have chosen to have a very divisive, openly racist way of thinking about world, and i think that what we are trying to do is talk much more about an inclusive, just, and prosperous future. i think americans are going to have a very, very stark choice

to make. i don't think we can have one shred of overconfidence, because i believe that we are absolutely in a fight for the soul of america for who we are and our most basic values. >> tom, we know, of course, the economy is very central to what we do here as americans, and the market is giving a vote of confidence for this tax reform plan warren buffett was on this morning. he thinks it's not baked into what we're seeing because of the 14 percentage points we were previously paying as companies to the government are now getting back to shareholders do you disagree with the market direction and the reaction to the tax reform plan under the republicans? >> i think the tax reform plan is a great gift to the corporations of america and to the richest people in america, and that's reflected in the stock market but the fact of the matter is, that tax plan is an attack on 80% of american people

it values the dollars and the rich people in this country at a gigantic premium over everybody else it is absolutely unjust. and the fact that it's reflected in the ownership of corporations who got a gigantic tax break at the expense of working americans doesn't surprise me, but i will say this long-term prosperity is based on the american people and their prosperity and the idea that we watch the stock market as a measure of how america is doing, it's really only a measure about the people who own stocks are doing that's the top 10% at best. >> but many americans have 401(k)s, invested in mutual funds, etfs, mutual funds, certainly they have benefits his core customer makes $80,000 or less will have direct benefit from the tax reform plan by having more disposable income in their pocket you disagree with that you think this only benefits

corporate america? >> the day i listen to the heads of american corporations to tell me what's good for the american people, that will be the day the fact of the matter is, if you look at that plan, they took a trillion and a half to two trillion out of the budge. they are going going to use that to cut services, education, health care, food for kids in school, cut training long-term this country does well when the american people do well, not when the corporations do well, not when the richest americans do well. that is a tax plan aimed at benefiting the rich and hoping that some of it trickles down to everybody else totally unjust i don't think -- the one thing you know about markets, and i will call mr. buffett and ask him whether he agrees with it, markets fluctuate. long-term what we should care about is the health of the american people, the welfare of the american people. i don't think that tax plan does a thing for them it's terrible for them

>> at the same time, tom, i mean, even sending the stock market aside, we have 4.1% unemployment we actually seem to have momentum in the economy. whoever deserves credit for it, and the republicans will be able to say -- point to this tax plan in an already strong economy and say maybe that had something to do with it is that your uphill battle >> i don't think this is an uphill battle. i think the fact of the matter is in spite of everything you're saying, and i know what you're saying, so trust me, i think i spent 35 years watching economics in markets, the fact of the matter is -- i really did -- >> we know. >> the fact of the matter is the american people have not had a raise in 35 years. so we keep looking at averages if you will excuse me for saying this, you guys keep looking at averages if all of the benefit goes to the richest people, and everybody else gets nothing, the average looks great but the 80%

of the people don't get anything the 1% have doubled their share of national income in the last 35 years, the top 1%, doubled it they have gone from 10% of national income to 20% that's actually what's happened in america as we've watched this unfold over the last 20 years. >> tom, your points are fair a lot of people would agree with you. the plan skews corporate to courtney's question how does it change going into the midterm it if, in fact, there is real wage pressure, easier to hop a job. if the white house can say we've excoriated bannon. we've potentially now opened up a clean daca bill, how does that make your message more complicated? >> i really think that if you're going to say that all of a sudden this white house and this republican congress, which for nine years has refused to do

anything with democrats have gone for the most corporate-based rich person-based tax policy, have pushed as hard as they can to divide us on ethnic, racial, gender lines, you are suddenly coming around saying, please forget all that, we're sweetness and light, i don't think that's credible we haven't seen -- you're hypothesizing about what's going to happen that hasn't happened the president saying i will renew daca if you build me an absolutely ridiculous wall for $35 billion. secondly, if you look at their budget, do through it, i've done it, and see that every single program that is the investment in the american people, whether it's education of our children, higher education, food for poor kids to eat lunch in school,

training, health care, every single thing that is a program to invest in the american people to make us more productive, to make us more effective in the 21st century, every single one of them. every program that is a command and control program, whether it's the military or the police or the wall or the border patrol, they want to bulk up you tell me that's a good program in the 21st century for the american people. that's insane. >> tom, one last question here is your priority the house or the senate seems like the senate, the margin would make it easier to flip but i assume you're tarl targeting the house because that's where impeachment begins? >> we are organized particularly with millennials to try and increase registration engagement and turnout so we get a broader voice in america we believe if we do that, we will see the house of representatives move from being a republican to a democratic

controlled place having said that, you will notice this very morning that three judges in north carolina ruled that gerrymandering in north carolina by a republican legislature was illegal and unconstitutional there are two other states where the same gerrymandering kind of behavior is under attack because it is unconstitutional by republican legislatures. so over this year, we're going to see a true change, i believe, in reaction to long-term cheating by republicans to try and tilt the board in their way electorally. we believe that the house is the first place where there has to be a change. >> tom, we hope you'll come back you are lighting up the phone lines, as you always do. we'll see you next time. tom steyer >> let's get back to seema mody.

>> the ftse 100 hit a record high by broader indexes are on track to snap a five-session winning streak here is why. it's that report that indicates officials in china are potentially looking at slowing or halting purchases of u.s. treasuries, bond market acting global scale, u.s. ten-year spread widening to levels not seen since april of last year. the yield on the germany up 10% since 2018 just to put that in perspective. a u.s. ten-year yield is roughly five times higher. european bond yields higher. that's giving a lift to financials in europe on the prospect of higher net interest margins, germany's commerce bank up 5% followed by banco desabadell about 800 million euros in bad loans from the bank, that stock

up nearly 4% there has been some profit taking in the auto sector, which is up 7% since the start of the year that includes tiremaker continental which has confirmed it is an early stage talks of considering structural changes at the company that stock down in today's trade. courtney, sending it back to you. >> thank you very much seema mody at cnbc headquarters. when we come back, 2018 state of business report. the ceo of the chamber will join us next. u.s. senate versus apple senator john thune demanding answers on iphone ttbaery issues he'll join us next when "squawk alley" returns you always pay

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>> cnbc news update this hour. senate report highlights russia's interference throughout the world. senator ben cardin, ranking member of the senate foreign relations committee issuing that report. >> today the government of the russian federation, universal values and rule of law assault at home and abroad president vladimir putin directs these attacks. >> french women's rights activist denouncing an open letter signed by movie start katherine deneuve and others which says men are unfairly targeted by misconduct allegations. the activists say deneuve and

others are using media exposure to make sexual violence appear normal usa reporting mark wahlberg got $1.5 million for all the money in the world reshoots while co-star michelle williams was paid less than $1,000. those reshoots were necessary when kevin spacey was replaced on that film by christopher plummer after spacey was accused of sexual misconduct that is the news update this hour back downtown to "squawk alley." guys, i'll send it back to you. >> seema, thank you very much. a powerful gop senator now demanding answers from apple in a letter to ceo tim cook, the third ranking republican commerce committee chair john thune looking for answers to apple's self-admitted practice of slowing down those older iphones. chairman thune joins us first this morning on cnbc mr. chairman, good to have you with us, thanks for the time. >> thanks, carl, good morning. >> i guess the question is, what are your key questions and what has the response been from the company? >> we're hoping to get a

response from the company. basically it's to find out exactly what they are doing, how they are informing consumers about this as you noted they have acknowledged they have been slowing processing speeds with a purpose, at least stated purpose, of prolonging battery life part of the thing we want to get at is the transparency issue if they deny they are engaging in planned obsolescence, forcing people to buy the next phone, we want to make sure through our role's oversight that's true secondly, to find out why they haven't been more transparent about this we think it's important consumers know what's going on and if they are doing this, they know as well they need to buy a new battery, that that's why >> what do you think the consequences could be if, in fact, their answers are not satisfactory >> well, obviously, this is a consumer protection issue. you know, clearly we have a role to try and get the facts we'll make decisions based on

what they return in terms of answers and responses to these questions. we aren't ruling anything out at this point if we aren't satisfied with the responses, obviously we could have a hearing at this point and elevate this further i'm hopeful we'll get the responses that we desire if the answers that they give we feel are not adequate to, you know, what we think consumers deserve, then obviously we'll look at other options. >> that would be my question there. if you conclude, in fact, transparency was lacking, customers weren't notified in a proper way, would there be an effort to set standards for all companies in terms of what they need to do >> i think that that could be ultimately something that would transpire from this. again, we're very early on in this they acknowledged after the holidays this is actually happening, which, you know, was an admission we think was long overdue. that being the case, we want to find out what they are doing to

inform consumers they now say they have lowered the price of replacement battery from $79 down to $29 the fact remains there are a lot of unanswered questions about this practice. obviously, i think consumers have a right to know, so we want to make sure apple is forthcoming, is responsive and we'll take additional steps as necessary. >> senator, what would you say to those that worry that more government involvement in corporate issues with big tech companies like apple could potentially stifle innovation down the road. there is some concern that is happening. >> well, you know, i'm somebody who believe in a life touch. i'm not in favor of the heavy hand of government we have too much of that in too many areas of our economy today, but i think it's important that there be transparency. i think from a consumer standpoint, we have a lot of consumers out there who buy apple products they sometimes will upgrade those products in this case, if they are throttling these processing

speeds and slowing down processing speeds, and there was any effort as a result of that to try and force people into buying the next iphone, the next upgrade, they need to know that. they also need to know what's happening to their battery life and whether or not they need to replace a battery. those are fundamental issues consumers have a right to know when they purchase a product we're not suggesting heavy hand of government regulation here but simply the need for transparency in the marketplace. >> you use the words "light touch" which have been used a lot in various cases by fcc chairman we're going to talk to tom donahue of the chamber of commerce in a minute about what he's calling a tech lash that is a backlash against big tech companies in the face of ongoing hearings on the hill how much of a danger is that >> well, you know, i just think there's so much that goes on in our lives now that relates to online platforms we're going to have a hearing next week on extremism online.

obviously if you talk to our intelligence community, they will tell you that particularly in certain parts of the world social media is about the only media people have access to. so it's a right target for radicalization for mobilizing terrorism. so what we're trying to do is just get some of these answers and to make sure that the tech community is participating in trying to solve some of these problems i don't think there's any sort of backlash. frankly, i think in some ways what the fcc is doing with respect to net neutrality is to lessen the hand of regulation and use that lighter touch and investment that continues to fuel what has been a remarkable explosion of productivity in our economy as a result of, you know, what we've seen with the internet we want to see more, not less, more investment, not less. we think the community needs to be responsive to questions that are raised particularly on some of these legitimate issues when you talking about national

security and radicalization that to me is an important issue we're going to be dealing with for some time to come. >> senator, hope you'll come back and give us progress on whether the company gives you answers to those questions thanks again. >> thank you good to be with you guys, thanks. >> john thune. >> for more on the growing backlash against big tech, the chamber of commerce calling it to be kept in check especially when it comes to regulation. let's bring in u.s. chamber of summers ceo thomas donahue who joins us now and first on cnbc interview. thank you for being here, mr. donahue. you heard senator thune. what do you think? you think the government had a light touch when it comes to technology sounds like you might have some concer concerns >> i think the senator was right on target. appropriate questions to ask and light touch approach is a good place to start one of the things we're trying to articulate here is that technology is not now a choice for this industry or that

industry technology now is the driving forward in almost everything, medicine, communications, trade, automobiles. technology, technology, technology so the real issue is that to be a leader in the global economy, to be a leader in national defense and intelligence, to be a leader in medical science, we have to encourage and support the use of technology in every industry not to look at it as some of these very large technology companies that that's what this is all about it's all about what technology is doing everything we're doing, including what you and i are doing right now. >> so technology, of course, plays a key role in all of those industries and our lives and the economy. but there probably has to be some delicate balance when it comes to responsibility. we heard just this week from

investors concerned about potential smartphone addiction in children and they have written a letter to congress as a result where do you stand in the role technology companies need to play as they become a more integral part of our daily lives and the economy, frankly. >> i believe they have to live by the law they have to be responsible citizens they have to understand that their customers are two groups the company all over america, large and small, institutions, and individuals, as you are talking about in the previous program. i believe that they are very concerned about that they are moving in a direction to be more transparent in what they are doing i mean, look, when you look at these huge companies that were founded and almost omnipresent and able to do so much,

sometimes you get so wrapped up in that that there are a few things you miss. we believe that transparency is critical we believe these issues will be looked at by the company but we're most concerned about we recognize it is not a small group of technology companies that are the issue here. the issue here is that every industry, every company, every organization and every government agency is all connected now by technology, driven by technology, become more productive because of it. whatever we do, we have to be very careful we don't restrict, limit, we fall behind overnight. >> mr. donahue, how exactly would any effort to, let's say, assess the role of facebook or google with regard to use of privacy, customers' information or content they get served or

edge they carry, any of those things that seem like they are under scrutiny for big dominant tech companies, how would any focus on that really impinge on the ability of u.s. industry to push forward in technological innovation >> look, i think privacy is a critical issue we've all been concerned about it people around the world are very concerned about it governments are concerned. first of all, all the cyber attacks on individual companies and government look what happened to all of the information that those that were attacking our government computers got. got people's irs information, employment, in my case security clearances, all that sort of thing. we were not at all aware when we put together a lot of these

technologies how significant cyber defense and cyber security was going to be. those same lashlg companies are helping us the big, big thing for me, you only figure out tomorrow what the next adventure is going to be in technology i want to caution that we use the light touch. if there is behavior that is totally unacceptable, then we ought to do something about it we need to have it to protect us from others and to advance our economy and to protect our national security. >> tom, one last question just on trade it's been said we're in the midst of bannon is gone, white house pushed out still concerns what trade could become as nafta talks continue

are you worried? does 2018 look any more complicated than 2017? >> it's not going to be more complicated but more immediate the negotiations on nafta are going to have to take a step forward. progress is being made when the negotiations on the south korean agreement that we have already got and we're making improvements on. i believe that you heard in recent days from the president who was at the farm pure aburead other places that he understands that to pull out of nafta would be an absolute destruction to the advances we've made on the economy growth through tax policy and regulatory reform and we can't do that we can improve it, change it, but we can't get out of it and we can't destroy it.

remember, nafta is 11 trillion and $1.3 million worth of economic exchange and growth between the united states, canada, and mexico and by the way, it is a program that keeps us safe on our borders because of the people that we are in a trading arrangement with >> certainly in agreement we need to pay close attention to as it may change going forward thank you so much for joining us today. thomas donahue, president and ceo of u.s. chamber of commerce. >> thank you very much. when we come back, discovery communications rising this morning after a rough 2017 we're going to tell you what david told us exclusively. first rick santaally, what are you noticing. >> all undated sovereign yields

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why names like micron and intel are down and whether it's time to jump in halftime report in a half hour >> let's get to santelli exchange with rick at carl. listen whether it's bill gross or jeff gundlach, we have a lot of people trading the fixed income markets and, indeed, their input us always fascinating. it's hard to argue with their success records. you know, when i think about how i perceive the treasury market, i have no problems understanding why these two gentlemen are getting bared up what i find really fascinating is that with technical afall sansd ev - analysis and fundamental analysis you can arrive at different answer in a variety of different ways that's really important because whether it's trend lines, long-term trend lines going back 30 years that bill gross referenced or time cycles that i like to pay attention to or

fibonacci retracements it might sound like greek to many, but in the essence it's the method of investors no matter what time or technology rules the roost as far as the level of 2.36 and its importance and the fact that at these levels bill gross is bearish and jeff gundlach is bearish meaning they are looking for higher rates, all can i say is we can all agree. what's missing is the calendar how will the market progress and how will rates be higher just because something has ended one cycle, doesn't mean it's going to be an immediate whipsaw in the other direction that's kind of the way i see what's happening in treasuries real quickly, because we're low on time. that is chart from the most significant technical level that i derived 2.63 a while ago, and that was one of the highs on september 2014, but i like time cycles, and we'll have to make this fast, but good fibonacci numbers is 3.77. the problem somebody when you have days and weekends and holidays so if you look as these two cycles which i find so

significant after the second leg of the double bottom, these are around 423 days, okay, these two cycles which is about 377 trading days the point of the matter is by looking at this cycle we know, looking at this bottom we know and the importance of these areas right around 2.63 i've gone into the future and calculated if everything is symmetric, we should reach a balance right around february 11, 2018 i think the 2.63 level is important. if i had to call it, i would say that we're going to be at that level and spend time there in a congested range till about then when we start the next leg of the move mike santoli, back to you. >> all right, rick great perspective on these markets which are huge and don't turn on a dime thanks very much as we head to a break, let's take a look at the major averages at this hour, now the dow is up more than 100 points from its low of earlier this morning. down just barely at 17 points. let's check on cryptos right now, bitcoin, ethereum and some

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the dow hanelys ar recovered am triple-digit loss "squawk alley" continues in a moment

let's get to julia boorstin at ces julia? >> reporter: well, carl, i spoke today to ceo -- discovery ceo david zazlov and the topic that we've been talking here is consolidation and i asked him whether discovery needs more

scale in light of disney buying fox's entertainment assets he says they are not in the same category. >> we're a different kind of media company and the deal that bob identifyinger is duke with rupert is brilliant but they are on the other side of the ledger. they are doing scripted television and scripted movies we're nonfiction we have a very strong position in nonfix and we own all of it. >> but discovery shares are still down about 16% over the past year and down since announcing its scripps acquisition but zaslav says he's confident in that scripps deal and here's what he said when i pressed him on m & a. >> you're always listing on a public company having said that, we love our hand and think we can execute on scripps and think we can emerge as a leader in global nonfiction around the world and the leader in sports and europe and the leader in kids and latin america and take that into asia, and within our basket outside of scripted television and scripted movies, we've got a hell of a

game. >> hell of a game and much more competitive landscape than ever before guys, back over to you. >> all right julia boorstin is the news flow out of ces continues guys, the dow is down 20 ge back above 19 for the first time since november and let's get to the judge and the half. >> and welcome to "the halftime report i'm scott wapner our top trade, current state of stocks and whether the market's unabated meltup will continue rolling on for the hour we have joe terranova, jim lebenthal, josh brown, jon najarian and karen firestone and kevin o'leary is here let's begin with the markets, of course stocks coming off another record close. they are slightly lower this hour they are still seeing though, as you see here, the best start to a year since 1987. the world's most famous investor weighing in today on cnbc on