good morning it is 8:00 a.m. at apple headquarters it's 11:00 a.m. on wall street and "squawk alley" is live ♪ a busy morning dow bounces back from session lows with tech mounting a comeback of its own. a lot going on today jerome powell begins his first official day as chair of the federal reserve. his predecessor janet yellen joins cbs sunday morning over the weekend to comment on the transition

we got a bit of her take on the markets. take a listen. >> this is a source of some concern that asset valuations are so high. what we look at is if stock prices and asset prices were more generally were to fall, what would that mean for the economy as a whole and the financial system is much better capitalized the banking system is more resill yen resilient. i think our overall judgement is if there that there were to be a decline in asset valuations, it would not damage the core of our financial system >> with more on all this let's bring in the professor of finance at the warden business school still celebrating the eagles world championship last night. congratulations. what a game. jeremy >> i was there got back to philly at 4:00 a.m i'm the happiest man wow. what can i say

it's actually my first super bowl i didn't get to the previous one. but i'll never forget it >> i'm sure not. >> something to treasure forever. >> that is absolutely true for any fan of philly. as far as market go, i know it's short term we try to be careful how significant of an offset to the gloom of friday is today >> oh, yeah. i mean it's important. you had an earlier guest and she had it right we describe the pullback as 5% that is the minimum drop in the market and we haven't even had 5% drop. we normally have two or three a year we just had too many momentum players, climbers on i mean that rally just got a little overexcited and, you know, you need a little wrinkle, higher interest rates and batteries from exxon and apple disappointment

you have the jumping off the train. and that's really what happened. now nevertheless, you know, i said last december that this year was -- this year was going to be much more challenging for the markets. higher interest rates are going to be a factor i said it's 0% to 10% return much less than 2017. so i don't think there is a bear market here. but there could be a correction. that's a 10% decline and, you know, even that, you know, we were up 40% since the presidential election even 10%, you know, is not something that is a disaster for investors. >> workers have been looking forward to this. there should have been tightness in the labor market showing up as rising wages earlier and now what appears to be happening, is that a positive long term for

invefi investors or is there a certain point you say not so much. >> if wages rise because of productivity, it's great it couldn't be better. unfortunately, the productivity news, you know, in the last quarter wasn't that great. so if wages rise and there isn't productivity, that is an increase in labor unit costs which does put cost pressures on firm i wouldn't get so excited. we had that -- you have a year over year 2.9% that is still nothing out of control. we see a the love firmness in commodity prices and that unemployment rate would tick down to 4.0. it's well below as everyone knows. but the fed's measure for when we're going to get inflationary pressures. so those are the challenges for this year. you know, discounting the earnings are rising interest

rates. i tell my classes at warden, it's a struggle between the num rater and denominator. the denominator on discounting the earnings going up and it just depends on which one is going to win about what happens in the stock market. >> we heard from chair yellen, outgoing chair yellen over the weekend. we played a little bit of that sound bite from the interview, her talk about the markets being potentially overheated we have that pull back friday beginning another pullback again today. we have bounced back but can you be bullish and also still want more of a pullback than what we've seen so far? do we need a little bit more selling? >> if you want to know the truth, friday keeps investors honest i mean the worst thing is to think that market is a one way street either on the up side or down side oh, i can make easy money. that seemed like to be the philosophy of bitcoin in december those things are bad for the market markets fluctuate. you know, you have to realize

that it's not easy money if we get the speculators out, i think that is ultimately healthy for the market i certainly don't think it's damaging >> all right jeremy draghi is on the take this morning he says while we can be more confident about the path of inflation, patience and persistence still warranted. do you see him moving off the stance with the last couple of appearances? and is that why we're seeing some action in europe as we have the past couple of weeks >> yeah. absolutely you know, europe is about two years behind the united states you know, they had that dip in 2011 because of the debt crisis, you know, we had ours in 2009. i think oohe's ending quantitate easing i think they're going to raise rates. growth is better in europe this year so, yeah, i think he's following the bernanke-yellen cycle just two years lagged and we're going to see the rates

going up in europe and probably even japan commensurate to what we see in the u.s. although i think that decline in the collar is a little overdone. we do see that bounce back since friday because people say hey, you know, the ten year might get above three. i like that we got some buying back on the dollar that's also a little factor that has pressured the international stocks that were benefitting from the declining dollar. >> jeremy, curious your take on earnings thus far, especially tech earnings. disappointment in google perhaps and even in apple. there were spots of good news there too. the $1,000 phone that some people were afraid wouldn't spark the kind of demand that apple was looking for turned out to be the best seller. >> yeah. and, hey, you know, we shouldn't forget amazon which on the worst day we had friday managed to

still do a great rise. tech is still, you know, an area that i think is attractive you know, you look at apple, what is it selling for 20 times earnings hot stocks like that as we all remember in '98 '99 would sell for 200 times earnings everyone that tells me we're just like '98 and '99 going into 2000, i say, no. we're far more reasonable across the board. and even with interest rates rising, we're still much lower on the interest rate sector. so i say markets are fully valued i like a little correction to keep people honest and we might -- and we might see a little bit more sometime later this year. it's going to be more challenging with those higher interest rates but no bear market in my opinion for 2018

>> jeremy, final most important question would you trade foles and if you didn't, would you start him? >> no, i think we got to give carson a chance. i think he's going to be hungrier than ever i think he thought he was going to bring the first super bowl to philly and we got to give him that chance and now with foles mvp, i don't know if we can afford to keep him. but thank god we had him this year truly a remarkable fairytale type of ending for the eagles and n. 2018. >> just an embarrassment of riches well deserved jeremy, thanks for the time. congratulations again. jeremy siegel talking markets and football once again, the dow basically erasing most of the 350 plus point deficit. let's bring in john rogers, chairman and ceo at aerial

investments. john, always great to check in with you thank you for joining us >> you're welcome. >> you think we're going to have opportunities here in the next few weeks? >> i do. i continue to be very, very bullish. i'm not surprised to see this recovery be as strong as it is i continue to believe that there are opportunities in the market to take advantage of weakness because over the long run and even over the intermediate term, i think markets will go higher >> how about overseas? europe is substantially weaker than where we are sit right now going into the close do you see opportunities in the european markets >> well, i'm optimistic there. we own a lot of stock in lazard and lazard is a great investment banking franchise but they have a great franchise for international and global investing. we were talking with the management team last week and they were optimistic what is going on in europe and our international team believes there's going to be opportunities there too. >> john, taking a look deeper into emerging markets, what's

your expectation on what's going to particularly move there this year is that some place where investors who have a lot of gains perhaps in the u.s. should be looking to move money if so, is there a particular area that you're looking at whether it's southeast asia or maybe brazil >> i think for us it's really not in our circle of competence. i spent 35 years here in chicago focusing on small and mid sized domestic equities. we have an international global team in new york that focuses on that i know we've been, you know, somewhat cone servetive wh somewhat conservative. but they got a nice recovery we think over time it's going to be a great place to be but we are cautious in the most recent period. but that's our team in new york that sort of leads that analysis >> john, in terms of -- we know some of the minefields in midterm years following a new

administration especially, have intrayear declines, i think the average is 16 or so, today blackstone's c.o.o. was on our air and said every historic norm stocks are very, very fully valued says the market could decline between 10% and 20% this year. do you think that's likely if you do, how are you preparing for it now >> well, we raised a modest amount of cash just in case there is the inevitable correction that happens. i wouldn't expect anything near 20%. i think because of the earnings season is so strong as jeremy just talked about, tax reform is a big, big deal for domestic equities again, we focus. and i give an example. one of our favorite stocks is madison square garden network. not only do they report great earnings last week, they talked about how much the tax reform is going to help them and the analyst went from a low $2 estimate to close to $3

estimate change. it's extraordinarily cheap i think that's going to happen time and time again. we'll see very, very cheap stocks getting cheaper because of tax reform. >> yeah, we sometimes lose sight of the names even in the s & p that are off the 52 week high. john, always appreciate the time thanks so much john rogers over the aaerial >> good to be here >> still ahead, continued coverage of this selloff and bounce back from every angle among those bouncing back, apple after hitting correction territory. we'll discuss what is next for the widely held dow component. the dow currently sitting at just below break even. the nasdaq is in the green s&p 500 down fractionally. two,that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches?

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at the time i was in that white house official's wing, the dow bounced back significantly since then that is the context in which that official gave that comment. and, of course, there are economic trends going on that

the white house likes beyond just the dow although this is an administration that talked about the dow more really than any other. they're also very excited about wage gains and job growth. so those are two other statistics that i think you'll hear the white house talking about in the days to come if this selloff does continue for now they're saying they're concerned any time the dow loses value. they think the fundamentals of the economy are strong >> speaking the dow, apple, one of the components bouncing back from last week's selloff briefly trading inside correction territory. worries do remain surrounding e demand for the iphone x and guidance for the current quarter. let's bring in a research analyst will power and mike olson, good morning good morning to both of you. >> good morning. >> good morning. >> will, let's start with you. what's the take away from this apple quarter? clearly not, i would argue, a super cycle upon us.

but the x, i mean, people are buying it. and people are, you know, eager perhaps for a x plus at the end of this year is this a positive quarter sfwl >> where expectations were for iphone shipments there is a disappointment they're focusing on the trees and not the broader forest when you step back, all the geographies grew double digits year over year they're going to generate free cash flow, $60 billion in our numbers this year. and we think the overall ecosystem remains healthy and vibrant, you know, as ever how many consumer tech companies are going to grow asp $100 or close to $100 year over year i think some disappointment again relative to expectations might have been. i think all in all, looks like, you know, pretty strong quarter when you step back >> mike, that was a pretty impressive trick i think the average selling

price of iphones was $796. but is the measure now average revenue per phone bundling in not just the asps but also that service revenue which is pretty clearly tied to the device sales? >> yeah. i mean, that's hugely important. we're going to hear more and more about services growth and services is going to become a bigger part of the story today it's only 15% or so revenue. but as we look out over the next several years, we can see it getting to 20% and beyond. when that happens, i think investors start to build it in when they're doing kind of some of the parts analysis and things like that. and they'll assign a higher multiple to that services business so that is an important component. and it's a nice annuity stream for the company going forward. >> mike, talking about components we now have the home pod of course, a little later to the game whether you talk about home assistance you have amazon's alexa, of course, and google home. what would it take for that really to be a new pillar for

apple? >> it would take a lot you think about the iphone and services given most services are coming from iphone users, that's essentially 80% to 85% of the company's revenue. so if you think about it, this really is a one product company for the most part. and if there is another pillar to come, it's going to have to be a huge one. >> will, tim cook and before him steve jobs used to sort of brag about being able to fit all of apple's products on one conference room table. you can't do that anymore. not only can't do you that, but there's one product as mike was just mentioning that is the lion's share of revenue and profit should we think of the watch, should we think of the home pod as in a way just moons orbiting around the iphone adding to that average revenue per iphone not as potential breakouts on their own? >> i think there is fairness to

that this is about the apple ecosystem. one of the numbers that tim cook dievillethed is t1.3 billion active device count. the capitalize on those active devices with new services and opportunities. so all these new devices with the home pod takes off or not, we look at apple watch, air pods, et cetera, those all help solidify the ecosystem, strengthen the brand and overall financial profile. i think that's how we think about it and the reality is there is upside at some point from some of the other new areas and we'll see if those can develop over time >> so, mike, if it's really all about the phone, how important is it that apple introduce maybe a lower price version of that the iphone x in the fall >> that's exactly what we're expecting. when youlook at where we saw the cycle this year, we were never really talking about the super cycle. we've been talking about a super

long cycle we spread this upgrade to the next gen form factor over a couple of years. it starts with iphone x with this past year's launch. and then over the next few months as we look into the fall, investors will begin to anticipate the next layer of that we expect a wider array of nexgen versions of the iphone x and iphone xs as they called it and then the xs plus for a less price conscience consumer who wants the larger real estate screen size. >> will, should we expect them to fill the channel as quickly as they did this past quarter at least on new phones? >> that kind of ebbs and flows i think there were unique circumstances this quarter i think generally with iphone they try to keep it within five to seven weeks of channel inventory. i think that's tough to call from, you know, from quarter to quarter.

but, you know, the next big event coming up which, of course, we haven't touched on is the cash that's going to come into the could havieghiers and l hear more about that on the next quarterly conference call. >> right really quickly on that are we 163 billi$163 billion net and they want to get to zero how much of that do you anticipate will be spending, return to shareholders are you starting to work on that >> well, i think the bulk of that will be return to shareholders reality is it hasn't been in the company's dna to do a major acquisition. they continue to not to rule that out i guess it's ossible but our expectations is that the bulk of that gets, you know, used for a buyback over probably a period of years and probably, you know, speed limit to the current dividend as well >> mike, given that so much of what apple's doing seems to be an ecosystem play. i wonder how much investors should worry about some of these late deliveries. i'm not talking about rumors

that show -- don't show wlup people expect. i'm talking about air pods which apple couldn't get in stock for several quarters after last holiday season now the home pod which didn't arrive on time and is now arriving with software that they talked about at wwdc, that's still not going to work. and then these content deals which frankly seem to be small ball compared to what netflix, hulu, amazon are doing is there an execution issue not at the iphone level but possibly below that that investors should be watching? >> i don't think big enough execution issue to create a problem for the stock. i wouldn't worry about it from an investor instant point. it is disappointing for consumers from time to time when the devices don't come out that the time they're looking for given as i mentioned earlier, you know, the bulk of revenue and profitability is going to continue to come from iphone and services i don't think the timing of air pods coming out a couple months late or home pod being a few

months late or something like that is something to really be concerned about from an investor standpoint >> will, president trump mentioned apple's investment in the united states several times recently the state of the union and in davos. is that a headline that apple wants to continue to make being sort of right in the per view of the president? >> well, look, you know, there is something to say for positive pr and there's no question they're going to use some of the repatriated funds to invest back in the u.s. and they talked about the various investment projects, manufacturing et cetera a lot of that i think of the $350 billion they laid out was probably already in the road map. but it clearly provides some additional ammunition on that front. again, i think the biggest question is where does that excess cash that is already on the books? in this is a company that is going to generate $60 billion a year in free cash flow it will be a problem to have where do you put that to use

>> yeah. that's a lot of money. thank you, gentlemen will power and mike olson. thank you. >> when we come back, a lot more on the market down turn and the bounce back. take a look at the dow down 62. s&p 500 just a few points shot of the flat line bitcoin falls below $8,000 on regulatory concerns. we'll get to that as well wheth when "squawk alley" continues on this money. monday hi i'm joan lunden. today's senior living communities have never been better, with amazing amenities like movie theaters, exercise rooms

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european stocks are participating in this global market selloff in fact, the broader stock 600 index now in the midst of the biggest six-day selloff since the brexit vote, down more than 4% over that period. the index also coming off the worst week in three months and erasing the gains for the year really led by germany. the german dax is down almost 7% from its record intraday high

hit back on january 23rd due in part to rising yields the yield on the german ten year benchmark rose to levels not seen since september of 2015. take a look at the banks tech is also under pressure. some of this year's notable laggers, deutsche bank which we have been highlighting today, burberry down, air france down klm down 12% and stocks are falling today despite a decline in european currencies against the dollar which makes this market selloff very interesting the euro lower latest retail sales data did decline by 1.1%. in the uk, composite pmi falling. it slowed to 0.3% growth in the current quarter. that is down from the 0.5% rate

it achieved in the fourth quarter of 2017. all this coming up ahead of the bank ofening glanld meeting on thursday back to you. >> thank you very much, seema. appreciate it. as we head to break. let's check out shares of broadcom and qualcomm. broadcom sweetening the bid to rival of over $121 billion shares of qualcomm down 3% broadcom higher by 2.6%. a quick look at the dow as we're slipping again, now down triple dints. 110 points lower more ahead on how to play this volatility straight ahead on "squawk alley. energy is changing fast and we're changing with it. building a smarter grid, investing in new technologies, that's aep's road to the future. 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.

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hello, everyone. here is your cnbc news update at this hour. syrian activists say 23 civilians have been killed in intense government air strikes on a rebel held suburb near damascus first responders team releasing the footage showing the chaotic aftermath. a palestinian stabbed an israeli to death at a bus stop near a west bank settlement before fleeing israeli forces searching for that attacker. since 2015, palestinians have killed at least 50 israelis. but more than 260 palestinians have been killed by israeli forces in that same period of time

on the agenda, the status of jerusalem and the fight against terrorism. back here the ahome, singer-songwriter paul simon says his upcoming tour will be his last citing the personal toll of touring and the death of his lead guitarist his farewell tour begins february 8th in vancouver and will take him across north america and europe ending on july 15th in london. you're up to date. that's the news update this hour back downtown to "squawk alley." i'll send it back to you, courtney >> a lot of big tours making their ends here. i guess that just adds another one to the mix we're sitting from a broad market correction. there are individual stocks nearing correction territory things we need to be watching closely. dominick chu is back at hq with more on that good morning >> good morning. it is a market of stocks as we talk about the broader indices, we're far away from the correction mark, down 10%. but some of the individual names stood out. we took a look at a broader measure of the stock market, the

russell 1,000, bigger population than the s&p 500 and also look at those that have at least pulled back a lot and hit highs recently so about half of that russell 1,000 index has hilt a 52-week high or multiyear high or record high sometime just in year to date and 72 of those stocks at least for right now have fallen into that correction territory at 10% drop from recent highs some of the ones that we're watching here, take a look at these names. wells fargo, no surprise there bad news coming the fed is going to regulate them more restrict their size they're 10% off the highs. they're in correction territory for right now. halliburton on the energy side of things, oil take off. energy stocks are a hot trade of late now halliburton is off 10% from the recent highs significant cigna, a the love the health insurers, cigna is 10% off the levels american airlines not flying as high anymore down 12% and wynn resort, we know issues there, allegations of sexual misconduct that stock is now 17 below

overall, carl, as we take a look at the stocks, if there is more continued down side momentum, some of these names could be the ones that fall even more but if there are those who are hunting for values or dips in this marketplace, these are perhaps some of the stocks amongst the 72 that could see some of the bounces. back to you. >> dom, thank you for that dominick chu stocks off session lows, back down triple digits for the dow tech stocks are helping lead the morning rebound. joining us at post nine to talk more about that elevation partners co-founder roger mcnamee. you think -- i mean you've been net critical of the market on valuation. >> yeah. >> you think that's going to change over time >> interestingly enough, i think what we've seen so far this year is this amazing spike. 7% right out of the chute. you can't annualize that kind of number we're now, what, up 3, 3.5% year to date even after this really significant cut last week. that feels to me like a number that if you analyzized it people

would go crazy if they said january 1 you'll be up 3.5% the first week of february, you'd be very happy with that. so i look at this and go way too early to look at this and draw any larger conclusions other than this is the market being the market and with tech stocks, it's the same basic thing they have been leaders right now they're leading again. >> whether you look at the market more broadly, how do you think we should digest a looser fiscal policy and a tighter monetary policy? >> this is a great question, courtney i'm not sure how this is going to come down i watch, you know, the treasury secretary saying the wrong things about the dollar. i see us making all kinds of mistakes in our trade relationships with our biggest partners and those are really scary so if you think about beyond the next few months, they're all kind of cloud onthe horizon. obviously the short term numbers for the economy are fantastic. and it just feels to me like we're coming to the end of a ten year run i don't know when it's going to kick in.

right? and again, i don't want to fight a tape i'm looking at this and says the market is doing exactly what you hoped it would do which is find a level right away and be led out of it by the guy who's led you into it which is the tech stocks >> i want to talk about the center for humane technology some substance behind some of the idea you've been talking about about how facebook, google, some others are seizing control of too much of our attention. on the site for this organization, you mention apple, samsung and microsoft as three companies that aren't beholden to this sort of ad-driven targeted driven business model what is your take on amazon and whether it would fit the design goals? it's gathering a lot of information. but it's telling you right along the way, hey, people who bought this bought that we want your money we want you to buy things. >> jon, the first thing i want everybody to understand is we don't have all the answers what we're concerned about is that there are companies using big data, really to the negative

benefit of their customers that is they're taking advantage of customers with data we want to be supportive the companies on right side of that equation and at the moment, the three you cited there are on right side. i look at amazon and say i hope they stay on the right side. you know -- >> you think they are on the right side >> it's hard to tell amazon is a hard company to get on the inside. i'm not sure of everything they're doing. i love the super bowl ad you know, i look at this and i have an enormous amount rev inspect for what amazon is doing. i think they're perfectly capable of being on the right side in fact, i think all of the companies can be and all we're trying to do is give a place for people to come and say i'm concerned about this issue. i want to stay informed on it. i want to participate in the process of figuring out the right answers and helping these companies make good decisions. again, this is not an us versus them kind of situation we would love to have facebook and google and others embrace these ideas. we think they can be amazingly successful without harming their youth. >> from an engineering stand point, is it about writing more

better, more humane algarythms >> the advertising business model is what creates the incentives to dakt people. you have to manage the advertising business model really differently and in case of google, if you look on their kind of ad words part, there is nothing wrong with that. that is, i express an interest in a product they show me cool products to me, that's completely fine. if i look at the problem on facebook, there you have an insentive to promote fear and anger with people to polarize and there are a lot of social problems that come out of the way facebook's model has been implemented. and i would love to see facebook move to a subscription model i think they can be the over the top solution of the future and in order to do that, they have to align their interests with the interests of users and publishers and media companies which candidly would be a better business model than they have now. so when i look at this i think there is happy endings for everybody here but we're going to have to do experimentation which at the moment you know, we're just

beginning that conversation. >> well, facebook says they're trying to be more responsible. zuckerberg, of course, changing content, trying to, you know, lower some of the viral videos they said good he is what? we have a lot of people watching >> courtney, i wish they were actually doing things that would make dafrns. the thing that bothers me is that they're treating this like a pr problem rather than a subinstantive problem. and the really simple solution is to look at the 2018 election and realize that all the things that allowed the russians to manipulate us in 2016 are still present. hundreds of people are going to try to use it. i don't know who they're going to be whether it's north korea or the chinese or russians or just people at home who shouldn't be doing it. but right now facebook needs to make its users aware that there is this threat and that they have the opportunity to essentially beat manipulation by voting the goal of the manipulation is keep from you voting and make you not believe in democracy >> so they would argue --

>> the stabbed arndards bodies technology but your advocating for ethics, for design on how these things work is there any precedent for companies actually bowing to that sort of thing >> not that i'm aware of but i do think they bow to public pressure. so what we're really trying to do is to sit there and say, you know, people are concerned they have a right to be concerned. they also have a right to have their opinions reflected in the products that they buy and the truth is these products are so convenient, so compelling that we've got addicted to them without seeing the dark side now that we see the dark side, we have to push back john, i don't know what form that's going to take candidly, there are a lot smarter people to solve that problem than me. but i'm in a position where i can call everybody's attention to it with your help and not worry we're going to wind up in a good place. >> right as you were walking off set last week, i said do you think we're going to see a drop in engagement from facebook when they report? we got our first quarter on quarter decline in da use.

that's not -- that's more than a pr pitch, right? they're doing things that are actually hurting their -- >> i don't think so. i this i that preceded the changes that they made and the changes that they made -- imagine for a moment that facebook has perfect information on what's going on with their users and they have been a real time and you saw a rollover in dau, wouldn't it be logical to go out and make changes that you could then blame the stage on? >> that is chess >> i assume they're a lot smarter than i am. i think you have to give them krit for thinking of things like that you know, they had plenty of time. and the thing i would point out here is that that was just a blip i don't know that that's an actual structural change look at the numbers. i mean, the arvpu went

ballistic. i want them to use this strength to make changes before it's too late >> are they taking your calls? >> not yet >> no? >> not yet but we can always hope >> this is a creative solution though trying to get some people together to -- >> and to get the smart people in the room talking about it right? again, at the beginning there were just a few of us. but hopefully eventually there will be hundreds of millions and then we can have a good conversation >> if mark's goal is to fix facebook this year, do you expect him to call you at some point this year or who do you expect him to call >> i hope he'll call tristan harris, my colleague and was the person who came up with the concept of brain hacking tristan is the designer at google for many years. and he's really the world's expert but there are literally dozens of people. tim woo, a professor at colombia is a great person. >> we had tim on >> i think candidly, you know, he should be sitting down with people like representative adam

shift and senator mark warner and senator richard bloomenthal and john kennedy, people that understand the issues and want to try to -- >> you want to mix in some republicans too. >> well, yeah. john kennedy is a republican from louisiana he was extraordinary in the senate hearings. and this is not a -- this shouldn't be a partisan issue. this literally, i mean, even if you love the outcome of the last election, there is no way to predict who is going to be involved in this one one of the things that facebook -- remember, kline was the biggest advertiser in asia there is no facebook in china, right? so what are they doing using facebook as a tool of foreign policy well, if they're using it in arab yashgs what is to stop them from using it in north america i mean this shouldn't be a partisan issue, folks. this is, you know, this is our country. we have to ep coo it for ourselves. >> roger, good to you have more next time >> thank you >> roger mcnamee more on the selloff this morning. dow back down 177.

we'll watch that closely rick santelli is watching things as well. rick >> absolutely. the pits are extraordinarily full, extraordinarily volatile because markets have moved you know, i've said many times all stimulus is fungible that means all policy is fungible we'll talk about that after the break.

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rick >> good morning. thank you, jon you know, these are exciting markets and to some exciting isn't a preferred word they would rather have less volatility, steady as she goes, maybe more of a market style that we experienced for much of 2017 but it is what it is but is but i think that there's some important things to learn in the macro about how to deal with volatility this period might give way to more stable outcomes but i think ultimately the question then becomes is this the big one? in other words, is this the big move that nails the top for a long period of time with respect to equities? i think we've already established those sub-140 lows and tenure are not going to be seen again any time soon my answer to that would be probably not, but it doesn't mean we're not going to have a bit of a wild ride all is fungible. there's a pit behind me with 200 traders in it. if they all put $1 in a bag, i'd

have $200. does it matter which one gavemy which dollar no when one country does something with respect policy, it affects the whole globe. since all the money they've thrown is fungible, that means at the core of that what we're really talking about is policy i think from a policy standpoint it's a lot like musical chairs the united states has a great benefit to being the first to buying insurance on the notion that inflation will be at bay forever, the notion of how it will affect interest rates will be up forever and the stockmarket will go up without a corresponding rise to rates. that world is now gone the world we're dealing with as we look toward central banks, we have one this week, bank of england, i believe

if mario dragic does it, all three may see their markets give way a bit. ultimately cross-border flows should be watched because interest rates moving down especially in europe, a little bit today may mean a lot in the big picture. courtney, back to you. >> thanks very much, rick. coming up, the selloff does continue the dow down 178 points. the sixth worst point drop in the history of the index came on friday in its worst day since brexit we're going to discuss what could push us welor or could push us higher when "squawk alley" richardsons you're going the want to stay with us.

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astrazeneca may be able to help. we're continuing to keep a close eye onthis self-off with traders debating whether or not a deeper correction is ahead let ee get to bob pisani with more on that bob. >> let's take a look at the s&p. this could go either way the good news is the lows was right at the open. you see we're drifting lower again. here's what you want to look for. the first thing you want to see is signs that the sellers are exhausted. we haven't seen that yet the second is buyer interest returning. we saw that in the mid morning but, again, not enough buyeriin

interest this is why i say this could go either way 2/1. volume volatility, we could go either way we closed the vicks x. i think we're still searching for some kind of direction here's what i like the cash vix is trading above the futures. it's usually something that goes backward they're freaked out about the present and not as much as the future this could go either way guys, back to you. >> bob, thank you very much. of course, it's going to be a busy week as the earnings continue autos, retail, consumer names, f phrma.

>> it really was so much of the direction on friday. right now we're sitting just about where we were on friday, 285. >> it will be interesting to get snap tomorrow with all of the heat around facebook last week and the moves that twitter has had. >> to say the least. >> yeah. >> let's get over to the half back at hq welcome to the "halftime report." i'm michesc michelle caruso caba what caused the drop and is it over with us today is joe terranova, stephanie link, josh brown and jon najarian don't let the markets breaking near even levels fool you. it's down 143. looks good relative to where we were earlier, but you can see earlier in the sessiongh