good morning it is 8:00 a.m. at twitter headquarters out west in san francisco and 11:00 a.m. here on wall street. "squawk alley" is live ♪ ♪ good thursday morning. welcome to "squawk alley." i'm jon fortt alongside david faber, morgan brennan with me at

post nine. also joining us this morning on set, s&p 500 global portfolio manager erin gibbs and business insider editor in chief henry blodget. carl is on his way to pong clanclan -- pyeongchang. >> he made it. >> he did? >> yes >> we have a lot to get to we're having another wild session for stocks following yesterday's action you saw the dow end in the red for the third time in four se s sessions we're down 430 on the dow. the s&p 500 is down over 1%. volatility continues erin, what's your take here? is this just going to be something we finally starting to see again in our markets that we had become perhaps unaccustom to >> yeah. for us, we're really looking at this as a full re-evaluation what's the shift how are you going to allocate between bonds and equities valuations, we came in really high at the beginning of the year and all of last year every time the markets got pushed up, we

kept saying well where else are you going to put your money? that was sort of the argument. and now we're seeing some other options on where else can you put your money and get some yield? and so, of course, you've got to re-evaluate what are you willing to pay for equity? >> so where else are you putting your money >> so now we're actually looking at getting some decent yield in the bonds. certainly in the prices. it could be a rough year you can really expect more reasonable valuations in the equity markets we're still very positive on equities this still looks to be a great year we know the fundamentals are solid. economics are great. any year where you look at 20% earnings growth is a good year we're expecting the year to end in positive territory. but we came in at 19 times forward earnings well above any year average since 2000 that was too high. now we're looking at more reasonable prices. >> this is a weird rethinking though for somebody who was a little skeptical on the markets, i think it's fair to say for the past couple years, we haven't

come down that much at all >> no, we've been -- the market has gone parabolic after nine years of straight upward movement but as erin said, valuations are extreme still. when you look at lots of long term cyclically adjusted metrics, we're two times what the average has been interest rates are low, things might be different this time we're moving to less infrastructure and more ip and morm more monopolies. but this is the way markets change it's not that you get to a peak and a light turns from green to red and everything different the next day and down we go. you go to peaks of 2000 and '07 and '08, it was like this. we stumbled. things broke down. psychology starts to change. the fundamentals start to weaken over time. and 18 months later we're down a huge amount. >> you can't say this is like 2007-08. that was a credit crisis followed by a huge financial crisis that really started in a

very different area. i mean this is more valuation. it would seem to me more akin to when you made your name back in the '90s >> i was on the wrong side of it then is it different this time? the record valuations noet only in tech but in the broader market >> this is more like '07, not 2000 >> valuation tells you nothing about what stocks are going to do in the near term. but nobody should be surprised if we bottom 50% down from where we are by now. that's where valuations are. markets do tend to revert to needs. i'm not saying tomorrow or what have you but this is the way things -- >> they're not that much higher. in this low interest rate environment, we're only trading about 20% above the three-year average. it's no the that high. it's not like we're in a bubble. >> we're in a long term cyclically adjusted measure. we have incredibly high profit margins and assume they revert a little bit, we're looking at two

times the long term average. again, lots of things you can say it's different maybe it is different. i hope so. >> two-time the -- i just want to understand the numbers. two-times long term average on multiple >> on average cyclically adjusted multiples the ones that everybody throws around the schiller ratio it has been challenged in a lot of ways. people say it's different. but there are others like gdp to revenue and market cap to revenue and others >> i want to dig into valuations i feel like several years now we start every year, it's going to be the year of the stock picker. every year it's more and more focus and passive investing. it's become a bigger and bigger debate topic in the last couple of days seeing, you know, the role etfs are playing. is this the year of the stock picker >> so last year definitely it was all about growth right? growth just killed value there were huge differences. and i think this year maybe it's not so much the stock picker but we can definitely see more

value, passive investing is still a great strategy and low cost strategy. but we definitely see some really good values out there that we're very positive on for this year. particularly when we look at the fundamentals >> do you want to note the dow has come back 100 points in the past few minutes now trading around 240 moving on. twitter shares outperforming soaring this morning on pace for their second best day ever you can see they're up almost 19%. after beating on the top and bottom lines dailyactive users up significantly, up 12% compared to this time last year on the call, rbc asked ceo jack dorsey about the recent departure of the chief operating officer. take a listen. >> we don't have to do any back filling of the team with anthony's departure. this is a testament to what anthony has built and the strength of the bench of the

executive team so executives from my team will be assuming a bunch of his roles and we haven't skipped a beat. and, you know, we're really excited about looking at the organization in a new way. but we have a lot of strength around the table and a lot of confidence to continue this strategy >> wow look what they can do with half a ceo and no chief operating officer. henry, more companies need to operate this strategy. >> is this a new day fon twitter based on the fact that daily active users are up but on a monthly basis they were down they're not fundamentally growing. >> they're making steady small improvements including changing the business model go back three or four years ago, it was going to be click to buy, something that just nobody uses twitter for. twitter is a find out what's going on now medium. actually an incredibly powerful news network they're finally embracing that

instead of saying we're going to be next facebook, they're changing the model to video advertise clg advertising which is much stronger they made good product improvements it is happening but not quickly. at least for our side on business insider, we're seeing a lot of incremental improvements. >> erin, is this a twitter specific story or a broader trend in social media and advertisers are putting more dollars here >> in general, social media is doing better and across the board internet industries are one of the highest growth rates within technology. it is good i think twitter should send a massive thank you basket to trump. but, look, we don't own it i still think there is a lot of volatility and things they need to, would out. it's sleen smaow and small incrl improvements >> way had snap yesterday and

twitter today. there is an argument to be made that they're making progress in terms of both of them appealing to advertisers as well. >> definitely. the new products, just to talk about twitter, the products that they're rolling out are good you can think of them as a new cable network. it's a soft cable network. software based social media but that is where dollars and time are flowing they are just embracing what they are and if you look at the valuation, this is a company that like facebook and others, they don't have huge content costs themselves so they should have a good margin long term we started to see that on the bottom line. >> i would be very careful that the competition is getting more fierce, more traditional media companies are changing models as well for me, i'm still the jury is out. honestly, we like a lot of traditional media companies ramping up the streaming >> it's funny you mention that we don't typically mention "the new york times" very often that stock up is 10%

digital subscriptions up 107,000. >> terrific. you go back five or seven years when "the times" first launched the subscriptions, panned among the pundits. terrible, he everything has to be free. turns out that over the last five years folks have expressed a willingness to pay for information they like. >> i mean, l.a. just spent half a billion dollars on two newspapers >> that's right. >> and the price doubled since jeff bezos bought "the washington post" for an old newspaper. >> amazing shift gears a little bit here henry, erin, stay with us. we want to get to phil lebeau who has more details on tesla's earnings >> depending on your point of view, there is either something to love inthe earnings report yesterday or you look at it and go, why do people continue to buy this stock let's start off with the skeptics the bears will look at this report and say this is proof that elon musk is full of it lower margins for the model s and the model x. model 3 production problems

remain they're struggling with automation and there is growing cap ex for 2018 all reasons why the bears are saying stay away from the stock. the bulls on the other hand, they are saying well, look, the cash burn slowed down dramatically in the fourth quarter. yeah, there was one time items in there it was down dramatically the model 3 production targets haven't changed for the first quarter to the second quarter and elon musk remelatively speaking gives upbeat guidance >> we could be positive cash flow like pretty significant cash flow probably in third quarter. four, five months from now but we think makes sense to invest in model a. >> by the way, the model y is a small utility vehicle that the company plans to really start making announcements about later this year including production facilities, where it will be built, whether it's fremont or

somewhere else that is likely to come later this year. shares are under pressure today. not a lot of pressure but down almost 3% as people look at this and they say i didn't get enough to really buy into the bullish comments but on the other hand, there's not enough here for people to say it's time for a huge selloff >> phil, thank you phil in chicago. all right. erin, glass half empty or glass half full? >> i'm a half empty. i'm not a big fan of tesla we don't own it. i think it's more than fairly valued here. i think the whole rocket launch was sort of like the wizard of oz saying don't look behind the curtain timing just i'm not a big fan of tesla. >> how about you >> i thought the rocket launch was awesome. i'm sorry. those pictures, star man in space. but this stock, to erin's point, this is a call option on elon musk there is so much future imbedded in this price. you look at where they have to get to to justify just the

market cap they have, $55 billion. somewhere in there talking about selling one to two million cars a year. right now they're selling 100,000 cars a year. yes, they're rolling out new mod ldz. y -- models it's an amazing product. but so much execution priproduc in you have to pull a rabbit out of the hat to get a great return. and then there is the constant delusion problem for years oh, we need at $2 billion. we need this we need that it's not like can you say that's all it's ever going to be. >> isn't this "good will hunting" at a level? i mean here's this guy, ee lon mus who can is clearly brilliant, genius, able to execute amazing things but doesn't actually execute all the time to the point where analysts are saying he says he can deliver this many cars but we don't necessarily believe him. yet look where the stock is. i mean, are you really betting on the potential of elon musk to either deliver something or some other company to come in and

execute at a certain point >> yes >> a huge percentage of that price -- >> tesla has a tremendous track rorld of missi record of missing estimates but it doesn't seem to matter. it is very much a story about elon musk. >> his compensation scheme though, you have to give the board credit there if it gets anywhere near those numbers, everybody will be happy. >> absolutely. people talk about entrepreneurial risk you're such risk takers. elon musk actually laid down his own cash on both tesla and spacex they were going to go out of business he actually took the risk. so this is someone who actually can make these amazing visions come true. >> one of the biggest things you want to watch, he talked about advancements and the factory itself is going to be the own kplod ti commodity in terms of technology we see that playing out on spacex side. i wonder if he can bring that technology to tesla.

or what it's worth >> yes certainly we're going to be able to continue to watch not only tesla but rockets launching, all kind of stuff. henry and erin, thank you for being with us. >> great to be here. thank you. when we return, shares of take two down after beating oren earnin -- beating on earnings. they did report a profit during the holiday quarter. take-two's chairman and ceo strauss zelnick joins us on set next in a cnbc exclusive stay with us the dow taking another leg down. down about 352 points. we'll be right back.

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welcome back take a look at major indices here the dow down 360 points. almost 1.5%. the s&p 500 also down. but a little bit less, about 1.1% the nasdaq, tech heavy, also suffering a little bit disproportionately compared to the s & p. down 1.4%. almost 1.5%. moving around quite a bit this morning. speaking of tech, despite strong sales for games like nba 2k '18 and grand theft auto, take-two interactive is down 8% after the video game maker reported quarterly revenue below forecasts. but also strong guidance and

profits. joining us now here at post nine, take-two clahairman strau zelnick. quite an extreme reaction after that report. what do you think? >> i think we never argue with the market we do the very best job we can we're super proud of our results. our net bookings were at the high end of our guidance range obviously, management reporting profits were exceedingly high. exceeded consensus and guidance and got it up for the year we had a great quarter and nba 2k is the number one tight until 2017, up 25% year over year. spending on the title was up 30% in the quarter and our standard-bearer grand theft auto sold in 90 million units. four years after the initial release is the number three tight until 2017 and grand theft auto online looks to be having another record year. so the results are phenomenal and honestly, that's our job

and market conditions sometimes they benefit us. other times they don't >> this looks like a day when investors need data to hang their hats on. so tell me what do you look at that gives you the confidence to raise your expectations for 2018 what are some of tail winds pushing you forward? >> at this point our releases are in the market. so we don't have any in releases of consequence in the last quarter. and we're seeing how the titles are already in market perform. that is relatively easy to anticipate for example, catalog sales in the last quarter were more than 50% of our overall revenues. so our ability to predict is sound. and we have beaten our guidance for many quarters in a row that doesn't mean one should expect us to beat our guidance i think you can rely upon our guidance as being pretty much as we see it and straight down the middle >> digitally delivered net revenue, at what point are retailers not part of this

picture anymore? >> retail is still our biggest partner. on front line release on console, it is still 65% or so of our net revenue so clearly they're our biggest business partner digital distribution is growing and it's over 90% of the pc format we said we expect that digital distribution will become the preponderance of the business in the coming years i think it will be a while before it is really, you know, really the majority. >> you made investments in mobile apps over the years are you looking at things like hq trivia right now? the trivia games are all the rage in the newsroom they're all the rage >> hq trivia is a lot of fun we wish we could anticipate every great application out there. we can't we admire what they've done. and i played it. it's great we have tuned up our mobile strategy we acquired social point, monster legends and dragon city are doing great. social point is still a small

part of our revenue, about 5%. but an area that we're super excited about and expecting to grow also wwe super card now is fourth iteration is doing great. >> specter and meltdown a month ago were very much what the tech world was abusiness abozz about affects computers that are particularly powerful. how powerful chips in them the gaming industry uses that type of computer you have seen any impact on consumer demand or, you know, your expectations for the year based on how those chip flaws have been handled or was it much to do about not that much when it comes to the actual business? >> i think it was a very serious topic. and we take those sorts of security issues exceedingly seriously as do our competitors. but we didn't see a commercial impact >> at all? >> no, we didn't >> one thing we've been covering on the show is sort of the fact that tech has been coming under fire for being addictive

certainly vild yoe games and studies and research we've seen on the gaming world in recent months has suggested that there's an addictive quality there, too how concerned are you about that >> my great grandparents' generation was concerned about how jazz music would affect kids and my grandparents' generation is concerned about how rock & roll would affect kids my parents generation was really concerned about how the beatles' haircuts would affect kids and i guess now -- >> you're not buying it? >> that was all about music. this is not about music. >> it was television and motion pictures too no, i'm not buying it. technology enhances our life like everything it enhances our life used the wrong way, it's not a good thing >> so you don't see this as a risk >> there is absolutely a risk for certain individual that they can misuse technology in the same way that certain individuals can misuse other things that would otherwise be

good in moderation or appropriately consumed we have to be mindful of it. we take responsibility of what we do. our goal is to create a great entertaining experience that fits with the rest of life our goal is not to take your life over. >> well, it certainly looks like you are able to do that based on your outlook for the year. strauss zelnick, take-two, thank you for joining us >> i want to note the dow is near session lows. down 431 points. and the s & p also down quite a bit, down 1.4% >> and the s & p breaking below that key resistance level of 2650 we're now at 2643. averages, lows of the day. coming up, more on twitter's breakout quarter as the stock continues to surge this morning. it's been an outperformer. up 20% finally, tomorrow, be sure to tune in for our olympic countdown to the opening ceremonies carl quintanilla will be with us

from pyeongchang with a ton of special guests you don't want to miss that. "squawk alley" after this.

all right. take a look at the broader markets. we're at or near the lows of the day on all the major averages. you can see the dow industrials down 1.8%. the broader, more important market, the s & p is still down 1.5% the nasdaq, i got apple positive not much else. of course, we talked a great deal about twitter's response today, the better than expected numbers and guidance to a certain extent that stock has come off its highs. but it is one of the only outliars in terms of a positive take in technology otherwise, it is pretty dark out there when -- or ried, i should say -- when looking at the names. volatility, we know that concern about rates. we have a 30-year auction later today. we'll see how that goes. you know, it's the same conversation and then throwing in sort of multiples and hedgery blodget

brought up names i have not heard. giving you the prospect for a significant down turn at least based on what he sees as metrics. >> which is the key question in this market, has this been a much needed sort of pullback in correction or a pivot in which we see more extended weakness and start of a bear market after what has been a long bull market >> with the underpinning being that earnings continue to be much strong, you heard from richard fitch richard fisher talking about broad strength overall on the economy. benefits for tax reform for so many corporations. but we do have some volatility that continues let's check in on how europe closed the day >> just like in the u.s., there is a stock selloff in europe this is despite the rebound that we saw in asia overnight the german dax down about 300 heroin points. the fatt-se is down almost 500 points and this on increased fear about what higher yields

could mean for stocks and the overall european economy today's bank of england policy meeting intensified that fear. mark carney said a rate hike could come as soon as may and that it may be larger than anticipated. bond yields meantime across europe are on the rise the german ten year bund hitting 0.8% today that is the highest level since september of 2015. let's switch to currencies there is a outperformance in the pound. $1.40 at one point in reaction to carney's hawkish commentary that stronger currency is one of the reasons the uk stocks underperformed the ft-se 100 lower by 6% in 2018 and markets in germany and france still in the red year to date but there are a few bright spots in europe today. that is on strong earnings there is advertising jenlt publicis and pernot upbeat

swiss re is one of the world's largest reinsurers with $215 billion on its balance sheet morgan, many people say this is an unconventional move for soft bank but they have been dipping toes into the broader financial services space >> yeah. you're right, seema. certainly it does speak to the fact that we're seeing more deal making in property and casualty and reinsurance right now as rates begin to tick up aig with their recent deal and reporting after the bell >> more deals. >> thank you for joining us. seema mody we're down 337 points right now on the dow with that, we're going to get over to sue herrera for a quick news update. good morning, everybody. here's what's happening at this hour president trump addressing the 66th annual national prayer breakfast this morning in

washington stressing that faith is central to american life and liberty >> ourrights are not given to us by man. our rights come from our creator. no matter what, no earthly force can take those rights away mcdonald's unveiling a contest to win that, that is an 18 karat gold ring valued at $12,000. looks like there are a few die plon -- diamonds in there too. fans can win the ring by creating a proposal of love to the big mac on twitter and tens of thousands of eagles fans pouring into philadelphia this morning to take part in that city's first ever super bowl victory parade organizers say that they are preparing for as many as two million people to jam the parade route. sunday's postgame celebration was marred by violence and

vandalism. hopefully this one will not. that's the news update back downtown. morgan, back to you. >> notice the ads for the big mac were not biting into a big mac. can you imagine the juice coming down on to that ring >> no. you don't want that. >> that gold all right. >> gets the diamonds dirty not good >> yeah. no sue herrera, thanks. coming up, more on the selloff. a look at the technical levels next the dow is down more than -- well, down about 1.8% right now. 435 points the s&p 500 is down 37 points. you got more back in a moment ♪

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welcome back to "squawk alley. markets continue to sell off right now we're joined by robert cinch, he is global strategist at peer point securities you brought three clarts with you today. let's talk about them. >> when we think about what is going on in the markets, we really think about two main forces one is this sort of fundamental. that really started in late january when the bond market began to sell off. if you look at measures of volatility, they started picking up more quickly than equity market volatilities. they went through late january and into the employment report

it was after -- >> that's what we're seeing here >> we're seeing this green light here starting to pick up sooner than the vix okay when that started, i think that started a fundamental re-evaluation of equity markets. the equity markets have not had to deal with a higher discount factor, higher interest rates for quite some time. we think it's actually the bond market selloff higher inflation, higher borrowing activity that drove the initial selloff in equities. if you remember back in late january, it was then the employment report at the end of last week that really generated in our view a bigger selloff in bonds, a spike in volatility and that's when the second force came in and that was the short term liquidation of a lot of the risk parody funds. so as they began to liquidate, that pushed volatility higher, forced them to liquidate more. we think that volatility spike has probably run its course. so the volatility spike run its

course what we're dealing with in our view is this rise in interest rates and how far it's going to go and how much of a discount that puts on equities. >> so in light of that, what is this clart tellihart telling us? >> if we go to the second chart that, is moving averages on the s&p 500. >> this chart? >> this chart here you can see we got very overvalued, very extended relatives to the 50-day moving average which is the purple line we have a serious correction down through the 100-day moving average. i think that -- and temporarily dipped down. it has come back that's the first level of support we have to look for is down at the 100 day which is around 2635 on the s&p 500 around 2710 is the 50. my guess is although we'll continue to have a lot of volatility, for now we're probably going to trade in that 100 day, 200 day moving average range unless interest rates spike further. i think the important thing to keep in mind is we're finishing up a week of auctions. today is the 30 year treasury bond auction bonds often sell off during the

auction and then settle down a little bit after the auction week is over if in fact we are going to settle down in volatility in the bond market, things stabilize a bit, i think we watch for the s&p 500 this range of 2635 to 2710 we may have a lot of volatility. we may stay in that range for the next couple weeks. >> whether you say next couple weeks, is that until we get another jobs report? >> probably until we get another jobs report. i think key in that jobs report will be the earnings number. you know, there were some technical factors, some base effects, et cetera, which pushed that earnings growth up to 2.9% year over year if that settles back a little bit, if the bond market stabilizes under 3% for ten year treasuries, then we may start to re-estabilsh some equilibrium. i think the adjustments continue the spike in volatility, i think that part of the process is behind us. >> so let's talk about the third chart that you brought with you today as well. pull that up on the board. here we go >> this is, as we were talking

about -- >> speaking of jobs report >> the spike in volatility we had the initial -- this is the vix. we had initial spike on friday and that led to selling. the explosion over the weekend, that, of course, led to a lot of the risk parody funds have to liquidate massive amounts of positions. this is through the end of the day yesterday. we're now seeing volatility come off its highs. if volatility stabilizes, the vix stabilizes, not back to the ridiculous levels we've seen -- >> this just -- gosh, if a picture could say 1,000 word here >> unsustainable if we settle around 20 below in the vix, if we get some stabilization in the bond market, then i think we can start to sort through these other markets and create some stability in the overall asset markets. you know, the risk is the bond market continues to sell off if we -- if the fact this budget package goes through and we have higher deficits, higher financing needs. if bonds were to sell off and we convincingly go through that 100-day moving average, we could

go down another 100 s & p point to about 2530. >> if we can sum this up in one sentence looking at all of the charts, for somebody who is maybe not has the technical prowess you do, what would it be volatility settles for a little bit and then keep in bonds >> i think the worst of the volatility spike and the capitulation selling is done but we're now going through a more fundamental revaluation of equity valuation in light of higher bond yields keep an eye on bond yields that is critical going forward >> great thank you for bringing us these pictures worth 1,000 word. robert cinch from amherst. and a down day for the market twitter still up 18.5% we'll have more on twitter's big quarter when we return but first, rick santelli, what are you watching. you know, we're going to continue on with this discussion with regard to risk parody, portfolio management with regard to volatility and an old phrase we used back many decade ago

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coming up on "the halftime report", wild mood swings and what they tell us about how long this turbulence might last plus, our traders making new moves. we're going find out what they're buying and selling and twitter posting its first profit the stock surging as you know. is it now a sell after the massive run or do you stick with it we're also going to have an

exclusive interview with vinny viola, the founder of virtue financial. he'll join us. thanks, scott. halftime coming up s & p is off the lows of the day. around 2650. down 1%. you can see the dow also off the lows by the way, if you're keeping track, the recent low on the s & p, 2593. that is in this recent down draft. so kind of gives you a sense as to where we are. there we're looking at the dow there is the s & p let's get to santelli now. check in on things in his world for the "santelli exchange." take it away, rick thanks, david. we're going to pick off, start off where robert in the last segment left off you know, risk parody. there is a real david and goliath story regarding what is the impact of volatility and where it comes from with regard

to the markets on a equity side. and the david side is the risk parody products that robert was describing this has been a very successful and it's a very innovative business that is growing into a variety of products modelled to some of the large efst institutn in the world, trying to maximize returns on their portfolios. the main issue is that the pricing of these products happens to be things like the vix. and specifically in many cases the vix. because everything needs a point of perspective with regard to make all the adjustments the issue is not only is the vix intergral into all the etps which are more of davids in this store yishgs b story but they're undermining the bull market in terms of psychology so you have this one point of information that ends autopup bg so important to big goliath type position and what the recourse is

so when that one point starts to move, it means that there is now a dynamic hedging process going on to try to keep the maximum return of the portfolio in balance. and they're not in balance we're talking hundred of billions of dollars if not more that need to be tweaked on the equity side with the direct line into selling s & p futures so even though etps is interesting, as robert pointed out, let's keep focused. this process is going to take a while. second, the treasury let's go to the board. there is a chart starting in 2009 of ten-year note yields the only important part is how close we are getting to 3% that all of this started to happen in a very big way when we took out the 263 high yield close from 2017 and our one single point of 303 which was the settlement on the last day of 2013. now what you can see here is that the important part of technicals isn't looking for little resistance areas in the

80s or 90s right now keep tunnel vision this market is going to test this 303 and before it does, if it doesn't get there, if it goes back under 263, that's your main issue to contend with. and it's held on retest intraday where it goes next when it gets into this zone, we'll cross that bridge be aware of the fact that we did a lot of work in 2010 between 3 and 350. i don't think we go here the first time we went through big. i think we come back and regroup. and that's the way the market is acting keep in mind, this type of volatility in treasuries is usually a buy signal pushing rates down as we've learned from soft auctions and all the activity we've seen since last friday, this thing has a mind of its own. and that is the key funneldamenl david faber, back to you thank you, rick. when we return, stocks, as you know, are moving lower twitter though, that's moving

higher you can see it there up almost 17%. we'll dig through the earnings report that has that stock in the green. and tomorrow, be sure to tune in for carl's exclusive interview with our boss, brian roberts, comcast seattle from pyeongchang, south korea and, of course, a lot more olympic coverage it is starting up soon "squawk alley" will be right back ah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

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the lows we're watching shares of twitter as well, trying for their second best day ever after the company reported its first ever net profit let's bring in analyst mark mahaney, mark, long time no see. >> hi, jon >> it seems you weren't expecting a quarter that would send twitter stock up this high. but you're not raising your target on twitter the way you did on snap. why? >> first, it's work in progress on twitter look, there were puts and takes this quarter there were some clear positives here i think the most interesting one was outlook for double digit ad revenue growth in the first quarter. the clear negative here was the monthly average users which didn't grow sequentially they expanded the character limit from 140 to 280 characters yet we're not really see it show up in the m.a.u. growth.

we're clearing seeing near term fundamental improvements ho how sustainable are they at some point m.a.u. growth will have to improve for that to be sustainable. it's very unclear whether they can do that. >> i guess that question, mark when you see m.a.u.s not improving and the checks that you have done at rbc on advertisers as sentiment toward twitter, pretty negative is that why you continue to bet that this stock is i guess going to go back down? >> that's the open question. near term fundamentals are clearly getting better our advertisers' survey shows clear deterioration in the twitter platform in 2015 and '16, real deterioration. it did show stablilization in '17. we don't know whether it stays flat or improves if it improves, you can be constructive on the stock. the question is what's going to

cause that to happen you have to come back to user growth advertisers are not disengaging from the twitter platform. pricing has really come down aggressively at the company. same is happening at snap, by the way, right now snap has the advantage of pricing going down and users still growing nicely twitter doesn't have that advantage. that's the big question mark for investors. what's going to cause that m.a.u. growth to re-accelerate without that, it's hard to see this fundamental improvement sustaining itself. >> mark, love it or hate it, twitter has president trump and one of the conversations we were having earlier on the show is, the suggestion that maybe twitter is experiencing a trump bump what do you think? >> oh, i don't think so. i sort of the wondered whether we would see that a year ago and, you know, we had 4% growth in m.a.u.s for three quarters in a row. look, this is a unique asset it always has been there's competition of course for ad dollars versus facebook and google

the advantage that twitter has, though, just from an ad dollars expensive, is the same as snap has. these companies are tiny snap is 100th the size of google twitter can grow without having to bump into these goliaths like facebook and google. that's the advantage of having tiny market share, you can tweak the needle, improve fundamentals, and don't have to worry about market shifts, at least for for you. eventually that issue will come up >> hard to know how to even value these guys when they're so much smaller than the giants mark mahaney, thank you for bringing us through it let's check in on the markets right now. all major averages are down 1% or more. dow is down 321 points s&p down 26. the rate sensitive utilities and real estate sectors, however, are both positive. it seems investors are moving tas these so-called safe havens

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welcome back taking a look at markets right now, as we come into the noon hour, all the major averages are lower, down 1% or more

the dow is down 345 points right now. the worst performer there, general electric breaking back below $15 a share at $14.81. >> it's important to remember, this is a global response to the prospect of -- >> absolutely. >> -- higher interest rates and the stepping back of central banks, not just here but in the eu and across the world in terms of providing endless amounts of liquidity and what that will mean if we actually do see some sort of normalization. as we've said, a reflection perhaps of the strength in the economy and the job markets in a lot of places. but we're not just suffering, so to speak, if you were long this market the s&p off, what, 7 poi.5% fros highs. germany's dax off from its high and the nikkei also in correction again, that's global issue with the synchronized growth we've seen and continued questions about the willingness of central banks to always be there, or not. >> also notable, in the green on

the dow, apple up above 160 bucks a share, i'm sure having all that cash on the balance sheet doesn't hurt at times like this also worth noting smaller stocks that are higher but for another day. now it's toss to the half and scott wapner back at headquarters and welcome to "the halftime report." i'm scott wapner the volatility playbook. what big market swings are telling us about the course of this correction and whether stocks are anywhere close to truly finding a bottom with us for the hour today, joe terranova, jim lebenthal, stephen weiss, sarat sethi the ten-year is sitting near a four-year high there is your market picture as we speak dow