good morning, it is 8:00 a.m. at apple headquarters in california it is 8:00 a.m. here on wall street "squawk alley" is live ♪ good morning welcome to "squawk alley." with me at post nine, michelle caruso cabrera carl quintanilla live from the olympics inpyeongchang, south

korea. he sat down with gold medalist chloe kim. that conversation is am coulding up in just a few minutes so stay tuned. >> that's going to be super fun. all right. now to the extreme market volatility less funneled which has been a global phenomenon as well for more on what's happening here and abroad, we're joined by stephen roach, former morgue an stanley asia chairman, yale university senior fellow he warned in december that global economies may not be as resill yen resill yent as once thought. we didn't plenmention that you' also an economistist what do you think of the interest rates spa spooked the markets. are they going to go higher or what is your prediction? >> well, i think the federal reserve is clearly got its antenna up, michelle, given not just one data point on inflation but the fact that the economy has a fair amount of momentum at full employment and lo and

behold we're doing a lot of deficit spending at the same time which is not exactly the recipe for stable inflation going forward. so forward looking fed has to look at the future with a different set of considerations than it has in the past. >> you have spent so much time in china and the chinese own perhaps more u.s. debt than any of the other entity in the entire world what do you think? there's been talk that maybe they might sell. they might become part of the bond vigilantes. how do you think china see what's is going on with our spending and our treasuries? and what do you think they're going to do? >> i think the biggest concern that the chinese would have would be if the u.s. stays on the path of further increases in tariffs which is certainly been rumored now for several months i think in that possibility, the chinese would view that as an act of aggressive trade behavior on the part of the united

states and, you know, at a minimum, i think they'd be inclined to buy less treasuries at subsequent auctions and if we got extremely aggressive on tariffs, then they might pull out the nuclear option and begin to think about selling their positions. >> stephen, i believe you said that we are in for a loss of complaisancy in 2018 and we're about 8% off the highs on the s&p doesn't quite feel like a loss of complaisancy yet. do you expect other shoes to drop >> i would agree with that i think the markets, you know, everybody has their own favorite valuation metric mine is one that looks at prices cyclically adjusted earnings and my new yale colleague robert shiller, that ratio is still

very he will valted elevated byt it is higher than it was back in 1929 it was only higher in 1999 relative to where it is today. and there is still plenty of down side in that ratio from present levels >> stephen, i guess the reason that would become an acute concern in terms of level of valuation is if the world economy didn't have any momentum where it could somewhat grow into these valuations not fully but at least kind of keep them at bay do you not actually see this period of pretty broad global growth as continuing do you think it's a little fragile? what's your take for the rest of this year? >> i think it's very froth i'ag. momentum is a very fickle characteristic of any economy. sure, the trends on employment and earnings look great and gdp has been up at a solid rate for two to three quarters.

but the savings funneldamentals, that's what makes or breaks an economy over the longer haul and the united states doesn't save, as you know, our savings rate of individuals businesses and the government sector stripping out the depreciation that goes for wear and tear fell to about 2% of national income late last year that that's one-third in the final average in the final three decades of the 20th century. and given this deficit spending, our savings rates are going to go to zero adjusted for inflation. and that's going to push us into a realm of wider current account and trade deficits so, you know, the way i look at the fundamentals is they're extremely fragile and we're kidding ourselves every time there is a correction to say well, the economy is sound its not sound at all it seems through the lens of low savings. >> so in that vain, bill gross and jeffrey gunlock have been on

to say they think the more than 30 year rally in bonds is over that we have now seen the bottom in rates and it's higher from here you agree with that? >> well, you know, with all due credit to those, you know, deeply well thought views, you know, when interest rates, michelle, go as low as they have for as long as they have, it's not a tough call to say that they're not going to fall a lot further. and, you know, i would subscribe to that with all due respect to those two gentlemen. i don't think it's, you know, a difficult call to make in the current environment that we're in >> stephen, i wonder, we seem to me to be at this odd political moment where there is no party that can even claim any more to be the party of fiscal responsibility how does that figure into what you expect to happen with the tough spot we find ourselves in

economically >> well, look, i think that's a fair point through no fault of the trump administration's, they inherited a u.s. economy with a very, very low savings rate the mistake that they're making is embracing deficit spending in a way that will take that savings rate even lower. and there's no one who is standing up and saying, wait a second, what about the long haul will we have enough saving to fund future economic growth? after all, saving is the seed corn of future growth. you can't invest in the future if you don't save. the only way we've been able to do it is to borrow surplus savings from others around these massive current account and trade deficits to attract the foreign capital. and now we're doing protectionism against the providers of that foreign capital. so, you know, we're an accident waiting to happen here and just by spinning a market correction saying the fundamentals are

sound and then going down the road of deficit spending, that's a worrisome way to run any economy let alone our own. >> all right let's see if they heed the warning, mr. roach thank you. >> thank you, michelle now let's get to carl at the winter olympics in pyeongchang, south korea. carl >> jon, chloe kim may be the face of these olympic games. of course, making her olympic debut winning a gold medal in the women's halfpipe she stopped by our set not too long ago we talked about her race and the tweets she made during the competition, tweets that were heard by fans and sponsors around the world >> i never really used twitter i was like, i was really bored at the top of the pipe just waiting for my second run and there were a lot of girls in qualifications i was just waiting i was like maybe i'll tweet something. and, yeah. >> you did it yourself or tell someone to do it for you

>> i did it myself yeah i'm glad everyone trusts me with my twitter account >> yeah. and i mean is it amazing to see the response >> yeah. -- >> i saw a piece in the "washington post" about the hwod hangry because of you. >> my mom gets really hangry sometimes and i definitely got that so my dad is like it's the worst when you and your mom are hangry because it's scary you both just attack me. i'm just like yeah, we do. fair point >> there's you, nathan, biny and some others who are either children of immigrants or immigrants themselves. >> yeah. >> to the u.s. >> yeah. >> i wonder what you think that says about america right now, the olympics right now, team usa. >> i mean, i am so proud to be a

korean-american. i watching my family work so hard has been so inspirational and i think -- i think i really got their work ethic you know, i always want to do the best i can i'm always working hard. so i think that's really cool. i don't know i don't have much to say about that yeah >> a couple more questions on business we were looking through your list of sponsors and you're very effective in helping to push toyota's message and you mention mondalise and nike how much of that are you able to do because, what, you got school to think of and your regular life >> you know, i actually love working with sponsors. it's not, you know, so much more than just a contract but it's like i genuinely only want to work with people that i agree with on certain things

and, you know, there are many sponsors i didn't really want to work with because i didn't really agree with their messages they wanted to use me to convey. >> can you explain what you mean by that? >> like if there is something i don't believe in or something happens, i want to be cautious of that. because when i work with someone, you know, it's like, it's a two-way contract. so i just need to make sure we're all on the same page and all onboard. so everyone i'm working with right now, i'm so happy w and i'm so happy to call them family you know, they always put me first and they always want what's best for me and we're always able to communicate about certain things and if something doesn't work out, we'll compromise. i think it's so awesome that everyone i work with is about athletes and supporting them you know, like yeah, so i'm just really lucky to be able to work with people like that.

and i'm very excited for the future >> oh, my gosh i can't imagine. last thing i'm going to give you rapid fire just quick choices you answer which one you prefer. >> okay. >> under armour or nike? >> nike. >> instagram or twitter? >> instawitter >> ice cream or churros? >> ice cream >> star wars or star trek? >> star wars >> netflix or hulu >> hulu. >> alexa or siri >> pass? >> pass. >> dogs or cats? >> dogs. >> olympics or x games >> pass. >> in and out or shake shack >> in and out. >> spotify or pandora? >> spotify >> what a remarkable story she is going to hopefully get some rest tonight, guys. and go back home, try to enjoy what happened to her, what she's accomplished at these games. we talked to her about just what

it feels like to have your twitter account explode and follower account go tenfold overnight and have all the sponsors tweeting to you she said it is kind of like seeing a new color for the first time it's easy to forget. she's 17 but what she's accomplished here in pyeongchang is just in decreed eb incredibly >> incredibly poised and char charming for 17. >> absolutely. i think that comes through very much so. after a full day of competition and media interviews by the way. >> yeah. she knows when to pass instawitter. wouldn't pick siri versus alexa. >> you want to hold out and see whose marketing dollars flow in. >> hedge your bets >> great stuff, carl >> thanks, guys. all right, still ahead we have apple leading the nasdaq and the dow higher yesterday with a 4% pop. today the stock actually adding to it.

up .25% in a weaker day. this is after the shareholder meeting. we're live with that plus, fighting words, why the ceo of youtube says facebook should get back to the baby pictures more "squawk alley" after this "" oh! there's one. manatees in novelty ts? surprising. what's "come at me bro?" it's something you say to a friend. what's not surprising? how much money matt saved by switching to geico. fifteen minutes could save you fifteen percent or more. at holiday inn express, we can't guarantee that you'll be able to contain yourself at our breakfast bar. morning, egg white omelet. sup lady bacon! fruit, there it is! but we can guarantee that you'll get the best price when you book with us. holiday inn express. be the readiest.

apple is holding the annual shareholder meeting today. we what is on the agenda >> mike, apple's annual

shareholder meeting is kicking off at noon eastern here apple park, the new corporate campus shareholders going to meet at that new steve jobs theater. i can tell you when i got here this morning around 7:00 a.m. local, there was already a long line of shareholders waiting to get inside today at this meeting, they're going to be voting on electing to the board of directors eight nominees including apple's ceo tim cook, former vice president al gore, and disney's ceo bob eger among others. they're also going to vote to approve executive compensation and two shareholder proposals among other items of business. as always, tim cook will be here ready to field questions from his stockholders who might have some questions about the future of the company's iphone franchise. apple recently reporting record quarterly revenue and earnings per share. shares of the new iphone 10 helping to propel the average selling price for iphones to nearly $800. now that helped give a lift to total revenue even as the number of iphones sold in the holiday

quarter slipped 1% to some 77 million units missing the street's forecast. apple also offering a softer than expected revenue forecast for that march quarter today the shareholder meeting is not live streamed. wield be here watching the event and bringing you all headlines as they come guys, back to you. >> all right thank you, josh lipton for more on this now, let's bring in the chief investment officer with wedgewood partners and andy argraves, analyst wit key bank capital markets he downgraded the stock this month to second sector weight. good morning to both of you. andy, downgrade, but the average selling price on the iphone driven by the iphone x is pretty impressive apple seems to have shifted from trying to hit home runs with the iphones to more singles and doubles with this portfolio of products why aren't you more bullish? >> well, i think it's a shift in strategy towards extracting more profit from each user rather than trying to grow users and

one of the things that we were looking for was for gross margin upside to contribute to that we didn't get it the costs are rising more than we expected and that took a lot of the upside out of our expectation. >> david, are you feeling similarly about apple the idea that perhaps the addressable market for the luxury good, the iphone itself, isn't as big so they're trying to make more of an ecosystem play? does that make you a bit more cautious on the stock? >> maybe a little cautious near term woen we owned the stock now for 13 years. so i'm thinking of where the stock might be in the next couple of years, it's actually a k issue. from a longer term shareholder, i'm thinking where the stock might be a couple years from now, i'd much rather than buy a boat load of stock at $150 than

$200 so i think near term expectations have been reset since the last quarter even the bearish numbers for this year are about $11 a share. that's 15 times earnings that's not too demanding i like the risk/reward here. we just recently last week firmed up our position a little bit. >> are you worried at all about the two for one sale at at&t and what might say about demand and the average selling price which was so high? >> yeah, i mean, it's a concern in that what's it going to take to bring in new users? replacement cycle is elongated again, i think if the context of the valuation of the stock, if the stock is 25 or 30 times earnings, i'd be worried about that again, i think it's not demanding here at this valuation. i think some of those really important bearish points are we think the reflected in the price right now. >> andy, david mentions the prospect of big capital return on the general topic of how

apple may deploy this cash that's now been unlocked by the new tax law, i wonder what it means for investors. there is almost never been a way for apple to invest in enormous amount of cash at anything like what the returns of the core business deliver i think that's what the market figures. so are you expecting in that area >> well, i think we have to be expecting both an increase to the dividend that is fairly substantial and increase to the buy back and i think there's some validity in that they can absolutely support the stock with yields if they choose to. for us, you know, we have to weigh that support against the upside potential and i think the real meaningful upside potential has to come from core fundamental performance which, is you know, as i mentioned earlier, where we see our problem. >> david, what are the down side risks that you're watching and perhaps worrying about i mean, it seems like for a long time it was commodity, samsung is going to come in with the cheaper phones that are just as

good as iphones and drive the average selling price down well that didn't happen. >> right. >> so what is it now >> i think the worst case scenario, i mean all the other parts of the business are, they have a good tail wind. they've been accelerating. the services business is really healthy, the whole ecosystem but the iphone quarter to quarter is the story the worst case is if unit growth flat lines for the next couple of years now that will be below expectations we're still looking at 225 million iphones being sold every year and now we have a higher average selling prices so you have to pencil in some negative news on demand even in more elongated user upgrade to get iphone revenues flat for the next two years we think that would be a significant negative we don't think that's in the cards. >> and andy, what about artificial intelligence? one of the things i keep hearing these days is look at google look at amazon

alexa and, you know, google assistant are so much smarter than siri is because apple has chosen not to combine all of our data together. is that the new bear case on apple that its software isn't smart enough >> i think that's a decent point. i think it's right that they squandered the lead that they had with siri. i think the bear case though, it really is back to iphone units and profitability that you have trade down activity over time. the phones are good enough you have he long waiting holding cycles and that forces you to support it with yields dividend yield which puts you in a position of being exposed to interest rate rises. i think that's the real sort of down side scenario here. >> well, one of the next looks we'll get is at home pod sales see how they do. david, andy, thanks. >> thanks. >> thanks for having me. as we head to break, a look at some of the stocks moving on earnings athe this hour. under armour is surging after posting sales that topped estimates highly by 17%.

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well, it'sonce again.eason >>yeah. 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.

recode's media conference is under way in huntington beach, california our julia boorstin is there and spoke with the president of one company in the process of executing a merger that is 21st century fox. good morning, julia. good morning to you. well peter rice is chairman and ceo of fox networks groups as well two-thirds of the assets he manages go to disney, assuming that deal goes through now with comcast reportedly still interested in the assets, i pressed rice about which media giant would make more sense as a buyer for fox. he finally said he thinks it's a great fit for disney so he would have to pick disney over comcast. >> we struck a deal that we thought was really good for the shareholders and we're excited about it we think the mix of assets that

are going to disney will make for a very, very powerful company. and we think that the assets that are staying at new fox are going to make for a really exciting new fox >> now rice wouldn't say whether he will go to disney or to new fox after the deal closes. and he says the role that james murdoch takes on will be up to james. rice saying the deal for thursday night nfl games will give the new fox options for building new digital offerings here's what he said when i asked him if fox is overpaying by committing to some $3.3 billion to the nfl >> so much value is built on the back of the broadcast network and the broadcast network is really built on the nfl and on our relationship with the nfl. so it's a long deal. it's a five-year deal. and in looking at that, we have an opportunity to build businesses on that >> now as for disney's potential

to build on hulu, rice is very bullish about the ability to compete with netflix saying by the time the disney deal closes, hulu will have 20 million subscribers. back over to you >> all right thank you, julia also at the code conference, recode's kara swisher asked a ceo if she's worried about facebook's video ambitions take a listen. >> you and i had this discussion for years. facebook is coming for you you're like, yeah. are you worried about them as a video platform in a competitive way? >> i think they should focus on what they're focused on. they should get back to baby pictures and sharing >> right >> and the quote of the night. >> i think that's what the kid call a sick burn, guys i dabble a little bit in youtube and facebook for digital video and the engagement that youtube still turns out is far and away beyond what you see on facebook and other platforms. we saw vox media making a

similar call recently. >> and what do you attribute that to? is it simply youtube has been at this long enough, knows what you want, is kind of got the interface down better? >> i think it thohas to do with what you go for. billboards, there are plenty of them but you're not watching a movie on a billboard you're just driving by a lot of times when people are in the news feed, they're just driving by when people go to youtube, it's more like a visit to a movie theater. the question is, can facebook create more of a theater-like space when people have a billboard mentality? >> i think they would need to have a much better search function because to your point, somebody goes to youtube, they're looking for something very particular. it's not this passive kind of thing going through the news feed i don't find the facebook search function all that great sometimes. if you want to find a very particular video >> yeah. and actually youtube benefits from being connected do google which facebook has resisted if you're searching for something on google and a video pops up,

you'll watch it. there facebook doesn't have that same benefit >> all right we will follow that. was it a year ago that facebook was all about live video i can't remember >> yeah. >> we'll talk about it let's get back to hk seema mody is there with the european close >> hi, mike. enjoy that discussion. european stocks lower giving up the gains from monday's rally. investors obsess over an inflation. new data shows that uk consumer prices stayed flat at 3% in january. just last week the bank of england indicated they may raise rates sooner than expected to tame the emerging inflationary pressures. you can see the pound rising against the u.s. dollar. let's talk earnings. caring reporting another strong rebound in profits thanks to heightened demand from chinese consumers and millennials. it could weigh on future results and that's why we're looking at shares down nearly 4%. take a look at travel group. higher on the quarterly results. helped in part by a more

supportive geopolitical dbackdrp as tensions ease in turkey and africa really a fascinating story that stock up more than 2% finally, the ecb is trending right now for its tweet on bitcoin. the central bank explains why bitcoin is not a currency highlighting that it's volatile, not protected, not backed, nor is it widely accepted. something that i've experienced as well. take a look at shares of bitcoin right now. lower by 3% to 4% depending on the exchange you look at mike, back to you. >> all right seema, thank you very much time now for a news update sue herrera is back at hq with that >> good morning, mike. good morning, everybody. here's what's happening at this hour the u.s. director of national intel m te intelligence dan coats says that bitter political wrangling and growing debt are grave debts to national security. >> i'm concerned that our increasing political month pro

s process with respect to frfeder spending is affecting our ability to defend our nation in the short term and especially in the long term. >> overseas, a british judge upheld an of the warrant for wikileaks founder who has spent more than five years evading arrest inside the ecuadorian embassy. the judge was not persuaded by asange's lawyers that it is no longer in the interest to arrest him for jumping bail fujitsu is recalling thousands of battery fakz, panasonic lithium batteries for notebook computers and work stations so check it out if you got one that is the news update this hour back downtown to "squawk alley." guys, i'll send it back to you, michelle >> i'll do that thank you, sue. all right. when we come back, we're live at the olympics first though, carl has more on what's going on in south korea >> 19 degrees and windy. but that does not stop people from visiting the rings at the

beach. one of the great traditions of the olympic games. r vegen cnbc continues in a moment. alerts -- wouldn't you like one from the market

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stoval from cfra, both here on the desk good to see you both >> good to be here >> ann, this pullback, so we were down more than 10% in the indices for a few seconds it seems like did it not lose some value for it is there certain areas of the market that have become much more attractive or not enough? >> it's starting to. 10, 15% correction is something we've been hoping for. we were kind of cranky, or i was kind a cranky equity manager searching for value that was really hard to find. so volatility can bring opportunities. we're searching for it we're looking in all different areas. there is some stuff in the material space and other areas in the market too. not fully putting everything to work >> so this break in the markets dn the really change the whole outlook in terms of what the market is going to pay for in terms of economic growth or didn't change the broader inflation? in other words, is it just about stocks got cheaper and

everything else is the same? >> you know, it's a little hard to know this early on. i think the economic backdrop looks really strong. we have a lot of stimulus. everybody is talking about going into the marketplace but inflation is really a concern. i mean we all, you know, if you go back seven, eight years, all we talk about is what is the stimulus going to do inflation is going to rear its sugly head at some point who knew it was going to take this long? so there is still a fear about what that's going to look like and how bad it's going to be >> and, sam, you were kind of doing a playbook on what to do now that we have had this little pullback so where does it make sense to go >> well, i think that if this is all we're going to get, we probably got off easy. i think we need to do a little more penance before we can say this market is truly oversold. but the 200-day moving average, it bent back upon itself but it acted more like a sling shot to move share prices higher so right now it's sort of like a test and see where we go

if you want to play this rally, what history says is you go for those, the dirty dozen, if you will, those 12 industries that were beaten up the most during the decline because they could get sort of a moon shot leading us out of this so areas like semiconductor equipment, life and health insurance, construction machinery, those kind of companies that had done so well early on took it on the chin and now therefore might snap back. >> what happened to their multiples? how much did they shrink over that time period what makes them attractive now >> well, we did see that market itself was trading at about 19 times forward 12 month earnings and then came back into the 17 area so we did see quite bate of change there on the overal market in terms of the individual stocks themselves, our analyst recommendations really hadn't changed. these earnings growth potential was still there. and they look about 12 months down the road. it's because of the very quick -- we sold off only 13 days the fastest 10% decline of

any correction or bear market since world war ii >> wow >> i guess the question if this is all we get, is what a the love people are wondering. if you're an individual investor, how much cash should you have perhaps in case we do take that extra leg down that 15% you've been hoping for so that you can snatch up some bargains >> i think it depends on how you're allocating assets longer temperature investments, putting more money to work say you didn't invest in your 401(k) for 2017, good opportunities to do that now i'd be doing that. i actually told my son, put your money to work. call, get it done. i don't know i can't time the market. it's hard for anybody to time the market perfectly a little bit of dry powder though on longer term money that's maybe not in your 401(k) to dollar cost average in to me makes sense. again, a lot of professionals, we all have guesses about what's going to happen. none of us have that crystal ball >> it's kind of amazing

considering all we did is go back two months in time to these levels so kind of shows you how much we rallied into and through the year end >> sam, thank you very much. >> pleasure. rvelg . now let's go to pyeongchang with carl quintanilla. >> you know, you and i talk about how it's nearly impossible no you to separate the modern olympic career from social media, right the athletes have so much to offer and so much to get from different platforms like twitter and instagram. so we tried to incorporate that into a little segment we like to call "ask the athletes." ♪ >> instagram, yeah so, yeah, i try to upload pictures and to increase the amount of followers. >> i guess twitter because it's fun to kind of see commentary on the sports >> i think i prefer instagram. >> instagram

>> pictures say 1,000 words. it's so easy to use. its easy to connect with people. >> i like instagram. i travel a lot i take a lot of pictures it's a fast way to share pictures. >> facebook i think. i've been there a long time. >> right now instagram i used to use facebook a lot but maybe in the last year i start to use instagram more. >> instagram i love it. >> i'm getting a little older so the whole snapchat stuff is not good i'm still on facebook. >> nice to get a bit of an international flavor there jon and michelle, i mean, i'd say that's probably 70% insta in the poll >> yeah. and i'm a little concerned for snapchat in that lineup. i've seen a little more twitter. is that way you ask the question or did snapchat just not rate? >> yeah, i don't -- who knows? i mean we -- remember when snap chat went public it's not about network effects but insta has done something

right. at least getting this young generation that you find an olympic athlete to get involved. >> and you remember way back when facebook did that purchase and people were like whoa, what did this guy do? overnight suddenly and that turned out to be a very good purchase >> yep i think that's right we keep hearing the same things over and over again. pictures speak louder than words. and s insta is a little less controversial than twitter. >> way nor >> interesting to hear chloe kim say let's give twitter a shot. most of the tweets are promoting a sponsor. but just one, a couple of tweets at the bottom of the halfpipe and maybe she'll find a new way to use it. >> maybe people have a way of creating heat on twitter. i don't know so i've heard. it's happened. carl, thanks >> see you, jon. so we have more "squawk alley" straight ahead. first though, rick santelli, what are you watching today? >> you can't see any of this

yet. we're watching potential pricing issues we have cpi tomorrow, ppi the next day all of this, of course, could affect your portfolio and your interest rate strategy tune in tethbrk. 'lta about it. jake!

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how much is really at stake today for apple shareholders at the meeting? we're live in coopertino as tim

cook speaks. plus, has under armour bottomed? we'll find out where our traders stand today. and the money manager who warned months ago that short toll vivoy trade could come crashing down nancy davis is joining us live at noon. we'll see new ten minutes or so. >> all right scott, it will be interesting to hear what they has to say. let's get out to the cme group and rick santelli with "the santelli exchange" and i believe some charts. >> yes, exactly. i'll tell what you i like charts they make everything simple. what isn't going to be simple is how treasury yields especially the long end, you know, the short end is on automatic pilot. two, three, four rate increases, we're not sure march is baked in cake the fact we have a the love volatility in equities may affect the fed's psychology. they may not admit it. only if it happens in close proximity. the markets can always get crazy

again. they seemed to have sut ld down somewhat let's go to the board. let's look at everything i think this was the entire key if you remember the big jobs report first friday of the month, year over year average hourly earnings. you can see that they are very important to pay attention to especially considering the fact that we're testing levels that we haven't seen in a while as a matter of fact, we went up to close to two and change when you think of the year over year being at 2.9 hasn't happened in quite a while. let's look at the break evens. now hovering at 206. that is the difference between the rates you see on your screen, 284 and, of course, tips treasury inflation protected securities 206, you can see we're going back to around the fall of 2014. now let's go to cpi. now we know that the headline number always runs a bit hotter. you can see by this chart that we're not on the highs last look was 2.1. but you can see that we haven't spent a lot of time there. you can see if you really want to see where we zoom from, that

was around this time in 2012 finally, maybe more important aspect for tomorrow will be the cpi core last look it's running at 1.8. and this chart doesn't look like it's going to gain a lot of horsepower we know that it's affected by various issues when you strip out food and energy, it really is a bit of a different picture. now what are you supposed to do with all of this i continue to say that in the final analysis, the real issue, in my opinion, is that one, 2.9 year over year on that number we know that work week had shrunk a bit. in the grand scheme of things, the most important aspect when we concentrate on that is to think that we're only going to get a handful of these numbers over the next couple of months, one a month. what conclusions can we draw in my opinion, if tomorrow and ppi the following session is as expected but nothing too hot, that means that when we get the next jobs report that one single

look could make a youth difference i think that's why everybody is jump into the market because t bills are getting closer to 2% that six month bill at mike, back to you. >> all right, rick, stakes rising towards the end of the month and the jobs report. when we come back, america's oldest gun maker says it will file for bankruptcy but there could be more to remington's problems than just falling gun sales. details straight ahead. the dow is down 85 right now. it was down about twice that a little earlier as it gives back let's say a little less than 20% of yesterday's rally more "squawk alley" straight ahead.

remington, america's oldest gun maker, says it is filing for bankruptcy possibly as soon as today. the company, which is owned by private equit giant has been hit with mounting debt scott cohn first exposed eight years ago. scott joins us now with the latest scott? >> john, the timing of this expected bankruptcy filing is crucial because we are on the eve of a federal appeals court hearing in kansas city, that's where i'm headed now, over a proposed settlement of those product liability issues they involve the iconic remington model 700 bolt action rifle which we first investigated in 2010 in our

documentary, "remington under fire." remington has agreed to replace millions of triggers on the 700 and a dozen other models to settle allegations that for decades the company covered up a deadly design defect that allows the guns to fire without the trigger being pulled the company steadfastly denies the defect to this day, also denies the cover-up. nevertheless, they said the fix could cost as much as half a billion dollars. critics, including some remington owners, say the settlement doesn't go far enough, though, particularly in terms of notifying the public. it's tied up in court and there's some real concerns that with the bankruptcy, no guns will be fixed at all remington and its attorneys have not responded to multiple requests for comment the closely held company told its investors yesterday in the announcement of the bankruptcy file that sales last year plunged 30%. the whole industry has been suffering since the 2016 presidential election with gun enthusiasts apparently feeling less urgency to stockpile guns

than they did under the obama administration the private equity investor had been buying up guns but it has not turned out after the company hoped. after the 2012 massacre at sandy hook carried out with one of its products, the bushmaster 2018, they said they were getting out of the gun bus altogether but never found a buyer. remington says it has an agreement with its lenders to restructure but has not said what the new remington will look like or what will happen to all of those guns they promised to fix. guys, 7.5 million guns are covered by this proposed settlement. >> any chance it's going to come up in court as you head there, scott? >> well, it's fairly likely. the question is how it will come up there are some that are speculating that it will allow the company to argue for the appeals court to uphold this settlement with the idea that if

it's not upheld, then no guns will be fixed at all there are some fears, though, particularly among the plaintiffs in the class action suit that with the bankruptcy, depending on how it's structured, that it could stay all kinds of acts, including this one, and there's a worry that none of the guns will be fixed at all this settlement has been out there since late 2014 and gun owners are in limbo in terms of what to do about their guns. >> yeah, all right interesting point. thank you, scott as we headto break, here's where the major averages stand at this hour the dow jones industrial average is lower by about 90 points as the s&p is lower by a little more than 5 and the nasdaq a little more than 3 points. don'mo, 'lbeig bk.t vewel rhtac (siren wailing) (barry murrey) when you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. we call that the golden hour. evaluating patients remotely is where i think we have a potential to make a difference.

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as we head toward noon, the major indices well off their lows the dow now just down about 74 points the s&p pretty close to break even watching twitter, it is up more than 7% on very little news. i don't know, maybe the chloe kim effect >> i was wondering she managed to get more than 100,000 followers last night after her big win, so maybe she's reinvigorated the interest in the stock. >> it's riding a little of a

buzz cycle i think there may be a conference presentation coming up people are talking about who knows if there's any detail in there. but facebook to the downside who knows, people re-evaluating how that sets up. a smaller stock, cheg, up 15%. a good quarter that they reported with that, thank you we'll toss it to scott wapner and "the half. welcome to "the halftime report," i'm scott wapner. we're following two major trading stories this hour. apple shareholder meeting getting under way as we speak in california, and a big surge for shares of under armour following a better-than-expected earnings report our traders are here to discuss and debate both events among everything else. joe terranova, stephanie link, josh brown, jon najarian tim cook and company meeting shareholders today with serious