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good morning, welcome to "squawk alley. we're watching the markets the dow down 264, close to session lows s&p 500 below 2600 joining us this morning is executive editor kara swisher. good morning to you. >> hi. >> we talk more about the markets, we'll keep our eye on that first up, mark zuckerberg reacting to comments that apple ceo tim cook made during an interview with you, kara cook claimed that april sl better off because it sells products to users and that its users are not the product. this is what zuckerberg had to say to that in an interview with vox. >> you know, i find that argument that if you're not

paying that somehow we can't care about you to be extremely glib and not at all in line with the truth. the reality here is that if you want to build a service that helps connect everyone in the world, then there are a lot of people who can't afford to pay and therefore, as with a lot of media, having an advertising supported model is the only rational model that can support building a service to reach people >> kara, we talked a lot about the relationship between these companies and regulators now we have to start talking about the relationship among them >> yeah. yeah well, sorry to start an argument that's not the response i would have played to that comment. it's not just glib, it's extremely glib and not in line with the truth i'm sure he is calling him a liar i'm pretty certain that's what that means

but he's trying to make an argument -- he's trying to insult apple for being elite and rich throughout that whole quote. i think that is the most interesting quote in the interview. and i think it's hard to, you know, i think it's an unusual argument to make because you can have advertising i think what most people want is responsible advertising from facebook and not just advertising. so making himself a pop lift or a person of the people seems a little bit of a -- i don't think he should have said anything i think he should have just let it go. let the one go right by him and said i heard him thanks for the feedback. we're thinking of all things or something like that. it was an unusual response i thought. >> so what happens now i mean, to what degree does privacy start to get used in the search of users or customers >> it's good for aprple to have. apple has issues in china and elsewhere, just china mostly n terms of privacy in the u.s., they have the higher ground here on facebook by far

and so i don't -- i'm not sure that facebook should be tangling with apple which is also very important partner in the mobile space. and i'm not sure why they did this i think it's going to -- i don't think they want it to be -- i think facebook if they get an argument about privacy, they're not going to win this argument with anybody and they're just going to subject themselves to more scrutiny from congress and regulators and it was interesting that tim cook called for regulation in that interview also which is airing friday. >> kara, do you think there is ever a scenario where facebook would do something like charge users and in response to not having their data given to advertising or the like? >> it's been talked about for years. they never do it i don't think it's in mark's dna to do that it's not -- it doesn't mean it won't happen certainly has control over that platform in a way thatother ceos don't because of the stock situation. so i mean they could do it but i don't imagine they will. but i certainly could offer it or have something else i think what people want is more

control of the platform by the people running it and making sure that content and advertising and privacy is protected. if they want to have this business model, they better do a much better job at policing it that's just the facts. >> what would response be -- >> i think i'm being extremely glib sorry. >> in light of the broader conversation we're having, what does responsible advertising -- what would that look like? is mark zuckerberg doing enough to enforce that? >> obviously not they let the platform be misused by russia, for example they got so many things on so many fronts. they have the russia issue they've got the advertising issue. you know, remember the anti-semitic advertising they have the privacy issue, the use of the data. they got a lot they're fighting on a lot of fronts i'm not sure why they open another fight with apple again but i think they've got to convince users that they are responsibly first and foremost using the data in a responsible way if they have an advertising

business i think that's the very lowest bar they have to reach the other stuff obviously they have to clean up the platform in a way and do better at running it they just have to have better control of the platform. i think they're very aware of this so we'll see if they're able to do that. >> we'll catch that story. kara, we want to touch base with you on the president's tweets regarding amazon today one of them reads only fools are worse are saying that our money losing post office makes money with amazon. they lose a fortune. and this will be changed what could that possibly mean? this will be changed >> i think the deal is coming up for renewal at some point soon the deal they have with the u.s. post office. the post office struck this deal and so the president i think is in charge of the post office so he can strike any deal he wants with amazon. although, i suspect amazon at some point, you know, you've seen them doing much more around their own delivery has a lot of options here dhoenlt ha they don't have to do business with the u.s. post office or

less business. probably he's talking about negotiations that would happen with big schippers the post office does it all the time so that's presumably what he's talking about. but obviously he's conflating jeff bezos relationship with "the washington post" with this so clearly that it's ridiculously political we'll see what happens >> ridiculously political or not, it's having an infeeffect the stock price. he also continues to make this untrue argument that amazon doesn't pay sales tax as we pointed out it does. it's third party sellers don't you think baez oes, i asked this earlier, is he under any pressure here? is there anything to be gained by him potentially going public or starting to discuss things in a broader realm? or you think he's better off just staying quiet >> you know, i think bezos has a lot more control of his mouth than mark zuckerberg does. it drags him down into a

ridiculous fight with trump. you know, they just have to make their case and do their deals and keep going and i think wall street, you know, has reacted to other companies that trump attacked and these companies tend to recover especially when it is -- i can't imagine jeff bezos saying much of anything. he is very controlled and careful of what he says. he has to be very careful not to appear to be partisan in any way and just sit there quietly and deal with it from a business point of view. >> i want to go back to this discussion around the u.s. postal service according to experts, two-thirds of all the amazon packages are getting delivered that last mile to people's homes by the postal service. there is a growing body of research out there from analysts and shipping experts that argue that the postal service does -- the rates that are paid are lower than the private carriers like ups and fedex i realize amazon uses all the different carriers and has their

own transportation network but one of the arguments here is the fact that they're growing at a rate faster than the capacity that is currently in existence can handle i can't help but think one of the risks here for amazon is if the postal service were to have higher rates imposed by regulators or, you know, some of that business taken away, we have the postal service that would mean higher deliver rates for them and higher costs. >> yeah. of course it will. of course it will. i think can you imagine if amazon started creating its own delivery service this is something i suspect they've been thinking about for a long time. they've been experimenting in this area. i can't imagine they haven't thought about this and the reliance on any vendor that is not them >> of course >> and so we have uber we have google and all kinds of people in the delivery business. the postal service is a long story of a long slow fall down the stairs for the postal service and how it's run and so i don't know. we'll see if they raise rates it

will impact amazon i suspect they'll do something about it delivery is critically important and critically important part of their business and i can't imagine jeff bezos hasn't thought this one through very carefully going forward i just didn't -- i assume he didn't expect the president of the united states to write a series of often inaccurate tweets about him and he'll deal with it. he'll deal with the situation. in the short term the stock will get hit. but again, i've seen -- they've done it a bunch -- he's done it a bunch of other times to other companies and they all seem to recover. and we'll see what happens on this deal that they strike with the post office. i mean the pofrs hst office has vulnerability too. >> to david's point, you mentioned the president targeted other companies. those companies eventually got drawn in to a political conversation or left a committee. i'm thinking of ken frasier, for instance but the notion that bezos stays

silent is up in the air. >> he's not going to tweet back at the president or being in his ridiculous public fight. i can't imagine -- i think he'll employ lobbyists and i think he'll do what he needs to do to talk to other legislators. there is all kinds of things that amazon can do presumably behind the scenes. i'm talking about a public fight. and i just -- every now and then jeff bezos does that he sends offer a funny tweet or underhanded remark on twitter. usually related to star trek or something. but i don't see any plus like i said, there is no plus in getting into public fights especially in this way there is absolutely -- with trump. there is absolutely no good way. he does own t"the washington post" even though it has nothing to do with amazon, trump is going to continue to make the connection and so it's just not a good look for him to be getting in a fight with him publicly i can't imagine he would but, you know, i don't know. i wouldn't have said what mark said about tim cook. >> exactly

thanks for the argument, care yach -- kara >> there's more to come when you see that interview >> i have no doubt thank you. >> and still to come, new york city's pension fund owns $1 billion of facebook shares it's now calling for changes to facebook's board a man pushing for change is next and take a look at the dow it's currently down about 300 points right now the nasdaq just went negative for the year as well down more than 2% right now. you know what's awesome? gig-speed internet.

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now you can get it, too. welcome to the party. welcome back to "squawk alley. take a look at the losses in tech over the past two weeks and continuing this morning, the nasdaq in full selloff mode. it's down more than 2% it's now negative for the year for more, we're joined by paul meeks, chief investment officer and senior vp and portfolio manager dan morgan gentlemen, thank you for joining us today >> thank you >> hi, morgan. >> paul, i want to start with you. i was looking at notes from you. you mentioned f-a-a-n-g stocks certainly looks like it's a bad day for tech are you buying >> the only stock that i bought last week on the initiation of the down draft was microsoft i would buy some facebook and google but what i would do is warn folks. everybody says that they're long

term investors but few people are. if you're a trader or worried about short term drop in principle, i wouldn't buy google and facebook if you're a long term investor, i definitely would in the meantime, i want to see facebook in particular see if it holds $150 a share we'll see. >> all right and so when you say short term, you mean days, weeks months >> a couple things have to happen first of all, i'd like to see some of the stocks finally at least trough and also trouf gh lower than average volume. i think the tell for facebook is when mark zuckerberg is in front of congress in the fetal position getting beaten up by congress people and at that point maybe all that is bad will be priced in facebook's stock and might be a time to buy long term >> and, dan, taking a look at shares of amazon, they'redown 4.5% today they were down 11% over the past

week i realize this is a consumer discretionary name we lump it in with the big cap tech stocks. do you think the selloff is justified in light of the flurry of tweets we've seen from president trump? >> kind of adding to what you were talking about before which is interesting about amazon. if you look at their fulfillment costs associated as it relates to the growth and revenues, every quarter is increasing by more than revenues are growing and it's kind of a issue going forward in terms of prime, what's going to happen with that $99 unlimited shipping is that going to start to he rode away for them amazon trades about 170 times earnings it has a 55% growth rate in profits expected for this fiscal year so there is bate of a displacement between growth and multiple the stock made a huge run over the last year and a half so obviously there's a lot of wiggle room for the stock to pull back. in terms of what we're doing, we're not accumulating right now. we do own amazon but i think you have to be a little patient with that stock

as the tweets go flying between bezos and trump. >> paul, we talk about f-a-a-n-g. we just touched on it. the other big temperature groch, semiconductor stocks, what's your take on that? >> i actually think that semiconductors industry within the tech sector is probably an overweight because some of these stocks started to weaken and underperform the tech sector and then even more so underperform the market well before this recent correction. i think there are a handful of semiconductor stocks, i'm thinking broadcom now that smoke cleared with the aborted qualcomm deal and also advance micro device that's look particularly attractive. >> dan, sort of looking at technology, i know there is a big write-up this weekend about the leadership, the outsized leadership tech has had. when looking at the broader markets right now, how should we think about this especially given the fact that ownership seems to be so broad based in these tech stocks?

looking out at a retail investors going what's going on with my 401(k) right now, what would you tell them? >> it's interesting, morgan. you look at the percentage of technology at the s&p 500. it's about 25% back in less's say 1999 it was 30 to 33% so we haven't hit that excessive level. the fundamentals for tech are still really good. last quarter earnings were up about 21%. the s&p 500, information technology index trades about 23 times earnings compared to the s&p 500 at 21 times earnings so we're going through a tough period a lot of negative headline risk in terms of facebook and amazon and the other stocks that we're talking about. reality is the fundamentals have not changed. i think when we kick off earnings season here middle of april we'll get netflix and ibm should kick it off april 16th. i think you'll show that earnings are good and headline should get away from all the negative things and focus on good earnings reports. so i would tell investors out there we're going through a tough situation right now.

but the core fund mentals within technology have not changed at all. >> gentlemen, we'll leave it there. thank you for joining us paul meeks and dan morgan. when we come back, new york city comp stroller scott stringer is going to join us he is taking aim on facebook calling on the company to make dafrpgs to t dafr changes to the board he'll make his case. the dow down 300 we're sitting at the 200 day of the is s&p oil down 2%. facebook back in bear market territory. back in a mitenu [ digital voice ] i used to be one of the world's most feared hackers. my friends call me "hack daddy." [ evil laugh ] but then cdw orchestrated a network transformation using cisco digital network architecture. allowing scalability and providing fast, comprehensive security from intruders like me. luckily i found a new calling. faster. security transformation by cisco. just run. run like you know how to run. it orchestration by cdw. ♪

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growing pressure over the came ca cambridge analytica scandal. they're calling for changes to facebook's board scott stringer is the comp controller and adviser to the five city funds. $900 million of his investment

social securi s is invested in facebook. zuckerberg has all the votes so you can yell and scream doesn't mean he's going to do anything why bother >> i think this is a wakeup call this is a company that lost $50 billion after this scandal broke. that's not insignificant amount of money even from mark zuckerberg so the value of the company has gone down. my job is to represent the firefighters, teachers, police officers, the people who we invest on their behalf, our pension fund we think there needs to be more independent board oversight. i think there needs to be an independent chairman of the board. i think we need more independent directors, directors that have experience in terms of data and ethics and all the things that these emerging huge companies need in light of what happened i think this scandal says that, look, there is revenue risk here there is regulator risk here and also brand risk given what's happened and perhaps most importantly, there's a risk to our democracy.

these -- this company basically the third party company rerouted data that ended up benefiting a presidential candidate and in light of the mueller investigation. i think congress has to ask these tough questions. >> now when you look at that board of directors, some would argue there is the presence of what you're asking for there are plenty of good, strong directors on that board already. what is it you're not satisfied with what you would like to see more of in particular or don't feel that they necessarily appropriately responded to >> i think we should add three independent directors who have specific expertise in data and ethics i think we do need an independent chair of the board this is the eighth largest company in the world they have two billion users. they have not come ported themselves that make people feel good about facebook and secure about their own data i wouldn't call it a data breach, but it's being used

without individual's permission. that's going to hurt the brand it's a brand that i've invested close to a billion dollars in on behalf of people who rely on our investmentes for retirement security >> i'm looking at this letter that you issued for proposed changes. what happens if the company doesn't implement the changes? >> we're going to keep coming back at them year after year i think given perhaps testimony in congress and pressure from other pension funds, i understand this is a slow slog through this process but i am very determined as i have been in the past to hold companies that we invest in to the highest ethical standards. we have no intention of pulling out. because we are investors, we do have a right to ask these questions. we want to look at regulator risks, revenue risk, the brand and also there is a real discussion that should happen around our democracy and elections. >> you knee this getting in. facebook is somewhat unique. you don't have the rights, the votes so to speak. but you don't have the votes to make anything really happen.

zuckerberg controls that >> i think when you start looking at what is happening throughout the world and in light of this, as you call it a scandal, everybody who is part of a pension fund that invests in facebook has the absolute right to ask questions, to prod the board. and to seek fundamental change that will grow the company we're not trying to harm facebook we're trying to make it a stronger company when something like this happens, and neighbor is a long time coming e in light of the investigations, we have an obligation to step up. >> growth is not the problem, right? some of these things that happen thap some argue came as a result of an emphasis on growth are you calling for, i don't know, an executive chairman or do you think zuk should run the company still? >> absolutely. i think by having an independent chair of the board it would give him more time as a ceo to put protections in place or think long term about how we deal with

data and mining of data and who has access to that data. one protocol that we need to look at in facebook and companies like this from around the globe. this is a new world we're living in, the technological age. >> do you have any other holdings of companies that are going through same lar situation? >> we're the fourth largest public pension fund in america we invest in everything that we think can get us a good rate of return i want to stress that part of our role is to think about how our investments are making companies stronger about i asking questions that need to be discussed both on this show and around the world >> i know investors are focused on this. obviously we've seen dramatic selloff in shares of facebook. are you actually getting phone calls from firefighters, teachers, first responders about this >> i wouldn't say we're getting individual calls but again, we're long term investors in facebook. we're long term investors in thousands of companies and when we see something coming our way, we try to be pro active

to go to the board to ask the tough questions to get answers for our firefighters and teachers to make sure our investments are strong and the company is strong. we all know what happens when a company tips where there is real reputational harm or we start to see value go down in a company that sends up red flags for us as investors and that's why we're asking these questions >> finally, xoscott, you've beea politician for some time and in the public realm is there any advice you have in terms of zuckerberg and his messaging? you said he hasn't comported themselves well. what would you have them do near term beyond what you're talking about to change that >> i think own up to some of the challenges this company is facing as it relates to data and sort of taking away people's data and transferring to the analytics companies and others i think transparency and honesty. step up and tell the story, identify the problems. work with us and your investors in ermz it of solving some of the issues do not go silent

do not think that this is going to go away we've seen companies that deal with crisis head on and end up very often emerging even stronger and we're going to push mr. zuckerberg who i have a lot of respect for to continue to think about the company and the long term. >> all right hope you come back some other time we'll have a larger conversation about pensions in general. $9.5 million that we're going to be contributing to that pension next year as new york city taxpayers. >> we also have a rate of return last year of 12% so -- >> amen. keep it up >> trying. >> we can't deduct our state and local anymore either scott, thank you scott stringer normally at this time we also bring you a check on the europe european markets but markets in europe closed in an observance of the easter holiday. >> up next, he leads a band that made $20,000 from a silent album on spotify royalties and music labels ahe had hf the market debut tomorrow and as we head to break, taking

a look at the dow. it is re-enter correction territory. right now it's down 301 pints. points. the nasdaq down 2% racing isn't the only and with godaddy, i'm making my ideas real. with godaddy you can get a website to sell online. and it will look good. i made my own way. now it's time to make yours. ♪ everything is working just like it should ♪

here's your cnbc update. winn winnie mandela died after illness. he she was in and out of the

hospital since the start of the year her activism in south after landed her in jail on numerous occasions. china imposed a 15% tariff on 120 different kinds of american fruit and 25% tariff on certain pork products made in the u.s. beijing says it's retaliating for tax that's president trump approved on chinese steel and aluminum imported to the u.s. the most powerful syrian rebel faction on the outskirts of damascus ghana band onning the strong hold in eastern gutta. this is part of an evacuation deal that hand the region to the syrian government. the supreme court says car dealerships are not required under federal law to pay overtime to the service advisors the employees that greet customers and assess the service and repair needs the 18,000 dealerships employ 100,000 of the advisors. that's the cnbc news update for this hour. back to "squawk alley. >> thank you very much welcome back to "squawk alley.

we're at the new york stock exchange market is down 348 on the dow, 1.5% s&p 500 below 2600 but right at the 200 day moving average we're seeing some big movers in f-a-a-n-g. nasdaq has gone red for the year spotify going public tomorrow where do things stand in the streaming music battle between spotify and amazon music and pandora and more we have more on the fundamentals of this company. take it away >> when it comes to the number of subscribers, spotify is the clear leader it is facing growing competition which is a risk factor when they start trading home spotify has 157 monthly active listeners, 71 million of them are paying subscribers that is nearly the double to apple music which announced they have 38 million subscribers and eight million trials pandora comes in last.

we have 5.5 million paid subscribers. in the guidance released, spotify projected they will grow subscribers to $96 million subscribers this year. but apple music is growing fast. adding the latest two million subscribers in about a month noting that half the a billion people visit the app store weekly so there is plenty of growth potential and apple has the advantage of integration with i phones and the home pod now even though pandora's down, the stock is off about 60% over the past year. it's not out just yet. the company acquired an audio ad technology platform prompting an analyst upgrade and the new ceo is focused on the free listening service. then, of course, there is google which introduced an all access on demand subscription service in 2013. and amazon introduced the music service. an done music unlimited two years ago.

now apple may have the deepest pockets and investment when it comes to music spotify did score a big win this weekend, tailor shift shot a video on delicate just for spotify. this is quite a turn around since swift's boycott of spotify four years ago most of artists reservations about the service have been addressed. guys, back to you. >> all right thank you very much, julia ahead of spotify's debut, we want to focus on the royalty payments to artists. o our next guest found a way to work the system by releasing songs like this one. take a listen. you heard that right in 2014, they capitalized on a spot fi loophole collecting $20,000 fwh royalties by asking users to extreme the completely silent album on repeat while they slept the band later used the money to fund an admission of free tour for the fans before spotify

pulled the album joining us with more on that is at artist behind sleepify. thank you for joining us today >> my pleasure let's rock >> how many airings total you have gotten or did you get >> five million. and it was removed under the terms violation that artists -- the artist cannot make money >> but indeed you did. what was the net we mentioned $20,000 >> net, yeah net -- well, yeah. we got 20 grand. and then funded the tour with that i don't know what the total was though >> right after all your costs so i mean what do you want people to understand about their royalty structure? what lesson were you trying toim

pa to impart on listeners >> well, i suppose to understand the artist payout, you need a new currency i call it the pitty. there are 100 pennies in a dollar 100 pitties in a penny and on a given play, the artist will make about 60 pities. and that rate seems to be dropping as well over the last year i don't know why i haven't heard an explanation for that but that's the all in. theres a slight difference between the writers and the labels and what not. but we're fully independent. >> jack, you got a song recently featured in an apple commercial. i've been very vocally critical

of spotify do you see apple more friendly to artistors is this just an opportunity to make money in different way? >> well, everyone's lemonade over this ipof we back up the camera and look at some business fundamentals, it's a $10 a month subscription, $7 of which off the top goes to rights owners. so this isn't lip tore come 2050 when 9.5 billion people are on this planet and the population caps and every human in the congo is listening deejay b.ornish, then we have a shot and that's a contender if that's what you want to bet on tomorrow. that's your call but let's focus on fundmentals. >> i don't understand. is your problem with spotify not paying artists enough or labels

not doing a good enough deal with spotify to get you paid more >> well, if whole foods came out with a $10 a month subscription to food, it would be a popular product as well. so everyone's betting on an interesting model. a bizarre consumption model that look mores like radio than a consumer product or on demand product, sorry. so the whole thing is jacked >> one last thing. aside from the obviously narrow or small royalty payments you get with each airing, is there some uncalculatable benefit you get in terms of notoriety by being on the service fans who might never have heard of you that see you in a search or something like that >> absolutely. and whenever i whine as an artist, we should all remember

that -- that's why i don't have to use a label. you know so stop whining. me >> jack, i think you made your point over time with this. we appreciate your time today. jack stratton ahead of spotify's ipo tomorrow as we've been talking, dow has taken a tumble, now down 510 we did slice through the 200 day on the s&p at 2575 now >> down 2.5% >> luckily they're not raising cash tomorrow at spotify they're just listing so it's not really going to affect how much money they raise because they're not raising any. >> when we come back, the markets are in full selloff mode s&p 500 joining the dow in correction that traders and investors have been watching so closely but first, rick santelli, what you are watching today >> i'm watching this funk in the equity markets

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our call of the day may you have popping a cold one and what the stunning fall for a biotech stock means for that sector it's top of the hour carl, back downtown to you >> scott, thank you very much for that we're watching the markets dow down 500 as scott said the security director is here at post nine. we were just talking, moving averages exist for a reason. >> we did breakthrough them a little bit ago 2558 is that level on the s&p 500 over the last six other seven weeks. we tested three time today we sliced right through it there wasn't any hesitation at that level we went right through it now that we're through it, there is no bottom at the moment at the moment if you go back and look at it real quick on the blue board which i was doing, 2514 which is like the july/september range of 2017, appears like really where it should find some real support. in between now and then, you may get a little bounce. there no support until you good et to that level >> how much is riding on us

closing below? we haven't closed below it since 2016 >> listen, it feels like right now that we're headed to close below. unless something happens in the next four, five hours that someone is going to come out and say, you know, do over you know, no the a big deal about what is happening with tesla and facebook and amazon and trade wars and trade tariffs in china, unless someone says it's all a joke, i think the market is going to close and just feels like it's lethargic today. by no means we'll be falling out of bed on no volume. no europe. so there is no participation coming from the european counter parse. there's not a lot of volume. one way or the other, technically we have broken and this is a key thing for investors to pay attention to. >> there has been -- you just mentioned some of them there have been so many headline risk f risks for the markets, rising interest rates, credit spreads, trade issues, tech weakness, liquidity from the fed shrink rg the balance sheet. when you see as the key catalyst what is really driving this big thing to watch

>> i think that tech in the growth is money coming out of the growth names as investors are preparing for more of that value play i think what's going to happen subpoena that the market right now is focusing on anything that's negative. right? you can throw all the positives out there. there are so many perceived negatives that they want to focus on the negative. tomorrow, you may see this big snap back rally. everyone is going to say not a big deal no i don't think. so we're tech nicktechnically broken i think the levels are lower >> we should point out that seasonally it's a good time. dow hasn't fall non april in 1 years. >> correct correct. and we've had some problems right around tax time, you know, after leading up into tax time but then it recovers right away. so net-net at the end of the month it seems to be okay. this actually feels like it just feels like the angst created in the first quarter hasn't gone anywhere just because it's beginning the second quarter, it hasn't gone away and with earnings now getting

ready to start on the 10th of the month, i think there is concern over the growth names. growth names is what is driving the nervousness. >> stay close? >> yes i will stay close. >> thank you, k.p. for more on the move, not just in equities but fixed income as well, let's get to rick santelli at the cme hey, rick. >> hi, carl. you know, as stocks are going through the consolidation period, and this really addresses some of the carryover equity issues from 2017. how many times do d. we go out throughout 2017 and talk about how there were no corrections in equities and volatility remained low and everything was just melting up well, that ended and when that ended and that volatility surged that we saw in february, it's been trying to be consolidating with stocks moving in stronger hands ever since is it over doesn't act like it is 2305 and the dow is an area i would suspect we could regroup to but what is most fascinating to me is how devoid of ten year

trans mission this entire funk in stocks has been sure, we're 20 basis points off the high yields. but we're still 33 basis points up on the year with respect to where we closed at 241 and as you look at charts where at 241 and as you look at charts of ten-year note yields, for the most part, when we weclimbing h, stocks were climbing higher. we haven't really dropped precipitously. today's ishlgs sm r report xwaif us interesting facts the headline number 59.3 wasn't bad, it's darn close to 60 there's a handful of 60 reads over the last 20 year, but prices paid at 78.1 was the best in seven years and many of the respondents because they have questions they is them, it was very enlightening. supply chains were a big issue, but even void of those possible

uncertainties, the notion of how do we fill imemployment vacancies and have enough supply in the pipeline to get our winlg ets made and out the door. these are intense issues, so friday's labor report really taped on an added significance because it split decision. on one hand, we have wages we'd like to see them reverse back up to the same horsepower we saw the report before last. but many were a bit concerned because it seem ed like rates moving up too swiftly. the other is spades in rates because they are the escape valve. the if we put more people in, we could push it off. what are describing here potential stagflati inflation w interest rates fighting every point lower. morgan, back to you. >> thank you when we come back, we'll continue to track this sell off. dow's down 442 points s&p down

56 200-day moving average in nasdaq down 184 more "squawk alley" back in a minute you know what's awesome? gig-speed internet.

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february lows and above some of their technical support in terms of the 200-day longer term moving average none is less though, they are in correction territory and now have joined the dow and s&p negative for the year. what we are see iing is really h love affair in tech. a love hate relationship emphasis on hate big sell off those big tech names are weighing on the index and many are in correction. those so-called faang names. amazon, netflix, facebook all in correction netflix is down 16% from its high is actually in bear market territory. down about 20% apple is just hovering almost at 10% from its recent high we're not seeing huge volume that's one of the things these stocks had been hit hard in recent weeks, so it's not so

much mechanic selloff. not the case on tesla with all of the negative headlines between the crash last week, fatal crash, ntsb investigating its self-driving technology and those perhaps unwise april fools day tweets from elon musk, the ceo, the stock getting hit today. that's trading on supervolume, hitting a new one-year low >> thank you we're going to find out what this means when europe rejoins us tomorrow. "squawk alley" is back in a moment don't go anywhere. duncan just protected his family

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welcome back we're keeping a close eye on the market heere with the s&p 500 down 2%. with this move, eight of 11 sectors are on pace to close in correction territory a drop of 10% or more from their recent highs energy is the lead iing charge the downside most of those stocks, more than 15% off their highs. all of the names in that sector are currently within negative territory. you've got tech, consume er discretionary all up >> thank you very much we'll see what happens this

afternoon. low volume and no european participation today, but sort of undeniable the violations of these lines. >> nasdaq 100 has dipped negative for the year. gold seems to be one of the outliners. >> watch that. let's get to the judge and the half beginning with breaking new us this hour the s&p now in correction toe territory as is the dow and nasdaq s&p even dipping below a key technical level and once again, everything is being led lower by the biggest names in technology. with us today -- let's begin with the selloff it's gotten worse within the last hour. joe, you think it's going to get worse. >> i do. the last c