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welcome to "squawk alley." obviously markets having a challenging day. dow down about 330 points. stocks nearing their lowest levels in about a month. and dow down five straight 10 times in 12 days now bob pisani is here not always a good sign >> yeah, you see me, why is he here manage bad is going on here. the market is dealing with a lot of problems. i want to show you the s&p 500 on an intra day basis. we started weak, but we weakened notably in the middle of the morning. and the reason that we did that, we wrote through the 200 day moving average you can put it up. i don't want to get into a debate this was the most watched number

on the street. and when enough people talk about it, and act upon it, then it becomes real. and that is exactly what happened i can't circle the number for you, we'll circle it later but volume picked up and we moved down when we broke the 2614 level now, take a look at some key numbers here the 10 year yield moved down the dollar moved down. and the biggest decliner were bank stocks which makes some sense as the numbers moved to the down side. the problem here is that this plays into the whole slower growth theme that has been out there that the bears have been pushing for several weeks now. the theme is getting more successful as a spirit, whatever you want to call it, and it is causing consternation. so dollar down, ten year down, banks down big issue. who big issues for stocks.

first the barrett tobear rhetor is overcoming the bull rhetoric. and most important is concerns about china.ett bear rhetoric is overcoming the bull rhetoric. and most important is concerns about china. the mueller probe as well as iran what do i mean about the bear rhetoric in january we were talking about new earnings, earnings at record highs. now all of a sudden we're talking about peak earnings. that is a complete change in rhetoric in january, bulls were talking about the global sink row miss economic expansion and now it is gone bears are talking about a global slowdown finally we were talking about benign inflation and now the bears are talking about inflation picking up this is a very, very potent stew when you talk about peak earnings coupled with slowing

global growth and inflation picking up, that is a significant headwind for the stock market and i think that is what we're dealing with right now, a complete change in rhetoric and the bulls have got to find some way my position has been peak earnings is a bogus argument if you really are getting global economic growth. look, just because you're going from 20% earnings growth this year to 10% in 2019 and ttsz because of the tax cuts it is a one time thing, that is not bad. 10% growth next year is not bad if you are still getting economic growth. but if you're getting a slowdown, then everybody will argue that those numbers will come down, they are too optimistic so that's what we're dealing with the bulls have to find a way to regain control of the rhetoric here or this could drop another 5% to 10% very quickly >> on a week where isms goo disappointed, pending homes disappointed where does that argument start >> and prices paid went up and so there is the inflation

argument going in here so what is going to happen tomorrow, so we had the jobs report, you need a perfect jobs report 195 is what people are thinking when that is the consensus. if you get 295, the bears will come out and say you see, the fed will keep hiking rates because growth is pretty strong. if you good 95,000, they will say you see, slowing growth. it seems absurd that they can win on both ends, but that how strong the rhetoric is right in the middle would be the best for the market. and then they have to stabilize the market the s&p has to stop drifting downward >> and biggest thing i'm hearing from traders in terms of headline risk is what is coming out of the talks in china and that is the thing driving market action today, tomorrow and beyond even more so than the jobs report and the numbers we get there. but it sounds like you're making the argument that this makes the jobs report number that much more important

>> yeah, first off, i agree. one thing we do know, china trade moves the stock market we have a history already in the last several months that it moves. so nobody doubts that. and i think that is a factor that is playing in the fact that the team that is over there, our team, wilbur ross and everyone else, has been essentially playing down, don't expect this to come back with anything in hand they are saying, i think it is weighing on things. it is hard to say this is 20% of the problem because we don't know it is not like an economic number that we can circle. it is a sentiment, but china trade in my opinion amongst the geopolitical issues, that is the number one thing right now >> bob, we'll probably see you soon thanks tesla is the other big story this morning shares down over 6% after that earnings call last night take a listen. >> so where specifically will you be in terms of -- >> next. boring, bonehead questions are not cool next >> joining us this morning,

general partner at foundation capital and our own phil lebeau covering this since the print. good morning to you both paul, let me start with you because we've had some sell side analysts on this morning keeping their $400 target saying don't pay taechks to tattention to th itself, this will be forgotten and the quarter to come is the prove it quarter do you think it is that simple >> i'm not sure if it is that simple you know, i don't think it is a great idea necessarily to go on to your quarterly conference call and insult everyone, but at the same time, i think we have to look at sort of the back story here you've got a guy who came over here as a young man from south africa, you know, didn't have the background, didn't have the connections, all the other things that are important in typical business worlds. and we look for disrupters in the silicon valley and he's disrupted not one major market in transportation and not two major markets with energy, but three major markets with

transportation, energy and space. so there is a lot of room for a guy like's monday musk in silicon culture and fabric and if i look at what is happening with the company, i don't have stock in the company, but i look at what is happening with the company, ten years ago quarterly revenue was approximately zero as far as i can tell and they did something like $3.4 billion last quarter and as far as i understand, the model 3 is about to outpace all other models of tesla combined in terms of production so, you know, i think these are some things that happen sometimes people get very focused on the present day and there are some sensational phrases that we got to hear from elon yesterday, but at the end of the day, tesla is a if a him no natur phenomenal company and their impact is a long way from being over. >> phil, you were on the call last night, asked a couple questions. how much of divergence is this

from typical elon musk it seemed to be a step beyond, and i'm tired of using the steve jobs excuse, steve jobs was a jerk, there are lots of jerks and genius jerks respect not all of them make investors money so let's not assume that correlation works all the time but was this a different elon mu musk, is this something we should be concerned about? >> well, he certainly had a shorter fuse than normal but if you look at a tesla earnings call, you are never quite sure which elon musk you will get there have been calls when he's been much more conciliatory trying to say, look, we believe we're on the right path and there have been others where he's been combative with analysts not to the degree that he was last night but when you listen to him, what he is saying is no different in an what he has said in the past. in fact let's hear what he had to say in terms of the volatility of tesla shares because this is getting some attention, but 80s really not different than what he's said in the past >> people are concerned about volatility, they should definitely buy our stock i'm not here to convince you to

buy our stock. do not buy it if volatility is scary. there you go >> i've interviewed elon musk, i've heard him say that to me, to analysts and other reporters. that is something that he has said repeatedly. why this is getting attention today, not just that comment, but the other comment, interrupting of the analyst and saying let's move on to somebody else, it is getting attention because he was much more direct and blunt than he has been in the past but i also have talked with analysts today who have said we are not surprised that he can be like this on a conference call >> great point you make. paul, just to sort of get back to this idea of production targets for model 3, the fact that revenue has grown, it seems to me one of the big issues here is that this is a company that is facing a cash crunch. it has been cash flow negative those numbers were even lower coming in the results last night. there is a lot of concern from

investors and you can see from some of the questions on the call around how they get cash flow positive. i know musk has said that he expects that in the second half of this year, but what happens if that target is missed >> if that target is missed, it is like any other target for public company, it will cause people concern and certainly musk's ventures consume a lot of cash. these are part of the factors. and i think anybody that goes in and writes these $100 billion, $200 million, $300 million checks into debt rounds and companies like this, they have their eyes open around this type of thing at the same time, i would also just remind us that there are very few people that can put together these kind of industries as a consequence, when money is looking for a home, it is looking for a return and people will have to take chances at some level with something like this you know, if i were somebody that were kind of a hawk on this issue, i would be, you know,

paying attention to the things that we're hearing about, to production and these other factors in cash and so forth but at the same time, again, from what i understand, the model 3 is already if not the fastest selling premium mid size sedan, it is on the way to being perhaps by the end of the year the fastest selling premium mid size sedan which is pretty extraordinary for a car that is barely on the street so far. and i think there is another aspect of this, too, that when we look at it, the whole concept of tesla, i was a doubter, most of the people out here are about these boy gene giusgeniuses. but he has turned the automotive industry on its head and i think we're in the beginning of that process. >> the word notion is the important word, right? i mean the issue is whether or not he can scale it in ways that say bezos has been able to scale. that is the test now

>> that's right. and in-that there are other points that are valid. i read some of the analysis around yesterday in terms of focus, does he have too many side projects, too many things going on and i think those are things that are legitimate questions for people that hold a public stock in any ceo especially a ceo that has so many broad interests. you know, when i look at what he's done in some of the other areas he's working in in the merging of tesla and solar city, certainly the knmomentum has slowed a lot we've been a huge beneficiary of that we have sun run now the number one residential solar provider in the united states so i think in the midst of all the energy and innovation and so forth, there are opportunities both the people that hold the stock, there are hunare opportu for the people competing against him in different areas >> paul, phil, thank you guys for helping us understand the

story a little bit more today. stock down almost 8% we'll see you soon spotify is the other big story sliding after reporting earning for the first time as a public company jul julia bour jul julia boorstin is in l.a >> it faces questions about how and how soon it can get to profitability. and spotify met its projections on user growth and revenue revenue grew 26% over last year's quarter, but declined 1% from the prior quarter the company's guidance for the second quarter revenue as well as second quarter user growth is a little lighter than analyst expectations jprgan pointing out that spite second quarter margin guide aunts beating consensus, the company kept its full year growth guidance unchanged. and reiterated his overweight and price target saying the

street expected more up side rbc says the song remains the same and maintained outperform rating, but trimmed his price target to $210 due you to foreign exchange pressures on the call last night, ceo says he is focused on the fremium plan and is not concerned about apple music. >> we don't see any kind of meaningful impact of competition. in fact when we look at this, we don't really think that this is a winner takes all market. in fact we think multiple services will exist in the market and we're all kind of in a growing market >> now, all eyes turn to pandora, it is focused really on the free ad supported music service, pandora reports after the bell today >> julia, don't go anywhere. let's bring this the rbc tech analyst who remains relatively bullish. do you consider this a mulligan

sf what what do you tell people looking for better numbers >> that the way this company is going to guide is how they expect to print. i think that is the message they try to give people also just the simple point that they gave guidance with five days left in the quarter you either had to assume that they wanted to immediately juke people right out of the gate which i don't think they wanted to, that would have been almost bad for their credibility. fundamentally there are two questi questions. and the apple threat will be unknown for a while. churn came down to 4.7%, but they also did see a slowdown in north america mau ads. so it is an unknown. still a risk gross marmargins, can they expa those. they are sticking with their full year gross margin expansion story. so i think that story still remains the same s that risk frif they can show e

premium sub ads, that is the only way that you can show it. we think there is a lot of up side to the shares >> and how do you factor in the risk the question on spotify isn't whether they can compete on quality as a streaming music service. and even grow. sure there are profitability questions, but it is more when you ever app you have apple and amazon and google, et cetera, companies in the music streaming space that aren't necessarily in to make money, they might not have to be better than spotify in order to hold their head under water and keep them from having to buy the business unless spotify can expand into other things >> that is a good point, jon the one major advantage that spotify has is that it is u ubiquito ubiquitous you will have subscribers on android, apple phones, including the echo devices

that is the advantage spotify has. and it is an android world, not an apple world, so that is why spotify currently accounts for 40% of all paid music subscribers. and we don't think that that number will shift dramatically and there is also a counterintuitive commodity advantage that they have no be can come out with a better service because nobody will get a broader category spotify has the brand strength, it will be the defect for many people just starting their streaming music service. and then the last thing is they don't lock people in, but this personalization, two-thirds of all music listening down is personalized either your own playlist or the company's. that means personalization is what keeps people on spotify other companies complaint match that >> and to your point about expansion, there are a number of points on the call yesterday about different areas in which spotify is interested in

expanding. they say they see a lot of opportunity in podcasts, and they also talked about the advantages of really investing and trying to get spotify built into more cars and they said that this voice activated speakers are also a plus for spotify and it will help them grow and a number of their rivals own some of those smart speakers but they said still it is a plus for them and of course they also have more international expansion ahead. when it comes to international expansion, that could bring with it more marketing costs, perhaps lower average revenue per user when it comes to the next couple of quarters. but it could pay off more over the long run so various areas of expansion for them which they did touch on quite a bit yesterday. but i think there are still these fundamental questions as they are investing more in this fremium model, can they really convert the free listeners in to paid subscribers but they do see various areas of growth >> julia, as we're having this

conversation about spotify, apple, amazon, google, the company we're in the really talking about is pandora and we're getting those earnings after the bell as well where does it leave pandora? >> i think it is important to realize that pandora is primarily focused on its free ad supported model. pandora is an alternative to free radio where spotify is much more going head to head with something like apple music which is that paid version so i think with pandora, we'll have to see how much people are willing to pay for music or whether they are able to pull more listeners from radio and also how their ad business is doing. pandora is not just competing against radio, they are also competing against the digital due on that duopoly. so we should look at the free version of where the revalue is in paid subscribers. >> a fascinating space

guys, thanks so much when we come back, elon musk didn't seem to care about wall street, but should he be more concerned about his reputation we'll discuss his leadership style with former direct tv ceo and bank of america board member michael white. ♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony. what are you working forward to?

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satisfying the desires of day traders. couldn't care less >> that was elon musk getting snippy with day traders, analysts and more on the company's conference call last night. musk calling analysts' questions boring and boneheaded. tesla shares still under pressure down more than 7.5% for more, joining us is someone who knows a thing or two about conversation calls, michael white. he sits on the boards of bank evof america, kimberly clark. great to have you. so elon musk didn't play by the same rules of everyone else. what was your reaction to that >> well, as someone who did a number of earnings calls both at pepsi and made my own share of m mistakes on a couple of early calls and learned, these are public markets and these tech companies that

run significantly negative cash flow are able to sustain that for a while. at some point the questions are going to come. and in-for a think for any, whe spotify or tesla, sooner or later there are questions about the fundamentals of the business model. and i can't speak -- he has a big and very diverse business between solar city which we did business with at direct tv, that business model is changing, too. the subsidies and government financing are all changing and so i think investors are going to want to is he more and understand more about the two business models and the economics of the two business models and if you don't need money, you can tell people to go pound sand but if you are going to need cash, whether you hit the debt markets or the public equity markets, at some point, you know, investors will want to know more. >> do you think this increases the call for a coo at tesla?

>> look, i think e lon is juggling a lot of balls, no question about it. i think that the question will be if he doesn't deliver the cash flow projections he's given for this year, we'll know pretty soon i think there will be pressure in general how it gets played out, whether changing the cfo like goiogle dd a number of years ago, which also mass a bunch of hobbies over here on left of and the core business and i think ruth has done after risk j terrific it >> and competitors are not standing still how would you expect the big players to move in on his space

in the meantime? >> my understanding is porsche is coming out with an electric car. f if ford can't make cars profitably in this country, it begs a lot of questions about the model and the pricing and how that krevolves. >> so looking at the broader media space, we have a number of big companies looking to get together and questions about whether that will be allowed but what does this tell you about this moment that there are all these potential tie ups on the table and then what did they do if it is not allowed? >> when we sold direct tv, our board was convinced that media was going through significant disruptive change. even i underestimated the pace and depth of that change you just look at the ratings use in and year out, i saw on kids

channels, nickelodeon, disney channel, cartoon network all falling through the floor. i have two grandkids that are three and they have ipads and they know how to go through youtube and find sesame street and put the episode on they want >> every day is saturday morning. >> so it is different. and so habits have changed and i think as a result of that, absolutely you're seeing companies trying to find new and different ways, whether it is scale, trying to get more scale through consolidation, whether it is going direct to consumer with the technology offering, you will continue to see that i think. >> do you think three carriers is better than four when it comes to the wireless market >> every time i've looked at antitrust issues, we always knew four to three is a problem in any industry now, this is a unique industry their economics aren't great so i understand the economic rationale. but my old rule of thumb was

four to threes are very, very challenging to get the government to approve. we'll see. i guess you can't blame someone for trying but i really am skeptical that -- i mean four to three in an industry just was kind of a red line i always knew as a rule of them when i looked at antitrust issues so we'll very to see whether that passes regulatory muster or not even with their offerings on 5g but i certainly understand the economics are pretty compelling to put the two businesses together >> their response would be you can almost hear them that they take share from the other two as a pair >> sure. i'm just saying the government's rule of thumb and the way they have always looked at antitrust, there was always something about four to three that there was always this additional concern that if you only have three players, they might somehow i don't want to say collaborate or whatever, but just you don't

have the same competition with four now, we'll see i'm just saying, you know, if you look, takes inadverteit is l merger and i don't see it not growing an incredible amount of regulatory scrutiny. and based on my experience, that means like two years of walking in the jungle trying to figure out whether you can get through the regulatory gauntlet. we'll see. >> we're seeing a lot we haven't seen before. mike be and he will whichael whu and when we come back, record shareholder returns this quarter thanks in part to tax reform, but another way the laws are impacting corporate spending dow session low is 393 and we're off 330 now. [ male announcer ] eligible for medicare? that's a good thing, but it doesn't cover everything.

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welcome back companies rewarding investors in record fashion thanks in part to tax reform, but there is another effect of the tax law. >> reporter: all the talk of buy back is overlooking a fact check out this robot, this is a significant part of the company's expansion efforts. it is lifting up cardboard sheets, pushing them through the machine. they will be turned into card board boxes later on they can be programmed to do other tasks. the company rents them out to other businesses as well and each one costs $95,000 the company's president tells me he felt more comfortable making this type of investment because of changes to the tax code that allows him to write-off more of his expenses >> our manufacturing plant has nearly doubled in size in the last two years we've been able to buy equipment that we needed to keep up with

demand >> reporter: now, it is clear that part of what is driving this expansion is not just the robotics, but also the wooden shipping containers that the company makes that are used for airline parts and also military equipment as well. now, under the new tax law, the company can fully deduct up to a million dollars of capital investments. before that number was $500,000. they also are able to fully depreciate long term assets in the first year, before they could only take up about half of that cost during the first year. now, data from s&p global market shows that there has been a 25% spike in capex during the first quarter for companies that have reported so far. but what experts are telling me is that the effect is expected to be even larger for smaller domestic manufacturers like this one because of those experiencing provisions.

back to you. >> all right thank you. and now time for a news update and sue herera at headquarters >> good morning. here is what is happening at this hour. investigators are still on the scene of wednesday's military plane crash in georgia the c-130 cargo plane crashed on to a highway killing nine airmen from puerto rico's national guard who was on board >> an investigation is currently in progress to determine the cause of this tragic event and ways to prevent such occurrences from happening in the future >> arizona lawmakers pulling an all nighter to enact a budget that provides big raises for striking arizona teachers. the governor signing the teacher funding part of that budget that will give them 19% raises over three years. the district spanning the scottsdale suburb of phoenix announced schools will reopen today. and the bill and melinda gates foundation says it will spend $158 million to fight

systemic poverty in america over the next four years. specific programs and grants have yet to be identified however. and that is the news update for this hour. let's get back downtown to "squawk alley. >> thank you, sue. let's get back to dominic chu who is also in new jersey with the european close. >> so european stocks moving lower in that first trading session since yesterday's u.s. fed statement indicating plans for gradual rate hikes and you can see the market narrative not too different in an what we're seeing here with our own major indices. and a surprise drop in eurozone inflation below the target of just under 2%. that core rate which excludes food and energy, tobacco, alcohol, also below the consensus as well. the inflation number does provide a challenge for the e krmpt b b and you take a look at the euro,

the pound in negative territory on weaker more than expected data in the uk this time around for the services pmi and earnings, smith and nephew down sharply after the device maker missed on results. and adidas falling despite strong quarterly sales in north america. and today's gainers include you loge tch ec logitech and also hermes back over to you all right. thank you. and when we come back, free trade is under assault that's what stanley drunk mien miller has to say just as the team arrives in china for talks. we'll talk to gary locke coming up

big story, the u.s. trade delegation arriving in china hi, eunice >> reporter: secretary mnuchin and his team have wrapped up their first day of meetings with the chinese. they were greeted by the vice premiere, liu he he is very trusted by xi jinping. nobody wants a trade war, however the feeling is that the idea that we could come up with

a grand resolution or even partial progress is potentially illusive and that is because secretary mnuchin and his team have been indicating that they are hoping to make progress in a wide range of issues, however some of those issues including china's industrial policies are core to china's national economic agenda so getting the chinese to change their practices is going to be very, very difficult also my sources in the chinese government have said that unlike other times where there have been trade negotiations, that there haven't really been a lot of preliminary working meetings. and so the standard has been that working level officials will get together, present their list of asks and then hash out all the details before the senior guys come that didn't happen this time around to the me level as in the past and so because of that, there is a big question as to just how much progress can really be made in the next in hours during this

very short period when the officials are here >> eunice, thank you for bringing us that stanley dwrrunken miller saying free trade is under assault plt for more, let's bring in gary locke, former u.s. ambassador to china. thank you for joining us >> my pleasure >> so coming into these talks, who had more leverage, the u.s. or china and how do you expect as someone who has been at these negotiating tables in the past, how do you expect these talks to play out >> well, this is as eunice indicated, the reporter you just heard from, a lot of the position of the united states has really not been clear and not spelled out by lower level working officials. and so the chinese are hearing the position of the united states in some cases for the very first time. yes the general be concerns have been known, but exactly what the

united states is seeking will now be revealed. so i don't expect much progress to be made these issues are complex and the issues keep expanding and changing so it will take time to reach any kind of resolution but i don't think anyone either side will win in a trade war the consumers, the workers and the companies on both sides will lose one thing though is that americans don't have many choices with respect to products whether used by companies or that they consume on a kael bas daily basis. prices would go up and they don't have substitutes china on the other hand does not have to order boeing airplanes yes, there is a huge backlog, but next year's orders, they can order more from airbus than boeing they can order more soybeans from brazil than the united states so china in some ways has few

more options but it will hurt everybody >> i'm surprised to hear you say that just because looking at the deficit and how much we are importing from china, i would imagine that we have more leverage than i feel like you're spelling out right now >> well, obviously we buy a lot from china but for instance all the shoes that we buy whether at many come from chinas target, so what choices do consumers have buy very expensive italian shoes? in many indicati in many cases they will have to absorb the surcharge or tax on the good coming in so it will hurt us and of course china buys a lot from america but they also somewhehave other sources. >> and sort of looking at this tit for tat tariff threat that has been playing out and certainly hats been affecting markets. i mean we have the dow down 345 points right now.been affecting markets. i mean we have the dow down 345 points right now

a lot of traders saying they are concerned about how these talks shake out, how long do you think the process actually takes and what do you think the u.s. actually gets from them? >> it really depends on what the demands are and the priorities that the administration people are presenting you have all the key players there. and so it is important to know that from china's perspective that we have the key united states players, that they are very serious about these issues. and it is more than just about the trade deficit. the real problem that american companies and foreign companies have is the force technology transfer so many parts of the chinese economy are off-limits to foreign investment, that is a problem. it is not -- virtually no sectors are off-limits here in america. so there is not a level playing field. number two, where investment is allowed, the american companie have to partner with the chinese company and therefore you have to share your technology and that is how the chinese take our

technology that is not fair for instance amazon or microsoft to set up cloud computing, they have to have a chinese part any. ali baba at other hand does not have to have an american business here. so those are some of the issues that really have to be addressed. >> so ambassador, those issues even more so kind of hamstring medium size and smaller companies. larger companies especially in technology i've talked to say it is a price of doing business and a lot of cases in china we can deal with that but are those the two major issues that you think this u.s. trade delegation should be pushing some what do you think they should be trying to accomplish over there right now? >> i really think they need to address that force transfer of technology which is really hurting american companies and the estimates are that american companies are losing several hundred billions a year as a result of that the other issue that the

administration has is what the chinese have called made in china 2025, where they want to be much more dominant in the world in terms of technology, whether it is robotics or artificial intelligence, semi conductors they want to be able to have their own supply of these high tech goods, they want to be self reliant in a lot of these high tech goods instead of having to buy from america and of course if they are really beefing up their technology sector, they are probably also going to be huge competitors and perhaps dominating the world by the year 2025 or 2030. so that is of concern. and the question is will the chinese government provide unfair subsidies, illegal subsidies under international trade rules to benefit the chinese companies. and of course what happened with zte is actually encouraging the chinese to being a agrees suf e

the administration said they can no longer buy qualcomm chips for their cellphones, zte is saying where will we get it, and the chinese government saying all the more reason they need to be independent. >> ambassador, we appreciate your thoughts. thank you so much for bringing them to us i think we have some news we have to get to stocks are near the lows of the day for sure dow down almost 300. session low down 393 nasdaq cckraed below 7 k more "squawk alley" in a minute. ? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.

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i'm scott wapner, here's what's coming up top of the hour tesla earnings fallout we'll speak live to one of the analysts, elon musk called out on the call. herb greenberg plus, we're all over the selloff in wall street, and what it means for money. and the dow, across the industrials. we'll talk caterpillar and other big ones in that space we'll do it coming up. >> sounds good, scott. the dow down well, it's cut its losses off the lows, 277 points, "squawk alley" will be right back. mr. elliot, what's your wifi password?

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welcome back to "squawk alley. the s.e.c. wants to know what shawn carter, aka jay z knows about iconic brands and its dealing with him and the brands he has jay z owned the rockaway brand

before selling it to i conix and this i conix has lost a lot of its market value over the past year. they say, jay z, through an attorney that he has not made any dates available for when he will show up for potential testimony. however, this is something that we're keeping an eye on. a very big anything in the world of media and music and everything else. the s.e.c. wants to find out what he knows about a possible securities violations or laws on iconix back to you, guys. >> thank you very much for that. meanwhile, what a day, tesla not the only story, the ten-year low, a two-week low. and off down a full percent. >> it is tech not suffering as much as some others in that selloff. i was looking at microsoft apple holding up better than the and far as companies doing pretty well, iac is up 1.5%.

>> and in terms of companies not doing so well, a ig leading financials well. a big move in the nasdaq, almost 9% >> and so much almost got lost with tesla overshadowing so much other news let's get over to post 9 1/2 and welcome to "the halftime report." i'm scott wapner post 9 today, our top trade this hour is sell-off mode. why stocks keep dropping and the biggest question now facing investors has the bull market topped out with us for the hour, jim lienenthaw and josh brown the dow is down for the tenth time technical damage being done as well s&p breaking through it'