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welcome to "squawk alley." i am jon fortt at post 9 with melissa lee and julia boorstin carl and morgan have the morning off. let's get to the top story, the employment report showing a slowing in growth. the unemployment rate fell to 3.7%, lowest since december, 1969 we had strong revisions the past months bond yields rising, stocks are lower after the dow posted the worst day in two months with the nasdaq on pace for the second negative week in three joining us at post 9 to discuss this, gentlemen, great to have you with us. jonathan, i start with you where are we in the stock market rally given reaction the market is having to stronger rates and the prospect of stronger economic data which we seem to be getting a hint of today with all of the revisions upward?

>> if you look at the economic data, we had two big indicators of where the economy is going, the ism report on manufacturing, the service side is strong on the economic side. then you look at the jobs report and the most important question is, is that report going to change what the fed will do, absolutely not are wages becoming a bigger problem. doesn't appear so. it has been a good week in terms of overall economic data >> the situation now, good news on the economic front is bad news for the stock market. that sends a signal to the bond market where you take profits, yields go higher >> the big line item is what happens on wages if we see the inflation number pick up, strength is a problem if plaguinflation remains contained -- >> what are the tales of two work forces. on one hand, one group where

wages get higher, unemployment rate is down, and labor force participation rate not budging, discouraged workers still discouraged. what happens to that group of people that's of substantial size, at a certain point does that become a real drag? >> i think what the fed is betting on here is that maybe the level of national unemployment is lower than we think for exactly that reason, there are still discouraged workers out there. i think that's one of the primary reasons the fed is in no hurry to get from modestly behind the curve to well ahead of the curve i think the fed has been a sweet spot, hitting on both mandates, full employment, more or less, stable inflation that's why i think the fed is going one hike per quarter probably three hikes below the natural rate or neutral rate,

and by end of next year, probably will be where they want to be. in terms of time and level, they're accommodative. one of the reasons they're comfortable there is one you just mentioned. >> i think one of the reasons why is a good news story if in fact the economy runs hotter, which is if wage inflation goes up, that means the working guy is getting a raise at the expense of corporate profit margins. and it is widening from a long time between the haves and have nots the economy brings that back together in a natural way. so it could in fact help policy makers out >> speaking of profit margins, we're about to hit into the next quarter of earnings. what are you expecting to see -- >> very excited over there,

waiting for the stock to open. >> by the way, every time we hear a cheer, that's the price range moving higher. that's why they are cheering right now, indication is 68 to 70 a share, it was priced -- >> priced at 26. so once we have that, we will go straight to it >> third quarter earnings season about to begin, expectation is 19% year over year growth. that number has come down a couple hundred basis points. i think earnings season will be pretty good, but it is clear that the growth rate for earnings is speaking here. q 1 and 2 are 24%, q3, 19. and next year estimated at seven or eight that boom from the tax cuts is working its way through the system, and it will be interesting to see if companies

are starting to guide. some of them are guiding lower, if they miss whether they blame trade or stronger dollar for that it will be an interesting season >> jonathan, you issued your target for the s&p 500 for 2019. what are you expecting >> first i think that this story will be that while earnings are absolutely going to slow, there's no way to keep a 20% growth rate. still going to be quite healthy. the only two areas in the market that are not expected to see robust earnings are consumer staples and traditional consumer discretionary stocks outside of the amazon and the like. outside of that, you have double digit results in virtually every sector even taking out tax benefits >> cannot deal with things like wage increases well. profit margins are thin, pricing

power is not strong. >> 100%. we saw the news about some folks moving up minimum wage a couple days ago, and when you have that pressure, who does it hurt, restaurants, retailers those are businesses that are already under pressure. >> thank you very much appreciate it. >> let me correct myself initial price range on elastic was 26 to 29, priced at 36 going to open higher than that >> the ceo will join us later this hour. we will continue to watch that and listen to the crowds behind us when we return, why elon musk may have -- a steep fall off, goldman analyst joins us onset to explain in a few minutes. cosqwkll" iltol me six in the morning.

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joining us, roger mcnamee, and mike volpe elastic, you hear them cheering behind us every now and then gentlemen, welcome to you both roger, the tweet read like a middle finger, not only to the sec but perhaps to board members who are trying to rein musk and his tweets >> i think the whole thing is so sad. first, the public market has been incredibly good to tesla and elon musk. and the motion that all of these shorts, the shortsellers have been wrong consistently. that's been fantastic for the stock. being mad at them strikes me as completely pointless i think the other thing is he should have been very happy about the settlement there's a court review going on now. i can see a strong argument for

saying that given the billions of dollars involved in the swing that the settlement was in fact exceptionally generous to tesla and elon, and if i were he, i would be keeping a super low profile. this whole thing is not going to end well if he keeps going this way. >> mike, tesla is hunting for a chairman and a couple of independent board members under the terms of that settlement if you're the next chairman of tesla and elon is tweeting like this, what do you do coming in >> roger is right, you have to rein him in. this is not smart on his part. tesla doesn't spend a lot of money marketing. a lot of it is because of elon's persona, his profile the company does benefit in the dimension that he is their marketing department, and it works for them you have to give him that. otherwise, it is not a smart move

>> you work with so many founder ceos, invest in so many companies, including elastic when you look at this kind of performance of someone like elon musk who has been celebrated for so many years as a genius founder ceo, how does it make you think as an investor about bringing in professional management, not allowing founders to continue to run companies. >> it is a fine line our industry, the technology industry is based on extraordinary founders, the elon, jeff bezos, steve jobs so as an investor, you have to surround them with folks that can help them professionalize, but you don't want to muzzle them it is has irreverence that they have which allows them to create things that are unthinkable like tesla, apple, amazon, and elastic. >> can there be a discount in the stock, maybe this is the stock and where we are trading is the discount, should there be a discount that a founder could

be there, that you need a founder and it is good for the company but you have the possible side effect of the founder going rogue sometimes? >> i think this is a really important question, how the market will treat this public investors have made tesla's brand. mike's point is really important. elon built this extraordinary brand around tesla public markets play a huge role in that, it is incredibly cheap marketing, amazing brand building the notion that he is dissing the public market right as they have stuck with him through a tough manufacturing transition i think is insane. i don't know what investors do about this the cars are still really cool people really like them but this kind of behavior, you know, i don't know elon musk, but if i did, i would take him aside and say look, my friend, you know, you can do better than this. this is nuts what you're doing now. >> i think a couple of people tried that

mike, i wonder how far elon can push this until it becomes an issue for the brand itself at a certain point do you think twice about driving a car built by a guy who takes these kinds of risks >> to a degree, but i think fundamentally consumers don't care that much about who the ceo is they maybe look at it -- i think he has to build a good product, they had some quality issues, he has to build enough of them. look, he is testing the limits of what he can do. we have a president that tests the limits of what you can do on twitter. he is going to go right up to the edge i think he is smart enough guy that he will pull back, but some of the moves are definitely testing the boundaries of what's appropriate. >> you sit on a lot of boards. how powerful is any board member to pull the ceo aside say you're nuts, put a muzzle on it, take a temporary break from tesla >> i think these days particularly for strong founder led companies it is very difficult for any individual

board member to reel folks in. >> if it is an independent board member, i.e., not his brother or former cfo of another company they bought. >> it is a collective job. the board has to work together and reel him in, but one member, no matter who they are, has a hard time reeling in a member like elon. >> roger, you have written and spoken so much about facebook and responsibility of that company's board and that organization to rein in its power. what should musk's board be doing and how should other boards watch this as a case study? >> to my mind, silicon valley has a problem. i'm with mike that there's no question great founders make great startups once a company is in the public market, it has other responsibilities you need to have in the team people that can fulfill those responsibilities and really importantly, you need to have checks somewhere in the

system, but increasingly, silicon valley companies have two classes of stocks so founders retain control and nobody has leverage. that whole thing, whether it is just being afraid of the personality of the ceo or being blocked by two classes of stock, many of these companies really don't have any governance to speak of we can see the problems. at facebook you saw the issue relative to their washington guy being at the hearings and the dreadful response of some of the executives this sort of stuff is out there because these companies aren't used to having anybody criticize them you know, they're not very good at hearing constructive criticism, embracing it, and making the future better than the past but we're going to find out whether there's any form of control or not right now, it doesn't look good. >> yeah. snap would be under a lot more

pressure if their founders had to be accountable to anybody but themselves at this point roger, thanks. mike, before we go, elastic, a company you're on the board of set to begin trading shortly interesting that it is a search company but not consumer search, behind the scenes, enterprise search and companies like uber with softbank, interesting what's happening in big data you saw cloud era tying up has the value shifted in big data toward companies like this and how do you define where the value really is? >> every business in the world needs big data to run effectively, to give themselves competitive advantage. companies that give software to the companies to operate make enormous difference and create value for themselves in a company like elastic, you think of it as enterprise data every time you use your uber app or tinder, the matching that's happening is done by a search app which is in fact in both

cases elastic. what you find is that this notion of data, it is not the abstract stock price, log files, sitting in the back, nobody pays attention. data helps every business operate well if you give businesses the ability to harness that data to make effective decisions with it, both business and consumer decisions, you build great companies with it. elastic is a great example of that >> there's search with price discovery behind us now. i'm sure you'll be sharing in a moment again, thanks. ceo of elastic will join us later. still ahead, more on tesla and elon musk's latest series of tweets why he is calling out fund manager blackroth. the dow extending declines from yesterday's session. now down 142 points, nasdaq composite down a full percentage point. check out declines in netflix

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mercedes doubling down on u.s. production expansion, despite concerns or maybe because of concerns of growing trade war between the u.s. and china. phil lebeau has more on the strategy >> reporter: jon, that is having impact on mercedes, all of the luxury suvs exported to china, there's a bit of a softening there. they're expanding here in alabama. we are here because this is job one or beginning of production of the gle, their mid size suv been very successful for them. they're also announcing today they're adding 300 jobs as they build a battery plant not far from here. that battery plant will be supplying batteries for electric suvs they plan to start building here in 2020 >> for our operation and say for the future of this plant and especially for the state of alabama, it is a fantastic

thing. this is the only battery plant we plan on building in the united states. and it will serve all our battery needs for this operation here >> the auto industry is increasingly saying sweet home alabama. look at the map. shows you how much auto production from top auto producing states there are alabama is a top five state in terms of production. 9% of vehicles built in the united states are built here in alabama. again, as you look at shares of daimler, keep in mind auto tariffs in the news for the last several months impacts mercedes. the suvs built here, about two-thirds of the vehicles built here are exported with a sizable chunk going to china they're noticing impact because of tariffs where the vehicles sell for 40% more because of the tariff slapped on them guys, back to you. >> thanks so much. fascinating how massive the numbers are. let's get to seema mody for the

european close. markets falling sharply to end the week, one day after the stock 600 index log, its worst session in seven weeks bond yields are in focus, uk ten year rising to a two year high, up more than ten basis points this week. its biggest increase since august take a look at the italian bond yield, also taking a leg higher after the coalition government published an economic blueprint, targeting 1.5% gdp growth in 2019, this as the european central bank president meets with italian president to discuss the market risks the country's proposed budget. unilever scraps plans to move the london headquarters to the netherlands. the move would have kicked the maker of dove soap and ben and jerry's ice cream out of the ftse 100 index

the stock is down 8% over the past one year. more woes for european automakers, volkswagon fell 2% after the luxury brand audi reported 56% drop in sales, blaming bottle next by new emissions tests. audi expects sales to fluctuate in the coming months down 1.7%. india signing a deal with russia to acquire s 400 missile systems, could trigger u.s. sanctions. it was signed during putin's meeting with prime minister modi in india back to you. let's get to sue herera for a news update. hi, sue. >> good morning, melissa, good morning, everyone. the senate voting 51-49 to proceed on the kavanaugh nomination for final vote tomorrow republican senator susan collins voting to advance the nomination but says she will announce her decision on confirmation later

this afternoon democratic senator joe manchin and jeff flake voting yes to proceed, and lisa murkowski voted no. a south korean delegation attending a north korean celebration in pyongyang part of an attempt to bring the two koreas closer together. first lady melania trump visits nairobi national park to highlight animal conservation efforts. she fed, interacted and played with small elephants she's on the third stop of a four nation african tour. and two ride hailing services want to help you get out and vote with free rides on election day uber is adding a special button for the midterm elections to help people find and book a ride to a polling station that's the news update back to you guys you have a lot going on there, jon. >> we do indeed, sue, thanks

when we return, the tech sector continues to take a hit with the nasdaq coming off the worst day since june our next guest is bullish on netflix. goldman's alanyst joins us to tell us why after the break. stay with us

welcome back shares of netflix under pressure, shares fall 3% this hour other faang stocks extend the fall from 52 week highs.

joining us, goldman, sachs lead analyst heath terry. thanks for joining us today. you're quite bullish on netflix, even though it is off 15% from recent highs, it is still about 80% for the year this is a company that's facing growing competition, not just from amazon but also hulu with new owners and all of these other direct to consumer options out there. why are you still bullish? >> a big part has to do with the size of the opportunity for them, especially outside of the u.s., we see growing competition in the u.s., obviously we are at a more mature stage of their business here. when you look at the opportunity outside the u.s., the competition is less severe, and opportunity is bigger, especially as we move from what has been a largely in home television product to a more mobile out of home product. >> how does media consolidation change the outlook, comcast buying sky, enabling them to do more direct to consumer, disney,

fox, you have disney app launching in about a year. does all of that consolidation change your perception >> it doesn't. if you look what netflix spends on content and make comparison to what those media consolidations are spending on content, there's no one getting to the level they're at. no one getting to the level where you or i as consumers say this is good enough, i'm going to cancel my netflix subscription for this. a lot of us have multiple subscriptions, subscribe to amazon and netflix but as long as netflix wins that value battle for what you spend versus what you are getting, they keep winning. >> that may be the case in a developed market like the u.s., the growth isn't as astronomical or bold as internationally, but when you look at winning share or winning consumers, new customers in new markets, how important is the economic outlook? if we think there could be a slowdown overseas, could that

impact growth rate at which they can expand internationally >> sure, at the margin that can have impact. that's the difference between shorter term and rising rates matter and the cycles that we go through will certainly matter. we're looking at this more long term can they get to 300 million subscribers or 400 million what does that look like, that's where the profitability of this matters. that's where opportunities like being down, not that 15% is that attractive, when the stock pulls back, pay attention to the longer term piece. >> do you think they stay pure subscribers, outside the u.s., probably in the u.s., there are so many opportunities in developing markets to work with partners in ways that could bring them if not direct advertising income, perhaps some extra sweetener. do you expect that to open as a potential revenue stream >> i think it is unlikely.

i think they have almost a religious view of subscription being the model for the type of content they've got, especially for creators, look at the pull for high level big name creators flexibility that comes with that, versus having to build content around 8 minutes of commercials every 30 minutes is something that i think is a big advantage for them, and the tradeoff we make as consumers of our time versus our attention for advertising, being willing to pay 8.99 to avoid sitting through the commercials is something that's appealing about the product. >> even if netflix stays ad free and subscription oriented, it is competing with more free ad supported services we've seen the likes of facebook, snap, twitter invest more in premium content because it is safe for advertisers right now, that's what they're focused on i wonder if you see those companies or amazon because it is not trying to do the same thing as netflix, it is trying to sell consumer products, it is trying to get people to order

more things online how much of those are a threat not just in the u.s. but internationally? >> we have a real survivorship bias when you think about competition for netflix. all of the competitors you talked about have been around over a decade, competing against netflix in this category over a decade there are tons of other competitors tried this, tried to go after netflix and their strategy around this and they haven't been able to have any meaningful impact. there's really been no one else successful in this category. you mention hulu that's not new that's where when we look at the competitive environment, keeping that in mind, keeping that history in mind matters a lot relative to how the competitors are developing. >> interesting to see what happens when netflix reports earnings heath, thanks for joining us appreciate it. coming up, search engine company elastic set to go public this morning the founder and ceo joins us

after the break as we await the first trade on the stock behind us stay tuned when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

you should have heard the cheers behind us at post 9 as the first trade for elastic, the internet search company crossed. you see a lot of happy people behind us. shares are trading 70. it is up by 98%. the ceo and founder will join us later this hour.

>> a lot of money left on the table. but a lot of money for investors in general, too. markets off session lows let's get to the cme, rick santelli has the santelli exchange rick >> thank you, jon. i would like to welcome my jobs friday guest, ed lazear. there was a lot of funk in the trunk on this number, ed, with respect to revisions, what wages did, florence. what did you think of the jobs number decipher it for us. >> if you looked at the number precisely, the 134 number, if you actually believed that, that would tell you that we are exactly at full employment the reason for that is that is almost precisely the number you need to keep up with population growth if you're creating jobs at the rate of population growth, that's pretty much what happens when you're at full employment when you were on earlier, joe

was teasing you about having nailed a number, you were weigh high he said -- way high. he said if you built in revisions to that, as i point out, i think the better number is not the monthly but the three month number that was about 190 if you think about that, that tells us we're still in the recovery phase we have another half year to go. the only negative is the rise in part-time work for demand reasons, and i think that's probably not a significant issue because the average weekly hours are okay but i would watch that in the future >> all right i have a love for the long maturities i used to trade 30 year bonds back in the day. the long end jumped. i have my reasons. let me hear yours. what do you think is behind the jump in the long end with the whole curve jumped, but the long

end outdistanced on the jump because we see the curve ste steepen. >> the steepen is important. when interest rates rise in the short run, don't know if that's demand or supply driven. rates can jump because funds aren't available, interest rates can jump because everybody wants to invest like crazy in this situation, the point you made about the long end being the one that jumped suggests it is more demand the reason is that the fed and their policies tend to have more an effect on the shortened rather than the long end when you see it at the long end, that suggests it reflects strength in the economy, investment going forward the way we will know this, when we look at the next two quarters and look at investments the next two quarters, that will tell us the story. if i had to bet now, i would say

there's evidence that it looks like it is on the demand side which is a good news scenario rather than bad news scenario. >> for my final question, ed, and this is also very important to me, when i monitor how the u.s. ten year is trading benchmarked with other sovereigns, i see historic wideness in the vicinity of 265 basis points it was 8 or 9 basis points wider than that inter day wednesday. what do you think of that, how should mario draghi think of that >> all right well, there are two issues there. one is the international comparisons and one is what i call a credit spread what you always have to worry about in terms of any kind of long run implications, whether we are headed for overheating, you look at the credit spreads when they get too narrow, you worry about that what draghi is looking at is

comparison between our rates and his rates, and we have been more aggressive in the past couple years at raising rates than they have and that's a concern in terms of flow of funds across national borders. if i were in draghi's shoes, i would be looking at that we know it is a world capital market there are some i did i don't see si -- i did i don't see sing -- >> it is enlightening to talk about markets economics. thank you for joining me jobs friday julia, back to you >> rick, thanks so much. let's get to scott walker for what's coming up at the half >> we are following the biggest story of the day, rates are rising, stocks are falling dow is at the low of the day as we speak we'll talk about that with tom lee. find out if the ten year keeps

climbing what happens to stocks. and did you know nasdaq is having the worst week in more than a month how big a problem is that if the best performing index continues to sputter. and call of the day on real estate, retail and rising rates. one analyst weighs in big time today. quk le iba athe day. "sawaly"s ckfter this lows

the dow with a decline of 219 points, good for a loss of

8-10ths of a percent no surprise, information technology, communication services on the s&p 500 really a head wind for the markets. let's bring in bob pisani. semis are being slaughtered. >> we are having a tough time of it i think the important thing is we're trying to figure out what the effects of higher interest rates are overall. the important thing is number one, today's market report is fairly neutral we are looking at the headline number below three month average, still good, revisions on the up side, 2.8% wage growth we would be dealing with a different story. and finally, i don't know how to look at the headline feds will look at the headline and start saying -- my opinion, this is not changing the path for higher rates

that's the most important thing. >> there's the commentary over the double line saying he was watching the 30 year yield, which is something we watch but we really focus on the 10 year yield. on the 30 year, it moved off multi year lows. through important technical levels that seems to indicate to him that it is a glide path higher, and that paves the way could be trouble for companies that ever levered. >> bottom line, what everyone wants is slow glide path this week we were thrown off, suddenly were up 16 basis points in the 10 year i think it is different now. we have a steeper yield curve. nobody wants anything to move too fast i don't think any of the data is changing the rate path that's why i am constructive on the market we can withstand higher interest rates, the economy is roaring. consumer discretionary should do great, growth stocks do great,

and banks if we get the yield curve. >> banks are down a half percent. >> it is a tough call. volumes on the flat side as well that's an issue. can we talk about elon musk? >> in a series of tweets, he was on fire. not only did he call the sec the shortsellers enrichment commission, but made a point that a pass of longs, etf holders, lend out shares to increase revenue stream. >> if this gets out, if anybody finds this out, call "the wall street journal" about this one mr. musk has good reason to be concerned but not for the reasons estating let me show you what the short position is. can you put up the full screen they have a massive short bet against it look at this 25% of float is sold short look at everybody else,

facebook, amazon, apple, on average, on the s & p, 1 or 2% of a typical s & p stock tesla, he is looking at that, saying the world is betting against me with that acting like he's just discovered some hidden cabal that nobody knows anything about. my heavens, we need to investigate this short selling is co-evil with the stock market it has existed from the very first day the stock market was created. the first short sellers were guys investing in the dutch east india company in the early 1600s. they invented short selling 400 years ago. that's how long this goes back there's nothing new under the sun happening here >> a fund manager like a black rock lending out their passively owned shares, that does happen that does not happen >> it does happen. of course it does. that's how you do it, by and large. most people don't physically own the shares they have to go out and borrow, and it's fairly common if you would eliminate the practice you would practically

eliminate short selling. that's what he's trying to argue. here is one of the problems, it's expensive it's about 2%. let's say you want to borrow $100,000 worth of stock and sell it, they're going to charge you $2,000 to borrow that stock for a year that's a lot you'd better be right, directional right, that the stock will go down and pay the costs of the borrow. shorts, the odds are stocked against short sellers. there's a reason only 1% or 2% is sold short because they are usually wrong. the odds are stacked in favor of the longs not the short. the stock market goes up historically because the u.s. economy, thank heavens, keeps expanding. i don't think there's a giant cabal and it's shocking mr. musk has woken up to the idea there might be people on the buy side that allow the stock to get sold short. by the way, they do make money and it does help offset their costs. it's true but not interesting. >> right his obsession with it, hey, i don't quite get. he has so many other things to

worry about. bob pisani, thanks and elastic going public moments ago. it's now up more than 90%. just a hair. the ceo will joiusexn nt.

enterprise search company

elastic going public here this morning at the new york stock exchange shares are surging in that market debut up more than 90%. up, boy, above $70 a share joining us here at post 9, shay banon. shay, you have to be happy about this >> i'm very happy we've reached this stage it's just one day in a journey we started six years ago and embarking to the future as well. >> you power search that connects people on tindr, uber drivers, in soft bank technology how do you see the opportunity in a market like search? google has dabbled but moved away from it it's an area i would think a lot of people would have backed away from and said that's soft. >> our vision ever since i tried to implement the first search box about 16 years ago or so, i

saw the power it brings to users across the world people feel in control of their data control of the internet and you browse it. we want to bring that capability and experience to any type of data, any type of organization, any type of enterprises. >> whenever you talk about data you'll have to talk about privacy and cyber security how important is protecting this data that you have access to when you think about growing the company? >> we provide the engine itself and other security futures and all the options to make sure the right people have the right access to the data >> you mentioned high-profile customers of yours what percentage of revenues are they for you is that aries s risk? >> we have more than 5,500 customers, no certain vertical we're just being adopted and

users are realizing the power of search >> and it's a subscription revenue model. most of your revenue comes from subscription services. how sticky are those contracts >> our net expansion rate is more than 130% for the last seven quarters it just shows when someone starts to use us, they use us more and more. they find other projects search is useful for. >> it seems appropriate given the way investors have reacted to it. the range was here and then it stretched up, 36 is where it priced and now trading at 70 give us a sense behind the scenes what that was like for you. was it a matter of understanding the technology and its potential? what do you think happened here? >> the story really resonates. these investors end up talking to customers and are very happy

using our software i think that just means that people put trust in our company. >> in terms of your expansion does it help at all that you're a netherlands based company and not a u.s. based company in places like china? i spoke to the ceo of a chip company who was not based in the u.s. and said that was a real advantage they are seen as a third party. >> probably it might be part of it we have a partnership with ali alibaba. i was there a year ago and we struck a really good partnership. one of the fascinating things about our company that people don't know necessarily we have employees in 35 different countries. we are a very distributed company. we started from our open source routes and when we founded the company we hire our friends wherever they are. >> all right, shay banon, congratulations again on this market debut as all the founders

and ceo say just one step along the journey. at the new york stock exchange with us here at post cbs announcing moments ago it has retained the firm rally and pledged $20 million for women's groups to fight sexual harassment this follows the resignation of longtime ceo leslie moonves. they plan to announce the recipients of the grant funds by mid december this is all part of cbs to resurrect its sort of image in the issues of sexual harassment with its new interim ceo we see shares pretty much flat >> we want to take a check on the markets now. we are down 270 points on the dow jones industrial average that's good for a decline of a full percentage at this point. we are worsening as the session rolls on the u.s. ten year note is 2.23%.

this has proven to be a headwind for stocks the nasdaq is now down by 1.5% semiconductors taking on the chin, down more than 2% this hour >> with that, that will do it for "squawk alley. thanks let's toss it to "the half." guys, thanks i'm scott wapner it is the biggest question facing your money. if interest rates keep climbing, will stocks keep dropping? it is noon we are near the lows of the day, and this is "the halftime report." a goldielocks market or should you fear rising rates the debate is on a rough week for tech. should you buy in? plus, yield plus performance. one analyst's big call on a reit on the rise. "the halftime report" starts right now. good to have you with us on this friday. here to de