to blame in the decliecne of sales. a quick look at the futures this morning. things starting in the red after most of the markets ending low yesterday. the nasdaq in positive territory and s&p is down by 23. that does it for us today. make sure you join us tomorrow we'll turn isov over to "squawko the street" right now. ♪ >> good morning, i am wilfred frost with jim cramer. carl and david are off today futures and nasdaq is down and s&p is down three points yesterday. nasdaq was down in terms of international markets and today china has stabilized the

shanghai stock exchange and currency we are not seeing as big of a sell-off as we saw we start with stock futures falling, hitting its highest level. investors weighing signs of the economy could be near a tipping point. google plus on the news that hundreds of thousands of data left exposed on the network for years. and bullish case of tesla. >> we begin with rising rates and treasury yield has hit a seven-year high. tesla is down for more than a percent over the past session. it is still a headline highs since 2011 yesterday was very ugly once we got off air but were covered by

the end of the session >> no. the main part of what i was looking for recovery which was what you just mentioned, the highest or the worse, if you think we have in coming inflation or in coming high rates, typically what the algorithm say, you should say. a bounce i think we'll hear from individual companies that things are not as good. i worry about the idea that there is a slow down and it is not just in housing and we'll talk about pg later but that's a true broad indication of some weakness we got autos very weak i am out and start getting concerned of retail oil is up. the consumer, yes, benefits from tax reforms other than a couple of states. we are not seeing what i am

seeing right now and the dollar. you know better than anyone. the strong dollar is a nightmare for a lot of our company >> the last month or so it has not been taking clear in directions in terms of the yield pick, let's talk about that in a moment a lot of headlines for the 10-yr, 17 years high we see the light of real estate and utilities do well and banks as well. >> somebody is right and wrong one of the things i think people miss in terms of coverage, there are many camps and there is a slow down camp and there is a camp that says we are going to hit a wall and there is a hard and soft camp. rates are trying to peak when i say trying to peak, we have a massive seller. the bond market is the largest in the world but there has been gigantic seller. if we can stay here, a lot of

that, thank you jerome powell, everything that yellen did is out of the picture any time you do that, it is very 2005 and 2007. i believe that mr. powell is going to walk back he's too thoughtful a man is going stay on autopilot. autopilot means crash landing. >> is he influenced by the president? >> no. i think he's becomingless data independent. >> is he influenced by slowing global growth? >> thank you, i think if you ignore the imf, some quality work, i think you end up and you work a long time with sara and i think sara would agree with me imf. >> i should have said that that's one of busy booking for my show. you know we have to take it seriously because it has been

two years kind of placid higher. >> inflection, will. >> it is not bad >> it is about to jump to 4.2. you have to take a projectory. >> i don't know what's going to happen for the midterm elections, people going through their pocketbook and not necessarily kavanaugh. i speak to many different companies and i don't see anyone whose businesses are accelerating aerospace is strong. >> this is a big change of tone. >> that's why i have been cautious >> i got cautious last week for the first time in ages because i don't like to see rates going higher and i don't like to see federal reserve do what we saw 2005 and 2008. we are going to keep our heads down with rates.

let's take a look at the data. if the data shows a slow down because of a trade, we are retaliating against the chinese. ppg, what they said. this is one of the worst shortfall i have seen. at 4:49 they told you they have a shortfall. china demands, that's not in sync with others >> ppr was up yesterday. they don't know that >> ppt is also saying significant roll materials and as well as the software demand >> they lost lowe'sthis was on of the worse preannouncer that i have seen.

why not say we are raising prices because we are having problems with demand that's a nightmare when you are raising prices and you say that demand is not there. those prices may not stick who needs it ppg. >> that's a nightmare. >> could it be just that >> are there opportunities that can banks rally and everyone growth is coming down. can they rally in that environment or affected by the jonah crowe? >> first down is jamie dimon, he's going to talk about loan growth and he's doing well i think citi is going to talk about continue buy back stocks there is a possibility that maybe people don't like any of these. if that day we have short rates up and long rates down, people look at it

these company neieds to grow acquisition. valuations are lowest since 1991 that's a positive. but, i don't see loan demand that i want. i don't see construction loan demand i don't see industrial loan demand other than louisiana and texas and some degrees of tennessee. >> that's call a slow down >> they don't need to borrow because businesses are going so great >> i understand that justine s jamie dimon, yes, indeed that the cash balance is big. what we really want as i regard of liner board my father sold liner board for years. liner board is crashing which is not good for them. i am saying there are signs that employment on friday may be a

bit of outlier, i know i don't like to try the labor port i am seeing too many companies that are concerned if autos throughout the world, autos with a big part of the economy because they hire. the lines that are being shut in this country because there is not enough demand, it is painful, will. >> vw stells that today. >> is that a small cap company >> the biggest automaker >> let's miss the largest auto company >> or toyota who are we not dismissing? ferrari? i was being facetious. do you have any irony going on there. >> i think we do, sarcasm that comes up

no way we are writing china off as being fake. >> what you write is what has been happening and our market is down buyer comes in as europe closes. that can happen. what makes me less sane is we are about to start earning season what happens yesterday is pepsico is up. it has been straight down. pepsico did not rally because of the numbers. i think we are quite good. people decided that we are bad if we got some truckers, will. if you and i and a bunch of people could go and become truckers have you try to shift? >> i was not strong enough to shift, this was like 10 years ago. >> i can ride stick but i don't know about a big truck, never tried that final point on international pitch. tl spread between italian and spanish, is a 20-year high that's encouraging because it is showing not contagent.

>> deutsche bank seems to be uniquely run i don't belong in that club. i don't know who belong in that club those club members all seem to protect each other when you go there it is like it is the merchant of sienna. >> nice town by the way. >> very nice town. >> i have not been there >> james bond went >> that sadly is not me as much as i would like to be. >> alphabet, google is holding a product launch event this morning. the third ed iition of its pixel smartphone the company says a bug exposed account information of 500,000

users. this was discovered in march and they decided not to disclose it. >> that's compounded google plus was not going well anyway talk about china making lemons out of lemonade. we are so used to hacks -- >> is that what the message was, let's wait and release it a little bit later the heat back in march were so severe they decided not to reveal it. >> what's the company, target, when they decided not to disclose its hack, let's say the tech team is hacked, meaning they are fired and contrast it with home depot and immediately went out this was a suboptimal way to treat the breach and does not reflect well because they did

not come to testify. it is an inexpensive stock and even facebook which is going to down number. it has not been able to go through 150. >> facebook is down 27% from its recent high. is it going to weigh on them or they're going to hire more or a smaller issue? >> facebook uniquely upset the advi advi advi advi advise advertisers you have to literally take the cash and have a chimney and throw it in. >> you enjoy those, don't you? >> it is like a frat house it is like animal house. it is like delta house i don't want a club. >> google announces the new pixel phones today

>> well, i got to get one of those. >> it is 1% of the global market share. did they give up on this >> it is google plus unless it is hacked. >> futures are pointing slightly slower the nasdaq is is ton the flat line >> also, ahead, an exclusive interview of the ceo of mattel >> loplease be careful. >> there we go we'll have that interview much more still to come and on the topic of futures, let's check in: down 28 points back in a couple of minutes. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable.

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welcome back to "squawk on the street," as automakers hope to rebound in new vehicle sales, they face the challenge of higher rates phil lebeau in chicago with more on rising rates. >> the concern is that these rates will ultimately mean a higher interest rates for autoloans. take a look at the change in the monthly payments as well as autoloan interest rates going back to 2013

you can see that both have steadily moving higher the average monthly payment right now is about $525. there was a time you go over $500, it is tough to sell a vehicle but now that's the average. in terms of interest rate, we always hear people say i got to get that 0% loan 0% of the late has been declining down to 5.6% of loans that are written in september this year. au i think final rate last year was 17.23, something like that four straight year over 17 million, this is the best stretch ever for auto sales in the united states. yet when luke at generyou look motors and fiat chrysler, it is

a little different there is nothing to write home about in the last year investors generally saying tell me when you have a plan when it come to monetizing autonomous vehicle. we'll see an impact when it continues to move higher because it is going to drive the interest rate of auto loans higher >> headline off 42.6% in europe globally of 18.3%. we are expecting them to fold but not that much. >> it is the new emissions standard and europe is the bug-a-boo here making the transition to these new emissions standards in europe because they have so many variance, that's why they are struggle to keep delivery as we have seen in the past. >> volkswagon are not alone here those deliveries should increase

the next couple of months it and they adjust to the new emissions steam. >> i am quite surprise that ppg issued a statement where they say cars are good, they're talking about inventories building china inventory building united states, i was a little chilled by it because i was using july analysis who says things are not that bad could things gotten bad this quickly given the employment number it is a big concern. i would be concerned but i am a bit surprise that people are getting bearish as they are in terms of auto demand if you want to look at demand for auto sales, it moves in lock step in auto sales so i am starting to hear people talk about oh, we are going to

big pull back, we are not seeing with the consumers out there >> it is very bad, phil, the ppg, frankly i trust you more than the evidence of ppg thank you, phil lebeau >> as ever, thank you so much. >> we did get some small business optimism of september which moderated a little bit it is down from 1.8. >> paychecks confirm that one. it was on "mad money" saying we are not seeing what we should be seeing at this point a lot of mixed pictures. i am not saying a downturn, i am concerned of china china autos tell me there is a real problem in auto remember king china, we are not able to say anything about this e them >> up next, we are counting down

to the opening bell and "mad dash." >> "squawk on the street" live from the new york stocks exchange, back in a couple of minutes. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. every investor should ask questions. is our money in the right place? what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor. as fiduciaries, they live by a simple rule: always act in the best interests of their clients. that's why charles schwab is proud to support more independent financial advisors

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i marble that and i just stop, okay, listen, talk to me in 10 or 15, i got to read this. that's what i feel mofeitt made

in snap. how much longer can snap remain in business? >> and what's his answer >> well, the amount of money they are burning indicates they need to do a financing rather quickly. i am sure there will be some bank that'll be willing to do some convertible bond. the amount of money they are burning is staggering. >> what matters is they got expensive fixed cost their daily average users fail across every single market with 2018 get this you know who's killing them? what is the most disgrace company on earth right now >> facebook. >> the love canal of social media. >> we know that about instagram. instagram stories are starting the eat it >> has the challenge from instagram peaked and can they fight back the other top line he mentions while snap is trying to do the

impossible, twitter is pulling off a similar miracle. >> but if facebook, how much longer can facebook remain in business >> i would say a long time >> it is 6:50, the opening bell is couple minutes away as a supervisor at pg&e,

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u.s. bank - the power of possible. we are at the financial capitol of the world opening bell is under a minute away >> it has improved a little bit. >> look. we come in and tlhere is a percentage of people, okay, listen, rates are about in a straight line go to 3.5. i don't think they are we have a lot of people say well, listen, their fed heads talks, they're going to talk about no data dependancy

>> there were zombiesome buyers there. >> ppg were up yesterday on the notion of a lot of demand. >> as we have discussed that there goes the bell ringing here at the s&p, fidelity national information celebrating their anniversary. and unity, stop diseases of aging. we are open. initially lower by 10 basis points >> but remember this was a fang market and fang is under pressure we have to watch see if we can get fang moving up i think they are the first stocks that bounce i am looking at a bunch of stock

that's doing terribly and they are cyclical i am reassure by phil because he does the most quality work out there. i am not getting the feeling that we are fine, it was all regulatory >> phil announce that it was encouraging about domestic demand and not necessarily international demand >> we want to see that confidence staying intact die despite the fact that oils are going up i am concerned of airlines air faires are not going up as much as fuel >> energy is the best sector of the open >> do we really want that? >> no, i am just pointing out. followed bayy utilities and staple >> we don't see amazon up today, i am telling you, david faber

likes to ask me, what's the key to this market amazon >> always. let's talk about one of theriva walmart. can they follow the footstepswas >> i want to match that with a kroger sale. it is basically saying walmart has figured out food and that's bad news for kroger. a price target of 24 from 30 that's going to be for a company that's in sara's hometown. >> indeed. >> let's talk about walmart a little bit more. is that sustainable? >> yes >> 4.5%. >> well, let me backup i think walmart is going to have good numbers because they spend a lot of money on ecommerce and accelerating

but then again with costco, it had great numbers and nobody cares. who's going to eat the tariffs is it going to be the retailers or consumers >> tariffs are real. again, what is my negativity based on retaliating against the chinese does come at a cause i have been prochinese since 2001 with larry kudlow they're real >> this note from deutsche does not think it will be warmer and the ability to taken the wages >> very positive they do have a positive balance. >> 17% online grocery. just back to the border market the nasdaq is slightly slower. s&p is down 0.2%

ahead of those earnings, we talk about valuations the 10-yr has historical averages chair cheaper and always cheaper. >> what you want to see is a different yield curve. you want to see more demand. i understand that is maybe this is flushed and not borrowing if things are strong as they seem to be, why not use that cash and borrow everyone more a more -- everyone more and try to expand i think there is a sense that maybe things are kind of cool. >> can i say when you have the kind of fight we have in washington, it is a demoralizing it is something that you think about, wait a second, the house is divided and you go back to lincoln. there are people who literally think like that and i don't think that's so all right. >> the midterm is closer to the market >> what's the best acting stock?

if you go back, they're talking about instagram and there goes facebook >> facebook is up nicely as you suggested. >> it hangs in >> hangs in. >> it is a value stock >> is it a value stock though? it is relative to the amazon and netflix to this world. >> yes, it is. >> let's say it can do nine instead of eight or ten. i think that when i look at facebook, it wants to hang in because there are too many people sniffing around saying down 27% it is worth buying and maybe they guided low of what they can do and particularly of instagram story. let's watch it close let's talk about something that's not a value stock tesla is an upgrade this morning. an upgrade from macquarie, it i up this morning on this note from macquarie of 2.9%

it talks about the ecosystem and the platform of the nature of the business >> ecosystem >> full service and offering software >> i am thinking of opening my own ecosystem frankly. here is what matters we need to see a level of maturity from the ceo and more numbers. you have to have both. given the fact that he exhibited of what i regard of erratic behavior >> page 25 on this makes good reading based on the price target on three times ev to sell for next year saying historically they traded 3.3 above that that's just about comparable of some of those big tech companies that we mentioned. >> these are price sales

situation. tesla is a cold stock and every time a cold stock gets a new buy, the short cringe and buy back some because they can't take the pain. elon musk tweets something that's completely insane and he gets another chance to cover >> let's flip back to the main market s&p is down 01%. >> that's fine remember what i said key of the market >> in terms of the bond market, another check in on the 10-yr which is high but not by much. yesterday, columbus day, the bull market were closed. we saw italy spiked significantly. >> that's the most important thing other than amazon being

the stock inner log. people feel embolden to buy some of these stuff they were thrown away. the valuations are so extreme that they won't be that much because we are headed for a buy more situation it is either home depot or lowe's let's talk about some of the other potential rate beneficiary, jim can you buy some of those more defensive name, utilities or real estate company? >> yesterday we mentioned bentas there is been a surf ed of nursing homes that's going away. i believe that vieenvironment

appropriate group -- what i would advise people is can we wait a little bit to see what the fed says we need to see powell walk back his comment of the okay over chute. h shoot. >> what about the impact on the dollar you mention the dollar but the last couple of months should not be too much of an issue? >> but all the forecast were based on a much more tamed dollar all the forecast were based on maybe supply chain issue will not be a problem and both of those did not come true. i see some companies that usually with a strong dollar, you may see something not good happening and i want to focus on starbucks for a second they announced a new cfo yesterday, he's a terrific choice they are solving their china problem. that's very important. u.s. is still not as strong but you get in one at two legs

kevin johnson is doing a great job. >> can the global growth story whether china or elsewhere continue as it has done. how many more years of that pace have we got in it and how much does the stock rely on that number every quarter >> the global growth story can't continue if there is going to be worldwide tariff is. we never got the european agreement that i was hoping for which is no tariffs. you can speak easily to europe france has become, i would say not an optimal situation these are negative >> that's a little out of ssync >> in terms of the tariffs, did you see the terms between mike pompeo following on that speech

for mike pence last week no hope of progress with china with the short term. >> we get mnuchin saying something positive and larry kudlow coming out saying listen, this is a possibility and the rhetoric here is as strong as i have ever seen it is very clear that retaliation -- we are retaliating of having been beat for a long time. you are talking about state department last time the state department got involved and when china became communist >> the word squirmish is appropriate. >> skirmish can escalate >> it very concerned when we got the state involved

and it was about who bought lost to china i don't want to go back to the day where we are at a cold war situation with china >> which at the moment with the rhetoric is a million miles away >> don't you think that's certainly a possibility that we could be in a cold war situation? >> a possibility but i think right not to be in most people's base cases we'll get to bob pisani on the floor of more of what's moving >> s&p is down four days in a row. it was a mixed open and a little declining. let me show you the sector opening tech is doing a little better energy, oil has bounced a little bit today. major global industrials are down, this is true over in europe and we saw automotive stocks down in europe again today. particular weakness and material sector, the most important story

is ppg take a look at what they said. they make codings for the automaut automotive industries and they have less pricing power than they used to they talk about weaker demand, not only nin china and then they have currency pressure you got a little trifecta going on here. some are arguing it sounds like stagflati stagflation. the economy is still strong. you can see it is moving down and that's a big fertimaterial . elsewhere, the world is changing and the last four or five days we have been discussing this of what has been going on here. low growth and what do you do? you buy growth and technology stocks you have low yields.

what do you do with that now the world is changing a little bit and started changing in february when rates started moving up and now it has been changing in the last week or so. you have a different environment overall here you have higher growth and you want to do higher yield as well. what do you do when you have higher growth and yield? treasury stocks and bond becoming more attractive that's the number one story. we see it playing out the last four or five days. what do you do of growth do value stocks, do they become more attractive over growth stocks they have been losing for ten years over growth. maybe the tide is changing maybe some inflection points have been hit. we don't know. that's the kind of thing that's being debated right now. what exactly should yield investors be doing you know what we have been telling you about for a long time we have seen some decline there. i want to show you what the fang stocks are doing here is that classic growth

story. these are the growth names you see what the impact has had when suddenly growth becomes a little more attractive tl ma the main growth names gethit particularly down today here i just want to move on and talk about the yield investor what's the yield investor do right now? there is a lot more choices and little more confusing than it used to be treasuries were never attracted and nobody wanted them and now they're more attractive. my mother mentions this to me the other day. then you have the traditional things and investors went in to consumer staples they're a little less attractive but the economy is strong. why would you sell consumer stasta staples if the economy is strong they'll get some growth there, too. high yield, everybody bought high yield, does it still work maybe. the credit cycle is still

strong we got a low default risk. it is confusing for the high yield investor right now there is a lot of choices for traditional stock market of investors right now. the world is changing and we are sitting at the right lows. >> thank you so much bob pisani. >> rick santelli is also back for us at the cme in chicago >> hey, rick >> good morning will unemployment, realist sticky. the entire curve, parallel shifted and all maturities are down one chart of september of 2018 for tens, the reason i like this chart is around week two when we clear the 3% hurdle, never looked back. every subsequent close has been a 3% or higher that has been the treasury of

this year. they extend and go sideways and extend again look at the longest maturity of 30-yr bond hovering. there is a lot of room above these long ends even though there is resistance all the way up this chart begins in june of this year and we are hovering right in the zone that is the highest or widest since june hyg, this etf is the high yield of etf, tlilike the spread, it s misbehaving a little bit it is coming off a historic tight level which is a good thing. this is ready to have some of the lowest prices going back to the end of 16. if we look at what's going on specifically in the market, it

is hard not to talk about crude oil. this long-term chart going all the way back to 2014 is what many traders looking at. the reason because there is a slice in the action there. so i remember flanner i am sorry, the big movement is balanced on the left or right. everybody thinks it is going to go through a hot knife through butter and finally the dollar index. outside of emerging market volatility, we have not closed of '96 since july of 2017. back to you. >> we are in a mid session lows. t still to come, the ceo o of adidas. we'll be right back in a couple

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welcome back supreme court justice brett kavanaugh will be seated for the first cases. >> after one of the roughest confirmation processes in recent history, he was sworn in ceremonially last night and offered this message. >> i take this office with gratitude and no bitterness. on the supreme court i will seek to be a force for stability and unity. >> reporter: the court will have the most conservative edge that it has had in decades. that could give big businesses and banks a break following the financial crisis. >> i think that this will see a reining in of the administrative state, that regulatory agencies will have a lot less power, a lot less discretion with a court that is solidly skeptical of

them. >> reporter: kavanaugh will take the bench today with less polarizing issues, violent felonies and repeat offenders and detaining illegal immigrants that have committed other crimes judge kavanaugh as an aappellate judge dealt with cases dealing with the environment, the structure of the newly created consumer protection bureau was illegal because it was led by one person not several commissioners like other agencies wilf >> diana oelnick for us there think your large cap equity fund

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this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. time for a quick stock trading, jim. >> one of the great battlegrounds is amd we can see how far it's come because the data center heated up, the gpu stocks have been unbelievable it's where people need for gaming this stock must hold i don't know if it can, because things are spotty in the semi world. take a look at micron.

it jacked up because intel was having problems. it's coming down as intel has reassured people be careful a stock up 162% is not one that you want to say i'm bottom fishing. >> what's on "mad" >> what is really strong versus what you think is strong very much what i do in football except we're not playing like arsenal. >> but you will fight back you are the champions, of course. >> we are the champions, thank you for saying that. by the way with a british, uk name. >> indeed. jim cramer, thank you very much. still to come, of course, on squawk on the street, we'll continue the discussion on the markets decline.

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♪ good morning welcome back to squa"squawk on e street." live from post nine on the new york stock exchange. stocks have been up and down technology is bouncing after a big decline yesterday with the

nasdaq leading up .4%. the dow down about 41 points and s&p trading along the flat line as we watch to see where treasury yields go, ten-year steadying around a seven-year high our road map starts right there. rate fears continuing to worry wall street as treasuries hit seven-year highs. >> and google shattering its social network after thousands of users' data was exposed for years. plus imf cuts its global growth outlook amid rising tensions between the u.s. and china. let's start with the markets. major averages back under a little bit of pressure, at least looking at the dow this morning, following yesterday's whipsaw session, amid fears of rising rates, growing china tensions. not just trade concerns out there. investors are keeping a close eye on the bond market yield on the ten-year, hitting its highest level in more than seven years, stabilizing around 322, pushing earlier almost to

326, the 30-year hitting a four-year high imf overnight downgrading its outlook of the world economy saying it will now grow at 3.7% this year and next forecasting slower u.s. growth next year to about 2.5% slight downgrade, guys, for the u.s. next year downgrade overall to the global economy. two main reasons this is not an all-inclusive economic recovery anymore. you're seeing problem spots in the emerging world like argentina, turkey, and trade this is something that the imf has been very vocal about, not supportive of tariffs, saying they will weigh on investment and growth they also took down the china growth forecast by 2.4%. >> not drastic downgrades but as jim was saying, has this marked the peak of we're now topped

out? the trend is notable it's a great read. 215 pages printed here where you can look at every country but the overarching theme iswhen you put tariffs in place and have trade tensions escalating, that is a growth killer. bottom line. >> bottom line of all 200 and how many pages >> 214 a lot of it is tables and charts, as always. our own steve liesman and also with us u.s. chief equity strategist for citigroup, tobias lefkowi ch. >> a stronger dollar and some of the trade fears. again some of the strength in dollars occurring prior to that and we started seeing downgrades in china and other places,

turkey, south africa have been challenged some of it is just that. look at the data on small business optimism, it's time to expand for capital spending. tax laws are helping on the capital spending side. it's more overseas u.s. in terms of the data. >> how resilient can the u.s. remain in the face of global weakness in emerging markets, potentially in china so far, so good. how long does that last? >> i think the market has a lot to digest here, and remember, we got a nice push in 2017 from unexpected global growth and that helped the u.s. it might have added half a point to gdp now maybe that's coming off, at least from some emerging markets. but the u.s. may be more -- i think tobias will back me up on this a price maker more than a price taker. if we're going to grow above a

trend, i think that will help overall global growth. we have to make some decisions here about which companies will be hurt by a little weaker overseas growth and which will be helped by a little bit stronger u.s. growth we won't be unaffected by it, but different kinds of impact through different companies, industries and sectors. >> tobias i was going to open it up for you there the markets have stalled in the u.s. a little bit as it contends with, obviously, financial tightening at the margins. you have higher yields in the potential of decelerating or uneven growth next year dploebl globally. >> we've been talking about in the rise of inflation as well on the wayside is that you tend to see a little more shift from value toward growth. you tend to see those trade sensitive names in technology

that really haven't been hit kind of now starting to at least show up. that's not where investors are worried about trade and they should be. obviously, things like china, ip, will be very front and center between the american authority sbts chies and the ch ones large caps over small caps interestingly enough, we just did a survey with clients, asking what they thought they're a bit conflicted about their views. i think the market will go higher they think the u.s. will continue to lead over emerging markets even if the dollar were to weaken and that's not typical. they raised a little bit of cash but they like financials probably backing off technology not a bad idea. >> steve, when we consider the international outlook and imf downgrade and news of late from the likes of italy, does it

change the view of monetary policy as well or will they focus on core inflation data and gapping up in italian bond yields >> i think there's two separate questions there, wilf. i think you know this as well as anybody, probably along with sara there, that you have this question of event risk that has to do with italy and, to a lesser extent, greece. they end up being a larger blip on the radar than probably the actual size of the event but that's a risk there. then you have the other risk, which is what happens with rates over in europe and beyond? i think the trend and the conventional wisdom is probably right here you have this very gradual end to easing in europe and some time next year we might even get a rate hike. i think that is part of what's propelling what's happening in the states a federal reserve balance sheet that is down below 4 trillion,

it's come down by 270 billion, but you have expectations this year and next year another hike in december and at least two more hikes baked in for next year. the fed doesn't have to worry now that it's raising rates on the short end and is being ignored on the long end. it's getting help from the markets. by the way, that's how monetary policy works in a sense, this is good news for the medium term but maybe a little nasty news for the short ter term. >> tobias, for 2019, 3900 is where you're at acres small gain next year. what do you assume with treasury yields with that kind of forecast >> so, it's less important what we think it's more important what our clients think and the investors themselves they think we'll get into 3.5%, 4% by the end of next year and i

think caps, what you can expect on multiples, it's really going to be about an earnings driver here we think earnings growth hit 7% next year, that will keep the market going there's probably near-term concerns we thought as much as a 5% pullback was likely as people started to understand the inflationary pressures that are building this is normal stuff but investors are freaking because they want to make money by year end. their bonuses are tied to it it's not the greatest time for them to get hit late in the year i think there's more of that type of positioning and pain issue going on, but it's a fairly normal environment. the big shock is why it took so long for the bond market to realize this and it all happened, i guess, during liesman's vacation. >> tobias, you can't have your cake and eat it, too if you are going to trade a market that expects 3% growth

rate and strong earnings, you have to believe that interest rates are going to be up this say test of the metal of the market in a sense that if you're going to trade at 3, you have to believe in interest rates that are well above 3 and maybe trending toward 4. >> i agree i think that means more moderate. >> we'll leave it there. higher interest rates and moderate returns thank you both for weighing in this morning. >> thank you. hurricane michael barreling toward florida, expected to make landfall tomorrow. courtney reagan is in florida, following the storm's impact on business in the region and awaiting that landfall courtney >> reporter: hey, good morning, mike we're in panama city, home depot now. we started our day across the street at lowe's this store opened at 6:00 a.m. it's been very busy so far today. what folks are buying most right now? plywood, generators, water, gas cans, rope, batteries.

all the things that you might need to prepare for a storm that's expected to bring both high winds and heavier rain. it has been upgraded to a category 2 with winds at 100 miles per hour it's expected to continue to strengthen from there. there could be up to 12 feet of a storm surge as well as a foot of rain. we talked to one of the store managers here. he said that it has been busier than a retail black friday. >> i've been through three or four this is the most powerful one that's been hit. we're in direct contact with this is probably like death con four right now as far as hurricane status it's a serious one we're facing. we ran out of generators yesterday. we called atlanta, who sent us three or four truckloads we went through almost 200 today. as soon as we opened up at 6:00, we had a front line from one end of the store to the other and within a matter of hours,

they're gone. >> they are waiting on that truck with more generators they're hoping for 100 more generators to come people have been looking for them and have been told to check back the store decided they will close at 8:00 p.m. tonight and stay closed throughout the day tomorrow they originally hoped to stay open until about 10:00 local authorities are here they're all working together to make sure that supplies get out to the folks that need them but also that everybody stays safe, both those in the community and those who work here at home depot. for now, back over to you guys. >> thank you very much >> still to come on "squawk on the street," google's big day. we'll take you there live for a sneak peek on what to expect. as we head to break, we check back in on the stocks that are performing best of all on the s&p. ebay tops the list, starbucks doing nicely as well and dollar tree markets broadly flat at this moment, the dow down by 60 points engineered to take the crown.

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and even manage your account. finding your xfinity username or wifi password, restarting your equipment, or paying your bill is easier than ever with x1. x1 help. another reason to love x1. say "teach me more" into your voice remote to get started. if you look at the dow down 40 points, s&p trading near the flat line strength, cutting gains in half over the last few minutes, we can now confirm according to a cnbc.com source that president trump's ambassador to the united nations nikki haley has resigned she was the former governor of south carolina she has been in the trump administration since the beginning. she just participated with president trump at the u.n.

general assembly eamon javers join uses with what we know about this story. >> reporter: she was headed toward the oval office with a number of staffers and declined to respond to questions from reporters standing with me, asking her whether or not she has resigned she's not talking to the press just yet as you say, we do have this announcement from sarah huckabee sanders that nikki haley and the president will be participating in an event at the white house at 10:30 president trump and ambassador nikki haley will meet in the oval office at 10:30 this morning. this event will be open to the pool some immediate questions will come into play here which is why is nikki haley resigning what other opportunity may she be considering presumably, if haley is resigning at an event with the president at the -- in the oval

office, then that is a friendly resignation, not something forced as we've seen so often in this administration. the question is, why now what's going on, if anything, behind the scenes and what is nikki haley have planned as the next act she's been widely regarded inside republican politics as somebody who had a significant political future ahead of her, perhaps even presidential ambitions. we'll wait to see what nikki haley has to say in just a few minutes time. >> one question, as you say, is why now. the other question is when exactly this would take effect i imagine no inclination on that answer yet either. >> reporter: no. in fact, white house aides were scrambling behind closed doors when i was up in the west wing a few moments ago. they said they would be putting out a statement very shortly we got that statement from sarah sanders but we don't have any context, timing or details as to what exactly has prompted this officials suggesting to us that they'll put out more detail in a few minutes but we have nothing yet. this one, catching everybody in

washington by surprise, particularly after the u.n. general assembly last week which was seen by many here at the white house as a significant success for the administration nikki haley very much publicly the face of the administration on the world stage and now apparently resigning as ambassador to the united nations. >> did she have any clashes with the president on policy? i can't think of anything major like we saw with other members of the team like former secretary of state rex tillerson. >> reporter: right she had clashes with rex tillerson in terms of who was going to be the face of this administration to the world and who sort of represented the purest strain of trumpism in washington and new york. there was political rivalry perhaps as to who was the senior figure inside the administration, but nothing that i can point to specifically on policy let's take a deeper dive, guys.

>> like i say, i think that indicates that this is a friendly resignation, at least looking at the optics of it, when other people have resigned from this administration under pressure or been fired, you haven't seen joint appearance. you've seen a situation where the president sends a tweet or somebody simply vanishes from the administration overnight an event in the oefbl office would give you an indication that the president is endorsing this resignation or at least considers this a friendly departure. we'll have to look and see what the officials have to say in a few minutes, the president tweeting moments ago big announcement with my friend, nikki haley at 10:30 a.m big announcement and my friend, the president says that's perhaps an overused washington cliche. my friend is applied to people

who you don't consider your friend but the president doesn't use that term excessively, i think we can say it's a friendly departure or is being presented as a friendly departure by nikki haley a few moments ago, she was smiling as she was walking in toward the oval office but declining to answer any questions from the reporters, who were gathered there, trying to figure this thing out. >> just adds to the suspense we'll see what we get in a few minutes. eamon javers, thank you. apple, amazon splashy gadget reveals this season and today is google's return, set to unveil its latest pixel phones. john forte is here at the manhattan event. what are we expecting? >> the line is just about to finish up going in to get set for this event as you mentioned, the pixel 3, we're expecting that phone and updates on google assistant, a

pixel slate tablet google home hub. a trend now in the smart and also new chrome cast with updated bluetooth and wi-fi capabilities it's important to keep this in context. distribution wise, google is seven years behind the iphone in that we expect it to launch in the u.s. with verizon only it was about seven years ago that apple branched out from at&t to verizon and multiple carriers we expect this phone to start around $800, according to some leaks. there have been all kinds of leaks around this. the primary feature that's gotten the most praise is the camera many reviewers have said it's better than the iphone x we'll see how it measures up against the latest iphone x cameras that are also improved the focus of google will be promoting artificial intelligence, google assistant

and overall ecosystem that's increasingly being led by voice, guy guys. >> do you think this privacy issue overshadows the announcement today, that google finds themselves in hot water both on policy and in an optics from political perspective >> reporter: it's certainly important because this assistant is driven by data. it's important to note with this latest google issue, it wasn't a hack, it was a potential for a breach that was discovered data could have been exposed in certain ways that's a bit different from saying somebody actually accessed this information. google said there's no indication that happened whether you're facebook, google, even amazon, to some extent, but mainly those two that got this ad-driven business model that seeks to make the most of data, they're trying to position it as

giving you a better experience because google knows all about you. on the flip side, if somebody else gets access to that data, it could be dangerous. they've got to address that, sa sara. >> and be transparent about it, and share it, one of the other big criticisms of that look forward to a lot more from you over the next few hours at the google event in new york. now back to the market etf spotlight, we're joined by dom chu at hq. good morning, dom. >> good morning. we're floating right around the 50-day average price for the overall s&p. some investors are taking a harder look at whether or not higher dividend paying stocks are as attractive, relatively speaking, given the ability to invest in no risk, long-term government bonds at the highest yields in seven years. dividend sectors like real estate, the traditional focal points of that rate discussion a host of exchange traded funds tied to dividend exposure have gained popularity.

vanguard high dividend etf, vyn, 30 billion in assets, current yield of around 3%, higher than the market it's been an underperformer versus the s&p so far this year, up 2%. s&p is up 7% to 8% the ticker nobl, $4 billion fund that has a yield around 2.5%, also better than market. it's up around 3%. also an under performer and spider, sdy. in a rising rate regime, big question for investors will be whether or not they find that mix of dividend yield and possible growth in these types of stocks is relatively more or less attractive than risk-free rates at multi-year highs, sara. back over to you. >> dividend paying stocks on big competition from the bond market now. dom, thanks. when we come back, as dom

mentioned, interest rates on the rise, putting a spotlight on the health of the economy. one key metric, the american consumer with holiday shopping season getting under way, we'll tap the anmartise of ceo of the toy git ttel, joining us next.

rates front and center julia borstin is at the vanity fair establishment, sitting down with the chairman eo of intel. >> thank you, sara in your first interview since you became ceo of this company back in april. thank you so much for talking to us today. >> great to be with you, julia. >> the entertainment business, all sorts of types of entertainment, tv, digital media. how do you plan to change this consumer products company? >> this story is so exciting mattel is the owner of one of the strongest catalogs of

family, tv, entertainment franchises in the world. barbie, masters of the universe, thomas the tank engine and many, many more, ageless, timeless, generational, iconic brands. we have two opportunities. one is to restore mattel back into being a high-performing toy company and the second is to capture value from our intellectual property by extending brands to highly creative business areas such as film, television, live events, video game and consumer merchandise. >> you recently launched a movie division lego and hasbro have had some success launching their brands which many say has gone back and driven more sales. do you think you're too late in launching a movie division >> we're at the very beginning mattel, given the strength of the catalog that we own, there's so much potential, you just have to watch the space and see what's coming. >> shares of mattel plummeted when toys r us announced it will

be shutting down its business. toys r us will be back up and running again. what does this mean for you and your business, especially as we head into the holiday season >> the toys r us situation is unique to the toys r us situation. the industry is actually growing. we're seeing increasing demand and other retailers are moving in to cater to this demand with great experiences and great toy. >> investors are concerned that this would be one retail avenue that would be cut off and could damage your business, at least based on the stock performance are you more optimistic now that it seems like toys r us is coming back or have you tried to diversify away from them >> toys r us will have a shorter impact on the industry we're focused on the future and putting the company on the right trajectory for growth. >> you talk about these things you're investing in, video games, et cetera, does that mean you think those will be more important than your actual

physical toys you're selling >> no, the toy category is still very important and growing and a great business to be in. we're very happy with where we are and we're seeing tremendous opportunity to continue to grow that part of the company in addition to that, we're seeing more opportunities to extend our brands to additional, highly creative business verticals. >> speaking of the physical toys, though, most of them are produced in asia and many of them in china. what do all these fears about a trade war and tariffs mean for your business? >> we're watching this situation very closely there could be an impact on the industry this is outside of our control but our goal is to design an organization that is flexible and adaptive and can respond to market changes and negative headwinds. >> what does that mean, bringing production to the united states? is that even feasible? >> we're looking at different opportunities as we're evaluating our manufacturing footprint and there will be more developments in the coming

months. >> you look ahead to the holiday shopping season and we see the rise of video games and categories you're not in right now, what do you see as the biggest threat to your business? trade war or competition from other game makers? >> our role is to design and create innovative product and experiences that inspire, entertain and develop kids to play in this day and age, big brands, quality content, quality toys matter more than ever. and this is exactly what we bring to the table, with the ability to leverage and grow and expand our business in the toy category as well as additional areas. >> and so what do you think is going to be the big trend this holiday season >> you know, we have a lot of ideas, a lot of toys in the marketplace and we're very excited about a number of initiati initiatives. we'll have to see how it plays out. >> mattel took a big hit when you lost the disney princess franchise. excuse me, we have a very loud siren behind us. big hit when you love the disney

princess franchise i'm sorry. it sounds like we have to go here sara, back over to you >> julia, i'll pick it up. thank you very much for that interview. we are, of course, waiting for that press conference with the president, and nikki haley thus the tight timeframe sue herera has our cnbc news update. >> i do. jeff sessions joins france, interior ministers of britain, germany, italy, spain and morocco are taking part. french police forces staging an anti-terrorism drill, involving a group of so-called terrorists killing a large number of fans inside a stadium using explosives and automatic weapons. the death toll from the indonesia quake and tsunami rising above 2,000 rescuers ramping up the search for missing victims two days before a self imposed government

deadline at least nine excavations ongoing this morning as more than 1700 homes sank into the ground and the supreme court is declining to review an appeal written by judge kavanaugh which struck down an obama-era environmental agency rule. you are up-to-date that's the news update this hour busy news day so wilf, i'll send it back to you. >> sue, thank you ever so much as we head to break, a quick check in on the marks, which are higher we are pretty much at the highs of the day, up 26 points on the dow, 0.1%. the nasdaq leads the charge up .75%. we're back in a couple of minutes. dealing with millions of customers a year, like this one. no, i'm pretty sure i didn't order a squirrel playing a guitar. that's why you work with watson. it works with your systems to resolve calls faster and improve customer satisfaction.

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welcome back to "squawk on the street." i'm sara eisen with wilfred

frost. the nasdaq is on track to break its three-day losing streak. a lot of what was broken off is coming back today, discretionary, technology, communication services, all the fang names are higher. dow up 28, nasdaq in the lead up .75% as we await to hear from president trump any minute now with an announcement on what he says is his friend, u.n. ambassador nikki haley, sources saying she has offered his resignation. a look at the ten-year treasury chart, yield rising from 2.8 to 3.22% this morning of course, the rate rise having wider spillover effects on the economy, autos in the housing sector joining us now, nobel winner, creator of the s&p schiller index, of course, is robert

schiller thank you for joining us what do you make of that pace of the increase in yields in the space of a couple of months? >> well, it reflects, i think -- it's not just fed policy it's also just a generally strong consumer confidence that we see at this point in time the economy has looked strong for years and especially since trump took presidency and i think we're just in an exuberant time people find these rate increases as normal, given the economic conditions. >> professor, can both consumers and investors stomach the pace that we've seen in terms of the increase, even if it was expected it has spillover effects. >> yeah. well, i think the fed is -- well, careful. it has been tightening now for a

while, but at a very measured pace i don't think it's creating any alarm at the present time. i think -- you know, i said this is an exuberant time but it's also a complacent time we've seen such steady growth. we had a recent, over 4% gdp growth number. people extrapolate those things and right now they're not so worried about interest rate increases. >> so do you think if, in fact, people are complacent, what are they complacent about the possibility of that, in fact, growth falters? that, in fact, this rise in interest rates is not necessarily purely signaled of better times what do you think the blind spots might be >> i think the complacency is a somewhat inattention remember this about kavanaugh. we've been concerned with other

things the economy seems to be coasting upward with this kind of complacency, this kind of confidence, i think, is volatile in the past, this kind of confidence could be disrupted. mysteriously, sometimes, with market corrections. >> wanted to ask you about your expertise in housing and how you see these higher rates impacting the housing market, which is already looking a bit shaky. >> a bit shaky is -- yeah, in our latest s&p shiller report we noted a weakening of home price increases but they're still going up at a good pace nationally there are some cities, seattle, new york, boston have shown a lot of weakening, but it's still not falling. i think that this housing weakness has to do somewhat with

the trade war. although you might think it shouldn't. the idea that we're going to have chinese or foreign investors pushing up home prices is a bit of a downer at the moment so, yeah, the question is whether this is a turning point in the housing market. i'm a little bit worried about that, but not ready to call that. >> professor, what do you make of the broad valuations across equities in the moment and in particular the differentials we see between certain sectors? >> well, yeah, there are important differentials across sectors but the general thing is very high -- i use the adjusted earnings ratio for the market as a whole is in the low 30s, which puts the market at a very high level, and the highest in the world in the united states there is some exuberance in the

united states that is very strong one wonders why. i think it has something to do with the tax cuts we just saw, signaling a government which is very friendly to wall street and i think that this is just being extrapolated by investors. >> so the imf -- >> but the -- >> sorry to interrupt. i wanted to get your quick thoughts on the imf on the u.s. economy specifically they say it will only grow 2.5% and this year only 2.9%. do you think that's right or too pessimistic? >> the big issue in the imf report was the trade war and what effect that will have even if the trade war turns out to be positive for this country in the long run, it poses a disruption, at least in the short run.

so that's why i think their growth forecasts are not more optimistic it seems to me it's in the ballpark they're not predicting any disaster they're predicting growth. we've seen negative growth quarters in the u.s. since the great recession. so, this is not a wildly pessimistic forecast i think i am concerned about the trade war because it will take different ramifications through time there's some bitterness. there's some boycotting of u.s. on consumers in other countries. i think that it's hard to predict what this will do to overall confidence still confidence is up it's strong for the united states and for the advance economies. this is what was sorted out in the report and emerging economies, despite brazil,

overall, people are optimistic that seems to be the fundamental fact about the present time, not necessarily the next couple of years. if i were in the business of forecasting gdp, i might cut my gdp forecast somewhat also, but it's based more on the state of mind rather than central bank actions. >> professor shiller, thank you for joining us great to see you as always. >> my pleasure. some headlines are crossing about the departure of u.n. ambassador nikki haley let's get straight to eamon javers is what we know at the present, eamon. >> cameras are rolling we'll get you that tape as soon as we can. we can tell you what's going on inside the oval office is a very friendly encounter, apparently, between the president and nikki haley, the president praising her as a key member of his

administration, someone whose counsel he and hopes that nikki haley will come back in a different role saying you can have your pick of roles inside the white house nikki haley apparently leaving on very good terms with the president. we've not seen the president say that about many other figures who have left the administration he has been impressed with her tenure as u.n. ambassador. two weeks ago she ran the u.n. general assembly at which the president featured so prominently. this is somebody who understands the president's foreign policy and understands what america first means in terms of the world stage. and now the president suggesting she might be coming back to the administration in a larger role at some point in the unspecified future that's what we know for in our we'll get you more as soon as we get that tape out of the oval office. >> we understand she just said

in the oval office that she is not running for president, but i guess people will wonder, even if she was tired and needed a break whether that is sufficient reason to step down from a very important role from someone that feels a sense of duty toward serving her country. >> reporter: sure. i think, wilfred, there's a natural skepticism there you see politicians resigning to spend more time with their families and take some time off and people are often skeptical that that's what it's all about. it may be that there's the emergence of two other figures in this administration, john bolton, who has been here for some months now and mike pompeo, the new secretary of state, who has been here for some time as well both of them strong figures and very close to the president. they have his ear. it's possible that nikki haley had a more prominent role with rex tillerson as secretary of

state than she does now and that she may like to move up but there's no place up the ladder to move in this administration that's speculation on my part. we'll have to see what everybody says when they come out of the oval office. >> what about the context also, eamon, that many members of this administration have left it's not just u.n. ambassador nikki haley. it's gary cohn, rex tillerson. >> sure. >> it seems like there's more of an exoexodus inside his cabinet than other administrations. >> reporter: this one, at least the way it's being presented now, feels tonally different from those those other resignations had weeks and months of drumbeat about when will this person resign, when will they be fired? nothing like that with nikki

haley. to do it in the oval office alongside the president, to announce this resignation side by side, cemented in the public image as a friendly departure, whereas we've seen some very unfriendly departures from this administration in the past. >> good point. eamon, thanks. >> you bet markets continue reacting to rising rates we'll bring you the latest on what you need to know and how to invest and we'll take this announcement we've been talking about from the president when it happens. more on "squawk on the street" after this geico has over 75 years of great savings and service. with such a long history, it's easy to trust geico! thank you todd. it's not just easy. it's-being-a-master-of-hypnotism easy. hey, i got your text- sleep! doug, when i snap my fingers you're going to clean my gutters.

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veteran bank analyst out with a new warning for financials as the group gears up to report earnings later this week find out what has him nervous on tradingnation.cnbc.com more "squawk on the street" after the break.

welcome back let's get to the cme group in chicago. rick santelli has the santelli exchange >> good morning. i would like to welcome dr. judy

shelton. thank you for joining me with respect to the dollar versus yuan, it is weaker since january 2017, about ready to test levels we haven't seen since early 2008 is this true appreciation, judy? >> i think it is a problem it is real the yuan has devalued 9% against the dollar in six months doesn't mean that's what china is trying to make happen it may be that china is having some internal problems, trying to stimulate their own economy, loosened reserve requirements. they're doing things that cause their currency to lose value against a strong dollar where we are raising interest rates it may be all they can do to try to keep it from getting so weak it is a signal of capital flight

lae leaving the country. >> excellent point we have seen it before rgs consideri -- especially considering stock piles to combat that they're playing russian roulette with respect to the negative side of the ledger, more capital will leave the country in the end is this something this week with meetings of the world bank and imf that treasury secretary mnuchin needs to discuss? >> i think the president has been discussing it all along, and the treasury department is letting china know in statements made before the meetings start that they're noticing. next week the treasury will put out its biannual report assessing whether countries are engaging in currency manipulation i think china is wary of doing that or looking as if they're allowing it to depreciate too much because this president has

always recognized that there's a connection between trying to compete unfairly by reducing value of your currency and how does a receiving nation combat that so he sees the connection between tariffs and currency manipulation tariffs is a way to counter what other countries do to compete unfairly >> now, in the end what the president thinks or says is like what he thinks or says about interest rates, yes, sir he has picked independent minded fed personnel. in this instance is it really all mnuchin to discuss what the chinese in a similar type relationship your final thought. >> just as with the fed, the president appreciates independence of individual agencies and the treasury is always the spokesperson on exchange rates and i'm sure that secretary mnuchin will relay the proper message and reflect treasury's position.

>> thank you, dr. judy always a pleasure. mike santoli, back to you. >> rick, thank you very much coming up, google set to unveil a new set of products as the company shuts down google plus amid a privacy glitch more on both stories ahead "squawk on the street" will be back after this. at&t provides edge-to-edge intelligence, covering virtually every part of your healthcare business. so that if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals? & share the data with other specialists yeah, i'm looking at them now. & they'll drop everything hey. & take care of this baby yeah, that procedure seems right. & that one too. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when your patient's tests come back...

welcome back to "squawk on the street." stocks are mostly higher most sectors in the s&p 500 are in the green now, contributing to the positivity. but the material sector so far you can see has been far and away the worst performer, standout to the down side, trading 1.5% lower in early trading. among the biggest laggard, ppg down more than 7%, after revising third quarter guidance to the down side, citing rising costs, weaker demand for products other notable laggards, cardboard and paper companies. look at west rock and packaging corp of america, international paper show down trends in shorter, medium, longer term a lot of red on the screen when it comes to materials, guys.

back to you, morgan. >> thank you, dom chu at hq. good morning, almost 5:00 p.m. at adidas headquarters in germany, 11:00 a.m. on wall street "squawk alley" is ♪ ♪ ♪ ♪ good tuesday morning welcome to "squawk alley." i am morgan brennan with sara eisen. double trouble here today from post 9 on the floor of new york stock exchange jon fortt is in new york city, will join us as the search giant is set to unveil the latest

smart phone dealing with its own security breach and a number of other issues, including deciding not to compete for the big pentagon cloud contract. but sara, looking at the dow, down about 50 points now pairing some of the earlier losses. >> we have been swinging all around on the dow. what's strong is echnology, that's a bounce from recent sessions nasdaq up a half percent and that's steady. consumer discretionary, technology, communications services, and that includes the faang names in those sectors are higher today is this resumption of the growth trade or is it just to come back after what we have seen value over growth. continues to be a big debate we await president trump, any moment expect to have tape from him live at the white house speaking with u.n. ambassador nikki haley who offered her resignation, set to leave end of the year there's curiosity as to why, what