headquarters in illinois and here on wall street. "squawk alley" is live ♪ ♪ good monday morning, welcome to "squawk alley." i am john john with morgan brennan and jon fortt at post 9. there's the nasdaq down three-quarters percent tech coming off the worst week take a listen. >> the outlook for the market in my opinion isn't nearly as good as it was.

you probably don't get a peak of substance in the market until the end of the economic cycle is in sight, traditionally that's how it worked. we had the bulk of good games. >> feeling like at this point we paid it forward. we've got a lot of good things that happened are reflected in stock prices. >> that's right. things work out, you get three to five out of the market. but that's not exciting and relative to treasury and risk free returns and with volatility as well. >> joining us to discuss, libby cantrell, and chief market strategist john stolz. is that consensus? >> i don't think so, isn't my opinion. tech has been hit three times, 9 to 10% it rebounded every time. we are in essentially what appears to be an upgrade cycle

for businesses and consumers intermittently, you get bad news people think tech has had it multiples have tried to drop since last week. likely people come back into the story remain solid to us >> he says it is hard to get recession with rise in household income and business and investment unless there's a major policy mistake so is that possible? >> right i think that's similar to our view as well we're not at the end of expansion but nearing the end of the expansion. if you look into 2019, you see fiscal stimulus start to fade, you see accommodative monetary policy, and of course what you talked about many times before, trade policy risk. trade policy won't be head wind to growth until 2019 >> john, after a nine year run,

is it that controversial to say the best is behind us? he did say 3 to 5% next year part which is probably the point most would take issue with what's so controversial about expecting that it is not as good going forward as looking back? >> i think it is easier to think after a long run, you're liable to get a slowing but you need something material to change things biggest threat is trade war business if we go into protracted trade war, that could trigger recession. the fed has been remarkable about not making a mistake almost ten years we think because they're more adept as gathering data, sources from which they gather data is more accurate, it is more in real time than ever before the real risk is related to trade. we think china is bound to come to its senses related to the need to upgrade trade negotiation procedures when it

realizes it indeed is a developed market that still has problems from emerging markets, whether human rights indiscretions, whether it is issues of transparency, governance and accountability, china is a major player and need to treat its trading partners on that level. >> we could talk about china, have been talking about china. need to talk about saudi arabia and rising tensions between the u.s. and that ally as well how much risk is that if you see it ratchet up? >> different administrations have different approaches to saudi arabia, but they have been viewed as a necessary partner regardless of administration stance i don't see based on president trump's comments yesterday in a "60 minutes" interview that changing necessarily all that much there are going to be tensions going back to the point on china, china is going to be the big source of risk here. i think we're probably a little more skeptical that china comes to the table given the real

inherent structural concessions we're asking, the administration is asking for from china we think this trade policy risk is likely a risk into 2019. >> is it clear what we're asking for? >> look, yeah. there's been some question about the administration's ee kw equivocation, but we're asking for less technology transfer as you saw from vice president pence's speech a week and a half ago, it is wide ranging. >> it is like currency promises embedded in every deal. >> it is interesting the report, currency report is likely to come out today, will probably not find china as a currency manipulator market will interpret that, reading too much into that, because again, i think the structural issues with china remain. >> we think 2025 goals that president xi has and is

committed to could be significantly pushed away from the date of 2025 if china gets into trouble economically. we think that's part of the reason china comes to the table. >> made in china, 2030 2035 >> and we think that's a key point that's yet to be considered in this 2025 is around the corner, it has already been reported, there's a lot of trouble in silk road with deals made so far, aren't great for trading partners the whole world needs to know china needs to come of age, already has come of age, but it is not recognizing, wants to be treated, given a significant handicap to play with its partners. >> look at the stock market choppiness in the past few days, couple of weeks, do you expect that to even out as you get through earnings and into q4 or will it continue >> what we have seen with economic growth in the united states has been solid. very much helped out by the real

fiscal tail winds from the government spending increase and tax bill but again, as that diminishes going into 2019, risk of fed policy error does increase and then again trade policy. we think that what we say growing but slowing, as good as it gets. we think that's the case. >> haven't even covered midterm elections. >> morgan, in terms of the midterms, we think the democrats will likely gain fewer seats than they expect, but the republicans will most certainly take some hits in certain areas. the reality is it is the economy and improvements in jobs that are winning people towards the republicans and the administration, politically agnostic as a strategist. >> after midterm elections, tend to see a rally in the stock market >> i think highly likely

>> if we get gridlock, we had that years and the market did terrific with gridlock the market cares about earnings and revenue growth. >> i'll insert i think that's all true and that usually the markets like gridlock. however, tail risks are higher in the new composition of congress positively and negatively you could see an infrastructure bill that could expand but also risk of impeachment. the tail risks, policy risk is wider in split congress than historically. >> good discussion see you seen moving on to sears once the nation's largest retailer now filing for chapter 11 protection and slumping sales and massive debt load. set to close another 42 stores by year end. the president addressing the news this morning. take a listen.

okay, we're having technical difficulties joining us to discuss, dana telce. it is end of an era, sears would be filing chapter 11, but it has been a slow grind, they have been losing money more than a decade how surprised are you to hear the latest development >> not surprised at all. it was only a matter of when, not if when you have been burning through cash, selling assets, stores haven't made a profit, haven't been material online, vendors get nervous, how do you maintain relevancy how does it go going forward, what does it mean? is it an on-going operation. that will be the question in the future >> and certainly we saw toys r us file for bankruptcy earlier this year and had a ripple effect to toy manufacturers and

other toy retailers. would you expect similar impact in terms of sears on some of its suppliers? >> i don't think it is as much surprise in terms of sears as it was for toys r us. i think vendors to sears were checking in with factories all along, waiting to see if they can ship goods to sears. i think it has been a long time coming there's a lot of share people can gain and companies can gain as a result of this, whether it is in appliances or apparel. companies like walmart, target, kohl's, best buy, after we get through the going out of business sales, there's dollars to gain. >> sears just sort of continued to be its own isolated story just because of its tortured history? or are there lessons in this still for existing retailers to pull out, beyond the leverage issues which they have and which toys r us of course had as well? >> i think what it tells you, if

you don't invest in your stores, don't invest in your brand, you can't expect it to remain relevant as the world around you changes. sears hasn't been investing in stores they haven't been investing in updates of their assortment and it became less relevant. other retailers got better while time stood still for sears >> dana, would it have been as someone that covers the space in general, would it have been healthier to have happened three years ago? >> it certainly would have been healthier for it to happen three years ago because what you have happening now is you have an environment overall healthier in retail three years ago, perhaps sales wouldn't be as weak as they are now, and you would have been more to gain keep in mind what sears has done in the past few years, whether selling off craftsman, lands end or other assets. and kenmore, only one bidder you had more to work with a couple of years ago than today

in a world that's omni channel, all encompassing everything, there's less relevancy of sears today than three or four years ago. but it is still a lot of sales for others to grab >> dana, thanks for putting it in perspective shares of sears down 26%, but it is a micro cap, penny stock. keep that in mind. and much more on the bankruptcy of sears coming up. former candidate mark cohen and toys r us ceo jerry storch more "squawk alley" to come.

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welcome back let's get to contessa brewer for market flash on casino stocks. >> we're seeing a continuation of what we saw last week, gaming stocks slipping. looks like lady luck has sort of left las vegas businesses in the lurch. penn gaming, down almost 5% on the day. last week i talked to the ceo of penn who just finished an acquisition of pinnacle gaming he said this is overreaction by stock. people worried about rising weights and leverage, he says all our debt is to fixed rates we're fine golden entertainment down 4.5% melco down 3%. because of concerns of trade and

he considers a win it gets the majority of revenue mccal as well. >> thank you. and tensions between the u.s. and saudi arabia are growing, following the disappearance of a well known journalist hadley gamble is live in riyadh for us hadley >> reporter: hey there secretary of state mike pompeo will be here by breakfast time, meeting with saudi authorities trying to find out what exactly happened to missing saudi journalist jamal khashoggi the repercussions of this have really been felt in the last 24 hours in riyadh, a lot of response from the country in terms of how they see this playing out. they continued to say in the last two weeks that essentially this is a situation that is further developing, this is a situation that needs further investigation, and they have been very hesitant to come out with any facts so far, but president trump earlier today getting a chance to speak with

king salman on the phone, said the king firmly denied any saudi involvement, so if they find saudi involvement in an internal investigation, there will be consequences and the president speaking to reporters a few hours ago from the white house, essentially saying rogue elements were involved potentially. a lot of speculation on what happened to jamal khashoggi. we understand a saudi and turkish delegation are inspecting at the consulate in istanbul and the internal investigation is on-going. on the other side of this is the billing -- bigger questions of the relationship how it impacts oil saw a report from a state owned news organization, though the saudis came out quickly to deny this was their intention essentially the report was suggesting da suggesting dirty measures that they might be able to apply to pressure from washington, one of which was raising oil prices the saudis denying this is something they intended to do,

but speculation remains and we'll be bringing to you all of the latest guys, back to you. >> thank you hadley gamble. as ceos and business leaders continue to pull out of the conference, for more on the relationship with the kingdom, bring in ambassador nicholas burns, former ambassador to nato and greece good to have you. >> good morning. >> we've te have attendees dropg out, op-eds threatening $200 oil. can this be kept from being an international crisis >> that might be one reason president trump is sending secretary pompeo to riyadh overnight to meet with king salman, presumably the crown prince the saudis made a real tactical error in appearing to be threatening western countries. anyone critical of them. they're on the defensive obviously president trump is feeling pressure as well we have republicans and

democrats in congress asking for an investigation business leaders dropping out of this financial crisis. so obviously the administration wants to show it's acting, although will the saudis really tell the truth about what happened that's not likely given the nature of their authoritarian political system. >> how do we square the president sending pompeo literally as we speak and at the same time suggesting this might have been the work of rogue killers in his words >> the president just hasn't been consistent. last week the president said we weren't taking punitive sanctions, measures because of the $110 billion in promised arms sales by the united states to saudi arabia. this week the president saying something quite different on "60 minutes" last night. rogue killers, i have to assume what the president means by that is that these were saudi intelligence, saudi security officers this was inside the saudi consulate in istanbul.

there could be no other explanation what rogue killers are and that could be one of the theories the united states is operating under. >> ambassador burns, you have turkey coming out, saying it has intelligence that it has proof that the saudis are behind this, what they say is a murder of the journalist if that does actually prove to be the case and we determine as a country that it is, how does this play out in terms of punitive measures? do you start to see defense deals go away? is it sanctions? is it something else >> the problem that the saudis have, they offered no plausible explanation of what happened the videotape shows that jamal khashoggi walked in the consulate october 2nd, 13 days ago. videotape shows he did not walk out. so something happened to him either he was killed or apprehended and taken to saudi arabia if the saudis continue with that line, they're going to increase pressure on themselves at the end of the day, president

trump has been down this road before with president putin and whether he intervened in our elections. if the saudis fail to tell the truth, i think there will be pressure on the united states to have some kind of disavow of the saudi regime rhetorically, some kind of sanctions. i would be surprised if the administration took stronger action i think they should because what happened here is an offense to the united states. jamal khashoggi was living in the united states, was a permanent resident we have some obligation to defend him and defend his family >> ambassador, that's the part that doesn't make sense to me that this happened inside the saudi consulate. king salman says he knows nothing about it, according to president trump, which seems strange in and of itself you would think he would know something about it, being the absolute power over there. and then there's a pattern from the president with putin, repeating putin's denials, in this case repeating king salman's denials

what's the diplomatic impact of the president repeating the denial of someone when we don't have or aren't releasing detailed information behind that >> right i think it is an issue in both cases putin and salman, you're dealing with authoritarian leaders that don't normally -- they're not normally transparent, don't always tell the truth, often don't tell the truth, especially when their country is accused of something as serious as this, so for president trump, it is a difficult balancing act. he doesn't want to end the relationship with saudi arabia they have energy interests and regional interests saudi arabia is part of the containment of iran. but on the other hand, you have american values to uphold. the president needs to speak to both sides of the equation i hope that there will be a strong denunciation of what the saudis have done, or the fact that they haven't told the truth. i hope there will be some punitive action. that's what republicans and democrats in the senate, the 22 senators are asking for, but i

think we're a long way from that because the saudis aren't likely to come clean on what happened >> ambassador, before we let you go, i want to get your take more on the defense piece of this, $110 billion in arms sales the president has come out and said he would like to see that left alone because of impact it could have on jobs and production costs does he have a point, especially when you take into account that we do have adversaries like russia and china that would be willing to come in and sell some of their weapons to saudi arabia in our place >> well, this $110 billion of deals was announced a year and a half ago, very little of it has taken place. i don't think the saudis can turn towards russia and china. these weapons systems take years to acquire and then integrate into a system. part of the leverage we have frankly i think it was a tactical mistake by president trump to say that was off limits

he needs to pressure the saudi regime now to do the right thing and to be more transparent about what happened. >> one last question, mr. ambassador i'm thinking of the list of international disputes we keep adding to faster than we can resolve them, iran, china on trade, the saudis, the eu on trade. do we have the band width to handle all these >> i think so. two strong cabinet secretaries, mike pompeo and jim mattis certainly the united states can handle more than one crisis at a time, but it is a challenging time, a lot rests on the shoulders of secretary pompeo and secretary mattis >> nicholas burns. mr. ambassador, thank you for your time. see you soon. >> thank you coming up at the top of the hour halftime report, legendary investor carl icahn is on with david faber and scott walker

that's noon eastern. must watchv. t don't want to miss it. "squawk alley" back after the break. she thought it was a fire. it was worse. a sinkhole opened up under our museum. eight priceless corvettes had plunged into it. chubb was there within hours. they helped make sure it was safe. we had everyone we needed to get our museum back up and running, and we opened the next day.

the percentage of americans saying now is a good time to invest is reaching an all-time high according to the all america survey steve liesman joins us now normally i would say that might be a bad sign, but all america survey has been right for awhile. >> it has done pretty well i have to warn you, these results are from a survey last weekend, not the recent one, so before the market sell off but it is instructive to look. what you see as jon was saying, missed out on the bull market that ran from '08, '09 through '15. but it popped up a lot of public was on board 51% of the public saying now is a good time to invest, more

interesting when you look to the internals. look at the demographics, see who is excited on stocks so it doesn't look like much 64% of those with income over 100,000, 34% of those below. those without any investments, 34%. and when you put it in context on the next screen, they get gold stars because they're all time records for 11 years we have done the survey shows some that have not typically been interested in the market or been optimistic are now. same on the next screen. you just go through that by gender women by the way have always been less optimistic on stocks there's a gender story in the survey here. high school education, and put the gold stars on, you can see we have a lot of records here, those with high school education or less as optimistic on stocks as they have been in the survey. looking on, however, earlier this month prior to recent

selloff, the dow his new record highs. only 4 in 10 report they don't know about it. and the dow recently hit an all-time high seven or eight days ago look at what americans think about the dow hitting all-time high 38% say it is a good sign of the economy doing better 46%, it is all corporations or the wealthy doing better 10% say they're not sure jon, a good amount of optimism on stocks but not necessarily what it means for the broader economy. that's the all america survey. 800 americans polled, all income groups, all regions, all levels here back to you. >> thank you. let's get to seema mody for the european close. >> stocks are trying to rebound after losing about 4% last week. the eurozone currency gaining ground brexit talks in the spotlight ahead of key summit negotiations between britain and the eu are

stalled with unresolved issues, including ireland's border prime minister may expected to continue talks tomorrow. european oil majors trade high as tensions with saudi arabia pushed oil prices slightly higher. total up 1.5%. some ceos are not attending the upcoming conference due to the disappearance of jamal khashoggi. some are still showing up, including john flint, and credit suisse, and tony heyward imf chair is horrified by the disappearance of khashoggi, she says i have to conduct the business of the imf in all corners of the world with many governments. when i visit a country, i always speak my mind. removal of potential sanctions following release of brunson continues to push the

turkish lira higher. still the worst performing currency in 2018 back to you. >> thank you very much let's get to contessa brewer as well, get a news update >> hi there, carl. senator elizabeth warren released dna results showing strong evidence of native american ancestry. she has been derided by president trump in the past for claiming that ancestry >> i hope she's running for president because i think she would be very easy i hope that she's running. i do not think she would be difficult at all she will destroy the country she will make our country into venezuela. with that being said, i don't want to say bad things about her because i hope she would be one of the people that would get through the process. opening statements set to begin in harvard university admissions bias trial. students for fair admissions say harvard excludes asian americans in favor of students from other

races. harvard denies allegations. check out this routine from ohio state band over the weekend, the rendition of the popular floss dance. marching to the walk the moon shut up and dance. they made three stick figures on the field. and had them floss you know what, it may not be news, people, it is not news, but it is something you need to know at the water cooler and are asked about the flossing on the field. let's get back to "squawk alley" now, shall we? >> i marched in marching band in college. that must have been hard to do, that lineup. that was crazy >> especially the knees. that's the hard work >> contessa, thanks. take a look at the markets as we go to break, managing to build some momentum. dow up 81. s&p has gone green we continue to watch back in a moment

nasdaq is lower again this morning, down about three-tenths a percent. tech stocks continue to take a hit. is apple weathering the storm better than others senior analyst thinks so writing apple shares are set up as attractive value investment, upping his price target on the stock. this as goldman warns apple earnings could fall short on rapidly slowing demand in china. you look at shares of apple now,

down 1%. and jim is joining us with mike santoli. thanks nfor joining us jim, layout your bull case for apple. >> morgan, we think that people no longer expect an iphone super cycle. thereof expectations have -- therefore, expectations have come down. with expectations down, it is important to get out of the office, do independent checks. our independent checks show they're not only buying the iphone but higher memory configurations people care about family and loved ones and are spending more on the average selling price and buying the higher configurations of iphone memory that in essence puts upward pressure on the average selling price which will help gross margins. we think earnings will be a surprise to apple investors in the future on the up side. >> and mike, there's focus given

the market in the last week or so on the big cap tech stocks, rising rates, the fact that they spend a lot, invest a lot, valuations, and potential head winds from china is apple more insulated? >> i think the market is betting apple is insulated look at the performance. it is up 27% year to date. only down 5% off its high. of the top ten tech like stocks in the nasdaq, the average is down 14% from a high, and up less than apple is it is considered to be the more durable quality fundamental story. i think the question is it is also at higher valuation than any time in the last five years, steadily marching higher people are embracing the idea it is not as volatile a business in terms of being hit driven. with the iphone, forward p/e, it is expensive in the recent history of apple the other thing i like to point

out, since 2015 through this fiscal year, apple has grown sales and net income at a low to mid single digits percentage annual rate. buy backs, 89% earnings per share growth it all has come together to be this quality investment, but i think it is still a slow grow story in the aggregate >> apple investors have a history of taking themselves out. back in 2015, the stock took quite a dive, went back on the trajectory that if you could see the future, there was nothing fundamentally that changed about apple. what's to keep that happening again? seems like investors freak out about some rumors or samsung taking over the world or something every year or two. >> you're exactly right. and your memory is correct people get caught up on super cycles, hype cycles, the i gotta have this product. the reality is smart phone

industry matured most people in developed countries have an iphone we look at where is future growth, it is in developing countries, places like india, places where disposable income is on the rise but they're buying the old, old, old phones, not the newest you have in your wallet or that people carry around the streets of new york. importantly, we believe apple is a growth stock, only from perspective of net income growing, sales that are much slower growth rate as you correctly identify, stock buy back has helped the stock. we expect that to continue 100 billion of stock buy back. and we expect this to continue to boost earnings. it is not dirt cheap or expensive, but we believe there's compelling valuation here we have a target price of $265 >> guys, morgan mentioned the goldman numbers brought in on china. they say we find it hard to believe this general environment

will be helpful unless things improve late year. is that unreasonable >> not unreasonable. psychological overhang at least, unless you see something specific disrupting supply flows. i think there's still time for more investors to come on board, say this is a steadier story than before, con senseis price stock is $235. it is not as if the entire world thinks the stock is going to the moon that's a net positive. >> thank you for joining us. and coming up, why carl icahn is taking on michael dell over the future of the company "squawk alley" is back after the break. alerts -- wouldn't you like one from the market

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i am scott walker. carl icahn joins us live, he readying for another fight with michael dell we talk about his new letter, what he really wants. and state of the correction. can it really be over if tech keeps imploding? we debate with kevin o'leary and nancy davis. and jim cramer with us the full hour as well it is a jam packed program today at noon. jon, facebookbar, regular crew s here, extra chairs, buffet table, it is on. >> sounds like a party should be fun. don't want to miss that. let's get over to the cme. rick santelli has the santelli exchange >> thank you, jon. many of course look at the interest rate complex and point

to it, say this is the reason stocks have gotten so volatile i understand the notion that rising rates will potentially take a bite out of stocks, unless the stock market pays attention to a stronger economy, which then comes in and sweeps rates higher and equity values higher that's how fed would like it to work and investors like it to work i think rates have gotten a bum wrap this is a chart of ten year note yields we began this year, ended last year, 341. let's consider, i talk about markets going guns hot that means new territory when we start the year, we start guns hot what's interesting is for start of the year, we went straight from 2.41 to 2.95, up 54 basis points then of course for february we start to consolidate, even traded below 2.80 awhile

then went guns hot back in may again, took out 2.95, and continued up so guns hot up to 3.11, in may, and that was the high yield of the year but that just added 16 basis points on. then we go through another as we did in the beginning of the year, a huge period of consolidation until we come up to the final point where we started to trade higher. this is early october, from october 2nd to 3rd, moved 12 basis points, end out taking out 3.11 end up with 3.23 high for the year add on another 12 basis points but the point of what i'm trying to say is if these black lines are guns hot, it seems hard for me to consider that if equities were getting nervous about the breadth or speed of interest rates, they would have gotten a whole lot more nervous you might say they did we had all of that volatility in

february, don't you remember i do just like now. except for smaller moves we had volatility surge again. and for good reason. volatility in treasuries remains quite low, volatility in equities is high when it goes up, equity positions come off long and short of it, it is cumulative increase in rates making them go farther than they are now. any given day, market doesn't have to complain should have done that at the beginning of the year. morgan, back to you. >> rick, thank you when we return, former sears ceo mark cohen and former toys r us ceo gerald storch are hee wi - here live. dow is up 86 more after this break.

sears roebuck when i was growing up was a big deal, and it's very sad what happened, very, very sad when you look at that whole filing that they did last night, to me is very sad. somebody that is of my generation sears roebuck is a big deal sad to see >> sad but maybe not surprising. that was president trump addressing the dramatic bankruptcy of sears, filing for chapter 11 protection late last night after years of declining sales. joining us now mark cohen, formerly chairman and ceo of sears canada, currently director

of retail studies at columbia business school. and former toys 'r' us chairman and ceo jerry storch great to have both of you. mark, is there a more recent moment that you would call pivotal, a turning point, maybe there was hope of saving sears from bankruptcy before but that moment nailed it >> sears holdings was toast about a day after it closed. that is the merger between kmart and sears roebuck. there was never a strategy that would have been viable the way lampert chose to run the business from day one. this is an outcome that just had to happen and the notion there's been some turnaround or transformation in place is just plain bogus.

>> jerry, when you look at the lessons from this, is it mostly about leverage or is it about overall missing online and mobile they didn't have the money, they didn't have the capital to invest isn't that what this comes down to >> i think it's broader than that you have to be good at something to win in business, have a place where you have a sustainable competitive value. you see that with a tjmaxx or dollar general or walmart. best buy is doing spectacularly well being good on the internet is table stakes everybody needs to be good on the internet that's the future of the world but, first, you have to have a distinctive position you're better than other people at something that really matters to the customer and that has not been true for a very long time at sears >> mark, sears and kmart stores,

about 725, have been closed over the last two years it looks like another 142 will be closed before the end of the year potential ripple effects when you think about some of the malls, maybe the class b or class c malls where sears is an anchor tenant. how much of an impact will this have now >> first, there are tens of thousands who will lose jobs, suppliers who will lose the viability of the business they do, and then, of course, the sears stores reside in malls which in many cases are barely hanging on by their fingertips this is one more where they've lost anchors with jcpenney next on the hit parade. >> the better malls love it. this is really great because sears was clearly operating in a subpar way and not bringing in the kind of customers they wanted in terms of volume and demographics

this is an opportunity to remake the malls. they have a chance to restructure their entire mall, put in restaurants, some form of amusement or entertainment at least they think they have an idea it won't be too hard without being too harsh. it won't be too hard to come up with uses that are better than they had >> mark, given the strong economy, what do you expect to move into the literal space that sears and kmart occupied and then the thought space that they occupied as far as perhaps maybe not physical retailers but others capturing that customers' business >> it will be problematic. most of the malls sears exits aren't economically viable enough to be redeveloped yes, the aaas are feasting on the fact they're getting that space back but hundreds and hundreds of other malls just won't make it

there may be schemes to turn them into lifestyle centers to make -- to given the customer more of an experience opportunity but i don't think there's the money behind it. as far as where does the business go? the appliance business, which is of any consequence at sears, continues to move to home depot, lowe's, and best buy they are the big winners and have been for quite some time. sears had 40% of the white goods business 15, 20 years ago. 40%, kenmore was the biggest piece of that. it was not only enormous volume but extraordinarily profitable in the united states and canada. that's virtually gone. it's gone. the surety that kenmore brand represented is gone. if there's a shred of it left this bankruptcy filing will basically make that essentially worthless. who's going to trust sears to

service a refrigerator they might spend $1,000 on? >> this year we've had disruptions in sporting goods because of sports authority, toys because of obvious reasons, is there anything that would be comparable to those two? >> i don't think this is going to be a big deal for the marketplace. it's an important milestone. it shows what's going on in the world. sears and kmart together have shrunk so much now they're about 3% the size of walmart it's a drop in the bucket. that has spurred so many places. and anyone thinks there will be some big winner is greatly misguided. if penney's picks up market share, great, they're picking it up in an evaporating sector amazon grows more in a single year than sears and kmart together this is not a market event this is a sears event and may be a heritage event when we look back on it and mark may work with his students and see things, lessons to be learned about the future, but in

terms of the consumer, this long ago stopped being a relevant story. >> ouch. thank you, mark and jerry. "qua "squawk alley" is back in three minutes. mbers mbers up to fifty thousand dollars, decided in as little as 60 seconds. the powerful backing of american express. don't do business without it. about medicare and 65, ysupplemental insurance. medicare is great, but it doesn't cover everything - only about 80% of your part b medicare costs, which means you may have to pay for the rest. that's where medicare supplement insurance comes in: to help pay for some of what medicare doesn't. learn how an aarp medicare supplement insurance plan, insured by united healthcare insurance company might be the right choice for you. a free decision guide is a great place to start. call today to request yours. so what makes an aarp medicare supplement plan unique?

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alley. coming up next investor carl icahn will join scott wapner and david faber why he's asking dell share holders to vote to the plan to return to the public market >> in the meantime a little bit after seesaw, the dow is negative along with the s&p. tomorrow we'll have goldman and morgan stanley and bring on ibm and netflix. let's get to the judge i'm scott wapner if techcontinues to fall, can the correction really reach a conclusion the nasdaq under more pressure this hour. the big question now, when will that selling stop? the big debate today -- >> the outlook for the market, in my opinion, isn't nearly as good as it was >> is this top market watcher right? are the good times coming to a stop plus, the one part of the market that may be set for a pop. if, indeed, the u.s. rally fails to restart and carl icahn is with us live and exclusively as he gears up for a new fight with michael