good morning it's 8:00 a.m. in apple headquarters in cupertino, california, 11:00 a.m. on wall street, and "squawk alley" is live ♪ good wednesday morning welcome to "squawk alley." we're going to start this morning with a deep dive into tech as the sector rebounds

after that dramatic sell-off to start the week we'll look at the dynamics at play for all five components of faang and where some other buying opportunities might exist outside of facebook. our tech panel has a closer look at netflix, alphabet and the other stocks to watch in tech. let's begin with julia in l.a. julia. >> carl, facebook shares nearly 3% this morning after gaining 0.7% over the course of yesterday. this is a rebound from a nearly 6% decline in facebook shares on monday now, the stock is still down about 38% from its peak in july back before it reported its second quarter earnings. suntrust analysts telling us this morning that they believe the stock remains a buy considering the current valuation and the growth opportunity still ahead. a new report out from e-marketer forecasts that facebook's ongoing revenue growth will

continue facebook holds the second biggest piece of market share after google and alibaba they dominate 60% of total digital ad spend with digital advertising surpassing all other types of ads by the year 2020. we'll have to see if facebook's latest issues impact that projected growth back over to you. >> indeed. thank you, julia now over to josh lipton who's looking at apple josh >> jon, apple is higher this morning. investors woke up to that headline that foxcon is cutting expenses in its iphone assembly unit and reducing its workforce according to bloomberg foxconn said the review being carried out by our team this year is no different than similar exercises carried out in past years to ensure that we enter into each new year with

teams and budgets that are aligned with the current and anticipated needs of our customers, our global operations and the market and economic challenges of the next year or two. but of course it's news out of the supply chain that has been worrying investors, cutting revenue forecasts. apple down nearly 20% so far this month how do bulls respond to all of this i just caught up with piper's mike olson he says supply chain results are not always a reliable meaningful indicator. he continues to believe that apple's overall revenue and eps results could be relatively solid with added revenue from services and buybacks. morgan, to you. >> josh, thank you let's get over to deidre for a look at another big tech name trading higher, amazon. >> amazon also rebounding and it was the best performing faang stock this morning but it has pared gains after headlines said a technical error expose customer names and e-mails

shares are up 2.5% at this point but shares still firmly in bear market territory, down more than 20% from its 52-week high. morgan stanley says it comes down to this, does the market want to pay for growth again if it does, it expects amazon to outperform quickly the company disappointed investors with its holiday outlook and it is still one of the most richly valued big tech stocks, but it's also more profitable than ever and its cloud computing and advertising businesses are booming according to kensho amazon has fallen into a bear market five times since 2010 a month later, it typically still underperforms the s&p trading positive just 60% of the time if history is any indicator, it may not be time to wade back in just yet. >> that's a good setup for where we're going now. let's bring in paul meeks as well as analyst and investor gene munster

happy wednesday, guys. thanks so much for your time today. we're heading into an important season paul, it sounds like when it comes to tech, you're being very deliberate talk about your short-term strategy here. >> sure. so i took over a orphaned tech fund recently, so this is interesting timing so what i'm doing is i'm playing some defense i have a relatively large cash horde and i am going in with some companies that i think are techish. ish is the key term there. they are companies like payment processors, mastercard and visa. i actually like some of the cell tower focused like crown castle and american tower, so i have the defense on the field at some point i will turn around and bring on the offense, we'll go in the shotgun formation, we'll spread out the receivers, give the ball to eli manning and let him fling it all over the field, but it's just not yet.

>> all right so then when it comes to the names that have been hammered, right, what are the parameters by which you would trade amd or buy amd, for instance? >> well, i like amd because -- and it's the only semi conductor stock i own because semi conductors are very cyclical as you know, but amd seems to me to have a nice technical basis on the charts and also i think there is no doubt that they'll continue to take market share from intel >> gene, when you look at names like netflix, which i know you've been pretty hot on, it's still up 40% year to date, but down about 20% over the past three months it's been richly valued by many measures for a while now how do you decide how to treat that stock, given that there's some trepidation around these types of names, but not yet an indication of the fundamentals have changed that much

>> we're somewhere in between optimistic and bearish, right in the middle there, jon. specifically we think this is a good story to own longer term but we think there are much better names to own, for example, apple or tesla. so we believe people will have a $10 a month subscription but the valuation and some more competition coming in from apple, for example now, apple will have more prudent content than netflix just because of the apple brand, but still a large competitor nonetheless. i think when you put all those factors together, it really is a tug of war where we come out is we think there are bertter names to own than netflix. >> gene, there's been a lot of hay made with supplier warnings over the last couple of days, couple of weeks and what it means for apple's production and, thus, apple's performance as a stock moving forward. but i can't help but think apple has been signaling for quite a while that we're at peak smartphone saturation and that

they're shifting toward services, software, accessories. it almost seems to me that it's more of a supplier issue and the fact that many of these names are caught flat-footed >> i think apple kind of caught them flat-footed they waited to make these change to the orders. but i agree with mike olson's approach in the setup here ultimately, this is not -- the channel feedback that we're hearing from the supply chain isn't representative of demand i want to give a quick example of why that's the case when apple launches a new product, they typically tell their supply chain to build more units than even apple intends to have demand for, so they do that as a safety net essentially to try to keep production moving in the right direction. so almost every year, not entirely, but almost every year you hear about these production cuts at about this time of the year only about one in four times it actually ends up being something

negative so i put the probability that this is something negative related to how investors are thinking about apple's quarter, i think there's a 20% chance that it's negative so for investors who are putting a lot of weight into it, i would say tread cautiously. >> yeah, we try to remind people of that every time we get an incremental headline regarding supplier, in this case supplier employment this bloomberg story on foxconn. paul, i'm curious to get your take on the digital advertising names. i know you've got a thought on google, but i wondering if that also translates to facebook today? >> out of those two companies, i prefer google. it looks to me like you've seen fairly predictable multiple levels of support at about $1,000 per share i also think that they are broader in some aspects than facebook and they're a very innovative company and will have

other legs of growth i do think facebook will not lose a lot of subscribers. they're going to continue to have some decent revenue growth, albeit a little bit slower because they're so large i'm just a little bit worried with facebook right now, what is their operating expense structure at the end of the day when they hire all these folks to essentially protect a user's privacy. so i just don't know enough about where facebook's business model is going to settle on the expense side, but i do like google, particularly at about $1,000 a share. >> paul, i want to go back to your comment about looking at techish companies right now for your portfolio to what extent would you look at mid-market technology companies maybe operating in the sas space that seek to serve those techish companies. some of them arguably have been overlooked in the focus on faang

over the past several quarters but could perhaps hold potential. do you think those are overhyped? >> i still think most of those companies because they started so expensive, jon, have come down but they're not down far enough to get me interested. as far as your thesis about serving some of those techish companies, by all means. i'm very interested to see, for example, what happens with salesforce.com's next quarterly report because that stock, it's a mega cap, has come down a lot recently but i concur with your thesis. i just don't think that some of those related stocks are cheap enough yet >> all right, guys there's a lot to digest and a lot of time to do it before the end of the year. gene and paul, we'll see you soon thanks so much. >> thank you. >> thank you. up next, mark zuckerberg isn't giving up his role as chairman of facebook we'll discuss where the social network goes from here after the break. don't go anywhere. the dow is up 155 points. >> so you're not stepping down as chairman?

>> that's not the plan. >> that's not the plan would anything change that >> i mean eventually over time i mean i'm not going to be doing thisorer fev but i certainly -- i'm not currently thinking that that makes sense. presenting the internet! whoa! what's he doing? come on, let's check it out! nice. he's pretty good at this. hm! it's like a game! (gasps) woo-hoo! got it! which car should we get? all of 'em! ooh, yeah! that one! this one looks nice. yes, and yes. i like this game. i think we're winning! delivery? where? (doorbell rings) (man) it's here! what? (announcer) save $1,000 from carvana black friday through cyber monday. then go see "ralph breaks the internet," in theatres november 21st.

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. welcome back mark zuckerberg standing by his number two executive in a cnn interview, praising sheryl sandberg for her work at the company over the past several years and her response to the "new york times" investigation.

>> sheryl is a really important part of this company and i leading a lot of the efforts to address a lot of the biggest efforts -- the biggest issues that we have she's been an important partner for me for ten years you know, i'm really proud of the work we've done together i hope that we work together for decades more to come >> zuckerberg adding he has no plans to step down as chairman facebook shares coming back slightly this morning. maybe more than slightly, up about 3.5%, but still down some 35% from it's intraday high. joining us now, former yahoo! coo and current chair and ceo, dan rosensweig it seems this current mess facebook is in, as much as there's been some finger pointing around who's -- should sheryl have paid more attention, mark zuckerberg doesn't like focusing on this sort of stuff,

getting in front of the media, making the case for facebook's public face. it always seems like he's kind of dragged into it it's on him, isn't it? if he had been asking questions about who was defending facebook and how, everybody would have known what definers was doing but nobody was asking that because they were so focused on product. >> yeah, look, it's a fair point. i think there's questions over board governance and questions over management but i think we should take a step back a minute no one has ever had to deal with this before. the fact that a ceo of a company would imagine that a foreign government would try to abuse a platform they created to influence a presidential election, it's not like anybody from the obama administration called them up and said, look, be careful of this or any of the candidates called up and said be careful of this. so it's entirely possible they missed it because of just naivete. it's not like they got up in the morning and said i wonder how a

foreign government is going to use my platform to try to influence an election. the question is what do they do after they knew. and what's clear is these are very complicated issues. i'm not sure they or anybody else knows exactly how to fix it my own feeling, because i'm supportive of them, is that they have lost the narrative, which is i'm not sure their employees know what the objective is right now, i'm not sure the investors know what the objective is right now, the government knows what the objective is right now, foreign governments know what the on the i've is right now, so i think they're in that catch-22 until they're certain what they're going to do, what are they going to go out and say i think that's a tough spot to be in. >> i don't know if many people fault them for not seeing the russia issue for me it's more how do they respond internally to people who said, boy, this could be a lot worse. it looks like it's a lot worse than we even realize

how much red flags should we throw hundrup, how much should telling the board. >> yeah, look, i don't know that we really know what the dialogues with the board were. i'm not sure the russian issue is the only big issue. there's issues over what is free speech, what is hate speech, what is bullying you know, there's the issues over holocaust deniers versus people who want to deny the need for black lives matter these are issues no one has had to deal with so, yeah, they're responsible and they're going to have to do something about it i think they're trying to figure out what to do about it. >> but more practically, we just had a money manager say the reason he's not more bullish is he can't get his arms around the expense structure. >> right. >> how many do you need to make this problem manageable? he doesn't know. does anybody -- do they know >> no. how could they know yet? >> because they have given some guidance on it. >> they have said they're going to add tens of thousands of people because the answer is

they know they're going to have to add people. do you know exactly how many people to add or how bad the problem is they have a lot of issues they need to deal with. right now facebook can survive this, they can come through this they have got to recapture what are they going to do they're going to have to explain to their audience these are what we're going to work on, we're not going to fix everything right away, it's impossible. they're going to have to convince advertisers the thing is if they lose advertise confidence, then it can go the other way as long as advertisers are still embracing it as a place where they can do business, they can get through this so as an investor, right now they're still in a position to fix these problems it's not like all is lost. >> do you think there's going to have to be fundamental changes to the business model? i'm seeing more and more analyst notes, expert notes suggesting that there will be. >> yeah. look, i've always believed that the advertising market -- from my experience at yahoo! what came clear is that the internet

is really difficult for smaller companies to make any money in advertising because you have to be at scale. traditional advertising was everybody runs an ad at one time to every eyeball and it's very profitable one ad, one eyeball isn't. the challenge for facebook and other companies is they were putting more than one ad on a page to make up for that so there aren't going to be three or four giant ad platforms to begin with. at some point that's going to run out anyway so i think they have been looking for things with local, with commerce, with payments, they just haven't hit on it yet. i do think there are going to have to be changes and additions to the model for sure. >> aside from this broader perspective you've given us on tech, you are the ceo of chegg which is up more than 50% since the start of the year. are you seeing student spending, and that's your core audience, holding up to the degree we've heard from retailers, the consumer in general is still stronger is there any sense you've gotten

around hesitation of spending in this market turbulence >> not for young people. i do think there's probably issues with the stock market doing what it's been doing for the last few months with families and parents, but for young people that's not really their thing. perhaps the small subset that bought bitcoin are freaking out. but no, at this moment we don't see themchanging their behavio or being depressed about the holidays or any of those things. they are working as hard as they have been, our business is as strong as it's been so i don't see their behavior changing. i think there's a broader perspective on parents who are concerned with real estate in california and new york and all the blue states which got really impacted negatively by the tax changes and i think the stock market impacts a lot of people's view, but not for young people, not yet. >> they're still spending money. >> yes. >> and will be looking for jobs. >> and we'll help them. >> thanks for being here. >> happy thanksgiving to all of you. >> you too. >> thanks. when we come backs, on black

friday don't miss macy's ceo who will join us at 9:00 a.m. eastern. we'll talk about the etailer's holiday strategy and how they plan to ward off the likes of amazon. take a look at some of the top percentage gainers on the nasdaq 100 so far today. autodesk, wynn, jd.c ldiomeang the way. the dow is up 180.

welcome back to "squawk alley. another big mover this morning, deere up 4% right now. the equipment maker out with disappointing earnings this morning. keep in mind, though, sales still grew agricultural equipment, the biggest segment up 3%. construction and forestry equipment sales up 65%, thanks in large part to that vertkan acquisition. also calling out what expects to be continued growth in u.s.

housing. here's how to think about all of this there are concerns about the strong dollar, global slowdown in growth, higher input cost which did affect margins this quarter and the u.s./china trade conflict that's help pressure soybean prices and whether this could hurt future demand for deere products on the call executives coming across pretty optimistic laying out four reasons, for example, why in the u.s. in terms of large agricultural orders, both farmer and dealer sentiment remains, quote, cautiously optimistic we're much earlier in the cycle still and they are seeing demands coming into 2019 from those farmers. comments like that are helping lift the stock, which i mentioned is up nearly 4%. that was after trading down in premarket activity before the conference call that just ended a short while ago. >> along with caterpillar, one of the best performing dow names at the moment next to microsoft. getting some news on

airlines and for travelers for that we'll go back to phil lebeau who is at o'hare in chicago. >> reporter: carl, we've got some breaking news with regard to american airlines all day we've been talking about how calm it is and no lines. not anymore. this is the line to check your bags at american airlines. within the last 15 minutes we've been told that the american airlines app, the mobile app went down. as a result, the kiosks where you check in your bags, they are not working either so imagine if you're going on a flight and this is just the beginning of the line that you will be standing in as you weave your way through terminal 3 to eventually check your bags we're going to keep walking here so you get some perspective of what's awaiting these people here at o'hare we have checked in with american airlines to see if it's all of their kiosks around the country. we have not heard back yet but, guys, this is exactly what the airlines have been trying to

avoid, long lines like this. and guess what this is the very end of the line at least on this side. let's come back here, somebody did not want to be on camera here what do you think about this line >> it looks like they had a really unfortunate mess-up on the biggest day of travel. all thaeir systems are down i think this is unusual, but i don't know what else to tell you. >> all you can do is stand and wait our photographer, bob pollack, will weave through here. guys, this is where people would normally come. look at all the kiosks here. notice, they are not working and this is the problem. because the app is down and because the kiosks are down, people are unable to check their bags, although there's somebody here who's trying to do it right now. plain and simple, guys, it's a mess, at least within the last 15 minutes let's see if they can get the kiosk and app up and working again. as you heard that traveler say,

not what you want on the day before thanksgiving, one of the busiest travel days of the year. guys, back to you. >> ouch. so you're saying i should print my boarding pass before i leave home thank you, phil lebeau. european markets meanwhile closing in an unfamiliar color, green. seema mody joins us now. >> it's important to note that the stock rally we're seeing today started overseas in asia and europe bouncing backs, halting a slide that sent tech stocks to its lowest level in nearly two years the broader european stock 600 index still down about 1% on the week sectorswise, energy is a big part of the story today. crude prices of course helping that stabilization royal dutch shell, you're looking at total, bp, all moving to the upside in today's trade by a good amounting, 1% or 2%. financials also near the top performers, up nearly 2% amid

support from the european banks. they are all jumping on reports that the deputy prime minister could be open to compromises on the country's budget this comes after they rejected italy's draft budgetary plans. oecd came out with their new outlook growth forecast and brought italy's growth estimate down to 1% for this year, 0.9% next year due to a weaker jobs ratio. this is the first global automaker to obtain a license in china and the timing is notable. this comes amid fears of a broader slowdown, pull back from the chinese consumer that stuck is up about 1%. guys. >> thank you very much. let's get a news update or sue update, sue herera back at

hq. >> good morning, everyone. here's what's happening at this hour investigators believe space heaters are to blame for a deadly fire overnight in maryland it happened at about 1:00 a.m. this morning flames engulfed the home and two people were killed six people were injured this morning in a crash between a texas commuter train and a semi truck. the truck was hauling liquid asphalt. the cause of the crash is under investigation. a man was caught on camera trying to siphon gas from a u-haul truck in oregon, but his plans went up in flames. surveillance video shows the man running away from the scene with his pants on fire. investigators are working to identify and locate that suspect. and apple is reportedly in talks with the va to provide veterans access to electronic medical records on their iphone. "the wall street journal" says a deal could boost apple's efforts to partner with medical institutions and turn its ios software into a database to

store and share health information. you are up to date that's the news update this hour back downtown to "squawk alley." carl, i hope you and the gang have a fantastic thanksgiving. >> same to you, sue. >> you too >> we'll see you on friday. we'll take a look at the major averages dow is up 170. one of those days where the inverse of the last couple of days microsoft leading the dow and j & j is the laggard back in a minute. cryptowatch is sponsored by gray scale

fears of a slowing economy keeping the markets on edge, but is it too early to mention the word "recession" steve liesman is back at hq taking a look at the latest economic data. steve. >> morgan, thanks. the latest forecast is not a sunny outlook and you can get that pretty much just reading the title which is, growth has peaked amidst escalating risks saying global growth is slowing and clouds are gathering on the horizon. here's the outlook the organization for economic development and cooperation downgrades 2019 growth that includes downgrades for the u.s., europe and japan and china

as well. go on to the next chart here, taking a look here now, that's what i'm looking for thanks, guys 2.2 is the u.s. forecast, 4.2 for q2 and 2.4 is the forecast for 2019 moving on here for the next -- while the u.s. is unchanged, several wall street forecasters have brought down their outlooks fiscal monetary and trade policies will become either less supportive or more restrictive we see the fed needing to exert modest restraint on growth hiking four times to 3.25 to 3.5 by year end. the forecast sees the u.s. growing back down to trend to 2% buffeted by tariffs and interest

rates. >> i'm glad you brought in that durable goods number this morning, steve based on some of the data that we have seen in recent days, reports like the ones you just cite and the fact that in the last woke the market has reversed the probabilities in terms of whether the fed hikes in december, how should we think about that >> i would think about december still being on i don't think the market gyrations are enough i think the economic data has been pretty robust through the fourth quarter i think that's what happened is the doubt going into 2019. there's one hike that's baked into the futures market, and the kind of debate about when that second hike if it happens at all. companies like jpmorgan and goldman are out there with four hikes forecast i think they're too aggressive i think two, maybe three is the better bet right here. >> all right, steve liesman, thank you. "squawk alley" returns after a quick break with the dow up 152 points

let's get over to the cme group and get the santelli exchange good morning, rick. >> good morning, carl. you know, what a couple of weeks it's been. actually from october 1st on

it's just been a wild ride you, the viewers and listeners on radio understand that all too well but yet sometimes we always look for reasons and we don't necessarily know if the reasons we end up with for the volatility or the market odds are the correct ones but in my opinion a lot of this continues to have to do with central banks. so i call it the counterfactuals of the liquidity exit, or lexit. one of the main issues that i see is something we've talked about almost every day for 2018, and that is divergence but divergence really falls in that counterfactual category because for all practical purposes as we look at the behavior of all the central banks and look at the behavior of the markets and their economies associated therein, so we pull out europe, we look at what's going on in china, we look at what's going on with japan, we look at the u.s., is

it any surprise to anyone that there's divergence there shouldn't be because our lexit here is a much bigger portion of our central bank's behavior than all the other central banks. in that regard, it makes perfect sense. the fact of the matter is, is that no expert at the beginning of the year when this was kind of just a topic of discussion and not actually a dynamic in the marketplace, most economists agreed universally there's just no way that the u.s. could go it alone. you add in all the issues regarding trade in china and it's an impossible task. but how deep does this go? you know, i had a guest on today, andy brenner. i pointed out that at the beginning of the year we were 200 basis points between our 10s and bunds. it's now 270 basis points. that's a huge point. if many people believe that our fed is at the epicenter of some of the problems of volatility in the u.s. markets, well, then my opinion, what's the downside

maybe central banks should leave everything the way it is forever. but andy brought up a great point. just look at the financial institutions in europe look at the banks in europe. look at the insurance companies in europe and japan. their performance and the economy's performance is capped. productivity, we always talk about. all central banks scratch their heads. we don't know where it's gone but we know it can't do better until it comes back. isn't the notion of global productivity loss associated with the fact that we've let all the walking zombies with low interest rates survive you know, the counterfactual of lexit is important because we could all complain we'd like the stock market to go up forever, but in the end there is a responsibility to create a landscape, as jim grant said yesterday, where we allow the markets to move interest rates in order to get that, we need to reverse some of the quick sand the markets are standing upon, and that is what we're going through right now.

back to you. >> thank you, rick happy thanksgiving coming up on friday, do not miss the first interview with macy's ceo, jeff gennette at 9:00 a.m. eastern on "squawk on the street." take a look at some of today's laggards on the nasdaq 100 nvidia, tesla, amgen, costco and gilead more "squawk alley" after the break. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. ♪ ♪ i'm all for my neighborhood. i'm all for backing the community that's made me who i am.

i'm all for my theatre, my barbershop and my friends. because the community doesn't just have small businesses, it is small businesses. and that's why american express founded small business saturday. so, this year let's all get up, get out and shop small on november 24th. i got croissant. small business saturday. a small way to make a big difference.

[ready forngs ] christmas? no, it's way too early to be annoyed by christmas. you just need some holiday spirit! that's it! this feud just went mobile. with xfinity xfi you get the best wifi experience at home. and with xfinity mobile, you get the best wireless coverage for your phone. ...you're about to find out! you don't even know where i live... hello! see the grinch in theaters by saying "get grinch tickets" into your xfinity x1 voice remote. a guy just dropped this off. he-he-he-he. i'm brian sullivan in for scott wapner

today on "the halftime report" how to know when the bottom is near and when it is safe to get back in the water and buy again. plus, the right retail stock to pick on the eve of the christmas shopping season. and today's call of the day pitting one bank against another bank "the halftime report" starting at the top of the next hour. carl. >> brian, thank you very much. getting another update here from o'hare and the trouble that american is having today phil lebeau is back. phil >> reporter: fortunately for the people who are flying american here at o'hare, carl, the app is now working again. that app, by the way, was out nationwide but the kiosks, that's more important for the people here at o'hare, they were down as well they are now back up running again so people can printout their boarding passes, go ahead and check their bags it has thinned out considerably, considerably since the app went back up and the kiosks returned. guys action back to you. >> phil, thank you for that update. markets rebounding with the

dow up triple digits and the s&p now out of correction territory. joining us on the phone, david rosenberg as well as our own mike santoli here at post 9. gentlemen, good morning to you mike, i'll start with you. how much, pardon the pun, stock should we put in this rally today? >> you know, the market is bouncing, i think, where it makes sense to bounce right here so you needed to see, i think, a little bit of an upside effort after we had just two days of pretty intense selling i mean i keep saying down 90 points on the s&p in two days, pretty close to the lows yesterday, so i do think it makes sense that you got on a short-term basis a little bit sold out some of the bellwethers are holding up okay. i'm watching apple, goldman sachs. also the equal-weighted s&p 500 is up more than 1% today that shows you the rank and file stocks are being picked up because they look overdone on a short-term basis the dow is up 160, the s&p

up 27. how are you thinking about the rebound we're seeing today >> just for some perspective, the worst days that the market ever had was in 2008 and before that was 2002. so you typically get the best days of the market coming after big drawdowns. so i think you have to take a look at a certain perspective. put the full year into the perspective. we've had a double top since january 26th and september the 20th rocked with intermittent volatility >> david -- david, i'm going to cut you off. i'm sorry to interrupt here, but we don't have a very good connection to you. some technical difficulties there. mike, i'll put the next question to you >> well, i was going to say to david's point, it's absolutely true that seeing a bounce today doesn't invalidate whatever you

thought about the market coming into today if you really thought we had kind of a bear market setup, yeah, you're going to bounce in bear markets as well but i do think it's of some significance that we didn't quite go back to the october lows we've kind of deferred that, if not avoided that for the moment. >> david if we could hear him he probably would talk about his note yesterday in which he says banks are derisking. the asset base is shrinking, commercial lending credit card lending mortgage lending flattening out over four-week trends conversion higher rates a couple months ago. >> you have to look for the inflection line. on the other other hand the fed senior officer survey still looks open, still open for business that's one of the things the fed looks at there is no doubt we are talking about a slowdown in pockets. the stock market was telling you cars and houses were bad six months now it's not new

and now there is a broader question of how pervasive the slowdown might be. >> the president was looking at the strong market as an excuse to push on trade issues particularly with china that he thought were too big to ignore, really important how do you think that shift in the market now changes the calculus on some of the other things because clearly the president is trying to push the fed, trying to push china, trying to push a lot of people. can he continue to push. >> and get oil prices down, right? i do think it somewhat detracts the case we have the overheating economy we can afford this right now. it makes sense i don't think it changes tactically that much i also think expectations may be ratcheted down for what gets done with china at the g20 maybe they've been forcibly ratcheted down in which case has the market

sorted out what we can or can't expect out of it the market seems it's in the mode of thinking this is a longer term stalemate as opposed to something that looks like progress. >> bringing david back in david there's been a lot made of no where to hide for the investors in the market selloffs we have been seeing this where do you stand on that thought process right now? where would you be investing. >> well it's a great point because normally you want to hide in gold but the stronger u.s. dollar mitigated that normally you want to hide out in treasuries but trillion dollar deficits and tariffs have mitigated but actually the place is cash that's the refuge. >> so are you -- so have you been putting more cash to -- or i guess taking more out of the markets and building up your own cash piles >> we have been raising cash because i say one of the biggest shifts this year has been, say,

the front end of the yoeld curve. this time last year the 2-year note yield was 1.5%. almost at 3% look at treasury yields. they were over 1% today 2% you get to be paid to be in cash that's making the drawdown different than any other spoik can you move the cash and get paid something in line or better than underlying inflation. >> so, mike, how much cash do you get the sense is on the sideline sns if people were cautious and maybe selling out of the market previously we're getting to levels where it could make sense to get in if you lock at the major indices, back to levels of the beginning of the year where people hoped to get in for bargains >> sure. i think there is plenty of cash there. the question is is the cash motivated back into risk you never tend to see bull markets stop because there was,

you know, all of a sudden people love the idea of the yield on short-term bonds the market breaks first and people say i can hide out here for a while and the relative risk return looks better one interesting thing you didn't see a furious rally in the it has not plunge. the markets are afraid of something but not afraid of deflags what we used to be afraid of. that's why bonds haven't rewarded you that much relative to the downside of the stocks. >> given the rest of the world and what's happening elsewhere. >> yes. >> one last question, david. on the list of worries where is an event, for example, a leverage name needs access to capital, can't get it and spooks everyone where does that rank >> well i say that it ranks number one i think that the operative word is liquidity you have far too many guests coming on talking about fundamentals and valuation

but the operative word is liquidity. dollar liquidity is in a shortage right now the global dollar monetary base is down almost 7% year on year people -- you know, people focus way too much on just interest rates. look what the fed did with the balance sheet. i think what's happening and the biggest i think -- the biggest worry is when you hit over 50% of the investment rate universe rated triple b the two words people hear are fallen angels. the extent to which how many of the investment grade names on the cusp get downgraded to junk? and what happens in terms of the financial for the rest of the economy and the widening and credit spread that's the number one risk that's what investors caught on to in the past few weeks it's not just equity stories look what happened with high yield spreads over the past weeks. they have widened significantly. that's crate creating a second round impact on the markets and

kplee. >> certainly ge is one of those names getting tossed around in theconversation. david, thank you for joining us. mike, thanks for bngei here. we have more "squawk alley" in less than three minutes.

welcome back to "squawk alley. nasa announcing it will launch a

safety review of spacex and boeing they are poised to launch astronauts into space from american soil for thefers time since 2011 the review beginning next year will be a monthslong assessment involving hundreds of interviews designed to evaluate the culture flt workplaces, everything that could impact safety according to nasa the review first reported by the "washington post" reported prompted by elon musk's apparently weed smoking and whiskey drinking on a podcast. remember that? in response to that spacex saying the drug-free workforce and workplace programs exceed all plikable contractual requirements boeing's response that its culture ensuring the integrity and safety and quality of products and people and the work environment. in is -- it's not unusual to see these types of reviews but this specific one focused on safety

and workplace culture is in many ways unprecedented we'll see what happens especially since theest tests are taking place in 2019. >> gains holding in there up by 150. obviously friday is busy with black friday and flash pmis. have a terrific thanksgiving see you then let's get to brian thank you, carl. happy thanksgiving and welcome to the "halftime report. "i" brian sullivan in for scott wapner backup your top trade is the thanksgiving eve minimum inny turn around for stocks for real >> announcer: are we getting to someone saying, is it safe to go back in the water? after this big selloff, how to know when the bottom is near plus, one bank's downgrade of another and what it says about the big picture for the financials plus the energy trade after a brutal six weeks for the sector. and retail picks on the eve of the shopping