good morning, it is 8:00 a.m. at apple headquarters in coopupertino, california, an 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪ ♪ good friday morning. welcome to "squawk alley." i am carl quintanilla with morgan brennan at post 9 of the new york stock exchange. jon fortt has the morning off. we begin with the markets. we have weak china debt overnight, sending stocks down as retail sales, industrial output come in under expectations for the world's

second largest economy, as china suspends some tariffs, including those on u.s. auto imports uni >> reporter: china's finance minimum tree will suspend additional tariffs on u.s. made cars and parts 211 items will be effected, with china lifting a 25% tariff on most of those items. the decision takes effect january 1st and lasts three months the finance ministry posted an explanation on its website saying we hope the two sides, the u.s. and china, will intensify negotiations towards eliminating all tariff increases. the announcement came after the economy showed they slowed down further. retail sales, industrial output missed expectations. retail sales grew at the slowest pace since 2003. industrial output expanded the least in three years fixed asset investment jumped slightly, only because it was

weak earlier in the year trade tensions are weighing on consumer sentiment china statistics bureau said so far the impact from the trade war has been minimal but the bureau expects greater external uncertainty in 2019 that's raised questions on what policy makers will do next the central bank governor said china would keep monetary policy loose for now, and next week, leaders meet for the annual economic policy setting meeting for the year ahead most analysts believe the pressure will be onto stimulate growth further as domestic demand continues to weaken, and the clock ticks down on the tariff truce >> thank you. apple is down as it continues a legal fight with qualcomm over the sale of iphones in that country. meantime, another analyst joining his peers, slashing iphone estimates shares of apple down 2% today.

joining us, managing director will piesak. and tom forte. good to see you both it is like the sun coming up, having them trim the target or iphone unit forecast for '19 20% in q 1 is that too severe >> it is too early to say. the focus is on the xr as far as sales. look, we're four years after the iphone 6 launch. upgrade rates are an all time low. talking about what's happening in 2019. there's some evidence in developed markets that some upgrade rates are bottoming out, meaning the replacement cycle has lengthened china, separate issue. 15 to 20% of sales, other dynamics there in terms of some court cases, economy, and things

like that. that can have an impact. 20% is an aggressive cut, massive sequential decline that we haven't seen in past years. >> there's a lot of headline risk circling apple, but are fears in general by investors overdone when you see shares dropped more than 20% recently >> i think it is way overdone. if you look at the adjustments made for the december quarter, taking down units, lowering the number on the sales front to the low end of guidance, you're looking at about 3% change in the price target on lower discounted cash flow as we use that to value the company, and as you pointed out, shares declined 20% so we think that correction is way overdone, has created a buying opportunity, even with lower expectations for units per iphones. >> is the story about unit growth or services slowing

is it about some legal exposure, people are throwing smoke bombs? >> ever since the company reported the story, it is all over the place it is supply chain, china, is it services, units, not recording units, we're all over the map in terms of concerns about apple. as the prior person mentioned, numbers have come way down, whether this quarter in 2019, there's been massive cuts by the analysts the stock has given up $250 billion in market cap. one thing that no one is talking about is the shared purchase activity at the current stock price, if they were targeting a net cash neutral target they talked about in prior quarters, the company will retire 20% of the stock if it doesn't rally if investors aren't buying the stock, the company will sit there and take in the share count which will lift earnings

growth. >> share buy backs, and also the fact it is sitting on a massive pile of cash in general. tom, in terms of investment on apple, what do you see as the biggest potential risk >> i think the biggest potential risk is china, when you think about 20% of sales go to chinese consumers, and while we're seeing siengns of thawing on th trade war, the prospect of not forging a final deal, seeing escalation of tariffs to 25% from 10, i think the biggest risk is china. i agree with the assertion that buying back shares and still generating significant free cash flow could have the stock in better position than the company may be in on the short term basis. >> and finally, more broadly a lot of discussion this week and even today in "the washington post," an op-ed by our former colleague about 5g and how it relates to the on-going trade war with china are clients asking about how that may or may not, how the

rollout and disruption we expect from 5g could be disrupted by obviously the strained relations? >> i mean, it comes up, but really our goal as far as what regulators and companies talked about is to be ahead of what the chinese are doing, whether vendors or operators it is still early. clients are very interested in picking winners and losers, figuring out the time line on this maybe 2019 you're not going to see a lot of flow through in terms of revenue and earnings for companies like apple, eric son, nokia but you position to see who the winners and losers are the decision that regulators macon thin make on sprint, t mobile, spectrum auctions that the government should or shouldn't do are things that come into play when you think about trying to be ahead of everyone else in terms of 5g. >> going to be a big story working into 2019. walter, tom, good weekend, guys. thanks so much

>> you too thank you. look at where we stand across the major indexes stocks are negative, off lows of the day. s&p and dow are negative, but the nasdaq 100 is up 1.5%. more on today's selloff straight ahead. stay with us i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here,

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welcome back to "squawk alley. take a look at the markets, selling off with the dow and s&p losing gains for the week as weak chinese data is pressuring stocks this as china suspends tariffs on autos, auto parts for three months and this decision set to come into effect beginning of next year joining us, terry haynes, head of political analysis at ever core happy friday terry, it has been another whirlwind week in terms of u.s. china trade headlines moving the markets. how would you characterize where we are in terms of the talks now? >> this is a classic example of one of the things i say a lot, which is the political time, market time are different times.

the market wanted resolution, wanted it quickly. the political and diplomatic process is rolling out more slowly but that i think you have some minor encouraging signs, the tariff announcement is one of those signs. the idea that china may be encouraging greater foreign investment is another potential sign bottom line here, the fact that lighthizer will run the negotiations i think is another positive he has the yes on nafta and the korean agreement, tasked to get the yes here those are all encouraging. fundamentally by end of march, unless there's actual progress, we're likely to be back where we are. today, i think signs are a small positive >> scott, your thoughts on this? >> morgan, coming into 2018 we felt like the two biggest risks were the fed making a mistake,

and global growth slowing. the trade situation, the frictions play into that, and we expect some positives. i think i agree with terry we have seen some positives, whether it was the trump meeting at the g20 or some news in the last few days, i think those are positives. we expect progress there this is not going to be easy negotiating like it was with mexico and canada. the eu, china much tougher we certainly expect some progress over time, but in the very near term you'll hear the hints of positive. the market has been conditioned now to the point where it wants to see something more solid, not tweets on the subject perhaps and not just rumors and so and so said this we need something a little more solid for the market to feel better i think right now the overall

global growth slowdown, that's a big concern. >> to that point, in terms of how investors should balance data coming out of china, on one hand, you have disappointing numbers, signs of a slowing economy, that would give the u.s. more leverage in terms of how trade talks play out on the other hand, second largest economy in the world, and we know so much industrial production, raw materials, sales, even for u.s. companies are tied to that country how do investors balance that? >> you know, for one thing our economics team has taken a stand. we'll see 6.2% gdp out of china next year. that's expected. that's reasonable. we don't think it will be any less than that i would agree with you where clearly china is seeing bumps in the road now, and i think that

is a positive in terms that it brings them to the table you hear the president all of the time say the chinese want to make a deal. we firmly believe they do. that bumpy road for china i think in the end makes them more willing to negotiate but certainly it is obviously striking fear into the market. like i said, we have trade friction the market thinks there will be positives there, but the overall global slowdown is really a big concern, although that's not the base case. we're not looking for meaning fully slower growth. we expect decent growth here, 2.7 gdp. really for us, good growth, not great but good, with modest inflation, stock should do okay in 2019. >> strikes me if we hadn't gotten china data overnight and

you came into headlines like china agrees to temporarily cut auto tariffs it imposed on a retaliatory basis, you may have seen a rally how much is legitimate goodwill until we get to march? >> i think a lot of it is legitimate goodwill, carl, i do. not trying to be -- when they came out of that dinner, what was said on the united states said, we have agreement to move forward, china agreed to engage, to talk about core issues we care about, big step forward from the united states perspective and we'll keep doing this and you're going to see additional signs those are starting to show up. those are moderate positives i quite agree about broader market, and i think the 90 daytime table is ambitious if we get progress, things will continue, the negotiations will not be easy, but they're moving

forward. and that's a good sign >> gentlemen, thank you. the dow moves back toward session lows, now down more than 300 points. it is the worst day in a decade for johnson and johnson the blockbuster investigation says the company knew some powders sometimes tested positive for small traces of asbestos bill george joins us, knows the medical device area well bill, the company is saying this is a false report, pushing back hard but what do you think it means >> well, carl, asbestos is a hot word, even mentioning it or cancer causes a great deal of fear talking almost 50 years here, 47 years. i happen to have studied johnson and johnson closely, i know the executives all the way back to

jim burke. this is a company of the highest integrity. they may have had trace amounts in talcum powder, they say it doesn't occur now. i think the real question is does it cause cancer i think they're going to have to prove that it is obviously something the plaintiff's attorneys want, the stock market i believe is overreacting j and j will come through it well, it will have to be tested in court with facts. i will be quite surprised if you find a causal link between trace amounts in the '70s to any forms of cancer, so i think it is an overreaction on the part of the market, and frankly the plaintiff's attorneys may get money out of it, and they may have to make payments, but it won't take them off the extremely positive course they have been on >> i mean, just to that point, the stock is down 9.5%, worst day since 2002

why do you think j and j comes out of it successfully, and what would need to happen in terms of the company's leadership for that to occur? >> talking about over $30 billion here that's why i think it is an overreaction of the loss this morning because i think j and j has extremely good science and extremely high integrity, has tested things very carefully, and baby powder has been around forever and we haven't seen real cases of this. now, you have cases of plaintiffs attorneys, but that's what they do, see an opportunity, get a quick settlement having faced j and j in court myself, i expect they'll be very tough and strong in forcing a causal link. i think it would be extremely difficult to prove a causal link between the trace amounts back in the '70s and any kind of cancer today, so i feel confident that j and j will stay on a positive course

they have strong leadership and it is a company, very mission driven if they thought even for a minute consumers would be harmed by their products, they would pull them off the market that's the kind of company j and j is >> it is funny, we were just discussing off camera this morning tylenol '82 remains a case study in how to handle a true medical or in this case consumer product crisis. do you think that colors their view or their play book there? >> of course they're all informed by tylenol. jim burke did pull the product off the market when it was actually a terrorism they didn't know what was going on there i think here, they've had almost 50 years to study this and look at it closely, see if there are any problems since they're treating cancer patients in the pharmaceutical area, i can't imagine they would promote a product that linked cancer that's not the kind of company j and j is

i think again, carl, this is a reaction, an overreaction in my opinion and i think they'll come out of this. yes, a lot of lawsuits, but won't effect the outlook going forward in my opinion. i think you'll see the company continue to do well with a balanced portfolio, broad base of products. >> appreciate you coming onto talk, given what little we know at this point. bill george, thanks so much. >> thank you, carl texas governor greg abbott with us to talk about apple's billion dollar campus in austin, what it means for jobs first, the worst performing names in today's session dow is down 333. back in a minute

in an announcement without fanfare, apple will build a

second campus in texas, housing 5,000 employees, will have the capacity to accommodate 15,000 employees, would make it the city's biggest private employer. joining us, governor greg abbott good to have you back. good morning >> great to be with you again. >> this kind of came out of nowhere. how long have you known about it >> carl, this is something we have been working on awhile. the first large growth of apple into the austin community is about a half decade ago. then there were plans to increase it. this is something that texas and the local community had. this is the latest iteration of tech companies coming to texas, expanding in a large way look at the size of this you mention the investment, it could add up to 15,000 employees, it will occupy 133 acres of land, fairly close in

in the austin area we call a texas size investment. >> you mention tech companies plural it has been a very sort of stark contrast between the search for the campus between amazon and apple. some called it a beauty contest with amazon. how would you compare talks with both companies >> listen, the talks and relationship with both amazon and apple have been very productive texas has been dealing with amazon a long time also as it expanded its footprint in texas. as you know, amazon acquired whole foods and their headquarters is in austin, texas. we have a great working relationship with both what we're seeing with the broader perspective, look what happened in addition to apple, oracle announced a massive 27 acre campus. after they did that, they announced they would double the

size of it pimco opening a facility with artificial intelligence and other aspects like that, and those are just two of dozens of examples of what's happening in austin, texas just this year >> governor, we were in austin not too long ago and all my friends are seeing houses sell for above ask. we know what's happened to growth in the town how do you handle the demand for workers for the new campus and what do you think it does to housing values >> for workers, one thing we pride ourselves in is all of the top two universities in texas, including university of texas in austin, one of the top level universities in the entire world, nearby texas a&m, cranking out r&d and engineers, and the type of work force that companies like this are looking for. then we have rice and other tier one universities because of our sheer size and because of the size of our

universities, we are able to provide the work force the companies are looking for. when i talked to amazon and apple, when i asked them why do you keep coming to texas, first thing they say is not because you have lower taxes and regulations, first thing is because of the top quality work force that texas provides. >> governor, i have to get your thoughts couple weeks ago talking about an l and g investment project down on the coast. there's a lot of that going on in texas when president trump comes out and lobbies for lower opening ceremony -- lower oil prices, what do you think? >> he lobbies for greater purchases of l and g by countries like china and elsewhere, so it is going both ways you know as well as i do with regard to prices of oil, they're not hinged to what one person or president says forces of the market at large will govern prices of oil.

we know in the long run the price of oil will go up. we know in the short run they're going up and down. more importantly, morgan, because of what texas is doing with regard to new l and g facilities and what you saw last week on cnbc was just the first iteration of texas being able to shift l and g. we will add more facilities in the coming years texas will be maybe the global leader in the ex-poporting of ld g. >> as far as apple goes, does this take some sting out of not getting amazon hq 2? >> carl, i have to tell you, ever since amazon made the decision, it opened up a flood gates of companies relocating to texas. the week after amazon made that announcement, mckesson, sixth largest company in america, announced they were moving headquarters from san francisco to dallas, texas

since then, we've had the announcement of other corporations moving to texas, including this announcement of apple which is not a headquarters move but the size of it. get this, a story came out in business journal announcing in the past year 1800 companies have left california most of them coming in texas we have so many companies coming here, we get to pick and choose. if i can use a football analogy, carl, texas is the alabama when it comes to recruiting in college football we get to pick the five star recruit companies coming to the lone star state. >> we are a bunch of eagles and giants fans here, but the point is well taken, governor. appreciate it very much. congratulations. hope you'll come back soon >> will do thank you, carl. let's get back to the market europe about to close. seema mody has today's action. >> european stocks started the day trading down on china growth

fears, then dipped lower on economic data from europe which also disappointed. first up, the eurozone pmi is lower than forecast. european auto registrations declined as well, over 8% in november from a year earlier, led by the uk, italy, germany. worth noting credit rating agency reiterated the negative outlook on turkey, forecasting growth there to contract 2% next year global growth concerns are front and center in terms of stock moving to the down side, european automakers, bmw and renault are trading lower. the topic of currency, sterling down nearly 1%, falling to a 20 month low on continued brexit concerns doesn't appear prime minister theresa may has come away from brussels with new concessions for her brexit deal. the euro is also down against the dollar lastly, a deal on the luxury

space. lvmh is buying belmond it was a competitive bidding process that includes hyatt and other hotel operators. it gives them more exposure to the luxury travel market which has done well in 2018. those stocks on the move belmond up let's get to sue herera for a news update. hi, sue. >> hello, carl and everyone. here is what's happening turkish president erdogan intensifying criticism of u.s. support of syrian kurdish fighters, warning they would clear them from a northern town. the u.s. backed the them in the fight with isis. israeli forces arrested hundreds of activists. after a wave of shootings believed to be carried out by hamas. new research suggests physical therapy may lower the

risk of opioid use stanford university studied insurance claims from 89,000 patients those that underwent physical therapy shortly after being diagnosed with body pain were less likely to use opioids in the following months. and spanish prosecutors charging the pop music star shakira with tax evasion, saying she failed to pay $16 million between 2012 and 2014. charges allege she listed the bahamas as her official residence for tax purposes when in fact she was living in spain. you're up to date. that's the news update back downtown to you guys. >> shakira, shakira. sue herera, thank you. more to come the market with another leg down, lower by almost 350 points weekly gains wiped out the s&p is down 28 going to talk to the heart of the selloff next

welcome back china saying it will suspend the tariff on u.s. auto imports effective january 1st. president trump tweeting moments ago saying a deal could happen soon quote, china just announced that

their economy is growing much slower than anticipated because of our trade war with them they have just suspended u.s. tariff hikes u.s. is doing very well. china wants to make a big, comprehensive deal it could happen and rather soon. phil lebeau back in chicago with more and how auto stocks are reacting to the news hey, phil. >> most of this is baked in. not seeing a huge move in terms of automakers, but it is good news, and anticipated by a number of investors and analysts out there that we'll see the reduction in china auto tariffs. here's what the reduction by china which kicks in january 1st, what does it mean it was 40% for vehicles built in the u.s. and shipped to china, effective january 1st, returns back to the same rate that it is for all countries around the world, shipping vehicles into china, where it was back before july that's at a rate of 15%. look at shares of daimler and bmw. the reason we show you these,

they have the largest presence in the u.s. in terms of vehicles manufactured here and shipped to china. and you're seeing not a huge reaction from the stocks today we're also showing you tesla because when you look at tesla in china, and we have been there, we have been to a number of their facilities over there, the reason this is critical is because china is the number one market for electric vehicles in light of changing tariffs, tesla cut prices in china for the model x and s, bringing them back where they were before july the idea here is that this could spark additional sales in china for tesla. again, that's the future for tesla. that's the reason the stock is moving higher, one reason it is moving higher the last couple of weeks. also, shares of general motors the reason we're showing you gm, the company put out announcement saying you know the 2700 jobs that they're in the process of eliminating at four u.s.

manufacturing plants there are more than enough openings at other gm facilities in the u.s. for those displaced workers. they will have to move from where they are, whether it is in lordstown, hamtramck or one of the other plants that will be idled. you're seeing the beginning of gm saying this is not about cutting workers, this is about eliminati eliminating inefficiencies not good news for lordstown, ohio, but this is what you're seeing between gm and the people in washington, lawmakers, who are trying to put pressure on them to keep the plants open >> thank you for putting it in context. phil lebeau. two hours into today's trade, the dow down almost 400 points now for more on the selloff, let's bring in david leibowicz, and

kevin carrone. good morning to you both david, i'll start with you the way we teased the segment, we're going to talk about the heart of the selloff what do you see as the heart of the selloff. >> there are a couple of things going on the biggest thing investors need to wrap their head around, the fundamental safety net, good earnings, good growth, easy monetary policy which provided support for markets for the better part of the expansion, beginning to fray at the same time that political uncertainty is rising. you have kind of this toxic combination where what happens in the next 12 months isn't terribly clear, risks are built into the down side that's occurring at the same time you see concerns on slower growth in china, u.s., numbers out of europe were disappointedin disappointing. >> gas prices are plummeting, the consumer on fire

they clearly have to hike next week >> in terms of next week, that's a foregone conclusion. at this juncture, the fed would do more harm than good, would harm the credibility given the language they put out leading up to this. >> are we back to this how long can the u.s. decouple from a slowing planet earth >> well, yeah. the story this year has been that the rest of the world slowed the united states is the starve the show ultimately what we have seen is the u.s. outperform other markets around the world to put it in perspective a year ago, we were projecting low returns for the equity markets, given starting valuations. we're still at something like $30 trillion stock market and over 15 times multiple you had a market that's tread water through the year, while the consumer looks relatively good we're looking good in the united states the rest of the world, not so much no, we cannot decouple forever

>> david, you look at the headlines out of d.c., investigations around the trump campaign, you have a new congress coming to work in january, are politics going to become a bigger driver of market action >> i think politics are going to be the driver of market action next year, given the outlook for earnings growth coming down from boomi booming levels the fact that fiscal stimulus will have run the course by next year the economics story expected to fade as we work through 2019 with that occurring, you can't ignore politics. i would say it is not just politics in the u.s., it is lack of progress with brexit, what's going on with italy. the list is long and distinguished of political risks at this juncture that's what's challenging. if sentiment deteriorates, we are seeing a market that may impact the economy and unwrap

the fundamentals further >> what happened if the president gets impeached next year >> gosh, well, there's a lot of things that happen politics has been -- would be a big one, sentiment is another one. it is too early to speculate about which way this cat jumps what i would say is as the other guest pointed out, sentiment is key. we had very good sentiment in the united states, driving investment, which in turn helped fo ke-- to keep profits moving. the tax cuts in place have impacted higher profitability and higher stock market. ultimately we're thinking fiscal policy remains relatively expansionary, but anything that would upset that or create uncertainty there could be something that the market would have to take to digest >> i don't know.

i combed through trading notes in the morning you would be hard pressed to find anything of substance on a shutdown from michael cohen, and that extends to today. >> exactly what the market is focusing on are things that could disrupt the economic story, things like brexit deteriorating the situation. italy seeing further debt growth, that weighing on sluggish pace of growth in that part of the world. pmis this morning didn't help when you think about broader narrative. you saw manufacturing output slightly higher in the eurozone, there are temporary things in river levels and auto production all eyes are on big headline political issues that can have underlying impact. >> are you trimming s&p numbers for next year? >> we aren't trimming s&p numbers for next year yet. my personal view is next year is a year of high volatility, what we have seen the back half of

this year. there will be room to make money, but you have to be tactful and trade the market for the year as a whole, mid single digits is a reasonable expectation. >> same question to you, kevin how should you be positioned for an uncertainty 2019? >> we have a barometer, the con ses us, 17% increase of s&p. to us it seems like a stretch, given what we are seeing with market sentiment and global conditions we're going to take the 5%, 6% until we see something turn one way or the other right now, we're neutral in terms of allocations >> thank you for joining us on this friday. we'll get more on the selloff this morning dow down 400 points. didn't get a bump from the presidential tweet, although we should point out a fourth of the

selloff is j and j alone rick santelli, what are you watching treasury yields are holding, considering the volatility and equity the dollar is doing something special the last couple of sessions we'll talk about both those after the break.

i am scott walker. here's what's coming up. we zero in on what might be the

biggest warning sign for stocks. and the stock of the week. under armour, down 20% or so in the past five days has the street gotten too negative on that name? we debate. and starbucks shares can continue the rally, despite today's pull back. all at noon on the half. we're ten away see you then. >> sounds good, scott, thank you. let's get to the cmi and rick santelli for the santelli exchange hey, rick. >> good morning. thank you. it has been a wild week on a number of fronts let's highlight some of the issues recently. of course, the tale of two retail sales numbers the u.s. solid, nice revisions china not so much. there's a lot of metrics going on with regard to china, they have deteriorated and their equity markets with it divergen divergence and other global weakness have played havoc let's not dismiss the issue there are credit rumblings at

the same time, and some run pavili parallel to the equity markets some of the peripheral edges of types of instruments central banks happily built a nice, beautiful, new expressway for investors investors to take upon themselves to pick up these riskier as sets. this of course is the other side of that mountain but let's not lose sight of the fact as jittery as it is, treasury complex itself, sovereign market, has been rather stable and the dollar index has been tell are laeeen . and keep in mind the dollar continues to fair awfully well and if you open it up to november rkt we are basically sitting at what is the high for 2018 a little bit above 97 1/2. and that actually goes back toward the summer of 2017 since we last hovered at those levels. now, on a closing basis, if we were to close above 54 near the

highs of the day thus far, that would be the best since 20th of june 2017. when it comes to treasuries, yes, we've had some periods of catch up in treasuries think about how that double top of 323 brought us down to our current state of affairs but all in all, the feedback loop from all other markets to treasuries has been good and that is probably because the drop had a lot to do with liquidation. now we hear liquidation going into money are markets, maybe pushing yields up. let's go to the ten year board we've talked a million times double tops are the fuel of selloffs in yields and this was no exception. we've had a lot of work done at levels we've held over the last ten trading sessions, we've had three that basically had of intra day lows of 281 even though the low -- sorry, 282 even he though the low close has been 284 you see we've basically held

this line along with the congestion and this wedge should continue to help us but the point is simple. should we do a whole lot of work meaning a daily close and weekly close in the same week under 280, that in my opinion would be a feed book loop to pay attention to morgan, back to you. >> loving the charts, rick thank you. uber ceo on the company's culture, its starbucks partnership and a lot more back in a minute this isn't just any moving day.

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.

so the selloff is picking up steam here we're down 436 on the dow. as we said, about 100 points of that is j and j. but even so, a close at these levels would be the lowest for the dow since june and since april for the s&p. curious that the vix is not that elevated right in our, but seeing some selling. no sector is higher. >> yeah. i mean, if you look at the week so far, you have the nasdaq and nasdaq 100 hanging on to gains the composite just barely. but the dow is down almost 1% on the week the s&p is now down about 0.8%

and the russell transports have been hammered. definitely calling in to question things like potential for dow theory it will be one to watch. tech stocks, some of the worth permit he was again today as well as we continue to tank about faang a -- take about faang >> and apple has gone red for the year once again goldman below 175. we'll get some people's attention as well. and then of course this is after negative responses to costco's quarter, adobe's guidance, even starbucks and what they told jim today. some of the biggest laggards right now. squawk "squawk alley" back in a minutes.

while we're a big company and a significant part of urban transportation, we account for less than 1% of miles driven in the u.s. so actuallies penetrati-- ally u talk about the penetration market, takes trillion dollar global market place. and we don't think that we're a big company. we have a long way to go and we have many markets to penetrate

>> that was uber's ceo talking to jim cramer this morning with kevin johnson of starbucks whose shares are back to levels from early november despite the partnership and talk about the china growth >> yeah, the two announced this partnership hence sitting together but it will be a big ipo to watch next year. and a big puig next weweek k with the fed let's get to the half. >> thanks. i'm scott wapner small cap stocks signaling big trouble ahead for your money the economy is so good, which many say it is, and then why can't the beaten down russell rebound? this is the "halftime report." key parts his year long lows a record amount of money is pulled from u.s. mutual funds. a big question for investors, are these potential signs of a bottom plus, three big movers this week we'll focus on starbucks, nike and under armour's big dro