good morning it is 8:00 a.m. in california, 11:00 a.m. here on wall street "squawk alley" is live. ♪ ♪ good thursday morning, welcome to "squawk alley." i am jon fortt, with me, morgan brennan, and david faber for now, let's start off with the market flash, shares of twitter taking a dramatic move

lower. julia boorstin is out west julia? >> reporter: jon, shares down 9% the company's worst day since july when they released disappointing earnings the second worst performer today in the s&p today, pointing to an amnesty international report, saying the company will be forced to clean up the site, saying that will impact its monthly active users. amnesty international, publisher for tuesday, fighting extensive online abuse against women on twitter. even with today's decline, twitter shares are still up 25% year to date jon, back to you >> thanks. i'm surprised it takes amnesty international for people to be aware of that. watching the major averages, one day after jay powell signaled a hawkish tone than some expected, saying the central bank would continue to shake the balance sheet at the current pace,

triggering more losses they're on track for the worst december since the great depression bob pisani is on the floor, watching it all. >> hello, jon, we're down but even on advanced decline line. look at sectors. help from semi conductors. banks in the green just went negative health care is weak. consumer staples, walgreen down on earnings and conagra. i keep waiting for signs of bounce citigroup down 11 days in a row. i don't think that's ever happened, i am checking on that. has to be close. we are mixed on banks. the issues for the markets, dealing with a lot of them the fed was a more positive issue for the markets a couple days ago than now. not as friendly as hoped for tariffs, mixed news, china commerce ministry says more

talks in january brexit is unresolved, and global slowing, we don't know how much. that's the big market problem. look at levels where the market is new lows for the year on the s&p 500, ten year yields are sitting at the march lows. oil at a 15 month low. gold at five month high. i mentioned the s&p 500, new lows and ten year yields at the lowest level since april the quarterly expiration of options and futures will create rebounding on the s&p, apple probably for sale, big buy back monster, will reduce waiting a lot of churning and follow whether that moves markets or not, not clear for now earnings picture will be the key story, beginning next week we are seeing quarterly numbers

come down. had 20% fourth quarter, now down to 16% i think the key is for 2019, the numbers haven't come down. we're still 8% expected earnings growth, but the market as we discussed many times is acting like it will be zero to 2 or 3% earnings growth next year. talk about it more next week back to you. >> bob, thanks for that. joining us for a closer look at the impact of the fed's decision, david rosenberg, chief economist. i want your thoughts on the fed, given that inflation seems to be flat lining, and as bob points out, got crude oil prices falling again today. other copper, industrial, commodities, nose diving >> you hear commentary about all the fed has done is take the funds rate to zero in real terms. that's on yesterday's inflation rate when you go forward and see the impact with u.s. dollars and what the commodity complex has

done, inflation next year is probably back to zero. real funds rate is more like plus 2% or higher, not really zero one thing i want to say, you had robert schiller on, he said this volatility and weakness started in february, what else happened in february. what happened, it was powell's first meeting. first thing he does is raises rates. this has been a liquidity story that's hit the markets in general. and it is not just the equity market i understand them not wanting to hold the equity market's hands, but it is not just about the equity market, it is every market, it is commodities, credit, high yield spreads have ballooned 170 basis points copper, oil down 40% the only times in the past when the fed tightened in this overall environment, you have to go back to -- actually never

happened before. it triggered periods like in 1998, 2001, 2008, 2009 when we had this kind of market, the fed never tightened >> so what's the read through? especially if you have the fed tightening and we're potentially above neutral? >> i think basically the fed has already moved into restrictive mode and this is where i differ with jay powell and his assumptions he said fell policies still accommodate. i am saying unfortunately fed policy is no longer accommodative. the bottom line is that i didn't see what the risk was for the fed to just say we'll wait until the next meeting or next couple meetings and how things play out. they raised rates three times. when you look at cumulative tightening in the system, including the balance sheet, basis point for basis point, it

is 325 basis points in the system we haven't seen that hit the broad economy. peak impact is next year, which is why i think recession risks are higher than what the fed has in their models, but the markets are starting to price it >> we dealt with the inflation stuff george was talking about is the economy overall as good as the trump administration has been saying? we went from hey, things are great, no end in sight to the positive economy and growth to wait a minute, fed can't raise even a quarter point. >> if i was a politician, i would always be talking how great the economy is but i'm not a politician never will be. looking at it objectively, the economy is not really that strong i think sara eisen said it right, it is barely okay gdp growth was barely above 1%, real final sales you're seeing what's happening with housing, you're seeing what's happening with capital spending, had a couple of good

quarters, now it is rolling over look what will happen with exports and the oecb leading indicator is down 11 months in a row. as weak as growth was this year, it will be worse next year when you do top down analysis, it is not hard to get a view that gdp growth is less than 1%. >> how did the market get it so wrong with stocks soaring as long as they were? >> stocks soared in january. almost an 8% runup first three weeks of the year because of tax cuts headlines said best january 1987 i retorted, when i canvas people about 1987, they don't remember january, they remember october this has been a roller coaster ride the market hasn't gotten it wrong. it ran up january on the view that fiscal stimulus would give us a couple of quarters of good growth that story is now in the rearview mirror.

this is the one sentence in powell's speech he gave in new york in late november. one sentence he talked about lags between what the fed does and time a doesn't hit the economy in time b or c, and that's basically the lags. the fed is a very incremental institution. somebody earlier had said that it changes, fed changes slowly i think we're seeing that now. the fed is behind where the markets are. let's face it, we are reliving history. recessions do occur. they're not like the dodo bird we've had basically 13 fed tightening cycles. and ten landed in economy and recession, usually inadvertently, and economists are generally the last ones to tell you about it. >> before we run out of time, i direct you to credit markets david tepper spoke to cnbc

earlier, talked about everybody is tight, chinese are pulling back, ecb continues to cut its own qe program, and we will have the biggest issuance of treasury next year still. what do you make of what's going to happen? >> i think what's happening on the government bond issuing side, that's an effect what he didn't mention to complete the story, not only do we have record government funding requirements, look what happens next year. next year is the first year of four of trillion dollars of corporate debt refinancing, a trillion dollars a year. they have to refund when they're running massive fiscal deficits, it will put pressure, added pressure on markets. >> something is going to get crowded out. what's it going to be? >> capital spending.

what's happening next year to prevent a fallen angel cycle where you get bbbs downgraded to junk, the way it will happen is you get more and more, you have seen share of corporate cash flows, not only gdp going down will be used towards what, debt service, debt retirement what's the follow from this? next year the theme will be this, corporate deleveraging in '08 and '09, the theme would have been corporate deleveraging and next year is going to be corporate deleveraging that's what comes out of that. the fallout will be on capital spending growth. >> great to get your thoughts. >> misery loves company. >> david rosenberg we have breaking news, got it a half hour ago justice department announcing charges against chinese nationals accused of conducting a global hacking campaign that includes a lot of u.s. based

corporations deputy attorney general rod rosenstein wrapped up a news conference awhile back eamon javers is in washington and has the story. >> reporter: that's right. here's the indictment that department of justice unsealed against two chinese individuals who were working for a private company that the department of justice says was affiliated with the chinese ministry of state security in a global hacking scheme that impacted a significant number of american corporations two individuals, the u.s. government says they were involved in a years long conspiracy with chinese intelligence to steal technology from american corporations that began as early as 2006 the government is saying they stole ultimately hundreds of gig by thes of data, and that included companies in aviation, space and satellite, manufacturing, pharmaceutical, oil and gas, communications, computer processing and maritime

industries a range of american companies effected here, the u.s. government says, by the hacking by these two individuals at a press conference rod rosenstein, the deputy attorney general said the chinese government is now on notice the united states knows exactly what it did. here's what he said. >> faced with detailed factual allegations today and corroborating statements, not just from the united states but from other victimized nations, china will find it difficult to pretend it is not responsible for these actions. >> reporter: the deputy attorney general was also asked by nbc's pete williams on the mueller investigation at the press conference, whether or not he is still going to be the official inside doj overseeing that, or whether matt whitaker would take over ro rosenstein said more news on that later today ultimately he says whoever handles it will handle it

appropriately. back to you. >> thank you major developments certainly something when you talk to folks like the navy secretary, richard spencer, or defense contractors. this has been a topic of discussion for quite some time eamon javers when we come back, strong words from mark zuckerberg's amazingly sloppy abuse of data that's according to kara swisher. she's coming up later this hour. and shares of tilray are surging, inking another multi million deal shares up 6% and sin in general is in juul one of the most valuable companies in existence find out why when "squawk alley" returns.

the nasdaq the nasdaq is down nearly 18% over the last three months amazon, apple, facebook are continuing to weigh on the index. joining us with their take on tech performance, business insider editor henry blodget and da davidson analyst tom forte. good morning to you both tom, start with you. we have been talking about markets overall in the wake of the fed decision tech in particular, even in the last three months has undergone a lot of punishment. look at the list of stocks that

are down by at least a quarter since then apple, netflix, nvidia among them what's going on from a tech perspective do you think >> sure. so within tech i think the same issues that are pulling down shares in general are effecting tech shares, and that's concerns about rising interest rates and prolonged trade war between the u.s. and china and whether or not tariffs are going to ease or not ease and individually some of the companies you mentioned, investors are trying to figure out on amazon how to think about greater profitability but slowing sales. for apple, how should they think about softer unit sales for iphone i think you have a combination of issues weighing on the sector in general and those weighing on the individual companies within tech >> henry, you look at a chart of the nasdaq in the past ten years, looks like a ramp pretty much you have been saying a long time

that something more than this arguably, does it matter the tal details, whether it is trade concerns or what's bringing things down? >> i think tom nailed it i think the sector as a whole, stocks are more expensive at the peak than market, they're coming down more as market multiple compresses then you have specific company issues at every company, when amazon is transitioning from a revenue story to earnings story, it is a big deal facebook is going through a huge storm. apple, things are changing good news is stocks are nothing like the multiples they were trading at in the 1990s, for example, and they have tremendous cash flow apple is 14 times earnings things don't have to go terrifically to justify that, as long as they maintain it i don't think it is a similar situation, but these are higher data. >> henry, what do you think of the markets more broadly beginning of the year you came on and said we're due for a big

swoon. >> my guess is we are in a bear market, the beginning of a relatively long bear market could take us down the average bear market amount or more, basing that primarily on valuation. stocks were very expensive on cyclically adjusted earnings, and every cyclically adjusted measure you looked at. head winds, loss of tax cut stimulus, huge deficit opening up, lots of things are coming together that make this more likely bear market that said, i don't know. we will see. been wrong before. >> tom, you're still bullish on a number of stocks, including amazon and apple how do you put into context fact that they're investing so much, when you look at the new locations that amazon is opening up in northern virginia and in long island, apple had an announcement, google as well, facebook says they're going to continue investing people to try to address some of the data issues i mean, does that perhaps signal going through an investment

cycle where investors should be concerned about how they're going to perform profit wise in terms of consistency or no >> the good news is they're investing for growth bad news is they've had to look to other geographies to find reasonable costs on labor. you see it both with apple where they added austin, texas and indicated they would add thousands of jobs to other locations in the u.s., hundreds of jobs in another tier, and amazon deciding the search for hq 2 ended up being for hq 2 and 2.1. i think the important news is they're growing, investing for growth, but i see the need for them to broaden geography as it is becoming more difficult for them to find talent. while there's greater uncertainty heading into 2019, as some issues with higher interest rates and concerns about trade are going to persist, i think there's reason to be optimistic when you look

at apple buying back shares and strong cloud computing from amazon i think all is not lost. >> in terms of talks between the u.s. and china on trade, given the doj press conference a short while ago naming specific hackers with ties to the chinese government, i imagine this gives the u.s. more leverage, but how does this play out in terms of talks? >> from my perspective, things are escalating quickly in the beginning, everybody thought president trump would wave a stick and get a little something to say hey, see, great new deal and we would move on from there, but we have stuck with tariffs a long time and things seem to be escalating they'll begin to bite the economy if it tincontinues much longer >> henry, tom, thanks. >> great to see you. speaking of escalation, more breaking news from washington and the potential for a government shutdown.

let's get to ylan mui. >> reporter: the white house is saying republican house members will meet with the president at noon today in a statement, press secretary sarah sanders said at this moment the president doesn't want to go further without border security which includes steel slats or awall the president is continuing to weigh his options. republicans have been thrown into disarray as there's been a strong message from rank and file members they do not want to go home without voting for a border wall. we spoke with representative mark walker, one of the leaders of conservatives in the house. he said there was a strong rebuke against the short term spending bill that passed the senate that would keep the government open through february 8th. they want to take a hard line stance and make sure they get a chance to vote on the border wall back over to you >> it is david i hate to ask you a question

like this. i don't know your wall technology knowledge, what are steel slats versus a wall? >> reporter: there's talk of a concrete wall, what counts as a border wall. the bill that passed the senate, the proposal from the senate included $1.6 billion for border fencing. democrats say border security counts, that they're behind border security. here in tweets today and statement from sarah sanders the president making clear he wants to see a physical structure that appears to be impermeable. back to you. >> thank you still to come, details on big tobacco's $13 billion investment in vaping giant juul. first, the worst performing stocks in the dow so far in today's session. a lot more "squawk alley" straight ahead don't go anywhere.

european markets are closing in a couple of minutes seema mody joins us with today's action >> global equity markets didn't like what the fed had to say, moving lower around concerns of slowdown in growth the european index fell to a two year low oil is trading lower, and fueling skepticism regarding growth bank of england keeping rates steady citing softer news on the democrat economic data front and threat of a not smooth brexit, saying further intensification of brexit uncertainties coupled with the slowing global economy

has also weighed on the near term outlook for uk growth retail stocks are down despite a good retail sales number aoso down 2 to 4%. back to you. >> thank you let's get to sue herera with a news update. good morning, jon, good morning, everyone. here's what's happening at this hour a new york judge has allowed harvey weinstein's sexual assault case to move forward his lawyers argued the case was tainted by allegations the police acted improperly in the investigation. after brief discussion with lawyers, the judge denied a motion to dismiss the case. russian president vladimir putin holding his annual news conference in moscow where he praised trump's announcement to withdraw american troops from syria, calling it the right decision, but expressed skepticism that u.s. forces would actually withdraw. trump's decision criticized by republicans, democrats, and

major allies. london gatwick airport closed due to reports drones were flying in the area. many incoming flights were diverted to other destinations in britain and europe. and former president barack obama visiting children's national hospital in washington. he spoke with some kids, spent time with families, siblings that were spending the holidays in the hospital. you are up to date that's the news update this hour guys, back to you. morgan >> sue herera, thank you. straight ahead why the next guest says it might be time to open that lead cycle play book and ease off risk. "squawk alley" is back in just over two minutes the dow is down 252 points. political considerations play no role whatsoever in our discussions or decisions on monetary policy. nothing will deter us from doing what we think is the right thing to do. from this point forward, we're

going to be letting the data speak to us and inform the outlook. there's a mood of concern or mood of angst on growth going forward, if i could capture it in one thought you always pay your insurance on time. tap one little bumper and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insurance.

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welcome back markets are moving lower on a number of different news items out of washington. obviously the fed in washington yesterday, and the president today having a meeting with

republican house members at noon a statement from the white house indicates the president is not signing that spending bill without funding for some sort of wall or steel slats. we're still working through that with us, david rosenberg said commodity prices are declining, and the fed is overshot beyond neutral and they're going to put us in recession next year. love to get your thoughts on that >> we would consider fed policy still accommodative at this point in time. we had nine rate hikes we have moved up a little bit in the past three years, but policy is a little below what we in the media and the fed consider to be neutral. we consider that rate hike to have been appropriate and we still consider two more rate

hikes next year to be appropriate as well. doesn't mean inflation is a concern at the moment, we don't need to get further from that, two more to get back to neutral makes sense. >> you sort of are in the fed's camp >> we are. we are there's predictable slowing in the economy that we're already starting to see that will continue next year still growth above potential and low unemployment rate. >> a lot of investors are looking around, saying where can i hide, where or what should i be thinking about sector wise for next year. i have plenty of people saying i would love to buy the banks which have been beat up. what are you looking at in terms of given the environment that's coming or we're in that will make sense. >> so first of all, i think the market has overdone it from a negative perspective but we expect fear to continue through end of the year, might base out in the s&p between 2400 and 2450 and then moderate back up. in order for a rally to be durable and hold up into 2019 you want to see other sectors

beaten up that haven't been able to participate take part in it financials is one of those you want to see industrials take part in that you also want to see small caps take part in that. that's after the market bottoms out, investors get back on the trolley, say i'm ready to ride this wave. >> any idea when that bottoming out process will be completed? >> could still happen this year, another 3 to 5% down from here still could bottom this year then i think economic fundamentals prop it back up everybody looks at it and says there's nothing structurally wrong here, and the fed is telling us, heard this from them yesterday, we're not in a place economically we need to be accommodative. don't need to be restrictive but don't need to be this accommodative. it is okay they continue to raise and signal they're data dependent. >> you have treasury yields lower, dollar at a one month low now. obviously stocks are falling

we have gold catching a bid today. what the markets are telling us the past couple of months is that there are concerns out there, such as trade tensions, a little disappointment in growth overseas and predictable slowing in the u.s. economy. beyond that, i think we would very much agree we have overshot on the negative camp s&p 500 trading at 14.4 times for p multiples, that's way too much, way too negative we do believe next year once we start getting more economic data that the fundamentals will speak louder than sentiment. >> liz, is the economy good or not? it seems like one camp says oh, the market is a better gauge of the economy, another camp says the fed is looking at more than the market and appropriately so. right now, labor markets seem tight. if the economy really isn't as good as some think, more people

outside of wall street might be in for pain in the coming months. >> it is certainly not bad, it is less fast than it was this year, it will be less fast going into 2019, but there aren't cracks forming in the economy. the market now i think is reacting to the fact that we're going to have slower fundamentals remember, we came into 2018 with a boost from tax reform. there's not a boost coming in 2019 so it has to stand on its fundamental legs and those fundamentals say gdp is slowing, earnings growth is slowing, and market is wondering what level can we sustain at that slower growth number. >> there's a psychological component to recession we can talk our way into one conceivably. there are plenty of executives, large corporations, pulling back which can have a self fulfilling effect are you concerned about that >> there is a concern that fall

in stock prices could spook consumers or spook businesses, but we're just not seeing it when we look at confidence we see high consumer confidence, strong pace of consumption remember, falling oil prices provided a nice christmas gift for consumers for 2019, and for businesses, maybe they're more cautious but that doesn't mean they start to layoff workers >> they're cutting back on cap ex that can have impact, can't it >> and when you look at next year, we think capex will be good an economy that grows 2% with 8% earnings growth, i would call that quite good. >> liz, the final word 3 to 5% before the bottom. next year? >> next year in the u.s. mid single digits, and outside the u.s., the interesting part is to watch the first half do we get

another deescalation in trade, maybe a peak in the dollar, depending what the fed does. if the fed pauses, they can prolong expansion longer second half of 2019, you may see a buying opportunity in international markets. >> thanks to you both. coming up, a rough year for facebook not clear there's a light at the end of the tunnel in 2019 either kara swisher is with us next to weigh in first, rick santelli, what are you watching >> you know, i'm watching the fallout of yesterday's fed meeting. there's been a lot of central bank meetings, some surprising, some not so much coming up, talking about how relationships have issues sometimes. and issues seem to be between the market, economy, and the fed. certainly not a marriage made in ds,llomg seay a cin up

i am scott walker. here's what's coming up top of the hour the man that called the selloff is back. mike wilson is here on whether the fed put the final nail in the bull market. and lee cooperman called out the sec for increased volatility in the markets today, the sec joins us. and rick saperstein, what to do with your money post fed, all at noon. david, about 15 or so away see you then >> awesome like to hear from lee as well. thanks, scott.

let's check the markets. we are basically at the lows dow and s&p 500 is down a point. 1.2%, near the lows. nasdaq comp. as typical, biggest loser at a 1.7% loss. >> among those that are negative, facebook and privacy concerns continue there. the social media company responding to persistent claims on how they handle user date stock down in the last six months, down 25% for the year. joining us, recode editor and cnbc contributor, kara swisher nice to have you, especially here at post 9 the latest on facebook and data sharing with partners, it seems to me the core issue is facebook has always been about more sharing is good. don't worry about sharing. it makes your life better. now it is clear sharing doesn't always make our lives better, but facebook doesn't seem to

have changed its message claims we dealt with the problems before, it is okay now, but more stuff keeps cropping up. >> a lot of it is about sloppy management of the platform some of the things they're doing to integrate with partners is fine, it makes it easier to make everything work with one another, android works with facebook, spotify. there should be some sharing among companies. that's a fair thing to say facebook should do i think it is disclosure, how they do it, what they give away. every time they give away too much or you don't know what you're doing, you're not getting consent. consent is difficult here. it is complex at the same time but the problem is their business is based on them having enormous amounts of information that they don't buy and sell your information, technically they don't do that, mashing up all kinds of information facebook is the nexus of it, that's why they're getting the criticism. >> terms of service, hardly

anybody goes all the way through. seems odd that on one hand individuals didn't seem to understand what was happening to data, and the companies facebook was sharing data with are largely saying we didn't really want it anyway so what was facebook doing not really informing either side of the data confetti. >> they have massive partnerships so many partnerships, it was run by dan rosa long time who since left so many partnerships, mobile partnerships, search partnerships, all kinds of things that integrate with facebook i think they were striking these deals. some are complex, you give away things you don't mean to give away or people aren't interested in, and it is part of complicated partnerships what happens is when looked at from above, it looks terrible. looks like what they're doing is giving away everything about you. many cases they're not trying to be fair to facebook, it is their business, their business is advertising,

therefore they have to be able to target their target customers in the same way, but it creates a problem. they're the nexus of all of the information. that's what they don't get then they sloppily did some deals, didn't close them off, didn't have them cambridge analytica is one thing, but there's all kinds of partnerships they did that they didn't end properly, clean up. that's really -- >> the constant drum beat of stories that seems to continue, the idea that management is yet to be on the right side of this. what in your opinion is the risk in terms of the regulatory side which seems to be what investors are most concerned about >> i think they're going to attract regulatory scrutiny. regulators don't think of it in a fine tune way, they think of it in a hammer way they're going to hammer facebook when you see "new york times" and everybody follows it, it creates a swirl around facebook that effects the stock market, whether they can make as much money, do as much targeting, and

people worry, sometimes unnecessarily. there's still a juggernaut there's no choice with facebook, google, and digital advertising. what happens with that, what can they do. the question is can they do smart regulation probably not they're going to hit it with a hammer, and you'll see problems. >> should more scrutiny be focused on antitrust, looking at this piece, beware of the tech backlash, argues that it is big tech companies getting bigger and bigger, even with regulations like gdpr. yesterday we had a lively debate about facebook and data haring the fact that a lot of partnerships are with other big tech companies >> that's a smart and interesting discussion these are giants -- to me, i liken them to semis that are going down the highway where are new innovative companies? they're not around there hasn't been uber, airbnb

what is what is happening that the startup ecosystem isn't as lively when you think about companies, they get bought. someone talked about pinterest, maybe they'll get bought, maybe this will happen some of these will get into the public, uber, possibly airbnb and others and lyft. where are the next companies coming from? >> funny you mention that, this juul deal. they're out your way not in the social media world. $38 million value. not a control position, no path to control for them, but they're not to the earlier point, not going public they raised $12.8 billion. >> they're selling cigarettes. i have these issues as a mother of a teen, the juul devices, how they're sold and it is nicotine they can't keep pretending it is

healthier version of smoking when you see something like this, they're buying a product that's a big marketing market leader it makes sense for them to do this philip morris to do this because they're not in this business >> they're 12 pin 5%, somebody discovered they're misogynist on twitter? >> i didn't know that. as we head to break. stocks at session lows on a possible showdown in d.c. over the border wall and funding bill the dow breaking below 23,000, it's down about 1.5% some of the day's laggards on the nasdaq 100 sma sma smantek, netflix

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. welcome back we've got markets at session lows right now the nasdaq composite is down 2%. hitting bear market territory. meaning it's down at least 20% from its most recent high. meantime, let's get over to the cme and rick santelli for the santelli exchange. >> good morning and thank you, a couple of things before we get into the heart of the piece. many have said -- especially in lieu of the fed meeting, stocks are a forward-looking mechanism. forward-pricing mechanism to get

a glimpse of the forward growth what the markets anticipate. and it all sounds great and i think at various times in the rear-view mirror it used to work here's my issue -- everybody seems to recognize that manipulation for policy in the fixed income, the sovereign debt market, the corporate debt market, that has distortions and we question the signals. many debate what the inverted curve means. but we never take that over to the stock side the stock market was the epicenter of what the central banks wanted to hold most artificially high, by putting many investors in more risky assets don't go in money markets, don't go in conservative investments stocks, corporate securities, you know, the riskier stuff. so why should they be surprised that it's gotten so -- antsy in face of the reversal of policy but it's never always been a marriage made in heaven. which made me think of something. you know the old saying for marriages, something old it's apropos here.

the something old that the market has to remember is prices policy outlasted its usefulness. then we have something new well fiscal policy then we have something borrowed. the money to pay for the fiscal policy and then blue? well wait, we need to make a slight change here this is more the blue i think we're all thinking of. and what blew up of course, 2018 returns and interest rates and to that, let's go to the 10-year note yield chart from 2016, the beginning and i pick that for a very specific reason. the double bottom, the second part of the double bottom, in the vicinity of sub 140 rate really signals a whole new way to interpret the technical for any market especially when it's an all-time historic bottom. as you move forward through time, first i want to draw your attention to never ignore double tops and double bottoms. maybe more to the point, at the end of last year we closed right above 240.

the double top right under 325, double tops are the king of the mountain when it comes to fixed income the last top, before we started to really emerge for this pattern, was in the low 280s the low 280s, happens to be the mid-point of the year. yesterday we settled below it for the first time this is crucial. maybe all bets are off granted we have a boatload of work right around 275. especially for the year. if we close under the 275 mark, beware john ford. back to you. >> thank you, rick santelli. stocks bouncing off their session lows, twitter, not so much it is down 12% "squawk alley" returns in less than three minutes hey!

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ringing up holiday retail. the pulse of the consumer. where there's spending, what investors should be watching "squawk box" tomorrow at 6:00 a.m. eastern, cnbc the nasdaq taking another leg lower this morning now down 20% from its recent highs. the dow was down more than 400 points at its session low. guys, volatility still reigns, especially after that fed meeting. >> you had the dow close at a fresh 2018 low, a new low, lower low. you had the transports close at a lower low. could you say what you want about dow theory it looks like we got a sell signal this week

in the middle of everything. >> i'm fascinated by the move in oil, 46.14 on wti right now. talk about every asset class down 40% since october on oil >> yeah, some semiconductors looking okay in tech but other than that, not that much that does it for "squawk alley," let's toss it to scott wopner and the half >> john, thanks, in fed we -- no longer trust stocks dropping sharply again after the central bank raises interest rates many openly wondering whether a major policy mistake is a growing risk it's 12:00 noon, this is the halftime report. >> two market heavy waelts join the fed debate on the halftime report first -- >> there's been a lot of damage. >> the man who called the downturn, months ahead of the rest of wall street. morgan stanley's mike wilson is back >> i think another 10% in that space, you know, that maybe 15 in some of the names will be it >> see what he sees now. >>