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good monday morning. i am jon fortt with me, morgan brennan, sara eisen. carl is onassignment we begin with nvidia getting crushed after lowering guidance on q4 revenue, citing weakness in gaming and data center divisions. the ceo jenson wong saying q4 was an extraordinary, unusually turbulent and disappointing quarter, pointing to china specifically on that one the stock is currently down almost 13% bob pisani is back with us to talk about that. bob? >> what we're doing is lowering the global growth expectations for earnings that's not priced in now markets are dealing with three big issues first, central banks and how much they're easing into dovish positions, china trade talks, and the big issue for today, slower global growth, not just in china but europe where numbers have been poor the last few months nvidia's warning was prompted by

declining revenue in china and taiwan the two of them together makeup 50% of their revenue u.s. is only 13% of their revenue. caterpillar is more diversified, but blamed tariffs for higher steel cost as a factor and slowdown on sales in china that's only 5% of their total sales. little more diversified than nvidia the concern is around the earnings recession debate. two straight quarters of negative earnings growth, that would be an earnings recession q1 estimates down to 2%. they're only a bit better at 4%. i want to note, this is a modest decline in the overall markets, given two big bellwethers warned in two industries. consumer staples are doing fairly well, banks are down only fractionally energy is down because of the big decline in oil and natural

gas, and tech with a decline of 1.8% if this happened middle of december, you would have a more notable decline. >> i wonder how much bigger it is because of china. that's where the oems are, it doesn't mean the end market slowed down. >> united states is the big end mark, then europe, and china the second biggest in market overall, but that's a good point. what's important today, what's the market looking why are we not down even more. i think we priced in a dovish fed. global central banks are going to be more dovish, that's the most important thing a good outcome on trade, market believes a good outcome on trade is coming. everyone knows about the global slowdown but haven't priced in the earnings picture enough. that's what's happening today. two smacks on the face from two big companies saying your numbers are too high on global growth and that's what's

happening today. >> i get that point and i get that there are concerns about potentially earnings recession how realistic is it to see an earnings recession and caterpillar numbers came in lower than expected but they're predicting profit growing. >> if you look at the numbers, by a strict definition, two consecutive quarters of negative growth, i would say chances are 40%, a lot higher than a couple months ago high enough to get people's attention. that's the fulcrum of the debate are we going negative or not remember, two things that matter most for stocks, earnings and liquidity. how much money is around to invest we know the earnings number is coming down. i think the most important thing other than that is central banks, which are the number one determinants of liquidity are becoming more dovish that's why the market is so

supportive we haven't gone down even more. >> when i hear you list the risk factors, the conversations last week from global ceos and other business leaders, investors, and politicians last week in davos, one, it was much more upbeat than the media portrayed i think the fact is the global economy is still growing, more than 3%. better than we were doing in 2016 two biggest risk factors are politics, brexit that could send the global economy tumbling, and nobody expects that to happen because it would be so bad, and trade war between the u.s. and china, also solvable by politicians. nobody was worried about central banks and nobody worried about u.s. recession whether that's right or wrong, i thought it was interesting. >> maybe the media didn't cover this you were there, i will go by yours, but the genoptics seemed down beat. >> you focus on the big risks,

and there are giant ones out there, we're in a practical trade war with china and potentially britain could crash out of the eu with no deal both of those are risk factors the underlying economy seems good china may be slowing down, but we're talking about more than 6% growth and a lot of ammunition to boost the economy actually my take away overall is a lot of recession talk is overblown. >> markets can go down, recession in the united states is not going to happen the reason we rebounded is the realization that recession isn't going to happen. slower growth, if the market is not priced, you can get 6% growth in china and the market can go down easily now we're adjusting downward expectations for what we've got. i would watch. i think the biggest support of markets is the central banks around the world clearly they want more liquidity in the market. now we have to figure out what's the right number for global earnings growth and how it impacts the stock market

overall. >> you'll keep us honest on that >> if it goes negative, you'll hear it quickly. >> for more on nvidia and tech stocks, let's bring in some analysts guys, good morning taking a look at nvidia this morning and the note they've got out on lowering the revenue expectation, saying the global economy decelerated sharply, particularly in china, but it doesn't say only in china. i wonder as you head into earnings week, we have microsoft, amazon, all this commentary on data center and cloud slowing down, but estimates for cloud businesses haven't slowed down. do you think that's perhaps a mistake? >> good morning. yeah let me talk about semis that i

cover. we have been seeing the last week, week and a half is earnings coming in lower companies have been talking about the impact just from the overall slowdown in china consumer and internal china spend getting weaker, and the impact of tariffs. but i'm going to go to nvidia. i think for nvidia it is not just a matter of china slowing down what we have been pointing out is this company was in our view the growth in the gaming center was artificial, driven by the crypto market to a large extent. then you look at the data center market, they've done a great job in training, but as we go in machine learning from training, think of it as prototype versus production, there's more competition. we have been skeptical of nvidia we're not surprised. our estimates for the year are

below the street and we have been below the street for awhile >> paul, broaden it out. i wonder specifically, it is not just nvidia, we've had warnings from micron, from apple. micron in particular talking about cloud and data center buying slowing down. could that mean that the momentum in the mega scale cloud providers like amazon and microsoft is slower than analysts estimated >> i don't think so. we may have deceleration of growth it is still within it spend the most robust area when we have results from the cloud oriented businesses reported by microsoft and amazon, we get some confirmation of my view in the meantime, with a little slower growth we have a situation with nvidia and some other chip makers that they're in a modest to fairly severe

inventory correction so when they come out and talk about geopolitical, macro economic factors, yes, they are impactful but not as much as buildup of inventory that hasn't been drawn through and i still believe for the semiconductor industry, we'll see alleviation of that issue the second half of the year, the stocks to work well, particularly withbetter visibility in what happens between this summer and december 31 >> digging into nvidia more specifically, you have an outperform rating on the stock, $200 price target, given that announcement we got, you sticking with that >> i don't think much changed in terms of the long term story we ran a segment flagging data correction for crypto currencies i think you'll have to see a digestion phase and then when we

get to june, i think you see a significant change, probably more games, data center will be through problems third, when they switch to proof of work, crypto currency commands are back. so all three of those are a back half choice. i agree with the prior comments, more like that >> i think nvidia, i think of one of the most beloved stocks of the bull market that's clearly changed i wonder what it means for the rest of the leadership group in faang, it was always attached at the hip and how much hedge funds and investors fell out of love with these stocks and what it means for 2019 >> the way i look at nvidia, a little bit of a different situation than the rest of the faang, but yes, it has been a leadership company, and the

problem with a stock like this is it has always been expensive, it always will be expensive, based on traditional valuation metrics. you will never make a valuation case that's the rub because we have stocks, including some names in faang which are starting to at least show me that they're at least dark reasonable price investments the problem with nvidia when it goes to pe of 100, you have to see momentum there i think we see momentum return with nvidia, but it is a second half story >> close this out for us amd is down almost 5%. one of the best loved stocks of 2018 do you see these as buying opportunities based on the sense that maybe semis aren't performing overall as badly as investors may think? >> well, for semis in general we

have gotten more bullish as the stocks sold off into late last year we just upgraded micron a couple weeks ago, first we were recommending a memory stock. we are getting more bullish with some specific stocks with specific names, we would agree with paul and say yes, there's a second half play things are pretty bad, these are cyclical stocks. and bad news in certain cases is expected and estimates have come down when it relates to amd, that's one of the names i am not a believer in, i think estimates are too high, expectations are too high, and i don't think they can execute and make money on a consistent basis that's why we're not jumping up and down >> mitch, same question to you >> yeah, i think that's fair of the memory side, i think they're getting toward the end of the pain period. historically speaking, you don't

see five or six quarters straight memory declines, but i think you have to pick your spots. the semi cycle improves probably the back half of the year, still have more pain there for amd, i'll take the other side, but i think it will take at least two quarters. when you run the task on amazon web services on epic, it outperforms intel in several instances, but you have to wait for epic 2 you can decide how big share gains will be. you have to be careful near term numbers, took down numbers for q1 and 4 because of the gaming issue, but back half will start to see share gains made >> okay. good info. thanks, guys see you soon >> thank you when we return, why kara swisher is offering her editing services to mark zuckerberg, following his op-ed. and why howard schultz is considering a run for president.

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this is it guys. you ready? to have epix? absolutely. woooo! you'd laugh. oh, ow. [ chuckles ] you'd cry. look, look, look, look, look, look, look,. maybe even laugh while crying. what the fertilizer? sounds pretty great, right? riiiiiiiiiiiiiiiight! just say, "add epix" and it can all be yours. it's easy to upgrade. and you don't want to miss out on everything epix. welcome back to "squawk alley. following mark zuckerberg's op-ed titled the facts about facebook, kara swisher is offering her editing abilities and correction of the record on what the facebook ceo was really trying to say. she joins us now with more kara, good morning to you. >> good morning. how you doing? >> let's talk a little about

your edits to mark zuckerberg's op-ed here what would you say were the biggest take aways from your vantage point? >> i was just -- it was more a joke column, i was rewriting it completely the whole idea was somewhat of a dulles aof things he said before, and i was trying to say what he said, meant to say or what he really meant so different things about their business model and how they're manipulating users and things like that. it was mostly a joke, but i thought his column was pretty awful. so i thought i would re-write it >> the timing is interesting the fact that he would release this report about a week before we get facebook earnings do you think it's sort of his way of trying to explain the business model in what could be a strong earnings report >> i think it will probably be a strong earnings report despite all these issues if i were him, i guess -- the reason it prompted me to write it as someone that likes him, if

he says something he is in trouble, if he doesn't, he is in trouble. i would veer toward saying nothing. he talked on capitol hill, he was on the i'm sorry tour, he and sheryl sandberg, and i felt if you're writing, write something substantive, and that's why i took it apart this is a lot of the greatest hits, that we don't sell their data, most people understand the basics of advertising business i think i made a joke that they don't hand a disc over your intermittent fasting posts to p&g. most people understand that. again, if you are going to write in "the wall street journal," say something. i think he is stuck no matter what he does in this case and probably in that case since he is relatively inarticulate about the problems, i would probably not say a whole lot, but that's just me. >> kara, my issue with what he wrote is it addressed concerns that i don't have as a user or

as a tech observer, saying of course they don't do this, but he didn't address the spread of bad information on facebook and how bad information seems to spread so much more virally than good information does, at least. that's my sort of qualitative, i don't have specific data on that, but how is facebook going to change or is it interested in changing the way it is engineered around information. >> it didn't spin forward. it left out cambridge and data leakage, hacking, left out the russians, anything we have been talking about that facebook zoep doesn't want to talk about and he addressed issues nobody has with facebook necessarily. we all understand it is an information vacuum that's pulling in all our information and spinning it back as advertising and services by the way, good services, some are good and some had problems it was a weird sort of like talk about howard schultz in a

minute, we serve coffee and it is not too hot it was odd i just made fun. i just had a good time i wasn't meaning to be mean about it >> one thing investors are trying to figure out ahead of earnings this quarter and the quarters to come is how much costs are going to rise. they have been dealing with this problem in part by hiring more people and backing some ai to that content and make sure that privacy is more protected. where are they in the cycle of spending how much more do they have to go >> we don't know we know they have been spending. the problem is their business is inexpensive to operate because they weren't operating it properly now they have to hire people and have to do more computing, they have to do a lot more things to make the platform better and that costs money one of the issues is they weren't monitoring it correctly. sheryl sand berg talked about it last week in europe, the idea is we didn't do enough. now doing enough costs money

maybe it is not quite the fantastic business everyone thought it was if they have to be cleaning up continually we'll see the numbers. maybe they'll figure out an ai way to do this, i don't know quite know how they are going to clean it up, but that's their job, to clean it up and i think people have that expectation. >> all eyes on that report wednesday after the bell first, let's get to dom at hq. >> we have shares of pg&e halted third time for volatility. they're halted up 3.5% up as much as 14% plus on the heels of bloomberg headlines saying there could be a possible investor group being put together that offered up a possibility for pg&e to avoid bankruptcy this is a $4 billion plan that includes hedge funds including elliott and blue mountain.

that resulted in a spike higher to the up side trading was halted another trading halt after that. this is the first trading halt to the down side, up 3.5%. we'll continue to monitor what happens with pg&e. that's why they're halted now and have been halted three times today. back to you. >> dom chu, thank you for bringing that to us. it has been a volatility stock turning back to kara swisher, howard schultz, former starbucks ceo telling 60 minutes he is considering a run for president in 2020. take a listen. >> i am seriously thinking of running for president. i will run as a centrist independent, outside the two party system >> kara, back in 2017 you tweeted response to an axios article saying bob iger may run

in 2020. guessing howard schultz would throw his hat into the ring as well turns out looking at this, your prediction may be coming true. what do you think? >> i didn't think bob was going to run at all, he said that to me several times i know howard pretty well when he was running starbucks, met him a long, long time ago. you know, he sent me some thoughtful, we had some thoughtful exchanges about the issue and i think he cares deeply about this country. it is difficult to come from an independent position without one of the major parties, so i don't know about that. not sure if he just wants conversations going or if he is serious. i suspect he has to be part of a major party, just the way bloomberg is considering it. there are hundreds of people running. >> seems like it some big risks for him too will his tech savvy, starbucks was among the first with wi-fi, mobile payments, things like

that do you expect him to bring that in, perhaps in how he deals with data to stake out an early sense of how he can compete or is his tech savvy overstated? >> i don't think that matters as much i think the question is business acumen, i think that's the idea. someone i was having dinner with two political reporters, it is the why not me candidacy i think he is a competent executive. if donald trump is in office, why not me he is civically minded and i think a lot of people are thinking about this. that's how i think they're looking at it, including business people. i think he is one of the few business people that will run. i don't think bob iger will run, sheryl sandberg's name was put out there or mark zuckerberg,

that's not going to happen i think he will be one of the three or four dozen running for office next time. >> while we talk about the election, i wonder how tech companies that we cover are bracing for this notice the headline, new york congresswoman alexandria ocasio-cortez, biggest threat to journalism are tech companies and concentration of ownership, calling out facebook we're in for bipartisan bashing, aren't we? >> tech isn't liked by either side i think the republicans are on them for being biased, the democrats are on them for the russians and concentration of power. i think tech doesn't have any friends now in washington, especially the facebook and googles. i think some other companies are like thanks for dragging us into the mess but there's going to be pressure on tech to do something, some sort of regulatory thing you recall, i did a piece on the internet bill of rights and i talked to the speaker of the

house nancy pelosi about her interests in figuring out some regulatory framework for tech going forward. and i think she had her hands full with the shutdown, but i think that's one of the aims of the democrats to start looking at the issues. you'll probably see action there. >> something we'll be talking more about thanks for joining us. >> thanks a lot. >> as we head to break, look at shares of caterpillar, lower after missing on earnings and disappointing guidance the stock is down 8.5% more on caps quarter next. first, the worst performing stocks in the dow in today's session. there's caterpillar and 3 m. more "squawk alley" ahead.

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>> sara, european markets starting the week lower as optimism fades somewhat ahead of a u.s., china trade talk round and brexit vote tomorrow we have down beat economic data out of china, weighing on investor sentiment globally. let's hone on two uk companies, pushing markets lower there and abroad petra diamonds falling after lower than expected revenues second half of 2018, citing lower demand for diamond and also the mine in south africa they're on pace for worst day of trading since last may shares of tesco, announced plans to cut jobs and close 90 stores as part of a major restructuring effort there as many as 9,000 positions could be impacted. and looking to tomorrow, british lawmakers scheduled to vote on theresa may's plan b for brexit. if she gets the necessary

backing, may is going to go to brussels and look for more concessions. despite uncertainty, the pound at the highest level against the dollar since october something to watch on the brexit front. back to you guys >> thank you let's get to contessa brewer with a news update >> here's what's happening now the congressional budget office says the u.s. budget deficit is set to hit $897 billion this year, and predicts economic growth will slow as the effects of president trump's tax cut on business investment begins to drop off it predicted increase of 118 billion after last year's $779 billion deficit. the cbo also reports the partial government shutdown cost the economy $11 billion. 3 billion is permanent the analysis didn't include some indirect effects of the shutdown, such as halt in some federal permits and reduced access to loans.

democratic presidential candidate kamala harris says those in power are trying to turn people against each other she spoke in oakland, california pope francis is speaking to reporters, traveling back to rome from panama, was terrified of a bloodbath in venezuela. comments came after struggle for control of the country turned to the military over the weekend. let's get back to "squawk alley. sara >> thank you when we come back, the busiest week of earnings season getting under way. apple, amazon, microsoft, facebook some of the giant tech names set to report. we'll look at names you need to watch. first, look at where we stand across the major averages, kicking off the week lower dow down 300 points. 1% or more decline for major averages technology being hit hard. quk le rur aer"sawaly"etnsft a quick break. hawaii is the first state in the u.s.

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40 billion of two year notes up for auction moments ago rick santelli is in chicago. what's the demand like >> jon, the demand was pretty good i gave the auction a b 11:30 is early yes, 40 billion. we will have another one let's go through a 2.60 was the

yield. that was indeed the offer side of the when issued market. moved to 260.5 that was the bit light piece everything else looked good. 53.4 on indirect, 19.4 on direct so b for boy on two year next up, 41 billion five year notes, coming in about 83 minutes. morgan, back to you. >> rick santelli, thank you. look at shares of caterpillar are falling, leaving the dow lower. reporting a big earnings miss and seeing full year profit guidance fall short of expectations for 2019. shares down 9% the heavy equipment maker often a bellwether for the economy cited tariffs and slow down in china sales as factors in a disappointing quarter. calls currently going on some of the headlines out of it

is that it is a healthy u.s. economy, they expect that to be favorable in 2019, latin america which also saw weakness last quarter, continued recovery there, but demand lower. europe and the middle east, political and economy uncertainty still exist there, and in terms of asia pacific, a big focus, given numbers we got this morning, company says outside of china they're seeing strength within china, industry is dynamic. variety of forecasts as of now, the china market is flat that's what they're expecting after two years of growth. 5 to 10% of total sales. some other headlines, that pricing continues to offset head winds from higher materials and freight costs, they're seeing higher sales volume, and we're going to continue to monitor that q and a is going on with the call you can see shares are down 9% today. i think the big take away, guys,

is that the company did see sales growth last quarter, but they're starting to see slower sales growth in the key asia pacific market where china is and where investors have been concerned. north america is still strong. they're still expecting growth and profit, expecting growth in sales, but not as strong as we have seen in the past. we're going to continue to monitor this and bring headlines as we get them from the call >> cat shaving 78 points off the dow by itself. let's talk about this. stocks are broadly selling off with the caterpillar numbers, nvidia pulling numbers lower, blaming china as morgan mentioned. cat reporting disappointing earnings and nvidia slashing guidance on pace for the worse day since november this as the national association for business economics is out with a new survey saying that $1.5 trillion tax cut had no major impact on business capital spending plans

let's bring in the chief investment strategist and scott ren. senior strategist at wells fargo. reaction to shares of caterpillar and any big conglomerate with ties in china, what does it tell you where the market is on the global slowdown story? >> i have to think that the market is responding healthily you have slowing occurring we have truces in terms of the government shutdown, we have a truce in terms of the trade war with china we don't have resolution and without resolution, slowing would seem to be significant, and will be acknowledged when the market focuses on that instead of positive developments that may be forthcoming out of the true situations under negotiation. >> what does it signal about the rest of earnings season and where we are so far and how the market is set up for it? >> the earnings season so far has been fine but the problem

here, you could say for the last year and a half, is the fed going to make a mistake, is global growth going to slow. really, we have seen the fed issue at least for the time being taken off the table, the probability of them making a mistake soon seems to be less, so the market is laser focused on the global growth story you heard it from cat, from a lot of other companies this morning. and certainly the industrials, whether it is trade, global growth in general, you know, industrials are going to react now, saying that, they have been one of the top performers year to date basis. we expect better performance out of industrials this year than last year. global growth is the story that's what the market is paying attention to i don't think so much what the absolute number is on fourth quarter earnings, it is all looking ahead. >> run it out a bit. congress and the president have to do something final in three weeks. that hasn't happened yet what's the market pricing in as

far as what happens? >> i think the market is pricing in some weakness here. we don't know exactly how it is going to turn out. the president is saying he could still pull the emergency lever so to speak, calling to fund the wall with emergency funds. and the market doesn't want to see that the market wants to see a resolution we think the probability is higher to get resolution with china by end of the first quarter, but the negotiations in washington likely to drag out, but we don't expect a bad entding ent ending we think there will be a deal. neither side wants that in a year where we're headed towards 2020, a big presidential election, no one wants to take the kind of blame a government shutdown extension or going for the national emergency lever so to speak would be utilized

>> i was going to point out that caterpillar is off 25% from recent highs, it is not a shock. i wonder how much is priced in in terms of bad news on the china story versus what companies tell us. >> i think that's a key question in the last couple years you saw shares of caterpillar run up the expectation was you were in the midst of recovery. sales and growth were beginning to accelerate, and maybe the best was yet to come then last year when you saw the higher costs and now with fourth quarter, you see sales start to slow a bit, although still up double digit percentages, many key markets, i think expectation is that growth won't be as strong, maybe we peaked, and that's why shares of industrial heavy weights trade lower, including a name like united technologies that had a solid report last week and isn't having the same impact from

china which i think begs the question, scott, i'll put it to you, are companies this year given all of the uncertainty, given slow down in terms of the macro picture going to spend and make investments because that's going to effect some industrial companies, it is going to effect tech companies, you see it with nvidia today is this a longer, more prolonged snowstorm in terms of capex? >> that was a big problem in 2018 and capex did increase, but it was minimal compared to expectations and street expectations that's a big concern along with the global growth story going ahead, it is capex you think about it, companies want increased demand, want to anticipate that. we're seeing the economy growing slower than in 2018 and 2019 there's also various concerns, whether it is tariffs and fear of the slowdown and those kinds

of things. i think the enthusiasm over capex is not what we felt it would be coming into 2018. we think we'll see better numbers in 2019, but between global growth and capex spending in the states, really, for the s&p 500, those are the two big determinants going forward that the market will pay attention to we expect better numbers i think the market's expecting some improvement there but we'll see. they'll be focused on capex, any kind of capex information or estimates. >> guys, thanks for joining us and still to come, what to watch in apple results this week in the company's first earnings report since ceo tim cook's warning on revenue and tesla falling slightly a story that saudi arabia

slashed exposure to tesla cites four people with direct knowledge of the matter. more "squawk alley" after this break. ♪hold on, i'm comin' ♪hold on, i'm comin' ♪hold on don't you worry,♪ ♪i'm comin' ♪here we come, hold on♪ ♪we're about to save you i'm comin', yeah♪ ♪hold on don't you worry,♪ ♪i'm comin' i'm brad castillo. did you know that americans who bought gold in the year 2005 quadrupled their money by 2012? even now experts all across america predict the real gold rush is just beginning. u.s. money reserve is the only precious metals company led by a former director of the united states mint, and is one of the largest u.s. gold coin distributors in the country, u.s. money reserve has proudly served

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the wind out of a big biotech stock. that and more at noon. about ten away >> thanks, scott. the government reopening after a 35 day shutdown, thousands of irs employees are headed back to work. is the shutdown going to slow down your tax refund anyway? ylan mui is in washington with more on this season's tax uncertainty. >> reporter: tax filing season starts today, and the irs is open for business. but it could take some time before the agency is fully operational. the white house tried to make getting out refunds timely one of the priorities, so even during the shutdown they recalled tens of thousands of workers to get ready for the season the only problem is roughly half the workers didn't show up either they couldn't be reached or said they couldn't afford to come to work because they weren't getting a check to pay for child care or transportation even now that the shutdown is

over, one worker said the irs suspect going to be ready to be sending out refunds immediately. >> we don't go from zero to 60 in one day it is going to take time to ramp things back up so i can't help but feel that refunds will be child credit or setting. stacked by humans rather than computer >> reporter: even at the irs it's not just about refunds, it's also about revenue collections. $2 billion in tax revenue won't be collected because of the shutdown they said that is money that's lost for good. back over to you >> thank you getting a check on the major

averages the dow is down 370 points the s&p is down 1.4% the nasdaq is down 1.6%. tech stocks, energy stocks and industrials lit hitti inting everything lower the latest innovation from xfinity

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rick santel lirli >> it's fascinating to me and not in a good way. one of the big driving stories is capital spending. it should be big story capital spending is the seed corn of tomorrow for the economy. thinking about why they haven't turn activity in all these big metrics we pay so much attention to that are corner stones of the good economy, why aren't they doing better i think one of the biggest reasons is government policies lately and lately could be a long time, take shortcuts. then there's reversals most of the policies are reaction natirea reacti reactionary to a condition all this makes sense to those mi politically minded return of your investment driven the most recent one is the

shutdown it's sad that both sides see something so strong that they hold out, but it's not good for the country. going backwards in time. tax reform whether you're a fan or not a fan. to not have any votes on the other side of the aisle or health care or the mortgages and the gfcs and the bail out. it seems as though there's never any long term thinking about those we put in office you may say it's always been that way and maybe it has. the problem is you add in social media and there's an echo chamber. listen, remember the holidays. you sit with all your friends and relatives. 12 people at a table and how it rambuctious it can get on certain topics where nobody agrees agrees they elect people that's very

resistant or extreme the problem is when you take each of these issues and let's take tax reform. she explained it in a way i can live with which is this. if you're a leader, world trade, gl global slowing those make a big difference to you. the biggest difference is the policy, the rates, may be short lived. if we legislate short lived policies the trustworthiness of our government will not work and the ultimate result will not be anything like what we're trying to correct, mold or change sarah, back to you >> all right thank you. stocks in the red. near session lows here we'll be back in a moment to show you what's moving inside this market. stay with us

as we approach noon, take a look at the major averages everything down about 1.5% the s&p bearing the best of the three. the dow down about 230 points. take a look at caterpillar and

nvidia reporting earnings missed, nvidia down more than 14 getting closer to the lows of the session. if you look across, amd not doing particularly well. some other tech names down in sympathy that will do it for squawk alley. l let's send it over to the judge. thanks i'm scott wapner the busiest earning season upon us it's 12:00 noon. this is the halftime report. earnings, a big miss in the industrial sector as caterpillar misses many big name chips fall like a stack of bricks. what kind of impact does this have on the fed? what should we read about the rest of everyoning season. this is the biggest week of the quarter. the halftime report with scott wapner starts right