good morning, it is 8:00 a.m. at twitter headquarters in san francisco, 11:00 a.m. on wall street. "squawk alley" is live.

♪ ♪ good thursday morning, i am carl quintanilla with contessa brewer and jon fortt morgan is on assignment. we begin with a sell off this morning. nasdaq down 1%, back in correction levels. amazon, apple, facebook, alphabet, netflix with the most negative point impact. watching faang remain in bear market territory, down 20% or more from recent 52 week highs joining us, rbc capital markets analyst mark mahaney, and portfolio manager paul meeks good to see you both mark, i wonder what do you think accounts for weak nness in the space and how specific the news is regarding facebook in germany if that's the seed of all this today. >> i think the biggest regulatory overhang has been regulation for the last 12 months i think it is why faang stocks

hit a ceiling, that and near term valuation middle of last year keeps bubbling up our guess is, our sense is that we're going to see that dissipate as an issue, in terms of whether it impacts fundamentals, we have two and a half full quarters of facebook and google results since gdpr, biggest privacy regulation we'll see for the next several years didn't seem to have any material impact i think fundamentals intact, the order of stacks we like, we like facebook first, think there's a rerating story continue to like google, though there are issues with operating spen expenses and netflix is third amongst faangs >> if i recall, top large cap picks were facebook which is up 28% year to date, netflix up 31, google and booking given what you've seen, are things playing out as expected

>> things haven't changed much for the stocks it has been a rerating issue look, the stocks sold off and sold off aggressively. facebook happened to sell off for not just one month but for six months we continue to like that name. we actually did see most material upwards estimates revisions with netflix this is an accelerating growth story. it remains that. this is like the seventh year in a row in which the number of new paid subscribers they add is higher than it is in the prior year you're still relatively somewhat early on in terms of the growth cycle of that name we continue to like both those names. you also have a price increase coming out with netflix. they have been successful in the past, we thinkthey'll be successful again nice new elements. google, there's a question can they manage expenses amazon has advertising revenue growth acceleration, we don't think that's sustained, and challenges in the india market it is a small market but that

was a big hope for investors there's a couple of wrinkles all over, we think the trends are consistent >> paul, let's get you on snap you say the goose is cooked long term why is that? >> i've always been a bear on snap, particularly with the add venlt -- advent of share. i don't think it is managed, you can see that with the revolume fg door of the management teeam. i think the strong will gets stronger i think you have to be in facebook and google. snap, i don't know if they make it long term twitter, i give them some credibility at least for the come back they staged in 2018. >> paul, do you feel differently about match? it is not an advertising place as much as subscription. after earnings, up about 9%.

some interesting moves they made in tinder, their major focus in terms of growth. maybe not one specifically you look at, but in terms of how players like google and facebook and amazon and apple effect the ecosystem around them, you expect subscription to play out differently from advertising >> i do expect it to play out differently and i have to give them some cred i have to delve into the company in more detail, but like all platforms, are they going to be robust and for a long period of time i don't know but in the near to intermediate term, that one looks like it has some legs. >> on the advertising front because the companies seem to be posting strong ad revenues, in fact we saw this with disney in their broadcast segment, they came out and posted strong advertising revenues is there more drivers for some tech companies because of the amount of ad spending going on

>> one of the things you'll have to note is as we go more international which is inevitable, as we go deeper into mobile and video which is inevitable, you have a situation where it is less profitable for the companies to sell digital advertising in those venues, so one of the things you have to see, and i think it will take care of itself, is you're going to have to increase with a voracious appetite because there will be constant pressure on pricing for the ads. but meantime, in that kind of scenario, the strong get stronger, and that's why i feel strongly about google and facebook and maybe apple, or not apple but amazon coming on rather than the other platforms like snap and twitter. >> all right, mark, paul, stick with us. shares of twitter are plummeting this morning after providing light guidance julia boorstin spoke with the

twitter ceo and joins us with more hey, julia >> that's right. twitter shares down 10% on concerns of lower than expected revenue, guidance and expenses growing faster than expected the twitter cfo saying the investments they're making make sense as they invest in improving the platform >> if you look at the 500 or so people added to the team last year, more than half were in the engineering product design and research organization. so we're trying to build technology advantage that can be scaleable, that can be durable, and that can help us solve problems and help people find things they're looking for on twitter faster >> as for twitter shift reporting daily rather than monthly active users, he says this increases transparency and doesn't change how advertisers pay to advertise their message. >> it is nothing new for advertisers. they come to twitter with a specific objective, to launch a new product or service, to connect with what's happening.

they tell us what audience they want to reach, what part of the world or demographic they want to reach and we help them realize their objective. >> as for what will drive twitter's next leg of revenue growth, he is saying most revenue is from big brands, they're working to make it easier for small and medium businesses to spend and reach consumers on the platform as well back to you. >> thank you, julia. mark, paul, mark, to you first, this reminds me the shift from monthly actives to daily able to see ads, this reminds me of the logged in versus logged off users thing. is this a concern, the fact that monthly actives was coming down as they were trying to shift attention away from the metric >> i like the reference you made there. make it simple for investors give us both facebook does that it is not that hard.

it is fine the more disclosure the better give us both the issue with twitter, this has been a great stock for two years, a real turnaround, their guidance implies for '19 expect revenue growth deceleration and margins flat they're saying they're not giving guidance on margins but expenses imply that. so in that environment, the stock is harder to outperform. it is a good core asset long term, has very strong value proposition. the one other question having said that on the positive side, when can we get sustained growth and maybe they can do it with the new metric they've got, monetizable daily average users. if you can get double digit growth, maybe the stock can't outperform, our sense is this stock can't. margins are a little under pressure this year >> julia, when they talk daily average users, you know in

television they report ratings, they talk demographics, how much money do people have, how old are they, how much college education do they have does this matter in the space? if you have daily active users, are they looking at the demographics as well >> what they breakdown demographically, users in the u.s. versus internationally and in different regions around the globe. one thing that's true for twitter and facebook and snap, these companies are generating more revenue per user in the u.s. and overseas because the u.s. market is more mature one thing we do know, if you talk about the demographic, you want people to be engajged with the platform with the daily habit people come to twitter, it means users may spend more time, may be more engaged and connected to what they're experiencing on twitter. we don't have as much information about age range as

snap we know their demographic is younger. certainly for twitter it is about making sure people are paying attention to what they're seeing >> paul, i wonder what you make of this. this new metric is less than half the mau metric. are there human limits to how much high frequency information we need? >> i think there is, and when i look at the change, it reminds me what apple did a couple of quarters ago with backing out the iphone units when you change the goalpost, no matter how articulate your argument is for doing so, there's usually a bad reason i take this as a negative. i agree with some things that mark said. and yeah, give them some cred for nice turnaround the last couple of years, but as the stock technically approaches $35 a share, it is a very tough resistance above, and going forward with incremental spend

over at twitter, what is the earnings per share growth rate of the company in future years i don't think it is that robust. it is definitely going to be less than other digital advertising platforms. >> mark, can you recall a time when a company in this situation shifted investors' attention away from one metric toward another, gave maybe less information, and it ended up being a good thing, in retrospect you look back and say they were pointing me to a better number and even though it was less information, they were right? >> i can't, jon, but you make me think of two senses. when amazon stopped reporting active customers seven or aelei years ago, they went up. so it is not great investors want more visibility in both circumstances, stocks may have underperformed for a

time there's more than just what they disclose disclosure is great, fundamentals are better. most companies the more disclosure the better and there are noisy metrics and sometimes they're out of date. you should always have something to replace them. last thing on twitter, daily active users are more valuable than monthly to advertisers and investors. i'm glad we're getting a better dau number i don't know what you gain by not disclosing that any more >> mark, paul, thanks, guys. a lot to chew on in tech today >> thank you. shares of match group surging after strong results beating the street's expectations on earnings and revenue. the ceo of match group sits down with us exclusively next don't go anywhere. this isn't just any moving day.

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this is a great time to be in the love business for many reasons. we really are seeing tremendous growth from tinder and then as we have recently talked about, we are other exciting things brewing. we have a host of other products across the globe that we leverage as well we're feeling pretty good. >> you have products that cater to different demographics and age groups can you talk about how you're using those to maximize exposure >> sure. the first thing i would say is that we see now more people use multiple apps at one time. between three and four apps people are using when dating we want to be able to service all their needs. we also see that people use different dating apps based on age and life stage, whether you're a 50-year-old divorced person or college senior, across the board domestically and internationally, you have

opportunity to serve a lot of people >> mandy, clear it up for me on your business model. i have been happily married more than ten years, i am clueless, it is weird google ing tinder lk i did this morning this morning my search activity is weird, sorry, honey i want to ask about the difference between tinder plus and gold the way i understand it, tinder plus was 10 to 20 bucks a month, depending on how old you were. tinder gold five bucks a month, and gold is growing gang busters. does that mean you were overpriced in the premium area before or is there something i'm missing? >> i'll explain how it works you say you have been married a long time. what's shocking is over ten years ago, 3% of relationships started online now it is 30% in this country. so the world has really changed. this is the number one way people meet. we think the numbers i just quoted are probably more similar

outside the u.s., but we think there's real growth opportunity. in terms of a business model, it is simple. you can go on tinder, get a great free experience, but we offer features you don't mind paying for we have plus which is a subscription feature that enabled you to access a number of premium features. a year and a half ago we introduced gold, which gives you the ability to see who liked you. if someone says you want to see the women or men that liked you, it is hard to say no we saw the take rate on that gold feature was high. that was priced at a higher premium, another subscription tier what we saw is not only were people happy to pay more for this feature, but we saw more people taking the feature. that's driven a lot of the growth >> your company says half the singles in the united states never tried a dating app that number is two-thirds globally what's standing in the way, 30%

of marriages started with an online date, match somehow what's standing in the way of convincing the other half of single people to try it? >> i hope nothing. i think honestly over time i think we'll see much more adoption even 2012, only 16% of people in their young 20s, 18 to 25, used dating apps. tinder changed that. it brought a whole new generation to the category we believe a lot of what's keeping that number down internationally, a market like japan we have been in for a long time but there's a cultural stigma around dating that's changing and changing fast >> you said, sorry, you said on your call you thought facebook could help you overcome that >> well, i think there's a couple of things i said two things, facebook entered the category, the dating category and because of the reach, i said there's a possibility that facebook could

open up in areas where they have real strength where people that hadn't thought about dating might try dating we haven't seen impact since facebook launched in three markets they tested in in our products, but i think over time people are going to feel more comfortable and that the normalization of dating and meeting strangers to go for a cup of coffee will become much more pervasive everywhere. >> i'm curious, in ten years of growth that you talk about, how much has been driven by apps that are tailored for basically women to make decisions about who they might date? >> if you think about the match group products, the one that stands out is tinder the scale it had went viral with little marketing spend and millions and millions of -- 190 countries, millions of users across the globe so we haven't seen anything quite like it. there have been competitors that

come into the market, a lot of them like local players, but really that has not driven market growth. what's really driven market growth is things like introduction of mobile and also a few years ago we saw when 50 plus audience when they started getting comfortable using social, socializing with people online, they also, that category grew the more people feel comfortable, the higher propensity >> i know you're gearing up for valentine's day. thanks for spending time with us loved it >> thank you and as we head to break, let's look at the worst performing stocks in the dow so far in today's session goldman, sachs, pferiz, dow dupont more "squawk alley" is ahead stay with us what do you see? we see breakthrough medicines getting to patients in record time.

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bank of england cuts its outlook following europe's downgrade steve liesman has more on the deteriorating global outlook you have nice tables on how the numbers have come down, steve. >> pretty significantly, carl. not long ago we talked about global central bank tightening now several lowered growth forecasts, blaming trade tensions and other factors, in a few cases outright easing it let's look at the world. the u.s. as you know last week moved its policy from gradual increases of rates to a patient rate bank of england cut its global outlook. one analyst saw that, wiped out the forecast for two rate hikes this year. yesterday, european union cut its growth outlook china has several times cut reserve requirements moving so fast for the cameraman there. we'll see if they do more there. india, i believe it was yesterday, reserve bank cut, and australia, bank of australia,

reserve bank of australia shifted its rate to neutral. one analyst had four rate hikes. he said the u.s. economy otherwise solid. he is worried about global economies. >> you look at what the risks are, i think global risks are probably the most significant ones and that will be i at least will be looking at over the course of the next six months, how does that evolve >> here's the numbers, carl. boe went down by 0.5% to 1.2% for 2019 eurozone went down by more than a half point, 0.6 to 1.3 and federal reserve, this is back in december, cut theirs by two-tenths the question is will they cut more i talked to janet yellen and she highlighted global risk as a

major factor for the u.s jon? >> thank you, steve. markets are set to close in europe seema mody joins us with today's action. >> jon, strong reaction in the equity market. the number of economic metrics for manufacturing to exports which have come in softer than expected the past couple of months, european stocks snapping a seven day win streak today, the worst day of the year for german and italian stocks. germany is down 2.5% look at the currency reaction. the euro is holding up relatively well against the dollar, marginally lower at 1.13 investors are selling italian debt, sending yields higher by 7 basis points chl germany, you're seeing yields there pushed lower it is worth noting that even with today's decline in the equity market, european stocks are higher for 2019.

there's this idea that disappointing economic data will push the european central bank to take on a more dovish approach you have the u.s. and china becoming a bit more dovish that's helped european investors pour into european stocks. italy up 7% in 2019. investors will watch for commentary from mario draghi the coming weeks to see if there's more reaction from the ecb on a policy front elsewhere, a couple of stock specific stories fee at chrysler, softer than expected giants. and tata motors, a charge for the luxury business, and rbs, trading lower on a report from bloomberg that the uk government may trim stake in the bank shares are down nearly 4%. a lot happening in europe.

carl, back to you. >> thank you dow down 300, largely on headlines from larry kudlow regarding china trade. we turn to kayla tausche with more news. >> reporter: i'm getting information from sources of my own. one source in particular, senior administration official says president trump and president trump xi are highly unlikely to meet before march 1st. they could meet shortly thereafter that meeting, but this meeting is highly unlikely to take place by march 1st the reason the timing is important is china is pushing to hold the meeting on the back of the kim jong-un summit we know to be february 27 and 28 they wanted this meeting to happen before that deadline where tariffs are set to double on some $250 billion in chinese goods. the question now is what happens to those tariffs on that date. the overriding feel within the

administration according to people in the administration, people are being briefed by the white house, they'll stay at 10% march 1st. they're currently automatically set to double, but a presidential memorandum could hold them in place at 10% if the two parties feel they're reaching a deal. there are a couple of reasons why the meeting is now highly unlikely to take place by march 1st. the first is there's too much work to do on a deal between the u.s. and china the second, white house advisers are urging the president to limit the scope of the trip to asia, to just focus on the relationship with north korea and push for denuclearization. and finally, the optic of meeting in southeast asia or on chinese soil as china is currently pushing for to announce a trade deal. there's still no details, date, or location where a trump, xi meeting would take place all of that needs to be worked out. certainly some important

developments for those situations they're highly unlikely to meet before march 1st carl >> you see the market responding a bit to this. should the lesson be or reminder to investors be even if a meeting doesn't take place by that time, it is not a given that tariffs will accelerate from there >> reporter: correct, it is not a given. china is pushing to have all tariffs removed entirely but if a deal isn't reached by march 1st, tariffs could come off. they could not escalate them as negotiations continue. ambassador lighthizer briefed some senators on trade they asked him about the deadline and chuck grassly said that lighthizer was not definitive on what would happen march 1st. so we wait and see what happens. as everything with the white house, the situation is fluid.

ambassador lighthizer and mnuchin could come back with a different reasonable degree of medical certainty -- recommendation for the president. >> he seemed reluctant to telegraph the what ifs of what would happen just a reminder here, in a lot of cases the companies that felt the impact of the tariffs have already built in the impact of a rise to 25%. that won't come as a surprise to international companies. kayla, thank you for great reporting. appreciate that. let's get to sue herera for a news update. superdelegat wells fargo experiencing a system outage. the company saying some customers are unable to log into mobile and online banking. it also says it is investigating the cause, couldn't say how many people are currently effected. the ukranian parliament

amendmenting the constitution to confirm intention to join the european union and nato. he called on members to support the changes. and new satellite images suggest iran attempted a second satellite launch, despite u.s. criticism of its program the images show a rocket at the space center tuesday, but on wednesday, that rocket was gone and there appear to be burn marks on the launch pad. and gucci has apologized for a black wool sweater after receiving complaints the item resembled blackface makeup it covers the nose, includes a red cutout for the mouth it was ridiculed on social media. the italian fashion house says the item has been pulled from its online and brick and mortar stores you're up to date. that's the news update this hour back downtown to you guys, carl. >> sue, thank you very much. watching the markets

dow down 360 this will be the worst day since atmosphere least february 22nd when we come back, a deeper dive into twitter's quarter after the company fell short on guidance and major averages a bit lower

after market weakness, do you is down 343. kayla tausche said the president

and chinese president xi are unlikely to meet before the trade deadline of march 1st, but that doesn't mean tariffs are hiked from that point on but obviously infusing the market with nervousness. >> and tech is selling off as well after weeks of consecutive gains. dom chu is looking at the market action >> jon, we talk about the market selloff intensifying, some momentum parts in larger cap nasdaq stocks are focal point for some traders if you look at this chart, this is qqq, eft that tracks the nasdaq 100, the largest cap of the nasdaq stocks. you can see the last couple of days we have run into resistance, stalling out point 200 day moving average, some traders look at it as a possible area of support or resistance in the market right now, pulling back from levels we did touch it yesterday very briefly. among the types of stocks we're watching, about 14 nasdaq 100

are now at least 10% below the 200 day moving average for each respective stock you look at semiconductors, micron is 12 or perhaps more percent below the 200 day moving average. nvidia, 32% below its level, an act vision, videogame trade down it is not all negative there are ten stocks in the nasdaq 100 that are trading well above their 200 day moving average. ten stocks are 10% above or below. united, continental. lululemon, 11% above, and starbucks 18% above the 200 day moving average you talk about, jon, areas for relative strength and weakness, these are ones they may focus on as tea leaves. do they hold up better or exacerbated to the down side

back to you. selling off considerably, twitter falling sharply, down more than 10% after the company provided light guidance. shares currently above 30 bucks a share. with us, henry blodget from business insider and kevin delaney. good morning, guys henry, how much of this do you think is the light guide, how much is uncertainty around the metrics that twitter is giving about how to track >> i think with twitter, it went public, everybody thought it is the next facebook. we have to get on board. then it is going out of business, it is terrible now it is okay they have a niche that they control that nobody else does and that is news but reflecting that, their audience is news addicts, people that want to check in all the time, what's going on, what's going on, what's going on. given that, the daily average users is a much better metric

than monthly this is people that are addicted, want to find out what's going on. twitter is a valuable platform expectations got ahead of reality. news is not the most monetizable commodity out there. stocks trading 8 times revenue it is in a good place now. i think expectation just got ahead of it. >> i think one of the most dangerous questions on competition that i often end up getting is who is going to be the number three player in x or y space. we asked it in smart phones, it is asked in online advertising, who's the third player after google and facebook. what if there is none. what if twitter and snap never have a long trajectory. >> i think that's the right scenario twitter is doing what it needed to, clean up the numbers, clean up the experience for users, that means getting rid of online harassment and getting bots out of the system. the monthly numbers have dipped. but that's a good thing. in 2018, the first profitable

year, and advertising is rising. so to henry's point, this is a good business. it is smaller business than facebook by magnitudes i don't think we can expect that sort of growth snap came in earlier this week at a similar scale in terms of user base. the question i would have if i were an investor in twitter on their board, is there a way to get to the next level? is there a way to grow, is there a way for them to enter the really big leagues as a social network. i don't think jack dorsey has shown he has the answers. >> for awhile we thought it was nvidia is it not? >> we have some attraction with them, but i don't think they've shown they can get in the same place as youtube which owns the news video area or increasing competition in streaming from names, netflix, disney, whoever else. >> are there limits to

engagement on video on twitter >> the most important thing for engagement is daily average users continues to decline that's great we do a lot of video with twitter, it is a good platform, same as snapchat there's a specific video that works well there as long as they keep growing engagement, daily, that should continue to grow there's a big opportunity. >> what kind of video, live, short form >> live, some can be short form, often news related or passion, food, travel >> henry, how much are you looking at who is it using twitter every day versus who is using insta orsnap every day how much does it matter? >> it matters, but it is self selected you're not following food unless you're into food tends to be a certain kind of people if you go after that, same folks that are watching food network, advertising in that. financial, it is huge. nothing like that.

that's the financial community. >> twitter is such a useful tool in pairing with live events. when we watched the state of the union, and you're doing it with twitter, you don't get the same experience on, i don't know if anybody on snap is watching state of the union >> that's right. they have a niche. if twitter disappeared tomorrow, you need it, they've got it, it is valuable. as long as they clean it up and make it a better experience, it can be valuable. >> the thing they tried to do through moments and changing how you see your feed, you can graze the news, learn generally what's going on opposed to what they're excellent at, when there is news, going there, seeing what people have to say they haven't been successful in building the moments and all of that -- >> especially for young people. >> for young people into the scale of what it could be. if i were jack door see, look at

that as opportunity instead of going to yahoo! or another news portal to skim what's happening. >> seeing in the cloud and streaming quarter is costs, whether you look at google cost, twitter talking of increasing costs, facebook talking about costs of policing the platform how much is that theme becoming clearer. it is more expensive to continue growing some of the platforms than investors might have expected. >> definitely. it is showing you the biggest platforms have this advantage in scale. spend more on content. all of the platforms started what you might describe as user generated content, more and more getting professionalized, you've seen it with youtube and facebook to do that, you need a bigger and bigger content budget. what's interesting, if you look at the development of the cable industry, it is exactly the same first thing you do is build the pipes distribution and all of the professional content is

built on top of it that's what's happening with soft distribution in the internet not crumbling yet. taking a long time >> kevin quickly. >> we're seeing they're incurring costs to clean up platforms, improve the experience for users facebook in particular needs to feel more pain for users in terms of costs and taking a hit on targeting, making advertising less lucrative for people to come around and feel it is a better experience. >> they might say they're hurting plenty already henry, kevin, thanks for being with us. >> thank you we're seeing kind of a rocky road on wall street today. the dow industrial is off 1.25%. nasdaq is down 1.5 following headlines on china trade talks and concerns whether it is actually going to happen more on today's action straight ahead. stay with us your employees must love you. [ chuckles ] thank you. you could say that.

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well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade major averages are down. let's get to rick santelli for more on the market rick >> thank you very much i would like to welcome andy brenner. andy, let's get right into it. there's a lot of moving parts to the global economy much of it emanated from uk, mr. carney, their monetary policy committee met, no changes. but there's more going on. quickly, eurozone, rates are negative, out to 8 years, france out to 6, switzerland out to 10

years. japan's 10 year is negative, even though it is under major control. these are all issues that have to effect the u.s. the question is how much >> i think it all starts with a weakening european economies. everywhere you look, everything is horrible. you have what, factory orders and industrial production in germany down 7% and 4% year over year you've got ten-year blunts at ten basis points everything else inside of that is negative. the bank of england came out today and see more and more risks. the brits shot themselves in the foot with the brexit and lack of negotiation. a lot due to the weakness out of china even though china wasn't mentioned today. as i just mentioned to you, you had three-month libor move the most it's moved in ten years today, 4.1 basis points. i don't see how it doesn't

affect the u.s. and this fed. >> if you're an investor watching, what advice would you give him it doesn't mean various shares that you have an affinity for can't do well. generically in the macro, how do we deal with the exportation of this slowing into the u.s. economy? >> rick, there's no way that the u.s. economy can sustain the growth that it currently has with the world crumbling around it whether it be europe, whether it be china, whether it be anywhere else you have to take that into consideration. and we heard quarles mention last night how he's looking at the global economies you have to continue to look at it and recognize that you may have to use the balance she the and the reverse of what you're doing. both you and i hate that idea of the fed getting more involved, but you've got to the keep those options open nothing is like watching paint dry. it doesn't exist. >> now, as far as brexit, i know

that obviously, that some type of an exit strategy would be best versus a no exit strategy but in the final analysis, no matter how it turns out, andy, don't you think there's some buying opportunities after the point of uncertainty leaves no matter how the exit is described? >> rick, you and i both have both been in the business a long time buy when there's blood on the streets. when everyone is selling and things get real bad, you do want to step in i don't think that time is yet in brexit. i think there's a lot more pain that will come to the uk and to europe as both the ec b&b oe try to figure out their next moves >> excellent andy, always a pleasure speaking with you hope you have a great weekend coming up. and carl, back to you. >> all right, thank you. downtown is wndo 342 as selling continues this morning we're back in just a moment. don't go away. e?

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federal court in the southern district of new york and seeks more than $6 million in damages. he alleges amazon backed out of the deal last june after an accusation resurfaced the director and actor molested his adopted daughtering in 1992. allen calls those allegations baseless we've reached out to amazon for additional comment >> let's go back to the markets now. continuing with the selloff with all the monajor averages. questions whether this meeting on china trade was going to happen by the march 1st deadline bob pisani joins me for some of the selloff. i thought listening to some of the earnings calls that the companies that had been most impacted by tariffs have already built in the hike in tariffs come march anyway. >> no, there's several problems. tariffs are part of it the biggest problem today was the crummy european economic news the eu downgrading bank of england, that was just

depressing the commentary out of the blank of england europe is weaker we were down 1.5% in europe. number two, mr. kudlow was saying we're a long way from the trade talk deals kudlow is the optimist over there. when he comes out and starts being cautious, we took a bit of a dip. the biggest problem is the market is really expensive now remember, we're going to zero earnings growth for the first quarter. we're already there. 0.1% is the earnings growth for the first quarter. 0.1. look at the market, we've been up six weeks in a row here we are really expensive now. if you're assuming 0% earnings growth for 2019, the market is 17 times forward earnings. the historic norm is 15. all of a sudden is, you tell me we're going to pay 17 times for zero earnings growth that's way, way overpriced that's my biggest concern right now. >> no hope for multiple expansion this year. >> we need to get earnings up.

the people who are the 0 percenters or earnings recession crowd have to get blown out and the market estimates have to rise more. now the analysts are kind of like saying maybe they're right and cutting the numbers aggressively now particularly in the first quarter. we've got to blow out the earnings recession crowd the bulls have to blow out the earnings recession crowd or else the market will have a lot of problems for the next several months. >> does uncertainty play into it it seems to me that this march 1st deadline, some people were looking forward to something changing then. you know, best case scenario for some people is, at least we would know what the state of play was going forward now it seems like well, march 1st comes and goes and maybe there are more talks if the trump administration feels like they're going well, no new tariffs >> the market convinced itself some deal can be done. important players remind everyone this is complex

it's not about buying soybeans it's the technology transfer issues that are really hard to figure out and the market believes somehow some handshake is going to magically make everything go away if we don't get that, that's a problem. we had the companies identify problems with tariffs already. the market is going to go away you've got a lot of good news priced in. you've got the fact that earnings are going to hold up better than the market than analysts think if it didn't, the market would be way lower than that we've been 7%, 8%, 9%, 10% lower. 17 times on zoers earnings is crazy. too expensive for market they've got to believe the earnings will get better later in the year. right now, i don't know. i'm not very happy when i see this european talk remember, 45% of s&p 500 earnings are outside the united states a significant part is europe

when you see those comments, that's an issue. >> dollar is a factor there, too. bob pisani biggest one-day crop since january 3rd. nasdaq worst day since january 22nd we're on the cusp of losing 25k. we're below 2700 that does it for quack alley let's get over to the judge in the half. >> appreciate it i'm scott wapner breaking news this hour, president trump, china's president examine xi unlikely to meet before the critical deadline in the trade talks. kayla tausche rorring that development moments ago. stocks lower on the day on concerns about global growth sliding is further the dow at the lows of the day down by 360 points, 1.5% that's what the s&p is down, as well. nasdaq is down a little bit sharper than that. we do have the traders here at the table to tackle all of that and more joe tear know val along with jim eleven tho