11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ good friday morning. welcome to "squawk alley." i am carly fiorina with contessa brewer and jon fortt at post 9 morgan has the morning off obviously a selloff on our hands, dow down 300 plus, session lows shares of apple on a tear, rallying enough to reclaim title of the world's motion valuable publicly traded company, trying to hang onto the flat line sending out an invitation earlier this week with the tease it's show time

as wall street looks ahead to monday, some long term holders of the stock remain skeptical. joining us, jeffries analyst jeffrey oh shay, and chief investment strategist that remains in the stock as well good morning, guys >> thanks for having me. >> help us understand whether or not you think at least the streaming wars will change on monday >> yeah, well i mean -- sorry. >> nancy >> i think the announcement is exciting we have long been advocates for the stock for services revenue, recognize iphone sales had begun to slow awhile ago i don't think it is a game changer. it is more of a psychological benefit to shareholders and an indication that the company is innovating rather than -- and i wouldn't even see innovating, they're following and hopefully

branding this in a way like they always do, so we're excited to hear the announcement and the breadth of it, but i wouldn't be chasing the stock at these levels because of this announcement >> tim, is content going to be kind of analogous to what the cloud had been for the enterprise it seems like especially for microsoft it was really a valuation mult meyiplier i wonder because even if this does well for apple, it is not going to move the needle compared to an extra couple million iphones or the margin that delivers. how should investors think about the value this product announcement will bring? >> look, the content will be key, we'll be eager to see what apple delivers and announces monday we know they have 12 originals in the works we know they're spending over a billion a year on content. we don't know how that will be bundled and don't know how it will be priced if you have something like "game

of thrones," that could be interesting. the problem for apple -- >> even if they have the next "game of thrones," come on, it is not the next iphone in terms of how it effects the stock and investors, even in the best case scenario, what is this really >> so sort of echoing nancy's comments, if you do simple math, right, if apple can grow to 140 million subscribers, right, the size of netflix today, by 2023 this video service will only account for 3% of revenue. the only thing that matters for apple investors is the iphone which is in decline. we're on the sidelines with the story now with apple, the multiple at close to five year highs, with iphone declining double digits in terms of units, we see millions of unsold iphones in the channel, we see heavy discounting on the xr. and when you look to the 2019 iphone launches which i think is the more important than what's going to be announced monday,

this triple camera setup doesn't seem to solve the problem of these length ening upgrade cycles i think they're going to wait until they get 5g. >> if services can't outweigh lagging sales in iphone units, nancy, what could be the catalyst for the stock >> hi, contessa. i think, listen, services is critical, streaming is even as part of services is not critical for us the solution is most likely a resurgence of growth in china which will prod global growth i know i have been on that for awhile we're starting to see signs of it tiffany reported with great main land china this morning, sales but not necessarily the tourist sales, i'm less concerned about that, i'm looking for green shu chutes in china. i think services are critical.

tim and i might disagree on that, but i don't think streaming is enough as a component of services to force you to chase the stock we're closer to being sellers than we are to being buyers, we bought in december and early january and now we're in a mode to begin to trim the stock back. >> interesting that's been a good trade tim, what happened to the argument that and morgan stanley and others that all incremental growth from here on out for five years will be services and wearables. iphone units are simply not going to be the focus. >> look, we have also been bu bulled up on the services opportunity. apple has everything it takes to build a valuable services business over time the problem is that iphone at $139 billion of revenue in 2019, the iphone business is just so big for apple that right now services is just too small to move the needle.

i think you get a higher multiple, but with iphone coming down double digits, i think in apple trading close to five year highs in terms of multiple, the stock feels a little tough now to me. >> nancy, here's the argument that i see for the streaming launch and for apple services strategy in general. tell me what you think this is really about the platform, and if apple succeeds in this services push, it gets people continuing in the ecosystem, not churning out. if they're downloading high quality video, they're more likely to want the latest devices, maybe the latest iphone, and that's a catalyst to speed up the replacement cycle should they think of services not as an alternative to that but as accelerant to it? >> you're right. that's what drives the stock long term and i think it will. to tim's point in the near term, you have to replace a lot of

revenue and and that's where the argument comes in. so at 17 times multiple, i don't think it is a bad idea to take some money off the table here and let the stock reconsolidate again and then we see the next leg up in the next 12 to 18 months, but i think your point is the right one and that's what we're banking on as investors. >> monday is going to be a big day regardless, whether you're in apple or not. see if it changes the media environment. tim, nancy, great weekend. thank you, guys. >> thank you >> thank you. still to come on "squawk alley," two more big ipos on the way, pinterest and uber. both plan to list their shares here at the nyse soon. speaking of which, let's take a look at shares of levi's, up big after debut yesterday. we discuss the ipo rush next. first, let's look at the major averages the dow down, let's see, 281

points s&p and nasdaq are both down more tn haa percent. we're back after a quick break

shares of levi strauss after debut yesterday. trading $22.79 a share with lyft planning to go public next week and possibly pinterest next month, uber also reportedly planning to file in april. so why are private companies and

notable tech unicorns rushing to the public markets in 2019 david etheridge, former co-head of listings here at the new york stock exchange, and larry haggerty, managing director from ljh investment advisers. >> good to see you. >> david, this year just the number of shares that are going to be available, the value of the companies planning to go public looks unprecedented levi's got a great reception yesterday. how should we be thinking about whether there's enough capital out there to absorb all of this supply >> that's a good question but i'm not worried about it at all. >> not at all? >> not at all. tremendous amount of cash for deals coming forward any kind of very, very, very large deal will go outside the u.s. for additional demand to soak up the supply

so i'm not worried about it as relates to being overwhelming for the market you go back to the '90s, we were doing 400 deals a year '96 did 600 plus we have done 26 deals for 5 billion. it is nothing. sort of like the warmup band for the concert. not only are you not going to remember it because of everything coming, but i am not worried about the supply and demand >> what's your take from the companies that have gone public? levi's yesterday, you know, founder family controlled, even though they're not involved in management of the company, didn't seem to effect the reception. they're still working on the direct relationship with the customer people said fine, bought it up what do you think? >> this is all kind of covered in the movie gremlins, jon one thing with the gremlins, you're not supposed to feed them aftermidnight, because after midnight bad things happen. >> you also don't get them wet

i get the point. >> the investors have been fed after midnight and demand for these things as david said looks infinite but at some point there will be a day of reckoning when i listen to things like lyft is cheap at five times revenue, there are only a few times in market history in the last 40, 50 years where people price things on revenue. it is all about cash flow. stocks are the present value of future dividends you look at lyft it is valued looks like now at $1500 a current customer let's say the current customer generates $300 of cash flow. a cable company would be valued about $2,000 a customer of cash flow, but the cash flow per customer for the cable company is much higher and the cable company sells it 8 to 10 times cash flow, and that cash flow is growing nicely what we've got is a situation that five years from now people are writing books about as they

wrote books about the boom in 2000 and 2001, it will end very badly. but before it ends badly, there's going to be a tremendous amount of financing and you have to go back to ec 101 the demand for what the companies are selling is basically flat and all we're doing is giving these companies capital which is inevitably going to increase the supply, lower the prices, sometime or other produce disappointing cash flows when people start looking at them and there will be hell to pay. >> and lyft is on a road show now, it is going to a roomful of investors as we reported on cnbc and saying we're going to make money, we don't know when and are not going to explain how, but we're going to make money. yet there's a lot of enthusiasm and tension. how do you explain that? >> if you are directing that at me, contessa, i think growth is a terrific elixir for a lot of people and i think there's anticipation reminds me when linkedin came

out, there were no social stocks before that. people were like i really want to participate in this, even if i'm not sure what i should be comp.ing this against, and it is a little like that i think there's tremendous foundation there, we have a market that helps the ipos, the fed helped us a bit this week too. there are a lot of folks saying i like the basic environment i see now and i'm going to participate in this out of the gate i don't want to miss this. >> steve case was on squawk this morning, they were asking what's the biggest difference now in the ipo market between when he came to market and now he said we sold for two times revenues that says a lot about where we are. >> i went to the ipo road show for snap, carl, it was on the 50th floor of the mandarin hotel. there's an old saying, if you have to sit in the balcony, time to head for the ex-its people were hanging out of the windows to buy this thing.

it was an absolute feeding frenzy and of course it ended badly a lot of them don't end badly, but if you remember when facebook went public, i think it went public at 36, the stock broke. we were buying it at 26. >> yeah. high teens eventually. >> the allure of getting the stock because the supply, because of the clever bankers is so artificially constrained in the initial public offering, the allure of getting some of the stock and getting basically the sure thing of a pop is like an elixir for investors and they inevitably, even though eventually it may prove to be bad for them, they keep coming back for more. and we're not inventing new tricks, we have a different generation of investors. >> david, you mentioned a distinction between apps on your phone companies and other companies that are coming to market this year i wonder if there's in a rush of companies coming public some

opportunities in the type that might be overlooked. what should investors be paying attention to perhaps outside the hype cycle of pinterest and uber where there might be a different level of value. >> jon, you're right thanks for bringing that up. when you look at it out there, people are asking about apps on my phone, those transactions getting media attention that are often times b to c there's a tremendous amount of activity in the union corp market there are names that the consumer doesn't recognize, no particular order or reasoning, mule soft or acta, and we saw those deals perform well they have great fundamentals it is very different than we saw in 2000, these companies are about ten years old, have a business model they have been tweaking quite some time they can get out, hit numbers, perform longer term. >> well, david, larry, thanks. as all of the companies continue

to go public, we're going to continue to need your insight and track how it is going. >> been a pleasure. >> thanks, jon. noting that we're at session lows you can see the dow-jones down off 1.13%. more on that in a minute and speaking of -- there you can see. a little off the session lows. phil lebeau spoke with mary barra earlier, ceo of gm and one of lyft's largest investors and joins us with more on that conversation with mary phil >> what's interesting is general motors is a significant investor in lyft, has been for some time. i had a chance to catch up with mary barra, ask her about some ride share challenges that were outlined in the lyft ipo filing. >> people are going to need from point a to point b that's why we made significant investments in cruise automation, we think that's the ultimate ride share 2.0, when

you're able to use autonomous vehicles, that changes the cost structure, allows you to reduce the cost and access a lot more addressable miles. our focus is on autonomous technology we think that's going to be a significant impact in the future, but it is going to happen over a long period of time >> we talked with mary barra as she announced the company will be investing $1.8 billion, adding 700 jobs in the u.s., including another 400 here at the orion assembly plant the 1.8 billion investment to expand production in the u.s. is not a change for the company when it comes to the four plants in the u.s. that it has already unallocated or idled, taken away production because the plants are underutilized so to speak. that's a criticism of president trump. he has been very vocal saying reopen the lourdstown, ohio plant. what does mary think about

trump's tweeting and bashing >> you're all focused on that relationship i mean, he has an agenda, it is about job creation i very much want the company to continue to grow, to continue to invest in the united states. we are committed not only did we make the announcement here, we announced we will be investing $1.8 billion in this country >> as you look at shares of general motors in the last couple of years, we should point out when they made the announcement about the investment in the u.s., one of the uaw executives here, guys, they had a chance to talk on stage to employees, he said well, we're happy about that investment, but we're not happy about the four plants they're going to be idling and have idled in the u.s this is a point of contention that will continue for weeks and months through the uaw negotiations this fall >> phil, thank you so much for that story and your interview with mary. coming up, what companies like paypal are doing to close

the pay gap in silicon valley. first, look at the worst performing stocks in the dow so far in today's session we have a lot more "squawk alley" still ahead don't go anywhere. imagine traveling hassle-free with your golf clubs.

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dow down 282 mike santoli helps us breakdown not just the action in equities, some utilities are hitting new highs. >> all very related. yesterday's rally in stocks seemed to get going when bonds stopped rallying when bond yields stopped going down, it gave a little lift. that's the mode we're in now i don't think it is because people look at the treasury market and say there's some secret scary message we don't otherwise understand about what's happening, obviously we know what's happening in europe, china, low yields around the world, but it is not a great

input at a time when let's remember the indexes hit another five month high yesterday, the nasdaq is looking overheated by the time yesterday closed. all of this is hitting at a time we don't need extra thrown in. >> the semiconductors had quite a run yesterday, this week in general, a number of them. amd, let's see, micron, among them what do you think is going on in particular, is it just that google news that helped get things going >> it has been rolling in that direction for awhile semiconductors peaked before the overall market last year there was a sense the market was trying to signal the cycle can see the light. i also think it was part of the momentum trade in sectors that have growth somewhat independent of what the overall global economy is doing, and to me carl

mentions the utilities you have the cell phone towers and things doing great, hitting highs every day, also the nasdaq 100 stocks amazon was going up every day. i think the bull case was the parts of the market that don't need a strong economy, maybe they hold the tape together until we have confidence that earnings come back second half day like today i think complicates that picture, says look, if the economy is softening more than we expected, maybe that second half come back hope is something we can't fully count on just yet. >> mike, thanks. don't go too far maybe to the edge of the set paypal is giving cnbc an inside look how it identified and closed its $3 million pay gap. julia boorstin spoke with the ceo dan schulman and how they're leading the charge for equal pay. hi, julia. >> reporter: hi, contessa. since they spun off four years

ago, he made diversity and inclusion priority back then, the first step was to guarantee equal pay. back then, the hr team couldn't tell them if they were paying fairly across gender and race. take a listen. >> i said right away to that, that's ridiculous. like we should know right away if we're paying equally or not, i want an outside study to go and look at this we want to address this gap if there is one immediately >> reporter: the first year, the company found and fixed a $3 million pay gap. since then, paypal reviewed the 20,000 employees' pay and performance three times a year, with audits by two outside companies. here's how it works. hr sets a pay range for each job category and location, looking at demand for certain skills and experience then, managers evaluate their performance across 12 categories, including communication and collaboration. and whether they hit specific

targets. >> i am being as fair as possible, as equitable as possible by using these very objective frameworks >> reporter: but bias still creeps in. hr works with consultants to ensure there's no gender or racial discrimination. >> we don't leave it to chance and don't leave it to individual managers to pick their favorite people >> reporter: three years after fixing the original $3 million pay gap, the company found and fixed a pay gap just a tenth that size. roughly $300,000 >> i think it is beginning to be part of the culture of paypal but you cannot step away from this for a second. >> reporter: that was just the first step schulman says now they're focused on the harder part, closing the gap in management as well as engineering roles. find out more from our interview and paypal's plan to close its diversity gaps on cnbc.com back to you. >> julia, the studies of pay

parody are not cheap to do we were talking to caesar's about six months ago when they had the conclusions, had drawn it out you say there are all these factors. generally speaking when you're talking to companies that say they want to pay people equally, is there the will to go in and spend the money, make the investment in looking at the issue? >> what's interesting, contessa, is that schulman poipnted out $ million may have seemed a lot if he talked about doing it in one quarter, the reality is it is a very small amount, a drop in the bucket if you look at it over the life of a company, and he says the investment in pay parody both in the amount that they had to pay up front and the smaller amounts they pay every year, and also commitment to the consultants to have a third party review it, he said it has paid off, helped them recruit better employees in a very competitive job market and helped them ensure that they have diversity of opinions in a

room where they want to have a product for the whole world. they want to be sure they have a diverse set of employees creating that product. >> that's a good story glad we got some attention julia boorstin covering pay disparity. let's go to sue herera for a news update. >> good morning. here is what's happening the trump administration hitting iran with new sanctions while secretary of state mike pompeo denounces that on a trip to lebanon. the sanctions target 31 iranian scientists, technicians and countries involved in that country's nuclear and research and development programs south korea says north korea has withdrawn its staff from an inter-korean liaison office, after the second north korean summit talks in vietnam collapsed last month seoul calling pyongyang's decision regrettable. chinese president given a red carpet welcome to italy,

launching a two day visit, aimed at deepening ties between the two countries. the italian president greeting xi at the presidential palace. and newly released video from the sarasota county sheriff's office shows the terrifying fall that left five performers, including two members of the wallenda family injured while practicing on a tight rope in 2017 everyone survived but one broke every bone in her face it is amazing they all survived. that's the news update this hour back downtown to you, carl >> thank you very much. when we come back, apple, disney, netflix, the competition in streaming heating up ahead of apple's event monday the next guest says netflix shouldn't be worried too much. meantime, dow holding on to 300 point losses, vix near6. 1 and the ten year cracks below 243.

shares of netflix down about 3% this morning, ahead of apple's media event monday he says netflix won't participate in what will be apple's venture into streaming but despite the competition, it has achieved a level of sustainable scale growth and profitability that isn't currently reflected in the stock price. joining us, the analyst behind that note, mark mahaney.

happy friday good to see you. >> good to see you too, carl >> all right we have been seeing the sell side talk about potential hundred million subs for this apple service. is it your point that netflix has too much of a head start >> probably. streaming is a scale business. in other words, whoever has the most subs will generate the most revenue, can bid most for content. fast and furious 13, when that comes out, hopefully it does, if it does come out, whoever can pay 80 or 90 million for it, it is not going to be bought on a per sub basis. that's the point i'm getting across when you think of content. whoever has the most subs has this flywheel opportunity. what netflix is showing is they're on a path to 200 million subs within the next 12 to 18 months and 300 million subs we think in three to four years they can economically outspend anybody else just so we have numbers right,

netflix is spending 14 billion in cash and half that is on original content or close. disney is coming out, they'll spend maybe a billion on original content these are very different offerings. very different offerings >> how many streaming services do you think the market can support? >> at scale, how many large ones, if we're going through a mega trend that we have to mention, unbundling of the cable bundle or cutting of cable, if you have that happening and people are taking that 150, 250 bucks a month they're spending as part of the package and start a la cartingtheir entertainmen needs, probably 2 or 3 it is anybody's guess. probably two or three entertainment bundles you'll sign up for. our strong guess is netflix is one of those the only way they'll do it is if they have more and more valuable original content at the right

price point. this is an interesting year and time for netflix you have a slew of renewed original content coming out, the big one to watch for is the impact of "stranger things" season three july 4th. that is a good reason to own the stock near term. >> i see a yellow flag in your u.s. survey results, negative churn trends, record high 11.6% of subscribers are very or extremely likely to cancel given that, you think it might have to do with price sensitivity after netflix's price hike with ndisney coming n cheaper, don't know where apple is coming in but probably cheaper, does that put netflix in a difficult position? >> it may, and i guess if there's something to watch for, there will be a series of new launches, at&t, time warner,

apple, disney. that is risk i just think there's a bigger move towards streaming that may be underappreciated by the market netflix has a conscious strategy of raising fees every two years. they think they get better content, that they can justify the price increase they probably can, but that's an unknown. and how aggressively they take up pricing they screwed up pricing in the past last two, three years have gotten pricing right, and pricing has gone through correctly. if they do it in a measured way, continue to have better content to justify price increases, it is not a problem if they put the price increase ahead of content, that will be a problem for the company. that's what the survey as you point out shows a potential risk. >> to your initial point, mark, about the amount of money netflix spends on original versus everybody else, instant response is look at the cash balance apple has on hand. why shouldn't that scare all of their competitors?

>> it should the open question, does apple want to do that. they want to directly take on netflix. by the way, the offer doesn't seem as directly taking on netflix as say the disney offering that's coming out later this year. seems to me what at&t is trying to do is like a tv, broad tv package which could at some point include netflix. it is not going to do it at this launch doesn't mean they couldn't include netflix in the future, that's an economic negotiation between the companies. apple has the cash to get into it the question is can they get the economics like netflix can to justify it it will take years to get return on that. doesn't seem like apple is willing to do that now >> that's fair definitely the time it will take is not in dispute, that's for sure mark, we'll see what happens monday see you soon mark mahaney >> thanks, carl. still to come, is a cashless economy discriminatory we debate it next.

that's what happens in golf nothiand in life.ily.

i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley. i am scott walker. we'll debate if the u.s. can withstand the slow downs and the signals bond yields are sending. did the fed make a huge policy mistake? the latest comments from jeffrey gundlach and the call of the day, we

debate if you should own it. about 15 away. see you then let's get to the cme rick santelli has the santelli exchange. >> good morning, thank you, jon. friday is a week that so much happened in a variety of different sectors and markets. we're going to call this a market match maybe do it every week first thing, caution, inverted curve ahead. when it comes to inverted curves, you have to really pay attention. here's the yield curve we would rather have it like that, especially all of the jamie dimons, but we have it like this. threes to 30s, that's what the original research was done on with regard to predictive or lack of predict ability of inverted curve to give you a heads up on recession, whether it is 12, 16 months down the road the real point is we don't know in so many areas of treasury distortions how much significance or horsepower to put into the notion of the

curve, but nonetheless be aware of it. tens to twos, flattest since 2007 nothing positive about negative rates. they can do all the research they want, much of this is my opinion, but i'm not alone, negative rates aren't good once again, we are approaching 10 trillion in negative rates. why did i bring it up, ten year boones if banks are upset and the financial sector isn't doing well, and you look at banking stocks, and we have a flat curve inverted only in the front, think about the horsepower that's sucked up with negative rates. finally, u.s. yields are seeking a bottom this has been the theme. let's go to the board very quickly. this is a 20 year chart. that was the double top we talked about so much at 3.25 that proved to be -- remember when i talked about double tops? i said that one, it is a top, but is it the top.

well, that is getting bigger here's the point we need to find a bottom there was a wave pattern going on basically, we've taken that out. people are thinking head and shoulders. but if that's the case, you could go close to 2% on the ten year the point is, whatever formation develops, any interest that stocks are going to have in trying to interpret this, and as you look at the board today, i would say we know how they're interpreting it, we need to at least form a bottom. markets are fickle even though lower yields may point to lower growth globally and domestically, once it starts to stabilize, stock market looks at the stability and maybe take off. markets relink at different places but sometimes resume the same trend finally, this is the exciting one of the week for me, live hogs gone wild this is year to date there's swine flu in africa, you don't need to know about that. what you need to know, countries

like china like their pork and are buying it, and probably trying to sweeten trump. you add swine flu into that mix, and what you end up doing in early march is this market has taken off. don't you wish your stock portfolio looked like this we have gone from 60 to over 90 cents. you want to watch all of these markets, when china is one of the main characters. carl and the gang, back to you have a good weekend. >> rick, you too when we come back, more on the market selloff dow down 360 almost. yesterday's intedahi 20.r y gh86 a lot more still to come ing on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here,

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market takes a leg lower midday dow down 350 mike santoli back at post 9 with bob pisani what do you think is at play here, guys is it yield curve at work? >> i think yield curve is getting the most attention yield curve says we're focusing on slow growth story, numbers out of the rest of the globe haven't been great, also catching the stock market in a certain field position where we were kind of extended. did we use up any 3 month rally in stocks. >> what happened here, we got mugged by the slower global growth story, that's what happened remember the narrative here, the bull narrative

the fed and all of the central banks have our backs that's going to be the biggest help the problem is we have the most dovish fed we could get on wednesday. eeshl the dovish fed is priced in what else are going to go away that was another narrative important. the president said maybe the tariffs will not go away that's a problem then we had the chinese are going to stimulate their way out of their slow down and the your pi -- europeans that's a problem the numbers are not going to be horrible we got mug by the european numbers. the manufacturing numbers were horrible especially in germany. the bond yields went to zero everybody said maybe this narrative is not so correct. maybe the tariffs will not go away maybe the european data will get weaker

if you assume it's not as strong, stocks are pricey. depends on what your numbers are. with zero or even negative global growth, even excludesing the united states, you've got a problem. you need to change that nar narrati narrative. >> riddle me this. it's not the multinationals that are down on these fears as much. it's the little stocks i'm going to chart it's the likes of roku and stitch fix and spot fi that are suffer ng the market not the ones with the european ease yours the someones that are planning to go in north america in the future >> and the high beta stocks. lots of room to go they have gotten pretty far ahead of themselves. one of the things bob says is i think it will be that day-to-day, let's debate with ourselves what kind of a world we're in and what's priced in. a lot of these issues were

there. we weren't quite focused on them in the same way. >> give me a sense of what it says about the sentiment on the street when you've got gold up, point three percent what does it say to you? >> it fits together with exactly how we got to this point. the race was good for people who wanted to take out mortgages here >> you got home builders doing well this week rates and utilities has been for

weeks now. ki i keep putting up these real estate investment. now this week we've got a small number of consumer names >> in a low interest rate environment, you get the utilities because they are the yield to play. you get more defensive names doing a bit better on the slower economic growth. you can see the market has a defensive stone to it overall. as you have noted, john, great numbers. it's been a great week overall >> if you can't control the global growth story. >> to call micron great -- >> they pulled off an amazing story this week. just like fedex, they guide

lower in december. then everybody said will they guy lower again. the story, they're narrative, that hockey stick story. folk, i know it's bad now. maybe it will be bad don't worry. the second half of the year it's all going to be better they had itstri sprinkled with magic words. >> when do we start really talk about a fed cut. we see the odds now by early 2020 >> it's the talk we're going to have >> in terms of when the market gathers up expectation for meeting to plemeeting, probablyo there yet. every one thought powell hit the right town the data doesn't come fast enough for the market because it's open every day. you don't have data that the fed will be placing a lot of significance in every day. i think the market is probably going to try and front run that prospect i don't know by how much

we talk about this inversion, three month yields to above ten month yields yes it's something that's an alarm. we should pay attention to it. when it happened for the first time the last cycle was january 2026 it was almost two years before we -- and the stock market really said, now we have a problem. >> it's way too early to talk about the fed cutting but the pivot is starting to look impressive given the data we had today. >> you might >> i think he's brilliant. he helped manage a very difficult situation. i agree. rates are too low. they are negative consequences for having too low rates he helped avert a much more serious downturn >> still got a little while longer with him. thanks guy >> let's head back to headquarters for a quick market flash. what do you have >> nearly three quarters s&p 500

trading on track it's worth highlighting two sectors moving to the outside. utilities and real estate. both groups are hitting fresh all time highs investors flock to safety amid mounting fears of a slowdown more than three quarters of the utility sector is hitting 52-week highs today. it's worth noting several consumer names have joined the list of stocks including hers y hershey, general mills this as consumer spending has remained robust. back over to you >> all right thank you very much. down 377 squawk alley is back in less than three minutes

all three lower for the week it's the worst day sincejanuary 3 rds. it will stay that way as long as the dow falls lower than 600

points tech stock down the most >> thanks the nice to have you here on a day like this. let's get hoto the halftime and the judge. i'm scott wapner welcome where we're watching a gathering sell off on wall street investors growing more concerned about the slowing global economy and whether the u.s. can avoid the worst of it. we're discussing it this hour with our panel joe, steve, josh, and shannon. we begin where we star ted. new data confirming weakness in severa