good morning it's 11:00 a.m. in new york city, 11:00 a.m. on wall street. "squawk alley" is live ♪ ♪

♪ good wednesday morning welcome to "squawk alley." i'm carl quinnipiac. jon fortt is at microsoft's annual surface event in new york >> we begin with the markets this morning it's been a rough ride to start quk q q4 behave bob pisani and mike santoli to break it down bob, i'll start with you >> the important thing, this is the debate all year, what side of the recession debate are you on if you believe recession will start next yeear anyear, market dro markets will drop. you want to watch the big consumer names this year if there's a slowdown but no

recession, these names should do well look what's been up, costco, home depot, nike, mcdonald's they're across several different categories watch if they start rolling over so far it's been modest. starbucks is rolling over a bit. jpmorgan had a negative comment on monday about them, but by in large they held up well if they start falling apart particularly after the jobs report comes out, i would get concerned. if you're in a slowdown camp, that's where i feel about all of this, then you can make a big argument defensive names through some of the consumer staples, walmart, kimberly clark, pepsi, they'll continue to hold up well maybe high yield as well what side of the debate are you on >> starbucks is down 12%, 13% for one month. >> yeah. >> you know, that's starting to -- who knows what >> starbucks was in that category of yes, they're consumer but also are these global dominant brand names. they had these quality and

defensive attributes to them i think we've gotten that and are backing away yesterday there was some shelter in apple, visa, popular growth stocks that's not really working today. software is down you do have apple also backing off 2% after it made another near run to the old highs. >> the key is everyone needs to believe the weak ism numbers yesterday is not indicative of a consumer slowdown. by the way, i think you looked a this before. ism numbers are not indicative of future stock market action. there's a weak correlation between a poor ism number and how the s&p looks. but there is a good one with jobs reports and a weakening pattern. that's why that jobs report is important tomorrow >> in other words, mike, if you see something like job losses in the manufacturing parts of the bls numbers on friday, that will add to the panic >> heavier job losses i would say. a back up in manufacturing jobs which we've seen the past couple of months would not be that

alarming that would confirm the story. the typical ism reading if you are in a recession or heading into it is the low 40s i know we're splitting hairs here, but we're not in that mode where the ism is flashing red. >> though people look at new orders, 41 41 is a germany kind of number >> it's very true. i think it's not necessarily in concert with every other number. it's a survey. >> right >> you good the gm stuff nobody knows how much front loading of activity there was. >> so if you had to choose which could be stronger, bls or ism tomorrow, you would choose bls >> absolutely. look at the market, how confused things are you have a year where the leadership is semiconductors and utilities. tell me what that means. there's not a clear trend going on here. there's a lot of crowding and defensive names, a bit of crowding in the small growth sectors that still exist in the world. everything else is in between or

down there's a large dispersion between the winners and losers apple is up 40%. you have swaths of energy, swaths of energy and other sectors down 20% that's a wide dispersion in the numbers this year. i think it reflects how confused it is. if you want a number to look for. everybody is looking at the 200-day moving average on the s&p. >> that's right in the same area where you had the lows in august >> yeah. lows in august a bit below that. >> we broke the 50-day people don't pay -- watch that 200-day moving average id >> a lot of information still coming our way in the next 24, 48 hours let's get to courtney reagan >> we are just off the session lows for the nasdaq. we're down about 1.6% or so, about 10 minutes ago now down about 1.5%. tech is one of the lagging sectors when you're looking at

the broad market here. within some of those names in the nasdaq 100 that we're seeing selling off, look at shares of united down about 4.5%. american airlines as well off by more than 3% only 14 names in the nasdaq 100 are holding on to gains. most of them are decidedly negative those widely held tech names will be the ones that are having the biggest point drag on the s&p 500. microsoft shaving off 20 points. apple about 18 points. amazon cutting off about 10 points amazon down by 1.3%. microsoft down about 2%. we are still holding on to the nasdaq 200-day moving average. that's at 7708 we're still quite a ways from that it's a number and level we'll continue to watch here back over to you

>> thank you very much despite the tellofselloff, lookt apple outperforming. new launches helping that stock despite some risks in china. all this while f.a.n.g. peers are fighting growing regulati regulation regulations. >> we have seen some price targeting increases. even with adverse fx, maybe more modde erest pricing expectationh cycle feels healthy, does it not? >> it does feel healthy, despite the macros and negative headlines. consumer fundamentals are strong traffic to these sites, social sites, search, remains healthy then you talk toed a v ed a vean agencies it seems like the party is going on.

we remain positive on most of the large cap names we cover >> in many ways apple is at this intersection of this bigger, broader market debate. manufacturing, the dynamics around trade, u.s. and china and still consumer facing. s what's your take for this quarter? >> one reason the stock is shifting sentiment mainly on the iphone side. earlier in the year, people were negative on smartphones and the iphone cycle in the last month we've seen a modest shift from being overly bearish to neutral for reasons that the pricing on the iphone is attractive. the new iphones are selling well you have a 5g cycle coming up. so i think people have become more at the margin more optimistic on iphones compared to a couple months ago that's what you hear when they

do the report the end of this month. kind of like how the iphone cycle is along with services the major part of the move is related to iphones >> a lot of headlines about tariff exemptions, the mcenroe in t mac pro in texas do you take that on signs that -- >> is this on apple? >> yes >> i don't cover apple i will let the other guest address this >> apple has been a -- you know, the poster child for not just the china tariff war but also the u.s. manufacturing maybe there's political pressure, i don't know what's going on behind the scenes, what you have seen apple is derisk the supply chain away from

china. foxconn, they are doing manufacturing in india you're seeing them diversify the supply chain i think the mac pro in texas is part of not having as much reliance on china. >> stitch fix earnings came out after the bell yesterday earnings ping-ponged around since then down about 10% today other retail stocks are under pressure as well what was your take away from the results, and does it change your investment thesis? >> if you look at their guidance, their top line guidance, which tells you the end consumer demand, it's at the high end of expectations 23% to 25% organically i can't think of too many ret l retailers or e-tailors growing

at that rate and ebita margins have been brown dou brought down by 50%, but when you look at it, the miss is by them hiring engineers and data scientists not because they have to spend more on marketing because of the customer acquisition costs getting out of hand. it's investing in fixed costs, scaling the business overtime, but all the checks we were doing intraquarter will tell us that the brand resonates, that the value proposition actually continues to be really positive. all the demise of the traditional offline retailers are definitely helping amazon. but also helping stitch fix on the margins as well. we're looking for a good 2020 for them >> we have seen weaknessin the

semiconductor space. i know you cover some of those names. signs that there's been a bottom and if so, given the fact we have seen run ups on some of these names to start the year, do you expect that to continue >> it's been a big head j scratcher. fundamentals are bottoming but be year to date, the trends, the out-year earnings estimates have been going down and stocks are going up ie you're seeing multiple expansion. i expect the trend to continue at some point, you will see the bottom the question is is the bottom around the corner or in the first half of '20. the biggest risk is the macro recession. strip that aside, you're in a bottoming out phase. the stocks are looking probably 12 months ahead. from that vantage point, you should expect continued

performance. the second thing i would say is if you look at it on a bigger perspective, some of these things, like the equipment names, even though they have seen multiple expansion they're trading on a pe basis with the market it's not like they're super expensive. you have that going in your favor. >> given the fact that there is this broader market debate over restroke e restoked manufacturing fears after the numbers yesterday, when you look at the internet stocks, are they recession-proof? >> i don't think they're recession-proof. i don't think much is. you look at 2008 as a proxy for how the stocks react relative to how they may react to recession. google back then, still called google, growth dropped

precipitously but still around 9%, 10%. facebook was growing too fast. so, i would say generally utilities like a google should outperform companies that are primarily focused on maybe brand advertising or things not linked or corrected to a quantifiable ry return on investment. within our universe, we keep -- we are still relatively positive on google, on alphabet alibaba is interesting we just came back from china last weekend a couple of things were important highlights one is how fast the innovation in tech is going in china and how involved the local government is to thchampion thee

companies at a time when we're talking about breaking up the googles and the facebooks. that would be an interesting name to have >> whether it's breakups or de-listings, lots of big questions to ask these days. thank you guys appreciate it. >> thank you >> by the way, getting news across the tape that pelosi is saying progress is being made on the usmca and she hopes democrats in the white house can renew our conversations about infrastructure >> wow >> we'll see if the tape responds to that microsoft's big surface event is in new york. jon fortt is there with a closer look at what they're unveiling >> i want to put this in the right context. i've been watching this throughout the show. microsoft has taken the biggest risk in hardware in 20 years, since the original x-box maybe the biggest risk in hardware ever. that's because they just

announced surface neo. a dual screen device that opens like a book. this is a highly anticipated piece of hardware. it has two screens that opens with a hinge articulates 360 degrees. it has a keyboard that flips up. it's not coming out until more than a year from now next holiday season. they're announcing it now because they want developers involved in developing software for this new version of windows. they have not announced pricing. this is sure to be a premium product. that's going on on stage right now. it's a risk for a number of reasons. there's no hardware like this developed. it's very expensive. who knows how this will be received they're trying to get developers on board if they don't get developers on board, that's arguably egg on their faces. they are trying to do that

that's one piece of the risk when you announce a piece of hardware not coming out for a year plus, will people continue to buy what you're putting out this year? which is most of what this event is about maybe they will be able to differentiate between these two things, people who want a tablet or laptop now, they will buy now, but there's a risk that microsoft is taking. they announced the surface pro x. that's the arm-based surface pro device that we were anticipating it runs full windows 10. they had adobe on stage demonstrating adobe creative cloud. adobe is the big guns you bring in when you show something is a full-fledged computer because adobe software tends to be demanding when it comes to productivity and processing power. they said this arm processor runs at 7 watts versus 2 watts usually. they worked with qualcomm to

enhance the power of that. microsoft adding its own custom ai engine to that. we'll try to put that through the paces and consider the implications for the whole windows market, not just the surface pro x but also surface neo. they say this version of windows that will go with neonext year, windows 10x will be available to other oems so they can also build dual screen devices. microsoft giving that push to others to innovate on windows design a big risk and big product announcements today from microsoft. >> who's the target customer for this is this for employees and companies and work applications or broader than that f >> for the surface pro x, it's your productivity road warrior office worker who wants

something thin and light with the longest possible battery life for the surface neo, we'll see what the pricing is. there's a category of hardware called executive jewelry this is the most premium product you can get. it's your highest end executives who might have it. this may be something that marketing and design folks like in the chelsea area of new york might carry around because not only is it a pretty device but it also gives you double screen real estate. somebody heavy on design might be able to carry a device like that it's $2,000 just for this new samsung device, the galaxy fold, that is little this is bigger we'll see where they price it. >> we certainly will, jon. thank you for keeping us up to date. when we come back, legendary tech investor bill gurley, what he's telling startups going husband and his thoughts on the future of weworework.

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welcome back to "squawk alley. the selloff continuing to pick up steam in what is shaping up to once again be the worst day for stocks since august 23rd the dow is down 455 points the s&p is down about 50 points.

every sector in the s&p is in the red. with us now to break this down is ubs director of floor operations, art cashin thanks for being here. >> my pleasure >> what are the levels you're watching now >> right now the dow is battling a case of 26,100 they've been battling that for the last 30 minutes. so far they're holding, which would be a good deal here. then beyond that there would be dragons. if they break down through there, then 26,000 itself becomes a real factor. earlier news we got news on bernie sanders, he had to have two stents put in. that may throw the whole election wide open we'll have to wait and see if

it's a minor condition, which we hope and which other candidates will benefit from that. that will have a marked impact for now the market is looking internally it's more about the damage that was done yesterday technically and trying to hold on and repair here in the short run, i would keep my eye on 26,100 if they break there, it could get nasty. keep your eyes on the news ticker we got what looked like a favorable comment from pelosi, did not have a major market impact it could add to a rally if we hold here. >> are you a buyer that services will reflect a bleed from manufacturing tomorrow >> i think, but not significant. i think we'll see a bit of a pull back in the area. i think, again, you're seeing a

general weakening in the economy. the consumer has been the all-star we are 70% consumer. so, we'll see where we go from there. i think you want to watch the market and its own internals i don't think they have fully gotten into politics and where things may go. the election is not for another year >> less than 30 days from supposed brexit. >> a few banks upped their call for a no-deal brexit >> that's coming at about the same time that we're waiting to see what the fed is going to do. >> and they have this other problem with the repos that is not fully resolved to some degree it's background to impact their policy

we'll wait and see i'm assuming they will do two more cuts because the economic data is weak >> how closely are you watching the bond market. we saw yesterday a big move, a big drop in treasury, that coincided with the drop in equities here. similar thing playing out today. is this a correlation that continues? >> it was noncorrelated before the number came out, what had happened was japan had an absolutely dreadful bond auction. there were rumors that they were beginning to realize, hey, negative rates don't work. they basically destroyed their own banking sector and they had to get things back up. so yields were going up around the world. when we came in with such a weak

number, that turned everything around yeah, i'm watching bonds to see if those correlations begin to build. >> art, appreciate it. >> my pleasure have some powerful figures in tech gathering in silicon valley yesterday meeting with over 100 startups warning them about the down side of an ipo. deirdre bosa joins us with more. big story. >> absolutely. this shift away from the traditional listings comes as startups stay private for longer look at some of the recent public names some of the ones that have been hit hardest, uber, lyft, pelo n peloton. the better performing names since ipo are zoom, pinterest and cloudfare, they're falling further from their peaks startups yesterday heard about the benefits of direct listings over a day of sessions including ones called four decades of

underpricing spotify and slack, the who companies who were through the process were examples of successful smooth direct listings airbnb was talked about as the next startup to go the alternate direct route which would enkourenkour encourage others nicole quan said squinn said she walked in with a candidate and they walked away excited about a direct listing being an option for them bill gurley was an organizer behind yesterday's event and critical of the traditional ipo. a source familiar with slack's listing said he personally encouraged the company's founder so go that direct route. as far as we know from yesterday he's trying to encourage other startups back to you. >> deirdre, as you mentioned, when we come back, we'll talk with bill gurley on the heels of that meeting what is his thinking at this point given what we've seen in

the last month or so we're back in a moment

welcome back i'm sue herera here's your cnbc news update house democrats say they will issue a subpoena demanding all white house and trump administration documents related to president trump's efforts to pressure ukraine to investigate his political rival, joe biden this in a letter from elijah cummings to white house acting chief of staff, mick mulvaney. democratic presidential candidate bernie sanders was hospitalized after experiencing chest discomfort last night. he was found to have a blockage

in one artery. two stents were inserted he is resting up over the next few days walmart has become the latest company to halt sales of the drug zantac after health regulato regulators warned about a potentially dangerous contaminant in the drug. and according to the american cancer society, the overall death rate from breast cancer has declined. that decrease, though, has begun to slow down as more women are diagnosed with the disease that's the news update back downtown to you, morgan >> thank you european markets getting ready to close seema mody has a look at today's action overseas. >> this story has been global with european markets tumbling looking at the stoxx 600 at the lowest level in a month following a negative session in asia overnight among the european majors, the ftse 100 on track for its worst

day of the year after uk prime minister boris johnson outlined his brexit proposal to the eu aiming to remove tuscustom chec at the border with northern ireland. some of the big industrial names like arcelormittal, siemens all under pressure by 1% to 6% airbus hitting the lowest level since june after that wto ruling chipmakers like asm, sd micro electronics falling sharply on the day. burberry, l'oreal, h & m, adidas down by around 3% to 4% recent growth concerns led germany to slash their gdp forecast from 0.8% to just 0.5%, that's leading to downward revisions on earnings forecasts

third quarter earnings in europe expected to increase 2.2% compared to companies in the u.s. where profit growth is expected to be flat. that will be a key indicator to watch. carl, back to you. >> seema, thank you. losses are adding now. dow down 515 this year's ipo losing streak has investors arguing for alternative strategies like direct listings. one of those investors is bill gurley joining us from stanford in california along with john for the who, as we know, is at microsoft's product launch event. jon, take it away. >> thanks, carl. bill, good morning we've been talking about this or writing about this back and forth. we had frank slootman, the ceo of snowflake on yesterday. big startup, $4 billion valuation. he's taken two enterprise companies public in the past he told me yesterday he's considering a direct listing for snowflake. is this a change

>> i hope so i would disagree with one thing carl said, trying to tie this effort to two or three ipos that broke issue. this is a problem that silicon valley has been tilting at for over 25 years. i went back and studied some of the history. in '98, this ipo process was said to be undemocratic. bill hambrick, '99, 20 years ago said ipos are an insider's game. we have to try to fix them larry an auction. you read why they did it, you come back is the price and allocation market based and do we have open and equal access to all. those are two core tenants that everybody could get behind in the traditional ipo process none of those things are true.

it turns out barry mccarthy spent two years tilting against this opportunity called a direct listing. he kicked that door open the more i was able to study that and understand how it worked, it solves those core issues you have market based pricing and market based allocation and you have open and equal access for all. if you put in a bid at 3801 from a robinhood account and they open at 3800, you're filled. that's not true in the ipo process. this is totally unrelated to anything that happened this year there's 20 years of data over the past 38 years, 171 billion. in the past three years, 15 billion. even this year with the three companies that you mentioned that broke issue, it's still a net 6 billion positive in first

day trades >> so, tell us how you read the tone of the meeting and whether there questions about the startups that are not mega unicorns able to raise a bunch of money right before doing a direct listing that the startups that actually need cash, will this work for them did you get questions like that in the needing >> the general tone was quite positive we have a remarkable frequency in plans between entrepreneurs and ceos most people are not like frank slootman and have done is it twtw or three times most people do it once in their life so we shared a whole bunch of information with them. we had everyone from spotify and slack that had done this before and showed them how they can take this approach that is very appealing, we're all tech

oriented out here. the notion of things being open and transparent and accessible is consistent with how we view the internet and what it enables. so i think people are super open minded so the point of capital. of course the current direct listing does not allow you to raise capital. one thing is true, there's tons of late stage capital. one reason people delayed ipos is because there's so much capital out there. we talked with the whole group about why ways to organize it, a whole bunch of progress around fund-raising, and the thing we heard from people like stacy cunningham who runs the nyc, there are efforts under way to add primary capital to the direct listing i think that problem will solve itself what we were looking for in that group is to find more pioneers like barry mccarthy and dani

dani daniel ackett and others who want to get behind this approach that's more appealing to those in my community. >> got it. what do you know about the effort specifically to add the fund raise to the direct listings process how far out is that? are you talking to those people? >> i have not been directly involved i spent the past six weeks working on this event so that he would could all come together and share information. i think the thing we'll continue to do is stay organized in this way vm several investment banks are helping with this, telling accounts that they also believe in direct listings and we want to get behind the people that are behind that movement >> bill, morgan here do you think things would have gone differently if wework it taken the direct listing

approach do you think they could have even done that >> once again, this is a movement that we're trying to solve a problem that we first recognized 20 years ago. this is something i hope will be a part of my legacy that i can give back to silicon valley by moving us away from this thing that has not been in our companies best interests i think it's unrelated to any one company. it is about finding a better way. once again, two ten thennant, mt based pricing and equal and open access >> have you had conversations with any of the folks on wall street, whether it is banks, exchanges, what has the reaction been like? >> absolutely. as i mentioned, stacy cunningham, the president of the nyc was at our event yesterday it's one of the few things that

i've been involved in that has brought the whole community together we are talking with anybody and everybody about this you know, yesterday there was news out that airbnb will go this way, get snowflake, airbnb. this would be wonderful momentum behind spotify and slack >> bill, speaking of momentum, we get your point about it being a 20-year effort, and it is, but it's these recent blowups that have given you the tailwind to make it possible, right? >> once again, i would back away from saying this is related to anything in the near-term. this is the data about how silicon valley companies have been taken advantage of by this broken process it goes back 30 years or 30 or 40 years it's unfortunate in the past three years it's gotten worse i think that's because the ipo

process devolved that's another subject matter. but i think it used to be that the ipo process was about disseminating, marketing, selling far and wide it's become a game of just hand allocating shares to the same 10, 15 firms as that has happened, it's gotten worse the underpricing has gone up if anything has been a trigger for us getting more active, it's just those under pricing percentages have gotten worse and worse and worse. once again, it's unrelated to any activity in the past three, four weeks in the financial markets. >> are you sensing any behavioral adjustments by the underwriters themselves? >> a few a few are leaning in and saying we completely understand why you would think this way quite frankly, i think it is hard once again market based pricing, equal and open access, it's hard to tilt against those things a lot of our speakers got

inbound text messages from banks the past three, four days and they would show them to me and say be nice. i was like be nice why aren't you saying, no, you should do it our way they're just -- there's no counter argument there's no really counter argument >> bill, i want to go more into that 15 years ago when google did its ipo, the postmortem was thatstrt do you expect this to be a fight? do you expect that kind of opposition to this move towards direct listings? >> any time you're trying to change a system in place that long, i totally expect a fight i think it will be extremely hard i'm not here to declare victory in any wear whay whatsoever. there's one element that's

different than the dutch auction. the dutch action was propped up as a new technology stack, new process. it was software that was written by one group, then another group by morgan stanley. what barry mccarthy discovered is the same processes that you use at the nyse that open the stocks every day can do a match for the direct listing opening so in the direct listing process you're removing steps. once you do an ipo, you do it with the exact equivalent of the direct listing opening the next morning. so you remove that step of the hand allocation, hand pricing, you jump straight to the market open what's really remarkable and very different from the dutch auction, these systems are already inside of our financial markets. so, you know, the direct marketmakers around you on the floor now, when they opened every stock today, they're using that same process for a direct listing. so i think we have a much more

elegant approach than the one that was the dutch auction with the exact same outcome that solves the exact same problem. i think it's a lot more durable. >> change is hard. i want to clarify or emphasize, frank slootman told me they will think about the direct listing, not for sure they'll do it >> fair enough. >> i'm sure you'll give him a call bill gurley, thanks for being with us. >> all right take care. >> good stuff, jon we'll see you in a few moments. when we come back, we'll continue to watch the market dow is down almost 500 ftse closed down 3% plus worst day boin aut three years we're back in a minute woman: my reputation was trashed online. i felt completely helpless. my entire career and business were in jeopardy.

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. here's what's coming up on "the halftime report." october is off to a shaky start. is it a sign of what lies ahead for investors? and a well known gaming stock cut to a sell today. we'll find out what the desk thinks about it. an interesting deal in the cannabis space today that pro sports leagues paying attention. we're about ten away see you then >> sounds good. let's get over to the cme and rick santelli for the santelli exchange. >> thank you about 38 years ago i was a technician for a large group of traders on the trading floor and i created a dynamic i used to call the pivot. every day i would put out support and resistance levels with a pivot the pivot was key.

when you start to trade above the pivot, the dynamics of the market change as well. have the japanese done a pivot with regard to policy? i think they have. but i do put many fast thing, although you never know how markets respond remember our 2013 taper tantrum. but i was pretty amazed at the low amount of stories that were written about what happened yesterday in japan and i know it didn't all happen yesterday. bank of japan pulling back from qe, one of the big end users and the big purchasers, giant pension, $1.5 trillion pulling back a bit this is major. and no matter how major, and i understand the economy is slowing, and we don't know where our low idle when i had professor mulligan on this morning, he said, there's no doubt we're slowing but he said, if we're slowing to

# th 2%, that's certainly in a recession. where's our low idle point i'm not sure, but it's a lot higher than europe and japan at least based on current conditions so lagarde's coming in at a time where many german financiers are jumping ship they don't want to be pulling out their wallet to continue to bankroll policies of monetary significance that they don't seem to help in the big picture. let's make it easy negative rates and many of the dynamics have to have an end chapter. they have to have an epilogue for the world to heal. so we want to pay really close attention to two things, how much more or less buying in domestic debt the japanese have and the difference between our ten-year and the europe ten year, because as that spread narrows, that's also a good thing. there's one other thing that happened in the last day, and that is ism number moving to the lowest level under 50 in ten

years. irngs ism in blue and s&p in black during the credit crisis, everything worked out. it was a good signal you can see how the ism is turning and the s&p is turning, but fit isn't a great indicator on prices. it might be a good indicator regarding the economy. at the end of the day, it is important, but doesn't necessarily tell you where the next big move in the s&p, the dow, or the nasdaq is. carl, back to you. >> that's exactly right, rick. something we try to remind our viewers of every day our rick santelli, down 507. back in a moment devices are like doorways

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dow seems to have found some support, just above 26k. and s&p around 2890. bear in mind, the vix has been above 20, but not markedly so. we keep waiting for yields to sort of ratify this sell-off obviously, a bit of a gut check ahead of two big pieces of data this week that are still to come >> and you've got those trade talks next week, too, which the ante just got upped on, although keep in mind, expectations have been low around those. but in light of that manufacturing number out, materials, tech, industrials, the worst-performing in the sector but you have everything, even though safe haven stocks like real estate, like utilities that are trading lower, as well microsoft is another name that's trading lower, and we're going to get back over to john now at microsoft's surface event. john >> reporter: with the rest of

the market not necessarily anything to do with this event today. i've got corporate vice president youssef medi with me we'll run through all of what they announced today you spend the least time on these, no disparaging, but surface laptop, give us the updated prices >> sure. so seven new products, first, surface laptop 3, $999, three times as fast as a mac book air. this is the brand-new 15", starts at $1149, runs amd horizon. fastest laptop in its class. this is the brand-new surface prop # 7 we're in the seventh generation. and to push the envelope higher, brand-new all-new surface pro-x. >> amd -- not amd, arm processor in this, from qualcomm >> correct >> there's been a lot of questions on whether you can run

full windows 10 on an arm processor. have you done that here, >> 100%. i think you'll be blown away with the ability to run full windows app, always on lte and look at this, we have now a built-in pen that is always charging the power of this device and the ability to go across the amazing. look at this here, 5.3 millimeters and its thinnest bezels >> do the developers have to make any modifications to windows 10 apps to run on an arm processor? >> we'll run all the main apps you want to run on this thing, they will run fine you can write them natively or we'll emulate them >> and now you have the surface buds here. >> surface air buds. just announced, $249 what makes these special besides the form and the fit, you'll have one in your hand while you're presenting. you can pop one in this way and you get a sense -- so while you're presenting, you can fast forward through your powerpoint slides and auto translate in 60 languages with the mics.

>> now, you're never supposed to do this, but you did it. you preannounced a product that doesn't ship for another year. but we've never seen anything, this is the courier, on the internet for years, you are finally releasing it two screens on the device. why did you do it? why is this important? i call it the biggest hardware risk microsoft has taken since the xbox >> neo we designed it -- we know from our research people need to be more productive. today, the problem, you can be super mobile with your phone or go and be highly productive. this runs windows 10x. >> you guys are releasing -- it's an android phone that has two screens. also coming out and just a couple of words about that we've got to end the show. >> it's a brand-new surface duo.

designed to help you be mobile and productive >> can't wait to see it. that's everything! we got to everything guys, back to you. >> nicely done, john great stuff. nice to keep our eye on tech and innovation even with a tape like this by the way, the two companies that gave us an earnings update today, delta and clorox, the earnings were suggested light revenue. we're keeping an eye on that but again, paychecks, which reports tonight is green and one of the best s&p gainers right now. >> and you had stitch fix after the bell yesterday as well better than expected earnings and revenue in line, but current quarter guidance seen as soft. and that stock has been trading down about 10% so far in this session. in general, it's going to be one of those other big things to watch in this month of october, which tends to be historically volatile to begin with, is going to be q3 earnings season in just a little under two weeks we'll have to see what we can get out of that, as well in the meantime, you are seeing this downdraft in the major

averages again today dow down 142 points and the s&p down 4. >> 10:00 a.m. tomorrow, eastern time is when we'll get ism services and that will help people understand whether or not the weakness in manufacturing is truly bleeding into other parts of the economy and then that jobs number on friday so a very important second half of week. let's get to the judge and the half >> all right, guys thanks i'm scott wapner front and center this hour stocks dropping, recession fears rising is an october surprise in store for your money now this is 12:00 noon this is the "halftime report". >> the bears are out on wall street is it time to take some money off the table? microsoft unveiling its latest gadgets. the f.a.a.n.g. outperforming in the past year. activision blizzard rallying almost 20% in the past four months but is it game over for the run? it's our call of the day and the world's biggest marijuana company making a major