tough, still down almost 400 points after that sell-off last week the s&p down about 50. we'll be -- hey, guys, did you forget, you know that today is tuesday. it's already tuesday i'm going to leave you with some positive news, today is tuesday, it's not monday. >> there you go. >> positive news. >> see you guys tomorrow. >> good to see everyone. we'll all be back here tomorrow, alone together "squawk on the street" is up now. good tuesday morning, welcome to "squawk on the street." as the tape indicates, another tough open futures weak, nasdaq on pace for what would be the worst three-day slide since march 9th, lots of news on tesla, airlines, gm, nikola and more. nasdaq futures indicate a 3% plus drop at the open.

>> then nikola's partnership with gm. why both stocks are set to surge despite of course the broader sell-off. >> and finally, this tesla snub. the s&p's decision to leave tesla out of its benchmark having a huge impact on the stock. not the only reason, of course we'll explain why later on this hour jim, thank goodness you're back, man. it was good to get your take from home at least on friday amid this madness. >> well, i'll tell you, what i saw last week and i see today is this parabolic move. look, friday's close, i thought it was what we would call phony. i mean the big rally please i didn't think there was anything to it other than short covering i think we'll revisit the lows that we saw friday and then we have to rethink, because the selling, frankly, is too hard this morning that doesn't mean that i don't think ultimately the people who don't know what they own shouldn't sell, i'm saying this is just trying to find price

discovery, where we were friday, and then we able to figure out what to do david, you know that that kind of rally on friday based on nothing is really a sign that people are desperate and shorts were desperate to cover. >> yeah. and to your point, trying to sort of figure out where there is a real bottom and if there was one or is one. you know, jim, it's funny, so many are, oh, the stocks are all down on no news. remember the days, day after day after day, week after week after week, month after month after month where stocks were up on no news understanding the underlying businesses were strong but nevertheless, this is the price to sales, no, this is the price to sales and earnings per share multiples that were through the roof here we are now, people wondering, gee, why is it coming down on no news? >> look, i think it's really important, i put together a list you're right, david. we're looking at times earnings.

everything is times sales, everything and what happens when you have that is that the value guys, the s&p -- not even s&p names, they're not going to come in the margin guys are going to get margined out and i'm specifically going to call out the robinhood people i know this is something we're not necessarily focused on in the sense there's a broader court than robin and i'm using it as a rubric but many of them are so over their heads, they will get so angry that i said that but carl, i remember in march and april 2000, i remember what it was like. i know there were a lot of people who said, you know what, i'm a millionaire, i'm not going to pay taxes, i'm a millionaire. carl, these people lost everything i think it's my job as a guy who follows stocks to say do you know what the stock is i read on twitter this weekend that there were some people who said, look, i love xyz and when i finding out what they do -- i'm like, oh, will you cut it out? don't be so damn proud of

knowing nothing. >> no, jim, you've been pretty interactive the last 72 hours with your club this morning you tweet high flyers, sell some, please, please, please to your point about robinhood and i'm sure at some point we'll get to softbank and the debate about who's driving the options market and its dominance over trading. >> yeah. it's not clear to me that the softbank story which you alluded to, a very large biy buyer of essentially call options, we don't know a lot of details, softbank haven't really said much of anything to confirm these stories, although i can as well at this point tell you that is the case. it had been in the market for a while. i found out subsequently people were aware of some of this buying but it is not the reason we are coming down. some concerns about trading desks and whether they're appropriately hedged to handle the other side of the trade. from what i am hearing, they

are. but it does at least add some fuel to the fire, jim, and give us a reason as to why some of these stocks have been moving up to the extent that they were it's also a very serious decision it would seem by soft bank we've been reporting on this company for some time in terms of the asset sales, the huge sale of the stock in t-mobile, they were also selling some stock in their softbank mobile unit in japan. they have trimmed the alibaba position armed holdings, they may look to monetize some of it in some fashion. but i think, jim, the expectation that they would go out and buy $4 billion of options to control some $50 billion of stock is unexpected it does go to this point that perhaps it is no longer a 100-year vision they have there but perhaps more of a minute-by-minute vision. the man who runs -- who is -- well, technically ceo of softbank investment advisers has a history in that area, at deutsche bank.

his old friend at cantor fitz is having an impact but it's unclear about how much of an impact it may have. >> i think they're using a research firm that has a reputation of excellence i think they're using barstool honest to god, i think they came in on top and feel that stocks can only go up look, in the old days i would literally say they're knuckleheads not anymore, i'd say they're ill advised. >> they have made money from it, jim. i don't understand the underlying incentives for why you do it. it's not as if softbank will get a higher multiple as a result of doing this. >> it's a great trade. portnoy made a fortune, let's own that if they take it off the table, whatever the heck they're doing, they're you're right, they're

smart. but they have been lumped in in terms of what i think, carl, in the same breath of the people who felt that stocks couldn't come down. hey, what did they like? look at this, they liked spotify and fastley and they're like all over they should have been buying the drug stocks but conagra or something. when i look at what they're buying, dave, come on! let's cut it out they're buying levongo, zoom, boston beers went up to square, peloton, they probably like the peloton. look, we should -- we remember there was a period in 2000 where people came in late, and this is what these fellas are doing. now look, it's entirely possible, carl, it's entirely possible that we bounce today after we hit where we were friday and they take something off the table. if they take something off the table they'll be as smart as the other people who take things off the table. >> so two questions, jim

one, you seem to think there is something in the 10% nasdaq drawdown that we barely touched on friday. two, why couldn't this be election season, september/october seasonality occurring right on schedule? >> jeremy siegel was on today, professor siegel i've always loved his thinking and he said, look, the nasdaq is not for the long run he was comparing it mightily to the period in 2000 where the s&p held in but the high flyers didn't i think the high flyers are much better than they were in 2000. look, the election is such a wild card. but i do think, i do think, carl, what this siegel says that there are two markets, there's the market that is very much price times sales and price

times earnings and he wants to be in the price times earnings which is the s&p i'm not going to go against him. he's been too right in the big picture for as long as i've known him, and i've known him very, very long. his book is just -- it really is the book for this era. it works and david, there's nothing wrong with saying that, yes, a softbank may have put on a great trade. >> yep. >> but you have to take the trade off. and then i'll salute them. it's not -- what is he going for? >> a few hundred years, 300 years. not anymore. the vision fundi, everything was supposed to be long term in nature the stock has done extraordinarily well as a result of the undertaking of sales that they have and the buybacks that have come along with it. but it's an interesting strategy and i don't know what's going on there exactly at softbank. the stock did sell off yesterday, i believe it was, as

a result of at least investors saying what's going on there because of course to your point, jim, you may make a lot of money on this trade but the next trade you could lose some. is this more of a hedge fund than it is an allocator of capital having the view of what the world will look like in 30, 40, 50 years, not next week or next month. >> he'll get the bounce maybe today and maybe he'll take advantage of it. >> i don't know. i'm not sure what they have closed at or haven't it's my understanding they had some call spreads on and some outright obviously call purchases as well on some of these stocks $4 billion is what's reported to have been spent. we'll see what the impact is but, jim, overall where we stand this morning and where we're coming down, i mean do you look to fundamentals to try to understand what really should be a level that makes sense for so many names that we've talked about that have gone more or less straight up over the last

month? >> well, if we have a recovery mode and people start going back, reed hastings had some good things to say this week but if we get the bounce in the economy continuing, which is what we've had remember, the unemployed -- it's really been pretty staggering how quickly it's come back from april. i think people will want to go back to the 3ms. i think they'll take a look at diversified industrials like dow chemical it's already up a lot. i think that the people who are, let's say, the newbies, let's call them that, who are pondering at this very moment what to do, whether they should go back and bet on the nfl on thursday or whether they should own stocks and broader rubric, i think that they have got to go they should go on their own terms first. but if they can't, carl, then they're going to go on the terms of the margin butchers, and that's exactly the opposite of what you want. >> but do you think that, what is it, chiefs thursday, right?

do you think that the return of football withdraw ss some retai participation in equities? >> yes, definitely i think there's a lot of hot money, had nothing to bet on so they bet on stocks they bet on, i don't know -- i'm just looking at the stuff they like someone was telling me, jim -- all weekend i was told to pump work horse i don't know, i was looking at show horse i was watching the derby not a lot of people at the derby, by the way. >> what happened to your buddy portnoy? he said he was going back to sports. >> he's still day trading. i'm sure people are saying why are you emphasizing him. i am saying, again, he's the paragon. there are so many people who now when you talk to them, they own stocks now these are people who have never owned stocks when you ask them what they own, carl, they can say, you know what, it's a digital play. beyond that they don't really have a rap so let them be blown out and then we can look at the stocks you know what's not a phony

stock? microsoft. there was a piece today, though, from goldman sachs reiterating their sale of apple. oh, yeah, okay, so maybe they'll be right for a couple of days. but they have been wrong for i don't know how many points, including a split. tesla is a major part, carl, tesla. it's funny that the people at softbank, they should be buying t-mobile excellent piece today by davidson saying there won't be a price war. so i want to take the other side of them unless they ring the register maybe they add nikola. maybe they were short tesla and long nikola. >> it's going to be a good trade at least this morning, carl, isn't it >> good to be back. >> nikola is up 28% premarket. we'll get you up to speed on this new partnership between gm and nikola to make the electric badger truck big story and one reason why tesla is down 15% premarket. back in a moment to deliver your. and the peace of mind of knowing

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we're very excited to be partnering with nikola when we look at the opportunity to continue to leverage our technology, the battery platform system as well as the hydrotech fuel cell technology, this is a wonderful validation of our technology then bringing our engineering and manufacturing expertise to the table. >> that was gm's ceo, mary barra, earlier this morning on "squawk box" when she was discussing the company's

decision to produce nikola's badger electric pickup truck gm will also take an 11% stake in nikola as part of that deal you know, jim, we had trevor milton on not that long ago, a month or so ago. we gave him a hard time, he's got to deliver this is number one on his list, and it would appear that he delivered on this front. shareholders also seem to agree. $2 billion in newly issued common stock to gm for what they're calling the in kind services and access to gm's global safety tested and validated parts and components that will have a lockup provision along with it and gm will engineer, validate and manufacture the badger battery electric and fuel cell versions. it's an interesting move for gm as well. we could get caught up in in nikola but this would make it

interesting for mary barra. >> this is a good reason to own gm if you think they're going to split it off as far as the honey badger, i don't know what they get for gm. what does gm get they get a list? what does gm get out of nikola david, help me here. nikola has a list of customers for the honey badger >> yes. >> i don't care. >> okay. why not? >> because the honey badger don't care there is no reason to -- what is -- nikola -- what are they, here we go let's just team up with gm and we will have a -- i don't know, what do they do? they make the outside of the truck? >> well, they make a lot of the truck. in fact it also utilizes their fuel cell technology to the class a semi truck market and represents a high volume commercialization of its leading fuel cell system and complements the battery electric propulsion.

>> all the things that gm gives them is worth a lot more than what nikola gives to gm other than a veneer of, hey, we're cool mary barra is cool, david. she's cool >> what i'm wondering is what is nikola bringing there? are they bringing all the plans? >> don't ask me, i don't know. >> i've got to ask trevor. i've got to ask trevor if he'd come on with us, we could have asked him, but he didn't. >> i prefer the call this morning -- i saw a call this morning about ford, a positive note about ford. a bet on jim farley. i think that makes sense farley is a car guy. he's not as good as office cabinets like the previous guy from steel case. that was not farley's suit farley is more of a car guy than he is an office -- kind of like a chair and cabinet guy. so i think, carl, that i like the ford call more

i know that gm is going to go up i know nikola is going to go up. but at the end of the day i want to know if gm is going to spin off this unit. if they spin off this unit, we've got some value but other than it's just the same i've got to be cooler than ford >> if it's a significant partnership, jim, you shouldn't just throw it away they own 11% of the company. they are commercializing battery technology together. gm will use what it develops over a broader product portfolio over time and it puts a significant vehicle on the road for nikola beyond its hydrogen big trucks and its fuel cell -- remember, it's a vertical system that it's got beyond that. >> i think it just -- all i'm saying is gm got a great deal. gm can now do something. it's got validated ev technology but what happens to nikola next? you read that amazon -- because you watch those ads. amazon is going to be green

called in 2025 and use these kind of trucks you see all these amazon trucks on the road. hey, they announced they buy some nikola trucks and you find, you know what, i guess this is just good for everybody. i'm saying right now that gm got the better of the deal because gm just got validation of their ev and it puts them like neo, like tesla, and everybody wants to be tesla except for today just didn't make the s&p. >> speaking of which, jim, three big pieces of news not included in the s&p, completed that sale of common that they announced on the 1st and musk has qualified for the third tranche of those options, another 8 million. >> well, look, there's -- i know people were disappointed it was out of the s&p when the s&p started to really matter, we used to say, oh, who's going to be added, who's going to be added, who's going to be added. people played that game and then it went away there was a problem with safeway and everybody lost some money

with safeway but we've got a lot of new people, david, who think when something is added to the s&p, it's great. the only guy who did terrific was the at the money sale of tesla at the high. but selling it to people who said, hey, it's going to be added to the s&p elon musk is both a great stock trader and a maker of cars >> yes, he seems to have an ability in a lot of different areas, actually. >> yeah. >> also stock splits stopped being a thing as well as some point during the end of the bubble 20 years ago, and this stuck moved up how much, carl, was it from when they announced the split? it was staggering in terms of the additional market cap for tesla and apple from the time both companies announced their intention to split their stocks. >> every tesla stat is buried in a pile of other tesla stats. i don't have that handy.

take a quick break here, we'll watch the futures. leader mcconnell is on the tape saying the senate will vote on a na cesrelief package as the seteom back to work after the long holiday become. we're back in a moment when the world gets complicated, a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations. that's the clarity you get with fidelity wealth management. makes it beautiful. state-of-the-art technology makes it brilliant. the visionary lexus nx. lease the 2020 nx 300 for $339 a month for 36 months.

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not one of the huge price movers premarket but lots of news surrounding disney. lots of news around "mulan" over the weekend. the parks at capacity for the 'lgetotime since they reopened wel t all of that and the opening bell in a few moments.

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all right. we're going to get over to jim f a mad dash there's your boy, portnoy. hey, elon musk, do something yeah, $389 billion market value coming into trading today on tesla, but it's not going to be that when we open. >> remember, elon musk did answer portnoy's tweet we have to believe that was elon musk not that long ago so it's entirely possible he will respond again. tony says current valuation is mind boggling. i like that. but he does say it's a fool's game to predict where it's going to go. if you want to look at the fundamentals of tesla, remember, it is making cars.

it did raise a huge amount of money. it has confounded everybody over and over an over again let's say elon musk comes in and say, you know what, dave, i'll bottom the stock he watches portnoy as does soft bank the key to this market is portnoy's next move. >> still >> because the nfl doesn't begin until thursday. >> when does this end? or is this with us now i know portnoy has told you when sports moves back he'll move back to focusing on that we use him as a reflection of a broader level of speculation in the market and this broader participation. does that die out? does it end? does it go the way it went 20 years ago? >> davie day trade i believe is going to be with us. he said he saved the market on friday there are older people out there saying what the heck is cramer talking about. i totally get that barstool, one bite is terrific

and barstool is great on sports. but i think this is an era where you have to come up with people who describe what's going on of the portnoy is everything that i've i'm seeing in the market that's exciting but not necessarily after today lucrative. [ bell ringing ] >> guys, there's the opening bell at the nyse look at the nasdaq there, watching some fill in. a holiday-shortened week we'll see what that means longer term jim, a lot of new research today. a lot of initiations we're going to start the kickoff conference season this fall. we could pick any of them. but i noticed morgan stanley initiating some airlines boeing at an underweight saying there's an underappreciated risk of deliveries that can be cancelled if your plane is delayed more than a year. >> at what point does boeing say, you know what, we maybe have to rethink a little bit about dave kellam. every single -- have you read a

positive story about boeing lately every story is bad it's obvious there are people in the faa that hate these guys have they done enough to clean things up? i don't know when i read that note, the note is devastating it is devastating. because they are talking about a remarkable $73 billion that's at risk in orders i was part of the stephanie link, my old friend, camp where maybe there's a moment to buy boeing david, do you think it's wrong to question whether calhoun is the right guy? >> i think you can question whatever you want. it may be too early to do that, yeah. >> better late than -- i don't know ford got run into the ground you don't want -- >> you were questioning ford, i think, an day one. >> yes >> you were after him from day one. that has not been the case here. >> you did not need a good office cabinet man to run ford calhoun knows this business, but i'm just saying it is

unrelenting. you would think that at this point with phil lebeau talking about how it was a good weekend, a lot of people saying -- morgan stanley saying buy southwest air. you might have to say why not buy some boeing. but carl, it just doesn't have any traction do i think that calhoun should go i don't know but i do think that something is really wrong there and i don't know how to fix it >> yeah. jim, chips, the smh below the 50-day first time since, oh, april 21 a lot of discussion now about china rhetoric heating up specifically around chip technology nothing new, of course, but perhaps to another degree as the president yesterday at the portico suggested a decoupling of the u.s. and chinese economy. how is this moving in your view? >> i think it's -- what it's doing is it's driving some money into health care, which has been a real dog i think that when he says these

things, people immediately think -- some of the rhetoric was basically you've got to make everything here. and remember, apple makes a lot of things there. i think the president still does not want to own up to the fact that we have companies that do -- that make things in china and sell them around the world and it's actually good for america. but he's on -- he is just on a tear against china and this is, again -- you mentioned electioneering he wants to show that he hates china more than biden. and then biden hates china carl, there was an article about china has infiltrated the universities the anti-china rap is just getting louder and louder, and that does make it so that the chips are a little more dangerous. the fact that the other side of that is, is that what can he do, what can the president do? can he put a tariff on apple phones how stupid would that be cut your nose off to spite your face. >> we're seven days away now from, i think, tiktok being

banned unclear. i mentioned that because we've never got full clarity on the september 15th deadline, which is what its parent bytedance and the potential bidders have been dealing with but there was another executive order that may have extended it a bit, the one that applied to bytedance and tencent's wechat but it could be as little as seven days until that thing gets shut down. >> look, i think that we're now in a world where i think the president may just say i am tough, tougher than everyone i'm closing this thing and that would be, again, something that would be -- all you need to do is try to separate them from china just get the code and separate, which is something that microsoft can do but the president, i think, again, cut your nose off to spite your face. i hope he's -- i hope that navarro is listening i hope some of the chief of staff is listening, carl, because there is a win here for america. but it isn't like it has to be -- that you have to destroy the chinese communist party.

you can win if you allow microsoft to get this and have it separated but i think the president is using a meat ax instead of a stiletto i think a lot of that is because the president is not a detail guy. nor is the administration when it comes to what's really going on in individual companies i don't blame him, that's our bailiwick, not his but if microsoft gets it, it's great for an american company. i probably dislike china more than anyone in the white house i refuse to think it's a bad thing for america if microsoft gets it. >> yeah. well, there's the tiktok issue, jim, but there's a slew of other headlines this morning for example, beyond meat getting a production deal for a site near shanghai. starbucks looking to add more plant based in asia with beyond meat's help. disney is getting kicked around because part of "mulan" was shot

there and at the ends of the movie it thanks thegovernment. that's a legit story. >> that's darkening another story which was unbelievable which was this disney -- they were talking about spinning off espn should a credit to the chinese government undo a deutsche bank -- and the espn stuff where they lose viewers. >> disney goes all in on streaming and disney succeeding in the land grab phase of direct-to-consumer that is the way the stock has been judged and one reason why it's only down 9%. if you told you at the beginning of this horrible pandemic that disney would only be down 9% given its exposure to all of the bad things going on, you might say, wow, i will take it first of all, companies consider all sorts of things. i have no idea whether they have considered what they're

discussing there but the idea being that you would have a very significant cash flow producing asset that might at least attract some shareholders for that. you can perhaps put a big dividend on for it some time, i don't know who knows. people come up with these things all the time but it does point to the strength of the direct-to-consumer platform. if i could pivot quickly, i did want to mention moderna. jim, i know you were going to hit, before we got the tesla tweet in the mad dash. moderna is part of that biopharma leaders that are uniting to stand with science. i know you guys have seen this astrazeneca, biontech, j & j, merck, moderna, pfizer, sanofi, a united pledge to uphold the scientific process as they work toward global regulatory approvals of the first coronavirus vaccines

their ongoing commitment to develop vaccines noorin accorda with high ethical standards and sound scientific principles goes to the concern that the idea of it being rushed perhaps for political purposes, but moderna is down 12%. >> it does due to increased skepticism for vaccines that are rushed to the market now, i'm enrolling for moderna because of the j & j it's just too hard to get into moderna can be easily gotten into the trial they have 21,000 people in the trial, according to meg. i don't know i want to get a vaccine. i was thinking about moderna does this change my mind no but, carl, if they're going to offer a trial vaccine that's been working so far, i don't know when i read about what's going to happen in the fall, when i read about what's going to happen when these college kids come back and i look at the college numbers, i don't think it's so wrong to get a little mauled earn moderna in your arm. >> i'm looking at this interview reed hastings is giving to the

journal this morning they asked him do you have a date in mind for when your workforce returns to the office? and he says probably six months after a vaccine. once we can get a majority of people vaccinated, then it's probably back to the office. he's no fan of remote work, jim, which sort of leads to your broader point about a vaccine being a real catalyst to a broad return-to-work dynamic. >> i think that's what's going on we have a lot of people who say the door is about to be opened if that's the case, then we've got to switch and sell the fastleys of the world. maybe we don't get into the data dogs as much as we would like to, the rokus and go back to something like yum i don't know if you guys saw, there was a positive note on yum this morning they're having pretty -- you can -- you know, pizza hut and taco bell. but yum, this is stifel note, and they raised numbers, yum when was the last time you saw somebody raise numbers, david,

for a consumer stock but it's happening it's happening and the campbell's soup debacle on friday, the interview where they basically said -- thursday or friday, it all blends in -- you know, what, the stocking is over i don't know, i kinds of like the s&p today, just so you know. led by disney, david i think disney will lead the s&p because this split-off of espn will be buzzing and gm, the split over ev. so it's called self help. >> these are things that are not actually happening except in your own mind. >> that's very true. >> i just want to make sure people understand that. >> right. >> it's not like this is actually occurring. >> you've never let the facts get in the way of a good story. >> deutsche bank analyst mentioned something that got your attention but you like to create your own outcomes you don't get an investment banking fee but you like to do that you've got gm spinning off with this nikola investment of 11% ownership and the partnership they have there. so you have them spinning all

their ev assets at some point in the future >> yeah. i think that's certainly possible i also -- when apple, by the way, let's go back to own it, don't trade it when the guy that's been dead wrong on it, the guy who has a sell from goldman, when he reiterates the sell, am i supposed to say, you know what, i've got to sell apple is he the ax, so to speak, or do you bury the ax? i don't want to create my own -- david is right i have periodically had a vision it was a vision kind of like the -- kinds of like the wizard of oz. >> oh, okay. sure did it have dancing monkeys, flying monkeys >> no, but it's a horse of a different color. >> those flying monkeys still to this day scare the heck out of everybody. >> you're right, jim >> apple is below a $2 trillion market value, guys, just so sglun ayou know. >> and how's our friend tesla doing? if tesla is all we had, wouldn't

it be exciting >> tesla is down 18%. >> are you trying to make a judgment there, david? >> keeps the sell rating new price target on. the real news is not goldman's call but the rumors to what degree they are going to introduce new features on a watch or are they going to start production of 5g phones by mid-september and nikkei suggests today. >> there's that 5g news. this is the news that verizon is going to leave nokia and go to samsung. david, that's phenomenal. >> that's a big number too there's a lot of money -- obviously, as you know, there's a lot of money at stake there. >> what do you make of that? >> i guess they think they have got the better technology and are going to be better able to meet the demand that's going to be there. >> and that's actually true. i think that samsung is under -- because it's from korea, we don't talk about it enough, carl but they have done a lot of things right by the way, the largest forge

company in the world, it's very important that we protect them i wish the people at the white house understood tsmc is important. they also -- they have got to find out more about the stocks that they're banging and the companies they're banging because it's not all one they're not all kodak. the kodak deal, david, what was that, that was a good deal, right? good deal for the ceo there. >> you have to talk to your boy. you have to talk to your man there in the white house about that one navarro. ask him about it maybe it came to him in a dream. didn't you call it navarro spac? you only do spacs when the market is going up >> it's only 9:43 so there's still time i did want to -- i did wanti to get you on oil, jim. brent is below 40, first time since june you talk that as an important

benchmark. this reuters piece about exxon, arguing that the market is beginning to worry about the dividend should we is the question. >> yes, you have to. they're talking about a big offshore discovery exxon bought back too much stock, they are not producing what we would expect this is the opposite of chevron. i think chevron has distinguished itself as being the one that has the firepower, has the dividend and did not, and here i've got to reference something that david has brought out to me many times david, mike worth did not pay -- he dropped out of that embargo. >> he did. >> smart, dumb, good, bad? >> of course it was smart. he had his parameters, he stuck with them. listen, momentum -- emotion plays a role in those kinds of things and also there was a buyer that felt like it was a must-have asset for him, that being of course occidental and in this case it was clearly

the right move not to have paid that price if they wanted to own a a anadarko but to your point they have been a fairly smart allocator of capital at chevron at least and in terms of making decisions of what to develop and not, not that they aren't getting hurt also the stock is down 34% this year versus 45% for exxon. >> carl, one thing that you correctly point out, below 40 is being taken as a signal that the economy is getting weaker. against that is the possible opening trade. i think that we should be thinking more about supply there's just too much supply once again when oil went above 40, the u.s. producers are just a nightmare. they just won't stop and they're the wild card every time oil goes up >> meanwhile we're not talking -- go ahead, carl. >> i was going to say 2% declines on the major averages we did briefly a moment ago

touch friday's intraday low, so we're going to watch that along with shares of apple as we said a moment ago getting slammed aztec continues to take a tumble on this tuesday after lakbor da. we're back in a moment at leaf blowers. you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. make ice. making ice. but you're not mad because you have e*trade which isn't complicated. their tools make trading quicker and simpler

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got a whoosh lower at the opening trade. nasdaq still below 11k let's get to bob pisani. >> good morning, carl. happy tuesday. eight to one declining to advancing stocks if you're in the rotation crowd you're going to be disappointed because it's really not happening. tech is weak, but energy, four days in a row down on oil. down 7% today. yields lower, banks are getting hit. so that rotation argument is not really holding up that well today, just generally weaker, but the emphasis is on the weakness in tech there's some headlines out there. those comments from president trump saying additional decoupling from china, that's not good for microsoft, it's not good for any of the semi conductor names and not good for apple. and the work-from-home stuff, again, down 2% to 3% what you don't notice here is the last few days have been really, really tough on the whole work-from-home crowd so salesforce, docu-sign slack is up just a little bit.

but we've got a healthy correction going on in this sector overall and it's more than a few percentage points let me show you from the 52-week highs now, and some of these have been a round trip in seven or eight trading sessions. but slack, wayfair more than 20% off their even nvidia, paypal probably counsel 10%, 11% as well, salesforce is probably down 11% or 12% off of its 52-week high we have a serious correction under way in some names. they tend to overshoot docusign for example, 220 six, seven, days ago to 280 and essentially at 200 this morning, a little bit over. all the way up, all the way down, below 200 at one point this morning briefly so you could easily overshoot on the corrections, overshoot on the way up and the way down in the blow-off tops. but it's not insane. the tech is doing well

third quarter estimates are coming out soon. technology is flat for the third quarter compared to the same period last year that's amazing, with everything else out there, look at the financials down about 26% for their earnings, for the third quarter compared to the same period last year industrials down 65% energy, you're looking at that's not hypo, 106. companies have negative earnings, losing money that are out there. so it's quite, it's not insane that technology stocks are doing so much better than the rest of the market, just on an earnings basis, they're clearly outperforming. as for the s&p 500, i know everybody's focused on tesla but the s&p keemz changing to reflecting the world and the way it is and the way the world is less retail and less energy generally out there, although energy stocks are not being deleted but etsy and some of the other ones being put in there tech energy, teradyne, of course a chipmaker and other other ones

in there as well, catalent does drug delivery devices. it's a tech-oriented pharmaceuticals throughout and the deletes are the tech names, koty and kohl's, two or three lowest market cap stocks in there. h&r block is the lowest market cap, it's not a retail stock the main point is the s&p is evolving to reflect what the country is looking like and generally, retailers are, old school retailers are thrown out this year, so we had macy's, capri holdings, urban outfitters, we've had nordstrom's, kohl's and coty's and i'm surprised, frankly, carl, we haven't seen some energy stocks out there. marathon is sitting down there, devin, very low market caps in the $5 billion range that's typically when they start getting into trouble and what happened here today with coty's

and kohl's, essentially market caps $2 billion or $3 billion, hard to believe when you're dealing with a company like apple with a trillion-dollar market cap, companies with $2 billion, $3 billion market cap sitting in the bottom of the s&p 500, they are responding to that, they're changing the composition. carl, back to you. >> yep, absolutely bob, thank you. casino stocks in the meantime getting caught in the sell-off this morning. wynn is down just about 5%, goldman downgrades to neutral. mixed picture for travel and leisure. cruises and airlines, after an uptick in travel over the labor day weekend. we're back in two moments.

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traditional advertising is not doing well but roku could be the leader if roku goes up today it could be a leader in itself for the stock market it literally jumped, i don't know why we keep this secret but roku key to the market >> none of that basketball dunking on you like was tweeted. >> don't forget the honey badger they get the scale and making and i'll defer to lebeau because he knows more than anybody >> yes, but jim, safe to say you're impressed at this moment with the degree of the early bounce >> of course we hit that level friday and look, there's too much selling pressure as bob pisani said 8-1. 9-1 is the classic level where you have to high 8-1 you should stop selling and better opportunity to sell if you want it particularly the newly minted millionaires who all got together with my pal

dave portnoy and a picture none of them was older than 30. i salute them. >> we'll see you tonight good to have you back on set >> you bet we have twitter. is it right the two candidates get to tweet before the election we'll find out >> very nice "mad money" 6:00 p.m. eastern time see you later. good tuesday morning welcome to "squawk on the street". i'm carl quintanilla with david faber. kelly evans joins us for the hour morgan has the morning off stocks are sinking we'll tell you what is behind techs tanking this morning >> the ceo of trip advisor >> and gm, stocks are bucking the sell-off the tech tumble is where we begin. james macdonald is here to talk about theactions in the market

along with alicia levine, chief strategist relentless selling pressure here, even though we've come through the long weekend what does that tell you? >> good morning, everybody look, i think in the tech sector in particular, i don't think we're done here but i don't think it portends something more sinister for the rest of the market unless we're down 30% from the high and in particular, if you look at the action last week, the lowest quintile stocks that have underperformed for the entire year outperformed last year and it was the opposite as we know in the tech sector which really were terrible so i think for now, and that could change, for now i don't see anything more sinister i think the crazy gains from august and the parabolic gains from august will probably be taken back, leaves with us a healthy market and even though those days are ugly, you really have to think about where we're going and where is the economy

going and where are earnings going. >> james, on that front, the next major societal event is the election is there anything as we kind of start to price that in and look at what uncertainties we're going to face that might be upsetting these markets? >> well, it certainly is an important point. i think however we needed to go through this shift from a raging bull market roaring off of the march lows going higher and higher, record july, record august we needed to see a pause in that and if you look just in the last week as of today, the volatility on apple, the volatility on google, up 19.2 and 26.7% respectively those are the largest spikes in volatility on apple and google since march and so as we look to the election as a catalyst, we have to understand there are going to be transition points and the transition point that we've seen in the past week is significant. the mart has stopped going up

and we have to look to put money to work going into the election and volatility is probably the best asset class to own here, not just referencing the two names but playing it through ubxy and the election will create volatility in and of it is ef. >> james, clearly technology taking it the hardest but the broader market down. we're not seeing that rotation into other names that are benefiting from technologies losses i wonder, is it reflective of overall concern about the economy, the lack of a deal, for example, coming out of washington in any way to try to aid those who are suffering, not to mention the states an municipalities that desperately need money >> i don't think so. i think it's a rally we have not seen a month like we saw last month since 1986, when the s&p, the amount of gains in the market over the past three months are simply unprecedented because of the antithesis you

mentioned. i called them certain dipity stocks stocks immune to covid, helped by it and doing great so i don't think there's anything to worry about here there's simply on our way to a correction and we have to look at this the march of the bull market >> aalicia, talking about volatility, the vix did get below 20 in the wake of the financial crisis never has so far now and now it's back of course to 35 but the fact that it couldn't be squeezed under 20 made some people believe that you can't really trust the hope period we're in regarding the economy. does that make sense to you? >> it is unusual that there were positionive correlations with the vix over the last few months normally as the market rises, you expect the vix to be lower as you pointed out i think for the most part, this is where the fed comes in and i think this is where liquidity

comes in and i think that as the fed has essentially nationalized the bond market, putting a floor under equities and supporting it, i think the vix is less likely to be an indicator here, because i think there really is no place for the capital to go and so ultimately, while you can protect your portfolio playing volatility and we do think this is the season for it historically it is and this is a very unusual election season, if we can say so that i think that probably vix is the way to go, but i wouldn't use that correlation as necessarily a sign of danger >> that's interesting. something to maybe keep in mind for the next few months. james, i don't know if you'd agree with that but i want to circle back on names you see value in everything from docusign, beyond meat and oled. tell investors why these are good places to be.

>> short term futures on volatility is important. the vix is a medium term volatility instrument, why you don't see a lot of upside there but there's a ubxy short term that place the volatility. as we come down and valuations go south we see companies that are going to roar forward through this recession, beyond meat is the first one, over 80% of artificial meat eaters are not vegetarians. they've got a 69% year over year growth despite half the revenue source being rocked out. when restaurants open this will explode to the upside. 88% of the business is coming from retail. i love data dog. everything is going to the cloud, everything, everything. their revenue is up 80% year over year, 37% more customers and getting 100,000 customers every single quarter this is a company that's going to do well the cloud will be critical to all businesses i also like zoom communications. we all know how powerful zoom

is this is what andy used to call an influx point in technology. we can be productive working from home, remotely working with other people and zoom is going to continue to roar. 4 1/2 time year over year revenue. if the pandemic gets worse, zoom gets better. docusign is up 45%, 61% year over year growth on billings this is a great company. di digitizing documents is something coming and finally any data, any information, any programming, any content, any entertainment we receive is coming off of an l.e.d. display, oled owns this space, these are the names we love. as we see volatility rising we'll own that in the short term, and as we get pressure under markets we want to own these names. >> james, it's david faber i had to jump in, man that is

some momentum portfolio you have got there. you are not afraid of multiple to sales 50 to c times aren't you taking risk off at all? >> we have to be smart you want to buy low, sell high we've been building up our position not in the vix. vix is a medium turn volatility but short term volatility is explosive. we came in the uvx around 19 bucks and looking good today that compensates and pays for the risk that we have to take on the equity names again, we have to make money year after year. these are names that are going to be higher next year at this time, names that will survive the crisis and despite valuations we have to look at the explosive upside and every one of these names has explosive upside >> alicia, let me turn to you and kind of what those names are replacing. the energy sector and what's happening in oil today is not

encouraging. is there a way to square that with the macro story with the momentum story or is that just a coincidence? >> i think there's some concern over the macro story and in particular, the china tensions have been kind of rumbling along, rumbling along and this is what we're seeing is an intention to ratchet up the tensions with china and we know that tech is sort of uniquely exposed to that. i'm so appreciative of james' enthusiasm, but i think when i think about you allocate a fresh dollar of capital today, ultimately you want to see what business growth is ephemeral and what isn't and i think for the most part, you can pick through the load of the cloud and the software and the tech stocks really get a sense of which businesses have been permanently changed forever and which got an ephemeral bump's of the

stay-at-home economy you saw in the last few weeks the market is sussing out that we are at an inflection point because we'll look toward the next six months. we're not looking behind us. something to keep in mooind as awe locate going forward >> thank you both, really appreciate it today, aleernia and james telling us about the markets. still seeing the nasdaq under the most selling pressure of the major averages. we'll stick with the sell-off with the s&p down about 1.8% off its lows. charles delar, former ceo of the institute of international finance. always good to have you, charles. we're 1:10 into the show we haven't mentioned as perhaps an impetus for the sell-off the lack of any new support coming from washington or perhaps the diminishing chances of it. so let me start there with you do you still think this economy needs further stimulus and do you think we'll get it >> well, let me first say,

david, carl, kelly, eight the good to be with us i think we need more stimulus. i think it should be focused, i think it should be targeted but i think it is necessary. i think actually politicians from both parties should not take the markets for granted the last two to three days should be a wake-up call, that this recovery remains tra jil. we ought to think about the recovery like a boxer, who took a hard right, was knocked down, got up off the mat, regained his feet and shook off the groginess but still doesn't squarely have the energy behind it this economy needs more support right now, particularly the small and medium sized enterprises, do the ppp program expiration pose a serious risk and despite the fact that the unemployment numbers last week were quite impressive, this is unlikely to continue unless we have another targeted focused stimulus program and i would say

the sooner the better. >> what if we don't get it it would seem that is certainly a possibility, given the imability of either side to come reasonably close to reaching a deal >> if we don't get it, i think so much then will depend upon really the development of the pandemic, the prospects of a vaccine. the covid task force a new member sketched out a narrow path that focuses on minimizing deaths on protecting the vulnerable but gets the economy back to work and i think that's -- after all the most effective stimulus would be to put a broader swathe of the economy back to work but we have to do so safely with socia distancing, with masks without that, and without a stimulus, i think this recovery

could falter not just in the u.s. but deployable globally we're focused on the u.s. markets and economy but the fact of the matter is europe is struggling the euro has strengthened considerably the german industrial production figures were disappointing the french economy has taken a major hit. we have to look at the global outlook here and ask ourselves, can this recovery continue to gain momentum without a stimulus or without a much more effective plan to put people back to work? i don't think it can >> to our point, though that, we've been discussing, france did issue another stimulus package. is it enough to help turn things around a bit there >> you know what i love to see actually is you're right france issued a similar package and i never thought we'd be taking lessons on economic policy from the french but it was impressive because it was focused on corporate taxes and other support measures and i think that what i'd love to see

is, look, there's an imf meeting coming in mid-october, the annual meeting the g7 ought to getity act together, come and announce in october a package of coordinated stimulus premeasures which focus on infrastructure investment all we need is a very clear, reliable framework of regulatory policies and tariff structures and we'll put private sector money, put pension money to work in reliable infrastructure projects around the world. we need a framework to do it and the g7 can create it >> you can always dream, charles. doesn't mean it will happen. you're talking about something we don't see that often these daysparticularly with an election two months away >> well, you're right. it's not highly likely, but on the other hand, six weeks is

long enough, five to six weeks is long enough to put together a focus package. i'm not talking about a wide-ranging set of measures the central banks have done what they've done one might argue they've done too much because this morning one of your previous speakers said we don't know what the real framework for the bond market is these days nor do we know what the market valuationless of the equity markets are but the reality is that there is a lot of scope and real need right now to give a boost of confidence in global markets in the global economy and a coordinated package would do it and it's not that difficult there's a handful of elements to it the governments could commit to it and we're talking about the g7, not the g20, which would be much more cumbersome it may be highly unlikely but urgent measures are needed if we're going to sustain this recovery and get ourselves back on a path so by sometime the second half of 2021, we are back

where we we were at the giching t beginning of the year. >> charles, thank you. >> it's a pleasure to be with you today. thank you. when we come back, trip advisor ceo is with us on the other side of the break, the nasdaq is back above 11k and the s&p 30 points above the opening low. back in a minute incomparable design makes it beautiful. state-of-the-art technology makes it brilliant. the visionary lexus nx. lease the 2020 nx 300 for $339 a month for 36 months.

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let's get o'er to seema modi who

joins us with the ceo of trip advisor. >> thank you welcome steven coffer. appreciate you joining us today. >> thanks so much. a pleasure to be here. >> we're trying to understand where the world of travel goes from here. tsa highest number of screenings since mid march. you have good visibility 30 to 60 days out. what does the fall look like for the world of travel? >> it looks good if you're planning a domestic trip we're not back up to last year's level, to be clear, about you we do see a strong interest in the short one to three to four-day domestic trip with september being a popular month to do some traveling. >> one of the revealing trends this summer, stephen, was the shift of vacation rentals. because you make over half of your revenue from hotels, this pivot to homes, what that means

for your business long-term? >> we do have quite a few vacation rentals, hundreds of thousands of them so we try to indicator to any type of travel that our travelers are interested in. obviously during a pandemic, people are most concerned about their safety, they're looking at those standalone homes of which we have plenty and which there's many available on the internet but when it comes down to it, it's all about that safety aspect in the middle of the pandemic you need to be concerned the survey says far and away that travelers are concerned about their safety we launched a travel safe program, free for all hoteliers and restaurants to contribute all of the information they have about how to make their guests feel safe in their restaurant or hotel. over 100,000 different properties have uploaded this information, letting travelers really understand whether these

places are safe to go. safety is the number one concern. that's what we're trying to address and to your original question, vacation homes are one way to address it but hotels are really doing quite a good job these days as well >> those safety protocols there are but unfortunately the latest data on occupancy those most americans don't feel comfortable getting out there. i've been reporting on the delinquencies on the rise for hotels in major urban markets like new york, chicago and los angeles. with international travel still down double digits, what is your outlook for new york, starting to see a lot of its hotel owners having to hand over the keys to their lenders? >> yes, it's going to be, it is difficult and going to continue to be difficult for these major urban destinations a lot of our travelers are looking for the beach locations, they're looking for rural, they're looking for the hiking adventures they're looking for something that doesn't have a lot of

people when a vaccine comes and good word on the street says it's not too far away, that's going to release what we believe is a tremendous amount of pent up demand so many people are on trip advisor today planning that next adventure and right now it's a short domestic trip looking for the outdoors, but i have no doubt whatsoever that as soon as it is safe to travel and obviously vaccine makes it quite safe, the cities will become roaring back to life so to the hotels, hang on, if you can, because travel will be back and we see it in our stats. >> i'm also curious, though, how important it is for the stimulus package to include the hospitality sector given the situation is difficult for hotel owners in big cities >> so of course everyone in the business travel or any other small business would love some

more government help we feel particularly pained for the independent hotels that are struggling that are in cities, aren't going to get the type of traffic and we've completely missed the summer season here in north america for those meaningful trips small restaurants, please don't forget them in the stimulus angle because it is critically important. we all enjoy going out to eat. we enjoy these vacations we take and anything that the government can do to help these folks hang in there for just a little bit longer, is of course very valuable >> yes, stephen, we've seen your stock fall about 54% off of its recent high. your message to investors out there who have held your stock throughout this pandemic right now? >> we, like every other travel company, have felt a huge impact from this pandemic

the pandemic is here, and it will pass, just like all the other recessions, just like the terrorist events of 9/11, and the travel industry has rebounded. trip advisor in particular is taking the opportunity to reinvent ourselves a little bit underneath the covers in terms of some of the things that we're doing to really get the site aimed at helping a traveler taking a very considered trip. this is a trip that matters to them this is a trip that needs, you are insight into hotels. what you'll do when you get there, where you're going to eat and the planning tools that surround that. we're also adding a direct to consumer revenue line that we launched with recco, a product helping people plan that considered trip with offline agent help and again, when you look at our space in the ecosystem, the incredible amount of content, advice that we offer, and how important we are

for so many travelers when they're taking those trips that matter a lot to them or place in the ecosystem is secure. we've resolved any question about our liquidity situation with the funds that we've received, and we're ready to emerge from this pandemic to ride the regrowth in travel and are quite excited about all the irons that are in our fire right now. >> yes and i see the changes you've made to your platform to help the consumer find those travel opportunities lastly, stephen, i want to ask you about google you've been critical of google in the past earnings calls your reaction to the doj reportedly pursuing an anti-competitive suit against google >> i think there's clearly been a number of areas where google has crossed the line in terms of lev leverageing a power that they have in one area into another. we think shopping, travel, we think a number of different ways

that they frankly abuse their position trip advisor is not alone in that position. there's numerous other companies out there and to see the doj be more active in regulating in taking action against google i think would be just a blessing for all companies on the internet that want to be able to innovate, given google's complete tom nance in the search category >> yes, it's a good point and story we'll continue to follow stephen, always grateful for your insight >> seeseema, thank you for brinn that to us we look at vanguard, ticker vgt. $40 billion of assets under management with a 21% exposure to apple, down 1.5% today. no surprise, feeling some of the

pain in tech this morning. ale is well off session lows in the first hour of trade but still down 2%, trying to hang onto the 61% year-to-date gains. we'll have more "squawk on the street" right after this ♪ ♪ ♪ ♪ rather than worry about how to pay for long-term care. brighthouse smartcare℠ is a hybrid life insurance and long-term care product. it protects your family while providing long-term care coverage, should you need it. so you can explore all the amazing things ahead.

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welcome back, everybody. i'm sue herera here is your news update at this hour in northern california a bid to stop nor wildfires as the largest utility cut power to 172,000 customers to avoid sparking more blazes the utility hopes to restore power by tomorrow night. in southern california, a gender reveal party that was supposed to basically unveil the baby's sex with a smoke device instead ened up starting a wildfire, that has burned about 10,000 acres but it was snow, not fire, that's the concern in montana and wyoming, several inches of snow on labor day shut one mountain pass and have triggered winter storm warnings in parts of both states and off the coast of sprri lanka an oil tanker has caught fire for a second time. firefighters are trying to prevent that fire from spreading to the ship's main tanks, carrying 2 million barrels of

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nasdaq shaved its losses to less than 2% and the other major average is off about 1.5% as we get a bounce off the initial lows blackstone's byron wean is with us now good morning, always good to see you. >> great to see you, david >> it's carl here, but david's with us, too, so you'll get two for one, plus kelly. >> sorry, carl i thought david was there. >> you were with us a few days ago and you said you thought the market was fully priced project too much optimism. you did say you were concerned the economy was not gathering enough momentum of its own how constructive would you say the sell-off has been? >> well, the sell-off is just a minor reflection of some of the

disappointments, but i don't think we're beginning a bear market i think this is a correction at most the internet and faang related stocks were fully valued based on my projections of earnings in 2021 or 2022 so this skrcorrectn is not unexpected. the market has been up nine out of ten days, it was very overbought and so this is just a pullback from what is basically a strong recovery market >> byron, we have a graphic up on the screen that says you see the recovery shaped like a square root, you talked about the economy needing a crutch, at least until a vaccine comes

along and that could be a while. doesn't sound like the environment in which value a rotation of value makes total sense, does it >> no. but where the undervalued stocks are. it seems to me the growth stocks that are benefiting from the lockdown that are benefiting from the slow recovery, that are benefiting from many of us working remotely, those stocks have reflected that good fortune. i think the real opportunities in the market are in some of the stocks that are in the more distressed areas i think energy is probably a trackive and if you can believe that transportation will ultimately recover, you can take the risks there. and also, in the middle areas

some manufacturing stock, material stocks, these companies are very reasonably priced, assuming that we get back to normal sometime in the next year or two >> i think when we had you on a few weeks ago you said the economy hasn't developed any natural momentum on its own and needs more help from the government here we are, early september, no help seems to be coming at least at this point. if we don't get some sort of new relief package from the federal government, are you concerned that we're going to backtrack? >> well, we are getting help the federal reserve is doing its part, and we do have the, trump using executive authority to provide some relief. the $600 was probably excessive because it created a situation where people were making more

money than they were before and reluctant to go back to work so my view is that aid is coming and i think mnuchin and pelosi will come to some agreement about continued fiscal support for those out of work and the economy. >> what about the states and municipalities that are cash strapped right now and faced with impending layoffs if not already undertaking a lot of those layoffs. is that a concern? >> it is a big concern you need probably $1 trillion to bail out state and local governments whose revenues have declined because of the coronavirus. so that has to be coming, but that's part of the point -- hold for a second >> we'll hold on and i'll make the point, byron, following up with you if you're listening that that trillion dollars is

not coming that's the key point of contention between the two sides right now. you seem what confident. 'not clear to mow others are, that we'll get that what you say is needed for the states and municipalities >> right we need that trillion dollars in order to sustain state and local governments, otherwise services like police, teachers, and other garbage collection, et cetera, are going to have to be cut back >> finally, byron, we're going to hear a lot over the next eight weeks about who is worse for the market on taxes, every sell-off is it the result of the market fearing one candidate or the other. biden is not necessarily bad for business but you think there could be revisions to earnings projections given the variety of tax proposals that we may see?

>> right there's no question that if biden wins, the corporate tax will probably go from 21 to 28 there will probably be a shift in the capital gains rate from the current preference to ordinary income rates. he'll definitely press for that. and a number of anti-business, anti-investor steps that i don't think are fully reflected in the market at this time, even though the market is mainly made up of institutional investors. so i think a trump victory would be good for the market but a biden victory may be more problematic. >> byron, people, i don't know, viewers are amazing. they already noticed that the glass that you drank from is a

packers glass. is that your team? >> i don't know. >> byron, thanks you can't get anything past anybody these days it's great to see you. look forward to checking in again soon >> okay. >> carl, thank you so much always a pleasure to have byron on keep an eye on shares of tesla this morning, everybody, they are the worst performer in the nasdaq right now, down more than 13%, after being snubbed from the s&p 500. mike santoli explains, right after this quick break we got no free pass.

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this sell-off may have been necessary to prevent a worse market outcome find out how deep the pullout to be on tradingnation.cnbc.com , even if their shares cost more. at $5 a slice, you could own ten companies for $50 instead of paying thousands. all commission free online. schwab stock slices: an easy way to start investing or to give the gift of stock ownership. schwab. own your tomorrow. a lot goes through your mind. with fidelity wealth management, your dedicated adviser can give you straightforward advice

and tailored recommendations. that's the clarity you get with fidelity wealth management. ♪ ♪ ♪ shares of nicola and gm, surging after announcing a significant partnership phil lebeau will break down for us. it is complicated in terms of technology and who is getting what >> essentially i've heard people on social media saying this looks like nicola is not giving gm everything and getting everything from gm gm and nikola the reason they're both up is that analysts look at this and say this is a win/win

situation. here is the deal gm gets an 11% stake in nikola, $4 billion in terms of services, manufacturing payments gm will supply its battery technology and fuel cells to nikola nikola will have its badger pickup truck built by gm here are the ceos of general motors, sorry, chairman of nikola talking about the deal this morning >> in addition to all the technology we're bringing in the value from an ultraand hydrotechnology perspective we're doing the manufacturing and validation and engineering all of that comes together and for the badger and also for the fuel cell technology for the nikola products and class seven and eight truck business so this is a huge growth opportunity for us >> we get access to their entire

supply chain, the team that built some of the best programs in the world the silverados and hummers, they have the best of the best and building our trucks out of their plant and that was the idea to save nikola billions of dollars, while still being able to grow with something that doesn't conflict with our dna. >> both company stocks over the last three months here, keep in mind nikola will save $4 billion. it comes down to this for general motors, the battery technology and the batteries that are going to be built in northeast ohio, and the architecture that's around that, what they're trying to build here is scale. now they have another customer who will be using that technology, that validates that technology, it helps get it out into the ecosystem that much quicker and at the end of the day, what you're looking at with the automakers is everybody's kind of coming around different platforms right now. you have ford and volkswagen

working together, gm working with nikola and work going on with honda, tesla has its own battery technology this is what we will see more of in the auto industry over the next several years you want to get as much size and scale as possible, and for general motors, adding nikola into the mix is not huge who knows what the badger will do it might ultimately be a flop but it is another vehicle they can build at their plant and use their battery technology for and if it's a success, then it's a win/win for gm they are in on the nikola corporation for an 11% stake and they get to further say look, our ultium technology, this is the real deal. >> but phil, when the first badger rolls off the assembly line, are we going to consider it a gm truck or a nikola truck? i'm curious who gets the credit or demerits? >> you're asking gm is building

electric pickup trucks likely at the same plant are they all going to look the same no, they will not. while there will be certain commonality underneath within the platforms of those electric pickup trucks, a lot of the the exteri exterior, the content is different, up to each individual automaker and you'll see this with other automakers as well where the content underneath, the guts, if you will, it may be the same in terms of the battery technology, the motors that are used, the battery management software, very similar, but you're going to see a different interior, a different top hat, if you will, and that's where each of the automakers will be able to say look, this is why our pickup truck is different from that pickup truck >> got it. phil, thank you. >> you bet >> phil lebeau don't miss a program "the path forward: race & opportunity in america. john fortt and andrew ross sorkin will take a closer look at the underrepresentation of

blark workers and leaders in corporate america and hear solutions from ceos, investors and entrepreneurs tonight at 7:00 on bc please tune in stay with us we know business keeps moving. and however we connect, whether it's over the phone, online, or in your office, we're here to listen and provide solutions that help you run your business better. because the decisions you make have far reaching implications. and a relationship with a corporate bank like pnc can provide just what you need. as one of the nation's largest banks,

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welcome back to "squawk on the street." the tech sell off continues with every sector in the s&p 500 trading in the red but far and away the worst performer on a per ten sage basis is energy. you have big oil and gases companies among the biggest laggards in the s&p.

u.s. benchmark prices down more than 8% this morning amid concerns that the u.s. and opec will continue to expand production even with the worries that demand may be slltaing out. "squawk on the street" will be right back keep it here

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i can to protect the environment so hopefully they can have a great future. every curve, every innovation, every feeling. a product of mastery. lease the 2020 es 350 for $359 a month for 36 months. experience amazing at your lexus dealer. watching tesla this morning bounced through the 50 day for the first time in several months mike santelli joins us this morning. you say it has some legitimate

reasons. >> i think it certainly has l t legitimate reasons i think it was a closer call than the market was assuming first of all does the committee want to defer to the markets momentum here in creating a $450 billion company that quadrupled in price year today. is it really something you can project into the future, and i think big in the minds of the people making the decision was the inclusion back in yahoo back in 1999. it represented a latter moment in that tech rally i also think there is a dilemma for the investors. do we assume the move is the markets way of telling us that

it figured out what the digital future is. >> some are asking if the index committeemen menwants to make se that they have not made all of their gains already. they look at tesla or zoom, i'm sure you think of others that are left out, and i think that sounds great and everything, but who is to say that they know that is what is interesting to me about this. the committee knows when the bulk of the gains have been made maybe they're great traders. maybe they have the right sense about them >> i don't think it is as simple as the committee got a little sticker shock at the price and how much it was up i think if basically tesla was fabulously profitable, in an unambiguous way, and the market was reflecting that, i think the committee would say get in there. what do we see in the last week or so it was a dangle offering

in tesla maybe it was fortuitous. it is only about 5% of the amount of stock that traded in the three days they were making that sale. look what happened to the sale price. they would look to offer more in conjunction with an index inclusi inclusion. and maybe we don't want to make this one of the top dozen holdings at this valuation when we still don't know ultimately if it is as profitable as we thought it is in the last four quarters >> i know we're supposed to chat tesla, but i have to ask about your mystery broker. you say he sees the pullback as purely technical >> yeah, it goes back to a week ago friday when we said it is getting a little silly that point, has not changed

that, tough seasonals. it is not necessarily macro related. it is not getting nervous act the underlying economic recovery it seems mostly about intermarket dynamics and hot money. >> it seems to me that last week the first couple days were more convincingly a reopening rotation names line wynn resorts at the bottom disney and netflix out performing i wonder if there is more of a china theme here as well maybe this is a little different market today than we have seen before >> it is definitely not a straight, it is clearly a kind of bumpy and noisy economic

recovery the bulk had been up the post. they're trying to absorb that, and i think if you look at the relative performance it is one of saying, you know, things got ahead of themselves and we're going to pull them back a little bit as opposed to a new round of panic about the economy. >> right, or about a rotation back into the reopening. one stock bucking the down trend today is beyond meat they are seeing a surge this morning. we have more on why it is moving to the upside today. >> yeah, announcing the company will open two factories in a new production facility in china the announcement following the push into china and that is when

beyond launched a partnership with china and since then, beyond has also linked deals at grocery stores in the region. the latest deal is the first time that a foreign plant based pro teen maker is building a production center in china is could be a big inflection point for beyond back to you, carl? >> thank you, good morning, it is 8:00 a.m. at tesla headquarters 11:00 a.m. on wall street, and "squawk alley" is live.

>> good tuesday morning. julia borsten joins us for the hour as well we saw a resumption of selling after friday's intraday low. back to 3360 on the s&p. got an initial bounce in some of those high fliers, julia, energy still problematic, but disney up 3% will be something to watch today. >> that is right disney up 3% on that deutsche bank note. disney did offer "mulan" to disney plus subscribers and that looks like it may have driven more downloads i also want to point to the fang stocks facebook down,