what is also a radical transformation that may be taking place at one of the largest certainly producers of oil in the world with the s&p now down 1.4% and megacap tech taking a big hit. that will do it for us on "squawk in the street. send it over to "techcheck" right now. ♪ ♪ happy monday, welcome to "techcheck." i'm jon fortt talking to julia boorstin and carl quintanilla. half of the stocks are 20% off their high it is now the time to reset in tech then leading the charge lower amid this tech selloff with another social media name

caught up in the downturn, a breakdown of the whistleblower's 60 minute secrets next. later, tesla goes the other way. why strong deliveries and a tweet from cathy would have having an impact on that stock up 2%. that tech selloff is where we'll begin this morning facebook, social media names and most of broader tech are down big this morning nasdaq dropping more than 2% today. mike santoli has a lot more on the selloff. mike >> i think it's best viewed as part of this on going kind of painful reset in the market. just the weight of the large cap growth stocks continues to be the main story recently as we have this messy rotation transition when we go down in price in the s&p, you also go back in time. one element of that reset, we're trading at levels in the s&p we first reached in late june so you got three months worth of upside essentially kind of wiped away for now and essentially retesting those mid-year levels. take a look at the nasdaq 100 etf against what you would call

the typical stock in the russell 1,000. so, the average stock against the large cap growth stocks and they kind of had this round trip together this goes back to early july and right now you see, yeah, that big outperformance built up by the nasdaq 100 now surrendered entirely and today by the way, you know, that equal weight russell 1,000 is down only one third of 13rs compared to more than 2% declined by the nasdaq 100. that's the internal reset that has been going on. also what's gone on, investment sentiment gone from complacency to concern usually helpful obviously doesn't mean it's over just yet, this period of the year is not that great and usually when you have a down september, have a 5% pullback for the first time in a long time, sometimes some extension further lower to at least an 8% drop is what history says and then perhaps things gather themselves for maybe a fourth quarter rebound, guys. >> mike, we're coming off of the weakest growth to value week since may. you got the percentage of ndx

names above the 200 names lowest since may of 2020. what's today's action doing to those who say a lot of this has been taken care of and priced in. >> you can view it as an overshoot. i'm not sure it is you had an outperformance by the nasdaq 100 for a while seems like a forced rotation and very fitful one. when you're coming from the big nasdaq names the facebook news does not help. microsoft, it's purely about flows and the style factors that are not in favor at the moment money moving out of big growth what it's trying to force its way into banks and energy, not something that can be supportive of the overall index i can see -- suggesting nasdaq 100 getting oversold in the short-term oversold doesn't always mean it stops on a dime and reverses higher, though. >> mike, in terms of catalyst in the coming days that might alter the narrative either for the better or the worse, we'll get a jobs number on friday. obviously isms in front of that.

pepsi tomorrow what do you think is going to be some news items for the week >> obviously we're watching whatever, if anything, comes out of d.c we're at a point right now where the market has been stressed enough even if it's just about keeping the government open and funded and the debt ceiling higher might be an excuse to find the floor friday's job market is asymmetrical it would have to be weak in order to change what the fed is going to do. maybe you're not going to get a lot of help from that although we want to see the expansion in jobs did continue through last month. but i'm not sure that's the one that's going to be the turning point. >> mike, you mentioned what's happening out of washington, d.c. we can't forget we have that senate hearing tomorrow. i'm wondering if there's a sense with the broad selloff across the social media names that there could be a new wave of regulation there and that could really for the first time have an impact on those stocks. >> you have to believe that's part of it, julie. there's no doubt you've been given many excuses to lighten up

here the other thing was, you know, treasury yields are not racing higher at the moment they obviously were higher just a few days ago so that's not in particular what's the approximate cause of weakness today in the big social media and other growth stocks. they built up a huge premium and valuation. facebook accepted it seems as if we're getting that skimmed away and we got to see what comes of maybe a more core value for some of these name. one of the patterns, though, is when we get finally to their earnings reports, sometimes the world gets reminded of just how fabulously profitability those platforms are and the stocks are weak sometimes when they can find some traction >> thanks, mike. well, speaking of facebook, it is one of the worst performers this morning as shares are falling today they're off over 4% now and down more than 12% over the last month. now about 14% off of that stock's all time highs last night we learned the identity of the whistleblower in

a "60 minutes" interview tomorrow she'll testify before the senate commerce sub committee on consumer protection at 10:00 a.m. eastern. she brings with her thousands of pages of internal documents. >> the thing i saw facebook over and over again was there were conflicts of interest between what was good for the public and what was good for facebook and facebook over and over again chose to optimize for its own interests, like making more money. >> frances haugen left facebook in may, former employee of google, pinterest and yelp she says what she saw happening at facebook was, quote, substantially worse than what she saw at other social media sites. social stocks are falling across the board today. snap, pinterest, twitter all down sharply as well so thequestionthat i have, guys, is, you know, jon, is this time different facebook has been under attack for so many different things in the past, but is this going to actually spark regulation that

could hamper its growth? >> maybe, julia. this is the nightmare whistleblower for any company, i think, in that she says she doesn't really have malice toward facebook. she just wants it fixed. she's a veteran of the industry. she is technical google paid for her to get her mba. she has a personal connection to this in that a care giver of hers when she took sick went down one of these misinformation rabbit holes that shows a story, at least, around her motivation that's kind of separate from any animus toward the company itself i mean, you never know which way, carl, these hearings goes, whose agenda might come to the floor. this is not a whistleblower you shrug off. it's a compelling story and it's real i was saying this morning, this was roger mcnamee with receipts. she has the info. >> it will be interesting what degree facebook centers their

defense around her personally. more broadly than that, we talked to a former ftc chair what her information and the journal's information could do to the discussion regarding potential legislation and his view was that it really does take that classic facebook argument, which is we are trying and we are spending money on this problem, and makes it hallow if you believe the idea that they knew about this and did look the other way >> yes facebook's defense does seem to be they're doing their best. there is even some data showing how little violent content they were able to tamp down but the fact that they said but we're still better than others in the industry, i think that frances haugen explicitly clear she wants t help regulate this industry. she doesn't think that facebook can self regulate and that's why she decided to take this step to file the complaint with the s.e.c. and change the trajectory of her life in becoming this high profile whistleblower the question is what could regulation actually look like?

how do you regulate a company that reaches over 2 billion people that is so integrated into so many people's lives and is so used by advertisers, carl. this is a company that has not really been hurt by any advertiser boycotts and no indication yet that advertisers could pull back, though we'll see. >> yep one more reason why this earnings quarter's commentary is going to be key. 328 will take you back to june today. it's a good setup for the first guest this hour, talked about facebook and also his top picks, webbush securities head of tmt joel ka lena i appreciate the time today. it is sort of the centered question, is this time different? what do you think? >> i mean, i think it is to some degree, right? i think the mentality and price action of tech is starting to shift after labor day. and right now as we speak the same issues we talked about a couple weeks ago are the same. you have rising yields and the bias there does feel like it's upward as a monetary policy

return to more normalization elevated issue with tech always. then you have pandemic tail winds, crowded positioning everybody piled back into the sector in late august and early september. and then i think just going back to evaluations, there's clearly some fear here look at the charts of cathy woods arc. golden has a couple no-tech profit industries. down 4% each so i do think things are different and on the regulatory front, i view the epic apple ruling as a bigger issue than what's going on with facebook. clearly "60 minutes" whi whistleblower last night will have remnants on capitol hill. >> we had conversations early in the year looking for the ndmx to give back, i don't know, 8 to 10% and then inevitably a point at which structural growth becomes the story again.

longer term innovation, produ productivity, reinvention of i.t., things that came out of the pandemic when do you think that conversation happens in earnest? >> the bull is clearly want to shift the narrative back to that kind of story. we know that investments in a.i., 5g, high performance computer aren't slowing any time soon digital transformation is only going to accelerate, but the reality is, i think what's different this time is it also throw supply chain headaches seem like they're going to worsen and i think we got a flurry of confessions in september, whether it was from the airline industry, industrial complex the automotive guys blame shortages on their revenue downfall. micron highlighted on their call rekrenltly that will be a big source of frustration and it's going to impact tech where as three months ago people kind of shrugged it off. but i mean, i think now you're going to see downward bias to guidance when these management teams roll out to the podiums to speak. and that to me is the biggest

issue. on top of positions which kind of we know tech is always a crowded space. >> so, in addition to the chip shortages, you know, you mentioned this facebook issue, but there's also the question of how facebook interacts with apple and what the broad implications could be of apple's changes to its operating system, preventing the targeted ad delivery that so many companies were so used to. how do you see that playing out potentially impacting the broader landscape? >> oh, 100%. we know -- i think a boutique firm last week maybe the week prior had a negative bone on facebook, really talking about the negative kind of -- continued ramifications and implementation of idfa that will be a problem for not just facebook, potentially for google, pinterest, snapchat, twitter, all the way down. and these are stocks that did a lot of heavy lifting especially in 2020 in the first part of 2021 and without the leadership from

these big tech companies, that's where we have a problem. i mean, look at amazon is now down on the year or pretty much flat facebook is breaking its 100-day pretty violently today outside of netflix and tesla, the complex has been cracking over the last few weeks. and you have to keep an eye on it i guess we'll see earnings season is a couple weeks away netflix kicks things off on the 19th now we're in a weird limbo period where you'll probably see more defensive positioning and rallies to be sold versus buying the dips. >> you said you see apple epic having a bigger impact potentially than what's gone on thus far with the facebook whistleblower. what would it take to change your mind on that? what direction would these proceedings have to lean in for you to see risk to facebook? >> yeah. i think with facebook, you have -- it's going to be -- time will tell, right it's tough to handicap it, but we do know with what's going on on their social media impact and

to the younger generation, it's pretty toxic so let's all hope that there is actually real regulation that's implemented on that end. regarding apple's -- potential app store changes, i think it's a ripple effect. it's more negative impact for apple and the likes of google with their store as well and just those are both major sources of revenue and profit for those two companies. and you know, as we do know, as apple goes, that's where the market goes. it's done a lot of heavy lifting over the past decade and if apple cracks because of this source revenue falters or becomes a lot less certain, that's a big issue for the market and i think that's the issue with the apple. >> yeah. we've known about that potential liability for a long time. and i'm sure a lot of investors have been bracing for it you mentioned china risk you mentioned supply chain risk both on trade and just on sheer goods. does that mean that fundamentally, directionally,

theematically you're choosing software over hardware >> i'm a little mixed. where software gets me is kind of you still have the growth of any price mentality. just buying these high-flying names that just went gang busters last year, they haven't worked this year there's been a few outliars, like docu sign jumps out at me and go down the list, twilio, zoom media making new logos for the move as well i think you really want to be defensive within your tech so within the semicomplex, i would be avoid anything tied to the pc chain and memory and prefer names that have more insulation from the noise out there. cloud infrastructure spend have an analyst day coming up and more defensive are the foundries. global governments are continuing to focus on investment becoming -- trying to reduce supply chain risk but for

now taiwan is where the bulk of chips are made so, i just think you want to be a little more defensive in your posturing and even look under the hood for names that lagged a little bit take a look at the video games big focus is wedbush starting to see relative strength today is the fifth or sixth day where you see the publishers outperform typically strong seasonality with these guys with the holiday season so i don't think the names clearly aren't going to work in the immediate future is my view. so just kind of look for outliers that lagged or stick with names again that are a little less insulated from some of the noise that's out there. >> interesting even as we speak, nasdaq at the moment could close at its lowest into june 2022 appreciate it. >> thanks for having me, guys. and let's turn back to facebook and the whistleblower joining us now we have kara

swisher, new york times columnist and cnbc contributor thank you for joining us facebook shares down my fundamental question, is this time different is something going to change for facebook >> i would like to say yes but i suspect no i mean, just listen to that guy on right before me i mean, they're like, sorry about teen girls but kind of thing. i think wall street tends to focus on their business. they don't really care, just like they did with cigarette manufacturers or open yet manufacturers. until there's action by congress that is significant, no. i think they'll be just fine. >> but do you think this could be the thing that sparks significant action from congress >> you know, i've been at this for what, 15 years or whatever, how many years, every time i'm like, this is it but it's not i think the issues are this is a significant thing because there's a whistleblower as jon said who is talking about it and who has the receipts this is something everyone has been talking about for a long

time and now there's proof, but somehow facebook as you can see from the way they're dealing with it from a pr point of view it's all act attacking research or eventually they'll attack the whistleblower. so i don't see them changing at all until they have a change in leadership so i'm not sure. at this point, it's congress's and regulators need to act and it's taken them too long because facebook is like someone on twitter today. going to say things like, well, we didn't start the civil war. not that we think they did but their culpability in a lot of this is critical to be regulated. and until they are, their stock will do just fine. >> part of the significance of this to me is that we don't often see people blowing the whistle on silicon valley companies about how they fundamental run their business the whole culture of these companies keeping people on the campus when we're not in a pandemic, kind of creating sometimes these cults of

personality around founders, around ceos bucks against it the closest thing is susan fouler five years ago blowing the whistle on uber's company. the implications of what uber did and impact on the valley was smaller. in that sense, could this have an impact on the way companies think about how employees and the public are going to react to them >> well, you know, it's interesting because people like mark in silicon valley not everybody loved travis i'm saying it was very easy to turn on him. it's much harder to turn on mark he's very powerful and so are the executives at facebook one of the things -- she's being represented by a very well known whistleblower firm, i suspect they're having trouble raising money to work on these cases with her i think nobody wants to -- if you notice there wasn't a lot of -- she's a product manager in silicon valley and she worked at a lot of companies you're not seeing a lot of public support katie santon supported her, a bunch of different people did, but you're not going to see a

ground swell of the way it was go, susan, go in this case so that's my concern that others will hopefully -- they're holding their nose and hoping it will go away i suspect that's how silicon valley will react. then eventually they'll try to self justify it so what's the big deal. they didn't like-- it's not their total fault. that kind of -- you can hear the little excuses they're using i think they're pretty appalling but that's what they're going to do. >> discussion continues as to whether or not the content moderation whistleblower story is as bad, worse, better than the on goingi ios disruption to the business model how do you compare the two >> i think it's content moderation meaning it happened previously where they were killing people in other countries, that one. i'm not sure which one you're talking about. what's happening here in this

country, for example >> yes what frances talked about on "60 minutes" last night. >> this happened before. the philippines was tweeting last night she had warned them about just this kind of thing they've been warden over and over again elsewhere here is frances showing that they had -- they knew about it and chose not to do nothing. that's the problem here. they didn't chose not to do nothing. they chose not to do enough. that's just to me is just as bad because here they are, something that's going to hurt their business they made a choice not to hurt their business and so we'll see they're definitely ly buffette all sides. you notice mark and cheryl are not speaking up at all because they don't want to be seen attacking her but they'll have plenty of people do it for them. that again is appalling for them to do that they should address it directly if they want to be lead thors of

facebook >> kara, you said that nothing was going to change unless there's a change in management of course mark zuckerberg is a controlling shareholder of this company. do you think that he's under pressure from any of his board members? and do you think that advertisers are going to start to put pressure on the company i haven't seen any evidence of it just yet. >> you know, the people that have been putting pressure on the board are not on the board anymore, if you notice a lot of people left people that are there spend a lot of time petting him. i don't know what else to say. they're probably egging him on he should get away from them honestly because they're doing him no favors. but they're huge supporters of him. and i think he would be better served just in a role that is -- i don't know if anyone can run this company, as i said before, a fresh start would be a step in the right direction at this point. i can't believe i'm saying this, but it's really quite astonishing they won't directly address this whistleblower the two leaders of the company will not directly address a very

significant whistleblower, typical and cowardly as far as i'm concerned. >> kara, it's always great to have you are yo insight and of course we would welcome mark zuckerberg and sheryl sandberg coming on here if they would do so. >> fat chance. fat chance. >> we are speaking to global head -- thanks, kara we'll try. we are speaking to facebook's global head of safety tiffany davis will join us later this hour. and stocks are down big and "techcheck" just getting started. ♪ it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7

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a 4k streaming box. -for free! that's because you all have the same internet. xfinity xfi. so powerful, it keeps one-upping itself. can your internet do that? so we're staking a look right now at the session lows for the nasdaq and overall the markets so to speak. the nasdaq composite, given where we're seeing the movements today so far have now pulled back with that particular index roughly 7% below the record highs that we've seen. so again down 7% we're not still, i guess, flirting with the 10% mark that many traders tend to call a correction which is the down 10% mark here, but it's certainly something to watch here. down 7% for the nasdaq composite. three areas of the market that have been considered bell weathers or perhaps leading indicators for the broader tech

and communication services sectors have been in semiconductors now they're down 2.5%. that's roughly in line with the market overall but they're now close to an area of possible support for some traders. that is the long-term 200 day moving average something to watch here for the semiconductor etf down 2.5%. we're down almost 10% from the levels we have seen from the recent highs from the semiconductors one other way to watch as well is another place to keep a close eye on, big communications stocks, social media companies, that includes names like alphabet, the parent company of google, that particular etf has also seen a sharp drop from the highs we have seen so far as well so if it's down 3.5%, that could perhaps be a bad indicator for the rest of the overall tech sector and communications services sector and one other place is within software that particular move there micro soft, you guys have mentioned that earlier this hour as well, the sharp move lower we have seen there, this eft, the expanded tech soft or igb is

down 3% as well. as you can see it's a relative laggard. but the movement lower there is suggesting perhaps there's a little bit of more weakness overall in the megacap tech trade. so overall between semiconductors, internet-related stocks and that whole movement lower on the nasdaq is coming into sharper focus and something we will be paying close attention to and given some of the moving averages that these levels are coming closer to, guys >> yeah. dom. sort of a perverse way the good news we had on vaccine rates, certainly therapeutics the discussion around merck last week, cases down 35% since september 1st removes that whole stay at home pillar that a lot of these tech names depended on earlier in the year. i noticed peloton has a bearish piece in the journal today one more leg they don't have to stand on today. >> it's not just that. the interesting part about this whole thing is many of those stocks and the valuations that they had even aside from the

covid pandemic were driven in large part by some of the valuation tail winds you could have from lower interest rates interest rates haven't spiked one way or the other that much, so all of these moves lower with many of these growth-oriented companies, not just the megacap ones but some of the work from home names and whatnot have come despite the fact that we have seen interest rates overall not become so volatile, at least in the last couple days here with the market volatility and stock that we have seen. so if you look at that as a maybe move that could be justified by the nasdaq overall, you take that away as well so, it will be key to see whether the reopening trade names can actually find some rotational benefit we did see that the last time the megacaps sold off earlier this year. it remains to be seen whether those travel and leisure names anything outside of oil. we know that oil right now is catching some fundamental tail winds. today specifically because of the opec plus meeting and the production levels that the world could see, but that reopening trade doesn't really catch a bid

that may call into question whether or not there could be any broader help to that broader base rally we have seen over the course of the last years, guys. >> dom it's really interesting. first full trading week of q4 and apple just lost the gains it had over the past three months microsoft is just a couple percent away alphabet is about 5% away. you know, amazon, i think, is down more. significantly. but it seems like a moment where maybe some data. we're not going to get a bunch of data for a while, i guess at least black friday will have some sense of consumer health. >> i mean, from a micro economic company specific standpoint, yes, those catalysts may not be quite as robust in the next couple weeks here. from a macro perspective, you wonder how much the narrative today is jockeying ahead of that big jocks number that we are going to see on friday right? we've got three big jobs data points between adp, weekly

jobless claims and the big jobs the nonpharms payroll number, whether that macro picture changes it seems to be a headline driven from a micro company specific perspective that bigger picture economic catalyst hasn't been there we would have seen rates move if it were something along those lines but when you see the social media stocks netflix by the way it's interesting it's down 2%. it hit a record high earlier in the session as well. so, when you see that kind of movement, it certainly gives traders pause this idea right now that, yes, you could see a big swing moment wise for some company-specific stories only to have them fall off again it's perhaps it will at the very least provoke some traders to question whether or not there is more leadership upside from many of these media tech-type companies at least over the course of the last six months we have seen some of those happen but those etfs i highlighted

before, if semiconductors can't really catch a bid here, some of the big software companies can't catch a bid here it maybe calls into question -- by the way, in concert with a possible hypothetical no reopening trade rotation that tends to be the real worry i think for a lot of traders out there. >> yeah. where there's volatility, money will be lost and made. dom chu, thanks. time for a news update now here is what is happening at this hour. crude oil prices jumping by $2 a barrel calls for more supply from u.s. officials and others. airlines are expected to lose far less money next year. losses will narrow to 11.6 billion dollars in 2022, less than a quarter of the losses forecast for this year factory orders rising 1.2% in august. that's more than expected, even though defense orders fell sharply. factory orders are up 18% over

the last year as firms seek to rebuild inventories. and the supreme court letting stand a new york state tax on opioid companies moving the way for the state to collect $200 million surcharge on opioid manufacturers and distributors the money is meant to help pay the cost of dealing with the opioid pandemic. back to you. >> christina, thank you. we do want to talk about the significant dropoff that we're seeing in tech stocks. let's bring in former cisco ceo john chambers. before we get to that, john, you are a veteran of the valley, a leader in the valley for a long time what we're seeing with facebook and this whistleblower is unusual. what's the impact you expect, if not for facebook, for the valley r writ large and the way leadership moves from here. >> jon, thank you very much. carl, julia, pleasure to be with you today. a lot of interesting topics. in terms of the overall issue,

it's about is tech for good or are the concerns that some people have about tech being bourn out. i believe firmly tech has to be for good and that every major company has to focus on its economic return or its shareholders, customers and employees but owes an obligation to society jon, you and i discussed it before during the '90s and 2000 tech was for good. relationships democrats, republicans, the european, the people in asia all very much aligned in terms of the goals. when there was legitimate issues, we resolved them i strongly encourage the large tech companies to step up and do the same thing we had this discussion about two years ago when congress began to get active if you don't change, regulation and anti-trust is coming i think it's very important that tech companies and large players adjust as an example, you saw with u.s. and india prime minister modi came to the u.s., his comments to president biden was your businesses were there for us

during covid and your technology companies were there for us during covid in ways that were just amazing so i think it's time for tech to get back for good. hold ourselves accountable as we have done in the past. if we don't, regulation is coming and more challenging times ahead. >> yeah. big challenge, you know, smaller but also present challenge the market right now understanding how to navigate them, supply chains are challenged. we're in q4. what's an investor to do >> well, i always look at the big picture, john. we talk about it before. my parents were doctors. i never get confused with my symptoms versus the underlying is issues tech is going to have a great run over the next decade one of the reasons i like the startups is i have to bet three and five years out and i'm locked into that and that way you don't have to worry about the ups and downs in a given period of time if you were to look at the

nasdaq a year from now and the dow as well, the high probability they'll be up and up comfortably based on what i know, all my startups that are private and i get to see that data all the time, they're all increasing in terms of the orders is supply chain an issue absolutely but we'll navigate through that. i've never seen it like this before and you look at the private equity funds just as an example for 500 billion on the sidelines. so i think we'll navigate through it i'm not as good on the next week or the next couple weeks but i'm purely a bull on this and complete bull on the number of unicorns in the u.s. and those going public, where you guys covering them the next year do >> john, july 26th you were with us you said you were encouraging your startups not to do business in china that you're in the invested in any china startups you said it's going to get bumpier before it gets better. talk about impression. you envisioned the headlines we

have had out of china since. >> actually i thought that was probably going to happen and i was hoping the reverse i personally think the decisions made in china, the top leadership forum, are more of a win/lose scenario. i think the administration has that read right. still huge issues on forcing companies to do technology transfer when you do business in china. not a level playing field. supporting their state-owned enterprises. hard to predict three to five years out what the regulation is going to be. and the key take away, john, this is why this is extremely interesting is watch the number of unicorns being traded in china start to slow. and your first reaction will be, wait a minute, what do you mean? just data point. china has about according to my data 277 unicorns at the present time they added 98 year to date that sounds like a big number if you look at the u.s. 396, 217. or india, which didn't have

hardly 20 plus unicorns a year ago added 31 so what you're going to see is a rotation in my opinion, a double down on india. you'll have betting on emergiin countries. modi's trip is general assembly approach shows that. so, i like what's going on in tech i like what's going on in india. i think china is making, in my opinion, mistakes that will -- when you start to regulate new industries too heavily and start to support industries that shouldn't be supported the economic consequences are there ch and investors won't invest if they don't see it curve out predictable. >> appreciate that big picture view john chambers, thank you. >> thank you, jon. and let's get back to facebook whistleblower frances haugen is set to testify before the senate commerce sub committee on consumer protection that's tomorrow at 10:00 a.m. eastern. joining us now over the phone is facebook's global head of safety

antigone davis she testified last week in front of the same sub committee. thank you so much for talking to us this morning. haugen says that facebook prioritizes profits over safety. you're head of safety. how do you respond to that accusation >> well, first of all, thank you very much for having me. in terms of that statement, i actually just sort of categorically disagree with it i think that we have invested heavily in safety and security over the last recent years to the tune of $13 billion. but more importantly, very specifically we did things like turn off issue ads and political ads ahead of the u.s. election and all the way through the inauguration that's money that was lost to us that was done for safety reasons. >> but specifically to that point, the whistleblower said that you turned off some of these different tools that enabled the fast spread of misinformation before the election and then you turned

them back on or adjusted the settings after the election and that was one of the factors that led to the attack of the capitol in january so i'm wondering how you address that in the sense that maybe facebook was not continuing to be responsible in terms of trying to minimize the danger to the public >> yeah. again, i think that characterization is just completely off in fact, we kept on the safety measures there are certain emergency measures that we put in place during or right around the election to ensure safety an security that wouldn't make sense to keep on all the time. for example, we turned off profiles for around your profile frame most positive. but during that time period we turned it off. but core safety things we left on and continue to this day. for example, we don't actually allow civic or political groups to be recommended anymore. >> but, the whistleblower said

explicitly that the evidence shows and this is from tens of thousands of documents that facebook is lying to the public about having made progress against hate, violence and misinformation and that the company takes action on 6 tenths of 1% of violence and incitement and facebook and facebook said that's the best in the business but question to you is that enough >> first of all, facebook is always trying to do better and to do more we want to provide people with the most positive experience that we can. and that means constantly doing research to look at where there are gaps or where there are challenges and how to make improvements to make sure there's a positive experience. but really it is contrary to my experience at facebook and i've been here for seven years to categorize not making progress or not caring about these issues it's just wrong. >> i would like your reflections on what looks like out of snopes

an accusation that facebook ignored warnings of brewing sentiment that led to some of the people who participated in the january 6th insurrection, fomenting that on facebook my understanding was at least part of snopes was partnering with facebook on dealing with some of these issues, so it seems strange that facebook would not have responded to that or perhaps followed up on some of the rhetoric that this partner of yours found concerning what went wrong there? >> you know, i can't speak to the specific snopes piece only because i'm not particular familiar with that what i can tell you from my own experience wedealt with a particular issue around something called save the children this was an issue that was potentially feeding qanon. and i know because i worked on this very directly we actually brought in our safety partners on that work, people who work on child safety issues, explain that people were

exploiting that particular terminology save the children to drive -- to try to drive qanon efforts. then they worked with us to actually put safeguards around that to allow them to continue to do important child safety work while getting in the way of exploitation of that particular term. >> is it possible, when you talk to other leadership there, are you considering that your lens might be off right now so many voices that are technically close to facebook, whether it's the oversight board, snopes just mentioned this whistleblower working within facebook on these issues, are saying that you're not doing the right thing. you're not doing it the right way. these aren't competitors these aren't rivals. these aren't regulators. people in position to work with you. does it concern you that there is that disconnect between what you're saying and what they are saying >> one of the things we do at

facebook all along the way is we do our own internal research, but we actually work with external organizations, experts, in all of the work we do for exactly that reason, to make sure that we're taking in how other people are perceiving the work that we're doing. also taking in their expertise and making adjustments based on any gaps that we may see so that's something that we take quite seriously. keep in mind that the oversight board is something that we set up for exactly that purpose. >> but i guess to follow on jon's question, it seems like if there is meaningful criticism coming from your partners, does that indicate that more dramatic steps need to be taken i mean, you're saying that you're trying, you're working to address these issues, but all signs point to the fact that maybe things need to change more meaningfully do you agree >> i would say in the time that i've been at facebook --

certainly the time i've been at facebook and certainly within the last five years facebook has taken a tremendous number of steps to try to bring more transparency, more accountability, more external engagement, everything from lining up our oversight board to setting up transparency reports to incokcorporating human right impact into the work we do to the oversight board. is there more we could be doing? we're always working to improve the experience for the people who use our platform, and we will always continue to do that, but i do think that 3 billion people or more are using our platform on a daily basis because they do see us as a safe and secure place to communicate with their friends and family and to build community >> yeah, antigone, i'm well aware of these safeguards you have put in place. i reported on them extensively, the oversight board, et cetera what i'm wondering right now per the conversation we had with kara swisher on our air earlier is whether now is the time there needs to be a dramatic change

either to the algorithm or oversight of the company itself because the step that you have taken are just simply insufficient >> one of the things that i think would actually be quite useful to the overall efforts that we've put in place is actually to see an update in internet regulations broadly it's one of the things we have been pushing for and one of the things we reached out to members of congress to see if we can actually get done. i think that would actually be one of the most helpful advances we could see in the near future for the internet >> antigone, i wonder how much of this discussion affects the pause of instagram kids and whether or not there are certain targets you feel internally, the company feels need to be met internally before that so-called pause is lifted. >> yeah. i don't know that we have some specific targets that we set out, but i think one of the things that's been lost a little bit in that conversation is that a large part of what was driving that work was actually to bring

more safety and a better experience for young people. one of the things that we sort of know is that young people between the ages of 8 and 12 are on social apps, social apps designed for people over the age of -- 13 and over. and their parents are letting them do it and what we would like to do is actually provide them with a safer, better experience so, we put it on pause that should go back to parents, to experts, to child psychologists, to other stake holders to policymakers and make sure we have in place what it is that they think is needed to ensure -- to meet the needs of families and meet the needs of kids before going forward. >> but given the data that was just revealed about how over 13% of teen girls say instagram makes thoughts of suicide worse, 17% say instagram makes eating disorders worse s the company considering potentially not doing instagram kids at all, which is something that was raised in the hearing last week? >> well, first of all, let me

take a second to reframe that research because, in fact, those numbers are not actually accurate what the research shows of the 12 issues we looked at, 11 out of 12 issues teen girls thought that actually being on instagram was more helpful than harmful. for boys it was 12 out of 12 now, there was evidence that there are areas where there are things that we could be doing that would make it helpful for all teens. so, for example, in the context of eating disorders, we found that of girls who already said they were suffering from eating disorders, 2 out of 3 found that it was more helpful -- their experience on instagram was helpful but 1 out of3 didn't that 1 out of 3 we want to change that. we put into place some meaningful changes and will continue to do that work remember, the point of all this research is to identify potential gaps or challenges and

always looking to improve experience of our users. >> i know you don't run coms and don't expect you to have an answer necessarily, but i'm sure you understand the street is curious whether zuckerberg or sandberg will respond to say the whistleblower's allegations directly, is there any chance they will do that? because we have seen them give taped or live appearances certainly when there's a new product rollout. >> well, that is actually as you said a better question for our coms team, but i know we are trying to get to address these issues and take your questions like having me here today and we'll continue to do that. >> antigone, thank you for joining us to discuss these important issues we hope that mark and sheryl will come and talk to us >> thank you for having me i appreciate the opportunity. >> we'll get more on that story throughout the day closing bell has one of the whistleblower's attorneys in the 3:00 p.m. hour eastern time. don't miss that.

meanwhile, the president is on the tape talking about the debt limit dow is down 435 after being positive for a brief moment this morning. more "techcheck" is back after a break. competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is. workday. th- [narrator] introducingng systhe grubhub guarantee:ld.

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zbl the nasdaq down, docusign, moderna, match and facebook down the most what does this action tell you >> it's basically what we saw from last time we spoke. we had a trend break in the s&p. we had a bounce up of the 100-day support then a rally. that has failed and produced new lows and tech, we also just broke the trend. so tech can rally from here because we're getting fairly oversold here on the rsi the relative strength index down to 28. we haven't seen that since march 2020 so i think what's happening with the close today may be worth watching otherwise we risk into the next support levels into the say 64, the 150, 241 or the 200

ma so see what happens at close today. >> so you perhaps position yourself differently depending on how the day ends up >> well, from our perspective, we've been kind of approaching this from early september, but we're also attuned to the signals and we've got to respect strong oversold signals that i think will be setting up for a bounce the question is just simply whether they can save the close today or we're going to hit these new levels so that's part of the calculation here into the beginning of the week, if you will >> meantime, president on the tape now asking the gop to stop playing in his words, russian roulette with the economy and debt ceiling asking the gop not to filibuster, quote, get out way so they don't, quote, destroy the country. how much of that do you think is actually in play today >> i think it's part of the kind of general uncertainty we have

the general debt ceiling, this gets kicked down the road. so it's just a matter of how far both parties are willing to take this i would expect one side as we go, if you have a major relief rally, but the extent this gets pushed to the wire, obviously, you could pressure equities even further. for sure >> i'm wondering what other catalysts you're watching now? jobs numbers what you expect out of earnings coming up? >> earnings is to me kind of the key because we heard a lot about supply chain issues. in many cases, they're very much real and the question is how companies will respond on those in terms of their margin in terms of the outlooks i think earnings are kind of now in the rear-view mirror. expected to be somewhat positive, but the key to me is the outlook. we have a lot of forward looking outlooked into to 22 and if

these issues drag on longer than people want to see them, this could pressure margins going forward. >> all right lots of action to watch. thank you for that perspective >> you're very welcome take care. >> meantime, in a very tough tape, tesla is an outlier. top gainer on the s&p today, off the highs, but got above 800 for the first time since march phil >> and the momentum is because of the deliveries for the third quarter, carl. take a look at what tesla delivered. most were expecting between 200,000. they came in better than expected about 94% of those were the model 3 and y. again, they never break down the regional sales we deliveredthis many in china in the u.s., in europe the interesting thing here, is look at tesla versus general motors in terms of their deliveries year-to-date. first, we're going to take a look at tesla's deliveries in

terms of what's expected they did a half million last year right now, many believe they'll deliver up to 880,000 vehicles next, tesla versus general motors you can see that while gm has had a nice move over the last year look at what's happened here in the last couple of months especially in the third quarter as gm hasn't done a lot. that's because tesla has done well in terms of sales year-to-date up 97% gm, just 0.1%. the outperformance of gm now coming back closer to tesla in the last month or so finally, cathie wood we know she's a tesla investor she tweeted over the weekend, they sold -- one interesting

thing to note. while evs require more chips than standard internal combustion vehicles, there are a lot of thingsthat go into the chip supply. but wall street has taken notice that tesla has tdone a heck of a job managing its chip simply and that was certainly shown in the third quarter with deliveries exceeding expectations >> still interesting about watching her tweeting about her top holding. i'm curious how you're processing the blend of varying headlines regarding the chip shortage both gm and bmw had hopeful commentary about supply or at least margins versus say audi and honda today. >> right and i think it partially comes down to where are you getting your chips and how are you

prioritizing those as you are getting them not all chips are the same for all automobiles and the relationships are different. adam jonas from morgan stanley was talking about this question. why did tesla outperform others in terms of managing the chip situation? he writes in there, look, they have relationships with chip suppliers where the chip suppliers probably look at tesla as a strategic company customer that doesn't mean they don't look at other automakers the same way, but perhaps they say them in a slightly different light. so i think you can't look at any one automaker and say, well, there you go things are much better or worse for the entire industry. it is a company by company situation. >> wow thanks ju julia, facebook is off the intraday low of 324, but i wonder what you made of our interviews today >> it was fascinating to hear

from antigone davis. but there are reports that whatsapp and facebook are having connectivity problems. neither are working for me right now and they're pretty widespread reports right now >> down detector with a few tweets let's get to the half. >> thanks so much. welcome to the halftime report front and center this hour, we're inside the sell off in stocks tech wrecked again as facebook faces the fallout over whistleblower's accusations. what that means for your match up with an ominous october underway debating today -- let's check stocks after friday's surge, under some significant pressure this hour. led by technology. dow's down 1%. about 350. s&p off about 60 points. there's the nasdaq though. two and a quarter percent to the downside a loss of more than 325 points steve weiss, i s