Us put this into some perspective, our Senior Market commentator mark santolli. You have the two day shakeout that is not yet undone last weeks rally you kind of gone up so far in a Straight Line and everybody acknowledged that the market itself is very extended to the upside sentiment is way too bullish you needed some kind of a rest i think youve had convenient headlines to come in there and grasp on to, whether it is apple on iphone demand they say okay maybe its time wlachlt is interesting is a lot of people pointing to this month end idea of rotating from stocks into bonds bonds dont have a very strong bid right now. Yields are not going up much anymore. But theyre just sitting there so i dont know if its just that or if its just kind of time for a reset and a rest of sentiment. Does it make you worry about february it makes you acknowledge that february is smimdzometimes a gi back month i think that brings it pretty much front of mind right now i think if you look back to august, this is the highest level of the volatility index since august august, mid august, august 18th or 19th is when this latest liftoff took flight. So that was about an 18 move in five months. Youre kind of seeing maybe this tl is Something Else coming on which is a mob choppy phase. We priced in the incredible up warld revisions perhaps. A the love the tax cuts that we opened oversaturated in the good news we tumbled to levels we havent seen since wednesday right so has anything fundamentally changed or one area that is reacting more unusual . I wouldnt say anything fundamentally changed today. You also would have said a week ago did anything fundamentally change that were up 2 . I think that is the market were in its very much about flows and sentiment. And today obviously youre seeing some victims. Youre seeing obviously the Health Care Group get smacked. In recent days, its really been mostly the defensive stocks, the yield stocks that have been baring the brunt and certainly some of the traders i spoke to here today say outline all the same things you just talked about. The fact that maybe this market was getting a little ahead of itself not seeing major losses positive day. I think there is a sent. On the floor that the selling could accelerate there is always a possibility. One thing way dont know is how much accumulated positioning there was which was an implisive bet on low volatility. And the fact that it was getting more of the same one thing im surprised about is this little kind of back off in the stock market was not accompanied by the dollar rallying and maybe even yields coming back down it would have been a general unwind of the pattern weve seen for weeks right now which is just this sort of global move toward higher yields, lower dollar and higher stock prices so well see if it develops. Im looking at the credit markets. Thats one thing you want to keep an eye on to say, look, is there something being sniffed out here in term of more fundamental things theyre calm theyre not really too disturbed. Thats one little benefit. In barons over the weekend, someone from a group said that if this isnt the silly season, we dont know what is. Meaning this oversaturation of good news. So you think if we were in a silly season its ending i think that ind coo of one way type, you know, nothing can keep this market from going up phase may be what were seeing right now. Its going to be a little more of a twoway take. By silly, i think it really was a magnitude of the gains in a short period of time as of coming into this week, the stock market was compounding at 125 annual rate yeah. If it kept rolling at that pace, thats where you got to, i dont think anybody in the world thought we were going to have that kind of year. Mike, thanks. Mike santoli on an interesting morning. Theyre teaming up to tackle health care and lower costs for their employees. Lets check in with Bertha Coombs who is following that talk about a Disruptive Force potentially. Large employers hand will more than 60 of insurance. They really set the tone a the love times for health care these three teaming together say they basically want to really take more control by forming a joint company that is going to look at reducing costs, creating better efficiencies, more transparency through technology and also doing it without what they say are the pressures of a profit making insentives that for a the love people would say that theyre taking aim at the insurers, middle men who do a lot of the processing, a loft the negotiations for them, processing the claims. And they are lower today, particularly anthem, cigna, which will very much aligned with large employers United Health as well. Unitedhealth also has the pharmacy benefit side and its getting some pressure on that side as well these middle men are ones that have been under pressure and a the love folks have been saying they need to come down on their pricing. But the ones who may be among the winners, if indeed this initiative does go large, could be some of the providers like the hospitals. Theyre up today in part hca having a better than expected Earnings Results better than expected admissions. But hospitals could maybe start contracting directly with them, lefrg the insurers out, lefrg the middle men out and Getting Better margin with regard to that while trying to give them pricing. But ultimately when it comes to controlling costs, you really have to try to get better prices, not just on the services, but really when it comes to drugs and health care itself bertha, i have a quick question for you i know youve been following this all very closely for quite some time. Weve seen some consolidation coming into this sector even ahead of all of this news. You know, cvs and aetna and the other deals expected to come off that merger. What do you think this does to the consolidation, i guess, speculation . I think its going to continue even more the whole point here is that you need to prove that youre able to control costs and thats what these players are looking for in consolidating and to do some sort of vertical integration, to be able to cut costs no the just on their Services Side but also on what theyre ultimately providing were seeing the hospitals look to perhaps try to produce their own generic drugs in order to push out some of the suppliers and push out some of the drug makers who they say are raising prices too much on basics, things like iv bags. So its one of those things where youre seeing everybody trying to find where the value is and how they can extract the most value to be able to provide that to the ultimate payers which are the employers and consumers. Good stuff there, bertha. Thank you for that Bertha Coombs watching this announcement today for more on this corporation disruption of health care, lets get to our guest this morning, walter isaacson. And roger mcname good morning to you both so to berthas point, i mean, sounds like they want to drill down and get a true baseline for what these Services Cost i think the really important part of this is when you go to a single payer model like this you have a chance to go after all of the overheads. Bureaucracy is where the zero budgeting somehow. You look at it and realize we have layer upon layer of things designed to take costs out and the cost associated with the guys taking the cost out is become a huge part of our total expense. And so i look at this and i go knees are three companies that are in the top six, three of the top six in the fortune in the s p 500500 and they have 1,100,000 employees in total so when they speak, its going to carry a lot of weight to me, health care is just out of control in the country. Its too big a part of the economy. We delivered low Quality Health care benefits relative to the rest of the world. Our best outcomes are the best in the world but our average outcomes are not actually that good and i dont know how long it takes to do this, but this is a really credible group of people to do it i mean the fact that amazon is bringing a technology piece of this gives me real hope. And incentives are huge for them to get this right. Walter, the three of them together still not as big as walmart. I think at least in terms of number of employees that theyre potentially bringing to bear and what is going to allow them to do this more efficiently than kaiser i think you just talked about taking out some of the costs and the bureaucracy costs. I think also in addition to that, the really big play is both the disruption that technology could cause and using data lining to make sure you get every treatment right. Im down here in new orleans i just got a very long briefing at the Health Hospital system here about how theyre using data mining to make sure that no treatments are unnecessary how theyre using technology to monitor patients at home all the time this is something that amazon in particular brings to the party and i think weve not seen the disruption that technology is causing other industries weve not seen that in health care and this consortium is going to help do that and to dig into that a little further, roger, what are the examples of some of the technology that could really streamline the costs and what are some of the companies . The really obvious thing to do is keep people from getting sick in the first place. Right . With amazon, you have a the Love Technology that people have around the home that if properly applied, can help them be well every day. So that their needs for health care are discovered sooner when theyre cheaper and that in general people take wellness more seriously than they do now. To me, in the united states, weve have an obesity epidemic it is really important to try to get in nt fro of the hospital as the place to do the health care. All right walter, i wonder what would happen in other industries if somebody came along with an initiative and formed a new company where there was no profit incentive people invested in in space to make money, not make Better Health outcomes for the country. How likely whats that going to do to margins over time well, i do think that theres a the love profit involved for the companies if they can save on health care but also you can see a path just like amazon did with Amazon Web Services where it works well for themselves and their partners and soon they can roll it out to other people when you talk about the type we just talk about obesity, but, you know, when i went to the hospital a couple days ago, hypertension is a huge killer in the united states. If can you monitor your Blood Pressure and things like that on four, five times a day instead of once every three or four months, then you could really start taking the cover thes out of health care well talk more about it over the coming weeks and months. Other story this morning, shares of apple are slipping again. Goes red for the year, actually, on reports that company will cut iphone x production on weak demand it comes ahead of the Earnings Report walter, i wonder, ive been wanting to ask you all the reports we get, its been happening for years signing unnamed suppliers, logistics problems and so forth. How do you know when the Company Truly has a production rollback and when they dont . Well, you know, well eventually find out and certainly tomorrows Earnings Report will be important but the real question to me is the funneldamental question whi is founded on which is are the new products really innovative and really great i still use an iphone. I love being able to turn it on with my thumb print because it is something i can do quickly and easily and not noticeably. Whereas, you know, the new iphone and the new technology hasnt quite caught on likewise, the watch has been very successful. But it hasnt transformed things i think apple needs to create a transforming product and one of the places they could do it and have been doing it a little bit or actually a lot is what we just talked about which is health care. Which is if apple is monitoring all your vital systems with the apple watch and theyre making deals with places like, you know, the Hospital System here, then perhaps youll see our two stories of the day joined together roger, i think a lot of people might be missing a manufacturing cop kmp in japan saying the demand slowdown, were not seeing it. Its not like all indications are in that direction. And then the iphone x is not the only new iphone. The 8 and 8 plus are also new. So all of this is higher margin mix potentially. Its possible that some of those demand issues for the x could be true but also apple could have blowout results with new phones at the same time jon, im completely with you on this. Apple has done two things differently in this particular cycle than ever before with the x they broke the 1,000 price point which everybody is freaked out about. But what theyre not paying attention to is the 6 is still in the market, the 7 is still in the market, the 8 is the new product. They have the much higher margin products out there the x is the lowest margin thing they got by a mile and the reality is i think its an amazing product and i think in time people will adapt to it. They did a lousy job communicating the new features of the product so people have had trouble with the new gestures but they will figure it out. They will eventually like it im actually still optimistic about the report and i think honestly with the valuation the stock has, if you like the markets, you have to like apple. If you dont like apple, i dont know how youre supposed to feel about the market right . Im looking at this and going i like the chances here. If they sell it off, you probably buy it. If youre a bull on the market, you want to be a bull on apple you like the market now you said you like the x, right you called it delightful. Certainly, i love the x i still carry a 6 and a x. What i keep finding on the 6 is i keep doing all the gestures from the x i like it that much better i think the face recognition for logging in is really epic. And, you know, there are a the love really cool aspects i totally get why people say 1,000, too much i mean thats fine but in time that will work out they dont need that thing to be a blowout for the stock to be a reasonable stock guys, well find out what they say exactly its the market. Totally true. Walter and roger, thank you gentlemen. Talk to you next time. And still ahead, much more on j. P. Morgan, amazon and berkshires attempt to revolutionize health care. John sculley, former apple ceo and Current Health care executive is going to join us to weigh in plus, facebooks problems in europe germanys antitrust chief joins us next. And a look at the dow at this hour. It is down about 226 points. Squawk alley back after this you know whats awesome . Gigspeed internet. You know whats not awesome . When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids, and these guys, him, ah. Oh hello. That lady, these houses yes, yes and yes. And dont forget about them. Uh huh, sure. Still yes xfinity delivers gig speed to more homes than anyone. Now you can get it, too. Welcome to the party. Regulators continue to close in on facebook more than 100 Child Development experts sending a letter to the company today urging it to shut down its mess efrpger kids app saying that Elementary School age children are too young to have social media accounts and across the atlantic germanys top antitrust agency is targeting the social network for misuse of users personal data and of abusing the dominant position in the marketplace. Joining us now from germany is president of germanys federal cartel office. Good morning to you. Now it looks like the product, the feature at the core of your issue here is the Facebook Like button which as long as youre still logged into facebook as you go across the web, visiting other sites, anyplace that has a like button collects your information for facebook i guess it is possible for that only to happen if you actually clicked one of those like buttons. Is that the main issue here that you feel people havent explicitly said facebook track me outside of facebook at least this is part of the problem. We believe that facebook is holding a dominant position in germany. Facebook has 23 million daily users. 30 million monthly users you see they have an enormous market share when it comes to the use of social media over here in germany. And indeed facebook has a data driven Business Model which means whenever you enter a website where you see a little like button at the bottom, all youll see a share button, exact lib in this moment facebook is collecting your data which means they know you are on that website, how long youre going to stay there and that at a moment when i think Consumer User does not even know that this kind of data is collected at this moment it would be more transparent if the data was only collected if they touch these kind of buttons or if he makes use of it but, in fact, your data is already collected only whether you are on that website. And this is part of the problem for us facebook disputes the idea that they have a dominant position the numbers you cited say they have a third to 40 of the population of germany, i believe, logging in every month. How do you define dominant well, first we define the market and we here have defind a market of social media. Which is a market where you as a user find a very rich experience where you connect with people, where you find friends, where you exchange views which is a very special market and it means, bythe way, that we do not include into these markets, for example, youtube or professional Networks Like linked in. We believe facebook is a market on its own maybe there is one competitor that might be google plus. So if you look at the market share, that facebook is holding over here and germany, its half of the population. I already mentioned the figures. 23 daily 23 million daily active users 30 million monthly active users. So you see that facebook is really covering almost or at least a huge, huge part of the on line population over here and now i think that is fair to say in this case th