After some huge losses on friday, relatively speaking to what we have seen over the last couple of months, you can see that the futures are once again indicated for a tripledigit down day. Dow futures right now down by close to 150 points below fair value. It looks like the s p 500 would open up down 18 points if we were to open here. And the nasdaq down by 48. The dow was down by 394 points on friday, a decline of 2. 1 . That was the worst daily performance since brexit. The s p broke the 43session streak without a move of 1 in one direction or the other. Finally getting decisiveness down by 2. 4 . Obviously, a lot of things have changed. People are coming back from vacations. Some are coming back with the big issue fed speak. There were concerning comments for the bulls if you listened to boston fed president Eric Rosengren to sound like he was in favor of a hike. He was in favor of a hike last time, too, but the fed is meeting next week. We do have more fed speak today including Neel Kashkari joining us at 8 00 a. M. Today. Hes looking at the last comments youll hear before next weeks meeting. Well watch that closely. Take a look at what happened overnight in asia. Things were trickling through from what we saw here on friday. The nikkei down by 1. 7 . The shanghai composite down by 1. 9 . And the hang seng was down by. 3. 25 . Catchup after what we saw here on friday. The dax is down 2 and so is the cac in france. The ftse is down by 1. 6 across the board with pretty significant declines. Taking a look at crude oil prices, crude oil is down by about 85 cents. So we are just sitting at 45 a barrel. 45. 03. Thats a big pullback after the gains we saw earlier last week. History doesnt repeat itself typically. That rhymes. But there is something about september. What is the coolest month, its not september, some other winter month. But for the market, september is cruel. And the reason we know about so many october lows, its because they are making a low after september. And i dont know for me, you know, when rates do go up, theres going to be near term. This is what is likely, i guess, to happen. But i wonder if it really changes, like, if youre at half a point, three quarters of a point what is the Tipping Point where it actually matters . Yeah, i dont think it matters up to what is actually happening, and unless stocks are inflated from animal spirits but what we have heard so long from david tepper, this is the way the funds are flowing. That was a year ago. But when it turns, that is their concern on some of these issues. But that was a year ago. Right. It doesnt matter on 50 basis points, yeah. That was a mowhole year ago. The vix was up last year. People have been begging for volatility. Well, there you go. Get ready. 400 points isnt what it used to be. No, although if you look at it relative to the last couple of months, its something to Pay Attention to. Thats true. Today is the last day before Central Bank Officials enter a weeklong communications blackout. I wish it was like that all the time, really, ahead of next weeks im excited to hear what kashkari says today. I like the blackout. You never know which one is good cop, bad cop. One is like, uhoh on liesman from friday, the market is complacent. Uhoh, now they believe us. Send somebody out to make sure we wont. Are you suggesting they are playing us . Yeah, we have no idea. Speaking late friday, dallas fed president Robert Kaplan urged that the fed can afford to be patient and deliberate in its actions. And he didnt specify or specifically say that he doesnt think that the feds should hike in september. He would never say that. New this morning the minneapolis president Neel Kashkari is saying that immigration and tax reform are keys to solving the slow growth. Kashkari will join us in an exclusive interview at 8 00 a. M. Hes a very animated fellow. Hes excited to be on and were excited to have him. I was saying earlier that hes a friend of the show and used to be on all the time. That probably isnt the only reason hes been raised to such a high level. I think its the yeah. Coincident with coming on squawk box. I was trying to explain that to you. Hes done very well and is an old friend of the show. Theres a fair amount of Economic Data on the agenda this week. On wednesday look for august import prices. Thursday we get august retail sales. We get the Producer Price index, which should never be shortened. Ppi. And then the production end of september, its okay to say cpi and september consumer sentiment. We are adults, really. Bridgewater, the Largest Hedge Fund manager, attracted 22 billion after taking the unexpected step of opening its active funds to new money for the first time in seven years. According to reports, the inflows are a rare exception in this industry which have suffered from poor performance recently. Most of the money went into a new optimal fund started back in 2015. The remainder went into the firms main Macro Hedge Fund pure alpha. And speaking of alpha, a programming note for you, dont miss the blockbuster lineup tomorrow at the sixth annual delivering alpha conference. This is the preimminent investor summit produced by cnbc and institutional investors. Well be there all day starting at 6 00 a. M. Headliners include treasury secretary jack lew, paul singer and carl icahn. More details at deliveringalpha. Com. And elon musk is announcing big changes to the autopilot on the tesla car. Phil lebeau is joining us. The changes are coming over the airwaves in the next week or so . Its an overtheair Software Update, thats what tesla is sending out to the vehicles with autopilot technology, all the vehicles built since october of 2014. Heres what the Software Update does and what the new system will do. Its now allowing autopilot to essentially use radar to detect objects on the road. Therefore, there should be fewer accidents, it will do a better job at detecting whether theres a vehicle that is suddenly stopped ahead of another vehicle in front of you. Thats the whole idea here to see octobers and car that is the previous system could not see. Because the previous system was primarily camera based. Now with the radar sending out electromagnetic signals, it should be a better job of detecting objects. This Software Update happens over the next couple of weeks and elon musk says this is a dramatic impact in terms of safety for the autopilot system, but no system will prevent accidents 100 . It wont ever be zero fatalities or zero injuries. You know, the world is a very big place and theres a huge number of people and a number of circumstances. So its really just about minimizing the be probability of injury, minimizing the probability of death. Not sort of the illusion of perfect safety. The upgraded autopilot system will not only have more capability. It will be easier to use for drivers and have more warnings for drivers. In fact, the autopilot system will turn off if drivers repeatedly ignore warnings that they have to stay engaged. They have to grab the Steering Wheel so often. If you dont listen to those warnings more than three times in one hour, the system will shut down and the only way you can restart it is to pull over, turn off the vehicle, start it back up. If you want autopilot to work, by the way, this update has been shared with the national highway Traffic Safety administration. Elon musk says they believe they will be happy with the progress that has been made with the system. Keep in mind, as we take a look at shares of tesla back to tend of june, thats when the fatality in florida was first reported and the shares fell 2 . Elon musk was asked if this software could have prevented that accident where a driver drove into a semitractortrailer turning in front of him. And elon musk says yes, this updated software would have been able to see the truck better and therefore alerted the emergency braking system and could have prevented that accident. Guys, back to you. Phil, thank you so much. In speaking about the stuff and how it has been down 2 because of the accident, is it more because of the accident or more because of all the questions surrounding solar city and the rocket issues . I mean, what do you think the Biggest Issue overhanging tesla is at this point . I would say the Biggest Issue primarily is youve got a number of issues in terms of the acquisition of solar city. You have questions in terms of whether or not they can meet the delivery goals they set out for the second half of this year. Im not sure autopilot hurt the stock initially, but its come back since then. If you look at the stock primarily over the last couple years, its traded generally speaking between 180 and 220. There are a times when it has gone below that and above 220, but generally its stuck in the pretty big band there. But i think its the production questions that really has everybody focused on what the next six months offers for tesla. Phil, thank you very much. You bet. And in agricultural deals crossing the tape, agrium and potash will combine and get a new name prior to closing of the transaction. It will be the largest crop Nutrient Company in the world. Both companies are based in canada. And lets get a check on the markets and the big moves we saw both on friday, to see how things are shaping up today. The futures are under pressure once again. This cops after the dow was down by 394 points on friday. The s p was down by close to 2. 5 . This morning the dow is down another 145 points, a tripledigit move, something we have not seen a lot of. The s p down by 18 points. It looks like the nasdaq will open closer to 50 points lower this morning. And check out what is happening with treasures. Both the tenyear and 30year on friday saw the highest levels in terms of yield that we have seen since brexit, which was back on june 24th. The tenyear note hit a high of 1. 678 . The yield is higher since then. 1. 689 . If you check out the dollar, youll see that the dollar which also gained in strength on friday as it made it look like the fed was more likely to potentially raise rates, the dollar is up against the euro, 1. 1223. Joining us is peter bookbar from the lindsey group, welcome to have you here this morning. Good to be here. Finally, we have a Little Something to throw around and figure to the and talk about what this means. The markets took some of the commentary they heard from rosengren and assumed september is a live meeting. What do you think, ed . I think theres a chance but it is more likely december. Probably your viewers are sick of hearing all of us speculate over what the fed is going to do. But they are stick of hearing about it but its the only game in town. Peter, what do you think . Its true. But really the most noteworthy thing is the rise in longterm Interest Rates. We talked about rosengren on friday with the tenyear note little changed on friday. It was the rise in longterm Interest Rates that started a month ago with the rising ggb yields and spilled into europe and is now spilling over into the u. S. What is that telling you . Its telling you that central bankers yes, we can see they are potentially losing control, but they are reaching their lodgistic logistical limits. They are acknowledging the flattening yield is damaging their banking system. Dragge acknowledged there are limits to how far you can push sovereign buying in qe. This is a global bond bubble. We are all in this bed together. And the u. S. Yields which are moving higher are following in lockstep with what is happening in japan and europe. Thats the northeast noteworthy thing. Short a month ago in japan. I know were sick of hearing about the fed, but what do you tell people to do at this point . Volatility spiked by 45 last week. People are wondering, is this a big pullback or more of what we have seen of the tiny dip and then were back to we are about 60 billion in multiasset allocation funds. We have had a tactical year, gone up and down, we are either overweight or underweight. We pulled back in july to a slightly underweight position. This is a bit of a pullback, but not necessarily a bear market. Staying broadly diversified, keeping a little cash. Wait a second, theres a big difference between a slight pullback and the bear market. Are you looking at a 5 or 10 decline . We are halfway to 5 . A 10 correction is not unusual. We have had one this year, so it is not something to panic about. Weapon wont go into a recession, but i think it is overdue that we have a bit of a pullback. Peter, you are looking for a real town downturn in the, m markets, is this it . If we look at the longer yield bond yields, in that central bankers have tried to suppress bond rates, start to lose that ability, then yes, the stock market is extremely vulnerable because of the evaluations created. And if longterm Interest Rates are a tad higher, then the weak earnings and economic picture thrown under the carpet starts to rear its head again. Thats part of the big question, do you think we have weak earnings and a weak economy, ed . I think the earnings will start to grow again, but the second half rebound has lost steam. The Third Quarter looks flat. So well see progress forward, but it wont be terribly robust either. Would you tell people to buy on these dips . If youre down 5 , is that time to jump in . Im looking at how we manage our portfolios as we are caution, we have a little extra cash and are not buying a resolute today. We are waiting for a little better opportunity. Is 5 a better opportunity or much bigger . It is a dynamic situation. We look carefully at the earnings and it is possible to see a growth next year. But we are not overly aggressive at this point. Scare me and tell me just tell me joe likes to be scared on a monday. I like to be scared on a monday. The worst Case Scenario theyve gotten into this thing and they have no idea how to exit. And for years we sort of have seen what the pessimists have said, they wont be able to get out very easily. So just the intimation of another quarter point in what is a tightening cycle when we go down 400 points at the drop of a hat. Could it play out as we actually get in a tightening cycle that they have more and more trouble doing this and are sort of stuck because they are afraid of every little tremor they see in currencies or equities around the world . Theres no question. Because they have tied asset prices, if they have embedded asset prices and evaluations into the economy to such an extent that if theyve elevated the asset prices because of their cheap money, once they back away, financial conditions will tighten and that affects the entire economy. Whereas back in the day at equity prices just reflected the underlying economy. And that is no longer the case. Equity prices have driven the economy. How artificially inflated do you think the stock market is at this point . The stock market has been in fantasy land for years. Look over the past year and a half. Earnings the Third Quarter is six quarters in a row. Its all about Interest Rates at the Central Banks. The longtime Interest Rates shouldnt be ignored here. Last word, ed . We are up 5 for the year. Its actually been a pretty good year despite the pullback. Especially if you factor in the dips from february and june. It is likely we have further to go in this pullback. But i still think were in a fundamentally bull market. Evaluations are elevated but not extremely elevated. No where near where they were in other bear market cycles. So the computer is a little too optimistic although well see normalization of rates overtime, we are in a fundamentally upward trend with the correction. Ed, peter, thank you both for coming in. So april is the cruelest month. Thats the first line. Its a poet who decides that. But why . April is a great month. The first stanza explains why. I disagree. I dont care if hes a poet. That ushers in may getting toward the summer and everything is great. September you are thinking of beware of the ides of march . September is cruel because people go back to school, they have the sick feeling that summer is over. I see it right now. Yesterday you could feel it a little bit. It was the wind and the leaves starting to come in my birthday is in april, maybe that is the cruelest month. Because you get a year older. Thats right. Winter kept us warm. April is not the cruelest. You must have gotten us heart broken in april. Hes wrong. Sorry. Coming up, Hillary Clinton canceling Campaign Events after a pneumonia diagnosis. But before yesterdays i have seen it characterized as a lot of things, a simple stumble according to media organizations. She was under fire for calling trumps supporters a basket of deplorables. John harwood will join us next with the latest from the campaign trail. Time to squawk and roll. Kansas is back on the road kicking off their 40th anniversary tour. First stop, squawk box with details to weigh in on the big business. Squawk box will be right back. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Welcome back to squawk box. To the campaign trail and Hillary Clintons health is in focus. John harwood is joining us now with more. Good morning, john. Good morning, joe. It was a bad weekend for Hillary Clinton. It started off with her depending the comment she made at a fundraiser with Barbara Streisand friday night where she described half of Donald Trumps supporters as a basket of deplorables. She was talking about prejudic