>> and i think defense is where you want ton. >> healthcare, also a bit of defense. >> kkr trading down to 98.25, seen if you can get some on the second sell-off. i know your phones are ringing off the human, but i appreciate you being here. i'll see you at 3:00. welcome to "the exchange." i'm kelly evans. the global sell-off that we have on hands. japanese stocks dropping 13%, now in a bear market. that is having major ripple effects. here at home, the dow is down 1,000 points. we are off the worst levels, and in what jeff kilberg calls a

great buying opportunity. dom, can we tall it a big board? >> much bigger thanle telestrator, but there's a reason why. we're featuring some of the biggest moves lower that we have seen in quite some time. this is pretty good by comparison. at the lows of the session, the dow industrials are down, 38,829. at one point we were down north of 1200 points. wow. the nasdaq composite we're going to call arguably the epicenter of this. megacap technology is the real focus. we're down 3% because of those names. now, remember, at the lows of the session we were down over 1,000 points in the nasdaq -- >> on the nasdaq, more than 5%, and down at the highs still around 320-some points. that gives you an idea of how big the range has been.

to put some of the uncertainty and fear into perspective, it's not often we'll show you the vix, but we're going to show it to you this time to show you how intense the sell-off has been. this is the longer-term chart. we're going back to pre-pandemic. we are at the higher levels of stock market volatility going all the way back to close to the pandemic. at the leave of 34, this is not bad. earlier it was 56, 60 pre-mark. >> yeah. topping around 80 to 85, the pandemic deficit during march of 2020. that's the vix. that's how much fear by comparing recently until the pandemic. the magnificent 7, we'll show the first four, apple down 4.5%, microsoft, nvidia, alphabet. in term of megacap losses, nvidia the biggest market cap loser since the recent highs,

you can see the fear trade playing out here. let's bring you up the rest of the mag 7. tesla, metaplatforms, down 2.5 to 5% as well. tesla shares down 4%, this is the mag 7 trade. because we are not just about about the sea of red you're seeing around the wall, check out this outperformers. this is kellanova, up 14.5% on multiple reports now that they are possibly in discussion with privately held mars to be acquired. that is why we're seeing this move higher. can you imagine a situation with eggo waffles. >> snickers goes with your eggos. >> there's all kinds of things possibly brewing. november a confirm deal. that's some sliver of green in

an otherwise sea of red. >> i appreciate you connecting all of this. as dom mentioned, stocks are selling off globally. japanese stocks have been the worst day since 1987. peter boockvar is the a cnbc contributor. thank you for being here, peter, as well. let's start with the nikkei. the worst tloof he day move we've had since at least 1949. >> the japanese stock market benefited from the persistened weakness in the yen. there's other positives that the japanese economy has been going through in terms of corporate governance, and so on. there was a fundamental story for japan, but i think what this is reflecting is how much money people borrowed in yen to buy japanese stocks among many other assets that are now unwinding.

same way the fed -- the bank of japan decided to hold rate hikes. one of just a couple. why did that so quickly push things to the other side of the cart. >> it's sort of revealing itself. the fed started raising rates in march of 2022. it took the boj two years later just to get them out of the negative interest rates. >> you think this should have gone sooner? >> yes. by waiting every month that went by, more borrowing was taking place in yen. it was the last place in the world to sort of get free money. that free money we couldn't necessarily quantify, but we're seeing the result of the unwind now to say, wow, that was massive. we didn't see it while it was going on, to the extent it's revealed itself to be, but it was obviously massive. >> here's the overnight rate, which we can see was negative for so long. they had 2%, but they didn't

move to raise rates until very recently. then they finally hiked up last week, but it was this period you think allowed all these carry trades to build up? >> exactly. the other federal banks, all of the world central banks were raising rates except the japanese. if you're a carry trade person who borrows yen, well, you're borrowing cheap, you're getting a weaker yen, and you're speculating all these different things, whether it's bitcoin, gold or tech stocks. you're making money on both sides. here's the yen weakening to support that until just about a month ago. july 10th is when the mag 7 peaked. a similar move here. what do we watch for now? i think we need to see it exhaust itself. the japanese market has

essentially crashed. that tells you this is rather dramatic. the taiwanese market since 1967. >> and korea, too. >> i think it's about to exhaust itself. is it the all clear? i'm not so sure. we have other otherwise, whether tech can continue to lead the way. >> of course, it all has to happen at the same time. >> that's the thing. this all came together all at once. you had excessive levels on the technicals, in terms of the s&p relative to its 200-day average usually 13% it gives me a red flag. it got to 15%. >> wow. >> and of course the global concerns and the monetization, so on and so on. everything came together. >> so we'll watch. if we continue to see it strengthen, i don't know how to walk this back. quickly, any opportunities that

you're taking advantage of, or do you wait a bit? >> japanese stocks. >> you're buying them? >> yes. >> that's the verdict of the day. peter boockvar, thank you. we appreciate it. how real is it the recession risk for the markets here in the u.s.? and whether the fed should get more aggressive with cuts because of that? we have team coverage coast to coast. rick santelli is tracking treasury yields. diana olick has what that means for mortgage rates, and brent has the impact on the lending. we'll close thinks out with jeff kill berg on whether this weakness is a buying opportunity. steve, let's start with you, as people are speculating on whether it would be an intermediate meeting. >> look, rick is going as to off you more detail, but the two-year yield has reversed course a bit, with austin

goolsbee leaning against the idea of a recession. then come back with another 50 in december, 25 in january. built in through january for a market. goolsbee wouldn't rule out an emergency cut, but he also didn't say it was imminent. than what the actual moves are? >> i think there's forces at

play. between kelly and peter, one thing i can at, with you don't know -- i'm pretty sure the regulators don't know, either. how much should the fed react for the unwanted the carry trade. early last week, most forecasts for 2% -- the jobs report was weak, but up until then we'll pick up more on that in a moment, and we'll turn to rick in the meantime. what does this all mean? >> before we get to the charts,

many believe that peter boockvar was talking about the epicenter of what the conversations around the water cooler are. wednesday they raise the rates in japan. right in between we had or fed, but even if the fed would have do a quarter, the previous meeting, i'm not so sure that much of this would have turned out very different. i think there's a weakness in the carry trade. i also would pay attention to the hong kong dollar, there's a lot of liquidation going on there. there's a lot of sort of carry tr

traits. >> and at very briefly, it was down minus 11, the last close we had was part of the first of jut than today that gives you a flavor for what global rates are doing. and 30-year bond yields have been the one yield, its move for lower yields was rather limited. back to you. >> rick i think that that's behind some of what you're

talking about. >> that was huge. i brought up the number at 10:00 eastern. i cannot tell you how huge, what a difference that made. many are saying it was prices paid, sure, but all the components were significantly better. it really kind of made everybody take a breath. >> a small sigh of relief. rick, for now, thanks. rick santelli. the drop in the ten-year is -- diana olick has the details. what can you tell us? >> rates took another leg lower this morning. the average off 30-years dropped to 6.34%. its c.o.o. matt graham told me lots of lend respect already -- he called that pretty crazy. take a look at the drop from 6.81 last month, and more than a full percentage point that is the recent lie of 7.52% in

april. home sales have been falling since april hit to affordable. if you put 20% down on a $400,000 home in april, your monthly payment was about $2240, not including property tax and insurance. today that payment would be $1,989. and now, normally news like this would help the homebuilder stocks, but they are all lower on the day with the broader market. concern about the economy may be overshadowing that rate drop, which makes sense giving that most consumers is their single largest investment. but we're seal record home prices. nationally, at least, prices are not coming down month to month. >> so maybe if you put more down, you can't get -- that's huge, yeah? >> it depends on what your credit score is, how much money you're putting down.

when we get those averages, you could be see a 5% range for the top borrowers. that could move the needle. thank you, diana. our next guest says the yield curve is turning positive and will, he's the president steve liesman is here with us as well. >> please, from someone who is on the front lines, how does this change the outlook? i did notice, the banks are not -- i take that as a sign this is difference. credit remains incredibly strong. and as you just pointed out. even though the fed has

yesterday to move, with the ten-year down. over the last 90 day. mortgage rates today, 6.25% or so, and i do think they're going to trend down. >> take a call. what? >> no, that's absolutely true.

do people say, boom, i've got a lower rate today, or does it cause some people to say. let me sue how far this can go?

>> i think you would not picking up on that. we see this as good news. >> and kelly, you have heard me talk about it before, i believe the for a think what this change in rates has done for that. it will soften the blow.

>> maybe -- we seem to be going into this, whatever this is, with pretty good balance sheets on the corporate side, and on the consumer side. , which is going to are we good deal through that left? looking for that tomorrow. walmart has telling us the consumer is choosier. all of us are struggling. i don't know how you would describe it. >> yeah, i know, it is a unique situation, right? if you step back, and we just

hit an all-time high, and now we're down maybe so%. that's a correction, and that happens with markets. that's normal. we already have markets moves, and that will benefit the consumer we're most worried about. >> all warm-up is a huge positive to you. >> we can dodge a --, and maybe there's a positive to the economy.

>> depending on what he does with credit statistics, right. that would offset it, but a slope to -- could that could be positive for the economy again. >> from your words to brent's ears. don't cut it off. >> we are not tightening standards. in fact, we are open for business. we're in a bit of a unique situation. we have substantial liquidity, and we are open for business. >> go answer the phone, brad. >> thank you for the time. we really appreciate it. thank you, steve, as well. the vix brief li hitting the highest level since the height of the pandemic. a level my next guest was hoping for on friday. he says now this is a buys opportunity. jeff kidberg, walk me through

the last 24 hours. >> it's been extraordinary. we talked about this. as you know, i partner with financial advisers to mitigate risk. i'm not a contrarian, but what we saw back in june and july, that top 10, on top of that, killingy, we saw all the variety of dirt repositioning their end of year target. there were all the signs out there, when the vix was at 12. we saw it move dramatically hire i higher, but today we saw a spike, an unbelievable move higher and that's when we capi capitalized. i kind of got ridiculed, but by selling puts. for example, when meta was trading at the lows an 450, we sold puts just out to next friday, regular expiration, collected $16 because of that

explosion. those puts later are at half. when you see that volatility come in off the open, you saw tons of fears. i want to take this and embrace this volatility. we are looking to reposition. there are cracks, and we get the fact that the consumer is weakening. the vix, you have to use it to your advantage to mitigate risk, and also allocate when others are fearful. >> do you pick up, for instance any positions in the mag 7? >> i think tesla is a great name. that's been the laggard. i think it makes sense when you see a swoosh in any of these names. however, nvidia, i've covered that position. i'm looking to long here. yes, kelly, you heard it right. >> i was going to ask if you were waiting for the 80 level or you know it's time.

we came out of that 950 level. that back, as an old trader, yes, we'll get excited about the earnings. there's been some technical damages, look a depth charge, so there would be ramifications and reverb reverberations, but you have to tilt into that and see the market move higher. i have to chuckle, the more volatile we see, the more opportunities to buy some of these great names. >> that answers my next question. it sounds like you're not, for instance, pouncing on the vix, and -- >> i think it stays elevated, but we can manage a vix from 20 to 40. where it gets tricky, when you see it above 65, like today.

i think this is very healthy. we have to remember, kelly, we were waiting for a reprice, or at least i was, a reprice of the mag 7. however, the velocity you saw the s&p 500 up 35%, you saw smh up 60%, yes, it's 24%, but i think the thesis, the raye thesis and theme is still impact, but you have to be -- and understanding risk tolerance. that's why i make the money i do. to help them mitigate through these touch times. >> interesting, that you think -- it's one of the big points being debated. for now, not quite a sea change there. jeff, thanks. >> thanks, kelly. the s&p at risk of falling into correction territory. 5102 is the number to watch

there. one market technician sees a deeper pullback ahead. scan the qr code or head over to cnbc.com. they call him the oracle for a reason. berkshire hathaway shocking investors. shares are having their worst day, apple, i mean. plus, brent crude turning negative for the year. around $73 a barrel. we'll look at the pricing levels to watch, and also talk geopolitical risks. they are well off their session down 6.36%. the s&p down 4.25, the dow down 1238 points. keep an eye on the next 90 minutes, though. "the exchange" is back after

this. [disconcerting stomach gurgle] not again. maybe i should get this looked at? [suggestive stomach gurgle] zocdoc? [talkative stomach gurgle] you're right, i bet they deal with this all the time. dr. finley really puts you at ease. let's do it! you've got more options than you know. book now.

with so much entertainment out there wouldn't it be great... ...if you could find what you mo want, all in one place?. show me paris. xfinity internet customers can enjoy the ultimate entertainment experience and save on some of the biggest names in streaming, all for just $15 a month. get the fastest connection to paris with xfinity.

pressure for apple as berkshire hathaway announcing over the weekend, they sold nearly half their stake in

apple, following selling bank of america shares over the past 12 days. so many people, bill, are wondering what to divine about this. this was supposed to be a tent pole kind of position, kind of into the distance future, and just after a couple years, they seemed to have changed their mind. why? >> i think it was mostly a risk management valuation decision. really, it was quite shocking, partly because, you know, he had pared some of the holding in the first quarter. we heard about that at the annual meeting. at the talked in glowing temples about apple, saying it was a great company, better than almost all other companies, so it was a bit of a shock. but i kind of -- that apple went up about 23% in the second quarter, and it was mostly -- at

least in my view, based on expectations that ai and putting ai in the new phones would drive a stronger replacement cycle. my spirkz were make things were ahead of themselves. you really have to sell into strength and not necessarily weakness. >> sure. >> i think it's worth noting, he still owns a lot of apple stock. >> we're showing that chart that shows a takeoff pattern from may through june. we know the position was exited sometime before the end of june. perhaps le talked at the annual meeting and decided if it's going to rally like this, there's a lot to off-load. i guess we'll have to let the apple folks say what it means, but he's good at spotting things. there's a big cash position now, what do they do with it?

>> well. i think he did say it at the annual meeting, he wasn't finding a lot that he found attractive. in my view, it's pretty clear that he wanted to de-risk the portfolio. i look at it as a cash percentage -- and it's as big as it's ever been, since 1990, which is as far back as my data goes. he said, you have to be ready to take advantage of big opportunities, and maybe they'll get a big opportunity coming up. now he really has a lot of cash to be able to do it. >> and again 10% from the all-time highs doesn't sound like the time they would pounce. do you think he would buy intel? you know, there's an opportunity to look through what might be something very attractively priced. what would you add from either

as a shoulder to do, or how you're looking at the markets today after this kind of difficult couple of weeks. i would say you have to keep it in perspective. at the end of the day, yes, he trimmed some of his stocks, but at the end of the day he still over over $274 billion of equity. it's not exactly the ends of the world call. just like he's doing, we should be looking through the carnage and looking for the opportunities, mind form of the fact that make we will see a recession. you know, that's exactly what buffett is doing right now, if i had to bet. that's what we should do, too. >> we need the modern-day dairy queen, whenever it was that everybody was buying it. it's impossible, but one of the

fun guessing games. bill, we appreciate your time today. >> thank you. there are some bright spots in the market sell-off, like tyson foods trading at the highest levels, this after beating estimates on the top and bottom lines. lower grain prices helped cut down on feed costs. shares are up 3.5%. we'll have more of the biggest movers on the other side. don't go anywhere. what will you do when the power goes out? power outages can be unpredictable and inconvenient, but with a generac home standby generator,

your life goes on uninterrupted. because when your generac detects a power outage, it automatically powers up, giving your family the security and peace of mind they deserve. we don't have to worry about whether we lose power or not. if the utility company does not come through, our generac does. after the hurricane happened, we just want to be prepared for anything. 8 out of 10 home generators are generac, with thousands of satisfied customers. number one thing to prepare for is extended power outages. don't make it so hard on yourself, have a generac home standby generator. and owning a generator is easier than ever. special financing and low monthly payment options are available, and if you call now, you will also receive a free 5 year warranty valued at over $500. call or go online now to request your free quote. wealth-changing question -- are you keeping as much of your investment gains as possible? high taxes can erode returns quickly,

so you need a tax-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth are managed in a tax-efficient manner. it's what you keep that really matters. why not give your wealth a second look? book your free meeting today at creativeplanning.com. creative planning -- a richer way to wealth.

here's your news update. sources -- sources tell nbc, that vice president harris is expected to announce her vice president pock, though it's unclear if she's made a final decision. she met with three of the reported contenders in person on sunday. that would be josh shapiro, arizona senator mark kelly, and the minnesota governor tim walz. five secretaries of states are demanding that they fix the ai, after it shared false

information. the officials from battleground states, including pennsylvania, michigan, they write that the chatbot named grok misled -- music has not yet commented. a group of 80 lawmakers have united it support mdma assisted therapy to treat ptsd. it comes as the fda prepares to issue a decision this month on mdma, commonly known as ecstasy as a therapy option for ptsd. back to you, kelly. see you in a bit. oil is sliding today as concerns about a global slow down overshadow texss -- tensios in the middle east. my next guest says it could take

a couple days before prices stabilize amarita, good to see you. what should we expect maybe iran, if anything, to do here? >> we are expecting iran to retaliate. you have seen the headlines from the u.s. as well expecting that, but it is going to happen in the next couple of days, that's what they've been warning, but we continue to tell our clients it's going to be a calibrated response. we're still not expecting an all-out war. this happened in april. iran needs to show it's doing something, but at the same time it also realizes if it goes all out, it's going to get attacked itself. if that happens, nothing will be off-limits. israel will go after not just the nuclear facilities, but will go after the oil facilities. that would be a huge amount of

damage. they understand that. so this is now about calibrating a response. it might be on proxies, and you've already seen a few houthi strikes, and that's exactly what's getting gamed out. >> would you call the oil market sort of unbothered by the developments there? describe the oil market there in terms of how much risk might be built in right now. >> i mean, i would note this, it's all about the macro and the focus on, you know, the weak non-farm payrolls and rising fears of recession.

so, tlvr, the focus has been on demand. i will say this, right? there's been absolute carnage in the grabbed scheme of things, oil has been relatively stable. for the last couple months, oil has been sending the signal -- we've written a few notes about oil is the canary in the cole mine, sending the signal that demand is slowing, and slowdown is coming. and of course it sold out, but generally, relatively stable given everything else around it. >> that's interesting. it's not that reassuring if it was already pricing in weaker demand. >> oh, look, demand has been one of the reasons why oil has not been higher. we've seen some disappointment out of brazil. but the fact -- and we've had canadian wildfires, et cetera. the reason we haven't broken out of the 80 to 90 range, it's

because demand has been weak in china and now in the u.s. now that the market is going all out and worried about recession, we have been flagging the things, because the data is weak. we will say though, now, this is an orderly slowdown. now the hype is almost the other way. it's neither. it is slowing. it doesn't look very positive for oil demand. we're only expecting a million bares for year-on-year growth. that's what happens when you have a recessionary year, but it's also not a collapse. >> i just get into this, because everyone in the market is trying to figure out what to call this post-pandemic reduction, and maybe it's even wrong to think of it in a post-pandemic terms. >> that's a great question. and that's why we as economists

are arguing about this. in part we have strong consumers, even in china where demand has been weak. we are expecting the first time ever refinery runs will be down, so it's clearly a signal that demand is lower, but people are flying and driving. diesel is the weakness. that's the weakness across the board. i think that's why there's more of a debate. not all parts of the barrel are going weakly, but there are definitely parts. it's still growing, but not 2, 3, 4, 5 that we have seen in the past four years. >> i think that's actually right. amrita, i anoint you as the economist. you can have that title from us, and we'll check back in soon. i appreciate your time today.

>> thank you. still to come, we'll take a closer look at sell-off at megacap tech. a week ago, the tech sector was trading at a two-decade high multiple. take a look at bitcoin as well. it's back above the level now. it was trading close to 70k stju a week ago, and we'll be back in a moment with more. stay with us. medicaid, i have some really encouraging news that you'll definitely want to hear. depending on the plans available in your area, you may be eligible to get extra benefits with a humana medicare advantage dual-eligible special needs plan. all these plans include a healthy options allowance. a monthly allowance to help pay for eligible groceries, utilities, rent, and over-the-counter items like vitamins, pain relievers, first-aid supplies and more. the

healthy options allowance is loaded onto a prepaid card each month. and whatever you don't spend, carries over from each month. other benefits on these plans include free rides to and from your medical appointments. you pay nothing for covered prescriptions, all year long. all plans have dental coverage which includes 2 free cleanings a year, fillings, and a yearly exam. they also have vision coverage including vision exams and a yearly allowance towards eyewear such as lenses or contacts. and hearing coverage, which includes routine hearing tests and coverage for hearing aids. you'll also have a $0 copay for the shingles and other routine vaccines at in-network retail pharmacies. plus, your doctor, hospital and pharmacy may already be part of our large humana networks. so, call the number on your screen now to speak with a licensed humana sales agent. wouldn't you love benefits like a monthly allowance to help pay for eligible groceries, utilities, rent

and over-the-counter items? so, if you have medicare and medicaid, call the number on your screen now and speak with a licensed humana sales agent. if you're eligible, they can even help enroll you over the phone in a humana medicare advantage dual-eligible special needs plan. so, call now. humana. a more human way to healthcare.

welcome back. with the nasdaq's drop today we're more than 10% off the recent all-time highs, the correction by big names all shedding 3% or more, as the high cost of artificial intelligence continues to weigh on the megacaps. deirdre bosa, what can you tell us? >> kelly, the extent of the sell offis so staggering, we put it

in one graphic. hundreds of billions wiped out. trillions from the nasdaq over the last week. these are approximate numbers as of 11:00 a.m. part of the reason is this next chart, the yen carry trade that i know you've been talking about, look how closely correlated the nasdaq and the yen have become. this helps to explain it, but only part of the story. it's also fundamental. megacap ceos over the last few weeks saying the more the better, but investors are worried about the impact on earnings. valuations, you mentioned that before the break, they have re-rated, though over the last few weeks, on july 10th, that's when the nasdaq hit a record high. with forward price-to-earnings multiple above 30. that has changed.

you now see that only two of them have multiples. the valuations have looked too rich, fading a bit, which some people may see as a buying opportunity. >> i think you're so apt to high defend light that. and people are talking about the fact that on one hand they shed a lot of market caps, but maybe it does all come down to valuations. even for showing like nvidia, the cyclical warrants valuations in the long run. >> semis has been the biggest generative ai winners in terms of sectors. so it's the names with the highest expectations. i also point to microsoft, well over 30 p/e, and investors and management teams are so excited about generative ai, and for a

while they were in lockstep. they sow this huge amount of spending was going to pay off, now investors are a little more impatient. they're saying that monetization and revenue is happening too slowly, where management teams are saying, be patient, we still have to spend tons of money to get there. >> progress is not a straight line or something like that. >> exactly. coming up, my next guest still believes in the fundamentalses of this market. as we head to break. check out some of the losses in intel. it's now 60% below, while super micro has lost half sits value from the recent high. you can see those numbers there. "the exchange" is back, after this. (♪♪) car, this isn't the way home.

that's right james, it isn't. car, where are we going? we're here. (♪♪) surprise!!! the future isn't scary. not investing in it is. car, were you in on this? nothing gets by you james. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com your record label is taking off. but so is your sound engineer.

you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

let's bring in dan suzuki, chief investment officer at richard bernstein advisers.

you think it makes sense, because things were looking frosty to you, or the piece that deirdre and i was discussing? >> yeah, it's a lot of what deirdre was discussing. she pulled up the chart that show it's correlated with the yen carry trade. also very correlated with financial conditions, so you can clearly see that those elevated valuations were driven by a lot of speculation. that was supported also by strong earnings, but i think the issue more recently is those earnings are starting to slow. it's harder to sort of beat expectations, and you see a lot of volatility on the back of that. you're seeing a fundamental earnings rho take. >> it sounds like a healthy one, in other words. on a day look this, where do you jump to action? >> clearly there's a rotation. now, the question that investors

are struggling with is what do you rotate into? i think there's two options. you either rotate into cheap cyclicals, or rotate into the more defensive safe haven assets. you can see just throughout the day, there's been a bit of back and forth between the two. we start off the day with defensive sectors, but as the day has moved on, you're seeing the cyclical sectors are gaining the lead. if we're ride, you will continue to say the broadening out, and it supports the rotation. >> we are so data dependent, i wonder if part of that of what you're describing is that it held up okay.

so we had the data last week, and the stronger services data, the market is rallying back a bit. i think that's something we have to live with. ultimately even if we go into recession, which i think is possible eventually, we have to remember it's like death by a thousand cuts. even if we go down that road, it will take a long time. neismt t. earnings growth is holding up pretty good. >> what is deep cyclicals and emerging markets, other than china? >> yeah. if you look from a sector perspective, industrials, energy and materials which are outperforming, you know, small caps i think will also see some of the biggest earnings acceleration over the course of the next few quarters. i think that's also true with respect to broad emerging markets, with the exception of china recently saw a bottom in earnings growth and that has a lot of room to run as well.

when you look at japan, to bring us full circle peter boockvar says on a day like today, he buys japan. do you have a view on that? >> clearly when something sells off dramatically, some of the biggest gains happen on the biggest loss days. for us, we're heavily overweight with japan for a while. we went recently to a big underweight. we think that their earnings cycle is peaking out and more likely to shrink going forward, combined with the positive sentiment i think it's more of a risky trade. >> now we have ended with disagreement. that's what makes the market, dan. thank you for rounding it out. i appreciate it very much.

dan suzuki, deputy c.i.o. that's it for us. i'll seal you with "power lunch" on the other side of this break with tyler mathisen. don't go anywhere. you get comfortable being uncomfortable. ♪♪ the enemy is always adapting... deepfake: hey handsome. ♪♪ [inner monologue] ...always iterating. ♪♪

while i am a paid actor, and this is not a real company, there is no way to fake how upwork can help your business. upwork is half the cost of our old recruiter and they have top-tier talent and everything from pr to project management because this is how we work now.

(reporters) over here. kev! kev! (reporter 1) any response to the trade rumors, we keep hearing about? (kev) we talkin' about moving? not the trade, not the trade, we talking about movin'. no thank you. (reporter 2) you could use opendoor. sell your house directly to them, it's easy. (kev) ... i guess we're movin'. [♪♪] your skin is ever-changing, take care of it with gold bond's healing formulations of 7 moisturizers and 3 vitamins. for all your skins, gold bond. welcome to "power lunch." the global sell-off continuing and worsening today. the dow is 6% off its recent