and celgene and so forth. maybe apple helping pull the market off its lows. >> if you think apple won't be the only one, starbucks is another one that should go green as a leader. >> guys, thanks. see you all tomorrow. "power lunch" begins now. welcome to "power lunch." i'm brian sullivan, everybody. tyler and mandy are off today. sara joining us from the new york stock exchange where stocks are lower but not nearly as bad as they were earlier. >> we certainly are cutting our losses after europe closed. the dow is still down triple digits. but it was down more than 200 points, way more than 200 points a little bit earlier in the session. at one point the s&p was actually negative for the year. we bounced off of those lows as well. bob pisani is here to find out what's moving. apple part of the turnaround? >> apple was $110 at the lows, $114 right now. i think the most important thngk

is europe close. this often happens. we just had a horrible day in europe. worst day of the year really. a lot of markets down 3%. you see just right after europe closed, closer to noon, the market came up and moved into positive territory. as for china, the etfs in china very heavy volume today. doesn't matter what etfs, ashr, that's mainland china, the a shares. the second one is hong kong shares. all of them are down though not as much in hong kong as you can see. this is spilling into the emerging markets. a lot of activity in emerging market etfs. for example, indonesia has moved down in the last few days. those are new multi-year lows for indonesia. the same what's going on in other emerging market etfs for example, br zale. ewz is very active. this is a 10-year chart. we just broke below the 2009 lows in brazil. that was widely commented on trading this morning.

with interest rates moving down, interest rate sensitive groups, particularly banks and insurers are weak. banks understandably. insurers, they've got to buy bonds against their obligations to pay out lower values for those bonds, obviously a problem for them. finally just want to note, retailers and what was going on with fossil, as well as macy's today. macy's came out this morning. one of the reasons they missed -- tourists. chinese and brazilian tourists aren't spending as much. 100% of macy's sales are in the united states and they still find a way to blame china. >> currencies really are the center of the universe. in the trades and for companies. >> very big. bertha coombs is at the nasdaq where shares of alibaba which actually trades here at the new york stock exchange are down 6% but there is a ripple effect there as the nasdaq. >> yeah, there is. you look at some of the biggest decliners, j.d.com, the internet

commerce site is down nearly 20% for the week. it is often sympathy with alibaba. yahoo! hitting a 52-week low today, as search giant baidu. wynn resorts with major exposure in macao now well into bert market territory for the year. at one point today apple was closing get to bear market territory off nearly 17% from its high in april. late morning we saw a big spike in volume and that has seen shares rising. we're now seeing apple here pretty much in fairly positive territory. that's one of the biggest reversals we've seen in a long time. on a day like today, you got to have a lot of courage to have your ipo go forward. not the easiest day when markets are down. global blood shatherapeutics ve

much defying the string today. it has nearly doubled. >> bertha, thank you. let's get a "market flash" with dom chu. >> selling shares of cree are on a tear today. the company swung to a quarterly loss as it logged $84 million inle charges tied to one of its big businesses, its first big annual loss since 2002. shares bouncing back a bit, up 8.5%. a news alert in the bond market. 10-year notes up for auction. rick santelli at the cme? how is demand? >> this was not a pretty auction. think lassie from the '60s. this was a "d," for dog. i didn't have time to count all the historics here but i have enough to give it a solid "d."

today first were 10-year notes. we'll have two reopenings over the next several auction. yield at auction, 2.115. remember higher yield, lower price. one issue market was bid at 2.105, it definitely tailed badly. if you look at metrics, 2.4 on bid to cover. worst since march of '09. 60.1 on indirects. which would would slave this literally from close to an "f." you have to go all the way back to february of 2011 to find a higher indirect. these foreign central banks in many auctions the last several months have really stepped up. directs super light at 5.8. "d" for dog. tomorrow 16 billion 30-year bonds. >> we'll see how you grade that one tomorrow, professor. the selling in stock not

limited to america today. a bit of a global rout everywhere. the dax in germany, france's index down as well. hong kong fell 2.5% and nearly every other major market around the world also lost ground. a few minor markets like kenya were up. you can imagine nerves are high, the vix volatility index up 9% today. many of you may be asking where is a safe place for my money right now. david marcus, thank you very much for joining us. your global value fund is up 14% year to date which is a darn good job given what's happening around the world. you still believe that europe is a better value than the united states. >> absolutely. >> why? >> look. china or asian markets you're seeing growth come off.

europe had no growth. it is coming off a period of decline, of investors just not focusing on it or caring about it. so europe's coming up from the bottom where china is coming down from the top. ultimately i believe that these european companies are taking advantage of the financial crisis that existed there, the restructuring, selling assets, buying back stock, shareholders pushing for change in a way that they never did before. >> the market reacted today like china matters. germany and france having their days of the year. >> it is a day. it doesn't mean anything. it means you get in the game and you take advantage, you buy on the dips. that's what we do. we're nibblers. this is a nibblers' market. if we nibble today on a bad day, it gives us more money to come back and nibble on another day. we're not gobblers. the key is to vae tang of the bad days. you str restruhave restructurin. yes, what china is going through right now. remember even with the decline

in china it still has the best growth of any country on earth. >> good point. we do need to remember that. the china story has got a long way to go maybe in the first inning of a nine-inning game. one of the cool things about this job is getting to uncover these sort of hidden men and women around the world who you don't talk about much who have generated billions of dollars in wealth and suddenly someone like you comes along and finds them. this man from france. don't know who he is but you call him one of the greatest value and wealth creators of maybe the last 50 years. you've invested in his company. what is it, how has he done it? >> so he runs a conglomerate. a 200-year-old business. he's the sixth generation of his nam to run it. it's created more value than all five prior generations combined. they have, you name it, they have it. they own 14.5% of vivendi. remember they own urs vesnivers music. he owns more ports than anybody

else. this is an old-fashioned conglomerate but he buys assets unbelievably cheap, when nobody likes them and he helps turn them around. he's an owner/operator. we're riding his coat tails. >> the other one is mostly an elevator manufacturer. >> thcssenkrupp. it is elevators and escalators. it is the best business. but then they have steel, stainless steel and other things. over the last few years they've been changing, selling the non-core, low-margin business to focus on the better birss. china is part of their exposure. it is about 14% to asia all together. but frankly, even with the slowdown in china their pick-up in europe, their pick-up in the other regions, it is

significant. they've had so much fat in the company that the opportunity is huge. when you have good managers coming in to previously undermanaged business -- so if you have an "a" manager going into a previously "c" managed company, wonderful things can happen. that's what you have there. >> three new names. david, thank you very much. good luck. to the story of the moment now, brian. china and its currency. here's what you need to know. china's currency is 3.4% weaker in just two days. against the u.s. dollar. that's pretty steep in currency terms. if you're a yum! brands, wynn resort or apple, the sales you get over there get smashed when you translate them back into dollars. emerging markets' currencies from south korea, singapore, malaysia are getting slammed. dollar up, emerging market currencies down.

they're export xet torls of china. they may also need to devalue their currency as a result of what's going on. wild swings like this spook the market because it could fuel trade tensions, interventions and other unfriendly market moves. but keep in mind the big picture here. yes this is a big deal what's happened over the past 48 hours but the chinese currency is still 6% stronger than the dollar over the last five years. we'll see how far china takes this weakening move to boost its own economy and its exports. for now the imf, even the treasury are backing up china and not being critical of the move but clearly, brian, investors are nervous about this u-turn in china. >> sara eisen, i know you love your currency. thank you. $1 trillion. that is a big number. that is where we could be headed in the terms of outstanding car loans. does all that borrowing mean better times for the carmakers or could it be a bit of a minefield? we are staying all over this market. if we close lower it would be the ninth down day in the last

ten sessions for the dow jones industrial average. less than three hours to the close. you're watching cnbc, first in business worldwide. ♪ ♪ it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank.

welcome back to "power lunch." corn, wheat and soybean futures falling sharply on a bearish crop report from the usda forecasting that harvest could come in well above certain expectations. the report sent shays of

agricultural giant deere down more than 3%. almost 3.5% at this point. deere, the agricultural side of things certain lay focus not for soft commodity traders only but for soft guys as well. also watching shares of ge slightly lower today. the company is selling its health care finance unit to capital one. fossil group is down today but it is off the lows of the session. finally, also watching the brazilian steakhouse chain that recently had its ipo. this was its first quarterly report as a public company. results came in better than expected thanks to strong u.s. sales. it has 26 restaurants in this country, ten in brazil and a new opening in rio close to the venue of next summer's olympic

games. people are borrowing in record amounts to buy all those cars and trucks on the road. we could soon reach $1 trillion in outstanding car loans. phil lebeau, these numbers are mind boggling. could some of this borrowing come back to haunt the carmakers? >> i think people are always worried you'll have people taking on too much dote and taking out bigger loans than they can afford, though we should point out, we really aren't seeing that at this point. latest data shows that in the second quarter, there are $932 billion in open auto loans. that's an increase of $92 billion compared to the same quarter last year. dl dlen kw delinquencies are virtually unchanged. who's borrowing and what are they borrowing?

subprime, deep subprime, those are the riskiest credit scores make up one-fifth of all of the open auto loans out there in terms of the dollar value. super prime, those with the best credit, also make up one-fifth. what you have in the middle is the rest of the market. bottom line, if you look at dealership stocks, people are worried that you're going to see too much borrowing by people who cannot afford their auto loans. but the delinquency rate is still well below the historic averages. overall when you talk with people in the industry, they're not seeing people not able to make their payments. it's very healthy and this is what we are seeing in the economy right now. people are borrowing to buy cars and trucks. >> perhaps kind signed of reaction there. phil lebeau, thanks as much. stocks are off the session lows right now but still looking at a triple digit decline. the dow for its part is down 118. trying to fight off some of those earlier losses, still down for the year. also watching the nasdaq of

course taking a big hit on track for its worst month since back in 2012. some of the big cap tech names selling off today. amazon, facebook, priceline, apple. much more on what's moving in these markets when "power lunch" comes back. ho's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day.

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stocks are slumping yet again following a further devaluation of china's currency. we are joined by managing

direct director. the dow now down 100 points. what's causing this midday turnaround? >> this is what uncertainty smells like. we got near that spot where a lot of us were thinking maybe we would see the capitulation. we didn't get there. we're still seeing a strong rally. likely been range bound since february. we're seeing this happen without real harm being done to the metals or to the treasuries. >> actually you are seeing a turnaround in commodities right now. energy is one of the better performing groups. >> is exactly. energy maybe a full percent. actually i put that out on "closing bell" on money to buy the energy sector. >> you think people stepping in here at the bottom to buy gets them better valuations? we really climbed back. >> we certainly did. for day traders, yes. long-term, we don't know. is china growing at 7%? no. are they growing at 4%? probably not. are they in recession? maybe. we have a lot that we don't know here. >> are you still staying away from the stocks with the exposure to china, whether it is in the consumer sector or

industrials or even commodities? >> i'm trying to stay away from china and biotech because that scares the heck out of me. >> currency the center of the universe right now? >> i think this he have to be but the underlying situation with global demand and chinese demand is what's causing currencies to take center stage. there is a story bigger than just currencies. >> what about the nasdaq? are you watching the nasdaq here? it is having the worst month since october 2012. >> it is tech heavy so it is more susceptible to the beta. we watch everything here, not just new york stocks. but the s&p 500 is really what i focus on. >> how much technical damage has been done here in the last few days? >> yes, there is technical damage but until we get to that 2,045 level on the s&p, we're not broke. sarge, steven, thank you.

we saw data yesterday that saw only 25 cents for a barrel of crude oil. that's help sent oil prices are sharply down recently. the intraday six-year low, $42.03 per barrel. right now we are at $43.36. >> let's look at gold as it is closing the session right now with a gain. gold up almost 1.5%. a nice move there for gold. it was $20 higher on the back of the weaker dollar. dollar was very much weaker against the euro. silver, copper, palladium and platinum all in the green today. especially copper which we've been watching on the back the china weakness and has been absolutely battered. the miners and the energy players. let's get back down to the bond market because rick santelli is at the cme once

again for us. rick. >> an intraday chart of 10s pretty much gives you a glimpse as to how the market was received in the marketplace. we still have another action. after tomorrow's 30 maybe we'll get a better sense of how the market trades post-supply. you can see this blended 20-year rate is at the lowest level since the 29th of april. but that's a derivative of a derivative. look at the cash market, start around the same day, april 28. the 30-year bond, we haven't seen these yields since the 30th. 10-year notes we haven't closed at these yields since the 30th. you see the low yield maybe in the wee hours of the morning? 2.75 and change. that's still above its settlement yield at the close kf last year meaning a lower price. should it hold or go through will mean a lot for technicians

trading the fixed income market. brian, back to you. now down to the stock market with another look at the s&p 500. mostly a sea of red. but we are well off session lows. the index once again positive for the year, just up very fractionally with all this volatility lately. greece concerns, currencies, whatever you name it, we'll have some big "power lunch" advice for you. "power lunch" right right after this. (vo) rush hour around here starts at 6:30 a.m. - on the nose. but for me, it starts with the opening bell. and the rush i get, lasts way more than an hour.

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hello, everyone. i'm sue herera. here's your cnbc news update for this hour. a fresh poll in new hampshire shows bernie sanders surging ahead of hillary clinton among a likely voters. it showed sanders with a 44%-37% lead. fidelity contra fund manager bill danoff who oversees $113 billion in assets says he's grown more cautious about the commodities sector while becoming more apartment pis mop

internet and financial companies. a new government survey says more than 7 million americans who didn't have health care lalt year got coverage this year. a recent gallup poll shows recent attitudes improving as well. police invaded uber's offices. officials say undercover police officers used uber's mobile app to hail five cars. they arrested the drivers after being driven to their destinations. you're up to date. that's the cnbc news update. it is time for another market check at this hour. the dow now down 111 points. that's a comeback. at one point this morning we were down 277. we are well off of the lows of the session. let's get back to the action. bob pisani back here with me on the floor.

also bertha coombs at the nasdaq calling some of those tech movers. bob, europe closed. >> there was hope that this would happen because we had such a terrible day. heavy very volume over in europe and here in the united states. the s&p just after europe closed we got a little bit of a bounce. some people are mentioning apple. maybe that had a little bit of an influence. apple went green. we've had a lot of volume in some of the high-beta etfs, the stuff that moves around a lot. solar stocks and biotech stocks and cyber stocks, hhck, very, very heavy volume. these were down a lot more earlier in the day. they've come back a little bit. we're also getting a little bit of a rally in the energy sector. xop, for example, this is twice the normal volume, exploration production stocks. this is enough for me to say this is some short covering going on. twice normal volume? that's very interesting. this is kind of interesting today.

first time i've seen some short covering in this group in a while. also banks and insurance. as interest rates have been down in the last few days, banks which have been market leaders have been really weak. s suntrust, regions, fifth third. who would have thought five years after lower interest rates we're talking about this. some of these latin america etfs, you can buy argentina in an etf. brazil is passing the 2008-2009 lows this morning. even chile is down but all off of their lows. but very heavy volume. of course this is a concern with people removing capital just like what happened in 1997 where people pulled out of these emerging markets. >> bob, thank you. over to nasdaq and bertha

coombs. we did see some heavy pressure on the chinese names especially at the nasdaq. >> we did. we're seeing a big reversal really led by apple. that's what's what has the nasdaq composite above 5,000 after hitting a low for the year on concerns about the prospect of a slowdown in consumer spending in china. that move is spilling over now to the semiconductor sector. in positive territory. intel one of the big heavy lifter in the nasdaq helping it move off its lows on an analyst report the chip giant may have part of the iphone to launch next month. other tech names are bouncing off 52-week lows. cree after turning around of a disappointing earnings due to lower margins. analysts say they are positive on its restructuring plans. regional banks are among the biggest losers here today. no bargain hunting there when it comes to financials.

with the treasury bonds rallying sending interest rates lower, the regional banks are under pressure. they tend to benefit in a higher rate environment. some of the big-cap tech names today still a little lower. these are the ones that have led the nasdaq higher this year. they are seeing some profit taking, including google giving back soft of the games from its alphabet announcement earlier this week. apparently google doesn't care alphabet.com was already taken by bmw. >> thanks for finding that, bertha coombs at the nasdaq. with the dow still on track for its ninth down day in ten sessions, where should you be putting your money? patrick and burt, thank you. this morning the fear was palpable. the dow was down almost 300 points. we're well off of those lows. are you worried about klein or are you buying on this dip?

>> i think this is more of a buying opportunity if there is a buying opportunity. we're pretty neutral on the market overall but i don't think that china fears right now are rational for the u.s. market. china's not that big an impact in many ways on what's going on in the domestic economy. we still look at jobless claims, still very strong. >> if that's your feeling where do you see the buying opportunities? >> so one of the ones we see -- it is funny to hear the news being somebody else is getting more negative on commodities because we think energy is a great opportunity right now. the time to be nervous on energy was when oil was at $100, not when oil is below $50. the stocks are down 50%. right now i think you should be looking more for opportunities in energies. they're up today but we think when you look at two to three years there's probably more risk of success than more risk rf failure. everybody's negative on energy that i talk to. when everybody's negative, who's the next seller for the long

term? we're optimistic there. we also think financials are overdone. >> burt, on these concerns about china, whether you're buying on these concerns or whether you, too, like we've heard from patrick and many other guests on this network are focused domestically in the u.s. which continues to be a pretty solid growth story. >> absolutely. you got to look at the bifurcated part of the economy. manufacturing here in the united states is decelerating because of china and greece and a stronger dollar and energy prices. that makes sense. but the much bigger part of our economy, the service high, is at decade highs, doing as well as it's ever been largely on the back of a very strong consumer. we actually think that's where the opportunity is. expectations are very low. look where places where the bar is very low. back to school is -- we're in the middle of it and there is a great chance that it does pretty well and exceeds that very low bar. >> would you be buying the

consumer discretionary retail names? macy's had a disappointing quarter. do you think they're bottoming out? >> some of the consumer names look pretty attractive here but expectations are in the dismal lows here. being able to jump over those is pretty good. we think some of those consumer names look good. also look at housing. that's continued to do quite well. that's another aspect of the consumer that looks pretty good. >> interestingly, patrick, we are seeing the dollar weakening against the euro. are people rethinking the federal reserve rate call that they're going to actually raise rates in september and how does that impact your investments if you are focused domestically? >> yeah, people are definitely rethinking. i've probably gotten more than a dozen e-mails from different strategists or brokerage firms today rethinking the need for would the fed be making a colossal mistake by raising. i personally don't think the fed would make a mistake by raising but where 10-year rates are today, they are coming down, clearly people are rethinking it. i think in general anything

that's more stimulative, whether china weakening the currency to try to propel their economy, whatever, i think is positive for the economy. i think there is a lot of noise here but i'm not sure anything changes the overall direction of the u.s. economy and i think that still some time in the next 6 to 12 months, whether it is september, december, what have you, you are looking at fed lift-off. >> thank you, both, gentlemen for joining us to discuss the markets. be sure to go to powerlunch.cnbc.com right now to see what burt thinks of china's currency devaluation and the impact on the fed. a huge talking point on here, quite a predicament about what the fed does next. >> september. they raise. no predictment with me. >> even in the middle of this global mess? >> china's still up year to date. >> the first impact of monetary policy is currencies. they're moving against them. it is going to be tricky.

>> you know i am not the currency aficionado that you are. >> that's true. >> they are fifth on my list of things that are important. >> but it is important for the fed and a lot of fed members including stanley fisher, the number two, has seen these kind of moves before in the asian crisis. >> jolt survey came out, 5.25 million job openings in america. >> there is definitely a case to be made that the u.s. is strong. >> you got to have another arrow in the quiver. right now the fed has nothing that it can do if things slow down. why not raise so at least if things slow down, to your point, have you a little mojo in the market. >> because raising rates and global turmoil would raise more chaos. >> we should bet like a sandwich or something. >> we're being told by producers not to. secretary of state john kerry will travel to havana,

cuba, the first visit to the communist island in more than 50 years. michelle caruso carrera has a story about big busy on the island. >> reporter: the long-time former leader of the country, fidel castro, came to power january 1st was 1959 in a coup. at the time he said he wasn't a communist. in fact, he insisted he wasn't when he went on nbc's "meet the press" just five months later. we all know now of course that is not true, he went on to seize every sing business on the island. but he started that process with the american banks. it was september 1960. newspapers across the united states carried front page stories about how armed militia seized all cuban branches of first national citibank of new york with i is now citigroup, first national bank of boston which is now bank of america -- and chase manhattan, now part of

jpmorgan chase. american banker bill rose was an executive at what was then national citibank of new york when all those frightening events occurred. >> we're always concerned about our employees first. and i think we were most kerndz abo concerned about what would happen to our cuban employees. the others working there could always leave. >> he later had a one-hour castro where they smoked cigars. in the meeting will bill rhodes recounted in his back castro he said made a startling admission about a major mistake he made when it came to cuba's financial system. he says castro said he should have put his gun toting pal in charge of the central bank. >> he said, why i ever did that i don't know because obviously he knew nothing about finance and banking but he said i put him in there because i guess i

trusted him. but it was a mistake. >> those three banks still have big outstanding claims against the cuban government worth millions of dollars, potentially billions depending on how they get settled, brian. a lot of old stories coming forward as we start to approach this big event on friday with john kerry here at the opening of the u.s. embassy. >> a big event, michelle. glad you're there for us. thank you. biotechs have been on a tear so far for the year. the bbw etf, up nearly 17% year to date. but some analysts are now seeing warning signs that we have perhaps weechd have reached a tn this red-hot sector. utilities and energy are up.

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glaxosmithkline closed a factory temporarily. the move is not expected to disrupt any supply productions made at that factory. beveragemaker dr. pepper snapple is buying an $11 million stake in body armour. for lovers of quarter pounder, good news -- it is getting a little bigger. mcdonald's has quietly increased the size to 4.25 ounces from 4 ounces. i have a feeling you're a quarter pounder lover, brian. >> i am not. but apparently after cooking it is 2.8 ounces. cooks down. we continue our week long look at what's being taught at the nation's top business schools. we welcome two professors in to

"power lunch." what are the key one or two big subject areas that the wharton school has decided to focus on in the past maybe two, three years than were even available or necessarily important five or ten years ago is. >> of course, the core classes are still the bread and butter of the place. but we're seeing a lot of interest in courses in some unusual places. of course we see the analytics, big interest in analytics, very heavy sta tift ctistical course also in decision making, human psycholog psychology, so behavioral and technology courses are big at wharton. >> it is nice to hear in this day and age human beings actually still matter. when you design a curriculum, do you say i understand we're in this big data age but a handshake still means something? >> well, a handshake, and also

it gets into issues about thinking fast and slow, about human biases when you're hiring people, whether you're working in teams, et cetera. you need to know your own biases and how to correct for them so those are very important topics. of course influence, managerial decision making, leading effective teams are very popular. >> steve, obviously the chicago school, not just the booth school but the actual school of theory in economics, one of it the most famous paradigms out there in the study of economics, how does the booth school differentiate itself? say we're not stuck in the past but it does matter to us? >> so i will say two things. first of all, we've got on the behavioral side as well. dick thaler is on our faculty and he wrote "nudge" and has

done other work in behavioral economics which i think has been very impactful. the other thing that you wouldn't know is entrepreneurship at chicago booth just passed finance as the number one concentration. we've had this huge increase and interest in entrepreneurship over the last 10, 15 years. >> that is really amazing but i wonder, steve, lou can you teach entrepreneurship? what is it that you can learn in a classroom versus doing it? >> so you can't teach somebody to be creative or to come up with a new idea. i think that's innate. but what we can absolutely do is increase the likelihood you succeed if you have a good idea. so an example is grub hub. grub hub's seamless. i think you guys in new york know it is seamless. grub hub was a raw start-up in my class in 2006. and we helped them a great deal in refining their business model, helping them get funded,

and today that company is worth on the order of $3 billion. >> not a bad roi, i think you business school types would say. >> you bet. >> steve and howard, it was a real pleasure. keep up the good work educating america. thank you so much. do appreciate it, guys. >> thank you. keeping an eye on macy's shares. sharply lower after reporting a big earnings miss this morning. is it a buying opportunity or should you avoid the stock? if consumers aren't spending money on apparel at macy's, where are they shopping? that discussion ahead. hello. i am technology that is changing investing forever. i am a fully automated investment advisory service. i can help you choose the right portfolio. monitor it. and even rebalance it. i've been called innovative. revolutionary. and just plain smart. i'd blush at the compliment if i could. but i can't. so. i won't.

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welcome back. here on this hour's, the "power points." commodities took a turn for the worse after usa reported harv t harvests of many crops came in below expectations. soybean and corn futures fell by 5% and 6% respectively. $932 billion more auto loans than last year's loan levels. crude oil desperately attempting to bounce back after falling to a new six-year

closing low yesterday. a third straight week of inventory declines which could be what's helping prices today. if you missed anything, visit powerlunch.cnbc.com. speak something of bouncing back, the dow is now down less than 100 points. >> energy is a big part of the story. if you look at the sector overall, the storks currently competing with the utilities sector for a top sector in the s&p 500. today among the stocks powering gains on the energy side, consol energy, apache. one of the etfs that tracks the energy sector, a very sharp move to the up side just in the last couple of hours. energy one of the sectors helping to lead the way. >> coming back strong. still ahead on the show -- the safety trade. six stocks you might want to consider owning in this turbulent market environment. you're watching cnbc, first in business worldwide.

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we definitery are s rr rly seei consumer didn't jump in our categories to the degree we thought the consumer would. >> if consumers aren't shopping at macy's, where are they shopping? two retail pros, stacy, if they're not buying apparel which we know has been a weak category, what are they buying? >> yeah. general merchandise is a tough place to be right now. so the consumer is just shopping elsewhere, they're shopping on experience, they're shopping and eating out, they're shopping on travel and really staying away from apparel. even the handbag and watch category has slowed down significantly so that's a big core category for macy's. they did take comps down from the year from 2% to 0%. i would argue that comp needs to come down probably even further for the rest of the year. >> the guidance there, jan, obviously consumer discretionary

stocks are not all created equal in this environment. where would you tell investors to buy? >> in addition to what stacy said, personal consumption expenditures are not rising the way they should given the health of the consumer and we're seeing way more go to durables than should be going to durables at this part in the cycle. usually 30% maybe at this point in the cycle should be going to durables. it is way up at 35%. it is going to hd, to lowe's, to cars. not into the kind ofdiscretion ary retail we talk about all the time. it's hard to get your comps up when you see deflation in your primary product be about 3%. where should people be investing? >> you and i have talked about this a few times. you mention cars. i hate to beat this horse,

wisconswhich is 20% of consumer spending to going toward cars. even if you take a lease out, you're still dropping $2,000 to $5,000. that's going to steal spending from other sources. should we look at a macy's miss and say retail spend something slowing down, or, no, people are just buying bigger stuff. they don't need jeans. >> they're still not spending enough of their personal consumption expenditures compared to other points when we've seen in this part of the cycle before. but yes, you're right, they're spending on other things. stacy mentioned a bunch of those other things but i think one of the big components is cars, car loans and leases. that will change. i still expect us to see good discretionary consumer spending in the back half. i think people will spend in the oil savings, quit saving as

much. i'm a perma bull on macy's and costco. if they get cheap, you should buy. it is a hard time right now for discretionary retailers. >> we'll see in tomorrow's retail sales report for july. there is a lot of hope this trend will turn around. denim is making a comeback. is that for real? as someone who wears leggings and has really embraced the athleisure trend, he don't know if i'm buying it. >> everybody's talking about back to school is all about denim, denim's going to recreate the wheel here around that's going to save apparel. i don't buy it. there's not enough to go around here. some players of course will benefit from a change in denim and the fabrics are better but it is not going to save everybody, including macy's here. i would also worry about in the second half of this year we all talk about wage growth but here's the thing. what if there is wage growth and the consumer is still holding back here and doesn't spend it? these companies are going to be even more hard-pressed to make

their numbers as they have to pay more to their employees and it doesn't trickle through to the revenue line. i'm still cautious on the second half of the year. >> not to mention gas prices keep going down. guys, thank you very much to our panel. macy's stock lower. is it a buying opportunity? i know you'll discuss that, brian. >> i know denim's hot but if you pay $100 a month for a cell phone or car, you ma i not be able to afford than denim. have fun with the leggings. it is now 2 p.:00 p.m. on w street. i'm brian sullivan. melissa lee is at the nasdaq. stocks staging a big comeback. the dow well off its session lows. at one point today it was down 277 points. it is now down just 74 points. 200-point comeback. the nasdaq also bouncing off its oil. crude oil has turned positive on the session.

if oil and the dow go in opposite directions today, one up, one down, it will just be the second time in the past 16 sessions that that's happened. there's been a 93% correlation the last three weeks of trading between oil and the dow. enough stats. bob pisani is on the floor of the new york stock exchange, rick santelli in the bond pits of chicago. bob? >> you just hit it right perfectly, brian. you hit all the right stats here. three things matter. europe, oil, tech rebound. the s&p 500 had really selling heavy in the first hour. i mean a lot, unusually heavy. kind of looks like people were out trying to get all the stuff out of the way. around the time europe closed, volume lightened up and we just started moving to the up side. i think europe closing had a little bit to do with it. two sectors led the turnaround. energy and tech stocks. both of them i think are equally important. in the turnaround. oil stocks rallied with crude flat earlier in the day.

that's very important. look at the xop. that's the exploration and production etf. twice normal volume. that indicates to me with crude flat, some kind of short covering is going on. i think that's something. haven't seen that in a while. the other factor is tech. i wouldn't deny apple might be a factor. it was $1.10 earlier in the day and slowly but surely, lightened up a bit. we turned into positive territory right after the european close. other techs were also very weak, they, too moved higher. microns, intel, texas instruments and broad com, all these stocks were lower in the day. but when you have a lower interest rate environment, you still get pressure on market leaders like banks and insurance names. these stocks have not bounced much so this is one sector we aren't seeing much of a rally. other than that, fairly impressive in the middle of the

day. the flight to safety is cooling off in the bond pits as well. the bond etf, tlt, now turning negative on the section. let's get more on the bond action with rick santelli in chicago. >> thanks, sully. start with the tlt. we could see clearly we are at levels unseen since the end of april which, since that's a derivative of the bond market and interest rates in general, we see that the 29th is the comp. last time we settle at these levels for 10s and 30s. let's continue to monitor 30-year bonds. if you look at the chart, 2.75%. pay close attention. that's the last maturity to remain above its yield, lower price, than it settled last year. this is hugely technically significant. look at fed funds, november futures. let's not get involved with percentag percentages. just realize, as prices move up, investors' minds think the rate increase moves backwards into

the future and maybe that is the reason, next chart, dollar index. since february, 96 is a very important area. we are still down over a penny and we're one-third cent off of the lows. sully, back to you. >> i'll take it, rick. rick santelli. the nasdaq well off of session lows. in fact the nasdaq composite right now down by just .2%. we are slowly trying to get back to the green line for the session today. same goes here for the nasdaq 100 but it is as we have mentioned all hour long a day of reversals here. i'm looking at the biotech etf, it turned positive just a short time ago. making a nice move in today's session. bob mentioned the move for apple, $109.63 was the low in apple. certainly apple's reversal is helping lift the overall markets off of session lows. intel, specifically, has been up

the entire session. northland securities saying it believes intel will win 50% of the new modem business that will launch in september. that stock along with the semiconductor index making some nice moves in today's session. when you hear the words death and cross in the same sentence it probably raises a couple eyebrows. but the death cross is a very real thing in stock analysis and it just happened. dominic chu is here to walk us through it, what it is and why we care -- or maybe don't. the death cross! >> pure technicians. purist technicians, helene miseler tweeted that this is not actually a true death cross because the 250 moving day averages have to be both declining when they cross. interesting subtleties that some technicians may point to. regardless, the 50-day or shorter term moving average of the stock market is now below the longer term average, the 200-day moving average. that's the cross.

>> but it is sort of a fake death cross then because they -- to your point, they need to be rolling down when they cross. >> tom mcclellan over at the mcclellan oscillator, a technician, very smart guy, watches charts and patterns. he is a technician. he said over the past two years we've seen a couple different times when the dow's shorter term price average has crossed below its longer term. we saw it back here 2010 a couple of different times here, 2011. but each particular time tom points out it seemed to mark a bottom or turning point for the overall market. he argues that over the last five or six years the charts say that this has become more of a buying signal. that's not to say it is going to happen this time around. interesting. right? because here you can see we're kind of in the early stages of this crossing pattern happening. whether or not it goes deeper than that nobody really knows. there is no crystal ball. other people are just saying that this is an indicator perhaps over the short to medium term. like the last five or six years.

>> what you're saying is the last two times the death cross has happened, the stock market's taken off. >> you can see, this is the historical chart. right? that happened. that was death cross right there. supposedly. a cross of the short-term average below the long-term one. stocks rallied here. it happened once again here, then the stocks rallied once again. it's come close a few other times. but again, this is just the last six years. >> i can't write on this thing. i was going to suggest a new name given that -- life cross. the life cross. given that the last two times it happened the stock market's done that. >> these are tea leaves. these are patterns that technicians, guys who look to see whether or not there's any kind of possible indicator of what happens in the future. fundamental guys will always say charts don't really matter earth. technical guys will say you can't fight history. again, one side of the story about what the charts are saying this time around. >> still watching the "death

cross" which is actually the life cross. read more on powerlunch.cnbc.com. if you are a believer in that and maybe that it will be bad, or maybe you just think the five-plus bull run for stocks is running out of steam, what are some stocks you might want to own? marty, what do you make of the death cross, what do you make of the overall market, china, currency markets, commodities collapsing. how concerned are you right now? >> i don't think we're goinging to have a big correction in the equity market but i do think that the levels of most stocks were anticipating an acceleration in the economy in the second half of the year, strength in emerging markets like we've seen over the last five or ten years and it just isn't happening. looks like the economies around the world are sort of running out of gas and it looks as if either stocks have to correct until we reach a better

valuation point or earnings have to slowly increase a lot to produce a little bit more value. i think we're just going to continue to tread water here and not go anywhere for six months or so. >> mark, what's number one on your list of global or state wide concerns right now? >> number one is really the strong dollar. we seem to be strengthening our currency at at same point in time that everybody else is weakening theirtheirs. when you look at the s&p 500, 30% of sales are coming from non-u.s. based sources with 13% coming from europe, 9% coming from asia. when you look at a lot of those multi-national companies out there, a lot of them have been struggling over the course of at least the past year and we would expect them to continue to struggle. at this point is really makes sense to as an investment strategy not really invest just in the s&p but rather get sector-specific and identify some either sectors or some individual stocks that can hold up over the next few years. >> marty, i know you like home depot, cvs.

i want to focus on one sector that's seemingly gotten a lot of attention at least from hedge funds in the past year, people say this could be the next break-out sector, the financials. you like p anc financial. how come? >> i think it is a very well run regional bank and i think it will have increased loan growth over the next two years and be able to also benefit if we have interest rates go higher. i'm looking for more increased loan growth and just organic growth in their business rather than a real change in the yield curve to increase their net interest margin, frankly. >> interestingly, mark, you also like the financials. yet you've identified the xlf, jpmorgan as well as bk, are you looking for a rising interest rate environment if we are looking at an environment where perhaps interest rates might be challenged, global growth might be challenged? are some of the global brokerages places you want to be in?

>> absolutely. one of our strategies right now as you can tell by the stock picks i gave we want to be in larger company companies that are doing the majority of their business domestically and both of those banks would qualify. also in defensive sectors. when you look at the picks that we gave, it is really based on both valuation and earnings potential. when we look at valuations of the financial sector in general we're looking at a forward pe ratio of 14 when compared to the s&p 500 which is almost at 17. when you look at earnings growth, financial sector over the course of the past year has been the strongest sector experiencing 20% year over year growth and projections over the next 12 months are also double digits. we think the prospects for those stocks and the financial sector are very promising. >> thank you both. have a great day. we'll see you soon. up next, the one thing that's happened to nearly every commodity you either eat, drink, wear, brew, fry, put on your

car, bird, cage, you name it. we'll tell you what that one thing is. and another shocking stat on oil which you will only get here on "power lunch." we're all over this comeback, the dow more than 200 points off its low. you're watching cnbc, first in business worldwide for a good reason. stick around.

welcome back to "power lunch."

shares of sdb financial are taking a big hit in today's trade, working on their second big down day in a row. the parent company of a silicon valley bank is being pushed lower by among other things a change in sentiment perhaps about private companies and start-up valuations in the tech world. silicon valley bank is investor in many of these times of companies in the area. earlier in the week a university of san francisco index of venture capital confidence reached its lowest level in two years. let's get you caught up on some of the stock headlines today. shares of alibaba down more than 6%, a new record low for the stock after weaker than expected revenues for its latest quarter, posting its slowest growth in more than three years. dr hortwho ar a handful of hitting 52-week lows including whole foods and yahoo!. let's get down to jane

wells. she has a crop report out there that shocked some people frankly. >> brian, that's right. i cannot remember a time when the global outlook from the usda was so opposite expectations. because of a really wet early season followed by a lot of dryness, the street was expecting less corn, soybeans and wheat. as one animal cyst said, american farmers are good. we're not going to have less, we're going to have more -- of everything. all of the commodities falling though, off their lows. u.s. farmers will produce 13.7 billion bushels this year of corn. that's the third largest ever. while the street expected a cut in yield, no. the usda predicts it will be nearly 169 bushels an acre larger. globally, less corn is expected to be used, including in china. however, china is expected to import more soybeans which is good for u.s. farmers but not good in you have to make up for unexpected supply. like corn, the street expected is less soybean production but

the usda says there will be more. instead of seeing a 25% drop in the inventories we should have at the end of the year, the usda says we will have 11% high ear inventories. wheat down, not as much. there will be more wheat at the end of the year globally and less exported as bmo said at first blush, "it does not create a good set-up for the fall fertilizer application season." i don't know how much fertilizer you apply in the fall. that's usually in the spring. >> depends on what kind it is. woos thank you. just about every commodity that we eat, drink, fry, wear, whatever, is lower over the past year. check this. it is really amazing. some of the big metals. gold. silver. copper. they're down 15%, 23%, 26%. on the food side in 12 months, hogs down 40%. sugar, coffee, cotton and lumber are also down.

there are a lot more, we just don't have time to show you all. some of you tweeted it at me, yeah, but the prices in the stores aren't going down. but every single commodity, almost, is down over the past 12 months. only one commodity up over the past 12 months and i believe that's cotton. >> wow, that's a good stat, good job there. we are just a few minutes away from the energy market closing. crude positive on the session. josh, one of your top picks is an energy play, williams company, mostly nat gas pipelines. is it the yield that you like? >> we like the fact that the yield is growing 10% to 15% over the next five years and that's backed by over $30 billion worth of projects coming online. in addition to support the stock, ete put in a bid on the name in june. that's support for it as well. >> josh, we got some breaking news.

want to go straight to stew herrera on a developing story. sue. thank you very much, melissa. we want to make you aware of a massive explosion that has been reported at the tianjin municipal in china. take sta la listen to this. that explosion occurred in a new area in north china's there are a lot love industrial companies, chemical companies. we don't know exactly what happened here and once again, these are social media pictures not completely authenticated by cnbc or nbc but as you can see, it appears to show a massive

industrial explosion of some sort. cctv reporting this morning that basically they estimate at least 50 people have been injured. there are some reports of fatalities but that once again is not confirmed. but as you can see, it is a pretty dramatic development in china. if you want to know exactly where this part of china is, we worked up a map for you. showing you where beijing is and also where tianjin is to it. it is basically the largest port in china. it is where they export a lot of container ships come in there, fill up with goods that are made in that part of china, then go to other shores obviously. we'll keep you posted as to how many people were injured. we do have reports again that some of these skyscrapers and large buildings in that particular area are out of

power. people thought that it was an earthquake apparently and a lot of people ran out into the street. but that's about what we have right now. brian and melissa, obviously a very large explosion. when we find out exactly what happened a in terms of what sorts of either chemicals or industrial industrials were involved in that we'll get right back to you. >> that is a very scary situation. that is a very crowded are place, tianjin is the fourth-largest city in china. the whole thing has been developed as an economic development zone. it is a 38th parallel crossing north and south korea. it is the very northern part of china but a very densely populated part of the country primarily devoted to industrial and warehouse uses. a massive explosion. we'll keep you updated on this developing story as it happens. macy's shares sharply lower after reporting a big earnings miss. could it be a buying opportunity in macy's or has something changed and you should avoid it at all costs? we'll debate that ahead. heading to break, some of

the green arrows out there in the markets climbing well off their lows. the dow has regained more than 200 points in just the laugh three hours. you're watching cnbc, first in business worldwide. g. today her doctor has her on a bayer aspirin regimen to help reduce the risk of another one. if you've had a heart attack be sure to talk to your doctor before you begin an aspirin regimen.

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the dow now down by just .5%. one standout stock, wayfair. ticker symbol w up. 28% today. a new high in today's session. second quarter revenues were up 66%. repeat customers made up a bigger chunk of business. good news for wayfair. this has been an outperformer this year, up 150% so far. >> that's all you got, 150%, melissa? come on. macy's, not up 150%. it is down by about 4% today reporting earnings be that missed analyst estimates. paul truss se matt, i understand that you actually just downgraded macy's to neutral. what is behind that downgrade? >> we downgraded the stock to neutral. i think the risk/reward on the stock is a lot more balanced. take a range of 10 to 12 times

multiple on a fundamental basis, the stock points to the mid 50s. there is some real estate optionality here incorporating that into our analysis. we moved to a $61 price target. the biggest change that took place today, earnings gret aowt algorithm is positive and ebitda's moved negative. >> you are more aggressive about the negativity surrounding macy's. i understand the overhang of this real estate optionality play but is there a reason to own a stock where you say it is a value but only if it gets bought? >> that's why we've had a sell rating. this stock has had a lot of real estate value already embedded in it. frankly, steel here in the '60s, i think that argument can still

very much be said as matt alluded to. if we look at this company on fundamentals alone, they'd only be earning 4.20 to 4.30 at a quality 11 times multiple, this could be a sub-50 stock. no, we stay away from macy's reiterating or sell rating here. >> what happened to macy's? it used to be the great buy in the retail sector. >> in the last two weeks this is our fourth downgrade in discretionary retail space. we downgraded coach two weeks ago and made a call on a slowing accessories backdrop. that's part of what's happening to macy's. the other piece that's happening to macecy's is slowing tourism. center core which has been a big driver of performance has slowed and now they are facing some tourism headwinds. on the conference call this morning, the cfo talked a lot

about some of the shifting dynamics and more shifting towards restaurants and some of the durables. the question is on a go-forward basis i think there is more uncertainty about what this top-line profile looks like. >> paul, we look at the story what's it going to take for you to turn around on your sell rating. what do you got to hear or see or whatever to make you get more positive on this name? >> i think that this is a very tough environment for apparel retailers particularly those that are big box and that are in the mall. the only name that we recommend that kind of fits that profile is nordstrom. that's because we think that this he have a more unique assortment and we also acknowledge the fact that they have a growing north strom ra i business and a phenomenal growing e-commerce. for us to get excited about macy's, it would be to follow

that nordstrom blueprint more. you couple that with the blue mercury acquisition they made, if that can be another big growth opportunity and they stabilize what's happening in the core department store in the mall, we will back off. but at this point in time nordstrom is our only buy rated apparel stock along with footlocker and footwear. >> thank you both. another big day in the oil pits. the final trades crossing for the session. let's get back to jackie deangelis at the nymex to set us up with the close. >> well, oil recovering from a six-year low yesterday at the close. what's going to happen today? looks like we've got a little bit of a bid on our hands but is this here to stay? the action moving higher or is it another head fake? we've seen them before. i'll tell you what traders are saying. stick with "power lunch." 26

hello once again, everyone. i'm sue herera. here's your cnbc news update at this hour. pennsylvania attorney general kathleen kane says criminal charges against her are part of an effort by state prosecutors and judges to conceal pornographic and racially insensitive e-mails they circulated with one

another. she says she previously exposed some state employees for exchanging pornographic e-mails but far more people she says are involved. american apparel says it doesn't have enough financing to keep operating for the next year. it will need to raise money or go bankrupt. the company has reported years of losses and falling sales and is being sued by the founder and ex-ceo doug charney. spanish police say they've arrested a man for selling isis related clothing. they released video of the suspect being taken into custody in northwestern spain. the man is accused of spreading islamist propaganda. a quick thinking neighbor is being hailed as a hero after saving a boy's life in china. the 3-year-old boy fell out of a fourth-story window, ended up hanging by his neck and head on that railing as you can see there. he struggled for air before that neighbor helped rescue him. he was taken to a hospital before being released. hopefully he's doing well at this point.

pretty scary stuff. back to you. >> that is tough video to look at. glad he's okay. heroes everywhere. sue, thank you very much. let's get back down to jackie deangelis at the nymex for the oil close. looks like we could be right on edge here. if you are like i am, you can see jackie, you just can't hear jackie. that's only half the tv thing. i'll read you the clo se right now. crude oil is trading up 11 cents to $43.20. we were positive, we were negative, positive again. very close. remember there was a slight inventory draw down today. it was the third straight weekly drawdown. you think that might be a little bit more bullish for oil prices. not the case, crude oil up 11 cents. as i've said a few times but i will say it again, if crude oil ends up and the dow ends down today, it will only be the second time in 16 sessions where the two have gone in opposite directions. in the meantime, even if we close a little bit higher today,

keep in mind oil has absolutely been crushed over the last six months. that's crushed the value of many of the oil companies. but the big oil companies have seen declines of an incredible magnitude. check this out. the nine biggest western oil companies -- the six biggies in america, plus total, bp, and royal dutch shell. that's nine. the combined have lost $400 billion in market cap over the past 12 months. we ran the numbers yesterday afternoon. it came out to exactly $400 billion. exxon alone has lost $92 billion worth of market value. wow. let's trade this and get now to "trading nation." are these teams on sale? are they a good value for their money or are they to be avoided? todd gordon, larry mcdonald. todd, based on the charts, is it a good time to buy these big oil

names? >> no. no, i don't. before we jump into the chart i thought you made a real interesting point about the relationship between crude and the dow. how about the dollar being down 1% today and crude oil with barely machining a quarter percent bounce. i think trend is lower. exxon's shed an amazing amount of market cap. the rally exxon staged from the late 2011 close, we sort of derailed around the $85 mark. now we look at the downside. i do some of this downside what i call the support of last resort, it is right around the $75 mark. exxon right now is kind of caught between a rock and a hard place. any kind of move back up to $82, $83 should be viewed as a sellable point. that would be a gift and eventually i think we break lower along with crude oil. >> larry, this is market cap obliteration. is this time to step back in or are we in a down trend

fundamentally, too? >> remember, going back over the last 20 years in the equity market, whenever you have a secular change, secular change in technology in 2000, tech lar change in the financials in 2007-2008, now you have a secular change in energy. it takes about two years for a real capitulation washout. but in the meantime you do have fantastic opportunities of capitulation rallies. if you look back in all of those sectors you had rallies of 10% to 30% multiple rallies only to fail and to make new lows. i think that's what we're in the middle of now with energy. energy names, something that could hold them up, the 30-year treasury right now yields 2.8% on the 30-year treasury. but the oil names, anywhere from exxon to conoco are 3.8% to almost 6%. not recommending individual names here but at some point the bond quality of the dividends

starts to support some of these equities. >> as long as those dividends stick around, conocophillips reiterating -- they're out there calming the market but you can't just assume always that a dividend will be there. >> no. what we saw in the financials, we saw this in tech, dividends will be cut. we don't know which ones but they will be cut. as a whole, you do have these capitulation rallies in the middle of a storm. that's what we're going through right now. >> larry mcdonald, todd gore do gordon, thank you very much. bob, i thought maybe we would end the day positive given the run we had a couple of hours ago. steams like we've stable itzili. >> no, we're moving in that direction. that's a bold call, brian. let me give you highlights. we had very heavy selling at the open. i mean really big heavy selling.

it looked like a lot of margin calls. then is stopped right before european close. volume lightened up and we started lifting. yes, i think europe closing hadding to to do with it but we also had a big turnaround in energy and tech. russell 2000, iwm, second-biggest etf out there, huge volume at the open. selling was exhausted around 11:30 and we started lifting from there. xop, energy stocks, oil stocks rallied with crude flat in the middle of the day. py smelled some short covering. we had twice the normal volume. flat crude rallying on heavy volume. apple another factor here. there is a little bit of a selling climax maybe in apple. $110 at the bottom. same thing happened at the middle of the day. i don't know what it is with old tech today but microns, intels,

and texas instruments and seagate, they all rallied along with apple. >> micron has an analyst meeting on friday so there could be some optimism going into that meeting. next, some red flags in biotech we're watching. those details ahead. plus we're talking to the first manager of a tech fund. where does he see safety. [ male announcer ] eligible for medicare?

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technical analysis from you. >> absolutely. i'm not a chart watcher myself but all of these guys who tweet us in and write to us and tell us about these chart patterns are pointing out a a number of things. this time it may be because they're setting up for a bearish take on what's happening with biotechs. this is what we've seen over the past year. obviously the up trend is intact. the green line is the 50-day moving average. shorter-term average price for the stock. we've dipped below it. john kosar, the chief analyst, points this out. if you look at this chart, he's seen something called a head and shoulders pattern. what it basically means is that we've seen two maybe intermediate term tops with a top up here, looks kind of like a head and shoulder. since we've broken down below that we could see more downside to come. what he is saying is that we could see around $125 in that stock which would put you right

around here, near the 200-day moving average, the longer term average for the market. at least one etf is showing is what happens to one technician a pattern watcher that we could be due for maybe 7% more downside. that's what he's targeting. although we should say this, brian. there are a number of etfs that track the biotech sector. this is one of the smaller ones. it's got $800 million some in assets. it doesn't trade that liquid leap. versus that ibb that we talk about all the time which has $10 billion in assets and trades a lot more liquidly with a lot more frequency. >> like the life cross. >> it's gone up. we're just pointing out this is one bearish side to maybe what's happening, perhaps a more near-term top. markets well off the lows of the day. the dow turning around by almost 3 points. dow component apple is up.

on the phone cuss, kevin landis. apple is up 9% so far this year which is better than all the major averages. apple is a top position of the firsthand tech fund. kevin, always great to speak to you. >> thanks. >> apple has been a great performer but most recently it is off 15% from its most recent high. i think there are some concerns especially going into the fall quarter that apple is going to come up on tough comparisons because the fall is when the apple iphone 6 was launch. how do you think about tough comparisons when it comes to apple which still sells lots of phones. well, by virtue of being so large it is a growth stock that trades at more of a dow 30 kind of a multiple. so i don't worry that much that people will think they're growing too slowly simply because any growth at all is going to push the stock north. there's not too much room for

compression on valuation. i just think lately the story's been about trying exposure. apple has committed they're going to grow their market share in china. so when bad news comes out about the chinese economy, that can't be good for them in the near term. >> given what's going on in china right now, kevin, how concerned are you about the china part of the apple growth story? >> you know, not being an economist but just being a tech person in silicon valley looking across the ocean at them, that is a big unstable growing mess of wonderful opportunity and really treacherous unpredictability. >> sounds like you don't know what to make of it then. >> well, no one really -- if somebody tells you that they really know what's going on over there, you should question really that source. nobody really knows, including

the chinese communist party. what we do know, if you roll forward 5, 10, 15 years, that's a story that just keeps getting stronger. it is really among the big economies it is the one that can swing the furthest in either direction. that's the one, unfortunately, that from quarter to quarter is going to cause the most variability in the global growth of the economy. it is just so big and it is changing so fast. >> will it cause variability in apple's earnings the next couple quarters, do you think? >> well, at least a little bit. at least a little bit because they do want to grow and that is where they're getting the growth in handsets. but i think apple is such a solid stock right now and it is not like this is a high multiple stock that's going to fall off of its pedestal if they miss by 1% or 2%.

this is a fast-growing stock that trades at a very reasonable multiple. >> kevin, great to get your thoughts. thanks so much for phoning in. kevin landis. up next, the one major economy that almost nobody else is talking about that could be a bigger risk than china. plus, a five-star mid cap manager bringing some stock picks. we're back right after this.

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we've been talking about reversals. check out the nasdaq now in the green up by about .03%, microsoft, intel, as well as facebook all at session highs right now. bri? >> thank you very much. teased about an economy that may be at bigger risk than china. could it be brazil? i know a lot of people aren't talking about brazil right now. china's getting the attention. keep this in mind. brazil is the seventh biggest economy in the world. by far the biggest in latin america. it is in recession and sinking deeper into recession. yesterday, moody's cut the rating. it's still investment grade. but s&p warned that brazil could lose the investment grade status, as well. and investors have lost a lot of money. look at the ewz. that is the big brazil etf that trades here. it is down 26% year-to-date.

that economy has absolutely been wiped out. investors hit, as well. something to watch. a lot of stuff out there. but don't lose brazil off your radar. with everything going on including brazil, where are the safest places for your money right now? co-portfolio manager of the five-star rated mid cap 30 fund. and after that intro, don't have time for the segment. i'm kidding. the fund up 14% this year. let's get into this. where are you finding value, brian? >> hello, you know, we like the domestic stocks. we've seen valuations in consumer discretionary stocks. you have to stay in individual stocks. i don't think there's a particular sector we think is cheap with the exception of energy if you're a deep value type of person. but i think that if you can find individual stocks that are outperforming the rest of the segment, those are the ones we really like. >> yeah, showing some of the names. jet blue, sealed air, mohawk,

talk about one of those for us, please, brian. >> well, i really like jet blue, and especially in a day like today where you've got oil hanging down in the low levels. jetblue's executing perfectly. i think they're doing everything they need to to build the airlines. going after a deeper, more broader consumer with their mint service. just flawless execution. and if you get a dip in it because maybe people are selling out of fear because it has come up in the beginning of the year. those are the type of stocks and entry points we like. >> i would assume it's mostly textiles, carpets, things like that, it's kind of a housing play. does that mean you're not worried about housing? >> well, i think the housing's doing pretty good. i think that we're seeing some kind of transition into the renting segment. they'll do well on the commercial side. consumers have really kind of put off doing any long-term housing starts and stuff. but, i think, they're starting

to get to a better position where they've paid down their debt, they're really looking at the bottom line now. they are moving into some of the durables. and one of the places they can get bang for their buck is to say, hey, look, my house is an improving asset. and if i put more money into there, it's about some benefit of living there. but it also helps with the performance of the asset. >> all right, brian out there in california. thanks very much. appreciate it. all right. unbelievably, folks, the nasdaq turning positive. the dow was down 177 points a the one point. will the dow close higher today? i don't know. we're going to go break and come back. stick around. here at td ameritrade, they love innovating. and apparently, they also love stickers. what's up with these things, victor? we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that

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time for street talk. there's room to find stocks are analysts are talking about. let's get to it. first stock, canadian gold producer, bank of america merrill lynch trying to help the stock down 40% over the past year. analysts upgrading it from a buy to a neutral. the target, $30.50, about 18% upside, based on a few things, including free cash flow forecast next year and four big new projects that might, just might act as catalysts. >> first earnings report since going public. and it was a good one according

to credit suisse out of the gate. minimal cannibalization. minimal cannibalization with other parts. >> don't you want to say where's the beef? you've got to say that. you just said it. >> you've got to say it. cannibalization, melissa. third stock, johnson controls, goldman sachs upgrading it from a buy to a neutral. they see 32% potential upside. and they say the company's not being fully valued. >> mgm partners, joint yield. raymond james upgrading it, maintaining the $27 price target. the analysts likes the two big parent companies that provides ample room for growth by a dropdown. the stock we should note down 31% since the ipo up 8.5% today. >> no time for the final stock. what's coming up tonight? >> take a look at this chart. we know that media stocks have been clobbered.

but not lion's gate. we've got the vice chairman at 5:00, brian. >> that's a big interview. worth watching. will the dow be higher by the close or no? >> i don't know, brian, it's a coin flip at this point. >> i don't know either, but "closing bell" starts right now. welcome to the "closing bell," everybody, i'm kelly evans at the new york stock exchange. >> and i'm bill griffith. another momentous day. stocks staging quite a comeback at this hour. the dow down 277 points at noon on wall street. investors spooked once again after china intervened and the currency markets yet again overnight. we'll break down this tug of war developed by china's central bank and the global markets. >> and we've got blackrock's global investment strategist joining us live coming up. why he thinks we're seeing violent movesn