they don't need us. chemical stocks, exposure for them. they're exposed to global growth. when that's in question, they go down. >> dow down another 300 points, tyler. >> all right. teeing up a big hour coming up. >> "closing bell," that is next. hi, everybody. welcome to "the closing bell." we are seeing another brex brexit-related selloff. >> yes, we are. following the historic vote last week and turning lower after standard & poor's cut the uk's credit rating. >> coming up, we have an all-star lineup of guests to help you make sense of the market. it's chief investment officer, technician and former wells fargo ceo. meantime, goldman sachs is

raising the price forecast for gold as the fear trade drives that precious metal ever higher. we have the analyst coming up, as well. let's start with the continuing fallout of the brexit vote. bob pisani is tracking selloff here at the new york stock exchange. kayla, you get to go first. >> well, bill, right behind me is canary wharf, london's financial hub and looks quiet but it closed out today the worst two days for the european financial stocks in history. down 21% in 2 days. that's worse than 1987, the financial crisis in 2008. and that really set the tone for the u.s. markets when they woke up and saw barclays down 24%. closed down 17%. rbs down 15%. that had also been down 24%.

lloyd's down 10%, as well. there's a torrent of bad news that kept investors on edge. goldman sachs foreigning of a uk recession next year. deutsche banc saying they would have to ease more and then that debt downgrade for the uk to aa. there's no macro relief in sight for the uk and for the europe, especially given what we have heard out of central bankers. that comes despite the fact that treasury secretary jack lew, george osbourne and the uk prime minister david cameron all sought to soothe markets jittery since late last week. here's prime minister david cameron. >> financial system is also substantially more resilient than it was six years ago. with capital requirements for the largest banks now ten times higher than before the banking

crisis. the markets may not have been expecting the referendum result but as the chancellor set out this morning the treasury, the bank of england and our other financial authorities have been putting in contingency plans. >> reporter: and banks across europe put their own plans in place. take a look at some of the revenue share across europe. goldman sachs has about 21% of revenue coming from europe. so they are on notice. they're thinking about how their business needs to react. but of course, they're safeguarding by the capital they're building up. buffering them against a crisis supposed to be on our shores. and we could get a little bit more information about those capital buffers later this week when the u.s. banks report their stress test results. i believe that happens in a couple of days but, guys, that was supposed to be a safeguard and it could serve to placate investors all over the world

when we get that data. >> yeah. the declines, the stock price declines in contest are remarkable. either this is a period as dangerous i guess as the last financial crisis or events like that or, you know, this is an overreaction that would turn out to be a buying opportunity. >> well, kelly, importantly, we should point out that there aren't really the cracks in the credit market undernooetd the surface that we saw in 2008 and even in 2011, 2012 when there were real scares about a eurozone financial crisis i'm sure we remember well. that's something that's very important to point out. right now, it is vjust very, vey steep bank stock selloffs. they wonder how long it takes for them to come out and say, look, we recognize the stock is not where we want it to be. we didn't suffer any losses or

perhaps we did suffer losses and here's the state of the balance sheet and the business. we need to hear more from those folks. >> that's the thing. very quickly, if you can, talking about the contingency plans for months in anticipation of brexit to pass, do we know what they are? do we know what the banks have planned and talking about the uk banks right now. what happens next? >> reporter: yeah. well, bill, we don't have many details and it is funny you say that because when i was interviewing the ceo of barclays on march 1st, when he unveiled the bank's new strategy, i asked if they had a plan if britain left the uk and he said we're a proponent that britain should stay and that was the solution at the time or at least the public statement official statement from the bank. certainly, i'm sure they're working behind the scenes and i think we need more detail about what those plans are. >> for sure. thank you. another long day in london

there. let's get to bob pisani here at the stock exchange. bob? >> huge split of beta stocks and low volatility names what's high betas? banks and energy names. look at devon today. down 7%. remember most of the stocks down 4% or 5% on friday. the strong dollar hurting the commodity names and other side there's names low beta and people are sort of hiding out in the money. here's the classic ones. con ed. new high for them. up another 2% here. you're dealing with 3% dividend yield. another play? reits. lower for longer on real estate. look at this. simon property group. up again today. not a new high. i think 214 is the old new high on them but close enough. consumer names, chlorox. look at this.

1.8%. another new high. every day this year seems like a new high and then other ones out there. come on over here. dr pepper. up 4% today. new high for dr pepper. most of the big consumer names. bottom line is this. high beta, last few days, down about 9%. the low volatility, the boring chloroxes of the world, down fractionally. 1% in the last week or so. this is that moment for those boring old reits and utilities and chloroxes of the world. back to you guys. >> they store cans of tuna fish under the bed. buy tuna. thank you, bob. gold is extending the gains as investors seek a flight to safety. and in wake of the vote, goldman raised the gold price forecast. >> joining us is the man who made it, jeffrey curry, global head of commodities at new york stock exchange with us.

jeff, welcome back. so clearly it's become this safe haven play. how much more is left in this gain right now do you think? >> well, we think about gold, there's a saying in the market that being long gold is same thing as being short politicians. i think there's a lot of truth to that statement in the current environment given the uncertainty following brexit. however, we would argue that the upside is limited an ena key reason is the market is incredibly long and also seen a sharp decline in interest rates, particularly u.s. treasuries which ugh zest that we have probably topping out here and we saw the market trade up to 1316 and come back down and why we raised the forecast to 1300. which is a little bit below the market and substantially higher than we thought we were before and would view gold as a good hedge for the type of political uncertainty we expect to see. >> what about oil now? carried out with risk assets. where does the price of oil go

now? >> well, with oil it is being impacted similarly by the uncertainty and think of it on a micro and a macro. macro, the reason appreciation and the dollar puts downward pressure on oil in the broader commodity and less gold and seeing that across the board. in terms of the micro, inventories of oil are still very high. and if we see a surplus again and push us up against the capacity constraints of oil storage, that's downward risk. i like to think of uncertainty in the face of risk, creates these downward price spikes we are seeing like today. the base case is market continues to trade in a $45 to $50 range. why? we don't see the impact of fall yacht of brexit having a substantial impact on oil demand. >> stay right there. meet the rest of the panel.

jim cahn with us, ben willis, and rick santelli from chicago. ben, we are at 3, 3 1/2 month lows. are you ready to move in? do you have a shopping list? >> trying to recover from being called beautiful by kelly. i'm considered boring. this kind of took my breath away starting the segment. but i'm actually looking like many traders from around the world. we are looking to jump in and buy and not gotten a clear signal. there's shopping lists as anybody at home should have a shopping list of what they find attractive. and one of my old customers said buy what you know and save money for when they're cheaper. no one's ready to call a bottom. unknowns for a year plus to come. so we'll have a shopping list ready and don't spend all the cash all at one time. that guy opened a fund called ma

gel ly ma gellen. i think he did okay. >> in terms of pricing and the market cap relative to the shear size of the asset base. what do you make of it? is this a huge opportunity for a terrible sign for the rest of the economy? >> let's start by saying we don't have an idea of where the uk ends up with relationship to the european union and whether the banks access those markets on a go forward basis so i think that the market's response in pricinging in the uncertainty is probably pretty accurate at this point so to say they're a bargain is extreme. what we do know is in periods like this, volatility tends to tell us a lot about future volatile till. if it was volatile today, it is probably volatile tomorrow and the bigger question is what do you do in the period where

volatility is likely to be higher for longer and where is your edge? so, you know, traders may have an edge in making decisions within sort of a day, an hour, a minute, a nanosecond time frame and the majority of investors have no ability to take advantage of an opportunity of an hour or a day or a week. so in that environment you might say, look, european banks look cheap. we want to buy them. but more broadly make sure that you have a financial plan that's going to allow you to stay invested because if you're trying to take advantage, you're probably going to get whipsawed. we have seen that happen to customers without a solid plan coming to markets like these. >> right. so, rick, let's make -- go ahead. try to make sense of this today. you have the dollar and gold going higher. you got the yield on the 10-year in britain below 1% first time ever on the day they cut the rating to aa. vix down 9%. all kind of cross currents going

on here, rick. when's going on? >> sometimes you have to step back. look at the landscape here. let's look at the u.s. stock market. haven't even tested january lows. okay? neither has the dax. looking at the stock markets actually today, our testing january lows, it's the nikkei with a boatload of negative rates and the very definition of debt. you look at france. the cac. basically testing the january lows. they have negative rates. you have spain touching very close to its january equity lows but they really don't have a negative rate problem. the oil markets and 45 or 46, i remember sub-30. i'm very impressed with the market's reaction thus far. this was the surprise vote. this is the one that's still very difficult to handicap. we don't know how trade logistics pan out but at the end of the day i think that the notion of equities all moving lower and testing lower levels

is not anything like the crisis. companies couldn't find funding for the next day, didn't know how they get funding to pay employees. this is a lot different and i'm not saying it's easier but i think that it continues and fairly similar fashion what it's doing and i would be very shocked if we don't test january lows in most equity markets. >> amid that, jeff, is gold the only part of the commodity space to recommend here? >> in terms of being long commodities against other financial instruments, we think -- expect commodities to outperform and the key reason for that is spot assets, they price the fundamentals of today and today's fundamentals are not substantially impacted by the uncertainty yet of brexit. thinking of stocks and bonds, they price the future which is substantially greater impact by this uncertainty which means you want to be long commodities against the other financial markets. >> before we go, ben, we're

right at 2,000 on the s&p. significant? what are you looking for today? >> 2005 is a top, about 3 or 4 times today, quite frankly. 1991 on the way down is bottom for today. probably a support of tomorrow and going forward, 1975 is a better look to downward move. 1961 below that. but 2005 appears is a short-term resistance for us. >> all right. thank you, gentlemen. appreciate your thoughts on today's market action. >> thank you. feels like just yesterday above 2100 on the nasdaq. today we're down under 2000. the dow near the session lows. nasdaq down 122. much more ahead on today's selloff. stock picks of leading wall street money managers next. the chief investment officer of calstars will speak with us

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welcome back. markets moving lower in the final hour of trading. the dow down 312. i believe it was down 325. s&p down 2%. nasdaq down before than 2.6% today and the dow transports lagging giving up 242 points. avis, united continental and ryder system down. >> lots of volatility in that sector. let's look at other movers today. borgwarner shares under pressure. improving fuel economy and emissions and performance and two largest customers are volkswagen and ford expected to take a hit from this brexit vote. we'll have more on the brexit vote's impact on the big auto companies later on in the

program. meantime, shares of kroger and whole foods are rising as mcdonald's and wendy's decline because of new data from market research group reportedly shows visits to fast food restaurants unchanged in march, april and may after quarterly lly increaf 2% since last year. obviously people are not eating out as much and going to whole foods more and spending more money there, kelly. >> fascinating. and corelates to my own experience. i have been eating at home and then there's a market move. >> i could have had a big mac. >> i hope that's what it is and not a sign that the economy is weakening. that would be -- $20 billion in gasoline costs the americans saving this year. the markets clearly don't like the british vote and there's a great deal at stake and also

interesting buying opportunities. >> probe those right now. michael farr is a contributor and david sourbee also joins us. >> good afternoon. >> absolutely. >> you're hanging in there. are you buying yet? what are you doing here? michael? >> i'm always long term optimistic, you know, bill. but i think right now when you're so much uncertainty over the brexit, people trade perception because they don't know what reality is and trading and the babies are being thrown out with the bath water. i got a call from kenny saying sales lining up to sell on the close are really getting bigger, almost 400 million shares. this could be a continued down day. >> that said -- >> there are opportunities. so maybe you look at some of the banks at one time book. killed. you have to do some buying i think. >> where else do you like,

michael? >> you get the banks one times tangible book with a 3% dividend with a treasury at half of that, 1.48, i think that those become compelling at least to start to nibble. consumer staples. health care. i was care you at the halftime report. the airlines. you have to start to look at when's really getting killed and try and find the babies amidst the bath water going out adavid, you think we're going to see a recession some point. how does that adjust your portfolio then? >> i think you want to be teed up to buy, bill. to me, the clear signals in always the tough call on when there's a bottom. average stock in the markets down 8% to 10% at the same time that investor sentiment combination of those bearish and neutral goes above 80%. that's usually a good contra

contraryicontrar contraryian time to be a buyer. aher price, asset manager that trades like an insurance stock and acts like an asset manager with longer term secular growth. the stock's off more than 15% from the highs. that's a buying opportunity. the rails, i think are unloved. that includes -- >> that's for sure. >> the stock's 18% off its highs at a time when it's going through cost savings and i think the secular story is there for norfolk southern. trades in an attractive evaluation and variam medical. some exposure. a long term secular story for the stock off 10% from its highs. any time you get these opportunities, i think you want to be ready to be a buyer. >> david, do you like the names

in spite of a recession that you see coming? is that what i'm reading here? that bearish in terms of the macro? >> to be clear, i think a recession coming but not for a couple of years at least until the yield curve at the u.s. level goes inverted. that's always the best indicator to me. profits have bottomed. likely to accelerate. most important for stock pickers is cash flow and free cash flow. i think that on the margin is improving. i'm buying companies with 6% free cash flow yields. that's an attractive valuation metric to me and signals recession far out. >> the chances for a recession in eurozone significantly higher and much sooner. >> that it has. >> that's sooner and that could be the trigger for ours at some point. no question you have to be very careful in making decisions to buy things with really solid balance sheets to endure. >> all right. thank you both. >> that's why we call it euro

sclerosis. >> trademarked. >> thank you both. down 331 points. >> thank you. >> fresh session low. >> we're right very close to ben willis' number of 1991 on the s&p right now so we're keeping an eye on that one. >> we have a lineup of heavy hitters. the chief investment officer speaks with us. ralph is also on deck. >> also ahead, dominic chu with a special report on which stocks gain the most after market shocks like we have been going through. coming up.

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we have a little over 30 minutes left here. we are down 300 points. s&p is down to 1994. down 42 points. by the way, if you haven't heard, s&p itself cut the uk's credit rating to aa from aaa. the agency saying that the brexit vote will lead to a less predictable, stable and effective policy framework in the uk. pound $1.31. it was $1.50 on thursday. it touched that just before the

vote. the yield on the 10-year in london below 1% first time ever. and the ftse earlier today down 2.5%. dax was hardest hit on the continent. down 3% in the today's trade. >> wow. the economic future of the uk is murky and closer to home in the aftermath of the selloff many americans are concerned about their futures and the vote is affecting retirement funds. joining us is chris ailman of calstrs. are you changing your investment approaches? are you worried about more economic weakness? how are you responding to this landmark vote? >> well, kelly, i would say yes to all of the above. first i want to say, you know, pensions in our system and others are secure. what this has an impact on is our future rates of return. this is a short term event so long term investors are using this as a way to take advantage

of these kinds of markets and volatility. am i worried about the uk? absolutely. and europe. we thought that would be a decent place to invest as bill said, back on thursday. but now that's all changed. >> in fact, your uk exposure was rather large. are you rethinking that? i know you're thinking long term and don't trade and because of the uncertainty, about where we go from where, what do you do with all that you have in the uk right now? >> well, bill, most of our uk exposure, global equities and real estate and private equity. we're going to have to see how it plays out. once they trig l article 50, is it a two or a five-year process or like canada of seven years to negotiate? i assume it's quicker and tracking on how banks and brokerage firms change their business of operation and tell us whether we diminish our

long-term investments in the uk into the future. >> as banks go, so your investment dollars go? >> well, for us, london has been a financial center. it's the one place in the world where you can see the entire trading day from asia to the u.s. in normal business time. that can easily transport as you said to frankfurt or to dublin or other places. that would change certainly our real estate, private equity investments. we have about a billion dollars of dry powder ready to go to work. mostly in distressed investment opportunities. this is creating distress in europe and the uk. >> i was going to say, so what looks the most distressed to you right now? what's starting to look intriguing? >> it is still too early to tell. the big question is financial services industry. does it stay in london or how does that move? another area is economic

slowdown. will we see a recession in the uk? what happens, you know, you had the picture earlier today with germany and france as the real leaders of the eu, how does that play out? eu has the problems with greece and the south of europe. so their problems aren't out of the way either and they have to deal with losing the uk as a member. >> would like to ask you about u.s. real estate. it's been a huge investment class not just for you but people looking for yield in the environment. is there a risk now of actually igniting a bubble in the asset class because interest rates are so incredibly low? cap rates low for years now. or, if that's not happening, is that because the cycle's going to turn. does this, you know, in a way kind of make that asset class no less attractive when maybe they should be? >> you know, kelly, i wouldn't use the word bubble because that's ort of implies it's extremes. real estate is back at peak prices so, yes, most people

expected the real estate market in the u.s. to turn and go through the cycle. you're seeing a lot of construction cranes in different cities so supply is coming online. there's going to be pressure on rents. so i think that over time, you know, we see real estate priced to a point we're willing to sell some and people are looking for yield. if your fixed income portfolio, i met with the cio of the giant jpif fund in japan. the fixed income portfolio at zero to negative interest rates and looking at real e skate with 3%, 4% cash flow they look at that as a decent opportunity. it's a substitute for fixed income and that's why i think real estate pricing can hold for a while. >> speaking of those rates, what do you expect our fed to do, in fact, what do you expect the ecb to do in light of friday's vote? >> well, clearly i think -- i said last week i think the fed -- i was disapointed they

didn't move and now janet yellen was clairvoyant and smart for them not to move in anticipation of this and i think a rate move is off the table for a good part of the table. >> do you think they could have to cut rates, would they have to go back to zero? could you foresee a scenario where that could happen? >> bill, i really don't. to cut from a quarter to zero i don't think does much to the u.s. economy. i would rather see the fed in a position to be able to tighten rates, not to slow down the economy but to rebuild their toolbox. they need tools in order to protect the economy. the ecb has to protect the currency and draghi has shown he's willing to do that whatever the famous phrase, whatever it takes. >> yeah. are you guys buying corporate credit ath the same kind of pace throughout this cycle? there's different ways of playing the credit space. what about the bonds that

companies have been and are continuing to be issuing? >> yeah. we just started. i came out of a meeting and focused on was our exposure to the financial industry. because you're going to see ady vur intelligence. some of them hurt badly and others not. so far, they've not widened. like you would expect. even in high yields. so i think people in the u.s. are going to continue to look at that as an investment opportunity into the future. you still -- you got to do your credit risk and know your underlying issuer. with interest rates so low, very little margin for error. downside is great. upside is very limited. >> since the vote, the dollar, of course, has been a place to go as a safe haven of sorts. do you foresee that as longer term trend? and if so, what's that do to commodities? >> well, bill, we don't direct -- we have indirect

exposure to commodity. currency was the first place. my team was here all night on thursday night and into friday morning. and i've been talking to them starting yesterday afternoon in california time 1:00 because that's the impact on the portfol portfolio. not just the dollar but it's been the yen and the currencies that people are going to around the world. so we have done some hedging in here. we are worried about a now continued strength of the u.s. dollar. we thought the dollar strength period finally waning but it looks like, you're right, the dollar and other currencies will be the place to be away from the pound and the euro. >> so what's it mean for the u.s. economy? because perhaps the most troubling piece of news was about fast casual restaurant sales slowing last several of months. if that's because of a change in preference, fine. do you get a sense there's a

deterioration in the u.s. economy? >> last week i would have said that the u.s. economy is fairly soft. i was worried that the may employment number was actually a sign that the employment was waning and the economy was softening in the summer months. i think that we'll still see a positive number and very low. not 2% to 3% gdp and more in the 1% to 2% range. this election had a real down movement on the u.s. consumer. you know, constantly being hit by negative comments of our elected officials doesn't help the economy overall and now a political event that i don't think it's going to become an economic event other than asset prices. but i do think that our economy will be okay but we'll be very low and slow and now for probably a prolonged period of time. >> you have to admit. we keep even during this conversation saying, well, before last week and before thursday. you know? that really was a major pivot

point for a lot of investments, economies out there. have you ever seen anything like this before, chris? >> bill, you know, we harken back to the past and in my memory and i want to forget about them. i don't want to visit it. the market really didn't see this coming and just like politicians didn't see it coming. we thought the smart money or the bookies and they very seldom get it wrong in the uk. they got it wrong. that's why i think you have seen from a financial stand point an earthquake and now the ramifications and aftershocks from it. look at the political fallout in the uk and the eu from this. this was so unexpected from that standpoint. what i really worry about is how have the banks done? markets are fluid and smooth. we haven't heard about anybody taking huge losses of trading

this. we sold off of all-time numbers in our markets. i think that's really important. now we'll get back to our economy and slow growth. >> chris, we were happy to spend some extra time with you. always enjoy talking to you. thank you for joining us today. >> thank you, bill. good to see you, too. >> thank you. chris ailman of calstrs. now with sue herrera. >> here's when's happening this hour. hillary clinton joined for the first time on the campaign trail by senator elizabeth warren. this in the battleground state of ohio. >> hillary clinton will be the next president of the united states because she knows what it takes to beat a thin-skinned bully driven by greed and hate. firefighters making progress containing the wild fire in

california. some residents in areas that did not burn were allowed to return to their homes but authorities say people who live in communities that were burned will have to wait a while longer. the fire has killed two people and destroyed at least 200 homes. a prison guard who pleaded guilty to helping two inmates escape is now a free man. gene palmer walked out of the clinton county jail after serving four months of a six-month sentence. he admitted to helping matt and sweat escape. and the new york yankees and stubhub ended the squabble. announcing a partnership that sets a minimum price for resale tickets. this agreement is worth about $100 million to the team over 6 1/2 years. that's the news update this hour. i'll send it back downtown to you, kelly. >> thank you. stocks coming off of sex lows. still down 242 points. 100 points better than we were just a few minutes ago.

bob pisani, when's behind the volatility? >> i think the market is trying to figure out if we're a short-term bottom and can't decide. look at the s&p. we are off of the lows but that shouldn't be much consolation for you. the volume is very heavy again today. friday a distribution day and basically major institutional selling occurred and seeing really a follow-on and north of 5 billion shares. a little or a lot? normal summer day 3.2 billion altogether. north of 5 billion, that's a lot. so the fact that we're not dropping more i don't think is much consolation. ending here, i think it's a serious situation. take a look at the sectors. i'll indicate the problem. pretty obvious, though. looking at the banks. everything is down 2% to 3%. the first problem is with the dollar. the dollar index is up. maybe 3%. in the last four or five days. you could see that's an intraday

there be trust me up 3% since thursday and putting pressure on commodities and stocks. so that's why you're seeing the energy stocks all under a lot of pressure. in addition to concerns of slowing global growth and the ten-year. ten-year 1. 75 on wednesday or thursday. now 1.46. that is not a lot of help and talking about the influence on the major banks and not just over there. but here, as well. that's the major reason of seeing this mess down here. only way to describe it. look at regional banks like fifth third. no exposure in europe but the low interest rate scenario is continuing to hurt them. there is some low rate winners out there and emphasizing some of the groups. con eds. utilities of the world. and the telecom stocks like

verizon there are some winners. you tillties are not big market caps and the telecom, not enough of them to move the dial. what matters are financial stocks, tech stocks, what used to matter is energy stocks. health care. those are the ones with big market caps to move the dial. nice to point out stocks on the upside. but they're not a big part of the market overall. finally, low volatile stocks, consumer stocks. new highs, dr pepper, chlorox doing well today. >> dr pepper up 4%, bob. thank you. now more from steve grasso joining us from stewart frankle, steve. >> it's the same thing talking about with bob. when you see volatility spike to this level, you have funds that target volatility and when it is running low, they can lever up. when it's higher, they're forced

into making a sale or potentially making a sale. so i think that's what the wonky guys are focused on right now. you could see a flood come in but i just heard you touch on it. the market stabilize. >> yeah. what do you make of the vix going lower today? >> when you look at where we came from, from brexit, bill, that's sort of a quick reaction. everybody thought it was going to be remain vote. took everyone sort of offsides and i think people are trying to adjust to it. >> yeah. so what now, steve? i mean, i guess the more that markets bounce back the less lasting the damage of friday's selloff and the british pound sitting near -- in fact, testing new lows against the dollar. >> when you look at the market as a whole and where the flow of funds are going, i don't think it's a short-term trend of yield search. i think you are going to see as bob pointed out utilities, staples are taking a hit because

they have international exposure. but even look at altrea group i'm long. you get the yield. i think the market is going to focus on where they can get the most bang for their buck. >> is the pound to the dollar the bogey to tell us the direction for our own equity market? for the past it was oil. you know? there were other indicators that we would use. the pound seems to be one that we're looking at the most right now. do you agree? >> i'm going to say no only because that's an isolated incidence and now starting that conversation what other country is going to have a referendum vote and then start looking at the euro again. so to focus on the pound i think short term, yes, bill. longer term, i think it is the market as a whole and more depend ent on where you led there with oil. >> the euro is resilient, steve. why do you think that is? >> looking at it, people so

lopsided on the trade and thought it was going to be remain vote and didn't think it was anything positive with them exiting and i think now re-establish and say if they start to tweak regulations, what does that do to the 28 countries involved in the euro and see where the chips lie. >> top of the hour, ben willis was saying 1991 on the low side of support. 2005 on the high side for resistance on the s&p. >> sure. he is talking single day. very short term. for me, where we came from. we stopped at 2032 to the downside on friday. below that we have a recent one, 2025. below that, we have the 200-day moving average is 2020. for a bigger, wider range, look at 1965 to the downside. that's a long-term support and we want to be above the 200-day moving average which is 2020 in the s&p. >> all right. thank you, steve. we'll let you go. >> thanks, guys.

we are going to dom chu right now, are we? all right. hello there, dom. >> i'm right here. we're talking about just this idea of opportunities out there, right? in terms of overall picture of stocks with the selloff. not say everything's going to go hunky dory from here on out but we want the numbers, data, statistics behind move that is we saw in the past of the large magnitudes to the downside. taking a look at this particular s&p 500 chart to the end of 2004, there have been actually around 49 days where the s&p 500 dropped by 3% or more from then until now. now, we have the financial crisis in there, of course. a lot of instances there and we wanted to look at which stocks stand out, five trading days later, 20 trading days later, a week or month out there. the s&p 500 in that time frame, 49 days of 3% drops or worse, take a look at the average 5-day performance for s&p 500 me

believes here. 20-day performance of the same performers, as well. after five trading days, about six, seven stocks that actually do really well in terms of their overall winning percentage and performance. people's united bank, average day 2% return. five days after the s&p dropped by at least 3%. it's always up about 71% of the time. that's a big move there. also take a look at qantas power services. 4% to the upside here. traded positively 71% of the time out of 49 instances. exxonmobil. a name that we all know. large cap. integrated oil. up 78% of the time. 20 days out, a trading month after we see a big drop in the s&p 500. among those names, bristol myer squibb. nearly three quarters of the

time up there. adm, up 7%. and then a name here and key on this because it's an interesting theme 0 talk about here. o'reilly auto parts. they sell off market auto parts. up 6%, almost 80% of the time. out of the top stocks in the 20-day span, 3 of them are publicly traded do it yourself auto retailers. they all screen very well in the big drop days a month out. see if it holds true this time around. back over to you. >> thank you. just for good measure. times square and the nasdaq market site and bertha coombs. >> we have come off the lows a little bit. we have ten stocks in the nasdaq 100 trading to the upside and most part on pace for a pretty big decline, you know, quarter and this week and the nasdaq on

pace for 6% decline. bio techs on pace for a 7.5% decline. among the better perm forers, ironically, chip stocks. but they have been hit hard the last two days. off about 11%. and i went back and tried to tally an we haven't seen a decline like that over two days in well over two years. back to back declines. today you can thank the folks over at bank of america mrill lynch cutting semiconductor companies including the stock to a neutral. you're also some reports that samsung and asian phone makers are cutting their tar gets for phone shipments in the third quarter. airlines continue to fly way low. in fact, half a dozen new lows in airlines including american, ryanair and jetblue there. priceline continues to feel it

hard with an awful lot of exposure in europe as does ryanair, of course. bucking the trend today, some stocks that were green, hard to find. i'm sort of harkening back to the 90s. remember faith popcorn and people wanted to stay home when things are uncertain. the stocks that are rallying today. buying food at whole foods. monster beverage and perked up with late programming wondering what will happen when the markets open and tesla today right now best performer in the nasdaq 100 and last week beaten up over the suggestion of merging with solar city. a couple of reports saying maybe long-term investors along with elon musk not so negative on that idea. breaks a four-day losing streak. back to you. >> thank you. we're here at the new york stock exchange with anthony khan.

chief economist. >> i don't think it's positive but the question is, is it grossly negative that the world will collapse? no. the markets were shocked because no one anticipated or the financial markets were not fully anticipating a brexit and now reacting. everybody's focusing on did fact that the equity market decline and means a recession. looking back historically over a couple of decades before recession you get declines. in the two to three months before the recession starts. but black monday, back in 1987. we had a 22.6% decline. we had to wait three more years for a recession. >> you think it's more like 1987? >> i think so because i think that over time as central banks really tried to sort of contain

the problem, the financial markets will recover. other things are people saying, the strength of the dollar to kill the strength of the economy. 1% to 2% stronger right before a recession and guess what. the great global financial crisis, the greatest recession since the depression, we actually had the dollar declining. >> right. >> 4% to 5%. so the strength in the dollar is no guarantee that we're going to go into a recession. >> because it's a politically oriented crisis right now, an awful lot of uncertainty and confusion, very smart people i know who write notes, e-mails, blogs out to clients are saying today, i have no idea what's -- never seen this before. >> i know. >> because we're all waiting for the politicians to figure out the next move. >> that's absolutely correct and today we just heard from osbourne at least making the move to step down and get the

process moving quicker than his initial announcement was i think a step in the right direction and then i think the financial markets take it as a positive. >> the fundamental position is to hang in there. what about europe and the uk? where in terms of growth are we looking for the -- >> in terms of hanging in there, not the same thing of saying there's no impact. you will probably see the uk and economy moving towards almost zero economic growth and eurozone growth chopped down. and the u.s. economy, last year grew at 2.4% and may well end up growing 1.5% and not the world is unscathed by this. the question is, is it a knockout punch? i don't think so. >> today s&p downgraded the uk. they were aaa. now aa. the 10-year guilt, below 1% for the first time ever. where is all that going do you

think and what impact on our markets? >> well, bill, you see that all over the world. lowering the credit rating on a country, same thing of japan, safety haven effect kicks in. central banks come to the rescue. this is not your father's financial market. >> same thing happened when the s&p downgraded the united states in 2011. >> absolutely. we know the central banks are ready to act in the united states or britain, japan. and so these kind of downward ratings don't really impose necessary discipline on the countries involved and central banks are there to bail them out and bank of japan and england and federal reserve, the ecb, all of them do more, not less. >> the worse the country structurally looks, the more people want to hold the sompb debt. i know. >> it's a positive. central banks are actually doing something about it. >> arguably, the central banks did about as much as they could in the recovery and instead of

fiscal guys taking over with the baton and running with it and supply side, structural reform, instead it sounds like they're hamstrung by this kind of breaking up of the will of the people for any kind of government action whether it's from eu bureaucrats or maybe even from our own. >> that's true. you did hear some noise from the leave camp in the united kingdom if they stepped away and wouldn't have to give as many funds to the european union they would reinvest it back into the economy. >> a hopeful note. >> where are you going? >> another show to do. >> i'm going to bring in bob pisani waiting to see what's going to happen here. the dow down. let's review the last 12 hours or so of market trading and see what happened. japan has been the outlier of the equity markets of the world with the gain on the nikkei overnight mainly there stating they're there 0 support the

currency and helped the equity markets overnigh. there's the nikkei overnight. the dax, though, was the hardest hit of the major stock markets over there. the german market down about 3% this morning. i mentioned earlier with the s&p downgrading the credit rating of the uk, the 10-year guilt as it's known over there, the yield went to 0.93%. below 1% for the first time ever. s&p down sharply on the open this morning. we were down below 1991 for a time. we are back around 2000 at this hour. and, bob, the one with a lot of traders scratching their heads right now. the vix lower, not higher today. but steve grasso pointing out adjusting from the freezing of the market that was going on on friday -- >> maybe. the interpretation.

this is very strange. s&p down 40 and the vix is down 2 points? the market, standard market interpretation of this is that the market is saying that this volatility we are seeing is relatively short term and since the vix measures 30 days out, the vix seems to be saying they don't think that the volatility lasts long. that's the standard interpretation. >> i would agree and telling you that this is going to eventually be resolved, not long-term situation and despite everybody saying that the equity market dropped a lot, it is down 2% year to late. why should we get so excited about this decline? >> this is taking the decline today back three months. back to march. >> yes. >> in many cases, some of these averages, and on the rise in march after the low february

11th. not the end of the world here. >> for that to go. look. here's the thing that's important. we are off of the lows today and not a lot of consolation. you think the selling abates today? no. 5 billion shares. maybe north of that. that's a lot. more than 50% normal volume here. big institutions, not retail guys. continuing the lighten up on the positions and i don't know where that's going to particularly end. i think maybe what happens later in the week matters on wednesday with the meetings over there and an indication of cooperation or lack of cop ration of the united states and uk. we don't know exactly where this is going to go out. there are too many known/unknowns and unknown unknowns. that are out there. i think we should be humble now. >> humbly step aside at this point. good to see you.

thank you, bob. going out with a decline of 261 on the dow jones industrial average. marathon oil ringing this bell. stay tuned, the man himself, with the technical read and former wells fargo on the financials on the second hour. thank you, bill. welcome to "the closing bell," everybody. after the decline, the dow going out with another decline of 259 points. we are nearly 1,000 pointer than before britain voted to leave the european union. the s&p 500 down 36 points closing just on the nose at 2,000 there for a gain of 1. -- decline of 1.8% and the nasdaq

down to below 4600. coming up, the tech sector is getting whacked on the vote. private equity invest glenn hutchens will join us. first, though, senior market commentator mike santoli is here with us and kate kelly and joined by joe zak, tim seymour in a moment. mike, peculiar. i guess before the vix and maybe you can weave it in there, we are down nearly 1,000 points call it from before britain voted to leave. is that warranted? >> it's probably not warranted if you knit it up directly to fundamentals here and argue that where we were at 2100 on the s&p a week or so ago probably represented a pretty optimistic view of risk appetites and all the rest of the things around the world and the fact we didn't

expect this. i can see why we're here. people look at the chart and say no matter the news on thursday or friday, we were unable to get past the mark yet again and seems like repair has to happen. i'll say that character of the selling was pretty method call. it didn't seem like a get me out and even though it was pretty heavy and definitely a measured risk reduction across the board. >> can we talk about the vix for a second here because i know traders taking comfort in the fak fact that the vix is down after being up. not to be sniffed at, right? we haven't seen this move since the financial crisis over a short period of time. people wonder why that lower vix means there's a sense of orderliness. i've noticed people saying despite the volatility, it's

volatile in a measured way. maybe like the boe injecting liquidity. there are bids for unfavored names and european equities to sell on friday, for instance. >> right, right. >> maybe the feeling is to settle out over a next couple of days. you know, in terms of the next couple of weeks, it would be a continued orderly and less magnitude move. >> we were talking last week about how the vix was up in a very unusual way which when the stock market was up and people heavily hedged and maybe the smart money saying it's not too much worse. >> joe, regardless of which way we go, you are looking at names to be attractive. such as? >> this is a response, a financial response to a political event. yesterday we were looking at financials heavily hit and sound names like metropolitan life, cbre, schwab, names with

significant earnings in the case of met life, a good dividend. we think it's time to start looking at those. >> is that the case for you even if they move down another 10%, for example? >> yeah. we have a significant gold fund, we are always looking at those areas where investors are fleeing so when bp's rig blew up, we looked at stocks. it is just what we do by instinct almost. >> how much legs do you think we have in this gold rally right now? people who are long gold on friday obviously doing well today. yourself included and thinking of george soros and acknowledged that he was fearful about the markets generally and positions that reflected that according to filings. >> sure. >> is there going to be weeks or months to go in this?

>> it's an insurance trade. ensuring the others have assets and preserve wealth. >> sure. >> no one blinks when a picasso sells for $140 million. we touched a low at 10.50. there's very fundamental reasons for it to be up. >> where are you going to get them in gold? >> gold is an insurance policy. we have seven different products. gold is a leg of the organization. we are still $9 billion in traditional u.s. equities and have to be cognizant of everything moving. >> plenty of people are excited about this trade. let's get to tim seymour from the nasdaq. that was the worst performer of the day. not asking you to comment on tech stocks per se but there's cross currents here. would you be wading into some stocks? >> a couple of things. talking about enormous

dislocation between the indices and saying the s&p is still outperforming dramatically and like a so what relative to what the rest of the world has done. we as you're talking about the dynamics of fund managers and portfolio flows you have a quarter end coming up here. you have very crowded traded stocks that blew up and puts more pressure on guys around the edges and key closes were the s&p at 2000 and then the dollar which now is broken above this key level at 9650. obviously, week over week what changed is we brought in this scenario where actually central bank policies may not be as aligned and thinking that the ba bank of japan will scramble and the fed's going to stay put. mabel it puts more upward pressure on the dollar. i will have to do it today. i think that the dollar is still somewhat range bound and let's watch it.

i don't think it's going to the moon. >> up nearly a point today. but hang on right there, everybody. there's a credit agency weighing in now. >> fitch ratings downgraded the long-term issuer default rating to aa from aa plus following the downgrade of the uk sovereign rating. once again, fitch downgrading the bank of england to aa. outlook is negative and this, of course, is following the uk losing the top credit rating of aaa from s&p this morning. guys, we'll keep reading through. >> thank you. anyone think it has a market impact? why pay -- on some level it matters in terms of investment flows. >> if you started out with the top rating which is what s&p did, for example, with the aaa. anything that looks like you have a less stable government and potentially a more questionable currency i think by matter of discipline you downgrade it and not much

implication for the borrowing rates. let's bring in ralph for more. a technician. love to know how you're looking at these markets. >> well, i got to say today's an important day for me. you know, for the last two and a half months the dow and s&p were in a neutral trend. today we broke down. we are now in a down trend and i hear all the talk about this is minor and i think if we're brutally honest with each other, we have no idea where brexit is going to go and i think most tech noirns, at least i am, are looking at the next important climatic low. and that was in february. the s&p was down around the 1810, 1812 area. so, i want to see the vix index and we were talking about the six a moment ago, i want to see that upped around 35 or maybe 55 before i buy again.

>> okay. joe zock, what do you think? >> i think staying low as far as the eye can see and your point about whether the uk's downgraded a function of losing credibility and central bankers and lost a grip on things at the moment. >> you heard ralph saying the market is going down before it bottoms. >> we're bottom up active manager stock pickers. it doesn't drive our investment thesis and looking at revenues, earnings power, traditionaltrad matrix. >> even if we go back to the february lows, you know, we ultimately got through that event. >> yeah, no. i'm not -- i don't want to be sounding like i'm very negative long term. i want to -- an entry point. i don't think today's action

indicates that we're near an entry point. i think we need to see more fear in the market police and probably see some more downside pressure. in prices. and once that manifests, i'll become much more aggressive. >> kate? >> just curious to pick up on a point of tim made about redemptions. i cover the hedge fund beat and there's issues before the brexit about whether or not we are in what one manager called a washout and performance isn't good. people are piled into the same stocks and goldman sachs hedge fund portfolio is doing poorly. do you think selloff in names that results from hedge funds needing to raise cash is yet another impetus for further downturns in the s&p? >> yeah. you know, you get one catalyst

brexit in this case, could simulate another catalyst and it kind of snowball s and that's what makes market bottoms. i think it's going to contribute to the near-term selloff. >> hey, tim. where do you see the uk and eu markets going here? i mean, is that the bigger question? >> yeah. i tell you. it is very interesting as a guy investing in emerging markets much of his career. the intertwined nature now developed markets are trading on politicians and whether there's a market impact, you have a major, major debate about that. you have economists and analysts as we speak marking down growth r around the world. so uk stocks could actually truly benefit from a weaker currency, right? this is an economy that has a major export component. the pound is -- what's fair value?

i don't know. the politicians dictate on some level and getting a place where a number of european markets certainly more than priced in any growth slowdown. you know? the reality of the euro breaking apart is something to ponder for many, many months and doesn't change tomorrow. i think you have an opportunity in euro stocks 50, some of the biggest multinational companies, the luxury part of the trade, as well. with head winds. i think you should be looking for great balance sheets and great companies. >> mike, perhaps the other interesting thing is some point a 20% or 25% chance of a rate hike. >> exactly. on some moment and i guess from some level in the market you might expect that realization and people saying, okay, we have the fed on hold. u.s. gdp probably up 3% and not 2% and 2.2% dif lend on the s&p

500 and looks like why not? take a shot at it. u.s. growth lowdown perhaps recession and the fed maybe being hostile, those are off the table. who knows what level that takes hold? >> joe, what about you? >> i just come back from europe and talking about negative interest rates in serious tones and thinking about how to configure the banking system for that, it's -- there's no real reason to think we can't go lower and the fed is neutralized. >> ralph, you, too. some said the 10-year in the country could go below 1%. what do you think? >> i agree. the pressure, the pressure's on rates because of bond prices. >> vicious cycle. more pressure on the financials. you wonder about the economy. all right, guys. thank you for joining us this hour. that's ralph, and joe.

and tim, we'll let you go, too. the rest of the crew coming up next hour talking to larry mcdonald who's making a bold call to buy the european banks on this dip. ahead here, the banks once again getting blasted by the fallout of britain's vote to leave the european union. we hear whether the worst is yet to come or creating a can't miss buying opportunity. some analysts sounding the alarm on the health of the u.s. consumer. find out if that's the next headwind here. move like a start-up? it's a question we get from some of our largest banking clients. the face of their business was tellers. then atm's. today it's their mobile app running on the ibm cloud. across every transaction,

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banks leading again today. kbw down 5%. bob? >> whole market down about 2%. take a look at the sectors. financials once again leading to downside. big moves down in the kbw. all to the downside. the first problem here, just lower rates for longer and why

you are seeing the financials down. not just banks like money center banks like bank of america, but regional banks like fifth third and comerica and life insurance companies, metlife and lincoln national. down 7%. they're having a tough time matching their long-term obligations with the short term no-rate scenario, no move up in interest rate scenario. the other problem, of course, is there's low rate winners out there. it's called a problem. you have the utilities like con ed at a new high. simon property. verizon and telecom all doing well. the problem is nice group but they don't have a lot of clout or market capitalization really to move the markets around. other issue, of course, strong dollar. the dollar index, a basket of commodity, a basket of currencies. moving up rather aggressively here about 3% as you can see. marathon oil, devon energy. when you have these kind of

moves it puts pressure on commodity stocks, energy stocks in particular. freeport-mcmoran, down. vale also on the weak side. then you have other high beta names, bio tech stocks, for example. hit 52-week lows. gilead sciences, all 52-week lows and move around a lot as momentum traders come in and out of them aggressively. back to you. >> thank you, bob. amid the financial fallout, next guest is calling for political leaders to act rationally not emotionally. joining us now is former wells fargo ceo dick kovacevich. everyone wondering what to do to lead the companies and why are you so concerned about a global recessi

recession? >> i think this is about political risk and not economic risk. and if the politicians act rationally and not emotionally and kind of calm down and behave that way, we will not go into a serious recession. if the rhetoric, however, is one of anger and punishment and retribution, i think people will be so concerned that they -- that the actual results will be negative that they'll run for the hills and could cause the market to go -- to collapse, if you will, or go down further than they are today. what has to happen is the politicians have to say that they're going to work together for an orderly exit of the uk. probably meenls simply that they'll have different trade relationships, not zero trade relationships. i think that the united states has to speak out. i think unlike what president obama said that the uk should go

to the end of the queue, if they leave, i think the opposite should happen. he should say it's at the top of the queue and should even say that possibly that the uk would be invited to nafta. i think he should say that the negotiations that are going on with the transpacific partnership to include the uk and the positive things they're going to operate on a rational basis and if that happens i think the markets will calm and we'll simply reflect the fact that the worldwide economy slow somewhat and not recession. >> dick, it is kate kelly. before the markets just wanted to ask you, you have criticized donald trump on the air before and said he's a bully and narcissist. as things stand now, which way are you leaning? do you think hillary clinton fares better with reason to avoid the recession you're warning about?

>> well, i guess i'm like most americans. both of the candidates have high negative ratings and they don't trust them. i'm probably going to vote libertarian. >> johnson? >> yes. >> leading the libertarian ticket. we have to see how he feels about the bank. >> dick, wondering the way the u.s. banks are trading, do you think that there's a chance that seeing when's going on in terms of this sort of at least perceived threats and the things is going to make it that much harder for u.s. banks to get permission to share more capital, kind of get, do some more shareholder friendly things with regard to regulators? >> well, you know, i can't predict what the regulators will do but i think -- i agree with the previous comments that i think that the reason the stock, the bank stocks declined thus far is simply lower rates for longer. and if you go through the stress test and so on, that was part

of -- they had rates going even much lower than we are talking about now, even negative rates and the profits if you will behave very well in those kind of scenarios so i don't think it will have a major impact on the capital issues. at least in this round. because i think it's just lower for lower at the moment. >> there's been some concern that the banks selling off hard both in the u.s. and outside because of their exposure and emotionally many trillions and exaggerated moves like this perhaps losses that investors can't see. do you have concerns about derivative exposure for the banks here? >> well, i think you always should be concerned but supposedly they're offset, they're edged, there's a buyer and seller on both ends and they're a middlemen and some people do it wrong. you can have isolated examples of people -- of institutions

that think they're hedged and they're not. do i think it's a systemic risk to the industry? i do not. >> thank you for joining us this afternoon. appreciate your perspective, dick, as we have historic times to navigate through. that's dick cove sikovacevich. coming up, glenn hutchens is here. but first, will it slam the brakes on rebound since uk is europe's second largest auto market? phil lebeau breaks it down for us.

welcome back. great britain has been the driving force behind the rebound in european auto sales in the past year. will they feel the pain of the vote to leave the european union? let's ask phil lebeau. phil? >> they are. take a look at the big three looking at thursday through today. basically looking at friday and today and the selloff in the stocks. fiat chrysler, down 17.4%. will investors look at brexit and say it's going to slow down sales in great britain and eventually in europe? remember, ford in the first quarter finally turned a profit in europe. they were losing money in 2011,

'12 and '13. gm broke even in europe in the first quarter. and when you look at the impact this is having on the big three, consider the impact it's having on the auto suppliers. these are some ugly numbers. the supplier stocks have been hammered. and now we'll talk first about the european automakers, down more than 11% across the board and that's the exposure when you're looking at europe and when's happening there. i have gotten a couple of questions of people safing, hey, what is going on with the luxury auto makers? the expectation is that demand for those vehicles will remain strong. remember, their biggest market is not the uk. their biggest market southern california, shanghai, the place where the ultra wealthy live around the world. those large markets, sales expected to remain robust. a stock to show you, this goes to show you a whacky market we

are in. look at tesla shares. down because of the solar city bid and up today in a market that was selling, tesla was up today. >> phil, it is kate. just a quick question on some of the european carmakers. do you have a sense yet whether the brexit forces the uk companies to relocate operations? how may that impact the stocks? >> they haven't made a decision and i don't think that you're going to see anything like that happening any time soon. keep in mind with some of the british automakers, they're owned by the european automakers. they're owned by bmw and volkswagen and not moving the operations. aston martin, it is where it's at and not planning to move the operations any time soon. >> i'm also just curious, phil, the decline in fiat chrysler today. >> yep. >> do you think the market is

selling off weaker franchises or exposure to a weaker europe? >> well, the ones with the most exposure to europe feels the most pressure and the european automakers down more than 11% and fiat chrysler, as well. keep in mind with fiat chrysler, relative to the competitors, they need to do a deal. so if you're going in to a potential recession, if there is one in the future, those are the guys who people are looking at saying they're going to have to do something at some point. >> thank you for joining us. >> you bet. time now for a cnbc news update. back to sue herrera. sue? >> hi, kelly. supreme court striking down a controversial abortion law in texas. abortion rights supporters cheering the news outside the court this morning. president obama says he was pleased by the ruling. the stonewall in at new york city deemed a national monument today. the first dedicated to the lgbt

community and the fight for equal rights. there was an uprising and inspired the movement for gay rights. chipotle has a loyalty program to get customers back into stores. following a series of food scares. the program will reward people based on the number of times they visit each other. the sales are down about 30%. and a record number of americans nearly 43 million of us are set to hit the road this holiday weekend. the majority driving according to aaa. the group citing lower gas prices and consumer confidence for the increased travel. >> that's the cnbc news update this hour. see you tomorrow. >> thank you so much. up next, live to london to find out whether brits feeling remorse over the vote to leave the european union and why the outcome is generational finger pointing. speaking to glenn hutchins.

find out how he thinks the vote continues to impact the market and the tech sector when we come back.

welcome back. a deep sell-off on wall street, extending another decline. the steepest two-day decline for the markets in about ten months. s&p down 36 point, closing at about 2000 on the nose and the nasdaq down 113, worst performer down 2.4%. that leave vote winning in britain last week and keying off the declines you see. not everybody is happy. 3.5 million people signed an online petition calling for a second referendum. sarah? >> uncertainty in the markets and uncertainty on the streets. that includes europeans who call this country home lived here for years and are now wondering whether they can even stay. have a look. >> well, first of all,

uncertainty because i don't know what's going to happen. the price i'm paying for as a teacher and secondly i don't know what, you know, economically speaking what does it mean for my future in country. >> that uncertainty includes businesses who import a lot of products from europe. preparing to possibly raise prices for consumers because of that weaker pound which actually makes their goods more expensive and because of any potential trade changes. have a look. >> we get all our ingredients for the paelle from spain. so our supplier is like a spanish company. we get the duck meat from the southwest of france. so everything that we import i'm sure is going to get affected. >> but there are plenty of happy brits who are not worried about the economic spillover and

rejoicing feeling nationalistic and feeling like they're regaining their british identity. we found this particularly among the older generation which voted overwhelmingly to leave the eu. have a look. >> i just think that we're a strong, independent country. i think we can more than adequately survive on our own. we did for a long while before and never really considered myself european. i'm not particularly nationalistic but never considered myself european. >> well, the millennial generation voted to stay inside of europe. kelly, that petition you mentioned with almost 4 million signatures, pretty much ruled out by the cameron folks today. in fact, david cameron at a speech first time, speaking since the resignation on friday said, quote, there can be no doubt about the results of the referendum. back to you. >> all right. the people have spoken. thank you. let's get more on the decision to leave the union.

the impact on private equity. glenn hutchins is here. thank you so much. >> nice to be here. >> so we actually heard calstrs saying they were looking to double down on real estate and maybe private equities amid the volatility here. does this change the way you value businesses? find deals, for example? >> i think you need to start from first principles. the headlines i would give is very bad for great britain. bad for europe. a mild negative for the united states. all right? so if you're looking at this from american perspective, not many of us are global investors, american perspective, knock-on, this is nothing like a lehman experience. nothing even close to that yet. absent the major impact of this is going to be, one, interest rates stay low for a longer period of time.

if in combination of that equity prices sell off a little bit, prices are cheaper. and you if you're exposed to the great britain economy and the best -- most likely case seems to be a mild recession, that's problematic and exposed to europe, a fair amount of uncertainty and don't know if this -- what contagion effect it has for europe. on balance, i don't think the consequences for private equity are meaningful one way or another. >> mike? >> you mentioned low rates is good for financing. what about the appetite of the credit market. you haven't had tremendous participation in the leveraged buyout area over the course of this bull market. do you think the credit markets are receptive to that kind of thing? >> the way you get returns in a market and fixed income in markets where the base rate is so low is from credit risk. so to the extent and this is in some respects good for the credit marks.

certainly in the american credit markets where we continue to be the place to fly for quality. what about tech? >> it has almost no meaning. i mean, if you're out in california, running a start-up, you're kind of -- you might hear about this in a couple of days. europe's reasonably important market. 20% to 30% of your market. so if you're one of the big ones, worried about demand. in europe and in the uk. but from the, you know, you have alla babba over my shoulder here and not affecting that trading. i would suspect. i don't know. but i would suspect almost nothing. the entrepreneurial companies, uber companies, like that, this does not cause concern i would think. >> the notion that 20% to 30% of your company in europe is that part of the rational why this is

-- >> for sure. absolutely, absolutely. that's why it's really important by the way for the united states to be once again the indispensable nation in the world which it has been for 400 years and make sure that we vote for a very different kind of outcome and become the global and my view is hillary clinton. global, stabilizing force. >> larry kudlow said good for democracy. good for freedom. i know you mentioned the negatives on the economies that we have invoked but the majority of the people there said, we have had -- listen, i covered some of the eu summit meetings in brussels. 5:00 a.m., no idea what's going on in there. you wait. there is an element of this which is the people sort of speaking out against what they're told and everybody says is the most advice and stable outcome to say to heck with it. >> in the united states, there's one message if there's one

message coming from this very complicated interesting election, has been that the deal of globalization of the american worker is no longer acceptable. and the mainstream parties have to listen to that message and i think come forward with a set of policies about creating fairness and a sense of growing equality. i think that's an american obligation that should operate independent of party or ideology. >> you certainly saw both parties responding to that same impulse, absolutely, during the cycle already. thank you for joining us. >> nice to be here. >> glenn hutchins. sectors are still feeling the pain of britain's vote to leave the european union. a look at the so-called fang stocks and whether you should be buying this dip. but first, seeing a trend of a bigger worry than the brexit. what that is next.

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welcome back. phil lebeau, when's happening? >> kelly, according to reuters, the final settlement of volkswagen for the diesel vehicles not in compliance with pollution regulations here in the united states, the final tab for the settlement is now

expected to be closer to $15 billion. remember last week it was initially reported about $10 billion for the settlement? reuters say it is tab and the settlement presented in federal court tomorrow and the tab of diesel vehicle owners in the u.s. tops close to $15 billion. remember, kelly, it is interesting to' what it will be. $1,000 to $7,000 per vehicle. we don't know the details. coming out when it goes to court tomorrow. kelly? >> meant to both, you know, make up for what happened and also perhaps entice drivers back. for now, phil, thank you. another hit for jokes waggen. a stronger consumer and a factor for pain for markets. what is it, mike? >> you know, really a contrast here in terms of macro consumer data, very positive. obviously, you know, low unemployment. jobs as plentiful in terms of job openings as they have been in many years. you finally have wage growth growing at a decent clip and the

atlanta fed wage track we are momentum behind it and steve liesman pointing out and say that the consumer's in good shape. the household balance sheet is in shape, too. so why are the consumer leverage stocks like a lot of consumer discretionary stocks and lending stocks so weak? i look at the equal weighted basket of an etf and faltering for a while now and then the pure consumer finance stocks. subprime personal loans and capital one. a lot of companies and the autos and airlines are saying, perhaps we have seen the peak in consumer capacity to spend and carry some debt so i wonder about this contrast. i don't think there's a clear answer to whether the market's overreacting or not. >> can it be as simple as a rotation to the consumer staples? >> yes. >> regardless, is it telling us

there's been a turn? >> it is. there's a preference for stable versus cyclical businesses and there's a sense that the cycle is mature and even if it's not ending very soon and all the things i think playing into this right now and an argument between the economists and people looking at the macro data and market saying i don't know if this is so great and ubs credit research analysts last week with a report on the kind of lower tier of consumer borrowing and strained. it is not just auto loans. never got out from under a lot of overindebtedness of the prior cycle. >> there's underpinnings of a consumer pullback and reading over the weekend fast food franchise traffic down three months now. people wonder about the budget. mcdonald's and the like. when people start to tighten the purse strings. >> massive price wars slowly

emerging in fast food. looking at the deals. >> we have talked about the mcpick two. that was the opening salvo. >> and chipotle with rewards and popeye's with a $5 deal. >> chipotle with a unique situation but point taken. >> whether does it truf? is this the kind of move to follow lower until more broadly the concern of a recession is put to bed or, you know, what happens here? >> it is really a tough one because you honestly have to look at a capital one financial and say, that's a cheap stock if we're not going into a consumer r retrenchment. >> guests talked about an industrial recession, even a small business recession. >> you have the rolling bear markets. >> not a lot of other planks to fall back on. the vote isn't just about angry status updates on facebook. it could also impact facebook's ability to make money. outside the u.s. it's not the only internet giant at risk. we'll talk about that when we

come right back.

welcome back. facebook, netflix, alphabet, all moving lower today. in fact, netflix was down 3.5%. britain's vote to leave the european union could mean years of uncertainty. julia? >> well, that's right. there's uncertainty about potential changes to tech companies prooif's privacy regular laces among other things. the uk has pushed the eu to take a lighter touch, regulating google and others, that the eu

might take a tougher stance of consumer data. brexit also brings big questions about risk to consumer as well as advertising spending and currency exchange. laura martin raising concerns about facebook and netflix profit projections. facebook generated about 24% of its revenue in europe year, warning that slowing demand are currency translation issues could hurt facebook's valuation. she cautions all the growth is offshore, raising concerns about brexit impact on demand for netflix as well as currency. jefferies estimates that 60% of netflix's international revenues come from europe and about a third of that from the uk. so, investors are keeping an eye on whether there is recession in europe and when that happens, whether it will impact the add spending and consumer spending and which companies will be best positioned to weather that out. back to you. >> thank you.

where would you be watching for kind of the tangible longer term outcome. >> first of all, i think netflix has had its challenges this year even before this. i think people are rethinking whether it's as special as we think. i would look at alphabet and apple to see if they can start to outperform on a given day. probably for sale not just because of european economic issues, but people own a lot of them and they're easily turned into cash, so that's what you want to see performance on those stocks. probably tell you maybe some of the selling is drying up. >> yeah. kate. >> yeah, i think that makes a lot of sense. i think the regulatory hurdles these companies have had, it will be interesting to see longer term because we're talking about a divorce that may not be finalized until 2019. it will be interesting to see if the uk becomes a more favor bable home to some of these companies, not that they won't want to do business in the eu. it will get more complicated to think through from a regulatory and legislative standpoint.

at the same time, maybe a new beach head in the european continent. might be more business friendly. >> drug maker, plenty of other companies are thinking through that same process. just want to update everybody. just add you know, kicking a dog when it's down here. england just lost to iceland in the european 2016 football soccer. >> what's here is that odds makers are broken. you had that upset, the nba finals and brexit vote. >> did you see the latest polls on trump? >> stocks sliding for a second day. after votes to leave the eu. will tomorrow make it number three?

exactly. welcome back. getting everybody set up for tomorrow. it's been two straight declines and big ones for the stock markets. here's the market today, down a percent and a half. 2.4% for the nasdaq. what are you guys watching tomorrow? >> the bank stocks are the epicenter of what's going on. clearly, wabt to see if they can stabilize. the currency markets is where this is playing out most dramatically. strengthen the dollar and overnight, want to see if china devalues heavily.

their currency again. that was the cycle in january and february. strong value. had a china response and people got upset about capital. >> and on kournsy note, sterling dollar can't be overemphasized. we've talk about these 10, 11% drop, but we were at 150 not a week ago and now, people are calling for 120 or 115 by year end. i wonder if year end is a longer time horizon. we'll see. and these bank forecasts are fundamentally sort of conservative. they want to be right. there seems to be lot of concern and we can see further weakness. >> couple of other aspects, too, here. the u.s. tenture, the benchmark won there. anybody try to get a mortgage right now, want to refinance, mike? >> it's amazing. becoming pretty much redefines what low is in terms of rates here in the states. i will say we're getting into month end quarter end, bonds have outperformed stocks.

>> what are the chances of us getting negative rates in the u.s.? that was part of the big stress test i reported on last week, but it could be a reality. >> turning in to forecast. thank you guys so much for joining us. that does it for us ch fast money begins next. >> "fast money" starts now live from the nasdaq overlooking times square. traders on the desk -- tonight on fast, european banks crashing to their worst two-day loss ever, but one market, several of those stocks are screaming buys right now. we're sitting down with the man behind that bold call. plus as the global markets, brexit bargains. we'll give you the names and later, the health of the auto industry post brexit. phil lebeau has a special report on with why it's not just the major auto stocks that could get hit the hardest. but first, another bru