pfizer down more than health care stocks. i don't think it is a big deal. >> real quick, back to the debate tonight, the one strategy post debate, all the fiscal spending, high government sales, that's what people will be looking at. >> loved having you. good show tonight. >> thank you for having me. so gracious. >> welcome anytime. jim cramer. "power" starts now. and we're all chasing jim cramer's eagles by the way. good afternoon, everybody. i'm tyler mathisen. here's what's on the menu for a very busy "power lunch." countdown to the showdown. t minus eight hours until hillary clinton and donald trump square off in the first of three presidential debates. we are live at hofstra university straight ahead. the call of the day, why one analyst says disney is no longer a slam dunk because of the nba. and breakout your knitting needles and diy picture frames. we're going to sit down exclusively with the ceo of pinterest, a big two hours ahead. "power lunch" starts right now.

thought you liked to crochet, tyler. welcome to "power lunch." i'm mellissa lee. mylan says profits are 60% higher than it told congress last week. we'll have more on that. new home sales falling in august, that drop coming in below expectations. and stocks continue to slide as we head deeper into the trading day. look at this, dow, nasdaq, s&p all in the red. major move higher in the price of oil. michelle? >> i'm michelle caruso-cabrera live at hofstra university in long island. as tyler mentioned, we're less than eight hours away from the biggest event of the political season so far. the first presidential debate with the latest polls showing a dead heat between hillary clinton and donald trump. what happens tonight could be a total game changer in the race for the white house. let's bring in cnbc's chief washington correspondent john harwood. lots of expectations for

tonight. what do the candidates have to do to win? >> lots of expectations, big event tonight. what does history tell us about how big it is, how much a difference it can make? let's look at what we have seen in some of the famous debates of the past. first of all, 1960. john f. kennedy debates richard nixon. john f. kennedy looks better than richard nixon, ends up winning very narrowly. debates might have made a difference, not entirely clear. and go to 1980, ronald reagan needed to reassure americans that he was a safe alternative to president jimmy carter who is very unpopular at that time. he did it, he ended up winning big. but reagan also had the momentum going into that debate. then look at 2012. barack obama had a lead over mitt romney who had his infamous 47% remark and lost ground. mitt romney won that first debate, he moved ahead in the polls, but the advantage was short lived. ended up fading and barack obama won a second term, of course. but here's the debate that may

have been most decisive and that is in 2000, when al gore faced off against george w. bush, al gore was a sitting vice president, he went into that debate as the experienced guy in federal policy, somebody who knew more on issues than george w. bush, but george w. bush emerged as a more likable candidate, and someone who is an acceptable alternative. take a look at the polling from gallop, very dramatic. before the first debate in 2000, al gore had an 8 point lead coming off a successful convention over george w. bush. after the first debate, that lead had been erased. after the second debate, george w. bush had a two-point lead. after the third debate, he had a four-point lead. now, he ended up losing the popular vote to al gore, but he became president in the head winds he got from those debate may have been an important factor. as for the job that each candidate needs to do tonight, donald trump faces an electorate where a majority say he's not

experienced and doesn't have the right temperament to be president. he needs to change some of those minds. hillary clinton is accepted by americans as someone prepared to be president. david plouffe said tonight, this debate tonight is 75% of the rest of the entire campaign. >> how will we know who's won? i ask that in the context of i'm the first to admit i'm establishment, right? when donald trump said what he said about john mccain, i thought it was over. and it wasn't. his ability to say things and do things that actually end up helping him, i wonder if we all sit there and watch tonight and say, oh, there was this gaffe or that, and ultimately it turns out we didn't hear them the way the electorate does. >> that's a very good point. and those judgments are susceptible not only to what we say, but what people say on social media. talked about that 2000 example a minute ago, when gallup poll

people after the debate, more of them said al gore won the debate. but al gore lost in the spin room. the bush campaign very skifl skillfully -- that hurt al gore badly. the difference between 2000 and now is that a lot of that xh commentary will begin on social media moments into the debate. how that consensus evolves, how it influences news coverage, how it influences voter reactions is going to be very big. >> social media is the new spin room, isn't it? >> exactly. what a dramatic change. go ahead. >> what are the campaign strategies for handling social media as the debate is unfolding? i imagine they have operatives, people controlling the message, helping to shape the message and there is a strategy going into tonight. >> well, it has been very transparent in terms of what the strategy is. the clinton campaign is going to be trying to make the case that donald trump is light on policy, that he lies, that he's saying

all sorts of things that aren't true, the trump campaign is going to portray hillary clinton as somebody who lies, she has a problem with honesty as well in the eyes of the voters. and they're going to try to present her as an overbearing know it all, just the way the bush campaign did about al gore, 2000, that was effective. we'll see how effective either side can be tonight. what we do know is that donald trump is close but he's slightly behind hillary clinton. he needs to generate some movement, get more voters than he has right now. and the voters that he needs are more likely to be college educated whites who were not his base in the primary. so the same things that got him that support among noncollege whites that intense zealous support may not be the same things he needs to do tonight to expand his base. >> his famous comment, i love the uneducated is reminiscent. i'm reminded of that. >> and they love him. >> so, yeah, they do indeed.

so are there ground rules we need to be ware of, number one. we know the moderator is lester holt of nbc news. and is there a framing of the content in the past, some of the debates on foreign national security policies, on the economy, on other things. is there that kind of framing tonight or is it just a free for all? >> well, there is, tyler, but the framing is so broad that i think it will be a free for all. the buzzwords that were put out to describe the content of the debate can encompass pretty much everything. now, i think that lester health, our colleague, we know he's smart, he's an excellent broadcaster. he's also a very decent human being. so i think his style, i think, is one of the least unpredictable things about this debate. he's been getting pressure from the clinton campaign, to aggressively fact check donald trump, the trump campaign says that would be inappropriate.

the debate commission sided more with the trump campaign on that. and said it is the job of hillary clinton to fact check him. so we'll see how that goes. but i think both of these candidates we know what they need to do, the question is under a microscope that is more exacting than any that they have seen, larger audience, 90 minutes of time, that's a lot of time to talk, how do they perform? >> john, exciting. thanks so much. john harwood covering it all day. be sure to watch cnbc tonight. we're going to have full live coverage of the first presidential debate 9:00 p.m. eastern time. don't miss it. let's turn to the markets here as we count down to tonight's debate. stocks lower. dow down triple digits now. close to session loews ws on th s&p. to dom chu. >> a lot of the buzz so far today has been about the debate and what john harwood and what michelle caruso-cabrera, you guys were just talking about. that's going to play in a little bit of the narrative. it is not all about the debate

now. we're seeing some strength and weakness in the places you suspect to see them. first of all, with the dow down 137 points, you're talking about near the lows of the session, hovering just above there. with regard to the outperformers, you got energy. probably one of the positive sectors, if not the only positive sector out there. utilities and reits, those interest rate sensitive stocks that tend to hold up better when the markets go down, they're outpacing the overall market as well. health care, financials and technology among the biggest laggards today. kind of a little bit risk on, risk off, if you want to look at it in those particular terms. one of the other things we want to talk about today, it is not about the down market overall, you got a big deal here for the exchanges. this is cboe holdings going out and buying bats global markets. not a massive deal, $3.2 billion is pretty sizable. in this case here, you've got cboe buying them for a mix of cash and stock. works out to be $32.50 for each share of the global market. still, debate narrative plays in

the trading, so does the price of oil. we'll see if the volumes pick up into the afternoon part of the session. back over to you. >> dominic, thank you very much. so up next, what wall street is watching ahead of tonight's showdown. debate, the election. and your money straight ahead. the clock is ticking. the anticipation building. "power lunch" will be right back. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. ♪ yet a lot of people still build portfolios with strategies that just track the benchmarks. ♪ but investing isn't about achieving average. it's about achieving goals. ♪ and invesco believes doing that today requires the art and expertise of high-conviction investing. ♪ translation?

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welcome back to "power lunch." i'm seema mody.

shares of nike falling 2%, making it one of the dow's worst performers today. jpmorgan cutting the nike price target to $62 from $67, blaming softer north american trends. it comes hours before the sports apparel brand is due to report earnings. wall street is expecting nike to earn 60 cents a share, 11 cents less than the same time last year. the company has been facing stiffer competition from brands such as under armour and adidas. back to you. >> seema mody, thank you. we have a news alert in the bond market. two year notes up for auction. let's get to rick santelli. how did it go, rick? >> it wasn't a very notable auction in any regard other than average weakness. i gave it a c minus. charlie minus is the grade. 26 billion two year notes hit the streets moments ago. the yield at auction, .75. 3/4 of 1%. if you look at the metrics, 2.65 bid to cover, pretty light.

the only metric that was remotely above its ten auction average and not by much was direct bidder at 19% versus 18% ten auction average. dealers take a rather large 44.4% primary dealers of the auction. so c minus tomorrow fives followed by sevens, an important auction, but longer maturity, the more important. back to you. >> rick, thank you very much. stocks are jittery ahead of tonight's debate. the dow down triple digits, let's bring in julian emanuel and jonathan gollof. great to have you here. let me start by asking, is there anything tonight on the debate that could really destabilize the market? i can't think of two candidates we know better than these two. we're familiar with them. >> well, so our expectation is, if you look at it factually over

the last month, the uncertainty has begun to build. and by most tally the uncertainty between these two is really at about the maximum point. we don't think that there is going to be any more resolution of that uncertainty tomorrow. and by that token, we think the markets could continue to be under pressure. >> a choppy and maybe down pressured market over the next few weeks. >> entirely possible. >> jonathan? >> a couple of weeks back, donald trump stood in front of the economic club and laid out what seemed like a very centrist conservative republican platform for growth. almost sounding like ronald reagan in the way that he talked. and i was really surprised at how well it resonated with big institutions who were there to hear that. this will be the first time tonight that he may lay out that kind of plan for the american people and whether they buy it the same way. >> you think the risk is to the upside then, if he continues to lay out the centrist plan, that

america could actually go for it and the markets could go higher? >> his story was, it sounded like jack kemp was talking, less regulation, lower taxes, don't worry about it, you'll make it up in growth, so there won't be any larger deficits. and so i think that we haven't yet heard that rolled out to the american people. that may be the surprise. hillary clinton made other comments which are pro growth, but this may be a big issue for the market. >> let's take it out of the political context and put it back in the economic context. are earnings likely to be -- is the economy right now strong enough to justify stock prices at the levels they are? >> the economy is strong enough, we think so. what we think is the disconnect is that expectations for 2017, which is running approximately 14%, we're closer to 6% are too

high. >> future expectations. >> noermally that wouldn't bothr us too much. where risk is low as measured by the volatility index, when you have political uncertainty, when you have an economy that, again, looks okay, but just chugging along, and you've got issues in europe as well, we think it is the conditions for applause are here. >> some might argue that allows people to stay in the markets and stay long the stocks, might revise lower because they can buy the protection or participate via options. that could actually -- it is actually a good thing. that's part of the reason why stocks are at these valuations right now because volatility has stayed so low. >> normally we would see that, melissa, but what we have seen over the last course of the summer is actually people are selling protection to go for yield rather than buying it at these low levels and that's a concern to us. >> jonathan, what do you think about earnings and are earnings going to be strong enough to

justify, where are we 2150 on the s&p, where do you see it at end of the year? >> and i'm kind of in the camp that julian is in that i think we're in a generally weak earnings environment. next year's numbers are too high and they'll come down. but the reason the stock market has been ripping really since february has nothing whatsoever to do with corporate profits. the fact that the total yield, dividends and buybacks is almost a 5% yield in an environment where interest rates no matter whether you look at corporate bonds or government bonds are just substantially low. so as long as you don't have something blow up in corporate earnings, it is more than enough to keep stocks moving higher. >> in terms of sectors, tonight with the debates, we'll be watching financials and health care tomorrow. you say the health care is overly discounted the political risk, even on a day where we're continuing to get more mylan headlines about overstating profits to congress last week. >> it looked -- the fact is is that whatever the makeup of government is going to be next

year, it is very difficult to enact legislation to regulate the sector. but at the same time, earnings expectations for health care are actually below that of the s&p for the first time in a number of years while valuation is at 25 year lows. >> so you would buy? >> yes. >> jonathan, did i hear you right, you seemed to suggest that the reason stocks are as high as they are, is because of financial engineering. >> it is not financial engineering. what you have is that stocks right now are spitting back a ton of capital back to shareholders. whether it is a dividend or buyback, companies are taking a lot of capital and returning it to the marketplace. the dividend yield on the market is 2.2. ten-year bond yield is way below that, that's not engineering. companies are buying back shares. not issuing debt because 100% of the buybacks now are covered by free cash flow from operations. so in that world, where so much

capital is being returned, stocks just looked too -- they looked undervalued for what they're delivering and so you can call it engineering, but i don't think it is. >> okay, thanks. appreciate it. jonathan, good to see you. jonathan and julian. up next, talking oil rigs, medical marijuana and one mountain of the mist. good, bad and just plain ugly. why disney is no longer a slam dunk investment. we have the call of the day when "power lunch" returns.

welcome back to "power lunch." time for the good, the bad and the ugly in today's trade. first to the good, gw pharma. the company developing drugs from the nonhigh inducing part of the cannabis plant. that's the part that gets you, you know. it is up 11%, no more than that. 16% on phase three results, phase three, in a rare brain disease. on to the bad, veil results, that stock under pressure after the company reported a bigger than expected loss for its first quarter at about 2%. and from bad to ugly, an ugly day for deutsche bank, look at that, the shares hitting record lows with investors fearing the

bank will have to raise capital after the justice department reportedly proposed a $14 billion fine. that was a couple of weeks ago, relating to an investigation into mortgage backed securities. right now, down 7%. melissa? >> tyler, shares of disney are down 1% right now and more than 12% so far this year. drexel hamilton downgrading the stock today saying it is no longer a slam dunk investment as a new nba broadcasting deal takes effect. joining us on the phone, analyst behind that tony wibel. great to have you with us. >> thank you for having me. >> the primary driver is that nba renewal but it sounds like the nba renewal cost was a straw that broke the camel's back. you have a litany of other reasons why you don't like disney right now. >> yeah. it is a big component. it is not entirely unknown that there was an increase. we think there is a chance the increase is bigger than people are thinking. but i think the bigger issue here is actually cable operators starting to integrate more

digital offerings into their set top boxes. i think that could kick off a second vicious cycle in media as we're talking about it. as programming on netflix and others show up side by side with programming on cnbc. i think it is more disruptive to some of the tv networks. in addition to that, we think of china as a drag on some of the earnings for the foreseeable future and think the company will have some very difficult studio comps next year and has a couple of questionable movie releases. >> you also question the health of the ad market and i'm wondering given the news about facebook, overstating how much time people are actually watching the ads, if you have further doubt on what companies like a disney can actually charge for ads. >> well, i think we started to see that migration, you know, last year. we saw some people betting more heavily on digital and we saw some results from some of the companies that their sales weren't as strong. i think there is money going back to traditional tv. it is leading to a relatively healthy scatter market, up-front

market right now. we wonder if that's a one time rebalancing rather than some kind of secular improvement. for the record, we think both digital and broadcast advertising complement one another and it is really not a mutually exclusive spend. at the end of the day, one does a good job reaching a large audience, the other does a great job at targeting. >> we'll leave it there. thank you for phoning in. appreciate it. the countdown continues to the first presidential debate of this election season. coming up, we'll take you live out to hofstra and show how the campaigns are prepping for the big night straight ahead on "power lunch." >> i am not going to exploit for political purposes my opponent's youth and inexperience. ♪

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hello, everyone. i'm sue herera. here is your cnbc news update for this hour. the u.s. charged four chinese nationals and a chinese company with using front companies to evade u.s. sanctions on north korea's nuclear program. the justice department filing

criminal charges against a development company. u.s. secretary -- rebutting allegations by iran. speaking at a news conference during the international atomic energy conference in vienna, he argued the u.s. is already lifted all the sanctions. >> this was an agreement in its nuclear dimensions focused exclusively on the issue of a peaceful nuclear energy program. the flip side of that is that the sanctions relieved were specifically the nuclear sanctions. and that's been done. hyundai's south korean labor union staging its first full nationwide strike in 12 years. it is over wages. the full day walkout coming after a series of partial stoppages since july. and a farmer in northwest england, look at those guys, has spray painted his 800 sheep

orange to prevent the sheep from being stolen. he's hoping that the thieves might think twice now that the sheep are so easy to spot. that's the news update at this hour. orange you glad i brought you that story, melissa? >> pulling the wool over the eyes. >> pulling the wool over your eyes, exactly. >> can we show the tape again? imagine if they don't actually change colors back. >> i would be running if i were an orange sheep. la look at that. >> thanks, sue. poor little guys. major indices lower across the board ahead of tonight's presidential he did bait. the dow is now down by 154 points. nasdaq down by .9%. 46 points to the downside. s&p down 17. we're pretty much at session lows. we should note that in terms of sectors, financials are just off the session lows now. we're watching wells fargo drift to the lows of the session. and approaching its 52-week low.

financials down by 1.6%. health care also another one under pressure, down by 1.25%. "power lunch" is back in two. it's me, arty! come see what i collected from the creative galaxy in my idea box. would you help me make art? ♪ each one of our journeys ♪ keeps us young hey, i have an idea! ♪ we'll never get older... arty: go be amazing! amazing! announcer: give your cardboard box another life.

welcome back to "power lunch." the 13th annual ad week conference under way in manhattan, we have a big rare interview to bring you. let's get to julia boorstin who joins us with the pinterest ceo in a "power lunch" exclusive. >> thanks so much, melissa. ben, thanks so much for joining us. i know you very rarely do an interview. we appreciate you taking the time. the big question is brands have so many options of where they should be spending their ad dollars. why pinterest? why are you guys different? >> the way our users describe pinterest is the catalog of ideas. they used to figure out what they want to eat, what they want to wear, what they want their home to look like. pintereoininterest is a little . >> who do you consider your biggest competition and what are you doing to stay ahead?

>> in some ways the biggest competition is we're always fighting for people's time. so many entertaining things that you can do on your phone, play games, use social media sites. so the way that we compete is we try to get really good at giving you specific ideas you can actually do in your regular life. >> in terms of advertising dollars, what can you give brands that is different than being on a facebook or google, which are considered the two behemoths in the digital space. >> two things. first is, you can give them an audience of people that are there specifically looking for an idea out there in the future. these are people that may not know exactly what they're looking for, but they have some inkling, you reach people that are open minded. second, unlike a lot of social platforms, since people are there looking for ideas and not to talk with their friends, they don't have to pretend to be the best friend, they can say here are the goods and services we offer and it fits in naturally to the platform. >> your sole revenue stream is advertising revenue.

sometimes video, sometimes just regular posts. you also have a lot of e-commerce happening on the site. what are you going to start taking a cut of the e-commerce revenue? >> the reason we built e-commerce was just to help our users out. our users told us nothing is more frustrating than finding something you want to buy and not being able to go out and get it. our philosophy has been that if we make that behavior valuable, that value will flow into advertising products. we don't want to do anything to restrict or discourage people from adding e-commerce inventory. we believe people are there buying, that will make the advertising products we have that much more valuable. >> the e-commerce is about driving more ad revenue. what are other potential ways you can generate revenue as a business? >> we're focused on advertising as our core business. but we see lite of different forms that advertising might take. we introduce the things like video ads. what is interesting about that is you have the option to attach specific products or services. so we're really innovating on

two fronts. trying to make it easier to target people that are really actively open mindedly looking for things and then trying to build better tools to let brands and companies tell their story. >> how do you reassure brands and companies that their ad dollars are really working on pinterest? >> the million dollar question. we invested really making sure that they have measurement and you can understand pinterest driving sales online and driving awareness and sales offline. that's a big focus for the team this year and going forward. >> you announced 100 million users about a year ago. i don't know if you can update the number oz or give us a sense of how big the potential is for pinterest? will you top at 300 million users like twitter or potential to be as big as facebook? >> i think of the service that pinterest provides, it feels like a service everyone can use, everyone thinks about what do i want to go on vacation, what do i want to wear, what is my home going to look like. we think of those as universal services. this year, especially, we focus our growing international brand.

we focus on western europe, brazil, japan. big milestone for us that we announced earlier is there are more users outside of the u.s. rather than inside. >> the valuation is $11 billion. what are you planning to go public and do you think you'll be able to go at a higher valuation than 11 billion? >> we don't have any immediate plans to go public. we're focused on building a sustainable business. we have been fortunate how we're well capitalized and we're generating revenue. so i feel like we focus on building a good business, hopefully the rest will take care of itself. >> looking at what is going on in the public market, is there some big success stories with ip ox os. >> i that i we really want to have an independent company. but i don't know. i don't have any better insight than anyone else. >> i'm a pinterest user. i'll continue using it as you work to that eventual point. thank you for taking the time to talk with us. we hope you'll come back again soon. back over to you. >> julia, thank you very much.

lands end down big today after its ceo of less than two years says i'm out of here. we'll tell you about the latest big retail shake-up ahead on "power lunch." >> senator, i served with jack kennedy. i knew jack kennedy. jack kennedy was a friend of mine. senator, you're no jack kennedy. a great night's sleep. s

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at bollandbranch.com, promo code: tv. less than two years after taking the top executive role, lands end ceo has resigned. so what prompted the shake-up? here is courtney reagan with more. this was the company that was owned by sears, bring in a new ceo to shake it up. shake it out. >> that's right. that's a good line. it is always a little bit of a mismatch. federico came to lands end from dolce gabbana and ferrari. she was asked with transforming lands' end into a global lifestyle brand. but sales have been falling for eight straight quarters. her big push, relaunching the more upkascale canvas by lands' end. it looked more like club monaco. pricey too. $150 for a pink suede stiletto.

a little too far from what shoppers think of when they think of lands' end, that potentially could be part of the problem. there are still those flannel shirts and more traditional merchandise that you can find there. but something like that just hasn't worked yet, at least not enough perhaps. >> pink suede stilettos at lands' end? >> yes, i know. >> i don't buy mine there. >> a lot of women that would want those don't go there. >> i'm not saying where i get my pink suede stilettos. >> that's the problem. if you're in the market for them, are you going to lands' end? >> no way. >> they did a lot of marketing in fashion magazines, nice big pullout spreads and i covered it up here for a lot of the producers here, the labels, and said who do you think this is. some of the guesses, club monaco, no one said lands' end. >> too far as far as standard deviations. with the ceo out, is lands' end in play at all? could there be somebody that could step in and buy this? >> that's a great thought. i think potentially you want to hang on to what the brand is and

always has been. there is value there. maybe not growing into something you would love to see, but there is still value in the basics. and so you suggested before, pvh, other brands. >> ll bean? >> perhaps. those are so close that i'm not sure that you could exist those two brands separately and still grow them. but those are good thoughts, for sure. >> okay. thank you. >> thank you. let's get to the market flash. what is moving right now. seema? >> it is the financials getting hit hard. they're the biggest laggards in the market now. jpmorgan and goldman sachs are the worst performing stocks in the dow. investors assess the recent comments from fed tarullo about the fed seeking more capital from the large u.s. banks and getting a better hand as to how big the european banking sector and the carnage we're seeing there will impact some of the big name over here. >> thank you, seema. we should note that deutsche

bank just hitting fresh session lows which are basically fresh 20 year lows at this point. thank you, seema. back to michelle caruso-cabrera live at the presidential debate site. michelle? >> just about seven hours away from the start of the first president ideal debate of 2016 coming up. we're going to talk to former michigan governor jennifer granholm about how she helped vice president biden. and hillary clinton's national press secretary just sat down. joining us right after the break. good to have you here. announcer: don't let e. coli

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welcome back to "power lunch." closing in on seven hours until the first presidential debate between hillary clinton and donald trump. how is hillary clinton preparing for tonight? joining us now, brian fallon is hillary clinton's national press secretary. good to have you here. >> thank you for having me. >> she faces a antipathy. does she try to make people like her? >> during the course of the campaign, we find it is difficult to breakthrough with your affirmative message. she talks a lot on the trail about what she wants to do for the country and what her motivations are, why she's running. in the back and forth of the

campaign, sometimes that doesn't always rise above the din. we're looking forward to tonight because we'll have an unfiltered opportunity to communicate to maybe 90 to 100 million people and so she is going to take that opportunity to communicate in an affirmative vision. goal number one, two, and three is to be positive and take her affirmative message to the public about what she wants to do in terms of the future of the country. >> john harwood says the campaign has been pressuring the moderator to do some fact checking when it comes to any statements that donald trump makes. regardless of how that comes out, it sounds like something out of a playbook that hasn't worked thus far in the campaign. >> i don't know about that. i think that increasingly the media has done an exceptional job of calling out donald trump's lies. at the commander in chief forum that happened earlier this month, he was sort of not challenged when he said that he was against the intervention in iraq and then pretty much the media altogether in sort of a

holistic fashion rose up and said that's just not true. and similarly a couple of weeks back, when he tried to deny his role in promoting the birtherism conspiracy there was also fact checking of that. >> and since both of those instances, the momentum has still gone this way. people are waking up to see a headline in the washington post that says they are neck and neck now. >> well, we do agree that the race is close. and i think that in august we had had a lead that approached nine to ten points in some of the national polls, we never really believed that properly reflected the state of the race. what happened was we had a big bounce out of our convention. he proceeded to sort of have some self-inflicted wounds by going after the khan family. i think that extended the honeymoon unnaturally and now you're seeing the race reset to its natural equilibrium. this is a polarized country and it is the rule rather than the exception for presidential contests to be extremely tight.

>> is that your hope for tonight, she comes out, sticks to the knitting and he does a self-inflicted wound. >> i think that while we have been preparing in our strategy sessions for multiple trumps, different versions of himself that he might try to present to the voters tonight, i think if i had bet at this point it is looking more and more likely that we're going to see a subdued donald trump, somebody that comes out and might even try to be gracious in his opening statement. just to sort of throw a curveball and get people to see him in a different light. but it has been a year and a half now of this campaign. we have seen donald trump for who he really is, that bombastic erratic person we can't trust to have the temperament to be commander in chief. i bet you his advisers are trying to show a different side of him tonight, but that -- if he does come out and act that way, that can't be the bar for success. needs to be detailed on policy and level -- >> tyler has a question for you. >> secretary clinton's weakness

is a gap on trustworthiness. how does she address that during the context of a debate, just by saying, hey, i'm trustworthy. how does she reverse that or erode it? >> i think she has to communicate her values tonight and she'll try to do that. i think that sometimes on .stump, doesn't always make the evening news in the context of the back and forth of the campaign, but she talks often about as a young girl seeing her mother who is somebody that was abandoned at age 14 and ended up working as a house mate, never had the opportunity to go to college and was devoted to helping make a better life for her, hillary clinton, and i think she sees somebody who never had the opportunity to fulfill her god given potential. she wanted to create that opportunity for everyone else. that's why she's in this race. i think she'll try to communicate that tonight. >> why do you think she has an issue with lack of trust by the american people? >> couple of things.

number one, she's been in the public eye for a while now, fighting these fights and in the context of that, she's had political opponents that have tarred her with a lot of untrue allegations. she acknowledged she could do a better job communicating. she said pretty frankly that when it comes to public service, the public aspect of it always comes less easily or less naturally to her than the service part. i do think every time she's had the opportunity to serve the public in a high profile job, she's acquitted herself extremely well and made the country proud. the campaigning part of it, the poetry part of the campaigning she has said comes more naturally to her husband and president obama. >> in the theme of self-inflicted wounds, though, for example, nearly fainting at the 9/11 -- the first story, the second story, the third story, there seems to be a constant issue with what is the truth at the moment. just like we talk about donald trump's self-inflicted wounds. aren't hers self-inflicted as well? >> i think we have tried to

address that over the course of the campaign. and that particular instance that you mentioned, that was really a staff miscue. we should have been more up-front and quicker to get information out about the state of her health, we try to do that as soon as we had an official diagnosis from a doctor later that afternoon. but i do acknowledge that i think that we heard ourselves -- that's on us, not her. >> brian fallon, thanks so much. be sure to tune into the debate tonight, expect unprecedented ratings. back to you. >> all right, michelle, thank you. to seema mody for a market flash. >> want to draw your attention to shares of twitter. we're seeing a lot of volatility in that stock on a report from bloomberg that disney is set to be working with an adviser on a potential twitter bid. this, of course, follows weeks of speculation of twitter potentially being taken out. the stock was down as much as 4.2% on the day. but as you can see, higher now

by around 1.3%. also worth pointing out that jack dorsey is on the board of disney and he will be speaking later today at a conference. back to you. >> thank you very much, seema mody. twitter was moving lower on downgrade from oppenheimer and the 21% gain made in friday's session. shares of disney. under pressure today from its own downgrade. we spoke to the analyst about that downgrade. but we are seeing disney shares take a leg lower here. it hit session lows on this report that if you're just tuning in, disney is interested in -- is in takeover talks with twitter at this time and perhaps, tyler, the ties between twitter and disney and specifically espn with football now are closer than ever. >> other than that, maybe i just don't get twitter. i can see that i probably don't get twitter. i don't intuitively see the fit other than the fact that espn and streaming and twitter and

streaming seem to be flowing into a similar river there. other than that, i don't know why -- i can think of other companies that would be a more natural fit for twitter than disney. >> this is an interesting one and it is moving the stock, so we'll keep you posted on this. meantime, let's get the traders take on this market slump, steven guilfoyle joins us from the nyse. a lot to unpack today. steven, i'll start off with you. how big of a deal is the debates, that's a rhetorical question versus let's say deutsche bank, a drag on the financials. >> deutsche bank is the bigger deal right now. tomorrow as -- let's say energy stocks, let's say health care stock, in those sectors the debate will be a big deal. the perception of who won the debate who got the better of who could impact those sectors. for today, the financial sector is the led on the way down. deutsche bank is a big story. for u.s. banks got to worry about things like counterpart risks and things like that. >> does it introduce in your view this notion that we had

before when commodities were at their lows and deutsche bank shares were also at their then lows that there is some sort of systemic risk because of what is going on in the european banking sector? >> certainly there is some systemic risk. we have seen this before. go back about ten years. things unraveled pretty quickly. so where there is smoke, there is fire. that's kind of the impression that we're getting down here. oil has been a leader for so long, oil is up today, seeing the market down. some of the sectors that steve mentioned, talk biotech, biotech under pressure, that's debate related. the big banks are a major focus, rock solid over the last couple of weeks. today, seeing profit taking and all of it is based on the deutsche bank. >> health care, second worst performing sector today. "power lunch" will be right back.

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i'm mellas why lissa lee. gearing up for the showdown of the century. what they must do and not do at the debate. the two sectors in the cross hairs. and mylan's latest mess, the new outrage over the epipen. second hour of "power lunch" begins right now. >> good afternoon, everyone. welcome. i'm tyler mathisen. that second hour of "power" begins with markets in the red. rather significantly. more than .75% on each of the three major barometers that we track for you here. the dow could post back to back

triple digit losses for first time since the two post brexit days. back on june 24th and 27th. right now, down about 151 points. oil soaring more than 3% as opec holds an informal meeting over in algeria. in the headlines, yahoo! in the cross hairs of congress. senator mark warner of virginia asking the s.e.c. to investigate yahoo!'s hack attack. that affected 500 million users. one of the largest hedge funds in the world will stop charging a management fee. brevin howard cutting some fees to zero for some clients of its flagship fund. that fund is down 2.5% this year. and pfizer plans to remain as a single company deciding not to split its established and new medical lines into separate businesses. michelle. tyler, i'm michelle caruso-cabrera live at hofstra university in new york. we are seven hours away from the

highly anticipated president ideal debate. that's between hillary clinton and donald trump. what do the candidates need to do tonight? let's bring in jennifer granholm, and cnbc contributor sarah fagan. good to have you here. govern governor, let me start with you. if and when donald trump calls hillary crooked hillary, how should she respond? >> well, she knows it is coming, right? so she's not going to take the bait, i'll say that. >> michelle, i -- i can jump in there, i think there is an audio issue with the governor, but i think what should happen -- what hillary should do is ignore him, laugh and play it off like there is just donald being donald. that's the smart way to approach it. ultimately, you know, pivot to something very substapt intivsuk about her plans for the country and that's how i would do it if i was -- that's how i would

advise the clinton campaign if i was working with them. >> governor do you want to add to that? we're not having an audio issue, the governor is outside where it is busy and noisy. what would you say? >> sorry about that. there is planes overhead, all sorts of things. but so i think that sarah is right, she shouldn't take the bait. she can laugh it off, but she can also pivot at some point. not early, but at some point pivot to his trustworthiness in light of all of the recent articles this weekend, rating him as being the most untruthful politician that the fact checkers have ever rated. so she's got that in her back pocket and she is rated along with president obama as one of the most truthful politicians in the fact checking that has been done. but -- >> the perception -- >> i get that. >> it is very different, right? >> of course. and that's why she's got to come back and tell people this, right. so, of course, because they

spent a lot of time calling her crooked hillary and all sorts of -- but i think that sarah is right in this. we have got to see her take it high, take us to the -- tell us why, what is your passion about why you're running and who you're fighting for, fighting for the people on the other side of the cameras that are watching tonight, fighting for single mom out there who feels like she's going to -- all of that, she's got to express the reasons why and the vision she has for america and i think she'll get a chance to do that tonight. >> i'm the first one to admit i'm establishment, i'll go out on a limb and say you are too. i wonder if a lot of the media is going to finish the night and not know who actually won because donald trump said things in the past that traditionally would have ended a candidate's run and yet he still is here. are we at this point able to hear what the electorate hears? >> i think it is a great point, michelle. you know, you look back at the primaries and i was certainly

someone who didn't think donald trump could win the primary. he did it. and if you -- we had all looked at the polls for six months, they told us that donald trump was going to be the republican nominee. and hundreds of analysts ignored them. the polls today show the race tied. they show donald trump tied in pennsylvania colorado and even wisconsin which hasn't gone republican since 1984. so i think that this race is donald trump's and hillary clinton's equally. and all donald trump has to do tonight is not make a mistake. that's all he has to do and this race will remain -- >> that's what's so unfair. >> it is actually not unfair. it is not unfair. >> governor, go ahead. governor, go ahead. >> tonight, so hillary clinton has done everything right in terms of tonight. she's prepared. she's going to walk in and people will talk about her

pantsuit or talk about whether she's smiling enough, not smiling enough, too harsh or is her answer fully and perfectly formed. donald trump walks in and if he stands there and looks presidential for 90 minutes, just looks, doesn't have to talk about it, then people will say, whoa, he's presidential. that is what is unfair. >> sarah, sarah, there is only one -- there is only one fair in life, it is the state fair. >> that's right. women who have climbed the corporate ladder, watching this program know that life is not fair. and you have to rise above that to be successful and donald trump is not a politician, he has not been on the presidential debate stage like he will be tonight ever before. she has. and so in that regard i do think it is fair to say that if he comes out, doesn't make mistakes, doesn't get himself in a gaffe blunder situation, verbally, that he will have passed the test.

and may not be fair, but that's the reality of the situation. >> on behalf of every woman who has been in those corporate board rooms, who has worked twice as hard to be considered half as good that is not fair. >> so three women having this conversation about the way women are treated, i think when you look at the demographics, the way the polling is going, there is a lot of white men out there who look at the screen and think she doesn't like me. she doesn't like me. i don't like her. >> i think that's right. i think they look at her policies as, you know, anti-middle class. if you're a working class person, and we heard it just last week, when she referred to some of donald trump's supporters as deplorable. these are people who are trying to make a living, they may not have a college education, and they don't want to be called deplorable or racist or bigoted

for supporting someone they think is the change agent in this campaign. >> that is twisting what she meant. she was referring to the people in his campaign who are there because they are from the white nationalist segment of society. that's what she was calling deplorable. the david dukes. that is deplorable. for the middle class, she is the one who has this comprehensive plan about small business, she wants to be the small business president. about infrastructure. the biggest investment in infrastructure since world war ii. about energy jobs, clean energy jobs, about investment in research and development, she has an extremely comprehensive plan and particularly about manufacturing, good being able to manufacture in the united states and what policies are necessary to make the u.s. irresistible to manufacturing. her plan, i'll be interested to hear his tonight. >> that's been the story the

whole time and yet the momentum has thus far been going his way. ladies, it will be interesting. thank you for joining us. mu much appreciate it. be sure to watch cnbc tonight. we're going to have full live coverage of the first presidential debate 9:00 p.m. eastern time. tyler? >> thank you very much. let's look now at how to trade this election with real money. the binary options market predicted. founder and ceo john philips joins us with the latest trades. welcome. good to see you again. what is your market telling you right now about the relative probabilities of the two candidates? >> it is interesting. you know, the market and traders in the market of which there are approximately 40,000 who have traded almost a third of a billion shares since inception at the end of last year, at the end of 2014, these traders are

saying that the chances have not changed that much. they have for donald trump, it is a 39 cents, where he's been for a while. that's on 6 million shares traded. the year to date low for trump was five cents on february 1st. and the high was 44 cents on may 26th and 27th. the post convention average for trump has been 31 cents and pretty much stayed there. hillary clinton, by contrast, is trading at 62 cents. 62 cents for the chance to win a dollar if hillary is elected. it is a real money binary outcome stock market on politics. so there is total volume of 4 million shares traded on clinton. the year to date low for her was 37 cents on january 12th the high 79 cents on august 10th. >> so can we say based on what you just quoted to me that the momentum seems to have moved a little bit in mr. trump's direction and a little bit away

from miss clinton, that's question number one. >> i think the answer is yes. it is drifting -- there has been some drift towards trump in terms of the pricing, but you don't see these great big swings of a state flipping or a -- the outcome flipping the way it has with certain states, which is interesting. >> i'm interested in not the -- i assume the prices are set in part by the volume of money that is placed on one side or the other side. not the volume of individuals who may be doing something. i'm reminded of the brexit betting that was taking place. a lot of the betting was indicating that the stay contingent was going to win. but that was being maneuvered -- it was saying that, not because most people were betting that way, but because the big money was betting that way. is that what happened here? >> well, tyler, remember, in the

case of brexit, which was actually predicted its third highest trading day since inception, there were london betting exchanges where there was no limit how much an individual trader may put in. there is an $850 limit on any market a trader wants to go into. so you can have -- you can have a multimillionaire trying to tip the market one way or the other. he can't influence more than 850 bucks. >> that's not happening here. >> it is not happening here. in fact, it is the -- what this large number of traders think is going to happen. >> in addition to just simply betting on the candidates, there are all sorts of other things that one could bet on when it comes to the debate such as trump not expected to say crooked hillary in the first debate, no mention of pneumonia by the moderator. have the odds moved higher that these things will happen? how do we interpret the prices? trump is not expected to say crooked hillary. 37 cents is the bet. >> it means 37% chance that that

will happen. but i have to tell you, i don't know what -- how to project what is going to come out of the candidates' mouths. the interesting thing to-like at is -- what people are looking at is -- are there any gaffes, is there that gotcha moment because how these markets and if you're watching the market tonight, the predicted market tonight, you'll be able to see something reflected in the market pretty quickly if there is such an event. >> john, thank you. >> thank you very much. >> stocks continuing to slide at this hour. let's get to dom chu. >> i was listening to the interview you just had. i asked a number of floor traders about what they think about the elections and what is going to happen with the debates tonight. a lot are saying they can't really tell if it is going to have a huge impact on the markets right off the bat for this particular one. we'll have to wait and see what happens tomorrow. the general consensus among many of the folks here and, remember,

this is a small microcosm, floor traders at the stock exchange, but they don't believe generally speaking you'll have a massive market movement just because of anything any one candidate says. that's something to watch there. with that being said, we are near our session lows right now, albeit not an excessively high volume. i will point out, though, that ten-year note yields for treasuries are now near their lowest levels since we saw earlier this month, about 1.57%. we're hovering right around that level right now, so we're watching interest rate sensitive is sectors like what is happening with utility stocks and real estate investment trusts, outperformers on a regular tiff ba relative basis. as we talk about the rest of the afternoon trade, we're going to see if volumes pick up, not excessive, right now to the downside, however, we watch all of that, and what is going to happen, guys, with the debate. back over to you. >> thank you very much. coming up, the thing that mylan ceo told congress last week that wasn't quite right. mylan's latest headache is next

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mylan shares under pressure again. the embattled pharma giant claire fight numb clarifying numbers it gave last week. this all has to do with taxes. >> it does. so a lot of people asking questions about the profitability of the epipen. in the congressional hearing last week, mylan ceo testified the epipen brings in $50 per profit for each pen. you can hear in jason chaffetz, the chairman of the committee's opening statements, he was skeptical. >> they're here to tell us that they make about $50 profit, which i find a little hard to believe. that's why i think it is important. >> being raised here today. what exactly went into the profits? the wall street journal out with the story citing numbers that mylan filed with the s.e.c. saying the profit number took into account a u.s. tax rate. without that tax rate, the

profit would have been a lot higher. you see we had a statement from mylan, they say that it is appropriate to include the tax rate, that is standard for any profitability analysis. they say the information they provided to congress has made clear that tax was part of the epipen auto injector profitability analysis. they say it is appropriate to include the jurisdiction, the tax rate from the u.s., in the analysis. but a lot of people raising questions today about whether that was the appropriate number to include. and the fact that in the hearing taxes weren't talked about as part of the profit. >> so this is a company inverted. so let's pretend that their tax rate is somewhere south of 37.5%. >> 7%. >> it is 7%. more like 7%, 7.5%, right? if they apply this tax rate which many believe is their tax rate for the united states sales of epipen, that means that number she gave to congress is too high. >> the number she gave under that scenario, under that scenario would be too low. they were understating their profits. and it should have been, according to the wall street

journal, they didn't include the tax rate at all, 16 $160. the wall street journal quotes an analyst saying that they shouldn't use 37.5%. >> let's bring in ronnie gow. great to have you with us. >> hi, melissa. >> you like mylan here. is that correct? you recommend buying it? whether or not this number is correct, it is too low, too high, put that all aside, she went in front of congress and presented this number, which is now being disputed which really gets to her credibility, doesn't it? >> yes, it does. this is a bit of a media storm. so, you know, things come out, not always how you look at it in a calm moment. we had 35% as a tax rate for epipen before this announcement came out. and regardless of what you think about epipen and what mylan has done, it is about 20% of the

earnings off mylan, the stock went down from 50 to 40. so in our review, it is like we essentially -- current valuation takes out the epipen of the stock and when we look at the feature of the company and the product launch, we are quite positive on the trajectory. >> i think you had a note out recently saying there was concerns the company would have to revise down its earnings guidance because of all of the rebates and the generic introduction. how do you factor that in? >> we figure they'll sell the pen for 200 bucks and still have a segment of the market using the branded pens for more than that. but that will mean they'll lose half of the profits of the product. with that decline in profits, especially for 17 and 18, right now looks unrealistic so we expect some point the company will have to address that, maybe on the upcoming call and have to

revise down guidance for this year and likely for the next -- for the next three years. >> what is the average selling price of an epipen? >> that's actually tougher question than you would think. >> i bet it is. >> so if you're under insurance, the company -- i think mylan makes in our estimates 360 bucks. but when sell it in bulk to places like schools and hospitals, they probably make between 100 and $150 per pen and that's normal way business is done through multiple industries. >> that's revenue. that's what they collect. >> correct. so $100 per prescription of 50 bucks per pen fits pretty well with our numbers. this is a 40% profit margin, not too far from what a typical pharmaceutical will make. >> ronnie, one more question. we're almost out of time. you mentioned making that $6 earnings target. and that's tied to some compensation related payouts for

management. people are concerned, i think, that they can't make that $6 through epipen, will they have to raise prices on other products or take other naumeasu? >> yeah, so, two things here. so, first of all, mylan compensation is tied closely to them hitting the eps target which can fairly be argued to incentivize them to take short-term view off their business. the company did hit its numbers. simply because they're so motivated. will they raise prices elsewhere, buy something to try to make their numbers and i wouldn't put them beyond management, and it is quite possible by the way that the board, which is very closely tied to the management team, will reduce the targets. >> who is paying $600 on epipen. if the average selling price was $350 and hospitals and schools it was 150 or 100, who is paying $600? >> the system is terribly regressive. it is the uninsured, the people that do not have good insurance, the people that have a high

deductible and do not have somebody to fight for them, they pay full price, usually more than 600. 600 plus a channel fee. i heard numbers as high as 660. that is actually not mylan's -- mylan's doing, that's the way the system works. if you got strong insurance, especially government insurance, pay or pay less, if you have no insurance, you pay a ton out of pocket. >> ronnie, we'll leave it there. thanks so much for your time. we appreciate it. ronnie gow, and thanks to meg. twitter is popping. disney dropping on takeover talk. we have the latest ahead. hillary clinton and donald trump often die picture edepicted as snarling. how do they change those images. oil and brent up. we'll get the closing prices when "power lunch" continues. announcer: they'll test you. try to break your will. but however loud the loudness gets.

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hello, everyone. i'm sue herera. here is your cnbc news update at this hour. a second group of syrian rebel fighters have been evacuated from the central syrian city of oms, part of an arrangement to restore government authority over the rebellious district. tsunami debris removal

finally getting under way in the waters near japan's crippled fukushima nuclear plant. authorities want to clear that area and reopen it to test fishing. work beginning in areas three to 12 miles from that plant. security is tight, but the mood is festive in the colombian city of cartagena. u.n. secretary-general ban ki-moon flew in to join leaders from around the region and the world to witness the signing ceremony. and here's news you can use. you want to dislodge painful kidney stones? maybe ride a roller coaster. after several of michigan urologist patients told him they had passed stones after being jostled on roller coasters, he tested the theory and found that those sitting in back of coasters passed their stones more than 60% of the time. kind of too much information. but that's okay. back to you. that's the news update at this

hour. >> i don't want to know. >> tyler has so many questions. >> so many questions. >> that's what i'm saying. too much information. >> file that away. >> news you can use. >> thank you. oil market is closing for the day. let's get to jackie deangelis. big moves in oil ahead of the opec meeting. >> big moves. we saw almost a 4% pop today. looks like we'll close under $46 a barrel. this is the start of an informal three-day meeting ending on wednesday. we have nothing concrete just yet, but the opec secretary-general saying that the oil market is in a state of flux. we knew that. it is premature to say if member positions are moving any closer. the bid in oil is this potential what if, what we could hear over the next two days and oil markets will be on edge, but now most people seem to think we're not going to get much of an outcome, no freeze in output is what is expected. >> that would be a miracle. we're live at hofstra university, the site of tonight's presidential debate.

larry kudlow with us, a trump informal adviser, cnbc contributor and latest book called "jfk and the reagan revolution" about cutting taxes. good to have you here. >> thank you, michelle. appreciate it. >> i was speaking with one market watcher who said, wow, donald trump unscripted for 90 minutes. tonight could be a trumpocalypse. >> might be fabulous too. we were talking off screen, maybe we won't even know for a while how it works out. >> the point being he says things you think might derail him and here he is neck and neck with hillary clinton. >> i'm an informal adviser, i'm pulling for him, but the answer is yeah, we have seen this before. >> what should he do tonight? should he call her crooked hillary? >> no. >> why not? >> he should hammer away on the single biggest important number one issue and biggest contrast between the two of them, that's the economy. growth and jobs and wages.

mrs. clinton wants to raise taxes across the board, wants greater regulation. mr. trump's clear position is lower tax rates across the board, individual, corporate, that's the biggest help to wage earners and roll back regulations. no bigger contrast than the economy. that's where he needs to go. no matter what questions he's asked, he needs to keep getting that out, getting that out. >> that's a good point, right? a lot of the debates, there is so much focus on the questions. they almost don't matter sometimes, right? each candidate has a message they want the electorate to hear. >> the kudlow rule of debating. i've done it for so many years. very interesting what the question is. but i want to tell you what i want to tell you. if you say to me, larry, the forecast is for 70 degrees in the new york area for the next 24 hours, i say that's great, michelle. lowering the business tax rate for large and small companies is really going to raise wages and growth. >> if you are advising her, what are you going to tell her? >> too late to have a different

economic plan. has to stick to what she's got. i never understood her message to be perfectly honest. even obama has a tax reform plan for businesses. she doesn't have one. where is she going to go? relentlessly attack mr. trump for past statements in particular and she'll try to discredit the economics, maybe blame george bush. had her problem for the whole campaign is what exactly is your message. >> what do you think about this issue -- this competing person in the front row? you see that hillary clinton wants to have mark cuban there and -- >> is he gone? last i heard gennifer flowers wasn't going to make it. >> they're trying to psychologically one up each other, right? >> as is always the case. but i think issues matter. i may be the only one left. perhaps yourself as well. issues matter. the economy, by twice as much is the number one issue. twice as much as the second issue which is usually terror or health care. any poll, the economy, and jobs

and wages, number one by a long shot. so if i were he, i would just keep hammering away on that and probably say to her, you know, mrs. clinton, you don't really want growth. you want redistribution, you want more government spending, you want nationalized health care, that sort of thing. see how she responds. or mrs. clinton, you cannot tax your way into prosperity. that's the kind of thing he needs to do. >> why shouldn't he use the phrase that he's become so famous for? crooked hillary? >> i just think that on this debate situation, i just think it is overkill. i think a lot of people are going to be looking at his demeanor. a lot of people don't really know him, believe it or not, a lot of people haven't seen much of him, believe it or not, may have 100 million viewers tonight. i think he has to be honest and on his best behavior. i know he knows that. we'll see. i wouldn't go heavy on her. he has so many issue advantages. >> larry kudlow. >> under four minutes. >> that's a miracle.

i'll write it down. >> i'm sorry. i had a credentials mess. i was late. >> tyler, back to you. >> thanks, guys. what do clinton and trump need to do tonight to boost their brand and likability? carter murray is ceo of fcb worldwide, part of inner public group and dan crutchfield. two british gentlemen talking about america. this is like the beginning of a joke. two british guys walk in a bar, talk about american politics. carter, it seems to me that one thing is this. mr. trump has created an emotional connection with the ehecht r electora electorate, with his supporters. mrs. clinton has not. do you agree with that? if so, why? >> it is a great question because when you think about this from a perspective, brands with purpose, we know win. we know that there was a future

brands study that came out that reinforced that too. whatever you think of donald trump, positive or negative, he's built a brand with purpose. he's gone up against the establishment and he's decided that he believes in a better america that he will change america. that's his conviction, that's a brand with purpose. hillary clinton has, you know, struggled to define what her purpose is. being determined to get to the white house isn't enough. i think people, there are some people that want to get behind her and for her to get 20% undecided, she needs to win this debate to find a purpose that every american can relate to. >> playing off what carter said, i think of the two slogans, make america great, real simple. i get it. i get the psychology behind it. hers is stronger together or forward together or do something together. i don't know what that means, number one. but it doesn't connect. >> it doesn't. i think she needs a simple message. i would test her communications team to say can hillary sum it

up with 15 words or less. trump has it in four words. we get it, we understand it, we connect with it. we want to with hillary. many people see themselves as democrats and want to connect with hillary, want to believe, want that emotional connection. we care about the economy, care about our jobs, care about our safety, and we want to show or see that hillary cares about us. that's a big pitch for this evening, that sense of care. >> is it too late? can she come on the stage and establish a brand or the beginnings, a glimpse of a brand that can connect with people? >> i think hillary clinton has a very clear brand. the problem is there is a huge hole in it right now, which in the convention you saw that optimism, that belief in a better america come out and she started to grow her lead. so i think brands and purpose can always be defined as any moment. absolutely she can. i think she has to focus on the why, she has to focus on why she believes she can make america

better. the status quo is not enough for her as a brand. every breath she takes, talking about donald trump, fighting his facts, doing too much detail and policy is a waste of breath because her base believes in her. they want to know why she wants to be president other than just the power of sitting in the white house. >> it seems to me that the challenge for mrs. clinton is as you say to make people understand what she really wants to do. not to dislike donald trump. her people got that. but the people who are in there but not enthusiastic don't know exactly -- i've got a tax credit for housing, for -- >> this -- it is not a presidential debate. this is a tv show and they need to think about it like that. this is about perception, not substance. we know that. trump is good at the perception game and hillary has been not so good. that's what it is about today.

about tone of voice, we want to see that, what really makes hillary who she is, what she believes, and why we should vote for her. >> gentlemen. good to hear from the british side. guys. carter, dean, we'll have you back. this is good. >> of course, tune into cnbc tonight, full live coverage of the first presidential debate, 9:00 p.m. eastern time. up next, how can you make money off tonight's debate? we're back in two. ♪ approaching medicare eligibility?

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welcome back to "power lunch." disney is working with an adviser on a potential bid for twitter. twitter trading at session highs but disney is down by half a -- 1.75%. on the phone is james cakmak. james, great to have you with us. >> thank you. >> so it seems more clear now given what has gone on with the nfl and week on week increase in terms of streams this could be it. are you getting any word that this is more likely to happen? >> we're not getting any more word, but we can see that disney needs to find a way to operate in a post cord cutting world

because they're investing in video streaming, now they need to reach an audience. what you see is an increasingly incestuous relationship between twitter and disney as twitter is moving more to sports, already working with and partnering with the video streaming company that disney partnered with and dorsey is on disney's board. we said media companies don't make sense because twitter has to remain agnostic. disney is the one i think could potentially pull it off. >> does disney plus twitter, does that equal a bigger competitor for somebody like facebook? >> yeah, potentially, because what you're trying to do is win mind share in the eyes of -- in the eyes of advertisers and users because you think about the $600 billion ad market, 40% of that is still locked in television. any way you can capture minutes, watched, whether it be stream ing sports, that is potential

share gains versus facebook and google. so definitely i think that if they can have a distraction platform for content, not only for their own, but also third party content through partnerships that twitter is already -- you can make that argument, certainly. >> how advantageous is it for twitter that dorsey is on the board and there is a precedent there because steve jobs was on the disney board when disney bought pixar? >> i just think it makes the case that much more compelling. these companies work together, bob iger comes to the twitter office, this is the close working relationship between the with companies. and that's why we made the case back in july. we actually see it as actually happening, we have been saying that, you know, likelihood of a take-out is probably not that high. but at the same time, you know, with the value of the pullback,

you know, buyers do come to the table. >> last quick question, james. if there is a deal, whoever the take-out, the buyer is, is a premium already in twitter? is it a 21% premium, 22% premium and that's that? >> i think so. you're seeing some of these numbers out there, $30 billion, i don't understand how you get there. you can be as creative as you want with the numbers, but at the end of the day, they only have 140 million or so daily active users. that number is not growing. revenue growing at single digits now. it is hard to make a case for where we are right now. >> thank you for calling in. appreciate it. just over six hours to the presidential debate. so what is the best way to trade it? let's ask trading nation team. kathy lena, ari wald. good it see you. kathy, to you first. you're looking at currencies and specifically the yen. >> right. i think there is a great

opportunity to sell dollar yen ahead of the debate. we know that statistically with the debates we tend to see stock market fall 80% of the time, week after. so dollar yen is correlated with stocks. lower stocks means lower dollar yen. most importantly, though, the market is thinking that donald trump is going to end up sabotaging himself. i think that underestimated the possibility of him crushing hillary. if that's the case, we could see a much larger reaction in dollar yen than downside than upside. japanese are sitting on their hands, they're nervous. they see dollar yen break 100. the hedges which are sitting at 60% could jump up to 80% which would involve more dollar yen selling. i think there is quite a bit of risk to the yun side downside. no one is talking about the fed tightening anymore, focused on the loss of confidence in japan, all of this going into november. dollar yen has serious risk to

the downside. >> you're going to defense. >> that's right. we think u.s. security is going to be a focal theme in the debate and really heading into the presidential election in november. we would -- we have been recommending our clients buy the defense contractors and one name in particular really stands out here is general dynamic. a stock is holding up very well in this very difficult tape, trying to push out to new highs above 154, 155 would be a notable breakout of the stock going back year long resistance. so we're expecting a q 4 market rally and think a stock like general dynamic should be leadership through that move. we like that industry a lot. >> all right, thanks, guys, for the predebate trades. we're just a few hours away from the key first president ideal debate. if there are any undecided voters out there, and there are, what will they want to hear? "power lunch" will be right back.

>> if kitty dukakis were raped and murdered, would you favor an irrevocable death penalty for the killer? >> no, i don't, bernard. i think you know i proposed the death penalty during all my life. and now the latest from tradingnation.cnbc.com and a word from our sponsor. >> different sectors of the market tend to do well during different periods of the economic cycle. when the economy is expanding, industrial and technology stocks have historically outperformed the broader market. when the economy is contracting, more defensive sectors such as utilities and consumer staples tend to outperform. so when choosing to invest in a particular sector, be sure to consider where we are in the economic cycle.

s&p 500 down by 0.8%. the one sector in the green today real estate up by just about a third of a percent. the real story on top of the debates, financials of deutsche bank hitting record lows. we have financials down by 1.6%. power lunch is back in two. these goofy glasses.

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so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders? i know. your brain told my brain before you told my face. mmm, blueberry? tap into the knowledge of other traders on thinkorswim. only at td ameritrade. welcome back. live at hofstra university in new york the site of the debate between donald trump and hillary clinton. what will voters be looking for from the debate. we are bringing in kelly o'donnell and ben white. nbc reporter earlier today that actually hillary clinton's

campaign is now prepping her for the possibility of a kindler, gentler donald trump tonight. >> a real strategy shift. early on in debate preparation there was the book phase and now the mock debate and practice phase. initially they began planning for the tough primary style donald trump who could hurl an insult. in the last day or two and including prep happening now they shifted to a more gracious trump expecting he might come with that as a way to disarm her. they are making sure we know they are preparing for that. she and the former president have arrived in the area. they are hold up in a place where she is continuing debate prep even just a matter of hours beforehand. >> discussion focuses on the fact that while it is supposed to be about the issues we know the issue is the economy. so much tonight will also be

about style. >> absolutely about style. the question of which trump shows up is a really fascinating one. i think kelly is probably right that the more gentile gentle donald trump will show up because he needs to convince voters who are not sold on him as a potential president that he has the temperament, the knowledge, the general demeanor to serve. the people who despise hillary clinton thinks she should be in prison are coming out for donald trump. the suburban republican women in the suburbs of cleveland and columbus and philadelphia. he needs those voters to say this guy can be president. i think you will see more of that from trump. from clinton i think the key is to make the positive case for why she should be president. i think there are a lot of people floating voters, flirting with jill stein and gary johnson who might otherwise vote for clinton. these are former bernie

supporters and others who don't really get why she wants to be president other than she is next in line. she has to say here are my plans on economy and student loans and what to do to combat isis. trump's voters are coming out. she has to get people excited for her. >> i don't really understand why a clinton voter would go and vote for a lib tar yn. americans like to like their president. they don't want a president who is mean. we have heard multiple people say that mr. trump should not use the phrase crook ed hillary if he doesn't should hillary say you call me crooked hillary everywhere else to my face? >> baiting him is one of the

things that is in hillary clinton's sort of play book for this. she famously said in her convention speech he could be baited with a tweet. she has worked on some of those things and trying to refine her answers to the two minute timeframe to be ready for all these different kinds of donald trumps. people feel very differently about voting for a president than their senator, governor or mayor. it is a much more personal relationship between every citizen and their president. so that likability factor has long played into this conversation. we know that these are two candidates who have, as we call it in politics, very high negatives. for donald trump he is well known for the bluster. the softer side, the more respectful side and more statesman like side is less well known. that is something we expect to see at least for part of these 90 minutes. if he does not sort of deliver the barbs and insults she can certainly draw that out by saying some things he said along

the way. >> the comment kelly made about different versions of donald trump, 50 shades of donald trump, how does hillary, are there 50 shades of hillary or will she deliver the same? >> there are not a lot of different shades of hillary clinton. >> is that a good thing or bad thing? >> on the likability front fairly or not people don't warm to her necessarily. i think she needs to work on her relatability. that is talking about complex policy things in terms that americans can understand how it impacts them on jobs, the economy, health care, education in particular for the bernie sanders crowd. she has to do that. i think it is key for her to come after trump if he is not nasty and negative to bring up stuff and remind voters these are nasty things said about others. >> your point is good. both have likability issues. >> we'll have to leave it there. >> good to have you guys.

thank you. be sure to watch cnbc tonight. we will have full live coverage of the first presidential debate 9:00 p.m. eastern time. >> u.s. appeals court ruling in favor of american express over credit card antisteering rules. we are looking at shares back in positive territory after spending most of the day in negative territory. that is american express slightly higher or off lows of the day. >> thank you very much. and, of course, we are watching financials in general. financials are worst performing perhaps the debate has something to do with it. deutsche bank a big drag. >> and disney not doing particularly well on word that they are possibly considering a conversation with twitter to make an offer there. twitter, on the other hand, moving up today. should we look at the markets and where they stand as we go into the last hour of trading. dow industrials down 160.

roughly where it has been for much of the afternoon. all indexes lower. we look forward to special coverage tonight. >> we will all be watching. thanks for watching. "closing bell" starts now. welcome to "closing bell" or as known today t minus six hours until the beginning of the debate. i'm kelly evans. >> the super bowl on steroids today. the financials are weighing on the market today. european bank, deutsche bank, shares falling on concerns over potential capital raise in order to settle the fine with the justice department. we'll get you more on this move coming up. >> oil prices.