market picture. there it is on cue. deutsche bank really the cause here for a market sell off on wall street. dow jones industrial average down 160 points. "power lunch" is going to pick up that story. they'll have all the headlines there. clearly, that show begins right now. >> and welcome to "power lunch." we start off with two huge stories on the banks. wells fargo and deutsche bank, wells fargo right now, down about one and three quarters percent. the ceo testifying on the hill and deutsche bank down 6 and a quarter percent. straight to bob pisani with the latest on these stories. bob. >> and this story came out of sort of nowhere just about 45 minutes or so ago. deutsche bank here, this is the abr, the trade here in the united states. there's a report that a number of funds that cleared derivative trades with deutsche bank have withdrawn some excess cash in positions. held at the lender.

this is a sign the story implies of mounting counterparty concerns. now, remember, they have thousand of counterparties out here, so this is a small group. but there you see deutsche bank down about 6%. it's had an immediate effect on our market here, perhaps an oversized effect. if you look at the s&p 500 because as the story came out, we were tooling along just about in the unchanged level, you can see that it, too, dropped rather noticeably. there's the dow industrials. put up the bank index, the kbe and here in the united states, which is a basket of all the large banks here in the united states and that immediately dropped. take a look at the bank here. this gives you indication of whatever, if any probably have nothing to do with jpmorgan for example. even it's to the downside.

signs this is a bit likely on the excessive side. hardly likely there's an impact on jpmorgan at all. rest of the market, there was a general decline overall. even consumer discretionary stocks. no impact from anything going on at deutsche bank, but when you get a situation where it's a fairly quiet day, programs kick in quickly. momentum program slightly to the downside and get aggressive here. s&p down 20 points. >> the idea that some hedge funds would remove from cash being at deutsche bank, this would be a idea in case there was an issue, they wouldn't worry about cash being locked in to accounts there inexcessable. >> correct. we're not talking about hedge funds invested in deutsche bank stock. we're talking b about hedge funds that have money there with counterparty transactions, where

they're doing transactions back and forth with deutsche bank. >> because every individual, most of our viewers will have a broker and a broker edge hedge funds use banks as their broker. they have a broker that does business with them. maybe you have your cash with your broker. you boing to let it sit. maybe decide to move it it's a good parallel? >> got it and you can trade derivatives, too. that's the key point. they have money at the bank and they engage in transactions and some circumstances of their counterparties. the point of the story is a small group maybe moving some money away from that because they don't want to get caught in the event there are somely quid problems. this seems to be a small number cited by this story. >> and we have to be careful here, guys, because this is a massive bank and there's two angles that could be at work here. one, say you are short deutsche

bank stock in germany or a rrk. say you short deutsche bank and you're a hedge fund. you may be a hedge fund short and you know that if you pull some business from deutsche bank and leak it out, there could put pressure on the stock like it is now thus ensuring it for for your hedge fund. two, there may be a where if you looking for a germen backed stop and to create fear, you could do the same thing. leak it out, try to force germany's hand. >> not really a question there. >> i'm mulling what is being said. the heart of this is that so many bank analysts will come on and say there is no systemic risk. whether or not, there is a risk

that's gripping the markets and has continued to do so with with every headline. it pulls the u.s. financials down and hearts the market. that's the bottom line, right bob? and the perception that even if the it's a small group of hedge funds pulling their money out because of a perceived potential problem in the future where they won't access their money, that really says it all. they're preparing for the worst case scenario today so, what is it we don't know about what's going on about deutsche bank? that's the interpretation of the three. sxwl i think it's reasonable to ask influence this would have on a jpmorgan. obviously, there's no concerns at jpmorgan. you're just going to have to accept the fact that in situations like this, you have momentum programs that kick in. if it gets more semiing, that's really wh we're dealing with in an age of high speed trading. >> two of my awesome team, could we bring up the five-year default stops?

another trade pinging me, rem d reminding if you are long the credit default swap, however, they were in the nuews a lot seven years ago, eight years ago, if you are long the cdss, it is in your best interest for deutsche bank stock to go down because then the risk goes up, thus, the investment in the credit default swaps goes on. >> it's a tradeable asset. you can own that thing it can go up in value and then you sell it. zpl going to bring up a chart of those. >> not that you're trying to trigger the insurance. just trying to trade the asset away. >> like any other stock, a soda stream, one with a loft controversy with the fear, is there are many ways to make money off a stock that is falling. just be careful to note that maybe somebody's got a position here they are trying further. >> all right, bob, keep us posted. from the floor of the stock

exchange. let's bring in larry mcdonald. what's your impression of this report? you have been quick to point out the equity market cap, that's a ratio that's quite skeweded. >> sitting on the deck, titan nick 2008. after being there, literally am sitting here with chills coming down my spine because we're in a similar dynamic in a sense. deutsche bank is not lehman in terms of the overall global risk. but the political situation's almost identical. the, a huge vast chasm between politicians in germany are in no position to do anything ahead of the election. the beast of the market.

the serpent of the market knows this and the market will push and push and push until they break the politicians in germany to come up with public funds because as you just said, melissa, they've got 16 billion in equity. only 16 public equity and 163 billion of debt. 16, 163, unsustainable, the market will push politicians until they break them. >> what's the bailout mechanism or the bail in mechanism, larry? how does this work in you start working through the capital structure and punish a lot of the bondholders, et cetera. how does this play out to the individual shareholder and bondholder out there because there's a whole new way to deal with banks in europe at this point. >> that is a fascinating part of this. we have been sold by politicians oaf the last eight years a new

drug so to speak. some of co debt and subordinated debt. if you touch the debt of deutsche bank, you're going to create a widespread global just like lehman, so everything they've told us over the last eight years has been boeg us. the most they can do is bail in. >> got it. >> wipe tout equity and junior debt. >> it's been long time since i've thought hard about the debt. thank you very much, larry. connection is a little tough. >> let's bring in peter eson and jack. welcome, good to have you with us. start with deutsche bank, peter.

do you have any opinions about that one in light of the idea that some hedge funds seem to not be pulling their positions necessarily, but maybe pulling some accounts that they have with deutsche bank. >> well, i haven't seen the press report, so i'm just commenting in general about things like that. you know, perception can be reality. until we see numbers on that, i would hesitate to make an extram trapplation on how bad situations can be. certainly, hedge funds are doing that just to hedge literally their dependsy on deutsche bank and on the worst case of course, i think you're prior speakers were talking about the interrelation between deutsch and the other banks.

>> do you think a capital race based on what we've heard from larry, 16 billion in equity and 100 something in debt that a capital raise is inevident bable. >> we don't cover deutsche bank. we cover the u.s. domestics, but there are a couple of parallels as i'm listening to this that remind me of '08. one, the leverage ratios are extremely high at deutsche bank, so one of those two have to be adjusted accordingly. second, this is somewhat reminiscent of what happened in the early stages of the bair and lehman where accounts began pulling away and reports of those created more and in a short period of time, it became a crisis of confidence. there are some parallels. >> is this going to impact your coverage universe? you can argue there is no systemic risk here, no spread necessarily and i'm sure a lot

of people would make that argument. the fact of the matter, we've seen deutsche bank drop like that. the u.s. financials follow. >> we've learned a lot about interconnectivity in '08 and '09. i think that's the concern. beyond that, something broader of a macro slowdown, which then pushes out you know, a rise in interest rates. >> thank you, peter, jack, for your time. >> we are keeping an eye on these battered banks to further the conversation. obviously, deutsche bank is in focus. wells fargo also in focus. a lot of big banks we're going to watch. also watching the market because these headlines coming out not only bringing down the german banks, the markets as well. there's a lot more to do.

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shares carefully popping right now but 11 and a quarter percent. there's a report out citing sources that qualcomm in in talks to quire nxpi. a deal could happen in two to three months and could be worth 2 to $3 billion. this is is turning the philadelphia semiconductor index

higher and helping the nasdaq as well, so widespread implications, but dow jones is reporting they are in talks, nxpi looks like it has halted. probably because of volatility. as soon as we get more, we'll bring that to you. >> all right. also want a keep an eye on another big german bank. they're not halted. the day is ore in germany. there's a thinly traded czrby. that's down more than deutsche bank, so a lot of focus on deutsche bank. but there are other german bank, a lot of european banks in italy as well. this is a story that's spreading maybe from deutsche bank the oldest bank in the world, 1300s is down by 90%. >> the issue you have in italy x

you have a lot of mom and pop investors. when you walk in, the bank tells you when was the last time the bank failed? this will be fine. they don't want these individual bondholders carrying the bag when they give you something. >> turn back to wells fargo. the ceo john stumpf on capitol hill. steven lynch joins us of massachusetts. thanks for joining us. you have tweeted that you wanted to see the ceo take more accountability. do you think you got that so far out of the session? i know it's ongoing. >> no, not yet. but we did learn this morning that we have three separate u.s. attorneys that have issued sub pea nas to wells fargo, so that could be coming. >> so, you want to see something put behind bars? >> well, i would like to see accountability and where ever the law leads, i know that look, this is a huge fraud case. you know, i know they fired 5300

employees, but this is a case where the employees actually you know, falsified accounts. they actually filled out credit cards and applied fake pens and e-mail addresses. >> sure. >> so they could collect these fees. >> what does accountability look like to you? >> well -- >> what does that mean in this context? i'm curious. >> i think eventually, mr. stumpf should resign. i think he should. he has been in charge this whole time. he's the ceo and the chairman of the board. it doesn't look like any of the suspicious activity reports that are due from his office in connection with a lot of this fraud were filed with trashry. we haven't seen them. we've been in contact with treasury, so there have been a number of failings. he's diminishing the level of

fraud by saying it was only 5,300 employees, which is the wropg approach to take when you think about the seriousness, these were customers r that were defrauded. i think there's a special you know, duty of loyalty they ewe to their own customers. >> sir, michelle here. you've been tweetinging and talking about how proud you are of the consumer financial protection bureau, the cf p pb, but they actually never found this froud. it wasn't them. it was a reporter. an official in l.a. just kind of rode the gravy train of this. why do they deserve any credit? it's a a huge new bureaucracy that's going to cost a lot of money and yet, the issue finds, but actually didn't do the work. >> well, they did do to work. obviously, this is an l.a. issue. they complained to the l.a. attorney and the city attorney. he did or she did --

>> we had the reporter on, who actually got it first. >> right. >> right. >> so that was the first step. it was a local issue and then when the consumer financial protection bureau got involved, they had a wider jurisdiction. this is a national case. up to 2 million accounts, so, obviously, you need someone with a national scope, which the l.a. attorney does not have. >> so, there is no failure in your view on the part, it cannot be perred as a failure or shortcoming of the agency if they take three years to follow up on work exposed by a hard work r r rotter in the "l.a. times" and then a city official to make this a national story. they've done a wonderful job and it's a huge win, which is what you tweeted. redoubles my faith in those agencies. >> let me get this right. wells fargo does what they do.

and you're attacking the -- >> we are not attacking wells fargo. just saying are there any other places in the bureaucracy, the agencies that should be held account bable for allowing this to go on for so long. >> wells fargo came back and said they fixed the problem. that's what the agencies are responding so. they looked like they were addressing the problem, but it kept going. now, we're in year five and we've got 5300 employee, but they haven't really corrected the problem. that's the issue here. >> sure. >> we're going to hear from the los angeles city attorney in just a few minutes, actually, so we're get more insight into how they work together. and how it took from 2013 to today.

i believe he's fairliry of the relationship he had, but again, the question is really why did it take as long as as it did. >> the question is why did it happen. why did this fraud happen. that's where the focus should be on wells fargo and what they did to their customers instead of turning this around and saying you know, well, why did the cops take so long to get these people. >> sir, i wonder, odd election time. this is weird and the faith in institutions in the united states is pretty low. actually, all over the world. we've been carrying the hearing all day. watching you guys screaming at the ceo and nothing justified. >> i didn't scream. >> nothing justs what that company did, but there's a lot of value being placed on authenticity and i wonderful as you scream and yell -- >> i don't scream and yell.

i don't scream and yell. however, i did ask him some legal questions about his responsibilities under the bank's sink rasy act and the laws he's required to comply with. that's what i accused him. no screaming, no yellinging. >> but do you worry about a backlash from grand standing? >> i worry about a backlash from not doing your job. about not holding people accountable. froms that's really what our responsibility here. we owe that to -- >> congressman, last week, a quick point and a question to you, sir, and i'll depend my colleagues. all of us were doing this same job when congress dragged fannie may in 2003. screamed how they were too big and too dangerous, then we had

the housing collapse. do you believe though congressman, that john stumpf should go to jail? >> don't know yet. that's why there are three u.s. attorneys that have failed subpoenas to find out what he knew, when he knew it and what he did in response. >> if you find out he did something that would involve a criminal charge, do you believe then he should go to jail? >> well, if you're convicted of a criminal offense that has a prison sentence attached, then the law should apply to you whether you're the prosecutesid a bank or anyone else. >> thank you for your time. we appreciate it. >> thank you. >> oil up again after opec decided to cut production, but is it just a giant head fake? oil analysts raising serious doubts. we'll talk oil after the break. what's the value of capital? what's critical thinking like?

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welcome back to pelz. i'm sue herera and here's what's happening at this hour. at least one person the dead. more than 100 injured when a crowded commuter train plowed into a train station in hoboken, new jersey. that came during the morning rush hour. hoboken is the fifth busiest station with 15,000 boardings per weekday r for new york city.

footage released today showing the destruction from the continued syrian bombing of the city of aleppo. john kerry says the u.s. is on the verge of suspending talks with russia on syria and implementing a serious fire because of the bombings. japan's first dmesically made passenger jet has arrived. the jet will under go tests at an airport near seattle. they aim mass production in 2018 after certification is complete. check out the upcoming cover of new yorker magazine. it shows donald trump as miss congeniality. the cover in connection with his fight with the former miss universe who he disparaged when she gained some weight after the pageant. that's the cnbc news update. brian, back to you. >> sue, thank you very much. the stocks are lower. your money likely down today. you've got a couple big stories. number one, this deutsche bank

thing. more on that in a bit. let's follow up on oil. it's continuing a little bit yesterday's rally. crude hitting the $48 a barrel mark 47.83. optimism about yes yesterday's opec headlines driving oil up. but will this really make any dent in the market at all? we're joined onset by senior energyist at oppenheimer. fidel, i'll begin with you. we were skeptical of it yesterday. now, i had people pinging me saying guess what, saudi arabia cuts their production this time every year any way because of seasonality issues and it's really a nonheadline headline, what do you think? >> correct. i put very low probability here that it will do anything that will really impact the market and will balance supply and desituation. peck has a history of saying

thing, promises broken. this is only the second day of the news with another week and see where prices go. >> you think there won't be an adwreemt or they'll dom an agreement and won't adhere to it? >> any agreement is is just as good as implementation. they leave it very vague. if you point out who's going to cut, who is going to free us, it's the other guy. not me. >> the it's not a cut. it's actually saudi arabia's isn't it just their natural slowdown any way? >> i think it's really important. we spend in two years with saudi arabia saying we're fine at 30, at 20, never going to cut. basically, they had to be dragged into doing it free. i think they're acting on domestic considerations. they had to cut civil service benefits this week. $15 billion debt insurance. they want an ipo. >> so, you believe this? >> i believe going back to what they have to do and balance the market themselves.

it didn't matter if iran doesn't play ball because herbally, they gave into the iranian. they kept upping the demands and saudis said, fine, you're first person i hear, but who believes that somebody else, a lot of people must because the price of oil has risen. >> we were the only ones who said we would do anything in the first place. we made that view based on the domestics of saudi arabia. >> so, they want the price higher. are they going to get that? >> they have established a floor. we think this puts in the floor in the mid 40s i think they were worried about the revel sal to 30. not great when you wanted ipo. i think this is about domestic politics and firming up. they don't want 70, but they're fine in the 50s. >> from the equity standpoint, isn't that important, this could at least put a floor because come november, we'll be in the situation situation where there are no production limits or better in inkrementally better if they go ahead with the

agreement. so, from the equity investment standpoint, isn't that a better situation we were in 24 hours ago? >> if it's where the price is going, 50 to 55 is bullish, but 80 so 60 is not. what i see here is clear. people forget, we talk about production, let's talk about export because the domestic con sumts is rapidly rising. they have fewer balance the market. you don't have money to replace reserve. do you need fortune capital? it's not coming at $50 oil. oil prices are low has to go significantly higher to make

sure supply will meet global demand and right now, woe don't have that. >> i think for now, the saudis want the 50s. they'll take that. froms. >> happy at 50? >> not great for their budget, but for now, they'll take the 50. >> thank you. >> thank you. stocks getting hit today. coming up. it's the small cap call of the day. it's had a nice run lately. why wall street expects this stock to go higher from here. the pursuit of healthier. it begins from the second we're born. because, healthier doesn't happen all by itself. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier

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welcome back. down day on wall street, but up day for the economy. the rapid update, up by .2 on the strength of better than expected trade deficit. so, we're not tracking, the median of ten economists who we track here at cnbc along with analytics up to 2.8%, a range of 2.5 to 3.7. we got higher to the second quarter actual.

now, at 11-.4. here's where different estimates are. amherst and morgan stanley at 3.7. moody's at 3.2. goldman sachs, 2.8 and hfe bank of tokyo, mitsubishi, 2.5%. i'm at the kansas city fed. more on that coming up in the next hour, back to you guys. >>. >> deutsche bank, all the talk. down on the floor, the cme. >> it is all the talk, but tell you, being objective, it's not big of a trade yet. they have values in the trillions on derivatives and that's what you're supposed to be watching along with the cocoas. one week of ten, haven't even violated the lower end of the range. neither have we in the two year.

it would is systemic issues that would affect the fed watchers that would be prone to be more aggressive or general flight to safety. if it was more than just a handful of hedge funds, we'd be juching more aggressively on the long end. as you can see on the intraday chart, it move nd the direction of fear but did not expand the range. the dollar index is up a whopping one eighth, so we're watching and talking. >> breaking news coming in. >> former delta airlines

employee has been charged by the cftc with making illicit trade frs his own account while he worked there. they are doing it while he was tasked with helping that airline manage the cost of jet fuel through various energy contracts. he had a personal account where he was make iing trades in some the same contracts designed to benefit from that insider knowledge. he is not admitting nor denying the charge, but is paying $3.5 million to the cftc as well as a penal penalty. an interesting resolution to

something we've been following for several years. >> a shot about what rick was saying. basically, yes, there has been flight to quality in the bond market in the wake of the concerns about deutsche bank, however, not so much that that people were terrified. yes, the two-year note fell. >> it's within doing that. and still within the range of where it's been. 1.55. he's suggesting if something really bad, people believed that would be happening, this move would be sharp e and stropger. >> i would agree, although financials are now back at session lows now. moves in the overall markets being masked fwi comeback we're seeing in technology because of that reported qualcomm nxpi yield that could be in the works. that's boosting semiconductors, boosting technology and that sort of pairing the losses we're

seeing in the overall market, but for financial, financials are still close to the session lows. >> having return ed from germany -- >> sober view come b up. >> i like your style and the pun. you get up in the morning and have a cup of coffee r or six, look at the papers. deutsche bank was not on the front pages as much. there seems to be a feeling among the folks we chatted with, there was some chat, no way germany's going to let this thing go down. >> it's the bank of germany. that's the name. >> just getting from here to there is what's going to be a painful -- >> if there needs to be something done politically. >> all the drama.

it's going to be -- >> getting busy. we love these kind of days. there's a lot going on. up next, more on the report in the chip space, plus more on the big move lower on the banks. all over the market slide. stocks sitting off their lows. do not move. "power lunch" will be right back.

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technologies for chips. >> i think qualcomm is looking to expand their footprint. look iing at categories around drone, also in areas of virtual and augmented reality, so to expand their footprint, it makes a lot of sense. >> why do you think they would want to sell itself? they just made an b acquisition which got them more into the internet of things and ore areas, so why would b thebds we're up for sale? >> i think what we're seeing here is is that scale and reach matter and there are so many areas where semiconductors are going to power the future. look at what's happening even with companies like google announcing they built their own semiconductors to do artificial intelligence. microsoft making a similar announcement recently, so the big players have to have scale and reach in order to be successful zblchl is this the best buy qualcomm could make to juice their business.

>> i think it's a good, complimentary strategic fit. i would think there's many other things out there better than this option for them. >> does this solidify their position with apple? when iphone 7 came out, perhaps they may have lost content even if they just split the business between intel and com that's a loss in content. does this solidify their positioning with apple because nxpi is a supplier for apple? >> i think it helps on the apple and china front. i think qualcomm is very aggressive in terms of trying to expand in the different ways it can work together with chinese manufacturers to come up with these tongs. a drone is a flying smart phone. >> oftentimes, the acquire's stock will fall when a deal is announced, so, shareholders obviously like the idea.

>> i think the first impressions are positive. >> any idea on what a fair price would be? >> hard to say. i haven't studied it close enough. >> i was going to put you on the spot. >> before, if you took a look at qualcomm today, is that company that is exciting to you versus a qualcomm nxpi in three months? >> i think qualcomm was exci exciting, but a higher risk prop sags because they're trying expand into all these new areas, so this puts a complimentary partner together with them and allows them to execute on more of these new emerging areas of which there are many. >> we've talked about, we do a segment called street talk, in video, all these upgrades, i didn't realize they were so big on driverless r cars. how big is the opportunity? is this price too high. >> i think nvidia is a pretty rich stock and i think what's driving it more than the driveless car is virtual reality and artificial intelligence. it takes a lot of gpus to do

deep learning type of scenarios and that's what is going to be one of the biggest drivers for invisit area over the next five years. >> very much. appreciate this. guy, one other quick angle on this deal. another big public winner. the private equity firm. this is a company used to be known as phillips semiconductor. the public ticker bought them. changed the name. respun out the ipo in 2010 and capital iq shows them as a major owner. ipoed at 14. stock's at 95. so maybe be huge winner. on deck, early version of street talk. four big stock ideas you need to know about and these two gets battered. wells fargo, goldman sachs. dow down 200 points. don't go anywhere.

. we kick it off with insight getting an upgrade. goes to 115. this follows the release of an ab tract showing president obos

results to treat melanoma. it's got a strong pipeline. also royalties for its rheumatoid arthritis drug, plus, it's got a lot of cash. $648 million. gilead could be interested. they've got a lot of money, so, yeah. >> got a lot of cash. all right, second stock is ebay. deutsche bank, research division, upgratds fr a buy to a neutral. says it may be the best story in the internet. they note ebay is reflplatformi. changing the way they do things and that's the time when the internet stocks tentd to generate the most performance. they compares to expedia's big run. they note sentiment is muted. their base case on ebay is 40 buck, but they have a bull case of 45 a share. >> actually, this is a pocket of strength in the mark.

ebay along with priceline, match have been up. so this is an interesting to group to watch. third stock here, fitbit, getting cut. the flag ship holiday product is off to a slow start. inventory is building a channel and below the blaze and alta levels. fit's utility problem persists like who's going to wear it. it only counts steps and things like that, making growth harder, tilting the risk reward to more unfavorable. >> i just wonder if people in general aren't getting the peek charging. you get with to point you can't by anything else you're going to charge. i had one, loved it, realized i was still fat, put it in a drawer. >> it doesn't make you lose weight. >> recharge it if yikd find the plug. nimble storage. california base flash memory company, down year to date, but a decent run the past few months.

thinks revenue is about to accelerate on the name for a lot of reasons. they boost the target to wells does this range. had a hang raing of nine to ten a share. boosted their valuation range to 10 to $11 a share. accelerating thing. another pocket of strength. >> yes. >> one hand in my pocket o and the other is buying nimble storage. >> right now, in chaska, minnesota, the world's top golfer rs preparing to tee off in the required cup. but the sport of golf is looking quite different than it did just a couple of years ago and dom is live at the ryder cup. lucky you, dom. >> i know, tyler. lucky me and talking about pockets of strength, the world of golf is trying to find pockets of strength right now because it's the first time in years we've seen a slight uptick.

with the help of the golfing economy. we do know that we've had strugs. nike is getting out of the golf equipment business. adidas is trying to sell its taylor made equipment there. but the world's number two golf e, dustin johnson, who's an adidas athlete announced they signed him to a multiyear deal, but we have to put that in the broader context of what's happening with the golfing economy. as we know the nike exiting the business, there's been a lot of equipment makers trying to jockey for position to see if they can sign athletes. tiger woods, a nike athlete, may now be open to playing another set of clubs so, a lot of polaris out there maybe looking to see what he's going to do and what they're going to do now that nike is not going to be on the golf side of the business, however, maybe the model is jordan spieth. an under armour athlete.

wears their clothes, played hittist clubs and balls, has a number of different sponsorships. that's what this ryder cup is about. trying to see whether or not there's that force for mashlgt marketing to get that stage set for a bigger move in 2017. as we talk about the troubles in the business, there are some golf insiders who feel there's really at least a few greschuet here achutes here and there. we spoke to steve know na. he thinks aren't that bad for everybody in the business. take a listen p to what he said here. >> the industry is going through a transition. but there are a lot of elements within even the equipment business that are pretty positive. callaway stock is up. they're doing well. parson o extreme golf is doipg quite well. wilson is on a bit of a rebound. the equipment business, very

competitive. p prz. >> what we want to do is to see if we can get more momentum. we got coverage on our sister networks. tomorrow at 8:30, golf channel with the required cup. also, this particular ryder cup will be broadcast this weekend on nbc sports as well. tune in. it's a great event. >> we will. thanks so much. the dow jones industrial average is off by 247 points. s&p is lower by 26 points. a sell off of more than 1% across the board. worries about europe. coverage coming up. don't move.

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let's get a check on the markets with two hours to go until the closing bell. stock rs lower across the board hitting session lows. dow is down about 2%. 200 point, excuse me, they took a turn lower when deutsche bank started to fall on the report that -- you can see the move. very sharp. other fanls taking a hit as well

and having a ripple effect akroz the cross the market. >> thankthanks. let's get to bob. kate joins us as well. kate, i'm wondering what you are hearing and if the sense it can happen with a few, it can happen with ten at first and then ten begets another ten, another ten, which is what we've seen before. >> right, this brings back memories of what happened at bear stearns in 2008. they had a run on the investment banking hedge fund rergs and that's the fear here, now r, i think we need to keep our tone nice and sort of fact based and solid. we understand that a number of hedge funds maybe pulling money out of deutsche bank right now, houf, no need to think it is a run on the bank. the bank saying in a statement they think their clients are aware of their stable base. as well as the macro environment they're operating in.

>> do we mean they're pulling money out of prime brokage accounts? is that the kind of money? >> i believe that's case, tyler. the still trying to get details. >> this is what happened with lehman where a lot of people were trading in those accounts got caught. there were count party there is and when the bank went under, they got caught. the probability this is going to happen is fall. >> if you're a hedge fund, you rely on leverage and borrowed capital. if you're short a stock, melissa, you know this well. you borrow in order to make that short position work. you may also borrow on the long side and these and other services are what prime brokage firms provide. to the extend that you're a client of deutsch in that part

of the bank and you're worried they may not have enough capital, they may not be a future going concern, you may want to pull your money out. >> they have other options. they could do a rights offering. they could do things here. >> certainly. this horrific outcome that people you know, pretend to worry about, we're not there. >> especially if you have a government step in. >> the chances of the horrific outcome you're talking about, it's not zero. the chances, but it is extremely small. i think a lot of people have asked me, why did jpmorgan drop one and a half% on this day? jpmorgan has nothing to do with it. >> i think the answer is a lot of thing that is didn't look correlated in 2008 turneded out to be correlated, so you get hire credit costs for example if

you have banks with other problems and that could be impacting bank standards overall. a harder thing to understand is why the market dropped. >> i have a thought. of course, there are plenty of other healthy banks and other prime brokerage options. the relationship between these banks is a systemic issue, we saw it even when sec capital was indicted. for a period of time, unbeknounbeknown to us, herbtheir assets were refenced so they could continue to borrow from their prime brokers so they wouldn't refuse to lend to them.

so, the ability to have those relationships conduct smoothly and not create either a huge capital diminishment and sell positions for a hedge fund is a huge concern. >> if you're short the stock or you're long the credit default stops or whatever your fund position is, you've got to wonder how the reporter got this news because maybe the hedge fund that shorted, i just pulled my money from deutsche bank. >> so, consumer default swap is more valuable. >> that's where reporters are responsible and we should stress we're trying tog get additional details here. >> i want to go back to why the overall market tropped. whirlpool dropped $2. i think the simple answer is right now, when you get these kind of events, the r participants in the market pull their bids for everything. they just simply stop. so there's a normal amount of

bids. >> it's a risk off mentality. that's why we're seeing the downturn in bio tech. what did they have to do with deutsche bank? absolutely nothing. except for beta. >> wasn't it sam sung's washing machines that are supposed to be explo exploding? >> watching machines. >> thank you. >> bob pisani. we should note that shares for deutsche bank, they are just off a fresh all time lows. talking about the adr and the ones that trade here in the united states on track for a record volume day. so, this is a story that is continues with us. on the phone with us, william smith. you own some financials, we are seeing a sharp reaction in the u.s. financials in response to the deutsche bank news. are you concerned there is

contagion len in the pressure that the stocks feel because of deutsche bank? >> from 30,000 feet, the biggest thing is, you're probably going to be looking at an equity offering or wipe out the equity and debt and then the german government's going to have to get involved sooner or later. the question becomes does management recognize this and act quickly or do they wait, let it get out of hand and get the german xwovt get involved. "the big ideal with donny deutsch" er question is with the european banks. why haven't these been addressed already. you know, tlir so way, way overleveraged and have these bad loans. >> preaching to the choir. they haven't been able to do it. haven't taken on the vested interest in each country. it's a very good question, but and now, they face the issues that they have brought by not handling it.

novotny is up saying europe does not face a new bank crisis. sounds like the same thing as they don't want to actually handle the situation. >> right. really don't have a choice to say anything other than that. i think it was brian that brought up a good point. this reporter got this story somehow. so, this does smell a little n funny. we were going through a day where the only headlines were about opec. and as the day moves on it depends on how quickly ta react to cut the head of the snake off. >> when the price of a bank fall x it's part of the capital structure. it has consequences. that are following that force regulators to do something if it doesn't stop. >> william, in terms of u.s. financials and the holdings you have, at this point, give me the bull case as to why. i take a look here in the united

states and say the ceo of wells fargo being grilled. not trying to defend at all, but financials here are under scrutiny. that stock drops and has an impact here in u.s. financials. especially with the yield curve so flat. >> right, so we're not long the deposit banks. we think volatility will pick up andam goldman will be the beneficiary of o that. in all likelihood will continue to break up the bank. so, as far as the fed in keeping interest rates down, we want to stay away from the deposit banks because rates are going to be low for a pg lo, long time. >> isn't that when you're supposed to buy efg? when everything is so bleak and grim and awful. >> william, thank you. >> get to the deadly crash in

hobok hoboken, new jersey. courtney reagan is live there. >> you can see the train station, the terminal is there in the distance. this is still an active scene, but chris christie is currently holding a press conference. he's given us an updated statistic. there is one person dead. there were some conflicting reports earlier. one woman who has died. there are 108 that were injured. some of them are still in local homts. the engineer of the train is alive. in critical condition at an area hospital, but he is cooperating with authorities. in order to set the scene a little bit for what it was like, take a listen to a passenger that was not on the train but was in the station when the train crashed. >> the lights flicker. kind of heard a boom and then a

crash noise. what is that? i don't know. i run out. as i run out, there were folks running away from the crash area and i saw the train had made its way completely down the line and just went through the terminal. part oof the ceiling and collapsed. >> governor christie says they are not speculating on the cause of the crash. they know that the train came in a high rate of speed and did not slow down. you can see here some photos from twitter. dimpblt passengers sayinging it looked like a missile hit the station. many saying they felt lucky to be alive. there is still no power at the station as you can imagine. the ceiling did collapse here. as it came in from the spring valley, new york area. one station away new york city. back to you. >> some people that i heard on the radio were saying it sounded like a bomb had gone off. >> exactly. that is very much some of the reports that we heard as well

others said it looked like a missile. some passengers had to break through the glass of the train to get out. we heard some reports that it took passengers ooempb longer to get out, but as of now, everyone has been cleared from the area. >> thank you very much. we'll be checkinging back with you later. the hearing on capitol hill involving wells fargo, mr. stumpf, has ended, so we'll be wrapping that up and more as we progress. up next, more on this market drop with the dow down more than 20 30i7b9s. goldman sachs, the biggest loser on the big board. in the dow stocks there. off 1.1%. the dow is right now. wall street's so-called fear index, the vix is popping. take a look at that. up 19%. "power lunch" will be right back.

welcome back. mexico's central announced it has raising rates to 4.5% this in an effort to counter inflationary pressures. the bank of mexico saying the increase is not the start of a tighteninging cycle, but keep in mind, pressure has been growing on mexico to support the currency, the pace that has bb

been on the decline. down about 13% year to date due in part to weakness in its economy, but also, uncertainty around the u.s. presidential election. many traders encourage the mexican peso as a good hedge on the u.s. presidential election and right now, we are looking at the sew strengthening against the dollar. i would point out there have been record short positions built up. back to you. >> thank you very much. >> the wells fargo hearing just wrapping up. it was hot. >> it was, indeed. it did start calmer than last week's hearing and impressively, mr. stumpf gave a better performance, giving details which was lackinging last week, so his performance better, but rightfully or wrongly, that wasn't enough for the law make r rs in the room.

not to have that heated negative tone as you rightly touched upon. here's an example of that tone. >> sir, i think today listening to things that everyone has said, you have proved that you did not off leadership in this. you have kind of shirked around and said the board can do anything it wants at any time. i, sir, think you ought to commsubmit a resignation and yo board cannot hold off action on that. thank you. yield back. >> may i make a comment? >> witness may comment. >> we did take accountability. we did invest in things to help reduce this. and we saw the numbers coming down. >> problems continued, sir. the problems continued right on through your actions. >> and that of course continuation of the problems one of the key issues lawmakers had.

s sugtss a big pack lak of oversight. all though, i would off set with a tone we heard that said his job is a job for the board, not for lawmakers. with the fact that mr. stumpf hawkeyes not given much time to respond to the tough questions or indeed statements that he was facing. but the overall other take away was the call to break up wells fargo. even though they haven't been brought under the umbrella, the congressman from texas saying other ceos should come in front of this committee, soon, as part of this hearing. froms. >> thank you. today's hearing is the second into fraudulent accounts, a $185

million settlement. the bureau is congress late toast game? joining us is l.a. city attorney. great to have you with us. >> thanks for having me. >> your lawsuit you filed against wells fargo was prompted by the 2013 article in the l.a. times. are you surprised that three years later, we are all is sittisi sitting here, only now that this has come to light and has become a big issue. >> well, once the story ran, i instructed my staff to conduct an investigation. i wanted to determine if we could validate the allegations in the story. obviously, we felt we could so we filed that lawsuit. the reason that this, the aftermath less surprising to me than it might be, we receiveded more than a thousand phone calls and e-mails from wells customers and current and former employees. that is a huge outpouring across

the united states. when we resolve our case along with the federal regulators about three weeks ago, i did not view that as the culmination of this. >> how did you find your attorneys? were they combative or admit blame and say we're going to fix something. >> in the first instance, when we filed our complaint, wells fought back hard. they sought to argue we had no authority in this case. they sought to remove the case from state to federal court. we beat that effort and entered into settlement negotiations. i can't talk about confidential negotiation, but at the end of this case, wells fought hard. we achieved a real victory. not only in california, but across the country. >> why do they thot admit guilt? >> well, in any settlement, i used to speak r for wells.

typically, parties don't admit wrong doing one way or the other, but what matter to me from the consumer standpoint, what are the remedies on the table? here, i represent the city of los angeles and i brought a lawsuit, have the people of the state of california. there will be complete restitution for those people whose behalf we brought that lawsuit and of course, wells will be held accountable here with every nickel of the penalty devoted to consumer protection in the future. >> when you say the constitution to whom was done harm or the victims here, what does this mean you're keeping the money, right? it's not going to the actual clients, right? >> no. so, in the lawsuit i brought, california law gifs me an opportunity to pursue a couple of different remedies. one is rest dugs for victims. another is penalties. to be imposed. the $50 million that we receive are in the penalties category. on the restitution side, which is especially important to me, wells has to continue a

restitution program to refund the customer, but we also set up a mediation program that wells has to fund. >> how much was the restitution in. >> whatever, we don't know for sure because it may mean refunding of money, communication with a credit. maybe a whole array of things. >> $2 million in either fees or overdraft fee, 400 o,000 in fees. works out to roughly 2.5 million. >> those numbers, not at all. there is no cap in our settlement on the restitution wells most provide. >> that doesn't mean we don't know what they've done in order to give back the money to consumers thus far. >> no, here is what we know. we know that nationwide as many as 2 million were opened without consumer consent. think of how outrageous that is. >> totally understand. what kind of money did those

individual lose? >> we're going to find out. those individuals have and opportunity now to come forward and assess what they need and present that to the bank. if the bank doesn't satisfy them, our program creates -- work to get those consumers what they need. >> one of the things we were talking about here, sir, has been the time it took between your investigation and today. and the sort of high fives and victory laps that some we sense federal regulators have taken or applauded by the legislators in the hearings today. talk to me about why we shouldn't be surprised or a little alarmed that it took this long to get from where you were to get to where the cfpb and occ got involved and this settlement

happened. is it odd it took that long? >> upon the filing of our lawsuit, have been contacted by a whistleblower or more than one and then we work very closely with the cfpb and office of the controlling oaf the currency. that was instrument also r far. very rarely, do the individual level of government work so effectively together as a team to put together interlocking series of resolutions so that each of our approaches complimented the other. i'm very proud of the work we've done. in fact, i'm looking forward to continues that collaboration in the future because it was so successful here. >> what would you say to people who would be critical of the cfpb and say where were you? were you aleap? why did it take mike and his group to unearth this? >> i'm very proud of the work my team, our office and staff put

together in this case, but i have to say as we began working with the cfpb, we found the quality of their work, the dog edness of their determination and the ultimate result to be terrific. i have only positive things to say about the work of the. and b ik if i were a resident of the nation here, i'd be looking to see take an example and say this is an entity you want to support because this is a moment in time when there's a tremendous imbalance in power between consumers on the one hand and institutions on which they rely on the other and the cfpb is a key ingredient in ensuring we have appropriate regulation. >> well, maybe you could run it some day. >> i'm going to do my best to be the best city attorney i can be. it's very well run as it is. >> i think it's down with the

ofcb. >> no, a monostore that's been created and some day, everybody's going to regret it. >> breaking news. >> one of the largest hedge funds when assets under management of $39 billion. has agreed to pay nearly $200 million to the sec to settle civil charges of violating the foreign corruption practices act. in fact to that, the ceo has agreed to pay nearly 2.2 million drrs to settle the sec charges that he caused certain violations along with joel fr k frank, who has agreed to settle the charges and according to reports, there may be more settlements to come. this is one of the largest hedge funds with $39 billion in assets under a. more pulitzer coming right up. hey what's up, peyt? you know i've got directv nfl sunday ticket - i get every game, every sunday. all in hd. yeah. i know that. so you want to come over? i'll make nachos. i can't right now, man. i'm playing.

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welcome back to "power lunch." headlines dropping that qualcomm could be interested in buying nxp semiconductors, so investors already asking here which chipmaker could be taken out next. i got off with phone with rbc. he highlights two names xy

links, altera got taken out. there's maxim integrated products. a stable business there with exposure to a lot of different end markets from autos to smart phones. and with that philadelphia semiconductor index up 24% this year, another deal could bring more good news for ship investors. we did reach out to qualcomm who declined comment. >> oil following yesterday's been gain with another today. jackie has more on the closing trades at a two-day rally. like a r record now. >> 48 clnt 32 is highest crude went today. yes, after that opec deal was admoinsed yesterday, we saw a second day of prices moving up. now, this market likes this news generally. it is a move by the saudis to try to stabilize and set this floor in with range.

this really doesn't change things that much. many saying this isn't even a major factor, but that demand trends leading into the winter are r more important. also remember when prices rise, nonopec pt cruisroducers, they . >> a check on the financials here, we are off the session lows, but we can pull it up here. we've got the dow down by 150. deutsche bank off its all time record low. aga again, you're look at a a shot down by 6.8%, on track for record volume. let's head to sue with her headlines this hour. >> guy, here's your cnbc news update this hour. one person was killed, more than

100 injured as a commuter train crashed into a station in hoboken, new jersey. this is cell phone video after the b crash. witnesses say many passengers had to kick out train windows to crawl the safety. iowa governor paid a visit to homes and areas hit by flood waters in the state. he was joined by lieutenant governor, kim reynolds. they issued an emergency disaster patriotically information. volvo recalling cars in the u.s. because the air-conditioning can leak water in and cause them to malfunction. and 23 giant panda cubs made their debut in southwest china today. the panda cubs were all born at a panda breeding research base this year. the number of newborns is almost doubled from a year ago. cutest animal on the face of the

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we can't go back to the years of devastating cuts to public education. exactly why i urge you to vote yes on prop 55. prop 55 prevents $4 billion in new education cuts without raising taxes on anyone. and there's strict accountability in prop 55. with local control over school funding decisions. and mandatory annual audits guaranteeing the money goes directly to our classrooms. not to bureaucracy, not to administration. so vote yes on 55. because it helps our children thrive. another hit to the hedge fund industry. rhode island, the latest state

cutting exposure. kate? >> the pension fund manager dealt another blow to the embattled industry, slashing by 500 milli$500 million, its comm investments. state treasurer said over the next two years, he would pare back the hedge fund portfolio and reallocate money he removed into many traditional asset classes. once the process is complete, 40% would be allocated to index funds. year to date, the state's investments are up 5.6%. he said the state's 7.5% target is unrealistically high. its portfolio has been lackluster through august. dragged down by miserable performers.

many charge 2% expense fees or chose to that, even when they don't perform and it's worth noting the state has invested in winners like elliot management, up about 7.5% through august. de shaw and the brigade fund. >> thank you, kate. >> let's bring in seth magaziner for more on this. great to have you with us. what's the straw that broke the camel's back so to speak when it comes to hedge fund exposure? >> this was part of broader review over the last serve months. we involved many of our state's leading investment experts, we worked with national pension advisers. as far as the hedge funds go, i think the last straw for many has been underperformance during the volatility of the last year and a half.

when you are an active manager, you either provide value by offering strong returns, which too many funds didn't when the market rebounded or you you do it by offers protection by being noncorrelating to the market. for more of us, the last straw was that they did not perform well and provide the protection over the last year and that protection is a big part of the rationale for why many exist. >> now, essentially, you're going to be doing more work yourself, granted a big part of that allocation that used to go to hedge funds is going to go into lower costs sort of etf passively man aunged funds, but you have to determine how much goes where. >> well, our performance has been positive overall. i took office in january of 20 15, in that time, we've made b

about $400 million of investment gains on $8 billion fund. we've beaten our internal benchmark, so performance has been solid, but the hedge funds have been b a lag. i should say in you know, i think this was set up well in the intro, some funds were set up well. >> they approved a new allocation yesterday. it's a mix. we're going to be bumping up our treasury for example to help news the next market downturn. also bumping up our private equity over the next few years, so we're going to stay diversified, but we're doing that in a way that de-emphasizes the role of the hedge funds and in a very diversified and risk conscious way. >> thanks for joining us. >> thanks for having me. >> let's take a market check

right now as stocks make a comeback bouncing off their lows. the dow was down almost 250 points. off 130. goldman sachs and merck, biggest losers in the dow. lots of financials are understood water. verizon and caterpillar, pbigget gainers. hi, steve. >> hey, good afternoon a. i'm here with alden mcdonald, the longest tenured minority financial executive in the country. from liberty bank. thanks for joining us. >> thanks for having me. >> you're out of new orleans. you're in eight states. $600 million in assets. as a community banker, when you look at what's happened at these big bank, for example, what's happening at wells fargo with phony accounts, how do you reisn't that correct.

>> looking at the wells fargo piece, we don't have that problem in community banking because we know almost every account that opens and could almost verify the deposit trends, but i'm glad i don't have that problem. >>. >> do you shake your head and wonder how that happens at a big bank? >> sometimes, i do, but i'm glad i don't have that problem. in big bank, they have big problems, in smaller banks, we have small r you are problems. >> when you look at what's happen with deutsche bank, it was down 7%. $14 billion fine. i want to just throw the same thing at you. what do you see, the community banks, which by the way, are going down dramatically in their numbers, while the big banks seem to be growing. >> in the community banking, we're dealing with a whole different issue of helping the local economy grow. we lend to the small businesses in all community that provides jobs and helps a local economy.

we're the bigger banks are dealing with a whole international economy, their problems are bigger. our problems seem pret thety big at time, but we're able to manage them. >> one of the big stories that came out of yesterday's temperature was the this issue of more diversity on the federal reserve board. do they need more diversity there? >> i think they do. the fed has done a pretty good job in balancing things over the years. but i think more diversity on fed board will bring more insight to what's happening in the urban communities in america. i think there's a number of policy changes that need to take place. you have a lot of urban communities throughout this country that continues to seek dee tier iee deterioration in neighborhoods. when you have deterioration in neighborhoods tack rs not paid. municipalities are not earning

the maximum revenue that can be generated. businesses go out of business in these small neighborhoods. we are in eight different state s and in all of the states we're located in, they have these pockets of poverty. but that's also pockets of opportunity for economic growth. >> what would you like to see the federal reserve do here for your bank and the communities you serve? is it better for them to raise interest rates now? >> to raise interest rates would give us a better spread. we've lost 80 basis points in the last year and a half. on our spread. it's very important to us. i think a better piece would be defined different incentives to put in these urban communities. i think that will help community banks to make up the spread because more business volume would come about. >> thank you very much for joining us. >> this goes back to something

we talked about yesterday. what was best for the nation. higher rates or lower and there's one gentleman's explanation. >> got it. we heard. steve, thanks so much for bringing it to us. >> all right. don't look now, but valiant pharmaceuticals back in the news today. we're going to tell you why that stock is getting slammed again. plus, the latest on why most of your investments are probably losing money today. why worry over germany's bank is wreaking havoc on our markets. that's coming up.

markets making a comeback in the last 40 minutes. we had been as many as 12 points lower. part of this is attributable to what we're seeing the semiconductor index. hire by 1.6%, close to session highs and this of course thanks to the dow jones report that qualcomm is in talks to acquire nxp semiconductor and that in turn is helping technology. technology is one of the best performing sectors behind energy as well as telecom, which are in the green today. now, to wilfrl frost on capitol hill with breaking news. >> i've been speaking to deutsche bank to barry, chairman of deutsch's hedge fund

business. this part of the business is where it's been reported today they've seen outflow frs the prime brokerage part of the hedge fund business. he said he can't comment on specific names or numbers of clients. they're not allowed to do that. he did confirm there have been outflows, but there have been also been inflows. said it was part of the typical ebbs and flows you see in the prime brokerage business you see in the course of o any week, any month. overall, they have around 800 hedge fund. there is turnover every year, but that total number of 800 clients has been relatively flat, but some have left and some have joined in terms of inflows and outflows oaf the course of the first week. didn't think there was a question of anything really going on in terms of calculated, whether any of these funds might have left because they had positions. that was not something he thought was possible. and said overall, the prime

brokerage part of o deutsche bank's business is very healthy and very profitable still. he did conclude however that probably have a perception issue, the bank right now. i think that perception issue comes down to whether it's been a simple one off capital question, whether this find comes in more severe or not or whether they've got a moric question. from comments they've made over the past two weeks, saying it's the former, just the one off whether this is larger and it's not the latter. those are the comments coming. >> great stuff. thank you very much. the stock is down more than 6% dragging down the entire financial sector today. let's brick in the team, dennis daven, max wolf of manhattan venture partners.

max, first to you. do you think deutsche bank is a deutsche bank issue or a financials issue which zverevs to bring the group down? >> i don't think it deserves to bring the group down, but i think the issue here is that all financial even large ones once they are in trouble for a while have these questions that pop up and there can be confidence runs on them that are much larger and more systemic than the problems they have. don't think this institution won't be with us in a year, two years, five years. there are enough people scared enough to move the whole directional index. people still jittery from the past and still have problems. today is all about reminding us of that whether germany or washington, d.c. the kohl's are hot and parties want torake you over the kohlco >> you believe this is an overreaction. the vix is up to 13.8. it is up however it is still

only at 13.8. how do you look at deutsche bank, financials and impact on volatility? >> in this market and having been through this in the past in 2008 and working at a european bank i can tell you they were the strong banks back in 2008. i don't think that is the case right now. i think deutsche bank is an issue. i think volatility is inexpensive. the price of insuring that position you can buy puts on germany. i would probably take the other side of max on this trade. i would be concerned. i think there is a lot of -- unless you get an absolute clear statement from deutsche bank as opposed to the one we just got i would still be cautious. i'm not a bank analyst. i'm a volatility trader. i look at it and say the options are still pretty cheap. you should probably buy options to hedge that position if you have concerns. if the options are expensive i would say too late to close the

barn door. there are still affordable options and it does go into a death spiral at times. is deutsche bank going to go out of business? citi group never went out of business but stock price was hit hard. >> everything starts at a point. dennis davit, thank you very much. for more trading nation you can head to our website. trading nation, power lunch back in two minutes. and now the latest from trading nation and a word from our sponsor. >> i'm often asked why company's stock drops after a good earnings's report. earnings are only half the story. frequently the company -- the future expectations don't measure up to current ones sometimes investors look to sell the stock. was just a bottle.

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an impact on the broader markets. deutsche bank shares 11.42 about a penny away from the all-time low. it is also for record volume day. we want to read you a statement concerning the report that hedgefunds have been pulling cash. the statement reads our trading clients are among the world's most sophisticated investors. we are confident that the vast majority of them have a full understanding of our stable position, litigation process in the u.s. and progress we are making with our strategy. >> earlier this week with the news of $14 billion fine. way bigger than anybody anticipated. angela merkel said no state aid. now this today. >> and the report this morning that some hedgefunds pulling money out of prime brokerage accounts. you pointed out this could be a

whisper. >> we will see. all big stories start small. it's a big bank. we'll see what happens. >> the low today was 11.19. that is the low we are watching for. thanks for watching power lunch. >> "closing bell" starts right now. welcome to "closing bell." i'm kelly evans. >> i'm bill griffith. another very busy day. stocks are off their lows but very much in the red. the financial sector has been the biggest loser after a report a number of hedgefunds had cut exposure to deutsche bank. this is still an evolving story. deutsche bank shares took a sharp turn lower along with other european banks around mid day and u.s. banks, as well. we will dig deeper into what ripple effects could be.