earnings was out of the faang, this stock is cheap. now it is cheaper. >> 26 times 2019 numbers. >> i'm going with joe theismann in terms of the patriots and looking at visa. it is down. >> that does it for us here in minneapolis. thanks for watching. "power lunch" begins right now. >> i'm melissa lee here is what is on the menu. a selloff on the street the dow off to the worse start in two years. what is fuelling the fear. one of the big issues, rising rates about the fed. do we need three rate hikes or four or five we'll ask the top economic forecaster and bitcoin rebounding after below and wiped off the global cryptocurrency in 24 hours is the mania over or is bitcoin near the bottom right now. "power lunch" starts right now and welcome back to "power

lunch. the crypt o hits the fan i'm tyler mathisen the dow down and off to the worst week in two years. energy is getting walloped apple shares on pace for the worst week in more than three months bond yields, this is the story, folks of the week. maybe the story of the year. the 30-year bond yield now above 3% highest level since march. the benchmark ten year jumping to a four-year high above 2.8% steve liesman is the man and he is joining us for the hour >> thanks, tyler i'm steveliesman we begin with the market, selloff concerns about rising interest rates a big reason why. bob pisani is at the new york stock exchange where we've just crossed the down 400 park. >> we bottom but the bad news is

we're not rising we're sitting near the bottom and paralleling the 10-year yield. we hit the highs about 2.85% that was about 10:00 eastern time and that was when the market essentially stopped going down you could see it moves sideways. take a look at the s&p 500 and we've been moving sideways since 10:00. but we're still sitting essentially at the bottom for the day. take a look at the sector. the reflation trade, the industrial and materials, semi and energy, all weak banks which would benefit from higher rates are better than everybody else but still down. health care is i market leader but still not as bad as the other sectors. so the bottom line is rates are a bit of a problem for stocks. the velocity of change, the phrase we've been using is accelerating the yield going from 2.5 to 2.8% in three weeks, faster than people anticipated wage growth with the new numbers. highest level since 2009

an it is good news for workers but giving trade -- >> are we accelerating to a bound side is there a bottom here. >> no, not yet and we don't know where the ten-year is going. so the question is what is the real freak-out mode. we're only 2.5% from a historic high on the s&p 500. that is not a lot. but the debate now is, is this the catalyst for a deeper correction i think the answer to that lies with the bond yields right now a. until we get that, we're not going to have an answer to whether that correction will be deeper >> bob, thanks and it was a healthy jobs report that started spooking the market this morning and compounded the market dilemma just how high the rates need to go and that jobs report was better than expected, up 200,000 with an estimate of 177,000, a slight revision and average hourly wages were up, 2.9% year over year

and the unemployment range unchanged and the participation rate at 62.7 strong job growth and strong economic growth and rising rates puts incoming fed chairman jerome powell in a predicament out of the gate. here is what i call the powell predicament. the tax cut stimulus and really increasing deficit spending and pumping money into the economy we're below what fed -- the fed considers full employment. inflation is expected to pick up and asset values are high. that argues for higher rates and on the other hand, you have a supply side aspect if there is greater capital spending, no inflation the balance sheet is declining that is also tightening financial conditions and it appears given the unemployment rate there is still slack in the labor market powell would be unlikely to raise hikes but the economic

data and the interest rate market could force his hands. >> isn't that what we're seeing today. we saw the likelihood of a rate hike go higher the one in 2019. >> we don't have to guess about it if you want to put it up in the back but we're looking at a 90% chance of a hike in march and 61% in the june. thaer calling that up. and 54% in december and that is the third hike and now a new chart that i'm now for the first time showing you, this is the probability of the fourth hike only 11% in november 20% in december. an it is not going to be the fourth hike but it is the last contract we have a probability for. january 19, 60% chance we go to the 2.25 and 2.5% range. >> thank you very much bob, thank you and what do investors do right now? let's bring in jim mcdonald with northern trust and jim karen, portfolio manager with morgan stanley. we'll call it jim glass.

jim mcdonald, let me start with you. what do you make of the market here and where do you think it goes >> well so tyler, it is funny that a month or two ago everyone was worried about the yield curvin verting and we've taken inversion off the table and have a healthy steepening three hikes priced in which is what the fed wants to do so i think this is a normal correction with good earning and stable inflation we're still constructive on stocks. >> jim, 2018 is not 2017, is it? >> no, it is not i think what we're seeing is a re-rating in the growth rate, in the u.s. economy so it used to be the fact that we couldn't grow much about 2% and now it is becoming more commonly believed that we could stay above 2%. 2.5% growth even maybe even higher than that. so i think it is pretty natural. why not. why aren't interest -- why haven't interest rates rise as much as they currently are right now. and by the way, rates are still low. so i don't really see this as a

material problem unless ten-year treasury yields get to 3% and stay above 3% and that could take a material upgrade in growth into 2019 and into the later years. so for right now, i see this as a healthy correction i think yields need to be higher i think we need to reflect the sentiment that the fed may continue to hike interest rates. there may be a fourth hike even this year. so i don't see this as a problem yet. only if ten-year treasury yields get above 3% and stay there and we see inflation expectations down the road. that is when it is a problem. >> jim mcdonald, i think it is fascinating that investors point to the 3% level. we've seen a massive move and the velocity in the ten year yield that has investors spooked. we're not far off and who knows where it stops that is the question here for investors. at what point do you see this in terms of threatening the valuation in the market, starting with equity risk premiums here?

>> it is hard to have a specific point in mind as far as the level of rates i think maybe more importantly do rates move more than the fact is expecting the history -- >> does this tell us they are? the move that we've seen this week and the move in rates, doesn't that tell us that maybe they are moving faster than the markets had anticipated. >> well so this is a very short period of time but to your point there is an extra hike priced into the market we've adjusted that. the markets come down about 3% from its peak. unless we have a second leg, if it worries about inflation, the market got priced into the interest rate structure and the environment we'll see over the next year and that is not going to be bad for the equity markets. >> isn't this just a case of when the -- when the facts change, i change my opinion. and the story here is that when you go back and look at the spread of the ten-year over the two, what you find is that the question is not why are rates so high now, it is why weren't they higher before? when you look at where we were,

you only go back to november jim karen, we should go to right now. you only go back to november and you had a spread where it is now -- all we've done is return to normal and the feds will process this -- not that now is the aberration, but when it was low that was the aberration. >> that is exactly correct i don't think the fed wanted a flatter curve. the fact that the two tens occurs has reached 70 basis points what we're seeing today is rare. which is a steepening of the yield curve as interest rates are rising that typically doesn't happen. typically the current flattens with interest rates rise and what we're seeing now is a repricing of better growth risks of maybe potentially higher inflation risks. so we're seeing a return to normalcy we'll see restoration of the turn in the curve which is a discounting for potential inflation into the future. i think this is healthy. i'm not alarmed by the movement

in rates i don't see it above 3%. i'm not alarmed. i think this is a return to normalcy i think you are right. >> let's take 3. 4 is on the table. is it time to mention the word five is it time to think the fed may move as much as 125 basis points that is the tail of the -- i think the market has got three in and it is thinking about four and now the question is to be more aggressive in a 12-month period go up as much as 125 basis points and maybe that is just crazy talk. >> i think five hikes would be very detrimental to the cycle. that would be very detrimental to equity or high yield. i think four is possible and would you be okay. five would be the big surprise. >> jim class is over thanks very much >> it is not we have another jim. >> i know we have another jim. >> but breaking news we have our first look at the stash tash rapid update for the first quarter of 2018 and it is a healthy one.

we have six economists answering our survey 3.3% is the average for the tracking forecast with a wide range which you would expect because there is little data for the first part of the quarter. 2.3 to 5.4 and gdp tracking at 2.6. atlanta fed, 4.5%. that is the number mel is is shaking her head. >> and i read your tweet yesterday why the fed have to back pedal on this. >> steven stanley is 3.7 moody's who puts forecast the forecast for cnbc and look at that high frequency economics on my left and bank of america at 2.3% so is the market right in pricing more rate hikes this year lets a bring in the top economic forecast, what is his name >> jim oef sullivan.

>> i think once a quarter is reasonable they've moved five quarters in a row if you count the balance sheet in september so i have them going four times this year and not stopping there and tipping into 2019. so i have another three in 2019. and i think to step up from once a quarter you do need some is bad inflation news so we haven't gotten that yet but it is possible. >> i want to separate this discussion of the market and everybody wants to talk about the market and the affect of high interest rates on the market and i want to talk about it on the economy. one thing bob pisani emphasized is the issue of the velocity of the change is the velocity of the change bad for economic growth? >> i think -- it is probably partly the change as well as the level. but i personally would probably put more emphasis on the level but i would broaden it out to financial conditions when the fed is looking at this and they see the downturn in the unemployment rate and it is already low enough to put pressure on wages an the message is they've got to slow down to

the bond yield and credit spreads -- >> [ inaudible question ]. >> right now bond yields have backed up. but for all of the excitement on the stock market, we're still up 5% on the year. >> and corporate bond is not -- >> they are as low as in 200 # when you look at financial conditions sh the dollar is down and financial conditions, we're about to get a tax cut the signal of this is the feds probably should be stepping it up because we're getting 1.5% unemployment growth. the labor force is growing less than 1% a year unemployment will keep falling. >> so maybe steve is not crazy when he says five. maybe your forecasts for four, there is risk to the upside in a -- in terms to the risk hike. >> as you continue into 2019 -- and the last cycle was very measured but it was a quarter point. so that was eight a year so four a year is incredibly gradual by past standards and they could step that up if they needed to. again at this point, i don't

think they need to because the markets don't even -- for the year four would be more and that is the direction we're going and they need things to slow down. unemployment growth is too slow and too strong. >> let me get two quick questions in first one, if i remember your research, it is the first quarter numbers are lower than the rest of the year >> yep. >> do you think that will -- and if this is low, what is high >> well, ultimately of course the feds mandate relates to the labor market and inflation and not gdp and inflation. so if gdp is 4% and unemployment is not falling, that is fine and if unemployment is falling, they can't deal with that. and at the low end of the forecast -- >> you are -- >> that is technical i think the trend is close to 3%. >> because of the weakness of the first quarter. >> initially now come july when they do the annual revision, there is talking about opening up the books to seasonal adjustment system and you could have a weak

q1 and then it gets resized. >> if you talk about seasonal adjustments i'll never get invited back to fill in. just very quickly. what is your out look for the year. >> i have 2.8 for the whole year 3.5 for the second quarter and 3 for the third and tailing off to 2.5 in the fourth quarter. last year was 2.5 and the expansion is average 2.2 so this is a step up and even 2% is enough to bring the unemployment rate down so i think that is the most important issue here from the fed's perspective. unemployment, even though it is flat this morning, we keep getting the unemployment growth and it is clear unemployment keeps falling and not just average earnings but the eci number and the unemployment cost index is showing for the unemployment rate is starting to put upper pressure on wages. >> that is my second question so you just answered it. >> another jim but not least. last but not least. >> great to have you. >> thank you. big day for bitcoin bouncing back seema is at the crypto desk.

>> bitcoin is seeing one of the worst weeks since april of 2013. in the span of six weeks, bitcoin has fallen nearly 60% since december 17th when it hit that high of 20,000. traders say the recent volatility is driven by retail investors. many of whom were first-time buyers of cryptocurrency around the holiday season and are now trying to get out. we're also seeing low volume in the bitcoin futures market which suggests that this is more of a retail driven selloff versus institutional. now a widening regulatory crackdown continues to be a source of concern. this week india announcing it is banning cryptocurrency and traders are turning attention to next week when s.e.c. chairman jay clayton and jay christopher giancarlo will testify in front of the senate committee on banking and housing and urban affairs on regulatory oversight of virtual currency. but regulation hasn't pushed everyone out the door. two long only funds that i spoke to say the rollout of the

lightning network, it is a technology that is said to make bitcoin easier and faster to use could be a catalyst for the price of bitcoin but it is still jell to -- yet to be determined when it will be fully implemented. back to you. >> doing my best brian sullivan van. we're at the board. >> and the oils now 765, up 182 from a year ago. we've been teetering back and forth. add and subtract a few but the addition of six is on the higher side with production topping 10 million barrels a day. with production still rising, a lot of weight on the shoulders of demand trends to pull through. back to you. sunday is a huge day for domino's as americans will order millions and millions and even billions of pizza while watching the super bowl but june 30th is also a huge day

for the company. and that is when ceo patrick doyle steps down what is next for mr. doyle and the company? and we continue to watch the markets. a big selloff on wall street now 380 points may not be what they used to be. but it is still a lot. ise dow down more than 700 point th is week "power lunch" returns after this so a few years ago, me and my wife were actually saving for a house. but one day we were sitting there and we decided that, you know what? something needed to be done about what was going on in our inner-city. instead of buying a house, we decided to form this youth league. what is he doing wrong? he should shed the block. exactly. it's volunteer, we don't get a paycheck. it's one hundred percent from the heart. football shaped my life and i'm praying that it will shape these kids' lives as well. ♪ ♪

the countdown is on until super bowl lii and that means big business for domino's. shares are up more than 20% over the last year. up 16% in just the last month alone. here for a power lunch exclusive is patrick, the president and ceo of domino's. it is great to see you. >> thanks. appreciate it. >> and i read you expect to sell 13 million pizza slices and 4 million chicken wings. and that is just on game day what is the leadup to game day is like at your various restaurants and what the inventory level is and when you procure the ingredients. >> procuring the ingredients are going and the team is training and getting ready for it

this is not just the super bowl for football players, it is for us as well it is a very big day one of the five busiest days but even more importantly, it is really compressed. basically all comes in at about -- in about two hours that we're incredibly busy. so all hands on deck everybody is in stores everybody who works in any store is going to be there for the couple of hours. and it is fun. it is this great high energy thing. so people look forward to it they love taking care of the customers. but we're going to be really busy. >> do you go in and give a pep talk or make halftime adjustments? what do you do what is your day like. >> i'll be out i always am. and i come in also in here where we're doing thedigital stuff but it is interesting. the half time pep talk we don't need because it is really busy until after halftime and then it stops. >> do you know second by

second -- because of your ability to track orders, how well you're doing on that day? >> yeah, we do. >> so you know >> we do we actually have -- >> we have a graph up on the wall it shows last year and the exact same minute. >> and i would love to see that and be there in the war room. because the food is good, i know that >> yep it will be. >> so walk us through that two hours. how much dough and how much doe? how much sauce and cheese and how much cheese? >> so we'll do -- we'll do 25 to 30% more than on a typical sunday but again, it is all really compressed so that is the whole thing about super bowl that makes it exciting, not only is it a big day, but it comes really quickly so you're talking about a couple of million pizzas. >> in two hours.

a couple of million pizza -- how many pizzas per minute. >> a thousand orders a minute. >> are there states that you would anticipate either buy more or pizza or wings and do the teams geographical locations and where the super bowl is being played educate you as to where the orders will come in. >> yeah. so it will be broad. this is a very high interest game we want it to be a close game. because the closer it is, the longer it goes the winning team, the party will continue so whether philadelphia or new england win, the stores in that area -- it will continue to go big for them through the night the team that doesn't win, may slow down a little bit more quickly. but it is a high interest game and so we think it is very strong those particular -- new england, so boston and philadelphia will be very busy and so will the twin cities. >> just want to point out to our

viewers, we're down very close to the session low on the dow. it was down 426 and now down 420. patrick, let me turn to the broader business climate as you see it number one, and get you to comment on that. but two, get you to comment on the new tax law. how it may affect your business and whether you are raising wages, whether you are paying bonuses. what are you doing differently because of the new tax law or because business is just good? >> right so look, the overall environment is very good right now and certainly the new tax law plays into that. it increases the return on investment for every company you are looking at your after tax return on investment and so that is improving so we will ultimately -- our investor day, we talked about our estimate for capital expenditure, the highest we've

done wages, it is interesting, you're seeing as you just with your previous guest talking about kind of the wage pressure out there. and it certainly is there and it is a healthy thing when the economy is going well, when it is getting harder to hire people and you compete for people and so we're looking at how do we do that more and more effectively and i think that is ultimately a very healthy thing for the economy. >> patrick, you're stepping down as ceo in june so this is your last super bowl. you've already denied widely that you will go to be the ceo of chipotle, but have you put any thought where you might go or could we see a ceo role at a private equity firm or start your own business? any plans here >> yeah, i am 100 % focused on the domino's until june 30th and then my wife and i are going to put our feet up for six months and figure out what we want to do next and where we want to be

and how all of that plays out. we'll put off to the back half of the year. but i want to make sure we're in great shape here and that i've done as good of a job as possible to hand off the reins to rich allison as our next ceo. so i'm completely focused on that and after that is done, then we'll start thinking about what is next. >> okay, patrick thanks very much i'm wishing overtime, which means 7 million -- >> overtime is outstanding we can do overtime that is a good thing. >> so pepperoni please thanks so much folks stocks are near the session low, the dow falling will 430 points and a lot of action in the bond market are yields are spiking we head to the pits and much more on this big selloff when "power lunch" returns. ink? i don't like it. oh. nuh uh. yeah. ahhhhh. mm-mm. oh. yeah. ah.

agh. d-d-d... no. hmmm. uh... huh. yeah. uh... huh. in business, there are a lot of ways to say no. thank you so much. thank you. so we're doing it. yes. start saying yes to your company's best ideas. we help all types of businesses with money, tools and know-how to get business done. american express open.

hello, i'm sue herrera here is your news update for the hour the justice department hosting a summit on strategies to combat human trafficking. jeff sessions said fighting it is a top priority for the department >> human trafficking is a violent crime. trafficking victims are often threatened, beat ep and drugged and isolated, deceived and manipulated psychologically in order to make them dependent to control them and to keep them

captive. it is hard to comprehend this level of cruelty but human trafficking remains far too common >> tobacco company alt rhea is giving employs a $3,000 bonus with the winfall from the tax cuts the richmond times dispatch reports the payout to 7900 workers totaled about $24 million but they posted a $10.3 billion profit, almost half in the fourth quarter as justing to the reduced tax rates. and flu season is bad. there are signs it might be starting to slow in the west the cdc reports 48 states have widespread flu activity, down from 49 states the week before because oregon was taken off the list your update to date. that is the news update. back over to you. we do want to check on markets which are down sharply across the board we're just off of session lows

the s&p is down 1.25% and down 3% for the week. today it is at 2787 and a point off the session lows goldman sachs and apple leaving the dow and exxon and chevron dragging on the do you and energy is the worst performing sector every single stock in this group is down. materials are also sharply lower. >> let's go to the bond market ri rick santelli tracking the action and there is action today. >> there certainly is. if you look at this, we are down two basis points on the day. but more interesting, we're up only two on the week you look at 24 hour ten-year note yield and they are up on the day. they are up 17 basis points on the week look at a one week of the dollar index, it is still closing for the week, if it stays here, around 89. in negative territory after the runup in rates that we've had. it is truly amazing as to the motivations of traders and foreign exchange, the euro still

reigning supreme if we look at the yield curve spread and if you look at tens minus 30s, referred to as the nob. it is still flat 23 basis points, but not true when you get to ten to two hovering below 70 it has steepened, because of what i mentioned when i first started out how much thetwo year and ten year have diverged this week and finally if you want a barometer for nervousness creeping into the fixed income and credit space, look at the etf. it is now hovering at the lowest yield since the last time we were nervous about it in march of 2017. >> thank very much. i'll say the proximate cause of the selloff is what is happening with bond yields i think it is fair to think about what is happening with the nunes memo that spooks market in the sense that some people spin this out to a constitutional crisis, we'll see this memo is now out. i think we'll talk about it

later. but the idea that there could be resignations, maybe when this passes we'll know that it is only bond yields but you could spin a bunch of very negative political outcomes from the release of this memo and i think it also is something on the minds of others. >> there is more to get worried about. >> thanks a lot. president trump declassifying that controversial memo we will tell you what he said about it and what it means plus 200,000 jobs added in the past month unemployment at 4.1% stocks selling off everything you need to know about stocks and the economy, everything you need to know is coming up on "power lunch. ♪ (nadia white) the moment a fish is pulled out from the water, it's a race against time. and keeping it in the right conditions is the best way to get that fish to your plate safely. (dane chauvel) sometimes the product arrives,

and the cold chain has been interrupted, and we need to be able to identify where in the cold chain that occurred. (tom villa) we took our world class network, and we developed devices to track environmental conditions. this device allows people to understand what's happening with the location, but also if it's too hot, if it's too cold, if it's been dropped... it's completely unique. (dennis woloshuck) if you have a sensor that can keep track of your product, it keeps everybody kind of honest that way. who knew a tiny sensor could help keep the food chain safe? ♪

welcome back to "power lunch. the controversial gop memo has been released and president trump weighing in. let's go to eamon javers at the white house. >> that is right we have some reaction from the president just a short time ago.

right after he declassified the memo but before it had been released publicly some very tough words here from the president of the united states here is what he said >> the memo was sent to congress who was declassified and congress will do whatever they are going to do. but i think it is a disgrace what is happening in our country. and when you look at that, and you see that and so many other things, what is going on, a lot of people should be ashamed of themselves. >> so what have we learned here is the key claims in the nunes memo it is just been made public by the house intelligence committee. we learned that the steele dossier compiled on behalf of the dnc in the clinton campaign formed a key part of the carter page fisa application. that is the application that law enforcement makes to spy on carter page who was affiliated with the trump campaign. the fbi did not disclose the memo that the dnc or the clinton campaign had been funding steele's efforts to the court

that was issued the fisa warrant so that means ultimately the fbi should have, i'm told by sources, included any information that it had in terms of steele's methodology, who he was working for, where he was getting paid, what his ideology was and all of that should have been caveated in the fisa application and the nunes memo said it wasn't so we'll have to wait for some answers here on why exactly that happened. we had a statement from the fbi before the memo was released expressing concern here. they said we have grave concerns about the material omissions of fact that fundamentally impact the memo's accuracy. so there are questions about what might be missing from the memo from the fbi perspective. was there earth eviden-- other evidence used as part of the fisa application so reaction from the fbi since it has been made public but we do have a reaction from the fbi agents association which put out a statement saying fbi special agents have not and will not allow partisan politics to

distract us from our solemn commitment to our mission. so a lot of in degree swirling and questions now being raised in terms of what exactlythis memo has revealed and whether there is any an effort to release the democratic counterpart to this memo which the democrats say debunked the content of the memo that was just released today. back over to you. >> and as you point out, it is not clear whether there was other evidence in this application for a fisa warrant that may have been a part of it, presumably of that other evidence might be included in a democratic memo. does that democratic memo have to be approved for release by the republican majority -- on that committee >> it does and the majority has already voted not to release it. the white house though said that if congress decides to release it, they would be happy with that too they say they're in favor of transparency here at the white house and one of the questions is could they release it though. because some of that information may be classified. there could be a secret russian source or a technology

collection effort that they don't want to admit they have. that they can't reveal in putting out that information. >> very quickly. refresh my memory, chairman nunes who is the person who released this memo and who with his staff wrote it, is the same fellow who earlier this -- last year recused himself from the russia investigation because basically he was sharing evidence that had been given to him with the president before taking it to his committee, am i correct on that? >> that is absolutely right. last year he was involved in an episode in which it appeared that he was working too closely with the white house on -- working on a sort of -- information that the white house wanted to put out. so nunes recused himself from the investigation. but it is an odd situation because he hasn't been removed from the situation and of course this investigation is the most important thing the house intelligence committee is working on and he remains the chairman of that committee. >> thank you very much eamon javers on the north lawn.

stocks are sinking the s&p is just about at session lows right now bitcoin quite a comeback the latest on the bounce coming up on "power lunch." today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. all across new york state, we're building the new new york. to grow your business with us in new york state visit esd.ny.gov.

to grow your business with us in new york state (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long...

is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, only with td ameritrade. all right. a better than expected employment report today with 200,000 jobs added in january. unemployment rate right where it was a month before 4.1% but the jobless rate for african-americans did go up to 7.7% almost a full percentage point jump from december joining us now, mark mory from the urban link and former mayor

of new orleans and ron christy from christy strategies and former special assistance to president george w. bush. we will set aside for now this memo that is for folks to deal with and what is mattering is this reading on the economy and the jobs picture right now mayor moria it is good with the exception of that blip up in african-american unemployment which may be sort of statistical noise. >> this is why i think what we need to be focusing on to really have the great economy we all want to have on working on those who dropped out of the labor force. helping them get the skills and the training they need so that they could get back in the labor force. and what the black employment picture shows is that last month was a aberration or that in urban centers the unemployment rate remains high. so while the average is low, we

still have pockets and components of america when the unemployment rate is still too high so this is directionally a continuation -- this is the 88th month. of course most of them under president obama. now the last under president trump. this economy continues to grow on a consistent basis. >> if you look at -- you didn't have the benefit there, mayor, or maybe ron maybe you did or didn't, of looking at that bar chart that we just showed of african-american unemployment and this most recent month does look like a bit of an outlier. steve you may want to chime in but ron christy, i would like to get your thoughts on where the economy is now historically the first quarter is the low growth quarter but this one -- the atlanta fed it is a 5% quarter or better. >> good afternoon to you, ty i think it is a good snapshot of where we are in america right now. i agree with mayor, we've seen consistent job growth for several months now

an it is a good indication that consumer confidence is up. business confidence is up. and as it relates to the african-american unemployment rate, look, we haven't seen in 45 years that number dip in 7% we saw it at 6.8% last month which is a great step forward and the number this month is an out liar and i have a hard time believing it will tick up a percentage point but this gives americans a lot to feel confident about and my goodness, i sure hope the atlanta fed is right if we could get 5.4% growth this economy is going to take off like a rocket ship. >> isn't it wrong, though, to expect that the big issue here, which to me is the gap between black and white unemployment and some of the work i do which i'm sure, mark, you're familiar with, the idea that black unemployment rate when it comes to college educated african-americans is -- going along what the unemployment rate for high school educated whites. which speaks to me the systemic

issues so i agree a better economy is better for everybody, and especially better for the people who are the most disadvantaged in this regard but it doesn't get a systemic issues that are out there, mayor. >> no, it doesn't. and i think you put your finger on the point that even though black unemployment has in fact come down, it is still higher across the board than white unemployment is. which indicates the issue of systemic issues in the economy, exclusion and some discrimination some issues of access to those jobs we have to address that because growth is good but we've got to make sure that the growth is enjoyed by all segments of the american people. >> so ron, as we look at a selloff that is now quite steep. 446 points worst day in months for the market worst week since well -- a long

time ago obviously for stocks. two years ago, in fact what do you think -- what do you think is causing that. the idea that is that interest rates are going up or that we have a continuing resolution in washington coming up next week or a daca issue, why in. >> i don't think it is a daca issue. think what you just put your finger on is the issue congress has failed to exercise the responsibility to have a budget in place by october 1st what does that mean for businesses businesses need reliability. if they can't rely on the government to put forth a appropriations and to have a steady series of appropriations going out the door, you can't govern by continuing resolution one week here and two weeks there. the markets looking for more reliability and thus far congress has failed to deliver upon their responsibility to do the bidding of the american people. >> let me get your super bowl picks. ron, you first >> new england patriots. 35 the philadelphia eagles 21.

>> mayor, i know you were heart broken by the saints >> but i'm a eagles fan, being a graduate of the university of pennsylvania, eagles 27, patriots 21. >> there you go. a spli mayor, ron, thanks. >> good to see you we want to bring your attention to the markets, we are sitting at session lows right now so we're watching this very closely for you. the s&p 500 down by 1.5% right now. meantime, wild ride for cryptocurrencies bitcoin itself plunging below 8,000 bouncing back. cleso coit a bottom or bigger dein tme we're all over this. "power lunch" will be right back

each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward.

it's simply a matter of following the signs. they all lead here. cme group - how the world advances. you know what's not awesome? gig-speed internet. when only certain people can get it.

let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. roller coaster day for cryptocurrencies, losing $125 billion in total market crap on fears of regulatory price coin manipulati manipulation we have the host of cnbc's africa's crypto trader which is the only show devoted to cryptocurrencies he's also an investor.

you said you thought we'd see 7500 we did, basically. what was it about that level >> i've been tracking bitcoin from last year and we went from 7500 up to 20,000 in anticipation of the futures. the futures were like a non-event. the event was the momentum play with people getting into cryptocurrencies so you had retail investors getting into cryptocurrencies for possibly all the wrong reasons. they got into it because of the fear of missing out. they got into it because they wanted to get in to make the money without understanding the technology and the markets went up. then the markets started to come down and everyone didn't understand the technology turned around and said hold on, what did we back here >> so is 7500 the level at which weak hands got in and now they're shaking out, so 7500, does that support? >> i think they got in high but between 10,000 and 7500 was the exit point for them and i think what you can see now is that the market is recovering a little

bit. so i'm expecting the market to hover here for a little bit. a little bit nervous then i'm expecting some kind of something to bring up a green candle and that will start the momentum back up again. >> it's been a terrible week for bitcoin. you said you believe bitcoin is a store of value is it still a store of value if it goes down with every other asset class? it's being seen as any other risk asset out there which is being sold off. >> it's a store of value but there's not mass market adoption yet and as we get mass market adoption we can expect it to become the universal store of value. but i always say if we're going out to run a marathon, we've parked our car and picked up the goody bag, we haven't got on the the start line of cryptocurrencies it's very hard to open an account, it's unscalable so yes there is a new digital gold, a new digital store of value, i think bitcoin is the store of value but the game hasn't started yet. >> i wanted to ask you, do you

think governments ult t may will sit by and watch bitcoin rival their currencies the euro, the yen, the dollar? >> i think when you start discussing currencies, that becomes different and i think in time yes governments are going to have to accept a new form of digital currencies and who knows what that will do. but i don't believe that bitcoin today as it stands is a currency i believe today bitcoin is a store of value. >> hold on if i started off the year and agreed to work the year for six bitcoin, i was making $120,000 now i'm making, what, $50,000? so as a store of value for my labor, the value of bitcoin got cut more in half so it isn't storing value for me. >> it has. because if you started off last year for with bitcoin you would have started at $900 now i look at your board, i don't see stocks that are in the substance last year.

>>. >> ron, great to have you with us. >> thank you. >> market selloff gaining momentum the stocks taking us down. blue jim cramer will join us his take on the big selloff and the eaesgl the second hour of power after this break me and my wife were actually saving for a house. but one day we were sitting there and we decided that, you know what? something needed to be done about what was going on in our inner-city. instead of buying a house, we decided to form this youth league. what is he doing wrong? he should shed the block. exactly. it's volunteer, we don't get a paycheck. it's one hundred percent from the heart. football shaped my life and i'm praying that it will shape these kids' lives as well. ♪ ♪

like you do sometimes, grandpa? and puffed... and i'm praying that it will shape these kids' lives as well. well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes.

symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. if you can't afford your medication, astrazeneca may be able to help. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

welcome to "power lunch. stocks are tumbling right now and are at around session lows, the dow falling as much as 463 points, nasdaq having the biggest drop in two months apple one of the big drags here. it's on pace for one of its worst weeks in three months. weaker-than-expected iphone sales fuelling concerns. check out other big names hitting lows procter & gamble, general electric among them. courtney reagan is joining us for the hour here. court? >> i am courtney reagan. despite all the strong earnings, the major averages heading for their worst week in two years we saw the selloff at the beginning of the week, it's happening again. bob what is driving the selloff

today? right now in particular? >> we are roughly paralleling ten year yields inversely. we're 2.5 to 2.8 this is an intraday, the highs towards 2.8 and above stocks hit their lows look at the s&p 500. we've been moving up again towards the highs we're breaking down to new lows in the s&p 3500 this is rate driven. it's declining to advancing stocks that's not a good number volume is borderline heavy volatility we're at over 15 on the vix, that's near a six month high we're halfway through earnings season and the number has been terrific about 15% earnings growth we're seeing overall that's the best we've seen in quite a while.

fourth quarter revenues, almost 8% there's your numbers for earnings estimates nearly 8%. folks, they used to say you don't have revenues and therefore it's cost cutting, not any more revenues are back and on the first quarter i want to emphasize numbers are continuing to go up from 10% to 14% and guys we are getting double digit earnings growth for all four quart quarter. >> is there chatter on the floor about the role of the gop memo playing into this selloff? >> i think it was a bigger story yesterday when there was rumors around the fbi might resign over th that i wash the markets and if you see today's action and watch what that ten year is doing, when the ten year reaches new highs the market reacts. that's what's happening today. >> all right

let's talk more about today's selloff with "mad money's" jim cramer who joins us now from minneapolis. welcome, good to have you with us >> thank you for putting me on the show. >> fantastic, great to see you explain what you're seeing in today's market and whether you think the market is overreacting to what's out there? >> well, i don't think it's overreacting because we've been up so much i think one of the things we see is bob gave a great rundown of earnings people thought you know what, it doesn't matter, you have good stocks, you have unbelievably good stocks and i think we're in a lot of weak hands right here. we have to flush them out and then we'll be fine. >> and the specific earnings that you're referring to i guess are alphabet and apple that weren't good enough or that there were internals within those reports that weren't good enough we're not used to having

forecast cut this quarter, whether it be tax reform, whether it be the dollar has gotten weak, whether it's the repatriation we've heard this is a good opportunity or this isn't as good an opportunity as another what we haven't had is, wow, numbers come down, does that mean we have to sell people seem to forget when numbers come down it's not the end of the world but it feels like the end of the world today. and it doesn't feel like it's over that said, we will be oversold at this pace by monday/tuesday and people who haven't bought anything should be thinking. there are a lot of bargains created along with things that maybe not that attractive. >> what's on your list, jim? >> i do not think that dow dupont was nearly as bad as the market is saying we have ed breen breaking things up you had a good quarter, there was some pull through. here's the stock that's down five straight points what are you thinking about? you're thinking about a breakup of the company i think that's terrific and i think when we look at that, we say wow, you know, i've been waiting and waiting and waiting for a price break.

look at estee lauder that was an amazing quarter. the president has clearly distinguished his company as the ultimate luxury good stock in this market. can't get out of its way because of the futures so you have to take advantage of tableau data that stock will be up much more if it weren't for the futures. i like stocks that are doing well in a bad day. walmart being the classic example. look at that stock. >> how about stocks doing well on a bad tape? i'm thinking of amazon they said this is the tom brady of the internet, to use a super bowl theme here. but it's up sharply. amazon is a safe haven in this market, jim? >> i think amazon is a company that we realize has great revenue growth and it has to be one that has great revenue growth that isn't necessarily pumped up on steroids. i mean, i think you had advertising going great. i think obviously prime can be raised a lot because retail is so good. amazon web services, we know google cloud is good

we know azure is good. we don't get a breakdown but amazon web services is fantastic. i think the stocks -- i see these price targets melissa of $1600, $1700, i think they're right. i think the stock should be bought i think the stock will be up 150 points if the futures weren't down. >> jim, you're in minneapolis. should we just eat the beer in the wings or should we look in the stocks and companies selling them to us on sunday >> it's difficult after listening that brady analogy for me to not think of a couple stocks that people aren't thinking about that have good performance records and may surprise to the upside going back to some of the ones -- i bumped into brian cornell in the green room, don't you love that, bumped into someone in the green room there's a stock i've been waiting for that one came down. if kohl's came down, these are the opportunities. but target -- united health, how many more days are you going to be worried about the troika of buffett, dimon and bezos

if that was a profit company run by amazon i would still sell unh down here. >> minneapolis is a sleeper city, isn't it, jim, in terms of the number of corporations based there. big ones, united health, target, medtronic. many others, 3m. >> best buy. >> you're so right when i was growing up that's what pittsburgh was like there were just 20 companies in pittsburgh and they were the dominant companies, the headlines, even during the vietnam war you would hear about companies with so much steel being used, so much mechanics, so much industry now you look at this is the ultimate town for the -- i'd say the 21st century we talk way too much about silicon valley, not enough about a 3m or medtronic. medtronic, there's a stock, geez, if that comes down a little more, how many right things are they doing? don't forget, abbot bought st. jude and we're just seeing now the fruits of st. jude which was

another great company. i think best buy is fabulous, really well run, surprised a lot of people, big short position. they know what they're doing when you want to do your house better you go to home depot and then best buy. by the way, home depot, that came down, that would be another gift. >> a company that courtney, best buy, knows very well a statistic that i'm sure you know there have been only three quarterbacks in the history of the super bowl who started the super bowl having started three or fewer games for their teams during the year, foles will be the third. the two prior guys both one. >> i knew him from college and i said geez, that guy is pretty good i don't cry anymore about football although obviously sunday night if we don't win it will be a different story but nick foles was fabulous and then the arc of his career is a shame

there's a hard knock where jeff fisher picks up the phone and says i have to get rid of foles. he's a human being with dignity and it's no wonder he almost thought about getting the business business is football and now the rejuvenation story is not talked about so much because foles is a team player a lot of the great eagles don't want you to know their names and they wear masks, underdog masks. >> apart from brady and a couple of others, there aren't a lot of players whose names you do know. we're at 456 down now. do we close lower or higher? >> i think this 500 level, down 500 tends to bring in some buyers i was looking at the oscillator, we came in not gnat oversold i think down 500 and i think people will say let's start picking, let's find something. let's just stop thinking, you know what? whoa is me, money will be worse.

people should be looking and when people look we nut a bit of a bottom i know friday afternoon is a frightening time there's nothing frightening out there. there really isn't if apple is frightening, i mean, we should be very afraid of everything >> jim cramer, fly eagles fly. good luck sunday. >> oh, thank you thank you so much. right? >> you should have had that on the whole time. >> thank you guys. >> we have great signatures here look at that here's some people who have real names. all right, maybe they're not famous -- yet, that's to be happening saturday. >> maybe they'll end up with some rings, too. thanks, jim, have a great time now over to codominic chu. >> we are just near, just hovering off the lows of the session so far with the low down

about 460 points we're now about 3% below the record high levels that we saw just one week ago today. so 3% lower on the dow from record highs, 3% from the s&p 500. the losses are exacerbated on perhaps a bigger degree by what's happening in energy and technology we know energy is moving a lot on the heels of the chevron and exxon earnings from earlier today. also lower oil prices in spite of what's happening with the rest of the market we values the u.s. dollar and strength is take its toll on oil prices as well the one thing i would point out is that per courtney's retail side of things, consumer discretionary stocks are holding up relatively well they're slightly lower on the day and we know why, because amazon says doing heavy lifting on the upside on that front. back over to you. >> dom, thank you. dom chu. joining us now is the managing partner with cornerstone wealth and peter costa, a cnbc

contributor. i want to start off with you, peter, what's the view on this selloff? what wins out? down 500 on the dow investors step in or are people too spooked by rates going close to 3% >> i think it's more about rates than anything else and like was said earlier, there's an inverse relationship. you see the yields going up, stocks going down. normally the equities have gone on their own path but the last couple days it's been all about rates. that will continue i think we will hit down 500, maybe a little more. >> today. >> i think depending on what the close looks like, it's very possible there will be people looking for bottoms and i think they're probably going to get that bottom on monday or tuesday. >> we keep saying this but these are fresh session lows at this point that we're sitting close to i want to go to you. a lot of investors say 3% is the

magic level. 3% is the level which being invested in stocks becomes problematic. given a move in treasuries that we've seen in yields in just a day, 3% levels just a few days away at this point, isn't it prudent to take money off the table? >> well, exactly the way the yields have been moving we have a 25% movement from the beginning of the year so is it time to take money off the table? i think the opposite i think probably just like cramer was saying a few minutes ago, there will be opportunities in this market you look at -- i think we've been as investors -- >> does it not matter that rates are rising this trajectory in their view is it not problematic to valuations >> it does it starts to show the valuations starting to -- certainly not an undervalued market anymore in some sectors we're well overvalued large cap growth and we're seeing it with energy selling off and some of the technology sector selling off

today. i think we've been looking from catalyst to give us a correction or pullback and with inflation and interest rate movements, the story of good news is not being -- it's bad news for the market right now i think it will be a temporary pause and a good time to look for opportunities, whether it be with financials, selective on technology, maybe looking at materials because we've got tax reform through but with -- when the president spoke about infrastructure spending, that could be another big stimulus to our economy and we haven't seen that come through yet. >> peter, what's the volume like there? do you feel any quickening of the pace >> zero. >> zero? >> yeah, zero. i mean our clients are on the sidelines, they're waiting, watching, they're starting to pick some spots on the bye side which i think may be early i'm looking for more on the down side today probably monday and tuesday as well.

i just think the market needs to wash out a little bit. i think we need to get down with somewhere roughly close to the 50 day moving average. we get there, test it, if it holds i think it's

and you're looking at three to six months there will be opportunities galore for somebody who has that kind of constitution. >> jeff? do you think maybe the backdrop for dip buying is a little bit different this time? i mean with the backdrop of the ten-year yield where it is, about 2.8%, with the backdrop of the dollar going higher, with the backdrop of selling around the world and across asset classes are you maybe more mereful this time around to say it's time to buy this dip? >> it's a good time to buy it may not be let's go all in. this may not be over as we inflation fear and what's the --

we've got new fed governor powell in place, the language from the fed meeting was still maybe became a little more hawkish in the notes so we know rates will go up three times i think earlier in the day we were talking a lot about maybe four or five times i think that will be another big factor to look at. how many times does the fed need to raise rates given the economy growing at the level it's at and the fed's main job is to either quell inflakes or deal with an overheating economy. we've got low inflation that's still starting to peak a little bit, we're still not at two. we're seeing the overheated economy as we're seeing everyday this week. it's a time to buy on this but maybe dollar/cost average in, all a great strategy to remember and we sometimes forget as the market has been running straight up right now. >> all right, guys, going to leave it there thank you so much for your thoughts jeff carbone and peter costa.

we're heading for the worst week for the markets in nearly two years. which stocks are fuelling the fall plus we'll head to phoenix where sully is sitting down with charlie ellis and phil miller. we'll get their take on the bitcoin plunge, tech slide and isart selloff. "power lunch" will be right back

the dow is down by more than 500 points at this how shall, almost 2% of declines, let's get more on the selloff with art

cashin from ubs financial services art, this appears to be accelerating into the close. we're seeing there is no safe haven, everything is selling off across the board. >> well, you started out, as you aptly noted earlier, that the pressure -- upward pressure on yields that puts general pressure on the market secondarily there's some vulnerability in the fang stocks, alphabet and apple not coming in as well and then this afternoon we've had the problem with the release of the so-called republican memo. it has served to dissuade buyers people won't know what's going into resignations, thewill therb calldowns? why take the risk? i'll wait until monday to buy. >> we're seeing in the united states that this follows what's

going on around the world. do you think there might be questions around this global stock market rise that we've been seeing. >> the great rally of 2018 is suddenly under question and that's another thing that puts a little pressure, people looking, gee, is this an inflection point? it was day after day almost hour after hour and now suddenly we've had a week where we've had a couple land mines go off and that i think has raised some doubts and raised some caution there's yields here and problems with the central banks elsewhere. for example, the yields in japan have been moving up, the bank of japan pushed back and the yields moved back up again so they're having difficulty keeping yields under control around the globe and that's a concern.

>> art, we haven't seen many 1% daily moves in 2017, four or six or something like that, let alone 2% days like we are staring in the face right now. but you've seen plenty of them how do you think about them? >> well, i think that you don't want to get too distracted by this this is not a 1987 crash or whatever but it is a market that was clearly overbought, way ahead of itself on the relative strength basis, way ahead of its moving averages so it was entitled to a bit of a pullback. you don't always like to see it come in one or two days but we've had a very bouncy week i would put in order let's wait until next week let's see what happens on the political front which is very important. this memo, et cetera, goes by and it's not a major event in washington you may find people come in and say those prices are relatively cheap, i'll start nibbling away again so next week

is when you want to look at things >> it is friday. the final hour of trade means a lot everyday but particularly on a friday what we're seeing action like this what do you think we should watch in this final hour of trade? if volumes haven't picked up and there's no one big catalyst that's going to end one way or the other, how do we position for this final hour? >> well, what's going to be critical is what happens with the so-called market on close orders we'll be looking at them shortly. right now they're leaning to the south side, i would caution the viewers to be careful with that because it can change in a matter of minutes. it can resflers a mverse in a mf minutes but we'll monitor that to see if it builds up to, as i say, $700 million or a billion to sell and that will put final pressure on the market in the ultimate 15 minutes. >> art, stick around we're going to bring in brian sullivan who is covering an investing conference in the phoenix area we'll have guests s is in just

couple of minutes. sully, welcome you have been struck by the level of optimism in the crowd where you are. what has today done if anything to that optimism >> not much, tyler, i'm in phoenix, arizona we just wrapped up a panel with bill miller and charlie ellis. they'll join us in just a couple minutes. very good timing to hear from these ygentlemen who have 80 years collective market experience with higher rates, with the political drama but with corporate earnings in cash flow still up. we just wrapped up that panel. we're getting ready, they're going to join us here. to answer your question in a short way, tyler, the optimism is still there but we'll find out what may or may not be concerning these guys. still a lot of optimism in phoenix, arizona, at an investing conference more "power

lunch," we'll roll up with bill miller and charlie ellis right after this >> all right, we'll stay right here as we watch the dow so art, a little less optimism is a healthy thing right now >> they were infatuated. it's the best january since 1987 and unfortunately i was beginning to hear things that i heard in 1987 and that was when the senior partners would tell the juniors okay, they're getting too high, sell into the strength, cut back on your position and after a while, the young kids would look at each other and say "hold old fogeys don't know what they're talking about, you have to buy strength, not sell it. that's what culminated in the

crash of '87 so we're only in the second month of the year but that kind of -- that heavily optimistic talk is what i'm starting to hear. >> when you said the words it was the best january since january of 1987 i won't oh -- [ laughter ] >> and i remember it, you remember it, it was rates again, wasn't it art. >> yes, it was and it was rates and currencies. it was a concern about secretary baker picking a fight with the germans over the deutsche mark and the dollar. >> and a new fed chief. >> who was in the air when the crash happened so he couldn't even be contacted. it was quite an amazing couple days. >> the comparison is uncanny. >> now i'm getting spooked. >> if we're making historical comparison

comparisons. bill miller made this point, history says that when we have a great january, the year goes well we know that 100% of the time since 1950 if we're up more than 4% the year is up with an average gain of 22.5% for the s&p 500. however when we have big januaries, february tends to underperform history is not a good guide, but if you're looking back you say good januaries can often mean poor februaries. i'm sure art has that in his giant brain somewhere. >> back to the '87 analogy, not only was van very good but after a slightly bumpy start, february turned out to be pretty good so we'll see how this february goes, whether it will be in with the rank and file that brian is

talking about or whether it will replicate what it did in '87. >> right now the dow is down by 552 points this shows you in terms of the steepest losses are being seen by fang stocks apple, for instance, is more than 10% off of its all time high hit just recently. >> that's where you had most of the air underneath certain stocks in the leadership groups. i think context matters for how we'll understand this a week ago almost everybody would have looked at this market and said it's overbought, overheated, overloved, it needs a pullback this is what a pullback feels like. >> can we bring up a reit etf? a reit etf >> that sounds like control room chatter cross talk, mike but we take your point

in other words so many people were calling for this but -- >> that it would be good and healthy for the markets and here we are. >> it's like saying i need a cold shower but man when you step into that cold shower, it's cold >> and what is going to happen when you have one of these pullbacks that everyone says we overdue is there is always a headline you can latch on to it's obviously yield so i don't think you want to shake it off one of the things about january was this rare combination of an economy running hot and financial conditions that were still extremely loose and at least right now the market is suggesting okay the economy seems pretty good. maybe slightly less loose financial conditions down the road if bond yields keep going we hadn't had that 3% pullback in -- since the election, essentially and earlier today you went to the absolute you went to the absolute tick, down from the highs, bounced then

came down again, didn't hold, that's a technical thing. >> i know you said the jury is out when it comes to this selloff, but it seems like there was always this tendency for buyers to come in when we had these pullbacks, there were very few pullbacks because they didn't last for too long do your worry perhaps that dip pieing might not come back in full force because of the backdrop in which this is happening, namely 2.8% rates >> as i says before, it's not the rates necessarily that are dissuading them. the buyers are being dissuaded by the political atmosphere. the release of that memo, media speculation that it might result in the resignation of that the fbi had or the assistant attorney general, you got the weekend talk shows coming up so if i'm a buyer i'm going to say wait a minute, why am i taking

this risk? i can take another look on monday so i don't want to commit any heavy money here and you can see the volume is very light and the reason we're having this selloff is that the markets are thi thin. >> mike, peter costa and jim cramer said they would not be surprised to see the market go down 500 or below that we've now come back off that 556 down point and so what are you feeling? >> yeah. i hoonestly think it could go either way from here i know that adds very little value right now. but basically this market has been operating on wider scales

than we were getting used to last time. if this pullback needs a flush in order to kind of basically put a punctuate it, then we haven't gotten it yet. maybe today is the start of it yet but there's nothing that says it's telling us more incremental information this afternoon about the underlying fundamentals except that people got too excited, there was too much money rushed into stocks in january chasing this rally and some of the froth is getting skimmed off in a hurry so i don't know how that process plays out in the next hour and a half. >> guys, thank you so much art cashin and our own mike santoli. eaantime, we'll take a quick brk, the dow is down and the s&p is down. stay tuned 're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that.

can we do that? we can do that.

take a look at the markets off session lows but the pain is still deep for the bulls the dow is down by almost 2%, that's a loss of 510 points. s&p 500 down by 1.6% and the nasdaq down by 1.3% on the dow apple really giving it a wallop there down by more than 3% off the back. >> let's check in with what's happening with apple because with this moon that we've seen

today hovering just about it right now, apple is now about 10% away from the record highs that hit just back on january 18, you may recall back then the highs we saw about $180 and change for apple shares, right now at 106.03. given this move, some folks like to call it correction territory when a stock holds back by 10% from its near term highs apple one of the biggest drivers of what's happening with the markets over the course of the past week. tyler, the most heavily weighted stock in the nasdaq, nasdaq 100 and, and s&p 500. the nasdaq has done a lot of damage thosing to five tech stocks dong a number of these markets. >> and when you look at the numbers yesterday from apple, i remember talking at the end of last year and one adviser warning that what you need to watch out for where the numbers come in but they're not as good as some people thought they

should be and when prices get as high as they are, a market that is vulnerable, this is a textbook kpal neptex textbook example apple made almost a billion a day. >> i mean, of course, but you put into context with the overall markets, as you see the -- i mean, apple is a dow component as well. we've dropped about 900 some points from the record highs we've mean the dow. apple is a decently-weighted component of that because it's a triple-digit price stock in a price-weighted index but even in the moves we've seen here, the proportion mat move moves in the s&p 500 have been much worse the dow has shaved 70 points out of the 900 that we've seen from the record highs we've gotten over the course of the past week so apple doing its part but even when the stock is priced like that, the least bit of disappointment can have a real impact. >> i got my profits and revenues mixed up it was a billion day in revenue in rethe most recent quarter

dom, thank you very much brian sullivan standing by with two nova scotiaing legends. >> perfect day to have this gentlemen on the phone charles ellis and bill miller, miller value partners. thank you very much. we were just chatting in the break about what sort of may be the cause of this selloff, you're debating interest rates, i know it's thing into give man of the market right now. you told me you don't believe this is an interest rate driven selloff. why not? >> it's no secret that interest rates are going up, have been going up and will go up so europe's -- we'll call it 18 months behind where the u.s. is but the fed has been very clear about what the policy is i think it's more the case that we have the lowest volatility in history last year. we had 3% correction we had a -- the market won't be up 7% every month and usually a

very strong january is followed by a down february and i think there's heightened political sensitivity. >> i stole your stat, i think you probably heard that. but we're down 500 we're not down 500 apple down 10% from its highs, the number of stocks are down 5% and 6%, people will wonder why it can't just be history don't you think there's some cause? >> no. i just think it's the ebb and flow of the market i think the fact that stocks -- the market's been so stable the last year people's sensitivity to decline is probably greater so it feels worse than it is usually over the last 100 years we've had several 5% drops in the market within one year typically so i think this is just trivial. >> and charles, you've been in the business 50 years. you've written 16 books. you've seen pretty much every kind of market cycle that we've

had but some would suggest that is this time is different because you have central banks worth about $15 trillion to $20 trillion in holdings you have interest rates which are artificially depressed for so many years. is there any historical precedent to the kind of market we see today >>. >> certainly not but in the general thing there is always terribly interesting things going on, very important trends being worked out and smart people paying attention, figuring out what does that mean for prices in individual securities it's the same old same old same old. >> what's the most important thing going on right now for the macro market globally? it is rates? is it central bank involvement is it investor euphoria? >> as you ask the question, i have to tell you, i think the most important thing going son that retirement security is not being given the attention it needs because people are living longer than think did before and they don't understand how much money it takes to be financially

okay during their retirement that's important honestly, the starts of questions you would like me to give, i have to tell you, for me they are details. >> people want to retire, the market has been very strong, given valuations, given rates, given central bank involvement, is the market fragile right now? >> no i don't think so when you're in these declines, if we go down 500 points for five more days in a row, people get increasingly agitated. in the beginning of 2016 remember the market down 15% in the first six weeks and then it rallied significantly the rest of the year and all of the stuff it was worried about that took it down 15%, macro worries about russia, about china, about the fed tightening, that proved to be just noise. and i think that right now the most important thing going on in the market right now or in the

world from a macro standpoint is global synchronized recovery that's the first time we've seen that in many years but earnings are going up, cash flows are going up i think the greatest risk that people face in markets is they fail to understand a very important things which the economy almost always grows. and earnings almost always go up we have recessions and stocks go upmost of the time and so the risk to people's long-term financial health is being underinvested in long bull markets and not the drops they get in bear markets. even with the crash of '87, the financial crisis of 2008 if people stayed the course they'd be fine. >> and your big chings has always been -- in your book you talk about this index revolution you can't beat the market all the time, but you know as well as i do that when you see a day like today it's hard not to feel emotion as an individual i'm

losing money today you only lose if you sell. what's your advice to the people watching us here to how to handle volatility like we're seeing over the last couple days >> the best thing you could do is have teenage children and realize how extraordinarily interesting sometimes exciting positive interest, sometimes angry, sometimes funny as hell interesting they are and then realize, yeah, because they're going through a dynamic period in the economy, we're always in a dynamic period in the market we're always in a super dynamic period but over the long term those kids will be fine adults and they will have their own teenage children which will drive them crazy, too. >> ignore the tantrums >> yeah. >> it appears to be not a huge tantrum but a bigger than we've seen tantrum. >> as the british like to say, maintain calm and carry on.

>> should we maintain calm and buy on would you be a buyer into this weakness >> i think it's better being a buyer into weakness than one into strength which turns into weakness i saw a great chart that had to do with bitcoin but it was novice traders trading activity so it showed a long flat period in the market and on top of that it says don't buy, don't buy then it showed a pike up like this and it says buy, then it drops down and says sell so it's a classic thing when something is going on i think people can -- they ought to be prefard for volatility. >> here's one of the concerns that we have around indexing and etf buildout that we've talked about and i've written about it, charles, you've touched on this around the edges which if you take the five biggest equity etfs there are five stocks which

are the top five holdings in all of them -- amazon, apple, foo facebook, alphabet and microsoft. so people buy these etfs thinking they are diversified when in reality they're buying hung stoc huge stocks which move the markets based on their market cap. is there a market risk to the oversimplification of investing. if we sell, we're selling the biggest things which cause the most weighted average move in the markets. did that make sense at all >> not to me [ laughter ] >> at least you're honest. but you know what i'm saying, right? is there a risk to people flushing everything because they think they're diversified? instead of selling one stock they're selling the whole market. >> i would wonder why are they selling at all >> somebody is. >> the question is why would anyone sell because other people are selling? that makes no sense to me. >> fear begets fear. the amygdala causes fight or flight. >> and is that fear and

psychology condition to making money or market or losing? i would say losing >> somebody is selling. >> we'll see how that works out for them. >> hopefully my point made some sense. how about this more basic, everybody the last couple years seems to be piling into the same thing. does that worry you? >> if it were so it would be concerning but i don't think it's so. >> why not >> i don't see crazy stuff like we tend to make rude remarks about the dutch and tulips fine and then something gets bitcoin, it's one of those phenomenon, times people are excited because the price is going up then other people are saying the price is going up but i'm looking at something in a different way people get excited because the price is going down. real investors ought to look at the underlying business, not stock price and they should be happy when stock prices are coming down giving them a chance

to buy at lower prices, higher value. >> when you said people are piling into something, what people piled into from october of 1981 to july of 2016 was bonds and that's where the bubble is if there's a bubble and the 35 year bull market in bonds is over and we're in a bear market, and it's a benign bear market but that's the bigger issue which is that people will lose money in the so-called safe asset for many years to come. >> but you're a believer that higher rates will drive people out of bonds and into equities so why are higher rates being blamed for the last couple of days or any market weakness? you think higher rates are good for stocks >> up to a point because they're signaling faster economic growth and as long as inflation stays low, that will be good for stocks the worry -- and it's a real worry -- is that the fed overshoots and the economy weakens and turns down but the

last worry we had was in 2013 during the so-called taper tantrum when rates went from 166 to 325 in about four months. >> yeah. >> that was the only year that was the only year when they went into u.s. equity funds so 275 on the ten year seems to be the breaking point. so above 275 is people start losing money in bonds, i think that money will find its way into caps and stocks. >> let's talk about bitcoin. you are a long-term believer, you're not selling bitcoin, correct? you still own it >> i'm not a long-term believer, i'm a long-term observer and what i observe in bitcoin is the same thing you had in every great boom from the railroad boom to the electricity boom to the radio boom in the 1920s to the internet boom which is real fundamental innovation which then has to attract a lot of

capital to fund the ecosystem and that's all -- i've invested in bitcoin, a lot of bitcoin, but it's not the case i say i'm a rah-rah bitcoin person. >> is there any correlation between bitcoin and the equity market you have mean? bitcoin, stock? is is there any correlation between the two? are they completely separate asset classes? >> well, they are separate asset classes. >> uncorrelated. >> they historically are not well correlated, yes, yes. >> bill mueller and charles ellis, thank you for your time we had a panel, we had this interview. very timely day to have so much investing wisdom on. we appreciate it we'll take a short break our special coverage dow down 540 points. we have more of this selloff stick around let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts?

$1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

the dow is down 533 points the last time we were down 500 points was the day after brexit. s&p down 00. nasdaq is down by 112 points or 1.5% decline it's shaping up to be the worst

week for the dow and s&p since january 8, 2016. >> for more on this, let's bring in krcnbc contributor jim yurio a familiar face for cnbc viewers. anyone that's spooked, what is your message about what we're seeing in the market with the dow down 550 points and the ten-year at 2.85 >> it's funny is that we knew this day was inevitable. but when it comes, it's still relatively shocking. i think in the back of everyone's mind who's been in here a few years, think to yourself, is this something that's as meaningful as we saw in '07 and '08, this is a garden variety correction this rally was built on two things one, an economy that's improving. yesterday the atlanta fed came out with revised forecast of 5% plus for gdp and q1. it's also built on this overarching back drop of low rates. when something comes in to

question that, there's going to be growing pains this morning's number we saw a pickup in hourly earnings, and a fed response saying, we have to keep an eye on that. that might change the way we do things and the market took that, in my mind, we might hike faster than we had in mind. this is perfect. we need a shakeout and that's what we're seeing right now. >> you can still maintain your bullish stance in general because you think things are fundamentally strong from an economic point of view and corporate point of view when we're looking at the earnings and still like a little correction here. what about getting it all at once >> we're going to get it all at once we always take an elevator down. that's the way it happens. to hedge yourself was relatively cheap. when we talked before, i heard brian talking about when selling begets selling and takes on a life of its own. that happens because as the market rallies, instead of people repositioning and rebalancing, people just get more and more bulled up. we say here, you know, bulls can

make money bears can make money pigs get slaughtered that means when you go in too heavy, all of a sudden the market starts breaking we're not breaking because of a little inflation we're breaking because everybody is looking at their portfolio saying, oh, my gosh, i had too many stocks. i got to get out of some and rebalance. that's when the last 25 points in the s&p is just because, you know, we're cascading lower. has nothing to do with the fundamentals that pushed us this morning. >> thank you very much really appreciate your point of view, as always. as the dow is down about 545 points here. thanks very much. let's get more on the selloff. david sieberg is with callan company. what's it like on the desk right now? >> there's nobody panicking, nobody saying, take this order and sell is it i want to get out. no question, you know, there's a calm about this sort of pullback i think more of a buyer's strike than anything. this is a buy in weakness. no question right now. in my opinion, you just look to buy quality names you want to stick with look at google, for instance

i'd be buying that stock aggressively with both hands apple gets downgraded by the top analyst on the street today, it's off less than 4%. look at the s&p 500? earnings, 50% of the companies have reported earnings so far. i think 75% better earnings surprise and 80% better revenue surprise so, you look at earnings are going to be ratcheted higher and you've got a market that just sort of fell in here and collapsed 3% from the highs. got a lot cheaper. you step in and buy stocks. >> do you think the narrative has changed? what we saw today and the past couple of days is what is good news for the market is actually bad news when whether he got that jobs report, it was the wage number and the growth there that really spooked the markets into thinking the fed could act faster anything that comes in hotter than expected from now on seems like it could be interpreted very badly >> our focus has been on fixed income and bonds you have to remember here, okay, we haven't really had fiscal

policy for almost a decade in the united states, so we're using the -- the trump administration is using -- and the senate and house are using countercyclical fiscal policy at the end of an economic cycle so, we hl average hourly earnings today, a surprise but we haven't even had the impact of tax cuts that's probably a first quarter event. so, we're looking at a parabolic shift in bonds i mean, we could be touching 4%, 3.5%, by the second, third quarter of this year because -- >> wait. by the second or third quarter of this year we could touch 4% on the ten-year yield, that's what you're saying >> it could be april cup of coffee it wouldn't be long. definitely 3.5 there's just -- you have to remember, this is the most important point. there's a trillion and a half dollars on this planet that has moved into passive asset management, risk parody, these people are long bonds, they're sheep. they have no idea they're

actually long disinflation so, if you have fiscal policy for the first time that triggers inflation of some kind, even a small amount, all of -- 5, on 10, 20% of that money is going to - >> i want david to react to that point because it's an interesting one. you have fiscal policy going one direction, looser, and you have monetary policy going the other direction, tighter where does that send yields and what does that imply for the stock market >> i love larry. i think it's extreme to say we're going to reach 3.5, 4% this year. i do not think this happens. i think this recent spike in yields is an overreaction based on positioning i think you look at shorting in treasuries right now, it's massive. you're in a situation where you had a lot of repositioning, if you will, ahead of the 2018 bond issues and i think people are set up now in a way that maybe is a little more extreme. i say, i think we're going to come back, retract in yields i think it doesn't really start to impact the equity market

until we get to 3.25 i think that's a ways off. ireally just don't see a scenario where the fed screws this up. i mean, you get a fed that basically, you know, hand-picked by this administration there's no way this administration, you know, with, you know, being the equity market is their benchmark is going to hand-pick somebody that's going to screw this up. i think we're in a position right now where you can take this and buy stocks on any weakness and continue to move. >> guys, thank you larry mcdonald and david, let's bring in kelly evans and wilfred frost who joins us for the "closing bell. we're off the session lows, guys, but it's going to be an interesting hour ahead. >> that was just in the last couple minutes, too, that we're almost down 600. thank you, guys, very much we want to get right to bob pisani who's on the floor for latest on this selloff, which has continued to pick up steam throughout the session today wilf, no sign of it letting up at all