i'm wondering how that influences how you think about what you might do next right, normally we would expect to see you lead the charge perhaps on a proxy fight but now that you have another activist -- >> i'll tell you this much, which is not known, i was considering, you know, talking to the company and possibly putting up a slate determined by whether or not i feel that the company is going the right direction. obviously the company went way down and the guidance was negative and i was thinking about that but then i realized that the night before the late was due, you know, i realized that there was going to be another slate and, you know mark franklin is a well-known guy in

this business and he had the backing of jeff smith who is a real smart guy and i saw that and then, you know, i do think that the management team have followers also and i said what am i doing here? i'm going to be the third horse in a three horse race. i just decided why should i get into it? i was only going to get into it if i felt -- you know, i might have got into it and not got into it determined by what i thought the management was going to do. but i tell you this, and i have talked to mike a bit and he has some, i think very interesting views about the future of the company and he basically is a capable guy, i think so i think it's going to be a tight race and i think i have to

decide which way i'm going to go but i do think the company is undervalued. put it that way. >> we'll certainly pay attention to it. i want to wrap things up we have lead into the next hour and they're gracious enough to have us do that. let me wrap it up this way, carl the dow is now down 270 points some of that has to do with worries of trade war along with a whole host of other issues as i said at the top of the interview, you were with us a few days before the market bottomed and then bounced. do you think we're going to go back and retest the lows now and what do you make of the speed at which stocks were able to come back it's fascinating that that happened we have these huge positions i would tell you that i do not

really think and especially at this time that anybody really knows which way this market is going to go on a short-term basis. i really think there's too many variables. there's too many things that could happen either way at this moment so you sort of have a -- you have to have a hedge position, for somebody that's got a major position but to come out and say -- i'm sort of amazed i'm amazed at some of these guys that i listen to are so definite it's going to go up or it's going to go down and it's so definite it reminds me, i think it was at what time in parliament. there was a young guy in parliament or something talking about one thing and another thing and another thing.

you know young man, i would be so happy in my life, so happy if i could be sure of one thing as you are sure of everything i really do not believe that anyone on a short-term basis generally what the market can do but particularly now, i do think that the model, the activist model is still one of the best models there is. we practice it for 18 years and i'm proud to say that our annualized return, 18 years ago when we got it would say i did it before 18 years ago in ipe. but you may return 50% of year annualized

but you made 15% annualized if you invest in the dividends you got and if you compare it to the s&p, at that time, which you think the s&p is good and it zboois good, you only made 5% so that model works. but a model, i haven't really seen anyone that makes money consistently telling you, oh, i'm going to buy stock now and i'm going to trade it and i'm going to sell it and i'm going to buy it. i just don't think -- there's just too many variables to the human mind that even these computers can tell you with any real certainty what is going to happen in the next week or month. i think there is certainly, as i said, if you look at it over a period of the next two years, you have to be cognizant that there's dangers there. i go back to the model i know best which is activism

many companies in this country look, i just listened to donald trump and i respect what he says but, you know, one of the problems with our companies, our productive, i keep saying, in many sectors, in many companies is poor management and poor boards and the boards don't hold companies accountable and the difference really is as i have shown it, over the 18 years, we take companies and we nurture them and we work with them if the ceo is great, we love them but they're not producing, you make them accountable and that's what life should be and that's what it is in a private company and therefore, that model, i believe works. and i say over years, if you do that model you'll make money but if you start predicting the market, it's like going to vegas and telling you ought to pay me because the farmer's wife just

shot five sevens and i'll tell you what she's going to do i'm not going to pay you to tell me what dice she's going to throw. it's very close to that in the market obviously you study it, i read about it so maybe i have a bit of a edge in predicting the market but not enough of an edge. >> do you ever take a look at steel or aluminum stocks those industrial stocks? >> i do. i look at them in fact, many years ago we had a large position or activist way back i'm not going to criticize u.s. steel. i don't know enough about it and he's done some real good things and this whole business with the tariffs and saying, we're going to save these companies, i think there is some real truth of that

on the other end, i think with all companies, a lot of companies in this country, you should look at, you should look at the management. some are great managements and some are poor managements, but that's something that we should be really doing more about that accountability. >> the management certainly in that room with the president i'm sure you heard them as well. whether it was the ceo of u.s. steel or the others. >> i'm not criticizing u.s. steel. i'm not criticizing caterpillar. i know the companies i know. and that's going to hurt us too. so there's a real delicate balance. that being said, there is

something to what they're saying about fair trade being fair and having that you can't, if you subsidize the country you're subsidizing the steel maker, obviously unfair, you know so i think there's something to that but i'm no expert on that. >> carl, we're going to throw the ball over to our friends at power lunch. the dow as we speak is selling off. it's down more than 330 points thank you for being on today for really a discussion on a wide number of topics. your own earnings today, your stock is up. herbalife, we know the news there, your victory over bill ackman after five plus years thank you for your time today. >> thank you for talking to me scott. we'll talk again. >> that is the story there as we wrap up our interview with carl icahn. what's happening in the stock market at this moment. i'll send it over to power lunch. thanks for letting us take a little bit more time. >> we are always happy to share our time with you, scott and with carl icahn putting a new

spin on the term queen's english. welcome to power lunch brian is here, courtney is here. steve is here. we're watching a big sell off in the market at this hour. and it is moving that way on news of new trade tariffs on steel and aluminum the dow was up as much as 156 points today right now down 350 points and much of that slide has come in just the last maybe 10 minutes really bond yields under pressure right now. the benchmark ten year, a couple of days ago there was great concern that we were moving up to 2.92 and 2.93 today moving the other direction. >> let's get more on today's trading action bob, look at the minute by minute tick. it's hard not to sit here and say this is a trade war/tariff fear selling that we are seeing. anybody saying anything else

>> this is a couple of hours ago but when powell came on and said the economy is not overheating and wage growth was not going to get out of control in the market rally into positive territory. there you see, it's about 12:20 we started hearing comments about the imposition of tariffs and the market started moving south on that. so obviously trade war is a big issue. look at the big sectors, tech industrials, financials, these are cyclical sectors, all moved down rather aggressively most of them are down about 1% energy was the only sector positive but it too has moved into negative territory. effect on steel, well, that is clearly a positive look what happened to u.s. steel, folks 47 to 43 and back to 47. so up 10%. essentially then down 10% and then up another 10%. you can see up and down. what's moving stocks here?

two important things powell and the velocity of rate hikes is still the critical issue for the market however this whole story about tariffs and trade wars is definitely trending. they do care about it because this is an economic leakage. powell himself weighed in earlier. as far as the white house, turmoil and d.c. drama not about mr. kushner but if there's turmoil around economic issues or fights about that over the market very much cares back to you. >> thank you very much let's bring in now also steve for more context on what these trade tariffs might mean. >> it means possibly higher inflation. there's more steel users than steel producers. workers working at those in terms of total gdp there's also a broader issue here as to a broader break down of the global trading system such as it is. the idea that we're going to handle this thing not through

general, wto or other means available, we're just going to slap these tariffs on. the president has the right to do this. i also understand to some extent the broader issue of the national security issues that the president has raised the question is is this the way to deal with it. there's a tweet from a washington post reporter and he said oh, he did that so there's not a lot of knowledge about this he was supposed to today didn't do it today >> didn't sign them. >> why he put that offer next week and the question is between now and then will cooler heads prevail? and when you look at the trade in this thing, you have to know that this is something. >> bob said that powell stole the market story of the day. did he walk back his commentary about the overheetding >> maybe a little bit. he said there's no context right now. you cannot currently saw the the economy is overheating he said there's room for the unemployment rate to fall. there's room for wages to rise and he affirmed this idea of a

gradual lay down so i think that it was a little bit more dovish tone to what he said compared to on tuesday. >> you're still there, thank you, buddy how much of this market slide to steve's point is directly versus indirectly on tariffs. here's my point, if we make more here, the manufacturing number today, the 60.8, that manufacturing index was a 20 year high. so that's good news for the economy but it does seem inflationary if we ramp up capacity in the united states more because these tariffs, will that then set off the inflation story more set off the hawkish fed story even more? set off the rate story even more and then send stocks down. clearly, in other words the economy is so good the stock market isn't going to be able to handle it. >> you're making a lot of linkages there that may or may not materialize. but here's the key point there's no doubt that trade

wars powell made a very diplomatic stab at this he said i'm not getting involved in the administration but he did say that tariffs may not be the best way to approach trade imbalances it's a good point steve but you have to admit it was a political point and he said tariff's may not be the best way to address trade imbalances and i think that was a very diplomatic way to say it's not a good idea. as to your question, the market dropped 200 points at 12:20 they came out and clarified there is going to be tariffs on steel and aluminum and the market has gone straight down since then. so that is a response that the market isn't happy with the prospects of trade wars. >> we're going to continue this conversation as the markets are selling off

but steel stocks are rallying, kayla is live at the white house with someone that is inside that tariff meeting we want to get over to them right away. >> thank you we're very glad to have the perspective of the ceo of century aluminum and was in that meeting with the president we heard the president say that he was going to push for 10% tariffs on aluminum, 25% on steel, higher than recommended but he's not going to formally announce until next week what could change between now and then >> i don't know. sounds like he has his mind made up he was clear about it. straight about it. very declarative he obviously understands the subject matter very well no great surprise. so we think we're excited and we're gratified about what we heard and we're ready to go and bring back the production we have been looking forward to bringing back. >> your stock is up sharply but the market has been selling off dramatically what do you think is the interpretation in the market of what this does to the global trading system.

>> i don't know. we're not market prognosticators. there's a lot going on in the m macroeconomic world. this should be good for u.s. he inquiry gattis and we don't think this will cause distortions that the market should be worried about. >> that's been the argument of critics of tariffs trying to convince the president not to do this or to dilute the decision. >> there was a spirited debate as i think the president would hope and the president was looking for. that type of discussion did, in fact, take place. >> can you give us any more about it >> i'll give you a example that's pertinent to us people talk about prices rising. i'll make two comments when the price of aluminum fell by 40%, the price of the products didn't fall and then number two it's important to put this in the context. if a 10% tariff got totally

translated into the end price of a motor car which it's unlikely to do, that would raise the price of your car by $37 a $37,000 car by $37 it's important to take the rhetoric and put it into context with data. >> you think that the consumer is healthy enough to absorb the price increase. >> yes we don't think it will happen. if the worst case happened and the whole tariff got translated into the price of that motor car, $37. >> what was your impression of any details that were communicated today did they talk about the timeframe? >> the president did say that he thought that they should be, the tariffs should exist for some period of time and he heard from the executives that that's important. we'll put $100 million into our plant to bring back the production this plant makes the aluminum for the military you need a period of time where the market is going to be behaving rationally in order to recoop that investment.

>> what is the national security argument here? the department of defense says what they need for our artillery is a small percentage. >> it is. >> it is indeed and that's only part of it kayla but do we need aluminum from only foreign sources to rebuild our electrical grid. it's such a persuasive commodity that it's not limited to simply the dod uses although that's an important part to it. >> what do you think the reaction will be around the world? there's a threat of retaliation from china whose top economic official is trying to soften the fact of whatever they decide. >> i don't know about the reaction around the world. i know about the reaction in western kentucky where there's 300 families of people get regular hired by us. that's the reaction that we care about. >> what will production look like at your plant how many more people will you hire how much more production what will be the economic impact >> sure at our plant we'll bring back 150,000 tons of production. that's about 15 to 25% of the

production that the commerce secretary says is available. >> is there demand for that. >> our country is short by 5 million tons of aluminum per year we're going to hire almost 300 people we're going to input $100 million into the plant these are devastated communities as you know in western kentucky, the whole community will benefit. >> you found out about this meeting last night at 6:00 p.m. >> indeed i did. >> there was quite a back and forth overnight and through the morning. what is your impression of the roll out of an incredibly important economic proposal like this one and where the white house organizationally is right now? >> it's been great it's been seamless to us we got a phone call and we were told to be here at 11:00 this morning and the thing went off without a hitch so we have been impressed. >> you were already in washington. >> i was lucky enough to be already in d.c. >> we appreciate it. >> thank you. >> the ceo of century aluminum back to you. >> thank you the markets focussing on trade the dow down 367

if that is not the low of the day, it is very very close to it president trump getting active here today slapping tariffs on steel and aluminum kayla just filled us in with one of the executives from the aluminum industry. a day after his communications director and close confidant announced she would be leaving earlier jared kushner lost his top security clearance and so who is driving the president's agenda joining us now is robert costa, national political reporter at the washington post and nbc news political analyst. good to have you with us. >> good to be here. >> kayla referenced the speed with which this meeting on tariffs came together, number one. and number two, the idea that there has been some internal disagreement reported within the white house on the matter of tariffs on imported aluminum and steel. what can you give us by way of color on that and the squabble on this particular very

important economic issue >> a lot of talk about hope hicks leaving the white house. it's important going to disrupt the president's inner circle but the more important policy move has been the entry. the reemergence of the popular economic adviser urging the president. this reappearance at the president's side, maybe getting a promotion to assistant to president that changed the dynamic and that's pushing the president today on trade. >> where is wilbur ross on this? i assume he is behind this new tariff move. >> in theme, yes but he has been more of a lower profile figure than many of us thought 13 months ago. he's a presence in the cabinet but it's the people like navaro that are encouraging the white house to move on trade like steve bannon they're

working their sources to try to get the president to move on one of his signature issues. >> there has been, i guess what we would call a lot of revolving doors within the white house here in the first year put into context, though, hope hicks leaving, the president apparently not terribly happy with his chief of staff. alternately, he is happy with his chief of staff put into context the comings and goings that we have seen in the early trump years as compared to some of the other administrations with which we might be familiar like the first clinton term, like the carter years. i recall a fair amount of ins and outs then too. >> that's a smart historical perspective. people come and go from this administration as they have from administrations in the past. you have to look at the presidents moving toward the center as he does at some moments of crisis or moving toward his base? all of this swirling around. general kelly having tensions with his son-in-law. the son-in-law having security

clearance problems he's turning to the base and going back to his core issues to try to make sure that his own voters are with him. >> robert, we appreciate it. and jay powell talking interest rates and the economy. president trump talking tariffs. what's all the other stuff going on at the white house? we'll tell you what matters most as we head out check out the s&p sectors at this hour they're all but one in the red and thatne o is just barely higher we'll be right back. that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums? ...no minimums. schwab has lowered the cost of investing again. introducing the lowest cost index funds in the industry with no minimums. i bet they're calling about the schwab news. schwab. a modern approach to wealth management.

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what do you do with your money as we kick off the new trading month. let's bring in samantha. global market strategist of jp morgan funds and the u.s. investment strategist. wow, okay. we have gotten some sniffs of this about these tariffs i'm not going to ask you to comment on trade policy or political policy but do you think that the scent -- because the president hasn't signed it by the way, the scent of a potential trade fight is sending the dow down nearly 300. >> i think that's what is driving it. >> connect the dots then. >> it's interesting because one of the things it could bring on is rising inflation. so then you're look at an inflationary environment on top of fiscal stimulus and global

growth and what is jerome powell to do? on tuesday he indicated that after the december meeting everything strengthened and he could potentially revisit his dot plot so maybe we're looking at four rate hikes and now he'll have to take into account a potential 25% increase in aluminum, 10% in steel when you don't have competition you'll see rising prices. >> also retaliation. >> more production in america prices go up potential retaliation, prices go up these are raw material which is are the building blocks and dna of most of our construction which sends the prices up for something else the fed must what? raise rates four or five times >> someone said they closed the door on two, they have opened it to four. that's where we are and i think this just helps seal the deal a little. >> so samantha, let's talk about -- there's a big reaction in the market to what has been announced here today but you

just heard the executive of one of the big aluminum companies saying if these tariffs were fully implemented it would raise the price of a car by $37. $37 on a $30,000 vehicle >> as the market starts to continue to digest this we know it's going to bode well but on the other side who uses steal. it's done using a lot of steal and a lot of aluminum. there's two sides to this which i don't think, broad brush strokes are down you'll see different things play out. >> what would your strategy be when you're looking at equities. >> across the board, before this news we were saying you had to be more selective because we didn't think earnings are going to lift the market dramatically,

2018 and 2019. yes, we have a reference for risk assets but we're saying you need to be more selective because rates were going up and inflation is increasing and you add in trade issues and you need to be more selective. >> if rates go up, if we see four or five hikes, do bonds become more attractive to you. >> probably not. if rates go up typically bonds and bonn proxy sectors don't. >> typically in a rising rate environment you can have equities that perform well if i had money to put to work would you urge me to put it to work in the united states or somewhere else >> with new cash we're seeing deploy internationally or at least get up to balance with your plan. >> where big world. and i wouldn't want to -- >> would i do it now or would i

lag it in overtime >> there's a case for dollar cost averaging over the long run that actually ends up hurting returns. that's what the research shows. >> really? >> yes, interestingly. only in down markets it tends to work but in a rising grinding higher market, it tends to do not as well. but the question to where we would say developed markets. emerging markets are poised to outperform their counter parts but with more risk and more volatility so some clients can't handle that risk and that means, i think it's a good place. >> and that's europe japan. >> for a little bit more color we like the 19 that use euro it's more of a domestic demand story and less about the entire area. >> what about switzerland. >> you go to all of these events you probably meet people that ask you this

if they have been invested in stocks for a long time they have done well. they have made a lot of money. they're starting to feel, rates are going up the political situation is what it is. i get asked all the time should i just sell because i don't want to be greedy because hogs get slaughtered. >> yes. >> what do they do >> we would tell them do not sell at this point. >> don't be spooked. >> do not be spooked we're not at a point where we are heading into recession now what you should do is hold on we continue to see more shift into value names at this point >> we sell losers? we don't talk enough about how smart selling is a good part of a strategy. >> i don't think, if you think that your loser is losing because it's fundamentally not going in the right direction, absolutely but if not, it's not a good time to play the volatility what we do see is we agree with

samantha the international segment is very attractive and we like europe for dividend and value. we like asia for growth and disruption and we also like some of their actually bonds and credit because they have more rates and higher yields than we do in the u.s. diver diver it's king. >> it's a sea of red talking about a major sell off on wall street as investors begin to digest what president trump's trade tariffs mean for the market and for the broader american economy we'll get a traders take coming up as the dow is down 300. we'll also speak about what the ct iffs mean for the steal seorn particular these stocks rallying right now. what happens down the road don't go anywhere. you know what they say about the early bird...

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an additional 2.4 million people impacted by the 2017 security breach. names and partial driver's license numbers were stolen. they reported 145.5 million americans. federal prosecutors charged him with two criminal counts for sending a letter containing white powder to donald trump jr. officials say he also sent

letters to four other people including the office of democratic senator of michigan a video released by the syrian humanitarian group white helmets is said to show first responders carrying dead bodies during the immediate aftermath of an attack on a rebel held damascus suburb. the organization did not say who was responsible for that attack. here at home, the body of the reverend billy graham departing the u.s. capital for its trip back to north carolina 2,300 people including president trump and vice president pence are expected to attend his funeral which is to take place tomorrow you're up to date. that's the news update at this hour brian back to you. >> an unbelievably tragic situation in syria. >> it is. >> absolutely. >> let's get back to the markets now. while the rest of the markets are selling off, steel stocks are flying thanks to comments from president trump joining us now is matt miller,

steel analyst, first off it's important to note for the viewers nothing has been signed, right? the president is talking about this right now as of right now, the situation is the same as it was yesterday. is it not? >> thanks for having me on it is correct. it is a 25% tariff on steel and 25% on aluminum which is higher than the department of commerce suggested in their report. although nothing has been signed into law and we don't know the specifics on whether any countries might be excluded on it, it can be signed into law. >> so we're seeing these stocks move 7, 8, 9, 10%, is that move deserved >> absolutely. in our view, we think that, you know, the steel industry looked very attractive fundamentals were improving we were seeing higher prices before this, partly in

anticipation of this but also just the fact that we're seeing higher demand, higher utilization rates and, you know, valuation was very attractive before today and we think that, you know, going back to the drawing board we're going to be looking at higher prices, expanding margins, ultimately increasing the ratios. it looked attractive yesterday and looked attractive today as well. >> what happens we valuation of these stocks if it does, indeed spark what we would consider a trade war? >> yeah, that's an interesting question and i know that there have been previous commentators talking about, excuse me, about the impact on automotive being very minimal obviously it's going to have a bigger impact on the price of steel impacting construction and so, you know, construction and automotive being the two biggest in markets and down the road, we

can, you know, possibly see, you know, ramifications of other countries trying to implemented their own tariffs. ultimately, you know, positive for steel and aluminum today we just have to wait to see what it's going to mean for the geopolitical landskap goicape gg forward. >> is there capacity to bring more online if it does become that we're producing manufacturing much more of these goods and steel and aluminum in the united states because of the tariffs? >> absolutely. there is capacity. you know, leading up to, you know, i think we average around 160% since 200 -- sorry, we average around 89% capacity utilization before the great recession which plummeted down to 50% in 2009 and really from 2010 through 2014 we were really rebounding quite steadily but with the

dollar, the u.s. became a ripe target for imports and that's really where, you know, utilization plunged down to 70% which is where it stayed for the last couple of years now wilbur ross, secretary ross spoke about 80 peculiar bei% bet for utilization. we agree, we think it's really healthy for the steel industry if we get above that that would be bullish for the steel industry and these tariffs were designed to get us back above that 80% utilization rate. >> maybe hiring with it. matt miller, thank you for joining us on short notice we appreciate it. >> no problem. thank you. >> all right if we learned anything from the new fed head it's that interest rates are more likely to go up than anywhere else up next, where one billionaire investor iseng oors eipptunity as rates are set to rise trades. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage.

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1.4% tech is really the worst sector of the day down by 1.5%. the president will announce tariffs on steel and aluminum. if we take a look at the stocks you can see that those are moving higher. we just had a segment if you joined us to talk about going forward there. telecom is the best of the worst. your dow laggards at this point. >> money has been very cheap for a very long time but the prospect of rising rates brings up questions about what that would mean for m&a and deal making joining us is a billionaire that owns a major newspaper in washington d.c i want to tease that there was another guy. apparently a billionaire that owns a paper in d.c. i thought for that moment i could scare our audience we're happy to have you mark you own a tennis league, you own the washington city paper and a bunch of stuff higher rates

will they kill the deal market >> no, i think in some respects it will create opportunity. >> where how? why? >> frankly what i do which is looking more for private companies prices are high because rates have been low. so borrowing is cheap and the alternative places for people to use capital have been cheap and multiples are high and it's going to bring things down to a reasonable place. >> we have to remember, we have to remember. >> we have to remember. >> we have to remember that rates are going up they may not but they're likely going up. >> things are pretty good. >> how good are the core businesses that you're running that you're looking at >> things are going pretty well but we try to find things where we can invest and then make them better so we're looking for things and frankly in the private equity world you're either paying high prices for things that are going great or you're paying cheap for something that you think that you can make better. so what's really important is what you do after you buy the company and how much value you create after you make the

investment. >> market down 400 now is it overreacting >> the volatility is like this all the time >> it hasn't been. it has been lately. >> yeah. >> but for five years it didn't move at all. >> no, but over the last year. i, it's hard to know i'm not a day-to-day markets guy so for me i have been able to look long-term. >> so brian asked you about one thing which is interest rates. i'm going to ask you about the other. how does it benefit you, your businesses, and you personally because one of the things that i guess people in private equity and hedge funds will not be subject to is a tax on interest. left it right where it was you're happy about that a assume >> the way i structure my business i don't get carried interest the tax law helps. when you own companies instead of getting 65 cents on the dollar we get 79 cents on the dollars. so that's just a gift to us and as long as rates don't go up,

until that impact happens it's good for companies. >> i follow retail very closely. we saw a lot of bankruptcies, many of them private companies because they had been taken out by private equities and they had these looming debt payments that are only getting bigger if interest rates rise. so do you think that is a problem for a sector like retail >> i do. i think that prices, as i mentioned, private equity have been high. leverage levels have been lower but it's also based on lower rates. when rates go up and the economy slows you'll see what happens in every cycle which is companies bought with leverage are going to have problems you have to go in planning for the long-term set up of a capital structure. >> more bankruptcies potentially to come in an area like retail. >> for sure. when the economy turns you'll see a bunch of bankruptcies in a lot of sectors that have leverage. >> tell us right now the next

thing you're going to buy. tell us. >> he won't tell anybody. >> is there anyone else listening. >> nobody else is listening. rising interest rates may create more buying opportunities for you as prices come down. what area sectors, or is that how you operate, is on your shopping list or where you would be -- here's where there might be opportunity your collection of businesses are, eclectic let's say. >> the common thread in all of them is there's a theme. so we get expedition travel. the theme that people want experiences in the world that's what people care about more than material good. >> couldn't agree with you more. so we love that. the last thing we did, the biggest software provider for the earned media industry. big believer that earned media is underappreciated. if we can help people measure it

that will rise so we look for things where we have a big theme and also where we can roll up our sleeves and make the companies worth more than they were. >> the old business wire. >> it is pr news wire. >> i only knew that because my former executive producer is now the executive producer is no the ceo, jason >> that's right. >> you also own -- >> he knows everybody. >> i do, but i think the thing, because i spend a lot of time with people in private equities, the founders of these firms. what really differentiates people now is what can you buy it's what value you create after you buy the company. the firms with the best records, it's less what they buy but it's what they do with it >> how many people work for you? >> about six we're small. and just in our core, the companies have tens of thousands, but in our little operation, yeah. >> interesting >> all right, mark, thank you. >> thanks for having me. >> grew up right down the street from where he lives. to the bond market, rick

santel santelli checking the action at the cme. >> let's start at the beginning. the morning when i brought ism, i was excited. here's why look at a chart, 20 years. 1997 and what you'll find is that today's 60.8 comp back, the last time we were at this level, was 61.4 in may of '04 that number is the highest going all the way back to 1983, as you see on the second chart. so going all the way back to 1983, today's number is the third highest. if you just look at 20 years, it's the second highest. no matter how you slice it, it's a big positive for manufacturing, and many always believe that so goes manufacturing, so goes the economy. after some of today's aluminum and steel conversation, maybe we'll have to put an asterisk there. 24-hour chart of note yields is interesting because after the ism number, we dewhat we should

do on strong data, the yields pops thereafter, it followed the weakness in equities which is kind of back to the way it was if you look at a chart of february 1st on, we're at the lowest yields should we close, on a closing basis, since the 13th of february i do caution, look at how flat it is. dollar index is really strong today. it gave up early gains but it's still in breakout territory. courtney, back to you. >> thank you very much, rick santelli big selloff this hour. the dow and nasdaq down 1.5% a bit off the lows at this point. a lot of it coming as a result of the impact from president trump's trade tariffs beginning to sink in with the market the dow tumbling nearly 400 points, more so just moments ago. boeing, united tech, intel leading declines inrizon holding up at this pot. we're all over the selloff on wall street. stick with us. ♪

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i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

the dow sliding 392 points right now. more than 1.5% on news, down by more than 400 at one point let's get the trader's take now from the new york stock exchange peter costa, and tim anderson, manager director at tjm. peter, you kick it off what are you seeing? what are the numbers telling you about how this market is going to behave? >> well, it's a couple things, tyler. i think what you have is a skittish market. it's been skittish for about three weeks now. any time anything comes out that's even that smells like it's bad news, the market will sell off, probably more than it normally would and the second thing is, we have tested or we're going to test, and not that i really follow the 100-day moving average, but the last time we had a little bit of a sell, about ten minutes ago, it was getting very close to the 100-day moving average if it breaks through that, we'll

probably see much more substantial move to the downside so we have to watch that >> mr. anderson, what's your thought? >> well, there's no doubt that the big leg down that we started to see about an hour ago was lined up pretty closely with all the comments that came out on the potential for tariffs in the aluminum and steel sector. the thing that would immediately come to mind to me would be, is there any connection with that and the potential for renegotiating nafta also clearly, that's something that's sometimes on the front burner, sometimes on the back burner, but there are obvious conversations going on on that front, and it would be interesting to see if these tariffs really do get put on, how that plays into the nafta negotiations >> i think you bring up an incredibly important point as i tweeted out, this tariff story is going to become a u.s. versus china story china is not a major imported of

steel to the united states they're a big producer, they don't import a lot canada imports the most of any country. mexico is up there as well do you view this as an opening salvo of a bigger nafta story then >> this whole talk about the tariffs could be part of the nafta negotiation. you know, with this administration, something like that is very possible. we just don't know yet i think that's part of the reason for the steepness of the selloff, is that it creates just a whole new list of uncertainties that come into play that, you know, the market always has an aversion to uncertainty. >> the vix closer to 24, up 20%. another wild day for stocks. dow down more than 400 points, now down just about 400. is march going to be like wi saw se rest of february ifo, you better buckle up. the second hour of "power" is up next

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what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley welcome back to the second hour of "power." there are tons of important money stories today, but the two biggest pieces of marked news are these. one, stocks deep in the red with the dow falling as much as 437 points at the low. the dow and s&p are trying to avoid their fifth straight day

of 1% declines two, president trump says he will announce big tariffs on steel and aluminum imports next week for more now on these stories, particularly the markets, let's bring back in bob pisani and mike santoli from the new york stock exchange let's dig deeper into these and how important are the final two hours of trading really going to be today >> oh, they'regoing to be very important. what's important today is we have a new issue for the trading community to deal with up until now, it's been jay powell's show. powell moved the markets when he said the economy is not overheating, wages aren't necessarily going up dramatically that put us into positive territory, but 12:20, when there was a firm announcement, there will be tariffs coming and the markets have been straight down ever since then. i think the markets now sending us a new message that trade wars are an issue part of the problem, mike, is this has been a nonissue for so many decades that people haven't had their hands around the implications of all this >> it's been a nonissue in

reality, but isn't it funny how for the last two years if you were forced to write a list of market risk factors, the potential for a trade war, as well as a more aggressive fed would have been two of the things there the top of the list, even though nobody necessarily thought they were likelihoods. that i think psychologically is why we have this big impact today. i would also say for context, we were watching it before. the market was in a fragile state. the s&p 500 was playing with this 2700 level, and that's last week's low it's basically also the level that's halfway between the recent lows and the all-time highs. and so there's a lot of reasons why people were looking for it to tip one way or the other. the tariff news clearly tipped it to the negative i think it's going to make the crowd louder who says maybe we have to go back and retest >> this is a subset of a fear of inflation story, essentially, a trade war. trade war would imply less competition out there. that would imply higher prices, and that would imply inflation

>> we should know right now we're continuing our market slide. the dow is down 526 points right now. so we're kind of, mike, seeing a little bit of what we had in the last couple weeks, which is a fairly innocuous market, a headline, volatility picks up, and the selling picks up at paces that are -- i don't want to say they're not normal because they're coming that way over the last couple wieeeks, b the acceleration of selling two hours into close could not be comforting for market watchers >> the reverse of what we saw last year, when the market took in any and all news and kind of shrugged it off and said i'm just going to go my gentle way higher now, it's almost a more of a raw never on all of these headlines. we have widened out the bands in which we're trading, the volatility genie was let out, and there have been questions about how much pent-up selling was there over the course of the last year. i don't think anything is decisive today it doesn't mean the rally wasn't

a genuine rebound, that the lows of february 9th can't hold, but it does show, a you suggest, brian, the rules and rhythm of this market have changed somewhat >> so here's ang interesting question just on the tariff issue, because this is a new issue on the radar screen how far does all of this talk go and translate into real actual rhetoric we're seeing it potentially here with steel and aluminum. does it go even farther than that this has happened in the past but never gone anywhere. nixon threatened tariffs rather aggressively, but nothing really happened we got an oil embargo, but that was a separateissue. we haven't had to deal with this as an actual in your face threat in a long time i think it's very important now to clarify how far this goes >> i come back to something brian mentioned a few minutes ago. that's the idea while these tariffs seem to be targeted to address specific infractions that the administration sees in trade, and obviously, a lot of the ceos who were there at the meeting see the very same thing, they're targeted they involve two and only two

industries but it is what these actions may say about a broader approach to trade, about nafta, and about potential retaliation that i think has the market as spooked as it is mike >> i think that's an excellent point. >> or bob. >> i fully agree with that the market is perhaps leaping ahead a little bit on all this i would point out the bond market's rallying so yields are coming down in a typical risk move it's not as if this is a true inflation panic. it's more about, well look, now policy is working in a direction that investors would not have invited, would not have liked to see. as i say, i think it provided a good excuse for a market that waus in a touchy state to tip lower. >> i think you're being very reasonable in your comment there. remember a few month ago when we were all trying to analyze the whole nafta aftereffects we saw selloffs briefly in walmart. they did a lot of business with mexico we saw a lot of sell offs in

kaun constellation brands it has broader issues than this steel and aluminum tariff is absolutely right >> call me mr. reasonable, bob but i also wants to come back to something mike said a moment ago, and it is a sort of difference in the texture of the market this year last year, as mike santoli said, the markeds stepped over everything as if there was -- there were no nits to pick at all. and this year, it is picking every nit it can see and i'm not saying these are small nits, but to your point, the market texture and tenor is very different >> yes, it does seem that way. also, why would it have been that way over the course of last year and into january, stocks got more expensive. and people got much more exposed to them. people owned enough. it was no longer a rotation in, and i think you're seeing the recoil effect. >> remember, too, things are a

little different the fed is slowly withdrawing liquidity and the interest rate scenario, the 30-year bull market that our friends like to talk about, the bond bulls and bears, is effectively, it looks like, over at this point that's a major change in trend >> thank you very much >> we have been talking about the 30-year bond market being over, now we have to call it a 35-year bond market. >> thank you very much for putting that in context for us, mike and bob, appreciate it. >> the dow may be off the lows we still have a lot to talk about as it's still down almost 2% bruce mccain is senior vice president with key private bank, and chris, with independent adviser alliance i'm going to start with you, chris. what do you think? is this overdone, the sell-off was the market looking for a reason to sell as the gentleman in our prior segment suggested might be possible. >> i think that's right. i think people are reacting to the headline news. and they're extrapolating.

they're wondering, will this be the first of many tariffs to come or if it's isolated to these industries, it probably will be a little overdone. the market's on edge, trying to discern what's happening with inflation, what's happening with interest rates we have a new fed chair, now you throw this into the mex. really, the markets got a lot to dige digest, and we're going to go through a period of consolidation, but all things equal, you look at the fundamentals, you saw the ism numbers from this morning which were very positive economy growing at 2.5%. corporate earnings continue to climb. you have a lot of positives in the background just a lot of issues we need to bur work through in the short term >> bruce, what do you think? inflation has been a worry, perhaps more of a worry today now that we have potential tariffs looming. is that a concern for this market and what do you make of today's reaction to the tariff news >> in the longer term standpoint, no question that inflationary pressures are picking up, and investors are appropriately worried about

where that could go. it's not high enough yet to really stall this economy or bring the markets down, but clearly, the game has changed relative to what it was in the first part of last year when inflation was very low and likewise, the prospect of an outright tariff and trade war is something that investors need to process from a longer term standpoint i think the key is to remember that that doesn't occur quickly. you have some time to see whether those worries actually translate into meaningful effects for the markets. and in the meantime, you could have some pretty good earnings this year that could push equities quite a bit higher. >> you know, bruce, i'm curious about inflation because we have been talking about it. and the fed has been more worried in recent years about it not reaching its 2% target than worried about it reaching and surpassing it. is that what you're worried about? let's just put the question on the table. where do you think the rate of inflation will be 12 months from now? 2%, 3%, what >> i think there's a real risk

that we're in the 3% range over the next 12 months we have seen the price index, food and energy, reach the 2% level over the last six months 3% with energy and food included clearly, if those continue to rise, i think that pushes the inflation statistics to a point that the federal reserve will feel they need to pay attention to it with higher rates. >> how about you, chris? where do you see inflation and can a little bit of inflation or maybe even a little increment to it be a good thing for companies and their earnings >> well, i think inflation is definitely a good thing. as we were all worried about deflation for the last few years and concerned about the new normal and whether or not we would break out of this cycle, you want a little positive inflation. you never want to be in the economy where people are waiting for prices to go down. you want people to act now, spend now, worried prices are going to go up over time that's the key you want a little inflation, not

too much, not too little we're at that spot, if you look at the deflator, the core index which the fed focuses on, it's 1.5%, up 1.5% year over year as far as the numbers this morning. if you can stay in the 1.5% to 2.5% range, the fed is fine with it i think you have seen from yellen to even bernanke when they were speaking earlier, the fed in general is willing to let inflation run a little hot by that i mean a little over 2%. if we got up to the 3% level, i think that would be cause for concern. but if we can stay in the 2%, 2.5% level, which i believe we can, then i think the fed can be a little more cautious and measured in their approach, and that will be the key for equities and bonds, frankly. >> we have talked through the scenario the market is dealing with right now, but let's help investors make smart decisions here let's put our money to work. bruce, what would you be doing as an investor right now if you look up in the middle of the day and see markets selling off on fears of a trade war what is your move right now? >> at this point, we're

overweighted equities, we will remain overweighted equities it can take a better part of the year for the economy to slow after you begin interest rate hikes. it takes a while for the market to reflect that as well. from that standpoint, if you're not up to the level you should be given your objectives, then adding some exposure on market dips makes sense for most of our clients, we're already there. it's a matter of maintaining positions to see how this works out in the coming months >> trying to buy on sale today chris, a final word for your advice if you're an investor here today >> you know, i try to be selective. there's going to be different sector ramifications depending on what's happening in the markets. you want to look to the financial sector a strong performer for the last 6 to 12 months whether that's rising rates, credit quality that still remains pretty high, and an economy that continues to grow i think there's always opportunities. i would buy on dips, but i would be sleblthive about it and make sure you're buying the right companies within the right sectors. >> we heard that advice several

times so far, even today buying selectively and looking at financials, the group down about 1.9% at this point thank you very much, both of you, for joining us. bruce and chris. >> all right, we have a lot more to do. don't go anywhere here hard analysis on what the trade tariffs or lakely trade tariffs because they have not been signed yet, really mean for the american economy let's look at the sectors of the s&p 500, as we head to break as you might imagine, on a day like today, they're all in the red. the dow is down 550 points volatility has returned once again. utilities the only sector holding up at all. when i say holding up, it's down only .2% markets the story. we're back after this. obvious. sometimes, they just drop in. cme group can help you navigate risks

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it's internet from xfinity that makes your life simple, easy, awesome. see how you can save by adding xfinity mobile to your internet. plus, save even more when you sign up for internet, tv and voice together. click, call, or visit an xfinity store today. okay, your top story is the dow jones industrial average, in fact all stocks. the stock market is sliding. the dow not down 600, but not far off. now down 585 points. and we have lost just like we had a couple weeks ago, we have lost about 300 points in less than an hour's time. the selling really has ramped up this coming after president trump saying he will impose tariffs on foreign steel and aluminum, although he has not yet signed the tariffs into law. bre let's bring in patrick he's also a trade professor at

columbia's school of international and affairs where. it's perfect, at the cross section of what's going on but do you believe a 560-point slide in the dow is because of potential trade tariffs? when this has been kind of rumored about for a while now. >> it's been rumored about, but there was a sense that, well, maybe he really won't do it, because for month after month after month, you know, there wasn't any action. so the fact that he came out and announced this, i think, is causing a lot of people to re-evaluate their economic outlook, because these tariffs, by the way, these are very broad. they're different from what's come before. if in fact they're enacted in the past, under the obama administration, the bush administration, we have seen very targeted tariffs on steel against dumping practices, targeted against one country this would affect all countries. and you have the eu, very senior officials coming out and saying this would ignite a trade war. you have mexico this morning

saying they would -- >> do you believe it will ignite -- you're a professor of international trade. will it ignite a trade war >> i think they're very serious. it represents a significant break from former u.s. policy. the fact that they're justified by national security actually opens the door for a lot of other countries to adopt protectionist measures of their own and justify it on the basis of national security and that would present a challenge to the wto so i think you're going to hear a lot of pushback from different industries that actually consume steel, from other countries, even friendly countries that are good trading partners with the united states against this and that's where i would caution, i'm not sure what's going to actually happen next weex >> thas what i want to ask, because brian has rightly pointed out nothing has been signed yet if president trump is famous for anything, he's famous for

unpredictability he can move in different directions from one day to the next and you have just said, hey, if these things come to pass. do you think there's, what, a 10% probability they don't happen or an 80% probability they don't? or what? >> i don't know what this will turn into by next week, whether he'll sign something >> he was inviting those executives back next week. >> there's a lot of opposition, even within the administration, to proceeding with these kinds of tariffs so you know, i would just say, he made a statement. let's see what that turns into next week. because he's made a lot of statements at various times about quitting nafta, for instance we haven't yet quit nafta. any other president, i would assume this is a policy they had vetted and thought through and were going to go forward with. whereas this may be something he says and doesn't necessarily

realize what the kickback is going to be in terms of reaction globally >> professor, what about the other side, speaking of the reaction globally? if you're a world leader and you are working in one of these administrations of the countries that deal with us, with these products in steel and aluminum, what are you doing are you making a phone call to the white house? >> yes in fact, a lot of them are making public statements i think i saw the environment of the european commission today say something about how serious this would be. and it's also potentially serious for the u.s. economy and that's why i think you see this sell-off taking place, and people re-evaluating their outlook. today, the ism manufacturing index came out it was above 60. very good number president trump even touted it on twitter but if you lift up the hood and look under it, you'll see that the price subindex is very strong above 70 which suggests significant price pressure in the economy. then you look into the comments,

and they're talking about very tight supply chains, shortages, even there was one comment about not being able to procure steel items. and so is that the kind of environment in which you want to introduce a price shock from a tariff and i think that's why you see the market reacting the way that it is. >> just the last question, what does this mean for national security >> well, that's a good question because the justification for these tariffs is national security, but i believe i saw the defense department came out with a report on thisjust last week, which suggested that it cuts both ways that actually, it may not necessarily, the tariffs might not hurt national security, not help it it's a flimsy rationale, actually, and one that could open the door to a lot of other countries using a similarly

flimsy rationale to protect whatever measures they would like to introduce. >> patrick, a pleasure to get your views >> big business beginning to weigh in on president trump's trade tariff proposal. auto industry with strong words. details next >> as we head to the break, these stocks are the biggest losers boeing, a major consumer of aluminum, a big dow loser right now. we're also monitoring the white house press briefing set to get under way soon we'll see whether the press secretary is asked about the tariff and trade war talk and the impact it's having on the stock markets. the dow dropping me orthan 500 points at lows today

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welcome back to "power lunch. as the markets continue to fall, we're beginning to get reaction from business to president trump's trade tariff proposal. the auto industry is weighing in phil lebeau is in chicago with more details there hi, phil >> we have gotten some reaction from some of the automakers as well as the international automobile dealers association for here in the united states. these are the dealers for international brands here inth united states. in that statement, the international auto dealers say the burden of these tariffs as always will be passed on to the american consumer. car shoppers looking for a deal

will instead find that they are paying a new tax general motors has told us that the bottom line is we support trade policies that will enable u.s. manufacturers to win and grow jobs in the u.s. and at the same time succeed in global markets. and finally, toyota issues a statement saying the majority of our steel and aluminum purchases come from the united states. and in fact, general motors said 90% of its aluminum steel is domestically sourced as well having said that, guys, one reason why you're seeing the auto stocks move lower is because there's a concern within the industry that even if the aluminum and steel is sourced locally, that you will see a similar impact in terms of the cost of aluminum and steel that we have seen, let's say, with the washing machine manufacturers where if prices go up overseas, thenyou're going to see that impact the price of those commodities here, even if it's domestically sourced. one more point there are certain components that are made with specialized

steel and aluminum, manufactured in asia. that's aluminum and steel that cannot be replicated here in the united states. some of this does have to come from certain plants over in asia, and if they're impacted by these steel and aluminum tariffs, that certainly is a cost, a higher cost for the automakers as well back to you. >> we pointed out earlier, phil, that among the dow stocks right now, boeing is the real laggard there. and they must be a major, major consumer of specialized aluminums. >> i would think so. we have reached out to boeing for an official comment on this, and again, they will likely say, look, a lot of our aluminum and steel is domestically sourced. but because you use so much of that commodity, and the fear is that overall, the global price will go up, that's the reason that you're seeing pressure on the stock. >> do you have any sense of how much more consumers could be paying earlier in the show, kayla brought us michael, and he said

it's only $37 more for a car is that way far off from what the automakers are telling you >> i was literally on the phone with somebody who consults with automakers i told them that they busted out laughing they said, sure, you say $37 i guarantee it will be higher than that. they wouldn't put a price on it, but they got a good chuckle out of that comment. >> very interesting. i spoke on the phone earlier this morning with the best buy ceo who brought up the price of washing machines we have been trying to track them to see what's happening he said, yes, they're moving um, maybe about $50. it's pretty negligible so far for that tariff that has been implemented, they said there actually hasn't been a ton of trickle down when you look at the price a consumer would pay in the store >> we still don't know what it would ultimately be in terms of the vehicle. how much that cost might go up >> very interesting. thank you so much, phil. really appreciate you bringing that to us >> thanks again. >> the beer industry, and we're all going to need one by the end

of the day, the beer industry also weighing in on the president's proposed tariffs on aluminum landon dowdy has those details >> that's right, the beer industry weighing in they say, quote, we're disappointed with president trump's announcement of a 10% tariff on aluminum like most brewers, we are selling an increasing amount of our beers in aluminum cans and this action will cause aluminum prices to rise, and it's likely to lead to job losses across the beer industry. we buy as much domestic can sheet aluminum is as available however, there simply isn't enough supply to satisfy the demanldz of american beverage makers like us, american workers and consumers will suffer as a result of this misguided tariff. looking at the stocks, shares are pretty flat right now. we have reached out to other beverage companies and we'll keep you updated >> landon, thank you very much well, meantime, the energy sector finished its worst month in eight years straight ahead, we'll tell you what companies may be ready to ride out the downturn. who could get washed out

>> plus, a former senior trade adviser to the trump campaign and former ceo of nucor steel will join us with why he says, hey, get over it we've been in a trade wafor r a long time, and at least now we're fighting back. fighting words, next

welcome back to "power lunch. let's get you a quick check on the markets. it continues to be a very tall tile day for stocks. the dow is down 586 points at session low. now down about 524 points. this as president trump announces he will impose big tariffs on steel and aluminum. potentially next week. right now, as you can see, the dow off by 527 points. that means more than 2% right now. the s&p 500 is below 2670, off by 1.7%. all 11 s&p 500500 sectors are lower. led lower by industrials not a big surprise there technology and health care the oil market is also closing for the day. >> let's go to jackie deangelis at the cnbc commodity desk to hear more. >> good afternoon. crude prices are trading lower on the session testing $60 a barrel the drop in stock certainly weighing on oil prices today the dollar index is a factor as well with respect to the news of the

day, the api already came out and said the trump administration's plan to impose tariffs on aluminum and steel imports would raise costs for oil and gas in terms of that sector think of it this way, these metals are used in energy infrastructure build-out and higher costs would hurt the energy companies look at the etfs, they're trading lower, as well as big oil. the servicers and the refiners so xom, cvx, phillips also trading lower on the session as well >> thank you very much >> president trump announcing major new tariffs on steel and aluminum that he plans to sign, he says, as early as next week 25% on steel imports 10% for aluminum joining us now on the cnbc news line is dan, former ceo and chairman of nucor steel, also president trump's campaign senior trade adviser and chairman of the coalition for a prosperous america nice to see you den. >> my pleasure is this tyler? >> it is

indeed, it is. i said see you i don't see you, but i hear you and see your photograph, so whatever i characterize these proposed tariffs earlier as seemingly narrow because they affect one or two industries. and one of our prior guests said no, no, these are not narrow tariffs. they're bod because they do not discriminate between types of steel products or types of aluminum or country of origin. so they're regarded as, he regarded them, as quite broad. talk a little bit about that and why, to you, that makes sense. >> well, listen. the tariffs that the president is putting on steel and aluminum, as a result of the 232, are completely justified by all the trade cheating and dumping that's been going on in our industry the last 20, 30 years, in particular, the last ten years. and as far as broadness goes, nobody has seen all the details yept my understanding is that the 25%

tariff on steel would be against all countries. and it will include things like steel and slabs coming into the u.s. i have not heard yet whether it weil be as broad as including downstream products or not and we'll hear more about that next week. >> how do you -- how do you counter the, i guess, fear or argument that this could be a cost booster for the consumers of these products, and that is one of the reasons why the dow industrials are down 552 points right now? because they see it as feeding into what may be the beginning of an incipient inflation cycle. how do you counter those arguments? >> the idea that you're going to blame some kind of incipient inflation cycle on these tariffs is ludicrous first off, what we're doing is stopping the trade cheating where they have been breaking the global trade laws. this has not just been an issue

for the united states but the entire world as far as the stock market goes, i would tell each and every one of your viewers and investors, no matter where they're at, it's a great buying opportunity okay, a major overreaction cost of steel, a small portion of most of the products that people are afraid about influencing. as an example, how many tons of steel are in the average car maybe one? so if the price of steel goes up $100, $200 a ton, which i doubt it will because of these tariffs, but if it did, okay, you're talking about the car costing $100 or $200 more. on a $30,000 car or a $20,000 car or an $80,000 car, this is a non-issue in terms of being the kind of fearmongering that's going on by the folks on wall street and elsewhere >> i take your point, and we had another ceo on earlier who had been in the meeting this morning. he made exactly the same point with respect to aluminum

if you cost it out, and these things are fully passed along to consumers and imposed at the full rate, the increment of cost on a typical automobile would be $37. so does it really justify this kind of sell-off in the market you know investors as well as i do >> great buying opportunity, tyler. >> yeah. >> what if this fear goes beyond the cost of a car going up by $37 and the sell-off is really more because there are fears this could lead to a trade war or other ways that countries choose to retaliate against the united states? >> is this courtney? >> yes, it is. >> hi, courtney. nice to talk with you. listen, i love your question i am so happy that you asked that question. because the reality, the hard reality for most domestic manufacturers, including the steel industry, is that we have been in a trade war with china for 20 years and now is the first time that we are standing up and saying enough's enough. we're going to fight back.

and what we're fighting back on is for them to abide by the rules they agreed to when they joined the wto, for them to abide by the rules they agreed to when they got permanent favored nation trading status with the united states they have been cheating. they steal our i.t., they cheat on the products, they subsidize, they manipulate the currency we're in a trade war and we're desmaded because of it what trump is doing today is delivering on his campaign promises to the american people, the working men and women who put him in office. here's the thing for your wall street folks to pay attention to president trump had an economic plan we were all part of inputting into that during the campaign. that plan had five points to it. four major ones. tax reform, trade reform, regulatory reform, energy reform along with some infrastructure which is necessary okay each one of those plans, each one of those parts of the

economic plan, act together in a synergistic fashion to deliver exactly what he promised to the american people. you take any one of those by themselves, they are not as strong as they are when they're all together and so you can poke holes in certain things about each one of those, and come up with some negatives, but at the end of the day, taken as a whole, our customers, the american consumer, the american economy, wages, job growth, are all going to benefit and our economy is going to benefit because he's executing on the entire plan, not just one segment of it. trade is now in the limelight, and i can guarantee you one other thing. trump is just getting started when it comes to trade >> it's brian sullivan listen, a lot of people out there will agree with you, the u.s. commerce department said china was dumping aluminum basically subsidizing it people accused china of dumping steel during the financial crisis, that they were producing it en masse at under cost, just

to continue to keep employing people, but that said, this is going to be made about china, but dan, you know better than anybody, china is not that big of an importer of steel to the united states. isn't this more -- >> that's where you're dead wrong. is this brian? >> yes, it is. >> brian, you're dead wrong on that that's the kind of - >> how am i dead wrong they're 11th >> those are the kind of numbers people throw out when they're trying to make a distorted point because they don't want to see what's going on for the american people here's the real deal china's overcapacity is huge they have 50% or more of the steel making capacity in the world, and we have about half of that in global overcapacity. just because we have won some trade cases against china in the short term that have cut back on their direct shipments of steel doesn't mean that the steel that they are making isn't going into other countries andforcing the to move their products that they wereselling in other countries in the world now into the united states >> okay, so what -- dan, my

numbers, i want to be clear for the audience my numbers are from the u.s. government >> they don't include the shipping, the impact they only have the direct number, and the reason they're so low at this point is because we have won all these trade cases against them this is bigger than just one country. that's why he's doing it against all countries. >> i think that's an important point that you're making, so what you're saying, and i think it's important we're not disagreeing here, that the audience understands this. even though we have canada and brazil and mexico and south korea making and importing more steel to the united states than china, what i think you're saying, dan, is because of what china is doing, it's forcing the other countries to effectively dump their steel as well, that china's impact on the world as the world's biggest single steel producer is outsized and causing effectively trade disruptions and pricing dislocations everywhere fair enough? >> fair enough if you look around the world,

they're all filing cases against china. they're all pissed off about what they're doing in their economies and more and more. we haven't even talked about the intellectual property theft and everything else they're doing. what you have is a situation of also trans-shipping. that means vietnam, china sends stuff to vietnam, tuz a touch-up to it, comes into the united states through vietnam or send it to mexico and canada because of nafta which is a big problem with the nafta situation and why that needs to be renegotiated they circumvent the direct findings so that stuff get in here and impacts the market indirectly the 3% number is a fictitious fake news number >> we'll let that one just sit there for a second my final question is, you said a moment ago, and i think it was tantalizingly said, that trump is just getting started on trade. and right or wrong, i think we could look at the market's reaction today and say that may be one of the reasons the market is doing what it's doing, is the

idea that he is just getting started on trade should the market be concerned about that and what do you think the next steps in that process of just getting started mean what do you expect to see next >> first off, the market should be focusing on what i said earlier. this is one of the four to five points of trump's economic plan. they all work together the market got all excited about the tax reform, as they should have, okay, and that is a big thing that's going to help us be more competitive also what's going to help us be more competitive in the world, and have people decide to build their plants here to make stuff to sell here as well as around the world is stop trade cheating and regulatory reform is a huge, huge positive for the economic growth in this country okay, and so on, and so on what the market needs to focus on is the long-term impact of his total economic plan, which it does include trade reform,

and rightfully so. now, when you ask me what else he might be doing, here's exactly what you probably have already heard and i will repeat. in the budget, for this year, the department of commerce asked for additional funding so it could take on more 232 cases. that doesn't mean more 232 cases for steel. or aluminum. that means more 232 cases for the other very critical industries that guide our economy, that make sure we have a strong national security, and counter the trade practices of countries like china you'll see that happen in other industries as well, and eventually, it's going to happen for our downstream businesses who will benefit by his trade policy >> all right, that was a really informed conversation, dan i really appreciate your time, as we all do >> my pleasure anytime, tyler >> dan dimicco >> moving from steel to energy,

a tough sector to be in in february last month was the worst month for energy stocks in seven years. the sector as a group lost more than 11% the worst monthly performance since smeeptember of 2011 is there more pain to come and what could the trade tariff mean for this sector, which yeezs a lot of steel let's bring in matt, portfolio manager at tortoise. trade tariffs, steel and aluminum the industry uses a lot of steel. i'm kind of asking you to make a connection here, maybe where there is none. do you think this will impact energy as well if it indeed happens? >> yeah, so the majority of the cost of building a pipeline is actually the labor but you're right that it will have an impact on the ultimate cost of the project. for projects that are under way right now, that steel has been ordered years ago. a lot of companies have started shifting to sourcing their steel domestically anyway, so i don't

see a huge negative impact to the cost of building a pipeline to the extent that cost does go up the companies will simply require a higher tariff to move forward with the project or a higher shipping rate to move forward with the project so it's a headwind, but not a major change in the story. >> let's get back to energy. here's what's interesting, matt, is that crude oil is above $60 not high, but it's also not $45 a barrel we had this lousy february i tweeted out this morning that, i sort of had a wink and a nod on this, which is that oil prices tend to follow production by -- they tend to lag by a few months production, 10.2 million barrels a day. highest ever in the united states in at least 40 years. is the market reacting like this because they believe that prices are going to come down soon, because of the surge in u.s. production >> you know, hard to say why the oil market is doing, the companies are trading any particular way in a given month. my guess is after getting off to

a real nice start in january, the vix doubled in february. and then the broad market sold off quite a bit. and for a sector -- and investors were still skittish. a rough couple years i think investors seeing broader market volatility pick up, really took a pause on allocations coming into energy so that's the main thing i would point to you have to think, keep in mind, so maybe we grow u.s. production 700,000, 800,000 barrels a day >> we have to go, i apologize. let's turn to sarah huckabee sanders at the white house >> -- concerned about the member and women of the country who have been forgotten about. the industries our country was founded and built on this shouldn't come as a surprise to anyone this is something the president has been talking about for decades. certainly something he talked about regularly on the campaign trail, and something shehe's de making it clear today in the

details and the actual announcement and signing will take place some time next week >> sarah, the president often talks about stock market reaction to his presidency is he surprised to see the market down after making this announcement without explanation on tariffs and do you have any detail on why he decided to announce it today, as john was asking you, it seemed kind of sudden when we were calling in for that event it wasn't something on our necessarily public schedule. >> this is something, again, that the president has been talking about for a long time. it's not a surprise. and we're going to continue doing what we can to protect american workers that was something that the president committed to during the campaign this is something that he feels is vitally important yeah, that part is new and he's announcing his intent to make those things happen next week, and we'll have more details on that. >> did he make that decision today? >> again, this is something the president has wanted to do for quite some time. >> was it a surprise to, you

know, the press gathered there it wasn't on the schedule. >> i don't think that the president always tells you guys everything first but it is certainly something he's been talking about for a long time. >> at the white house, there were events. >> these are conversations that the president these are convers president has been having for a long time. he's made his intentions very clear to the team at the white house. i don't think it came as a surprise to anybody here. >> could that change between now and next week? >> i think that's the intent but until those details are finalized, i'm not going to get into any more specifics right now. >> a couple questions for you. first, a number of members with the public scrutiny and in some cases it's been general for spending, first class travel or ben carson at $31,000 dining set accidents, the president talked about during the campaign he's going to drain the swamp

is he going to drain his cabinet? >> if you're - >> we're going to step out for a moment if there are any news-making headlines from sarah huckabee sanders, we'll bring them to you. you heard the president say he wanted to do these tariff and trade actions for, quote, a long time. >> i think the markets were a little surprised, or at least worried, judging by the reaction we're seeing with the dow down almost 500 points. the beer industry also weighing in on the financial impact of the trade tariff plan. landon with more details. >> more beverage reaction we're getting here this time from the beer institute saying this 10% tariff will create a new $350 million tax on america's beverage industry, including brewers and result in more than 20,000 american jobs. back over to you. >> i'll pick it up, thank you very much. let's bring in art hogan, chief investment strategy and kevin coran. art, is this a trade/tariff

fear/selloff or something else >> i think it's very much tied to what's going on with tariffs. unfortunately, tariffs are the beginning, they have a much longer tail. you don't think about retaliation, don't think about china helping us with north korea in any way, but think about the nafta negotiations we're going through right now. that makes them impossible they are difficult and we're working through a process. our two most important trade partners are canada and mexico slap a tariff on steel and blow up those trade negotiation agnostic to a trade war, to the fact we get zero help from china and north korea. think about nafta and the impossibility of getting that negotiated, going forward and the ramifications for that i think that's what the market's reacting to now. >> is that an appropriate reaction, art, that the market is having right now? our fears of a trade war overblown or something we should be considered as potentially realistic? >> well, unfortunately, we have to consider it as being

unrealistic because it's happening. contemplating nafta not being renegotiated, we obviously walked away from transpacific and, you know, we've had harsh words towards nafta. we don't like bilateral trade agreements we like unilateral trade agreements in my mind, i think all of this has wound up in this protectionist attitude that we don't hear about until we do and i think we didn't hear about it for a period of time. we heard about it on the campaign we stopped hearing about it for a while. i think trump believed that if he stopped this for a period of time that we'd get up to north korea, we didn't, so here we are today. >> let me try to put words in your mouth are you saying nafta is dead >> this is not going to help that process it's going to make it arduous if not impossible nafta was critically ill to begin with negotiations have not been going well understand, it's critical we work our way through getting a stronger nafta renegotiated. two most important trade partners. >> kevin, how do you see it?

>> i see all of this in this body language in the talk about trade issues as a negative, especially for the macro view on profits looking out a year or two. there's no way to paint it up in a pretty way you can think about it from a micropoint of view, think about u.s. companies doing business in china, you can think about it from a balanced approach and that is not a good thing for long-term profits either i know this is the headline, but we have changes, fiscal changes that are positive as it relates to profits and the data on the economy looks relatively good. yes, on the margin, this is a discussion that's a downer for markets today, but it doesn't necessarily dominate the discussion unless it becomes a tit for tat thing going forward.

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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 back to "power lunch. the news of the day, the importants on steel having a ripple on the shares exxonmobil trading lower reuters reporting the proposed u.s. tariff on u.s. steel could impact exxonmobil's deliberation on refinery expansion.

reuters is citing a source here. certainly when you take a look at these tariffs placed on imported steel, it would have a larger impact on the industry. these metals are used in terms of infrastructure build out. it's not just big oil, we're talking about the surfacers and refiners as well, all trading lower in today's session. >> thank you. to kate rogers tracking the industrials. hi, kate. >> hi. take a look at the industrials, currently the worst performing sector in the s&p 500 due to the rollout of the new steel tariffs, down around 2%. johnson controls, boeing and cummins. johnson is down 3%, the worst day since february 8th boeing is the currently drag on the dow accounting for more than 90 points. johnson controls having its worst day since february 5th when it fell more than 5%. cummins is down 4%, on pace for its worst daily performance when

it fell more than 4% the dow and s&p are both negative for the year, guys. back over to you >> thank you very much kate rogers reporting. those companies are ones that are consumers of aluminums for big engine makers and the aerospace industry >> look at tech, too >> tech down. >> we talked intel and nvidia. nvidia down more than 4% that's a big one to watch as we watch the nasdaq and technology sector pulling down the worst sector of the day, down 2%. >> this is going to become -- it's a trade story but it's going to become a china story, i think. that's my take >> eventually it is. it's interesting here, you made this point earlier, that this is not merely a thing about steel and -- it's what it says about china, it's what it says about nafta, it's what it says about what's next. that is why, i think, the market is reacting. >> it is >> i don't know how big this will eventually get. we need to remember our exports

to china, while sizeable, are one-fourth of what they import to us. most of what we send them is grains >> we don't have a huge export business to china. >> that's what trade's all about, right you do what you're good at. >> grains? thanks for watching "power lunch. >> "closing bell" starts right now. >> hi, everybody, live from the new york stock exchange, this is the "closing bell. i'm kelly evans. >> i'm wilford frost in for bill griffeth the dow off sinking more than 580 points at the low. >> we'll show them to you again, but check out those steel and aluminum stocks right now. they're moving to the upside niece are the beneficiaries of the big tariff news today. nucor, u.s. steel, ak steel, ken