wall street. >> a big drag today as well as a lot of disappointments investors are asking some tough questions. what's behind the selloff? how long will it last? and what do i do with my money cnbc's special coverage of the markets begins right now.

>> and it was indeed a dramatic day on wall street you are watching cnbc's special coverage the fast money team, we are going to stick around to help make you sense of it all brian kelly, karen finerman. and brian adami. tonight, we're also taking your calls. so dial in any and all questions about the market, we will try to answer them. for now, starting off with the sell off closing down 458 the nasdaq which is the best performing index all the year, now in the negative. the s&p 500 fell more than 2%. so you are a retail investor at home, you see the headlines.

it is not pretty so what do you do right now? >> i don't want to be dismissive pretty significant move on the down side. the only thing that is remarkable is that it is a normal selloff in a market that has been going from the bottom left to the upper right. in other words straight up for a number of years. the only thing remarkable is that we haven't seen it sooner if you are watching it at home, this shouldn't be happening, it feels bad. >> most people freak out in this situation, don't just do something, stand there relax, calm down we have had this decline you don't want to be the person who is selling the low if you look at it, it is a longer term type of thing, these are the places where you want to start looking to buy in here you don't want to be buying at

the top and getting, you know, fear of getting in but here, where it feels terrible and feels horrible, that is where you want to look to buy. >> i am afraid it is going to go even lower tomorrow and the next day. >> the last time we had bouts of volatility it was the summer of 2015 low in august and a quick bounce and then a retest in september and then bounced and in january and february, in 2016, same situation. double bottom and kept on going higher here is the problem with right now in this setup right here we are now back at that prior low from february 9. it is important what happens in the next couple of days. if we break that february 9 low, we could have a top in place when you think about how much higher we are, the 2015, and

again in 2016 and you think about what are the head winds right now, you could have yourself, the top could be in the market for 2018. it could mean we bang around at lower levels. >> does this feel worse, only that it had been a long time since we had a correction. a number of different issues facing the market. the facebook data scandal. tariff concerns, the fed raising interest rates, series of things to be concerned about. >> there are however, a number of good things going on too i am a long-term investor and also a long investor meaning i always own stocks. never a time where i say i want out of the market. so what can i buy to own for a long-term. in days like today, it feels

awful and psychology is not your friend your gut intuition leads you to do the wrong thing it really feels bad to buy them when they go down so much every day. but that is when you have to buy them that is when they present the best risk reward so that is where we are right now. could it get worse absolutely i look at it as, if i had a fresh dollar today, and i own nothing, would i start buying? absolutely buy names like google here you can find this story or that story or eu is going to charge them a percentage of revenue you are never going to have a perfect time any time it feels like this is a perfect time, that is closer to it not be the perfect time calm down, and take a breath there are opportunities to buy things that are good values. >> everybody wants to talk about

the dow jones but that is a handful. the s&p 500 is that, 500 dan mentioned the low we had in february, that low was 2535. the good news is we are about to enter an earning season where depending on who you ask could be record in terms of earnings growth i think that sort of gives you hope over the next couple of weeks that maybe we can flush out to the downside and get reinvigorated by earnings. >> on february 2nd, apple recorded a good earnings there are a lot of names that we could be banging around. maybe there are some of these features of the economy, not the market that are starting to weigh on valuations a little

bit. at one point everybody was excited about profit margins, what if we do get into a trade war? >> all of these companies have conference calls to talk to wall streets after reporting the earnings the line of questionings are going to be telling in terms of how those companies are managing expectations, if we are entering what has been a seasonally weak market, they will probably be conservative. >> very conservative, because the answer is we don't know. are we going into a trade war? we don't know what the answer is if it is simply a negotiating tactic and it is entirely possible over the next 60 to 90 days, we see progress in this, then the market will go higher dan might be right, we have seen

the high for 2018, but when things sell off and all of that bad news is priced in there, there are opportunities in here. there are ways to make money or ways to put capital. >> are there stocks that you like specifically. >> the ones that are leading, netflix, amazon. i still want to look at those because they were the leaders, even when the market was going down, those stocks led i want to listen to shows. >> chief investor strategist great to have you with us. what do you attribute to these market jitters at this time? >> i really think that what unleashed this in late january, early february has to do with

the fundamentals that we are talking about. the spike that we got in wage growth the break out on the upside in the ten-year yield i think that the proximate cause if you want to call it that was a sentiment environment that got too frothy you saw an add attitudinal measure. and now the question is whether we have effectively gone from that era to one where we have washed that froth out. and i am not quite sure. i don't think the first of the leg has done it. and too soon if the second leg has done it. >> what do you tell clients now? do you make moves in your portfolio? >> first of all, the one thing that we tell investors is that panic is not a strategy. neither get in nor get out

neither get in nor get out is an investment strategy. investment should be a process over time and you can apply that same knowledge to the nature of corrections. corrections don't tend to be moments in time. they tend to last on average longer than this one so far with a bit more pain than this one so far. i don't know what is going to happen next. we came into this year expecting a heightened amount of volatility tighter monetary policy, less loose financial conditions, higher inflations and that the maximum drawdown, that is what we are getting whether this is the bottom, i have no idea but with more volatility comes the ability and opportunity to

rebalance. >> what do you recommend investors do specifically. >> so, valuations have come down quite a bit because even with the corrections you still can see the denominator and your pe go up. so you awe pes come down to a greater degree than prices came down but i would be cautious about using valuation either when it is high or low as a market timing tool because there is literally no correlation between any variety of pe ratio and what the market does. number one you should have a plan and your allocation should be a function of you as an investor, your time horizon, risk tolerance and use these opportunities to

rebalance and what rebalancing does, is you don't have to worry about which person on cnbc has the right market call. your portfolio tells you to do something. it forces investors to do what we should do, the basics >> so giving their shopping list potentially, the things you might want to look at based on your time horizon, what do you think are values in the market >> i think the values in the market, biotech had a big sell off for a number of different reasons. to dan's point in our earlier show, they are still clearly in the cross hairs. if you have a five year horizons, the valuations are compelling i would like at big cap

pharma-and biotech. >> facebook is in the cross hairs. here is a stock that has become very cheap 30% growth in sales. if these guys don't have to hire and they don't get regulatied this is going to be a cheap stock. if you felt like you missed out on facebook, and you think this is a storm that is going to pass, this is a name at $150 that you start buying on the way down a quarter position, 150, 140 that sort of thing. >> let's take a look to futures. after a day like we saw today, we want to get early indications where stocks can open up tomorrow this is early, but so far we under the green across the board. we will see how that pans out. plus, a number wildly held

stocks are stumbling later, do you have questions about the big market selloff, we are taking your calls later in the shows. call in 1800-743 cnbc. much more right after this

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welcome back to cnbc special coverage of the market sell off. it was a brutal day on wall street, dow fouling more than 450 points down more than 10% over at the plaza to break it all down. >> as we talk about those names, three out of every five stocks within the s&p 500 actually hit at least a 52-week high sometime just in 2018 out of all of those stocks, 169 are in that 10% phase or lower, that correction that you referred to. also, 46 of those stocks are

actually down by 20% or more something some traders refer to as bear market territory we will focus specifically on some of those fang stocks. facebook down 20% of those levels here from recent highs. amazon 16% and netflix down 16% and netflix as well. the ones you want to focus is this one, this one they are among the top five. they have a lot of impact. what is going to happen with the pe ratios a lot of those earnings haven't changed dramatic estimates on the next 12 months, facebook at its highs was at a 28 price to earnings stock now it is 20 amazon 169 down to 135

alphabet 28 down to 23 now so as we talk about valuations they are coming in the question becomes whether or not they stay that way or earnings estimates go into the season get to revised. >> often times dom chu is with us but we never really know if he is with us or if he maybe taped something. >> he is with us tonight. >> dominic chu, what is your birthday >> i am here. >> he didn't answer the question we don't know if he is here. >> june 6. >> gemini, psycho gemini. >> do you have a real question >> no that was my question. >> thanks. it is good to see you. before we talk about these stocks that dom mentioned, here is an important question particularly when the market is selling off the way they are how do you know when a stock is

cheap? >> well, one of the things that i look at is what metrics has this stock traded at before. so i look at its own history keep talking about this pe multiple which is price divided by the earnings. so i look at a company like a facebook, let's use google because i like that one the most we haven't seen earnings multiples in a way i can tell you, if i think i can buy google at a pe multiple of 21 here, it is actually better than that. this is a company with hundreds of billions of dollars with cash that makes the pe multiple less than what it appears i think that is a good buy it is an incredibly powerful business i am not that concerned about it not as concerned to say i am going to sell it and wait for a

better time. i have to pay taxes and then know when that better time is. i don't know when that better time is going to be. >> i would add to her valuation. when you have a stock that trades $5 million a day, makes a new low on volume that is four to five volume, that may be the market telling you all of the weak hands got out remember roberto duran what did he say to ray leonard he said no mas and then you know that your stock has become cheap. >> you said that you are looking at amazon, netflix, how are they cheap even with the sell off. >> they have unbelievably high pe ratios, but when it comes to those stocks, they never really

traded on pe ratios. when i look at something like that, i am looking for, this is where technicals can come into play you can say we are prior support. you don't need to be a mass technical analyst and do all kinds of ratios, but look back and say where did the stock trade before in price. where did people buy it before where did it break out so i look at amazon and netflix and say these things might come down, but if they get lower and get the support, that is where i want to buy. >> we can tell in tesla, the sentiment is really bad, facebook the sentiment is really bad. if it fits your technical levels, your valuation levels, that is when you take a stock. >> still ahead, what is the trump administration saying? head down to d.c. to get the latest i am melissa lee, you are

watching cnbc. here is what else is coming up on the show. >> this is guy adami, how can i help >> mr. telephone man. >> announcer: we are taking your calls on the red phone call us at 1-800-743-cnbc. talk soon.

. welcome back to cnbc special coverage of the market sell off. trade wars with china heating up and those fears slamming the market >> the white house not seeing this as a case of the market focused on fears of the trade war. peter navarro who is in many ways the architect of the plan he said this is a case of the white house having american

businesses back. he said ultimately the president's trade policy will be good for the market even if it wasn't good for today. here is what he said. >> ultimately i think it is a good thing for the market that we are doing these kinds of trade actions because what we are trying to do with this situation is try to get to a place where we have fair and reciprocal trade, balanced trade across the nation. >> that word reciprocal. that is where he wants to get country by country across the board. i asked the white house what they thought officially of the market selloff down 700 points here is what the official told me saying we are focus on long-term fundamentals not really reacting to market fluctuations so when the market is down, the white house not really keen to talk about it, but last week we saw the president in fact eager

to talk about it here is the tweet the president put out about six days ago on a much better day for the dow. he retweeted a cnbc headline saying the dow had posted the third best one day gain ever when the stock market goes up, they are more likely to talk about it around here than they are when the stock market goes down >> in terms of this potential trade war, we are -- for exacting intellectual properties. >> we are expecting to see that at some point this week possibly as early as tomorrow wait and see when they roll that out. are we going to get into a tit

for tat situation where sech one of these measures causes a backlash saying they didn't expect the chinese to fire back we will wait and see whether or not we get into a situation where we go back and forth for who knows how long. >> thank you joining us from the white house this evening for more, how the chaos in d.c. is impacting the market. let's bring in scott great to have you with us. >> what in your view is the reasonable worst case scenario, obviously a full on trade war. >> i think that is a low probability event. i think we are going to see a lot extreme targeting. this is going to play out over the next couple of years the topic was brought from the back burner to the front burner.

they are going to be renegotiating and negotiating on a lot of trade deals that have been in effect for a long time and the thing today, the chinese retaliation if you want to call it, you know, that's mini shot over the bow the administration has taken a few shots over the bow and i think when it gets down to it, the volume of trade between the two countries is obviously huge and what the tariffs are actually on is pretty small. so i don't think we are going it see a big escalation here. i think we are going to see a lot of renegotiation and the bottom line for us, is an all out trade war is a low probability. >> this is in response to the steel and aluminum tariffs which is tariffs part one.

tariff's part two is what is still to be announced from tech goods from china and that could be the bigger shot across the bow if you will from china in terms of retaliation we are hearing rumblings it is appear anything the data where manufactures are citing the dampening effect are you worried that we are not accounting for the psychological impact even though the dollar amount may be small? >> i think there is a psychological overhang and certainly that would show up in some of these ism surveys. clearly this intellectual property deal is a big deal. they don't want to go in, they would love to sell their product into china, obviously it is a

huge consumer market and it will grow from here, but they are not about to give up their technology and the rights to that that is where we are going to see some give here by the time this is all over and done with and it is not going to be an overnight situation, the administration they need to go after this intellectual property problem. it is a huge problem and if it didn't come to the boiling point now, it certainly would at some point down the road and for me, i want to address situations like that as soon as possible. >> all right scott, great to see you. thanks for your time scott wren wells fargo is trump still the stock market president? >> on up days. my biggest problem is, and you know, i am 54-years old so i have been around for a number of administrations. this is the first time that the administration has used the

market as a report card. there has to be ramifications when things don't go well. and then say we are in this for the long-term when the market is down that is a problem. >> the notion is if trump points to the stock market, if it keeps going down, maybe back off some of the policies that are causing it to go down. a trump floor in the market. >> the uncertainty that is out there. is there a strategy here is this a negotiating tactic what is the strategy it appears to change rapidly depending on the news flow to me, the best thing for this market is rip the band-aid off and get whatever tariffs are come so we can reprice this and get on with our day. >> certainty with a bad outcome

is better than uncertainty and an uncertain outcome i am happy that larry kudlow is there. he is excellent voice on communicating a message. i think, if you are going to live by the sword, you are going to die by the sword. i hope he backs off some of these policies and i think he will. >> much more ahead on today's market sell off, we will be taking your calls in just a few moments so call in at 1-800-743-cnbc guy adami will break down what you should not do when we have these big market swings. much more right after this break. fire fighting is a very dangerous profession.

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rally in the s&p in the last half hour in trading that is continuing now that is up about $8. we closed 2575 so that is up eight points 15 point rally in the last half hour similar story for the mini dow futures. up 70, almost 80 points as well. crude oil down more than $2. it is opening slightly lower 6301 was the close remember, we are waiting for the asian exchange that will open in a few hours. japan at 8:00 and hong kong at 9:00 p.m. >> thank you very much since this special is all about you out there, we are going to be taking some phone calls, the first caller is julian from

georgia. what is your question? >> caller: for new investors like myself who are coming in late to the bull market. i want to know is now a good time to dive in or do you think this correction might still have legs to go with that as well just your perspective for a new investor like myself is now a good opportunity for stocks that i have been looking at since november? should i jump on that now? >> thanks for calling. that is the million dollar question for me, i feel like, you know what, i am never going to pick the exact time so you shouldn't expect to pick the exact time either. no one can do that with great accura accuracy you buy a quarter position and then over the coming months you put the next quarter, the third

quarter, the fourth quarter to work you will never pick the bottom but you will never have an average price at the top either. that allows you to take the emotion away from investing. this is emotional. and when markets move so much, it is scarey and so that is what i would do. >> thanks for phoning in we want to take this next one from carol in texas. what is on your mind >> caller: hi, melissa, thanks for taking my call i watch you all every day and i love all of you. now, i have all of the fang stocks plus apple, baba, nvidia, microsoft and boeing to name a few. all that y'all have recommended. i bought amazon at 400 and google at 600. since all of this is in our 401(k) and we don't ever expect to have to use this money, can i

just forget these stocks and hope in five or ten years, my kids will be rich? or should i hold. >> there is so many layers to that question. and carol even said she likes dan nathan >> so as a fang investor what do you do >> the short answer is, karen will say this all the time it doesn't matter where you bought the stock if you do have a five year time horizon, all of the names you mentioned are fundamentally very much in tact they are all going into their personal crisis. but my suggestion to you would be keep watching our show, but don't necessarily watch every

price fluctuation, because five or six years from now, you will be happy. >> that is a great portfolio when sentiment felt hot, really great about all of those names you talked about two months ago, it might make sense, even in a retirement account to take some off the table and think about another opportunity another sector that may look interesting, that is one piece of advice that i would throw in there. >> thanks for calling in dave for illinois, what is your question >> caller: thanks, mel, last week's market's movement were difficult to digest as concerns about more hawkish fed, trade wars and more churn and chaos at the white house weighed in on the s&p. just barely above its 200-day

moving average and today it dropped below. so i am looking for guidance and a way to navigate april historically a good month for markets and i see this week to be critical to determine market direction. how do you see it? >> brian kelly, why don't you tackle the question. >> thanks for your call. what you talked about is everything what investor are afraid of. has the economy changed? has the direction of the economy changed. we have had repricing and there may be things on the horizon that are concerning. we are not looking at a recession, a slow down in growth we are looking the a repricing i agree with you, this week in the shorter term does appear to be a critical week and that is more of a sentiment type of thing. if everything feels horrible,

when it feels the worst and you are the most nervous, that is the time you want to start buying on the other side of that, i would add these concerns are not going to go away in the next week or so or next month so when the market does rebound, and these fears have subsided, you want to take some off the table as we get closer to the highs. >> dave, thanks for calling in and thank you to all of our callers. >> i love this we should do a show like this every night. >> here is a question that i have. >> thanks for calling, melissa. >> what are the safety trades in this market. bob mentioned gold where can you comfortably wait owl this market volatility. >> steve grasso says correctly, when the market goes down 70% of the under lining stocks go down with it. so i am not certain there are

safe people will point to dividend paying stock we have seen on a number of pays where if you have a 3.5% dividend yielding stock, and the do you is down 4%, you have given that up. dividend is a cherry on top and not a reason to buy the stock necessarily. >> tesla shares dropping is musk a liability for tesla. if you are worried about this crazy market, relax, guy adami will tell you what you should and should not do right after this you know what they say about the early bird...

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right foot... by comparing prices from over 200 booking sites to find the right hotel for you at the lowest price. saving you up to 30%! you'll be bathing in savings! tripadvisor. check the latest reviews and lowest prices. welcome back to cnbc special coverage tesla now down 35% elon musk has shown strange behavior on twitter. >> wild day for tesla. let's make a run down of everything that happened first off with the most recent news happening in the last couple of hours. elon musk is now in charge of production at tesla. doug field is now going to

handle strictly engineering duties the company says he has done it in the past and is in better position to step in right now as they try to ramp up production he was tweeting a lot today. some of it had to do in relation to his tweet on april fool's day. the guidances for 2500 model 3 per week at the end of the first quarter. media report says that tesla probably got to 2,000 a week analysts expect the number to be more in the range of 1500 to 1700 model 3s per week remember, yesterday being april fool's, elon musk sends out a tweet saying we are bankrupt

if i thought there was any chance it would actually happen. we are showing you a two year chart of tesla keep in mind the stock broke below $250 for the first time since march of 2017. and we talked with ron baron, the legendary investors. he is still sticking with the stock. a wild day for tesla. >> didn't ron baron get in at double digits? so he has a lot of downside to where his level is in terms of elon musk tweetage, it seemed to get more defensive as the day went on

tweeted back at the "wall street journal. does it seem like a change of tone for musk to be addressing all of these people? not directing to him per se. >> if you come at him, he will come at you. if you mock him or say you have no business doing what you are doing, whether it is tweeting or getting involved with the production of the vehicle, he will come back to you. relative to how i have seen him in the past when people have gone after him or criticized him, he can be much harsher and, isn't that correct -- regarding the mod el x

investigation. his feeling is i am going to put the information out there. and i am going to tell you what i am going to tell you and let everything happen the way it is going to happen. >> phil, thanks a lot. is sentiment so bad, we are in a situation where the most bullish analysts on the street, they don't expect these targets to be hit? could there be a buying opportunity? >> two different cultures. here on wall street we are talking about the next quarter you build out a model. that is not how elon musk thinks, he thinks in five year, ten-year increments he thinks about changing the world if you look at ron baron, that is why he is saying he has a ten-year view on this. >> the stock is only here because of him so to me, i think guys like ron

baron are thinking 20 years out and i think that is how a lot of investor are. >> still ahead, does the crazy market have your head spinning relax, guy adami will break down the three things not to do during a selloff hi, i'm mike ditka. and i'm johnny bench. and we've spent our whole lives around professional sports taking hits and catching our fair share of aches and pains. which is why we use blue-emu's pain relief products. blue-emu products; non-greasy, deep-penetrating formula that works down into your muscles and joints and works its magic. it's comfort that won't leave you smelling

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. welcome back to cnbc special coverage of the market selloff, the dow, s&p and nasdaq all in correction territory if you are worried about the selloff, don't be. guy adami has a break down what

you should and shouldn't be doing. in a segment we like to call, "the moreyou know. >> number one, don't make sudden changes. when traffic picks up, the last thing you want to do is change lanes. stay in your lane and wait for the traffic to dissipate same thing with your portfolio don't make panic phone calls, don't call your boyfriend, your girlfriend, your mom, dad, aunt, uncle. they are going to say the same thing, stay your course. the time to make the calls is when the market is in the up trend. and now is not the time. the last one in my opinion, don't pretend it is not happening, the move is happening. the market has gone down for a month and a half don't bury your head in the sand and pretend it doesn't happen. you can use this as an

educational tool and you will be better for it. >> bk has a question. >> i am curious, people are not panicking here, not selling, but they want to trim some, how do they know when to do that? what is the sign that you look for? >> i think you will have a cap pitchlatory bottom i think you will see the bounce and the bounce can be from 3-5%. and if you are concerned, i would use that bounce to take money off the table. >> what they are watching for tomorrow stay tuned

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of the futures market. it looks like we will be in the red. keep in mind, this is early going. we are waiting for the asian market to open as well as european market. we will get a better read earlier in the morning say around worldwide exchange time tune back in for that. time for the final word around the horn, what the traders are watching for tomorrow the day after this big day. >> i am watching the intraday low. i really think it has to holds before you start nibbling. >> i am looking for that capitulation bottom. >> i am looking at city, relax, wamp the game tonight. >> don't get used to this people jc will be back before you know

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