>> dsw buying calls ahead of earnings which i believe wednesday. >> josh brown. >> we were talking about the banks, i am in j.p. morgan >> joe. >> store capitals. thanks for watching. "power lunch" starts now >> i am melissa lee here in the midst of the markets sell off for the turmoil, italy's deepening political crisis rippling around the world. investors facing another moment. how much lower could crude go from here, the key levels we need to watch and battered banks, financial stocks falling across the board and down anywhere from 3% to 5% bha what's taking them down? buckle up, "power lunch" starts right now. >> welcome to "power lunch," i am sara eisen. fears of italy and the euro zone

impacting your money the dow is plunging at this hour the currency markets hitting its low. bonds on the move, this is the center of the action yield on the portuguese note. oil is tanking again, adding to last week's big drop and prices hitting the lowest level since mid april. >> tyler welcome everybody, i am tyler mathisen let's get to trading at this hour, what a busy day we are watching we are around session lows right now of 100 points off of them right now. see see seema see seema mody is at the new york stocks exchange. >> the europe market is closed

for the day. a lot of moves out of rome and the lead that raise the likelihood of a possible snap election worries that these parties can campaign on an anti european platform italy is much larger than greece, third largest european economy, making it much more intertwine but global assets also, worth noting that italy has been without a government since an inconclusive vote in early march. the banks are dragging down further. what has been working is the rate sectors, utilities and reach are higher at this moment.

>> seema mody, thank you let's take a closer look at what's happening in europe and how it is affecting u.s. markets. our wilfred frost is joining us now. it is complicated of the government there >> yes, initially the last month we have seen four yields that raise because of the prospect of the coalition governor of the two populous parties even though they promised not to form a coalition but looks like it is headed that way. despite the significance over the weekend after the president represents the establishment and rejected the finance ministers investors are saying this means fresh elections are more likely and those who parties might do even better than they have done before we got the latest polls on that and particularly rise in recent weeks for the league as you can see about 10% from where they already did well in march and if

we were head to fresh elections and these two be able to form a coalition is a majority. also, and however there is a crucial kind of step back to it. they had two key things both parties did. they also promised that across the border from the left and right they would not form a coalition. both of those things did not go away can they really perform better in another election? it is a little long way to go before the russia election >> it seems like it was a midst calculation of the part of the italian president to reject. just because he said in the past he would be anti euro zone because that way it gave memory the fuel to say hey, you know what, you are ignoring the voices of the people here. >> absolutely right. >> it was the classic fuel of the populous wanted against the

establishme establishment. >> right and gave them a reason. >> he had some grounds to do this both parties dialled back down into euro rhetoric and pointed into finance that was very muc empty euro it was pretty unprecedented from the present. just going back to the results of the polls for the moment. the lead has gained significantly, this is the right lead, of the very crude generalization, they have gained about 10% from 17 offset polls to 20.5. will mr. di maio wondering do i got more to lose or to gain. his has slipped a little bit >> are there any polls ask whether italians want to leave the euro is that what it is all about

if fwoboth of these parties fra it within the vote staying in the euro it is out of the italian hands >> let's remind us that it is hard to get to the point of referendum in italy. what's unequivocal is asking th question, did the president do the right thing and the answer is no. what they represent, the polls are saying today and those two parties will gain about 10% if they have another election today and that's a big concern, of course >> how do you put together a coalition of the far right and far left it >> it is a very good question. >> jeffery is comparing to a bernie sanders and donald trump together to form the government. >> the unifying theme is p populousipo

populism >> that they'll unite on do they agree in terms of universal basic income which is the bernie sanders' side of things want verses tax cuts for business it is big goals. you are right, it looks like they were about to form that coalition. the question is will the voters now having realized that coalition is likely still turn out in high numbers for if they were doing it verses as opposed to popular reasons >> we'll point out 10% slide in the euro which we have seen. it is less than whhalf of 2010 d 2011 >> quickly the contagent, we have not seen to a series extent in their own markets por nothing like in 2010 to 2012 this is an italy issue sparking

concerns for banks as opposed to all europe >> u.s. yield today certainly did not help >> exactly >> and germany as well and u.s. moved in the opposite direction. it is affecting different countries differently. >> we are keeping an eye on it, wilfred. thank you. >> let's dig deeper how this can affect u.s. stocks our strategist and randy warren with warren financial service. randy, i will start with you, are you worried of the impact this could have and a problem as big as italy on u.s. stocks? >> it is hard for individual in investors to figure out why this matters and we have seen this movie before and we are chopping this up to what we could call it a geo-plunge these are risks that you don't

want to take for granted even though they are hard to understand >> what does it mean in terms of actionable formation do you make any move >> we look at it from our clients' perspective, if you are a gen x person, up to look for buying opportunity and days for when the mark et is down like today or in the near future or if this continues to be an unfolding problem. you can wait a few days and pick up shares of some really nice stoc stks, the fa stocks and anything thanet's do extremely well would be a great way to play that. if you are older than you know, baby boomers or the greatest generation, you need to be concerned or a little bit more cautious you need to worry about what if this thing takes a t10% or 15%

downward turn. what's my outlook and how long am i in for this thing for we like to think six months ahead and if this italian situation flares up and gets worse, it means less rate hike here in america. that could be good news down the road for investors but it could mean a lot of pain in the short term >> michael, there are a lot of bricks in the war of worries right now. there are north korea and now italy added to the mix and not to mention domestic politics here in the united states. how should you as an investor think about this sort of rising wall of worries right now? >> well, i am concerned that many of the catalyst that have been driving the stock market higher than the last 12 months are beginning to fade the same time tyler, you mentioned a few of them the synchronized growth recovery

is starting to fade, fiscal policy have not provided the boost that we expected to the economy and corporate profits may are peaked in the first quarter. so, what's interesting though is that although global growth and corporate profits may have peaked, they are still growing although monetary policy and conditioning are tightening. they continue to do so gradually and fiscal policies and corporate earnings are still growing. investors should be positioning in global secular. >> what's so remarkable of today's session is netflix had an all time highs and twitter is up 4%. those are actually doing well. are we in this period where we are looking for growth and

abandoning this notion >> the thing was investors continue to talk about this idea of regime change to a shift to higher levels of interest rates and higher level of inflation. i was never quite sold on that m merit. i still think we are in a goldielock's situation in that environment, melissa, you want to buy growth and where that growth is it is acute right now. it is in technology. i do think buying areas where revenues are growing and earnings for shares are growing and whether investors want to be in the market. >> guys, we'll leave it there. thank you for joining us in the markets today. president trump announcing new efforts to fight back of what he says discriminatory and burden some prey practices from

china. is that going to affect corporations fromchina and north korea. we'll discuss that the dow is down about 433 points ws were down 470 or so at the lo stay with us here on "power lunch.

welcome back to "power lunch. i am melissa lee eamon javers is live with that story. take a look at these two key dates here the first one is june 15th, that's when the u.s. is going to announce a list of $50 billion worth of chinese goods that are subjected to a 25% tariffs and on june 30th, the u.s. will announce investment restrictions and what they call hand export controls for chinese persons and entities related to industrially significant technology annocements today pending downe the dates ofn it will happen the official chinese statements saying no matter what the actions ar actions are the u.s. plans to take, china has the capability to defend their nations and the core of people side by side with this dramatic north korea negotiations

you remember at the end of the week, the president cancelled the north korea's summit between the u.s. and north korea now it appears that u.s. negotiators are trying to make that is back on. here is what we know about the schedule from here on out. the japanese prime minister shinzo abe will be back at the white house again on june the 7th from meeting president trump, the north korea vice chairman, he'll meet with pompeo here in the united states the united states are in singapore right now working out, they think they can move forward. now they're pushing ahead and we'll see where it lands back over to you >> eamon javers.

on the summit to the ongoing nafta. here to help us navigate washington right now is columnist george will. good to have you with us >> glad to be you. >> it was a song on it called the "revolution would not be televised. it was against the time back then as i heard mr. mnuchin say, the trade war would not take place as scheduled i don't know why that came into my head. i can't follow it. all of this doing and throwing on whether it is north korea or whether it is going to be kind to zte or not kind or good with respect to trade and china or tough with them. i don't get it >> it is the art of the deal

>> what's the use of the phrase national security? the president has said that importing cars from allies such as italy and germany and japan and south korea, that's a threat to our national security you say our national security depends on economic strengths, therefore anything that affects economic strengths can be regulated by the president under national security guidance well well, everything is on the table. the french was doing what the french do as they were endorsing free trade while carving out exceptions to it they list government loves to do this. >> is there a linkage between what's going on on trade with china and what's going on with north korea? >> well, the president enjoys

really on the world's stage and it gets a lot of attention and that seems to please him the problem is, it is hard to see what is in it for north korea. back in the day when the soviet union with nuclear weapons, if north korea were to denuclearize, it would be upper volatile without rockets well, what's in it for them is they can raise the standards of the living people. the knnorth korea regime has be a family project and not once, anything other than the security of the regime and never any interests in increasing the the standard of living of other people >> i don't believe there is ever a nation once it acquires

nuclear weapons have given them up >> that's almost right kadafy did give it up. he did not have them yet >> he announced it at which point we said fine, we'll leave you along and nato is leading the charge that have him murdered and covert in horrible circumstances the fact is hassan if he had nuclear weapons, he would have survived i am afraid that u.s. policy have taught unpleasant people of the utilities of nuclear weapons. if north korea did not have nuclear weapons, no one would pay attention to it at all >> george, what do you think of the success? clearly trump wants to cut the trade deficits it is not realistic and nor most

economists tell us is it crude and policy, what is he looking for? >> unfortunate, he has a case to be made against the chinese and others regarding intellectual properties the president seems to have one metric of national strengths and that's not to have trade deficits with other countries. how you are going to run the world where every country has a trade surplus is exercise in arithmetic that i simply do not understand i have a chronic and deficit from mike barber every week i buy something from him and he never buys anything from me and somehow it works out. they understand that it works out that international trade globally is by definition is always in balance. the idea that you can have as an

index of national health, the absence of trade deficits, you want that to go back to the 1970s when our trade deficits shrank as the economy shrank >> george, thank you very much it is always great to see you. great to be with you >> coming up, casinos and alcohol and a new phone, sounds like a good night out. a big sell-off on wall street right now. we'll keep you apprised of it. real estate and utilities are holding onto ama sll gain. treasury prices rise and yields go lower, "power lunch" will be right back whoooo.

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save by bundling usaa home and auto insurance. get a quote today. welcome back to "power lunch. for the first time today, coca-cola sold an alcohol beverage if coke is going to test something out, it always does it in the japanese market they get the best drinks because they have consumers that go with the fads and they're willing to try new things they even get hot drinks in vending machines they got a hot ginger ale that was a mamazing >> it was a coke product this display soaring the company has oled

this is according to a korean report of the plan and also apple trying to go after a lower price point, of the mass market phones, oled screens are much more expensive. >> what do they do on the screen >> color, i think. >> some of the japanese makers of the other lcd screens fell pretty sharply in the session. >> japan display for one >> the dow is more than 400 points, 429 to be exact. a lot of financials and goldman sachs and j.p. morgan, up next we'll take a look at what's dragging those down. we are at isigfintth snica

sell-off

hello everyone, i am sue

herrera, here is your cnbc updates for this hour. doctors two treated sergei scripal and his daughter say they expected the two to die they spoke publicly for the first time about the incident with bbc >> when we first were aware this was a nerve-agent. we were expecting them not to survive. we would try therapies and ensure the best clinical care. but all the evidence was there that they would not survive. here at home, roseanne barr apologized for comparing jarrett to an ape. and he apologized to clinton

archaeologists discovered more than 25 geoglyphs in the southern mountains it was appeared to be made more than 2,000 years ago your up you are up to date, that's the news update at this hour back so you, sara. >> thank you, sue. >> the political turmoil of italy. the dow dropped down 450 points right now and breaking below the key technical average. all groups are lower except for real estate and oil continues to sink prices hitting their lowest level since april 17th worst hit group by far, the banks and financial slam dom chu tracks the action there. >> absolutely. traders and investors are continuing to grapple of all the

political aintunce elsewhere and europe and spaina. those financials were among the hardest hit stocks it is a mouth fuful but the ticr is eufm. now for the new worry for in investors here at home, you got concerns that are weighing on u.s. financials. sending shares of the nation's biggest banks and you got citi group and j.p. morgan and morgan stanley is getting hit hard. it was down as much as 6% earlier and you can see it down 5.5% right now in part due to concerns of italy. they were talking at a conference for deustcha bank

now, it is dropping and you mentioned sara, below the 50 days for the broader market. that's below its 200 days moving average. finally take a look at the volatility index of its highest level spiking to 17 and change back over to you >> thank you, dom chu. >> let's get more contact of today's sell-off >> brian is joining us here. good to see you >> thanks for having me. >> if you don't think there is c contagent, if you don't think global synchronized growth is an issue then it is just u.s. growth there is so many reasons here to not be in financials and the trades have not cooperated >> it is a great question and it is a broader one with respect of how active we are.

why are we bringing up in argument again we had contagent in 2008 and 2009 this actually what's going on in europe and a day like today brings the mind why fundamental realities, sometimes over take consensus. consensus has been to buy europe, buy europe because it is cheap and sell america because we had this big move how does that work out so far? not so good. why? fundamentally europe continues to be a declining asset and you see volatility with respect to politics and fundamentals and in growth by the way. why do you want to be in an atmosphere like this where the fundamentalties going back to the financials

dividend growth is the stronkget in the world in u.s. financials. we need to provide our investors with income going forward if yields are going higher. this is a one day thing with respect to financials in terms of the reaction, we become an over reactive market it is not over in one day but this type of opportunity provides an opportunity to be a longer term investment and picking up these stocks that have fundamental reality booipd t behind >> italy here we go again. >> here we go. >> does it make u.s. stocks more attractive or risky because we are so linked? >> let's go back to the global synchronized growth. the biggest growth engine in the world is the united states of america. we still have the strongest g.d.p. regular the pigs and we talked

about that in 2012 what's the percentage? >> it is not about g.d.p. though >> italian bond market is a 2.3 trillion euro bond market. >> correct with respect to how volatile it continue to be why do you want to be over weight in terms of our investment dollar there. the strategy is not to be there and be more consistent with respect to your growth and at reasonable price value and highest quality assets with respect of equities in the world remains in the united states bri brian belski, thank you. let's bring in our virtue financial, matt, good to have you with us, what's the buzz today and if you had to explain in a phrase or two, why the

marks a markets are doing what it is doing now, what is it? >> we are playing a little bit of catch up. we were off for three days and it does not happen over night. it is an over extension of what brian was mentioning or a one-day event. it is in the financials and the oils today's action you look at u.s. dependent companies and small caps and look at the russell,st out performing today hopefully, it does not spread like contagent is supposed to spread >> what about if you look at bond and what they are doing, what does that tell you of the next few weeks and the course of the summer >> well, we have seen a lot of volatilities of the bond recently and we expected the 10-year yield to go above three.

now you are selling the sell-off aggressively the risk off trade is here we have seen this and we know it is going to go above 3%. if you think that and believe that going forward, maybe your significant buyer on this dip here, one thing you have to monitor here, what's the fed is going to do because europe got so far behind. they cannot get too far ahead. there is a lot of cross currents right now but i would expect the ten-yr to yield back near the future >> because of what's going on for europe, is that a good thing for the markets or bad thing >> easy money has been good for a long time. >> easy money because of the risk of contagent is a good thing? >> no, it is hard for me to believe that this just happened over night it is a long time coming and we should have for seen some of it. the feds are going to have their work cut out for them.

they're looking to maybe cut going forward. that's why they needed the raise in case something like this happens. the fact that they did not get the raise in, maybe we can keep it around here and we don't get three or four rate hikes >> i am not sure you think why this is a one day episode of this sell-off >> we are off and this is all happening today. this maybe could have happened on monday or a little bit today and would not be so bad. we would not feel 5% decline in some of the financial names. some of the broader markets are holding up rather decently maybe a little bit of a panic move and maybe we see some reasons to it. and maybe wecome in and buy th market a little later tomorrow >> matt, thank you very much matt cheslock on the floor >> rick santelli is tracking the action at the cme group as au s always rick >> boy, it is a busy day, look

at the two-yr note, they are at the lowest here. tens are now down 13 basis points could be the lowest close since the 11th of april. let's go to the epicenter of what's going on. the italian ten-yr, these are huge move and recalibrating the safety part of the you acurve w is the german curve. the repercussions for this is why our yield curve is so flatten and so down today. the dollar index, while all of this is going on, the dollar index is up three quarters of a percent. we are at the best level of the dollar index and should have closed in the zone since july of last year and ten minus bund, for a while they were 261 basis

points that's a three dade wide they have come back a bit. the bund closed and the spread was around 254 this is sure to have a bigger effect on our markets and an every expanding relative value trade but we are also making investors nervous. what is the message of the long bond and how mixed up is it because of what's going on in italy. back to you. >> hey, rick, quick question remember mario graghi says he'll do whatever it takes to set it to zero. what would he have to do in this political crisis if it spins out of control in italy, it is a whole different ball game? >> remember mario draghi could give a certain level of collateral of any paper it wants. that does not mean the market is going to agree and that's where we are at right now. >> thank you, rick santelli.

>> oil is tanking again and now down of 8% russian opec is thinking of boosting supplies. how much ler cowan oil go from here we'll explore, next. ♪ there's nothing more important than your health. so if you're on medicare or will be soon, you may want more than parts a and b here's why. medicare only covers about 80% of your part b medical expenses. the rest is up to you. you might want to consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like any medicare supplement insurance plan, these help pick up some of what medicare doesn't pay. and, these plans let you choose any doctor or hospital that accepts medicare patients. you could stay with the doctor or specialist you trust...

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it's a good time to get your ducks in a row. duck: quack! call to request your free decision guide now. because the time to think about tomorrow is today. welcome back everybody russia and opec is considering pumping more supplies. joining us now, a portfolio manager at asset management. explain to me one thing. why is the gap between brent and u.s. domestic crude is so wide right now. what happened is in the u.s. we have been so good of what we do. we continue to serve in our

production the pipeline to get it to the fuel to the end user, they're trying to catch up >> they're trying to add capacity as quickly as they can. >> absolutely. these pipelines take time and pe processes and highly regulated industry >> as oil went up in value the last few months, up in price i should say what is driving this session is it geo-politics >> markets does not like uncertainty and the strengths that we see in dollar. what we touched on a minute ago, the saudi arabia russian announcement which we did not think it is going to happen at least the end of 2013 or 2019, with we'll have a coordinated effort

to begin to get production >> where does it meet opec later next month >> we have a june 22nd meeting between the saudis to kind of discuss this i think what we need from opec is certainty we are going to have many of the producers in the u.s. will just continue to produce and as long as we get that infrastructure in place and our exports, we'll see more and more go out >> if you get u.s. production continuing to go at its pace and the ability to deliver that production, catches up and you get a production increase from the saudis and the russians and maybe opec as well what does that do to prices and how soon >> you have to remember in 2016 we had 325 million barrels of excess supply over five years averages today we are at about 140.

if they brought on half a million and 300 from russia and 200 from the saudis and even by the end of next year with the added production would still be 40 million barrels under it crudes back here and had a nice run and we got some support here in the low 60s. >> what does it mean for gasoline prices for a guy that paid $4 per gallon in california last uniqweek >> you will see gasoline prices stay where they are. they tend to go up when oil goes up and hold a little bit for a while. >> funny how that works. >> it is like interest rate. thank you very much libb libby toudouze >> here is what's happening, starbucks are closing around 2:00 p.m. for anti-biassed training the u.s. is expected to export records amount of oil in the

next couple of months and taking more shares from iou peck. mgm is buying nyc-area casino. sara melissa, the financial is taking it on the chin. today the fall-off we got goldman sachs leading the dow lower. what's fuelling the fear where does the big banks go from here that's ahead on "power lunch." a sinkhole opened up under our museum. eight priceless corvettes had plunged into it. chubb was there within hours. they helped make sure it was safe.

we had everyone we needed to get our museum back up and running, and we opened the next day. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too.

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welcome back to "power lunch. let's get to julia boor stin in l.a. with breaking news. >> abc has cancelled "roenz. the twitter statement is abhorrent, repugnant and inconsistent with our values and we've decided to cancel her show this comes after a series of offensive tweets by roseanne barr, one of them making offensive comments about valerie jarrett, obama adviser, a tweet

that was deleted set muslim brotherhood and "planet of the apes" had a baby that tweet deleted, rose ann barr apologized but abc has decided to cancel her show >> thank you very much, julia. a brief -- well, that was a brief stay there for rose ann barr with a successful reboot of her program. >> it's hard for companies like maybe abc because that's part of her brand, right, but when you cross the line and go so far and sort of spew such bigotry, i think it left them no choice there were already starting to be #boycottabc all over twitter. >> it will be interesting to see if the president tweets because he had been pleased very pleased with ms. barr's show >> it was seen as his core >> it will be hard to defend that one >> absolutely. may 29th also known as national 5/29 college savings plan day i didn't know that but many families are not likely to celebrate. senior personal finance correspondent sharon everson

joins us now on national 529 day. a holiday i didn't know we had i'm going to leave i'm going to take off. celebrate. have some cake >> but you know, ty, some families actually probably are pretty frustrated by the rising cost of college, their inability to find the ways that they need to save as much as they're going to have to have for their child's education. one of the main reasons, though, why many people aren't celebrating 529 day is that they don't even know what a 529 plan is >> no, i don't know what it is >> zero idea >> i don't know what that is >> i believe a 529 plan is a plan where you put money away for your -- you start young for your children. >> the results of our random cnbc poll are that a handful of people in suburban new jersey mirrored a national study by the financial services firm edward jones that found only 29% of americans could correctly identify a 529 plan as an education savings tool

that savings can be used to pay for qualifying expenses, tuition, fees, room, board, books, computers, internet access, and earnings on your contributions to the plan are not taxed. and since you put in after tax money, you can withdraw the funds tax free to pay for college. but the reality is nearly half of families borrow to pay for college instead and they -- and look at the long-term impact they're facing if you borrow $35,000 for one year's tuition with interest, it will cost you $52,000. that's if you pay it back $435 a month over 10 years with an interest rate of 8.5%. now, on the other hand, if you contribute just $100 a month, over 18 years, to a 529 plan, you will have saved $21,600 and if that money grows 5% a year on average, you will have $13,400 in earnings and you'll meet your $35,000 goal for the first year's tuition so, the bottom line, of course, is it's much cheaper to save

than to borrow, but so many people are borrowing that money, and only about 13% use a 529 plan to pay for college. >> if you have that asset of a 529 plan, does it count against you when you're applying for financial aid? >> that's a big reason why a lot of parents say we're not going to do it and the reality is that it counts as a parent asset, which means that it has a lot less of an impact on your financial aid than if it was a student's asset. so, at most, it will count about 5% of the money that's in that plan will count for financial said >> so that sounds like i should not save in my child's name. >> right >> you should not save in your child's name the great thing about a 529 plan is it can be for any beneficiary so you can be saving for your child, you own the account, but you can save for a grandchild, your child, a niece, a feonephe friend >> i think it's cool that you can use the money now for other school, not just college >> you can use $10,000 for k-12 private education, but you have

to check with your state and make sure they also agree with the federal law that says it's a qualifying expense >> sharon, thank you >> sure. the dow is reaching its 50-day moving average financials getting slammed today, how do you protect your money and is this going to be a volatile mmer wo we're all over this. second hour of "power lunch" begins right after this.

i'm sara eisen, here is what is on the "power lunch" menu the summer set-up with a number of head winds starting to build from italy to global growth to crumbling oil prices, how should investors be preparing their portfolios for the summer? financials deep in the red as italian debt concerns and new comments from some of the companies' top chiefs have investors running for the hills today. names like gillette, cheerio's, campbells soup all hurting as consumers are saying bye-bye to big brands. what's next and can they save themselves "power lunch" starts right now and welcome to "power lunch. i'm melissa lee, as sara had mentioned, we're seeing a selloff on wall street with the dow down by more than 400 points the biggest decline since april 6th. meantime, take a look at the

yields and the two-year hitting a six-week low, the ten-year falling to a near seven-week low as we see that bid for safety in today's session. financials and industrials leading the declines, real estate, utilities eking out some gains and speaking of financials, the sector lower across the board over concerns over italy that stock along with jpmorgan, citi, bank of america, those are the laggards in this sector. and we are watching shares of disney, breaking news in the past few minutes, disney's abc canceling "roseanne," following her earlier tweet. welcome, everybody i'm tyler mathisen we begin with today's selloff and mike santoli at the new york stock exchange mike, do you think italy, the situation there, far from a true contagion right now, why and what would it take to elevate to it that happy state? >> yeah, at least right now, tyler, i don't think you look at the markets and say this is a

full blown contagion i dohink you've been talking about the bond yields, treasury bond yields, back to levels of a few weeks ago. the u.s. stock market has given up a couple of weeks worth of gains, even bank stocks were here in early may so a lot of kne these markets took this as an opportunity to back off a little bit. obviously i think it's the credit markets that will hold the key as to whether what's going on in it lee aaly is goin spill over into u.s. corporate america, access to capital, how we price risk over here, so that's what i would be watching and right now today, yes, a little bit of a flooder in those credit markets in the high yield market but nothing right now that says that this is really that different an environment than we've been in for a while, which has mostly been range bound for a bunch of different asset classes. >> and whatever happens, it's going to happen in italy over the next few months, isn't it, michael? in other words, if there is a second election as it appears it's probably not going to take place until late summer, early

fall, number one, and number two, it's just going to play out over time. >> right so, what we have, then, is a situation where everyone all of a sudden becomes an expert on italian electoral politics for a while, and maybe the market just kind of burns out in its concern for this, so there's two ways it can go here in a sense either we have that sense of, okay, we were here before, we had euro debt crises before, caused these big corrections in u.s. stocks, caused people to get out of riskier debt or do people say, you know what? we dodged this bullet several times. it didn't hurt us. the u.s. economy stayed okay it did not end the bull market so i think somewhere in between those is what we're headed for if things don't calm down in europe or italy right away >> but i do think that what is really called for here is a week of live broadcasting of "power lunch" from rome this summer, correct? >> well, if you think a week would do it. >> yeah. at least a week. it may unfold so we may need to stay a lot longer. >> i feel like we're get a

better sense of the economy by going to the amalfi coast or tuscany. rome would be okay >> all right michael, thanks. global markets in focus today as fears as michael just said of italy's deepening political crisis and euro exit talks spooks investors the yield on the italian ten-year hitting its highest level since march 2014 and that got attention of global investors today. joining us to discuss, peter, a cnbc contributor so here we go again. but i think it's important to note some of the similarities and big differences between italy and greece a few years ago. how do you look at it? >> well, greece basically defaulted on everything, didn't pay back some, and stretched out for 40 to 50 years the balance of their debt to their other european creditors italy, it's not really any new trouble, but whatever ailments they had politically and debt-wise is now just being exposed. i think what just is astonishing

about this whole thing is that yields are back to where they were a month after he said whatever it takes, at least from the two-year, so we've given back four years of qe where they took their balance sheet from 4 trillion euro is to 2.5 trillion euros. >> but is the lesson that the ecb is quite powerful, can bring in a big baa zzooka and will do whatever it takes and therefore investors shouldn't worry too much about the fate of the euro. >> most italians want to stay in the euro this is more of a debt issue, a bond issue, an interest rate issue to me, rather than an existential euro question. >> let me ask you about the charters at the various central banks and the foreign holders of italian debt if it gets downgraded to junk, does that cause any of these parties to dump the italian debt and cause that further spiral? >> right, that's a risk, particularly the ecb, which is not -- >> they own, what, 20% of ial dan de

-- italian debt >> all three credit rating agencies would have to do that but that is a possibility. >> it's on watch again >> right so it could happen now they do have a primary surplus, they are beginning to grow again, but i just think that dragi, again, has lost control of all these years of trying to suppress rates and just to lose control in just a matter of weeks is unbelievable. >> italy's debt problems didn't go away. they've just been re-exposed there has been some austerity, right, in an italian fashion it's an oxymoron, italy and austerity don't go together. >> but it's not a coincidence. the ecb cut q.e. but 50% and they're going to cut it again. here's this monster buyer that is then walking away, and i think when that happens, when that liquidity flow goes the other way, investors just become less tolerant of issues. they become more focused on turkey where the president has been, you know, somewhat off the rails for years now.

argentina has had inflation problems for years but now all of a sudden they care. i think that is tied to central banks now behaving differently >> the other thing is it's a political crisis, unlike what greece faced that was a debt crisis yes, italy has a huge debt to gdp but have we also learned somens lso from political -- i won't say crises, but upsets, the electionf donald trump, the uk voting to leave the eu and sort of how the market has been sensitized to some of these big political shifts as we look toward a pretty uncertain election potentially in italy. >> you're right and that somehow populism is now a new thing but politics has been interesting. colombia just elected a very business-friendly person argentina, notwithstanding the problems, he's a business friendly guy latin america is moving to the right and italy is moving to the left and you have this back and forth, but i think an underlying thesis, though, is debt levels that are still very high, you

know, dragi gave a lot of these countries a free pass. there was no urgency to get things in order when it costs so little to refinance your debt. now that rates are now rising and it's going to cost italy a lot more, we have to see how that government then responds. >> yeah. rising rates make things a little trickier everywhere peter, thank you well, turning closer to home, the dow slumping on worries about italy's political turmoil, spilling over into the global markets, it is the biggest drop for the dow in over a month. david is managing director and portfolio manager with ankora advisers good to have you both. david, i'll start with you do you look at the u.s. markets any differently given what is going on around the world? not just talking about a potential threat of contagion or not contagion but even just what it means for what the fed could do to interest rates which would have a direct impact on the markets here >> simply put, the contagion is nonexistent. quickly.

i remember doing cnbc interviews february 2010, the topic was greece stocks since then have compounded at 14% for u.s. stocks post the brexit vote, june of 2016, u.s. stock market large caps compound at 16%, small caps even better, 20% compounded rate the average stock in the s&p 500 now is about 15%, below its 52-week high you get these opportunities in an environment where italy will not be the major problem and as long as you're patient and you go put some money work today, you will be better off because i don't think it will be an event just like it wasn't ultimately with greece, with brexit, and many points in between >> jason, do you think the fed changes course given what is happening in europe? do you think it wants to have more bullets, so to speak, just because there could be this impact from what's going on there? >> you know, it's too early to tell i think it gives them an

additi adal rtionson to pse i dot think they're going to change course from the path we'ron, which normalizing monetary policy in this country but certainly this idea of four rate hikes this year which the market has been wringing their hands over for sometime, it might put three more firmly in the camp for the fed >> so, david, are you using this pullback as a buying opportunity in any of these areas? take a look at those banks if you say that there is no contagion and that this could be a buying opportunity, you've got, what, morgan stanley on sale, down 5%, citi down by about 4% or so what do you do >> i think you go buy and it's not just the big banks, whether it's jpmorgan or b of a to name a few. a new jersey-based savings bank, only three analysts follow the company. i think that represents valuation opportunities, the finance company that also benefits in a rising interest rate environment because i do believe the fed will continue to embark on a rising interest rate environment. so, there's a couple of out of

the ordinary financial stocks that you can be buying to go with your big cap bank names >> jason, what about the u.s. dollar i mean, it's starting to strengthen to levels that we haven't seen in almost a year. this is how u.s. stocks are going to be affected, it certainly impacts corporate earnings of any business that has anything overseas in terms of sales so, do you make any moves based on that alone if this continues? >> it's a wise observation, and part of the earnings recession that we had, you know, circa mid-2015 through the election in 2016 was based on a strong dollar so, watching that is important, and yeah, i mean, i think one could certainly make an argument that tilting the portfolio toward companies more domestic oriented and away from that currency effect could play a role in slight out performance if the dollar continues to strengthen but our view is that the dollar has risen some. i think part of that has been the back part of what's happening in europe. part of it has been the fact

that the dollar has been fairly weak for the past year or so, so you know, there's going to be a bit of a reversion to the mean there, but we're not terribly strong dollar bulls. we think the economy is still around 2% or 2.5%. inflation is in check so we're not adjusting our portfolios based on the what the dollar is going to do but it's certainly something market participants are watching closely >> jason, david, our thanks to you. >> thank you >> thank you all righty here's what's coming up on "power lunch." oil prices, we have been talking about them a lot today they've been dropping but that isn't holding back one company from expanding its operations. the ceo is next on where he sees oil going. that will be robert phillips plus, financials sharply lower. just talked a little bit about that a closer look at what's behind the sudden selloff and what it could mean for your portfolio, good or not so good. buying opportunity or not. and the slow death of big brands, a look at who's on life support and who's defying the odds as we head to the break, take a look at the dow 30 heat map, only one of them in the green.

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welcome back to "power lunch. oil prices lower amid fears the market is growing oversupplied the u.s. is set to export around 2.3 million barrels a day in june one oil and gas company, crestwood energy partners, says business is booming and they have more supply than they can handle joining us now for a "power lunch" exclusive is robert phillips, ceo of crestwood

equity partners. robert, great to have you with us on "power lunch." >> great, thank you, good afternoon. >> your company is an mlp, and for many, many years, people thought of mlps as part of the toll roads and it didn't necessarily matter if oil was way too high or way too low, what's a sweet spot for you and do you benefit if oil prices go higher >> i think that is still the case to a large extent, companies like crestwood don't have a lot of commodity exposure we are a toll road we charge fixed fees for our services, gathering, processing, storage, and delivery to the market, whether it be by truck, rail, or pipeline. there is a sweet spot and we think it's somewhere in the $55 to $65 a barrel range. that's more than sufficient to drive supply development in the areas that we operate but not too high that it destroys demand as well so there's certainly a sweet spot i think we're in it today. been a negative reaction over the last couple days from the opec announcement on friday but honestly, the markets are fairly

balanced right now, both globally as well as in the u.s. and we think it's in a good spot for the industry >> are you -- do you benefit, though, if you see activity pick up in the permian, if there's more fracking going on, just because of where your pipelines are located? >> we do the permian is probably the most active basin in the u.s., 475 or so rigs running, about 45% of the total u.s. number of rigs that are active today in the area that we operate, which is in southeast new mexico and far west texas, and about a 100-mile stretch, there's over 200 rigs that are actively developing oil and gas properties in that region, so as a result, we've seen a pretty significant increase in oil production, associated gas, as well as natural gas liquids. >> i want to come back to something that one of our prior guests asked, was talking about. and that is the ability of the transportation infrastructure to handle the capacity that you all are able to -- that oil companies are able to bring out

of the ground. where does that stand right now, and how much catch-up needs to be played there? >> well, tyler, that's the -- exactly the problem in the permian basin right now. we've had such great success, the producers have, with tremendous improvements in drilling and completion technology that honestly, the industry can continue to increase supplies even at a lower rig count. that drives down break even economics, leads to rising volumes, even when we have rising prices. the challenge for the midstream industry, of course, is to match up to that supply growth and oftentimes there's a disconnect or a lag and we're seeing that in the permian basin right now there's about 3.3 million barrels a day of oil being produced, but some estimates have that going to north of 5 million barrels a day, so the industry's building a significant number of new oil pipelines, same for gas, same for gas liquids, and in the interim, commodity markets tend to discount future prices

because of the concern about adequate takeaway capacity and we're certainly seeing that in the permian today. having said that, producer net vacs are still well above break even economics so we continue to see strong supply growth and that's good and benefits the midstream companies as well. >> robert, great speaking with you. thanks for your time robert phillips, crestwood all right, the big news dropping in the past few minutes, that is that disney has cancelled "roseanne" following her racist tweet about former obama adviser valerie jarrett. we'll talk about the fallout ahead. and as we head to break, take a look at what is taking the market down, 10 of the 11 s s&p 500 sectors are in the red that looks like all 11 right now. duncan just protected his family

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the cnbc disrupter 50 is a list of the private companies that are disrupting existing industries or creating entirely new ones >> we can't go public until we're flying regularly to mars >> this list celebrates entrepreneurs and helps keep our viewers ahead of the game. welcome back to "power lunch. breaking news in just the last half hour, disney's abc canceling "roseanne" following tweets from actress roseanne barr julia has all the details. >> that's right, disney canceling its hit show after roseanne barr tweeted a series of offensive and racist

comments the black female head of abc saying roseanne's twitter statement is abhorrent, repug nant, and inconsistent with our values we've decided to cancel her show disney ceo bob iger sharing that sentiment. barr tweeted racist comments about president obama adviser valerie jarrett. in another tweet, barr apologized to jarrett for a, quote, bad joke. "roseanne" was the number one topic trending on twitter this morning as people called for viewers and advertisers to boycott the show the show was a hit it was on track to finish the tv season as the number three rated show with more than 18 million people watching on average the show was scheduled to return next season. so, roseanne's comments are putting dozens of people out of work and the cancellation will hit disney's ad revenue. >> ulia, thank you joining us by phone is "new york times" columnist james stewart, author of the

book "disney war, the battle of the magic kingdom. great to get you on the phone here it really is a stunning decision and very quickly -- for the speed. i mean, it happened very quick they just brought back "roseanne" after decades after it was on -- off the air and here she is making this tweet and they quickly responded. what's your reaction >> well, the whole thing is kind of unbelievable, but i mean, a, i think they did what they had to do. but i think we've got to recognize that this is not just because it's been a hit but this is the -- probably the single most talked-about, visible network drama on tv today. that's both because it's returning, you know, of a much-loved star, roseanne, at least by many or they were until this happened. it's an attempt by the network to cultivate a viewership that, you know, in the wake of the trump election, people felt was being underserved. and it was giving some -- to abc

which has really been struggling to increase revenues and earnings with the abc network. >> but i think it shows that companies in this day and age have a conscience and they have to i mean, actually, this is interesting. it comes on the same day that starbucks is closed all of its stores, potentially forfeiting millions in revenue, to train its employees on racial bias >> yeah, well, i think we really have entered a new era, and i think, you know, the me too movement is a reflection of some of this as well, that major public companies, you know, when bob iger's comment, he said, we have to do the right thing you know, i think companies for years paid lip service to that but i think they're recognizing they do have to do the right thing because otherwise the social media backlash hits you hard, and especially with such a consumer sensitive company as disney, not just with people who tune in or might boycott the program but its many other offerings and its consumer orientation. so, i think it's both a good

decision and as iger said, it's the right thing to do. the era of being able to get away with this kind of thing is over >> you know, jim, you can do the right thing, but there's another constituent of that, and that is how quickly you do the right thing. and it does seem that in recent events, and i'm thinking of this one, i'm thinking of the one at our own sister network, nbc, regarding matt lauer, the network moved quite quickly. contrast that with the time it took a decade ago for nbc to part ways with don imus and his program on msnbc where there were some sort of racially insensitive at the very least comments made. so it seems like employers are getting the message that it's not enough just to do the right thing. you've got to do it fast >> yeah, i think that's correct. i mean, if you give the -- when it's so clear what the right thing is, if you give the public

the impression that you are plotting behind the scenes to see if there's some way to worm out of doing the right thing, that hurts you almost as much as not doing anything at all, and again, i think social media amplifies these reactions, and the consumer backlash can be very, very swift so i think you're absolutely right, both for practical reasons and hopefully because, you know, people are trying to do the right thing, they are moving a lot faster. >> this is not just, you know, a warning shot to companies, though, jim, right i mean, this is really a warning shot to everybody, you know, also who's in front of the camera i mean, stars have to own up to what they do in their personal twitter feeds. people have to take ownership of their own actions, so it's not just companies coming out and condemning these people, but it's, you know, hey, you're not too big to lose your job and right now, we've seen so many examples of, quote, unquote, stars who networks, you know, people thought networks couldn't live without, they can live without them now >> yeah, i think that's a very good point and it makes you wonder, should

they start -- i mean, should people in such a sensitive position be allowed to have unfettered access to twitter i mean, from the company's standpoint, i don't know i think you're going to -- if you're managing these people, i don't know roseanne personally, is she prone to these kind of outbursts? i don't know but i think with benefit of hindsight, would it be better if roseanne didn't have any access to the twitter account again, yopi don't want to cur be h -- curb her freedom to say what she wants but it's had a terribly destructive effect. look at althe people on the show who are going to se their jobs, it's going to hurt the network and there are 18 million viewers who like the program and they're going to lose it it's sad for everybody all around and by the way, the comment, i -- what was funny about that, absolutely nothing and why pick on valerie jarrett, who's not even in the white house anymore. it was completely bizarre remark in my view >> we were just sort of

wondering about the ripple effect of this, just how many people lose their jobs, how many people work on a show like this within an organization, whether they get placed on other shows, just how big of a mark it's going to leave on abc and parent company disney >> well, i think it's, you know, for individuals involved, i've known enough people working in that business that you finally get on a hit show, many of these people have been waiting for this day for years, they finally get it, now have it snatched away because of a ridiculous comment like that, that's going to be devastating. for the network, i think it's going to hurt morale, it's going to hurt momentum i mean, abc had been struggling. this was a bright spot for them. this was giving them, you know, the earnings in broadcasting this past quarter were flat, which is actually better than they had been. this is going to put a dent into that momentum. and you know, overall, broadcasting is not that big a part of the disney earnings, but if they didn't move quickly, it

threatened the whole franchise so there really was a lot at stake here >> and they did move quickly jim, thanks for calling in >> sure. >> always good to get your take, jim stewart of the "new york times. let's bring in david faber who just got off the phone with bob iger >> adding to what's being said here, of course, melissa, just did speak to mr. iger who clearly has a lot on his plate as you well know these days but in speaking to him about this decision, he said the following to me. there was no debate about this, said bob iger. you can't debate what is morally rit,n this case, of course, morally right being sang that this show was cancelled. as you might imagine, there was some conversation, of course, that goes on he said, but it really moved very quickly this morning. because there was nothing really he saw to do here other than cancel the show itself certainly speaking to ben sherwood and others involved with the show, there had been, you know -- there was some discussion about what to do, but

he basically painted it as, more or less, the conclusion was drawn very quickly that this is the decision that had to be made, certainly sounded like in his mind there was no question about it whatsoever, that it would be made, and they took about two or three hours, and that was that. so, again, mr. iger saying, again, there was, in his mind, at least, no debate about this, and again, you can't debate what is the morally right thing to do melissa? >> all right, david. >> david, thank you very much. we appreciate it still ahead, the big banks falling on italy concerns and comments from two financial firms. is it the time to buy? if so what are you better off not that's next.

hello, everyone, i'm sue herera here's your cnbc news update at this hour. according to a new harvard study, nearly 5,000 people died in puerto rico as a result of hurricane maria. as opposed to the government's estimate of 64 the study published today in the new england journal of medicine says many of those deaths were not counted because people died months later from injuries and illnesses as a result of the storm. education secretary betsy

devos traveling to michigan to tour a school in grand rapids. the the school is located inside a museum and it focuses on a hands-on approach to learning. >> one of the most important things i can do is go and visit schools like this and talk about them and help other communities see and learn about what's going on in other places and that's what i've done across the country and will continue to do officials at the pompei archeological site announcing a dramatic new discovery that's a skeleton of a man crushed by an enormous stone while trying to flee the eruption of mt. vesuvius in 79 a.d. the victim had his thorax crushed. it's a new area of pompei pompei they' -- they're starting to excavate >> i love pompei >> i did not know this >> one of my top five places in the world. >> it is truly one of the great

places, spend days there sue herera, thank you. >> you got it, guys. let's check in on the markets right now because we are seeing a pretty big selloff. the dow is down. the only component that is positive is coca-cola. jpmorgan, ge, they are all the biggest losers, all the s&p groups are in the red right now except for traditionally defensive real estate group, which rises as yields fall on treasuries >> all righty, dominic chu has a market flash for us. >> as markets continue to sell off that you guys were speaking of, we are trading near to lows of the session, but we're keeping an eye on semiconductor stocks that are holding up relatively well. intel, nvidia, and texas instruments are outpacing the broader technology sector and the broader overall market and take a look at applied materials and micron, both are trading in positive territory as you can see there. micron up more than 2% and earlier today hit its highest levels in nearly 18 years so

those shares certainly a focus finally, we want to highlight a few other names outside the chip sector industry group. you've got ralph lauren on the retail side, align technologies for dental stuff and then streaming giant netflix. netflix, guys, earlier today, hit a record high as well, this time around so those shares seemingly immune to some of this market selloff >> dom, thank you. the oil market is closing for the day. let's get to jackie at the cnbc commodity desk >> well, crude losing a little less than 2% today just about 8% in a week for crude oil. did the price move too far too fast to the upside possibly but with the talk of peck boosting output in light of iran and venezuela boosting shortfalls it makes sense that oil would be trading lower here in the u.s., production continues to rise as well, almost 11 barrel million barrels a day. the only issue is this same way the price went up on speculation, it's now moving down on the same

nothing is going to be concrete until opec meets later in june financial stocks down across the board. with the sector the worst performer so far today the financial etf, the xlf, its worst day since april 6th, falling below its 200-day movin average. gerard is at rbc capital markets. welcome, good to have you with us >> thank you, tyler. >> we appreciate it. we've been sort of debating or knocking around whether this is a one-day kind of event or something that might last a little longer than that. so, why don't you address that first and then i'll get on to a couple of other things >> sure. if you're leaning toward the one-day event, clearly the news out of italy over the weekend was disruptive to the global markets, and it was a flight to quality, buying the u.s. government ten-year government bond and that's pressed the yield down and has flattened the yield curve out and i think that's the major reason why the

bank stocks are down as much as they are today >> so, if you begin to see that yield curve or that yield curve unflatten a little bit or those yields go back up towards where they were, whatever happens here, you'd expect the stocks to turn around, who knows what will happen, but is this a time to buy either the individual company shares or that xlf index product? >> i think it is and in fact, you touched on it with the ten-year government bond yields. remember, about a week and a half ago, that ten-year government bond yield was 3% it's currently about 2.8% today so it's come down quite a bit in a short period of time the underlying fundamentals for the u.s. banking industry has not changed in two weeks, and in fact, with last week's news that the congress has rolled back part of dodd-frank, it's even gotten better so i would say the outlook for the banks remains strong in the united states. >> which is probably why you've got buy ratings on jpmorgan and

citigroup, a more cautious hold on goldman and a sell on wells fargo. why don't we focus on those latter two i think wells fargo's case has been well documented but you can pick it up as you'd like but why the hold on goldman? >> yes, i would say the goldman numbers in the first quarter were quite extraordinary as we all know, they had a very strong trading quarter, investment banking results were good as well this quarter, probably will be less buoyant for them as with the group. you know, quarter to quarter, second quarter is always a little softer than the first quarter. there's obviously transition going on at goldman. we need to see a little clearer what the future is going to look like for them and then we can reassess the situation wells, of course, as you mentioned, is well documented, the issues there >> are you not worried, gerard, about what morgan stanley said today at the deutsche bank conference is this -- you mentioned that fundamentals are improving are we seeing in other lines of

business, then >> i would say that when you look at the trading revenues, i was encouraged when they talked about the revenues being flat year over year we were anticipating trading revenues for the group we're actually going to be down in the second quarter from a year ago, so i think it was already priced in the weakness in trading revenues in the second quarter, because as you remember, the first quarter was really volatile, end of january, early february, tapered off at the end of march, and that carried through into the months of april and may >> gerard, we're going to leave it there thanks for calling in. >> you're very welcome >> gerard kasdy, rbc the slow death of big brands, what does the future hold for some of america's iconic companies that story is next

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the red with the focus on that jump in yields for the italian debt consumer staples holding up relatively well here in the session but it is no secret that many of america's best-known and oldest brands are hurting from play tex to palm olive, cheerios to velveeta. campbells soup just announced it's in a review after the abrupt retirement of its ceo that represents a lot of what's going on they missed key consumer insights consumers shifted behavior to eating soup as an appetizer instead of a main course company missed it, didn't innovate around it there's also poor execution on acquisitions these big companies and it's not just campbells, buy smaller brands that are growing fast like general mills, buying annie's but they don't integrate the cultures and they don't learn from some of the success they also don't necessarily keep the top talent and the founders on board these were the ones that had the

game-changing innovations to begin with and then there's this retail war we talk about, amazon, whole foods, kroger, walmart, all slashing prices to compete, squeezing food margins three key reasons for the pain there are some notable standouts that don't get attention con agra, estee lauder has made a connection locally with its customers to stay relevant and focused on demographics. coca-cola, they've done a better job at integrating smaller acquisitions into the company's culture and learning from them a lot of the analysts i talk to also pointed to unilever on that front. there's a real struggle out there. most of them are in trouble. >> a lot of people just sort of want to have new brands. they don't want the old brands >> they're not loyal to the old brands >> they're not loyal or they reject them because they seem to represent something that they don't like, maybe it's the healthiness of the product or the perceived healthness >> the big zuconsumer companies

were so slow to take out artificial ingredients so what we've seen from younger consumers is they're willing to pay a premium price to get a brand that they perceive as more so it's not that they don't care about brands they care about different brands >> and they care about what's in the product. they care about what's in the product in a way that in the convenience generation, people didn't >> so, how should investors think about all this ken goldman is with us with jpmorgan ken, do you agree that it's just a lot of missteps from these big consumer companies which make them hard to invest in right now unless you have a day like today where there's a little bit of a bid for safety >> i do think it's a lot of little thins sara, you talked about it and you gave a great summary of what's happening in and going on there are some categories that can come back to life. i don't think these brands, these categories are dead and you brought up conagra think about what frozen entrees were ten years ago we still call them tv dinners

half the time. now look around and see power bowls, the bowls themselves are made out of biodegradable material, companies have done a terrific job of making those brands more relevant for consumers. i'm not sure every company's done the same thing and i'm not sure every category can react that same way but it's possible. brands are hard to kill and it may feel that they're dying but they're not dead yet, put it that way >> ken, when you take a look at the pie and you see that the big brands are losing share, where is that share going the most and how much does generic branding, you know, whether it be the house brands of various supermarkets or even an amazon basic sort of line, how much are those lines taking away from the big branded? >> it's very difficult to quantify exactly how much private label is taking because you think about some of the channels are where private label's biggest, whether it's aldi, trader joe's, those aren't really measured by nielsen, rii, we know that private label is taking share within the channels we do measure and track and

really what we're seeing is a bigger growth of smaller manufacturer brands and to the point that you guys made earlier, it's really these smaller brands where the consumers are shifting and think about rx bar, which is actually a personal favorite of mine kellogg bought it last year, they may have paid a little bit too much but if that brand continues to grow, people don't know it's kellogg. >> but they pay up, they wait too long, they pay really high prices, and as i said, they don't keep the founders on board for more than a transition they don't change the company culture. so, it's hard to imagine what comes next what do you see? is it going to be a fresh wave of aboctivists carveouts and spinoffs >> i'm as negative as you are. i'm just trying to find the light at the end of the tunnel here, perhaps, because most of my conversations with investors are much more on the doom and gloom variety. and i'm on that side but i'm just trying to make the point that things can change things will have to change even more if you think about where these companies are, there shouldn't

be this many companies that i cover. i cover 15, 16 companies we should have mergers but a lot of them, they're either run by families or insiders, it's difficult to make those mergers happen >> can some of these companies pricehappen. >> can they price cut their way to a bigger market share or greater profits? i'm thinking of the big cereal companies, the products are expensive for a box of cereal. >> yeah, well, the box used to be bigger, right >> box used to be bigger, right. >> my new favorite yquote is price shrink, and i think it's okay to shrink the box, and if there's something they are willing to pay for with, and you talked about soup before, we've not been given those products that we were willing to pay up for, and it's the consumer shifting >> thank you appreciate it. >> all right, coming up, the technical take, why a strategist

says the charts tell him the bull market will come roaring back lots more ahead on finnish your muscles look good, but we should be seeing more range of motion.

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. a market check with the trading nation team. stocks slammed today, dow fell 500 points there it is, down 2%, s&p 500 down 44 points, 1.6%, and tech heavy nasdaq hit 1%. arie is here, and larry mcdonald, and arie, what damage are we seeing here we saw the dow cross below the key level. there -- >> there's been damage under the surface. it's too early to call small caps off the new high, the bull market continues, albeit a moderating pace. looking at levels for the s&p 500, near term trading level to watch is 2650. that's where the 200-day moving average comes into play.

that's where the near term trend of higher lows come into play, but, again, all about selection. we like small cap growth that's the top theme, stay away from europe, it's a value trap, not value. >> hearing that today. larry, you wrote about italy for a few weeks now. one of the critic gurus, so how big a worry is this as far as spreading into the markets like the u.s. >> thank you, sarah, thank you very much. we have -- back in 2010, we created our risk indicator index, and it's a credit spread index that looks at different credit markets around the world. we were trying to determine is how much risk is there the indicators are rising at the fastest pace in about six or seven years. you got eurozone banks, major financial institutions whose credit default swaps are up 100 basis points, 150 points relative to u.s. banks, and we see that spilling over

that's why today you're seeing the financials are under performing the financials underperforming by 200 basis points in the u.s although u.s. fundamentals are strong as an economy, the systemic risk from europe, from this really political change over there, revolution, impacts the u.s. and we see further damage >> all right, guys, thank you for weighing in. big story of the day for more insights, go to our website at tradingnation.cnbc.com and follow us on twitter at trading nation a lot more to come as we watch this market selloff still ahead on "power lunch. and now, the latest from tradingnation.cnbc.com and a word from our sponsors >> when markets get volatile, don't be afraid to admit you don't know where things are headed when you're uncertain what to do, sitting on the sidelines is not a bad idea sometimes the best trade to make is no tre adat all in other words, don't do something, just sit there.

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dow down 480 points, so what are the quote-on-quote safe areas? russell 2,000 relatively outperforming compared to the broader markets, down half a percent here, and, of course, domestically focused stocks, not expo exposed, that's where you find the outperformance >> less exposed to the strong dollar >> yes >> i was going to point out the euro on watch again for the currency markets and the euro tumbled at the lowest points since july

2017, so it's nothing extreme or panic, it's not like the days of 2010 and 2012, but we watch that because it affects our markets >> a lot of moving parts in the market right now, and italy has just become yet another one. >> yes it's a big close here. thank you for watching "power lunch," and "closing bell" starts right now ♪ welcome to the "closing bell," i'm wilfred frost, marketin markets taking a hit, and fears of interest rates dragging banks and markets with it. we're at the new york stock exchange exploring rates in the u.s. and europe. plus, keeping a close eye on what the currency markets are signaling. from cnbc global headquarters, i'm dom chu. tech remains the top performing sector of 2018 so i'm going to check in on the high flying names and it's not the usual suspects i'm kate rogers outside a starbucks store in new jersey. the company taking a coffee break closing down