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 8,000 company owned locations for an afternoon

of racial bias training. details on that next i'm kelly evans, abc shocker, cancelling the top rated show "roseanne", and one country trying to facebook experiment forbidding citizens from accessing the site. the "closing bell" starts right now. ♪ >> welcome, those stories in a a moment, but, first, the dow and s&p seeing the biggest drop since early april, down a moment ago about 500 points, and all because of europe dragging u.s. stocks lower today >> indeed. europe, the main driver, and meanwhile, billionaire money manager george soros warning it's not a figure of speech to say europe is an existential danger it's a harsh reality. there's a defining comment if ever there was one, and seema is charting today's selloff, seema, starting in europe >> absolutely, will, by global reaction to the italy situation

is significant starting with european equities. the selloff mode was really witnessing today the eu banking index closing at the lowest level since 2016 now, those worries spilled over to the u.s. markets, right now, near the lows of the day, let down by the financial sector look at the sector performance, though, reflecting risk-off sentiment today, reits and utilities higher, due in part to the 10-year yield dipping further below 3%, and opposite story in italy, yields there hit the highest levels since march of 2014, and on the short end of the curve, selling there, 2-year yield hit the highest level since 2013 euro fell to the lowest level in a year now down 5% in the past month, and analysts say it could fall further remaining unclear whether the prime minister designate, a former imf official wins a bode of confidence in italy increasing a likelihood of

a fresh election perhaps as early as sumr, strengthening the euro skeptic voices. this reawakened fears of what happened in 2010 and 2012, those concerns around greece and the high volatility seen in european markets. >> thank you very much for that. let's bring in senior market commentator mike santoli how this impacts the u.s. market mike, when we awoke this morning, it was a factor for italian markets, surprise the extent it's weighing on u.s. markets. >> it is, actually, as the day's gone on, it's intensified a bit. i will say we are doing two days worth of europe pain in one day today in the united states >> true. >> there's some mechanical aspect to it, but you have to take notice atleast to the fac what's going on in credit spreads, i mean, it's not exactly as if this is a huge screaming riskoff moment, but it definitely shows you there's more concern that is seeping into the markets i think, also, with jp morgan. >> yes, no, go ahead, go ahead >> jp morgan is underperforming

banks, right that's the rock solid one. that shows you a give-up instinct to say, okay, fine, the banks are not investble now with yields doing what they are doing with what's happening in europe. >> is the main linkage in the story, the huge drop in the 10-year yield in the last couple -- last check, under 2.8% from over 3% is that the main thing hitting markets or other signs >> continuing effects, right everything going on in europe we talked about, and it's impacting both the treasury yields and the credit markets, and basically just a sense that, look, the story's changing, right? it's no longer about galloping u.s. growth and how we price that >> i think that 10-year yield in the u.s. tells an important story because equity markets, clearly, banks worst performer, utilities the best performers. >> yeah. >> a broad effect on yields hurting things which also, actually, says another point how bad it is in terms of serious contagion in europe because we've not seen all european bond yields rise. in fact, german yields fell,

dragging down the u.s., so there's serious worries about italy, but we have not seen the same contagion in all european yields >> amazon upmost of the day, tech hanging on, so, again, it's not indiscriminate selloff, not yet, and i think it's within ranges s&p back where it was, and treasury back to where they were several weeks ago. it's not new territory >> why is jp morgan underperforming? >> that's the big question i don't know if it's overowned, where people are hiding the most i don't think it's about presence in europe necessarily >> they had some more exposure in italy perhaps than the u.s. banks, and see the value of the italian bonds fall, it's the third biggest bond market in the world, not just in europe, but it's third biggest in the world and that's not affected, there's exposure there, and that's why european banks are down. i think in terms of what the worst case scenario is, we are a long way from really saying is italy going to leave the euro.

>> after soros's speech and reactions -- >> it's a consistent position of soros's, though. >> you see eu bureaucrats saying maybe we should -- you got to be careful were tamping it out that makes the situation worse. >> i think the comments we had from brussels and eu only angered the popular more, and i think that's the extra fear today, bringing up the graphic we have of how the parties are doing in opinion polls today, and versus how they performed in the march election >> better, i would assume. >> five stars slipped a little bit, but up 10%, and that's in the league, and that's fear if there is an election in july, could they now, together, form a majority, which would be a big concern, but said it all day, the difference in march, said clearly before the election, we are not forming a coalition, and, clearly, then, they did will they get a base of support turning out where one is fairly left wing, the other right wing. the immediate opinion polls and market reactions suggests they

might, but when we get to that actual crunch point in july -- >> there's bedfellows, but common enemy can do that sometimes. >> if the market moves in this direction with this going on, i wonder if the cut to the chase instinct for u.s. investors is, look, we got in deep with greek electoral politics, had to figure it out, what was the payoff for that? the payoff was buy when it looks intense and nasty because we always dodge the ultimate bullet i'm not saying that's correct, but that's the instinct. >> global blows up there, on the wrong side of it, but ultimately, potentially, the trades bore out. >> another thing, clearly, we talked for ages how strong the u.s. banks are relative to europe's, deutsche bank's trouble, now in unicredit, and when this all settles, provides no collapse, u.s. banks, again, look stronger than the european banks, and yet jp morgan stays up, and likes of goldman sachs, this volatility should ultimately help them, and they are not as tied to the interest

rate curve as retail banks, and yet they are up sharply, so, again, provided we do not see calamity in the next month or two, not the base case, we might see trading revenues pick up, and, certainly, reason for the banks to play catch-up >> the vix popped above 18 to your point mike, thank you. how are investors handling the moves? we have shannon from boston private wealth, doug, and jeff, welcome to all of you. doug, starting with you. >> thank you >> are you a buyer of the u.s. banks on this selloff? >> yeah, i mean, i think ultimately the banks are well-positioned. i think they are clearly down, rates drops from 3.1 to 2.8 it's about loan growth, credit quality, how long is the next recession out, and our feeling is that's well down the road, so things remain cheap and rates ultimately rise and retrace the gains made in the last few days, so, yeah, a buyer of banks

probably here. >> shannon, are you getting reminded of the 2010-2012 eurozone crisis that really did affect u.s. markets? is it fair to be affecting u.s. equity markets today >> i think it's worthying back on where we were during the initial sovereign debt crisis in europe i want to point out, i mean, think about what happened ahead of that in 2011, the european central bank raised rates. not seeing that this time around or tightening then, but the european economy is not in the state it is today, back in 2011-12 so those are positives for people looking for holes to poke in the story. i think the concerns that are happening with financials is really potential spillover from the european central bank to the federal reserve. if we see continued choppiness, does this slow the rate hikes here in the united states? that would be a negative for large money centered banks here, and i think you're seeing that here today >> and, jeff, you say you don't think that this is a crisis just

yet? does it -- is -- does it have the whiff of one, though, forming? >> yes, i guess you're talking about emerging markets here, obviously, what i cover. i mean, what's happening in emerging is we are getting dragged into the negative tone today, obviously, we've had individual things challenging emergie ining markets in recents the lira in turkey, last week, a dreadful day in brazil yesterday based on the strike that's going on amongst the truckers, which is really damaging the supply of fuel, and there for the economy, the real move today, which is obviously generated, as you said, already by events in italy, drove the events higher in the euro, and when the dollar rises, people take money out of em and go back to the u.s. and safer assets so today we are in emerging markets getting caught up in this general sell iing that's going on because the

dollar has been so strong, and we need that turn to get emerging markets moving again. >> all right guys, stay there back to dom at headquarters with a look what's happening in the sectors. dom? >> we saw outperformance earlier today on a positive basis from the interest rate sensitive, more defensive names like utilities and real estate, however, at this moment right now, every single sector within the s&p 500 is now negative on the session. as you can see, real estate is re l relatively outperforming, but down, and utilities off a third of 1%, and consumer staples like coca-co coca-cola 20 minutes ago was up, but now down half a percent. work through the economically sensitive sectors, you see materials and industrials and the financials, of course, like you guys have been saying, are the clear underperformers in the whole situation. so as we talk about where the market activity has been, perhaps one thing that the bears

will point out is that the financials doing the thing they are today is perhaps not the best of singles for the overall market, but i will say this. key in on this particular move right here in technology off by 1%. outperforming the broader markets and so with technology doing a little bit of heavy lifting on a relative basis, you could say, perhaps, the bulls look towards technology as more of an indicator here and not that wholesale broad base riskoff selloff you guys may look towards in the european contagion. back to you. >> dom, thank you for that doug, to what extent is this interest rate driven, and if it is interest rate driven because ecb is not raising rates quickly as thought, does that matter if the fed continues to raise rates? >> are you talking about dollar strength or just the whole selloff in general >> whole selloff, as dom said, financials at the bottom and utilities and real estate at the top. it's a yield-driven move in the equity market today.

>> i think it certainly is in financials i think, you know, the point on the selloff overseas and what's going on in italy is fundment tally driven our view on that is that the italian politics, this is par for the course i think we had 65 different governments in 70 years, so it's not a surprise that, you know, this one can't get it work out as quickly as people would have liked. ultimately, if this is a referendum on european union membership, we do not think italy's going to leave because it's difficult to do so. a number of countries tried that you know, u.k. right now is a little bit of a debacle for them to do that certainly, greece and portugal tried so our view would be maybe a tempest in the teapot for italy. our guess is long term we look back and say it's not a bad time to acquire italy here. >> all right guys, thank you, all, doug, s

shr hannon and jeff. another big story is what's happening at starbucks, closing more than 8,000 stores for racial bias training >> kate rogers is in englewood, new jersey for us, kate, what's the latest >> reporter: guys, good to see you. that training is just starting at locations like what you see here behind us 8,000 company owned stores closed at 2:00 p.m. local time today for the racial bias training, expected to reach 175,000 of starbucks' u.s. partners or their employees. now, customers we talked to today, they were mixed on what the training might mean for starbucks and the business, take a listen >> i think it's great to start this dialogue as a country, and to begin to address racism and through the various companies like starbucks >> i think it's a good attempt, but i also don't think one day out of the year is going to make a difference or make a really

big landmark on how certain people act in today's society. >> reporter: starbucks reiterated it's just step one, day one of the action initiative they intend to take on this really big issue and pointed out the training was not mandatory for the partners, but for anyone who makes starbucks a welcoming place, and, guys, shutting down for the afternoon could be costly there's estimates there that starbucks is losing between $12 million to $14 million >> the guy behind you tried to get in and tried the door and realized, like, oh, no, all right. >> reporter: yeah. we've seen that quite a few times, and everybody's been disappointed, but i think we talked to customers who understand why they are closing, and they seem to be supportive of the initiative and message behind it. >> all right we'll have more on this next hour, kate, see you then, thank you, kate rogers there a special panel on what corporations can do about crisis regarding racial bias coming up. we have 45 minutes left of the trade today, and we are

lower, led by the financials, and low of the day on the dow was 490 points, down 470, right near the low of the day as we speak. tech is outperforming in a relative sense, so nasdaq down .9% to the dow's 1.9% decline. 45 minutes to go stay there we're just getting started abc shocker. cancelling the top-rated show "roseanne" after the tv star sent a racist tweet. plus, much more as investors start the week after a slap in the face from the bears as stocks tumble in the face of new threats from europe. this is the "closing bell" with kelly evans and wilfred frost live from the new york stock education change we're back in two minutes. (siren wailing)

(barry murrey) when you have a really traumatic injury, we have a short amount of time to get our patient to the hospital with good results. we call that the golden hour. evaluating patients remotely is where i think we have a potential to make a difference. (barry murrey) we would save a lot of lives if we could bring the doctor to the patient. verizon is racing to build the first and most powerful 5g network that will enable things like precision robotic surgery from thousands of miles away as we get faster wireless connections, it'll be possible to be able to operate on a patient in a way that was just not possible before. when i move my hand, the robot on the other side

will mimic the movement, with almost no delay. who knew a scalpel could work thousands of miles away? ♪

welcome back 40 minutes left of trade, down sharply 2% for the dow, but nasdaq outperforms just down 1%.

looking at individual moves, the board with the biggest laggards in the dow today financials, as discussed, leading things lower, jpmorgan chase down 5%, and goldman sachs, should be benefitting from the spike in volatility is down 4%. a bright spot, american woodmark up today's trade, some 15% at the moment on fourth quarter results coming out earlier, solid growth in dealer and new construction channels. 15% pop, wow controversial tweet prompted abc to cancel "roseanne," julia >> barr tweeted offensive and racist comments one about president obama's adviser, prompting abc to cancel her hit show the abc president, osaying the

statement is inconsistent with our values, and we've decided to cancel her show. disney ceo bob iger said the decision was made quickly with no debate, tweeting, quote, there's only one thing to do here, and that was the right thing. barr tweeted an apology for a bad joke, but roseanne trended on twitter with viral comments, and it called for viewers and advertisers to cancel the show as roseand was a big hit, on track to finish as the no. 3 top-rated show leading a comeback for abc with 18 million people watching on average it was scheduled to return with another 13 episodes next season, so the comments are putting dozens of people out of work guys, over to you. jew >> julia, any prospect anyone else picks it up or try to pick

up something similar to this show, put it on tv, and capture what viewers liked about it with or without her involvement >> something could try to do something similar, but the way the shows work is that abc owns that concept, and abc has the rights to roseanne, and disney deciding that the backlash and the response to have financial success of the show. just a very big and swift decision on behalf of the network and parent company, disney, so, yes, kelly, anyone could try to recreate the success, but the concept itself is owned and controlled currently by abc >> julia, thank you very much for that i mean, fascinating, 2.5% in

disney share prices, yes, the market is down, but significant from one show. >> a poor weekend showing as well with the latest star wars movie, but in this case, it's not that this is just one show of many they air it's the third most successful show we just heard about - >> 18 million viewers is huge. >> were beginning to put more into backing it. having realized there's, again, a consumer appetite for the roseanne show, and trying to find another way to fill it now, either they'll be able to figure out what makes it so successful, or they will be left with a big hole >> you feel as julia said for the large number of people put out of work. >> oh, yeah. >> from barr's action as iger reported as being no debate when there's something morally wrong that happened. we've got 37 minutes left of trade, down near the lows of the session, meaning 2% decline for the dow, and 1% decline for the nasdaq, and s&p in between financials leading lower brazil reaching a deal to end the trucker strike, and why

they are feeling the heat. first, amazon's jeff besos set sights on the moon and why we must leave the planet when we return os set sights on the moon and why we must leave the planet when we return sos set sights on the moon and why we must leave the planet when we return os set sights on the moon and why we must leave the planet when we return zos set sights on the moon and why we must leave the planet when we return ness, ingenuity, and grit, we're not only capturing energy from the sun and wind, we're storing it. as the nation's leader in energy storage, we're ensuring americans have the energy they need, whenever they need it. this is our era. this is america's energy era. nextera energy.

but as it grew bigger and bigger,ness. it took a whole lot more. that's why i switched to the spark cash card from capital one. with it, i earn unlimited 2% cash back on everything i buy. everything.

and that 2% cash back adds up to thousands of dollars each year... so i can keep growing my business in big leaps! what's in your wallet? welcome back, quite a selloff on our hands, reopening after memorial day, europe open for two days, and turmoil in

italy over the weekend, describing as the collapse of their government, wilf, effectively what's happened. >> it was not even in place yet, march election, looked like the government was going to be formed between the two parties, the league and five-star movement, which, by the way, would have been unprecedented anyway >> bernie sanders and donald trump coming together as a coalition as described >> what was going to happen was that was going to be the coalition, but there were a few other moderating people joining that government too. the fear that has spiked over the weekend and elevated the selloff seen in italian bonds now we have actual elections, and those two might do better and well enough they are on their own in a a majority position together. >> italy has a figure head president appointed by parliament, an elder statesman, i don't like the finance minister, too much, sorry, this can't happen >> exactly >> that's the fallout. >> crude as you framed it, and that's framed as the establishment, the president

pushing back against the pop w populist vote. why u.s. equities selling sharply? safe haven bonds around the world, but particularly germany, bought instead - >> german 10-year yield is almost negative, and we're about 2 partnersh 2.75 >> in a month, it was positive to where it is nowanthat raises the question whether the ecb, meant to be the next central bank to raise rates can raise rates at all, affecting domestic u.s. yields, and, clearly, seen in the sector performance, if we show the sector performance again, effect yields have had. banks just getting the contagion or more broad? it's more broad. real estate and utilities best performing sectors, albeit, down >> when election problems hits

yields, then our yield, and entire trade is built around yields going higher or lower everything is linked to that that's playing out on the screens now. >> added factor for the banks because, yes, the fact we've seen yields across the globe in terms of safe haven markets move lower, not good for the yield curve in how they borrowed, that's the obvious example, but also - >> 4% today, down, the whole sector >> 84% globally as well like deutsche bank commerce bank, bmp, all down sharply with an added factor here, italian bond market is huge >> yeah. >> thereaftfore, not contagious a way it was in 2010-2012. banks in the world hold bonds, and that - >> especially european >> yes jpmorgan helped in the past, so they have a -- they are tiny relative to the overall value, far from systemic for u.s. banks, but more exposure for others so they take a ride down

on that thing. again, there's potentially opportunities here volatility spiked. >> sure. >> goldman sachs should be enjoying things today, but when the bank index is down 4%, hard to shrug it off. >> explaining why the dow is down 500 briefly, down 470 now, worst of the major averages, russell down a half percent. we go now to the quote of the day. >> it is positive. >> let's see what your interpretation is. >> it's not framed positive, but i will amazon ceo jeff bezos gives a gloomy forecast on friday of life on earth. discussing the possibility of humans living on the moon, quote, we have to leave this planet, and it's going to make this planet better we'll come and go and the people who want to stay will stay >> bezos said what he's doing with the rocket company is, quote, the most important work

he's doing point on this is these guys remind me of the original ones who said, you know, we're not going to be able to grow agriculture enough to support the population, it's gloom and doom, and this same idea we're going to outgrow earth's resources, to me, this is the 21st century version of that same idea. >> he was not that negativ about the future of the earth, just said things are not going to continue to improve unless we have another planet's resources. did not say the world would end. >> he said we're going to run out. >> what i like about this he said this is the most important work we're doing, involving us teaming up with other companies, like this is not like trying to destroy companies, but they are working towards, you know, spacex and others. >> focus on fixing this planet we'll be just fine it's hard work, but it's worth doing. >> anyway, there we go my attempt to make it positive it was not that positive individual stocks to watch

today, up first, universal display jumps today on a report from the electronic times that apple will use oled screens for models planned in 2019, jumping 5% we heard other makers in the world like lg display jumped as well, 1% samsung is down a bit. they use that for all phones, and they supply apple's iphonex, the only iphone currently using that >> you call it the x too >> yes brazil's government announcing a 60-day cut in diesel as part of the deal to end the trucker strike this is hurting petrobras. the original intent of raising the price getting everybody upset was to shore up the financials of the important company and provide tax cuts elsewhere in the economy now they walked that all back. there's been massive shortages,

little economic activity i'm surprised it's not hurt more on this. >> we should say, though, the action in oil prices over the last week not helping either slipping from the recent highs down 4.5% last week, another 1.5% decline for wti today as well time for the cnbc news update, sue? >> hello, everyone this is what's happening at this time the body of a national guardsman who disappeared after sunday's flooding in maryland has been found. edison herman was found in the river just across the baltimore county line. the 39-year-old was swept away by flood waters that ravaged the town >> abc cancelled the reboot of "roa "roseanne" after racist tweets the disney ceo told cnbc quote, you can't debate what is morally right which is why today's decision was so swift, end quote. weinstein's attorney was in court today, but waived the

appearance weinstein was charged with rape and two other crimes against women. it is not westminster abbey, but areas of the church were -- you can't make this up it was closed to the public some 300 -- [ laughter ] >> sue, this is what happens you can only take so much, and then they show the dogs instead. >> now theydogs, and now i'm following a german shepherd you know parts of the abbey have been closed to the public, never been -- this part never opened they will open it in a special tribute to the abbey, putting out all sorts of items on display, historic paintings, the

funeral head, hopefully no german shepherds unless it's a service dog. there you go you're up to date. >> sue, thank you. >> sue, great stuff, thank you very much. the -- >> i'm not the video editor. >> infectious laugh, impossible not to join in >> let's get to our closing bell exchange today talking about the markets, pro-share advisers, art cashin from ubs financial services and rick santelli from the cme in chicago. arthur, i want your two cents going into the close this weakness across the board, u.s. is warranted? >> well, first of all, that's what happens when you say "alexa, get me west minster. we had extra pressure, market on closes looked heavily to that sell side. that's pairing down, may ease things part is technical breakdown.

as you apply noted, we were closed we have a two-day buildup. that's why it's severe breaking through the 100-moving day average on the s&p, then 2700, so the big concern is that much of this italian debt is held by the italian banks, and they are allowed to carry it at par. they don't have to market it federal debt, if the government de debt is treated as a par situation, they do not have to hedge it that's the concern in the situation, that most is not hedge e hedged >> rick, in terms of the moves seen in the bond market in eight hours, what does that take you back to in terms of memories as worrying as the 2010-2012

eurozone crisis moments? >> well, in my world, in certain ways, it is, and i'll tell you what i mean. back then, it was full ammunition, mario draghi's was loaded, and now they bought all the good paper in europe and good chunk of the bad paper. i think what's beginning on with italy is huge, and maybe for all the wrong reasons. many believe that it's not -- it's nerve wracking as the previous episode in 2007-2008 because it's mostly political in nature, and in my world, i would think that makes it way more dangerous. i think after brexit, after the tea party, after trump, the world has a raw nerve to it, and i think that the political class, the technicrats will put thumbs on the scale. they want another election what's going on in the market

gives them the excuse to head that direction, but the more they head in that direction, the more it creates other unforeseen, unintended consequences because politics in the end is living a life different from global economics. you can call it globalism. that's a subset of what's going on i think it gets worse. i think that the ecb is going to have a real issue as draghi turns over the reigns, hopefully moving further down the road of normalization. italy stands right in the path of that. >> simeon, where does that leave you? pockets you say, well, you know, jpmorgan shouldn't be down 5%, 6%, whatever the case may be, opportunities created by this? >> there's defitel portunities. there's hyperbe here they say italy is the fourth sovereign bond market in the world. yeah, but only 2% or 3%. cont contagion unlikely, but the opportunities emerging is in the corporate and bond market.

as spreads widen, issuing declined because of the tax change, deductibility is capped. there's an opportunity in u.s. bonds or high yield if energy prices stay high >> how much have yields moved up >> wider by 20 to 50 basis points that's a big move towards cyclical medians so real opportunity there. >> rick, quickly to the european bond markets as we discussed and simeon said, it does not feel like at the same level of contagion to the rest of southern europe, and, yes, rates risen, but nothing like italy or the contagion seen in the peak of the eurozone crisis, is that fair >> it is fair, but we have to remember that what is going on with italy, with the good paper in terms of the bunds, and those recalibrate other relationships so even though what you are saying is true, i'm not looking at short term funding problems i'm not looking at seizing up of

short term credit. it is something different than that, but it does not mean that ultimately it's not going to hold the markets hostage, and i think that's what we are underestimating what is going on with italy basically what's happening here is that we are learning the hard way that policies create their own unintended consequences or reversal of policies, and those reversals throw a monkey wrench into the fed because there's not a lot they can do about it from the domestic perch trying to run our own country's monetary policy >> art, what do you say to that considering the fact we've had a move up in the dollar? >> yeah, no, i think rick's right. if you look at the fed minutes, they were already beginning to lean a little dovish, and uncertainty around the world, they'll be slow to press the button >> arthur, do you think the u.s. banks' ceos are concerned seeing

moves in their share prices, knowing the factors driving it, concerned there's more to come >> i think they are concerned with the way the market's viewing it, and, certainly, it's understandable in the european banks. the fact it's bleeding into the american banks is a little tougher. simeon, back to the point how it's a passing concern, what happens if interest rates stay down back around 2.75%, round number from over 3%, if for whatever reason european issues or not we stay down here, then does that justify the banks and other parts of the market? >> i think maybe banks, but not overall. so this certainly could be an opportunity to cease the consumer sectors, discretionary and staples outperform, real laggards, and tech valuations may be stretched so in large caps, yes, however, look at the dramatic outperformance of the russell 2,000 today, small and regional banks might catch a bid here because normalization path

of rates, notwithstanding inflation down a little bit, but unwinding of the balance sheet gives us bigger opportunities. >> what about goldman sachs? will they benefit from this volatility >> look, volatility's good for trading houses, not as much as it was given all the rules subsequent to the crisis, but there's an upside there. this is a reminder that the difference between the big large cap global banks and the smaller regional banks that don't necessarily, you know, react the same way to lift a potential contagion, and we have good consumer confidence today. >> art, i wonder given how well tech companies have done, the one thing a head wind was rates moving up because it makesle valuations maybe a little bit different. now moving down and look what happened with netflix and twitter and the others today, do you worry that it starts to get a little too extended over there? >> well, you know, it can be

netflix, everybody was wondering who would be the first $1 trillion company netflix is taking a good run at it, but, yeah, no, i think you've got to let this day pass. this is catchup. what happened over the weekend, we were closed on monday, and so you get some overreactions and some areas, i think when people begin to sort out what it means as simeon said, if you look at the russell domestic versus international, i think you'll see things begin to change >> rick, we've been focused, of course, on the dollar's strength in recent weeks, in particular, against the yeeuro in the last couple days, but the dollar is weak against the yen, yen strengthening today by three quarters of 1% does that yen strength make it less likely we see bank of japan tightening as well as less likely ecb tightening?

>> no difference with respect to the bank of japan tightening i don't see it on the horizon, and their compass points in the wrong direction, and i don't know what you describe is going to make a point more true north, and one final comment, art hit it when he first started talking. this reminds me of the crisis in so far as you are trying to price assets in a way the market does not see as an honest pricing so the full collateral value given to the securities by the cb and reconciling that with the market repricing them in realtime, that ultimately is going to create a condition that economics will have to take account of >> yeah, and we talked to rick, too, about the fact going back several weeks, the italian 10-year yield is below 2%. i don't care what's happening on the ground there that seems a little mispriced, right? >> well, it's above that now, but, yes, it was, and to think that even at its current pace, it's basically in the neighborhood of where we were in

our 10-year, just 36 hours ago, yes, there's an issue there, and, you know, think about france now france holds a lot of french paper as well, and even though the paper protected because it's collateral values locked in at the artificially high level, that's not all the paper, and what we're witnessing is probably a better clue as to what's going on with the rest of it >> rick, just quickly, you said earlier that, you know, five, ten years ago, draghi's bazooka was locked and loaded, but empty now. if forced to because things turn for the worse and he wanted to say, yet again, like he did no 2012, i'll do whatever it takes, are you saying that he would not be able to do that this time >> i'm thinking it would be much more difficult in terms of what he would buy to accomplish his mission on quantitative easing plain, but in general, what's going on with the dollar in large part reflects that the market is discerning are

they doubling down and do a japan and do more bad things, and if they do, the economy suffers for it, and that's part of the dollar trade. >> all right si simeon, euro, dollar - >> a a llot of reasons the doll continues to strengthen. it's not a straight path physial union was not a permanent solution or astraigh line >> reminded of that again. thank you, all rick, simeon and art, letting you go dom is looking for pockets of outperformance in tech in particular >> looking overall the semiconductor stocks, this is going to be one of the situations where perhaps one of the leaders in the bull market run to record highs could be a laggard or leader to the downside if things really do turn, so that's what we watch with regard to technology stocks right now. if you take a look at some of e names wiin the semicouctor world, look at

outperformance here. with the semiconductor, you are talking an 80% price appreciation in three years versus s&p's respectable 27% they lead the upside, even though they are not the biggest companies out there. look at the charts because five stocks in particular are still holding near their at least 52-week, in some case maultiyear and record high levels nvidia, a jugger no-fau egernauk over the years all healthy returns holding near multiyear highs. look at these two names. if you look at these, they are now hovering within a stone's throw of recent highs as well. we're talking names like microsemi and intel. they are up. as we talk about semiconductor stocks, a lot of traders out there may be looking add them a tea leaves or gauges for overall

technology and market overall as well names to keep a close eye on as things develop whether or not we see dip buying come in or people selling some of the exacerbated move chip stocks could be front lines where it plays out in the domestic u.s. market, guys, back over to you. >> all right, dom, thank you very much, dom chu there we are down 500 points, lows at the start of the hour. we have come back down, dow's down 378, and you should see there is divergence between what's happening in the blue chips and small caps as we said, down a point and a half right now and s&p down 30 >> and big sector differences as well, of course, as we discussed, particularly, driven by whether they are sensitive to yields in a positive or negative way. financials at the bottom, and real estate and utilities at the top. seema is in the heart of the action >> biggest drop in the s&p 500

since april 6 moving on heavy volume, surprising given it's a a holiday-shortened week it's outpacing its volume, 78.4 million shares exchanged hands, and we are looking at 5 out of the 11 s&p 500 sectors set to close in correction territory, really led by financials, the big banks, and the regional ones participating in today's selloff. the big names, goldman sachs, morgan stanley, jpmorgan, down 2-4% on the day, and energy, the story there is certainly not helping. the price differential between wti crude and brent crude, a topic we are following closely energy was the worst performing sector last week, losing 5%, and weakness continues in that sector the question is, will earnings change the story earnings so far this season have been pretty strong we have two big names in the tech sector, hpinc and salesforce a cloud player, and

intense competition from the likes of google and amazon will that company be able to beat expectations despite that competition? that will, of course, be a big question we'll get that answer after the bell for now, guys, back to you >> earnings coming our way, thank you for now. meanwhile on the floor, mike santoli looks at disney and the hit it took today, mike. >> yeah, this is the worst performing dow industrial stock that's not financial or industrial disney underperforming other media stocks today mainly reaction to the decision appointing reaction to the new star wars movie and worst performing franchise movie since disney owned lucas film back in 2012 we are talking about is there "star wars" fatigue, too close to "dead pool" other comic book movies ironic in the sense because the poll case for the studios of disney into the year, wow, stacked up for so many new releases i would add, guys, that the

announcement today that disney was cancelling roseanne's sit come did not change the picture. the stock did not change up or down from that abc network is a small piece financially of walt disney, guys >> i was going to ask. amazed it did not move on. it's a hit show, showing abc has no real value to disney overall? >> it's not a swing factor right now. certainly not one show with a handful of rating points once a week, nobody thinks they could not extrapolate a financial impact there >> different story with "star wars," mike, i guess, see you in a bit. how is tech holding up this afternoon in the selloff, bertha >> relative to the dow, we are watching the nasdaq hold up relatively well, especially when you poke through sectors, large cams and small caps the relative outperformers today. when you look at the volume, where it's trading, that tells

you more about the sentiment today. we are seeing average volume on all of the sort of major sectors in terms of chips and in terms of small caps, in terms of technology overall it looks like people are taking some profits here. that said, the chips are among the worst performers, some of the biggest losers today include asml, marvel, and qualcomm trying to get that final approval checklist from the chinese, but on the other hand, some of the best performers are also chips today including micron that hit a 52-week high today, and, also, some of the apple components are doing well today as we hear more about apple preparing for new phones in 2019, and if you look at fang, that's where we are seeing some of the strength here today as well. facebook has been positive for much of the day, amazon turning positive here in the late afternoon. we'll see whether those help

lift the rest of the tech market and rest of the nasdaq going into the close wilf, over to you. >> bertha, thank you very much for that we have got about five -- no seven minutes left of trade. let's look what the story of the day's been, and, of course, that's selling look at the intraday s&p chart, red throughout the day, weighed down by europe concerns. more on that in a moment, but selling intensified throughout the morning, and that was led by banks and coming to that as well in a moment, and t lows of the s&p, 2% for the dow, but we have rallied a little bit off the lows of the day. we were nearly 500 points down on the lows, down 380 points as we approach the close, and nasdaq always outperforming down only 1% of the lows of the day and less than 1% at the moment, but certainly a negative day of trade. let's talk through the european issue. starting with the italian two-year we have a chart of it year to

date you can see the extraordinary spike in yields that we've seep, not just over the last month, but particularly the last couple days as those intents to form a new government in italy collapsed, and polls suggest the populist will do better in the next round of elections so that's why we see that extraordinary spike. wow, look at that chart telling the story perfectly. half screen now coming up of the european banks, all down in the 3% to 5%, whether it's unicredit, germany barclays in the u.k., bmp in paris, all down as you can see there sharply deutsche bank down 6%, unicredit down 9% by the close in italy. extraordinary moves there in the banks, unicredit most important bank in italy, of course what's it done to yields outside of italy rising a little bit, but the biggest move in safe haven bonds is in the opposite direction here's the german 10-year for you over the course of the last one month, and you see how yields wednesday from 0.6% to

now below 0.3%, and, again, the pace of yields moving lower in safe haven bonds, opposite direction in italy picked up pace over the last couple sessions that's spread across to the u.s. 10-year, and, again, yields moving sharply over the course of the last couple weeks, as you can see, 10-year moving down, affecting the u.s. banks today, whether you talk pure investment banks or the big universal banks like jp morgan chase and bank of america down sharply, too, and looking at sector performance, clearly, banks worst performer today, but other interest rates sensitive sectors like utilities and real estate moving in the opposite direction, in fact, green for the first time today we got reality up 0.3% seema joining me now, four minutes left of trade, and seema, banks are the worst >> rate sensitive sectors getting a bid today.

one trader said it's hard to quantify the political riff from italy. that's why you see derisking in portfolios, reducing expoe inint the currency, euro, trading at 1.15 at the day, lowest level since july of 2017 weaker currency is typically good for european exporters. is it something to watch >> something to watch, euro briefly crossing 1.25 months ago. mike santoli is here as well course, with a terrible weekofg last week, down today again, energy one expected to do worse than today >> interesting, wilf, because all the effects you guys talked about seem designed to target lots of crowded trades, right? people really started to love energy stocks as they outperformed recently, and, of courses crude oil having a

nastinast pullback here, and same for treasury yields. it was positioned to continue higher, but now a bond market rally in the u.s. drops yields back, so i do think the market's a little bit bereaved. there's not a leadership spot other than technology names doing okay, and, of course, the small caps are holding up, but they can't move the entire market because they are relatively small in size >> peter costa is on the floor as well. what have you bought this afternoon? what's been oversold and what are people on the floor asking for? >> our guys are buying financials >> on the dip? >> buying on the dip any time there's a move like this, especially with, like, a goldman sachs or down 9.5 points >> you're focus oging on the investment bank, more exposed to the pickup in volatility >> i think the guys are doing more just an opportunity to get that trade i don't think it's so much based

on that, but it's the right, you know, right process behind it, but the guys are buying dips because it's a substantial move and very good size >> how do you digest the italian political risk >> you know, we are digesting it, i think it's way overdone. i think it's way overdone, and you know, the viewers see it like a brexit. what do you call the italians getting out of the eu? needs a name, but that's what people's concern are, and i'm not worried about it >> peter, when we consider moves seen in bond yields globally, particularly, in europe, affecting the u.s., traders here today, thought, gosh, reminds beof 2007-2008 or 2010 or more relaxed? >> that's another thing, unfortele media related than anything else we don't see it that way although, 2007 with greece, people were nervous about it i was not, but i think that was -- they think, well, this could be the start of that all over again, and i don't think it is

>> peter, thank you very much. >> thank you >> get your final trades done. >> thank you >> you mentioned how the stronger dollar may help european exporters, but what about the stronger dollar, hurting emerging markets? >> it is alternatively, helping the russell 2,000, smaller cap companies domestically oriented, but in terms of the risk-off, watch gold prices. gold typically gets a bid on days like this, but it's not it's down $4 today, something to watch. >> okay, seema, great stuff, thank you very much. 40 seconds left of the trade let's see the intraday chart of the s&p. opened lower, selling intensified in the morning, hovered on the market, low of the day down 1.7% of the s&p, and as we approached the close, we've seen a decent improvement, there you have it in the last hour of trade, now down 1%, and the dow remains laggard, down 400 points the low for the dow today was

about an hour ago of 500 points. nasdaq outperformer down less than 1%. there's the bell ringing the bell is abi and at the nasdaq is terveystalo. i pronounced that wrong, but they are ringing the bell. kelly's got the second hour. thank you, wilf, and welcome, everybody, i'm kelly evans. down 500, the lows of the session, dow closing down about 391 points to kick off the week after the long weekend, and after the turmoil in italy, in particular, politics there dragging down yields across the globe. the u.s. 10-year yield, remember that over 3% not anymore. low as 2.75%, and that dragged the banks down with it the dow closing down 1.5% today, s&p down 1.1%, and nasdaq down only half a percent, and russell

down two tenths, closing lower by three and a half points more on this and why tech is holding up better in just a moment we have earnings headed our way this afternoon eric is awaiting salesforce results, and josh lipton has hp inc is it just hp? >> just hp, kelly. >> thank you, see you shortly. joining me now, michael santoli and jason from research partners and carrie firestone, welcome everybody. there's an alcoholic lemon drink launched in japan that helped coke gain two-thirds of 1%, but consumer staples generally doing better because of the drop in yes jp morgan the decliner, more than 4% drop laying into all of this what's happening with

interest rates align technology leading s&p, and morgan stanley the laggard >> appearing to the confidence today, setting a negative tone, and morgan stanley relative to goldman with euro stress is hit harder don't make much of it. it was a wholesale selloff in the financials with the big global banks getting it the worst. part of it, though, is, they were very loved. thought it was an easy story to own the banks, and with treasury yields doing what they were doing and yield curves compressing, understandably you saw the pain this. >> jason, showing fang components this, earlier today, the president moved ahead with steps to protect ip, intellectual property in the u.s. and impose tariffs on china. although they talked about the trade war on -

>> my opinion is the real news is out of italy and real news is that 10-year yields e going down, not up, and people wonder if that's a signal >> oversold just last four or five days. >> yeah, no, in my opinion, i don't know if i -- i still like the financials quite a bit, mike, and i know this is -- this will play out over the next couple months until we have new elections in italy probably this fall, but my opinion, basic standard trade, which would be long cyclicals, financials, industrials, and energy in my opinion, still holds >> so all your premises about strong economy, is one of the premises interest rates keeps moving higher or stay where they are? now this is a setback, right >> it is, and i would also say, to be really bearish on the financials, i think you'd have to say the fed would not care. it would continue to tighten regardless what happens long end of the curve >> to be bearish >> to be bearish, say, oh, the fed's going to continue, have a

linear view, normalize rates regardless what happens to the long end of the curve. i'm not sure that's the case in the old days, the fed would not worry about the dollar treasury worried about the dollar >> how far back are you talking? >> up until four, five years ago. now i think the fed, obviously, has to worry quite a bit about the dollar, and i think given what's happening - >> how many rate hikes -- the fact that the dollar index is near 95, how many rate hikes does that equal for you? >> it wouldn't surprise me if there's fewer rate hikes or talked sweeter to the people >> says june and we have to wait and see. >> wow that's all for the rest of the year >> it's a snapshot today >> yeah. >> obviously, it's not a a verdict on the entire year, but that's where it's trending >> are you changing your investments with that scenario in mind? >> no, not at all. we've thought for some time that they'll be three rate hikes. we've not been hawkish about how far the interest rate rise could

be, and, in fact, i think we've talked last week about how this expectation of a lot higher interest rates over the next two months might be premature. the requirement of the large corporate borrowers in the united states is really pretty minor considering those ballot sheets they had enormous hordes of cash and repatriation has given tremendous cash back into the coffers of companies in the united states, so, perhaps, there is not that stress to raise rates. i also think, and it's important to remember, if you look at italy, what's happening today, think back to greece, spain, france, talk about how the other countries were likely to leave the euro, and they did not do it, and the situation particularly, greece and spain, was much, much worse than what you have in italy. >> we'll talk more on that in a moment i know one focused on repatriation, just how many dollars come in. it's to pay down debt, does that

help the economy >> we're quite bullish on capital spending i think we have a differentiated view, nonconsensus view that the economy will be quite strong and people shouldn't fade the idea that companies reinvest in themselves certainly, if you're not getting it now with the changes in the tax code you saw last year, you're not going to get it, but it is early. there's the immediacy of a 24-hour news cycle to think it happens all at once, capital spendsing it different it takes time. i think we're thinking maybe something like $500 billion in repatriated profits come back this year. add that to the spending and tax cuts, you're looking at an enormous amount of stimulus that has yet to be felt in the u.s. economy. >> all right we'll see what that does mean in terms of how we perform, but talking more about the selloff seen on wall street today. rick santelli has a look at the drop in rates, and bertha tracking the selloff, and seema

as well. >> down 500 points in the low, ending off the lows, still down 1.6% for the dow, a 1% decline for the s&p 500, really brought down by the large cap financials, names like goldman sachs, morgan stanley, jpmorgan, citi bank among others down 2-4%. the painal banks under pressure today, something that traders really were trying to get a belting understanding of, especially if the concern was italy and europe, why were the smaller banks reacting well, something due to what we saw in the bond market with yields falling further below 3% here in the u.s., very different story in italy with yields rising to its highest level since 2014, and the other big sector that impacted markets today was energy no love there for some of the big oil giants that continue to come under pressure, names like chevron, exxon-mobil, energy the worst last weekend, on going

concerns what opec does on the supply-demand equation that weighs on wti crude, now below $67. now, one thing to keep in mind is earnings after the bell we have hp, salesfarce, and tomorrow, another look at the health of consumer with a lot of retail names from pbh, owner of tommy hilfiger and dick's sporting goods also reporting tomorrow, plus michael kors. earnings a big part of the story. watching the ongoing political headlines out of italy as well for now, though, dow closing down 391 points. kelly? >> seema, thank you. let's flip uptown to the nasdaq, bertha, a place that did not do poorly today had brighter spots? >> negative, but relative outperformance, particularly when you look at the sort of tech sectors they were down not as much as energy, not as much as the banks. a little bit of a downdraft when it comes to healthcare and biotech here, but overall, not as bad a day

among the losers, mercadolibre, more concerns about the trucking stoppage in brazil, how that s thimpact firm. we saw airlines trade lower, maiott trading lower as well take a look at some of the stocks that bucked the trend today including chip names, even as chips were down overall applied materials, micron, tesla, which was under pressure over the last few weeks over various rs, and today bouncing back, and ulta, one of the fall from grace stocks bouncing back today as well, and the megacaps, that really helped you have amazon today doing pretty well, and netflix putting in an all-time high ahead of a little bit of a profit taking this afternoon facebook also higher as well kelly, bear in mind that if you have some of the pullbacks, you talk about some of that capital coming back to the country,

apple has $100 billion buybacks so on days like this, you imagine they will be in there buying a little bit cheaper prices >> yeah, that's true sur they don't mind. bertha, thank you very much, up at the nasdaq for us talk about rates and the dollar, both of them moving big. rates down dollar up. rick santelli. >> you know, kelly, there was a point in time, not that many weeks ago, we discussed when rates go up, we have to look at why that can be a good thing there's no doubt, as much as we all like lower rates for the most part, today's one of those exemplary days where we don't. it's going down because of bad reasons in europe. look at the 2-year note yield, down 15 basis points today look at the 10-year, also down 15, and to consider one week ago today we settle at 3.06. a week ago thursday, high yields at 3.11. now we're close to 30 something

basis points below those levels before a selloff to the 2.80 mark on the italian side, 3-year chart of 2-year italian yields, but to really look at that and encapsulate how fast it happened, just to think in mid-may, they were largely negative with respect to yields, and the dollar, what can i say dollar index cracked 95, bringing you back to the july comps of 2017. it did not stay there. 91, 94, 95, big areas in november of last year, right about where we are at, but don't dismiss strength it really has been a lot more linear than many thought it was not that long ago were we at 112, and -- excuse me, 92.12, and now a 95 handle. look long term, 95 is a big level and could spend more time here than the dollar has because

of the motion to the upside. back to you. >> rick santelli, thank you, in chicago for us dave has more on how it plays out politically. we said, wait a minute, we did this with greece, we went through agony in the global financial markets several years back what are the likely outcomes this time? >> it's nice to be on, kelly, thank you for having me, and, yeah, we've been through it before we saw movies like this even in ireland, cypress, and memorable is greece, theextended the playbook is one when the european elites, whatever you call them, don't like an election, and it goes against them, they sort of use the ecb and markets to kind of fight back, and we're going to see a little crisis and italian banks come under pressure, ecb comes into play and start threatening certain actions like collateral acceptance and the like, things wrote about in the commentaries today, so --

>> dave, you think this goes back -- last week, we saw, for example, ratings agency come out and warn about italy, and that seemed to then give the justification for the president to say if the rating agency warned about this fragile government, and i don't like the sound -- wilf asked last hour, are we going to see draghi do whatever it takes? draghi of the ecb. you said the ecb is going to say, no, no, no, we want it done our way, our way or the highway. >> well, that's not what the ecb did with greece or what they did with ireland or cypress. they basically said, we're going to turnoff off, you're not getting more euros unless you join a program guess what the program is? raising taxes, cutting spending. the exact opposite of the program that these two guys who got together in the coalition would like to do so this is the new europe the new europe is one where the ecb is the muscle man. they come in and basically can sort of make -- i think -- painful outcomes for voters if

they decide to go too far away from the center, and i'm more convinced that's what's happening in italy, and, by the way, that's much more dangerous in italy than it is in a place like greece, cypress, or ireland. italy is bigger and integrated into the market. the market is correct to be nervous, particularly in the italian markets, because that's where pressure puts and threat of contagion i think, like many of the guests, not as worried about it because i do think the ecb will try to contain it, but they want to still cause a little pain. >> yeah. they want to still it and contain it i want everybody's thoughts on this i think everybody talked about the greece crisis and thre of it. more pain was in the markets before ultimately we were able to write it off and say, no big deal >> it was not just a dow 1.5% move >> exactly that said, drawing back, not looking at news at all, i say, well, looks like the market has

to prove the bottom end of the range will hold. did not change anything. back a few weeks in terms of s&p levels bank stocks gave up weeks worth of gains so treasury yields back to seven weeks ago >> overran -- generally -- >> whatever the category was, reoverran, including oil and people short treasuries, i don't know about the s&p, but i think in general we have to, i guess, refrain from saying this is some kind of a game-changing moment the s&p is basically flat year to date. >> jason >> listen, as was said, i think the stakes are going up in europe there's no two ways about it because you had a democratic election that suggested that the populism is an enduring political theme and enduring investment them. >> yeah. >> the ecb is going to have to blink. >> what do you mean by that? >> i think the balance sheet right now, you know, is 4.5

trillion euros up from a trillion, and they want to taper, but i'm not so sure they will be able to because -- >> do you think -- >> push comes to shove - >> define italiabonds? >> i d see what the choice is if you have the five-star movement and ref r-- referendum would be dangerous by what you've seen in the world over the last couple years. >> mike said it's a market that's flat on the year, 16.5 times next year's earns. they are up 25%, we're expecting 18-plus percent this year. that's a big number. that could continue into next year i don't think what's going on right now really changes that scenario there's issues with the dollar, but there's positive, strong

positives to even to the extent interest rates are low enough not to force the substitute question about whether you buy bonds or stock stocks are retractive on that level until you get into the three-plus area and stay there >> and so dave, going back to the three options here you think, you know, three possible outcomes, one, which jason raised, the european central bank buys the italian debt, and germans blink because they don't want italy to leave the eurozone that's one option. other option is that they just crush the political movement and move on, and third option, you're saying, italy, you know, leaves or force the out of the year row what is likely at this point >> i think the germans and elites will end up trying to crush or curtail the italian movement that's likely. might be more pain as all guests seem to highlight. as your guests highlight, there's great fundamental stories in the united states the equity market, to me, still looks very positive,

deregulation, lower taxes, great earnings, and if you through in a fed that's closer to stopping, which i think they are on a number of reasons, not just because of italy, but because of disinflation risks - >> you think theymight not kee raising rates? >> they will in june, but market was crazy to think there's four this year and next year. that's out of its mind this italy thing plays into that better, but great news for stocks reason stocks did not rally this year, i should say, on the great earnings story, they had to be -- they had to be discounted at potentially much higher rates. what we're seeing is rates are not going to materialize >> you know, i guess anybody who bought banks for higher rates go nevermind, but for deregulation, m&a, just better economy - >> yeah -- >> i'm not not as excited about the financials as everybody else they are not bad in fact, a european banking crisis, which is what the sort of elites would push through, could send a lot of customers back over to u.s. banks because

they are just worried about what might happen in europe with financial institutions, so it could be a boom for some of the big money centered banks, so there's other things other than interest rates keeping earnings in a good place. things like deregulation and lower taxes are there. >> all right >> i don't want to single out financials as the main driver here, but i think there's a good stock trade, a lowernterest rate trade, but there's volatility, serious volatility coming as the european project -- leaders of the european project try to influence the election in italy >> and, by the way, volatility helped the banks too listen, we got to hit the earnings, dave, thank you. salesforce results here, eric? >> that's right, kelly a beat on the revenue number, 3.01 billion dollars in the fiscal first quarter compared to 2.95 billion ups 74 cents, not comparable to the forecast, but raised guidance for the second quarter

revenues, better than the estimates. stock moving 1% to 2% up after hours. this is a stock up 40% in the last 12 months back to you. >> wow eric, thank you. up 40%, mike >> it seems like every time it reports, you say, well, had a great run -- >> yeah. >> but it's going to have to be enthusiastic on the call and he is >> fair enough we'll see what he says today right now, up 1%, but like you said, waiting for the call hp, josh lipton? >> kelly, hp reporting eps at 48 cents in line with expectations. revenue 14 billion, street looked for 13.6 billion. q3, 49 to 52 cents, street at 49 cents. for the year, raise the eps guidance now looking for 1.97 to 2.02 street wanted 1.97 they expect free cash flow for

2018, and personal systems 8.76 billion, printed 5.24 billion. big changes here in the company's c-suite, kelly the 11-year veteran of the company named cfo effective july 1st. kathy, been there for more than 30 years, is now interim coo the company said before her retirement, sometime, they say in early calendar 2019, i also have the chance to catch up briefly with the ceo, wanted his take on the pc market for the rest of 2018 he does not broadly disagree with analysts, expecting units to decline in the traditional pc space, but they play their own game, consistently growing faster than the market, he said, and we've been doing that now for 17 consecutive quarters. as for printing, that samsung integration, how that is progressing, key to the company capitalizing on 55 billion dollar a3 market

he's pleased with progress driving integration as quickly as possible, and timely, kelly, a take on ongoing trade tensions between the trump administration and china. i asked whether that's impacting business at all. and he said the impact on the business today is minimal, continue to monitor, track, influence where possible and spend time in d.c. with the appropriate people that conference call starts at 5:00 p.m. eastern, kelly, back to you >> thank you, josh all i know shares down a quarter percent. i love my printer. call me old school i use it all the time. i mean, it's double sided, color, i'm living a life of luxury thank you, both, very much, for joining us today to talk markets. there's a lot more ahead on the "closing bell. much more on stockings after a rough start to the week, rates, threat of europe falling off a cliffing and how it could impact your stocks here in the u.s. plus, the day star general bucks locked the doors, what is likely

happening behind the curtain as employees get anti-bias training the closing bell with kelly evans live from the new york stock exchange rolls on in two minutes.

welcome back, rough day in the markets, especially for the dow, down 500 points in the low as we came off the close under 400 lower, but five 11 sectors down 10%, so there's upheaval in the markets. tech a bright spot, interest rates falling, dollar moved up bob dahl talks more about this, and, bob, you know, do we dwell on italian politics here and whether the euro holds together? what do you think? >> that is certainly an issue, without question, kelly, the forces in both directions are pretty severe in the high, and markets hate uncertainty that's part of the story today we also did not get a lot of discussion, but i think the trade issues with china are still very much front and

center, and my bearish friends call to say, oh, towards the end of the cycle, had great first quarter earnings, decelerates from here, oh, my goodness, so, you know, the pe head winds are strong that are bucking strong tail winds from earnings you're getting that bark and forth. >> mike, you know what you say, the markets love to climb the wall of worry. >> they do trying to figure out, maybe bob has a thought on this, what's the market looking towards in the next sign post whether issues resolve or not, right we have the fed meeting in a couple weeks at a moment where the markets beg the fed to get easier? do we know what the fed responds with >> the fed to the extent the uncertainty continues off the full robust and create uncertainty about the fourth one, which i think would be healthy. i've been a three rate-hiker all year long, hoping they were not going four we got these cross currents, and

not long before there's prereleases -- >> why -- so, this is fascinating to me, we have gone from, hey, you know, the economy -- you talk about the labor market, you think, we're overheating. we can't get enough workers in the country to fill jobs, unemployment rate for almost every demographic is at historical lows, so you have that on the one hand and everyone says, minute, only raise rates once more this year things are that precarious i don't understand >> no wage increases to go with unemployment set of statistics you accurately cited the fed's got to be careful how fast they move they'll move higher. we have to normalize they are not done. do we have to go four this year and four next year as a lot of people have believed i think that's a little bit much of an overkill we don't have an inflation problem. inflation's moved from very low to low, and it's not problematic. >> all right so what you're saying basically

is there's no danger in leaving fed's rate this low, you know, i guess that's the point, right? we have seen, you know, increases in mortgage rates and things like that, so it's not to say those can't go higher organically on their own, but no long term dangerous for rates to stay this low for the fed? >> i don't think they'll stay this low the fed will raise, but questioning the pace of increase, kelly. i think it's slower than four this year and four next year that could have been problema c oblemac, in my view. we don't need to overdo the pe head winds that come from interest rates, and the bond market out in the curve is telling us that in backing off from 3.10 to 2.75. >> that's what you said to mike's question there, you want to get into that period of past the fed meeting looking at earnings and think that helps us out here >>. >> i think it can. with the selloff, we are back to where the s&p was three weeks

ago, so if you are like i am sort of thinking we're in the trading range that may last for months, marked by the 25-32 direction low, and the 2875 all-time high, this is just noise, and italy is yet another development on the head winds to pes. we will get earnings the earnings should be good, and, yeah, that probably gives the market another reason to run up and we get excited again. >> well, that -- so that, to me, is the question too. are we going to see a more routine pattern ahead of the end of the quarter of earnings estimates being revised down >> true. >> that's totally normal way things go and maybe happens this time because it did not happen last quarter, and that's another talking point. >> could be easier to clear after the first time expectations are high. >> exactly, opposed to saying it's 20% as if that's the trend. >> right, bob, thank you >> right, very much so, right. >> bob dahl, thank you very much talking markets with us now. here's a recap if you missed it how we finished

dow domarkets are down, and hers an update with sue >> israeli jets bombing gaza hours after militants from the territory fired more than 25 mortar shells into the southern part of the country. the israeli military said they carried 35 air strikes on seven sites across the strip maryland is trying to pick up the pieces after sunday's devastating floods ripped through its streets. it was the second major flood that town has experienced in two years. business owners are, again, facing another expensive cleanup. lowe's announcing it is committed to phasing out harmful chemicals found in paint thinners by the end of the year. environmental and consumer grouped urged the epa to ban the chemicals linked to dozens of deaths and, finally, you may have noticed we had a little snafu last hour regarding west

minster abbey, and we're doggedly going to get it right they opened up a church previously closed to the public, some 300 items on display like paintings and funeral effigy head of king henry vii >> no german shepherds >> no, but the story gave us paws >> oh, okay, that's two. that's two too many. at lest one too many >> no, you got it. >> you have my attention i want to see it drew more attention to the story, sue >> absolutely. >> would be fascinating to see >> yes >> we'll send wilf excellent. >> thank you so much >> you got it,ee you tomorro >> see you, sue. coming up, whether the traders see a buying opportunity there, but, first, did abc make the right call by cancelling its top rated comedy "roseanne" after controversial comments by the

star roseanne barr that's next here on "the closing bell." all in one place. ♪ when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

hi, kids!

i'm carl and i'm a broker. do you offer $4.95 online equity trades? great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service and low costs, backed by a satisfaction guarantee. if you don't like their answer, ask again at schwab. zplmplgts welcome ba welcome back, papu papua newguinea is considering a new site built for residents of the country, a facebook rep said the company reach out to the government to understand their concerns facebook closed higher today actually abc announced they cancelled top rated comedy following a

tweet storm by the star, barr, including a racist tweet about a former obama white house adviser. responding to a story on obama-related conspiracies, she tweeted, quote, muslim brotherhood and planet of the apes had a baby equals vj. she apologized tweeting, i apologized to value ree and all americans, truly sorry about making a bad joke about politics and looks. i should have known better forgive me, my joke was in bad taste. she quit twitter then, but later this afternoon, abc cancelled the show outright. more on these developments is senior tv editor of variety and robert thompson from syracuse university welcome to you both. abc had a lot at stake here. this was what the third rated show, top rated show on tv >> correct one of the top shows going into the advanced ad sales talks, taking place right now, so as abc talks to procter & gamble,

this controversy hits, not a good look for them. >> in fact, turns out they got a lot more ad revenue, professor thompson, once it was clear that roseanne, that just came back, was ahuge hit. you know, they were getting $420,000 for ads, more than double what they got in the past there was no hesitation -- not that financial concerns would have been first and foremost for them, but they moved immediately to cancel this program there was no hesitation, and now they have to fill that hole, right? >> they are. this was one of the biggest shows of the new fall season, one of the most -- sorry, the new -- this past season, it was going to continue in the fall. it was going to anchor scheduling, one of the most talked about shows of the entire year i'm sure they did not want to just make that go away, but i think the people at abc took one look at those tweets, one tweet, especially, and realized that this only had one outcome, and

that was to cancel the show, and by doing it on the same day as the tweet coming out, they have been congratulated by most people, including myself i think it was a good choice >> brian, there's also been pushback, though people who say, wait a minute, you know, espn is so quick on saying on the political side of this because politics intertwined with roseanne and tweets, saying, espn dragged its feet on the hill issues, or look at keith's comments in the past. how does this company try to keep that from feeding into a theme, especially for espn viewers, that, oh, this is just shutting down political speech they don't like. >> well, abc prime time is not a news network or sports network it's a general entertainment network. it's the california, new york, kansas, iowa, colorado i think exactly what we're saying, look, this just happened, a polarizing time, audiences are quick to jump. get this off the air now

also, look at the ratings, whole they had a great spike in two weeks, trend line was going down i spoke to media buyers today who do not think is the worst move made given the circumstances. >> you know, brian, you know, it's kind of an amazing turn given the fact that disney was considered an abc, continuing to crack the code for one of the big media companies to appeal to a middle america type audience with this series bringing back the series what would you handicap odds are that somebody's going to attempt to pick up the series if they get the rights >> well, you know, i've seen tweets from other producers of the show who disenvowed her comments today the staff of the show are stunned. producers left i think even people in the show were dismayed by the tweets. how do you get the cast to work with her again or have the show without her? come up with a scenario that works without her in the plot

line maybe it's a probability and shop it elsewhere, hulu and netflix are hungry for new content. this show has a problem today. >> i don't think anybody would pick the show up with her in it, even if all the rest of the cast agreed to stay because that would be sending the message that the standards of abc found what she tweeted unacceptable, but we over here at whatever new place picked up it, found it acceptable enough to continue to work i don't think there's any chance this is coming back with her in it there's certainly a lot of great actors in that ensemble, but i have my doubts as to whether they are going to rerally and make a show without her. >> we'll see guys, thank you, professor robert thompson, brian steinberg, news abc cancelled roseanne industrials worst performing sector of the day. we have the "fast money" crew joining us this afternoon. talking about, karen, whether

you see some opportunities here after this market day. >> oh, i guess there's a couple opportunities. for me, something like a boeing was not expensive going into -- was expensive going into today, so i don't think this is an opportunity you want to jump on there, but i mean, some of those names, they need a stable growth story, and so a day like today is a little bit disorienting for that, but things will settle down there's value in the space highest fliers for me, unrelated to whatever's going on in italy or the eu. >> have not come down enough if they sold off, what does boeing have to sell off for you to get interest ed in? >> 5%. that could happen in a day and a half at this rate. >> we'll see >> discussing interest rates, is there a relationship between rates and industrials, or, you know, how do you think about that as people take fed hikes off the table? >> i do. the lower rates go, the higher multiple of the things trade at

and get away with it, and we find rates higher, multiple compressions take caterpillar or deer, fundamentals are good, but i expect caterpillar seeing growth in all segments and recovery and a back load in their ag business, especially new business, you know, i think this is a company that's probably going to go back to 17 or 18 times, middle or lower part of the range traded in. rates low, people ownered them at higher multiples. that's the irony of what's going on right now >> good point. high water mark or not thank you, both, very much >> thank you >> much more on "fast money" beginning at 5:00 p.m. eastern time just under 20 minutes time. looking for couffee from starbucks this afternoon no luck. kate rogers is outside one location in englewood, new jersey, kate >> reporter: that's right. starbucks closing down thousand of company-owned locations for company bias training. there's more after the break on "closing bell. cdw brought it orchestration to ross the city.es

increasing productivity like never before. which is amazing. unless you're a barista. cdw implemented a dell emc unity flash storage solution. keeping data available and people connected from anywhere. so lucky me. so nobody wants coffee? hey can i get a couple copies? increased flexibility by dell emc. it orchestration. by cdw.

(sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, with td ameritrade. ♪ this is where i trade and manage my portfolio.

since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. starbucks closed 8,000 locations across the country for an ti anti-bias training we have more with kate roger grs >> reporter: it s.t.a.r.tarted a time 2:00, and training set to reach about 175,000 of the u.s. partners or employees.

now, in a preview of the training released last week, starbucks said each store would receive a tool kit allowing employees to learn together in small groups there's video messages including statements from the founder as well as starbucks partners take a look at what they had to say. >> on a personal level, i want to ask you that together we do everything we can to build that third place in your store. >> when i first started working there, i had to deal with difficult homeless customers all the time >> i found someone in the restroom shooting up immediately, i shut down, i froze. >> reporter: customers outside today were mixed on what this training might mean for starbucks moving forward >> i think, you know, they are going to invest money and time in training, so, you know, as a customer, you appreciate it. >> makes for a lot of show i think they are doing it from a

corporate level and pr front i don't necessarily think it makes it down to the individual level. >> reporter: but starbucks insists it will. it also mentioned to me that the training was not mandatory for workers, but any partner who wanted to make it an inclusive, welcoming space, which they are committed to they are reopening at 5:30 a.m. tomorrow morning everybody inside seems to be aware of it, and we're very gung ho to participate. >> do you think they had a good turnout? >> reporter: i think so. we chatted with people inside. one we talked to said she heard office mandatory, but arbucks said it was not, but about welcing those who wanted to make it an inclusive space, left it up to the partners deciding whether or not to participate. >> all right kate, thank you. kate rogers. joinings now to talk more about this is patricia pope, ceo and chief creative officer of

pope and associates, and professor of social psychology at the university of michigan. welcome to you both. do you think this accomplishes anything, this afternoon's training in. >> if they said it's a start, and glad they are positioning it that way rather than a one and done so they are saying all the right things i'm encouraged by that >> doctor marks, could they just have said, look, the guy was a dope at the other location, overreacted, we're sorry, move on >> it's bigger than that because what you want is a culture where it's unlikely that somebody would feel empowered to make certain assumptions about people just walking through the door. i like to emphasize what they put forward, and howard and the coo working on moore house college campus, i'm a professor there, went there for graduate school, but they said the right

things, said this is the beginning of the longer process, which would be necessary if they want more organizational change to really occur. >> patricia, just give us a sense of exactly what you imagine the employees are going through with this process. what are they looking for? how does it link up with the starbucks' way of hospitality beforehand >> well, i think they are starting out by sharing some history, helping people understand, you know, what's happened over the years, in terms how biases impact the treatment of people. i think that is a good starting place. i started doing this work years ago at procter & gamble, and they offered a black history course, and it was optional for any employee who wanted to attend, and i thought that was a great move on their part, and it was not in reaction to anything, but just early '70s, we have a lot to learn, and so that was

how i got started doing this work i think, you know, people have to make a decision to learn. they can show up and go through the training, but if they have not really made the decision that they want training but if ' really made a decision that they want to learn, then i'm not sure think it is a are very sprij thing. >> you have to have an open mind you can't just make somebody sit through and it think they have downloaded the information i was going to ask dr. marx whether this was just a publicity stunt. a dramatic step to close all over however company owned stores for a period of this many hours? what do you think? >> no it is a pretty significant investment just for a publicity stunt. in all fairness, starbuck's in terms of training and battleground engage in best practices already in terms of employees and staff. so we have to provide them with

a bit of credit there. at the same time they said they want to be a leader in the space. that the curriculum they are developing they want to release other os and corporations and on open source format. they seem to be taking it seriously in terms of partnering with experts in the field who have authentic experience and credibility in the space to assist them. right now at georgetown university doing some work here and great conversation with professors and administrators upstairs, and talking how this diversity and bias work can actually affect the bottom line. so for mbas who are literally learning to be corporate leaders, they need to understand these lessons early on the importance of create agriculture where being inclusive is really valued not just a check the box so i don't get the sense that this is a check the box moment for starbuck's it. remains to be seen i remain cautiously optimistic but we're seeing over examples talking about in order centromeres or denny ors waffle house or whatever this is. this is not an isolated event and corporations have to be

sensitive to the issues in a authentic way. >> dr. marx, last thing before we go. they have also made this decision to publicize the fact that their restrooms are basically open for anybody now was that necessary do you think that -- does that make sense to you from a business point of view >> i mean, i get what they are trying to do >> i think it is a symbolic way of trying to say we're being inclusive. small coffee shops have taking advantage now what happened at starbuck's and saying come here. even if you can't buy a cup of coffee chill out. by want to create a welcoming place for everyone >> and bharp ywhat were you goio say dr. marks? >> well i think they need to focus on the bigger issues we want to be as inclusive as possible and i agree with that. and that the risk that we run is we're bringing in too many other

topics at the same time. it runs the risk of diluting this particular incident this particular incident involved -- i'm at morehouse college. it is 2300 young black men i think of young black males, i achievements scholars and engineers. these two young black men enter a starbuck's and within 2 minutes the police were called that it is micro we need to stick with that as well as general inclusivity. so i think both lanes can be pursued. >> i don't really understand why a business has to say whether it is a local coffee shop or national chain, oh we want to be inclusive. therefore anybody can come in and be on premises isn't that actually the opposite of what a business is supposed to do? that is my point i don't really understand starbuck's making that decision because of this event which separately just says to anybody and everybody out there, you

know, you don't have to be a paying customer. you can just come in and is that -- what does that accomplish >> well i think most people are too busy to just go in there and sit there and do nothing so i think it will do what it is they intended to do. years ago one big corporation, anybody that worked there regardless of your level you could go to the corporate dining room and have lunch. and all of a sudden somebody decided to take that away. and it was this huge fire storm in the company because most people never went up to that executive dining room but they knew that they could. so when they took it away, you know, it created a lot of heartburn for their employees. >> well now dr. marks, of course we have companies like google and everybody throwing perks and saying you can have free -- maybe that is the problem. you know, everyone else is throwing free food and drinks around and maybe starbuck's feels it has to do the same. i don't know i'm not sure about it as a business decision.

i think the message gets outs there to exactly the kind of people who you want your paying customers to make sure look it is homeless people we've talked about this. the drug paraphernal in the bathrooms. the messe go out to those who are going to exploitt. and perhaps why they made too big of a deal of the situation instead of saying hey this manager was a jerk and shouldn't have handled the situation that way. >> if i could. >> one of the -- go ahead. >> i'm sorry the ceo was basically in a catch 22 on the one hand if you say well it is explicit bias. that is saying we hired somebody with explicit bias towards young black men. and that is not going to come across too well. if it is implicit bias, then the assumption is that well the training that is experienced by the staff and so forth is not enough to mitigate implicit bias in playing out so he was in a tough situation and i get it i understand it. i just think we need to be hesitant from a distance trying to crawl into the mind of another person and interpret

what percentage of her treatment was explicit versus implicit it could have been a little bit of both. but at the same time from a leadership perspective it is difficult to have a silver bullet solution, so i understand the path they are taking. >> thank you both. appreciate it very much. dr. mark and patricia pope there was a big selloff meanwhile on wall street today we're going to recap the big headlines and the after hours movers after this. the financials got crushed today. eyava nian to talk about why now is the best time to buy.

whoooo. when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices.

welcome back quick check of the headlines making news after hours.

salesforce shares up 5% now after better than expected quarterly revenue and strong sales guidance we're already seeing -- >> we know the drill. >> i think people are used to what to expect. >> and he knows how to promote the company well better than 5% gains for sales force. strong sales of notebook pcs did we get the job support this friday because it is the 1st. >> yes i believe it is friday and tomorrow is wednesday. so the week is going to get away before you know it on the sales force reaction, it is interesting because those type of fang, fang plus type names big growth tech stocks found a bit today. an interesting pattern that people just reach for those when it looks like yields are coming down and growth in question overseas. >> you think those are related growth is coming down. falling yields. >> yeah little question about

the capital marketings and growth in europe and these things are insulated >> -- done so poorly. >> yes affirmative action in market form. >> we'll see how that translates to tomorrow's session. for now thanks for joining us everybody. that's it for "closing bell. "fast money" starts right now. >> over looking new york city's time squares tonight on fast stocks getting slammed today but check out this start. does bitcoin hold the key who t.o. where stocks are headed next one of the largest bit traders saids yes. and drama and disney why are some trader still bullish on the names first we start off with today's big selloff. you hear the dramatic music. italian tuoi