everybody, they were excited to have everybody in town, and, like, oh, my gosh, the president is here and kim jong un. it was much happier than you who would have expected. >> considering the topic at hand >> yes it struck me >> fascinating stuff >> pleasure to be here >> thank you for watching. "closing bell" starts right now. it's time for the "closing bell," and i'm wilfred dprofrost the new york stock exchange. we have a global macro outlook at the nasdaq, markets today is a tech-led selloff. a breakdown of the big movers here at cnbc global headquarters, i'm dom chu. trade worries are portfolio worries. who has the biggest exposure to china. we have the details. i'm kelly evans. in a sea of red, serging after promising drug data.

the "closing bell" starts right now. welcome to this uesday, everybody, hello, to you >> welcome back. >> i know. >> nice weekend? >> i didn't -- did you see the mickelson hole sat >> i did not see that particular one, but - >> unbelievable. >> i have not gone to -- >> were you on the course when it happened? >> yes, but not by his hole. >> crazy >> it was hot. >> so hot. >> attempt the headache with the beers? so - >> it was unbelievable all those stories in a moment. a check of the markets, though, down more than 400 on the trade tensions with china. coming back, though, 419 at the lows, dow's down 276 points now, but, by the way, negative now for the sixth straight day for the dow. >> are, indeed, although, the other indexes held up better throughout the last week and day. out to washington where kayla

has the latest on this escalating trade war >> reporter: wilf, president trump floated new tariffs up to $400 billion in chinese imports yesterday in response to china retaliation for the $50 billion targeted by the u.s. on friday in remarks today, trump said the move was necessary, but he was mum on how china responds and what happens next. >> now, maybe something happens where they come and they say we agree it's been unfair for the last 25 years, but somehow that does not seem to work so easily. we're going and we're going to make it fair >> white house trade huff made yesterday's pitch to the president to ratchet up tariffs said today, there's no talks with china on the books after china failed to make any proposals to stop stealing u.s. intellectual property, the heart of the dispute the u.s. in a separate ask wanted a $200 billion reduction

in the trade deficit china said they would buy $200 billion in goods over three to four years, and that proposal went down over talks, but nav navorro said the phone lines are open treasury steps up the investigation again with investment restrictions with inbound investment from china, prince s and deputies method at the white house friday to discuss this part of the package i'm told by sources there's still divisions over how far to go, but i'm told there is no run recommending not to go ahead with those wilf >> thank you very much for that, and the stock move, goldman sachs chairman lloyd blankfein weighed in on trade speaking at the economic club of new york. let's take a listen. >> it's not my style, but if what you want to show is -- if you want to give somebody an incentive to see the world from your point of view, it doesn't help to remind them of your

negotiating position, and it's a better one fact is, by the time you get to 100, they run out of things to apply a tariff to, and we don't. so if you want to make that point, you make that point now, that's what you would do if you are crazy and really wanted to end free trade, and that's what you would do if it was a negotiating position and you wanted to remind your negotiating counterparty of just how much fire power you had to bring to the negotiation >> i mean, he was remarkable sanguine about this. saying there's great opportunity working with china and great frustrations talking about setting up jd it was 15 years ago, and promise then was a couple years down the line until they own 100% of it, and today, they study there only with 51% he was more siding with president trump than you might expect >> by the way, look at markets, you sense, yes, there's concern,

but it's not panic out there the surprising thing about it was that it came from lloyd blankfein, personally made it clear he's not a fan of the president with his past tweets and that kind of thing he just said, you know, from a a negotiating point of view, i get it i wonder when the market will come around here too >> on things like politics in europe, rising interest rates, he was also pretty sanguine and relaxed with it at as well >> having a good day feeling good a good year for goldman over there. the dow going into negative territory for the year now let's get over to bob pisani with more market movers today, bob. >> the days have a pattern worst performance in the first hour, and you slowly come off it that's what we see still down and ugly. boeing the poster child for trade wars down 4% we are at 338 awhile ago coming off the lows there. caterpill caterpillar, same thing, at 142

awhile ago, and now 143, but down six points, between these, that's half the decline in the dow. all big material names, steel names, aluminum names with a rough day, down 3%, u.s. steel typical example. you think with the commodities to the downside here, most all commodity stocks would be down, but a number of energy stocks are still up nicely, apache, eog, companies that are in shale names are holding up well today. you want the one stock that i'm interested in hearing from that's going to be federal express. they are reporting after the bell you can bet they are going to get a lot of questions on their conference call about what they are thinking about the impact of trade on their business. they are a global shipper. i think this could be the most important company in the next 24 hours. you can bet i'm looking at that conference call. guys, back to you. >> bob, thank you very much. watching for it as well. trade war worries are not the only thing impacting markets,

and mike santoli has another look at the six day losing street >> trade at a market wide basis, nuance for the market, intermitten effect, but one of the reasons it has a little resonance is it feeds the other big fears, the slowdown in economic growth or a soft patch in non-u.s. economies, in europe, china, in emerging markets. this is why the market is inclined to be cautious, and i think that the stresses we're seeing in particular in the emerging markets with profound underperformance in the stock markets, currencies also flairing up down there is one of the reasons that i think we're a little bit twitchier when it comes to the trade headlines, but, also, the markets' own field positions coming into the week contributed to the fact we were prime for a backing off we basically had stalled out in a level that we had seen only back in march. you were up almost 8% in ften weeks in the s&p 500 i look right now, if i see the

s&p down .4% of 1%, you didn't need trade headlines to get the s&p down .4% of 1% after a three-month high after this run looking sentiment looking complacent it's a blend of factors. trade, perhaps, a growing one, you it's really not the only story for why the market is hesitant here. >> mike, as you said, if there's concern about the slowdown, the housing starts this morning, the number highest seen in the cycle in goldman's -- maybe this is why lloyd is in a good mood -- gdp tracking estimate is 4% for the quarter. >> slowdown concerns are exclusively about outside the united states, not right here. so i do think that that's where you get a little bit of reassuran reassurance if you look at domestic numbers, what companies are saying about the markets here the pain is localized in the multinationals, in the big durable goods xporters, and no really broad based in the consumer area. >> mike, thank you, great stuff. see you in a bit to the closing bell exchange now, joining us, richard

bernstein, jim, and steve from steve -- we got a pattern here, steve, but -- it's real money? could be -- you don't want to name -- they did rich bernstein, jim -- i'm just saying you could go that direction too. >> well, what do you want me to tell you, kelly? >> tell us about the market. rick santelli is in chicago. starting with you because i gave you a hard time today. do you think the market should be down more on the trade war concerns or do you think things look all right to you? >> you know, domestically, things are all right, and let's get all these fake free traders all their high horse they're not the president. reach out to the g7. let's drop all tariffs across the board. was not the g7 crickets? silence, oh, wait, the playing field is fair, we don't want to go there >> started well before g7. >> tariffs were coming this way

greater than tariffs going that way. it is not. the president's actions simply are retaliation. >> no. if he wanted to retaliate against china, he could have with the allies. that's not what he's done. >> they are not coming because they are chicken spit if you know what i'm saying >> i don't know -- >> listen, as a trader, let's get off my political soap box. as a trader, there's broad penalty up action. industrials come in hard what do you do identify where there shouldn't be a discount. where's that defense. there's blood in the water and because it's going to be a united states space force, a at least we think there might be. what do you do today you buy volume when everybody sells it buy when everybody's selling buy northrop, broaden positions, sell puts accordingly much lower so you take a discount for yourself, and there's c-calls later in the week. stocks are down. buy goldman, lloyd was just on, i bought that twice today. i didn't buy citi, and well

i have those coordinated puts. >> what about you for the broader markets, sarge >> i think the u.s. is going to win and the markets are suggesting that too. what happened to the chinese stock market last night? down 4%. what's happening to our market today? down .4% on the s&p. right now, the markets are all looking like if there's a protracted trade war, china comes out the loser end until time they decide to coming to the table and discuss with us. they do hold a nuclear option. they could sell their trillion dollars worth of treasuries. they could devalue their currency, but neither of those markets are acting like that's a viable option right now. for the moment, the president seems to have all of the cards in the chinese that are trying to play along, and even lloyd blankfein said that, too, that he has a better negotiating

position than the chinese, and i think that's why the markets have not taken this trade war talk nearly as worrisome as a lot of political commentators have >> you know, rich, we have the chinese, i think, injecting liquidity overnight. they are clearly concerned a little bit about what's going on in the markets, and you had action from the u.s. again, zte, another blow for them, so what do you think that all means? does it drive more capital into the u.s. as people think, well, maybe china in particular, it's not so attractive, but drives people here, do you think? >> kelly, look at fundamentals around the world, there's no question the u.s. economy is the shining stair. that's really been true off and on for quite some time, but it's definitely true now as the coordinated global recovery that everybody used to talk about is actually framed. that was a great story for 2016-2017, and it's an old story now, the coordinated global recovery this is a forest in the trees type issue

where everyone's focused on trade, and they are missing the much bigger issue about what's going on you look over the last three, four months, almost every sizable selloff we've had has come from pro-inflation policy coming from washington i think that's what people are missing here there's a major seat change going on in the backdrop where we're going from a disinnationary environment to inflationary market. we have tight labor and product markets. we got tax cuts on top of that we're getting fiscal spending, right? fiscal stimulus up 6% year on year now we're getting trade, and we're getting immigration restrictions these are all pro-inflation policies, and i think that's the big issue in the background here that the market's having trouble with >> rick, a strong dollar, but a yen stronger still is that the typical response to the trade fair >> absolutely. as a matter of fact, i'll build

on what jim said because his comments really reflect much of the conversation that's on the trading floor. the flight to safety really started to occur before our time zone, and as jim pointed out, the stock market's overseas, emerging markets, were in much more dire consequence giving treasury the lift and the yen, and to some extent the dollar, the lift it's counterintuitive to the best negotiating tactic that the chinese have in forms of securities they hold take it a step further look how the emerging markets are moving in many ways. that weakens the economies of the most disassociated with china in many regards, and i think that's important to pay attention to as for how this will all play out, in the end, i don't know the answer, but i can tell you this, it certainly seems as though it's mostly the day trading population, whether it's automated or not, doesn't really

matter, that puts the pressure on these stories in the conventional wisdom approach, but i think the grander scheme of things and why the market holds up is those that are really sponsoring equities and believe in the solid economy of the u.s. are not panicking, and i don't see any change in that past, present, or future >> all right do you think at the end of this, and i don't know when that is, months, maybe years from now, that we end up with lower tariffs for everybody involved than higher tariffs? is that kind of the conclusion for you? >> no. there's no conclusion. one thing all traders must remember is that always all conditions are temporary victories are temporary. defeats are temporary. always evolve and adapt. identify what the opportunity is as for china, should i talk tough? i owe you $100, i got a problem, i owe you billions of bucks, you got the problem. >> right thank you very much, everyone. coming up, famed economist

stops by post nine to weigh in on the market action an what the long term market implications are of a trade war stocks down today, but therapeutics has a notable exception rocketing higher on drug data. the stock's up 32% we want to hear from you reach out to the show on twitter, facebook, or e-mail us. closingbell@cnbc.com we're back after this. directv now gives you more for your thing. get all the good stuff about tv without all the bad stuff. yes! you can still stream your favorite shows... yes! ...with no annual contract. wait, what? it's live tv. yes! with no satellites. what? and no bulky hardware. no bulky hardware! isn't that great news? yes! noooooo! no! noooo. try directv now for $10 a month for 3 months. more for your thing. that's our thing.

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welcome back small cap stocks are positive today. they are less than a point up, but we've seen a major comeback from the lows this morning, watching the dow, still down nearly 300 points, better than 1%, sixth day in a row, down more than 400 from the lowing earlier on >> shares of sarepta up more than 30% after announcing news of a positive outcome for a muscular dystrophy trial that's up 30% at the moment, up as much as 60% earlier >> yeah. in a cnbc exclusive, we are joined by doug ingram, the ceo

of sarepta therapeutics. congratulations. >> yeah, everyone is excited for patients put it into context what these data, and three patients, what it means for the kids. >> that's right. preliminary results. we have to be careful. take the results we have, we need to treat additional children and watch the children for a while, but this is potentially transformative so these kids have something called muscular dystrophy. it kills 100% of them because they don't have a protein that is a shock absorber in the muscles. we've given them gene therapy invented by jerry mandel at children's hospital and given gene therapy that replaces that shock absorber, and at least in the first three children, at three months, they are showing this amazing expression. the shock absorber appears to be

in the muscle. >> wow >> in early days, it appears to be working >> one quick question on that is, is this able to go forward because of the right to try legislation that's come out of washington, or is this -- you know, because are these treatments and therapies the result just of the research and development you've been doing all along or a change in what the fda allows >> this is our research and development path led our goal, single-minded, to get this therapy eventually to all patients, and that means we have to finish the clinical trial we have to get the results that we hope we're seeing now in a broader set of kids, and then with the fda's, you know, participation, get this therapy to parents and doctors that are treating them. >> one of the trickiest thing about the disease is the gene is so big you can't deliver the whole thing by gene therapy. you made a microdistrophin does this bring kids back to an

average person or get them to have a less severe form of the disease? >> fascinating how this all came to be. over 30 years ago, there was a case, and it was a patient that -- it was a 61-year-old person who was still walking and let's be clear, these kids, unfortunately, are not walking by 11 or 12 and die by the time they are 20 or 25. this person was still walking at 61 he had a form of the middle of the gene that was missing, so researchers, dr. mandel figured out they can edit the gene down and still expresses a miniature version of the dystrophyn and it was functional it's getting to the right place. this is on the muscle, itself, and there's a biomarker called ck the kids have muscle damage every time they move >> oh, my gosh >> this biomarker goes through the roof, and they dropped by

90% in the first 90 days it appears on the face to be functional >> three kids only, and three months only. >> yeah. >> is there still room for this to now turn in the opposite direction, such encouraging results so far, but a long way to go. >> seeing really encouraging results, but you're absolutely right in the sense that we need to treat more kids we're going to treat 12 kids versus 12 placebo kids, and watch them for some time, perhaps a year, but we don't want to wait that long because every single day that we delay, these kids are being damaged, and we got to find a solution. you know, there's been people trying to find a solution for decades. >> what do you think about sticker shock case of this this is one of the issues -- how much have you spent on research and development and how much do you charge for this kind of thing, and who bears the cost, ultimately, i mean, this is a dramatic -- i don't want to use the word "cure," but dramatic step

what are we talking about? >> first of all, this is a potentially profound therapy, a one-time therapy, and we're currently focused, you know, single-mindedly on getting this therapy confirmed so we get it to the kids. far away from those types of issues other than to say i, at least, am quite confident if the therapy confirmed to be the profound therapy we certainly hope it is, that these kids get access to it, the payers and governments will, in fact, give these kids access to it. i'm confident about that >> okay. we have to leave it there, doug, thank you so much, congratulations, and we hope it comes together nicely. >> thank you very much 35 minutes to go, still, dow down a little more than 300 points, but the difference between the large caps and small caps, slightly positive for them we have dr. doom coming up roubini here to break down the economic impact of the trade tensions with china.

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bell," trading lower, but off the lows, dow's down 311 points, the low of the day was 419, s&p down half a percent as is the nasdaq russell just dipping in negative territory. individual market movers, amazon introduced a new version of alexa to increase guest access to amenities at hotels alexa hospitality is available to hotel providers by invitation starting today with marriott international introducing the new alexa experience at select properties i have to say, i don't want one of these at home, which i own, i definitely don't want one in someone else's home. >> unplug it if there's one in the room >> and put it, like, in the -- >> chuck it into the hall. >> wrap it up. >> what happens when you stay in your posh hotels in i brbiza and you can only get room service by ordering through alexa

>> that was spanish. >> i feel the same way you do. >> particularly, the hotels, don't you want someone at the enof te end of the phone >> you don't think they want to say, oh, we don't need the support staff, talk to alexa >> it's the hospitality industry that's what they are supposed to do >> we'll see one company to work to better compete with amazon is cvs, a home-delivery service where the post office picks up prescriptions and delivers to customers for a charge of $4.99 per visit. this is a fascinating one because they have to learn how to make it work logistically they going to cvs, pick up the prescription, drop off at the door five bucks a pop >> i thought it was steep. >> it is >> depends if it's included in amazon prime and a kind of free service or not >> yep >> five bucks is, i mean, again, depends -- >> outside amazon, though, this is cvs with the post office saying to amazon, look, maybe

this is an area you're not figuring out the business model yet, and we can kind of get in there and get customers -- look, if i needed something cheap, i don't know, but if you needed a prescription, and i think about my grandfather, too, you know, we get it right to the door, that would be a real advantage >> it would be i guess if youed know eneed it , it's a decent service. we'll see. time for a cnbc news update, contessa in. >> this is what's happening right now. republicans on capitol hill searching for ways to end the administration's policy of separating families after illegal border crossings senator cruz put forth his ideas. >> the legislation that i'm filing this week would prohibit separating families, mandate that kids should stay with their parents. now, a number of congressional democrats have a proposal to do that as well, but the democrats' proposal, the they way want to do this is return to catch and release. i don't think the right answer is to return to catch and release. a gunman crashed a vehicle

into another vehicle outside walmart in alabama opening fire, killing two women before taking his own life authorities say the violence appears to be related to a domestic dispute and did not pose a wider danger. a virginia elementary school named after confederate soldier is now named after barack obama. that's your cnbc news update at this hour. back to you. >> thank you very much let's get back to today's market selloff. the dow down 314 points again, a lot of concerns about escalating trade war with china you say you're dr. worried now come on, it's all roses, isn't it gdp is growing, the trade stuff have you concerned >> many things i'm concerned about. for a while there, global economy was growing in a sink newsed way, but in the last few months, there's the eurozone and then the u.k. slowing down

two key elements of global growth remain u.s. and china, and now they are on the verge of a trade war. at the time, there's signs of a slowdown in global growth and emerging markets, and fed tightens higher and higher this is a moment of some degree of vulnerability >> verge of a trade war or 24 hours have we crossed a line in making it much more real >> some believe there's going to be an agreement between china and the united states. those within the u.s. and china is not just about the trade imbalance, jobs of the -- but there is a broader stretch revival in the u.s. and china now. for me, the new u.s. national security strategy says this is the united states, once achieved dominance in the industry, of the future, contain china. it's going to be to the just on trade, but also on technology, and on foreign direct investment and a broad economic and financial relationship it's going to get worse. >> the numbers are not that big right now, even if you take the

$200 billion figure today and try to add up what this means for the, you know, trillion dollar economies we're talking about. so, you know, you know that better than anybody. is your concern that those numbers will get larger or is your concern just about, you know, some sort of broader faceoff between the two countries? >> well, the numbers are not very large, but there's some impact on global supply chains, going to slow down the global trade that's behind the global economic growth that leads to some increase in the price level of the united states, but there are the two chinas that are important that affects negatively business and consumer confidence at a time there's revival in capital pending, an already redaction because of the trade announcement throughout the years, in march, and lately, of global equities of over a trillion dollar, and that's an impact, again, on business confidence and to the effects of consumption and capital spending challenge of transmission are several. >> might lead to stronger pressures on inflation what's your outlook anyway

>> inflation in the u.s. is going to gradually increase. that's what the fed now decided to go forward on for the year and go more than three times next year. at some point, the fed might hike too much compared to what happens to inflation, and everything given tightness of the labor market and the fact there's no gap, meaningful trade war with the u.s., it's not just the u.s. and china, steel aluminum tariffs, nafta, u.s. decide not to go for tpp, a bunch of other trade actions, this is a situation that's escalated right now, might imply some increase in the price level, and that's going to make life difficult for the fed because slower growth and high inflation -- >> what do you think of the deficit situation these days too? back to last cycle, it was a concern, kind of the capital account, deficit, how the u.s. was dealing with that. is the president right to be concerned about the size of our deficit? is it large because it's just a side effect of growth right now?

is it inflationary how do you think about that? >> first of all, the u.s. is running a large deficit because we spend more than we produce. from a macro economic, that is not the question it has to do with the fact the u.s. is overspending, and that's the reason we have a large current -- secondly, we are just past $2 trillion fiscal stimulus within the tax cut and spending increases, first time in peacetime and first time not in a recession. everything is equal with an increase or decrease in public savings for any given investment and private sieavings trade deficit gets worse one of the consequences of the unsustainable fiscal deficit is the trade situation gets worse and therefore they are the cause of the deficit, and this is driven by domestic economic policies the other factors at work is going to be that now we have an appreciation of the u.s. dollar, brought by the fiscal stimulus and tight money and appreciation

of the dollar, again, fiscal policy and monetary policies leads to a worsening of the trade balance, leading to more -- >> where is this going to end? >> the risk is a generalized trade war between the united states and the rest of the world, but the problem is not that trade practice of the rest of the world causing the deficit, economic policy of the united states are behind it. >> just back to the bigger picture, is this a good time for president trump to be trying to change the trade relationship with china given the strength of the u.s. economy, how low unemployment is or not >> well, in some sense, you say the opposite, worried about jobs and employment and wages, all the things doing better right now, while attacking china right now, and at a time the world is becoming more fragile, the fed is tightening, the dollar rising, stimulus is going to lead to greater economic growth, but by next year, stimulus is phased out and economy is going to slow down and end up in a trade war, implications with the trades account through the cognizance of the fact of the financial sectors, especially

the stock market, an economic slowdown we don't want, not desirable, and cannot afford >> we'll love it there thank very much. >> that's why he's dr. worry >> great to see you as always. we have got 24 minutes left of trade we are lower, but not at the lows of the day. down 1.25%, 315 points the low was down 425 points. half a percent for the others. tech stocks hit in the selloff. we'll tell you the names with the biggest declines on the washington headlines apple pulls in roughly 20% of the revenue from china, but a trade war is not hitting the iphone maker like you'd think. we'll explain why coming up. (indistinguishable muttering) that was awful. why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo!

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welcome back 20 minutes of trade left at the moment, down just over a percent for the dow, half a percent for the dow and s&p. industrials given linked to trade materials down there as well, down 2%. technology suffering to the tune of a percent telcos the best performing

sector utilities follow that. consumer staples with a bounceback being negative yesterday. let's zero in on the dow's top performers verizon tops the list, upgraded today to buy from hold by deutsche bank, and then johnson and johnson followed by pg, and walmart. consumer staples having a good day after suffering yesterday. second worst performing sector yesterday. bounces back today shares of apple jumped more than 50% since president trump took office in january 2017 could a looming trade war slow the stock down we'll discuss how the tech giant could be impacted. that is coming up next later, the nasdaq coming back now after previously being on pace for the worst day in nearly two months. breaking down the biggest movers coming up here on "closing bell," down a half percent and dow down 329 points. back in a couple [phone ringing]

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giddyup! kayak. search one and done. welcome back to the "closing bell," dow's down 315 points, six straight days of declines for the blue chips and hardest hit of the major averages, small caps positive. matel downgraded from buy to neutral. up 25% since the mid-march lows

and giving up 30% of the gain today. >> trade fears loom over silicon valley, president trump has reportedly told apple's tim cook, the tech giant won't have to worry much about tariffs. josh lipton has the story, josh? >> mainland china accounts for an estimated 15% of apple's annual revenue, and it assembles most of the iphones there, then shipped, of course, around the world, so investors might be worried here about whether apple now gets caught in the cross fire of the burgeoning trade war. trump administration, as you mentioned, told tim cook, they are not placing tariffs on iphones according to the "new york times," and just today, white house trade adviser had no knowledge of any such iphone exemption. regardless aside from tariffs, apple could face pressure in other ways for example, apple is now reportedly worried the chinese government causes delays in the supply chain in retaliation for the proposed tariffs

tim cook has advantage in the fight, though. apple controls 10% of the smart phone market there, and assembling the devices employs 1 million people chinese guys, back to you. >> but, josh, i guess if we look at the share price in recent sort of weeks and months and quarters when nthey reported, hw they do in china is absolutely key and a little tariff on the phone could change the needle in terms of which way the share price moves. >> i think you're slouabsolutely right, wilf. it's perfectly reasonable for traders and investors. they remember the history and know china has used apple before as a weapon in retaliation in 2014, china delayed approval of the iphone6 apple executives reportedly interpreted that as a kind of retaliation for the obama administration's decision to indict five chinese military hackers. the flipside to the coin, i checked in with gene munster of

luke ventures, selling apple for a long time. he doesn't see it. he thinks, in his words, it's a low probability. he believes apple takes any kind of material kick here, a number of reasons for that, but first and foremost, because he thinks apple does sell a popular device and employs a lot of chinese, guys guys >> thinking it is leverage, who is to say, oh, you know, tariff's back on you know, maybe it's popular enough with consumers, he wouldn't do that, but never know josh, thank you. we've got 13 minutes left of trade, and, certainly, there's been a trade effect weighing on markets, but you could expect it to be bigger, dow and s&p -- sorry, nasdaq and s&p down half a percent, and dow down 1.3% >> watching the selloff in the close. any bright spots hidden in the market wait until you see amazon and

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welcome back shares of software solution company red hat falling today on

the heels of a downgrade from market perform to outperform, and the firm cites peak valuati valuation, tough growth outlook for the move and trading down some 3%. >> let's look at a the nasdaq, though, lower throughout the session, but well off the lows, and some individual components doing well today uptown to bertha for a look at those. >> what we are seeing today is rotation here where we're coming out of the big cap tech that has been the winner going into biotech. the big loser, of course, the chips, seeing the biggest volume to the downside as well. a lot of the names that are leading the way down today, all have china exposure, jd.com giving back all gains it saw yesterday after the report of google pouring in some money that's the chinese online e-commerce ctrip, a travel site from china

as well, but also, nxp, a $47 billion merger that needs qualcom. from the chinese with will that be held up longer because of the trade dispute skyworks, 80% of the revenue comes from china on the flip side, there's micron, which, today, bucks the trend in the chips, reporting earnings tomorrow. it's up 21% since this whole china tariff war began at the end of february, even as it has, about half of the revenues coming from china, and the standouts today are the cloud players who got netflix getting upped over $400, and intuit upped with a new price target above $240 alexa, once again, is amazon's all-time high. back to you.

i know you don't take to her, wilf, but she can tell you things from cnbc, some great things she'll do for you >> well, the cnbc market update is definitely the best part >> reason enough to get it >> exactly >> you said there are pharmacies who do this dropoff already, the prescription dropoff already for free, the mom and pops >> yeah. my mom's around the corner from where she lives at the senior center, and they do it it's one of the ways they compete against the big chains certainly, the pbms do mail order for you. i imagine -- >> true. >> i imagine if this catches on for cvs they look to do some sort of thing like a lot of the other big retailers have to get some sort of delivery service to bring costs down and make it more reasonable for their customers. >> and in the meantime, all the neighborhood places, i'm saying, you know, get a kid and a car and start making the rounds to stay competitive

thank you very much. coming up next, we'll be back with the closing countdown, six minutes of trade left. >> after the bell, looking at companies with the biggest revenue exposure to china. keep it here u'ating cnbc, first in business worldwide 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.

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minutes left of the close. before we do the count down, gordon is on the floor here. surprised there's not more of a selloff on trade concerns? >> not in a horrific way so i think we settled down and stabilized nicely into the bell. >> industrials pick up tomorrow? >> yeah. seems like they've been, you know, just rotating, and so i would suspect they'll behave themselves >> dollar strength today, increasing concern if it continues? >> well, you know, it's all about the trade war at that point when you talk about the dollar, we'll see how currencies go tomorrow. >> you like salas goal as well >> i did >> watching the world cup here, but there's always a screen there, nice to see, let's look at charts. firstly, intraday, yeah, a bad day today, but look at the steady improvements throughout the day, so the trade concerns weighed a lot at the open. they weighed much more in asian trade, of course, shanghai composite down 3.8%, and the close, really, not too bad at

all, s&p down half a percent, steady improvement throughout the day, and all the individual indexes, you see the russell suffering much less because domestic focus, and dow down healthy percent. here are the sectors as bob discusses them as you would expect. industrials suffering quite significantly. telcos bounced back as well as consumer staples and utilities it's boring and domestic sectors whereas industrials suffer >> industrials, materials, and semiconductors, all the sectors the weakest. well off of the lows in fact, on the s&p, closing at the highs of the day, down 10 points, were county more than twice that russell 2,000 a moment ago turned positive. again, we're in the space where when we get these -- when the trade talk is really negative and the markets are down, most of the decline is almost invariably in the first hour, and that's what happened today very familiar pattern on bad

trading news days. the market bottoms fairly early on i think it's important to note some of the logistics names. notably weak companies like expediters, robertson, madson, all the companies in the transimportapo. they move stuff around, some in the united states, some all over the world. they are among the weakest stocks seen today. i think, again, the key stock to watch? fedex at 4:15 reporting earnings, and there's a conference call at 5:00 what i'm interested in hearing. >> there's been trade days where the nasdaq outperformed, not much today, and netflix is a part of that having a strong day offsetting the price >> that's right. there's certain sectors holing up besides some of the fang names. for example, oil stocks, which you think are down because oil is down. a lot of names in the u.s. shale sector, your apache and eog up today. people anticipated it's strong

there, and not selling names off as impressively. energy is not a huge market mover. >> we are approaching close, bob, down 292 points on the dow, low of the day was 419 well off the low, but the dow is the underperformer, down over a personality, s&p and nasdaq down like half a percent. ringing the bell is brand, and lgi homes at the nasdaq. that's all for the first hour. kelly's got the second thank you, wilf, and welcome to "closing bell", everyone, i'm kelly evans, dow down 300 points, but better than when we were down 400 after the trump administration said it was looking at more tariffs on china, up to $200 billion worth of goods this time the blue chips hit hardest with the 1% drop, 289 points lower on the close, just under 24,700 the s&p, broad market, down .4%

of 1% today. 2762 nasdaq held up even a little better netflix and amazon, outperformers. shed about .25% to 7725 today. russell added a point on the bell to 1693 we got two big names reporting earnings after the bell today. josh lipton has results from oracle seema covering fedex bob xcited for that. see you guys in a couple minutes. joining me on the panel is the mikes, michael season aantoli ad michael block, and vilary jo joining us as well welcome, everybody boeing the biggest decliner as often happens in the trade issues boeing down 4% today nearly, over in the s&p, assurant the

winner and mgm the loser is this emblematic of what happens? not nearly as scary as it felt this morning and people all last hour telling us this whole trade spat looks worse and worse for china than the u.s >> if you keep score by whose stock market is down more, sure, china looks relatively bad i don't think that investors love the entire effort, but that does not matter. market can do math the market can inflict pain where it belongs, and guess what, that probably is boeing up 80% over 12 months >> this does not make sense to me i understand they have a big business in china, but do you think it's because of the exposure, adding dollars and cents or saying they are up so much >> high up so much, a profile way for china to retaliate there was a massive premium on perceived lock-tight pipeline

that was not going to change illusion of predictability in boeing's forward earnings got you 90% gain in 12 months, and now it's 70% gain in 12 months i think the markets three days in a row had a big intraday comeback at 4:00, new york time, that's when only americans are buying stocks, right? the rest of the world started selling before we get to work. that's the dynamic, and tomorrow, it changes >> block, what do you think? >> yeah. i notice a rally every day, what is called a professional close real money's coming in, buying the end of the day here, meaning as real money goes to work, all the nonsense gets done with the overnight shatter. the other thing over my left shoulder is the russell 2,000, again, closing in the green. >> yes >> looks extended, yet it keeps going. what is this is it small companies insulated from trade here? >> for the russell - >> yeah, absolutely, worried about trade and the other things, and russell made a record close

>> that's what mike said last hour which was we talk about market, quote-on-quote, concerned about this, it's the multinationals, the internationally exposed companies, not the american ones that are just going about their day. >> yeah. talking about boeing, the performance year to date, what i tell you is on a day like this, industrials portfolio managers in general made profit this, using that as an automatic teller machine, sell when you can, not when you have to. >> buyer of boeing or caterpill caterpillar? >> i buy dips in general, but not industries more shoes will drop boeing, we heard, china was not going to include airplanes on its blacklist in terms of tariffs. could be another shoe to drop here it's worrying right now. i'm not big on the chinese economy either i think there's adjustment that needs to happen there. they are not the stocks i want to own >> sure. we saw the chinese names as well hit even in the u.s. session today. lamar, what are you buying and selling in this kind of market

>> well, we're focusing on what we generally focus on, the smaller caps, more the russell, the u.s. predominantly u.s. names, seeing a lot of interesting opportunities where there's still, you know, you saw today, especially this morning, the markets trading off, and a lot of things that have no exposure whatsoever to trade, traded off with it, creating a lot of interesting opportunities. >> yeah. i see your picks this, progressive, and we briefly will get to the oracle earnings now josh >> oracle reporting eps here of .99, versus expectations of .94 revenue 11.26 billion, the street looked for 11.2 billion other metrics, cloud services and license support revenue, that was up 8% to 6.8 billion. they say cloud license and on premise license down 5% to 2.5 billion. waiting now for the guidance on the call when we expect to see

the ceo talk about that q1 cloud revenue gunidance that starts at 5:00 p.m. eastern. we're on it. kelly, back to you >> thank you, josh any early standouts, stock's up 2.5% >> it's a big laggard as a stock in software and cloud play so i think it's looking like relief based on the headlines being a beat >> poor stepchild like josh pointed out. we have to hear cloud revenue guidance, falling out, had the one cheat and it's just the truth, stock has a big hill to climb here see what they can do >> all right how do you feel, show what happened with netflix and amazon today. michael block, what do you think about the names? juggernauts that just keep going. netflix through $400 >> advising folks who own large cap tech stocks, a champion of the tech stocks for a long time. i said at the least, buy cheap protection here, skew, trim, trade around it. i don't think -- i think this run is unwarranted

boeing was an atm. these stocks too, i get it, you want growth? go to the big tech stocks. we'll hit a wall sooner or later. you're not going to want to be all in on these things >> they don't like that argument, sooner or later, in the meantime, i'll collect the check. >> not saying cut short, just trim >> i hear ya the companies that have the biggest exposure, dom, talking revenue as we learn who, you know, who is the market focused on for the right reasons and who is swept along with it >> we know, kelly, these are the names to focus on because over the course of the past six to nine months, even a year as trade talks come to a head, these are the stocks that in real life show us volatility around trade-related headlines these are the numbers. not every s&p 500 company roberts sales on a regional country by country basis, but those that do, folks that look at the numbers, aggregate them

together, and these are big names you all recognize as having decent sized exposure in terms of business to china you mentioned industrials. starting with those. they are, of course, the well-known ones with heavy machinery aspects china uses, john deere, deere and company with an 8% sales exposure to the region caterpillar, 9% exposure moving up the chain here, you mentioned boeing, biggest laggard in the dow in terms of point drops, that's a huge one over 11% of its revenues come from there 3m, 13% of the sales from china, and ao smith, you don't know the name, but a huge maker of water heaters and boilers, a third of the business is there. not just the industrials there are consumer names that you have to watch as well. for instance, nike, 12% of the sales profile from china tiffany and company, 13% there tapestry, formally coach, 14%, and starbucks, mcdonald's at 15% both and, of course, we cannot

forget apple those particular profiles there, iphones, ipads, everything else, 20% of the business from the greater china region as we talk about the battlegrounds for these particular trade headlines, these are some of the stocks that could be the ones the most volatile on the downside, and, of course, on the upside if things resolve in some way, shape, or form back to you. >> yeah. dom, thank you very much it's a good reminder, we don't talk about consumer companies as much as the industrial ones, mike, why is that? >> i think it's because it doesn't feel the same way in terms of exports, in terms of i'm going to cancel this series of orders. i'm going to say those things, big tickets rarely bought capital goods are that much more expensive. >> imagine if china said, okay, starbucks, you're out. >> it's going to be once every 15 days you open a store now >> they wouldn't because it upsets the chinese more than - >> there's a level of why do we want to disrupt the consumer experience trying to cultivate middle class consumer culture over there. i don't think china's looking

for ways to escalate in that fashion. or maybing keeping that in reserve. the biggest issue is not the product by product impact, but trying to say, fine, let currency devalue let it go. see how you deal with that >> we'll -- it needs to happen so they clean up the credit mess they have there. what's it mean for the consumers? the funny thing is you hear -- >> the u.s. consumer >> ya u.eah, u.s >> if china devalues, what we buy from them is cheaper sounds great >> i meant the chinese consumer. >> okay. >> double talking me, evans. >> just trying to follow >> no, no. we're on the same page now >> that's the thing about all of this back and forth is trying to figure out is the market - >> yes >> justified in reactions, and to the point about the chinese consumer, if they do something that hurts chinese consumer, it's self-defeating. >> the long view here, you know, i think the trade issues will be

resolved big fan of free trade. maybe i'm talking heart here, but i think there's a method to the madness. now, if you go out long term, thinking about how you want to play china, let's not forget gdp there, the consumption as percentage of it lags behind the u.s. and some of the western european economies that's the way of the future what's funny is the companies like starbucks and apple, two years ago, no trade wars going on, all you hear about is china, china, china go to consumer product conferences, everyone was a china play, every company a china play now it's under the rug and it's a.i. plays including starbucks longer term, it plays out and works, and i'm excited for right now, there's a lot of fog, of course >> lamar, when you said, you know, focussed on small caps and small caps rallied today, they are not the ones necessarily who are out there the last couple years saying this is our china, you know, china is basically bailing out the growth strategy, right? >> that's exactly right. the bulk of our portfolio is

focused on the u.s while they have -- some lagged over the last couple years because they were not able to get out there and start, you know, going raw, raw, all about china, right now, they are looking to be positioned well in the event there is, you know, some further escalation. >> and, lamar, in the u.s., the only thing i wonder because you know small caps better than anybody, everybody trades them, look, they don't have the international exposure u.s. economy, again, goldman second quarter 4% gdp number looks great. too over simplified, though? we know there's going to be a lot of small companies ultimately affected by the tariffs. >> sure. no we can't globally just buy it and go home. it's stock to stock. you mentioned our picks is progressive, actually a little larger than a lot of the companies in the portfolio, but look at progressive, they have no exposure to china whatsoever. they are growing

they actually benefit, we got under the china trade so much, lost track of the fact we're in a interest market with a real impact as well when you find a company that is doing good on both metrics, that's what you look into. that's one of the ones trading 11 times our number for next year, so r ythere are interesting opportunities, just have to look for them. >> last word, block. >> yeah. one thing to think about, companies like that sound great u.s. plays, but watch to see what the trade winds are bringing us. let's take the home builders, for example. guy and tim yesterday talked about that home building number, affected by canadian lumber prices now, a year ago, the national association of home builders estimated tariffs on canadian lumber costs an extra $1200 per house. that number, yesterday, is $9,000 >> wow >> huge effect that's 4.5% of the median home by price little things to watch

personally, home builders may be hated and beaten up here one of the first to own on a further selloff of the issue >> that's a tough one this year. >> yeah. >> fundamentals look good, but still do not trade well. better let us know, okay >> damn right. >> breaking news on starbucks, as a matter of fact, kate rogers, what's going on? >> kelly, quite a bit here from starbucks. kicking off, they now lowered guidance on comp store growth for the third quarter. they anticipated 1% global comps. this was 3% projections for q3 closing 150 underperforming stores in densely penetrated areas in markets fiscal year 2019 up from fifth annually they tripled the number. announced they are going to be returning approximately $25 billion in cash to shareholders in the form of buybacks and dividends through fiscal year

2020 and also upping their dividends to .36 per share, payable august 24th, 2018, and announcing that they are planning to partner with an external consultant to drive speed and identify areas of opportunity. kevin johnson will present at the conference in boston this afternoon. releasing this information we are going through it. big takeaways here, lowered their comp growth projections for q3 2018 and closing 150 stores in the densely penetrated markets in 2019. the stock down 3%. bringing you headlines as we go through them back over to you >> kate, they are doing buybacks, big number there, too, so capital returns >> yes 25 billion buybacks and dividends in 2020. >> thank you very much kate rogers there. shares down 3% on this news.

don't miss our interview with kevin johnson at 9:00 a.m. tomorrow on "squawk on the street." mike, listen, you can say, oh, great, not opening as many stores, returning cash, love this why are the shares down 3% >> acknowledgement that they could not get comp sales going again on the current store base. essentially, kind of plays into its -- it's a concession to abiding fears in the north american businesses that said they are cannibalizing, overpenetrated, and raising dividends is great, 2.5% yield basically on current share price, another acknowledgement of maturity of the business. it does not mean it's -- you know, it's not going to produce results down the road in terms of rationalizing store base, but i think it's a nod in the direction of the doubters. >> michael block, exactly what you said a moment ago, the companies said, okay, well, you know, we can grow in china, and now there's clouds over that, but it's amazing, saying the u.s., third quarter comps would be up 1%

1% with starbucks, not that it's not happened before, but sayi i tell us if 5% is achievable. >> they said, wow, too many, i never thought that in any event, i think what's interesting here is this the last beige book, we learned consumer companies in general, retailers, have a better time, in sense, recent months, dictating price. starbucks dictates price, you want the coffee? pay what they ask. it's the business going, we have to cut this down, maybe we need to give short term pain here retransfer, return money to shareholders, retail stocks have been getting a pass. a lot is because they dictate price. it's starbucks playing into the story well it's interesting let's see where it goes. it's not, oh, enough of a dip to say it's exciting. it's not i think they are headed in the right direction showing bravery on their part to make that admission and focus on what they are good at. >> yeah. too many starbucks, lamar?

>> do we have too many we have inf we have too many there's good competition with the local companies. >> i wonder about that as well the new specialty startup shops. anyway, guys, thank you. lamar, michael block joining us, starbucks delivered unexpected news they are closing 150 stores, opening fewer or slower pace of stores in 2019, third quarter comps, mike, not about being -- well, it is, but this is existing locations growing 1% >> that's right. >> bomb shell. >> a little bit. no without, remember, the company also recently agreed to sell retail grocery sold coffee business >> that's right. >> trying to rationalize the business maybe trying to take care of some deferred decisions, you

know, now, howard schultz exits the scene, cleaning the slate. >> good point. focusing on that shares down a couple points after hours. meanwhile, tech a big underperformer in today's selloff. discussing whether the sector is in trouble from the tariff fight with china, plus, "fast money" says whether there's better investing opportunities in the u.s. or rest of the world. we want to hear from you reach out to the show on twitter, facebook, or e-mail us at closingbell@cnbc.com. back after this. 's not theirs, . the new rx 350l with three rows for seven passengers. lease the 2018 rx 350l and rx 350l awd for these terms. experience amazing at your lexus dealer.

welcome back, earnings from fedex came out, we have the numbers and stock reaction >> kelly, shares of fedex higher here on a better than expected earnings report from fedex 5.91 adjusted on bottom line which came in above consensus. revenue at 17.3 billion. wall street looked for 17.25 billion. also, reporting out ground average package up 6%. for guidance, sees earnings for 2019 coming in above consensus, and for fiscal 2019, fedex targeted growth of approximately 9%, which is also above analysts' estimates. on the conference call, we'll look for comments from the ceo,

fred smith, on impact of oil prices, earnings, profits, as well as earnings gientuidance a investments, a big story as e-commerce trends higher and impact of trades no talk of trade in the earnings release, but looking for that in the conference call. shares higher fractionally in after hours trade. kelly? >> thank you watching it. mike, the stock trying to figure out what to make of this >> yeah. the stock is still been a good performer. raised guidance justifies the stock right now. looking at the mid point of the fiscal year forward guidance keeps stock at 15 times multiple, which is, you know - >> not crazy >> it's not crazy, but a little bit higher than fedex has traded in years past, but 9% growth is good >> stocks staged off a big time with the selloff, dow down 400 points at one point. some of the areas in particular in tech. >> at one point, the chip sector

was down nearly 3%, closed down just over 1% well off the lows. some of the biggest decliners were the stocks that have some of the biggest exposure. gorvo, skyworks 80% revenue exposure to china. qualcomm and nxp, a merger pending that needs to get blessed by the chinese government could that all get held up now in the midst of this trade tip on the other hand, you have a company that's not in china, netflix. today, hitting a fresh all-time high kind of doing the opposite of what it did yesterday, fang names moved higher yesterday, and netflix held back, so we seem to have a rotation into that name today, also, had some love from analysts today that raised its price target, the stock today closing near above $400 a share, and biotech another area with rotation as well good news coming for muscular

dystrophy, casting a halo over the stocks, and sector, itself, underperformed chips year to date back to you. >> thank you very much joining us now to discuss the impact of the tariffs on tech is cnbc contributor from the "new york times" ed lee, and -- [ inaudible >> looking at semiconductors in particular, looking to apply tariffs, where are the biggest vulnerabilities? >> we have the chart up earlier, netflix going up, and these are companies that basically gave up on china, so these are not really exposed, and they are sort of seeing sort of the bump up from that, but i think there's a bigger picture to look at, which is, you know, retaliation does not come in the form of tariffs. it could come in the term of bureaucracy, right so if netflixmen menwants in ch invest in a chinese company, google invested in jd.com, and beijing could say, we don't like

the deal we need to figure out a way that, you know, to put that on ice, that's another way the things happen, and it's not just china. i mean, with the eu, with canada, with mexico, even, like, all the other areas that facebook, google are trying to grow, and if they can't grow the areas because there's just this sort of geopolitical mess going on, it's harder to get visibility in what they do in the next quarter out >> and as analysts here look through the companies, are you marking them down for this how does that work >> not really. i believe china needs u.s. semiconductors they have a 2025 plan to be the leader in 5g, autonomous driving, artificial intelligence they're not getting there without chips from intel, nvidia and companies like applied materials. i'm hopeful. i think the industry's hopeful this will blow over because at least from a component standpoint as it relates to semiconductors, seems like the u.s. has an upper hand >> and, you know, even beyond

the tift for taft, product line basis, trade slowdown, there's a carrot dpaangling out there somehow acknowledging or having china acknowledge intellectual property theft may be more careful and play by the rules in the area tech companies would love to see that what form might that even take i mean, just going to be, yeah, we're going to stop demanding you do a joint venture, stop demanding work process ip, they are not paying back license fees, though, for whatever technology they have on hand >> license fees, but the media piracy that's happened in china for decades at this point. a lot of the stuff, i don't know that we can put the genie back in the bottle on that one. there's concessions that used to ring out of the situations, but, you know, so murky for so long that companies even like apple developed all the parts, big supply chain come from china you can see bureaucratic retaliation as i said earlier

about, you know, having these things come through or not so that's another factor not explored that the calculation in trade is much more complicated of you tax me this, i tax you that >> romit, we have to go, but will intel move operations out of china >> i don't think so. intel worked extremely well with china for decades, and, you know, they have one assembly and test facility, a memory facility there, china a season important market for them. pcs are consumed in china. key area for them to grow. i believe -- i believe that intel continues to work closely with china >> all right we'll see as the companies deal with the turmoil guys, thank you, romit and ed lee. a new trade war or fears about it sparking red in tech and wall street. down 300 at the bell bob pisani was in the middle of

the action, bob? >> important thing here, kelly, three days in a row, there's been trade worries, and three days in a row, look at the s&p bottom in the first hour, and we have risen throughout the day. this is a consistent pattern that we've been seeing russell even ended the day positively it's the same sectors being affected, industrials, take a look, industrials, materials, and semiconductors consistently are the sectors that are hit the most here. all of them came off the their lows, but not dramatically look at the dow laggards today boeing was 338 another the lows, closing 341, and united technologies, put the stocks together, half of the declines in the dow industrials damage is concentrated in small areas of industrials, materials, and some of the semiconductors names. take a look at the transportation sector, notably weakness there, and here, again, logistics companies, the

companies that move stuff around the world like robinson and expediters, and other names in there in that group, all of them down today on concerns that the trade would interrupt flow of business overall that's what the logistics companies do fedex you heard a moment ago had good guidance. unfortunately, no comment on how the trade wars might be impacting them, but i expect a lot of that in the 5:00 p.m. conference call, and, of course, we monitor that. guys, back to you. >> bob, great stuff, thank you despite the big selloff, s&p still higher by 3% for the year. compare that with emerging markets, down across the board about 7% joining us now to talk about whether here or aboard is a better buy for investors, "fast money" traders, guy and pete, welcome, gentlemen, and, you know, that's one right answer here, and it's america, right, guy? >> ask pete. he says that all the time. yes. >> yes >> mixed question. >> easy. >> easy. so, look, you say, what's the

best place to be emerging markets europe my answer is this. i'm not that smart i proven that every day for 12 years. it's clear lly obvious as i'm standing here today. what i know is this. there are companies if you want to have international exposure, there's companies in the united states to get you done what's one of them writing this on the board. look at this, nflx netflix. >> oh. >> i'll do this. >> true. >> underlining it. look at their international growth get a great u.s. company with international growth nike is another name coming to mind >> so you want the -- so, guy, you -- >> clear, by the way clear. >> secular, international growth story. we were talking all day about, well, what happens if you want to hide from a slowdown overseas, pete, what then? >> i know what guy was going after talking about the stuff just now nike, of course, we talked about that for a while now on the show we talked about the fact that it's no longer just a north american story

this is truly a story that's growing internationally. now, you got to understand, that's why i would always rather be in a usa type stock, nike and why that one because i know the transparency what's in their books. i understand that company completely they are out this. we can see that. because of that, we know how much exposure they have, whether that means it's into china, whether it's going to japan, whether it's going down to south america, wherever it may be, and whichever ones have that exposure, if kbroyou're afraid f the tariffs, that's going to be -- that would be a name that sells off hard if this continues to push hard, but i don't think that's going to happen >> and you'd be a buyer, sounds like, even if it did >> i own nike right now. i love it. >> all right >> it's going higher >> all right, you got a swoosh to show us >> oh needs to curve more. >> can you -- look at these -- i mean, look at these things >> that's -- that's size 16. >> size 16 wing tip swoosh

>> nice. >> craziest thing, like herman munster. >> you have bigger feet than my dad. >> i know you don't know who that is. >> i know who it is. >> my cousin vinny mama named him clay. >> this is going off the rails now. we'll see you at the top of the hour, guy, pete. >> sanitary you'd say. >> i'm not even going there. catch all "fast money" at 5:00 p.m. joined by former chair and ceo of chrysler saying markets overreacted to the trade war and they'll explain why. time for a news update >> speaking of big boots, angela ameri merkel, the chancellor contradicted president trump claiming immigration caused crime to skyrocket in germany by 10%. she clarified her country's crime rate actually dropped

nearly 10% in 2017 border residents from new mexico and west texas gathered in el paso to march against family separations participants demonstrated with signs chanting "free our kids" ford motor company anounnounced plans to resurrect the train station. set to be completed in 2022 bringing 5,000 employees to the historic immigrant neighborhood. >> we've already been working in investing in new kinds of businesses, committed to making this vision a reality from radar and mapping technologies to artificial intelligence platforms. one of the greatest things about detroit right now is its vibrant, fun, startup culture. that's your cnbc news update at this time kelly, back to you >> all right thank you. coming up, we'll look at how the threat of new tariffs on china could cause trouble for u.s. auto makers and how china might retaliate against the u.s back in two. s and water damage..

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jim cramer sounding off on weak guidance learned from starbucks minutes ago. jim said he thinks starbucks should be lower. down a couple percent after market he thinks it should be lower than that because of that 1% comment told abo futor q3. jim will join us in a minute we'll be right back.

a lot of news from starbucks earlier this hour. shares down 3%, company issued weak same store sales guidance with a host of other announcements. jim cramer says shares should be lower after the 1% comps hit in

the third quarter. we got jim, jim, thank you, like you're supposed to be doing your show you got -- >> kelly, i've always have time for you because i love the show. >> we saw the tweet, and this is extraordinary, right i mean, you could -- i don't know what do you think >> i mean, there's -- when you are looking for 3% comp store growth, which is still below mcdonald's, you can just justify the superior price turnings multiple starbucks had ratchet down 1%, okay, they are 13 buys in the stock right now most of the buys believed 2.9% comp store growth. if you think they upgrade this, you're nuts. people are going to downgrade it, you're probably right. the stock sells at a high multiple dunkin' hit a 52-week high today and comp sales are worse nthan star bucks i want a growth company. >> amid this, they said, look,

we're going to close 150 stores. it's going to be slower store growth in the u.s. in 2019, do a 20% dividend hike, return 25 billion to shareholders. listen, i can see a universe in which the investors go, great, do they think starbucks is still a growth story aren't they clearing the air in a way in. >> well, yes are they admitting what a lot of us knew? i think so at the same time, when we always hope that a company is either run out of room that's been telling us they are still a long runway, and i feel like starbucks, i know that this is a -- it's a very prickly situation, but credibility needs rebuilt here you can't have declines in samestore sales done mid-quarter, where out of nowhere, one, i mean, one is not great, and on top of that the fact that who knows what's going to happen in china we can say they have the greatest relationship of any american company in china, which they doo >> exactly >> who knows what's going to happen i mean, we got -

>> right >> a whole different dynamic with the president right now >> well, that's what we said earlier. if you were china here and really wanted to inflict -- maybe, like we said, don't want to hurt their consumers who want the starbucks, but, jim, we know howard schultz now is stepping down from the company. that was just announced. >> right >> is this the right way the ge thing where people say the new people need to get in there and say no >> don't ever -- >> you know -- >> you know, yeah, you can't ever use ge in the same sentence of anything other than perhaps a t-rex, okay. that's a direct dinosaur reference because it's a dinosaur no, starbucks is just a situation where maybe the love affair with coffee is not great. dunkin' donuts, negative comp, and the guys are not doing well. mcdonald's coffee is doing well. you have, kelly, a stock that sells at 18, 19 times earnings go to the 52-week low. no reason to think it's a d disgrace

sometimes businesses slow. mcdonald's slowed down before easter brook came in do i have a man crush on him as some say i think he's good at his job kevin johnson has his work cut out. has to be technology, there's more at work here than being just a coffee shop >> yeah. that's what i wonder peak coffee shop u.s. and what does starbucks, if they want to be growth again, how do you do that you can't turn back time >> no, look, that's when i heard closing stores, that's the first thing i thought of is that we reached a peak too many stump towns and boutique coffees, and, you know, look, i mean, i -- it -- it does happen i mean, think about it like this do you know when i was growing up, gin companies did billions of cases of gin, and now they don't exist. who knows what happens with the american public. the american public seems to have decided, you know what? maybe we've got all the coffee

we need. that's why china keeps being emphasized and emphasized. you know, suddenly, you wake up in china, and there's an article that says the pre says, you know, we're not happy with starbucks. could that happen? anything could we're in a different time. >> anything can happen >> we're in a different time the government says we don't want you buying apple phones anymore, so why do we want them to buy a triple venti skim wet it's easy. those buying starbucks say it's the bottom what i want to see is the end of the trajectory down, and any sign that that is the case - >> all right >> i'm not in it for a dividend. if i want a dividendividend, i o verizon. >> that's not a play >> just a second >> now that you mentioned verizon. >> the jurassic era there. >> you said gin and tonic.

>> 2 million cases back then remember jb? >> no. >> remember the browns >> no. >> anything can happen >> jim, thank you. really appreciate you -- >> the brown liquors, other than bullet i'm not kidding. >> tequila >> 23% tequila, that's my wheel house. you know all about it. >> exactly catch more jim coming up at 6:00 p.m. speaking of the ceo of oil and gas today, as a matter of fact, and tomorrow, exclusive interview with kevin johnson 9:00 a.m. at "squawk on the street," final comment, mike >> jim said 18 pe stock, that's a lot. >> implies what? >> just, like, 23 times forward now, doesn't mean you go down the full amount to the 18, but i think that's the adjustment psychologically to make. >> wow >> with a new ceo, they reset,

you know, go back to - >> clear the deck. reset the stock price too. >> yeah. might not be the worst think in the world. >> all right we'll watch that markets also sold off broadly today as the president threatened more tariffs on china. ulat retaliatory actions they cod take, starbucks or otherwise. that's after the break at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

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on chinese goods how long will it take the tariffs into effect, kayla >> the tariffs announced by president trump previously on steel aaluminum and chinese tech imports were the results of studies and meetings of dozen government among government agencies and this set you mentioned will be no difference in the next two weeks, they will announce chinese investment and they may move forward with the $30 billion in tariffs that first round remember those were announced march 22nd, three months ago an additional $16 become in tariffs wouldn't take place until july 31st, nearly two months after the products on the list were published. >> that brings us to a new set of tariffs on $200 billion in chinese imports the council of economic advisers had been tasked to assemble a list of products they have to get comments on it, publish it hold a hearing, revise the list

and set a date for the tariffs to be implemented. they say they could blunt the impact of what the white house wants to do here say, quote, the u.s. will have to present a triggering issue and go through a notice and comments period on the proposed tariffs. this means no matter how fast trump moves, china will always be able to move faster of course, it is a traditional check and balance here in the u.s. against impulsive decisions. but that doesn't exist in china, not to mention one other thing that doesn't exist in china, congress to potentially provide a backlash, which we've seen when tariff policy comes out, kelly. >> yeah, no, it's much more straight forward, shall we say there, thank you very much china is planning to retaliate against new tariffs, but it may come in the form of boycotts rather than fresh tariffs on its own. what are we talking about?

>> reporter: boycotting chinese goods they have used in the past a chinese boycott of mangoes and bananas from the philippines, salmon from norway over a human rights dispute and a wide ranging unboycott from south korean goods over cars and overan anti-michigan device china saw as a threat to its own security the boycott was so effective that korean car makers hyundai and kia reported a notable decline in sales plus, fewer chinese travel to south korea, which hurts the tourism industry a china expert says, if president trump makes good on his 10% tariff on $200 billion in chinese goods, a boycotted would be one likely element in a chinese response, given the high profile and popularity of many american brands and corporations in china, like starbucks, wal-mart, apple and nike now the implementation of a boycott would likely be administered through the use of

social media platforms, like weibo, they have used in the past to whip up a boycott campaign >> it's interesting the way those examples are, we may experience as well general motors and ford falling told after the president said he was prepared to impose mortarives on china. phil lebeau is in the port of charleston with what this could mean for the auto makers, phil. >> reporter: kelly, if you want to see what's going on with foreign trade with autos in the u.s., this is a perfect spot to be i am surrounded by bmws, suchs, many on ships like that headed over to china. what's at ake stas trades tensions escalate ween the u.s. and china? that story when "closing bell" returns. zblmpb

zblmpbls. shares of gm and ford getting hit hard today they were down 2%. phil lebeau is live in charleston with the potential impact on our auto sector. >> reporter: that ship back there is taking 1400 bmw/suvs over to china. it will take a couple weeks to get there. they are constantly shipping vehicles here in charleston over to china him and bmw, mercedes, tesla, those are the three companies when you look at these in terms of the vehicles, the companies exporting the most number of vehicles to china this year, nearly 90,000 for bmw. remember when you go to bmw plant in star tan burg, south carolina all say that build are suvs. the good news for these guys is that china lowered the tariff for vehicles built in the u.s. and september to china down to

10%. remember, kelly, there were retaliatory tariffs they announced for certain hybrid vehicles, bumping them up another 25%. that itself concern when it comes to the auto trade. could those tariffs, once again, be ratcheted up? >> that's what seven wondering phil, thank you in sunny charleston, south carolina a sell-off on wall street today. we will get a check on the after hours movers right after this. you're gonna do great!

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six straight days down for the dow now, starbucks down after hours. that discuss it for the "closing bell, everybody" "fast money starts right now >> "fast money" start right now the traders are pete najerian, steve grasso, guy adami. both are reporting earnings, those conferences are kick off right now. check out the big after hours movers, starbucks, it is dialing back its gross prospects pete here says the name is a screaming buy. he will explain why. we start with those trade wars