still obtaining right now, but it is a nasty day with technology bearing the brunt of it >> i think the administration, they talk so much when the market went up and had this incredible run, and the economy's doing so well. they have to address questions how much pain they are willing to tolerate here on the market and economy on trade >> particularly if it continues. >> that's all for us here on "power lunch," and "closing bell" starts right now hello, everyone, i'm wilfred frost at the new york stock exchange stocks sell off as trade fears with china elevate once again. president trump's top trade adviser will join us live. we're at the new york stock exchange, and china's trade tensions could have an unintended consequence, the ipo market i'll explain ahead >> we're at cnbc headquarters, and the latest of the all-american economics survey results are out, and one sign in particular could be a bullish one for the president. carnival stocks crushed.

the ceo has an exclusive interview with us as the "closing bell" starts right now. ♪ hi, every, welcome to the "closing bell," those stories in a moment, but what a way to kick off the week here, dow down 445. down to -- >> just about to the lows. 496. >> wow this is all happening, gotten worse throughout the session of course, an hour to go now, and we'll see if we continue to slide. nasdaq worst performer down 2.6% dow down 1 po.8%. trade contentions continuing, dow on track for the lowest since may now. >> one theme about trade, international stocks selling off more, and today is u.s. is playing catchup. >> not just overnight, as you know, but the whole last period coming into this >> or catch down, not catch up

we have all the details on the elevating trade disputes from washington for us today, kayla >> reporter: the principals on trade at the white house are meeting this week to timize a -- finalize a plan that's intended to limit technology. there's still some divisions, among administration officials, on this scope of the limits, on the ownership levels they should apply, and a potential look at outbound u.s. investment into china. we see these administration officials, what they decide over the course of the week the white house confirmed larry kudlow is back at work after suffering a heart attack a couple weeks ago we'll see if that shifts the dynamic in the room, ideologically at all they are implemented without comment from companies or stake holders. that's interesting too this comes just a few days ago, china's president warned 20 western ceos they will not turn the other cheek when it comes to

fighting back against the u.s. the administration has said that its goal is to lower tariff barriers worldwide, to get to a zero ter rir worariff world, bus there's increased tariffs worldwide in thentime. that's something that goldman sach's chief economist warned of he said the proposed tariffs on the table only have a modest effect on growth worldwide only about 0.1 to 0.2% in a detraction to global gdp he did say the risk lies in escalation he said a multilateral trade war in which everyone imposes a tariff on everyone else leads to higher world inflation, tighter monetary policy, and slower growth the negative effects would be amplified if equity prices dropped around the world i'm told by sources that from march 22nd when this deadline of this saturday was put in place for the treasury department to

look at investment restrictions on china, the treasury has been keeping a close eye on what the u.s. stock market says in response we'll see whether they are taking today's move into account as well. guys, back to you. >> yeah, and, kayla, there's been a lot of different information out of the white house today with secretary mnuchin saying it is not just about china, but everybody i don't know that's reassuring the markets, but thinking, wait, this is broader than we realize. >> reporter: certainly, the mandate of treasury is broader than just looking at china and purview of the current legislation pending on capitol hill looking at foreign investment into the u.s. is broader than just china, but what they are doing this week is intended to look specifically at china i mean, there's ands, ifs, or butts about it that's what the white house said back in march. that's what the white house said

back in may. while they take an up bre umbre approach, the intentions are to hit china. >> we'll talk with peter navarrro in a couple minutes time, asking him everything about these trade issues about the market's response to that, president's thinking - >> exactly, how close they are watching the big selloff >> and because of this, tech stocks are leading the market lower today. nasdaq on pace for the third strait day of declines, and bertha has more for us >> no respite in tech. they led the tech swoon, but the chip, etf, chip sector etf sinking into correction territory this afternoon, off 10% from the all-time high losers include my crop, nvidia, a number of these companies have large exposure to china. we are a couple weeks from the

beginning of earnings season, so if these tariffs do, indeed, go into effect, that's certainly an issue that a lot of ceos ask tech chiefs about on those conference calls apple among the big fang names, not the biggest loser, but it is now negative for june. the selloff in the group very much in keeping with the dance, the harder they come, the harder they fall, and hardest falling today is netflix it has been the standout momentum name double year to date, and today, biggest loser on monster volume, 200% of value already, and down over 9% from its intra-day high just last thursday, a few small caps, though, bucking the trend. earlier we are larger cap consumer staples that were positive they have gone into negative territo territory. look at the ones in positive territory. fred's, redson, online real estate firm, and hostess brands.

i consider twinkies a consumer staple i don't know about you back to you guys >> i want to know about that reggae song. >> you don't know it the harder they come, the harder they fall? >> i don't think so. >> oh, my gosh >> i know the phrase, but i don't know that i would have attributed it to a song. >> holy cow, i feel old. i'll send you guys the video >> it's not an age thing, it's just a, you know, we're just hopeless over here thank you for now. >> let's continue the market session with the closing bell exchange today, todd from frog light, his ceo there, and shawn, and tim anderson, and rick santelli at the cme in chicago, all joining us, very good afternoon to you all, and tim, starting with you, for the last couple weeks, saying how resilient markets were to trade fears, and now that might not be the case

>> they have been resilient. typically, you sigh it's unlikely to see the market sell off sharply into the end of the quarter. i think being close to the end of the quarter is incentivizing selling in tech. amazon is up 50% year to date, netflix up 100% year to date, and there's fear that this push over trade wars and maybe some foreign investment in technology may gather a lot of steam going into the third quarter you certainly want to take your profits now whether you look at some of the stocks being down 10-15% in mid-july >> do you agree with that? do you think the market's making too much of this or not enough >> hey, look, i look around the stock exchange, i see cnbc and the world cap being broadcast. so the world cup is up >> see >> the world economy is slower than expected. the july 4th weekend is coming up trade -- where are the buyers? now, as tim just pointed out,

with restrictions looking as if they are going to come on chinese buyers, that means fewer people are there to make the trade on the buy side. so i think that the fact is the market has crawled all the way back to where it was, where, may 3rd? if you're donald trump in the white house, you ask, is the market low on may 3rd? was the u.s. economy in shambles may 3rd? no, we were doing darn well. >> the guy you worked with, george h.w., and line them up this far into presidencies, the market was better under bush than trump right now this is happening right now. the last six months of weakness added up going back to the jobless speech and warning on trade with china >> peter navarro who i taught with at harvard. maybe you were there, kelly. >> i was never there >> okay. if you can't take on china now when the economy's growing at 4%, when unemployment is nearly at record lows, when will you have the wherewithal to do that? now, does it take a toll on the

economy? yes. does it take a toll on the market yes. this is a president who made his name in real estate and in reality programming. he knows a lot about game theory this is a game he's playing. we're all participating in it whether we want to or not. >> when we look at the bond market, yes, it does react from time to time to the trade talk, but not as much as stocks have is that a surprise, do you think, down the line, we could see people want to leave u.s. treasuries in masses if there's a real trade dispute >> i think -- i think the demand there's sort of investors wanting safe havens in assets. if you want to park the money somewhere, think about it relative if you can't do treasuries, 10-year trade at 195 basis points, where can you go look to the eurozone bunds trade at 30 points basis yield. that's a demand for that, but there's a shrinking deficit,

there's a demand of u.s. dollars back in treasuries, deficit spending, spending dollars overseas, and oversea holders of the dollars reinvest back in the treasuries there's going to be a back and forth that literally determines what happens particularly down at the long end of the curve >> rick, how does that add up? watching the dollar here, of course, which has been so strong lately, and i don't know if that's the place to watch. the move lower, we're seeing in tra treasury bonds >> you know, bonds and the dollar, i think, are holding up well as was framed in will's question especially in a relative analysis with the sponginess an stocks domestic in global. i think the comments that kayla mentioned earlier that this going on with trade is going to lead to tighter monetary policy. think about that for a minute. let's look at what we've done to normalize. now, let's look at what everybody else has done. let's look in china's direction. look in europe's direction look in japan's direction.

i guess what i'm getting at is, forgetting what the outcome of the trade negotiations will be, it's more than we can take they can they are in -- not only is our economy at the right time as we've mentioned, but their economies are at the absolute wrong time, and i would agree with john that this is going to lead to a monetary tightening in countries where monetary tightening is not even in the pack back of their minds. i think the pressure is definitely in favor of the u.s i can't tell you how it's going to turn out. i will tell you this we're taking a bite on the dollar index in the treasuries every day. we don't see it show up very much, but we really do need to be prepared as one of the guests said, if restart to see bund yields under 30 basis points, that's a test for treasuries, which, for the most part, every day this month have settled 289

to 298 >> if we see tightening elsewhere, what's the effect on equities and u.s. in particular? >> could be somewhat restricted, but to rick's point is the shanghai market is at a two and a half year low, and there's this theory out there that china really can't afford to get into a trade war with us, and they know that, we know that because they are clearly the surplus country, and if they were to escalate to a full trade war, which i don't know if anyone has correctly defined yet, china's not going to win that. as much as people make fun of trump saying it's easier to win a trade war, it is easier if you are the -- if you run a trade deficit. >> let me ask this how many swing voters does president xi face in guangdong

province none >> they would protest. >> president trump has to worry about the party coming to him, if you want to win the election and hold the senate, we can't lose the farm vote >> they face internal pressure the reason they got in the spat in the first place is because people were losing jobs to these factories and starting these protests they needed employment >> that's true, but china has -- >> there's no other alternative. they already doubled down on that approach. the stock market's still at two and a half year low, and already spent all this money and effort into reeling of what happened in ten. >> and what you're likely to see, a problem for the u.s., is further depreciation the way that's fought is over currencies right now, the u.s. dollar has been strong. earlier this year, of course, weaker, but now the strength came back. the chinese rb wed weakened, mag it tougher for u.s. exporters.

it's a policy that they are playing with here. we might win we might not >> what do you think, tim, last quick thing. >> i just think that, you know, it's -- i wouldn't be surprised to see another day downside this week and then a lift as we get into the second quarter >> all right >> we got a final revision of q1 thursday, and people will probably say, oh, you know, by the way, we made a four handle on q2, gdp >> the difference between the u.s. and everybody else looks all the more stark >> yes >> wednesday may be the end of volatility >> oh, all right, we'll see. thank you, guys. todd, shawn, tim, and eric >> and president putin -- the three of those -- yeah -- >> three great guys.

>> take your pick. >> oh, still ahead on "closing bell," supreme court hands down a decision that could impact which card you pull from your wallet that particular ruling and why shares of amex are higher off the back of it carnival took a dip, down 8% right now. company lowered earnings guidance for the year. the ceo arnold donald is here exclusively to talk about the move, and stick around for the first cn ierewbcntvi with peter navarro coming up in just a couple minutes the "closing bell" is back after this

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. see that is down as well as the broader tech down, 6.3%, and caterpillar and mcdonald's round out the list >> there's a less visible impact, the ipo mark bob? >> it's more than tariffs.

there's confusion. the issue is bigger than just tariffs. the president talked about restricting chinese investments in the united states so it's not clear exactly what that means, but that could ultimately impact more than just chinese m&a, for example, in the u.s., and, for example, so it could have an impact on the chinese willingness to come here raising money in our ipo market, even this year, including tech ones, entertainment firms, billy billy, and it services firm, clps, they had big gains since going public, and that was not that long ago. who knows where this could go. that's the problem we don't it might go the other way around if the president tries to restrict not just chinese investment in the u.s., the chinese might restrict u.s. tech investment in china. there's an example chinese smart phone maker is going public soon on the hong kong exchange. they lined up nearly 600 million

dollars from seven corner stone investors, direct investors into the ipo, including u.s. chip makers, qualcomm might they be prevented to buy in from the chinese? you see why the market pulls back here, to sort out repercussions if it gets more complicated. i think that's part of the issue now. we are just not sure you see companies pull back, and china, of course, down notably for two weeks now. >> the ipo relation as it relates to china is relatively limited in terms of the grand percentage of the ipos >> yes but we're in a direct competition to go have companies here, and they did not come here they, even discussed going in the mainland themselves, but they decided not to either they are listed in hong kong, safest choice for them we raised a lot of money for chinese firms here, and i can tell you, the nyse and nasdaq did not consider this trivial at all. there's a notable pullback on

chinese ipos, a big player here. >> i wonder, too, if this the case where this is -- people are selling the u.s. tech names because of the concern, but chinese tech names you referenced are the ones hurt from this. >> even particular already down 11% this quarter the u.s. small caps up 10% down today, but up overall they outperformed by 20 points in two and a half months chinese small caps, if you ask who is winning, u.s. small caps are clearly winning over chinese small caps and markets vote put money here rather than china >> bob, great stuff. >> okay. still ahead, peter navarro discusses the volatile reacti reactioninreactioaction today. we will speak with the ceo

of carnival about today's drop and the company's long term outlook. don't go anywhere. back in a couple minutes ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

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points still a 1.6% drop trade concerns weighing on the nasdaq too, down 2%. checking on the individual market movers. campbell's moves higher on a report that heinz is interested in purchasing the company. also, general mills could be a possible buyer up sha shares up 8% >> you know why they are interested >> have you had it or referencing the president's feelings about the matter? >> oh, next individual stocks to watch, amsazon expanding savings program to whole foods members those shopping at whole foods see 10% off hundreds of sale items. down 3.7%, but i think more part of the broader tech selloff. >> i can't wait. i can't wait for it to come to

my local store it's on the way home >> plans for it? >> i assume. i don't know i'm excited for this you know, i go to both if i can get a deal -- >> them why not. >> bring it on >> 3.7% down, but others like netflix and stuff, clearly, just a broad tech selloff, down more, so i don't think it's the story. >> i don't know that amazon is starved for investment right now. >> no. >> check out cnbc.com for more on that story and why the whole foods' customer base could double in ten years. that's online right now. up next, speaking with the man who knows a lot about the president's economic agenda. peter navarro talks trade policy and crazy market reactions stay with us

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welcome back, we are watching the short steloff on wall street today, s&p down 48 points right now, and nasdaq down 2.5%. some sectors are in the green, you can guess utilities up 1

partnersh1.5% consumer staples up slightly higher, and yield on the 10-year lower on the day time for a cnbc news update, sue? >> hello issue everybody attorney general jeff sessions defending the immigration policy in a speech in a school safety conference in nevada calling on congress congress >> this is a difficult and frustrating situation. i have spent hours, days, months working with homeland security, border patrol, and i.c.e. trying to deal with the loopholes and problems congress could help us tomorrow. we're going to need congress's help >> a wind whipped wildfire is burning thousands of acres in rural northern california forcing evacuation of 3,000 people the pawnee fire destroyed one dozen buildings and threatening

hundreds more. so far, no injuries, luckily, have been reported in australia, misguided kangaroo look at that, delayi ining playr 23 minutes they tried to kick soccer balls at him with little impact. a coach in a pickup truck chased him from the stadium they should have put him into the game >> panama could have done with one of those over the weekend. >> oh, yeah. absolutely >> that's a soccer game i'd actually watch >> you're missing out on world cup, kelly tune in. there's been great games i'll just leave it at that >> yep >> sue, outstanding stuff, thank you very much, sue back at hq. >> thanks. back on wall street, trade war anxiety is hurting markets today, dow fell 1.7%, down 436 points

tech-heavy nasdaq down 2% on the heels of reports that the president is cracking down on chinese investments in tech firms. weighing in on the developments in a first on cnbc interview, joined by white house national trade counsel director, peter navo navarro, welcome, sir. >> great to be here today. >> what's the administration planning your colleague said today that the president is not aiming this at china specifically, but actually at all countries, is that right >> let me be really clear. there's no plans to impose restrictions on my countries that are interfering in any way with our countries this is not -- this is not the plan all we're doing here with the president's trade policy is trying to defend our technology when it may be threatened. this idea that somehow there's going to be restrictions for the world, please, discount that i say broadly i think today's

market action is a very large overreaction what we have here with trump ccs for the country and dous market it's bullish we have -- >> let me just go back - >> i think it's important to put this in context. >> one second. >> sure. >> on what you said about the secretary's comments, you're saying there's no plans to impose investment restrictions on any country, so why is he sunlig sunlig suggesting it's for all countries. >> let me be clear all we have done with the 301 investigation is investigate what china was doing with our particular country with respect to technology and all the president was secretary treasury to come back with an assessment of that, due at the end of the month, and that assessment does not include any other countries.

with respect to other countries, we'll defend ourselves, threats to the technology, but as a practical matter, great relationship with much of the rest of the world so that's not something the markets should be worried about. in fact, there -- our administration -- the technology has been tremendous boom to the nasdaq and russell basically, it is bullish retaining our property and technology again, the picture here. things are bullish here in america. there's high consumer confident, high investor confidence, high manufacturing confidence, a manufacturing index off the charts all the tariffs that the president put in place has triggered new investment here in america both by domestic firms and foreign firms. we'll hit 4% growth rate we got the lowest level of employment, particularly in the african-american, hispanic

communities, so, hey, i look at what this stock market did, what's going on here when, in fact, everything was bullish there's misunderstanding about where this president is headed all this president wants, all the president wants is free, fair, reciprocal trade, and by taking a stuff stand on countries that have hi tariff barriers who restrict our investment, that's going to lead us to a better place >> mr. navarro, if this continues and proliferated, does that lead you to change direction on the path? do you watch what the market's interpretations are every day? >> i'm just a foot soldier part of a big team. the eye we have on the ball is a strong manufacturing base and strong defense industrial base, a work force that works with the hands and makes good wages what the president is doing whether deregulation, tax cuts, trade policy, unleashing our

energy sector is taking us beautifully in that direction. investors should think about where this country's going this country's going to a beautiful place right now in terms of growth and in terms of increase of reality wages without inflation, and this is where we want to be. this is something you can only dream about before this election, and president had 16 months to basically move this ship, move it speedily in the right direction and smooth this, and the trade policies are an important part of that, and all the president is saying right now is you go to the g7 -- >> to be clear - >> we know that. >> and so the question -- the thing that the market's trying to figure out right now is, okay, there are abuses, and what is the u.s. -- we believe the president at his word he's going to do something about them, and we get reports from the "wall street journal" saying he's going to bar u.s. companies from

investing in u.s. tech and block exports to pressure beijing to that outcome, but you said there's no plans to impose restrictions on any country, so what's - >> let's unpack this the "wall street journal" wrote a story this morning on the basis of leaks from people in the deep state who may or may not had an agenda to stir up precisely this problem what the president has done and stated is that we have an issue with china, basically coming in and taking our technology either by forced transfer or acquisiti acquisition. what he's done so far is direct the ustr to impose defensive tariffs on targeted industries in china, all good with that we need to do that, and he's ask the treasury secretary to look at the issue of investment restrictions treasury secretary will report back i have to say at the same time he's doing it -- >> it's still a possibility? >> at the same time that we're

doing this, we have congress strengthening legislation called committee for foreign investment in the united states there's the firma act that's pushing strongly through, and, by the way, there's a whole thrust of that, that bill is the fact that we have countries, china and others, that are coming in and basically taking and buying up assets for strategic purposes >> sounds you're saying we're not pursuing this today, but it does not sound to me it's off the table, but the secretary is looking into it. >> i think what -- i think what the pargt should do is let the process work the president makes great decisions based on the best information he gets. he's going to get good information this week on where the chess board stands and make decisions accordingly. remember, the mission here is to defend our technology and

intellectual property so we can prosper in the future. we know what the past looked like for the last 15 years of up fair trade and we lost a lot of industries we used to own. appliances, machine tools, a lot of industries, computers we don't want that to happen, the artificial intelligence, robotics, advanced shipping, these are serious matters, but i'll tell you the market has been responding positively to signals that this administration will be defend iing our technoly and property from the kinds of unlawful kinds of actions that others might take. so, again, i think this is a day that, you know, momentum traders get a hold of that and trag it out, but if you're a long term investor, i mean, come on. this economy is going great. the president, tax cuts, deregulation, low energy, and good trade policy that's yielding a strong investment

here i mean, what's not to like about that that's where we're at. >> so you mentioned trade policy leading to strong investments in the u.s. and there's been stories from the weekend that harl harley-davidson moves production outside the u.s. because of various trade tariffs imposed on both sides your take on that? >> you're going to see stories pop up like this in order to sway public opinion one way or another. look at harley davidson, the ceo of the harleys right here on the white house lawn thanking this president for the tax cuts and also for the tariff policies we adopted. they came to us pointing out tariffs to harley davidson it's going to happen under the president's trade policies >> all right, your colleague, our former colleague, mr. kudlow, returned to the white

house today, first and foremost, when he speaks, send him our very best. >> can i say one thing >> first two words out of his mouth were "free market" this morning, and he's in fine shape, and he'll be back in front of the cameras soon he was missed. he got a standing ovation at the staff meeting this morning at 8:02, and he'll be back up here telling you capitalism's great like this president does and i do >> well, that is wonderful to hear he's back, mr. navarro, but his absence in the last couple weeks, do you think he would have had a tougher battle yourself convincing the president to escalate trade disputes and might come back in that sense now that he's back? >> i think there's a great misconception what goes on here in the west wing the president is the leader and visionary pushing his agenda forward based going back to a

speech in june of 2016 in pittsburgh in a jobs plan speech promising to do all the things he, in fact, is doing with respect for tariffs, with respect to protecting intellectual property. all we do, and i think it's a really good team to have tifring opposed to devisive voices, give the president different points of view and have him make decisions. he's making great decisions. i mean, look at this economy it's just off the charts, and it's got nothing but blue skies ahead on this, and the people here in america really appreciate the fact that they are back to work and back to work and paychecks are going up, and the tex bills are going down, and it's all good. >> well, the market seems to view it that way you've come out and said no plans to impose restrictions dow was down 500 at the lows i want to let you clarify that one more time that are you saying there's no plans period

or investment restrictions sounds to me there's no plans today? >> no, no, the only thing that's going to happen in the near term is on friday the treasury department's going to report to the president about the issue related to kmchina. that's all that happens. with respect to other countries, nothing is on the table. >> mr. navarro, coming back to a question that existed since the g7 given comments you mentioned back then about canada do you regret this whole process over the last six months, it's been focused on china initially, allies have been caught up in it as well, whether we are talking about canada, eu, the u.k., do you regret having to escalate tensions with allies or something they had coming and deserved >> so, the word that i regret you using there is "escalate intentions," all it is is a trade dispute. as the president said, we have

as much problems with our allies like europe and canada and mexico as we do with china it's a trade issue we have things to work out there's a $151 billion trade deficit in goods auto tariffs are four times higher than ours that's punitive. all we want to do is be able to sell as many fords into germany as they sell bmws here there's nothing wrong with that. the president's standing up to that principle we have issues with canada on dairy and lumber, which are long standing, and other issues with japan, sells us 100 cars for every one we export to them. what the president is, he's not singling out china he's not doing that. what he's doing is singling out unfair, nonreciprocal unbalanced trade hurting the men and women of the country who work with their hands, who manufacture, and the president says, look, we

don't have a strong manufacturing, and the president's industrial base, we don't have a country that's all that's going on here. every step he took, solar, washing machines, steel, alumin aluminum, all that happened is new investment it's amazing what's going on in the steel and aluminum industry as we speak. in illinois, new plants opening up, in kentucky, aluminum, $150 million modernization and expansion, and solar coming back for the first time in decades. it's all good. >> technology sector, peter, going to be added to that list is that viewed as industrially significant technology that the u.s. mewants to promote being md and invested in by people here in the country, and, you know, is that going to join the list of what you mentioned? >> i'm an economist by training, and what you learn in economics is solo growth model

only way to grow, prosper, and have wages go up is through innovation through technological innovation it's in our interest, the president recognizes this, to not only maintain our strong position in the traditional manufacturing industries, but also to maintain emerging futures, art official intelligence, robotics, high-tech shipping, extreme manufacturing. that's the president's decision. the beauty of the president is he understands this. he understands what needs to happen over the next 20 to 30 years because he doesn't want the next 20 to 30 years to look like the last 16 before he got into office. we're doing great here he's a great president and i hope this will be appreciated by investors as well as folks out there in the flyover states which we love >> well, we're showing the dow down 330 points right now off the lows peter navarro, thank you very much for joining us today.

>> my pleasure so check in on the market again because as kelly said, w were down 496 at the lows, and now we're down 332 points, so a significant pickup in the market during the course of the interview. >> mr. navarro denying investment restrictions are on the way after media reports overnight sent us down to the lows secretary -- you know, there's been a lot of mixed messages from the administration, but the market finding comfort, apparently, in what we just heard from the trade representative there shares of carnival are on pace for the biggest one-day drop since 2012 talking to the company's ceo about that in an exclusive next, reactions to the share price and much more.

welcome back, shares of carnival plunge after a disappointing outlook for the year they highlighted a stronger dollar and weakness in the caribbean because of hurricanes hurting the business shares down 8% >> in a cnbc exclusive, we are joined by the ceo, arnold donald good afternoon to you. thank you for joining us >> good afternoon, kelly good afternoon, wilfred. >> talk about the share price move the earnings themselves solid,

and your guidance was reduced, but not too significantly. what do you think investors are reacting to so negatively, down 8% >> well, first of all, guys, i want to give a shoutout to my 120,000 passionate and dedicated employees who work every day to exceed our expectations, and thousands of travel agent professional partners around the world whose collective efforts resulted in another quarter of record earnings performance. in fact, 30% higher than the same quarter last year, so very proud of the performance and the results. i think the market is -- >> go ahead. >> i think the market -- sorry yes? >> go ahead. >> yeah. i think the market is reacting to a lowering the guidance from march guidance it's still higher than the original guidance for the year we are offsetting a 19% drag and fuel in currency, mitigating that, resulting in a lower guidance for the rest of the year, but the reality is that

that's all that's going on, and, of course, we're going to work hard to beat that. >> i want to ask you about what's happening with korea. you said chinese are not doing korean trips, still boycotting because of the bad missile deployment there was an issue going back last year. you still think china's the biggest cruise market in the world. what happens if this this trade, china says don't go on u.s. cruises. how much hurts your business >> i was just in china last w k week, and there's no conclusion they are banning travel on u.s. cruise lines in order for that to happen, it's unlikely it would, but in order for that to happen, china represents less than 5% of our capacity, and we have to be prepared in any market because every year in the world, there's some place where we can't go because of joe go political tensions, so we would adequately

manage that. that's probably not going to happen, and we have no conclusions of anything like that >> what about weather? caribbean cruise taking longer to pick up after those storms late last year than you expected >> well, all that happened with the caribbean was last year with the hurricanes, during that hurricane season, people stop booking. nobody was booking cruises for the caribbean at the time. our services, people book out a year ahead we missed a period of bookings that had some impact going forward, and then the other thing is just san juan and puerto rico continue to get negative in the news, but reality is, people are going there, ships are full, and people are having a great time our earnings will be up. there's additional capacity, and that's over a great year last year there's tremendous momentum in the cruise industry overall for our business >> what cruise do you put two people who say they don't like

cruising on? to convince us maybe it's worth a look >> say that again? which cruise do i recommend? >> we don't want to go cruising, convince us. >> we have to convince you it's real simple first of all, there's all these -- i recommend that you do the qm2. i know a little about you, but there or we have a new ship coming out, and the godmother is oprah winfrey. for you, kl elly, there's a girlfriend cruise in january for the naming ceremony where she's the godmother of the new ship. >> i don't know. >> we have carnival horizon. a lot of brands. depends what you're looking for. >> i have to say the talk of the vacations, it is appealing, even if i have not done a cruise yet. arno arnold, thank you for joining us

this afternoon, pleasure >> thank you very much, guys, be safe >> we've got just over four minutes left of trade, and we'll come back with the close in just a few minutes. after the bell, we'll have more on the market selloff the dow down less an 3th00 points it was close to 500 at the lows. we'll talk about that, what peter said, and where to find safe havenings but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. you mighyour joints...ng for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish,

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welcome back to the "closing bell," 90 seconds left until the close. low of the day was 496 points, only an hour ago, what a rally seen in the final hour of trade with most coming during that interview that you saw here on cnbc with peter navarro, elating trade fears as it relates to the tech industry and china. well off the lows, down still 1.3%, still 320 points for the dow, but we were down close to 500 points look at all three, the nasdaq is lagging, but it's now down less than 2% or right on 2% approaching the close, and just going to show other international markets with their closes as well for the first time, almost as much selling in the u.s. as seen around the rest of the world, but as we said, shanghai at two and a half year lows, international markets hurt becauseof the domestic bringin in bob pisani as well to show you asset classes, we had not seen a rise or too much

movement >> great job with navarro, no plans to impose additional investment restrictions. unfortunately, that leavs confused about what exactly the plans are. this is the problem. it's not clear exactly what the intentions of the administration are. >> i know it's going to affect the market, calming the market, he did that, down 313 points at the close on the dow ringing the bell here at the new york stock exchange, brian kelly, and rex now kelly has the second hour of "closing bell. >> congrats to brian kelly ringing the closing bell welcome, everybody, i'm kelly evans. dow down nearly 500 at the lows, closed down 326 points, weak, but could have been worse. markets concerned all day that the u.s. investment in tech, and that's why the nasdaq was the

worst. and dow down 22453, and then we heard from trade representative peter navarro who soothed the market, and there were no plans, he said, no block investments, and that helped this late stage comeback talking about that in a moment we have dan niles weighing in on the sector coming up joining me on the panel, our senior market commentator michael santolli and keri firestone, welcome to all of you. the big winner in the dow today was walmart. in general, utilities and consumer staples did okay today. intel the biggest decliner in the s&p. campbell's soup the big winner more on that in a moment, and carnival, spoke to the ceo there, the big loser tech worst performing sector overall after reports that the u.s. could restrict chinese

investments in u.s. tech companies. names e e-- included micron, intel, and nvidia do you think this explains the markets all day? >> first of all, i think the rorg reports of restrictions on training investment overnight yesterday were triggered for some weakness in stocks. i think the the technology was not going to be impervious, it just chased hot money out of areas overheatright? it was not the idea of restrictions on chinese purchases or investments that has them underperforming the s&p today, or netflix down 6.5%. there's overextended technology in growth sectors, and this idea

that maybe the trade issue is ongoing. that's one thing investors do not like there's no process to handicap it's just this thing you keep getting new volleys of kind of aggression on both sides without seeming like it's building to negotiations >> we spoke with mr. navarro a half hour ago. this is what he said he mentioned the comeback session for stocks >> there's no plan to impose investme menment restrictions interfering with our country in any way. this is not the plan all we're doing here with the president's trade policy is trying to defend our technology when it may be threatened, so this idea that somehow there's going to be restrictions for the world, please, discount that >> he was clear, but when we discussed it a little bit further, it did not sound to me like that possibility was off the table entirely it sounds to me it's not

happening right now. your thoughts? >> well, i listened to most of the interview, and i agree with you. i think the first comment that he made in that conversation sounded definitively that was not a proposal, but, kelly, you asked about what was discussed with the secretary, he said, yes, it's on the table i think there's questions that we have to answer. i would agree with mike, though, i think in particular because of some technical triggers that hit today, more so on the dow coming through, its 200 moving day average, although that does not incorporate a lot of the fang and fang-related companies it was a trigger for some concern. that may have caused technically based selling, in turn, i agree with mike, is about where profits had been, so i'm not sure yet the concerns on traders specific, the reasons concerned specifically a referendum on whether it's consumer discret n discretionary or technology

stuff. that's just where the gains have been >> and the lows today, dow down 9% from its late january highs, and nasdaq, though, less than 4% from the highs we've seen, just a couple weeks ago, in fact, and so are you seeing netflix down 7% saying it's an opportunity? in other words, does this make sense to you or no >> i think it makes perfect sense at the end of a quarter. the s&p is up about 3%, but if you look at the groups that had been really jut staoutstanding s quarter, energy is up 10%, technology up 7.5%. netflix up 100% year to date 100% >> yeah. >> so a 6% decline in netflix is just a tiny drop in the bucket, and let's not cry for that stock. i see this as many do in the investment business who see end of the quarter profit taking and

perhaps a little window dressing if you had a strong quarter and there's fear about tariffs and a trade retaliation process. take money off the table that starts a bit of a cascade we did not close at the lows of the day. the market had a rally at the end, and i find that -- we should be comforted from it. >> yeah. the industrial stocks, those were the places that investors fled about concern stocks lower were caterpillar, csx, mike, a familiar list - >> yeah. >> boeing, another name suffering. these are companies that have done welcoming into this, but it is true now. we're going into six months. if you take the dow from the highs, when the president was in davos talking about cracking down on trade with china this is, you know, it's not been six weeks anymore or three months it's been going on for a long time, and does the whole trade

thing need to be moved off the table before the target can rally again? >> i wouldn't say it needs moved off the table, but it's coinc e coinciding with a few things going on such as economic growth in the rest of the world came off the boiler at the same time. the manufacturing purchasing managering index rolled over as well, so all that stuff is not great for the industrial stocks. they were up a lot that's where you worry about the fact that if they are seeing the peak in earnings growth, that's going to be an issue trade, yes, guilty until proven innocent when it comes to any time trade flair ups, fine, sell boeing more, up a lot over 12 months ago i don't think it means it's tied up in a bow on the trade front before the market makes progress >> the reason i, you know, it's hard to be too upset about the range we're stuck in here in the markets is that we were so strong into that late january high that it was starting to look parabolic

you don't want that either >> yeah, to your point, the par parabolic increase was to sentiment, frothy in the december-january time period, and that's an important factor a lot of that came off the boil, and i think that's a good thing, but, of course, we've got other sort of impediments for the markets that have nothing to do with trade or maybe just directly related to trade, not least being tighter financial conditions, stronger monetary policy, and what's tied to trade is recent strength in the dollar which has implications for corporate earnings and multinationals, so i -- i think that we do not need to see, i think, some calming of tensions on trade for a sustainable move higher here, but there's moves the market is grappling with, and those are not disappearing any time soon. >> one finishing higher today is american express, shares boosted

after the supreme court sided with it in a credit card lawsuit, up 1.5% today >> it is a win for american express. the stock closed up higher than 1% on the news today in a 5-4 decision the court sided with the credit card giant over more than a dozen states backing the company's anti-steering policy now, that policy prevents merchants from incentivizing shoppers to pay with cards that charge lower fees during transactions that's important adding up to $70 billion a year according to the national retail federation they are charged higher fees, but argues customers spend money with the cards thanks to rewards in rebates program the company argued that this role encouraged competition with other credit card company and increased benefits and rewards for card holders in a statement, they said, quote, the supreme court's decision is a major victory for consumers and for american express promoting competition and innovation in the payment

industry visa and mastercard previously settled antitrust claims and no longer have these roles in the agreements with merchants and american express's language stayed in tact we feel advocates including the national retail federation and national retail center said it's a loss for consumers facing stifled competition, kelly, and rising fees. over to you. >> i thought this, kate, was interesting, just the fact -- so they -- if i'm a customer in an amex locatio the propry ter y c use this card, you don't pay as much >> that's right. amex charges higher fees, and according to the decision, a merchant cannot direct you to a card charging them a lower fee or incentivizing them saying us your visa for 10% off. >> surprising, kate, thank you

do you think that's -- it almost to me, i know we're not talking about the same thing, necessarily, but restriction on free speech. you should say, hey, we made the agreement with the company, but, you know, you should know and we should be able to tell you, you can save yourself money. >> the issue is actually having formal inventives in saying you have this price with american express versus this price with mastercard the merchant has the ability not to accept american express, right? >> amex was up, but will it hurt their business >> no. i think it was a background concern. a little overhang on the stock it's been running a very long time, this litigation, seemed like they were in the clear years ago. now this ends it i don't think it necessarily changes that much of the overall market shares. >> i'm surprised they charge high fees that they do, frankly, in this day and age. what about shares of campbell's? another big story today closing higher by nearly 10% in fact they are interested in buying the food company, and they ra y

rallied a bit on the heels of the tstrategic review the stock is down 12% this year, and, you know, for camp bell's, mike, you know, if they are -- you know, i guess they basically signalled this was coming. >> yes >> and kraft has to keep buying things - >> lacking a permanent ceo right now, and it's forever been put together by investment bankers from the outside, management in grilled cheese merger that would be, you know, everybody's favorite lunch, so i do think it makes sense on paper listen, this is going to happen. doesn't mean campbells is in play, but it means the food stocks were so brutally hated and oversold, it bounced hard in three, four weeks. >> yes consumer staples was higher today. are you a fan of the grilled cheese and tomato soups merger >> i like it, but we don't own either stock, and i think it's a very, very tough place to be as

mike suggested it's been a brutal segment i don't know 2,000 basis points or something like that. it's time they catch a break whether they can do something together, which is more than the abysmal time they have apart, i don't know, but i suppose it's worth a try. this does add brands to the businesses >> it is and perhaps the list is interest rates moving lower do you think that we're talking lower for longer just when everybody's getting excited about rate hikes and owning banks and that sort of thing >> well, we still have an outperform on financials in our view from the fixed income group on the long end is that we probably were at recent highs, not at the near term peak, but close to it, that said, we think that the fed will likely

continue on the path as they laid out, barring any real shock, market or otherwise what's important, though, as it relates to the fed is i think their tolerance for market volatility is higher than what it's been in the past. i don't think at this point any trade related volatility, if it's solely based on that, in and of itself, is going to kind of pull the fed off its -- not predetermined path, but the path that i think the consensus is built in for the expectation >> all right >> yeah, so i think yields -- probably continue to see a flattening in the yield curve. >> mike, last question, who has a bigger appetite for market volatility, the fed? >> i think the fed does now, at least what they signalled so far. >> there's a trump put in the market >> ultimately could change their stated approach, but seems as if today there's interest in the administration to make sure the market did not go into free fall on the idea they were getting opening up a new front on the

trade war. >> peter, spoke with him, just into the close, guys, thank you for joining us to talk markets today. still ahead, we're going to dig toh ading the selloff on the trade tensions with china up next, dan niles says whether there's buying opportunities utilities are one of the other few bright spots today talking to the "fast money" crew about where they find safety we want to hear from you reach out to us on twitter, facebook, or e-mail us we're back in two. you always pay your insurance on time. tap one little bumper, and up go your rates. what good is having insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates

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welcome back dow down sharply today, almost 500 points at the lows, and we closed down 328 points all of this with trade tensions swirling around. reports came out last night that the u.s. was considering investment curves against the chinese in our technology, and then that was -- let's see, what language do we describe that walked back, clarified by the secretary this afternoon saying no, not just the chinese, but all companies that interfere with our technology, and then we

spoke to white house adviser peter navarro, and he said, no, no, no reports like that, no plans like that are coming he did not totally deny it might happen either, mike. >> i think it's worth reading in the original wall street journal story, the on the record statement from the secretary wilbur ross, he said the president made clear his desire to protect american technology, and all possibilities that would better protect american technologies including changes to export controls are under review >> yeah. there was the opportunity to massage this any way they could and that's how they did it >> market chose to respond positively as well, ending the day in much better fashion than looking at the lows. what does this mean for technology companies dan niles here, founding partner, and, dan, again, confusing signals out of washington names like netflix down 7%, and did you pick anything up here in. >> no, i did not because i think you commented on this earlier, the market in january ran too

far too fast and corrected some, and then went up again, but if you look at the u.s., it's misleading, look at the chinese stock market, the shanghai, for example, it's down 20% from the highs in january their markets are near a two year low it really does not make a lot of sense in my mind that u.s. stocks were, you know, near their highs when you got, you know, the other side of the trade dispute down nearly two year lows and down 20%, and quite honestly, a lot of the tech stocks should not be up a lot. we did not bargain hunt today. i thought about it because i have my shopping list written down, so i know what i want to buy, but we did not actually go ahead and buy anything today, but there are certain names in the internet space, for example, and in the media advertising space that we're looking for >> even in china, look at the large tech stocks, fang stocks in china, yes, down a lot too, but outperforming still.

if you look at indexes with a huge weight, they hold up better than mainland china play seems like a global phenomena that people want to hide in large internet companies the question is, when does that dynamic overshoot a little bit >> well, here's the thing, it's actually making sense to hide in the u.s. companies because if you think about it, well, to goe or facebook, do they have business in china? no, because the chinese government is so restrictive on the ability of u.s. companies to be able to do business there, you don't have much revenues out of google or facebook or amazon or netflix so for those names, this does not matter much. today was a global momentum tech-led selloff, but i think what if you sit back and think about it more broadly, you go, well, that does not matter to them if you're a semiconductor company or sell pcs. pcs, no. 1 market is china smart phone, no. 1 market is china. that's a big problem so it makes a lot more sense to

take those stocks down than other names. other than a fact up 100% for the year >> the semiconductors down 3%. dan, to be clear, you agreed that it seems to us looking at this, like, there's no reason from the headlines that google, that facebook, that amazon, that those names should have sold off today, right >> no. >> nothing to do with their business >> no, exactly right so you have to remember a lot of tech funds or mutual funds, when they own technology, they own a broad basket they loan those names, but they own semisuggester stocks, high flying software companies that have 100 pes, little in earnings, huge valuations issue and they'll own them too when you go through a day derisking your portfolio, you throw everything out -- the baby with the bath water. what typically happens is that creates a buying opportunity

so, you know, on the shopping list of mine, you know, there's facebook and google, and it does semiconductors that do not sit on the shopping list, and, in fact, selling those last week. it does not make sense this is worse. these are the names that get hit. on top of that, there's massive amount of inventory in companies like apple that need to be worked off, and then you got the currency issues on top of. that those are not things that, you know, you really have to deal with, and there's no inventories on facebook to worry about, right, so it's a different situation when you look at it, and, eventually, you know, people start to sift through this rather than selling everything >> you mentioned, alluded to media and advertising names. did you just mean facebook and google or traditional plays as well. >> good pickups, mike. actually, i was going beyond that, and so if you think about what's going on right now, you have the biggest sporting event in the world going on, which is the world cup, a world event, opposed to the world series.

so you got a month of games being played when they invite japan in the world series, it's considered a world series, but anyway, they're advertising going on that's going to be good for a lot of the media companies we are looking at names outside the internet companies because we go, well, you know, this may start to benefit them as well. you got the midterm elections coming up. that will be really good for advertising dollars being spent, and the economy in the u.s. is doing well i think you look at all of those things and the fact these stocks are rightly got beat up over the last couple years, and that's an interesting space. >> we got to go, but i want to know if mike supports the world series concept with japan. >> every now and then toronto's been in the world series >> oh, my gosh >> it's been a while >> thank you for joining us. dan niles fr

it was a big one, selloff, turn back to active investing hearing from a small university whose endowment fund exceeds the ivy league he> harley-davidson says ty could move production overseas detail and fallout on the stock for the economy still to come.

new report shows a university is at the top of the class when it comes to returns on university endowments

ju last june, the connecticut school brought in gains last decade including during the financial crisis the school credits success to stock pickers. ishat a good sign for active investing? joining us, the president of the university, welcome to you, and is it quinipeac >> accent on the first syallble. >> this is extraordinary what do you think accounts to the success? >> well, i think the -- we have an outstanding investment committee made up of trustees headed by bill spears, and they have a bias towards equity, and a tilt towards value stocks, and i would say we really have an asset allocation that's typical

of endowments, 30, four40 yearso 50% international equities, so 70% equities compare the asset allocation of the endowmentment to most ivy league skoolchools, they're at % at most. we tend to avoid the more turning investments, the private equity venture capital and oil and gas. >> yeah, the yale model. you're the opposite of the yale model. >> i am. i'm a fan of david swenson and it works for yale. we're smaller. we do not have access to the same deals they have, and so for us, and we don't have a large staff, i mean, we have no full-time investment offices, and i, and my chief financial officer are the two people who look over the endowment, and we rely heavily on trustees

bill spears and others in the business of picking individual managers we then become stock pickers for us, it's a lot easier, more transparent stocks it less risk, more liquid, and for us, we have a comfort level around them, and any annualized return >> they did 20%. >> by any measure, it's very good performance, and i guess, you know, the tradeoff that a lot of endowment managers view is that they can't deal with a bear market. so they just simply cannot sustain stress testing endowment levels, the market going down 40%, because they rely on it, draw from it to cover expenses, and i wonder how that comes into play with your thinking. honestly, taking nothing away

from what y'all achieved here, it sounds like kind of a bull market story it exceeds the market by picking stocks >> yeah. well, what's interesting is in this downturn in 2008-2009, you would have thought that and would have thought, therefore, that the diversified endowments of the schools would have protected them better on the downside if you look at the harvard and yales and everything else, they were down by the same 30% all the other endowments went down by in addition to that, our college, heavily again in equities, down by 30%, taking us one year to get back to the 2007 levels by 2009, we were back to where we were pregreat recession it took yale and harvard institutions seven to ten years to get back to the 2007 level. >> wow >> i don't know whether the last great recession was unique, but i will say as heavily dependent

we were, we were not worse on the downside than the other far more diversified portfolios of the ivy league schools >> we learned, again, they work for yale and not for everybody else i wonder if there's a rivalry brewing here >> for me? i remain objective >> john, thank you for joining us >> a good rivalry on the - there's a big rivalry on the hockey ice, i can tell you that. >> ha-ha, oh, we appreciate your time, sir, thank you >> thanks for having me. we have a news alert on trade. kayl as with the latest. >> as we try to discern what exactly the investment restrictions coming out of the treasury department by the end of the week will look like, we are getting conflicting statements from members of the president's economic team. you may remember earlier this morning that the treasury secretary tweeted that reports from the wall street journal and bloomberg were fake news saying these restrictions targeted china, not so, he said,

targeting all countries that are trying to forcefully steel u.s. intellectual property. that was a sentiment that was refuted on this program just last hour by peter nevarro, one of the president's white house advisers, listen >> there's no plans to impose investment restrictions on any country's technology that's not interfering on our country's that's not the plan. all we're doing with the president's trade policy is defend our technology when it may be threatened, so this whole idea somehow there's restrictions for the world, please, discount that. >> and navarro made those comments here on "closing bell" as press secretary sarah sanders was in the middle of the briefing she seemed to double down on the secretary's tweet from earlier today saying that the restrictions would target all countries. this is what she said.

>> as the secretary said, the statement goes out that targets all countries trying to steal our technology we expect that out soon. we'll keep you posted. >> reporter: we'll get the answer in a couple day as time, but it's material to the market as the dow fell on trade fears today. we'll see what more information we can glean from here at the white house, kelly >> yeah, meanwhile, you know, kayla, i grew up in lexington where that red hair restaurant is >> have you been there >> no, because it seats like, eight people, and it's coming in as i left college, very exciting, upscale, and i don't know, now it's the whole town, everyone -- no one can believe it thank you very much. >> reporter: sure. this is how we finished today, dow down 328 points, better than the 500 down at the lows s&p down 37. nasdaq down 160. russell down 28. let's get to the other big stories of the day with the rapid recap.

stock futures in the red again, trade war fears hit wall street and your money. the wall street journal and others reporting the white house is now preparing to bar many chinese companies from investing in u.s. tech firms and blocking american tech exports to china >> there's a lot of problems and issues to navigate in the last, you know, i'd say innings of a bull market in the economic cycle. >> women here in saudi arabia finally in the driver's seat is this exciting to be able to drive? >> yes, yes. very, very happy >> american express higher after the supreme court ruled anti-steering provisions do not violate antitrust law. fallout felt, harley-davidson expect the costs of bikes to spike. >> announcing this morning it is planning to move some of its production for vehicles built in the u.s. and shipped over to europe and said they say, look, we'll find another way to supply europe so we don't send as many to the u.s. from there

>> no maps to impose invest, restrictions on any countries interfering in any way with our country's. >> dow down 500 at the lows, closed down 326 points still a weak session, but it could have been a heck of a lot worse. and i wonder if there's going to be a tweet about harley-davidson. surprised that's not been one yet. >> so tangled, right this was in retaliation for u.s. measures, but harley - >> $2200 a bike it costs or something? >> not raising retail prices any anywhere so they'll take the hit in termsmargins. surprised they sell 40,000 bikes in europe every year, a quarter of what they sell in the u.s >> wow, it is a big number we have a news update with sue >> hello, kelly, hello, everyone this is what's happening president trump claiming a lot of progress has been made in the middle east, but did not specify areas of improvement that came as he welcomed king

abdullah to the oval office. >> a lot of progress made in the middle east, a lot, and it really started with the end of the horrible iran deal that deal was a disaster, and things are a lot different since we ended that. a lot difference >> the chicago police k-9 unit carried out a massive marijuana bust over the weekend pulling over a vehicle carrying approximately 1500 pounds of marijuana with a street value of more than $10 million. the driver was taken into k custo custody. look at that guy the food and drug administration approved a marijuana-based medicine to treat a rare form of epilepsy. it is an oral solution derived from marijuana it does not contain thc, the ingredient that gives users its high all right. you're up to date. that's the update at this time, kelly, become downtown to you. >> the k-9, i guess, all right

with it. does not have -- >> one proud puppy >> yeah. sue, thank you very much >> you got it. turmoil sparks a selloff on wall street. could veeeha bn worst, but where to seek safety in the volatility after this quick break

welcome back the dow dropped 500 points at the low of the day, closed off levels, and talking safety trades, our fast money traders welcome. this is a weird one today. it was panic and yet there were names like we talked a moment ago like netflix down for no reason that has anything to do with china, dpguys where would you be >> it's dropped down 500 dow points and names like netflix, on fire, taken out to the wood shed because people shoot first, ask questions later. if the broad markets are down in a meaningful way, take money off the table in the high fliers that's what i made of it i'm doing this with my fingers because mel offset talked about

a haiku, and i was trying to figure out if it was, in fact, seven syllables. >> what do you think >> well, i think the safety trade, i mean, to me, hiding under my desk was the safety because nothing was really working, but looking around, what would work? it's the thing one should own is travelers. the insurance company. i mean, you know, slow, steady as she goes. not expensive. you know, te at 11.5 decent yield i don't buy on yield, ironically in the business of managing risk, but as a stock, it's a decent safety trade. >> guy >> safety is interesting look at cvs, and look at media stocks, like, wow, i'm going to talk media stocks. you need two to have great minds. with that said, you look at valuations trading nine times forward

earnings, 15% growth this means the market is big or the competitors are boxed up to 18 times forward earnings. >> right >> you ask yourself, maybe - i have no idea, but it should drag up the rest of the space. i'm not saying it's trading in the teens, but - >> especially the essence -- yeah and always the one that every day there's a fresh report about someone taking a look at it >> precisely >> all right couple good ideas, thank you >> thank you, kelly. >> guy, karen, looking forward to more haikus and more in general coming up on "fast money" at 5:00 p.m time to shore up tech, and coming up here, harley-davidson one of the worst performers on wall street warning trade could force production overshore tariffs from the eu, see what's at stake for the motorcycle maker and for its american workers. that's coming right up because, when you really, really want to be there, but you can't.

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countries with high tariff barriers, restricting investment, that's going to lead us to a better place >> now for more on what's happening with trade and the market implications, we are joined by ambassador chris hill, former secretary of state for east pacific affairs and former u.s. ambassador to iraq. welcome to you, sir. what do you think is the state of affairs because the same interview last hour, he also suggested thatthes are on the table when it comes to u.s. trade policy >> well, i think it's speaking to the overall problem that when these guys roll something out, there's no game plan there's no coordination, and so it becomes a question of who is going to say things last, and, of course, we'll all stand by for the twitter storm to follow. the problem is not what they are doing, but getting tough on china, ipr, and other issues is on review, but it's how they do it, the failure to put together

any kind of game plan, and they just go out there slugging away, and i think the markets, to some extent, are not just looking at the daily chop, but they are looking at underneath the surface, how this is looking, where you have a u.s. administration that just doesn't seem to get organized enough to deal with very serious issues. >> i will say from where i sit it looks to me like there's a lot of proposals flying around the white house. some of them make it into newspapers, some in policy, many tabled, probably more we don't know about that could be tweeted about and put on the table tomorrow, so is this a case of a lot ideas out there about how the u.s. combats the situation as you suggested, something needs to be done about it, right? >> well, there's no questions there's problems with trade in china, and ipr came up to the top, but the issue is how do you manage it? how do you deal with it? how do you reassure other allies

who are not part of an ipr problem, and you get the sense that the ad visors all disagree with each other, and they famously disagreed with the others so this has been -- the whole thing adds up to a view that somehow they don't have their act together making people very nervous >> ambassador, in your view, is there an actual approach to treatment of technology and property and the rest of it effective here it's not as if there's some, you know, obvious solution to unlock this problem because it's been with us for so long. >> you know, the chinese tend to appreciate you sitting down with them, not going to the press, and certainly not putting it out on twitter, and say, look, you and i, we have a big problem, and we need to resolve this problem. what we have now is not sustainable.

so sooner or later, we're going to have to take this to another level. so what can you do this this regard and do this together? they kind of appreciate that with this administration in particular, the the chinese the chinese know this won't go away because they've had a nice dinner and discussion. the trump administration will come back at them and back at them which is a reason why some people are very admiring of the administration the problem is they often come back in a way of threatening people and you can pull this off in certain businesses. you can't pull it off with a country that represents 1.4 billion people and you've got to manage that a little better. >> but as we were pointing out earlier, the chinese economy and its market looked weak right now so i know i'm going to ask you to pack big ideas into one but what is the most effective way for the u.s. to keep china from stealing our intellectual

property >> i think the theory of known consequences is the best way to deal with it which is to say we have a situation where we can't allow this to go on, explain what the consequences are going to be and if they continue to do it, if they don't take measures against it, do something clearly but this idea of lurching from one crisis to the next is not helpful. and the chinese are getting support elsewhere they they don't deserve. >> ambassador chris hill, thank you for joining us. >> thank you. >> it was a whirl wind day investors anything but high on the hog. harley-davidson warned of fallout from increasing trade turmoil between the u.s. and europe we'll tell you what the motorcycle makers twh iupo en we come right back e market was p nearly twice as much. that's a tough pill to swallow. exactly. so i started trading. but with everything out there, how do you know what to buy? well, i think my friend victor has just the thing for you. check this out, td ameritrade

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president trump's trade skirmish with the eu taking a toll on shares of iconic motorcycle maker harley-davidson. shares are down nearly 6% today. we'll tell you what's going on and the fallout for investors when we come right back. with the new chase ink business unlimited card i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about the details. fine, i obsess over the details. introducing chase ink business unlimited with unlimited 1.5% cash back on every purchase.

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erns about trade weighing heavily on the market today and that's taking an especially big toll on shares of harley-davidson, down nearly 6%. phil lebeau explains how they here in the cross fire phil >> they're taking a big hit from the eu essentially because you're looking at tariffs specifically targeting u.s.-built motorcycles shipped into europe so here's how it impacts harley-davidson. they're going to see tariffs rise on those vehicles, those motorcycles going from 6% all the way up to 31%. that will add an average of $2200 per motorcycle which, by the, harley-davidson is not passing along to the customer. harley-davidson says it will eat that cost. how much will this cost the company annually $90 million to $100 million. we reached out to harley-davidson to get some

reaction in terms of what the plan is, what happens next, especially for workers in th united states. the company says we are currently assessing the potential impact on our u.s. facilities we are hopeful the u.s. and eu governments will continue to work together to reach an agreement on trade issues and rescind these tariffs. what does the white house think? he here's peter navarro. >> you'll see stories pop up like this in order to sway public opinion one way or the other but if you look at harley-davidson which the ceo in a harley is right here on the white house lawn thanking that president for the tax cuts and also for the tariff policies we've adopted. remember they came to us for example pointing out that india had 100% tariff on harley-davidsons that's not fair. we want harleys made here, more made here and that is going to happen under the president's trade policy.

>> let's see what happens with employment as well as production for harley-davidson in the united states but for some perspective on how this company has done in the trump administration since president trump took office this is what the stock has done it's down basically 26%, 27%, so a rough day for harley-davidson investors. >> as we were saying, mike, they'll try to absorb the cost of these increased tariffs but harley has been struggling for month. they were talking about moving production to thailand back in january. >> it's not happening in a vacuum, they don't feel like they're in a market position to pass along price increases i also wonder, though, about how what the interpretation is going to be. punitive tariffs from europe has a company making stuff there maybe our punitive tariffs will have companies making stuff here i'm not saying that's the way it ought to work but -- >> unless they go elsewhere to pick another thailand or

something like that. if they're the ones first to do this or maybe under the most financial pressure, do they still give a sense of other companies that may follow? these are the ponderables. phil lebeau, thank you for the latest on harley that does it for the closing bell thank you for joining us, run if -- "fast money" begins right now. "fast money" begins right now. i'm melissa lee. traders are tim seymour, guy adami. the selloff in full force and one sector traders are betting will get hit harder. plus, not just stocks selling off, the summer of pain for bitcoin continues and a top crypto investor in bitcoin says things will get worse for another 200 days spencer bogart of blockchain capital will be here to explain that first, we start with the market selloff the trade war igniting massive selloff. the dow falling 500 points and nearing correction territory more than half the