good economic environment. when volumes increase and they can check price. >> i like vanek oil services sector etf, oih. service stocks have way underperformed their peers, $75, think it can go up. >> big einhorn fan, not selling apple with him have a great weekend, every, "power" starts now. >> all right, scott, thank you very much. welcome to "power lunch," i'm tyler mathisen bailing on bonds interest rates soaring to new highs. stocks tanking again is this the beginning of potentially a major mauling from the bears? and the last time the unemployment rate was this low, the mets won the world series. that is not happening this time. neil armstrong landed on the moon as well what the latest numbers say about the economy and what it means for the future of fed policy it's been called juvenile, narcissistic and stupid but did it break securities laws

has elon musk gone too far with his latest tweet that mocked regulators and short sellers "power lunch" will explore that and keep you up to date with this big market selloff down 272 right now on the dow ♪ why do you build me up butter cup baby just to ♪ ♪ let me down and mess me around ♪ welcome to "power lunch," i'm contessa brewer. stocks plunging again. dow down 1%, the nasdaq getting slammed the most, on track for its worst week in a month. tesla, netflix and xilinx leading the declines netflix down 8% this week and rates are on the rise. yields on the benchmark ten-year note hitting the highest level since may of 2011, the 30 year hitting its highest level since july of 2014. >> let's get to the market action and the selloff

bob pisani, what are traders chatting about >> the markets are concerned about high rates but a lot of people feel the rates will go up for all the right reasons and are not worried. let's see what the market is doing now. let's look at the dough lw laggs big global tech names, big global industrial names. apple is 32% down minimally but one of the losers boeing is the second biggest gainer up 30%. these two names have benefited from the lessening of the trade tensions and boeing notably in the last month a little profit taking today. how about what's leading it's all defensive names, procter & gamble, pfizer, mcdonald's, coca-cola. what's going on here is this is a good old-fashioned let's go high and low volatility names and figure out what is going on

next week. higher rates, higher costs killing the housing stocks new lows in lennar, mo hawk, whirlpool, anything housing related is having a big problem and that's where you're seeing new lows bottom line is i think rates are going up for right reason. we have record earnings 25% a shot at from the third quarter 3% gdp growth. unemployment since t lowest since the 1960s and the recession probability is extraordinarily low. i'll take those adds interest rates could bear to go up and remember something just put up the yield curve do you remember three months ago everybody was saying oh, my heavens the yield curve will go negative, we'll go into recession. what happened to that? the yield curve has been steepening all through this week

look at the difference in the ten-year note and the 30-year note the spread between the two and the ten-year has dramatically increased this week so we have a different worry than we had just a short while ago. hey, i'll take the yield curve that's increasing, the economy is so hot that rates are going up story any day over the opposite guys, back to you. >> bob, thank you for that more money came out of u.s. treasuries in the past week than any time over the past year and a half rick san telly is tracking the action at the cme. rick, what are you watching? >> money is coming out but let's not dismiss the notion that we're left with rates significantly higher the other turnstile coming in. if you look at 10-year notes, since the first day of september when they were at 286, we're up 36 basis points. that is a huge move. as a matter of fact, right now the 30-year bond is touching 340. that means it's up 19 on the

week alone where 10s are up 17 and, yes, we're about 34 basis points 10s minus twos. bob is right if we look at the credit differentiation going on that we've been talking about, if you could have treasuries at these yields why would you take lesser qualities? you can see it, whether it's barclay spreads which have been very well behaved, they've started to widen from low tame levels but the etfs are the same, the hyg has dropped to the lowest levels since july of this year but the lqd is trading at the lowest level since february of 16 and the mub is trading at the lowest levels since february 16 as well a lot of preferences of investors change when rates go up and not all of this is bad. maybe they want to look at a different menu dom, back to you. >> thank you very much, rick santelli how big a threat are rising rates for the markets and the

economy in the long term peter bookbar is a cnbc contributor and the chief investment officer with the bleakly advisory group scott clemmons is chief investment strategist with brown brothers harryman private banking. rick laid out a number of landscape points in fixed income right flow somehow that translating into the market action on a macro basis. is this just about rates and the fear of them >> i think over the past few days, weeks, maybe even six weeks or so the market is coming to grip with the idea that there is more inflationary pressure out there than perhaps previously anticipated that seems odd but if you look at the 10-year break even spread, it's only above 2% the fed economic projections last week or the week before around 2%. inflation is higher than that. i think rates are affecting reality. >> so why aren't those break-even spreads, the indicator between inflation protected and non-inflation protected bonds pricing in more

inflation? even the fears are out there right now. we know them we see oil prices and everything else on the rise. >> the last time i checked the ten-year break even was at 217, a few basis points from the highest level since 2014 so it is trending higher but it's also happening where we're in a quarter that the fed has just ramped up quantitative tightening the ecb is cutting q next half the bank of. already cut qe in half and are lating rates rise so rates are rising for good reasons but a variety of reasons and i think that's the biggest risk to the stock market. >> so let me ask the men with the yellow ties. t question here. >> i didn't get the memo. >> you said as bob pisani said, rates are going up for right reasons. but does that matter to stocks because whether they're the right reasons or not, rising rates seem to be taking a lot of air out of this balloon. >> it's the same conversation we

have in every rate hike cycle. the fed is raising rates because things are good. >> i've forgotten it's been so long. >> it's good up to a point. >> up until it's not. >> the problem is that we have a credit and debt-dependent economy that runs on credit cycles the cost of money is the most important innut that type of situation so then it becomes once you get to a certain point in rates it becomes a threat to that good economy and those good markets. the question is when. >> why isn't this priced in? is there anything about this that is a surprise >> i wouldn't think so and i look back at the break even spreads and the fed is -- i'm surprised they're surprised because we've known about this one of the beauties of this economic cycle as protracted as it has been is transparent the way things have unfolded i tend to agree with bob the important thing here is not that rates are rising but why they're rising and yes at some point the fed overshoots we're still a long ways away from that as long as corporate

earnings remain. >> do we need to care. just because you put the thought in my head that every time we have a rising rate cycle, well, that hasn't been for a damn long time do we need to worry that there are a lot of portfolio managers and investors in the market who have never seen it before? >> no question. >> 10 put us into recession. to be positive now on this rate hike you have to assume we're going to get a soft landing the fed doesn't have a good track record and now you have the rising market rates, too and as bob mentioned we're seeing the softness in the housing market and autos, the two most interest-sensitive groups there are. >> is there something to be said about not just the trajectory of rates but the velocity at which they're moving we've seen rising rates but they haven't gone up this quickly in

quite some time. the last time we talked about rates i think it was february 2. it was a hot jobs number and rates took off so does this mean we're due for the same market fall we saw back in february >> i think so and i'm not bothered by that because that was a sentiment and price setback and maybe a recognition that this is terra nova we haven't seen for quite a while but we've done okay since then we've seen that kind of experience a number of times go. back to the taper tantrum. there have been a series that have had sentimental impact without having a fundamental impact on the markets or earnings or values or the underlying economy. >> what should i do with my money right now, peter >> if you want to be in bonds be short term bonds cash i think is an asset class because that theys and well and if you're going to be in equities you have to extend your time because if the road gets bumpy you have to ride it out. for some people you can do that

because you like a stock because of the prospects over the next ten years but if you're afraid you're going to get shaken out, it's time to rein in some risk. >> consumer staples, strong balance sheet, good cash flow, decent dividends and the market laggard year to date they've done better over the past couple days we like cash as well the option value of cash, the ability to take advantage of market disruptions is an appealing thing and to peter's point, you're getting paid to hold it. >> and gold and silver, very bullish. >> all right, thank you so much for joining us. now to the big developing story in d.c., a final vote on brett kavanaugh's nomination to the supreme court could take place now tomorrow after clearing a key procedural vote in the senate, eamon javers has the latest from the white house. hi, eamon. >> i just talked to a white house official who told me the white house is confident they have the votes going into this tomorrow but they can't say for sure that they've got in the the bag. they're feeling good but there is some uncertainty and that's

why all eyes will be on this 3:00 p.m. announcement from susan collins. she's going to suggest how she will vote tomorrow and that could throw this thing one way or the other look at the cloture vote cloture isn't the same thing as final passage. that simply means you're voting to end the debate and get on with the voting e. it was a squeaker 51-49 republicans prevailing to move ahead the president tweeting he was prout of the senate for doing that a couple key senators to watch collins said yes to move on to the vote, flake said yes but lisa murkowski of alaska voted no and suggested she doesn't believe brett kavanaugh is the right man for the supreme court right now. so that was something of a surprise, she was one of the votes people had been watching carefully but the rest of washington is going to be watching the susan collins announcement this afternoon. just because collins voted yes

for cloture to get on with voting doesn't mean she will vote yes in terms of confirming the nomination so that is one to watch for but maybe that yes vote on cloture gives us a sense of which way she might be cleaning. >> so if murkowski and collins and one other vote no, that means it lands in the lap of mike pence >> well, if you get a 50-50 vote the situation is mike pence the vice president of the united states can break a tiebreaker. i don't think that's happened before with a supreme court nomination talking before we came on the air about the clarence thomas vote but in this case which this would be something historic. it's very split in washington, d.c. and these things have gotten more partisan over time decades ago, even a decade ago these votes were overwhelming. people of the opposing party would generally vote for the president's nomination unless there was something very unusual going on now it's a much more fraught

process. >> our executive producer just said 52-48 was the clarence thomas vote years and years ago. >> in one could be tighter >> sounds like it might be, eamon, thanks. weekly recounts just out and seema mody is at the commodity desk. >> u.s. oil drillers cut rigs from a third week in a row rigs fell by two to 861 this week oil prices spiked initially when the data came out but we're off the highs. wti crude is $74.72, up by half a percent. >> thank you, seema mody elon musk calls the s.e.c. the short seller enrichment commission in a tweet. former s.e.c. chairman harvey pitt calls that tweet juvenile, narcissistic and stupid. but does he think the section should tear up its settlement agreement with musk as a result of it? harvey pitt joins us next. and the dow dropping sharply for the second straight day and

nearly 500oi pnts erased in two trading sessions stay tuned, "power lunch" will stay tuned, "power lunch" will be back after this break. it's not what champions do. it's what champions don't do. they don't back down. they don't settle. and they don't quit... except for cable. cable? oh you can quit cable. because we are cougars and we don't quit!! unless what?!?!?! [team in unison] unless it's cable! quit cable and switch to directv and get the most live sports in4k more for your thing. that's our thing. 1-800-directv

what you are seeing is the markets as we stand. the dow down by 277 points near the lows that we've seen far today. the s&p off by a percentage point as well. the only two specks of green are

utilities and real estate, typically viewed as more defensive sectors. it's communications services, technology and discretionary that are the laggards. the ones considered more economically sensitive so that technology weakness continues and tyler, con tess, is a communication services.tessa, communication services >> and we're seeing the result with those tech stocks taking a nosedive as well let's talk about the jumps in mortgage rates along with fast-rising home prices hitting housing affordability. diana olick has new numbers from washington hi, di. >> hi, ty. rates and prices a toxic cockta cocktail affordability hit a ten-year low. they calculate that base tonight percentage of income needed to buy the median-priced home in

the local market the average wage earner would not y'all phi to buy a median price home in 84% of the markets based on a 3% down payment nationwide the median home price was $250,000, up 6%, that's twice the annual rage growth and the average rate on the 30-year fixed mortgage is a full percentage point higher than a year ago regionally buyers it would have spend the most of their incomes to afford a median priced home in brooklyn, new york, san francisco and maui the most affordable markets, providence, rhode island, the philadelphia metro area and the chicago metro area the biggest drop in affordability compared to long-term averages came in denver, dallas-fort worth and grand rapids, michigan ing to jobs have moved into the area pushing demand for housing and consequently home prices higher very quickly. back to you. >> diana mtds wh, what are you n

terms of first time hoe bme buy being able to go in and afford something new. >> very difficult. at the entry level is where you have the lowest amount of homes per sale so you're seeing bidding wars at the bottom of the market the biggest price gains that we're seeing are at the entry level side of the market entry level buyers don't have a lot of wiggle room so as mortgage rates go up that hits them. >> diana olick in washington thanks. >> elon musk mocking the s.e.c. in a new tweet harvey pit calling it "juvenile, narcissistic and stupid" but does it break securities law every investor should ask questions. is our money in the right place? what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor.

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i'm gonna regret that. with new car replacement, if your brand new car gets totaled, liberty mutual will pay the entire value plus depreciation. liberty mutual insurance. ♪ liberty. liberty. liberty. liberty. ♪ . tesla shares sinking 7% after ceo elon musk fired off a series of tweets mocking the s.e.c. and short sellers it's the worst-performing stock on the nasdaq 100 our next guest says musk is juvenile, narcissistic, erroneous and petulant here to explain is former s.e.c. chairman harvey pitt those are words i don't think i ever heard come out of your mouth before. >> i don't think i've ever said them before, at least publicly but i think they're well deserved in this case. >> so what should either -- is

there in these new tweets some reason for the s.e.c. to do anything or is there some reason for the board to do something? >> well, there's something in my view for the board to do and it demonstrates why the s.e.c. was spot on in requiring as part of its settlement with musk that the board exercise meaningful control over his tweets. but this tweet as silly and obnoxious as it is does not do anything other than express his erroneous view it doesn't relate to the securities laws and it doesn't even relate to his settlement. there's no requirement that people like the s.e.c. although there's no reason for them to like the s.e.c >> harvey, it's dominick here.

do you think this colors the judge's acceptance of this plea agreement in any way, shape or form >> well, i think it's entirely possible that the judge may ask counsel for tesla exactly how they intend to implement that portion of the consent decree which requires them to control musk's tweets. i believe that this is now a real issue for the judge but again this particular tweet doesn't deal with a corporate announcement it deals with his opinion. >> okay, we're looking at the dow, down more than 300 points near session lows of the day when we're talking about these tweets we've seen a lot of people in

positions of power who tweet out juvenile, narcissistic, stupid and erroneous tweets that also have an impacting on finances and get this case is it any worse than what we've seen from organizations in positions of power, harvey? >> this particular one s of that avoid the precipitous continuing drop in tesla's stock price. all he does is rile up investors and make them worry about the rationality of the person who's supposed to berunning this company. >> jim cramer brought up on "squawk on the street" the idea that there may be some sort of mental imbalance going on behind

murv musk's most recent actions should that factor into how the s.e.c. responds? >> at this point i would say it should factor into how the board responds i'm not qualified to express an opinion on that although i do think his tweets are precipitous, mercurial and dangerous. it's up to the board to try and figure out how they can cabin these bullss he seems to have while making use of this creative genius. >> interesting, harvey thank you so much as always for joining us. >> my pleasure something happening today that hasn't happened in 50 years. the unemployment rate falling to 3.7% the last time that happened, the mets in the world series and they were winners, the jets were reigning super bowl champions and a man had just landed on the

moon much more on that big jobs po arertnd today's selloff when "power lunch" returns after this "power lunch" returns after this break. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.

markets are showing more red. the dow off by just around 300 points the s&p off by 30, the nasdaq you can see it are the outsize decliner off by almost 2% at this point the home construction etf, the ishares, itb is the ticker hitting the lowest level since august of between on pace for its eighth straight day of losses transportation names moving lower. a number of airline stocks pushing that group to the down side american airlines on pace for its worst week in three years amid that climb near and medium term oil prices and look at one of the semiconductor etf, ticker smh on pace for its worse day

for early september. microchip among the biggest lagers down more than 12% so far this week so we will watch that particular industry. now sue herera has a news update >> here you are, everybody, here's what's happening. more than 100 people staging a protest inside the senate office building against supreme court nominee brett kavanaugh. they chanted and marched outside the office of arizona republican jeff flake who this morning said he will vote to confirm kavanaugh unless, quote, something big happens. the congolese surgeon who will share the nobel prize for peace says he is dedicating the award to the women of the world wounded by conflict and confronted by violence everyday. he is speaking to jubilant colleagues outside of eastern congo. and first lady melania trump joining her kenyan counterpart for her performance at the kenyan national theater in nairobi. they were serenaded by a group of young children when they

arrived. so cute. and bette midler is apologizing far tweet that caused a social media backlash when she compared the struggle of women to the history of racism. she wrote that women, quote, are the "n" word of the world. that comment drew sharp criticism. she tried defending her tweet before deleting it and ultimately apologizing you are up to date that's the news update i'll send it back to you contessa. >> sue, thank you very much. well, 1969, what a year. i was not around for it but i read the mets won the world series, the jets won the super bowl and we landed on the moon it's also the last time the unemployment rate was this low. >> i remember all of it except the unemployment rate part. >> the september jobs report showed that it dropped to 3.7%, the lowest late in 50 years. more on this and the impact in will have on the midterm elections with ron christie, former special assistant to

president george w. bush and marc morial, the president and ceo of the national urban league and former mayor of new orleans. good to see both of you today. is there anything about this jobs report not to like? not only do we have national unemployment rate near historic low bus black unemployment is 6%, latino unemployment down to 4.5% morial, what do you think? >> it's a continuation of a trajectory and a continuation of a trend. the decline in unemployment has been steady since 2010 in the aftermath of the great recession. the storm clouds obstruction of justice the horizon are rising inflation and the fact that wages industrial not keeping pace with price increases. for many americans low unemployment is a good thing but they don't feel like they've got enough money in their pocketbook to pay their bills and live the quality of life they want to live so that caveat has to be understood in this context and

concerns about the housing market that comes through in this report. >> and ron christie, if you're looking at things that might immediately affect those who are working jobs and seeing wage growth finally, higher mortgage interest rates, higher cost for autos -- auto loans, how krrnd you about those rising ratesover interest >> good afternoon. in the short term i'm not that concerned. i'm more concerned by the fact that those americans who want to have a job are able to go out and gate job those americans who want to be a productive member of the work force are able to do so in historic levels we haven't seen since 1969, the year that i was born so there's a lot riding on 1969. will we see the federal reserve raise interest rates probably again before we get to december? but long term speaking, many, many americans have a lot to be happy about this morning. >> ron, it's dominick. many americans have a lot to be thankful for and rightfully so

however, every time i give a report about jobs numbers and these multidecade lows the feedback i get from viewers is well, that's not me. there are millions of americans out there who are unemployed and cannot find work or are underemployed so how does this administration address that? what's the message they have to convey to those people not feeling as economically upbeat as other people are out there? >> no question about that. if you look at our urban areas and more rural areas people aren't feeling as much of the glow of this economy i look at the folks who don't have a college degree, fwhoex have been at a higher level of unemployment, those numbers continue to go down. african-american rates go down, hispanic rates go down so for those saying the glass is half full, i'm saying under this administration for the last several years you've seen consistent job growth and there's more to do but it is getting increasingly better by the month. >> mark, there's speculation about whether we're going to see

a shift in the balance of power come midterm elections in washington, d.c. should the democrats be worried that voters will go to the polls and vote their pocketbooks as conventional wisdom holds? >> well, two years ago when the unemployment rate was 4.6%, just a point higher than it is today the economy didn't help the party in power i think this election is about bigger gut issues -- what kind of nation we want to have, do we want to protect our health care, do we want to work together for the future are we going pass comprehensive immigration reform are we going to protect the gains we've made in civil rights these issues, i think, gut issues about the future of the country and how we feel about the country are think are going to determine the outcome of the fall election. i think a shift in power is on

the horizon. what i hear is an anxiousness to vote, an enthusiasm to vote. an interest in really sending a very strong message that they do not like where washington, d.c. is today. >> we've seen a getout-the-vote effort trying to energize people who have never been to the polls and certainly not in a midterm election before. is that something republicans need to be aware of? how do they capitalize on the growth that we've seen in the economy. >> well, contessa, there are two things to keep in mind i believe midterm elections are about the economy and how the party in power is performing republicans in congress voted for the tax cut. not one democrat voted for it so republicans can say but for us -- >> they're not doing that. we're not hearing bragging about the president's tax cuts. >> i think you hear a lot of republicans in the house and senate bragging about it the president might not.

my second point is this, we've heard about this blue we have a coming and i think that might dissipate to be the red ripple why? the disgraceful treatment we've seen of judge kavanaugh. you don't have to agree with him or support dr. ford but i think what we've seen in the united states senate judiciary committee there are a lot of people who traditionally didn't want to vote and said i do not want to return the democrats to the power if that is how they will treat nominees in that manner. >> it's about how dr. ford was treated with a flimsy non-existent bogus so-called fbi background investigation they conducted. look 48% of the american people today are against the kavanaugh nomination 41% are in favor the that is the lowest number for any supreme court nominee since supreme court nominees have been polling. the american people are say nothing to kafgs they're not buying this victimology that somehow kavanaugh was not treated well

he's a grown man and a lawyer. if he can't take the heat, he can't sit on the bench. >> let me turn it back to the economy, ron, if i might is this potentially as good as it gets? >> i think it is i think you're hitting levels of statistical full employment. i agree with the mayor on several points i think we need to find ways to have wages rise. how do you look at folks that don't feel a part of this party? that's what our leadership needs to look at how to be sure part of this american dream have it will we see unemployment go lower? i think we're as low as we're going to get ron christie, marc morial, nice to see you both. thank you. big time tech tumble, the chips getting chopped, ipg photonics out with a profit wnheing and investors are taking do t entire group. we'll get the traders' take on this selloff next.

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the unemployment rate, as we've been reporting, falling to the lowest level since 1969. what does that mean? for retailers who are looking to hire for the holidays will there be enough workers? >> most of our economists say there will be enough workers but it won't be as easy as it has been in past years the national retail federation expecting the industry to hire between 5885 and 650,000 seasonal workers even the low end of that range is above last year sales forecasts are predicted higher the seasonal holiday work force are made up of students, recent graduates, retired workers and parents. the chief economist at i sense says employers will look at less experienced and more minority

type candidates. glass door estimates there are 16 million american the gig economy that retailers could tap into retailers are recruiting from the same labor pool as hospitality, restaurants and construction so the package needs to be competitive. kohl's started holiday hiring in june j.c. penney offering drawings for $5,000 gift packages and vacations before amazon's $15 hiring announcement target said its $12 an hour was attracting 20% more applicants than the year prior because that was an increase last year macy's seasonal workers will be eligible for bonuses and those bonuses plus the retailers' momentum is why their ceo told me he is confident the retailer will find the 80,000 workers its needs. back over to you guys. >> thank you very much, courtney reagan it's a selloff on wall street right now the dow tanking more than 300

points at its lows the nasdaq getting slammed down 2% lower on track for its worst week in a month's time joining us now is fast money trader steve grasso. steve, as we look at technology it's not just the tesla types and the netflixs of the world. it's established semiconductor stocks as well what does that tell you what about this decline looks like in the grander scheme of things could we see more down side ahead. >> it tells me everyone is selling everything you start to hear about risk parity funds that gets lost in the weeds but when you look at the overall averages, the s&p is battling with its 50 day, s&p cash 2877 the triple qs as you mentioned, the nasdaq, you start to look at that they're battling with the 100 day, the iwm, the small cap, battling with a 200 day.

this is a make or break moment for the markets near term. >> as we look at the small cap trade, it's one that has been underperforming as of late are we to glean that this is not part of a fundamental picture but more trade related or this selloff indicative of something that happens once in a while >> when you look at the russell and the small cap, they are insulated to trade issues so you would have thought they would have outperformed if those trade issues start to exacerbate to the upside so right now real liquidation, people are confused, i don't see panic, having said that you are going to year end and this is the best month for the s&p on a seasonalalty issue for -- october is and november is the best month for the iwm so we've had a year where never believe past performance so let's say if

that plays out. >> steve, does it feel to you right now like what happened in the early part of february as rates were rising and a hot job set things off anything we should glean between that time and today? >> if you look at that it feels similar but to me going into year end where the average hedge fund is up 3%, there's got to be a chase for performance so everyone has been waiting for this selloff and what do you do? do you buy the selloff or just sit on your hands? i don't know if they have the time if they can afford the ability to wait going into year end when they're trailing benchmarks so i would think this will be short lived. >> we've also been told earlier on in the show that many consider cash to be more of an asset because it yields something thanks to the fed because it's raising interest rates. is that something invests or should look at in the overall

scheme of their portfolios >> it used to be whatever your age is is what you have in cash and when you have these momoh stocks, it was impossible to outperform so i doubt if we'll get to that asset class of cash back the wayit used to be 10, 15 years ago and i would assume you have to keep up with the jones's, keep up with the market you won't do that without the momoh stocks so maybe the market is taking a respite from those names but i would think they'll have to dive back into the horses that got them here and the outperformance sooner rather than later. >> lots of market dynamics to. what steve, thank you so much. >> thanks. >> one sector holding up reasonably well, the restaurants. should you bet on diners who will keep going out to eat our next guest says this is the year of the restaurant find out why and the big tech names, the worst performer in this two-day selloff, the nasdaq 100 down

nearly 4% just since wednesday's close. we have much more on the markets coming up right he o"per nch.ren ow

another big selloff on wall street the major averages tumbling 1% or more at their lows. rising interest rate fears fueling some of those fears again in the market. as we get closer to the holidays and with consumer spending on the rise, will people go out to dine more? and what could that mean for the restaurant industry overall? let's get some top picks for the end of the year from nicole miller reagan, senior restaurants analyst at piper jaffray. nicole, this coverage universe is fascinating to me because we all love to eat. what are the best picks as we head into that shopping holiday season >> well, it's the year of the restaurant so with that being said, where we are in each cycle helps us determine how we make recommendations. so at this point, looking from contraction into expansion phase, we're going to stick with the momentum plays and the winners like a shake shack, mcdonald's in a qsr. but we also love recovery stories. so that would be chipotle and potbelly

then we make reference today we upgraded b.j.'s. in terms of casual dining, that whole segment is doing better. >> one of the stocks you mentioned of the idea that straunts could be good is a mid-scale play darden restaurants has hit a 52-week or better high just recently yet it's one of the biggest laggards in the past two weeks or so. is there anything we should read into with that with regard to whether the consumer is still healthy or not >> i think that was a sell on a new situation. i think we should read two things into it number one, the restaurant space is poised to go higher so the fact is we have fewer restaurant stocks creating scarcity value or a valuation floor in terms of premiums or multiples. and the second thing is we have balanced supply and demand so sales performance has gone from negative to positive. again, darden slowed on the news

and other casual diners are also starting to do well. sometimes when that gap closes between outperformance, you'll have stocks the way darden did >> i'm slightly uncomfortable with the idea that all stocks are rated overweight in the restaurant category. be that as it may, i'm going to ask you a similar question to one i asked ron christie a few moments ago. is this as good as it gets you seem to believe these stocks can go higher, that the momentum can continue >> so in the last expansion cycle, restaurant stocks traded at a 500 basis point or five multiple pe turn to the market today the index as we measure it is at parity so we have no doubt restaurant stocks are going higher. if you look back at our ratings 6, 12, 18 months ago, i would say we had many more underweight ratings. they've been consolidated. strategic buyers came in and bought we lost one-third of our universe of coverage again, that puts a floor in the

space and that plays -- it's a big factor to take into consideration. >> it seems like every day i get a new flier in the mail, nicole, from meal prep, meal kit company that comes in and wants my dinner business. how much of a challenge do you assess for the blue aprons or the world or even walmart getting into that meal kit business >> we call that shadow supply. there's many places you eat today that you didn't eat before before it was just a consideration between full service sitting down or quick service getting your meal and moving on. there are other places whether that's a cinema, anned a v ed a play gaming place. they're all small dollar amounts. when you think of the $800 billion restaurant industry. so while they can grow rapidly, they're so small in comparison in combined shadow supply is something to think about but meal kits in particular is not something we're concerned

about. >> wages on the rise the labor market's tight will restaurants get hit because of cost? >> absolutely. the benefit is commodities are down so we have deflation there massive 5%-plus labor inflation. you're seeing restaurants take price of 2% on average to offset that so it is going to take comp performance to hold that store level margin line steady and that's why we're looking for companies with the best culture married with the best cuisine profile. >> all right thank you very much, nicole mill mill miller regan are you handy with a wrench? the airline industry could need over a half million mechanics over the next 20 years and this comes on the eve of the earnings season. could earnings be strong enough to send stocks higher? or are expectations too high

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and an ice plant.rs with 70-megawatts, 35 mules, but we brought power to the people- redefining what that meant from one era to the next. over 90 years later we continue to build as one of the nation's largest investors in infrastructure. we don't just help power the american dream. we're part of it. this is our era. this is america's energy era. nextera energy i'm contessa brewer. here's what's on the menu. with earnings season kicking off next week, we'll kick off where we could see growth and where we might stall.

the need for aviation mechanics is taking off and the pay is competitive details ahead. and the nasdaq sinks this week as three names fall hard. is it the buying opportunity you've been waiting for? and how sweet it is. mars is investing in creating jobs as it adds two new members to the m&m family. "power lunch" starts right now welcome to the second hour of "power lunch. i'm dom chu. with the major indices deep in the red here, we are off the worst levels of the day. the dow had been down 325 points at its lows. right now there down about 235 the s&p off by about 21 and the nasdaq off by about 116. the real laggard communications services is the big sector laggard real estate is now trying to hang onto green territory.

semiconductor stocks getting hit hard across that entire industry group. texas instruments, nvidia, intel. you can see some of the steepest declines and some retail stocks very much in negative territory. costco, under armour, restoration hardware, and dsw. for more on today's market movers, let's go to bob pisani at the new york stock exchange over to you. >> dom, we are well off our lows we're ten points off the lows on the s&p. that's almost regaining a third of the losses. but we're still deep the red here let's just stick with the basic theme. let's hit the big cap tech stocks here. just sticking with the dow here, look apple's the big leader of the year it's up 30% so far this year nop surprise, a little bit of momentum loss there. boeing is also up 30% on the year caterpillar the perception that the trade wars will be lessening. they've had a great glide up in

the past what's benefitting this is a good old fashion flight to quality. let's hide in defensive names and pfizer and mcdonald's and coca-cola and procter & gamble housing related names, not only do you have higher rates, of course, you have higher costs and higher overall expenses for people buying houses and housing costs in general these are new 52-week lows mohawk another one associated with housing, 52-week low. let's pull back and see what's going on for the week. banks, yield curve noticeably steepening this week three months ago we were worried about yield curve inverting. we're all now positive banks are up s&p is only down 0.8%. but you see the russell 2000, that's a rate play there's concerned not just about the whole trade war reversing, but also higher rates hurting smaller companies. home builders i mentioned down 4%

there's your big play in the nasdaq 100 with the big cap momentum names finally, i have been looking around for rate play concerns. i've had people ask me questions about why there is so much decline today in the gaming stocks these stocks are fairly heavily leveraged and it's possible here this may be the first signs of rate play concerns in certain sectors. you're going to hear if we keep moving this way and directions with the interest rates higher, you're going to be hearing a lot about rate play concerns this may be one of them. back to you. >> thank you very much how should you position yourself to deal with the recent ups and downs? with us are krishna memami, kim forre forrest, and bill smead. welcome to all of you. krishna, let me begin by asking you. you point out that rising interest rates had the potential

to take this rally in stocks down but you don't think that is likely why? >> well, i think the moving rates is driven by a strong economy. the fed continuing down the tightening path. i think that comes off middle of next year or first half of next year as economy moderates and the fed starts to find ways of getting off of its tightening path so it's to be expected that at some point, the u.s. economy slowing and rate pressures come off and the markets stabilize. >> all right kim, what do you think do you agree with krishna's point of view there? maybe the rise in interest rates will slow by the middle of thex year and that the market can keep rising a pace >> well, i think it all depends on how well the economy's doing and if the fed feels it's overheating. if things remain as they are right now and that's with pretty good job growth, pretty good but

not super high job or income growth, then, you know, okay inflation. which is around 2% i could see this going on just as the fed chairman said, for a long while but if anything heats up, i think the fed's going to feel free to raise those rates and that might bring the party to a crashing end >> and bill smead, let me bring you in one of the areas you like in the face of the rising interest rates is of the home builders. explain why and which ones >> first to answer your question directly, the demographic momentum, if you look at diana's reports, she's telling you that things are really going bad in new york city, san francisco, seattle, the hot expensive markets. and that's not where the homes are being built by the five largest home builders. they're being built in the other 85% of the country which steve

case calls the rise of the rest. all you have to do is look at all u.s. recorded history. people are most excited to buy a house not when they're the most affordable that was 2011. we built 320,000 houses. they were least affordable in 1978 and we built 1.4 million houses why? because the baby boomers were getting married and having kids. and now their children are getting married and having kids. the second thing i'll say about the way the market's behaving is as the riskless rate rises, the riskiest investments are going to come into question. and what you've seen in the last few days is what's going to happen when people stop to consider at higher interest rates the bets they've made, the speculation they've been making in they riskiest stocks. >> krishna, are we going way too overboard with regard to the rate rise fear i only say it because the new

york federal reserve today took down its estimates for current quarter gdp as well as fourth quarter gdp as well. so maybe things aren't overheating as much. right, krishna or not >> absolutely. i think the u.s. economy has already started moderating it's growing, growing at a decent pace, but the second derivative is already negative i think that continues so i expect rates to start moderating very quickly and probably go lower by the middle of next year this is one of the most attractive entry points for long rates we have come across in awhile >> kim, you also think some of the volatility in the market has to do with deals that haven't been made. tell me about your theory. >> sure. so the third quarter is always kind of weird. and it's weird because people go on vacation. and that kind of makes the sales flow kind of seize up, we'll

just say, because people that can sign off on a large deal for tech or for an industrial company, they're on vacation so that makes third quarter a very uncertain quarter and i've learned in my 19 years doing this to kind of look past that and try to discern is this the beginning of a downturn for a company where deals aren't signed or is it really just a few deals that have slipped because, you know, a lot of the population is out there enjoying the summer so that's always the head scratcher. but that's what you really have to discern in this next quarter of earnings. are things okay or is this just the beginning of, you know, a down cycle and i have to agree with krishna that i agree that things are really firing on all cylinders and they are very smooth my first segment was really kind of negative. and i'm not negative at all. >> bill smead, the last word goes to you. tie it all off

what's your best advice to viewers today? >> advice to viewers is when extremely expensive stocks start getting hammered, it takes a lot, lot lower prices to actually create value. and the second thing is, do not underestimate the five-year view right now people are worried about the next three months or six months and what you should be doing is betting on main street, betting on earnings growth from main street and get away from all the fantasies about what your next virtual reality project is going to be. >> all right bill, krishna, kim, we thank you all. coming up, mercedes doubles down on its u.s. production plans. we're live in alabama with a look at how much the automaker is expanding its footprint despite trade war concerns plus we're a week away from the start of earnings season could this be the make or break

moment for the -- you'll want to stick around for the interview with the mars president, the iconic candy maker as we head to break, a look at the dow down now 261 points at this point it had been down 325 points at the low. intel, caterpillar, and ibm the biggest laggards here. we'll be back. are you ready to take your wifi to the next level?

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welcome back to "power lunch. let's take a look at the s&p sector heat map right now. technology and communication services really the worst performers here utilities and real estate are in the green right now. dow jones industrials off by 256 points down a percent on the day. off the session lows earlier of more than 300 points despite concerns of a growing trade war, mercedes-benz is doubling down right here in the united states. phil lebeau is live in vance, alabama, where the automaker is expanding its footprint. you're not far from the university of alabama. roll tide. they make a lot of suvs and coupes out there are they doing with this footprint? >> reporter: they're expanding it, dom. as you talk about this plant here, we're right on the line. this is where they're making the new gle which they just had the start of production today along with the gls the gle format very busy here they will build about 300,000

vehicles here. two-thirds of which will be exported their worldwide suv sales at a record high and global sales up 5.4% but yes, they are feeling pressure because of the ongoing trade war between the u.s. and china. >> we export two-thirds. our biggest markets u.s. and china. last two months we've seen impacts of the tariffs slowing down a little bit the incoming orders for the plant here >> take a look at this wall, because this shows everything in terms of autoproduction in the united states. we talk repeatedly about expanded production of vehicles in the deep south. alabama is a perfect example of it 9% of the vehicles made in the united states come from alabama. and daimler as you look at shares under pressure mainly because of the trade conflict and the vehicles built here are at a 40% tariff in china

they are expanding their production facilities here in alabama. breaking ground today on the new electric battery plant that will employ 3 hurk00 peopl. that plant will supply the batteries for the electric suvs which will start rolling off this assembly line starting in 2020 >> great news for alabama, phil. appreciate that. in addition to jobs friday, today is also manufacturing day. out with the latest outlook survey showing that more than 92% of participants have a positive outlook for their business in the third quarter. but it's slightly down from last quarter's all-time high. and puts 2018 on track for the highest level of optimism. wilbur ross wrote today in an op-ed on cnbc.com that manufacturing is booming again in america thanks to the trump administration's economic policies can the momentum continue into the end of the year? let's bring in david farr, the ceo of emerson electric.

and jay timmons of the national association of manufacturers david, let me begin with you i know you're the chairman and this is the last hurrah, so to speak, of your chairmanship. what's behind the slight decline of optimism? >> i would say that we've been running at high levels for some time now people are starting to digest some of the trade rules and policies in this country i think people are starting to see that and see some being positively impacted and some negatively impacted. still very strong. >> how big of a concern is it for these manufacturers -- the fact this skills gap does exist and is predicted to continue to exist? >> yeah. predicted to grow greatly, actually so three-quarters say finding labor is their number one concern.

it's the head wind we see right now. reform are the things responsible for that 92% positive outlook when you say it's down a little bit, we're talking 92% to 95%. i'd take that in school any day. >> is there enough the government is doing to address the skills gap we heard from -- what about the people the people who help make the stuff? >> well, business. and dave is a perfect example of what a company can do. what the forecaederal governmens doing is hopefully they're going to be consolidated so i don't have 65 different programs we're really impressed with the trump administration's program on the apprenticeship program. there's a very large focus on this >> how hard are you finding it at emerson to attract the workers you need, number one

and number two, are you raising pay and wages? >> both yes and yes. >> we've been hiring about 8,000 salary people worldwide. we've gone from last year was about 80 days to find those people we're a little over 100 days today. we're up about 25% to get that the base salaries and starting salaries of these individuals are clearly climbing if i look at the wage salary increases for the skilled workers, this year we're probably up around 3.2%. last year we're around 2.7%. there's definitely an upward trend right now. the statistics you're seeing, they're definitely much higher >> are those pay raises easily absorbed by your company or are they affecting possibility? >> we are absorbing that from

that perspective and so, you know, my concern will be if it slows down i look at next year, we're talking probably around 6%, 7% underlying growth. i think we absorb that productivity is up for us right now. we're having to do a lot more with less people because i have quite a few jobs still open but the base wages are going up. we're having to spend a lot more money on training. this is a regional thing i think the government can get out of the way, can help us change some regulations, consolidate. in the end it'sgoing to be business that drives this local. every area is different. we need to start doing that. we're doing that in st. louis right now. >> jay, i have a 1 1/2-year-old daughter it's a little bit more for me to worry about what she's going to do for a job when she gets old enough how is it that americans in general can prepare to be gainfully employed in the next 10, 20, 30 years >> it requires a focus in our

educational system to kind of change course a little bit everybody is not ready for college. i was in detroit yesterday speaking to a group of young people who have decided they probably don't want to go to college but they'd like to figure out what they want their career path to be. they've been exposed to robotics and other manufacturing processes. they're excited about joining the sector by the way, some of it requires a couple years' training >> does some of that have to do with changing the perception of manufacturing as a job >> yes that's what manufacturing day is all about. we have 26 countries and many others opening their doors to students and parents today using ar, 3d printing, things we were lucky to use paper. >> i was lucky to go from manual

to electric typewriter. >> we have stem days across our facilities in the united states. we have over 50 facilities in the united states. we open up our facilities each year to allow the parents to bring the kids in. encourage them to show what we're doing in manufacturing i used to walk the floor with my dad. it is completely different today. i mean, there's a lot more technology you have to be ugt educated and skilled. we are working extremely hard to try to get the workforce trained for the next generation. >> david farr, the ceo of emerson electric thank you and good luck on your last days as chair -- >> i'll still be around. >> good to know. thank you, jay jay timmons. coming up, rising yields putting pressure on home building should you stay clear of it? "trading nation" is next and as we head to a break,

whirool lpand microchip hitting new lows we are back in two minutes six in the morning.

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of "trading nation." let's look at one corner of the market getting absolutely crushed like tomatoes. home builders, the group on its longest losing streak ever down nearly 9% in a month. as u.s. treasury yields surged to multi-year highs and mortgage rates do as well morgan gibbs and bill baruch what do you make of them at this point? love them, loathe them >> i wouldn't quite say loathe definitely stay away as you said, the interest rates, those mortgage rates are keeping potential buyers on the side but on the other side, home builders are facing massive raises in costs. they're having trouble finding skilled construction workers so you've got higher cost in building, higher prices from a consumer perspective and that's just really making

the earnings growth tank and so we're seeing a big decline in earnings growth for the second half of this year and even worse, 1/4 of the growth next year. for us until we start seeing somewhat of a slowdown in this earnings growth for stability, we'd recommend staying away. >> erin has laid out the recipe beautifully in this rising economy. home builders are sinking. is there any relief in sight after they've dropped so much? >> very ugly chart peaked in january. the selling picked up in september as treasury yields rose they roared higher and rising yields are not good for home builders home purchases and from here, i do think the 10-year finds a sealing at 3.25%. i'm buying treasury prices now so what does that mean for the home builders? we broke a trend line coming back from february of 2016

then i'm looking out for a breakout in the first quarter of 2017 you look at the apex of those two trend lines and you've got support at 34.25 i think this will get down to there. that's a good buy there. and youm see treasury yields topping in that time as well >> bill, thank you erin, great to see you appreciate it. for more "trading nation" head to our website or follow us on twitter @tradingnation coming up, it's time for the dessert portion of "power lunch. from manufacturing to m&m's, mars wrigley is hiring we'll talk to the company about that next and the latest additions to the m&m family. on this down day, a look at the stocks hitting fresh 52-week highs. verizon, pfizer, and cme we are back in two minutes with that look.

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welcome back to "power lunch," everybody. i'm sue herera here's your cnbc news update at this hour. arizona gop senator jeff flake says he will vote to confirm brett kavanaugh to the supreme court on saturday. unless something big changes but he added that he doesn't see that happening >> do you plan to vote the same way tomorrow >> you plan to vote yes tomorrow >> i'm glad we had a better process. there was a verdict in the trial of former chicago police officer jason van dyke who was accused of fatally shooting laquan macdonald in 2014 the verdict will be read in about 15 minutes

the jury began deliberations thursday afternoon archologists have uncovered a new treasure in the ruins of pompeii. it is a richly painted garden scene in the shrine area of a home that had been buried since the explosion of mt. vesuvius. it was an altar space at the entrance of the homes of the well-to-do and it is beautiful. you are up-to-date that's the news update at this hour contessa, back to you. >> look at them still making discoveries there. stocks are off session lows but still deep in the red right now. dow industrials are up a by 0.75% or 196 points the nasdaq is off by more than a percent. and the s&p at this point down half a percentage point. it's not all bad out there though a number of staples performing well and finally taking a look at the rest of the world here emerging markets hitting a

14-month low today down 13% since the start of the year and 21% from their january high >> thank you the oil market closing for the day. let's go to seema mody at the commodity desk. >> oil prices right now lower by around 0.1%. but we are higher for the week it's been a very volatile week for oil hitting a four-year high on wednesday took a deep following comments from the saudi oil minister who said his country is pumping oil at all-time highs. many analysts suggests saudi arabia will try to push more onto the oil market to compensate for anticipated pullback i also want to point out, we are looking at gold moving higher here trading back above $1200. back do you. >> thank you so much for that update the most important earnings season ever is upon us or at least it has the potential to be the best or most important one. companies are facing serious

head winds you've got tariffs, growing fear over inflation, all of which could make it easier to beat that wall of worry is this earnings season a make it or break it moment for this bull market? let's bring in ron insana and also paul hickey paul, we're going to start with you. you look at the earnings season. whap are the expectations we can have double digit earnings growth >> in response to your question, expectations coming into this earnings season are pretty high. we have seen a lot of selling on the news so far in just the month of september, stocks reporting earnings have declined over an average of 1% following their days the second half of september has been worse averaging decline of 3.5%. and in august we saw stitch fix.

october hasn't been any better it's been analyst investors that are selling stocks in reaction to earnings right now. and this goes right in the face of a fed that's come out this week and has been a lot more positive on the economy. which ultimately leads to more hawkish actions by the fed when you have that combination of a fed that's more optimistic and investors maybe seeing companies not quite living up to expectations, it's not the greatest combination for a bull. >> all right sop ron insana, i was being hyperbolic in my intro to this segment. we used to call it the most important earnings season since last season. >> most important hour of the trading day. >> yeah. most important everything. so is this a critical juncture only because as paul points out,

it's high going into the season. >> i would agree given the numbers we're seeing the numbers were depressed by the hurricane. we've seen upward revisions over the last two months. fed's probably going to get more not less aggressive. and you've heard more and more companies warn this quarter rather than in the last several quarters there's a high hurdle to meet on earnings the economy may be overheating in some respects so i think you do have to worry that -- and again, this is a cyclical issue not necessarily a structural one in which we could see the fed go too far, tip us into a bear market and somewhere in the next 15 months or so move us towards recession. >> so then how do you describe the expectations that are out there? i mean, are people just spoiled for this amazing earnings reports? >> you can't duplicate what happened in the first and second quarter. the huge gains you've gotten in profits from the tax cut are not going to be repeated no matter what happens going forward

now granted earnings can go up it doesn't mean we reached an absolute top then you have to support valuations in a rising rate environment. that gets a little bit tougher >> paul, take that apart for us. it sounds like ron is suggesting there was a sugar high from the tax cut that -- >> yeah. >> a little bit, right >> you've had real organic growth but on top of that the tax cut. >> on top of that you had the tax cut. and as we get further away from that, do the effects of the tax cut get mitigated? >> you know, i think rather than sugar high, maybe a booster you can call it. the economy is still doing well. it was a quick boost that's going to wear off but the economy can still move forward here what we've seen as we've seen some of this weakness early on in earnings season, the one silver line is you're seeing some revisions come in we've seen in the last month more downward revisions than upward revisions

i think you're seeing part of it are analysts looking at initial reports and seeing that things may not be as, you know, optimistic as maybe they were at their highest. and that sets the bar a little lower heading into earnings season doesn't have to be a disaster. but you do have to -- >> tie it off in 20 words or less. >> technical deterioration of the stock market number of new lows exceeding the number of new highs on a regular basis. that's something from a charred perspective. >> that's 24 words ron insana, phil hickey, thank you. coming up, there's a problem taking flight in the aviation industry there just aren't enough mechanics. kate rogers is in queens, new york, with more. hey, kate. >> reporter: hi, tyler that's right we're going to tell you about a growing shortage of aviation maintenance technicians and what companies like jetblue are dngoi to combat that problem coming up

after the break on "power lunch.

with a record number of passengers taking to the skies, more aviation mechanics than ever are needed. the problem is, there's just not enough of them kate rogers is live in queens, new york, with that story. hi, kate >> reporter: hey, contessa

that's right the industry's projected to need some 750,000 aviation maintenance technicians like howard behind me over the next two decades. that's as the current workforce ages out and the global need continues to grow. delta will need about 2,000 in the next decade alone. >> and throughout the industry, we had a lost decade of hiring that occurred in the 1990s through the early 2000s. as a result of that, as an industry as we've had consolidation and all the other things that happened, it's really increased an overall demand we have to find ways to prepare to get them hired to make sure we're ready to go for the future >> reporter: companies like delta and jetblue are partnering with training schools around the country like aviation high school in queens to ensure they have a vast pipeline of talent but the industry is also facing

challenges including a gender and skills gap as it seems to fill these important roles we spoke to laurie demarco she was the first woman to attend aviation high school. she also says there's a perception problem in the industry that jetblue are looking to change. >> i think many want their kids to be in white collar jobs i mean, that's -- so i think that's where there's a smaller pipeline so i think we have to as an industry have to do a better job of partnering with the schools like aviation high school. >> reporter: also noted here, the salary could be about $70,000 a year which is very competitive and you don't need a four-year college degree to reach that pay level >> thank you very much the candy giant mars wrigley making big news this week. the maker of m&m's and snickers unveiling a host of new flavors. they're unveiling manufacturing initiatives across the u.s. and it is making a hiring push "power lunch" exclusive now with

the president of mars wrigley confectionary america. welcome back >> thank you very much good to be here. >> what are some of the new flavors you're coming out with we have some of them on display here and which one do you like the best >> that's a really tough question they're all really good. >> it's like which of your children. >> in december we launched a new range of m&m tablet bars >> these are bars. >> they're tablet bars, yeah. >> these are chocolate m&m's inside a chocolate bar >> they are. and they taste fantastic that part of the category is going really well. those come out in december they'll be in the stores >> and in stockings, you presume. >> i hope, yeah. i hope so. >> it's also -- it's not merely that you're taking your very well established brands like m&m's and snickers and reconfiguring them, reimagining them but you're also resizing them which i think is brilliant these little things which give

you all the good taste with half the guilt, right >> yeah. consumers love to treat themselves and the category is vibrant. but what's really important is we offer consumers choice and are transparent about what's in the product. you want to make sure people enjoy treats, an indulgence. make sure you limit your intake. >> she's looking right at me >> and i live in a house of sug sugarholics. if it's out, it's gone halloween is coming up how important are these holidays for the bottom line? >> the holidays are really important. halloween is the second biggest season following the christmas holiday. and 75% of americans gift candy as part of the halloween treat >> you have to otherwise you get the trick. there's the toilet paper and the eggs and all that. >> but the season itself for retailers, the halloween season in total not just candy is up 30% from 2015 to 2018.

so people are buying costumes, celebrating with their friends, and enjoying our wonderful treats >> we have had a theme throughout this show about jobs and hiring because it is a jobs day. you guys are hiring. >> yes >> are you having problems finding skilled workers? >> we don't, actually. we're very lucky we pay competitively and good benefits in fact, if you look at how long our workers stay with us, we on average 20% of our workers will be 12 years. for the nation that's about five years. i myself have been at mars for 20 years i won't tell you how much over 20 years we keep people for a long time we've been for the last six years on the fortune top 100 best places to work. and doing things like this, being private family owned makes a huge difference. because we can think for the long-term. we don't have to be quarter to quarter. we can invest in things that make a big deal to associates and consumers. and we invest in american jobs >> how much of your global manufacturing is in the united

states and how much is overseas in local markets? >> the u.s. business is about 40% of our total confectionary business we're the largest confectionary player in the world. we also have a big pet food business so the u.s. is the biggest country in the world, so of course it's going to be the biggest part of our manufacturing industry but -- >> where's your biggest plant in the u.s. >> our biggest plant, it's a tie between waco, texas, and cleveland, tennessee if you look at our new products, the snickers new product coming out in january, that's made in waco, texas. and where we're adding the jobs right now, 75 new jobs in cleveland, tennessee that's where stheez will be made >> how heavenly does it smell inside one of those factories? >> it smells fantastic but the taste is even better >> we know your company is in environmental conscious planning do you feel it's a company's job

to be at least a steward of the greater good is that something that should be part of any mandated corporation out there? >> yes it is easier for us. it's one of the benefits of being a private company. you can think long-term, you can invest for the future. we've been here for a hundred years. if companies want to be here for the next hundred years, they need to take care of the planet. climate change is real there's no getting away from it. it's industry's job to step up and do what they need to do. >> does that translate to other issues as well fixing gender parity and pay and things of those issues >> i would say absolutely everything and especially for us because we're in a treat industry. even more important when you're in this sort of industry to step up we partner with partnership for a healthy america just over a year ago with industry colleagues to make commitments about reducing calories, increasing choice, being transparent. you'll notice that our calories are right on the front of the pack because people don't pick up our

product and go, i wonder if there's sugar in it. they know they're buying a treat. but they look at the label >> i pick it up and wonder where i can hide it so it doesn't immediately become the meal instead of the treat thank you so much for joins us really appreciate the insight. i can't wait to taste the new flavors. but maybe off camera >> thank you well, coming up, tech is leading the market declines today. amazon, apple, snap, google, facebook you name them, they're lower we're going to tell you about the tech wreck and where to at cinup th'somg next on the show see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade

tech getting wrecked again joining us now the michael graham analyst what's behind the decline here >> yeah. thanks for having me on. i think it was a little bit of a pull back after a long period of appreciation for stocks. i wouldn't read too much into it we still very much like most of

the stocks netflix and facebook were rated an google. i think the backdrop is pretty strong i do believe that fundamentals remain pretty strong for most of that group >> if that's the case do you see that as a buying opportunity >> i do. you have some stocks that are close to all time highs that are close to price targets i do think that overall when investors look at the broader stock market and tech sector in particular it is hard to find large cap companies are bright growth outlooks. i do believe that, you know, on pullbacks we should be viewing those as buying opportunities especially for amazon which in our opinion has the brightest strongest fundamental outlooks >> let's talk about franchises

that don't have the same kind of weight that amazon do. let's talk about snap inc could it become twitter esque? >> i think the company is making moves to try to work itself out of the operating head wind environment that it has had. the fundamental issue with snap has been that the user base isn't growing as robustly as the company would like or as investors would like one of the major reasons for that is facebook and instagram facebook and instagram were able to grow and evolve without a primary competitor snap, you know, faces this company head on in a bunch of different ways facebook has made disclosures about some of its stories, products and instagram stories

reaching user levels that are a lot higher than snap that's for one feature on facebook so, you know, i definitely think that's competitive head wind as well companies working hard to redesign its products and layer in new features. we'll probably talk about the memo that seems to have been leaked from the company today. the company is doing quite a lot to try to stem that user tide but so far we haven't seen great results. >> tell us about the leaked memo and whether you think snap is an independent company in five years. >> yeah. from what we can glean assuming the memo is accurate, the management team is getting more focused on probability in our current forecast we have snap losing money all the way through 2020 and being profitable in 2021 the management team came out today and internally messaged

two employees they would like to see in 2019. i view that as a sign that the management team is really trying to, you know, be a little bit more disciplined and sort of shore up the country you talk about the possibility of snap getting acquired and the interesting thing is the two cofounders control the company absolutely it is really sort of up to them. >> thank you very much have a great weekend more on the market selloff coming up next let's begin. yes or no? do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team

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all right. markets are selling off right now. there is one stock that is the best performer of the s and p. what is it ge up 4.5% it's the best week since 2009. this is a company that maybe some investors are trying to find some kind of life to buy this >> i don't know. >> bring good things to life >> this is a good start because he will get rewarded if the share price -- >> bench marks are made for the

next few years >> a lot of inevestors have not seen a time when cash paid you some money we were talking a little bit about that it probably will continue where cash is going to be at least acceptable thanks for watching power lunch have a great weekend everybody >> closing bell starts right now. good friday afternoon. i'm wilfred frost. >> a big down day today. the dow down 325 points. we did open briefly higher the jobs number taken as a positive for the economy and initially for markets too. as we look quickly the