watching going into this close going to matter. 20822 on the s&p 500, the the other thing, too, i think that we're missing here is 100-day moving average and a close below that could indicate inflation. inflation -- all the things that a break in momentum. bob mentioned early on in his report are inflationary, and you we're sticking close to that line and we'll watch that line look at the trade in tariffs, very, very carefully as we're that's going to cause inflation. that's putting upward pressure down more than 2% on that on rates, and i think that's why people aren't moving into bonds right now because they are afraid rates will move up, and indecks. they can get hurt. a tha thanks for watching "power >> matt, just quickly. lunch. a very busy hour of "closing bell" starts right now going for gung-ho purchases at the moment, if there was a sector or stock you would buy that it does, tyler. now, what would it be? >> i'm -- i'm very cautious good afternoon right now really. welcome to "closing bell." >> okay. >> i think we're going to get i'm wilfred frost. further discounts here >> and i'm sara eisen in for start to look at oil when oil got to 65 everybody kelly evans. >> been a wild day on wall said it's going lower and will break down street as you all know now it goes to 75 so they think a look at what the indices are it will break down again doing. down 2% on the dow in terms of narrow to middle of the range. points, down 527, the low of the if we get some further selloff, session. it was down 569. you might see people plow into the high was up 11 it feels like a long time ago oil again. >> and the stocking is picking early this morning up steam again s&p is down just over 2% and every sector in the s&p has gone nasdaq down over 2.5%. negative, including utilities which were higher pretty much >> some were itle declines for all day, tech by part biggest loser. >> guys, thanks all.

stocks what's interesting is the cross-currents right now v.to look at bonds and look at the dollar as well take a look at the ten-year treasury yield this has been a huge source of fascinating exchange 45 minutes left to trade, and we're neither session lows as angst for the stock market sara mentioned lately 322 so hovering right around the let's send it over to dom chu on 11-year high when it comes to the market flap. bond yield you're seeing it across the >> as we talk about what's curve. happening with the market the two-year shooting up to a downside, the transportation stocks are notable downside ten-year high and the 30-year, relative underperformers to the multi-year highs rest of the overall market been a little bit higher earlier in the session as you can see, but the elevation of the bond the dow jones transportation index now off by just around yield, also wanted to point out the u.s. dollar which is weaker 3.5% as we head into this closing bell in the next 45 today. it's interesting that bonds, the minutes or so, far outpacing the dollar and stocks are all declines in the broader market selling off together for the dow or s&p 500 usually stocks sell off in a big if you take a look within the way, 500 points down, and you're transportation stocks, there are the notable parts that are rushing to safety like the really dragging things down. dollar or the safe haven first of all you've got what's happening with treasury so a little bit of a the railroad stocks. a number of those railroad different correlation and different feel which could stocks moving to the downside suggest not an all out and out and among worst performers in the index, csx on the railroad panic but what is safe in this kind of environment. >> the move in -- yes, we're side is having its worst day so hitting those sort of record far. that's one name to watch and take a listen to what's ten-year high type of headlines and the move is small over the happening with the airline stocks because even with lower

last couple of headlines oil prices to some degree are >> not getting a reprieve, and not finding any kind of a bit. that could be part of the problem here they are caught up in it the we've got a lot to talk about transportation downdraft this hour. railroad and airlines two of the we'll talk about the tech drop key parts here that is what is dragging this i would also point out that as market down. alpha one capital dan niles will we take a look at the etf, one be joining us. what he says is the biggest of the keith etfs, the ishare threat to the sector as melissa just said. average etf, this is the ticker 20% off the highs for netflix. 10% off the highs for amazon, iyt, it's now traded more than double its average daily volume and is the selloff just beginning or the start of a today. also worth noting that the dow bigger pullback? jones transportation index has we'll talk to mohamed el-erian now fallen below its 2,400-day also during the show. moving average or the >> who has been relatively longer-term trend line, the first time since back in upbeat about growth. judgment as we take a look at >> he said the imf was too the overall picture for the market and narrative that's gloomy. >> exactly look forward to speaking to him developing, there are certain and all of our guests. key hot industries and sectors but, first, let's get to our reporters following the market the transportation stocks had been one of the real standouts towards parts of this bull run bertha coombs in the nasdaq and higher it's now leading the declines. bob pisani here with the key it will be something that we're going to watch for sure in the things investors need to watch ahead of earnings season closing parts of this trading session to see whether or not bertha, let's start with you. they close at the lows >> reporter: precisely the issue. we are ahead of earnings season wilfred? >> great stuff so no companies will come

rushing out and giving you thanks very much and we'll look terribly good news or bucking forward to those airlines, some the trend, the feeling that of which report tomorrow companies aren't going to be in let's dive into the dow which there buying their stocks ahead briefly was down 630, 640 of earnings either, so that is points part of the issue. it's back down now to down 600 what we are seeing is much larger than normal volume in points still, of course, a significant tech sells which tells you that selloff. there are the dow losers there is more conviction in the selloff today, and it's being nike down 6% led particularly by the chip boeing down 4%, of course, sector which is now down five heavily influenced by the china days in a row. trade and microsoft even down it is off about 15% from highs, significantly 3.9% and having gotten an upgrade earlier in the and seeing the worst daily decline for the chip sector week there's no place to hide at the moment let's go out to sara on the since june 25th which was also floor with mike santoli looking when we saw the big downdraft on at tiffany which is seeing an the s&p 500. among the big volume losers evenbigger plunge today. >> no shortage of losers today, today, the big caps that are but we came down to the post where tiffany's trades dragging things lower, the usual suspects are there, netflix, it's down 9% it's part of a broader consumer amazon as well as microsoft. these have all been big winners discretionary, especially luxury goods sector selloff for the most part. there was a catalyst if you take a look at netflix, still up 73% year to date even lvmh obviously a huge luxury with this big decline that we've seen of late, the big pushback conglomerate in europe warned

china was being stricter with different story for facebook its checks of travelers back and not trading in its high volume forth across the bothered, looking into the luggage of as some of the others, but luxury goods facebook is one. sump an important luxury goods market and people are trying to figure out what china will do to fight back in the trade war, so i think it sent some shivers f.a.n.g. names that w -- one of the f.a.n.g. names that was down early. down the spines of some it's now down 30% from its high investors and all luxury players. and down 12% year to date while >> exactly shows you the sensitivities of the others have held on to investors to those issues. gains. some of the stocks that are asia exposure was a big, bullish actually bucking the trend talking point for any company a today, some of the gainers are while back few and far between. now it's a negative, and the concerns about, you know, just only 10% of the nasdaq 100 seeing exactly what the friction dollar tree and the number of is going to be affecting retailers today are getting a little bit of love, but some of companies with regard to chinese them like x-ray are really countermeasures, all these bouncing off of new lows, so not things come to a head with a whole lot of positive movement china -- with tiffany, which is here to be found back to you. still up year to date. >> bertha, thanks very much for a 9.5% drop today. still up 7%. that will earnings season be a a lot of profits built up in the catalyst to turn the market around bob pisani takes a look at that? consumers names and people think the economy is great. >> i can't believe i'm >> hey, we took off on friday mentioning for the second time covering your sector which were banks, but part of the problems this hour the fastener the markets are having and why we're down today partly is that distributors, china was an issue it's a much more complicated and dominated the conference

picture for earnings season than call today, and there is some anxiety there about this global it was even three or certainly six months ago supply chain and just what china let's run down some of the is going to do to disrupt it. issues number one and most importantly we're dealing with higher rates, >> literally the nuts and bolts but there's higher costs also. we've talked about higher raw of the global economy. that's what it does among other material costs amazon raising wages things and yesterday ppg you're going to hear about yesterday was an industrial higher wage costs perhaps in coating business 2019, and they are trying to that's why i do think there's figure that out. kind of an accumulation of we've got weaker foreign currencies that may be impacting concern about what it means for not just third-quarter earnings big multi-national companies we'll hear about that, of but just what it looks like course going ahead when you do have a we've been talking about tariffs, and there's some little bit of, you know, china prospects of weaker demand from and the u.s. kind of going their separate ways on trade right china. heard some of that in some of now. >> and pulling sort of different the sectors. because of this it's a different weapons. >> right. >> in the fight. investment world than it was we may not have as many even six months ago and certainly more than a few years imports -- we have more imports ago. the old world we had low growth to put tariffs on from china and low yield and in that than they do, but they have other ways of making it more environment you bought growth at any cost and bought technology stocks now it's different getting higher growth and higher yield. technology is a little out of difficult. >> our economy is insulated from fashion, but what's in fashion trades but not necessarily the well, treasuries are starting to look more attractive against stocks that's a big reason the markets had a hiccup in the last week or stock market which isn't so, and is value starting to win

over growth? it's an old story that we've mirroring the markets. talked about for ages, but there is a sign that things are >> 2.4% lows, nasdaq down 3.17% getting a little stickier. for example, the market leaders, we've been talking about all of to be precise with 40 minutes these stocks off their 52-week left of trade. let's discuss this a bit highs, how many are 20% off and it's true, technology and further. joining us now is kevin o'leary, industrials 20% off, but the market leaders are still holding chairman at o shares etfs. up healthcare and utilities and i want to talk about dividend energy and real estate consumer staples, 3%, 4%, 5% off stocks you talked about them in the past, that they have strong cash flows and an area of the market their 52-week highs, not the that you generally like. do you like them in particular highs at the start of the year in this current environment of a these tend to be defensive names, and they tend to be big selloff? >> i like them a lot in this value-oriented plays current environment. in other words, there's some in fact, they are starting to signs that the story about value outperform because at the end of is getting a little more sticky. the day when you start thinking about the success we had in bottom line here, we're going to hear a very complicated story technology for such a long run, about earnings starting on friday back to you. >> and, bob, you know, while they are the infinite long asset. we're still waiting on the they pay no dividends. there's trading at extremely biggies including the banks, what we've gotten so far hasn't high pes been that rosie. when i'm thinking about pepsi, not necessarily bad stocks but warning of higher freight costs tend to have violent corrections and the impact of a strong as they are right now. on the other hand, you take a really boring balance sheet like dollar on profits.

ppg yesterday, names we really a chevron or a pfizer or an don't talk about much, but that's, you know, an industrial at&t, boring as hell, extremely supplier, and all of them were strong cash flows and payout of warning about tariffs and rising costs. a significant dividend yield, so far not so great. significantly higher than the >> that's right. s&p scc yield so you can get 100 micron talked about the impact of tariffs and didn't basis point more with these particularly put a number on it, stocks and that's been part of the these the stocks i tend to favor in times like this because they problem. nobody has been able to nail pay you to wait, and you don't down an impact that we're having know when the bottom is going to i think you are going to hear be in fact, that's -- on days like about all those issues that we talked a little bit more and today that's what i buy. that's what the market is doing. it's in the process of you know i love big indexes. correcting for that uncertainty. if you understand that, you can see it today is an osa day, an index remember something though. the market, the overall economy still very, very strong, and i boring as hell, monster balance think the important thing for people to bear in mind is the sheet and big succulent cash revenue growth is going to be companies that tend to be out of very, very high. favor for last couple of years, so when you have 2% or 3% and all of a sudden people love cash flow again and so do i. increases in costs and the it makes me feel warm and fuzzy, revenues are going up 7%, 8%, every quarter when i get that sara, you've got a lot of room to hold the margins up, and that's one of the things that dividend. >> ketch, i don't think i've will really help the market. seen you wear anything but all revenue growth, still strong black and you've got a red back to you. >> we'll see what margins and handkerchief this. guidance look like bob, thank you i don't know if that's in honor

>> joining me now are the of the red we're seeing across the screens. "closing bell" exchange to diving into this point -- >> wilf, i'm so glad that you discuss more on the big market took notice of that because i respect your look all the time i'm trying to match this red band on this daytona which has a black element to it to my suit selloff. tony, this move in bond yields, i'm so into this fashionista what's the primary driver, and stuff these days hem me, help me. does it continue >> i will. >> well, the great rate reversal i think, you know, you shouldn't we've seen from 2018 is clear just launch an index but maybe ollie fashion brand. i think it would do very well. proof that some cyclicality is i'd be your first customer kevin, back to the call on yield stocks being brought back to the in the way you're explaining it market some of the late-cycle dynamics there, is it because it pays you that bob pisani just spoke to as you wait but you do expect that leads to cost pressures and the prices to fall along with a breakdown in the correlation everything else, or is it between assets it's not as easy to protect because the companies that tend to have high yields have strong equities against a risk, simply cash flows backing them up using bonds right now, but we >> no. it's all about the balance sheet would suggest though that most of the rate rise that's likely and the quality of the balance to be seen has been seen sheet because what happens with these stocks when you have already, that the so-called new violent corrections as we're having now neutral for global policy rates remember, wilf, it's been a long is still in place. time since we started to have in other words, we're likely to violent corrections. see low policy rates stay in when you see stocks down 10% in

place in europe, japan and even one day or sectors down 3%, 4%, the united states, but what will happen over the next year, the final point is, there will be a 5%, it's been years before we've decision point from bond really seen that and now we're investors and they will have to starting to have that and the decide were we right about this reason i love strong with strong balance sheets and strong cash idea of the end of the feds rate flows and distribution to them cycle? if the market decides it's wrong is they tend to correct less so and decides on a 3% level, on a mark-to-market basis when i'm looking at my overall portfolio, these are the anchor yields will move positions and these are the ones they are already in a zone to suggest a 3% or 3.25% rate could that tend to help me outperform during periods of extreme be handled a year from now. >> matt, the rate hasn't soared volatility they are boring but they have their place in their portfolio itself rising quite significantly in you know, when people say i'm never going to buy an all-boring weeks. why today are we off more than stock like a chevron or a pfizer 2% >> a perpetuation of things that we've seen or a roche, those are the ones not a trading opportunity. i don't see anyone rushing to you love on a day like today, buy equities i think we're waiting for more and that's why they should always be there. of al pullback, but we're trying >> you love on days like today to see the other cross-current when markets are falling, kevin, but not when treasuries are in the market. you are not seeing a rush to rising the big bond rout, doesn't that gold in terms of utility plays make you nervous as a big this market has room to the dividend holder of stocks that downside before we start buying there's a real competition now against the stocks because it. you've got bond yields at >> s&p and dow are down 3.5% and multi-year highs

nasdaq down 6%, 7% from its >> you're make an excellent point, and here's my comeback to recent highs that what do you need to see to start go back in history and look at buying again >> look what started to happen periods when economic activity and low unemployment have forced in china china got slammed. the fed to move and up rates we really didn't you do get a correction like are we far behind? so we need confirmation of where we're having now, but then you go to the companies that are we stand at that point, and i increasing cash flows and don't think we see that increasing their dividends during that period, like the crescendo to the sell side we want to see that volume pick boring ones that i'm talking up and really get us a little about, and they continue to perform, even in a rising rate bit lower. it's going to be painful maybe environment. the reason the rates are going in the short term but it provides a buying opportunity. up now is the fed has no choice >> chris, is it a buying but to actually deal with the opportunity? are you taking this opportunity to buy, or are you sitting out fact that we had extremely low >> this is a buying opportunity, unemployment, had really strong earnings and the economy, particularly the small-cap especially if you look towards value stocks because in the end when all is said and done, companies that i invest in all over america, we're having our profits relative to price is what matters, so that's what best year ever, ever, and we're we're starting to see in this loving what's happening with policy, and yet we have to deal with the fact that the fed is market right now is it's starting to raise rates, so, no, valuations and profits is what i'm not in love with stocks that don't have enhanced cash flows is mattering. >> and you like alphabet for or don't have the benefit of tax that reason. >> i like alphabet and i like reform, but there are so many intel especially today that do that i actually think you look at that, that's easiy we'll have a good year at the math to do selling at 11 pe which gives you end of this year, and i'm still bushel for next year as well a 9% earnings yield.

that's why you can see the value maybe not 21% earnings growth, of having profits. but i think we could have a good they just need to grow a little bit and you're looking at a strong 6% to 8% and there's double digit return. >> rick, when you consider the nothing wrong with that, data that we had this morning, assuming policy stays the same does it justify the selloff in >> so, kevin, flesh that out for equities that we've seen today us a little bit more if you're in your eyes and factor it in so optimistic about the strength with the auctions and action of the underlying economy and the small and medium-sized that we're seeing in the bond market >> no, i don't think the ppi companies that you have such data is responsible for this good knowledge of and exposure let's put this in perspective on to, why are we seeing such a big the interest rate side as i look up at the yields 2s, selloff? put aside the bigger dividend be 3s, 5s, 7s, be 10s and 0s, pick, the broader s&p 500 and the other indices today, how all basically where they were on much more downside is there that friday we didn't see these kinds of would sort of be justified selloff activities to the extent versus the strength in the economy that you're seeing friday that we are today >> well, i think it's fair to i think what's going on is a big see large-cap companies and say that they should have some macro liquidation part two, exposure to the volatility of the rest of the world because maybe even part three, and it's 47% of the s&p's earnings come from overseas market, notably simple as to why asia having a massive correction jack bouroudjian talked about it and europe which is slowing down a little bit the german numbers over the last today. imagine you're a japanese three months have been slower than people anticipated and it's investor, bad fundamentals and started to be reflected in some of their debt, but i still look europe and japan in negative

interest rates for years, big at that and say to myself, okay, institutions and investors if i'm going to own those companies they buy into the markets over time they go bankrupt. because of the sheer scale and what do they do? growth in dividends. they come here yes, we have more volatility we've talked about divergence. because there is some concern about china and other markets, how does that happen look at their own markets, no but our own domestic market, our opportunity, they come here. there's a problem. companies in this country, which when you have great investments here you skew, it there's your don't sell abroad, which have a lot of their input costs at divergence but you also need to question, which is one of the reasons small caps are correcting, people are worried about tariffs actually affecting convert. if you're a european investor input costs, when i look at -- i convert it into euros and if have over 306 them now in almost you're jps, convert it into every state. we've never had -- the last two yens the markets in europe are kind quarters i've never had anything of weak and the big hedge swaps like this in moy life. we're hitting on every cylinder to hedge the swap flow is is almost at full capacity. we've got, and so, look, yes, we it's been that way for a while should be concerned, but the thing bank of international standards has written at great core economy in my view. length about this, so i guess what i'm saying is there's pressures in the system that can the american core view is on cause liquidation of positions fire it's on fire like it was in the in the u.s., and the back story '60s that's how i feel about it so there it could also be in when you talk to me about competition and my new dollars addition to the fed and the going in economics of our economy pushing i'm not going to buy a ten-year rates just a little bit higher at 3% because my companies are as well. doing better than that every >> good explanation of sort of quarter, so why would i want to

put it into a long-term debt the correlation or lack thereof. position that's only giving me in this market, tony, and we're now looking at a 600-point 3? i'm still bullish on the decline on the dow jones american economy industrial average, a move like my money is going there because this in stocks, usually there's i live it every day. these are not public companies a flight to safety into the bond but private ones that send me a market or the dollar neither are happening today. check every quarter, and cash flows are going up i love them. what does that tell you? >> it tells you something about where we are in the economic >> not blue apron, kevin, down cycle, late-cycle dynamic where 65% in the last three months there's dispersion between sorry, i just got to call that assets early in the cycle, 2011, '12, one out. i know it's in your "power lunch" stock draft not a good environment. >> absolutely. '13 and '14, easy to buy >> not a dividend payer. something and pick up beta and >> i -- i live in volatility credit equities and win because like everybody else do, and i one need not worry about can't be right every day, but i interest rates that isn't as easy and one buy balance sheets that generate should think when investing cash flow. that's been my mantra for a about risk factor investing, decade, and it's protected me during times of extreme there's some investors who volatility, '07-'08. should be thinking about these are the companies that come back faster, and when liquidity risk and volatility you're an investor you have a risk taking a risk factor approach is decision to make every day important because there's going do i want to go to cash? to be dispersion in a late by the way, cash isn't horrible. cycle. >> we're at session lows, down you make 2%, but if a company 633 points on the dow. can generate 5%, 6% increase to just very quickly, matt.

you mentioned you like intel cash flow i'd rather be there what don't you like? and live with volatility, and the reason we're not having a what are you avoiding? >> well, i think what you need major correction yet on the to avoid are high-priced tech china story, if we get a deal done as we did with europe, as stocks, you know, so you need to avoid the amazons of the worldi we can with canada and mexico, if we get a deal done with china, katie bar the doors, the good work on the s&p if that gets worked out will be extreme. a concern about a meltup that you don't talk about on a day like today and that's why they are waiting to see what happens. mnuchin and kudlow, put your nose to the grindstone and solve this. >> good to see you as always kevin o'leary. >> now we know why he likes the cash flow. great perspective, mixed perspective from kevin let's check in on some individual stocks to watch today. turning -- barclays note turning

bearish on alibaba lowered its revenue outlook due to slowdown to china's macro and economic environment key bank cut its price target 215 to 2 to and alibaba is down some 5%. of course, it's been performing badly on china fears i've looked at some of the valuations on this next year on the barclays note, it's got a pe of 30, 29.5. you compare that to apple and facebook in the high teens and google in the mid-20s and you suddenly think why on earth would you be buying that for exposure to a high-growth tech sector when you've got the china fears as well and a premium valuation for alibaba, even despite the four that we've seen recently. >> it was having double-digit revenue growth and the results were amazing, growing very fast and was at premium valuation but the risk is there. >> it's expensive. >> my stock to wamp is campbell's soup, a rare bright

spot in today's selloff. the stake in the company raised from 5% to 7%, and letters were put out. there's a proxy fight and he wants a full board. >> 5% to 7%, does that increase power to get what he wants he's up against the family. >> he's up against most of the family the family is split. he has one of the members on his side the shareholder meeting is november 29th, and he -- i mean, it's going to be tough for him to get the votes the thing that's working for him is the underperformance of this company, both in earnings and the stock price, but the company is going through a strategic review it has an urgent search right now for a new ceo and it's fighting back saying loeb hasn't pushed for anything new. first pushing for an outright sale and unclear what he's laying out to do this. getting more bitter as we approach the date and we'll get at response from campbell's

ahead of the november vote. >> good soup, up 2%. broader markets, down 576 points on the dow, so slightly off the low which was down 640, but we're still down more than 2% and down around 3% on the nasdaq joining us now, financial chairman ron kruszewski. >> we haven't had a five-day pull back since april. got rising rates in the ten-year going up i think this is healthy. i think this market could correct here we could see another down 5%, but echoing your previous guest's comments, the economic conditions in the united states are very favorable >> so, i mean, ron, you've been bushel for a long time can you explain the action in

financials why -- why they aren't getting more of a benefit from this new world of rising rates? >> the financials have had a huge run here at well and you're seeing some tepid long growth and some things that maybe don't completely square with -- with what you're seeing with rising rates, but, you know, the financials are -- are -- have pulled back, but, again, i think they are going to be fine. i think the economy is going to be fine. this is a healthy -- my message is this is a healthy correction, not the beginning of a bear market my caution, what kills bull markets? they don't die of old age. they are killed by the fed i don't think we're in that range yet, but that's something that you do have to watch. >> what's the kind of fed rates or the ten-year or 30-year rate that does kill the bull market >> well, look, i think that pes come in as the ten-year rises. earnings have to keep up with it today our equity risk premium is something i always look at the

yield minus the ten-year and makes the ten-year become increasingly competitive with future equity returns. the ten-year will get 3.50, 3.60, that could be the recipe for not performing very well what we have to remember is the united states with the fiscal policies, the tax policies and investment of a strong dollar, earnings here can surprise on the upside as well, so i wouldn't be getting overly concerned about what i believe is a healthy correction in this market i'd be buying stocks after this is done. i think though that i must say you can see another 5% down from here >> so everybody is using the term late cycle today, one of the most popular on the network. i wonder how you interpret that because you see a very strong economy, and most of the data backs that up. is this late cycle, and if so what does that mean as far as when we hit a recession?

>> i do think a lot of people think late cycle i personally believe we had a recision in 2015, '16 when industrial production, you know, was really almost recessionary levels today with the fiscal stimulus and with unemployment and with the united states as strong as it is, i really see the next couple of years being very favorable, so i don't see it la late cycle that's been the popular word today. we do have inial corrections every once in a while. let's have one now and get on with it. >> in terms of what we're seeing around the rest of the world, does that concern you, or should be the u.s. be a little bit more inlated fr insulated from negative moves whether in asia or europe? >> i do think it's negative. the story at the beginning of the year was synchronized growth the imf was talking about the

world growing in a synchronized manner, and the only one who has held up their end of the bargain on that is the united states the rest world is in a correction, and i don't think we can turn a blind eye towards that as well that's one of the reasons we're getting a pullback, but i don't think it's the beginning of a bear market. >> some optimism, ron. thanks forving us. >> i've been right so far, we'll see. >> let's get back to bob pisani for more on what's behind the big selloff with the dow down 630 points. >> down more than the prior five days, fifth day in a row and the same stuff is down the most. two major problems those are tech stocks and industrial names techs and industrials on the weakened and banks down nearly 1% but not as much as the rest if you look atlagards

you're seeing the ones you see every day, boeing and 3-m, big-tech names and big industrial names we're transitioning from a low-growth low-yield world, and in that world you bought tech, and now to a higher growth, higher yield world where tech is a bit out of fashion treasury is starting to look very attractive against certain stocks, and that's a big factor, and now you start getting the question about do we play more value stocks so look at the dow leaders or at least stocks that are not down that much today. your p & gs and johnson & johnson and wall greens and mcdonald's. these are the classic value stocks there's a certain flight to quality and there may be a long-term stickiness about the value play that finally works on a longer term basis. it hasn't worked for ten years market leaders, i want to emphasize, we've been telling you all day look at the tech stocks 20% off their 52-week highs but a lot of tech -- a lot

of leadership is still doing very, very well. healthcare is 2% from its two-year high and energy about 5%, real estate, consumer staples, all value stocks. holding up really well compared to the bigger declines we're seeing in technology and in industrials. guys, back to you. >> bob, thanks very much for that see you on the flor in half an hour owes time let's bring in art cashin, theias damage is down 3%. >> was this warranted this, selloff? >> i think what you saw was a test and a failure the first two weeks in october are historically biased to the downside they are usually cleaning up a selloff from september we didn't get much of one this year, but we're still in the negative two-week period you came in this morning now in the prior days of selling.

we -- we saw the market go dunn and test various moving averages, various trend levels, and they tested successfully and bounced a little bit today they went down to those testing areas and fell and i think that prompted a lot of people to say oh, my goodness this is not what we're used to support is supposed to hold and they are supposed to bounce, so the failure to bounce i think brought in additional selling. there was kind of a domino effect where the weakness led to further weakness, and i think that's why you're down 600 some odd points, too. >> it's getting pretty ugly and looks like we're headed to a nasty close. what would you be watching for overnight as a clue as to whether the selling continues into tomorrow? are we watching the chinese fix of the currency, the treasury market what is leading the charge >> i think you want to watch people look through the auction

and take apart what the bids were to give you any sense if there was any backup from th chinese. i think you want to see the foreign markets as we were breaking through the support levels the markets in -- the continental markets were beginning to accelerate on the downside so i want to watch the foreign markets and see how they go, to see if this picks up i do think it's -- it's a bit of a calendar item, and when we get past these first two weeks things may slow down a bit. >> as you mentioned, the last couple of hours, 90 minutes of european trade was pretty bad. dax looked particularly -- we've got some kick kicking off, banks and transport newspapers something that could stem the earnings if something comes through in a positive sense? >> i think it would if we get to the earnings period and it looks like they are holding up

that will will begin to mollify some of this to now it's 90% technical -- i should say 80% technical and 20% concern about foreign things such as currencies and such as trade wars. >> everyone is wondering if this is finally it, the shift from growth to valuele? what do you think when you hear that i mean, value stocks have been performing much better throughout this powered. >> i think in this case they are a bit more defensive, you know growth comes into question because you don't know what's going to happen with world trade and what not i think that's the trend that's going. is it going to be a major shift in the market direction? i'm not sure of that at all. >> thanks very much. >> my pleasure. >> for joining us there. we might actually bring you back in in a moment down 3.5%, if session decline, pretty astonishing slide in that

sense. just your response to that, art, down 3.5% and 700 points on the dock. >> this is -- people are going out from a very nervous day. there's a sense of what is going to happen and i think -- i tonight want to carry too much risk overnight so let me sell it right here. >> the dow is a sea of red not a single dow stock that's higher including the so-called defenses including procter & gamble, home depot and mcdonald's which were higher earlier in the session and have now deteriorated the biggest losers on the dow and overall markets are stocks that have been big winners, momentum names, winning names like nike which is drawinging down the dow microsoft, boeing, visa, the sort of liquidation theme. >> the reason the selling is broad. there's an old saying in wall street when you can't sell what you

want to sell, you sell whatever you can, including your grandmother's necklace, okay, so some of the favorite stocks are no longer favored when you're in this kind of a selloff. >> we just dropped -- the $2.5 average. this is something you mentioned falling behind the lines. >> well, i think what you'll have to do it see where they actually -- when the seller begins to turn opinion you canny and tomorrow morning i'll give you numbers you can take a look at. >> thank you so much for that. >> i would just point out, wilfred, i don't know if you just qualified it as panicky, as we're seeing a steeper drop towards the close we're seeing a turnaround in bond yields where they are buying treasuries and

the ten-year and the two-year yields have gone lower on the day. >> some night to safety. >> i was wondering where that was at the top of the hour traditionally you see that into u.s. assets. >> only when it started to accelerate going into overtight, and people want out. i think there's going to be a lot of phone calls to the fed tonight, among the internal fed members. should we be concerned about this and where are we going to pick up? >> do you think there's some blame that goes to the fed >> they moved had a little fast, and they are sticking with the dot plots. >> you agree with the president, that they are moving fast? >> i think they moved pretty fast you know, i've been a bear. >> look how good the economy has been. >> the economy is great, as o'leary said if you look at the nfib report this morning, the president of the nfib made a statement that was borderline giddy she talked about how grade the economy is. >> that's an environment where

you would expect the fed to be raising rates. >> i understand that, but it's beginning to have an effect in things like housing and other places, so i think they want to be very wary as they move along. i think you've got to go away from the dot plots we'll hike rates if it's in order. committed on december already and i want to hear some conversation from the various fed priss errs. >> and monitors. >> thank you back to dom chee for a look at the volatility index today. >> the vix as it's otherwise known is near the highest levels of the session i'm not going to quote it in percentage terms, but to give you an idea of what it's like, we're at 21 pots, this is one of the biggest levels that we've seen gaining in the vix here in months now at this point you mentioned how that's translated into broad market dechains here. you mention that had 200-day

moving average for nasdaq overall, breaking bloat 200-day moving average, it's the first time that we've actually gone down bloat 200-day moving average looking at the charts here since july of 2016, so it's been more than two years now since the nasdaq composite has seen this kind of weakness on a relative basis to its longer term trend averages. also want to call your averages to what's happening right now with shares of amazon. art cashin spoke about the stocks that you may or may not want to be and the momentum type names that you've been discussing amazon is important here because right now amazon at the worst levels of the day. right now down 5.5%. i would also point out that amazon shares moving down lower here, the last time we saw a day decline like this, it's been months now if you go to the levels that we've seen in amazon.com, the one-day declines, the worst we've seen, the entire complex of momentum driven names, growth-oriented names tied to

internet communications, retail in the case of amazon, have been taking it hart on the form of the chin we'll talk more about the levels thattraders are watching as we head to the closing bell sara, wilfred, back to you. >> stay close, come. >> heavy selling and meg tirrell is here now with another look. >> reporter: stocks down almost 3% but down more over the last week the biotech etf and xpi up 9% and the ibb down more than 7%, and it tends to be the smaller cap riskier biotechs that swings more broadly and that's what's happening today. check out stocks like amicus, exelixis and blue byrd, and the larger cap, amgen and gilead are

holding up there divergence becomes more clear over the last month. the ibb weighted more towards larger cap stocks is down significantly less than the xpi. a couple reasons for the divergence one could be rising interest rates or just the fear of rising interest rates it's held that biotechs will suffer in higher rate environments but it was analyzed of 20 years of the relationship between biotech performance and the ten-year yield they found in the five periods when it increased so did the nasdaq biotech index that, guys, could be playing into what we're seeing now. >> just in terms of the broader healthcare move, meg, actually it's the best performing sector in the s&p so far this year, up about 12%. it's getting hit with the rest of the market today. a lot of people looking to healthcare for a leadership position if this market can turn

around and say there's a lot of value there. how do you see it? >> break it up into the sections, biotech the most momentum driven there, aetna and the health insurers and larger company pharma names does fairly well of course, they have deal news and definitely divergence into what pockets of healthcare you're looking at. >> great stuff thanks very much for that. let's bring it back to the broader markets, a new session low on the dow 765 points. >> slightly off of that. >> we've come off of that, down 2.6% as we speak the nasdaq down significantly, of course. the laggard off 3.3. russell down 2.4 mike santoli has joined us here at post nine the selling has really picked up

pace as we've approached the close. >> i think you didn't get what had become a little bit of a typical 2:00, 2:30 bounce attempt, so it did seem as if there was a broader, more aggressive risk reduction going on extremely heavy volumes in the etfs i often look at things like the s&p and the dow are down very much -- very close to the same percentage, right. those are two differently constructed indices. the across-the-board haircut being given. it's about many of the things we've been flagging for a long time, imbalances in the market that are kind of being all at once maybe addressed, so tech got too big as part of the market the u.s. was outperforming the rest of the market and small-cap stocks were lag and, you know, i was here saying all that is fine and well and something always comes to the rescue of the overall index. you had this rotation that worked for a while and today it didn't work. >> clearly this is a big selloff and it's painful for a lot of people in this market, but we look at the vix and dom pointed out the so-called fear index at

21 obviously a big jump today, but not even near the highest levels that we saw earlier this year or like february. >> no. in february you had a very unusual kind of round of destruction in -- in the volatility trading space because you had people aggressively speculating on continued low volatility no, it's not extreme by historical standards at all. as a matter of fact -- when people ask you is this a panicking move what does it mean? >> it's not panicky but it shows you the buildup of anxiety in general terms you would really not like to see the market close near its lows and the vix close near its highs shows you there was not much of a, you know, people taking the opportunity to -- to buy into this -- into this decline. >> mike, to what extent what is happening today similar to the worst days we had earlier in the year, january and february time and clearly after that we had a lot of concerns in the midst of that and we recovered and fresh record. >> if anything reminds me a

little more of what we saw even in june where we were down 3% in three weeks and it seems as if perhaps we were not going to get back to the old highs. earlier in the year i think the market was more extended than it has been recently. sentiment was much more bullish in january you had to have that cleansed out of the system and valuations were higher, so i think right now it's a little more of a real acute sensitivity to what 2019 is going to look like for growth, for global earnings and, you know, for whether these trade frictions matter when you have bond yields going up at the same time, people are concerned about slowdown risk, that doesn't feel right, right it feels like there's not as much of a cushion underneath you when that's the case ? >> having a debate with art about how much of this is attributable to the federal reserve. >> yeah. i mean, it's part of the backdrop i think federal officials have definitely made an effort fast few weeks to remind the market that the fed's own forecast is

for three more rate hikes next year the market was not willing to price that in or embrace that as the likely outcome, and i think they have wanted to say the underlying -- >> that speech last week by powell saying we're not close to neutral, that felt like a bit of a turning point. >> it did, and i think it got people's attention, but once again it was mostly because he's reiterating what the fed has been saying on paper, but people didn't like him actually saying it out loud. so, no, i do think that this idea that the fed is paying attention to things that are not really market-based at the moment anyway, they are not talking about global instability. they are not talking about volatility in markets because they don't see it as something that's threatening right now the u.s. economics. >> that's what they are also talking about. >> yields are going up and inflation is the concern, as opposed to when janet yellen was in there and we were staving off deflation, it's -- it's a different equation because it means yields can go up and the feds can still get rates higher. >> mike, stay with us, of

course, as always. for a technical read on tailed's market selloff we're joined by katie stockton, the founder and managing partner of farelly strategies how much damage are we doing today in the selloff and what should we watch? >> i would say none at all with this kind of action we don't want to the panic. i think it's sort of a do-nothing day we can let the market panic for us, and in doing so it becomes a capitulative low so what we see is extremes on the market and internal measures. they get very, very oversold believe it or not, with this level of a decline, we're still not seeing a lot of breakdowns on the individual stock level. what it's done it's taken sentiment from having been overly bullish at the end of august to now what would be an overly bearish reading. >> so, katie, that's interesting because if i heard that right, forgive me if i didn't, a lot of market participants today have been pointing to the fact that we've crashed to the 200-day moving average on the nasdaq

that the s&p is quite significantly below the 100-day moving average where we stand and that's not something that concerns you as a technical analyst. >> there's a couple of things. obviously moving a. to tend to act for support at times and we have to look at them as cushions and not precise points and also acknowledge the fact that the major indices have really tended to bottom just below the moving averages a good case in point would be the russell 2,000 index relative to the rising 200-day moving average, and to that index i would point out that it's got its first intermediate oversold reading since mid-2017 with this declines and even with the magnitude of the decline on the small-cap front, which, of course, are not deeply undersold on a relatively basis, we don't have as many breakdowns as one might thing. >> what if we look at many so of the other international markets? are you less concerned or more concerned of clearly the influence that we've seen, whether it's on a good day or bad day from asian and european

markets? it's recently been significant on the u.s. markets. >> we indeed have seen underperformance outside of the u.s. and certainly downtrends are more prevalent outside of the u.s. what i'm noticing in the charts, and these are still low conviction signals, but we are seeing some short-term counterpunch signals that would enhance the oversold conditions that we have overseas, and when you look at the relatives, even against a nice so-called safe haven market like germany's daxdax i would suggest you get rotation from overbought markets. >> katie, thanks so much for joining us, katie stockton let's send it back to dom chu at hq with a look at key levels to watch. >> wilfred, as you and katie stockton just talked about the levels, the cushions and the moving averages that katie stockton was telling you about, want to visually show you by

putting the trend lines into play with regards to what happened you mentioned the dow jones industrial average right now the 50-day moving average, the 50-day average price is the one that is in play and as you can see here, we're just below the levels right now trying to see if there's any way we can find some support remember, over the course of the past year, we have bounced off some of the levels in the past see whether or not we can move the trend line to the upside the other thing to watch as well is another chart that we've kind of spoken to this whole idea there are moves in longer-term averages as well. the nasdaq composite,the 200-day moving average as you can see we've now just dropped below that level there watching that and of the nasdaq as well and one more point to put a finer point on the whole thing is the russell small-cap index. that one below its 200-day moving average and as you watch the declines outsized overall these are ones to watch. if you're looking for a bright spot in this market, just follow me here to the wall, because there have been parts of the market sara had mentioned utilities is outperformers. but if you take a look at some of the ones that have at least stocks specifically doing a

little bit better relatively speaking, it has been some of the retailers that are perhaps multi-line and characteristic here in the united states, but we're talking about mid-scale names like a kohl's department stores those shares are actually outperforming the market in the green so far today you can also see what's happening with nordstrom outperformers just in the red now by three-quarters of 1%. dollar tree is up by 2% and target is off by half a percent. at one point all four of these stocks were in the green, but they are relative outperformers, so as we talk about perhaps the movements that we're starting to see, there is a sense that some of these stocks could in this current environment be outperformers, and you're starting to see some of those play out, at least in the domestic-oriented multi-line consumer product names, retail names, like we're seeing here, guys >> either way it's the worst dom, thanks very much. i was just checking in on some of the records, dom, which are significant. the nasdaq on pace, stays down over 3.9% for its worst day

since brexit that. really puts things in perspective. let's look at the dow. there's the dow intraday chart for you, and we're down over 800 points down 790, but essentially we're right near the session lows, a really ugly chart there that i had. quickly look at all four indseeds, ain indices, did have all four down 3% moments ago, but the dow is just above that, still a significant decline. nasdaq down 4% but just shy of that level the russell down less than 3%. going to show the dax chart just quickly intraday selling in europe sparked a selloff of selling here as i bring in possible pisani and kenny polcari. >> germany more than 15% off of its 52-week highs. important to emphasize why this is happening we're moving from a low-growth, low-yield world to a higher grower and higher yield world.

tech becomes out of favor and treasuries look more attractive and value stocks like consumer staples perhaps start getting morphed in. >> at 3:30 when the nasdaq broke -- >> down 4% right now. >> exactly right, when nasdaq broke at 3:30 you could feel the flush in the market. look what they are doing on the nasdaq all the outlooks are on overdrive and you have the riskoff because the algorithms, they take those technical signals and now it's all about a technical break. you can say anything you want about rates, china, talk about anything else. now it's about technical breaks. >> a much more complicated picture going into the earnings season does not work on technicals. it works onning fact that the world is changing and the earnings picture you've got higher costs and higher rates and tariffs totally different picture than six months ago. >> understood, but today now, this move is because that technical growth. >> guys, thanks so much for joining us right at the end, ringing the bell, vanguard ringing it at the nasdaq which closed down 4%,

wow. that is a huge decline for a single day, the dow is down 820 points, extraordinary selloff that we've seen today. that does it for the first hour of "closing bell." much more discussion coming up on the second. sara, back to you. and welcome to "closing bell." i'm sara eisen other for kelly evans. wilfred frost rejoining me, mike santoli is here. cnbc senior markets common at the same timer let take a look at how we're finishing up a brutal day on wall street. it was ugly throughout the session, and the losses really picked up steam in the final hour of trade. dow trading near the lows of the day, down nearly 800 points, lower by 818 points or 3%. s&p 500 down 3.33% check out the nasdaq tech leading the selloff lower the nasdaq composite down 4% that takes us back -- that takes us back to levels of may 29th.

for the s&p, we're now at the lowest points since july, and the dow, the lowest level since august 16th. the russell 2000, which has been in a correction mode, down almost 3% as well. ugly and broad-based across the board. mohamed el-erian, chief economic adviser will be joining us in a minute with his take on the selloff and what to do next. let's talk about this market stephanie link, and dow saw red across the bore. the biggest loser though was nike over on the s&p, dollar tree was the winner today tiffany was the laggard, we talked about that after the warning from china from lvmh overnight. mike, what stands out to you in the sea of red >> pretty indiscriminate 90% of all volume to the downside that's actually been pretty rare, even when the market has had trouble. you haven't had that first 1% move in a long time i think a lot of things kind of had a little bit of a break today, right you had this rotation that was kind of rescuing the indices for

a long time. the market was being stress-tested by the new higher levels of yields, and the fact that it's going to have to cause some kind of valuation adjustment very sensitive to the hint of slowing down of growth saw that building up for a while here that was it, that plus some technical breaks got you a flush of selling not great that we closed near the lows for the indices and at the lows of the volatility index. it shows an unstable tape. getting oversold fast, and it would not be surprising, because most stocks have been down for a while to have the makings of a balance taking shape. >> in the last six months when we first experienced this for the first time, eight, nine months ago in january, so much talk about this is the first time we've had such a big sudden selloff since markets have been so dominated by the algos, by the index funds. does that make when we go 4% first time since brexit for nasdaq, does that mean tomorrow we wake up and have the same thing again?

how do we shake it off >> no, i don't think so. it changes the rhythm of how the market trades. i think you have a lot of kind of signals that a lot of people are following collectively, but i don't think it feeds on itself if anything, the algorithms are essentially the most disciplined trader you could ever have, so they are not going to press. they are going to probably look for opportunity to have its mean reversion bounce at some point. >> breaking news now the white house is responding to today's selloff on wall street eamon javers in washington the what are they saying >> reporter: president trump has been briefed on today's market selloff in the oval office this afternoon just before departing a few moments on his way to an event in pennsylvania this evening. a senior white house official is offering a statement now on the market selloff saying this is a bull market correction it's probably healthy. this will pass, and the u.s. economy remains strong so the message from the white house is that this is a bull market correction. that obviously is upbeat language to use to describe an

800-plus point selloff, but the message from the white house clearly that the bull market will continue after this correction they are saying the u.s. economy remains strong as well white houses in this type of situation on days like these in the past have always pointed to the fundamentals of the economy, and in this case the white house is doing the same thing, saying the trend that we've seen in overall economic growth is not going to go away just because of one day of bad selling on wall street sara >> eamon, will the chinese negotiators be licking their lips at the sight of this. >> >> reporter: that's a fascinating question it does put political pressure on president trump the president just left the oval office a few moments ago, did not take any questions at all from reporters who were gathered on the south lawn trying to get him to talk. the president ultimately -- the president ultimately not responding to this today we'll see what he says tonight in pennsylvania. he may address it there. he's -- he's talked about the

stock market more than other presidents have talked about the stock market the white house officially, the very early days of this administration, said that they view this as a mark-to-market business they very much view the dow as a barometer of their success, so they will not be happy to see this today, and they will not be happy to see any commentary that might link what's going on in the markets to the president's global trade practices as well >> eamon javers, eamon, thanks very much. senior white house official, sounds very much like our old colleague larry kudlow saying it's a bull market correction. is that what it is, stephanie? >> i think it is, but i think today -- when we've been focused on rates and global growth slowing, but i think today was really more about earnings worries, because we had a couple of pre-announcements in the last 24 hours we all have talked about the ppg news, right? but we had that group which is an industrial which goes -- and there's a lot of semiconductor parts that this company will touch. they actually massively

pre-announced. the luxury sector rolled over hard in a huge way, and that's even after lvmh reported a good number, but apparently september was a no comment in terms of -- >> they are worried about china, stricter checks? >> much -- well, i think, yes, but they reported a good number. people are wondering if that's stateable. that's a big group and a big growth and a moment mum area in this market. then, of course, oh, by the way, quietly, alibaba is calling around saying their numbers are too high, so all of these things are putting into question earnings, and that's what i've been saying all along, that earnings have been -- earnings will stay strong because the economy is strong. if all of a sudden earnings are in fact strong, then obviously you have a lot of problems now, i will also say it's way too early to say that earnings are going to roll over way too early, because the economy does remain strong so you have to be patient, and that's why, sara, your question, is it a bull market pullback yeah, we're in a bull market it's a pullback. you pick your spots. >> now, of course, the big mover today was the nasdaq

everything was a big mover, but it was the biggest mover, down over 4%. bertha coombs is up there with the breakdown of what really happened bertha >> reporter: well, the nasdaq decline here was led by the big names, the usual big names and the chip sector. stephanie talked about, you know, how a lot of the producers use chips, chips in a way are kind of the cyclical sector within technology, and that's where we saw the biggest declines today, one of the worst performers for the semiconductor indices since last june that we've seen low semiconductors, marvel technologies on semiconductor, and as those guys start to report, there's going to be a lot of concern about what kind of demand they are going to see, especially as we start going into the new year and what's going on in this current quarter. a number of the big names have been lower amazon has really been under pressure since announcing that

increase to $15 an hour as a minimum starting wage for a number of employees. there are some employees who complained that they might actually make less under that policy because they will no longer be getting stock bonuses and monthly attendance bonuses and things like that, but it does raise its underlying costs as it pushes those wages higher, and that's likely as it does for amazon, any business that they enter and anything that they do, likely to impact other retailers today. that said, you did see a few retail names today that were higher, and another sector that -- that relatively outperformed today was healthcare the biotech was lower here on the nasdaq, and biotech is usually one of those sectors that can be very volatile today. some of the healthcare services name outperformed. express scripps finished the day lower, but it actually hit an all-time high today as a rival over cvs over on the nyc got the

go-ahead from the doj for its aetna acquisition. back to you. >> bertha, thank you very much for that if we come back, stephanie, to your point about if earnings followed this news bad, then we really fell out of bed, what are the most tech names you're most confident in the numbers for, that declined so sharply today >> i would say the software companies. they sounded the best in conference season. it spending is at record levels, and most of these companies don't expect that to roll at all, and that's because it's driven by secular growing themes that we've talked about forever. internet of things and cloud, security, soft wear, so those are ones that are not cheap and they haven't pulled back enough in my opinion and those are the ones that i put on my radar and i also think if i look at f.a.n.g. i still look at facebook because on a relative basis it's the most beaten up and most controversial and that one is actually held in a little bit better in the last couple of days than some of the other f.a.n.g. names and that's also a

name that, you know, you look to be buying. >> not a single name in the technology and the communications services, the new social media internet space. >> there's a lot of air under all of those stocks. it's where you would go if you wanted to turn stocks into cash. that's where you would reach first. i do think in general what's interesting though, who knows what's going to happen in the next several days before earnings season, but if we go into earnings season with the market being very sloppy and a lot of stocks beaten down, it's going to be a different complexion and responsibles. >> meaning it could be a better setup. >> could be a better setup also, big picture, in january or february we had ten-year yield, ten-year treasury yields at 2.6% we were expecting 20% earnings growth now we're expecting in the next 12 months, 8%, 10% earnings growth and the yield is at 3.2, so that tells you that -- that

that's kind of a push-pull of valuation against good numbers in a decelerating market. >> multiples are down from 19.5 times to 16.5 times. >> earnings are great. >> you're not having to pay as much at this point because we've had multiple contractions all year long and the reason is because of rates in general, not necessarily on the earnings front. it's the concerns about rates. >> guys, just want to bring in someone else to this conversation joining us now by phone with more on the big selloff is mohamed el-erian, chief economic advise err with the dow closing lower by 831 points, you've been relatively optimistic about the state of our economy what's your level of concern after this big selloff today >> maybe it's because i was on a plane earlier today, but i think of this as the markets changing engine while flying at a high altitude what do i mean by that we were a liquidity-driven

market we are becoming more a fundamentally driven market. that's good news over the long term, but we'll inevitably have lots of turbulence in the short term, and it's not simple fundamentals this in the midst of big divergence and growth and policy amongst advanced economies so it's not surprising to me that we're seeing this. the only question, you know, why did it take so long, but it's not surprising me at all >> mohamed, earlier in the week you said the dow was too bearish. do you remain as optimistic as ever on the outlook for growth, particularly in the u.s. and if so, is this just a temporary pullback >> so i do i think the u.s. will be a 3% growth economy both this year and next year. the imf up 2.9 and 2.5, but i also said if you remember that they were too optimistic away from the u.s., and that speaks to this key issue of divergence.

when you get such divergent growth rates and policies, you start stretching markets remember, only yesterday the yield differential between the 10-year trish irand the so-year bund was 270 basis points. that's enormous, so there's a lot of stress going on in the context of the u.s. picking up momentum and the rest of the world decelerating >> what did this move in bond yields, mohamed, howie is veer does it look to you, and do you expect to continue given the economic backdrop and what the fed is doing >> yes you know, it's not going to be linear, but i would expect higher yields, and i would expect a steeper curve, and that's totally consistent with both what is happening on policies and the economy but also what happened to non-commercial buyers of long-baited bonds. they are slowly -- long-dated bonds. they are slowly exit and the

influence being reduced and, therefore, we can expect higher yields and deeper curve but it's not going to be linear. >> mohamed, we got a comment from the white house that said fundamental growth in the u.s. is still fantastic this is just a one-day market move, and people shouldn't be worried about it i'm paraphrasing that, of course what will the chinese reaction be when they see this type of share price decline? does this even the playing field in terms of the negotiations between the u.s. and china >> evening is a strong word, wilfremptdwi wilfred. it makes the chinese say it's about time our markets have really been beaten up when all this trade war rhetoric started the u.s. was holding in. finally the u.s. is starting to react so i think they are going to see this as somewhat better for them, but i don't think it fundamentally changes where each

country stands in terms of negotiation. >> moment, the bears would say and argue with you and say the fiscal stimulus can't go on forever and the feel-good effect is going to wear off the fed is raising interest rates which it typically does in a healthy economy, but that can also kill the bull market and the economy and lead to recession. we're heading into a trade war tensions have only escalated with china tariffs on both sides and cost pressures are rising for corporations this is all starting to manifest itself in corporate america, so what's the main argument there >> so i would say you have to move between the baseline and, yes, could you get a policy mistake by the fed could you get a market accident whereby the technicals take hold of this market, and, yes, we may end up in the trade war. i put that probability at 25%, you know, that's a meaningful probability for such a big event. however, if you look at the

baseline, there's something striking going on about the u.s. it's not just about fiscal we are seeing a pickup in, yes, fiscal spending, but also household income and also business investment, so you've got three domestic engines revving up at the same time, and that should take us through this year and next. thereafter you need to hand off actual growth to potential growth, but for the next two years -- >> sorry, continue, mohamed. >> for the next two year, you know, growth prospects are good for the u.s. >> mike, clearly mohamed is optimistic about the growth in the u.s. he mentioned technicals can take hold but isn't too concerned about that i mean, how likely is it that that happens that the technicals take over? >> i don't think anything that happened today would give you an idea that the market is fundamentally disorderly, that

there's anything that's kind of adding some spring-loaded selling power here this the was a pretty orderly adjustment in stock prize right now. it's painful all in one direction, and it was a big bite all at once i do think that bigger picture, i mean, if we're talking about technicals i didn't see the credit markets freak out today so a lot of stuff you would look for to say there's something mechanically wrong in how the markets are acting, i'm not seeing any of that i do think, you know, mohammed brings up this great point that the u.s. seems like it still has this growth one way and i would ask actually if the fed is looking at exactly those same things and feels that's exactly where we're head, are they not just going to stay the course with the rate hikes, and that's maybe what the market is trying to acclimate itself to >> mohamed >> yes, they are i think the market has to realize that this is a different fed. the fed put, as people like to call it, is way out of the money now, so i don't think this

derails the fed in any way we just have to get used to the fact that we have to stand on the basis of fundamentals and not on the basis of central banks. it's not an easy transition. it's going to be volatile, but over the long term it's better for the health and the robustness of markets. >> we will leave it there. thank you so much, mohammed el-erian let's take a look at how broad the selloff was. contessa brewer is breaking down gaming stocks and kate rogers at restaurants and leslie picker with the hedge fund angle. got it all covered bob, let's start with you. >> we've been talking about the hit to tech and industrial stocks for different reasons, but let's just show you what was down the most today. you can see microsoft, boeing, 3-m, apple, i would add nike into that as well. what do they have in common, all up 20% or more this year, so there's a certain let's take down the winners

there's a certain let's sell tech and let's sell industrials, but it's fairly broad take down the winners. the leaders, emphasizing the more defensive names, your procter & gambles, mcdonald's, johnson & johnson and wall green'gree green's. tech, we've been talking about big names that are in connection we've seen most of the big-tech names that hit their highs and particularly semiconductors like micron and facebook, highs way earlier in the year and intel is 22%. alphabet a little better down 15%. why is this all happening? it's happening because the investment world is changing it's different before were in a low-growth and low-yield world. now we're transitioning to a higher growth and higher yield world. what toss that mean? that makes technology less attractive it makes potentially treasuries more attractive against stocks a big factor of what's going on, and it makes value potentially

more interesting over growth it's an old story, hasn't stuck really, but it may stick this time i just want to show you the market leaders we keep telling you about all the stocks off their 52-week highs and yet look at the market leaders right now where healthcare, utilities, real estate and consumer staples, not down nearly as much as other sectors like technology from their 52-week highs. what the do they all have in common they tend to be value names so that's the story to keep an eye on as we go into earnings. guys, back to you. >> contessa brewer, tell us about the impact on casinos stocks. >> we were talking about the impact on stocks, and the big loser on the day is crease yar's which has doubled the debt to ratio to its nearest competitive and 75% of the balance sheet is tied to floating debt. as you can see, down more than 6% on the day. melco resorts another big loser on the day, down 4% or so. that's tied to a lot of these

concerns over an impending trade war with china, ongoing as well as a softening of the chinese market and the way that the chinese government may affect qualitative measures on macaw gaming we're also seeing las vegas sands losing some ground, golden entertainment losing some ground one bright note on this spot is penn gaming acquiring pinnacle for $2.8 billion i spoke to the ceo tim wilmont, and he thinks the impact of the rising rates is largely overblown. he says in his case his balance sheet is all fixed debt so it's not moving are and he expects a much larger customer base coming online as well as an opportunity with 40 casinos to really build their loyalty program. both of those stocks today, penn and pinnacle, up on the day. wilf >> contessa, thanks very much for that let's focus in on restaurants. kate rogers? >> restaurant stocks closing right in the red rather right along with the broader markets

today. the stock that took the biggest hit today, shake shack closed down more than 7% and domino's closed down 3.25% followed by starbucks and chipotle closing down around 3% today interestingly enough, bob mentioned this, a lot of today's biggest losers were some of the best performers for the year, including chipotle up around 50% year-to-date and tom know's pizza up around 45%. so far the only restaurant stock that closed in the green, brinker international, the owner of chile and macaroni grill. mcdonald's was positive earlier in the day thanks to the upgrade from guggenheim before it closed down almost 1% nd, of course, the selloff comes before a wave of restaurant earnings that are coming in the weeks to come. guys, back over to you. >> okay, kate. thanks very much for that. let's now go to leslie picker for the impact on hedge funds. >> i want to read you a line from a report that i got this morning because i think it really sums up kind of the sentiment leading into today's news now, this report, which is from a prime brokerage, says that hedge funds risk down not off by

adding to equity shorts and reducing tech longs. ten-year shorts as rising rates derail one of the last remaining tech stocks. nasdaq is positioning to be more defensive. they are hunkering down and many seemed to be leaning into today's movements. now, the report notes the distinction from prior selloffs, january 2016 and most recently the one in february 2018 where we saw that huge volatility spike, saying that managers this time are actually repositioning their portfolios they are changing them to be more defensive now, of course, much of this volatility can be an opportunity for hedge fund managers. that's a way for them to generate alpha from their short book, but i've been texting with sources in the industry and i'm getting lines like sea of red, bloodbath, those are some of the main things that people in this industry are focused on right now. of course, it's too early to tell exactly how today's market moves have really shaked out,

but we're going to be reporting this all afternoon and evening back over to you. >> leslie, thanks very much for that now a good deal of talk today about the selloff is being tied to rising rates and more fed activity, potentially more fed activity joining us now on the phone with his insights, former dallas fed president richard fisher thanks so much for joining us. clearly, there's been a spike in yields of late in recent weeks today there wasn't too much of one, but it's been a big factor concerning equity market investors. what do you make of the recent rise in rates and the pace of it in particular? >> well, first of all, we had a weak three-year treasury and ten-year treasury auction today and i believe that was probably a bit of a tripwire, but i don't think there's any surprises baked into the cake here it's pretty clear the fed is continuing to move along its path, the so-called mutual rate, they often discuss it it they don't know where it is. powell has made that clear

they are likely to pass through where they think it was which is the 3% level we're getting close to that. have a ways to go, so i think it's very almost conceited of the market operators to blame it on the fed by the way, they can thank the market for turning the market at 666, the devil's number in march of 2009. been on a run since. great year last year, the s&p up about 20% or so, so i don't think it's fair to blame it on the fed, and where i sit at the policy table like i did for ten years, i would say we need to continue to gradually tighten because we're seeing some price pressure beginning to develop. more importantly, we need to, have as i like to say some nuts in the tree to give back when the economy begins to turn, and we haven't seen evidence that have yet. >> yeah, you've been warning, richard, that it's going to be not the easiest transition to go from a world of easy money back

to normal. >> no. >> but i'm really glad that we have you, because i know you know the current fed chairman jay powell, and you know former fed chairman janet yellen, and you know there was this idea of the yellen put whenever the market threw a huge tantrum the federal reserve would look at it and may even pause or rethink the direction of where they are going or how fast they are going. do you think that fed chairman powell has a stomach to handle these kind of selloffs and this kind of jump in rates? >> probably a stronger summit rather than his predecessors did, although i was with janet on monday night and we talked a little bit about this. she feels very strongly that there should not be a put. she made a very good point in our conversation i do ent want to violate her confidence, but several people have been saying this which is the markets went up when rates were kept up for a long time it's only reasonable as rates go up the market should adjust the way they discount future cash flows to present value, so, no,

i -- jay powell comes from the credit market side he came up from dillon reed all the way up circuitously all the way up to his private equity firm i know him well. i think he has better constitutional sense of the way markets operate. he's not had a theoretical economist. he often refers to this as a risk management exercise, and he's probably much more tolerant if you go back and look at the record of what he said in his first meeting of june of 2012 it was that we were -- had to be very careful here because we're heading on a one-way street, taking vol out of the market and this could serve as a trap later on i do think he's coming from his different background it's not a matter of sophistication, it's what you understand markets come and go, and the fed has underwritten markets for a very long time he made that very clear in his secondpress intervention which was our job at the fed, quoting him, is not to underwrite the

equity markets their job is to underwrite the economy, provide liquidity necessary to create full employment where we're presently far beyond full employment, and also to keep inflation at bay which they seem to be doing rather well. >> mike, do you think if we did get any kind of comment from the fed that hinted that they are watching this, and that they are not as guaranteed to rise rates in december and next year, that the market would embrace that to the upside >> it would probably be taken as a net positive. >> what about what richard said, don't bank on that >> i don't know that you'll necessarily get that the market today, just today as the selling did really get intense, started to try and take back some of the expected fed rate hikes for next year in terms of the future positioning, so it shows you that there is some level of market upheaval that potentially would have the -- the fed change its mind, but i don't think we're there yet. >> i mean, it was an ugly day, but you're down 3.5% and probably down 5%, 6% overall

from the highs. >> good point. >> this is hardly something to get really freaked out about now, if this continues for several days and it really gets out of control and it does feel like it's more problematic for sentiment and consumer sentiment and confidence and that sort of thing, that's something that you'll have to monitor but for now -- >> stephanie, this is the worst day for the nasdaq since brexit. that's significant. >> i'm not saying it's not significant, but think about how much it's up since brexit. i mean, it's up a lot. guys, we've had so much -- >> remember where the ten-year was the week after brexit, 136.6. now it's pushing around the 320 level. >> right. >> so, again, i don't see anything unnatural here. unless it, as you say, if it were to continue and begin to infect the economy, infect confidence, et cetera, we don't know, and that's -- the fed will only move when market

perturbations, viltolumes volum volatilities. >> costco reported 7.3% growth and beat handley our expectations i want to throw out a data point and i think it's important to remember that the economy is strong we're in a good place for the fed to do what they are doing as long as -- >> exactly. >> -- they don't overshoot and that's what we're obsessing about. >> final word to you, rich we've been talking about the strong economy, not just the economy but the lowest unemployment rate since the '60s how much can it withstand and is it too premature to talk about slowing growth >> i think it's too premature and i would look at the nfib data and how strong it was in its reporting, how strong it has been and the strongest in the 25 or so years. that database, by the way, those

small and medium-sized businesses represent overall 51% or 50% of all u.s. workers, so if they are feeling strong about the economy, they are willing to commit capital to the economy and risk growth and hire more people, that will affect -- you're right, the consumers are the key variable in the gdp equation so here's the thing don't expect the fed to deter from their path until they feel or unless they feel that the real economy is weakening. they are not driven by what happens in the stock market, and they should not be, unless it infects the real economy, so that's where we are right now. i appreciate having the last word i haven't had the last word in an awful long time and i'm really grateful for it. >> richard fisher, always a pleasure, thank you. former dallas fed president. >> local markets are also experiencing turmoil seema mody has the death tails watching how the world has been

reacting. >> sara, absolutely right. higher rates in the u.s. has caused more pain for emerging markets. the emerging market etf down another 2% today, actually 3%, seeing its worst day since august 15th, but check out how the individual markets are faring, and you'll see that the russia etf is trading down about 54% from its all-time high india, china, brazil off more than 20% europe is in focus as well, a notable decline in germany which now down 17% from its respective all-time high. rising concerns around the resilience of the chinese consumer, that sent a number of european luxury stocks lower today. lvmh down over 7%. burberry and gucci, moncler among others i wanted to point out banks in europe have seen significant moves. over the past two weeks greek and italian banks are down about 16%, so the pain is significant overseas, and, wiln, we'll have to see how japan opens in a

couple of hours to give us a better cue of how global markets respond to the selloff here in the u.s. >> seema, thanks very much for that increasing trade tensions with china are one of the factors behind the markets joining us is richard kang, former cio at emerging global advisers richard, thanks so much for joining us i mean, the selloff clearly has had a number of factors behind it, whether it's interest rates, domestically or problems abroad. update us on your late views on how much pain china is feeling in its fundamental economy at the moment. >> yeah. so they have felt a lot of pain this year, like the numbers that were just stated so 20% down is a pretty significant drop, but they have had bigger drops than that, 2015 was another more recent painful drop. i guess the question is do you see it on the street, so investors feel pain in the real estate market, the stock market, but if you are on the street you can see that there's still spending >> so what does the chinese market reflect to you, and the

chinese currency in particular which is nearing a very key level against the strong dollar at 7 against the yuan? >>ia the lower growth projections by the imf simply are showing it with the stock market down and the r & b down 7%, maybe down closer to 10% by the end of the year i guess that's why there's concern from the u.s. government of currency manipulation, but if you just think about it for the long term, any sort of tariff or trade war is a selective tax, investors will need to also modify their selection and allocation thought process to think of what domestic play in the u.s., china, wherever it might be, will not be impacted by cross-border transactions, your supply chain, your sales force, whatever it might be. >> richard, is there any sense that the chinese government is losing control of its currency,

that there's a risk that the reserves not so much will run out but won't have much effect to stem the decline of the current? >> i think if you ask someone in china they will say, yeah, there's probably lack of controls money flowing out resulted in something like the vancouver real estate bubble there's concerns about cryptocurrency, so i would say that most people say, yeah, there's possibly a big concern there. i think for the -- for the global investor looking at china, simply say, look, i can access china through hong kong because of stock connect you can't control what the chinese government does. no one in china can either because you can't vote for anybody else too bad, you'll just have to navigate as you works and given it's a big drop in the market globally, do you want to al gate more to what you already have, amazon, or something that you probably don't have a lot of, alibaba? i think that's the only decision that you can make right now. >> very quickly. just walk us through what would

happen, richard, if the u.s. does declare china a currency manipulator. mnuchin warning about the chinese currency and devaluation. the report comes out next week what would happen if the u.s. treasury does level that designation? >> yes i'm trying to think if this is a short-term thing because it's an election year, and there's nothing better for a politician than to find a problem, point a finger at that place and say i'm the slicing for it that's shorter term. but longer term it's like two gangs shooting at each other and who is the collateral, canada, southeast asia, et cetera. anyone who trades with the u.s. or china is going to be a prock, and if that's the result of the imf downgrading the economic forecast of growth, then that's a longer term problem but then we can see the elastic snapback and end this long bull market. >> rich, thanks so much follow joining us

richard kang. >> the s&p falling more than 3%. is there more pain ahead mike santoli made his way over to the telestrator looking at key levels. >> basically, sara, i want to look at the field position a one-year chart of the s&p 500. we closed a little bit below 2800 obviously we gave up the recent move above the former highs. that was here 2872 that was the high from january we spent all this time below it. i think the level that people are now focused on below where we are is around 2800 so here is the 2800 mark. the reason for that is that was about the level that capped the market during this correction period right here. we went above it finally in july but we hit the all-time highs. that seems to represent the area where people think that maybe very to make a stand to say that we can kind of protect this uptrend that we've been in for a while. now, with regard to the 200-day average, that's this line right

here, the beige colored line as katie stockton said earlier we dropped the low marginally a few times and there's no magic to the line. it doesn't mean it's game over and it fams apart. as a matter of fact, it seems to act as a little bit of a slingshot effect when you've gotten there it's not so much a tripwire, but if you do think -- if the market doesn't mount some kind of defense in the next 2%, 3% of downside if we actually get some follow through like that you have to have people saying all of this is in question in terms of whether that was true demand for stocks. >> mike, just looking at the levels, the 200-day moving average is sitting at 2765 and we closed at 2785, so less than that. >> less than 1% from here. >> we're above the 50 and now the 100 dayy moving average. >> momentum is to the downside, but very, very important, the averages themselves are pointing up, right, so if you're below a trend line that's still going up, it's much better than if the trend itself has rolled over and then all of a sudden that's when

the market loses the benefit of the doubt. >> mike, i'm kind of curious if you're worried about just in general the nix becauvix because really exploded higher. >> i'm not worried about it. i'm looking for that moment when the vix says we've had this fever and the fever broke. so the level doesn't matter as much as when you've spiked up a lot and you have come down a few points, especially towards the end of the day that often means we've had a bit of a flush if we keep going higher in the vix, especially in this grinding way and don't get any relief there is telling you there's some kinds of vibrations in the market that you're not liking. >> stephanie, you're a numbers person and when you see them breaking through key levels and breaking to averages, who do you read that? >> i pay attention to it because i think you have to. i pay attention to quants and technicians and fundamentals and all that matters at the end

day i think fundamentals wins and the charts look so good and the vix not so good because it's spiking higher, i think, you know, we have a couple more days before we get earnings just give it a chance, because we're going to hear real good things from a lot of companies it's always a tough time pre-earnings season, pre-announcement season. apache just had a terrible announcement about a dry hole, so you're going to get the bad news items, and they are all lumped together and we'll all freak out a little bit but let's get through all of earnings season and if there's something that materially changes then i'll see if i change my mind but i really don't anticipate that at all. >> and as soon as friday we'll get the earnings from the banks and the commentary on the earnings calls from the likes of jamie dimon and tim sloan. >> and those stocks actually outperformed today on a relative basis, is and they have been outperforming over the last several weeks. >> down but not quite down 4%? >> as a long portfolio manager i

look at that and it's all relative. >> absolutely. let's take a look at how we did finish the day on wall street. the dow down 3% and s&p down 3.3%, the nasdaq down, the worst since brexit and the russell down 2.9%. >> so as you mentioned, the nasdaq closing lower, 4% biggest one-day drop since back june 25th. the tech-heavy index is by far the major market performer joining us now is dan niles of capital markets. has something meaningfully changed in terms of the investment thesis with this group? >> i mean, i think it depends stock by stock when you look at technology because i think a lot of these stocks were well above

where they should have been given the fundamentals and the valuations they were trading at. it's very rarely i get asked to do an interview and i feel significantly different at the end of the day than the beginning and at the beginning i was like these stocks need to go down a lot more and towards the end of the day we started covering a lot of our shorts and started to actually pick up some longs. went into the day with 15% cash, and we started to deploy some of that as we went through, so we're actually longer today when you take our longs minus our shorts than we were coming in, so we think this is good, that it's healthy, we loved seeing the panic on the street. volumes were up almost 40% from what i saw the traded value was up 50% from what i saw this is a positive in my mind because when you get into earnings, you'll see the companies, like some of the bank names that will report on friday, that are going to have some pretty decent numbers, and so i think that will help. there are other sectors within

tech that are exposed to things like autos from china or industrial, et cetera, where i think you'll have some real issues so we've been, you know, avoiding the semiconductor space and been short it for a while. we actually ended up covering a fair bit of our shorts today, but we think the fundamentals there are going to be awful, so i think it really depends on what you're picking and what spaces you want to be in. >> dan, what are some of the names you were buying today? >> well, i mean, some of the names that we like right now is we're trying to find names that don't have china exposure, that don't really get impacted by tariffs, et cetera, so if you look at like a name like google, for example, the goods news is they don't really get to operate in china, so that's a real positive for them, and the tariff situation, obviously they are not selling physical goods for the most part, so that's good for them, so that's one we start nibbling on today at the close. you know, you look at -- you look at a name like wrst,

obviously they have some chinese exposure but not as much has most given, again, there's issues with piracy, et cetera, and if you look at the pc market, this is the first time since 2012 that the pc market has grown year over year that's a long time, and microsoft is really going to benefit from that. intel is another name that we like as well for the same reasons. you know, obviously they have to name a ceo i hope they pick a good one which makes me nervous, but, you know, again, you're in a market where the pc market is growing for the first time since 2012. so that's also positive, and we like the telecom stocks like, you know, at&t, for example, and verizon where we think, you know, they will have good numbers and estimates will be able to hold and go higher, so, you know, that's some of what we're thinking about, and, you know, where we started to speculate in those types of names towards the end of the day. >> dan, you didn't mention

amazon, and i think it's interesting it's one of the quietest 14% drops in the second largest stock market that i can ever remember. obviously you had this, you know, idea that they are going to by a $15 minimum wage and some of these news items around it, but mostly it was just a perception issue people got too on board with they could do no wrong where do you see that stock, at least as a sentiment tell for overall tech >> it's like a really great point, wilfred when you look at it, they don't have any real business in china either so for them, you know, athe of this doesn't matter. the $15 minimum wage increase, that's going to add somewhere around $1 billion to their cost structure if you look out from when it's implemented. you can't ignore that. the flip side is they are leveraging a lot of the infrastructure investment that they have done in the past, and

their foray into advertising is really good. if you're selling products, where better to advertise than on amazon which is where everyone goes to buy the products cloud growth is strong, definitely something that we're looking at when we want to get involved because i don't have risks from china or autos or industrials when you're talking about that name. obviously consumer sentiment,ful market keeps dropping like this, you know, that will get depthed, and you need to pay attention to that, but you're absolutely right. the stock got ahead of itself more than anything else. >> you own amazon? >> i do, i do. one of my longer position. you have a lot of ways to win,

advertising is under showed us operating lefrmgs as well and you need to look at how to value it looking at their total addressable market, and there's a lot that they have in terms of growth, and there are things and end markets that we don't know that they will be involved in, so they will continue to evolve over time. >> down 6 boston today dan niles, thank you for jumping on the line and sharing some of your picks from alpha one capital partners the selling ongoing here in the after-hours session. check out three etfs that track the major averages, qqq which tracks the nasdaq 100 is down. it looks like a little more than half a percent s&p 500 etf also lower by half a percent, and the dow etf also trading lower by that amount i'm not sure if it's any sort of tell we'll have to see how foreign markets open up in a few hours. >> usually foreign markets will

take a lead from what new york did so now anything else >> we should also warn that we expect asia to open down because the selling happened in amuch more pronounced afternoon in the european trade and the likes of the nikkei were higher hand hong kong was slightly higher so we shouldn't be terrified when we see asia going down. >> what are you watching for q, stephanie? >> well, tomorrow i want to see initial claims because i got really excited last week initial claims was the start of i think why rates jumped a little bit higher on the margin. rates were on their way anyway. >> adp the day before. >> and initial claims. i expect them to be very good. i don't know if it's going to matter tomorrow. it's not a huge number but it's also indicative of how strong jobs are growing and wages are slowly rising in a good way and, again, it supports a very good consumers which a big bulk of our economy and also manufacturing is doing well, so, i mean, you know, i'm not

whistling past the graveyard i get that we rose really fast and we're at levels where people are uncomfortable because we are seeing higher rates. what kind of multiple will you pay for that, but, again, i think earnings will bail us out. just got to be patient over the next couple of days. >> all right we'll wait for the numbers, both on earnings and the economy. as stephanie mentioned, shares of construction company flora plunging after hours seema mody with the details on that one seema? >> reporter: take a look at the chart. shares down 12% after the company warned on revenue. the stock is down another 12% in extended trade this. comes after the company reported disappointing earnings back in may, and we did see the stock fall back then as well this is an industrial engineering name and the warning from flora comes after ppg issued weak earning guidance a couple days ago. the conference call for flora will be at 5:30 p.m. eastern we'll be on that call to get a sense of why it's guiding lower for guiding lower fo revenue ant earnings are

expected to come out november 1st. more to come back to you. >> mike, if we saw more ever these types of warnings it would spook the market. >> yeah, injury you are seeing a build up of the one off announcements pfluor is a particular industry. these are not in strip malls these are massive projects long dated contracts and lots of cost stuff. >> i know if you would extrap rate much. >> i won they are volatile to your point. and this company and seccer tends to backlog i want to hear what they have to see on the bag log on the conference call pl but they are at the the end of the spectrum in terms of energy and mining exposure it's a high beta way to play energy and mining if you expect the commodities to rise. people have started to get interested, myself included, jacobs engineerings, jec if this fell in sympathy with fluor that

is an interesting buying tune because of the diversified mix. >> you talked about energy we are going through the sector by sector damage energy one of the worst performing sector. finishes lower by 3.57%. >> joining to us discuss is john hoff miefter, former president of shell oil can company thanks for joining us. what's your take at the moment in terms of where we are with broad err oil prices and whether they can maintain the recent highs? >> well, i think we are in an overall rising trend but that doesn't mean there won't be dips. i see today as a dip and probably driven by the size of the selloff where some of the traders would worry about future growth but underneath it all -- and i come from an operating perspective rather than trading perspective -- but underneath of it all there is a four-year gap in spending capital on the industry to replace reserves or to grow reserves

and we know that in the shale formations in particular there is a rapid decline in -- in what oil we produce so i'm a bit worried given that four-year history ever how we maintain growth and meet demand in the coming years. so i'm on the side of rising prices over the next, say, year, year and a half where, as some people say we could touch a hundred. i'm in the sure i'm there yet. but certainly in the 80 range and above. soink today is a dip we shouldn't read too much into it. >> and where are you on what kind of economic impact that would have, john there is a debate sort of about obviously it's not good for the consumer paying higher gas price. but as kevin has lit from the white house told squawk box it doesn't have that kind of negative effect on the economy because we are a oil producer. >> except from the consumer pocketbook standpoint it does. if we get much above $3.50 per

gallon of gasoline or up in the range for diesel people are pushing back and we will see demand destruction where we really see the demand destruction is when it hits the $4 range that's when consumers and frustrate moving companies tack on surcharges. all the prices go up suddenly the consumer is really in a twist from an ep standpoint and the expiration in production standpoint, the comment from the white house is absolutely correct. the rising price is actually fueling more investment, fueling more growth and with the shale formations and so forth. but i look at is not only the upstream portion of the business but also the downextreme portion. and they come together when you look at the macro numbers of how much growth and demand there is or how much destruction of demand there is. and it all plays out ultimately in the oil price. >> john, in terms of -- we were talking to kevin o'leary earlier

who said now is the time to own dividend paying stocks are you confident the big dichds, the yields are sustainable for the likes of exxon, chevron where or former employers. shell and bp in europe where the dividend is higher still. >> i can tell you from the industry perspective when it comes to dividend policy there is always a multiyear outlook on dividend policy. and it's always looked at in terms of low price, median price, high price, scenarios so that no company is going to commit itself -- because it is a dividend driven kind of investment marketplace no company is going to commit it's stove a dividend policy where in the next year or year and a half they might have to re-look at it. they'd rather have a consistent steady dividend policy they are atracking shareholders more in for the long-term. the industry o industry is not for day traders. it's not for the short-term mined individual because the

projects with long-term, the investments are long-term both in the upand downextreme it's important for investors to lock in and go for a dividend policy they like and if there is share appreciation on top of that that's all to the good. >> john, nangs for joining us. john hoff miefter former president of shell. the dow fell 831 points. nike microsoft, visa losers after the plunge in the blue chips is the selloff creating a buying opportunity from far miller in washington. as well as john petrides joining us by phone. michael farr do you take the opportunity to boy or wait to see zbhoo the old don't try to catch a falling knife. the after hours selling in the pullback maybe this is the beginning of the correction we've been waiting for for a long time. we have to wait and see.

but informs a risk off trade nasdaq well underperformed the dow jones industrial average after we had a weak three-year and 10-year cows auction everybody is taking the fed seriously they are raising rights why they haven't i don't know wall street does that but we are looking for higher rates. stocks seem to take some of the steam out. stocks go down at times. it looks like this that is farther to go. >> john, the same question. >> i think, you should be preparing your buying list and using this opportunity to grow out there and buy good value companies. i do believe this may not be the start of a correction but it's the definitely of the rotation and out of growth into value let's not growth growth has destroyed value from a style standpoint over the last five years. you are seeing some of the wind taken out of the sales of growth with tech rolling over big time today. >> john, i guess the question

would be -- fallout just because of the fact that growth mass outperformed value by so much, but are we at the point economically where it seems value should work? so many of those sectors are beneficiaries of kind of more of an early cycle type environment. >> all right so i mean it's all a function of where is value today and what are you willing to pay for future cash knows? i think there is significant value out there. one name in particular is at&t we know the deal the trfrmtive deal at&t has done by taking on time warner are warner backup prp but you get a 6% dividend yield trading at ten times earnings so, eye you know i think a lot of concern is already baked into the cake for a company like at&t and i think that's a great way to start in picking up value today. >> michael, where do you stand on the growth versus value debate and what are you buying. >> i've been talking about that for a while, sarah and was

talking at the end of the beginning of the year if you hit them where they ain't look at the value stocks woefully last year and that's followed through to this year to make sure there is there there and real earnings with the balance sheets in companies you own. i would caution investors to active it a little bit of patience markets go down. and being really too quick on the drawn draw for the patient long-term investor doesn't make sense when the stocks start to roll over. let's see where it goes. if you are a long-term investor you shouldn't be changing investments on a day to day or interday basis depending where the market is. be patient i agree with the buy list. but be patient and wait to see it out i won be too eager to rush back anywhere now no know i stay long all the time and i'm happy with the stocks i own. >> okay, guys we leave it there. thanks very much michael sanity it itly, tomorrow morning key things to wind chill

for. >> i mean, i don't think you want to see acceleration to the downside overnight, the futures did for the open well this afternoon. i do think you want to see certain divergens. equal the weighted s&p lagging forever outperformed the s&p was this the big headline indexes kind of belated subcoming to gravity when most stocks had been down a while. >> less than 30 seconds what are you watching. >> which secretarier is going to outperform, relative or absolute today banks and health care and staplings. i will take banks and health care i would buy those on weakness. >> which is the top bank pick of the moment. >> top bank -- i have so many, goldman sachs. >> interesting. >> i was going to say before tomorrow watch "mad money" jim turned cautious yesterday for the first time in a long time that was a good call. >> it was indeed you don't want to miss mchld

don't miss "fast money" beginning right now. "fast money" starts right now. with breaking news stocks getting shattered today the dow worst day since february tanking 80 oh point. the sell accelerating into the close. and we close the dead lows of the day. s&p 50 oh worst losing streak in two jeeks .look at the sea of red. the market took no prisoner. tech getting hit the nasdaq falling 4% the worst day since brexit everything from transports to small caps, taking on the chin 66% of the s&p 500 close