when he put up teslaila. >> after you have had enough of you can't say the word teslaquila >> 125 up right now. power lunch is over and closing bell starts right now. >> it is sometime for the closing bell here at the new york stock exchange another whipsaw day on wall street john joins us to break down his quart ef defending after sharp criticism whether the fields need to change course.

shares of netflix getting a boost after falling. details on a new analyst call. the closing bell starts right now. back to the closing bell >> thank you >> looks like we might have a suspenseful hour >> another one >> we have a 150 point rally ton dow. at the high we were up more than 400 points, 414 to be exact. so another crazy flip-flopping day on wall street >> in some days kind of typical. let's get to more details on it. posting their worse week since march as it stands right now let's get to our reporters watching that action bob is on the floor here at the new york stock exchange. so bob, as i was saying, some what typical to have a tentative

rally. how are you seeing it? >> exactly there are reasons to be optimistic there is reason to be a little bit pessimistic. bank earnings were good. they have been selling the banks all throughout the day none of the banks are bouncing at all really really oversold group i would have thaugtd there would be buying attempts there are a few reasons i am little more optimistic number one we have seen wild price swings attempts to buy at certain times which we haven't seen on other days during this recent selloff.

a lot of stuff down 10%. sectors down 10% in the last week and a half. the ratio, 1.2 to 1. a lot of people going out and buying that's a sure sign at least they are concerned and that's associated here. it's not just the cash that's elevated traders are going out and buying it is not just a plont or two months out they think there will be short-term volatility. they are not worried it will go out a month or two months into the future fanlly, our man over at jp morgan follows a lot of these accounts and he came out with the comment in the middle of the day here we think the majority of systematic selling is behind us. he often follows the stuff very very closely we'll see how the close goes back to you.

>> yeah. chasing the shadows of the big money is what he tries to do >> thanks. >> nasdaq outperforming today. it is not the beaten down areas. nasdaq did touch that 10% down level in yesterday's level we have more on that >> yeah. it looks like we'll close off of those for the week tech is releasing the snap back. it will end the week down 4% chips will earn the week down about 6% apple was among the best performers it is down about 2% for the week today's rally, chinese online travel is the standout it is up 8% for the day and for the week it is negative for the year. among 40% of the nasdaq 100 stocks that will go out this week off more than 20% from recent highs take a look at american

airlines that has the nasdaq's biggest decliner this week it is down 40% year to date. the airlines are another area that's really beaten down with those rising jet fuel prices for nasdaq the big question bob mentioned is how long it is going to take for small caps to recover. the russell 2000 on a four week losing streak which is the worst since the third quarter of 2017. >> all right thank you very much. joining our closing bell to talk about the action today, jack is here steve and rick is it convincing >> we are not out of the woods yet but it is healthy not to

make a new how the friday before the initial thought on today >> jack. it looks like you say it's a standard healthy correction. >> i think we are pretty typical in the sense of this correction. we are seeing a lot of selling, a little bit of fear maybe it goes another 1 to 2% on the lower end. we are very close on the bottom. we'll see over the next five or six weeks all of the companies reporting. it will set the tone and into 2019 >> rick, obviously the narrative for the week and actually for a couple of weeks has been pointing to the bond market as the catalyst far lot of this kind of upset in the stock market as you have been pointing out it has been kind of methodical and yields a little bit lower today across much of the curve what do you think the story is telling here >> is that rates are going up. we could debate the calendar

event of that and they are going up it is in a way it really isn't as threatening as many think certainly what we went through was a big deal it got momentum. we haven't looked back since whether it was right around three and a quarter on 30s it is trying to come back and retest the breakout levels from the third week in september. what i read into that is rates will be firm and will be very t stingy about the agreements that rates give back a little and stock market gives back a little oar lot. they never reach double digit basis point retreats from the high yields which were exactly one week ago friday at 323 the dollar index also figures in it really feels spongy but it's doing okay especially in the context if you were to erase some of those periods during

volatility it would change the whole look you don't think the dollar index is performing well look where it was in april i think it tells me that the economy was doing well the fact that it flattened a little bit during all of the volatility tells me the most important information that it is easy enough any time soon is not built in at this point >> what about the fed unwinding its balance sheet? i know rick is well steeped in the knowledge here we haven't talked about it we are up to 50 billion per month now and you see the effect >> this is the tightening. >> yeah. people are talking about rating but you also have at the same time them unwinding the balance sheet. whether or not you have a debate on rates why not do one or the other at one time? it is twice as much now. >> can i throw -- >> let me -- >> okay. >> let me just jump in here. the problem is that the ball

lachbs sheet is such a unique animal when you see it has dipped under 16 million. i think bernanke tried to keep it as orderly and on a very predictable trajectory and let's see how it goes. they may use it more as a tool i don't see them kind of touching that area as much sense as you say makes >> the other problem is that 13 central banks are simultaneously tightening at this point i get what you're saying we want to get to more normal markets. there's a lot of losing parts here that are all happening at the same time. >> yep >> so why are banks up you have higher rates. rick says they are going higher. you have tightening, better economy and the results today weren't that bad j.p. morgan, citi group. it's the worst performing group right now in the sector.

>> i'm a big believer the market anticipates. we have most of the larger banks last year. they were anticipating this very strong economy, expected rise in interest rates and we are seeing the rise in interest rates the market is trying to make a bet. the bet is we are half way or two-thirds of the way through. these are companies so the market may be right. they may be wrong but i think it's one of the reasons they have not performed all that well despite the fact that earnings -- >> i think a lot of people would take a half or two-thirds. it seems they are sense toif to the idea we are later than that. >> it will be interesting to see if they actually show a lot of strength going into 2019 the corporate profits will certainly be good. the economy is in great shape. it sort of gives the environment. >> did you take the big drop to

buy more i know you like that one >> we have involved in amazon for quite some time. happen to like the whole internet backbone strategy oonl few companies you can really invest in that are critical variables those are amazon, mike socrosof. >> guys, thank you have a good weekend everyone >> thank you >> jack and steve and rick all right. still ahead we have much more on this wild week on wall street. a pair of technicians will break down to most important charts. and wells fargo out with mixed results. john shrewsberry talks about a rst on cnbc interview right here on the closing bell x1 is here to help.

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bell visa up. wall gre walgreens boosts up. earnings season kicking off. we have some of the highlights from the calls and the quarters. >> that's right. we saw kind of a mixed bag among the three large banks reporting earnings this morning. j.p. morgan getting a boost. trading revenue dipped citi group saw trading strong but average lending slightly lower. wells fargo some analysts are calling an inflection point and highlighting signs of stabilization. the bank seems to turn around business the third quarter was a major test to see how banks are fairing in a rising interest rate environment on analyst call jamie dimon brushed off concerns about rates. >> it is still growing the economy is strong.

rates are going up most of us considered a healthy normalization. it is more of a free market when it comes to access pricing and we need that so to me overall is a good think. so i do expect rates will continue to go up. >> on a call with reporters dimo also highlights risks from brexit, italy, turkey and saudi arabia it is what he described as geo political issues bursting all over the place, guys >> all right thank you very much. she did just mention wells fargo earnings the stock is trading higher. joining us now to discuss is john shrewsberry thanks for being with us this afternoon. >> sure. thanks nice to be here as was described we announced our earnings this morning. we had a great quarter by all

measures we had a lot of profit blt we generated an roe of 12% we had a lot of signs of momentum auto loans we have big momentum we are the biggest debit card issuer we have payments in the quarter and interesting things happening all over the country >> yeah. what were you able to tell us and investors today about the outlook on a couple of stories people seem to be concerned with on the investment side the strength of the mortgage business and net interest margins at a time when banks will have to compete a little harder for deposits? >> sure. on the first one in terms of mortgages with rates a little bit higher it is much smaller

than it was 50 basis points ago or 25 basis points ago so that smaller market is much more purchase oriented those are the customers everyone is pursuing. there is excess capacity so margins are tighter so there's a reason. it is a big part of our business it is about 15% of our noninterest income we are happy to be a leader in it we love it for the long term there is adjustment going on i think it will have an impact on people who are smaller players. with respect to the interest margin -- go ahead >> no. go ahead i want to hear what you say

about that >> as rates move upmost are asset sensitive. we expect to earn more with higher rates because they price up faster than our liabilities the related questions you raised whether deposits will cost more, they likely will but this cycle has been slow to adjust versus what assets we are priced to we have seen more in the last six or nine months with people with excess liquidity moving to mutual fund and other cash equivalents. there's some of that going on. it's better than history would have predicted in terms of what it means for the first 200 points of movement by the feds over the last couple of years

how does it tell where you are with all of the can -- -- scandals depoz so deposits leaving, does it show you're in the process of putting it behind you? >> yes revenue is up and expenses are down both of those are good things. it is a reflection of what you're referring to. they are down year over year of having several different types of settlements so on the momentum front i would say things are really good with respect to the asset cap and overall growth of the business we took a couple of measures at the beginning of the year to create plenty of head room so that lending and deposit

taking it isn't really impacting those customers or the business they do with wells fargo that feels good too. we are get ago lot of things behind us. the momentum is good in the business i described there are certain categories that are up year over year it reflects engagement of our own team members it is like auto among others >> and just before we go, just wondering if your take right now on the state of commercial loan demand because i think it has been one area of perceived softness out there >> yeah. >> so commercial loans are business loans and real estate loans. deman demand is up it tends to be a little more aggressive there isn't a lot of utilization

of commercial credit by our borrowers. they are performing very well because the economy is doing as well as it is. the bond market is wide open there are people turning themselves out or borrowing in the bond market and not just on banks books. those things are all going on. with respect to commercial real estate there's a lot of nonbank activity in 2016 banks accounted for about a third of commercial real estate funding in 2018 it is about 15%. it is a combination of asset managers, hedge funds and other nonbank play thaers aers that ae contributing it shows up in terms of weaker funding for banks. we are actually okay with that >> you guys have such a good window into the economy and housing, how are you thinking about this big selloff we have seen on wall street and what's

happening with the economy and interest rates >> yeah. so the selloff in the stock market seems completely detached from what's happening. we are on fire in the high threes this year and probably into next year benefits from tax reform relatively low rates being expressed. it is for things to begin to slow down as a result of rate increases after the end of next year you know, we don't see it in today's confidence numbers and in the flows i mentioned what's going on -- you. >> you don't see it in the housing market >> it is regional. it depends what markets you're talking about. home prices, the borrowing costs are very affordable. you know, what's happening in housing is a function of what's available for housing, how far they have to commute, what their preferences are for single

family homeowner ship versus commute patterns a lot going into it. we are talking about a mortgage market in the coming year which is a lot of origination. >> all right seems like a pretty good job thank you very much for walking us through all of that >> thank you >> thanks for having us. >> bye bye all right. we have under 40 minutes to go sticking to positive territory nasdaq is up russell down .3% >> i think this upward drift is a surprise i think people were expecting a little more jerky action >> last half hour is always the most interesting still ahead the global market pushing a number of indexes into

a correction we'll tell you what you need to know straight ahead. >> the stocks seeing a big rebound today. we'll tell you what's driving it higher right after the break i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure?

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>> the dow is up nearly 400. now we have it audiotape about 230 points in the last ten or 15 minutes we have had stocks pick up a little bit. let's check on some stocks to watch. shares of netflix jumping on an upgrade. firm says the selloff is a buying opportunity is a recuring revenue franchise. you see the stock up more than 5% of course remains down close to 20% from the high. up 70% for the year. essentially it has been a big whip it seems like people are going to wonder about not just the subscriber growth but whether they have a path of turning free cash flow positive now folks are arguing it might

be flthree years off. >> the question is subscriber growth it was such a disappointment the stock didn't find its foots since then >> and it's almost always a very big mover on the report. >> as we are seeing just from an upgrade as they called it today. este lauder downgraded from neutral to overweight. the tariffs will go into effect have chemicals that go into the cosmetic industry. este lauder has been a travel play going through airports and buying at the stores if there is some sort of slow

down and not activity or crack down in china a lot of people are worried about the stocks >> it is more on the input side for them or more on sales in china. >> they are exposed in both ways >> such a favorite stock >> yes time for an update with sue herrera. >> amnesty international says the coalition in raqqa caused civilian casualties. it is 80% destroyed. 30,000 houses have been completely destroyed and 25,000 are partially destroyed.

>> israeli forces fatally shooting in one of the deadliest days in months along the gaza border they say 14,000 palestinians burning tires and throwing rock, fire bombs and grenades at soldiers arrived in moscow of their failed launch to the international space station. russia says the two are absolutely healthy and very very lucky. that's the news update this hour i'll send it back downtown to you. >> all right thank you. we'll see you next hour. what a week it has been. two technicians looking at what got us here and what investors should keep an eye ongoing into next week. we have rob and cnbc contribu

contributor. show us the chart. we had a big break in the market which was pretty disappointing we had a big break in the 50 day this week and now the market is challenging the 200 day which had people pretty concerned. a couple of points we'll have to look at which argues that the market is setting up for at least a short term bounce. when you look at it it is hovering around that level chb though you can't see it clear l clearly on this chart you're right at the biggest move. you have retraced half of what we have had through 2018 i think we'll expect more chop going into the weekend we are going in and you often see lifts around that time

>> sit a relationship between growth and value the founder of funds made a point about how value tentds to outperform this long-term trend beginning at 17 and challenging it right now. it hasn't broken the move that we had the last couple of days, a lot of these are starting to bounce back. software names coming off the day. it has to hold that summer trading range low. we'll give it a little room. my guess here is we'll get more going into the end of the year next year it will be a hot spot. >> it would help the overall market bounce back >> i would think so. very big capped names. they are extended. it's not as though there's not a lot of risk in these names investors will go back to the names they know and trust. that will be key we break that relationship >> what about you?

>> i think to start you asked the question at the top why are we here? i like to look at the big picture chart of the yields, of bonds in fact. if you ask somebody at a party what is the relationship between stocks and bonds what do you think they would say >> they go in opposite directions >> they go in opposite directions they say the price of the bond looks like they go in the same direction in fact. if you look at this this is a direct relationship. the problem that you're seeing is we are starting to see a little die ver jens. if you were to draw a trend line to where we are now, if you were to hone in on this right here we have broken up trend support that is four decades that just clanged. it could be a generational shift in yields and can stocks handle that >> you think there's a longer term shift that develops

>> the damage is done. we broke a 38 year trend i'm not going to extrapolate what that means but it is broken >> on a 30 year? >> on a 30 year, exactly >> 30 year yield and this is a semi long chart. make sure you're looking at percent change compared to other percent change so hopefully it makes since. >>fully though any thoughts on ? >> the shorter the duration the earlier they broke trend so yeah. this is a serious problem. i think as you shift it over to the s&p i'll pick up where you left off that's how we look we just closed below it. the other point we are talking about the small caps if you look at the s&p it is

divided into small caps. we have also begun to breakthrough the s&p is outperforming it is underperforming the s&p. i see those small caps lead and it's happening again i'm concerned. >> all right >> we have to leave it there it seems like we have a lot of crucial junctures. so it will be interesting. thanks very much we have about 24 minutes left before the bell. we still have the markets attempts to go into the weekend on the stronger side s&p up and nasdaq up 2%. s&p fell 5.3%. we are recovering in the zone. >> it is down for the week >> it is about one fifth of what we lost. still ahead defending the policy in the face of mounts criticism from the oval office we'll debate whether the 23ed

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we are back on the closing bell these are kind of the growth sectors that had been leading the market until we kind of came into the tail spin communication services lagging very conspicuous financials. that sector is marginally in the red. >> things have definitely improved over the last few minutes or so. >> yes at one point it was all green. new developments surrounding last month's massive facebook hack facebook saying 30 million had their accounts accessed. for 15 million feem attackers

accessed names and details and for 14 million people the attackers also accessed other details on their profiles such as relationship status, religion, hometown and birth date and last ten places they checked into or were tagged. they didn't access any information. as for what the hackers intention was with this hack or what countries they were tied to, facebook said no comment they are continuing to work with the fbi which asked them not to the details. it is everyone that advising them how to protect themselves on how to exploit the stolen data back over to you >> thank you very much seems like we keep having to keep track of these. appreciate it. >> we have 19 minutes left before the bell. you do have the dow up 228

points the s&p is up and the bounce will hold into the weekend up next we'll find out what is driving the charge and after this week's big selloff a number of global markets are trading in correction territory we'll preview the economic data that could set the tone globally we'll be back after a quick break. dealing with millions of customers a year, like this one. no, i'm pretty sure i didn't order a squirrel playing a guitar. that's why you work with watson. it works with your systems to resolve calls faster and improve customer satisfaction. i detected fraud and helped reassign a new credit card. honey, they're overnighting us a new card. woooo!!! woooo!!! for ai that works with tools you already use, choose watson. hello! the best ai for the job.

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back back. what's driving this? >> obviously it was one of the favorite growth stock winners. people loved and was one of the best performers in the dow those are really suffered in this move away from momentum the fact that it is representative as people either say look, they have got two beaten up and oversold or we think this kind of story will play out the rest of the year. >> i think one of the charts

over there is still in place >> i was also thinks j.p. morgan reported strong consumer normals today. >> yes >> it strengthens to credit cards and spending >> it really plays on the volume of spending and the move from plastic to cash. das payment play >> visa up 4.75% a growing number of ruli uere nal markets ar stggngnd double digit declines we'll take a closer look at that trend after the break. how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go.

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restarting your equipment, or paying your bill is easier than ever with x1. x1 help. another reason to love x1. say "teach me more" into your voice remote to get started. >> welcome back. the dow and s&p up more than 1% right now. nasdaq up 2.2% russell 2000 is about flat recooping some of the big two-day losses here are some losers j.p. morgan down 1%. travelers and that is the rule, financials and energy ton downside today >> it is similar to what we saw yesterday as well even with the

big selloff on wall street well, with this week's losses a growing number of international markets are fearing a lot worse than the u.s cnbc is back at headquarters with some of the carnage abroad. >> if you think the u.s. market has been bad take a look at the picture overseas we'll take a look. the broader european stock market is now down about 11% from the recent high hit back in late january basically financials and tech were the two pockets of weakness plus political concerns and italy also weighed on investor sentiment. individual markets also fell into construction territory. this week it is now down 11% from the recent high take a look at greece. major under performance, down about 41%. asia suffering deeper losses it is down about 11% and also

want to point out russia tightly correlated with the move in oil prices it is now down 15% from the respective high. we talk about the chinese tech names out dpts performing yesterday. they continue to outperform today. it helped stage a come back today. only down about 1% on the week all in all even with the big two-day drop in stocks the u.s. is still vastly outperforming global stocks this year. the s & p 500 up about 3.5% this year compared to the global index. it is down 10% next week markets will be focused on china's number and the treasury report on currency manipulation and earnings season from goldman sachs

it could also set the tone for markets as well, guys. >> you know, that chart that you shared there, the s&p, i think it might be at the center of everything going on in the markets this week. it really, a lot of folks are looking at this and saying they let us down into this position i wonder if the conditions are right for the immerging markets to close this gap a little bit it was after the strong performance that we saw in immerging markets gaining ability 60% over those two years it has been quite the opposite those comments are certainly not helping. >> they have been worried far

while about immerging markets, slower growth in the immerging world and global recovery. i think the question -- and we have been talking about this all of the time is that where does the u.s. -- how correlated are we economically and from a market's perspective we are not the most open but if we start to see a global slow down how does it effect it >> it is a massive tech bet that we have. that is starting to go in reverse too. we'll see -- >> although you could say china has high exposure. it makes such a big component of the broader immerging market index as well. there is that. >> very true thank you very much. have a good weekend. up next we are going to have the closing count down for you and after the bell, how buy backs could contribute to a big market buy back.

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your neighbors. you like them. they always remember everyone's names. your kids love swimming in their pool. you like them. if you forget your trunks, they'll loan you some. they have a section in their stock portfolio just for pool stuff. everyone likes them. you like them. but you'd like them better if you made more money than they do. don't get mad at your well-liked neighbors. get e*trade. >> less than four minutes to go. you have the dow up about 337 points right now we have been up over 400 points towards the open there was a big bounce in the

morning. similar to the activity after a big selloff. s&p was down more than 5% over the prior two trading days we are getting back a little less than one quarter of what was lost there a couple of days. we have bob and kenny here t can you tell us about monday >> i thought they were going to close on the lows today. if they close up above 2765 it sets itself up it feels like monday could be another kind of up day not huge >> this is the kind of action that you tend to see here. up 400, down 400 but all throughout the day they were attempting to buy the market unlike we have seen in the prior days it has been one sided on the sales side i think it's encouraging we had high call ratios. it means that it was way way

high people were panicking short term so i think this is very encouraging right now. there's been a lot of damage. >> we are up 300, down 200 it will happen until it kind of digests all of the damage that's been done. >> it's not the usual formation. happens. >> but also with the kind of formation it does seem a little unsteady >> yes that's a sign that people with unsure what's going on they reach for the protection. you get 1.2 to -- normally you don't get a lot more that's usually a sign of a short-term bottom. you look at the psychological indicators of short-term panic that usually subsides. >> i think the broader question

are they issues that worry everybody the high rates, the tariffs, the increase in costs going away they are not >> they are not. >> and maybe i'm hearing arguments we saw big papers out today from the firms that, listen, we can handle higher rates if we get over 5% it will be probable. if you're okay a lot of discussions about costs. they are putting numbers on it they say at these levels of tariffs it might cost 2% on gdp growth next year there's estimates and basically the estimates are already everybody, don't panic here is trying to sort of moderate the hysteria tone about this >> yes >> not a lot of expectations >> yes >> look what they did there. a little disappointed we didn't get a little better response

i thought numbers were good. they do often sell off on the day you start doing that >> a very good close second hour of the closing bell starts right now >> looks like a strong week. the dow closing by about 276 points we'll be back in just a minute let's take a look at how we are finishing up the day on wall street the dow is finishing up higher

the bors day since march 23rd. the dow is up, the knack daz had the strongest since may. technology bounced back hard it is dune little lesds than 4%. financials and energy got hit the hardest and technology came back roaring in this market. joining us is evan and barbara leading the dow this week was walmart. caterpillar was the biggest decliner fluror was the lagger. >> it is bullish in a sense that it could have been worse i think that the market coming into dodd totoday. when you go down more than 5% it was really something

the encouraging part is the market didn't take the opportunity to fade into the weekend. i think really it is better that you close but the verdict is not in just yet for this little phase. >> first positive day of the week almost 300 points higher. what does it tell you? >> we are having a little bit of a post bounce. i think the rally can continue whether it continues next week in a straight line i'm not sure about that i think investors have to hear each of the company managements in terms of what they are seeing whether it is wages or trade tariffs and what will happen to margins. i think a lot of companies will guide it a little lower but i don't think it will go off a cliff. >>. >> it often talks about being --

>> no. no no no no i'm waiting for more than that maybe i'm get ago little greedy. it is probably the low for the year thereabouts >> but the weird thing is that i think the market is pricing in a very good earnings season. i think the -- there would be more -- you're more likely to get negative reactions than you are positive reactions >> even with a big selloff this week >> i think so.

i think you'll have a number of ceos to use this to guide down even though they may not be seeing it yet. they may go what do i have to lose i'll guide down a little bit i don't know what will happen with interest rates. i don't know what will happen with the trade war i don't know what will happen it is better off being conservative here i don't think you'll get a lot of super bullish commentary. everything is going gang busters. everything is glorious i am still kind of because of financials and financials have been really super weak which has been odd >> so i know you disagreed >> yeah. >> so how do you explain the action >> i don't disagree. i think they will be guiding down i don't think it will be dramatic i think before this drop and now we obviously -- i think we'll switch around.

>> i think we'll continue to rally. >> the other theme has been these huge growth stocks >> a big growth stock. it means growth will not outperform for some time it has not changed the secular growth stories it is huge in terms of what's going on in this economy it is a question

you get the sales forces, netflix. those are still up a lot this year i don't know what amazon's numbers are but it was up. it must be up 45 to 50% still. >> yeah. >> whatever the number is. >> but basic cash flow math. >> it is maybe as much as 4% you should see significant downdrafts in the sales forces netflixes of the world i'm not saying it's going to happen >> momentum names? >> yes and i would kind of know you're going through a real correction if you see that happen

i'm not saying it is going to happen it would be important. >> do you need to steer clear of those momentum names >> i think last week it was -- names were too expensive right now i'm starting to nibble like amazon, it was down over 100 points in one day. i said this gets interesting estimates in the last 12 months the companies have repurchased $646 billion of their own stock. almost 30% more than the year before and there's plenty of dry powder left. one firm told me there is at least $350 billion in unused buy backsjust waiting to be put to

work more than 300 large cap companies have active buy book programs with some of the large fres apple, visa app materials and more companies can buy back stock in the period just before earnings are released providing they have set up a plan to buy back stock on a regular basis there are certain restrictions you cannot buy in the last ten minutes of trading so with prices down corporations can buy back more stock and may get more aggressive as prices have dropped here is the big question, when will companies stop buying back stock? companies are generating enormous amounts of free cash

flow i'm betting they will into buy backs. >> thank you very much it has been a huge focus for the market the companies that are buying back the most stock don't always outperform i kind of figure almost it's a psychological effect we know they are buying back stock. we might as well feel safer doing it do you think on a timing basis it matters a lot >> the buy back window is open or closed or not >> a lot of people said this week the selloff was worse >> i'm not sure that any company stepping this week, particularly we had it i don't think it would make any difference at all. it is these huge volume names that one buyer and they are not in there rushing to buy. i don't think it makes a

difference day-to-day. >> i mean ibm is the poster child. >> yeah. but it's the one that didn't work >> yeah. >> what about apple? >> all i'm saying is it's a technical element. if a bull market is resting on corporate buy backs as a leg and major pillar of the foundation the bull market is? trouble. we don't talk about it anymore >> it's actually not a capital spending deficit as far as i'm concerned. >> and it is in terms of company

spending plans >> they will continue. it is huge you have seen it we are in terms of share buy backs as a shareholder i would rather see dividend increases. they don't nlts they think -- unless they think it is sustainable. it does help you're reducing supply out there. if that's the only thing you're in trouble >> sure. >> and there is a lot of debate as to whether this year we saw a bulge in buy backs you know, bond yields were low you could borrow and all of the rest >> i think, you know, the major question about the markets right now is not about how earnings are. it's like are we at -- i don't flow the answer -- fli don't knw the answer but it could mean i think that's the bigger point that worries me rather than are

we going to see the market down 2% next week it feels right now that the u.s. is is either going to follow these other markets which have done very very poorly or find a way to lead the markets. i don't really know. i think a lot may be riding on this thing with china. >> as a bull on the market how do you answer the fact that the composite is down more than 20% and whether we can continue to go separate ways it >> is a question we haven't seen such a disparity. maybe it should be rotating into i don't see it slipping into a bare market. we have had different sectors performing it should be defense ifr i don't think defensive stocks just yet i don't think we have those worries right now. >> inflation worries >> resercession worries.

>> i know all of these things right now. i can't point to the bond market and say yields are so high right now. i don't feel that way at all i'm talking about it has a feeling right now that the u.s. market has done well in the face of a lot of other things not going so well globally i think a lot more may be riding on this relationship with china, good trade outcome, whatever this meeting is. i think it's a lot more riding on the global economy than people may think right now it's a get feel. it's no -- i can't point and sisa yeah, give me a recession. >> we'll be able to figure this all out in a few months. >> yes you can confirm that today >> yes we'll talk about having a meeting where they talk. >> yes >> hopefully that's what they do >> i think they may be inviting

kanye to that meeting. they were looking for the fliest musician >> thank you very much >> thank you it has been a dreadful week for the bulls. coming up we'll have a lot more on whether the market can build on today's rally when trading resumes monday closing out the worst week since march. lltswe'll look at potential faou braming for week's selloff.

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we dat sat down with charles everiens and he defended calling economic fundamentals quote very strong >> we are adjusting the policy stance we have been doing that gradually, increasing rates. we have been moving upwards targets 2.25% right now. so after many many years of accommodative policy which i have supported strongly because inflation is up at 2% it is time to readjust at least to flneutr.

we might have to do a little more after that. . >> joining us now to weigh in is greg and william at the federal reserve board and at the university of kansas do you see this selloff that we saw on wall street this week it is a result of what the fed is doing and the shift in tone we got at the last meeting or a speech after that? >> yes yes. trump is right this is the feds fault she wrong to say there's something wrong with that. all that's happening is that we are exiting a period of around eight or nine years. we had one shock whether it is brexit and the fed was always biassed to being easy to a world now where the risks are two sided.

there are equal probabilities that the fed goes faster rather than slower. bond investors have been slow to basically catch up with that the rhetoric makes it clear they are two sided that we are in a normal world that requires normal interest rates. it is just natural that stock investors have to adjust as well >> professor barnett, we have this debate raging and words that we throw around are neutral, normal, how are we going to define those words before we decide whether we should go past neutral >> in the field of economics it is a term. neutral would be the product of natural which varies over time i find it difficult to believe that it is above the marginal product of capital so i don't see a problem

it is to raise a few more through next year. >> i'm in favor of what the fed is doing as you know i am author of the book getting it wrong which is a criticism of the federal reserve. in this case i believe the fed is getting it right. >> and it's i had a question for you for the yield curve. when they look at -- what are they say it does matter a lot it is pretty flat given the current projections for economic growth >> they look at the yield curve

and the long term bond yield it is kind of -- it forces them to kind of check their map and look over their shoulders. we had -- you were following this debate as closely as i was. there was a lot of flattening of the yield curve was a recession. i personally never bought that story. there is certainly a long history. it is proceeding recessions. what i find a little puzzling now is that it started to steepen in a rather dramatic way. they are now worried as well and saying it is steepening. it is terrible you can't have it both ways. i kind of feel that long rates going up faster than short rates kind of comforting because it

tells me bond yields are going back to a world that sort of feels normal to tell you the truth it feels abnormally low to me but not as low as 2.5% was which is where we were in august. i personally had trouble getting too excited about what we are seeing in the bond market now. >> so that's lot of debates out there right now. some of them we were just talking about. there's another idea some are saying that one of the sources of the market angst this week has been people worry that had the fed is sort of on auto pilot here they want to get back to normal. they see the economy as looking very healthy and very strong there are pockets of weakness. cramer has been cross-appeally big on this theme. he will get liner boards and there's a question as to whether the fed is missing some pockets of weakness out there in the economy and they will be raising

rates at a time when the economy is decelerating. do you buy that argument >> in my opinion the worst thing that could happen at the present stage of the expansion would be reappearance of extreme exuberance what's happening at the present time in the stock market basically indicates that people recognize there are risks. you mention some of these risks. there are a number of reasons to be concerned the fact that the stock market is adjusting to it is good i view all of this as positive >> if i could jump in i would disagree with william on that one. when you actually look at the internals will have signs in there you might want to worry about. the sectors are banks, transports

these are sort of the sensitive sectors which are usually carrying the coal mine if you sort of basically look at the mathematics of the huge boost we got this year from the tax cut it is pretty quickly over the next 12 to 24 months. it is into thinking there were developments ahead of theme. it is growth sharply and over tightening >> is the fed missing something? >> they are very well aware of factors we are discussing right now. it is a balancing act. i don't think they would have chosen now as a time to pour $1.5 trillion into the economy not with an up employment rate at a 49 year low

it is over the next six months or so. >> appreciate your time today. thank you. >> thank you when we come back we'll discuss whether it is a sign of the market is ed ending or if a rally could be in the cards next week >> thank you a huge role in the last housing market have returned in a big way. it is backed by one of the etggest banks on wall stre we'll have details later on the closing bell so they say that ai will put the future in the palm of our hands. that's great. but right now you've got your hands full with your global supply chain. okay, france wants 50,000 front fenders by friday. that's why you work with watson. i analyzed thousands of contracts and detected a discrepancy.

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finished is week lower utilities had a loss of 1.2% and materials down 6.6% for the week s and p itself down by more than 4% >> joining us now to discuss this week's wild market ride, what could be in store for next week nancy is back and jim is here. welcome to both of you what will you be looking for as to the direction of this market after what was a strong finish to a tough week? >> so earnings i think we'll be watching on a top line numbers and guidance that management gives. we use different evaluation metrics.

i know they are important. they are the mothers milk. we are much more concerned about what's happening especially in light of the ppg, rising material costs and we'll be looking at margins pretty closely. let me ask you what is your kind of what actually happened this week we kind of scapegoated this rise in bond yields there is stock evaluations what do you think we had it is 40% and those portfolios have been under performing what it sold off this week it took all of the losses because both went down

sit a type of portfolio. it is a managers and not about whether or not they are under valued or whether earnings and you thought they were supposed to work a certain way. >> all right let me ask you i have been negative for way too long but especially over the last few months in the bond market what does a bond investor do especially with any duration right now. are we at the end of this market that started in 1981 or 82 or is this going to be as steady as she goes kind of you'll get the whatever yield you expect to get

on the bond going forward? >> there are two ways to answer the question the first is what is inflation going to do? if inflation is going to go higher then bonds are going to und und underperform most likely they will outperform the stock market it looks like the 1960s to the 1990s when interest rates went occupy because inflation rates went back. we have seen that again in the spring and right now i9 effects the second question too. if you think yields are going to go up do you think the stock market is a place to hide? we found out it wasn't a place to hide now and that is also the other question too what do you do about it if you think that the stock market and bond market are highly correlated again >> nancy, i guess maybe the other shot at context is they went from 1.3% up to 3.2 and stock markets up plenty since

then it can make its peace with a higher level of interest rates where do you think we are now? >> the ten year is back where it was in may we have had a nice run since there. i she we have a nice way to go with whatever you want to call it we still have a way to go before it impacts stocks negatively stocks will be trading in the medium term not in the short term gdp is not earnings we think it will remain relatively strong. i'm not worried about inflation yet. i might be seeing it i might be missing it. i lived through the 70s. >> what will be the tell you said earnings are the big key. we'll get bank of america. >> yes and then we'll start to get netflix and then a consumer giant. everybody was saying jp morgan

could set the tone for the entire market. it didn't exactly happen >> the good news is we are coming into this at a more depressed level. we have the underlying s&p stocks we have had this massivish selloff. second after all we want to see what the trils are -- industrials are going to do. it is still growing. it is driving that and i'm not crazy about. and then lastly the consumer i think consumer discretion flairs, it is in great shape net asset value or total asset value is 40 trillion higher than it was before 2 peak in 2007 the debt service levels are super low. i think it's important to

recognize the consumer is in great shape. >> thank you very much all right. time now for cnbc news update with sue herrera >> hello leaders of the world bank are urging the u.s. and china to call of their trade dispute saying it is effecting the growth of the world economy. >> current trade tensions could reduce global gdp by 1% over the next two years clearly we need to deescalate these disputes >> here at home the death toll from hurricane michael rising to 13 crews are rescuing people that survived but unable to leave their homes. a black hawk rescued these women that were in an area

inaccessible to ground vehicles. a jewelry collection that once belong today marie an twon net. the jewels will be shown in new york next week which will include collections from sinatra and rockefeller. >> have a good weekend >> you too distance is what global companies are putting between themselves and saudi arabia right now. reports of a washington post journalist murdered in turkey. up next a former ambassador, a look at the global tight rope business executives are walking here when it comes to doing business here. it could be the return of risky business for the housing market we'll tell you about a new trend for sub prime loans. the nature of a virus is to change. move. mutate.

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life. to the fullest. businesses and ceos are distances themselves many pulling out of an upcoming

conference they are joining the exitous media partners cnn, cnbc all withdrawing from the vent as well the relationship is complicated for some like uber which received billions from the fund making it the biggest investment in the country ceo is bowing out and so is sir richard bran son she suspending talks regarding a $1 billion investment in his space companies. said di business ties reach more in other ways. apple and amazon said to have been looking at investments. saudi arabia plans to build has an advisory board. facebook board member and that's not all of the start ups as

well the kingdom makes up more than half of the vision fund. all of the portfolio companies have exposure. there is also the defense space. boeing signed a memorandum earlier this year and they announced a commercial cooperation worth over $10 billion with 14 american companies including big names like honeywell google and jamie dimon are among executives that are slated to attend and it remains to be seen if we'll see any backlash there. back to you. >> thank you here to talk about the fallout robert jordan is with us president of energy and also a foreman exxon arabian golf resident welcome. >> how much of an impact is this

business backlash going to have on the kingdom >> i think it will be quite substantial. it has fallen since the financial crisis this last year it really fell off a cliff. a lot of this was in the wake of the arrests and detention of many princes and business leaders. i think we may well see it drop further as a consequence of what appears to have happened here. >> jerry, this latest round of announcements by companies kind of disengaging from this event that's happening, obviously has become some what about public relations not wanting to endorse these alleged acts by the regime over there do you think it will lead to more of a disentangling?

is that feasible >> i think there may be opportunities that are lost because of this and thinks that may change we have to bear in mind that cooler heads have to prevail here said udi arabia is the largers security position that we have in the region as well as economic position. i think there are things that have to be discussed carefully i do not see a major effect until we find some more facts. i think turkey and the u.s. and said di ne saudi need to deal with this to see what can be down >> how do they deal with this? how the was the kingdom respond to all of this >> i'm not sure. i can't read they mind but i think they defer nitly have to answer some questions and try to at least explain what they know, what has occurred and why it

occurred dealing with that, with the many suggestions we have is very difficult. maybe some of these companies are reacting a little bit premature but maybe because of shareholders >> and what do you think is going to mean for the u.s. relationship with sarudis at ths point? >> it was about as low a point as we had in many years. i think we are at another low point depending how this investigation comes out. i think if regrettably the facts have been as we heard them to be there has to be a reckoning. you can still have common interests. at the same time you have to stand up for human rights. you to stand up against murder and dismemberment. for heavens sakes if we can't

stand up against that we have all sorts of moral leadership in the world. i think it will be a very rough period for the relationship with the saudis there will need to be some kind of sanctions we need to invoke the act. i think we'll find ourself in a really rough patch it doesn't mean we can't continue to have common interests. i think it means we have to stand up to what has occurred here >> we'll see if the backlash continues and whether there's any impact >> thank you struggling retailer sears is maring a bankruptcy itay be getting an early christmas gift those details are next only half the story? at t. rowe price our experts go beyond the numbers to examine investment opportunities firsthand.

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struggling retailer is to keep alive through christmas. it would allow sears to keep some of the roughly 900 stores open longer but some outlets -- shares immediately. they trade below the $1 mark >> the shares -- i mean in all likelihood are going away. >> right. >> right. >> if it's in fact the bankruptcy the shares are knocked away. >> how long has it been postponed. >> this will be one of the great business school study case studies ever done on how to run a company into the ground and still end up a billionaire which will be -- >> it's a slow motion liquidation is what happens since it merge with kmart. lampert owners the majority. he is a big creditor of the company itself in a sense, you know, you might have gotten into a position where it's worth more dead than alive. >> we try to figure out who wins target is pointed to

j.c. penny. >> i think you could argue wal-mart and home depot did them in before amazon. >> that's true but sears when i was growing that was the retail. >> at one point the world's largest department store. >> gone. >> remember the -- remember the dow industrials too. >> traded at 144 per share it's a long way from that. >> it did at some point. >> next china recorded a trade surplus of $$34.13 billion with the u.s. amid trade tensions between the two world largest economies. that surplus in september was larger than the overall trade spur plus. china a net importer. >> they showed steady growth on the export and imports number. >> all i hope is when president trump meets with is it president xi. >> yes. >> when they meet he doesn't

focus on trade. >> the deficit. >> yes because that's -- that will not be a good meeting it won't get to where they need to get to in the end of the day. >> and this number was fattened up by supposedly imports ahead of the tariffs, right. so there is a bump here. but also it shows when the u.s. economy is strong we import more from china. >> it's good it's god not bad. >> the chinese market has gotten killed lately because of the trailed tensions you talk to ceo. i asked adidas how is the consumer doing there. >> great nike reported double digit growth in china again. this could speak to that as well maybe the stock market there isn't the best reflection. >> is reflects more the the sentiment toward the currency and the export sector exactly. >> finally video showing this at lass robot running and jumping you can see it leaping over logs and jumping upstairs with seemingly no problem the company saying software updates enabled the new feature.

the at lass human oid weighs 165 poisoned, almost 5 feet tall. >> i like the low motion i like the slow motion the low motion looks like the $6 million man which is a tv show predating you sarah. but it has the -- it can -- you think you could jump over the log as well as the robert does, mike. >> no. but i always take comfort in these videos that presumably they could design this not to look like a human should work. but apparently it was designed well when they make a new things it looks like humans. unless they are just doing it to scare us >> i need the $6 million music it had the sound. >> what about the bionic women. >> this pretats sara she doesn't remember that. >> up next we look at the return of subprime mortgages and the big wall street bank backing them stick around i do remember osthe, evan. >> the is subprime

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wells fargo shares higher today after slightly missing the profit estimates and matching revenue expectations

the bank's mortgage business faumg 19% from a year ago. something the cfo discussed earlier on the "closing bell." >> with loan rates a little bit high her, the refinancing business is smaller for the sfree than it was 50 basis points ago or even 25 basis points ago the smaller market is much more purchase oriented. and those are the customers that everyone is pursuing >> meanwhile, another big bank ramps up the presence in the subprime mortgage business diana olick has the details on this new old trend, i guess. diana. >> what if i told you there is a program offering no downpayment mortgages to borrowers with poor credit and backed by bank of america. this is not the old subprime this woman wanted to be the first in line. >> i left home at 4:00 this morning. >> first to apply for a no downpayment low interest mortgage at a special four-day event in miami.

>> i did own a home in the past and went through foreclosure i'm ready to purchase a new home. >> no downpayment, right. >> the event is one of several being held in cities across america this year run by the non-profit brokerage, neighborhood assistance corporation of america >> it's a national disgrace about the low amount of home ownership, mortgages for low and moderate income people and minority home buyers. >> bank of america is fueling the program with $10 billion in mortgage commitments >> do you see any risk to bank of america. >> no, it's total upside we have seen significant wins in in partnership >> now the mortgages have below market interest rates, about 4.5% fixed rate over the 15 or 30 years. borrowers must have full documentation and prove the ability to repay loans a really interesting program a lot more on cnbc.com back to you guys diana thank you very much.

interesting. i mean, obviously one of the problems with subproim mortgages done traditional ways it assumed home prices would go up and people were looking to flip and couldn't afford them this is different. this is to solidify people in a house. >> seems more noble. >> i always get nervous when there is just win/wins somebody -- somebody at the end of the day ends up paying. i don't know who in this case. >> let's talk about the market next we can because we are just coming off the 4% decline across the board, worst week since march, earnings, treasury offers the report on whether mcis a currency manipulator the minutes from the fed meeting. >> the market has been consumed with its own dynamics the last few days i think we close the week as well as we can it's a plausible -- it's a plausible trading low but all the things you mentioned will tell us whether it lasses. >> i think the bond market will actually still call the tune here it's going to be interesting to see the bond market. no matter what happens with

earnings, the overall tone if you see the long end spikes for any reason, if it spikes the market has problem zblas the yields backed off from the highs. >> and the levels on the 30 year. >> over the course of the week, that's right that does it for "closing bell" this week. >> "fast money" begins right now. have a great weekend, everyone "fast money" starts right now. live from the nasdaq market site overlook new york's time questionnaire i'm scott woman ner traders on the derrick tim seymour, darter werth karen finerman and guy adami tonight on fast netflix make a comeback after getting crushed the chart master says don't trust the bounce he is telling us exact why plus, something happened on jp morgan earnings call that has karen finerman questioning everything she will tell you what it is and just how worried to be but first we start with the rally and it was a hard fought one at that. the dow rallying 400 points at the open before turning negative and then it was up and down througho