accomplished request they continue that growth as you were talking about, enterprise, can they grow in the cloud >> 15 seconds left final trades give me a name >> ford. five times earnings. people are expecting death i think it's not dead yet. >> stick with banks. us bank. >> jpmorgan. >> cme >> thanks for being here "power lunch" begins right now i'm melissa lee. another volatile session on wall street not even a booming boeing enough to calm this market down what is driving these gyrations and is it safe to jump in? after the bell earnings-palooza, ford, tesla, microsoft, amd and more your study guide ahead of the results coming up and a view from the owner's suite the view from the economy. real estate and the consumer and the g-men. a "power lunch" exclusive with jonathan tisch, the ceo of lowe's "power lunch" starts now >> welcome to "power lunch." i'm contessa brewer. stocks down for a sixth

demonstrate day. we're off the lows of the session. the dow was down almost 290 points earlier the nasdaq again just feeling the brunt of the pain. things would be much worse if it wasn't for boeing. that stock keeping the dow from sliding deeper into the red. boeing well off session highs on the back of its strong earnings and outlook. on the flip side check out at&t. investors hanging up on that stock after its profit miss. consumer staples rallying on pace for their fifth straight month of gains that hasn't happened since november 2009. kimberly-clark, p & g and pepsi leading today's gains. oil prices are higher but energytakering a hit it is one of the worst-performing sectors today marathon petroleum, cabot oil, gas and noble energy leading the declines more on where this group goes from here. that's coming up, melissa. >> let's get straight to the trading action bob pisani on the floor of the new york stock exchange on what is fueling the fear. mike santoli's there, looking at the odds of a fourth quarter rebound. phil lebeau taking a dive into

boeing's results and seema 34 a mody's looking into hilton's results. let's begin with bob >> the important thing is we are seeing volatility and gyrations in the middle of the day sell programs, look at the s&p 500, sort of tooling along just a little below normal. below break even 11:00 sell program comes through. just a generic sell big etfs like the spy and iwm went on for a few minutes and stopped and the market sort of stopped and started to rally again but these have been coming through with regularity in the last two weeks and a lost people are trying to figure out when the bottom is. here's what's going on the markets have been looking through the earnings generally the earnings have been very good and the commentary for the fourth quarter has been very good but the market's not paying a lot of attention and stocks are not being rewarded for not only good earnings but decent commentary about the fourth quarter. because we're dealing with a lot of macro two principal issues china slowing and tariffs.

two related issues and the fed hiking rates and how long and how far they will go. the other issues are still out there, higher cost, dollar strength and italy we've had movement -- you want to see how crazy things are? yesterday regional banks had decent earnings. all of them were up 3% today on not a lost news the exact same banks are down 3% of course that makes no sense on a fundamental basis but on a trading basis people are trading into strength. semiconductors this is one of the few areas we've actually seen some indication from a company about weakness in their sector with texas instruments came out and talked about weaker demand overall. other than that we're not seeing a lot of companies come out and saying we're seeing a lot of weakness in our particular sector again a lost people trying to figure out where the fed is going and how far they're going to push it i thought robert kaplan was very constructive this morning in his discussion with steve liesman as we were talking with him about that the important thing is they're talking about potentially, he

is, three more rate hikes. one this year, maybe two next year they've got to get more certainty on that. guys, back to you. >> thank you for that. yesterday's big reversal was seen as a positive for the markets. but today stocks are falling again. were stocks just retesting lows or is there more down side ahead? let's get to mike santoli. what do you think, mike? >> we had certainly several of the ingredients of a potential retested the lows and maybe a short-term trading bottom. but it's still a very fitful apprehensive market as you see today. some of the things you do look for as a retest is obviously the market indexes going down to the level of the old lows, maybe a little below and stopping there. no new aggressive selling at those levels then on the rebound you did see some of the hardest-hit groups start to lift yesterday and to degree today as well but it's a process and not just one moment in time very difficult to sound any kind of all clear a lot of folks are saying you kind of need the market to give some sort of convincing bounce or rally relatively soon because

you have the seasonal factors working, starting to work in investors' favor obviously, fourth quarter rally time is here if it's going to happen at all. and obviously the negative reaction to earnings season is making it a much noisier period right now. if the market kind of can't get out of its own way right now it might sort of wallow for a while. theerz these are the kind of give and takes we're seeing. one more point the volatility index yesterday did go higher to the mid 20s but not as high as october 11th on the lows that's another small net positive >> we're looking for them wherever we find them. why can't the market hold on to any gains? does that mean there's more down side from here tally ledger is an equity strategist with oppenheimer funds. and brian millen chief investment officer at the commonwealth financial network is it that the markets are really trying to tell us something, brad, or is it that this is a bunch of wild beasts who will stampede at the slightest indication of any spook?

>> when you look at all the bad news out there, it's not a question of why the market is down it's a question of why it's not down further saudi arabia, chinese slowdown, fed raising rates, the midterms. looking at that you can say of course the market's down but it doesn't seem to be dropping we're still in normal volatility so in the absence of further downward momentum i think this just continues to be noise >> but the companies themselves are coming out and even the companies reporting these gangbuster earnings, they're beating expectations, maybe lifting guidance, i saw this with irobot yesterday, lifting fourth quarter guidance in spite of the tariffs and yet they had their stock going up after they reported that but so many companies don't. can what are you reading in the tea leaves, tally? >> i think there's good reason for stocks to be selling off here and investors are realizing and recognizing the gathering headwinds to u.s. growth whether it's the trade war slowing u.s. exports or the

strength of the dollar having a similar effect and also on slowing earnings growth as we head into the second half. rising interest rates and wider corporate spreads. might i also mention elevated oil prices all of these things are brakes on growth in the u.s >> why do you like growth stocks, tally? something doesn't make sense to me this doesn't equate. >> so it might seem paradoxical. but when economic growth is slowing, you can't get it in an abundant fashion you want to favor those companies that provide the fastest sales and earnings growth rates, and that is exactly why i think this remains a growth market from an equity perspective. >> reaching for idiosyncratic growth stocks, namely technology, tally, that hasn't really worked. we're seeing a market where technology is being sold off the hardest. it isn't people looking for that idiosyncratic growth story anymore.

there seems to be some doubt surrounding that why would you go into the sector, particularly when you have for instance, just as an example, the fang stocks, right? we lost some of them in terms of their 52-week highs in late summer, and we haven't looked back >> so you're talking about a one-month dynamic and i'm talking about chaos that creates opportunities for the next couple of years. and that's kind of where i am. if you think the expansion continues, tech stocks can help extend the cycle here and give us some of the growth that we're looking for. >> okay. so cnbc used kenshow to take a look at which stocks do really well during volatility and they said steady stocks with big dividends and consistent revenue like united health, chevron, verizon. what do you like, brad >> i tend to like health care. i tend to like real estate i'm a little concerned about energy but i think tally's right. growth over time is the place to be but it's got to be covered growth it's got to be reliable growth and you get that in a sector like health care you get that in a sector where

you can actually see where the money's coming from. tech, it's all about growth. i think you need to go back a little bit to actual real dividend generating growth and that's where i am. >> it's great to have you. thank you, tally ledger joining us as well as brad mcmillan. gentlemen, nice to have your perspective. >> thank you, contessa >> major auction in the bond market right now $39 billion in five-year notes on the block brian battle, director of performance trust capital partners, is tracking the action what does demand look like >> it was a good auction not a surprise sometimes the stock market has given some bid to the treasuries five-year treasury note auction, 39 billion, the yield was 2.977% bid to ever could, this is how many bids they have versus how many notes to sell, 2.3 times. a little softer than average we've had about 2.48 average over the last couple auctions. a little less demand indirect bidders 59% this time versus 61. so a good auction overall but a pretty easy day to bring an auction when the stock market's

selling off, there's a flight to treasure quiz. >> brian, thanks brian battle, performance trust capital. shares of boeing are higher today keeping the dow's losses from being worse phil lebeau joins us with a look at those earnings. hi, phil hi, contessa the reason the stock is up, in part because of what they did for the third quarter. this was a strong earnings report beating on both the top and the bottom line. but also the optimism that came from boeing in terms of its outlook. it has raised its full-year guidance both in terms of earnings and revenue its commercial airplane deliveries are improving and it's not seeing any slowdown from china overall they're pretty optimistic about what they're seeing free cash flow in the third quarter. well above expectations. coming in at $4.1 billion. and again, while boeing shares are down a little bit from earlier in the session, this is a nice pop of greater than $10 a share. you can't say the same thing about ford this is a stock that has been under pressure and is under pressure again today it remains under pressure because people want to see what happens during the earnings report, comes after the bell

three things to focus on frahm, what's the slowdown in international business we know that china's bad south america's going to be tough. europe not expecting good results there as well. jim hackett's turnaround plan, will the analysts get any indication in terms of when it will go into effect, how extensive it will be they were not very kind to him during the last earnings call. we'll hear what their conversation is like this afternoon. and finally, can this company make money off of autonomous vehicles that's the plan at some point starting after 2021, when they plan to have autonomous vehicles out in real world traffic. guys, we showed you this last week and it got a lot of attention. we're going to show you again. take a look at the returns for ford shares under its last four ceos going all the way back to 2001 only alan mulally had a ten-year where the shares were up finally take a look at shares of tesla. they were a little under pressure about a half hour ago when "consumer reports" released its auto reliability study showing that tesla was number 27 out of 29 brands in this year's

report we get test las earnings results after the bell but before that coming up later on in"power lunch" we will talk about jake fisher, the auto testing director for "consumer reports," about what complaints tesla owners had about their vehicles. guys, back to you. >> it's going to be a very busy after-hours session. two back-to-back calls it's worth noting tesla's calls of 6:30 p.m. eastern time which is a little bit of a departure because they moved up that date but of course the focus is going to be can elon musk act like a normal human being that's the bottom line, right? on that call >> i think it's one of the keys. people will be looking for and look, he's shown a little bit better discipline in terms of his messaging and use of social media since settling with the s.e.c. let's see what happens on the conference call this afternoon >> that will be a good one phil lebeau. shares of hilton falling after an earnings report and the company says growth in the u.s. will be hurt by among other things higher labor costs and higher interest rates.

the company's ceo will join us next in an exclusive interview obvious.. and another up and down day for the markets. the dow fell nearly 300 points at the lows of the day we are now down by just about 218. "power lunch" will be right back markets and drive forward with broader possibilities. cme group - how the world advances. ♪

stocks lower across the board right now.

as you can see, the dow industrials off by almost a full percentage point s&p approaching off a per-cent and a half one big issue weighing on the markets is trade in china. hilton down 5% after its report the company ceo about to join us, after their big earnings but first let's bring in seema mody fire look at hilton's results. >> hilton did report a beat on earnings but its revenue per available room only grew 2%, which came in shy of analyst estimates. on the conference call hilton said it's getting harder to get more deals done as interest rates move higher. though it's still on track to hit a record in hotel signings this year thanks to strong demand overseas. so can international growth offset a potential slowdown here in the u.s.? let's bring in christopher naseda, president and ceo of hilton for a "power lunch" exclusive. fresh off the earnings call. thank you for joining us today >> thanks, seema great to be here >> you mentioned higher labor cost, inflation-k and with that

higher rates impacting deal flow would help us break it down. how will costs on the rise impact the number of hotels you can bring on the market? >> seema, what i said on the call, which is true, is that you have the cost to build hotels going up at a pretty rapid rate in the united states cost of labor going up cost of interest rates going up and availability of money getting a little bit tougher or tighter. and the consequence of that is that you see supply numbers going down ultimately that's healthy for the industry we're already in 2018 sort of at a 30-year average. not particularly high levels of supply and those numbers are expected to go down next year, which should be good for the industry health and good for same-store results. the nice thing for hilt okay, because we have the strongest brands in the business, the highest average market share in the industry, while we're 11 and change of the u.s. industry, we have 25% of the rooms that are

under construction in the united states bear a hilton flag. and importantly for us strategically it's a big world things ebb and flow. this happened after the great recession. the u.s. market slowed down. other markets picked up. and that's sort of what's happening now, is the u.s. market from a development point of view is slowing down but the other markets around the world, all of them are going up we will actually have a record year in terms of number of deals that we'll sign. now more of those will be overseas than last year. but we'll have a record year for that and we'll also have a record year for openings by the way, next year in the guidance we gave for our unit growth next year will be yet another record year in openings on a global basis. the core algorithm of our business which is taking new unit growth and adding bottom line growth-s doing

exceptionally well it's a very resilient model in a world where we spun the real estate and timeshare businesses out. and our growth is great right now. >> it is great but let's talk about china the market is obsessed and better understanding what is exactly happening on the ground in a key market for the hotel sector you just got back from asia. what do you see on the ground there? any signs of a slowdown? >> not really. the third quarter was a little bit slower in china. but i think that's entirely related to a bunch of weather-related items, related to typhoons, et cetera it was stril very strong we still expect same-store results to be up in china 11% this year. our development deliveries will be up 25% to 35% depending on how much gets done between now and the year end and next year we think we'll have another very healthy year i did say on the call as you heard we built in an expectation of a little bit slower growth in china next year just because the expectation that their overall

economic growth rate will come down but to us that still means we're going to be in the high single digits for growth, same store in china. >> you're expecting a slowdown in china but what about tariffs? are you expecting a boycott from chinese consumers as u.s.-china trade relations suffer >> we do not sense that in any way. i talked to my teams literally twice a week are we seeing any signs of impact from the trade wars either in our operating business or in the new development pipeline and i'll say so far we've seen zero impact from that. and talking to folks on both side of that equation i think everybody realizes that travel and tourism is a healthy thing in both economies. and my impression is that that is not really front and center on the table in terms of the trade war at the moment. but -- >> but with this somewhat precarious environment why launch a new hotel brand like motto right now when we're still not sure where the economy is going? >> because our customers want it the reason we launch new brands is in direct response to talking

to existing customers, talking to customers we want to attract into the hilton system and them telling us where they think we have a white space or where they think there's a white space in the industry in this case we think we had an open space we also think that nobody in the industry has really delivered an urban micro lifestyle hotel at scale in the way customers want. the reason we're doing it is because customers say they want it and we think in this environment, in any environment, that product if we deliver it well, which we obviously intend to do, will do very well, will be very appealing to customers, allow us to drive high market share and drive really good returns for owners the urban environments around the world are continuing to thrive more and more people want to be in these environments. but they can't always afford it. the idea is this is a really affordable concept our most affordable concept to get customers into an urban environment. >> chris, i want to ask you about the constraints you're

seeing to expansion of the u.s. market rising wages and rising interest rates. that sort of catches the fed between a rock and a hard place. risetion wages is going to cause them to raise rates. what's a bigger problem for you? what would you like to see the fed do >> ultimately the fed is going to do what it does what i'd like to do is see them be responsible >> do you want rates to go higher >> i think ultimately the fed needs to management rates to manage inflation as i think they historically have done i'm not an expert economist in terms of judging how often they should raise rates but i think the economy is still reasonably strong, notwithstanding everybody wanting to talk it down. the economy's still reasonably strong i still think that there is a significant amount of investment that's going to go in in the form of non-residential fixed investment in the coming year, in part as a consequence of tax reform it takes a long time to get that money invested there's a lot of work that has to go on before you can get it

reinvested i for one think the economy, when i look at the underlying trends in our business which is what i can be an expert on the underlying trends in our business, whether we're talking about corporate customers or leisure customers, group business, all of those trends are quite solid to improving corporate trends have improved a bit. the group business, which is a lot of the corporate business, has continued to improve when we talk to customers across a broad spectrum, i think their expectation is next year they're going to be investing more in plant equipment, technology. they're going to be hiring for and they're going to be traveling more again not -- sorry, go ahead >> we're going to leave it there. we wanted to get to some breaking news but i wanted to thank you so much for giving perspective to these big macro issues christopher nassetta >> happy to be here. >> we have some breaking news on exxonmobil jackie deangelis has the details. >> new york's attorney general has filed a lawsuit against

exxonmobil alleging that the company defrauded shareholders by downplaying the expected risk of climate change. the litigation has been ongoing for more than three years. so this is really no surprise. but it could open exxonmobil up to further lawsuit you can look at the chart, intraday chart of shares today and see the stock was trading higher, lower, and then a little higher it's come down on this news. near session lows at this point. but certainly something to watch when we're watching that just energy specifics xom but energy overall, guys. >> jackie, thank you jackie deangelis >> now we'll get to steve liesman with some breaking news on the fed >> loretta mefter, the cleveland federal reserve president, says she is not adjusting her policy stance because of the recent market drop. however, she goes on to say that prolonged market downturn, which would clay build-up in rixz, would affect u.s. economic data and by inference could affect her outlook. she sees no signs of a pending u.s. recession and says the underlying u.s. economy is strong she's among the first, maybe the

first to talk about the recent market drop and be a factor in this case. no effect on her policy stance but overall amid this decline, melissa, each fed person has come out and said pretty much they're sticking to their forecast despite what's been happening with stocks. melissa? >> does that surprise you, steve? it seems to be in line with what you'd think the fed would do at the same time from an investor standpoint you want to heart fed being more receptive to other data points that exist there, out there, including not just with the stock market but what corporate america is saying about the environments >> i think that's right. and by the way, coming up in about 35 minutes we'll get the beige book and we'll get some sense of what the fed is hearing from in individual companies and individual anecdotes that are out there. but no, this is not the kind of magnitude of market sell-off that i think creates economic realities, that change the more important data points the fed looks at like gdp, inflation, unemployment >> steve, thanks steve liesman. the marijuana rally is going

up in smoke. shares of tilray down 20% this month. did the pot bulls just get too far ahead of themselves? plus the s&p 500 down more than a percent. if it falls again today that would be 13 down days in the last 15 sessions we've had much more on the markets, when "power lunch" returns. hi, kids! i'm carl and i'm a broker. do you offer $4.95 online equity trades? great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service and low costs, backed by a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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aditi roy joins us from san francisco with the details hi, aditi. >> hi, melissa a lot of those stocks are still in the red today after taking a nose dive earlier in the week. this after a months-long rally leading to canadian legalization on pace for its worst month since february cronos down more than 21% for the month. its worst since march. those stocks along with shares of tilray, afria and aurora are more than 10% off their recent 52-week highs. what's the reason behind the sell-off some analysts say it's a bit of profit taking. others think these stocks have become overheated and the valuations of some of these companies need to be reset they still add there is tangible long-term value in these companies as far as how sales are doing in canada, a cowan report analyzed the first five days of legalized recreational

sales and found online stores for five provinces were sold out of 46% of products the report also looked at products like canopy growth, tilray and aurora and found all of them had high sellout numbers ranging from 30% to 60%. melissa, back to you >> aditi roy in san francisco. let's get a check of markets another very volatile day on wall street. the dow going from trim-digit gains to trim-digit losses and remember it had been down almost 290 points at the lows. it is now down 210 points, or .8%. the nasdaq is feeling the most pain there, down by about 2% right now or a decline of 159 points consumer staples a bright spot in this market this group on pace for a fifth straight month of gains. the last time that happened, back in november 2009. and procter & gamble helping to fuel those gains on pace for its best month since january 2013 contes contessa >> so the dow falls 5% in october so far you've got all these factors that you could blame for the

pushing and the pulling of the markets. slowing economic growth at the same time interest rates are rising getting a lot of this blame. up next, jonathan tisch, the ceo of lowe's hotels, joins us to talk about his business, the economy and maybe we'll get him to talk a little new york giants football "perun" lle ght back

hello, everybody i'm sue herera here's your cnbc news update at this hour. police are investigating a suspicious package at the florida offices of democratic congresswoman debbie wasserman schultz. other people who have received suspicious packages include hillary clinton, barack obama, george soros, former a.g. eric holder, new york governor andrew cuomo, and cnn four apparent explosive devices sent to obama, clinton, soros and cnn offices are linked the photo shows one of the suspected devices intercepted by law enforcement officials today. three of those packages were nearly identical meanwhile, the migrant caravan is on the move again numbering in the thousands, the

migrants began walking before dawn today the goal is to travel 45 miles for those hoping to reach the u.s., they have 1,000 miles to go and the mega millions ticket worth $1.5 billion was sold at a k.c. market in simpsonville, south carolina the winning amount is just shy of the largest jackpot ever won. it is that state's first mega millions jackpot win-win and i'm sure they're all very happy down there that's news update this hour i'll send it back to you guys. >> all right, sue. thank you very much. sue herera stocks are tumbling. as you know, rates are rising and fears about a potential global economic slowdown are on the horizon. our next guest sits at the intersection of all of that. he's a builder, a majority owner of real estate and he's got exposure to the consumer all around the world joining us for a "power lunch" exclusive is jonathan tisch. he is the chairman and ceo of loews hooet hotels he's also co-chairman of loews corporation, co-owner of the new york giants. we will get to that at some point as well.

you won't be smiling -- >> we may be running out of time it's good to be here, scott. >> how does the economy feel to you? someone who sits in the seat that -- do you feel like peak growth >> so the economy has been good to the travel and tourism industry the last couple of years have been very positive. we continue to see growth in our industry you just heard it from my friend chris nassetta at hilton we feel good about what we're seeing certain markets we're in are starting to get overbuilt if you look at a nashville, if you look at a miami new york city adding a lost hotel rooms. but the numbers are still fairly strong certainly a choppy market. what's happening with trade. these are signs that we continue to look at and worry about a little bit, but right now we're in a good place. >> you obviously watch interest rates as closely as anybody does given the industry you're in and you have a new strategy which would suggest that you don't see rates as too punitive to your business you're now building more than you're buying, so to speak

>> so scott, for the last couple years, going back three or four years, we acquired a couple hotels loews boston hotel, loews chicago o'hare minneapolis, seattle but then we decide what is our competitive advantage? as you know the big guys, the hiltons, the marriotts, they're asset light. we decided we like owning the real estate. and at loews corporation we have access to equity that we can invest in hotels so when you include the equity that we're putting in and then -- which is about $250 million right now of loews equity, put in partner equity and debt, we're building right now in five new construction projects $2 billion worth of hotels so we feel good about the economy going forward because we have committed to a strong growth through development, through new construction >> does that reduce your exposure to rising rates or how does that work? i would imagine you have to tap capital regardless of whether it's for acquiring a property or building it out. >> once again, we were fortunate

that we have access, loews hotels is a wholly owned subsidiary of loews corporation, so we can go to our parent for equity but there are construction loans. and so certainly we are abare of where interest rates are going but we feel still we're in a good place because we're doing unique one-of-a-kind projects that really nobody else in our business except maybe omni out of dallas, they have somewhat of a similar strategy >> you look a year out if the rate on the 10-year yield is one full point higher, does that change your world at all? does it change how you look at the world? >> not necessarily these are long-term projects we're building for the next 10, 20, 30 years we are not sellers so with our partners we plan to own these assets for a long time and we're building unique properties with our partners at universal, nbc universal, we just opened our sixth hotel in orlando that brings us to 6,200 rooms. we have two more under construction

another 2,800 rooms. that's going to be 9,000 rooms and we are working on projects in st. louis, in arlington, texas where there is a sports element, and then an 800 room convention center hotel in kansas city. >> and some of these are basically for budget travelers tell me about how you weigh where you get the maximum benefit between luxury hotels and budget-friendly hotels >> we only put our loews name, contessa, on a four-star product. the ones we're building today in orlando with our partners at universal are three and two-star the new ones are called endless summer 2800 room two,star product, but a really nice two-star product so we'll make our money by owning half the equity in the project and then the management fees >> and your materials and labor costs, though, remain the same whether you're going to charge $400 or $500 per room or $150 per room >> except we've got scale, 2800 rooms. and i will say with tariffs

increase it is causing us to look at where we're going to source product where are our beds going to come from where are our dressers going to come from? >> have you changed any of that? >> we're looking at it we're place these kinds of orders now but universal is a great partner. we're doing it together. and now to have up to 9,000 rooms total when these are done is a great place for us to be because it's been -- the business in orlando is really strong >> are you feeling the pressure of higher labor costs? >> absolutely. there is no doubt about it and when you look at the pressure on margins through labor costs, through energy costs, through insurance, through real estate taxes, we have to get smarter and better about how we operate our hotels to increase margins wherever we can. but increasing labor costs are an issue in most of the markets and will continue to be. >> the labor costs on the new york giants are going down as of today. right? you guys made a couple of big moves today. you know that -- >> apple yesterday

>> snacks harrison today the papers in new york are going to frame that as fire sale, giants are trying to rebuild are you? how would you characterize what you're doing at this very moment >> clearly, this season has been disappointing. john mara, our partner, who is the ceo, is very much involved in the makeup of the team. working with our coach, working with dave gettleman, our general manager. nobody, especially ownership, wants to see us at 1-6 it's disappointing for us, for players, the fans. and the team will do everything we can to change the tenure of the season right now and for the future >> do you regret not taking a quarterback and keeping eli manning? >> i think if you look at saquon he was certainly the best person we saw in the number two position he is a very talented and a terrific young man so we feel good about our choice and we'll see what happens the rest of the season i know that you're a redskins

fan. so you guys are up next on sunday we'll see what happens >> enjoying our position right now in first place, i should say. >> enjoy it while you can. >> good to see you as always jonathan, thank you. jonathan tisch p of course the ceo of loews hotel, co-owner of the new york giants. coming up, more evidence rising rates are having an impact on the housing market plus energy stocks among the worst-performing sectors in this recent sell-off. we're taking a look at the damage and searching for the opportunities. that's next on "power lunch. daddy, mommy's on the phone! hi! how are you guys? ♪

welcome back to "power lunch. new fears about the health of housing. home sales falling to near two-year lows. diana olick's got all the numbers. hi, diana. >> hi. yeah, right. this is the worst number yet in a string of bad housing data sales of newly built homes in september fell 5 1/2% for the month, down 13% annually to the

slowest pace in nearly two years. this number is so critical because it measures signed contracts. that is buyers out shopping in september when mortgage rates jumped those buyers were making the calculation can i afford this home with these rates. and clearly a growing number were saying no prices were slightly down. but that may just be because more of the lowest-priced homes are getting deals, skewing that median number lower. mortgage applications to buy a home are now unchanged from a year ago, and sales of existing homes have been lower for the past several months. tomorrow we get pending home sales, which also measure signed contracts for existing homes watch for that right here on cnbc at 10:00 a.m. eastern time. and for a wrap-up on just how badly mortgage rates are hitting all facets of housing, that's up right now on cnbc.com. back to you guys >> all right, diana, thanks. diana olick. >> ah. energy -- thank you. energy stocks are off their lows today. getting crushed in this recent sell-off as oil falls 6% in the past month the xle energy etf is down 10%

in that time dom chu looking at some of the individual names getting hit. dom? second worst performing sector in the s&p so far on a month to date basis crude oil agreat driver. you can see the long-term trend line, the 200-day moving average. we tested p a little bit a couple months ago p we have now breached that level trying to find some support there. if you take a look at the energy sector versus the s&p 500, also that gap very evident as well. over the course of just the month to date period down by 10%, 11% 7% for the s&p that gap is smk we're going to watch there as well. as for the individual names check these out because they do span a pretty wide range of the oil and gas industry halliburton on the oil services side, valero energy on the refining side of things and new field exploration for exploration and production all down more for the market and more as a sector as well, contessa all this stuff and the underperformance is going to be something to watch with oil prices in play sanctions for iran kicking in november 4th back over to you >> thank you for that. how do you play the energy slide? joining us is mike kelly, senior analyst at seaport global

securities how closely are you watching what happens with the iran sanctions and tension with saudi arabia >> yeah. it's something you've got to be cognizant of that's one of the major kind of bull arguments, that it's going to keep oil at this 65-plus level. >> what's your prediction for the rest of the year, mike >> well, it seems like we can't win in the e.p. space. the stocks didn't work with oil going up to 75 they sure as heck had some down side to them when oil's dropped here less $10. if you look to the rest of the year we hope the oil prices kind of stabilize the $67 level where we're at right now. the way we see it we absolutely love the space if you throw $67 through our model. we are at record profitability with this group. outstanding record organic growth and these names are cheap, cheap, cheap if you look out to 19 and 2020

multiples. >> what happens if the economy or the market tries to still sniff out weakening in the global economy and oil prices either stay where they are or go down >> yeah. this group gets hit, we're not going to be shy about it this group gets smoked if oil prices ultimately get retraced to a $50 or lower type level it is what it is and the biggest thing i think you look for there is on the demand front ultimately, if the fears on the economy translate to lower demand on oil, then oil prices going down >> jagged peak, halcon resources, mike, i'm wondering how hard if at all does this group get hit when interest rates rise how dependent are they in terms of short-term credit >> there are so many dynamics at play with the e.p. group oil price is still the most important. you look at that, interest rates

could have some influence on that for certain but i do think what you pointed out first, let's look at iran, look at imo 2020 let's look at venezuela potentially increasing production continuously. those are the big factors. interest rate takes second fiddle to that >> mike, thanks for joining us with more perspective on it. mike kelly with seaport global securities >> shares of texas instruments getting hit today after reporting disappointing results. up next we'll talk to an analyst who lowered his price target on that stock today that news spreading to all the chip names can amd turn the sdeli around when it reports in a couple of hours? we're checking on chips next "power lunch." ve days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market.

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what no one on my block has done before. forget that. what no one in the world has done before. all i need access, tools, connections. high-speed connections. is the world ready for me? through internet essentials, comcast has connected more than six-million low-income people to low-cost, high-speed internet at home. i'm trying to do some homework here. so they're ready for anything. it's a shipwreck on wall street today after disappointing guidance from texas instruments. they're down 14% in just october. it's tracking for its worst month in a decade. this ahead of amd earnings today. stacy rascen joins us on the phone. it's great to get your analysis in. >> good to be here. >> tell me what the industry is like the semi conductor sector has been performing poorly way

before the month of october started. and more recently, we've had confirmed weakness in prices we just had weakness coming out of europe from amx, the apple supplier then we get techs in warning on the industrial side kwhich is taking down nxpi in particular in today's session it seems like every single end market that semis feed into is weak what's the reality of the situation? >> well, yeah, so, look, you're right. the stocks have been weak for a while. they do tend to be anticipatory. things have been prepping for a downturn is not necessarily a shock. t.i. was at $115 not that long ago. so it's not a shock. and this is it we've been in a demand driven up cycle for a number of years. the worry is what are triggers

that can send demand over? we have potential issues that are making people nervous. the people are starting to see it it's not a shock it's happening. the question is going to be how long does it last and how deep does it go >> answer your own question, stacy. if stocks are anticipatory, their bottom should be in before we see the turn around actually in place. >> the general rule of thumb on semis used to be you want to buy the stocks after the second wave of negative revisions. not the first cut, but maybe the second cut more generally, the best time to buy semis is after numbers start coming down, but before they hit bottom the same kind of idea, trying to anticipate the trough in the earnings estimates the worst time to be holding the stocks is when numbers start coming down. the numbers have been coming down for the last months or two. we're in that part of the cycle right now. >> i'm surprised, given all that you've said, stacy, that you're maintaining your outperform rating on texas instruments.

>> so, look, part of it is the issue people are going to have with t.i. and a number of the names in the space right now, they're going to ask what is the catalyst semis may be challenged. the end of the year gicias we're waiting for that t.i did take a lot of their medicine up front. it's the biggest q 4 decline they've guided through since 2012 it's the biggest consensus since 2012 it was always bad but i think it's good -- >> you're buying the kitchen sink >> well, i mean, bottoming is process, right i think they're closer along -- further along that process than others i think as you come out the other end of this, t.i. will be one you want to own. they're doing spectacularly to

take control i think when things bottom it will be a stock to own. >> for a long time we've been watching the semi conductors role over. is this a canary in the coal mine in terms of what they're saying about their end markets i know you're the semi conductor analyst. do you have colleagues saying where is the bottom? are they worried that it's indicative of future weakness? >> t.i. didn't get a whole lot of color, they just said it's broad based weakness across most end markets except for maybe communication infrastructure, but across all geographies that's not incredibly helpful when you're trying to read across to other parts of the markets. these cycles, the inventory cycles like this do typically tend to last a few quarters. the stocks tend to overshoot in both directions, to the down side and up side we're in the part of the cycle where we'll have to wait and see.

not even the companies know how long it will take. >> worst month in six years. >> thanks, stacy. up next, the feds' latest ayad on the economy moments aw it could be a market mover it could be a market mover don't go this is a diamond you can follow from mine to finger, and trust it never fell into the wrong hands. power is back in two minutes this is a shipment transferred two hundred times, transparently tracked from port to port. this is the ibm blockchain, built for smarter business. built to run on the ibm cloud. this is the ibm blockchain, built for smarter business. each day our planet awakens but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward.

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welcome to the second hour of power lunch the fed is set to release the beige book in a few moments. the s&p is nasdaq are a few points off of session lows as we head into the beige book s&p 500 holding on to 2,700 right now. the beige book is out. >> reporter: tariffs and the tight labor market, those are the key themes out of the beige book today the fed said they're pushing up prices across the country. the fed doesn't appear to be too worried about those dynamic just yet. the price increases are happening at a modest pace, but there are pockets of pressure in individual districts in cleveland, two thirds of manufacturers contacted said they're raising their prices in boston, the cost of a new car is set to rise significantly because of tariffs as for the new nafta, dairy farmers in chicago say the

benefits are too small and too far away to help them. they remain worried about retaliatory tariffs from canada and mexico some said that companies can't find enough workers. in atlanta there is high demand for low skilled workers. that's causing some fast food restaurants to close their doors because of a lack of employees the fed used tame language, saying it's growing modestly to moderately the economy is also expanding at a modest to moderate pace. employment growth, that, also, is modest to moderate. hiring in san francisco remains robust the fed noted there was an impact to tourism and agriculture because of hurricane florence back over to you. >> thank you steve leishman is here

steve? >> you know, what i find interesting about this is the elevation of the tariffs to such a high level it goes back to a debate that was had earlier this afternoon with scott where he's hearing it from the corporate reports i'm not seeing it either in the numbers necessarily or in the forecast from economists who basically say there's only modest potential effects you're much more worried about the tariffs? >> i just go and melissa said earlier, too, i go on what the ceos have been saying from the very beginning of earnings season you can down the list in the manufacturing economy and these industrial company whose are paying more and they're seeing the impact of the tariffs. >> they're looking at moving supply chains. >> they're adjusting their supply chains as a result. i think maybe the ceos have a greater handle on it no disrespect to the economist

community. i go with what they say. >> having been slapped around in halftime by scott and now seeing the beige book, maybe i need to change my outlook for tariffs. i was initially very concerned about. but i sort of lowered my level when i didn't hear other people sort of coming along now it's showing up. i don't know how widespread it is there are a couple of marquee reports out there that everybody keeps referring to we don't know. i think there's another way to think about this beige book, which is on the one hand, the conv conversation between the president and the fed is one sided. trump talks and the fed refuses to respond unless you listen to what they're saying about the economy. when they say things like, we don't have enough workers. that's the fed saying, look, one interpretation is you have pumped up this economy

we now have problems of companies finding workers. we have wages going up we have tariffs and incipient inflation pressures from those tariffs. you want to know why we're raising rates, mr. president look at the list of things you have done. including -- >> inflationary pressures. >> so the fed is not responding directly to the president. but its economic commentary can be seen as a response to the president. >> stay right there, steve let's bring in our panel of market and economic experts. joining is the senior portfolio manager, managing director with nat west markets and the wai want to go to you, did you make of the beige book when kmaueeconomists dismiss iti get that br but you start hearing ceo after

ceo start talking about tariffs, the inflationary pressures they're facing, wage costs going up and the pressure to look at moving their supply chains entirely out of asia, that's a lot of pressures. >> it's a lot of pressures but a lot of the impact is localized on certain industries. whether it's furniture makers or steel consumers. i think there's the short term negative when companies have to readjust i've heard ceos say this we have deal with the tariffs but we have a sophisticated global supply chain and we'll adapt. the reason china got to be such a large supplier is because people adapted their supply chains to that it's clearly a short-term disrupter. on the wage and employment side, we've been looking at surveys for month. getting good workers is one of the most difficult things for all businesses that's what's been driving the unemployment rate lower where you have semi skilled, unskilled

workers. those unemployment rates have come down the most in this economy. that's what we think can give a floor to the concerns we see in the medium term. >> do you think the fed has the markets back they look at what's happening with tariffs, they see the unsettled nature of the stock market as a result of what many ceos are saying and what the earnings and projections have been do they seem set on their course >> you know, i think what the beige book underscores is that there's a lot of peripheral evidence out there that we're in an environment where price and wage pressures are starting to -- you know the risks are to the upside instead of the downside the tariff problems are so far relatively small next to the tight labor market, i think they're not their number one inflation concern. i think for the fed, what it

means is that their path forward is much more symmetric in the sense they can see themselves moving faster as easily as they can see themselves moving slower that's what's shaking up the markets now. they're coming off a period of seven or eight years when the fed alwayseer erred on the side going slower it's got to add risk to the equity and bond market. >> i don't hear anybody, especially the fed chair, mr. powell, coming out and saying, well, we'll go slower if we have to we're a long way from neutral, we could go past neutral there's nothing they've said that almost goes down the list it says we're worried about the th things we're hearing if we have to go in december and have a seat, we're willing to do it. >> that's absolutely right if you listen to chairman powell's overall view of the world, he's displayed much more agnosticism as to whether we've

hitt hit a point that triggered a response it displays an underlying tendency which i think will actually hold the market and the bond market in good stead. provided his assumption that this doesn't trigger inflation explosion proves to be correct. >> when he made those comments he said it was about signaling predictability, what the fed was going to do. michelle, does that make any difference to the markets right now, knowing what he intends >> first of all, i think the feds themselves have been clear that going forward there is no preset path. speaking to what greg has mentioned, you do have a fed that's becoming increasingly data dependent as they get into the range where they think neutral is that's more uncertainty, more two-sided risk that's something the financial markets are going to have to deal with. i would take exception to the idea that all their comments have been one sided. echoing what greg said, i think the references that fed chair

powell has made to the late 1990s episode where he talked about the fact that greenspan understood there were other things going on. there were reasons why, even though the unemployment rate was low, it made sense to hold off, to wait until you saw the inflationary impact of that before acting. i think, to me, those are signals that this fed -- exactly as greg said -- there's an openness to thinking that the world may be working differently, that the transition to wages to higher inflation is less clear it's not the fact that they keep hiking and hiking because the economy is doing well. >> the concern to the market is that the fed seems to be on this path, which by all accounts, seems to be somewhat data dependent. they have that out and the concern is you're getting more and more data points that the fed may not be looking at as much as the market is looking at in terms of market america. >> the dissidence here is the fed's conviction about getting to neutral

when you listen to fed speakers across the board, they all feel comfortable -- i'm not even sure the great and brilliant greg was right about it, that the risk was two-sided in getting to neutral. i think it's one sided in the sense, greg, that they're going there and everybody feels pretty co comfortable, barring any huge sta shock to the economy where the two-sided risk is after that do they go 3.25 or 3.5 do they stop and smell the daisies? i guess the market is spooked by that idea. even though, to my mind, the underlying economics are very supportive. >> it's been laid out but we haven't gotten the commentary from corporate america until just recently which aren't even in full effect yet would you say the impact of the tariffs are in full effect in the u.s. economy right now have we gotten reads -- >> no, i'm sorry

does anybody on the panel here have an estimate for the tariffs that's greater than a quarter point detraction from gdp? >> i'd like to jump in here. i don't have a point estimate, but i do have a strong view that the weight of tariffs in the cpi is far below the weight of the tariffs in our headlines and our discussions. tariffs have a lot of our mind share, but the actual effect on the economy is very small. >> that's my point. >> even as the president's been raising tariffs and we're being hit by tariffs, the there is up 5% to 10%. that is exercising a very strong restraining impact on foreign inflation. people always forget that. if i were to name my number two concerns about inflation tight labor market and pass through from high energy prices, tariffs is way down that list. >> this is why that fed is in the proverbial box. >> there's a difference between the way investors and economists think about these things

you hear reports about executives blaming tariffs and you're like, tariffs are killing the economy. and economists step back and look -- >> i don't think it's killing the economy. i don't think that anybody has a great idea about what they're really doing they're only starting to get inklings i don't think they're anywhere close to be fully in the economy at all to really get a great view on what ultimately could happen and whether they reverse a lot of the good things people say the administration has done through regulations and tax cuts. >> michelle, you crunched these numbers. why don't you weigh in do you have a quarter point negative or greater estimate on the tariffs? >> not on growth we have .10% on inflation. i completely agree with what kevin said it's a very small impact when you look at the number of goods that are going to impact the consumer sector. in some sense, there has been positive developments on trade if you will say that the focus is narrowing to china. now that we've got hopefully

agreements in nafta with respect to mexico and canada, we seem to have taken the risk of auto tariffs with the euros off the table. it's not good news china is very important. but to some extent that we've become more focused on one country and as opposed to a broad based trade war with tariffs across the board from most of our trading partners, to that extent i think, too, the news in recent weeks has been -- become a little bit less worrisome in terms of the overall threat to economic growth. >> good discussion, guys it's the discussion that's going on in the markets as we speak. we should note, by the way, the nasdaq is down by 2.6%. >> i was literally just looking at that. >> the s&p 500 is down by 1.6% we have given up 2,700 2,010 was a key level. >> it's the nasdaq that jumps

out at you down nearly 200 points. >> almost in correction territory. cnn headquarters in new york city, one of several locations receiving suspicious packages today. the office evacuated as a result our courtney reagan in live in manhattan where cnn is located. >> reporter: that's right. the building behind me is the location that was evacuated and is still, even though the bomb that was found here is being described as a pipe bomb has been taken away by the new york city police department truck this is just one of at least seven suspicious packages that have been sent to very prominent individuals. let's go through the list. president obama, former president obama is one of the individuals that a package was sent to that it was intercepted, however, by secret service before reaching his residence. former secretary of state

hillary clinton was also sent a suspicious package intercepted by the secret service. representative debbie wassermann schultz, governorand row gomo, eric holder and billionaire george soros are all the individuals who have been sent these packages there was a press conference here it was held by new york city mayor bill de blasio, as well as the new york city police commissioner they described the package that was sent here as a pipe bomb that was removed there was an envelope that was also part of the package containing white powder. that is still being evacuated currently in the cnn mailroom in the building behind me, which is the reason why the building is still -- there is still no one inside

mayor de blasio says there are no current threats to new york city governor cuomo said he wouldn't be surprised if we see more packages. >> we're waiting for comments from president trump as well we have heard condemnation from the white house but waiting to hear directly from the president. there's the moment when he'll take to the podium. coming up, tesla, forwad, al are down as we head out, the losses pick up nasdaq getting slammed don't go anywhere, power lunch don't go anywhere, power lunch back in two mitenus. (bicycle bell sound) ♪ ♪ (bicycle bell sound) ♪ ♪ explore more witteed 4pm cht at over 1,000 fine hotels and resorts. it's another way we've got your back. ♪ ♪ the platinum card from american express. don't live life without it.

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i want to welcome you back to power lunch we told you what was happening in the nasdaq. the nasdaq down nearly 200 points that's 2.5%. led lower by several of the fang stocks facebook is down more than 3%. amazon down almost 3%. netflix now giving even more up now. $309 a share for netflix that's a loss today, more than 7% there's alphabet as well with its earnings coming tomorrow down 2.5%. there is still a heavy focus on those type stocks. let's go live to the white house to an event where we're expecting to see president trump. right now we have melania trump speaking we're waiting to hear what the president has to say about a

number of packages that were sent to some high profile targets. >> i must say i'm proud of our president and the work being done in the white house and across so many agencies to help those affected by drug abuse and addiction. just last week, i visited thomas jefferson university hospital to learn about the addiction treatment, education, and research program this program supports families and babies born with neo natal syst symptoms my campaign be best is committed to helping children with the many issues they face as they grow up. sadly drug abuse is one of those

issues be bet will continue to shine a light on successful programs that demonstrate positive results for children over the past year, i have travelled both nationally and internationally, learning about many of the programs offered through private organizations, schools, and hospitals which are meant to help children and families as they deal with drug addiction what i constantly hear is the need for support at all levels law enforcement needs our support and the resources necessary to stop criminals from putting drugs on the streets families need resources to get treatment and follow-up care for loved ones those who are addicted need the support of resources and guidance to know they're

fighting a disease and should not be ashamed young mothers need the support necessary to not only beat their addiction but get the tools needed to become successful parents. babies born addicted need resources for treatment, but also need follow-up care for years to come. i was honored to be part of a round table comprised of several experts at thomas jefferson university hospital that was convened to help with the design and information of a new initiative the department of health and human services is working on to measure the long-term health outcomes and needs of infants suffering from neo natal syndrome we must come together to fight this epidemic by providing as many resources as possible i know as long as as my husboffa

priority fighting opioid abuse goes across all party lines thank you all for being here and being part of the fight to end this epidemic. it is now my honor to introduce the president of the united states [ applause ] [ applause ] >> i want to thank you very much, melania. i know how hard you've worked on this that's just one of many

languages that you know, so it's just amazing the way you can do it thank you very much, darling, appreciate it. also, i want to thank mrs. pence for being here you have been just so terrific working alongside of our great vice president thank you very much, karen i really appreciate it [ applause ] i'd like to begin today's remarks by providing an update on the suspicious packages and devices mailed to current and former high ranking government officials. the safety of the american people is my highest and absolute priority. i have just concluded a briefing with the fbi, department of justice, department of homeland security and the u.s. secret service. as we speak, the packages are being inspected by top explosive experts.

and a major federal investigation is now underway. the full weight of our government is being deployed to conduct this investigation and bring those responsible for these despicable acts to justice. we will spare no resources or expense in this effort and i just want to tell you that in these times, we have to unify. we have to come together and send one very clear, strong unmistakable message that acts or threats of political violence of any kind have no place in the united states of america [ applause ]

it's a very bipartisan statement, i can tell you from both sides we both agree on that. this egregious conduct is abhorrent to everything we hold dear and sacred as americans my administration will provide additional updates as they become available and i just want to thank everybody for their understanding. we're extremely angry, upset, unhappy about what we witnessed this morning and we will get to the bottom of it we're gathered together today to address america's drug and opioid crisis. and a crisis it is which now claims 70,000 lives a year. >> we have been listening to president trump making some comments regarding the suspicious packages sent to various locations, including the offices of cnn here in new york city as well as the homes of presidents obama and clinton he says the full weight of the u.s. government is behind this

investigation that is currently underway and that they are inspecting the packages as we speak. any other developments we'll bring them to you. we want to get a check on the markets because we're in the midst of a big sell off. the nasdaq taking it on the chin, down by 2.5% 7,252. keep in mind that just 24 hours ago when we were seeing the markets making a turn around, we saw netflix helping to lead the charge here we have netflix trading lower to the tune of about 7% in today's session. s&p 500 is down by 1.5%. we are watching shares of ford and tesla as well today with both companies recording earnings after the bell. the two stocks have been in focus lately with investors asking questions about ford's restructuring plan the auto sector has been beaten up all year with ford, gm and e fiat chrysler. tesla is down 6%

what's it going to take to turn around this? a lot to unpack here let's start off with ford. what do you want to hear how much of a leash does the ceo have at this point >> we're expecting the earnings to be down 35% year over year. we're also expecting them to lower the full year earnings guidance we don't see any scenario where they're not going to lower the guidance because their margins are under such severe pressure from the tariffs compared to when they reported earnings a few months ago we just don't see a catalyst for the shares here. there are some things we like. the stock is yielding about 7% the balance sheet is okay. and we like the fact that they're focusing more on production of higher margin pickup trucks and suvs >> it hasn't been a good environment overall l, but is this an auto sector problem?

a jim hackett problem? >> a combination of both investors have been patiently waiting for some kind of update, some kind of plan regarding their restructuring. still haven't gotten it. it struck us as an odd choice as a ceo to begin with. he had no prior experience in the automotive industry. and they're facing now some very severe challenges on their sale to europe. in the u.s., down even more. china, just a complete disaster. ford's china sales are down 30% year to date it's a combination of things. >> they have talked about a billion dollars worth of cost increase because of tariffs. let's move to tesla for a moment most important thing to look for today is what? >> the bottomline number

elon musk, in each of the last two quarters, the company has lost over $3 a share the consensus is $0.09, loss of $0.09 for the quarter. we would be very surprised if they pull off a profit for the quarter. but we'll see. the big question are the margins here we know what their volumes were. we know what the production and shipments were for the quarter but we don't have the margins yet. >> gary, do you think he should hire a coo why? >> yeah, i mean, all their issues have been on the operational side and on the distribution side. so they don't have their house in order it's a big question mark for the company as they continue to scale model through production can they really deliver? do they have the infrastructure compared to a company like forward or general motors? that remains to be seen. >> garret, thank you garret nelson from cfra. coming up later in the show we'll be talking more about what

caused that drop in reliability of tesla vehicles with the director of auto testing from consumer reports. let's get over to mike santoli, hi, mike. >> thank you very much financials getting crushed today. 52 week lows names like jp morgan, citi, goldman sachs, wells fargo, bank of america, all selling off over the past three months. is the worst still ahead or is the bottom in for the banks? we have michael bapas at rockefeller capital management to weigh in on that. obviously very, very ugly charts as we just described but are they yet so bad they could be good? >> i think they are. i think they're getting that way. it's funny because i've been quite negative on the group this year until now we're seeing the capitulation that's washing out the group we can never catch the absolute

low and catch the falling knife. i think what people want to do over the next two weeks or so as we get towards the election is pick their stocks. if you look at either the kb or kre, its weekly rsi chart is getting oversold the last three times it got this extreme, the group bounced very sharply. the smallest bounce was 38%. they're also approaching their 200 week moving averages, which provided great support back in 2015 over, the thi it's a midterm election year i think that the groups that are beaten up that are washed out are the ones that are going to do the best. when the rest of the market washes out, i think this is one you'll look good at. it will be a good group come december. >> contrarian play there the fundamentals haven't much changed and people think they're okay if the stock is cheap enough. >> there's been nowhere to hide.

everything's gone down there are so many distractions if you look at the fundamentals of the group they're there we think there's going to be a sector rotation from the high fliers, the low earnings into the companies that can make money. the biggest question in this space is will economic growth continue but valuations are very attractive i mean, the sector is trading at ten times next year's earnings you buy companies like that with high dividend yields, you're going to win in the end. we're -- as we said before, it's not everything at once, it's piece by piece but long term we're very positive. >> all right looking to lean against the wind thank you. for more trading nation head to our website or follow us on twitter @tradingnation back over to you, scott. coming up, consumer reports out with his auto reliability rankings it's not pretty for domestic brands we have the results straight ahead. take a look at what the markets are doing.

a lot of pressure on the nasdaq. s&p, 2,709 a lo, down 30 points take a look at the tech names. netflix, amd, facebook, power lunch is back in two minutes

welcome back let's get a shecheck of the markets. we have stabilized 165 points on the dow jones industrial average. we compared our losses across the three major indices. the nasdaq is down 2.3%. we had been 40 points lower on the session earlier today. the s&p 500 is now down by

1.25%. let's take a look at the biggest earnings movers in today's session. at&t falling as profit fell shy of estimates revenue did beat forecasts and the company reiterated its guidance at&t stock is down by more than 6% u.p.s. estimates came down below. it's the best dow performer, off the highs of the session, but still up 3%. take a check on microsoft, that stock is selling off ahead of its earning after the bell we have much more on that report and what to watch for after the bell in power lunch. that stock is down by 2.75%. let's get to sue herrera for a news update. thank you so much. here's what's happening at this hour, everyone hillary clinton says she is thankful to the secret service for intercepting a suspicious package sent to her home in new york she addressed today's news in

florida. >> many of you and others across our country have asked after me and my family i'm very grateful for that we are fine thanks to the men and women of the secret service who intercepted the package addressed to us long before it made its way to our home >> a stack of boxes containing random items prompted the evacuation of a san diego high rise building that houses a local newspaper and the offices of democratic senator kamala harris the response coming after those suspicious packages were reported in new york and also in washington new york is suing exxon mobil accusing it of defrauding shareholders by downplaying the risks of climate change. the lawsuit comes three months after the s.e.c. dropped an investigation into the company along those same lines that's the news update this

hour thank you for that consumer reports is out with its auto reliability rankings, let's get right to phil who is in chicago with the results. >> it's done by the owners of vehicles, a half million filled out a survey response from consumer reports the three most reliable brands this year, no surprise, we tend to see these guys at the top lexus number one, followed by toyota, followed by mazda. who were the least reliable brands there were 29 that were ranked dead last, volvo, cadillac and number 27 is tesla keep in mind -- we'll talk about tesla in a bit with jake fisher -- tesla reports its results for the third quarter and a potential profit, that's what some are expecting after the bell today and so we'll see what they have to say then. let's talk first about the reliability results with jake fisher who is in charge of auto testing for consumer reports he joins us from detroit

jake, first off, what's the problem with tesla vehicles in the eyes of their owners >> sure. so actually it's a mixed bag so the tesla model 3 is doing well we're recommending the tesla model 3. it's average model x continues to drag down the brand. a lot of complexities on that vehicle. problems with the doors, some of the just complexties of it there's electric powered front doors, too the infotainment system. a lot of issues with that model. the tesla model s, that's the change the tesla model s, up until tiss point we were recommending it. we saw it go down this year. the model s is really an interesting case because even the car hasn't been redesigned it looks the same since 2012 it has had a whole a lot of

redesigning underneath the sheet metal. some of the latest changes aric making the reports coming into us not so favorable. >> by the way, we should point out one of the problems you highlight is complaints about the air suspension feature in the model s. we reached out to tesla. tesla says we were aware of some of the problems when we initially introduced that feature. they have been addressed in the eyes of tesla. i want to shift gears to model 3. has that ramp upin production, as far as you can tell, has it resulted in people that are getting that vehicle saying i'm not happy with it. >> it doesn't appear that way. so, again, if you look at the story of tesla, it's really about the added complexities on top of the vehicle that are causing the problems the model 3 has been a pretty simple car i actually refer to it as the chromebook of cars there's not a whole lot of things to go wrong it's only available in one flavor

however, going forward, they will be adding more complexities to that car. they are delivering cars with all wheel drive. they're talking about adding air suspension to it hopefully they're able to maintain the reliability of the vehicle as the complexities increase. >> jake, it's a busy day with earnings we'll have to wrap up this interview. guys, i can tell you that we talked with jake extensively we have more about his comments on this and other brands on cnbc.com go check it out, along with the full list of every brand and its ratings. back to you. thank you for that if you're prone to motion sickness you might not like these markets much the dow, the nasdaq, the s&p all in the red one bright spot out there, boeing, the stock up around 3% following its strong earnings. joining us now to discuss is kevin o'leary. boeing, one of your picks in the cnbc stock draft did any of this prize you about how positive it was across the board? >> boeing's business model is

slowly changing to an interesting metric around subscription services. when you buy a system from them, even if it's a commercial aircraft, you're buying a long-term subscription to all the firm ware and software updates. very much like the apple model of five years ago. people were wondering when the subscription business would be more than 5% a lot of people don't understand that about this. they think it's a cyclical airline driven aeronautics cycle business the truth is the management has done an outstanding job in charging everybody that buys anything from them an ongoing fee in perpetuity with abseobsc margins. it generates so much cash flow i'm foelemotionally involved wi this stock i love it so much. >> are you surprised there isn't a greater impact in china on boeing >> it already took that hit.

that happened. as soon as the trade war discussions happened it was one of the first stocks that got whacked for that people look at it over the long-term, these contracts to deliver aircraft are multiyear contracts. at some point we're going to get an ip agreement with china and access to their markets. i don't know if it's next month, next year or the year after that but in the context of delivering long-term contracts of aeronautics to china, it could be just a blip and so at the end of the day i don't think either side wants to cancel them. certainly president trump looks at the company as one of the success stories in america it exports everywhere. i don't think china is going to take down the boeing momentum going into 2019. i think you'll continue to see good numbers and enhanced cash flows and maybe even a dividend increase let me throw that out there if any members of the board are listening to me. >> we know how much you like

that what do you think about the correction do you think it's almost over? >> no. i don't think so it is still a garden variety correction we're having a compression across every sector. one of the hallmarks of this correction was the discussion of a change of leadership people have been talking about the financials taking over the leadership i don't think that's going to happen i don't think the financials are what they used to be, even five years ago. i think the long books are punk. they're not growing very much. you saw a lot of that in the recent quarters. they're not as levered as they used to be they've been decimated and continue to go down. i think what matters now is -- we've had compression down to 16 and change depending on whose numbers you believe for next year, which is better than it was, you know, even four months ago. you've got to pick balance sheets where leverage is going down i don't care what sector you're talking about.

find a balance sheet and park your money there i like europe and asia better now. we're talking about 11 and 12 pes for the same sector in europe i know europe's got issues >> even in spite of all the attention the markets are getting, we heard talk in the newsroom about your most recent episode of shark tank where these three kids came in and pitched a product that had been created by their dad he passed away in the aftermath of 9/11. they had also lost their mom to cancer a few years prior even to that this inspired all the starks to get together and invest jointly with these kids. what was it about their story that made you decide this was the right move you wanted to make this deal >> well, let me give you some background about what happened in that studio that day. i mean, you know, we don't see these deals beforehand we don't know anything about them when they come out on that carpet as that family told their

story -- i have to tell you, even the cameramen were weeping. it was brutal. think about it the mother died of cancer, leaving the father who had been a 9/11 hero in the fire department and he was working on a demo tape with his board to show to the shark tank producers when he succumbed to cancer very quickly. probably as a result of working in the 9/11 site these kids -- we're talking about kids are left alone with an older sister and brother to raise a young sibling. in that moment, in that studio every person was crying. i get welled up thinking about it it was not a normal shark tank deal it had nothing to do with the product at that point. we wanted to help this family fund this thing and get them going in any way we could. i never heard such an emotional story ever and there's 150 people on the set.

it was an emotional meltdown i've never seen anything like it. >> what's the product? >> by the way -- the product is a board that the father designed he was an avid chef. you basically chop whatever it is and it had a surface where you plugged in a plate that caught all of the -- whatever you were cutting away that was waste. it was a brilliant solution to the old strategy it's a better mousetrap in a cutting board. as a result of what occurred that night, they sold out a a million dollars worth of product in 28 minutes. we know america is doing that to help the family, help the foundation the father chose that helps other firefighters of 9/11 it's not a regular shark tank product. it has a whole different meaning. i have never in my decades long of doing television, ever been in a studio where 100 people were crying. that's what happened that night. >> amazing thank you for sharing it, mr. wuerff

wonderful. >> thank you okay, coming up, shares of microsoft lower today, but they've had great year, up 22% the company is out with earnings after the bell what do you do ahead of that report should you buy microsoft shares? 3% lower today 3% lower today we'll tell you next. so, that means no breakfast? voya. helping you to and through retirement. so what else is new? humm..she's doing good. she needs more care though.s . i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. the meeting of the executive finance committee is now in session. and... adjourned. business loans for eligible card members up to fifty thousand dollars, decided in as little as 60 seconds. the powerful backing of american express. don't do business without it.

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welcome back microsoft reporting earnings today. the stock is down today. what can we expect tonight is it a buy? with us right now is piper jaffray senior research analyst. good to see you. stocks down over one month 7.5%. is it a buy into the number? >> i would say it is it is always hard with microsoft, but our checks indicate that fundamentals couldn't be better and i don't think some of the recent pressure is driven by valuation. so we are confident that they

will beat across the top and bottom and we'll be looking for continuation of the durable growth rate that they have been putting up >> what happens if it is a great report but tech remains out of favor, can it still go higher even if the broader sector is still in question? >> i don't think so. i think again from a fundamentals perspective, i think the sector is doing really well but microsoft is also a liquid stock. and so people sell but it is also the first thing they come back to. it is a really good growth opportunity, really efficient. well run company >> has become a cloud play in and of itself. >> exactly so look, it is hard to say what the market will do any given day, but i think over the next year or two, you are getting a double digit growth story, a free cash flow performance at a discounted value >> isn't the valuation of

microsoft compared to its historic self too high i mean if you take a look at the five year averages for various multiples, price to sales, price to book, forward pe, i mean all of it right now is higher than its five year average. so should it command that premium in this type of market >> so i think that is a great point. and i had bring up the point over the last five years, it has changed as a dcompany. more of the revenue is getting deferred on a flree cash flow basis, it s trading at a discoun discounts so while it looks expensive for the kind of company that it was, the kind of company that it has become i really think that it is still a really good stock and story over the next year or two. >> we'll see what happens. alex, thank you.

ahead las vegas sands set to ou y r after the bell. shldouoll the dice on the casino giant "power lunch" is back in two

sands will be reporting earnings and casino stocks have gotten slammed over the last six

months sachbd sands down almost 30% in that time frame in the earnings call, we'll be looking for a picture of the challenges china is posing and the consequences of any backlash to trump's tariffs it may be an indication if you hear from the ceo what it means for other companies in the travel and leisure space as well >> and of course we're watching the overall markets and the nasdaq because it is taking on the chin, because it had been leadership for this entire year for the broader markets, that is what i'm watching. it is now down about 2.6% going in to this close we're just off the session lows. but we will be watching this especially as we are coming up for a big week in terms of tech earnings so it will be make or break. >> netflix reported, stock went up huge and then gave it all back you have to wonder if some of these companies will buck the

trend. i'll still watching if the market has confidence that the fed has its back we'll see. >> but the more conference calls we get, the more ceos talking about tariffs and the impact on their business, i don't know, i think the more doubts there are about whether the fed should go ahead with the rate increases thanks for being here. it is time for "closing bell." another volatile day of selling. and after the bell, more earnings to hit the tape we'll have full team coverage. plus apple's tim cook out with a stock warning the way tech companies use your data. >> are we shouldn't sugarcoat the consequences this is surveillance >> we'll tell you why cook is advocating more government oversight ahead. >> energy stocks under pressure again toda