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 today pushing the session into correction territory. we'll debate whether it is safe to buy the dips. and plus a massive miss for new home sales what it means for the economy at large are. the "closing bell" starts right now. good afternoon a warm welcome to the "closing bell." let's get right to this volatile day. the dow moving over 400 points intra day. down 310 at the low. currently down 270 points. >> the nasdaq is the worse performer. it is down for the fifth time in the last six sessions. currently down almost 3% so heavy selling among some of the tech names our reporters are covering all the big stories. mike santoli watching the broader market action.

elylan mui i can't is watching e beige book and phil lebeau and we also have dom chew mike, let's start with you >> yeah, the market is turning around the area of yesterday's lows it is making the dip buyers sweat a bit, buttants -- tantalizing the bears. leaving intact the idea that the market is oversold leadership groups have been munimun imun -- punished the reason i think people are starting to feel as if the market needs to rally very soon is usually you don't have the indexes sitting in this kind of vulnerable position. the lows are intra day average with a steep decline very oversold li solsold levels. and i do think that the problem with the defensive leadership that we have in the market coming into this weaker phase

for stocks, it is reminding a lot of people of what more signature market tops might look like that is not a call, but it does seem as if time is getting short for this market to respond and get a good bounce. >> all right thanks very much and the market went lower following the beige book data. >> tariffs and a tight labor market were the two key themes out of the beige book. and the fed says those are pushing up prices across the country. but they didn't seem too worried about those dynamics just yet. it said price increases are happening at a moderate pace, but that there are pockets of pressure in individual districts. take cleveland for example two-thirds of manufacturers contacted there said they have had to raise their prices in that atlanta, energy companies are rearranging their supply chains just to avoid the tariffs. and out in the minneapolis

district, one food business said that large regular annual order from the eu, that was canceled because of the tariffs now, on wages, some districts said that growth is getting constrained because companies can't find enough workers. in atlanta, there is high demand even for low skilled workers and that has forced fast food restaurants to shut their doors in some cases because of a lack of employees but they say the economy is growing at a modest to moderate pace employment growth is also modest to moderate. so the fed noted that had hiirin san francisco remains robust and tourism has taken a hit because of hurricane florence. back to you. >> always a good read. thank you. and as we're speaking, we are seeing session lows on the major averages the dour currew currently down t

315. nasdaq is down almost 3% watching the dow today, earlier the average was higher because of boeing. it is a rare bright spot adding 567 points 56 points to the dow let's go over to phil lebeau about that. >> and if you were a investor, this is about everything that you could hope for. they beat top and about the line raised a full year earnings and revenue guidance and it gave us strong outlook when it comes to the commercial plane business remember earlier last quarter, they were running into supply chain issues which were holding down production of the 737 they have worked those out in fact they expect that the delivery rate to meet expectations by the end of the year and they also eased a number of concerns that have been out there. first of all, china trade concerns that question came up on the conference call. and they say they are not seeing

a slow down or change in the tenor. tariffs are not hurting the bottom line. certainly we will be seeing higher costs for all companies including boboeing, but nothing material here. and finally the global al deman ma remains strong and this was a strong report boeing >> thanks very much. let's switch to at&t moving in a very different direction on the back of their earnings dom chu has those details. >> so disappointed if you are looking for one word to describe how at&t investors are feeling after the earnings release, that is probably it on the surface, it didn't look all that bad earnings per share came in a little below analyst estimates while sales narrowly topped expectations but in it earnings season, even

mixed reports get negative reactions. at&t is in the middle of a rebalancing effort trying to shift toward more media and content distribution at&t lost a net 359,000 direct tv subscriber, more than anticipated. as for the over the top stand alone streaming video service, the direct tv now service, it added 49,000 in the quarter. it had added 296,000 in the same period last year now, on the positive side, at&t did add more profitable post paid phone customers than expected as for the stock drop, if we see it close more than 6.25% down for the day, it would make it the worst one day performance since november of 2008 and already at&t shares if they stick to this pace would have their worst year since the financial crisis, 2008 back over to you

>> and interestingly verizon is higher on the back of at&t's losses after better results. >> but we will leave it there with that opening set of previews let's get to the closing bell exchange today a good afternoon to you all. rene, i'll start with yyou. should your clients be concerned? >> i know it's been a while since we've had the traditional october wonkiness, but this is where we are and i think that we are in a correction mode. so it is not about shifting from a bull to a bear market right now. i see this as an opportunity for us to look at some areas that are going to represent the best places in the industry to be and it doesn't surprise me nor does it surprise our clients that certain sectors are really being slammed.

so the industrials, the auto manufacturers are definitely as an example are being very much victimized by the change in our foreign trade and our u.s. dollar strength. so we are looking at certain areas that are going to represent some major opportunities. >> so are lolori, do the reactis that we're seeing and some of them are looking pretty violent justified what we are getting out of these company results >> well, i think at this point, i mean you've had a massive outperformance of the growth trade in particular. and we're seeing companies have to be perfect. and if you are falling short in any way, you're getting punished for it >> jack, i wanted to ask you about the u.s. dollar. the fact that it was taking out the 96 handle. talk us through the levels that it is at today and what that means. >> i think that you can see what is happening in europe especially when we see what is happening to

the euro currency, to cable, a lot of those institutions abroad are suffering. that is the ancillary implications of a strong dollar. having said that, what we also see is money being taken off the table 37 whether it is a large sovereign wealth fund or whatever the case is, we l low indications which is a price dislocation and causing a lot of uproar around the world. the real question is this. over the course of the next two or three months, i think we should expect the dollar to continue to go higher because of repatriation and the dollar demand is unprecedented. so the real question is what happens to the rest of the world as we see the dollar continue to go higher. and i think more than likely we'll's a litt see a little bit this we haven't seen enough pain yet. i hate to say that, but until we see a bid in gold, i don't think we're done yet >> so fred, you were looking for

a correction though you say you remain largely bullish what is keeping you bullish and how do we know when sentiment turns? >> well, i was looking for a correction in late september i actually communicate that had had -- i communicated that to one of your producers. but these go with the territory. there was a major correction in '16. 5% there was a 10% correction in early '18. and right now we're down about 8.5% so these aren't to be -- these aren't unexpected. our clients are sending us more money ironically enough. their basic view is this isn't the end of the world this is a buying opportunity but it is interesting that only four sectors, i'll exclude utilities because they are up about 2.5% this year, but only technology, health care and

consumer discretionary are up year to date that doesn't surprise me i think that is where you have to invest. and when you start to invest in areas that are vulnerable to cost inputs, to regulation, to trade policy, then you are on thin ice and so we are trying to steer away from that and we believe that secular growth will continue to carry the day as it has for a long period of time. and those sectors have gotten beaten up. but they are still up for the year substantially >> lori, you are shaking your head >> yeah, i think some of these secular growth areas have gotten beaten up over the past month. these have been extraordinarily crowded areas. extraordinarily overvalued areas. we're seeing some derisking. what we're noticing in our client conversations is that there is nervousness as i talk to my analysts, we're all hearing a lot of comments of

late cycle if people are derisking, thinking about the end, these secular growth areas are where they will be taking profits. >> so go in to defensive sectors. right now what is up, utilities, consumer staples, real estate. >> and we're neutral all of those. we have utilities on upgrade watch. we took our underweight off back in april we upgraded staples back in september. i mean we've been telling people to tip toe simply because that is where the value is in the market at this point >> and a lot of international risks out there. could that not derail the strong u.s. growth numbers moving in to 2019 >> well, they certainly are not adding to any of the value that we have. so that is an area that you want to hopscotch around. but usually when you have these kind of market drops, it is a good time to look around and say okay, where is the next growth cycle going to come from and so we're not out of international at all

we are holding steady especially with emerging markets. because when we get through the cycle, and we will, then that is a place where you already want to have your foot in the door. so we are focusing right now here in the u.s., i know energy is getting slammed, but i think that is still a great place to be definitely financial services. health care. i'm a baby boomer. so we are still seeing an extreme amount of acceleration of benefits and services and consolidation in that space. and also the communication services sector which is the new addition to the s&p sector and that includes the traditional at&ts, verizons, but also netflix, al taphabet >> so this entire correction started from higher interest rates. but clearly as interest rates have stabilized, the conversation has moved in to slowing growth what is the chatter on the

floor, is it housing related, a global story, tariffs, or just sort of a bad combo leading us to wonder whether growth has peaked >> i'm so glad you asked that question it is a disconnect between what the fed is saying and what the market is saying when you see the flattening yield curve, it is telling you that the long end of the yield curve does not believe what the fed is saying about inflation. you saw the house prices come out today. they are lower look at what is going on in grains, in meat, metals. copper under $3. this tells you that there is not the inflationary pressure that the fed is telling us that is out there and more importantly that market -- the yield kifcur is giving us that situation. i've been told that bond market traders are smarter than stock market traders so the bond market right now is telling us that there is a problem. and it is not over yet so until we start to see some real consistent rhetoric coming

out of d.c. and out of the fed -- remember, this disconnects is also because of what is coming out of the oval office and the pressure on the fed chairman this is not something that the market is used to and we're trying to price that in too. >> a lot of factors there with the fed. guys, thank you. with the dow down 300 points, we'll leave the conversation there. we have breaking verdict here in the college basketball corruption trial sue. >> indeed. thank you. basically what has lapped is three college basketball recruiting insiders have been convicted on fraud charges prosecutors say the defendants committed fraud by basically concealing and making secret payment that violated the ncaa rules. they would make those payments to the players themselves and also the players' families in return for those athletes then signing with schools that des

today spok today -- that adidas sponsored the company says that we fully cooperated with the authorities during the investigation and respect the jury eye verdicjuryt we look forward to working with the ncaa and other stakeholders in a constructive manner to improve the environment around college basketball and they say that they have strengthened their internal processes and controls and remain committed to ethical and fair business practices. there are others on trial in a separate case that pertains to this as well but this is the first three verdicts coming in, guilty back to you. >> thank you very much for that. now still to come here, from elon musk's funding secure tweet and his pop smoking interview, it has been a wild quarter

we'll preview why today's earnings report could be a make or break moment. and new home sales data coming in well short of estimates. could be a sign of broader economic weakness. we'll dig into what is behind the slump coming up next with the dow down 326 what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals?

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simple. easy. awesome. click or visit a retail store today. welcome back here are the winners in the dow on a down day. we are down 377 points at the moment, that is pretty much session lows stroers t of course the nasdaq and s&p down lower still but there are the winners. mcdonald's -- no, excuse me, coca-cola at 1.5%. p&g leading the pack pup. >> and consumer staples definitely an outperformer for the day and month. a massive miss for new home sales injecting fresh worries into the housing market. diana olick has more

what do we make of all this weakness >> reporter: this number was particularly weak and we weren't even expecting anything great. sales of newly built homes fell 5.5%, slowest pace in two years. this number is so critical because it measures signed contracts. which means buyers out shopping in september when mortgage rates jumped those buyers were making the calculation asking can i afford this home with these new rates and clearly a growing number are were saying no scott and natasha put a ghos on on -- deposit on a new home in austin but construction is taking longer than expected and their rate lock expired. >> there is a lot of uncertainty as to what we will be able to afford by the time we lock in an interest rate. >> we thought we had a plan, but now we're just really nervous. >> reporter: and 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 a read on pending home sales which also measures signed contracts. watch for that right here at 10:00 a.m. eastern time tomorrow and for a wrap up of just how badly all of of the housing numbers are coming in, that is on cnbc.com right now. bla back to you >> session lows again mere for the major averages with the dow down 371 points. selloff is accelerating. nasdaq down more than 3% >> and if you look at individual sector performances, communication services is now down over 4% energy down 3% but a significant move lower and the stocks that have outperformed -- >> technology, yeah, social media. is still to come, will this afternoon's earnings reports be able to turn things around for the market we'll tell you the key numbers to watch as tesla, ford, mike grow somike

-- microsoft and visa report. and there has been a ramp up in vol tilatility of late. we'll dive into the reports.

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welcome back to the "closing bell." u.p.s. trades, an individual mover that we are watching shares are down about 5% it was already a pretty lousy performance intra earnings it looks like the revenue miss surprised investors. profit beat rose but when you have an economic bellwether like u.p.s. warning about the trade war and tariffs impacting the business internationally, that certainly spooked investors. they also talked about rising costs thanks to a lot of the

macro concerns we've heard lately higher commodities and a stronger u.s. dollar and this is the first time u.p.s. has missed those revenue numbers in the past seven quarters and i'm looking at a couple european banks start with deutsche bank here is the adr trading down 6.5% significant declines, down 44% year to date, down over 20% since the new ceo took over a couple of months ago so really not performing well. the thing to focus on here is the trading performance. that is down 15% year over year. switch and look at barclays which is up 0.8% before we got more of the selloff. their trading performance was up 18% year over year so there is that sort of difference that maybe one of the european investment banks can play catch up to the u.s

also a stark difference on their roes deutsche bank 1.6% you have the high teens multiples of roes for jpmorgan so we'll have to see whether or not barclays can continue their improvement and deutsche bank can find a bottom this -- in their tanking. time now for an update at this hour, president trump hosting an opoid legislation event at the white house, he began by speaking out against the suspicious packages sent to several former government leaders >> in these times, we have to un any g un-hfr unifun -- unify, we have to send one strong message that being theac

threats evof political vie seole have no place. and putin commented at a joint news conference with the italian prime minister in moscow and the fda has approved a new drug to treat the flu, the first new flu treatment in almost two decades it will be available in the next few weeks. it will cost 150 bucks, but patients with insurance could pay only $30 you are up-to-date back downtown to you >> thank you, sue. let's check on the markets we are seeing new session lows the dow down 421 points. in terms of the sectors that are dragging down the s&p 500 right now, materials, energy, consumer

discretionary, industrials, technology, all showing some broad weakness within those groups as far as gainers, defensive stocks, utilities staples and real estate. let's go to bob pisani for more. >> i think this is technical if you put up the s&p intra day, we broke through the prior lows yesterday. that was 2691. and the minute we did that, we broke lower. i don't like attributing market drops to technicals, but in it case there seems to be some kind of a relationship. so 2677 the last 15 minutes or so on that 2691 breakthrough the sectors, this reflects global concerns overall. we look at the sectors that are down the most here semiconductors, materials, energy what is holding up consumer staples, a defensive

sector one of the only ones up there. reits also holding up. in terms of heavy volume, we have seen recently heavy volume in energy etfs, semiconductors have been heavy volume for the last several days. materials also seeing heavy volume it is curious that by he oiotecs seen heavy volume. so what is moving the markets right now is the market is beginning to doubt whether 2019 earnings will be as strong as anticipated. we are talking about roughly 10% growth there is an overlay of macro murkiness as i like to call it two issues are china slowing/tariffs, and aggressive t -- how aggressive the fed will be on rate costs

i would say other things are peripheral >> and netflix is down 8%. some of these winning technology and communications services stocks are really getting beaten up, which sort of goes against the argument that it is earnings driven >> no, the overall market seems to be saying here -- by the way netflix did manage to raise $2 billion the other day. so they are still not having problems with credit if you just look at what has been going on, the multiple on the s&p has come down rather noticeably it was 16.5 a month ago and now 15 today a multiple is a reflection of what investors are willing to pay for the future price of earnings the market overall is being taken down implying the 2019 earnings numbers are not going to be as strong as people anticipated. now, i think they may be wrong on that. but the current estimate is 10%. the market is trading right now like the actual earnings growth next year is only going to be about 5%

and that seems to be what the message is from the markets. >> bob, thank you. let's zero in on energy. it is the worst performing s&p sector over the past week, poised to close in correction territory. 10% off the highs. is it a buying opportunity for the energy stocks? let's talk to our guests here, ed and james ed, are you a buyer on this weakness >> yeah, we are definitely recommending that investors buy here we think the backdrop for energy longer term here is really never better with the underinvestment you've seen. so understandably there are frustrations here, but ultimately global supply outside of the u.s. and outside of the middle east is starting to pull back that has been one of our main these cease. a -- these ceas. and we think that it will take a number years to catch back up. >> and james, do you agree and

what about the sub sector specifically that are the way to play this? >> we do think that it is a great buying opportunity ed makes a good point on the underinvestment. and right now oil production is declining according to the laws of physics rather than the laws of bear markets. laws of physics typically trump in the end so he radihe reinvestment is ne. it is estimated that the permian basin alone is supposed to be at least 60% of global oil production growth over the next couple of years. and that is going to resume its move up as soon as we add a little pipeline capacity to the permian. so we think the way to play this is onshore u.s. recovery in the services sector which are primarily halliburton, patterson drilling, and several of those that have already seen activity

triple in the last two years and now they are getting ready to hit the reap mode after sowing a lot of capital and building up capacity >> so ed, in the last three months, the price of oil looking at wti, the u.s. benchmark, is down 3%. if you look at the s&p energy sector, it is down 12% so why are energy stocks taking it harder than the underlying commodity? >> i think that there is definitely some fears around how energy may play longer term. there is a lot of talk about alternative energies creeping in to the sector. i think that the bigger issue for oilfield services is is that we really haven't seen a lot of pricing power yet. and that is compounded by the fact that we now have a slowdown in the u.s. frac market. ultimately i think we will see a reversal in that when pipeline capacity comes into the permian. although admittedly we have fears long term about north

america in terms of a bit more constrained growth potential so we've actually recommended that investors focus more on the offshore centric names we think that is where the better growth potential is longer term. >> jim, give me a couple of your top picks. >> halliburton is trading where it was when the u.s. recount was a third of what it is today. it is trading where oil was when oil was $26. and so that clearly is under pressure and needs to be bought. patterson uti which is a drilling contractor is trading at 16. its last deal was done at 28 and ed has a point on the longer term outlook for international but we still think that it is a couple years away. and clearly for the next two years most of the story is still going to be onshore u.s. international has been improving for the last year, but pricing

has been so bad, you haven't noticed. and deep water probably isn't coming back until 2020 at the earlier. so you want to buy before pricing really kicks in. that is the leverage point and we think that that starts very early in 2019 >> so we've been talking a lot about the company fundamentals here, but obviously we're watching some of the big mac crow issmac - big mack xrro issues. what are you watching as far as the interplay between u.s. and saudi relations? >> saudi came out and said that they won't use oil as a weapon, basically threatening the u.s. to impose sanctions. but the head of opec also came out and said that he is encouraging all 13 members to produce as much as they possibly can because the looming shortages in the next couple years. so i think that the politics

will be interesting. but oil is a fungible commodity and demand will -- supply and demand will balance out. >> ed. >> yeah, i mean we're largely in agreement with that. we don't think ultimately that saudi is going to use it as a weapon if you really look at what saudi has done in terms of positioning for growth in the future, they clearly are of the opinion that we will be short supply over the -- we'll call it medium term through 2025 to 2030 and so ultimately it is in their best interests to cooperate and we think that that will ultimately happen. so we don't really see a lot of negative to the commodity price from here out. >> okay. ed, james, we'll leave it there. thank you both very much by far the nasdaq is the worst performer of the day let's head up to bertha coombs with the biggest movers. >> you have the nasdaq fighting

to go positive intra day a couple traders saying they saw some buyers step in, but they would quickly move back as we would see program trading push things lower we're seeing a downdraft coming from chips and communications in particular if you take a look at the large cap tech losers at this hour, netflix was down nearly 9% and right now on pace for its worst one day decline. at&t talking about how difficult it is to provide content to keep and retain subscribers not as big of a problem for netflix yet, but the area is getting more competitive and chips are getting decimated by the negative comments from texas instruments. so new lows there as well. some stocks bucking the trend,

juniper is getting the benefit of the doubt and a lot of the ones moving to the up side here are the consumer staples but also some retailers. one trader said it puzzled him because they are likely to have a hard time. and take a look at the russell 2,000, it is down for the sixth straight day second time this month. only up for less than a handful of days all month so far and that is the sector that really is concerning people because they feel that lot of these small cap manufacturers, small cap players just don't have as much wiggle room as we see more costs rise. >> okay. thank you. mike santoli is joining us on set. the chip stocks are leading the charge lower >> and i think one thing that you can pull out of the action today is that you finally have gotten a little more of that sense of nowhere to hide many people would have looked at

yesterday's action and said that that was an impressive reversal, but there wasn't that feeling of a little bit of panic. today you have kind of the cool kids in the nasdaq getting laughed at along with everybody else it didn't mean this is anything important because you have now essentially gotten back to the break even level for the s&p for the year so i think there is a bigger reset that has gone on and also a good bit in treasury yields is also probably showing you that there is a little more of a safety trade happening. so the ingredients are there for this to be a little bit of a s crescen crescendo, but the market is not behaving the way it has during the last year or two where it responded to these sharp pull backs. >> and also the dollar getting a nice bid today so now the dow briefly raising its gains for the year let's send it back to seema mody for a look at the names leading the downturn >> and what is notable about

this market selloff that we've seen is that there are a number of big intra day reversals that we have seen for example take a look at shares of freeport mcmoran, you can see that it is down about 8% on the day and shares of twitter, we've discussed the notable weakness in the faang names twitter was up about 2%, now down about 3% ahead of its earnings report tomorrow morning. and pultegroup, a bright spot yesterday, higher around 5%, and now trading down just traction alley on ttraction -- fractionally on the day. and so that is notable and these intra day reversals on a number of companies that actually reported better than expected earnings. >> thank you very much and mike, that has been a theme. and i was highlighting netflix

before but not everyone getting punished have some signals in their earnings reports >> the market is essentially assuming that either this is a peak or there will be a sharp falloff. and what is next matters a whole lot more than what you just did the prior three months and it could be that it means that the market has blind spots about the companies that will do fine next year, but right now it has the feeling of much more of an overall risk reduction kind of liquidation effect, getting out of some of the crowded trades along with some of the ones that we thought should have bounced by thousand. >> and mike, yesterday we were saying how the u.s. was relatively resilient compared to the rest of the world. and today that has flipped on its head when you look at things like the nasdaq down 3.6%, that is worrying to see that >> it is worrying to see, but then you also have to ask if this is kind of the final sort of capitulation that the u.s. won't hold up as well. if you look at the last few weeks, the u.s. and the rest of the world have kind of been in parity so outperformance happened

before this little rough phase >> but everyone is saying that we need that big spike in fear before you can consider it flushed out. the vix is still 23, 24. >> and i do think once you have gone a few weeks or a couple of weeks at this heightened level of volatility, people buy up their hedges and they don't have to buy another one in a week, but i do think that that is something to note. and there are more stocks up today than there were yesterday. i don't know if that will matter or not so it is not like you want to keep focusing just on the silver linings when the overall action is not telling you that really this market is about to make a stand. >> and there is a narrative that the marketsniff position oing o weakness wherever it is. is that fairway to put it? or are some of the underlying factors weak >> i think the market is mostly being anticipatory about this. with some companies clearly the street was blind sided by margin

issues, by the way costs have come through and the fact that management can't explain them away so yeah, some of it is a bit of a surprise but i really do think that they are setting up this wall street versus main street dynamic. meaning the overall economy can be pretty good and so therefore the leading economic signals can hold up while corporate cash flows get pinched a bit. >> and another point to make, the general theme through some earnings has been one where we have seen this ongoing 20% or so earnings growth, but revenue growth slowing and again that points to that question of whether we've had the peak in terms of the pace of growth and on the fundamentals, and this isn't a major worry today, but it is a continuing theme, yes, the u.s. pmis are strong. eurozone missed expectations and that is another question of at what point will this weigh on the domestic u.s. data as well >> and it is the reverse of a year ago when everybody was discovering the fact that the

entire world was growing at won't, which was a rare event. and i do think that it is a bit ragged it doesn't mean nix yeext year's earnings won't grow and we have to radically revise them down. but i think people are looking more on the dim side of what the prospects are. >> yeah, selling not getting any relief here. the dow down 480 points. let's go to bob pisani on the floor. >> i don't normally like attributing weakness to market technic technicals but when things move very fast and the market gets confused about what to do, traders will often abandon fundamentals and turn to technicals because it tells you what to do at least on a short term and when things break certain key levels, it tells you do something. either buy or sell about 3:00, 3:01, 3:02, we broke the prior lows of the day at

2691 and of course that was the lows for the month. and a lot of people felt that was important. when peopenough people feel a ne is important, when it doesn't hold, some will act on it and you will see another leg down. and that is what happened. often these magical numbers don't really materialize, but when it is important enough, it does and i think that was a factor in the most recent leg down with that said, we've seen sectors that are generally involved with global issues. so the semiconductor stocks, the material stocks have been weak consumer 125i7 r stap willing -e have held up better. and by oiotechs have high valuations so perhaps not surprisingly biotech would be a reasonable play so overall what is happening

here is not anything to do with q3 and not really anything to do with q4 earnings numbers the mar gket is trying to get 9 we've told you they are 9% or 10% earnings growth. but the market seems to be questioning the assumption right now we're at 15 times forward earnings we were at 16.5 a month ago. that is telling you that the market is starting to doubt what the numbers will be. and in this case to get it back to 16, you'd need to be, oh, 5% earnings growth for next year. so that is what i think is going on you just saw these macro concerns that are there, the two big one, the china slowing story and the fed rate hike story. unless we get clearance on that, as of now, the market is saying those issues are going to impact earnings growth in 2019. guys, back to you. >> selloff picking up steam here in the final ten minutes of

trade. dow down 500 points or 2%. and our reporters are standing by with what investors need to watch for. phil lebeau has tesla and ford josh lipton on microsoft deidre bosa has visa phil and let's start off with ford and the big question will be when these guys report their earnings, how much of a slowdown will we see. and what is the update on the turnaround pla arounaround plan. analysts want concrete detail. so what is the commentary from the ceo. more than a few analysts expressed frusz trags at ttratie lack of information. and auto stocks is among the worst performing sectors this year and so ford's issues, which you can see reflected both in general motors as well as fiat chrysler, none of these stocks are really doing anything, take a look at tesla. this is a controversial stock

for a far different reason when they report earnings, the question is will it be a profitable quarter, will it be an earnings report what is the outlook for model 3. they have been a little cagy in terms of giving us the outlook and where production goes from here and is there is a capital raise that is needed in the fourth quarter. remember, tesla's conference call starts at 6:30 tonight. 5:30 is ford, tesla is 6:30. and on both, it is what the ceo says and how they say it that lot of people will be tuned intint into. >> phil, thanks. let's head over to josh lipton >> and here is what is expected of microsoft the street will be looking for eps of 96 cents on revenue of $27.9 billion. that would represent jumps of 15% and 14% on the bottom and top respectively and satya has transformed the

company. and red bank thinks that it will be up about 50% year over year and also some are focused on cloud commentary and surface commentary as well back to you. >> thank you very much deidre is monitoring visa's results after the bell what do we expect? >> this is their full fiscal year report. it is expected at $5.32, revenue at $22.96 billion. if either come in lower, you could see the stock get hit in the after hours. but visa shares are up about 20% year to date, though that does lag mastercard which is up about 30%. and visa has been benefiting from new forms of electric payments particularly in europe

and india. and last quarter payment volumes were a bit lighter than expected so that hurt the stock so we'll be watching that number as well. >> absolutely. and thanks to everybody. we will see you all after the bell as soon as these companies start releasing their numbers. let's get to ubs' art cashin on the floor for more on this selloff with the nasdaq now officially in correction mode. 12% off the recent highs what is driving the selling in to the close >> as bob noted earlier, you begin breaking levels. and in the earlier selloff the other day, you didn't have carry-on selling when you break a level, sometimes they have algorithms to say that is a sign of danger, sell some more you are getting some of that today. secondarily, you've got relative to the china worries the treasury auctions this week have been not so hot. they have been lightly bid and that gives people a concern

that maybe china is boycotting some of these auctions not selling bonds, but certainly not buying them. it should be applied to safety if there is a bond auction, you would think the bids would be two times normal and they are not so that raises the question about china. so the market really here is a little concerned again, as i said earlier, it is like a patient who has a cardiac event. how well do i feel and they tell that by how they react to these supposed support levels so the market will leave here nervous. the market has been leaning to the buy side 20 minutes ago, they flipped to the sell side. and that is also adding to the pressure >> sentiment very shaky. art, hang on we'll have sam stovall join the conversation feels like a mix bad housing data, disappointments when it comes to earnings what do you see as primary

driver here? >> well, i think as art mentioned, right now investors are focusing on the technicals prices tend to lead the fundamentals and since the fundamentals are still calling for good economic growth in 2019, about a 10% increase in corporate profits, i think that investors are looking at the price action to say, gee, maybe we should be revising our earnings forecast for the coming year so the 2700 level breaching that brings us back to the 2600 level on the s&p 500 where we are probably see some support between 2580 and 2600. >> art, how would youi characterize the sentiment out there is we look to whether everybody is bearish and there is a lot of selling. how does it feel to you right now? >> it is not a stampede. it is a bit of a cascade because they keep breaking levels and

that brings in selling but if everybody was panicking, it has looked much more like a cattle stampede and the volume would be much higher so unfortunately, it is still rather organized selling so far. >> and sam, how do you tell investors whether to do buying amid the selloff with some of the sectors getting pounded, some of the best performers all year like tech and communications services? >> well, i think in the near term you just pretty much step out of the way and let the market find its own footing. what i have been saying before is that we've had several times in history in which we've had two five plus percent declines in the same year and typically the second decline ends up being deeper than the first one because we didn't reset the dials enough the first time around so the implication therefore could be that we see this s&p 500 off by 12% or so which would bring us down to that 2580 to 2600 level i just

mentioned. and then typically those that were worst become first. those beaten up the most extend to then rally off of that bottom the quickest >> we'll watch the levels. thank you both for joining us. with the nasdaq now down 4.33, it is getting ugly >> and now down more than 600 points s&p 500 down 2.9%. kenny, what was the key level? >> it was in my morning note i said if we failed at 2710, which was the low of last week, that we were test yesterday's low which we slice the right through it the minute you did, you get all the risk management software kicking in, creating the sells and the minute we broke through that level, we traded lower and we're closing right on the lows of the day >> 2656 on the spx

what is the next level >> i think 2650. and we could get there in the next three minutes if it stays like this. >> and we're down more than 4% on the nasdaq. >> i've been here 38 years we've had a major move over the last week and a half we're down 10% on the dow in the last week and a half so it has been a very, very tumultuous time. but part of it is part of the correction part of it is all the issues surrounding. and the geopolitical issues is weighing on investinvestors' mis >> thank you very much. let's have a look at the s&p 500 intra day chart. there was a moment of green.

but steady selling since then. nasdaq down 4%, down 600 points or so. over 3% for the s&p. and i'll bring in bob pisani entinternational markets were better >> remember, the stock market is a discounting mechanism to understand a stream of future earnings when you are in the fourth quarter, the market is trying to figure out 2019 earnings level we've said time and again they are expecting decent numbers in 2019 on pretty good u.s. economy about 10%. but the market is acting like those numbers could be half of that, about five percentage point gains. so it is adjusting downward. obviously it is on the chooina growth story and the yield story. >> and energy, tech, communications services down sharply. the dollar for you as well seeing a spike up. that is a continuation of the

recent theechme that does that help. the s&p down over 3% nasdaq down over 4%. a very ugly final few hours of trade. that does it for the first hour of the "closing bell." and welcome to the "closing bell". mike santoli is here with us and another brutal day of selling across wall street today that really picked up steam in the last hour of trade heavy selling across the board nasdaq composite closing down 4.4% this is the worst day for the tech heavy nasdaq since august 18th, 2011

that puts it in perspective for you. by the way, with today's selloff, the dow and s&p 500 have officially turned negative for the year whipping o wiping out all their gains we don't see that too often. and the dow closed more than 600 points down on the session the russell 2,000 and small caps also did not see any relief. utilities, real estate and staples were safe havens but communications services, technology, energy, materials, industrials, all got hammered in today's ugly session we have some names reporting after the bell today phil lebeau is covering tesla and ford, josh lipton with microsoft, and jackie deangelis will have numbers from advanced micro devices. contessa brewer is covering las vegas sands.

and seema mody with whirlpool. but first straight to better th that -- bertha coombs. >> yeah, tech is leading the charge to the down side. and it was really all across the board about that the one thing that i would say is when you look at the volume levels, this wasn't panic selling they were pretty much in line with the average we've seen over the last 30 days or so that said, we saw sharp selling accelerating in biotech which is often one of the most volatile sectors. and it is the chip sector that really is driving things south we had negative comments coming from texas instruments about demand that follows reports on soft demand in the memory space so that is casting a big shadow over chips which are used in all parts of

the economy. so that has a lot of people wondering is this just a chip situation where perhaps people stuff the channel, or is this more of a problem with the economy overall. we saw new lows for texas instruments and a number of other chip players today none of the components of the m index traded to the up side. and take a look at facebook, we've seen real damage in some of these stocks. you look at the communications sector overall, it is negative pep when y big tech overall is still moss but names like facebook, netflix and amazon, those stocks are really broken. facebook with a new low taking out last week's low. and that stock very much in bear market, down 33% from its high earlier this year. but amazon although still up 43% through the year, here in the last month, that stock has just

fallen out of bed. it will be reporting tomorrow after the close. a lot of concern about amazon raising those prices and all that it is spending and all sorts of different sectors so earnings this time i think right now seems to have people kind of nervous rather than looking for a positive catalyst. >> we'll see what we get in a few moments. thank you. joining us to talk about the market selloff, mike santoli and nancy tangler. united technologies trailed again today. and barium medical was a big winner but dxc technology lagged. how did the selloff feel to you? >> it accelerated and it was definitely not indiscriminate. and i don't mean that in a positive way it was not everybody saying absolutely sell everything it was basically levels giving

way. we actually stretched the down side a little bit of this move to the early year lows and i think that that will be where we'll have to start the conversation and say what has changed since then it has been a derating of stocks for a long time. basically investors unwilling to pay up for tomorrow's earnings and that has been the story for eight months it is not good to close on the lows that being said, i do think that it is a net positive that you finally got some of the glamour stocks that everyone thought could be bulletproof through almost anything. it really got hit hard >> faang has collapsed >> yeah. >> and we're negative for the two major indices. all year we've been saying europe down 10%, asia down 20%, but the u.s. is still high and that fell apart today. what is your take on this? is it a buying opportunity or do you have to let it settle? >> you always have to let it settle this becomes self-fulfilling and i think that it is a

technically driven selloff, because the earnings have not been bad we do know however that they are decelera decelerating we have midterms coming up so i think that we are getting that midterm correction and then we are also seeing investors kind of recalibrate to the new lower earnings levels. the thing that i'm most concerned about is prices are going up across the board. industrials, consumer products, and that will push inflation and actually ironically that might be good news for stocks if the fed backs off a little >> we have microsoft numbers from josh lipton >> and reporting $1.14 revenue coming in at 29.08 billion, expectations were from 27.9 billion just looking quickly through the segments, revenue and productivity and business processes, 9.8 billion, an increase of 19%. within that, they say office 365

commercial revenue saw a growth of 36% in the quarter. revenue in intelligent cloud, an increase there as well and revenue in personal computing, that was an increase. and surface arrive new revenue . back to you. >> clearly a big beat on the eps line mike, the azure, people were wondering whether it could be maybe even 90. >> so i think that that is -- if there is one way to look on the down side of a very good report, it probably is that right now. i have to say, right now i think that we are in the mode of just sell anything that has held up really well and that was the case during tregular hours. so nothing in the numbers that said this will rescue the tape >> and nancy, you own this stock. >> i do.

and the expectation were for 75% for azure. so it has to h slow down i want to see the margins. >> and when you see that we have s&p and dow negative for the year, nasdaq not up much and microsoft still up 19%, does that concern you that it hasn't been hit hard enough relative to the rest of the are market >> listen, that is a viable question, but i think for these kinds of companies like microsoft and like boeing, i actually think this is an opportunity to add to your holdings if we get pushed down further. these are the kind of companies that you want to own in a market like this and i think that we are returning to active management so this is one that i would take advantage of >> so are you buying or selling? >> we are about to buy

there are a few stocks that we have an opportunity to unload. and this is a place where i would be putting money in some of the older real tech companies i guess i would say. and pharmaceuticals where we are already overweighted >> and what are some of the older tech companies >> cisco has been a great place to be with cloud exposure. i think it is time to take a look at intel. i know that i recall get flack for this, but texas instruments after yesterday's report i think is super interesting because that was not unknown china exposure, autos, it was expected or at least i expect this had company would slow down but we had a switch in ceo so once they get that settled, this is a team that they can manage as they have. >> and bob was saying the fact that the s&p 500 has come from 60.5 times to 15 times fallen back into its valuations. clearly the nasdaq was a big mover today. what are the valuations now off

those big sexy faangs? >> the nasdaq 100, so that is dominated by faang-like stocks, is now in the 19 range maybe a little below so probably about 18 and 19 in aggregate. so i do think that if you believed that the secular growth stories are intact, that is not terrible, but a five year average is closer to under 18. so you have not really removed that premium that you had built up in those stocks just yet. >> if you ask everyone, you get a different answer art cashin said that there is fear that the chinese are not participating in some of the treasury bond auctions if that is the risk going forward, what do you do with that >> honestly, i think it is an being accumulation of what if concerns including that, including what is happening with saudi, including what do we make of the fact that china has been in a bear market, the german index

looks like it is rolled over for good and are we finally just going to have to succumb to the gravity that has been affecting everything >> and the president ratcheting up pressure on the fed chief >> right and also are we in this fix. if every company says it is all about costs, we will try to push pricing threough, and meanwhile the stock wants the fed to pull back, that is not very comfortable. >> and selling individual names because of it? >> we are reducing our exposure internationally. and it is not just china or em the slowdown in europe is real and i don't think that people are talking about that and i'm concerned about that and china. not worried about the treasuries yet because there is still a

buyer's market >> i'll make one more comment, and i never think that headlines are necessarily -- you don't want to stretch to kind of attach market moves to headlines. but the fact that we had all these ongoing news items about these bombs sent around, it is the kind of thing that psychologically happens around the time that the market says forget about it, i'll throw in the towel. and that se and i'm thinking of the ebola scare. there wasn't an economic event, but just that one thing that people fixated on. >> and we have got another earnings alert las vegas sands, contessa brewers with the numbers >> yeah, a miss on both the top and bottom lines missed by 4 cents and revenues with 3.7 billion coming in versus estimated 3.4 billion macau revenues beat estimates

increasing the property increasing 18% and they will raise the dividend by 8 cents and they have repurchased $300 million worth of common stocks we'll be listening what they have to say about china. >> and it looks like another decline, 2.5% after hours on what has already been a double digit decline. >> yeah, the casinos are -- they have been just cast aside. so i don't know whether this number could have changed that story or not i don't know if you've looked at these guys >> that yield looks pretty compelling >> those sectors are more exposed to china but the fact that if they do want to target individual companies, these have licenses to gain in macau and they can just remove them >> and also falls in the

category of global luxury stocks and that is ugly >> and we have more on microsoft. josh lipton has the individual line items of those numbers. >> just a bit more color about of course what investors focus on here. that cloud business, the commercial cloud revenue clocked in at $8.5 billion that is a jump of 47% year over year so just to put that in context, q4 that number clocked in at 7.9 billion. a year ago, 5.8. and the margins comes in at 62% about that , so that is expanding and now you can see that it is popping in the after hours back to you. >> that is a bit of a turnaround there. >> and that margin number is what we were looking for so 62% is pretty good premium.

so that look s good >> and when we talk mr. tabout sell soethe se selloff, larry kudlow tries to explain it as garden variety correction the democrats potentially winning the midterms as a reason why the president have blaming the federal reserve. i mean is the administration going to be forced to respond to this in some way >> i don't know what particularly would force the administration to respond in any particular way, but i almost think that in a proactive way, the president has responded by keeping fought xus on fed chairman powell and saying that if you want to point to somebody, it is his fault, i guess that is one way to do it honestly, i think that we have overweighted the credit and blame in terms of who is running the country with regard to the stock market in general.

so maybe there should be a response i don't think that it will be a policy shift >> we do have earnings out from ford let's go phil lebeau with that >> ford for the third quarter beats the street on both the top and the bottom line. but it is a lot of issues beyond the earnings that people will be focused on it concerned 29 cents a share, but that is a drop of about 33% compared to the same quarter last year. revenue coming in at $34.7 billion. that is about $1.4 billion better than expected a couple notes first of all, ford is reaffirming its earnings guidance for the full year between a range of 1.30 and 1.50 so that will be reassuring for some ford investors. at the same time the company says that it is not going to be making its target of hitting 8% profit margins by 2020 so what worked and what didn't

wo work for ford? it is all north america. overseas, it is a total mess china down $378 million compared to the same quarter last year. europe, a loss of $245 million turkey, russia and a number of other issues weighing on the results there. south america a loss of $152 million. and one other note, no update from ford regarding any restructuring plans. that won't sit well with some analysts the ford conference call starts at 5:30. >> all right and tesla looked like a big bre beat on revenue. >> and if there was a stock primed for it, it would be this one. taking what phil says about the lack of detail on any restructuring plan, you have to take that seriously. but it bounced yesterday gave all the bounce and more back today

so this is one of the more depressed parts of the market that really better get relief soon >> and important to see the likes of ford and microsoft up >> it certainly helps. i think what you want is the market respond to corporate specific news. so i do think that that is good. and i said before, it wasn't indiscriminate you had a fair bit of stocks up today. >> and now test practila earnin. >> people were saying maybe tesla won't be making a profitable quarter but a profit of $2.90, that is well above the consensus estimate of a loss of 19 cents a share. revenue much better than expected at $6.82 billion. the expectation was for revenue at $6.33 billion we'll dig down into some of the numbers here for the quarter but again, that is the reason the stock is moving higher, substantially higher

surprise earnings beat, $2.90 in the third quarter for tesla. back to you. >> thanks very much. >> and a wooarm welcome from shareholders >> and kind of extraordinary that we have this, changing recommendation from absolute haters to lovers almost as if something -- well, we don't know what happened. >> there is an old trading rule that says if you cover your short, should you probab, short, you should probably go long >> so don't given them too much credit >> no, but it is a thing that is done >> we told at tsold at the end year and we put the money other places and we're pretty happy with that. i can't justify a company without governance and that was one of the things that i said on the show a while ago that is not -- this is a great beat

this is big. i'd like to see what the model 3 looks like in terms of production but it is hard to justify the valuation when you compare to ford or gm. and i get the technology but i think at some point it comes down to valuation. >> and it is a big beat. the question really, is it sustainable. is this one quarter or not >> that's right. >> do you believe it could be sustainable? >> we'll see the loss of senior management, the lack of a board that is providing oversight, it at least gives me pause i feel like it is gambling so i don't know the answer to that i mean ibm couldn't sustain it, this is not ibm, but i do think that you have to see more than one quarter. >> does james murdoch if gets it favorite to be chairman, but a media background, would he change your mind in terms of that governance? >> i think so. it is about leadership

and it is about pru dech-- prud. >> and we have to hear elon musk i guess the numbers provide some sort of an indication after the s.e.c. settle nlment >> how they got to the number will be scrutinized as well. there has been talk that they are front loading a lot of orders and only making certain high priced configurations. all that stuff but the estimate for 2019 on the books is that 282 a share for the year so clearly if there is anything approaching profitability that seems sustainable, that has to come up a lot. and then it gets priced against earnings as oppose

elon saving the world. >> that is a great point about that. >> so 100 times next year's estimates. and then you have a ratio you have to play with. >> up 10% after hours. we have an earnings alert on visa hi, deidre >> basically in line with expectations revenue at 5.43 billion. a little shy of what was estimated. adjusted eps though higher than expected, $1.21 versus 1 -- $1.20 expected the number of processed tractions rose 12% and revenue projects is low double digits. eps company saying projected to be in the mid teens. adjusted, the street expecting 16%. and the payment processor is

benefiting from consumer spending and expansion and their multiples more attractive and analysts say that they still tapgs like e-commerce and mobile commuting. back to you. >> d, thanks so much mike, another sort of sliver of positivity >> i think it make es sense people would love an opportunity to own something like visa >> flanancy does >> it is no the like t-- not li secular performance. >> and if you need reassurance, i think this would provide that. >> this was a great report guide answer is rig guidance is where the street was expecting. so interesting to hear what they say about currency

but then i the thiink oil prices going up is powerful so a lot that we can take away >> and is is this one that you would consider topping out >> absolutely. >> and we have another earnings report >> a company caught in the trade conversation, shares of whirlpool moving higher, a slight miss on revenue, but a big beat on earnings 4 4.55 and that is thanks to the north american region. the company says that is despite slow industry demand and continue the cost inflation. and the company says that it is announcing and additional cost based price increase on its u.s. kitchen and brazil major home appliance businesses this is not the first time whirlpool has raised prices due to rising input costs. they did do that couple months ago. and it also is announcing new

strategic actions in europe. not sure what it mean, but we will be on the conference call tomorrow morning to get the a better sense of what it is trying to do with its international business the stock up 9% on the big earnings the beat, but the stock has been down by as much as 35% in 2018 on the topic of tariffs and trade. that is of course one stock caught in the crosshairsuncerta. back to you. >> yeah, some relief there for a stock that was hit the last year >> yeah, being hit by the steel consumer kind of tax that has been imposed so another real downtrodden stock that is getting a bounce >> and if you are just joining us, there was a massive selloff on wall street negative territory for the year. nasdaq having its worst day

since august 2011. there is the final perform answ democratic >> and unclear whether there will be a boost to the overall market and back to phil lebeau for more on the tesla earnings. >> one thing that lot of people have been talking about is how tesla has debt obligations coming due and that might force their hand. there is no indication that they plan to race capital cash position increased from 2.2 billion up to 3 billion. so improvement there and they also say that our cash position should remain at least consistent in spite of the fact that they plan to pay roughly

$230 million in debt obligations. so investors are saying wait a second, we may not see the dilution that many were expecting in terms of a capital raise whether it is on the debt side or on the equity side >> thank you very much, phil let's continue the discussion. r roman and joe are joining us. roman, thanks very much. i'll start with you. in terms of the numbs, hnumbersw impressed are you? you must be kicking yourself your timing hasn't been great on these upgrades and downgrades. >> you know, we've always been bullish on fundamentals. our downgrade was really based on the behavior of the

leadership and elon particularly but i think that the numbers are solid. and if you think about the barricades just over the last year, it has been they can't -- tesla can't make the model 3, there is not enough demand, they can't make money making the model 3. and i don't know what people who are bearish on this stock have left the cash flow numbers and balance sheet look really solid. >> that is rich. you downgrade the stock. you can't claim now that you've always been bullish and you don't know what the people that are bearish have left. >> well, you know, there are two parts to it. there is your fundamental view and -- >> but there is a conclusive downgrade. >> yeah, that is true. but we have always been bullish on the fundamentals of this company. and that has not been the only part of the narrative. >> joe, i guess you're pleased by these numbers what do you want to hear on the earnings call that would cement your optimism?

>> well, to be fair, i'm optimistic more as a result of what we see happening over the next several years not the just what happened today. what happened today is nice. i'd like to hear broabout planso making the model 3 profitable at lower price points and i'd like to hear about plans for continuing to address the liquidity situation. i think that is pretty important. and in particular if they did decide to try to build a plant in china next year, that could take some money as well. but i do think that the numbers today are a validation of our longer term thesis which is that the company can continue to grow at a rate multiples of the industry which is by the way why we're buyers of the stock despite it being more expensive than any other automotive company >> so nancy, you are not a holder of tesla stock and you have a pair of xwul lish bulliss >> i'm worried about sustain

5b democrat ability and management depth and if we get the leadership at the board level, that is compelling and that would be a time to step back and say okay, maybe this is sustainable and maybe it is time we took the first double and that tends to be the least risky. and now we need to see the fundamentals and value the company on those >> what about the governance questions? that is something the bears are circling on. >> it is an important question and in the coming weeks, the company will announce a new chairm chairman i think that hire will be scrutinized and very important as far as it relates to the corporate governance how they will communicate with the public via social media, their guidance practices who they hire will be very key

>> are dodoes a james murdoch chairmanship take away the leadership questions that you have >> i'd like to see them hire somebody externally. >> mike, are you digging through t through the numbers? there are so many passionate short sellers. >> and i think that they will probably suggest that demand has been front loaded or that the margin guidance won't hold up or that the capital that they will need for the chinese buildout will be a big bite but i don't see anything that says that some obvious reason to undermine the stated numbers i haven't taken a close look the stock is a bit off its highs. so we'll see >> all right thank you very much for joining us let's stick with autos and the other big mover.

ford rallying after better than expected earnings. let's bring in michael ward and matt matt de-lorenzo. michael, how much relief do you see given the fact that they did not provide any sort of update on restructuring >> it would have been highly unusual for ford to give any details about a restructuring on an earnings call i would typically expect them to do that at the beginning of the year i did not expect any information on the restructuring as far as the earnings, i don't put too much weight on one quarter. however, when you look at north america earning $2 billion in pretax market where they are still in transition where a key plant is down, that is a pretty big number 8.8% in a seasonally weak third quarter when a key plant is down a very strong performance. >> does it speak to the shift of

higher margin trucks and utilities? >> absolutely. no question about it and ford made the statement that they are essentially getting out of car production over the next couple years in 2020, they will produce over 150,000 cars trucks make money, cars don't. so that is a meaningful change and you are seeing the company go through the transition and still make close to 9% margins on the year. that is pretty damn good >> matt, what is your view on this print and your target price? >> i agree with michael. the shift to trucks is really the driver in a lot of the profitability in the margins the average transaction prices are way up on the vehicles so ford is pretty well positi

positioned right now the car decision won't hurt them that much in the short term. we'll have to see where the market goes in the longer term and the other areas of concern, they raise a concern over the tariffs, the fact that their material costs may go up by a billion. but that is the underlying uncertainty that lot of the street is looking at when it comes to ford. >> all right we'll leave it there michael and matt, a business jump for ford shares and we have another earnings alert for you now. >> good afternoon. let's start with the top line here a little bit light, 1.65 billion, estimate was 1.7. the adjusted eps at 13 was a penny better, but the problem with the numbers is the weak fourth quarter revenue guidance. 1.45 billion versus the sgenkts

tags sgenkts -- expectation of 1.6 so look forward is the issue degrees m gross margin was 40% so that was positive this is a turnaround story just look at the chart and see it spiked 130% so it has moved very high. but analysts with l. wall want e that it continues to go ford this is after texas instruments missed that i ever numbers smh the worst day since november of 2008. and lisa su will be on

squawk on the street tomorrow to talk about the results don't miss it. the stockstill up still up 121% we'll see what tomorrow brings >> which makes it quite the exception in that group. still holding on to a lot of those gains. the market started sniffing out this kind of rollover months ago. and now with texas instruments, different starts of the market >> you can be a buyer of the chips right now? >> we'll take a fresh look at texas instruments. yeah, i think you can if you have the right time horizon. you can't do it if it is the next three months. but if you are a threeholder, in opportunity. >> does this hurt the momentum coming tomorrow? >> potentially although i have to say i don't think that we'll be either rescued by one or two or taken

down by one or two i think that it is kind of building into a much more macro index trade. i was looking at the equal weighted version and it was down 2.2% versus 3% for the actual s&p so it was the real big growth stocks that held up better that really got blasted today so not a silver lining, but there was a bit of differentiation going on >> and let's take a look at how the etfs are trading here after hours. qqq is trading higher. so it looks like some buying it is pretty thin trading here and spy also trading higher by about 0.4. and the dia higher by half a percent. so maybe some buying hard to really tell. it is pretty early we'll watch overnight and early

futures trading tomorrow i guess if you are bullish, you don't want to see more selling >> it kinddepends how you think. but it is true that this morning when the futures were regaining some ground in the morning after boeing, you know, a lot of folks saying that is not what you want to see you don't want to see a half hearted rally overnight because during the day, they have been just knocking it back. >> and the dow and s&p 500 fell into red no the yefor the year whole. bob pisani is in the middle of it bob, a summary of what happened. >> and again, the primary concern of the market reflects global growth slowdowns over china and tariffs. and to a lesser extent concerns about an aggressive fed.

what are the plox city are the s the weakest sectors. it was the industrial names. banks have been horrible, but they continue to act terribly. goldman sachs a good example banks did try to rally yesterday. but they were all down 3% today. and defensive stocks, there were positive stocks. good day for mcdonald's, verizon, coke, block toprocter e and you look at consumer staples in general, utilities for example, reits, you look at the gold complex actually held up well so there are pockets of the a

market finding safe haven. and you see materials with heavy volume bank stocks. semiconductor stocks biotech is not really a global concern. but generally to the down side and fine and he wially, the mar essentially trying to look through earnings into 2019 and it is doubting whether the numbers will really hold up. they are talking 10% market it will be 5% and issues around higher costs and the dollar strength in italy. buts if chi it is china and fed hikes that are imt papacting ths >> thanks for that >> and a testament to just how far we have seen large cap come that you have had a horrible trade out of those big momentum

names all month. horrible day today and yet they are still the best performers for the year. the s&p tech sector is the best performer overtaking health care we did see that broad decline here in the nasdaq that really accelerated at the end of the day. all are looking at correction territory. that new communications sector with facebook and netflix, that has more than half of the components in bear market territory off well more than 20% from their recent highs. today the real factor was that negative commentary from texas instrumentses in t es i e es ine and amd's report won't improve sentiment as we go into tomorrow again, a lot of these stocks at new lows a lot very much in correction

territory. and bear market territory. so technically very, very weak interestingly juniper, a gear maker, also talked about a little bit of softness in demand particularly in the compuloud computing sector but it did reaffirm its earnings, but few and far between looking for these stocks that manage to elude the sell off. a lot that were winning today, but small caps are the worst performers and this month down 12 port st. luci lucie --% and it has seen two six day losses here and again the month isn't over twice this month. it has been down six days in a row. this is an area people are very concerned about. bla back for you. >> and hardest hit was the

nasdaq, but still positive on the year >> exactly and the tech space ironically when you look at apple a lpl lp amazon, they have kept the sector up higher the drag are chips they are technically broken at this point >> amd earnings not helping out that trade tonight let's bring in david rosenberg, a chief strategist so you have been calling for this for a while you've been bearish pretty much all year looking for some of the warning signs in this economy. is that what you see happening in this market that equity investors are finally starting to pick up on the weakening signs like housing >> there has been a general heightened sense of uncertainty from all circles that we haven't really had any other time this cycle and of course we all know

that the pe multiple is correlated to uncertainty. and i think that the market is repricing growth for next year we all know second quarter was great about that we all know third quarter will be roughly 3% but you are not buying it on yesterday's news and next year looks like it will be a vechallenging year for the global economy and one statistic nobody seems to talk when, the leading indicator which has gone down now for nine months. and now back to december 2016. so the cloids are there for the global any next year it was obvious when you see the chinese stock market down more than 30% for the year and things start to crack there, i mean really early this year, it never

recovered, and there is not a snowball's chance in held ig that you will g hell that you will get a decline to that extent >> people wonder whether the fed will pause in terms of the interest rate hikes. do you think the inflation picture will allow them to do that >> well, i think that we have a differen different sort of person at the head of the fed. obviously if we tiffin to get a sharp downdraft in the-ofof -- f we continue to get the sharp downdra downdraft, about and it causes the fed to second guess the optimistic economic forecast for the next 12 to 18 months, then of course they will because. maybe they will be forced to ease policy. we all the know inflation is a

lagging indicate ernie waor anys it peaked in the summer. so i wouldn't be so worried about the inflationary backdrop. if the market goes down enough, and it causes the fed to reassess its economic forecast, that is the key. will things get bad now cause the fed to backtrack that is the point at which the fed will stop tightening monetary policy. but not before >> so with all these recalibration of expectations around earnings, what are you really talking about you are not talking about a recession. because the bulls will say this is a direction, it is long overdue, it comes after years of strength for the committee markets. and we are not looking at anything like a recession. so it shouldn't be any sort of prolonged slump or you disagree >> i think there is a lot of hope in your voice what has changed, this time last

year, the two year note yield is at 1.3%. and today it is hover goiing clr to 3%. soindicator for the whicheconomy. we know there will be a lagged impact from the growth overseas. we don't 4ri6 in't live in a va. it is just lag we know that next year we will get signature fiscphysica signiy withdraw and we also know that with certainty that the peak impact of the fed's rate hikes and balance sheet from what they have already done and what they say that they will do hits home next year in a very dramatic way. remember the fed hits the economy in both directions rate cuts and rate hikes with lags that are long and variable.

next year is the peak impact so if you are going to ask me could we see a recession second half of next year? i have absolutely no problem making that base case scenario but it isn't my only scenario but i think recession next year is higher than most are calling about. but calling for a recession is very difficult and so hardly anybody hardly anr it but i think that the conditions are ripe for it and that there will be serious clouds over the u.s. economy >> all right thanks very much great to see you and be sure to tune into cnbc, we have a special on the market selloff coming up tonight 7:00 p.m. eastern time >> and now a news alert on amgen.

>> and they just announced that it is slashing the price of its big drug by 60%. now they say they are doing it in order to try to lower the co-pay, things that medicare beneficiaries have to pay. amgen closed down when 5%. not really move management after hours. this is because the drug didn't become a big money maker because there was reimburse 7menreimabo reimbursement trouble due to the price. and amgen gives credit to the trump administration showing it shows support to try to lower drug prices. and this is a day before president trump will give a speech about drug prices tomorrow so you can see it was a bad day biotech. >> and still interesting

development. and two executives taking a leave of absence at wells fargo. the company just announcing that its achieved a minuchief david julian have begun a leave of absence from wells fargo and no longer members of the company's operating committee. the leaves relate to previously disclosed ongoing reviews by regulatory agencies which is in connection with the historic retail banking sales practices they are unrelated to the company's reported financial results or internal financial controls so continuing fallout over the retail sales practices of wells fargo two executives taking a leave of absence back to you. >> sue, thanks for that. clearly the important thing in the announcement is it's not down to current reporting standards which everyone gets

worried about when it's an auditor. but the fact that two members of the committee just being removed. >> what took so long. >> what took so long so many times you hear them saying we think the worst is behind them we believe them. but add odd that you get the two high profile departures but wells not trading down because it's not related to the current financial reporting. it's been a wild after hours session. tesla, ford, visa all beating street dpimts. the chip trouble amd accepting on the fourth quarter guidance following a 9% fall in actual trade now microsoft rallied after the bert than expected earnings joining joining us to give the take robert lunaa and ivan from tigress financial partners i've starting with you what's your take on the numbers do you

remain positive. >> absolutely. it's a great quarter they own the productivity suite. i don't know anybody that doesn't use microsoft office they have successfully transitioned from a licensed model to a subscription model. and they keep improving it almost every other week you see upgrades and now everybody is paying $8 to $16 a month they still dominate the desk top operating system and they are growing strongly in cloud. and they have a tremendous presence in gaming all the key areas they continue to do well. >> rob, how long can they keep up 70 to 90 peppers growth in azure cloud business. >> that's amazing. to ivan point this is a great company hitting on all cylinders but the only problem is you look at the stock it's no man's land. the dividend is down to 1.5% and it doesn't have the growth i believe to where you pay the preem dwrums you are 24 times forward earnings right now

even if you want to look at the back of where it's been 18 and a half times earnings saying that's in in the rear view mirror it's cloud now and that's the future, put a google multiple on it that gets the stock around $95 a share we like the company a lot but at these valuations we just don't -- we can't get too excited. >> jump in here nancy. >> yeah, i mean i guess i would like to think about other places you want to be in this environment. so this is a high quality company with a high quality management team. and i think sometimes when you are in a dekrerlting growth environments in where you want to be despite valuation. i'd like to hear the feedback on that. >> what do you think object the on that robert. >> i'm always afraid to say despite valuations i think the valuations matter a lot. stocks don't go because they are bad companies. the s&p isn't down because of five hundred bad companies just a at these prices and especially the environment where we are right now where people give up growth for things like

dichds look at general mills, proctor & gamble those stocks raleddied hard today that used to be microsoft with the 2.5% yield. 24 times forward earnings i can't get that excited about the stock. >> ivan can microsoft shrug off the down space. >> i do like divides but they don't support stock prices and they do have plenty of cash to increase the divides and increase the share buyback there is no place i'd rather be than microsoft and they have other growth drivers that three will improve- the next big area is voice interface and they could improve on courtena. that ties the ecosystem together they own the gaming box in the home which also can die are tie in the cortanq interface the surface laptop and tablet are selling well they just introduced a lower priced model to better compete

with the apple's ipad. but they still experience very strong demand for the higher priced model as does apple experience strong demand for the higher priced phones so i think they are hitting on all cylinders. and i mean, imagine your computer wouldn't work without them for the most part and you won be as productive without the office suite for the most part. and the -- they are benefitting from the trend with the migration to the cloud they are on the forefront of every technology trend >> ivan and robert, great bull/bear debate thank you both very much. >> market in agreement ivan up 4% after hours tesla earnings call coming up fill lebeau tells us what investors want to hear after the blowout numbers. >> really three things can they sustain the profitability? doesn't mean they will be as profitable in the fourth quarter. but investors want to make sure it not a one and done and to that end what's the liquidity situation?

it increased up to 3 billion from 2.2 billion in the second quarter. what happens as we look out into the fourth quarter, the first quarter, et cetera going forward? will the capital raise still be off the discussion table and finally, what's elon's attitude i know this sounds strange but i think the investors -- they feed off his attitude clearly he will be relieved that they have turned a profit, as he forecasted but it's reading between the lines. what does veto say that will give investors a real sense of what elon thinks about the future at tesla? this call starts by the way as 6:30 eastern time. typically starts at 5:30 but because of the forward call analysts said can we move it back it will starpt at 6:30 eastern time back to you, guys. >> got it fill lebeau thank you very much. more than 12% up after hours. >> it's amazing. if you want to do a thought experiment and say let's say there was a real deal to take the company private at $420 if

they report the numbers they would get sued for stealing the company. that's how much of a huge rage range of what the company could be forth if they can turn a decent margin. >> you make an important point earlier, mike, about the pe multiple which it doesn't have when it's loss making when it suddenly does have if it starts at four quarters of earning. >> they're not valuing like an auto stock. >> it will at some .1 day. >> but in the tech bubble you saw this dynamic a little bit. some of the high flying tech like yahoo! reported earnings they looked like a stock and you couldn't just wish for you know for the fairy dust. >> we have more detail and visa numbers. dee bosa has been speaking with the cfo. >> and visa bright spot in the after hours. strength this year is really about the u.s. consumer and the strengthening economy. the cfo telling us exclusive quote with the tailwind of strong global economies and rebouft consumer spending

enhanced by the growth of strategies that we have outlined we look forward to a another strong fiscal year and guys the fiscal 2019 projections in line with the street expect aches pushing the stock up about 2% in the after hours. guys. >> dedra bosa as dedra mentioned is the global economy low slowing oh or not in you look at visa. >> dedra. >> you look at the consumer poif look good. >> they do but it's not straight spending they are also bifurcating from the changing ways people spend it's hard to tease out yes the global economy in many areas is losing steam i don't think it's shrinking but the market move in the last few weeks has been almost a belated catchdown effect to what the other markets are saying not to say anybody could see it coming. >> now are we oversold. >> very, yes technically speaking stretched

down to the downside you rp going to see damage down. folks are saying do the charts look so good that they are good, they are essentially primed to rice from here for a decent bounce. >> nancy quick thought. >> i'm looking forward to tomorrow. >> and deploying cash in the morning. >> i think so we are picking away. >> top name you deploy cash to. >> we look at plates where we can add boeing and also texas instrument one winner and one looser. >> how much can -- we get some more big earnings like amazon come out tomorrow. >> goog zblool we ask this every day can that turn the tide but amazon has been a blrpgt for the momentum names. >> it has. if they disappoint, i would say look out but if they don't i think what happens is every stock gets obilli obilliot billiot rated and then you are primed to have a second second half. >> you might see momentum

feeding off each other with the technology stocks. >> nancy thank you for joining us great to have you with us for the hour be sure to tune in tonight at 7:00 for the market selloff special. in the meantime we have full coverage here of the selloff of the after hours moves and some of the earnings calls getting under way melissa lee getting ready for "fast money" hi melissa. >> a big show we pick it up froer from here "fast money" starts right now live from the nasdaq market site overlooking times square the traders are tim seymour. karen infinerman the the on a busy fats earnings straf dwans reports from tesla, ford, microsoft, advanced microdefines devices and visa coming out moments ago. everything is higher except for chip stock amd which is crashing full team coverage the conference culls job lipton on the microsoft beat dedra bosa watching visa and contessa brew brewer watching the las vegas sands. but breaking news iv