>> take two, red redemptions, activision blizzard, time to buy and he has a six smack >> strauss >> which is different from molson and bud >> have a great night. >> thank you, thank you. nice to meet you thank you. >> thank you for watching. "power lunch" starts now i'm becky quick. stocks tumbling now. apple and tech fueling the declines why one strategy that stood up to the worst market crash since the 1920s could be on the verge of a major comeback. we'll explain straight ahead reimagining ge shares falling below $8, its lowest level since 2009. the new ceo laying out his turnaround plan on cnbc. and the wildfires in california raging on more than 30 dead now, hundreds of people still missing. thousands of structures destroyed, and shares of utility companies there getting slammed. we are live on the ground with the very latest. "power lunch" starts right now

>> welcome to"power lunch. i'm dominic chu. it's a sell-off on the street in progress the dow and the s&p down 1%. the s&p falling below its 200-day moving average and the nasdaq getting slammed the most, down around 2% right now apple one of the big culprits, dragging down the entire sector in tech after one of its suppliers cut its outlook hinting programs at weaker iphone orders. chip stocks getting whacked because of that. ethe tf on pace for its worst day in more than three weeks crude in know cuss, higher for the first time in 11 days. reports opec and a yup of exporters are moving closer to a possible production cut. >> dom, thank you very much. time' tyler matheson the action driving today's drop, about a 460-point drop for the dow, goldman and the financials big drivers.

bob pisani joins us from the floor of the new york stock exchange hi, bob. >> reporter: the big story a tech valuation reset at apple, one of their suppliers, lumentum which makes optical components for apple products talking about a lower demand for one of its principle suppliers. everyone is assuming that is apple. you could see the other suppliers for apple, corvo, cirrus logic, jabil trading to the downside we've had a valuation reset, which is what i'm calling it again today. you see everything down 2%, 3% or 4%. what is going on the market issues right now. number one in my mind is the tech valuation reset i don't know where that will end up but that's number one that we've got. number two is the trade war. is the trade war going to continue into 2019 or are we going to see a true sometime the end of the month, maybe we don't get tariffs in the beginning of january. the oil weak as soon as a mystery to everybody people say it's a supply

problem, others say the overall commodity market is terrible the other commodities aren't doing well it's signaling global slowdown that's a big issue overall energy stocks today a 1% rally in crude for the first time ever, and we're not doing too much cabot, a gas oriented stock, eqt not down as much schlumberger is down 20% and a lot of discussion about the big banks and what's going on with that goldman is down. there's speculation what, if anything lloyd blancfein might be having with that. bank of america, jpmorgan chase, citigroup to the downside. rates are flattish maybe some specific goldman issues but also issues around rates and maybe about capital markets in the first quarter of 2019 guys, back to you. >> bob, thank you very much, bob

pisani the sell-off we've seen in equity since october sending investors fleeing to quality what the quality stocks and what does it mean for the market overall in rick santelli has be - mike santelli is looking closer at that. >> the quality stocks and wall street jargon are businesses that have high profit margins not dependent on the overall economic growth rate and low debt levels. strong cash flow, not leveraged and they have defensive properties if you want to look at stocks that are near 52-week highs think of mcdonald's, starbucks walmart is up there, lots of health care. health care is the best performing sector this year, up more than 11% year-to-date the question really is, what does it tell us about the market's character going into year end well, it does tell us that a lot of the fears of potentially peak growth rates and financial tightening by the fed and just by the markets are wearing on investor preferences right now, and they're kind of hunkering down in some of these names that

seem like they can ride things out. it doesn't mean it's predict iv of a worse market environment but you see this when volatility remains high these are not value stocks, not necessarily cheap, they're perceived as being able to weather tougher times a little bit better lot of wall street also tyler talking about how this should be a strategy going ahead you hear the strategists say prefer quality over riskier more cyclical type names here >> mike santelli, thanks very much is it time to start looking at value shares? let's bring in jack, chief investment officer and kate warren, investment strategist at edward jones jack, let me start with you. where are you seeing value, and is it in those value stocks? >> yes, there is, it's an interesting play in value, but there's somewhat of a catch. the problem is, a lot of value stocks do have a lot of debt,

and in the event that we are seeing a resetting of interest rates back to fair value we've had low market interest rates for ten years, that could be an offset there is a mild post out there and i think the berkshire buy-back could be the signal to say you know what? most of these berkshire companies are value oriented companies. that's an indication that warren thinks that that's the place to be >> kate, let me ask you a similar question, but phrase i maybe a little bit differently given how much some of the big tech stocks are off, the fangs, a couple of them in bear market territory, i believe amazon has fallen 20% below its highs, facebook 36% or thereabouts. at what point might some of those turn into value opportunities, from where you sit? >> well, they certainly could, but they aren't there yet. we have hold ratings on both of

those and it really has to do with the outlook for their business going forward, the growth rates and the fact at higher interest rates, you have to discount the cash flows and they're worth less than we've seen at interest rates when we look at value, we look at diversified companies that have solid dividends that are growing, and have multiple lines of business, and some pricing power. now, in some cases, that's true of some of the fang stocks it's not true of all of them, and we'd be cautious on buying things that are down the most, largely because they're not necessarily the best in the next phase of the market. as we get late into the cycle, what you want to look at are the companies that are able to create their own future, and that's some of the technology stocks but also stocks in other sectors. >> let's turn, kate, just pick up there you said there were a couple of them that you like that have diversified lines of business. ge has that. growing dividends, ge doesn't

have that. so you're looking at other kinds of companies, maybe in industrials? >> yes, in industrials, we'd look at a company like united technologies, which has the multiple lines of business, well diversified, its acquisition of rockwell collins, scheduled to close this quarter should expand its product line it has growing earnings which is a problem of course with ge and a track record and we expect growing dividends in the future as well. we do think, in addition, that it's been hurt by worries about trade with china and as a result, if you get any kind of resolution of that sometime in 2019, we're not optimistic for later this month, it's likely to be a catalyst for upside in those shares so we're looking at companies that are very well positioned across different lines of business, and have that growth potential as well. >> we just want to call your attention, folks, this idea we are down about 495 points in the dow jones industrial average, so these are session lows as they

stand currently, off by about almost 2% at this point. jack, i want to go back to you as we talk about emerging from the midterm election cycle and looking forward into 2019, how much should investors pay attention to the political environment in the united states is it just noise for investors, or is there something that we really have to key on in the legislative and presidential agenda in 2019 >> no, i think it's critical one of the things is the fact that, for example, the republicans held the senate means that the tax plan that was put in place earlier this year will remain in place, and that's critical for some of the pieces like the qualified opportunity zone program that, in fact, we're doing a fund for the other, of course, is will we get impeachment or will we get infrastructure my guess is we're going to get infrastructure, so i think that governments are now focusing less on monetary policy and more on fiscal, and my sense is, it's going to be some kind of a public/private partnership, so i

boo would agree with the infrastructure guys and the industrials but i think ge, the multinational that leveraged the global supply chain was probably yesterday's news, and now we're moving more toward smaller more specialized industrial companies. >> i'll throw this out as a jump ball to either one of you. any thoughts on apple, because it was for so long considered one of the fang stocks, but other people, including warren buffett, would look at this and think it's a consumer staple is this a value company, a growth company what do you think? >> well, to me, it's a growth company, just because of the valuation, but i do think it has, as buffett would argue, it has a hugely stable brand, a very loyal customer base it has many other channels from which it can continue to pipe into that audience, so the fact that we're seeing a blip in, you

know, potential supply to me isn't any reason to turn tail on apple stock. >> i would jump in, we have a hold rating on apple, and it's largely because of the slower growth rates, basically with the large business, which you've got out there is slower growth rates and i don't think that's entirely reflected in the valuation. so when you're looking at growth or value stocks, you always have to compare what's the company going to do with what you're paying for those growth rates in the future >> jab ablin with cresset advisers and kate warne, thank you. the most destructive wildfire ever to hit the golden state of california and the pictures are shocking. more than 30 people are dead, thousands of homes have been torched, and there is no letup in sight check out what's happening right now shares of the big utility companies that have exposure in the state, pg&e and edison international both getting hit hard pg&e at its lowest level since

20 2003 aditi roy is live on the ground in camarillo, california is there any positive development happening out there right now? >> reporter: dom, earlier yesterday the winds calmed down. right now the wind gusts are the highest all day long they'll stay at this level for the next few hours here. up north, the camp fire is the most destructive fire in the state's history and matched the record for the deadliest, and beyond the tragedy of those deaths, we're also getting some new numbers now on property damage zillow reporting nearly 22,000 homes are threatened in the woolsey and the hill fires alone in southern california, with a combined value of $42.2 billion. we're also seeing an impact on the markets, as you mentioned, pg&e shares in the red by double digits the utility blamed for a number of fires in northern california. shares of edison international and sempra down.

farce insurance estimates, the tubs fire resulted in payouts of $8 billion so far, the camp fire has resulted in an additional 1,000 homes lost, so it will be interesting to see how that number ends up and in its latest earnings call, travelers insurance last month warned investors about upcoming wildfire payouts, that was before the latest round of november wildfires hit dom, you could probably hear the helicopters buzzing above me, no doubt going over those fires with water >> we can hear how much wind there is as well becky and i were just noting that aditi, stay safe out there thank you so much for that report reimagining the future, general electric ceo larry coke speaking to cnbc laying out his vision for ge's turnaround will investors buy into his plan the stock falling below $8 today on pace for its worst year since the financial crisis back in 2008, over a decade ago.

the major steps coke and ge management need to take, next here on "power lunch." i'm ray and i quit smoking with chantix. in the movies, a lot of times, i tend to play the tough guy. but i wasn't tough enough to quit on my own. not until i tried chantix. chantix, along with support, helps you quit smoking. it reduced my urge to smoke to the point that i could stop. when you try to quit smoking, with or without chantix, you may have nicotine withdrawal symptoms. some people had changes in behavior or thinking, aggression, hostility, agitation, depressed mood, or suicidal thoughts or actions with chantix. serious side effects may include seizures, new or worse heart or blood vessel problems, sleepwalking or allergic and skin reactions which can be life-threatening. stop chantix and get help right away if you have any of these. tell your healthcare provider if you've had depression or other mental health problems. decrease alcohol use while taking chantix. use caution when driving or operating machinery.

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no question about it. i am a techie dad.n. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. welcome back, everybody. check out the dow jones industrial average right now, just moments ago we fell below 500 points, the weakest levels throughout the session, just

below that now down 492. goldman down by about 7% apple off by more than 4% and boeing down by almost 3% we will continue to keep track of what's been happening here. again, heavy pressure on this first trading day of the week. larry culp marking six weeks on the job as ge's ceo with an exclusive interview with our david faber. listen to what he said about the decision to reduce the dividend on general electric shares >> step back from all of that and given the way the stocks traded, i think we make the same decisions today. those are the right decisions to make sure that the company is facing forward and dealing with the fact that we do have a lot of leverage. i think we all agree in that regard, but we have a number of options to bring that leverage down over time, and the company is very committed to doing that. whether it's an equity analyst, whether it's the rating agencies, witness the downgrades, or what we said ourselves, we need to bring the leverage down, and i think we've

got plenty of opportunities through asset sales to do that in the last six weeks, it's my sixth, marks six weeks on the job, i've heard from lots of people across our markets, people who have interest in ge assets, and i think that's confirmation that we have quality franchises and frankly that we have options two weeks ago, folks were i think understandably asking the liquidity question i think we've. you the that to rest, given the fact we have 20 billion of cash, we have a robust program and $40 billion of bank lines. we've only tapped two, but i think that gives us a foundation, and as john wooden, the famous basketball coach, said, be quick, but don't hurry. and i think that's the mind-set that we have we look at health care, for example, a tremendous franchise. we talked in june about an ipo there, where we take 19.9% of the proceeds as cash we have flexibility. we have options there.

>> i guess you could flip that around though. don't hurry, but be quick. can larry culp fix general electric jeff sonnefeld from yale school of management and cnbc contributor. only six weeks in, he has a lot on his plate what needs to happen >> it's hard the taking charge process for new bosses, new leaders were done inside ge, studies decades ago, it takes two years to learn a new job. he doesn't have to years >> he doesn't have a year. >> no, he's through the taking hold process and usually a person immerses themselves to see how people respond to whatever you've done he doesn't have that luxury. he's pounded each day with tidal waves of bad news. of course, the disappointing quarter as he stepped in, the big writedowns, the bad news on the dividends that they issued out there, the accounting investigation, if there's anything scandalous taking place. how do you get out from under

the bad news is hard, and when you take a look at great turnaround leaders, bob eiger of ge and others, they're able to present a vision, a positive scenario here is catching the falling knife. how bad is bad each day. >> one of the issues he's faced with, though, he's heard from a lot of people who have a lot of different in ge assets should there be an ipo what needs to be sold off in they're not going to issue more equity, not in the plans >> it seems like a mixed message in his interview he's reassuring people we have stuff we can put up for sale to deal with the cash problem if there is one he says there isn't one, we have the $20 billion of cash, but of course our jpmorgan analyst tells us today they've got $100 billion of reasonably short term liabilities coming their way, how are they going to pay off the debt coming their way and they don't really have that much cash, so he's saying we can heave things off perhaps. perhaps the health care business he knows so well is the one

people talk about, he knew that very well from danaher >> why ipo, why not sell it? >> whether or not he could get the right price for it, whether adanaher could be a buyer. the size of it is hard to digest it's a reminder, people complained about for decades about the highly diversified conglomerates. when tyler and i started our careers, ltv and itt for the most part largely fallen by the wayside of the diversified conglomerates. they never made sense. people at michael porter at harvard saying ge is on borrowed time others saying they're proving the rule wrong and made it work. now the disjointed pieces don't fit together >> the conglomerates have gone out of fashion but maybe after you and i are long retired there will come a time investors decide they're back in fashion and these disparate business

assets will be better together than they are separately let me ask a different kind of question here. is it harder to be mr. culp coming in from the outside, trying to do what he's doing, than it would have been for yet another insider to do what he's doing? >> usually insiders make the more profound changes. they know where bodies are buried and have goodwill with the board. unfortunately in this case, the board that fired john flannery is not the board who hired him the board wasn't fully on board until late june. they signed off on this new strategy in late june, and announced in july and they begin to execute it in the doldrums of the summer in august, they fire him two weeks later. it seemed a little hasty >> with the investigations, i think that changes the picture, too, makes it difficult to bring in an insider to be doing something like that. >> yes >> so the idea of new broom sweeping clean, the old ra

rastafarrian proverb, new sweeps clean but old brooms get the corners. tom horton the chairman is just as savvy, done a fantastic job and contemporary in age at american airlines. it's a great leadership team with promise who wants to take this job >> we've been slamming ge for a while now, and rightfully so, the stock has taken the brunt. is there some bull case to be made the fresh perspective from larry culp is just what ge needs to get things turned around, bring in an outsider, get all that stuff done, despite the fact they maybe don't know the corners as well as that other broom did? >> i think there is aa belief he don't have my dewy-eyed nostalgia from the past. flannery made some dramatic moves but didn't have the optics there is something about the symbolism of the new person that gives us extra credit. you look at him exiting from the

dow. lot of companies that left the dow, ibm and coke had left the dow at one point and rejoined. have they straightened themselves out they possibly could rejoin, but right now, i think there are three original members at least old time members in technologies and procter & gamble and maybe one other that have been around from them, but most have fallen by the wayside, mandeville and rca and the onld at&t that was there. the theory of the economist, the great triumphs of capitalism are the seeds of their own failures. they build large bureaucracies that kill themselves and we're looking for the facebooks, the new thing, et cetera ge at its day, edison was the mark zuckerberg. can they bring that back in? that's what jeff immelt was trying to do, make ge cool, but the optics weren't enough, and i think one thing we have to question is really what's going to happen at ft. point channel

boston will they build an edifice you can see from the moon or maybe something less grander the theory of danaher was an understated firm and ge will probably be more humble a firm for obvious reasons. we need somebody to take these jobs we're lucky he's there to do it. >> jeff, i want to thank you very much for your time today. it's always good to see you. >> thanks. >> jeff sonnenfeld with the school of management democrats are set to take control of the house next year, and a number of big companies are already in the crosshairs. we'll tell you about that story, and as we head out to break, three movers in this sell-off, amazon downby more than 20%, what some traders call a bear market, down again more than 20% for its recent highs, nvidia one of the biggest losers, 100 the dow transportation index and correction levels down 10% from its recent high. avis leading those declines. stocks to watch in this market

sell-off we'll be back aevfter this brea. because each job in energy creates many more in this town.

welcome back to "power lunch. we have a sell-off on our hands in stocks. take a look at oil, also right now at its worst levels of the day. the president tweeting just moments ago "hopefully saudi arabia and opec will not be cutting oil production oil prices should be much lower based on supply. that could be moving markets as well julia boorstin, we go to for

a market clash >> comcast shares moving lower, down about 1%, after president trump tweeted "american cable association has big problems with comcast they say that comcast routinely violates anti-trust laws these guys are acting much worse and have much more potential for damage to consumers than anything at&t, time warner would do charlie gasparino," quoting gasparino earlier today on fox business this comes after today the american cable association called on the department of justice to open an investigation into the business practices of comcast nbc universal, which is of course cnbc's parent company, the aca saying they are "focusing on harm stemming from the dominant communication firm's control of cable systems, tv stations and regional sports networks," concentrating on some of the largest local markets in the industry tomorrow on "squawk on the street" we'll have maka makan delrahim about this and more we've reached out to comcast for

comment and have not heard back yet. we'll back with that tyler, over to you >> julia, thank you very much. democrats have not officially taken control of the house of representatives yet that doesn't happen until the first of the year, but already, some big companies are in their crosshairs ilan mui joins us from washington to explain. >> the dems versus corporate america next year. they are determined to use oversight authority to turn up the pressure on big business some of the names they've called out so far, amazon, at&t, deutsche bank, chevron, boeing, green briar, in just the days since the midterm election, and they're all companies connected to president trump or his top lieutenants. democrats are betting that business could be a back door in to investigating the trump administration itself. in addition, there are four industries likely to face extra scrutiny at a new congress, financial services, pharmaceuticals, tech and energy i talked to a lobbyist who has been tracking every letter from

democrats to corporate america over the past two years, and he said that more than 100 requests had been sent, covering just those four sectors so lots of companies are starting to get their affairs in order. they're prepping response materials, identifying a point person to handle potential investigations, recruiting a crisis communications team, for example, so guys, we fully expect the democrats in the house will use their subpoena power to make sure they get answers. back over to you >> ylan, in some case, it's not the companies themselves facing the questions but maybe the department of justice or the postal service, i'm thinking specifically in the cases of at&t or amazon they may be the ones who are fielding the questions here, not the companies. >> it could be both. the democrats want to use the oversight on two tracks. the mueller investigation is one way they want to use the oversight authority, but turning to the businesses and what has been an administration that is filled with business executives

is one way that they feel they can hold the administration accountable in ways that are perhaps not as obvious >> ylan, thank you very much, ylan mui folks, it is turning into the most deadliest and destructive wildfire in california's history shares of the big utility companies there, pg&e and ed iton international hit hard. what's really happening on the ground right now, as we head out, let's look at what's been taking the dow down this hour, goldman, apple and visa among the biggest drags. boeing is down, too. we'll talk more about this sell-off when we come right back

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welcome back to "power lunch. let's get a check on the sell-off this hour the three major averages tumbling the dow dropping by more than 500 points at its low in the last half hour the s&p 500 breaking below its 200-day moving averages and the nasdaq down about 2% check it out right now, the dow down by 450 points technology here, apple, other tech stocks really fueling the declines, although the weakest

component we've seen in the dow is goldman sachs plus check out oil prices. oil just turning negative after a tweet from president trump moments ago saying he hopes saudi arabia and opec will not cut production see right now oil down to $59.98, back below $60 a barrel, the first time earlier today we had seen wti up and that's the first time that's happened in the last 11 sessions also, king dollar is pushing higher, jumping to its highest level since june of last year. sue herrera has some headlines >> here's what's happening, everyone we begin in southern california, where firefighters there say they have able to hold the so-called woolsey fire, but they are struggling to get the upper hand the fire continues to burn in various parts of ventura county and los angeles county it has grown to more than 85,000 acres, and it is just 10% contained. a suicide bomber killing six people near a police checkpoint

in kabul, afghanistan. the attack came as hundreds of demonstrators gathered in kabul to protest the government's failure to prevent such attacks. british more than minister jeremy hunt meeting with saudi arabian king salman in riyad the war in yemen and murder of journalist jamal khashoggi the topics there bruno mars part of his 24k magic world tour thanksgiving day meals go toward the salvation army's 48th annual thanksgiving dinner meal program. good for him little bit of good news to end on guys, back to you. >> sue, thank you very much. the latest on those wildfires ravaging california, amidst of that and the devastation and the human dislocation and tragedy, shares of two large utility

owners are plunging today. pg&e corporation stock down nearly 16% right now those shares were down as much as 37% at the lows of the day, and edison international also sliding. those shares found around 11% right now, as you see. there more downside risk ahead for shareholders joining is cfra analyst chris muir he downgraded ed iton international and lowered price target on pg&e on friday citing the fires. chris, welcome, good to have you here >> thank you, glad to be here. >> explain the ultimate risk to the two companies we just mentioned and maybe sempra is there an existential risk to the companies and if so, how and why? >> well, simply said, it really comes down to regulators with regard to last year's fires, there was a new law that was passed that's going to potentially shield the utilities up to the point of bankruptcy,

meaning that if there's sufficient liabilities, they will be protected from going into bankruptcy. however, for going forward for future fires, if the companies are found to be negligent, they could be on the hook for all of the costs going forward, and edison international has said in its filings it's having trouble finding wild fire insurance for reasonable cost and there's a chance the wildfires continue to happen, and utility equipment is continued to be blamed, then they may not be able to find insurance at all in the future >> one of the providers was implicated i guess for causing some of the fires last year, and so that is really what is at issue here were these providers involved in any way in causing these fires, right? >> that's partially right. if their equipment starts the fire, inverse condemnation laws

require utilities to pay out all liabilities but if certain conditions are met, they can recover the cost from customers and those conditions would include whether they acted in a reasonable manner, and whether they were not negligent and things like that >> and where does the state come into play on these, as regulated utilities that regulate their rates? >> i'm sorry, could you rephrase that >> the state, what is the state's role here, because these are regulated state utilities, right? >> that's correct. the states set the rates that the utilities can charge customers, so if they're found to be liable for these wildfires, and maybe they did act in a prudent method, they acted to prevent wildfires, they maintained rights-of-way clearances along their power lines in a proper manner, the state regulators may permit the utilities to recover the cost of the liabilities. if they were found to have acted negligently, maybe they didn't

trim a tree back far enough or something like that, and that caused the wildfire in a high wind situation, then the utility itself could be liable and their shareholders could be liable for all the damages. >> chris, one of the reasons i've seen, why we've seen increased wildfires like this, why so many more structures are damaged, why people are in the midst of these wildfires at this point is buildings have been built within these urban wildland areas at a much higher rate do the utilities have any choice but to service those areas, for example, if they're worried about being held liable, can they say they're not servicing buildings, structures, towns in the middle of the woodlands? >> well, they've already cut off power in the high wind situation just a couple weeks ago, to a certain area, because of the risk of wildfires, but california is in a state of severe drought conditions in many areas, and drought conditions in some other areas, so that really increases the risk of wildfires.

so the utilities are already serving those areas, but they have the option to shut off power along their power lines, if they are able to, but if they, for some reason, chose not to shut off the power, then they, and the fire starts, they can be on the hook >> you've got cell rasell ratin pg&e and edison and sempra you have a buy quick thought on that one. >> sempra energy also has lots of different businesses outside of its utilities, and one of those businesses is the lng business, the export business, which looks to be very promising for them in addition, they basically don't have any fires right now, and haven't had any fires last year >> right >> things right now for them seem to be fairly calm however, if there is a fire in

their area, i would have to reevaluate my stance >> chris muir, thank you for your time, cfra. stocks are tanking right now, but let's focus on the oil market, which was moving higher in the first part of the time in this day it was going to be up for the first time in 11 days, but it just turned negative after a tweet from president trump moments ago saying he hopes that saudi arabia and opec won't cut production, despite the recent oil slide, your next guest is still bullish for the remainder of the year with an $81 price target for west texas intermediate abishek, thank you very much for joining us here today. as we talk about the price action, this could be the longest losing streak on record for west texas intermediate. is there an end in sight >> yes, thank you for having me. yes, i think what we are seeing is clearly two main reasons that driven oil down. october was a macro driven decline on the back of almost all of the asset classes coming

off, and then in november the physical market took over and we've seen the physical markets even now are quite weak and that is clearly showing up in the market, in the oil prices that we see we are seeing cushing stock prices go up why are seeing pricing reaching our target levels or not, they'll recover because of two or three main reasons. one is we expect u.s. production growth to slow down towards the end of the year and into first quarter, because of constraints that are related to takeover capacity and also slowdown in the drilling and completion activity second, we believe that opec is likely to be more proactive than reactive now if you keep aside the sound bites which we hear from u.s. or any other country right now, we have seen from december '16 accord that the u.s. has done a

pretty good job in trying to basically be there when the oil is needed more and trying to reduce the oil when oil is excess in the market i don't see why opec would let go of that strategy it found so difficult to get all the members on the table especially having russia on board. i think they're going to try hard to keep the oil markets balanced, and finally, i think what has led to really the excess oil surplus in the market is the fact that iran's oil was still in the market until the 4th of november, so the 5th sanctions came into force. what we saw was of course some of the waivers as a surprise, which came to us in the market from the u.s., but to be honest, with close to 50% still expected to be cut from iran by most of its buyers, which are eight countries that we have over here announced by the u.s. state department, we still believe that ultimately shall the goal for the u.s. would be to make sure the buyers take those imports from iran closer to zero so eventually towards the end of

the year, next year we believe the markets will be well supported. >> abhishek desponde of jpmorgan thank you for the insights julia boorstin has a market flash. what is going on, julia? >> well, dom, comcast responding to president trump's tweet saying the american cable association has big problems with comcast and its nbc universal acquisition of several years ago, and saying that comcast routinely violates anti-trust laws. comcast responding saying the market is incredibly competitive with new programmers and distribution platforms, saying they are "continuing to innovate in conducting our business in splins with anti-trust laws and other legal requirements," going on too say "among other things, comcast brought networks to the x1 platform and saying we believe aca's letter is without merit and constitutes an

inappropriate attempt to gain leverage in the commercial marketplace. comcast shares trading down about 0.7% back over to you >> thank you, julia boorstin folks, check this out, a mystery chart for you, up almost 500% in the last two months. we'll give you a clue, it's a pharma stock also investors are betting on positive results of a trial conducting on a heart drug those results are out, and we have them. the ceo of the company will join us next. ot that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

shares of amarin falling after mixed results in the tryout for the heart drug. the company's ceo will join us in a moment. meg terell explains why the stock is down. >> this stock gained more than 600% in the last three months, much of that on a single day in late september, when amarin presented preliminary results of a major trial of its heart drug, the medicine called vascepa was derived from fish oil and shown

to reduce heart attack or stroke by 25% compared with placebo investors and the medical community have been anxiously awaiting the full details of the study, represented over the weekend at the american heart association conference in chicago. they generally supported the initial chicago. they generally support the initial finding but some researchers raised questions about the placebo group which was given mineral oil and saw increases of bad cholesterol the question is whether that caused the placebo group doing more poorly. you can see amarin down 7% joining us now is the president and ceo of amarin. thanks for being here. >> happy to be here zbl abo >> about that placebo question, how do you look at that and the stock impact nchts so i've been coming out the plast three days we've been at the american heart association meeting. this study shows a 25% reduction

in cardiovascular events this is on top of staten therapy. the overall reception of this from physicians has been amazing. people are referring to it as the most significant advance in prev care in 30 years we presented our data at the american heart association it's important to have data subject to scientific debate and review by the new england journal of medicine. we stand behind the results and the published results in the new england journal of medicine and believe that this is a therapy which is well positioned to help millions of patients >> do you see that question being a bit of a hiccup for you guys in terms of the research community? will they still have questions about the effectiveness of the drug or do you think that this is a stock overreaction? >> i think as people begin to understand our data better, they'll appreciate that this drug does much more than lipid

modification we're talking about questions and a ploacebo using mineral oi. it's an agent approved by the fda going into this study. the reviewers from the new england journal of medicine concluded that the mineral oil couldn't have explained this significant result we encourage people to understand our results better and look forward to helping many patients with these results. >> so your drug cost about $2,400 a year compared to other new cholesterol drugs is actually a lot lower some of the new class of drugs cost $6,000 after discounts. you said you want to keep the drug affordable. are you going to change the price, or will you keep it where it is? >> i think it's important to be affordable therapies introduced about 30 years ago treated more than 30 million patients on an annual basis. there are as many patients who have risks for cardiovascular

disease beyond cholesterol management so we're trying to treat millions of patients and to do that we think the drug needs to be affordable our current pricing is similar to slightly lower than staten pricing was before it went generic and we're proud that this drug not only works well but is affordably priced >> you had $82 million in cash as of september 30 and you're ramping up your sales force in order to reach more doctors having these new results do you need to raise money >> earlier this year we raised money and the money we raised gives us the runway to significantly expand our sales force, which we're doing we've had over 18,000 resumes for 250 position on our sales force that we're adding and to get through these things like this important presentation this weekend at the american heart association and the publication results. our focus right now is very much on operational execution we think we're doing well in that regard? >> were you surprised by the

market's reaction today? >> markets are off broadly today. that's always disappointing. >> you're down 6% in a 2% market >> i think our execution will be recognized by the marketplace. we can focus in on execution the drug works it works well. we'll help millions of patients. >> i want to thank you for your time today john thero, thank you. goldman sachs is the biggest drag on the dow right now accounts for nearly 100 points of the losses you're seeing. dow down by just over 400 points goldman sachs on pace for its worst day since june 2016 after an affidavit reveals that the ceo met with the leader of a scandal. what's the significance here >> more clarity on this. so the reports are that former goldman sachs ceo met with the

figure in the fraud case that's raised concerns that the scandal could escalate up the executive ranks. blankfein was at a meeting in 2009 after goldman refused to open a private banking account of that individual over questions of the sources of his wealth "wall street journal" reporting that they attended a second meeting together in 2013 that would have been more consequential. now, the doj has been investigating the scandal and goldman's possible role charging three former executives in asia with money laundering and driebdrieb bribery. goldman earned around $600 million in fees from the sale of over $6 million in bonds.

former banker tim leissner said he conspired with others at goldman in line to conceal facts from certain compliance and legal employees of goldman sachs. >> who is joe low? >> he went out and siphoned 1.5 billion from the fund. he bought yachts and private jets he funded a movie with that money. >> the statement from that last individual who said he conspired with others at goldman sachs said they were doing it to keep it from goldman sachs compliance making it sound as if they didn't want bosses up the line to know. >> that's correct. when we talk about did goldman now or what did they know when you have to think about two sides of goldman the legal and compliance side and then the banking side. the question is did they know anything on the banking side or did they do anything to deliberately keep it from the

compliance and legal folks who were already way back in 2009 raising questions about this individual >> robert frank, thank you very much for that. apple is one of the big reasons why the major averages are selling off this hour. shares of the tech giant sliding after one of the big suppliers cut its outlook. what is it signaling possibly about iphone sales and how worried should you be about apple shares check out the financials they're taking a hit on the chin goldman sachs leading the declines worst point contributor on the losses to the dow today. ouhi's fueling the fear in ts grp overall? the second powhour of "power" begins after this break.

good afternoon, everybody. we're in hour number two of "power lunch" on a turbulent monday here's what's on your menu from a rising dollar in china, we have a wall of worries starting to build for the markets. we'll look at which one could have the biggest impact on your money. a big supplier to apple issues a warning about deliveries for what they call a large client who could it be? is it a canary in the coal mine for apple? and ge falling below $7.

there we go. and can anything turn this stock around plus, the california wildfires continue to rage with a quarter million residents under evacuation year on the ground with the latest as "power lunch" resumes right now. welcome back to "power lunch. i'm becky quick. stocks moving lower at this hour with the dow falling more than 470 points at session lows down by over 500 points. the nasdaq the lagger down more than 2%. s&p moving lower today and within the dow goldman sachs, apple and boeing are the big laggers. apple and goldman shaving 172 points off the dow we have more on apple's decline straight ahead amazon and facebook the biggest lagger after apple amazon falling into a bear market and energy stocks in the

red today as oil falls once again. let's get more on the markets with bob pisani at the new york stock exchange bob, take it away. >> important thing here is we're having what i call a tech reset. put up those names again there are reports that one of apple suppliers cut their outlook. that's definitely true we're wondering whether it's apple. everyone assuming it is. you can see the valuation reset that's going on. for a long time we've had this problem. big banks, there are issues about whether lloyd blankfein was involved in this scandal there's been speculation he is not just goldman you see morgan, bank of america, citigroup weak here. rates aren't going up. there's some question about whether the capital markets will be strong in 2019. it's more than just the goldman sachs story playing in here. defensive names, look at the dow leadership it's proctor & gamble.

johns johnson & johnson. the trade war or truce in 2019 with china, we don't know. the dollar has been rallying speaking of this dollar, let me tell you what's been going on here i think this is playing into some of the big global names here we've been betting on a fed rate hike that's obviously an issue driving the dollar up. we've had brexit in italy weighing and china slowdown concerns no surprise why the dollar has been rallying. it's hurting things like commodities and not just oil we've seen oil drop all this month but look at what's going on with other commodities throughout the year. copper and aluminum and lumber and gold and some of this is tariff related a lot is china slowdown and the dollar a lot of issues hitting a lot of different sectors of the market today. guys, back to you. >> robert, thank you very much so bob pisani just mentioned

many of those worry points, those flash points in the market let's put them in our wall of worry. these are just among some of the issues that traders are grappling grapple ing with right now first of fall, bob mentioned china. will the slowdown affect the emerging markets to our shores trade tariffs play a part. what happens with rates and the fed? brexit in italy, two big catalysts we're watching as well and oil. could we see something happen with oil prices now that president trump weighed in on twitter about oil prices and where they should be heading and what's going to happen on the u.s. political side of things, something that was mentioned in the last hour on this show u.s. politics, is it trump and the auto industry because of trade and tariffs and everything else that's happening there. democrats and the u.s., mexico, canada agreement all of those in play which of those are ones that

aren't mentioned here that will be the most important to investors going into 2019? back over to you shares of apple supplier lumentum holdings sinking today. what could it mean for apple josh has more. >> new worries about the health of the iphone franchise. key apple supplier lumentum slashing it's q2 forecast saying a large customer cut orders. lumentum didn't name that customer specifically but the technology enables the phone's facial feature apple says it's hard to extrapolate trends from just a handful of data points other smaller laser suppliers to apple include finisar and ii-vi.

this news just reinforces the view that iphone shipments are on a declining trend and jpmorgan trims its earnings estimate forecasting modest year over year declines in iphone shipments and the iphone 10r shipments are cut by 30 million units. i did catch up with citi they say that lumentum is a concern but he was never counting on a jump in iphone units only he sees a jump in iphone revenue, services growth and capital return back to you. >> thank you very much, josh apple shares down about 12% over the last month how worried should investors be? joining us now is an analyst with wells fargo we should note that aaron has a market perform rating with a $210 price target on apple aaron, what do you think

is this warranted or not, this sell-off that we're seeing today? >> i think given the extent of the cut and also noting that lumentum just provided guidance a couple weeks ago, i think definitely calls out some worry on some of the iphone units in the mix. a lot of people as previously mentioned have more of a flattish unit growth expectation going forward but the blended average selling price moving upward was kind of an offset to that i think definitely if they're having challenges with the premium products, i think that's going to continue to weigh on shares and we think today's move is warranted and we do have a market perform rating on shares of apple >> what if you're wrong? what if lumentum's warning is coming from something else >> then we're wrong. i think we think about the mixed shift within the portfolio and how the average selling price would play out and then i think we go back to our numbers where we're more or less low single digit growth on the iphones and then it's more

asp and services growth expectation. i think, you know, as we sit here right now given some of the macro concerns, i think there's clearly going to continue to be a drum beat of soft expectations going into apple's next earnings >> i would love you to tease out the point that you keep coming back to, and that is the relative importance of unit sales, a number that i think apple is going to cease providing on iphones, versus the average selling price, which is going up average sale price goes up and you care about total revenue and profitability. tease out the conundrum here for us >> it's just that product cycle dynamic. if you look back over the last couple years, apple has had about 70% latest generation iphones as a contribution to the december quarter if we're seeing a bit of a mix away from some of the more

premium products, the xr and xs toward iphone 8 or iphone 7, we're talking about concerns around that pushing $800 plus price point on the apple and i think that's where investors could take concern of apple has pushed too far on the higher end points on these products >> we're not going to get unit sales volumes of any of these products is that important for you as an analyst when you look at this overall scheme of whether there's transparency into apple's growth plan in light of what's happening with these possible headwinds from suppliers rchlsupplier s? >> i think there's a double edge sword. we clearly appreciate what apple is trying to communicate with regard to the services growth and then that coupled with the base but on the cell side investors including us have really modeled this company on the unit growth expectations going forward or lack thereof. so to the extent that that

transparency starts to subside, i think it will be much more difficult for us to understand how exactly that 60 plus percent revenue contribution falls out as we look at our model expectations going forward >> just very quickly, your price target is $210 you're talking about the stock down $15 below that. i know you're not incredibly fond of the stock, will you bring your price target down just based on the news we heard today? >> we really look at 20% upside top justify a buy rating on the shares i would point out that apple is trading around 13, 14 times. it's traded in a range of 10 to 17 times over the past five years. so we're not at that low end band of the valuation at this point. i think clearly given today's news and some of the news over the last week or so, there's more downward more than upward pressure on expect ace ations as point. >> aaron, thank you very much.

as we discussed earlier, the wall of worry is already being built so what should investors pay attention to the most and what is just noise out there let's bring in jimmy lee, the wealth consulting group ceo and also jeff is the managing partner with cornerstone financial partners thank you for being here jimmy, we'll start with you. as we talk about the most important catalyst out there, what is, in your mind, the thing we need to pay the most attention to in the markets in the coming months? >> well, i think it's the fed. that's my biggest fear is that the fed moves too quickly killing this bull market we've been in. as you've been talking about on this show, there are investors that changed sentiment from being optimistic from tax reform to being cautious now and whether it's interest rates going up or tariffs or what you said about what's going on overseas, a slowdown in china, brexit, italy, any reason to sell people are wanting it take profits. the fed is what we're watching very closely >> so any reason to sell, jeff,

that doesn't sound very good are you seeing that play out is this a market where we'll sell rallies instead of buying dips >> last week we looked at risk on trade today we look at risk off. like jimmy just said, you could name it with china, europe, italy. you could name apple, goldman sachs, the wall of worry we're on top of right now. the thing with the fed that i look at is that i almost see this as with midterm elections last week, a goldilocks perfect scenario here. if the republicans had won the house, we would have had a much higher chance of additional stimulus, additional tax reform which would have put the fed closer to additional haright hikes. we're close to a fourth one this year how many we get in 2019, se expecting three, i don't know if

we get three more than likely to get two. >> when you talk to clients they express concerns about this wall of worry what are they most scared of this idea right now that they could be losing some of that hard earned wealth over the course of the past few years we know the stock market grad kw -- quadrupled >> these corrections are buying opportunities. we have a very strong economy. here in the u.s. we just finished most of the erparnings for the last quarter 60% of the top line. we have a strong economy i think it's important to watch the fed and make sure they won't move too fast and stop what's going on from an investor standpoint, i think this is a great place or time to put money to work that is in cash or money that's in assets that are not moving up as much as equities could over the

next 12 months >> so last point to you, jeff, as you talk about the market action we've been seeing over the course of the past month or so, what goes on investor shopping lists in your mind? >> i agree i think the markets right now are giving buying opportunities because if you look at -- i think there was a show earlier that said 70% of tech stocks are in corrective territory. when i look at stocks right now, whether it be technology, consumer discretionary, health care and play it safer, maybe the defense industry because that's one area where republicans and democrats maybe can agree upon, we need to increase our defense, there's opportunities there. when you look at those companies, there's a lot of technology companies that are selling closer to their 52-week lows i think we'll have opportunities in the year ahead. >> all right thank you very much for joining us this afternoon on "power lunch. >> thank you coming up, ge drops below $8 a share for the first time since

the financial crisis even the ceo unable to soothe investors today. is there any hope for a rebound? plus, those california wildfires. they are raging on and are now the most deskrutructive in the state's history. we'll go live to california with the latest details as we head to the break, look at the dow 30 heat map.

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a guy just dropped this off. he-he-he-he. welcome back to "power lunch. general electric dipping below $8 a share today hitting the lowest level in nearly a decade dating back to march of 2009 what will it take to turn this stock around joining us on the cnbc news line is christopher glynn chris, the street is not entirely sure what it wants to hear, i think. we heard the results a couple weeks ago. you saw the stock dip when they got the dividend even though that was probably right move what would it take for people to say, okay, this is what i like hearing? >> thanks, becky first and foremost, i would say time and in particular clarity on the contributions they might have to make to ge capital because there are some

unknowns -- they said they would send 3 billion in cash to ge capital in 2019. that changed to 3 billion at lea least. terms have been subjective terms with ge. i do give some credence to the new ceo coming in and saying there's not a liquidity issue. it's a leverage ratio. you know, the schedule of separations from health care to the transportation business do represent meaningful sources of liquidity just need clarity on the s.e.c. investigations and what the incremental hits to current ge capital book value might ultimately be quantified as >> there's really the answer there's nothing he can say right now because there are too many

unknowns because it's hard to know what to expect? >> it can only be staged in terms of there's not going to be one day of disclosure that's going to say now we have clarity. it's going to be stages. >> let's talk about what the new ceo has said he said right now they're not planning additional equity to be sold to investors. and he said that they could do a lot of things. they could sell different items or do an initial public offering of the ge health care. what to you makes the most sense out of those potential solutions? >> i would say the thing from this morning that larry talked about that was new to me was really opening up the idea of the separation of health care from being a 20% monetization to ge corporate and 80% split or spinoff to current shareholders indicating that could be as much as 50% of the transaction value

of separating health care going to ge corporate. and in the meantime, they have the bank lines that they have unfettered access to, so i think some of these pending transactions sort of function as short-term collateral against potential usage of the bank lines. i think the bank lines sit there more as an insurance policy than anything that they're going to dip hard into. >> chris, thank you for your time today >> coming up, the chip wreck stocks sinking today on pace for the worst day in three weeks names like aed down more than 5% is there more pain to come and fang stock seeing declines led by apple and amazon. amazon in bear market territory

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are standing by. so call now. welcome back to "power lunch. it's time for trading nation

chip stocks getting wrecked after an apple supplier lumentum sparked concerns over industry demand today's loss is added to heavy selling in the past week let's survey the damage here j.c., this group has been under pressure for months now. what are you looking for in a charge to give us some indication of where things may eventually get some relief >> you're right. it's becoming increasingly more difficult to defend this area of the market coming into 2018, a pause was likely that's following two years of 35% gains. so a pause or consolidation was healthy. as the pause went on, we lost technical strength we look at trend and looking at a 40-week moving average that was great support on the way up all of a sudden we start to

break down below trend october was the worst month. we undercut trend and lost relative ground to the s&p 500 so we have a relative lagger now. we had support at the 98 level that was critical support we were keeping a keen eye on we undercut support. we tried to rally back as we always say, support becomes unable to break above that it's a weak area of the market we can point to support at 86 which was october lows but a break below that and all bets are off. >> looks like the sector lost the benefit of the doubt boris, are you contrarian investing instincts twitching here to push against the bloglo? >> it's a perfect storm. you have saturation of demand in the western markets. rising interest rate environment

and you have u.s./china trade war issues putting pressure on prices i think it's thin hope to believe that 5g will resuscitate this demand. the general history of semis is they go from grossly overbought conditions to grossly oversold conditions i don't think we're near capitulation point right now at very best i would wantscenar. i want to stand down for now because there's more to come to the downside before it washes out. >> stocks often look cheap well before they actually do hit a low with these cyclical groups appreciate it. for more trading nation, head to our website or follow us on twitter. becky, i'll send it back to you. >> thank you so much when we come back, it's time for a pushup that's what one analyst says predicting an upside from here

we'll talk about it next and look at the retail sector today. names like hr, children's place, home depot, all moving lower much more "power lunch" still to come stick around we'll be right back. >> and now the latest from trading nation >> a bullish wedge consists of two converging trend lines slanted downward a break is considered a bullish signal a bearish wedge consists of two converging lines breaking upwards. presenting the internet!

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biotech also having a rough day. one of the etfs, the spider biotech down 3% so far it's not all bad out there somerestaurant stocks are moving higher. you can see they are in the green for right now. something to watch there let's head out for a news alert on one of the newest numbers >> the first speech as san francisco fed president. she supports the gradual normalization of monetary policy she also argues that we are at or beyond full employment and that inflation is, quote, on target she expects prices to tick up and rise 2% over the next year or so. daly says the economy is in good shape. she says we've got tail winds

from fiscal stimulus and global growth which has been solid and household business sheets are healthy. she spends time talking about one big blemish in the economy and that's labor force participation. she says one reason it could be so low is because more women are staying at home possibly because they lack parental leave the u.s. conference of catholic bishops have postponed any votes on new steps to address the clergy sex abuse crisis the move comes at the request of the vatican which asks that the bishops wait until after a vatican convened global summit on sex abuse in february >> at the insistence of the holy sea, we will not be voting on the two action items in our documentation regarding the abuse crisis that is the standards of accountability for bishops and the special commission for receiving complaints about

bishops. >> violence between israel and hamas in the gaza strip has escalated after what appeared to be a botched undercover raid into gaza by israel. palestinian militants fired after a raid left seven palestinians and israeli officer dead >> and stan lee, the man that co-created marvel comments has died an ambulance rushed to lee's home early this morning. he was taken to the hospital in los angeles where he passed away stan lee was 95 years old. that is the news update this hour guys, back to you. becky? >> sue, thank you very much. sue herrera. now to the other big news story we're watching today wildfires in california. the worst in the state's history. 31 people killed across the state. thousands of home destroyed. many more people evacuated from their homes and hundreds unaccounted for. let's go to california west of los angeles. what can you tell us at this

hour >> we are at the command center for the woolsey fire winds are really high right now. i'm holding my hat they've gusted up which is a big challenge for firefighters right now they have 20% containment here up north the most destructive fire in history. also matched the record for the number of lives lost beyond the strategy of those lives lost, we're also getting some new numbers on property damage because it's so early, those numbers are pretty wide ranging. let's start with some numbers. total reconstruction value of the more than 48,000 homes that are in extreme or high danger in the woolsey and camp fires is about $18 billion. zillow reporting that nearly 22,000 homes are threatened in the woolsey and hill fires and have a combined value of $42.2 billion. we're seeing a big impact on the markets. pg&e shares in the red by double digits utility being blamed for a number of fires in northern

california this past year. shares of edison international have also been down. and as far as insurance estimates according to industry reports, the fire last year resulted in insurance payouts of $8 billion so far the campfire has resulted in an additional 1,000 additional homes lost. it will be interesting to see what that number ends up being back to you guys >> all right thank you very much for that update stay safe out there. the oil market is closing for the day. let's get out to seema mody. how is oil shaping up? >> president trump's tweet saying lower prices should be lower pushed wti crude lower a different picture when wti and brent crude rose 2% on hopes of a potential oil production cut by opec after saudi arabia signaled its concerns over an excess of supply in the market if the global economic slowdown takes hold traders say it's not just

trump's tweet. there's a broader market downtoudow downtoudow downturn and a rise in the u.s. dollar back to you. there are more than 20 million veterans in the united states and drexel hamilton is one organization making sure they have somewhere to work after their service. more than half of the workforce is former military joining us to discuss the importance of honoring our veterans is co-president of drexel hamilton. thank you. >> thank you for having me >> thank you for your service. tell us about your company not only are half of your employees veterans, your company is veteran owned >> 100% veteran owned. we're proud of that. it's something wall street should be proud of we've worked hard to get to that more than 50% employee base being veterans and 100% owned. it's just something that we're really proud of. >> tell me about the veterans

whom you hire. do they have backgrounds in finance or do you hire them and train them for the jobs that they're going to do or a little of both? >> we're move of a bottom up approach so we take a lot of folks that have zero experience a lot junior enlisted officers we have a vet in program it used to be two years where we formalize that process into an 18 month program and have mentors and get everybody licensed and network >> let me ask it this way. what are qualities that veterans bring to the workforce that makes them stand out even if they don't have the immediate experience what is it you find in them as a group? >> i think integrity i think veterans are men and women of character i think that also some of our hardest days we had overseas on

the battlefield so kind of that sense of mission accomplishment. there's no task that's going to be too hard for us to accomplish i think that's a lot of the success that drexel had over the years and giving us the ability to build into other businesses we launched an asset manager that's growing assets under management an infrastructure fund now with a suite of funds participating in the p3, the public/private partnerships and capitalizing on that we also have a play of single stock future hedgings that is really catering to our client base so we're finding a lot of success. >> what about just team work when it comes to really relying on the people around you >> sometimes i talk about it obviously being airborne ranger i never packed my parachute. that's something i talk about. it was packed two weeks ago. my first time exiting out of that aircraft would be the first time the parachute would deploy.

our team work and our trust. i talk about when i was en route to a target and i never had to check the fuel gauge of the helicopter all of these tasks were done in a team environment we had the same type of team work on our floors at drexel ham i ilton. we're now doing that in the b d boardroom. >> i got to know the firm well over the course of the last few years because of the profile we did here at cnbc one of the things i would say it's not just veterans it's disabled veterans as well that's a big part of the story at drexel which resonated with me >> i know you brought something for us we want you to display it because it's a very touchi inin memento. >> the men and women on duty actively serving, only 1.3 million are active duty.

there's some fans of yours in iraq, northern iraq and syria defending us they just wanted you to have this because of all of the work that you have done in supporting us over the years. it's that transition from active duty to becoming a veteran that we can't thank you enough. maybe you can find a nice spot for that >> we are the ones with the debt of gratitude to you and everyone that serves. >> our work may be fun but it's not significant compared to what you do thank you. >> thanks for having me. >> a big sell-off on wall street right now. 9 of the 11 sectors are in the red. tech is the worst performer but financials down 1.5% two biggest sectors out there and it's the big names dragging us lower goldman sachs, morgan stanley, bank of america, citigroup down as well. what's bothering the banks that's story coming up next on "power lunch."

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markets in sell-off mode we want to call your attention to trend lines it's 27.62 that marks the 200-day average price. we'll keep a close eye on that when it comes to the dow, we're watching the 100-day moving average. you can see that area there something we're watching and for the nasdaq, keeping an eye on 200-day average price. 75.18. that level you can see around there below it right now certain key trend lines we'll watch there. let's get the view from the trading floor. joining us now is cnbcour fast y traders. tech and financials. we've been mentioning it all day long steve, maybe for you first what does that kind of trading action tell you about what the market sell-off has in store

beyond today >> the biggest thing is the last of the soldiers, the basically apple, that's the last one to go when they come for apple where apple was your growth and value stock and they hit that one, nobody is safe so either we're in the ninth inning or this thing is just getting going. dropping below the 200 is a huge headwind for the market to overcome once again even though it's done it a number of times >> the financials are certainly in focus right now we've highlighted the fact that the dow is down what it is right now. 100 points of that is goldman sachs alone. these financials have been unloved for quite some time. is there anything that you're seeing out of today's pricing action that would lend you to believe that maybe the banks are trying to find a bottom or is there more pain in store for this unloved sector? >> i don't know if they found a bottom today looking at the price action a couple reasons for the sell-off first one is today is a risk off day. buying of treasuries

that's why you see jpmorgan, bank of america down at the moment now the investment banks are down more. why is that? the big tech sell-off doesn't help does it push back the likelihood of those big tech ipos we've been waiting for high correlation investment banks have that doesn't help them goldman sachs down 6.8%. you talked about that with robert frank earlier but if we take the worst case scenario out there when you talk to investors, even if they gave back all $600 million they made on that bond issuance, that's about 1% of their assets, 6% of this year's earnings the sell-off we've seen which is 11.5% in the last three trading sessions for goldman sachs is suggesting the market at the moment thinks it would be worst than that. maybe it's a big fine. maybe it's something else. the sell-off more pronounced than just the finer numbers

would suggest so far on this scandal. >> steve, is there anything from the trader's perspective that you would look for that would make you more constructive about what the price action will be like in the coming days or does it still feel heavy to you >> it feels heavy. i've been on the mindset i want to go back and test those lows or even the 25.32 february lows in cash. i would feel constructive if we closed above the 200-day moving average at least today i don't think it's going to happen to everything that will said, you have a financial sector that could not provide in a rising rate environment the headwind is global growth being questioned it doesn't matter where rates are or doesn't matter how constructive rates are moving up i'll go back to there's no good reason for rates to be rising for the equity market to be moving higher.

it's always a headwind >> thank you very much we're going to see you shortly on "closing bell." a tech wreck on wall street today. the nasdaq down nearly 2%. chips getting chopped. there's one stock holding up very nicely today. shares of l brands a standout on this down day. more on that sryto and this market sell-off when "power lunch" returns

welcome back everybody brands down about 30% and 65% for their highs. it could be the next retail turn around story upgrading to out perform it would be up more than 40% from where it stands right now

he is managing director and this is a pretty tricky story you don't think it is an inflection point wry do you like the shares here? >> i think you have to look at this and you'll want to keep your eye on it it is the 2019 turn around it is a space that has not seen the upside that the retail environment has gone through across the board it is a name that struggled. it is down to 65% off its highs. you're right it is not about an inflection looming. it is about optimizing first and foremost they starting to look at cost and expenses in a much more strategic way telling you about the money losing businesses starting to optimize the structure getting those off and then from that point forward you start to see a rerating. it starts with the expense structure and from there i think

the vision leads to a rerating that's kind of wra we are hoping for. >> you would like to see it cut by 50% it's victoria's secret that really struggles here. >> yeah. first i agree the capital structure, what we wrote today we think it needs to be optimized and changed. i don't think it's the go forward yield. i think it takes that and cuts it in half i think they use that excess cash flow and you start to pay down some debt remember, they are four times least adjusted levered that's a little bit high i think it would be a good decision in terms of capitalizing the structure i think margins are down about 10 points from their peak levels i think it is a company that they will admit it is slow to ado adopt the change these were things that listened

to couple things they need to listen to and i think maybe they will are there others that they need to number one and number two have they been as efficient and effective as you would like to see them be in selling through a digital channel. >> you have been decent on digital. it is about 15% of sales it is the first steps. there is not money losing businesses outside of those. here is what's important they are still overstored in north america. they are at the peak north america door count i don't think it is at peak door count. i think it is a beginning. also, look internationally it could be a brand that could make tons of money overseas. they took a lot of those businesses in house.

there is optionalty. that's where we are starting to focus today. this is about a rerating and looking at profit bability. >> thank you for your time today. >> and we have more on the markets after this ♪ ♪

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let's take a look. they have gotten wobbly again today. at one point the dow was off about 511 points right now about 400 some oil had nipped into positive territory as well earlier. it is now once again back below $60 a barrel some of the concerns in technology but elsewhere seem to have surfaced. >> tomorrow we will continue to surface. >> there have been so many concerns when it comes to housing market it could be the counter to that. you can't get a new mortgage but we'll get those numbers tomorrow morning. >> we have been talking about that overall maybe we get some kind of a move up there higher. my guys, my view is on the communication services sector. more than half have pulled back by 10% or more so it has been the epicenter

i'm looking at electronic arts, netflix and all negative >> all right that does it for us today. thank you for watching power lunch. >> really good to have you here. >> closing bell starts right now. it's time for the closing bell we are kicking off monday with a big sell off on monday concerns about tech, china and the rising dollar. we'll take you through all of those factors. >> and as apple sets crushed he'll reveal what he thinks moving forward russ will be here to tell us where to find opportunity amid the tell off.