we've been buying back at $80. $8 billion market cap company. >> farmer jim. >> starbucks has good momentum and is safe in this market >> shareholders will fall in love with cash flow. >> achc. >> good stuff. thanks for watching. "power lunch" begins right now i'm melissa lee. here is what's on the menu volatility is back and in a big way. a 600-point drop on monday 300-point swing yesterday. and now the apple is big dog the dow is the big dog apple falling into bear market territory. should this put fear in the hearts of investors? a look at why new york and virginia won the coveted amazon hq2 and the reaction from a number of cities that ended up as big loseers in that competition. plus, oil bouncing back from its longest losing streak ever is this the turning point, or is there more pain to come? and snap gets subpoenaed while morale at facebook tumbles

"power lunch" starts right now good day, everybody. welcome to "power lunch. i'm tyler mathisen stocks, they are lower really basically at session lows right now. a strong start this morning, now nearing those lows the dow had been up more than 200 points in early yeier tradi, out of here. financials, technology, that's been the story, folks. they're the big laggards communication services among the few leaders. speaking of technology, apple falling now into bear market territory earlier in trading it is on now pace for its fifth straight day of losses we will have more on apple in a moment netflix a big loser down nearly 4% the stock off a third from its most recent high can you say bear market? and the pot stocks seeing big declines after disappointing results from canopy growth and tilray on the flip side casino shares getting a bump boyd gaming, melco, wynn, mgm

all higher as tyler mentioned shares of apple falling. 20% below its 52-week high which the stock hit over a month ago josh lipton live from san francisco to go inside the numbers. hi, josh >> reporter: a week that apple bulls would like to forget here, that shock has been shelved. now tumbling into what some traders define as a bear market, down 20% as you mentioned, courtney, from that october 3rd, interday high. the week started off with that downbeat report from key apple supplier which told us that a large customer had cut orders. goldman sachs responded reducing fiscal '19 units by 6% today ubs, which still rates apple a buy, also trimmed calendar q4, q1, and q2 estimates. guggenheim going a step further down grading apple to neutral. guggenheim telling cnbc this

morning that weaker iphone units was one reason for the downgrade but bets iphone average selling prices won't proep vid the same help they did a year ago, so iphone ref fuse will also decline. so how do apple bulls respond here i just caught up with gene munster. he says what's most important is a stable iphone business which he still sees flat ahead and big buybacks, he says, totaling $100 billion a year back to you. >> thank you very much, josh let's get more on what's behind today's reversal with bob pisani on the floor of the new york stock exchange. we know apple is a big part of it but not all of it >> reporter: it's not. what's moving the market, fed, inflation, and tariffs we may have a new risk, regulatory risk. the s&p futures this morning prior to the open. we got the cpi the numbers were good overall here they were in line. core cpi was weaker.

the market lifted. then we had maxine waters who will likely head the house financial services committee coming out middle of the morning saying regulatory roll backs in banking will come to an end. not just bank stocks, they moved down, but the overall market also was moving down on top of that take a look at the banks on this all the big banks, regionals as well as the big money center banks, down 2% to 3% on that news bank issues, we have a lot of them out there the banks haven't done much for a while. now we have the new threat of the regulatory pushback that's threatening them rate hikes, well, we have a steeper yield curve. maybe that will help there have been issues about loan and revenue growth and whether that will be peaking in 2019, the numbers will not be as strong and, of course, the tail wind from tax reform is fading a little bit as well it all points to lower valuation multiples for banks. that's the problem we've got finally just note josh hit it right on the head, qorvo

lowered, skyworks is down, nvidia has been week as well so put tech on top of financials and you're just down today those are the two biggest sectors for the market back to you. >> robert, thank you very much let's dig deeper into today's move chief investment strategist with russell investments and the managing director and portfolio manager. welcome to both of you glad to have you here. david, i understand that you have some shares of apple in your portfolios. tell me what you're thinking about that company now and whether you are concerned. >> well, i'm a long-term own earp of apple. the key metrics that would make me continue to own it is a high free cash flow yield of 7% they're growing their dividend at 14% the price to earnings ratio is more compelling 14 times earnings so from a dividend growth, free cash flow yield and free cash

flow growth, you're going to get this with apple. i saw it in 2012 and '13 when it fell, and yet the market continued to go higher and apple got right back on the bicycle and proved that it's a great shareholder wealth creator >> you can have all of those nice numbers, obviously, david, but the stock market may not agree or they may look past those numbers and the sentiment can hold an otherwise good stock by the measurements down >> absolutely. whether it was mid-2012 to mid-2013, episodes in 2015, apple will lag but, nevertheless, if you look at it over the long term as a good allocator of capital in the best interests of shareholders, apple is a name you can own and down 20%, i don't like it but it's still holding up better than so many pockets of tech that are down much more. >> and for a long time apple is

looked at as one of the defensive stocks in the market eric, for all the reasons david mentioned, investors thought this stock would be more immune from sort of the downturns and it's certainly not a netflix, an amazon when you're having a conversation whether valuations support fundamentals, it's sort of the faang stocks, the true f.a.n.g. stocks that are the poster children of that. the amount of cash on the balance sheet and they will be buyers of their own stock in spades so what does this exemplify. is this emblematic of a broader problem for the markets? >> i think it is it's been our contention the u.s. market is very expensive and the bar of expectations got raised higher and higher as we went through 2018. now the market is understanding economic growth in the united states will slow substantially next year. we think it will be 2% gdp growth and that earnings growth is also going to slow because you're not going to get the

turbocharged tax cut we got in 2018 i think the market is trying to justify high valuation levels and the u.s. market on a relative basis to other markets, the bar is awfully high for the u.s., much lower for a non-u.s. developed and emerging and they have a much better chance of the fundamental data on the upside. >> if you think the gdp growth will slow something around 2%, do you believe the fed is being a bit too hawkish, too aggressive >> i'm not sure thinking they're too aggressive and too hawkish but wage pressure is playing out in the u.s. economy. i think the biggest recessionary risk that we see is the level of unemployment is very, very low and that is going to continue to cause issues in terms of input prices and profit margins for corporations it's also going to be a hindrance to growth in terms of the bodies that can work we do see recession risk rising and we think the fed very like they have in the past will

continue to process that is eventually going to end with a recession. >> all right, erik, thank you very much. >> not for a couple years, tyler. >> not for a couple years, you say. >> growth has peaked but we're still going to grow through 2019 we still have corporate profits and cash flow that will expand and there will be a time to circle the wagons. just not yet. >> all right, gentlemen, there's what a market is made of thanks, guys now to the crypto collapse happening this hour. bitcoin dropping to its lowest level in a year. others are plunging big time our dom following the action and there's been a bounce, too, dom. >> there has been a bounce at one point bitcoin was down worse than now and the alternative coins were down by much more. take a look at the reason why it's point bitcoin the largest and most high-profile of the crypto currencies for the longest time about a

couple months now you can see here in this little square bitcoin price have is done relatively nothing even with the move lower, they are still relatively stable. this is the biggest move lower that we've seen in quite some time it put a little bit of fear back into the marketplace for the people who have been long the crypto currencies. the reason why it's important is because it's not the worst performer. the reason they are lower on the day is because there is something called -- it's a hard fork, a software change that will affect bit coin cash in particular and bitcoin cash will go through this process that could by some theories debase the value of the alternative coin some of the coins are down even worse than what bitcoin is for some of these they were down 15, 16, even 19% going into this so something to watch there, guys, as we watch the crypto space develop. >> dom, thank you very much. before we go, another big market mover is pg&e.

it has related its moves to the fires in california. what's going on? >> that's right. if we can put up a chart to give you an idea what's happening now with pg&e corporation you can see we are off the lows of the day so far but off 23% there are concerns because pg&e said in a statement, in a filing, if it is determined that pg&e is the cause or one of the causes of this campfire up in northern california, that the liabilities associated with that damage could exceed the insurance coverage it has calling into question the liquidity and viability of the company. that particular regulatory filing sent those shares much lower at one point today i would highlight right now we are off the lows of the session so far but, still, it will be important to watch at the current levels pg&e corporation, one of the biggest utilities in the state of california, has now lost nearly half its value

we will be paying close attention because of the tragedy happening in california. back over to you >> dom, thank you very much. dom chu. turning to retail, macy's shares falling despite a positive earnings report this morning posting a significant earnings compared to analyst expectations and, again, raising full-year earnings heading into the critical fourth quarter and crucial holiday season same store sales rose more than 3% 3.3% in the third quarter. that does mark four straight quarters of gains for the metric which started last holiday season let's bring in credit suisse analyst. what do you make of the stock's action with macy's does the street not believe they can hit the bullish forecast numbers? >> thanks for the question so i think let's give them credit where it's due. they're investing in their stores after a few years of investing in e-commerce and the stores are moving along and they are getting sequentially better as we go they're doing a nice job with that

but the market is looking at this saying is this as good as it's going to get? last year we had a good holiday. the bar gets higher this year and the markets really are saying these are stocks that lost market share to other places for longer periods, 20 years. is this as good as it can get? do we start to slow down from here a lot of the margin metrics are pushing profitability higher as sales have started to slow down here i think there's a lot of questions if we saw the last good data point on what's good execution for macy's >> i spoke with jeff ginnett and he said he's confident he can turn in a stronger growth rate on top of last year's fourth quarter. he thinks macy's is ready. the market may not believe it. what about you >> i think they'll have a good holiday. they have comp sales on a store-by-store basis every day when the weather is not a problem in a store, we're seeing customers show up. they're generally buying the merchandise we put out in the stores at good margins

there might be some weather back and forth. it's pretty cold right now so i would assume trends are looking good on a store-by-store basis the customer is coming in and transacting. all the customer sentiment seem to be good and landing and showing them all the signals and rich data sets >> michael, i'm curious one of the things that leapt out at me is that macy's has shown 37 straight quarters of growth in their digital channel. >> double digit growth >> double digit growth online. any company would love to see that is that their future and, number two, how much credit should they get for being able to do that a lot of retailers would die to be able to say that. >> that's where size really helps them they have a balance sheet they can invest in. that is an impressive number, apparel and footwear are growing in the u.s. more bradley at

about those levels as well and macy's is a bellwether that they shouldn't underperform for any reason they've done a good job investing in the business over time the trick with department stores, they've lost share with their brick and mortar stores. they can do a nice job online. but at the same time they have to figure out how to generate economic returns in their brick and mortar stores f. you're bearish you can say, aren't they doing a good job online and that's pulling people out of their stores a nice sale that would lever the investment you have to do to keep the stores up is moving online it's a circular reference. to be clear, they do a nice job. they have a big balance sheet. they are trying to figure out how to grow into an online business today >> despite what macy's says, michael, should investors maybe take the word of an amazon, an apple, a home depot who basically all warned about fourth quarter i mean, is there a bigger concern that we should have about the consumer given what some of these other retailers or

retail proxies have said about fourth quarter >> i'm just worried about what we talked about earlier, that last year you had two bad winters in a row nobody is buying boots and jackets. a different way to say that is this is your first benign holiday comparison we've had in three years. the bar is higher and, again, some of these sectors have a lot of structural issues of people coming into their stores if you're prudently investing in stocks you have to say over and over again when do the actual reported results for a holiday start to look like those longer term realities that we know about? they've done a nice job cleaning up inventories a lot less markdowns again, the worry is always, look, we know where these things are and there's a lot of pressure longer term when do the results start to look like that did i just see the best results go by and it gets slower from here and the comparisons get much tougher this holiday. >> that makes sense. average retail up about 3% we know there could be more tariffs coming i know jeff is worried that

apparel may be coming up on the list that could be a big problem for macy's if that's the case. thanks so much for joining us. and levi strauss reportedly plans to go public wow. leslie picker has the scoop. leslie tyler, that's right. levi strauss is planning initial public offering which could come as soon as the first quarter the ipo could raise between $600 million and $800 million sources said and the deal could garner a valuation of more than $5 billion. levi's has tapped goldman sachs and jpmorgan to manage the deal. both banks and the company declined to comment on the ipo levi's is privately held currently by its descendents of the family of levi strauss which started the modern day denim about a century and a half ago it was subsequently taken private in a leveraged buyout in the 1980s. now the company's japanese affiliate is publicly traded in

tokyo currently and its bonds are publicly traded so we're able to get some sense of the financials there it appears that after profit declines in recent years levi's is seeing its top and bottom lines rise once again. according to those financial disclosures. and the ceo has said on cnbc the proportion of sales online has been growing the company still owns almost 3,000 retail locations and its products are sold in about 50,000 stores worldwide. guys leslie, with the descendants of the levi family would they control the company still? i wonder because oftentimes you reach a point in a company's history where there are many, many descendents and they all want their money >> exactly >> and this is the only way to free it. >> i think they would have to. they did the first leveraged buyout in the 1980s and another in 1996 that secured even more control in the hands of those descendents. i think if you float a traditional ipo, say 15% or so,

i think you still have to have the rest of that company largely in the hands of those descendents. my guess, although not knowing this from sources but the ipo world, they would have to have about an 85% stake following that ipo >> leslie, thank you very much let's head to wilford frost for a news alert on brexit >> reporter: some confusion the last hour as to whether prorm theresa may would be making a statement following the ongoing cabinet meeting on brexit. it now seems like she will, indeed the key thing we know that's been pushed back, the cabinet meeting drags on it's into its fifth hour, over four hours so far. looks like it will hit the five-hour mark and the one thing we can draw from that for certain is that the cabinet did not quickly fall in line with prime minister theresa may's plan and, therefore, she continues to try to convince them to do so. let's look at what the pound has done interday. you can see it is falling, down about 0.4% as we speak and then

also noises outside of the meeting not supporting the british pound whether that's coming from the ardent leavers or tony blair saying this deal helps no one that's why we see that pound weakness you can see that we are pretty much in the middle of the range. 127 at the bottom. 132 at the top >> will thanks new york city and arlington, virginia, celebrating being chosen for amazon's new headquarters we'll talk to the mayors of dallas -- the marp yor of dalla. speaking of losing, oil looking to snap a 12 session losing streak, its longest ever is this the beginning of the turnaround or just a stoonhe y enowerp t

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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. well, you may have heard this, folks, amazon has picked two sites for its second headquarters one is new york city, long island city, to be precise, and northern virginia, arlington

so what do those places have that everyone else didn't? scott cohn is looking at the runners-up, and there were many, scott. >> reporter: yeah, about 235 of them, tyler. what the winners had, of course, was money. we're talking $2 billion plus in incentives between new york, virginia, and tennessee, which will get an operations center, and people, skilled workers. but many of the losers were willing to offer at least that much money they also say they had workers, $4.6 billion from pennsylvania, according to the pittsburgh post gazette, and then atlanta, which many believe had the inside track going into all of this georgia's economic development authority and the local counterparter in in atlanta released the details of the bid and they're staggering how about $2 billion in state and local incentives to start. that's just to start how about this, a dedicated airport lounge plus free

parking. and how about this, commuters, a set aside rail car on the rail line to deliver not people but amazon packages and, yes, they would rename some streets. i think alexa lane, kindle street instead of all those peach streets. they are doing some soul-searching including here in san jose, one of the places that submitted an unsuccessful bid. it could turn out with amazon having $177 billion in revenue, able to afford to buy this on its own, that the losers may turn out to be the winners melissa? >> joining us now is mike rawlings, the marp of dallyor o. mr. mayor, thanks so much for joining us here on "power lunch. we do appreciate it. >> great to be with you on your show >> this took many months to put forth their best proposal.

it was a dog and pony show only for amazon to choose two locations on the east coast. do you think they had a bias towards being on one of the coasts from the start? >> i don't think from the start. i think this process has been going on a long time they had a long list of wishes dallas was right there at the very top throughout the whole process. my sense is at the end they had to make some decisions on some things were more important than others, cost of doing business, cost of building these buildings, cost of living obviously wasn't as important to them and being on the east coast. that's why they did it the customer is always right more power to them more power to mayor de blasio and those folks. but we are doing well here in dallas we don't like to lose. we don't like to hear the word loser with us because we won 120 corporate relocations in the last eight years we're hot right now and we'd like to have kept that streak

going. >> is there even the tiniest part of you, mayor rawlings, that is breathing a sigh of relief that you don't have -- here in new york at least there are some backlash by residents of long island saying why is new york city basically subsidizing the move of one of the richest companies on the planet to start up a location here in new york city you would have had to field those questions. >> you know, i see that happening and it's so -- i don't think people understand how jobs are created and the ecosystem happens. this is an ecosystem maker we were prepared for that. look, there are challenges, affordable housing, we were prepared for that, making sure that we didn't have transportation issues. we were prepared for that. that's what makes you better that's what makes you grow as a city you've got to get out and compete. we're better for competing we were close, but, as they say,

no cigar we've already got 10,000 employees from amazon with a lot of engineers i think we'll have a long-term relationship with them and a lot of other companies want to be right here in the middle of the united states, be able to get the coast very quickly in amazon's case they decided to go ahead and be on the east coast. >> mayor rawlings, a lot of discussion has been had about the data amazon was able to get ahold of from dallas and all the other 238 locations that put in a bid. there's probably still a lot of value in that data are you going to go after somebody else? i know you said you have 120 corporate relocations. want 121 go after google or some of the other tech companies looking to expand >> we're already talking to businesses they're calling us all the time. this pitch has definitely made us better. i told jeff bezos that, competition sharpens your edge,

and we're there. it's also about customization. it has to be right for the companies. so we have a lot of real estate that's available in urban environment to be able to accomplish those things. i think our story is pretty good for a high-tech company that needs a lot of tech workers. we'll keep on inning right now we're crying in our soup a little bit. >> well, you got smoothie king, mayor. you got smoothie king. they relocated to where you are. "the new york post" today in their cover, they put down queens ransom because long island city is in queens i wonder if from where you sit you would say that the taxpayers of new york state and city, the taxpayers of virginia, are going to ultimately be winners because of this or not would you enthusiastically say this is money well spent, and they will make money in the end because of this?

>> when i look at the return on investment, i can say that look, it's very expensive. we're talking about the big, high-stakes poker game here. we decided not to offer as much because we didn't think incentives were the thing that was going to get them. in the long run i think they made decisions in different fashions but the key is really a trajectory for a city over a 20, 30, 40-year period of time, and i think those markets will be better for it. i think amazon is a good company. they're tough but ultimately i think, and i learned about them in working with them about dallas, they wanted to do it in the right way. they wanted to come to a marketplace and not only have a marketplace that was pro business but they were going to give back. and i suspect they're going to do the same thing. i'm just sorry that they're catching grief back east when

they just won the big mcgilla. >> new yorkers are never happy >> new yorkers will complain about anything >> mayor rawlings, thanks so much >> there's always -- yeah, thank you very much. great to see you >> mike rawlings from dallas, texas. amazon also coming out with an alexa-enabled microwave before you say why would you possibly need that stick around to hear our tech guy todd hazelton and what he thought and, of course, much more on the markets coming up as stocks continue to lose momentum in afternoon trading the dow off nearly 1,000 points in one week down 185 points at the moment one stock playing a huge role in that decline, boeing, up more than 5% in a week. we have the latest on the anx tiny over its 737 ma ples stick with "power lunch.

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welcome back to "power lunch. i'm sue herera here's your cnbc news update this hour. israeli defense minister lieberman resigned in protest over the ceasefire reached with gaza militants potentially weakening the netanyahu government prime minister netanyahu saying hamas has, quote, begged for a ceasefire and they know why, end quote. this after the warring sides ended their most intense fighting since 2014. here at home newly elected members of the house of representatives gathering for a group photo in front of the capit capitol.

over half of the newly elected democrats are women. shooting suspect nicholas cruz attacked a detention officer yesterday in the broward county jail. the attack started when a sheriff's sergeant asked cruz to stop dragging his sandals on the ground in london bells rang out to celebrate the 70th birthday of prince charles the prince was born at bu buckingham palace. trust me, you could hear the artillery. that's the news update this hour thank you, sue after a decline in tech and bank shares, the dow down more than 200 points, worth 0.8% the nasdaq as well

taking the nasdaq lower this hour, mylan, netflix and vertex. melissa? >> to the bond market, rick santelli at the cme. >> reporter: you know the bond market for weeks, almost months, actually, has really refrained from some of the volatility means rates have held firm look at september 25th should we close here the lowest since the 1st of december that double top seems to be doing the trick, we could close at the lowest levels since the 29th of october should we stay at these levels. you see the two day but also the lowest yield close should we close here since the 29th of october.

the dollar index as you see on this chart, it continues to basically staircase higher tyler, back to you west texas crude on track to break a losing streak. could the worst be over for oil? we will tell you why oil may not be done slipping away.

welcome back to "power lunch. oil on pace to snap its losing streak jackie deangelis joining us now with a look at the issues causing the long decline what's going on? >> a long relief after a painful 12 days. we say these things don't move in a straight line people asked me, do you think it's over? i would say the numbers don't necessarily indicate this. production is high and climbing.

the demand figures are not that encouraging either 2019 will be tough for demand. i would say the oil market could quiet down that's if opec cuts again. remember, for them that cut is coming from the inflated base. to that i'd say as long as they're still in the game, they're able to influence the market investors getting more aggressive on growth and i think that sentiment is cooling. you don't fall that far that fast >> when you say regressive on global growth, do you mean not in a good way? >> not in a good way >> they're not buying the growth thesis >> they're thinking in 2019 we could see more of a stock market

correction, emerging markets cool off and that we're going to have demand problems not only for oil but it will translate over to stocks >> jackie, stick around. what's next for oil? the head of energy tradingality seaport global securities. welcome. good to have you join jackie and all of us. you heard what jackie said agree? >> a lot of great points the velocity of the move is what really has taken a lot of folks by surprise. it's a demand issue as well. u.s. supply continues to go higher it will eclipse the saudi capacity we also have a demand problem.

we have anxiety over trade wars. a lot of people looking at operating earnings of peak growth this quarter. you overlay that to a dollar that's been very strong rallying to the next fed meeting. >> how much do you think of the move as just being mispositioned and here we are now we have nat gas after being up 39% so far this year. so has that unwound happened already? is that pretty much done where are we >> a i think a lot of it has happened if you look at the cause of the move, we have supply and demand. inventory 17% lighter than the five-year average. heating demand up 55%. those are the route causes

was it amplified i think absolutely there was a real washout of all commodity contracts and guys just getting flushed out a lot of it has happened it's hard to really quantify what that is or not. that played into the equation for sure >> it seems you laid out the slide. >> as i said, it doesn't go down so quickly you do see a little bit of the bounces but the weak demand season as we head into the winter and this drop to start us off is not a good sign. >> thank you very much how much your family spends on vacation can be a leading indicator of the strength of the economy.

where you can invest in leisure. take a look at the dow 30 heat map we are at session lows on the major indices right now although home depot, disney and verizon holding on to slight gains this hour every investor should ask questions. is our money in the right place? what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor. as fiduciaries, they live by a simple rule: always act in the best interests of their clients. that's why charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com

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and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ welcome back to "power lunch. travel companies have been posting impressive profits over the past quarter with the economy doing well if you want to play the sector, where should you place your bets the founder and ceo of ultima capital. >> brad, great to have you on the show today >> thanks for having me. >> we're in an environment we're trying to understand the state of the consumer, where the economy is headed. where are the best places to invest >> first, thanks for having me i'm going to pull this out

because i'm getting a little echo i think today in travel online travel is a massive industry the airlines are having a fantastic year this year oil has been rather high this year that industry has been transformed, warren buffett is the largest investor in the united states only 10% of the airlines >> that's a vote of confidence. >> berkshire is not a short-term investor they look at the structure of the industry for years they said it was the worst place to invest. and then you mentioned price line and expedia we have a billion and a half global hotel rooms booked by those two alone. we continue to see predictable earnings growth, top line growth

out of these two very large internet e-commerce companies. >> are those names you want to hold in an environment they pull back on spending, travel and leisure >> there's a secular curve which is how are consumers changing their behavior and a cyclical curve. what we know is more and more people, online apps to book their hotels and travel. at the same time we also understand and realize there may be less spending on airlines, on car rental companies, on hotels, but ironically if you look at 2008, 2011, price line and expedia accelerated in those cycles hotels become more dependent to distribute their products. >> looking to the private market, you're invested in uber and airbnb we may see the companies push out their date that they go public is that a concern? >> well, first, i think both are

excellent companies. they're both continuing to execute verywell uber is still growing over 40% an interesting fact about uber, it's larger than all ride sharing companies in the world put together they've wills demonstrated they're more than just a ride sharin they're a platform for food delivery this three years they become the largest food delivery business in the world, and so i think that they will continue to push forward on the ipo track i expect that they'll go public in the first half of next year >> $100 billion valuation, that's a tough sell for investors for uber >> i think that ultimately investors want to buy growth the thing about uber is it is a truly global platform frdehli to paris from ree io to san franci, remember, it's not just ride sharing. it's going to be global food delivery from restaurants, from grocery. freight, payments, loyalty this is a very important global platform. >> amazon now in bear market

territory. a lot of these high growth tech names have come down do you see opportunity as now the time to get in >> great question. i think it's a healthy correction the causes for the correction, we can debate whether it's rates going up, whether it's global trade fears, but the reality is the multiples of these companies were near recent highs at the same time we've seen some deceleration in their top line, and so to me it's a healthy correction i know when something goes down 10% or 20%, it feels like bear market or feels like a disaster, but we're seeing opportunities i've commented about a position that we've been building in facebook we think there's still a really interesting company still growing. and trading at a single-digit multiple of ebitda when you look out a year or two. so long as you have a 24 month or 36 month time horizon i think we're starting to see opportunities. i don't see anything that's corrected so much where i would light myself on fire and say today is the day you must buy it

today. >> not yet got to wait it out a little bit. for facebook we've got to figure out the regulatory issues there. brad, we're going to leave the conversation there thank you for your insight today, brad gerstner thank you very much. >> thank you very much. coming up on the closing bell, don't miss booking ceo glenn fogle coming up at 4:30 p.m. eastern time. we want to take a quick check on the markets on the dow we briefly went below 25,000 just minutes ago. we're now down by 1.1% 25006 points is our level, down 280 points and on the s&p 500 we are just a couple of points off of session lows as well. financials have doubled their losses in the past half hour down by 2.25%. information technology down by 1.4% we've got some of the biggest sectors on the s&p 500 weighing the index down at this point we're watching this very

closely. regulators are taking a close look at boeing after a potential software issue in the 737 max planes we will bring you the latest stay with us here on "power lunch.

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welcome back to "power lunch. that is a live shot of 10 downing street in london, england, where we understand a brexit statement will be made by prime minister theresa may imminently, and as soon as she comes out of that door we will bring that to you live but again, we are expecting prime minister theresa may to make a statement about brexit imminently. in the meantime, boeing continuing to face scrutiny over a potential issue with its 737 max planes the faa and the company are deciding if there needs to be changes made to the software let's bring in phil lebeau >> there was a bit of confusion over the last 24 hours about whether or not the faa is expanding its investigation into the operating systems for the 737 max 8. that version of the plane, the

newest version of the max 8. the faa, it was reported yesterday was opening a new probe, and they came out today and said no, that's not happening. we have not launched a new probe. we are continuing to investigate what's going on with these systems following the crash of the plane a couple of weeks ago over in indonesia. meanwhile pilots for american, southwest, they are complaining that they were not fully noti notified about some of the changes in the system. here's the head of the airline pilots union for american airlines talk with us this morning on "squawk box" about how they feel about some of the changes with the 737 max 8. >> obviously there's a problem when they said they chose to not disclose this information. as pilots from the sully to the newest new hire that we have, we want information about our aircraft that's our obligation ask our calling as professional pilots someone choosing that they don't need to know that is not part of a safety culture but the good news is we have that information now

we're processing it. we're asking additional questions. we're finding out more and more smaller details that are important to us, and i think that's going to make us an even better aviation system throughout the country. >> and as you guys take a look at shares of boeing, keep in mind the company has maintained and continues to maintain look, the operating system is safe and the pilots do understand from the operating manuals how this plane should be functioning at all times. this is one that's going to play out over time. >> do they say that they chose to keep certain information away from -- >> no, no. >> from pilots? what do they say? >> well, boeing is say -- we're getting into -- you're starting to split hairs in terms of it's he said, she said, the pilots versus boeing. boeing said all the information is in the operator's manual. there's nothing that has been secret from the pilots the pilots come back and say wait a second, there are some procedures that might need to be implemented in certain

situations, which might be relevant to what happened with the lion air crash that we were not aware of, and therefore boeing should have told us or made it clear about some of the changes in the software and in the systems with the 737 max 8 it's a matter of do you look at it as boeing looks at it which is we've kept you informed of everything, basically procedures haven't really changed at all. the pilots are saying wait a second that's not entirely true. that's where we are right now, and that's what the faa is looking into. >> i'm not sure who the sources were for the wall street journal story. they certainly -- the author of that story said that boeing had kept certain information out of the eyes of pilots. >> tyler, the pilots are adamant they believe they were kept in the dark, certain pilots and they've been very vocal about saying that. >> again, we are expecting prime minister theresa may to make a statement shortly on brexit. in the meantime, let's go to wilbur frost at the new york stock exchange

which is sort of confusing we thought she wasn't going to make a statement now she's going to make a statement? >> reporter: exactly either way if the statement does come, which as you say multiple sources are suggesting the meeting has wrapped up and the prime minister will make a statement imminently if it does come we're talking about a good five hours since the cabinet meeting began. clearly the cabinet meeting wasn't smooth sailing for the prime minister we'll wait to hear whether or not she has got all of her cabinet m cabinet ministers to fall in line if she has she might be able to move on to the next stage which would be to try to sell her deal to parliament. if we look at the british pound today, it's been up and down throughout the session based on little headlines and nuggets people have been trying to hold on to. it's still lower on the day, fractionally moved up on the news that the cabinet meeting is winding up even if she gets through this cabinet meeting and she comes out in a moment's notice with some positive update, there is

another story brewing on the side, which both the telegraph in the u.k. and the bbc's political correspondents are reporting, that the hard brexits don't care what the cabinet might or might not agree to and they want to submit their letters to the party chairman and have a vote of confidence regardless it requires 15% of the current members of parliament in the conservative party that's 48 of 316, and both the bbc's and telegraphs are suggesting that the number of letters required is tantalizingly close. that could happen regardless of how this cabinet meeting has gone. >> i was reading some flashes and going to ask you about that very point, the possibility of a no confidence vote that could come very, very quickly if those -- the number of letters is met the other thing i saw and i'd like to get your thought on,

maybe you haven't had a chance to look at your screen, but that the brexit minister who was scheduled to go to brussels presumably to present or hail an agreement, a brexit deal, was going to leave today is now not going? >> absolutely. i saw that about ten minutes ago. the brexit minister who replaced david davis only a matter of months ago who had resigned himself, that i wouldn't say is the most crucial headline of the day,tyler given that it's late in the evening in the u.k. it's plausible that even if the development from this cabinet meeting was positive that they might wish to delay that until the morning anyway either way the pound up and down throughout the session doesn't know the answer yet, but i think the key thing to take away from the last hour or so is this cabinet meeting has dragged on for five hours even on the side of that, members of her party, the hard brexiteers who are members of parliament but not in cabinet

aren't very happy either both the cabinet and the parliament could push her over the edge the british pound is trading lower, but off the lows of the day, and we'll continue to watch what happens, the fact that we still haven't heard from her has got a lot of people worried. >> and we're down more than 300 points on the dow as you see there at the new york stock exchange, or 1.3%. if there is a no confidence vote in theresa may, what happens next >> if this is a no confidence vote that comes from those members of parliament outside of the cabinet, as we said 15% of the 316 mps, 48 mps, then there can be a vote held as soon as tomorrow morning the vote will be just those 316 conservative mps, 48 of them needed to trigger the vote, but then 50% of them plus one needed to oust. if she survives that, she gets a 12-month stay of execution they can't have another one of

those sorts of challenges over the next year. if they challenge her and fail, then it sort of strengthens her position somewhat. the vote itself could happen as soon as tomorrow if that happens, that would just be a vote within the conservative party it would be a changing of the leader of the party as opposed to a general election, and then they could find her replacement within the party as soon as ten days to two weeks you could see a change of prime minister my expectation is if she either comes out to say cabinet is not backing her or we see that sort of vote of confidence triggered, that we would see pound, the british pound fall quite significantly because it would increase the chance of a no deal brexit might fractionally increase the chance of a second referendum as well, but i think markets would focus on what the default is, and the default without a deal is no deal >> lots of moving parts, thank you for keeping us updated if we look at the pound versus the dollar, the pound is down a third of a percent against the

dollar at 1.29 the dow has fallen more than 300 points, below 25,000 losing steam here into the afternoon here, bob. >> reporter: and an additional risk in the market now remember what's been moving the market, fed ask inflation concerns, china and tariff concerns let me show you the s&p futures. we had good news on the cpi. the market rose preopen on that. then about 11:00 we have maxine waters who likely will come in as the head of the house finances services committee saying regulatory rollbacks in the banking it's going to come to an end, and the market drifted south on that. this is a new additional slight risk for the market here, regulatory issues that we haven't heard for a while. take a look at the dow movers want to show you the weakest sectors, it's all financials travelers, goldman sachs, jpmorgan all dropped on that news, and they are now the weakest in terms of percent of the dow industrials. apple has been weak throughout the day. health care stocks also dropped on this news, united health was

one of the weaker components in the dow jones industrial average, and most of the health care component in the s&p 500 is also among the weakest sectors out there, and that's because health care potentially is also another sector of the market that's exposed to regulatory risks around the democrats being in control of the house. this is a new risk factor that we're going to have to deal with in the near future, and sort that all out guys, back to you. >> thank you, bob. let's get more on today's decline with jim mcdonald, chief investment strategist with northern trust and brad mcmillen, ceo of commonwealth. thank you for joining us as we're sitting at session lows. bob just gave us a bunch of risks and worries to the market. is this a short-term list of risk and worries, or is this something that we should really be mindful of going into the end of the year? is a recession at hand, jim? >> no, so let's separate these factors into ones that have got some relevance and ones that are just noise

brexit, for example, probably noise. people are way underweight uk stocks change in regulation probably also not a sustaining problem. what i think the legitimate concern is around earnings growth and the pace of economic growth into 2019 and does the fed make a mistake i think the market's adjusting to a lower growth environment, but i don't think we're heading into a recession or a bear market >> and what about you, brad? are these risks something that we should be concerned about i know when we talk about recession we're looking at economic growth. we had guests on earlier in the show that said economic growth is not over, but it is slowing >> it is slowing, but the thing you have to remember is when we look at a recession, that's usually where we get a bear market we don't see the signs we see consumer confidence at very high levels we see business confidence high. the fed is still stimulating, and job growth is still spectacul spectacular. we don't get a recession under those conditions when that happens, we'll see volatility we saw it earlier this year. we saw it in 2016.

that doesn't mean we're going to have a bear market i think that's where we are. it's still fairly healthy. >> doesn't mean it's going to be an easy market to make money in, though brad? we have this debate on almost a daily basis on whether or not the bull market continues, whether or not there's a bear market but there's a lot in between those two scenarios and that's the scenario where we are right now. you can point to all sorts of economic data that say the economy is doing very well, but at the same time corporations are saying going to the fourth quarter we may have a real problem on our hands we've got apple, amazon, home depot saying fourth quarter sales are going to be weaker than we expect those are big and broad barometers of consumer spending going into what should be a very seasonally strong quarter. going to the end of the year, brad, is it a foregone conclusion that seasonality is going to kick in and that because there's no bear market that we're going to be making money on the broader indices >> i think what you have to remember here is companies have a vested interest in being kind of down beat and then beating

expectations we see this every single year. every single earnings season so it's almost expected for the companies to come out and say, wow, things are going to be really tough i'm not sure we're going to be able to do it. i'm not too concerned about that because if you look at wage growth, for example, if you look at spending, all of the factors that drove faster wage growth are still there. even if we get slower growth, it's still growth. it's not terrible. >> so many guests have come on cnbc and said banks, financials, this is the growth group today they are the biggest laggards as interest rates rise, banks are supposed to be making more money and now you have maxine waters saying watch out, those bank regulation rollbacks are going to end i know that's striking fear into financials today, but is that group not a favorite class anymore, and what can we glean from the action in financials? it seems to be a reverse of what so many thought would happen this year. >> i don't think financials are a group to over weight here. i don't think they're going to get another regulatory push

either beneficial, and it's also not going to be a big headwind we also don't see interest rates continuing to rise, which would benefit the bank ifs it were to occur. we like the health care stocks they were great before the election we think they avoided a bad case outcome through the election, and if you're looking for a sector to joeoverweight we'd pik health care. >> i have to say jim, the sight of you standing there above number 10 downing street where it looks like your body is over half of your body. >> i'm getting ready to make an announcement. >> if that door opens and we see something, i don't know what i want to see. anyhow, brad, if you hadt 12 months, what might it be >> right now i think japan is an interesting place to be. they're continuing to do well. they're really the only economy that's continuing to stimulate in fact, the central bank's investment in their markets is actually helping corporate governance i think japan is probably the best risk/reward trade right

now. >> well, gentlemen, thank you very much. jim mcdonald. >> open that door. i want to see the door open. >> i want to see if he's wearing any pants is what i want to see. >> and brad mcmillen of commonwealth financial network thank you. the two biggest marijuana companies, till rray and canopy growth, are investors concerned about their growth a. >> reporter: cannabis stocks are taking hit today during a busy earnings week for the sector both tilray and canopy growth down in the double-digits. canopy reporting earnings this morning missing revenue estimates. it was a sequential revenue miss for canadian cannabis companies the challenge is that the quarter ended before recreational sales began in canada while their earnings reflect the expenses incurred from ramping up in preparation for the recreational opportunity, they didn't capture the sales as one analyst tells me, many canadian cannabis companies are dealing with rollout execution issues as they struggle to meet

demand linton told us on squa"squawk a" that prior to legalization, provinces were just doing stress tests. >> the provinces are doing a good job now, but they couldn't buy anything in the quarter because they were all getting up to speed we're getting up to speed. none of that prohibition ending product landed in the quarter. >> analysts also point out that while some of the operational challenges are specific to canadian cannabis companies, american cannabis companies like cu cura leaf are also down today. representative maxine waters presumed to be the incoming chair of the house financial services committee when the new congress vconvenes in january speaking out about banking regulations. elon mu wee is in washington with more. >>. >> reporter: she certainly struck a combative tone there. waters promised to flex her muscle once she takes the helm

of that committee. >> make no mistake, come january in this committee, the days of this committee, weakening regulations and putting our economy once again at risk of another financial crisis will come to an end >> reporter: this is part of democrats' strategy. they want to use their oversight authority not just to investigate the trump administration, but also to position themselves as advocates of main street and not wall street so expect to see a lot more hearings and a lot more rhetoric like you heard this morning. i am outside the caucus room where democrats are laying out their strategy for 2019. it's been a -- dems clearly want to maximize their time in power. >> thank you very much. we are still waiting for the u.k. prime minister to speak about brexit we expect that to happen moments from now, but we expected that moments ago. we're watching the door just like you are behind door number 10, theresa

may or may not as we head to a break, a look at the dow 30 heat map. right now the dow is off 280 some points. that is a bit off its lows of the day, but still looking pretty soggy for the dow i am a family man.

i am a techie dad. 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 to "power lunch. we are still waiting for u.k. prime minister tree so mheresa speak about brexit we will bring that to you as soon as it happens. some surprising findings in a new retirement survey from wells fargo. four in ten workers say living past 85 would be a financial hardship and the most stressed out group right now aren't millennials, but generation x here to explain is frederick oxider head of strategic business at wells fargo asset management why is gen x so bummed >> in a way they were sandwiched between two different systems. the boomers, many of them have a traditional pension plan, a defined benefit plan the millennials have oftentimes

been automatically enrolled in a defined contribution plan, a 401(k) plan and gen x fell in between. they started saving six years after the millennials. less than half of them have a financial plan, and more than half are paying down student loans. they're more vulnerable. >> so let's talk about the level of savings that people have, and i am always shocked at how little it is take us through some of that >> yeah, it's -- i think what -- first of all, what we find is this extraordinary power of what we call the -- to have a mind-set where you are -- you're taking action. you have a longer term plan. you also have a shorter term plan, and if you don't have that, this planning mind-set, then you're becoming more vulnerable you're saving less, so i think in order to get people to save

more, to accumulate more savings, we've got to get more people into this planning mind-set. >> i'm wondering if recessions in some cases are helpful for the long-term to scare investors straight, millennials, for example, quite young when this financial crisis happened. i'm a millennial i was early in my work life relatively when that happened, and i got to tell you, it sort of scared me into thinking i want to be more aggressive when it comes to savings. is that helpful for a generation to have that in early earning years? >> i think it is in many ways helpful, and because they see just the difficulty and you saw that maybe it was your parents that were going through a tough time your friends had a tough time finding jobs, and it just highlights the importance of taking that longer term approach and, you know, we've seen that with other past generations, those that went through the great recession as well, so in a way it can provide some really

important learning. >> how many people are worried about outliving their money and should they be >> it's a great concern. it's actually the greatest concern that we have from a financial standpoint seven out of ten are concerned about running out of money. >> and are they right to be? >> yes, yeah, and in fact -- >> they're in danger, many of them, some of them >> yes, and people are becoming more realistic also that they may live longer. 42% expect to live past the age 85, and 38% say that if they live past 85, it represents economic hardship. >> should you think about retirement not as at 65. these days if you're thinking you're going to live until 85, part of the reason you're scared of running out of money because you're thinking about 20 years without bringing in a salary should that new age be 70 or 75 now? >> more people -- two parts to this, the first, more people are

thinking like you and i also want to -- >> sorry, we've got to interrupt. u.k. prime minister theresa may emerging to make a statement about brexit. >> the cabinet has just had a long detailed and impassioned debate on the draft withdrawal agreement and the outlying political declaration on our future relationship with the european union these documents were the result of thousands of hours of hard negotiation by u.k. officials, many, many meetings which i and other ministers held with our e.u. counter parts i firmly believe that the draft withdrawal agreement was the best that could be negotiated and it was for the cabinet to decide whether to move on in the talks. the choices before us were difficult, particularly in relation to the northern ireland backstop, but the collective decision of cabinet was that the government should agree the draft withdrawal agreement and the outlying political declaration. this is a decisive step, which

enable us to move on and finalize the deal in the days ahead. these decisions were not taken lightly, but i believe it is a decision that is firmly in the national interest. when you strip away the detail, the choice before us is clear. this deal, which delivers on the vote of the referendum, which brings back control of our money, laws, and borders, ends free movement, protects jobs, security, and our union or leave with no deal, no brexit at all i know that there will be difficult days ahead this is a decision which will come under intense scrutiny, and that is entirely as it should be and entirely understandable, but the choice was this deal, which enables us to take back control and to build a brighter future for our country or going back to square one with more division, more uncertainty, and a failure

to deliver on the referendum it's my job as prime minister to explain the decisions that the government has taken, and i stand ready to do that beginning tomorrow with a statement in parliament if i may end by just saying this, i believe that what i owe to this country is to take decisions that are in the national interest, and i firmly believe with my head and my heart that this is a decision, which is in the best interests of our entire united kingdom >> we have been listening in to u.k. prime minister theresa may making a statement after a five-hour long or so cabinet meeting. we want to go to wilford frost down at the new york stock exchange we understand that she will also address parliament with the contents of the deal, which she says is firmly in the best interests of the nation.

>> reporter: absolutely, melissa, and we saw sterling rally and as it started to do in the previous minutes up 0.23% on the day. it had been down 0.6% as recently as an hour ago. we did see equities in the u.s. pick up as well off the back of that the key thing she has achieved here is she has united remainers and brexiteers within her cabinet to back this deal, it seems unanimously from what she said there what she has not done is united extreme brexiteers the most extreme priestly in the cabinet, the likes of boris johnson and david davis resigned some months ago therefore they weren't in that group. a very big achievement what she's done today as we've also been hearing throughout the day, there are some others in her party who may not be happy with this she's not in the clear completely, but she has taken a massive step forward with her deal as she said, the collective

decision of the cabinet to agree to her deal, and she called it a decisive step towards brexit sterling is up, but still pretty much flat on the day, which highlights there are still many hurdles to overcome. >> what do we know of what is in this proposed deal and how it would impact britain's economy and europe's >> reporter: well, at the moment, just leaked details, 500 pages it's reported to be this provisional agreement, which as the prime minister just said will now be published so that all members of parliament can dive into it and of course the members of the european union can as well. at the moment it's just theresa may's negotiators and michel barnier that have come to agreement, and now the cabinet as well. i think the key point, though, in general from what we know on this tyler, is that it is a middle ground brexit it is not a hard brexit, and therefore it is not the worst-case scenario for the british economy in terms of its trade with the european union.

the other key point that she made at the end there, she felt this was in the national interest for the entire of the united kingdom i'm sure she chose those words on purpose there's been a big debate whether this debate could separate northern ireland away from the rest of england i'm sure she's implying it will not. still very much within its range, the last four months around 127 to 132. the markets at least not resoundingly celebrating what is a huge individual day's achievement for the prime minister because there's still a long way to go to get this ratified. >> thank you so much joining us from the new york stock exchange, and we should note that u.s. indices right now are well off the session lows. we had been down below the 25 mark on the dow jones industrial average, and right now we're down by 231 points or just about 1%. wall street's darling rolled

over apple entering a bear market as wall street begins to doubt how many iphones they can sell is the street right, or is this the perfect buying opportunity much more "power lunch" straight ahead.

welcome back to "power lunch," i'm mike santoli it's time for trading nation the bears have come for apple. the tech giant under pressure again today now down 20% from its record high set in early october. it has now shed $213 billion in market caps since that point joining us to talk about it is bill baruch with blue line futures, and rockefeller capital management, bill, what's the setup here in terms of how this chart looks? you've broken through the 200 average, obviously well below the $200 mark on apple shares. is it any kind of a bottoming process here, or is it kind of a freefall still >> i'm actually not too concerned it's below the 200 day moving average look at february, look at april, it was below for six and seven sessio sessions i'm also not even too concerned that we're below 187 which is a

trend line from those areas. i do see a tremendous amount of support down in 182. i want to see that be constructive i would love to see it close back above 187 on the week, and if we can get above that 200 day moving average, 204, 207 could be in the cards the next months. i like apple, i think it's going to recover very soon >> michael, you know, it's interesting it's been such a weak stock it held up so well going into this phase it's going back to about five or six months ago in terms of where the stock traded around memorial day. does that mean it's at a big discount or do you think that basically it can get cheaper still? >> i think it's at a big discount this panic and craze is unjustified. the fact is it's still up 10% for the year the s&p is flat. let's face it where we are even though it is down. if we shift to fundamentals, millennials want it, teenagers want it, adults want it and they're talking about the nebs iphone, the next product, the

ne next apple experience. we're long the stock for the foreseeable future. >> is this a longer term call? in other words it's going to be all right or do you think there's something about current levels where you think that fundamentals are going to shine through? >> i have no concerns. i think the holiday sales will surge. i think earnings are going to continue to grow they're trying to figure out how fast they're going to grow and how many products they'll keep selling. there's nobody close to them in the market >> all right, that's what the bulls are hoping guys, appreciate your time today. thanks very much for more trading nation head to our website or follow us on twitter @trading nation. the inflation debate, it turns out more and more companies are concerned about rising prices. are they worried it will hit their bottom line, and if so, what does that mean for the economy? plus, the world's largest retailer has been outperforming the sector in the markets.

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let's get a check on the markets. stocks moved pretty strongly off the session lows the dow had been down by more than 350 points earlier in the session. right now the dow down by 209, a decline of 8/10 of a present s&p down by 21, and tnasdaq is off 57 points. dow dupont and home depot are laeting, and some big retailers in the red, macy's, williams sonoma macy's lower despite an earnings beat oil stocks are moving lower even though crude has pushed higher now let's get to sue herera for

a cnbc news update. here's what's happening at this hour, everyone. acting attorney general matthew whitaker making his first public comments since replacing jeff sessions last week he spoke at the rural and tribal elder justice center in des moines, and that summit is regarding crime against senior >> our goal is to reduce crime in america and protect our seniors, and we have good reason to believe that our work with law enforcement partners is reducing crime and having a real impact in the quality of life for seniors in this country. >> the 13-year-old boy who shot a classmate and teacher at his indiana middle school last may is now headed to juvenile detention. the child whose name is not being released due to his age admitted to that incident. the judge sentenced him to the facility until he turns 18. the number of tick-borne diseases across the country is at an all-time high. that's according to a new report

released by the cdc. nearly 60,000 people were diagnosed last year, mostly with lyme disease i don't know if you could hear the groan in the newsroom, but everybody was groaning at that video. >> that video was more than i needed to see. >> i liked seeing the tick being plucked off. >> they are all over the place. >> i don't like that. >> even when the weather gets cold you've got to be careful. >> yes, that is true i don't want a tick-borne disease, and i don't want to see that video again. >> we do not need to see that again. >> wait until it gets popped off. holding on for dear life we missed the money shot when it's actually plucked off. >> thank you, sue. i think. >> oh, you're welcome. >> i think. >> yikes the oil market is closing for the day. let's take a hard right turn and go to jackie deangelis at the cnbc commodity desk. >> it's hard to follow that tick video. it only will get better from here oil prices higher in this session, session high was 5737

now you can see 56 and change. the gains today less than a percent. after such a dramatic decline in oil prices this bounce was normal, but is it convincing enough some investors think 55 is the short-term floor others think the fundamentals show oil shouldn't be priced this high. the gains in oil started to walk it back. the correlation between the two certainly can't be ignored right now. back to you. >> jackie following every tick in the oil market. >> that was good >> as of right now, the fed doesn't seem too concerned about inflation. should they be steve liesman digging through the corporate earnings calls to see what ceos are saying what are you finding >> we scoured 425 of the earnings calls that are in so far from the s&p 500, and we found that the mentions of inflation have ticked up you can see here 33% of companies that have reported earnings calls have mentioned

inflation. that compares with a ten-year average of 26%, so it's up a little bit it goes up with inflation and mentions the question is does it lead here are the top sectors we've seen it mentioned. 65% of companies in consumer staples have mentioned inflation. 57% of materials the bottom three of the sectors, health care very interesting, not seeing a lot of inflation right there. communications services and information technology these sectors tend to have lower prices or even declining prices. here's some of the commentary we came across. you can see the diversity, kelloggs, ralph lauren, ppg here's some of the commentary. chipotle says wage inflation is a bit of a wild card we can't overcome that with transaction growth alone that will require some careful timing and place in a menu price increase over at ingersoll rand,

the second half has been become increasingly inflationary since we updated in july we are embedding the impacts of additional material and other inflation tariffs, the question is does it lead to greater inflation down the road? >> steve come on over. we want to bring in mark zande, the chief economy at moody's analyti analytics. great to have you with us. >> you guys got to get out of the city that wasn't that bad. >> you see these ticks all the time is this old news >> show it again >> you've got ticks in the suburbs. >> when it comes to inflation, mark, i mean, companies it behooves companies to say these are costs that are rising to sort of sandbag on guidance. what do you believe in terms of what companies are actually seeing in the pike compared to what you're seeing in the data >> this is real. i don't think they're sandbagging. yeah, no, i think prices are rising, and for the things they're buying, the inputs into whatever they're doing, ask

they're raising prices for what they're producing. inflation is picking up. it's still low, it's close to the fed's target of 2% but definitely picking up and will pick up more going forward. >> do you think that powell's going to talk about this tonight? >> i think he's going to say that inflation is at or near his goal and his target, and he's happy with that, and he'll by implication suggest that that is enough for them to continue to raise rates. i think he doesn't have to talk about this as much as through his actions. the idea of them continuing to raise is sort of em placing what mark is saying remember what's going to come down the pike in the next couple of months. you're going to have lower energy prices, and the question is does the fed look through that i expect it to look through that. >> mark, my notes say that you say that the economy is strong and threatens to overheat. >> right >> why do you say that if most forecasters say that the economy's growth is actually going to slow as we move into 2019 >> it's going to slow because

interest rates are going to rise because of the overheating it's a process, right? here we are, the economy's very strong growing above potential, unemployment's low it's going to fall further the unemployment rate is dwsh. >> -- it's going to be overheating at the same time it's slowing >> it's overheating. >> now. >> right now it's rip roaring, 3% growth, unemployment is falling. wage growth is picking up. inflation's going to pick up that's an overheating economy. the fed's respond, interest rates are rising long-term rates going to rise in part because of the fed and also in part because of the big deficits. >> does the fed win this fight, and then does the economy go into recession >> well, the metaphor is the fed's trying to soft land the economic plane the reality is the fed has never soft landed the plane, so in my view recession risks are very, very high. not next year because we're going to be still benefitting from the juice from the stimu s stimulus, but in 2020 when the stimulus goes away, i think recession risks are very high. >> should the fed be taking a different path than it's taking

in order to avoid it can they do it this time >> at this point the die is cast once the economy goes past full employment, it's by definition it has to come back to full employment or it overheats let me just finish. >> what is wrong with your idea that the fed has never soft laned the plane? >> let me finish this one point. this seals it in the mind of people who don't think about this every day if i'm going to a 3% unemployment rate and 4.5% is full employment. we can debate that that means i've got to go from 3% to 4.5% without crashing the plane. that is incredibly difficult and i would suggest almost impossible. >> but it would be worse for the fed to take their foot off the pedal in terms of being more dovish >> no if anything they've got to be more hawkish. they've got to be quicker and take more steam out of the economy now to try to forestall

that overheating that's dead ahead of us. >> the thing that's wrong with your idea, i love the idea that "power lunch" is now the place for ticks and plane crashes. this is the thing, we've had two of the longest expansions in the post-war history almost back to back, so i think that tells you that there's a lot of landings that happened that we may not really be accounting for here. it's possible i think for the fed to get out of this, and i think in the following way one thing you see when you see these corporate earnings reports is companies are struggling with what to do before passing on these increases t some of them are forced to reduce margins some are boosting productivity others are looking for ways to do that. i think there are ways to stretch the global resource system here without having a whole lot of inflation so i think the fed has some time

to put some constraint on the economy, slow it down, and not necessarily cause a recession. >> let me clarify, every time the economy has gone past full employment it has never soft landed the plane you're right we can come in things slow and ebb and so forth but once you go past full employment, particularly when you go way past full employment, we're going way past full employment, they've never soft landed that plane. you're right, it doesn't mean -- things happen. you're right, we could have some luck on the productivity picture, but that, if you're a prudent planner, you don't plan on that. i mean, i say bring it on. give me the productivity right now the productivity growth is below what we've experienced historically, and we're expecting some miraculous e mac lat consumption. maybe, but i wouldn't count on it. >> nice to have you in the house. >> it's good to be here. talking about ticks. >> good thing. >> there's obviously some diversity here >> yeah. the dow off its lows but

earlier in the day testing the 25,000 mark, so what happens if we do close below that level art cashin is with ubs financial services on the floor of the new york stock exchange. do you see that, art welcome number one, do you see 25,000 as a kind of line there >> actually, it turned out to be so they were looking for support at 2,700 in the s&p and 25,000 in the dow, and they broke through both of those, and it was almost an audible gasp down here on the floor, and everybody wanted to see if that was opening a trap door and would we begin, you know, major league selloff, and instead, what they did was they kind of dried up, and you know, that which doesn't kill you makes you stronger we broke through the support, but it didn't turn into a trap door, and so now it's deemed to have been a successful test of support around those areas. >> and so what does that suggest or portend as we move into the end of this week and next week >> well, it suggests that you

want to, a, hold that level. you might get a retest of it you know, we had the market rally, and then it failed on its own. in the process of its failure, we had maxine waters come out and basically say she was going to be tougher than ever on the banks and financials that added to the selling. then what was supposed to be a very brief cabinet meeting for theresa may with a brexit proposal turned into five hours, and that brought more selling, and then we tested those levels. so for the balance of the week, i would expect you might see a retest a lot will depend if you can keep oil under control here, and a lot will depend what happens when that number door opens. >> as we move deeper into the fourth quarter, are you a believer in seasonality or should we write that off at this point? >> i think for the short run we have to put santa claus's picture on a milk carton for now, but maybe a week or two after thanksgiving we can go looking for him again.

>> all right, art, thank you very much. always good to have you with us. art cashin, ubs financial services. and coming up, walmart has been an outperformer over the past three months. the company's set to report its results tomorrow, should the stock be on your shopping list we'll get a break down of what to expect and how to trade it. that is ahead on "power lunch. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

welcome back to "power lunch. earnings season may be winding down, but we're still waiting to hear from a very big names, including retail giant walmart that reports tomorrow morning. what should investors expect let's bring in a partner at moffett nathanson. walmart on a great run, 15 straight months of traffic growth and 14 straight of u.s. comp sales growth of 4.5%, the best in ten years last quarter is that going to continue? >> we think they can have another strong quarter so we

think they will do over three comp the key is watching traffic. the traffic is something they have invested a lot of margin over the last few years, and once you get traffic running up 2%, that's the part of comp that can sort of stick and have momentum that's what we're watching for tomorrow. >> traffic is important because the vast amount of sales is done in stores and we're looking at online because that's a growth engine what are your expectations there because we've had some quarters where the growth rate has pulled back and it's really weighed on the stock? >> right around 4% and next is 5.5. the over/under is 30% plus is key and how they are integrating multi-channel, store and online. the real growth driver for them is click and collect pie with your phone, online and put it in your car and they will roll that out to another thousand stores this year. >> are you worried about the fourth quarter in spending after amazon, apple hand home depot say fourth quarter is going to

be weaker on sales specifically? >> well, we have a 5% holiday forecast, on our lead indicator says the consumer is in a reasonably strong spot basically due to a good employment market. the wealth effect has been helping as well. we're reasonably optimistic about holiday, so to speak next year a little more concerned as we think about what a rise in interest rates can do and also tariffs, if that sparks some inflation. >> i was going to ask you. what is the tariff trouble that walmart may face, and how will they deal with it? >> we did a piece over the summer and getting more and more updates on it. if you look at our 24 companies, they account, we think, about 150 billion of their cogs come from china. >> cost of goods sold. >> right. >> so if you think what that can mean to inflation, if they pass through 60%, 70%, it could be 30 to 40 basis points and if it's running 2 to 3. >> it could go up.

>> that's right. >> so let me flip back to sort of the on-the-ground thing what has walmart done right in its stores >> the key for any retailer is to give that experience, and what they have done in the stores is they have improved the experience by investing in the stores, by investing in labor. they started raising their wage rates several years ago. they started adding labor back to the stores and bringing in department managers, so i think that execution in the store combined with really focusing on merchandise and basic merchandise. >> you can find somebody to help you, and they know what they are doing. >> in retail that's blocking a tackle lane. then you layer that in with investments which hopefully improve productivity and i heard mark before. we want productivity growth to get sustainable wage growth. if you do that you get the traffic and repeat customers. >> walmart's ceo really worked on the retail fundamentals. >> absolutely. >> when he came in they weren't firing on all the cylinders. >> he's done a great job. >> thanks very much for being

here, greg. >> good to see you remo of today's market volatility and more on the market moves straight ahead. (toni vo) 'twas the night before christma, and all thro' the house. not a creature was stirring, but everywhere else... there are performers, dancers, designers the dads and the drivers. there are doers of good and bringers of glee. this time of the year is so much more than a bow and a tree. (morgan vo) those who give their best, deserve the best. get up to a $1,000 credit on select models now during the season of audi sales event. i am an independent financial advisor. for our firm, it's about trust and transparency. trust that we do what's right for our clients,

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time for check, please in just our two hours here on the desk, we've seen the market go down to its lows of the day about 350 points comments by maxine waters about being tough on the banks that might have been one

explanation. some concern about brexit which apparently has been allayed now as theresa may came out and made a statement. now, we're down only about 95 points, back above 25,000. the s&p 500 breached 2700, but it's now back above that. >> i'm watching on facebook very, very closely just in the past 15 minutes or so, facebook moved towards session highs and so half a faang is behaving. facebook shares moving to session highs. >> a sharp move. >> really jumps out at you when had you take a look at the intraday chart. >> very quickly, victoria secret's ceo resigning her position after two years the big business within l brand. shares not moving much on the news l brands down sharply, down 45%. >> one of the picks on "the halftime report" desk.

i can't remember which of the crazy najarians picked that. >> dodged another bullet in terms of ending the show here at session low though art cashin said santa, we'll have to look for him come december. >> on a milk carton. >> for now on a milk carton. thanks for watching "power lunch. "closing bell" is up next. >> courtney is not going to "closing bell." >> i'm not. >> but it starts right now >> i'm many wilfred frost. another roller coaster session here on wall street as apple enters a bear market territory we'll debate whether it's time to bale on the bellwether. and closely watching brexit across the pond as the relationship between the uk and eu hangs in the balance. we're hear from a former member of parliament who says prime minister theresa may is a traitor and needs to go. >> and i'm morgan brennan in for kelly evans. high-level trade talks taking place between the eu a