it is midnight in china, 11:00 a.m. on wall street.

♪ ♪ good morning i am carl quintanilla with morgan brennan and mike santoli. jon fortt is on assignment we begin with full team coverage of the selloff another 600 points after 800 tuesday. the arrest of wow way cfo as they weigh china trade tensions. dow is down 2% and ylan mui has more on trouble for tech as silicon valley ceos have a meeting today with the trump administration first, jackie deangeles with breaking data. >> interesting day for oil

we await a final decision from vienna you can see the losses are paired, and that's because the eia was out with weekly inventory report, delayed because of the national day of mourning yesterday what the number signifies is that even if production in the united states and globally is at high levels, if demand is there to meet that production that the oil market could find balance. u.s. production numbers, 11.7 million barrels a day, that stayed stable. it hasn't risen in three, four weeks. that's something investors are watching still in the session, down more than 3%, closer to 4%. $50.93 back to you. >> thank you deird deirdre bose has more on the cfo arrest. >> it can effect the supply

chain. meng wazhou is sought for extradition by the u.s., related to u.s. sanctions. also december 1st, president trump and president xi had dinner the embassy in canada demanded her immediate release, and state run global times call it declaration of war against china. tomorrow, a bail hearing was scheduled. guys, meng isn't just cfo, she's also the daughter of the founder, ren zhengfei. meng is seen as his possible successor. it is not public but global reach far greater than better known companies lika like aliba. they're the number two smart

phone maker. its reach spans europe and asia. meng's arrest is the latest in their troubled history in the united states. its equipment banned on security concerns and recent "the wall street journal" report says that washington launched a campaign to persuade allies to do the same so far, australia and new zealand have taken up that call, the uk could be next guys, we continue to track this complex story through the day. >> very complex. thank you. the tech sector on pace for the worst quarter since july of 2010 nasdaq down another 1% today bring in portfolio manager jeffrey meeks. talking about tech at large. paul, this story is an outlier, hard for analysts to predict this ramp up in escalation in trade tensions what does it mean for tech companies, for executives trying to do business in china, and

obviously today, share prices. >> i think this is unprecedented and incredibly stupid. i'm embarrassed about trade relations when we pull something like this. of course, in technology, the more cyclical industries in the tech sector, semiconductor and capital equipment, even though their stocks have come down to attractive valuations, i still can't step in when this stuff is going on in the background. >> until what, until what happens, paul? >> i would like to see some of the names fall even further to valuations, whether they be priced to book, price to sales, to earnings akin to what we got in the depths of the financial crisis for some stocks, it is a way to go of course on the geopolitical pro front, we need to see some

stabilization. some sort of move by both sides to come to some sort of a peace. >> brent, there's a lot of focus on the supply chain. we don't have a lot of details there are questions how this will play out, the role sanctions are playing and the u.s. is not the only country that's been cracking down on devices sold could there be potentially winners in all of this, namely some american tech names if you see more demand go in there direction? >> yeah, i cover mainly the internet names, not the supply chain names so as paul said i think many of our clients are sitting on the sidelines of tech they want to wait until end of the year, assess how companies guide into early next year before they're willing to step in here. we have seen a 20% correction in faang since the peak the group is still up 10% year to date.

down 20 from the top i think as paul highlighted, we think some historic multiples can go even lower in the short term and again with year end beginning of year starting, i think most clients are saying i'll take a wait and see on tech clearly in terms of valuations, seeing some attractive names like facebook at ten times, google at ten times. we believe there are long term opportunities here now but again, tactically short term there's little to get anyone excited on tech until early next year >> you say a lot of clients are on the sidelines it would seem if they're on the sidelines, that's recently it is a crowded setup ahead of this downturn. i wonder how difficult that makes the job of saying now finally stocks are overdone on the down side. what we're seeing is people cashing in few areas of the market where they have gains >> yeah.

i won't say everyone is on the sidelines, but definitely seeing exit and rotation, defense of sectors of names like coca-cola, starbucks, dunkin' donuts that held up better than some names i think we're seeing overall rotation out we don't think that stops until early next year. relative multiples are starting to stream more attractively. client conversations, their belief is they have time to watch it drift lower >> paul, when the trade tensions were pretty nascent, a lot of analysts came on and said beware of hardware, but because of the change in trade flows, software might be immune. then a story like facebook, international regulatory institutions are putting pressure on a name that has nothing to do with buying chips or part of the semiconductor

cycle. >> very good point there we have a privacy issue, and it is not domestic, it is global and i think i may disagree with the other contributor here this morning. i do like facebook yes, it does have a relatively low valuation, a valuation this low we haven't seen in some time however, i don't know whether added expenses that beef up privacy all over the world, i don't know what their business model will be. i have some sense what the top line will be i don't know what their expenses will be long term. meantime, the street is predicting flat earnings per share next year for facebook, and man, that stock, if that's the case, could come down lower. among the faangs, google is a buy at a thousand. even though i haven't said this in some time, i think the valuation pendulum is overcorrected. if you can get apple in the 160s, i would be a buyer and i have been negative on

apple for some time. >> interesting on a day where roseblatt takes their target to 165. talk to you soon >> thank you. let's get to the oil story brian sullivan in vienna with breaking news from opec. brian? >> reporter: we're seeing oil slide more here. this is the way it was supposed to work, opec meets, decide how many barrels to take off the world market and have a press conference about it. we got word the press conference today will not happen. that means one of two things it means they have not been able to reach a deal upstairs how many barrels to take off the market that's unlikely. the more likely reason it is cancelled, they're waiting on russia russia is not an opec member but they arrive tomorrow morning opec may have a number in mind but need russia's cooperation. they're likely waiting for the energy minister to come here,

run their number by him and get the russian blessing that's the expectation that's what we're hearing from sources at the opec meeting. what does it mean? it means that oil is not in trouble but certainly the market is going to be more jittery. guys, it also means this write down the date, december 6, 2018 that's the date that vladimir putin became more powerful with global oil i say that because whatever deal russia is blessing has to go through putin because putin is the only one with power to tell them what to do. the energy minister can say we agree to that cut, but big oil giants in russia are the ones that have to deal back taps. one person can do that, that's vladimir putin opec getting putin's blessing on the deal tomorrow. the global intrigue kicked it up a notch. >> you can say that again. brian sullivan in vienna watching that meeting. dow down 660 getting breaking news regarding

the board structure at coke. sara eisen has that. >> reporter: good morning, carl. the news is that the board voted james quincy will become chairman of the coca-cola board in april of next year. the previous ceo will be retiring at that time. muhtar kent stepping down after 41 years at coca-cola. it comments a leadership transition that's been in place since james quincy was announced ceo, has taken on the reigns of coca-cola, and transformed this 130-year-old american iconic company into a new world where they have been very aggressive, buying a stake in body armor, buying a uk coffee chain, getting into the restaurant business, and so on, as consumers change their habits, don't drink as much diet coke or regular sparkling beverages.

they're diversifying management and leadership and the product as well. the company has outperformed under quincy in the last year, outperformed pepsi, and the market, up 6%. guys, we're going to talk about it with muhtar kent tomorrow that's a cnbc exclusive on the change and new face of the company. back to you. >> thank you very much coca-cola has a good story to tell impressive management continuity. when we return, much more on this morning's selloff how investors position themselves in today's market, where the buying opportunities might be art cashin sits down with us after the break. resqwkll" sthemo "ua aeyju aad this isn't just any moving day.

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media that she was arrested on the 1st, and didn't get released until yesterday when u.s. markets were closed. >> the cfo. >> that's right. >> i noted looked like we would do a test of thanksgiving lows, getting close to it. that would be dow, 24268, and s&p, 2631. so we're basically there >> we're there >> you want to see, if they can hold here, then you can make credible point that we tested a double bottom, you could get a rally of some substance. if they slide through here, then you're going to look to test much deeper lows beyond this land, there would be dragons. >> i knew you would say that testing, what is the test if this fails are you in this new 2400 camp?

>> yeah, no, i think that becomes a likelihood we have yet to see the dramatic effect of this arrest. again as we discussed off camera, it would be like the chinese coming in and arresting steve jobs' son or something this is a high profile lady. it is going to be interesting to see what he has to say about it. in answer to morgan's question, what is the market reacting to, they're saying gee, this is such a high profile thing, how can we get the tariff truce started again. so they think it is pushed way to the side. >> this is also a market, art, isn't it, the last couple of months that's been unable to shake off any one particular adverse thing, especially when there are other things to grab at to worry about. you still have oil that's not quite stabilized

the fed tried to walk things back still looking at a rate hike we have a jobs number tomorrow it seems like the market is in sell first mode no matter the ted lines. >> it is a combination what's interesting, the day before, the brexit announcement, then broke a moving average, and they moved on from there also you had this thing about the yield curve wouldn't go away with it came the idea does that mean recession is looming. and you look at things like housing numbers, how far back will powell go and where are we. there is a sense of uncertainty. i have been beating a dead horse all year as carl keeps reminding me about interest rates. i have been a one and done guy, going to do it in december i think they have to walk back from it.

you're beginning to see that you see a couple of central banks walking back from where they were. the world is not what it appears. you're right, michael. i think the market senses that vulnerability on several levels. >> although that would be very similar to 2015, right you have a rate hike in december, first one of the cycle, then none for 2016 as you predicted. the market was in process of figuring out if that was a decent low >> i think they're scrambling around two big wild cards are trade with china because there's some sign of slowing globally, and then the other is the fed. we'll go from there. >> construct the ideal jobs numbers tomorrow >> oh, i would think that you've got to be careful with ideals, you know what the bulls want the

fed doesn't want i would say you don't want to see a big jump in wages, in wage pressure i think you want to see it kind of continue in this line if there's any kind of surprise move, if labor scarsity looks like it is building, that could spook the fed. the first line i would watch, wages, and things like average work week. >> before we let you go, you mentioned interest rates yield on the 10 year treasury, 2.835. seeing a dramatic move in the last couple of days. in the past, it has been nowhere to run, nowhere to hide for investors. the fact that investors are piling back into treasuries. what's the read through for the equity market? >> it is somewhat of a warning sign the whole thing about the curve is the fed is talking mildly tough, so that rate is at the

short end. but the fact that intermediate and longer end are coming down says that people don't believe you're going to see that kind of high pressure. i'm still in the same camp i think one and done, you may get to see a rate cut late in 2019. >> last thing, we haven't even mentioned brexit or tuesday's vote or may's tre -- travails. >> art, thank you. as we head to break, take a look at the worst performing stocks in the dow so far united health, dow, dupont, boeing dragging the index lower. boeing shaving 150 points from the dow. a lot more "squawk alley" still ahead. alerts -- wouldn't you like one from the market

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obviously the s&p is down more than 72 points, dow down 728. we have crude. we are watching 51, it sliced through that saudi arabia is proposing moderate cuts to rebalance oil markets. the cartel facing increasing pressure to appease the president who made opec a focus of the last year, tweeting nine times about the group, recently calling on suppliers to keep oil flows as is. joining us, founder of husseini energy thank you so much for joining us are you seeing any clarity out of this meeting? >> well, good morning.

yeah i think the good news is that we have both russia and nonopec meeting with opec, that's very important. this is a very important meeting. i think the fact that they will not make a final announcement until tomorrow is also very sensible they all need to be on board the minister of saudi arabia of course supported by uae, the secretary general of opec, they're all working together that's all very positive 2019 looks like it will be a weak year, demand will be soft usually the first quarter takes a big drop from the last quarter of the year before so it is important to have a clear idea of what the demand is going to be like and then to adjust supply accordingly. >> morgan brennan here what's more important when you look at what played out the last

couple years, price stabilization or market share. last time they cut, the u.s. produced more and prices were low and took on more market share. >> i don't think it is a question of so much competing for market share, i think it is a question of looking at the global outlook and making a pretty good forecast of what supplies are from beyond opec. i think the u.s. production is clear. not so clear is production from other countries, including within opec. iran, for example, venezuela, for example. so trying to get a handle on what the global supply will be like, then coming in with the additional supplies from within opec or reductions to make sure the market is balanced no intent at this time i don't think to try to achieve a certain price, but mainly try to

make sure there's no overhang of supply which is what we were seeing the last couple of months at the same time, not trying to make a big adjustment so abruptly that the markets react to that as well. >> as we look to other markets outside of oil, it seems like investors are bracing for a global slow down maybe it is under way, maybe it is a fear of one is there anything on the demand side that gives you concern when you talk about getting the market back into balance >> yeah, the demand of course with all of the issues of trade and tariffs, with issues of the chinese economy perhaps not being as strong. north american economy is well but the europeans are not. these are indicative of softness in the demand side on the other hand, you know, we

do have a usual downturn in demand every year first or second quarter are soft, by midyear, demand picks up quite a bit. i think strategic players in the market will not let the short term dominate their thinking i suspect that they'll be trying to go through this downturn now in demand and look to longer term later in 2019 to see recovery >> so you think seasonality remains a story? in a broader sense than past years or typical seasonality >> definitely there's seasonality as a foundation to what the outlook looks like. then beyond that, there's geopolitics. we still have iran building ballistic missiles, creating

tensions we still have instability in venezuela and concerns about ability to sustain production. and again, the european markets with all of the issues of brexit and trade, so that's an imprint on top of seasonality. that has to be considered carefully. i don't think opec will make all its decisions in one go. they will look at the situation now and review it again, and they will set targets during the course of the year to adjust their outlook. >> and looking ahead to 2019, opec will look different as well with qatar exiting the cartel. does that create a risk you can see more countries follow suit >> qatar has its own priorities. one of the largest l and g producers. certainly one of the largest gas reserves in the world. it is not a very significant

player as far as oil i think as they look at their outlook in the long term, they probably see perhaps advantages to striking a different act in terms of energy markets. it is sad and regrettable that they leave opec because certainly they were important at least politically important player, but it doesn't effect opec in any other way. they will still have the main producers, the five major producers, and with russia and others now supporting it, they will still be able to do a fairly good job trying to regulate oil markets >> we'll be looking for more headlines out of the meeting appreciate your guidance as always thank you for your time. european markets just closed, pretty much at the lows. seema mody has today's action.

>> mike, optimism of a trade deal is sparking a global selloff, european markets are down 2 to 4% germ german dax off from a recent high the market in london, the ftse 100 is down almost 4%. the index trading at the lowest level in two years comes as prime minister theresa may continues to defend her brexit deal ahead of a key vote in parliament next week. also weighing on the ftse 100, glen core and others down 7% and base metals and oil continue their decline. as relates to trade, autos, valeo and daimler are down, many times seen as proxy for the trade war. it is worth pointing out despite concerns of tariffs, impacting sales of eu automakers, volkswagon saying it is on track for a record year of delivery.

that stock down 4.6% as relates to technology, shares in european tech are underperforming following the arrest of huawei cfo here's where we stand in europe. italy down 24% from a recent high germany down 20%, france and uk down 15 and 12% respectively some significant losses overseas when you look at where they're performing relative to their 52 week high. morgan >> absolutely, thank you let's get to sue herera for a news update. hey, sue. >> good morning, morgan. good morning, everyone here is what's happening at this hour a suicide car bomber attacked a police headquarters in the iranian port city killing two police, wounding 42 more a little known sunni jihadist

group claimed that attack. the envoy for yemen says the two warring sides in the three year war signaled they're serious about de-escalating fighting people are gathering for the funeral service for george herbert walker bush in houston james baker, his former secretary of state and his grandson, george p. bush will be delivering eulogies. a special exhibit at the presidential library will be used to pull the funeral train it will pull his remains to the final resting place in college station. this will be the 8th train in history and the first since eisenhower traveled through 7 states 49 years ago. we'll keep you posted on the memorial service through the day. that's the news update at this hour back downtown to you guys.

carl, back to you. >> thank you very much union pacific, chairman and ceo sat down with us yesterday to pay respects to the late president and talk more about that locomotive that will take 41 on his final journey from houston to college station later today. take a listen. >> president bush had originally asked us to be part of a transportation summit at his presidential library in college station and for that purpose we painted one of our locomotives up 4141 in a special presidential scheme. only the sixth locomotive at the time we have done like that. as part of that, he had an opportunity to operate the locomotive on a two mile segment of the railroad, and he loved it he thoroughly enjoyed it almost couldn't get him out of the cabin. i had a chance to meet the president personally some number of years ago when i was responsible for the southern

region met him at an event. once he knew i was part of the union pacific railroad, first thing he wanted me to know, he was a great friend of the union pacific. did we know we would transport his body when he passed away he wanted to remind me finally i had to tell the president, mr. president, i love talking with you, i love learning about this event that you care deeply about, but i would like to talk about anything than the time you're passing away >> we forget, guys, the president was a pilot, made his living for a long time in oil services technology. he was an engineer the fact that he fell in love with the locomotive and trains in general is not a surprise >> who wouldn't. exactly. look at the major averages, down 681 today boeing alone accounts for about 150, 160 points. no components in the green s&p, 2632.

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stocks continuing a selloff, the dow down 675 points now. bob pisani with the latest from the floor on the action and levels investors should be watching >> we are well off the lows here, still 10 to 1 declining to advancing stocks that's an unusual number often signals a short term market bottom.

look at the sectors. it is largely trade related, but not completely energy is down because of disappointment possibly on opec numbers. bank stocks another group that's down we have 500 new lows at the new york stock exchange. that's expansion from the last couple of days mostly confined to industrials, banks, across the board, big money center banks and regional banks on the declining yields we have seen, and then some oil names. thishas been around, service names like halliburton and others sitting near 52 week lows the only thing balancing are home builders. they love lower rates. they're all up today technical levels, we mentioned it earlier

russell 2000 breaking below the october low. 1468 yes, these levels matter you see that's a three month chart. s&p is sitting at the november low, thanksgiving low. 2632 we closed november 23rd. we're sitting right there. that would be important. what matters to the markets, you keep mentioning the three, four things if you include oil, fed and rate hikes encouraging sien encouraging signs from kaplan saying to be patient tariffs in trade, the huawei arrest is a big negative, and major reason the market is down so much. growth slow down, that's the major problem going forward. oil here, we don't know yet, there's some concern of production cut may be disappointing. bottom line, we're oversold, down 1500 points in the last few days

and still not significant signs of buying interest now that's one thing i'm concerned about. we should be getting some balance here, not yet. back to you. >> just a round trip from beginning of last week that's the unusual part of the big update for more, we're joined by thomas dignan and brian levitt. guys, good to see you. bob ran through a lot of issues we know that the markets are wrestling with the over arching theme what mashlg markets are trying to price in, peak, risk off sentiment >> i think what the market has right is with policy uncertainty comes market volatility, we're dealing with a lot of policy uncertainty. one of the risks of late cycle stimulus is that it led to a

stronger dollar, interest rates, u.s. economy is slowing, and on top of that, concerns of trade war. one thing they're taking from the tax cuts is this was going to lead to new investment, and if you add tariffs on top, it slows business confidence and slows the economy. what i want to say is i think a slowdown in u.s. growth if you come to some agreement, that should be a good thing but we need to get through uncertainty. >> we got enough head of steam out of tax cuts to carry us through a period of not knowing what's next? >> we got enough head of steam it is unlikely the u.s. was going into recession unless we made a policy mistake. we're staring at two of them could the fed get too tight with loan rates coming down, could trade lead to further disruption of supply chains neither of those are my base

case we could back off from either of those. that's what the market is waiting to see >> you talk about dramatic moves, s&p is down year to date. underneath the index, a ton of damage done. half all stocks that morgan mentioned down 20% as somebody like you, head of intrinsic value equities -- >> things have been on sale. >> what's on sale? >> you mention halliburton, it is trading below than when oil was $28. you have sales in different areas. i think there's a lot of fear embedded in the market my fear is the behavior company cfos want certainty before they make dealings, and right now that level of uncertainty is high on trade. >> does that mean you expect earnings estimates to come down? how does that play out >> ithink you need to be

cautious on earnings estimates we had 20, 25% earnings growth with a flat market now that multiples are lower and we still have low interest rates, when you want to talk about goldilocks scenario, moderate multiples, low interest rates, and even where we have pressure oil prices, it is good for the economy. most people at home aren't upset when prices go down. >> no major asset class has gains for the year, and you have to go back a ways to see a year like that. >> you do. this is somewhat similar to what we saw '15 into '16, the fed got too tight, and money came out of international markets and we got hit across the board in the energy patch and high yield. that was the last time we had policy uncertainty '17 was a good year.

i don't think that, pretty convinced it doesn't look like end of the cycle we go through market corrections and we have to adapt on a policy front. your question about everything peak, peak growth, peak margins, peak earnings, just because you're at peak doesn't mean the cycle end. things slowing can make this sustainable and lead to continuation of the cycle. >> that's a key point. i want to note, we'll have christine lagarde on, that will be must watch tv you don't want to miss that. meantime, tom, i have a note that you're optimistic i suspect there are a lot of folks that don't necessarily pay attention to markets, it is end of the year, they're opening the retirement accounts and going what the heck is going on. >> they're flat for the year, flat since thanksgiving. we talked about that volatility is something that the biggest danger aren't people

opening their envelopes today, it is people looking at this day to day i would say you need a long term focus. the underlying economy is strong we reference late 2015, early 2016, there was fear of recession. there weren't many signs than bond spreads here it is the same. yield curve inversion has people freaked out. trade, you look at that relative to overall stimulus. the economy is in strong shape >> what gets us out of the trap? early 2015 it was the fed? >> certainty you get some direction from the fed, from trade. you saw it on monday i am surprised monday wasn't stronger, given news from saturday, then it is pulled back, i think it will be a roller coaster on the trade front. >> guys, thank you very much. get to sara eisen sitting down with christine lagarde,

managing director of imf sara >> thank you very much, carl i am pleased to welcome christine lagarde back to cnbc thank you for being here. >> lovely. >> we know you came from a business round table discussion with ceos which we'll get to in a moment first on the stock market that's tanking again, what message do you think the market is trying to signal here >> i think the markets are saying there's volatility, tightening of monetary policy, there's emerging markets that are also volatile out there, and there's a question mark about growth prospects going forward my sense is on the latter point, it is a little bit overdone, 3.7% growth forecast for next year is not bad. >> globally. >> globally, yes >> what about the u.s. we're seeing parts of the yield curve invert >> it is not quite there it is getting closer i see that

but you know, i don't see the elements of recession in short order for sure and we still have a pretty strong growth forecast for next year for the u.s. >> i was going to ask what happened consumer we haven't seen in years why that seems to be peaking out and slowing down now >> ace told you, i first of all there is just more volatility now than there was a year ago. if you look at the vix index, it's twice what it was a year ago. second, from a baseline that is reasonably optimistic looking at fundamentals, the economy as you said, consumption is high. numbers are looking pretty good. there is that concern about trade. and the trade tensions and rhetorics and threats and tariffs, those that have been applied and those that are being threatened and the uncertainty as to how this is going to be resolved, which is weighing i think on the optimism of

markets. what happened over the weekend should be a good reason to have reassurance. that the lead players are going to want to sit down, negotiate, and address the issues that have been bones of contention in terms of trade >> you were the at g20 in argentina as a breakthrough between the u.s. and china or not >> you know, it was very different was that, you know i was on quite a few of those g20 meetings and for the first time i think all leaders around the table recognized that the rules of the road, the rules of trade, have to be revised. that the wto needs to be reformed that the dispute resolution system needs to be improved. and that was not a position they all had at the last g20 summit in hamburg this time in buenos aires it was common view, including from

china, that there had to be changes there had to be revisions, there had to be improvement. the question is, how fast will that come? and you know, that's where markets probably are impatient and where they want results today. if not today, yesterday. well, unfortunately when you negotiate those big-ticket items, such as intellectual property rights, such as sub cities to state-owned enterprises. such as rents. such as you know, extortion of this or that, it's going to take a long tile. it's going to have to be defined. and understood in terms of scope, in terms of you know, how it's addressed how it is sanctioned how it is ruled. >> 90 days a realistic timeframe? >> you know, if people put their mind to it, certainly identifying the framework within which negotiations take place. is, is probably doable there has to be goodwill there has to be hard work and there has to be an understanding

that not all issues will be resolved at once because it's just really, really tricky, detail when you look at line items, in terms of tariffs, it's just, it's monumental just looking at that small thing. so talk about defining what is protected by intellectual property how rights will be enforced. how sanctions will apply how the judicial system in each and every member will play out all of those are tricky issues, having a framework would be, my very humble view, maybe a starting point from which the parties can actually with all the technical experts, helping them, reach hopefully a consensus. just said there has to be goodwill and i think investors have questions about that, after we get news this morning that the cfo and daughter of the founder of huawei has been arrested by the u.s. what is the significance of that >> well, i, you know i would not necessarily put that in the same

basket as the determination of the two leaders to address their trade issues because i was a witness to that, i was not at the table where they had lunch sory, dinner. but i was certainly saw them operate during the g20 and there is clearly a desire to work together to move forward and to resolve some of the issues, it was very clear now if one individual is violating tluls apply, you know, it's thank goodness, there's a legal system in place that has to be respected. >> i know you must have been happy to see that the leaders seem to suggest that there wouldn't be an escalation in tariffs and the tariff rate in the united states. how much damage something done by the tariffs between the u.s. and china? >> you have the direct and the indirect damage. the direct damage, if things stand still where they are now, no more escalation, no more

tit-for-tat, it's minimal. frankly. we're talking about you know, .15% here, .10%. hardly so there. so this is minimal but if you add the indirect damage if you're factoring confidence, markets apprehension and uncertainties, then you're talking about more than that sos the direct and the indirect impact and in the same vein, if there was know truce if there was continued escalation, if there was tit-for-tat and if the whole business was actually under 25% tariffs, then you're talking about much more than that. by you know its modelization but by our modelization, we are talking about .8% less growth. by 2020. and that's assuming that you know, it's full range escalation >> you mentioned confidence as one of the swing factors there after meeting with business

executives this morning. what's your sense of the level of optimism. they were so happy after the election and yet -- we're seeing lots of evidence that that's fading. >> well i only spent 30 minutes with all of them but it's true that it was a creme de la creme of the of the u.s. business community. and one thing for sure is that they like the tax reform that was a clear message. what they don't like is trade uncertainty and an attack on trade. because that's how many of them have built their business model. that's how they've organized their supply chain and those, those business leaders were not from the banking or financial community where there were some bankers, but not many it was predominantly real, economy, leaders >> what was your message to them >> well you know, please support the factors that are going to generate business for you. that will materialize into growth into jobs

into thriving economies. so if you believe that tax did help, great. if you believe that trade should be predictable, should be rules-based. should be well sorted out, participate in the process and support it >> do you think the business community has not participated enough the trade fight and the trade policies of this administration? >> you know i'm not sure that a fight is necessarily the desirable outcome. cy think that now that there is a platform and there is a desire to move forward, and to improve and to reform, i think what the business community needs to indicate is, what are the directions where does it matter and help in that respect. >> finally there's a lot of angst right now about the federal reserve. do you think they've been moving too fast on interest rate hikes? >> my read of the latest communication is they're probably going to slow down a little bit and they will talk

about dovish positioning rather than hawkish so that might signal less than the dots that we have been expecting and possibly you know, an adjustment to, to their reading of the facts their reading of inflation and unexpected inflation, their reading of the state of the economy. >> would you suggest they pause as soon as december? >> not for me to say our recommendation is that their policy be data-dependant there are consequences outside of the u.s. and some of the big markets out there will, will, will either adjust or suffer depending on how well it's communicated and how gradual and cautious it is i think that's our take. >> we always appreciate your thoughts especially on a big market day like today those are some of the concerns out there. thank you for joining us

i'm mana imf managing director christine lagarde. >> as we heard lagarde with i would argue relatively confident tone talking about the reaction maybe being a bit overdone that these things can get, significant work can get done in 90 days if people put their minds to it >> i thought the comments about the fact that the g20 had commentary about reforms for wto, also really interesting is especially since it was sort of lost in the shuffle this week and she mentioned what we've heard from so many other guests this idea that what you're seeing in the markets right now in general is volatility >> yeah, i mean not very alarmed about the growth globally. i think that to me was at the top, she's not shaken by any change in the potential outlook. although saying that the market has become more volatile and that's all it is, is kind of circular i think it's a fair point. not much has changed underlying. >> day is not over

powell will make some brief remarks tonight at a housing conference, you can see we're off the session slow lows, which were down 700 points citi down 5.5% we'll get some people's attention today. let's get over to headquarters and the judge. >> we begin with breaking news, stocks falling sharply again on trade tensions with china and growing fears of a slowing u.s. economy. the s&p now on track for its worst quarter in seven years bond yields also dropping. the 10-year note yield hitting its lowest level in months we're going to discuss all of that with our team this hour. joe terranova, steve weiss and jon and pete najarian are here and we want to welcome in legendary investor leon cooperman who joinses us by phone. nice to talk to you.