1.8% we have seen so many times in the 2:00 hour. >> yes >> things seem to fall apart a little bit >> yes they do the nasdaq down for the year might be the first since 2011. the worst quarter since 2008 >> thank you for watching power lunch. >> closing bell starts right now. it is time for the closing bell, more volatility as we kick off the final trading week of 2018 are investors better off so searching for growth outside the u.s. >>. attorney relating to the

scandal. stocks hit a 26 month low. we'll break down the latest coming up. >> and gundlach has a chilling warning. >> i think we have the first leg down the second leg down is usually mu painful >> the closing bell starts right now. we are currently down 447 points seeing significant losses at nearly 2% lower >> yes >> 2 dow having since the third quarter of 2011. the nasdaq could be since 2008 let's see. bob is at the floor of the new york stock exchange. let's start with you

>> let me show you the s & p 500. it was the floor we were trading 2,600 to 2,800 for most of the quarter. not anymore. we hit 2,600 today and the market could not get over that these become very important when the macro situation becomes important they become more important. we saw selling in winters today and a little bit of a change in tone they were at 52 week highs look at aes. it is a typical utility name it is down 6%. that was a new 52 week high. avalonbay is one that is out there. that is also at a 52 week high not long ago most of the other ones are down 3 or 4% here we try the one that should have

rallied was of course the ba bas a nice impressive rally overall. it too has failed. you can see late in the day we are in lower territory these stocks are down dramatically, 20 to 30% from their 52 week highs. finally, health care, which has been a big market leader not helping today. you can see what it is doing back to you. >> and thanks. the nasdaq is dipping into the red for the year after today's drop we are at the nasdaq with a look at some of the movers there. >> nasdaq 150 points off the

february low of 6630 today's move is getting us closer to that level what is moving today are stocks moving to the downside a number of high growth stocks. oracle has gone negative it is nont uncommon we have only completed two to two and a half weeks is not a bullish sign oracle numbers will be watching after the bell back to you. >> thanks for that >> the big event, will they raise rates and if so ho muchw h of that is political

they addressed that earlier. >> right now we have zero inflation for all practical purposes so on wednesday the only argument i'm hearing for the fed to raise rates is that some how they have to exert their independence from the white house. this is a bad argument i think what the fed should do is simply do what it says it is going to do which is look at the data >> this adding fuel to the possibility that the president wants to fire fed chair powell. what is your expect station? >> we think they should. economic data really sporupport

it we have 2% inflation we have a tight labor market and all things point towards us having a stronger inflation. >> professor, if the fed goes ahead with the hike as many on wall street expect this week, besides using the pulpit what else can he do >> president trump, twitter is not an ineffective mechanism for him in his mind. it is probably cutting against him. it is fairly stupid for him to engage there a public fight with a fed. >> they could point towards

raising rates. >> if this really escalated how easy would it be for the president to remove the fed chair? >> the short answer is we don't know and we are extremely unlikely to find out the longer answer is a lot of presidents have been pretty angry at the fed chairs and pretty similar circumstances of what we are seeing today one, president truman succeeded at firing his fed chair. the law is murky he could probably remove him as fed chair but not as a fed governor his attempt to do so would send the fed and the economy into disarray people wouldn't really know where to look for leadership it would be an unmitigated disaster >> how would the market take that >> the market is looking for some clarity about fed policy. i agree if there was a fight over the change in the leadership that it would also be

really bad for the markets. we think getting clarity is really important for how it could be they have clearly been experiencing a lot of volatility since the comments we expect clarity on that. >> do you think it gives a little bit of cover to cease hiking the short term and whether or not it is early next year >> yeah. they are moved to tighten financial conditions we also see the widening and risk spreads they have going to see how it is effecting the economy. >> all right let's see what happens on wednesday. thank you both for weighing in jeffrey on the halftime report sounding the alarm on the spare market

>> i'm pretty sure it is a bare market i mean people like this definition of 20% down as a bare market but that's obviously very arbitrary. i have been around for over 35 year and seen a number of bare markets. it's more about how you kand of lead into it and how it changes. i think we have had pretty much all of the variables that characterize the bare market >> let's bring in our closing bell exchange and chew on that rick joins us. tom, does it look like and feel like a bare mashlgt? if so what does that mean for investors? >> i this i he hit on one thing. it's about sentiment right now we have broken through that level which technically is bad. if we see a fed hike this week from an emotional standpoint many investors may move to the

sidelines. it tells us a lot. investors have bought to dips. so far we have had record inflows. in the last month positive in the s & p 500 and surprisingly more people buying immerging markets than selling however small businesses make a big impact on markets and they really ran most of the gdp growth in the last couple of years. if we see a sentiment move to the downside and selling that could move us lower. >> we just hit a fresh session low on the dow it is down 2% on all of the major indexes. what do you make for all of the sectors? is it concerning you >> i think that rally we talked about, i don't think he is coming at all this year.

it is frus raltitrating far lotf people friday is significant. it to closed on lows right below both of the october and november lows that we created that just set us up for exactly a day like today and this 2550 level was what we are talking about. we are right there right now we seem to be holding there. there is not a lot of support there. if in fact it is negative i think a push to the february lows of 2530 is clearly in sight. i would rather not see it happen i think if they keep doing that you're going to, the momentum is going to push it how much is bake into the bond market at this point >> well, the bond market is holding in rather well obviously yields have come down and they have come down where at a point over the last week and a half we have seen the mid-to long end prices at levels and yields at levels that we have held on a closing basis.

so that gives me some confidence of course we are on a bare market to me the only question is are we on the bare market and as far as data points you talked about confidence let's look at a couple of data points the association of home builders since may of 2015. we had the empire's lowest since may of 2017. there is definitely something going on i'll tell you what, i know it's a small window if there is a santa claus rally i think it's in the hands of the f1c committee. how they discuss it afterwards will be key and definitely could trigger a several session rally. ultimately what give me the most confidence is from a global perspective we are still doing the best there has been deterioration as much as central bank is in this argument i think the wall

street journal really does expect the notion. i would think it probably isn't really so knee deep in this notion of a confrontation that wouldn't be in the best interest it would perform rather well for the time that dynamic takes place. the issue is trying to recognize when it hits some of the weaker economies and investors will have a trickier question.

>> we of course kind of change its tone a little bit. we will leave it there coming up on the closing bell shares of goldman sachs hitting the lowest levels since the 2016 election the latest on the scandal and how much further the stock could sink next. >> and later the u.s. market is trading well off its highs we'll break down the areas that have been hit the hardt esand which ones may have big

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lows were 470 points moments ago. we are tracking near the lows of the session. american express and proctor and gamble hit the hardest boeing is fearing the best all negative so pretty broad selloff. they are hit tg lowest levels since october 2016 after malaysia filed criminal charges to the scandal you have been following this closely. >> uh-huh. >> what's the latest and what are investors still afraid of here >> the company was dealt another blow asthma l they tiled charns against duoformer employees. they say they committed gross violations of the security laws. they said gold man had to be held accountable for his 3

billion worth of fines doj continues to inve gait as well gold man responded today chl they said they will defend against them they added certain members of the former government lied to goldman sachs. the stock has fallen sharp in recent months. down 27% since early nofr losing nearly $15 billion in market cap. investors not only fearful of a large fine but possible loss of rev flew and more important possible rising costs. investors would like more clarifications wells fargo said one issue has been and remains the silence of the ceo to investors it is the first time faced criminal charges but neither so far suggesting gold man's involvement was intentional. >> so the communication, i mean

you have talked to goldman abiliabou this >> yes we have talked to them about this so far they sort of suggested we can't talk we can't talk because we are being investigated the statement they gave today about an hour ago suggests they can say something. the wells fargo analyst saying after the issue within about a month diamond was able to have dialogue on the topic of investors would definitely like to hear a bit more >> let's continue the discussion what's your take on this malaysians filing can remembhar what's your take >> the scandal came up about six to eight weeks ago, moved the stock lower then we understand that doj is looking into it.

there is a lawsuit and then the federal reserve announces they are looking into it. we have ma lay that sha taking action the question is this the end and probably not we'll probably see more negative headlines. each time they hit it will put more on the is to be it is never good >> i'll ask you the same question i have been asking about johnson & johnson and these new revelations. how much of it is worries about the company, theliabilities, reputation and how much is just all of this negative news that's hitting and what more and more people are calling a bare market >> liabilities is one area today if we look over $3 billion, you know, estimates out there were around from 2 to $4 billion i think, you know, everybody would have to at least look little bit north of that in addition reputation is a big issue. does it effect to get business

with other nations as a result of this zan dal? i think they are working hard to maintain that business we don't know. they don't get it. >> how long do these things ramble on for? one company admitted wrong doing and the other has not done so. clearly with that issue it has rumbled on for two years stock prices suffering because of it and ongoing internal reviews. is it possible or are we talking a total different ballpark >> i think it depends. when we look at malaysia and they are assessing criminality they have to defend that to the

end. it could easily go longer. those investigations clearly take 12 to 18 months before they begin to wrap up as well i think 2019 would be a choppy year >> okay. great stuff. thanks very much so just to run things off on the evaluation at the moment historically they have traded at a 68% discount and the moment on terms that's trading at a 46% of that level i mean it's less than value. it's pricing there a lot it could rattle on for a number of years >> it doesn't help they have a group. >> of course >> clearly under performing. we are looking at session lows the dow is down more than 500 points >> a big part of that decline as are all stocks today dow is down five or six points

>> we'll see what happens. 37 minutes to go here. stocks are down 25% this year. new data could spell more trouble. we'll break down the red flags on real estate and we'll discuss what the technical levels are to watch for. we are back in a couple minutes. see that's funny, i thought you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that.

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welco welcome back we are down 540. all sectors lower. all 30 stocks are low. >> we are watching s&p currently within striking distance of february lows. we are over showing you which levels are important, steve. >> thank you very much the big level has been the 2,600 level. i will round that out.

it is october lows we have been playing back and forth for 200 points in the s&p. so you have your 2,800 level right here it is the ping-pong game and which one breaks out or breaks down with the the markets. once we break this level my thought is that it would be a violent drop down to that 2532 level. basically we are there right now. the problem i have with this is that everyone is still asking where do i step in to buy the market bottoms are formed when no one thinks the market is ever going up again so it's not that crucial >> it is crucial

most will leave it and wrap it up for the year. the quicker we could test this level, maybe you have people say that's enough for now. let's figure it out for 2019 the truth is there's nothing carved that says we test this level. we balance it and everyone is back to business again >> was there anything today or general gloom? >> you have trade headlines. you growth slowing incredibly. you have the aca declared unconstitutional what has been one of the strong points health care. you tileties they have been strong. they don't believe all hope is lost you need to lose all hope to have that bottoming process. people are not panicking yet

even know. >> i have two factors that the stock market has been worried about. both are going to other way today and yields have been >> and one last thing. there's a lot of funds who have taken a beating. there is panic in certain spots of the mashlrket but retail investors still think markets only go one way and that's up. >> 2532 is the key level to watch. p we are down sharply. thank you very much. time now far cnbc news update. >> hello everyone. sheer what's happening at this hour a top house republican explains why former fbi director james comey is back testifying for a second time this month congressman mark meadows claims that some of comey's public statements are add odds with his first rounds of closed door

testimony. >> i will give him a chance to clarify that i can tell you when you look at his public statements and also the testimony that he has given those don't seem to reconcile. >> overseas dozens of fire fighting crews tackled a massive fire which broke out in poland local residents did not need to be evacuated due to favorable weather conditions it is unknown what cause that had fire the great holland wreath controversy has been resolved after complaints more than 21,000 people voted in a poll commissioned by the port authority which over sees the results moved the tree from the n in holland to over the a and removed a wreath hanging over the u only in new york and new jersey.

i don't know it has been -- >> the people have spoken. >> yes they have. it has been hour and hours of vigorous debate. >> it does look like holland tunnel >> don't start a debate. let's look up some of the bilge biggest movers >> it was not a straight down day. we had a notable attempt to rally in a couple of groups including apple and the bank stocks it basicallyfailed

they opened at the bottom and went into positive territory and drooped down sitting near the lows of the day. every attempt to buy the bottom failed it is not lost on buyers it is eventually to say i'm not going to bother right now. i mentioned also the big industrial names, boeing, the same situation boeing was negative to start and afternoon failed again one thing that's different ability today is big winners for the year like utilities have generally been selling off they are all down 4, 5 or 6% back to you. >> thanks for that global market evaluations are at a five year low. we have been taking a look at which markets in particular are

looking attract ifr. >> take a look at this it is calling the chart of the week it illustrates the correlation to geo political risks it shows as risks range from trade to fragmentation rise global stock evaluations have inclined contributing to the under performance we have seen play outfrom kline that to europe in fact the global stock market is trading at 13 times earnings, a five year low. it is one they are using to decide whether it is time to get into the markets that have under dp underperformed it is related to trade and are harder to predict. i can tell you a number say if we get some type of deal it would be a big sign for chinese

equities back to you. >> thank you is it riskier? >> there are risks in all markets. you lower your risks when you look for low evaluations i would argue that it has been much more significant than we have seen in the u.s. market there is opportunity there >> in china? >> absolutely. especially china tech. it is an area that is sold off and has been beaten down we don't need any kind of great trade resolution >> what's your top market? >> i'm with christina. i think people should be rebalancing to markets that have done much worse, much more i

tractive evaluation it offsets the risk keep the emotion out and not to try at the time of the market. >> developed international or immerging markets? >> immerges many particular. >> how much of this is a bet that the fed is going to change its posture and stop hiking interest rates >> it is certainly predicate until part that the fed will ease when i say ease will ease off. >> ease off, exactly th it is as a result and it hasn't been rate hikes but it is what is significant >> you mentioned you like em in particular it is not equities it is some of the national debt markets that stand out >> that's right. >> so we prefer the dollar doe

nominating debts the spreads to credit are, you know, to u.s. credit are very attractive you know, the fed may relent a bit. it makes a big difference to those people they are not in the situation they were in the late 90s when they were deeply indebted. the financial position is much stronger >> how do you feel about european stocks? if you look over the past 12 months germany is down 18% >> there are certainly opportunities in european equities there is likely to be more of an

economic downturn in italy germany's cause, economic slowdown is more lookly to be relatively brief there is opportunities there keep in mind, europe also has much more support of policy even though they decided to end >> okay. we'll lever ave it there we are briefly touching a fresh low there. we hit 574 for the freshest low. we are down 550. all s&p sectors all down stocks in the red. coming up we'll look at another potential red flag for the market >> and we'll look at oracle earnings we'll have stock reaction and instant analysis for you when ck rhtosing bell comesig ba

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welcome back 2 dow is down almost 600 points. there is your picture down across the board the biggest losers are the

defense i defensive plays like real estate and utilities. industrials have been harder in this overall market selloff. >> let's dig into the consumer discretionary names. we have details. >> you can see it downloaded3% there. hong today's worst performers and booking holdings ma mattel is down more than 9%. >> across all sectors lower and down more than 1%. dows also lower.

we are currently down 590 points with 18 minutes left until the close. y the warning that sunk this stock coming up. we'll bring you instant analysis coming up on closing bell

>> welcome back to the closing bell 596 is the fresh low we just saw ton dow. we are back to 552 but woe ae a down on all of the mayor indexes. >> it feels like we are in this familiar pattern where, you flow, stocks are lower throughout the day and they take a spill in the 2:00 hour and it picks up steam into the close. it is the same reasons we hear sited, risks around the federal reserve tightening >> it's not everyone thn there' lockovlocack

of bad news. rates are down it should help the market but every sector is lower. >> bad news used to be good news >> yes let's check in on individual market movers today. u.k. online fashion retailer asos is down 37% they have particularly sited weak consumer sentiment, france, germany and u.k. in particular i picked it because of the size of the move because of one of the retailers but also that fear that we have had playing into markets here that europe is slowing down more than expected. effecting that stock today >> shares of lululemon receiving an upgrade to buy.

look, it has also been a darling. it is up 55% over the last 12 months though it has pulled back over the last earnings report and in the recent market turmoil. that is part of it is that there is plenty of uncertainty there is a good entry point for large cap growth and they look at lulu for one of them. >> we hit another fresh session low down 623 on the dow. it is down more than 600 point, 2.5% if we look at the s&p 2532 was the february low we were talking about moments ago we are back on that level where we closed below it we will know that in 12 minutes time oil closingbelow 12 minute a barrel let's get to the nasdaq which continues to underperform the market >> as you guys have been discussing it was a gradual move

for the nasdaq once 3:00 p.m. eastern hit we did see an accelerated move. we are down about 2.8% so at session lows traders are watching 6630. that is the february low that the nasdaq hit in early 2018 we have seen the dow hit that level but not seen the nasdaq. for month we are now lower by 7% that is for the month of november the nasdaq has gone negative for the year it has punished a number of companies. one that i follow very closely is down notably on the day it is only fractionally on the dow. it is the worst performing stock. they are still higher for the month although they are trading

down touday. >> thank you dow down 643 points. it is only getting worse with ten minutes to go before the closing bell all of them are down in the overall s&p right now. we are back in a couple of minutes. [leaf blower]

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>> welcome back. the closing bell is now seven minutes away the dow is down 566 points we were down 640 points. a lot of sharp swings. s&p is down. naz dock down more than 2.5% here are your losers today all 30 dow stocks are down the biggest losers are american express, nike, sisco systems

unh taking 45 points off the dow. >> the big stock indexes have been unable to escape the bottom of that 2018 correction ranges mike joins us with more on if the market is immune to good news >> i think for about two months it has been immune you can think of an alternative market universe. the strong numbers, the good employment would have comforted a market that was concerned about a recession coming up next year we are in this sort of sell first mode it is a bull market environment where it ignored bad news. i mean this right now, i think the question is how much bad has been priced in not what good news has to get us out of this. we priced out earnings growth.

nobody sees the catalyst because that are not hearing our pleas the fear is that the fed is going to go along with a plan on wednesday. the process of cutting down earnings estimates from now 8% down towards 0 will be painful if they had gotten it. >> i can't remember there was so much at stake not necessarily a policy decision but just the tone and a statement it feels like it could go either way and the market could go either way >> the market made its peace >> they are out there. they are telegraphing the move >> there is so much uncertainty right now. the one that seems vaguely familiar was the first rate hike of this cycle. markets were still upset not as much as right now. the markets were definitely unsettled after the correction and the slight rebound there was some what for

something like this. >> and the thing that would be a huge negative surprise for markets is if the rhetoric, if it was a hike and it was not that dovish next year. >> yes to the point where i almost think that's a difficult scenario right now i think right now it's autoabout is it a super dovish hike where they say look, we are kind of on hold for now or do they forgo the hike which i don't think is likely >> is it about the fed is that what this is >> no. i think it's a combination >> does it come back as hiking >> it is the fed it is broken technicals. it is the fact that everybody is in this liquidity vacuum a lot of it is telling you that the markets are still uneasy with something the high yield market, the corporate debt market is still not calmed down to the point where you say the stock market is throwing a tantrum.

>> stick with it at the top of the hour let's get up we'll get the latest >> what is unique about today is rather than it being led by semi kul conductor stocks it is still broad based. a number of the chip names are lower. for the most part they are de -- the other notable trend are the reversals. apple has reverse course it does business here in the u.s. and overseas. so the earnings report will be telling for tech investors to get a sense as to whether global growth concerns are justified. that stock also reversing course ahead of the earnings report

back to you at the floor >> thank you very much for that. we have just over two minutes left of trade. we are down over 2% on the dow around about 514 points. the low is 640 you can see we did try to rally. we have of course significantly sold off the last ten minutes we have seen just come off of the lows but looking pretty unattract ifr. 2544 on the dow. 2532 was the february low that she was talk act earlier weighing them all in the nasdaq is down most of all 2.5% sectors for you today, all of them negative. the defense ifr most negative at all. even financials, the best is down 1% itself here is a little half screen interesting to see this today in

light of the dollar and yields moving in a direction you would help would support equities. oil prices not that would support it >> the market looks kiebnd of broken here. it was on honest attempt apple started it at the open the bank stocks started lifting ability 9:45 it is time for them to lift. it is the most logical >> yes >> but it failed nonetheless you can argue about the technical levels we failed at 2,600 it used to be the floor. now it's the ceiling we can't get above 2,600 if you notice right here at the close we did hit 2532. that was the old low on february 9th. we bounced as soon as we proved often. we bounced often and we are not closing any where near the immediate february lows.

still, you a sense there's a biassed rate going on. why should a buyer buy right now when every time they buy it fails? >> yes there is the bell. we are down 501 on the dow at the close. that is quite far off the low of 640 but nonetheless, 2% or so decline there percentagetime that does it back to you. >> thank you he will join us again in just a moment. let's take a look. the dow closing lower, down 2%

which was off the lows of the session and down to as low as 640. ended the day down 500 points. s & p 500 dropping 2%. the nasdaq underperforming russell 2000 nasdaq goes down for the year. s&p at the lowest since october 2017 a lot to talk about today. bob is on the floor of the stock exclang. seema is at the nasdaq covering today's action what happened today, bob >> a lot of failed technicals. we did make an attempt to rally. it started down. apple and other stocks turned us around it used to be the floor. now it's the ceiling

it drooped here. buyers are not being rewarded. take a look. we had a bunch of stocks that had 52 week highs. proctor and gamble you flow what the problem is bay and large we have had a bunchov of winners that in the last week or so down dramatically stocks that are winners being sold you can pull up walgreens. look at this it was in the last ten days we are down to 86 to 76 the point is these were not loser stocks they are now drifting lower into the close of the year. utilities, another group that was at new highs today selling off 3, 4, 5% of declines

yields were down it doesn't matter. everything three, four, five and some cases 6% to downside. back to you. >> thanks so much for that let's head uptown to the nasdaq. seema has that >> it because steady move to the downside we were flirting with positive territory earlier in the morning. we are negative for year the selloff was broad based. social media names what is notable are these reversals. apple initially started higher and ended lower. oracle started in positive territory and ended down about 1.8% some of the high fly winners we

have seen also trading down. tesla is up 16% if you look at a three month chart. it lead the declines for the nasdaq and ended up being the wor worst performer. amazon and facebook making that list it is not uncommon to be down for the month of december if you look back 20 to 30 years but to be down 7% for the nasdaq, that is certainly not a bullish sign. 6630 is the next level to watch. that is the nasdaq's february lows back to you. >> all right thank you for running through some of the damage at the nasdaq joining us to talk about the market is from aerial

investments. >> maybe you'll have more sellers pile on. in the last two weeks this looks something like a slow motion crash. two weeks ago today we were 9% higher in the s&p. it has given away a liquidity air pocket that is one factor here if you looked at the run-up through the january high it went on such a steep angle that it didn't spend a lot of time around here. it went from 2,400 to 28 and change in a very steep angle >> i don't think the levels are that important this market has no real spon sponsorship here we know or think we know that earnings have to come down a bit for many sectors next year that process is some times ugly and painful. we have created suspense around

the fed. we have been clear about what they think they have been doing. >> what do you think the market is focused on in terms of the reason for the selling for more of late? >> i would point to the outflows, the retail investor is taking money out of we cequity funds. if somebody owns and s&p passive index fund that sells every stock indiscriminantly we sit on the other side and try to find values we are looking at a wall of selling that's indiscriminant. right now there's a lot more sellers than buyers. >> what happened to the trump trade? that's part of what you're eluding to the market has wiped out all

giens seance the tax cuts came into law >> yes it was december 22nd of last year >> i think we have r5e8ly changed from we might overheat the u.s. economy can handle a trade war to maybe not at least in the short term. the s & p 500 earnings more than a third are nonu.s. sourced. if the globe slows down it will have an impact right there i don't think that necessarily the market has it perfectly right now in terps of what the outlook is for 2019. you had this and we thought the u.s. was at risk of a recession. it didn't flower into something so nasty on a fundamental level. >> are there sectors that still

remain expensive >> yes i'm glad you asked me that question there absolutely are there are more importantly some sectors that are very attractive so what it is essentially is we still have the names that went from ridiculously overpriced to overpriced we still have industrial names it is trading at eight times earnings we are goldman sachs trading and we have anything with a hint of sensitivity trading at very attract ifr prices the market thinks earnings are going to miss. in fact in 2018 earnings have been well above expectations we think the economy is in a lot better sthap than the market now. >> it is also an unfamiliar spot it is very rare to have the market hit a year to date low. the market has not behaved as they are supposed to they have not react today a lot of the ins fluns the way we got

accustomed to. >> the other thing given that so much focus is that the dollar was soft today rather than strong and that yields slipped >> way down though from the highs. >> if it was a trend we saw continue on more than a one day move would it be extra for the markets so they can't rally on any day where things are working? >> sure. i think if it was a trend reversal but i think we have a way to go before you become convinced it is anything more than a bullback. -- pullback. they will help put it together whether it has more to go. >> let's talk about jeff and what he said earlier in an exclusive interview when he proclaimed the bare market is very much in full swing. >> i'm pretty sure it is a bare market i mean people like this definition of 20% down as a bare market it is very arbitrary

i have been around for over 35 years there this interest. it is more about how you lead into it and how it changes i think we have had pretty much all of the variables that characterize the bare market >> let's talk about this bare market the point is it continues. >> the bare market in an individual stock does not have much relevance part of the -- >> he likes bare market. he doesn't like bare market territory. >> okay. >> so my point being part of what is a bare market is it's pervasive. there's almost no place to hide. this kind of behavior that we are seeing in the markets, hasn't hasn't responded, sure but it is indistinguishable from trying to sort out what the f d

fundamentals are >> this is scary stuff what are you telling people to do >> i tell people to buy when others are panicking and sell when others are euphoric we have one absence of factor that you flormnormally have. we really don't have that. we have speck laigtlatiulation t we are running it and we will have -- we have had a lot of purchases that are going to produce earnings growth next year i do think this is not debatable. this is no time to join that negative hurt. >> that's funny. i see the panic in the numbers of how in many stocks are down today. stocks on a 52 week low. in terms of the feeling of it it seems like constant steady

pressure on the market that is interesting to me. maybe it feels different rhythm wise you don't niecely get a feel of that >> it is over 2% on a one month treasury bill. it is to feel better and saying i want 2%. >> oil prices fell sharply again today concerns of supply in the u.s. crude settling for the first time since september of 2017 what kind of signal are you getting from the energy markets. >> i think it's more demand. i think it is all tied together with the market thinking that we are going to have a global growth problem and if you a

global growth problem you'll a few million barrels a day. i think it all ties together earnings drop and gdp drop i say more of this was logical and made sense it was speculation which there sant lot of everyday >> the correlation of crude hasn't picked up a little bit. >> oil trades as a risk asset. i don't think it's too much of a surprise to see this it is another thing that echoes the 2015 and 2016 period >> i think global growth concerns the forecast for global growth is 3.7%. it is not a recession. it is not a disaster it is a marked slow down and little less than paeople were

expecting. it is braced for something nobody knows anything on that. it is acting as if there is something besides a slow glide to a slower growth rate and the market seems to be handicapping. >> we have earnings out. >> well, reporting 80 cents. the street was at 78 cents and revenue coming at 9.56 billion it was at 9.52 billion cloud services and sliens support up 5%. it is up to about 6.6 billion. it clocks in at 1.2. ceo saying that the company is confident they will continue to

report free cash flow during the second half 06 this fiscal year. we expect to offer guidance and it will be on it back to you. >> thanks very much for that it makes it flat for the year now. >> yes and brings it back to where it was a few days ago. you talk about a slow and steady this is now kind of the safety type companies that people would grab if it seems like the boring fundamentals are in tact >> you say it is overvalued. >> i own a lot of it it is trading and sit a busines that has some. it is sort of our view of corporate america in general it is nothing spectacular.

>> let's talk about johnson & johnson. claiming the company knew about asbestos in baby powder for decades. >> and we were talk about places to hide in this market j and j was a poster child for what was looking safe, health care was big >> credit which is extremely rare >> a lot of this is the market we are no. >> it is the type of liability and the fact that it's very difficult for the market to try to price it in or handicap what the possible outcomes are. it is a vast company and they have been on this for many years. >> are you a buyer >> yeah.

i own a lot of this too. it was something i did not need. i agree with these lawsuits. typically get settled for numbers in the millions, not in the billions this issue has been around for a long long time this is powder i think it will end up being a billion dollars exposure, not a tensover billions of dollars exposure >> we'll see important interview you won't want to miss we'll sit down with jim cramer tonight at 6:00 p.m. do not miss that >> final thoughts on the markets before we let you go are you going to be deploys any crash in the week ahead? >> yeah. it's the beat up names it's black stone, wonderful companies trading at ten times earnings it is warner at eight times earnings there's a lot of cheap value

stocks are we in a recession we think we are. >> a lot of those safe haven stocks, even though we saw yields lower >> yes in an upside down way is a positive when you sell whatever you have as opposed to trying to be cute. >> it is better. >>. >> thanks for joining us >> so now after this big selloff nine out of all 11 sectors are negative for the year. one bright spot has been health care the best performer of the year up 5%. >> a texas judge ruled the affordable care act is unconstitutional michael bonds at the white house office of drug policy and good afternoon to you both.

if i start with you what do you make of this ruling by the texas judge? >> i think the ruling is deeply flawed it is likely to be overturned. >> sit an easy analysis they would have conducted there was a before and after we knew in july of 2017 two u.s. sflarts made an important vote not to repeal the affordable care act and a few months later in december 2017 they voted for tax bill that included a zeroing out of a tax penalty for not buying insurance and they intended to sever that from the rest of the aca and lever it in place. it is say that the slau constitutional the impacts would be horrific on consumers, states and certain industries including the pharmaceutical and in some cases the insurance industry >> we did see a market reaction

especially from the insurers what is the big fear >> well, look, the affordable care act is the law of the land. it celebrates the ninth birthday in march the issue is people were not expecting it i wanted to add that it is still in the district court's hands. what that means is that they only issued a declaratory on one count. there are four other counts. no way to appeal it yet. there lab lwill be a lot of acts and headlines. preexisting conditions but reality is this law we think is pretty entrenched. we think that the appellate court which is two-thirds republican may want to skip the issue all together and rule on

standing and certainly chief justy roberts does not want to revisit the affordable care act yet again. >> clearly it is highly unlikely it would be ruled unconstitutional if it was how kig nif cant would the impact be? which areas would be hit the hardest? >> it is especially in the suicide crisis >> it is through the exchange. they wouldn't necessarily have coverage at that point and insurance would revert back. and a type of market and meaningful coverage for people when they need it. it is impossible for people to get in to buy health insurance states would be left with trying to some how fix that the blue states would have a difficult time with their budgets as well as createding sort of middle ground systems

for this medicaid expansion population that would have no coverage if it were to be deemed unconstitutional >> so you are clearly both skeptical. does it mean you would allow them that got hit on this headline >> i think as far as the insurers goes there are multiple lines of business, books of business you have the commercial book of business i think it could be an opportunity for certain elect insurers and then on the hospital side, you know, congress is incrimental. the law will be here to stay and there are opportunities for hospitals from here on out >> all right thank you. >> thank you we have a news alert from washington and president trump

>> yeah. hi the president is tweeting within the past docouple of minutes particularly with soybean farmers that he is authorizing a second roundov of payments to go out under a farm aid program he is saying i am making good to defend our farmers and ranchers from trade retaliation i have authorized of the agriculture to recommend a second round our economy is stronger than ever we stand with our farmers. the back story on this, if you read some of the agriculture trade press, a lotover people in the farm business uncertain whether those payments would be made earlier in the year the agriculture department authorized up to $12 billion in additional spending caught in the cross fire of the president's trade war with china. there had been some hope inside

the administration that additional roundov of payments wouldn't be necessary because china was starting to make the soybean purchases last week. the president has decided that either they aren't buying enough soybeans here or the farmers haven't felt the economic impact of that as quickly as he wants them to. he decided to mover f forward h. it ends some of the unternty here >> okay. thank you for that >> in terms of that general tone of improving trade relations >> i suppose it is true. i also think there was an instinct for farmers and whether you have to hunker down.

>> we'll show you a few warning signs. that's story is coming up. what are the odds of the expected rate hike and gives president trump what they want we lay out the possibilities coming up next the future of technology investing lies beyond the tech sector. it's about technology transforming every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing.

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>> announcing a $5 billion buy back up to $5 billion. the stock is down 13%. it is up about 1% after hours. this company is a $346 billion market cap it has a $5 billion buy back we are seeing about a 1% buy back there >> all right thanks for that. >> this is the kind of sloet of confidence >> oit is trying to vug jest that >> it is symbolic. >> it will be on mad money later. >> it is expectations. it is one of the causes of that. he joins us with this take on this week's feds meeting

>> if it will weigh the pros and con and likely come out on the side of hiking but it is a much dlo closer call. here are a few of the factors the fed will be weighing. >> fed chair has already said it moves more slowly. it is unclear if it applies in december but it definitely applies to 2019. markets more or less expect the rate hike followed by a decline in the feds own forecast for future hikes what might it look like? here is what it looks like now each bar represents the number of of fed officials who are forecasting a given number of hikes next year. so three or four that assumes they hike by a quarter in

december you can see a lot of distribution the average there is three it may move back to an average of two for each fed member the question is whether the fed will back off enough saying no more hikes some beginning to whisper. >> yeah. wow. that would be something. >> we have somebody on the air mention that >> cut rates >> we are actually talking about that >> so the president tweets out again for the fed not to hike interest rates, mentions the dollar me mentions the global economy. do you think that this makes it more likely the fed is going to hike rates >> i think it does i think it shouldn't i think the fed will sit around the table and they broeprobably won't talk about that. the fact that have to do that

certainly believes it is a key part of the monetary policy. the reason is because it thinks that the market needs to know that it is doing what it believes is right for the economy so it gets the market to move with it if the market givens to think it could do things for a political reason it would clang the dynamic between the market and the federal reserve. it would be better if the president didn't say these things but the fact that he is in fact saying them i think makes it more difficult for them tomorrow >> steve, remind us the percentage and where it was two months ago >> you're in that 70 to 80% range. it used to be 80 to 90%. i think there's one in there now. >> thanks. >> steve, we have a nudews aler on boeing. >> boeing has authorized an

increase in the quarterly dividend raising it by 20% starting in the first quarter of next year to $2.05 per share the company authorizes a stock repurchase program of $20 billion. there because previous program to repurchase up to $18 billion. boeing raising its quarterly di dividend back to you. >> thanks for that boeing moving up in after hours an the back of that dividend hike let's take a look at how we finished the day more broadly. it is down 507 points. it came about half an hour before the close nonetheless 2% decline for the dow, the s and p for nasdaq. all s&p were lower all dow stocks were lower.

>> lowest since october 2017 time for a cnbc news update with sue herrera. sheer what's happening at this hour. james comey finishing his second day of closed door testimony before the house judiciary committee. he responded about president trump calling his former lawyer a rat. >> this is the president of the united states calling a witness who cooperated with his own justice department a rat remind yourself where we have ended up this is not about republicans and democrats. this is what does it mean to be an american? >> more than a dozen north carolina middle school students were taken to the hospital after their school bus overturned this morning. troopers say a toyota sedan crossed the center line and hit the bus causing it to hit the road and flip onto the side.

waves cancelled the mavericks surf competition massi massive waves having rolling in. that is the news update. i'll send it back down town to you. >> thanks very much. up next, halftime report trader tells us why he is paying close attention to duofinancial names that may get hit if the fed does not raise rates this week. >> we will look at the latest trouble for the housing industry and whether there's any hope for a come back coming up. ♪ ♪ (buzzing) gather new insights, leave your data protected on-site, and put it all to work with ai. the ibm cloud. the cloud for smarter business.

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trillions of dollars in assets on their books a lot of lending goes back and ford -- forth you sign it and you're ready to go because of that people bet on these stocks when they think rates are going to rise because these guys get an immediate impact dfrom it. it tells me maybe people are betting that use as you and wolf were talking about were more likely to even see a dip in rates rather than a jump in rates. when you look at this right here look at how it sold off. they were buying it in there throughout the session as well at the money puts a put bet that is basically saying this thing goes lower the stock goes lower because they don't get the interest rate increase that perhaps we had

priced in at 80% just days ago >> and people are worried about the assets on their balance sheets it is that debate which applies to the big investment banks which is bl it is good volatility if that outweighs the fall in their sort of asset management is that applying to these guys as well? >> it would. if we take a look at the slide we have seen 175 or 195 down to 170 like that just in a matter of days. that is one of the ugliest charts in the entire financial space right now

>> it is the fed hiking rates. >> it is kind of working >> they are asset gatherers. >> quickly, guys, the vicks has inspiration on the opening wed this week. we really only have tomorrow to trade it two days to trade they were pouring in to upside calls which isn't a good sign. since those calls expire the further bad sign could be that if these people needed protection and it expires on wednesday they might have to seek that protection again, further pressuring up in the vicks and maybe you get what he was talking about on hafr time today. >> he said 40. it would be a big pop. >> it would be a big pop

i don't see that in the cards either given how muted it has been lately we have seen 10% pops and even 15% we haven't seen any along the lines of what jeff was talking about. >> thanks for being here >> good to be here home builders falling after the lowest level in more than three years. this and other headwinds we'll discuss that next.

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home builders fell to lowest level in more than three years there is a mixed picture we have some of the details, diana. >> last december they were basically euphoric what a difference a year makes it dropped 4 points to 56. that's the lowest level since may of 2015. a huge drop from 74 last december that's according to national association of home biuilders monthly index. we are getting very close to the mark if the index three come points it fell down and sales expectations dropped and buyer traffic through new homes fell 2

points home builders point directly at welcome afford blability as the problem. in a survey that's not out yet they say 41% of builders reported reducing prices as a sales inse sales insent ifr it is up from a year ago that's where home prices are the highest but it was down across the nation we do get the latest nation tomorrow morning they have been weak for sever months we are not expecting much there. back to you guys >> all right thank you. the latest down beat news on the housing market joins us to discuss what to do with the stock is susan joining

us and with regard to the data diana is talking about >> we thu a lot of this is pried in we have been negative all year it is bad for housing i think the rising existing supply which we don't think is tight will lead to further price contraptions >> susan, what's the main factor in terms of that general fall in sentiment we are seeing? is it rates or other factors >> rates is deaf flitfinitely pa considerable role. you're seeing the fact that inventories are rising all of that seems to be contributing to consumer sentiment and buyer advocates. >> they are still lacking overall. >> they definitely are we are seeing a lot of, you

know, weakness nness in the market it seems like nofr and december came back. still, it was driven by more incentives you're seeing traffic levels above actual transactions. it suggests buyers are in the market they are taking more of a wait and see approach as it relates to pulling the trigger >> what is priced into these stocks right now you know, the home builder outperformed today it has done that suggesting that, you floknow, the market s of discounted the sector down. >> correct the builders are down. many of them are trading which is historically seen as an evaluation floor we disagree with that right now. historically it shows stocks don't bottom until you have fundamentals about two give or take months.

i think this issue that inventory is tight has to face a significant adjustment we'll see that in the spring selling season as prices are less than people expected. we continue to see builders missing the trends that is really under the evaluation today. >> what's your view on the evaluation and what's your top pick in light of that? >> we also think that the evaluations could potentially be under pressure es essentially ahead of this spring selling season everyone waiting until we get past the holidays to see how traffic and sale actually come together within that our top picks are d.r. horton to put homes on the ground where we are seeing more growth pulte is our other pick. we think it should suggest a

higher evaluation for them >> the other question is how much is it a signal for the broader economy like it was in 2007 the fact that it could be bigger or worse things. >> did the same ones apply >> did it have the own thing going for it >> people are moving less. is that something about the society right now as opposed to just the housing cycle >> we'll leave it there, guys. thank you very much susan and kenneth. still to come, s&p sectors could be sending a warning signal that's coming up one says that the bull market isn't over. tune in to fast money at the top of the hour.

another big sellingooff on street, the dow closing down about 500 points mike santoli is checking out the chart that could signal more pain ahead >> are on the market already braced for a lot are more pain ahead. this is from jim paulson it shows four cyclical sectors financials, industrials, consumer discretionary and materials. and compared to the overall index. so a relative performance of cyclicals versus depends sifens. we're hitting lows that are below what we saw at the beginning of 2016, that period that much mads up in some ways

with what we're going through right now, lots of fears of global slowdown. and in goes all the way back to 2011 when we had the european debt scare and the debt ceiling kind of stand ovoff in the jund. so i think the market has already gone a long way to pr e pricing it in. >> and when you list those secto sectors, slightly more effective than in past years by other fact are tore like tra ors like trade >> exactly and you're right, materials and industrials really are a proxy for a global reflation story and that obviously -- by the way today was not about the cyclicals. it was about the stuff as sarah said that held up a little better coming into this period so whether that is a end trend changer or not, i think the

message is this has been going on for a long time for most of the year you have seen the market based expectations of the economy kind of come of on the boil and maybe that means that we are kind of far along into the process of coming to terms with a slower outlook. >> just wanted to get through the first attempt. >> you were okay i'll try the next one. >> lea please do. >> shares of johnson and johnson selling off 13% since the report came out saying that the company knew about asbestos for decades. the stock is hammered on the news and alex dorsey weighing in on , rtofhainrvw ie next so, the whole world is talking about ai.

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shares of johnson & johnson falling more than 10 percent on a report claiming that the company knew aboutssbestos in is baby powder for decades. their ceo sat down with jim cramer >> we believe that our talc does

not contain asbestos and that is glon straigis demonn thousands of studies, studies conducted by independent authorities well respected thoo authorities where we look closely with regulators who are overlooking the methodology. and we also not only use the best testing methodologies that were available, but we continue to improve them through the years. >> you can catch the rest of the interview tonight on "mad money. 67: 6:00 p.m. looking forward to that interview and jim's reaction off the back of it he's always said you have to wait until the worst is behind them so certainly one to watch. >> and it says something that he came on cnbc to talk about it. >> and that slight buyback as well that they announced >> the stock is marginally up

after hours. so i think folks are looking for the opportunity to say that the company has it under control >> i feel like j and j have become sort of keys to the market lately. the first paragraph, the stock did this and then the second paragraph -- apple has been like in a amazon lost almost 5%. >> goldman sachs as well it used to be that they wouldn't drag down the whole sector, so i think that there is a raw nerve out there. >> and when you see the broad negative sentiment, do you think that we can rally in the next 48 hours or get through the fed >> i don't know if you have to get through the fed. typically people will be neutral ahead of the fed and the market will try to get to a point where it is an equilibrium of some sort also down big friday, down anything monday sometimes does set you up for some kind of

relief down the road we're in this game of how low is low, how extreme is extreme. you don't really know. it is a perfectly plausible flush we've had, just maybe not as extreme as people would like to see >> pl >> all right thanks for watching. "fast money" starts right now. live from the nasdaq market site, i'm melissa lee. we have your traders on the desk tonight on fast, red december is on stocks tanking again today, but one strategist says the market isn't dead yet plus it just keeps getting worse for goldman sachs, but the chart master says there is one thing that has him pressing the buy button and we start with the market selloff, s&p 500 taking out the february lows in the final minutes of trading we did slightly boun