collapse the guys worried they were losing their timeliness but now feeling like maybe they have it again. >> maybe they do i remember covering that crash and it was a scary time. >> 23% in one day. >> it was 500 some points, but that was when the dow was at 2400 or something like that. >> gives us some perspective thanks for watching "power lunch. >> "closing bell" right now. welcome to the closing bell. i'm sara eisen >> and i'm mike santoli. let's go right to the markets. >> on the first trading day of the year, dow at one point down 398 points at the low. but flipped positive about two different times during the session. and is now weaker again. a lot of chatter around president trump speaking does that have anything to do with -- >> it seemed like the market kind of lost a little altitude during that, but made up for the losses coming into the day with the global markets on their

heels. seems like there is money out there to be put to work because we were so oversold coming into the year, but unclear if people will be -- >> the glitch of december. the 9% drop he called a glitch >> and coming up, we'll look at global indices and where investors should look to buy and plus the government shutdown enters its 12th day. how long it could last and why the housing market is getting hit as a result. that is all still to come. >> but let's begin today with our reporters watching seema mody, over to you >> yeah, if today is any indication, 2019 isn't looking like it will be any less volatile than last year. we started the session down as much as 400 points on the china growth concerns, came back into positive territory as oil regained momentum and then moved lower following comments from

president trump during the cabinet meeting where a number of topics were discussed s&p now flirting back into positive territory and with oil moving higher, energy stocks are outperforming. names like bp, chevron among others moving to the up side and also contributing to the rebound, financials. goldman sachs, jpmorgan, after a somewhat lousy performance in 2018, they are being -- moving to the outside health care is trading to the down side. and despite all the twists and turns we've seen over the past couple weeks, the so-called santa claus rally is still going strong, s&p up 4% since christmas eve. >> how about that. thank you. and the nasdaq slipping back toward bear market territory and then a big turnaround happened in the session

bertha >> small caps provided the leadership, fueled in part byte. and we are seeing more strength in large cap tech. and the faang trade, facebook, amazon, apple all higher apple on pace for its first three day win streak since the end of october wynn is the day's biggest gainer, stronger than expected, but that stock down 36% from a year ago and chinese search engine baidu despite warning that winter is coming and that they will need to buckle down this year. tesla, the day's biggest loser and the stock seeing the strongest volume today well over 140% of the normal day

volume of late edging back near bear market territory after announcing a price cut due to the fact that that electronic -- electric car subsidy is getting cut as well this year. back to you. >> that stock doesn't always move with the market thank you very much. let's get to the closing bell exchange we have paul hickey, matthew ch cheslock and we had the flurry of buying coming into this year. a big question was going to be those who decide whether to buy or not. certainly decided to shp we rallied back pretty nicely. santa claus rallies typically

happen two days after. and we saw that start last week and it is continued today. so expect volatility that won't go away with any remarks out of the white house >> and you've done so much work on seasonable impacts and factors. how important is today and the month of january and how reliable of an indicator is all that anyway? >> i think that it works sometimes and it doesn't work other times. so i wouldn't put too much weight into it i think it is encouraging that we opened up weak and rallied throughout the day but keep in mind that as mike was just saying earlier, this is the third straight month now where we saw a 5% rally in the s&p 500 to close out the month and all three of those months weren't the greatest months. it is the opposite of the trend we saw earlier in 2018 where the market would fall towarded e etn of the month so i think it is a matter of

rebalancing toward month end and there are still a lot of unknowns in the market d.c. dysfunction hasn't been settled. the fed is still an issue, trade is still an issue. so i think that we could -- wouldn't surprise me to see short term lower gains here, but when you look back at these prior periods which you guys have been covering a lot over the last several weeks, we have seen very extreme readings and the key is that year later you tended to see strong market returns. in the short return, you tended to see a lot of volatility and most of the time you saw lower lows so you could start putting a bit of money to work here. but be prepared for more weakness in the one to three month time frame >> and i recall from last week you were talking about how the bond market has a way of making a bit of a splash at the start

of the year. what is your read on today's action as yields are mostly lower? >> beginning of last year, end of the previous year, we established as you pointed out the low yield on the first trading day in the low 240s. i don't know that we could make that same comment now. i doubt if 266 is going to be the low yield are oror 265 now however the level that we have referenced, that 1240 level, wie huge support but there are ways to test it, one is collateral margin capital charts a lot of snufgs of institutions that will seek to put a lot of treasuries on their balance sheet. add into that what we call the no money down players in the equity markets i think that is what is going on the last couple months

a lot of leverage who every morning when things get volatile have to go through their portfol portfolios i think that we are settling back a bit on that i also think the implication of the global slowdown have showed up in earnest. we came into 2019 flattening two years are up one ten years are down three 30s are down four. and we need to pay attention to that and i think that is the main reason i'm looking for more give back, a little higher applies acti price action on the long end >> and earlier we were talking to jeremy seeing igal he now says that we could have a 15% up year in the u.s. manages to escape recession because things got a little bit overblo overblown. do you agree >> yeah, if we don't get into a recession, the stock market should do well the yields curve has flattened,

but we don't -- the key is how long does this weakness in the market last and the longer it lasts, the more likely it is to filter into the economic data. we are starting to see auto purchase intentions and home renovation intentions start to trend lower. so that you are starting to see some signs of it i don't think that that will be -- enough to put us into a contraction at this point. but the longer it lasts, the more of a problem it is. but at the same time, again sentiment towards the market has been decimated the last couple weeks and again, long term that is something to focus on and the lower yields that rick was just mentioning, i think that could be a positive for the housing stocks this year and we've seen the home birlsd which led the market lower in 2018 they didn't make new lows in decemb december, so that is an air that you want to focus on ib tell didn

intel didn't make a new low so the three areas that started to stabilize is something that you can look for as an encouraging aspect to year end 2018 and it being a potentially decent year. >> and matt, before we go, we are backing offer a bit here the s&ppoints. we have a jobs report and fed meeting on friday. >> i think we'll start to see readjustment in earnings we're starting to overplay some of the fed meetings. we know what we'll get out of the fed going forward. >> we come >> in fact we don't know, but we know we won't get a lot of help. and i think that is not going to change at least in this meeting. so what you will look at is the earnings >> all right a couple weeks before that matt, paul, rick, thanks to all

of you and still to come, the partial government shutdown entering its 12th day with no end in sight really. we'll bring you up to speed and why the shutdown matters to your money. plus a new red flag about a potential slowdown in china sending shockwaves across the globe. we'll discuss which international markets could be impacted most by the global slowdown and which could be good buying opportunities and you can reach out to the show on twitter, facebook or send us an e-mail. the dow now down 100ois. pnt "closing bell" will be right back ♪ ♪ (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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like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. weak data out of china sending shockwaves across global markets today. seema mody is joining us with more on that >> first signs of a slowdown in china event is stocks lower. honk do hong kong down almost 3% all which rely on demand

witnessed a slowdown and in europe, italy seeing its third straight month of contraction painting a somewhat concerning growth picture as we start the new year three things traders are trying to figure out, how the global economic slow down will impact the fed. if beijing takes on a softer approach in the trade discussions. and lastly, what the monetary and fiscal measures china will use to stimulate its economy hsbc writing whether asian economies stabilize in 2019 relies on on policy support out of china and they expect more rate hikes in 2019 and tax relief measures to be introduced this year. if the data out of china worsens, traders will be closely watching the chinese yuan to see if they engage in another gradual deceleration >> seema mody, thank you for more on what investors should dough, let's bring in

clark packard and also peter pachini. peter, would you tell people to buy the chinese market which was the world's worst performing on hopes that they will stimulate now and add more in terms of monetary and fiscal lift >> i think that it is a really good question because asset prices have underperformed in china and it is one of the hardest hit in the world that said, the economic data is decelerating and has been for a number of years now. i would say china is probably poised for a bounce not unlike a lot of other risk asset markets that had been so beaten up and the big reason i think that is because in fact rates volatility has actually stabilized a bit in developed markets, so yes i see that the two year has not moved all that much of late the long end of our curve has not moved all that much of late.

so capital yoult flows froutflod a bit. >> and that is a key govern? >> very much so. i think one of our big thesises this year, as we see when the currencies start to depreciate, they are forced to raise rates and that then slows their economies and that is what we're seeing >> one factor that could impact is trade, clark. as the trade policy council, what kind of down accept acouns giving for a trade deal? >> i'm not surprised that china's economy is slowing down right now. no one is going to win a trade war between the united states and china. it will be -- there will be blood in the street. they are the two most

intertwined economies in the world. they are both super powers i think obviously it was good coming out of the g-20, the sort of deescalation of essentials between the united states and china. but i think that that is the big question is to what extent will we get some sort of long term deal that we can kind of hang our hat on that will kind of alleviate a lot of the volatility in the market >> and what do you think the prospects of that are? you have all this range of opinion that says that there will be some kind of token gesture of cooperation, some kind of thing on paper that allows both sides to deescalate. or on the other hand, you have robert lighthizer today saying maybe more tariffs will be needed >> i think that is the big question so one hand they are hawks in the trump administration that want protracted battle and see china fall to its knees. but the president mindful of the stock market and i think that that will discipline the united

states i think the president looking to 2020 is not going to be willing to get into a really volatile stock market situation where, you know, equities are declining in the overall economy starting to soften. so i think odds are pretty decent that we will get a token gesture, but these problems that the united states has with china are long term. and they are not going to be solved in three months >> one of the questions, peter, that you say equity investors have to be asking is at what point does it infect the economy and the markets. first part of last year, china was cratering and the u.s. was doing just fine. then all of a sudden we started feeling it ready to the back half what happens this year >> well, i think when you talk about the stock market in the u.s. and what was going on here in the economy, a lot of it had to do with temporary impacts of fiscal policy including tax cuts and let's not forget the deficit spending that we're undertaking right now which is fairly massive to fund trillion dollar

deficits i think china does matter and our relationship with china is important. i think one of the drivers of global growth in recent years has been trade and the lack of friction across borders allocates resources globally to those economies that most efficiently use them and whether we like it or not, if you have cheaper labor in a particular economy, that is likely where capital ought to migrate and that is what trade does. >> all that being said, have the markets gotten to a point where they have already priced in a lot more of that friction? meaning that they could be susceptible to saying any deescalation is good >> yes it is very difficult in a global economy to know how much is trade, how much is a slowdown in u.s. housing, how much is europe they are clearly all intertwined. and unfortunately, i continue to come back to central bank policy because the driver to me really is the cost of capital paradigm, where is the fed, what is it going to do next, where is the ecb. as we have discussed on your

program previously -- >> they are not moving in a friendly direction >> they are not moving in a friendly direction >> all right clark, peter, thank you very much one island of relative calm, brazil at a record high up another 3.6% sort of straight line up speaking of global hot spots 40 minutes until the bell here and checking on the major averages, the nasdaq continues to remain positive dow down 106 points. not as bad at 400, but we'll see what happens in the last half hour or so of trade. coming up, shares of tesla plunging more than the market as fourth quarter deliveries miss estimates. we'll have a debate with what to do with this name. and energy is far and away the best performing sector we'll tell you what is behind this sharp reverseal in crude. it's so simple, i don't even have to think about it.

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welcome back to the closing bell dow down 115 movers include travelers, united health and coca-cola and interestingly, some of the winners were the losers of 2018. goldman sachs rising to the top, but exxon and chevron also getting a boost with energyoff all the breast performing sector right now. >> laggards definitely getting a pop.

an crude oil looked like it would start off with further declines, but a morning rally sent prices rebounding higher. hey, eric. >> that's right, oil prices staging a big rebound closing at a two week high. wti had been down a full dollar at the session lows. but turned sharply higher by mid-morning. trarsd trade trade traders attributing to saudi arabia starting to make vows to cut output but china's key monthly manufacturing index contracted for the first time since may 2017 those numbers adding to the already mounting concerns about weak demand for 2019 back to you guys >> eric, thanks very much. and of course the president today in his public remarks

taking some credit for that big decline from saudi supply in part and we have 35 minutes left before the bell. the dow down just about 95 points s&p 500 is down not much nasdaq slightly positive and russell also just about flat up next the government shutdown having unintended consequences we'll tell you one under the radar impact you need to know about. and later, if today's market action is any indication, we could be in for a bumpy ride in 2019 we'll take a look at the key eshacod ivthe e market in this new year. cash cd from capital one. i earn unlimited 2% cash back on everything i buy. and last year, i earned $36,000 in cash back. which i used to offer health insurance to my employees. what's in your wallet?

there you see the tech stocks numberi two and real estate utilities on the do upside time now an update. >> here is what is happening u.s. drug companies are kicking off the new year with price psychs on more than 250 prescription drugs, but that is fewer than last year

washington state officially banning the and i would of semi automatic assault rifles to anyone under the age of 21 it passed back in november with the age restriction taking effect yesterday opponents have sued to block the initiative a federal judge dismissing lawsuits against facebook, google and twitter pertaining to the december 2015 mass shooting in san bernardino. the law allows that the tech giants allowed to flourish on their platforms. and a major sausage recall, more than 5 tons of sausage after complaints they may have been contaminated with bits of metal. they are 24 ounce packages with the used by date of january 24th check your refrigerators this is your cnbc news update. courtney, thank you. and the government shutdown now

entering its 12th day. our reporters are following what it means to your money ylan mui, let's start with you >> congressional leadership from both parties are at the white house right now for a briefing on border security they will be hearing from officials from i.c.e., cbp, local law enforcement. this meeting is being held in the situation room and members of the media are not invited however we do know what president trump is thinking because he gave that free wheeling cabinet meeting earlier today. he talked about the need for the border wall and he talked about a cry are sis of illegal immigration and when he was asked how long the shutdown could last, he said as long as it takes he said that he believes that the american people are behind him in this. well, democrats, they don't believe that the american people actually back the president on this they will take the president to task when they intend to vote on a bill to reopen the government tomorrow once democrats take

control of the house now, the president also said that he believes that nancy pelosi is one of the people to blame for this i spoke with nancy pelosi before she headed to the meeting and what she told me is that she hopes that the president will consider the offer that the dnls ha democrats have put on the table, but she said there is no guarantee that the senate will even vote on these bills so there is still a long way to go before any type of deal looks like it could be made especially heading into this meeting today. back over to you >> let's try to define long way to go. the house is going to vote on something. presumably it won't go very far if anywhere from there and then what? >> and then we remain in shutdown so the question is, will the senate even bring this un. if it doesn't, then these billse government sort of dies on the vine and really it comes down to president trump and what he decides to accept. he has to publicly come out and

give his support to a measure before the senate will ring anything up because both sides feel like they have been burned in the past. >> all right thanks very much and the government shutdown also having a big impact on the housing market diana olick has that story for us >> and this really couldn't come at a worst time for housing because mortgage rates have fallen pretty sharply in the last month which is a big opportunity for borrowers who might have been priced out in the fall now there may be snags in getting a loan the biggest issue is the irs which has an income verification service to validate a borrower's tax return, that is now not happening. so if you have special is circumstances especially self-employed maybe, you could see a delay in closing your loan and there are also issues at the fha. it is operating on a skeleton staff. lenders do get automated loan numbers from fha, but if there

are any problems with the loan, they are not likely to get anyone on the phone very fast and that again could delay some closings finally, there is the agricultural development's rural loan program, a no down payment loan for rural home buyers a small percentage of the overall mortgage market, but a big deal in some rural states. and it is totally shut down for now. so we'll what tsee -- we'll hav to see what the impact is. >> president trump putting his wall funding request into some context. listen >> the $5.6 billion is such a small number literally, it is one month in afghanistan. and we're talking about national security this isn't just a border this is national security. this is health and wellness. this is everything >> president trump standing firm on his request unclear whether the that are kets are treating it as any sort

of economic impact but it certainly can't help to start the new congress with a tone like this i don't think that anyone expected any sort of cohesion and major legislation, but in case there was any hope, i mean they have to vote on trade deals and that matters >> yeah, keeping the government open wasn't necessarily something that you thought would be in question this deep into the year. and you wonder if the anecdotal stories will have a cumulative effect on the negotiations peel going unpaid and this friction in the housing market >> jobs in particular. and joining us now to talk more about how the shutdown could impact the economy, ed mills and terry haines terry, what are you telling investors today as far as the odds of when this wraps up >> well, i think it takes a while to wrap up what you have here are people that are far apart in no small

part because of their political leanings and the fairly hardcore instances that have been taken on both sides. trump with the last minute request for more money the house and senate democrats with their desire to not want to give him anymore money for border security. so what you will have is a situation that will take a while to resolve frankly and meanwhile you have 25% of the federal government by spending anyway shut down while the other 75% continues to operate. i suspect strategies change a bit after nancy pelosi gets elected speaker tomorrow >> and so the president is really not wrong that the actual amount of money is not necessarily something that moves the neegd very mucdle very muche is tremendous volley power for

both sides so what does that mean for any type of arrangement here >> what i learned when i first came to d.c., when you are explaining, you are losing and that is one of the problems we have right now. democrats don't want to vote for a single dollar that funds donald trump's wall. and donald trump doesn't want to given up on this so i think that that is part of the democrat strategy here, try to separate the wall, try to separate the department of homeland security funding from the rest of the funding. get the government reopened. and try to see if we can cut a deal where democrats could get something on the d.r.e.a.m.ers and permanent status for daca recipients and try to kind of move this into february rather than have the start to the new congress with this government shutdown fight. >> so terry, what is your best guess as far as the date and who will cave? >> i think that this goes on for another week or so frankly it will take a little while for mrs. pelosi to accurately assess her caucus

and i suspect that there will be a lot of the centrists in the new democratic congress that will push her to try to make some sort of a deal. and i think everybody has to back down a little bit frankly i think that the president has already shown some willingness to do that by cutting his own request in half and i thin there are deals available in part by providing a bit more money and in part by reprogramming existing funds that would allow everybody to have a little bit of a win and move on. this is a tempest in a teapot right now without a lot of market impact. but the longer this goes on and the more bitter it becomes, the more likely that it may impact fiscal 2020 spending and possibly even the debt ceiling about which i know markets are already concerned. >> and talking about concerned markets, the president did reference the stock market decline in the month of december listen to what he said this afternoon. >> our country is doing better

by far than any other country in the world from an economic standpoint we're the talk of the world. and we had a glitch in the stock market last month, but it is still up i guess around 30% from the time i got elected and it is going to go up once we settle trade issues and once a couple of other things happen, it will go up. it has a long way to go. >> a little glitch 9% drop. worst december since 1931. but i think what is telling there, he says that it will go up when the trade deals are settled. which it would seem would give him a lot of incentive to get that settled is that good thing >> i think w >> i think yes i'm not going to get too overexcited about this some possible false positives answer i won't get too upset over some potential false negatives. the dow has been the marker that trump has liked the most because it is an independent verifier of how he is doing or at least that is in his mind and so with the selloff of

december, that does put a lot of pressure on him to cut a deal with china the bigger question is that they are really far apart and if he cuts a deal, is it something that he is willing to defend we saw when there was a temporary deal cut in may once he got any criticism of that at all, he quickly moved away from that and so the bigger question here is deal or no deal, that if he supports what anything that gets cut from lighthizer or others in his administration >> and terry, quickly, we haven't even mention ed the fac that the president openly bragged about having brought oil prices down with a phone call to middle eastern oil producers i guess we're kind of used to this notion there. but there was a time when we would have raised eyebrows at that kind of claim >> every president wants to take personal credit for everything good that happens in the economy. and want to blame other people

for the down turns and so that is really never changed. but according to your own chart, the markets have gone up by roughly a quarter on net since the president was elected. they keep -- they and he and his aides keep referencing that as a astone fa touch stone as to why he won't change his policies and i take that to the bank >> all right, guys, thanks we have less than 20 minutes left to the bell the dow now down about 116, half a percent or so. the s&p 500 down a bit better. nasdaq just below the flat line. after a down year and a near bear market, what should i believe investors expect for 2019 we'll take a stab at answering that next. plus 2019 roadmap warning signs. the key things to watch that could set the tone for the year.

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dow down 98 points

another nearly 500 point swing >> futures are chasing the global markets down especially in asia. and once the u.s. woke up, it firmed up from there >> so after a down year and near bear market, should investors expect stocks to tumble in 2019 or start to rebound? that is the question for mike santoli. >> and maybe both. who knows in what sequence but i do think that it is worth looking at other years that had relatively similar losses to what we saw in 2018. these are other years where you had a single digit negative return since the 1970s so 2000 with as the one that wah nastiest we were in the midst of a longer bear market there. 2001, down close to 12%. really no rule on the other ones except to show 1990 was interesting because the market

eventually found its footing with a pretty good year. i don't think that you can necessarily take any of that as indicative except to say it is rare to have two straight negative calendar years in a row. it happens but usually you need a recession for that to happen so here is more of a context are earnings cuts priced into the market yes almost everybody expects the estimates to come down, but has the market already accounted for that what is the cost of an idle fed? markets priced out the fed hiking rates pretty much for the rest of this year. does that mean though that we're good with the kind of economic and market conditions that it would take to truly force the fed to the sidelines and the credit markets, they did flare up, they are not as bad that is early 2016 but this is an area that should show a little benefit of new yearly liquidity coming back into the markets so we're have to watch that.

>> as far as the wall street consensus, sell side analyst strategists, higher stocks moderately and some trimmed their outlooks. stocks to rise and no recession is the consensus >> and so essentially soft landing of some variety i think is the consensus and i also think that wall street projections, the targets look more bullish than they are. because the market fell so much in december, people are sitting there with stale targets based on old prices. >> market would have to rally like 20% to keep up. >> so i think people have expectations more in check than that >> and here we go, 13 minutes before the closing bell. taking a look at where we stand, the dow down 93 points

s&p is down a quarter of a%. nasdaq still positive. so losing altitude >> definitely outperforming for sure and shares of tesla falling after the company missed wall street delivery estimates. though dees ta those details are next. [leaf blower]

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welcomeminutes to the close dow down 96, s&p down a little a more than a quarter of a percent. let's get a check on some individual movers. growing fears over china's economy having an impact on ali baba the stock falling sharply at the open after the new data showed factory activity in china contracted for the first time in 19 months. it is down a half a percent. but this is sort of one of the proxies to watch in terms of u.s. trade for those continued concerns about china's slowdown. we knew china was slowing, but when a manufacturing number in china actually contracts, i think that is a whole new level where investors wonder how that -- >> for much of the last year when ali baba was weak related to the trade frictions, a lot of

people said what is the point there. it is not an exporter. but when you are talking about domestic slowdown none china, i think that is much more immediate for an ali baba. >> but a little detached from fundamentals where you still saw double digit growth. >> and shares of tesla fell today. they announced a $2,000 price cut on all models. so the stock down more than 7% it didn't miss deliveries by all that much, it was a couple thousand relative to the consensus, but i think that it kind of raises once again the concerns about whether tesla perhaps has run out of demand for the higher priced versions of the model 3 and then with the stock price down where it is, you also have the issues coming up they have to pay back the convertible note offering so coming off a time when tesla

outperformed by a lot when the market was melting down, it shows you that the big picture concerns are not gone. >> and i wonder if the concerns have shifted more from supply to demand because they are finally cleaning up supply and becoming more productive at the factories. but now they are losing the tax credits starting today and cutting prices where demand was never seemingly a problem for tesla. >> and i do think that it comes together with sort of a little bit of a loss of consumer confidence among affluent consumers and you mentioned the loss of those tax credits which seem pretty important to bolstering demand. >> we'll see 2018 was another tough year for the short sellers. >> it was. so maybe they are reheadileoadig today. we'll see where it goes. coming up next, a debate on tesla, so stick around for that.

don't get mad. get e*trade, dawg. we have a market flash on health care. eric >> that's right, we're keeping a close eye on the health care sector heading into the close. that sector among the worst

performing groups to start the new year, back into correction territory. a lot of stocks down, so again, looking that the down more than a percent today. back to you. at flurry of buying coming in near the close. the dow down 398 earlier now almost back to the flat line we had some selling overnight, global markets were very weak. just for some context for this move, the market was down 6.2% in price terms last year, but up more than 6% to end the year so you basically had this big bounce the question was, was real money going to follow that and banks were outperforming today despite the fact that treasury yields were coming in and the yield curve flattening

so lag guard gards from last ye bounced. and the vix thousanow down belo. there were a lot of hedge fund liquidations so maybe the calm first day of trading here has settled some nerves and has a bit of a spike on that vix chart. seema mody, yeah, we had some weakness overseas. >> and it seem like the market where every headline was being traited, we started the day looking at china, growth concerns and we were lower by as much as 400 on the dow came back as oil regained momentum and closed higher and then the remarks from president trump around 2:00 p.m. eastern and we once again lost steam and here we are the dow down about 12 points >> really not a dramatic move which is almost news in itself because the market has been swinging around so much, but you point to the correlation with oil, which is really vivid

>> tracking the last two or three weeks now. >> and it has tried to make a bit of a stand i did mention earlier these laggards getting picked up there definitely was a heavy tax loss selling season that led us into the turn of the year just because the market was down so much, so many sectors down a lot, ge was a big winner today because you did have some of those laggards out there >> and in terms of other sectors and stocks, technology staging a late day comeback. i want to highlight how amazon has done over the last 12 months it is up now 30% in the last year compared to apple which is down 8%. so what you are seeing is not just a total selloff in tech there are some winners that are emerging not just amazon, even other names have done well >> definitely a reach for the old kind of glamour growth

stocks today the ring of the bell the dow up about 30 points s&p 500 up 25. ringing the closing bell, the alliance and also sprouts farmers market second hour of "closing bell" starts right now is sarah sxwla are so . some buying there at the close. welcome to the closing bell. i'm sarah ieisen. let's take a look. wall street up despite being lower around the open. dow managed to close with a gain of about 16 points there so pretty flattish, but still a nice recovery. s&p 500 up a little more than a tenth of 1%. and consumer discretionary

leading the charge there nasdaq had been outperforming all day long it is up half a percent on the close. the russell 2000 index of small caps did the best of all four. up a little more than half a percent. and the midday rebound coincided with the turnaround in the price of oil which lended tended up mn 2% tesla, we'll debate whether weak vehicle deliveries is a sign that the investors should stay away from the stock. goldman sachs led the dow today and united health the biggest decliner today arconiment doctor was the leader joining us to talk about the market day, barbara duran and can he ken fisher is buy the dip back?

>> it has been a few days now. and it seem back at the moment, it is just how deep and severe the dip was. i really did being as 2019 start, you are still feeding on the oversold conditions that you got to in the depth of december. you had only 10 respect about of stocks above the 200 day average. that is not something that necessarily gets kind of taken care of with a bit of a four day bounce so that is why i do think that there was an incentive to figure the market might have been sold out coming into this year. you have more funds and risk to work with i think if you are a professional investor coming in with a blank slate >> so let's talk to some professional investors i know you have been wanting to be a buyer. >> i think the bottom is in and the correction has pretty much run its course but i think last week we saw a lot of backing and filling and

today was growth in value names. small cap. and i think that you will see a lot of people cherrypicking. it won't be a sharp v from here. we still have the uncertainties in terms of the fed and earning z a and the china trade. >> bull markets kind of don't let you in before you get the headline that says coast is clear. so are we in that kind of a market or will it wait >> that is the question i've been wrestling with. and i think here as i think last week you could start taking positions. today look at amazon and facebook i think you do have to start it get positioned i i think earnings in a few weeks will be okay they have come done, bwn, but we that >> and ken, what is your level

of optimism or pessimism >> over the top before barbara is more articulate than i am, but i'm a big believer in the v here and now last year and particularly december because driven by the most underreported story which was hundreds of hedge funds forcing against each other stampeding to close by year end. that story hasn't really been told and then as that pattern drove stocks down, you got short serls t sellers trying toen a tis pay the that but i think that the v will be strong and there are several simple rules of life when you have a year like last year when you have both stocks and bonds juunder perform cash,o get double digit returns so i'm optimistic.

but i tend to be more optimistic then not most of the time. >> so those hedge funds didn't just decide to go out of business and race for the cash by the end of the year a lot of stocks got killed the crowded positions were decimated starting in september and october and largely that was because of people ratcheting down growth expectations or exposures to spots around the world that were slowing. so there was something behind it besides the mechanic of liquidation, wasn't there? >> we kind of disagree, mike let me take you through you that hundreds had announced that they would liquidate and close by year end what they didn't anticipate is that they would all be stampeding against each other. and starting the second week in december, you got almost daily patterns where the market got bombed starting the middle of the morning sometime and that was all selling for speed over price that is very unusual and those steep drops get followed by

steep similarly, not identical, butascents which is that v. but once they announced that they were closing they had to raise the cash and speed over price became operative and they are doing that day after day after day. that story has not been told next week i'd like to tell that story in detail. >> you seem to have told it pretty well. but we'll talk to you again for sure mean while we do want to mention president trump making fresh comments earlier today about the volatility that we've seen in the stock market >> our country is doing better by far than any other country in the world from an economic standpoint we're the talk of the world. and we had a glitch in the stock market last month, but still up i guess around 30% from the time

i got elected. and it will go up. once we settle trade issues, once a couple of other things happen, it will go up. it has a lock wng way to go >> so barbara, complaint deny the m -- can't deny the dow is up 26% since the election, but is the market primed for celebrating something like progress on china at this point or will it be another excuse not to celebrate? >> takes good question the word glitch is very interesting because i actually do degree that it was juagree tr correction i think it is a correction >> so not just a data error or something. >> no. but what i think it tells us about his mindset, stock market performance is always important to the president and what he needs to do he now given his

challenges, he needs to win. and china will be a win. so i think he has more of an incentive than china to come out with a big trade agreement with china and the market in definitely applaud that. and if earnings are pretty good, which they should be, i think the market should be primed. maybe we do have that v. but i think that we are primed for a big up side surprise on the china trade. >> and what impact would that have on earnings and the market and how much is that baked into your view that we will get a daily with china >> it is not baked into my view at all fundamentally whole trade trip talk is making mountains out of mole hills the actual gdp impact are a single digit percentage of one year's gdp growth. and people can't get that out of

their mind because they are still fixated this notion of tariffs causing the depression in the 1930s i don't think that it will one other. but that doesn't have anything to do with my otherwise over the top optimism >> let's look ahead to the economic data because we will get some initial jobless claims tomorrow. jobless reports on friday. how important are those numbers this month in the could be text context of what the fed will do? >> i think that the expectation is that they will be in line.ntt context of what the fed will do? >> i think that the expectation is that they will be in line the fed has indicated that they are primed to pause if necessary. so i think that the fed may pause and not do a march index so just more information for the

fed. >> and ken, will we be in one ever those worlds or are we already where the market seems to crave weaker domestic numbers? >> oh, i don't know because my view of the fed has always been -- and this is not this fed, it has been every fed since i was studying this stuff as a kid, the fed is basically always out of its mind almost by definition i don't think that they know how they will interpret things so trying to outguest what can't be outguested i think is a silly game the fact is the market sometimes wants to think that way. but sometimes the market just looks the other way and ignores it all i think for figure that out is a loser's game and likewise i agree with barb w completely, there is no real

sign of an inflation pickup and you won't get a real sign of that unless the quantity in money numbers go up markedly and they are not so trying to figure out how the fed interprets that, i just think that it is tough to do >> but what about your sense of the real economy and how much it is slowing? there a positive year for the economy, but thousand what >> and let's just step back. if you look at leading economic indexes, pmis are positive but all the forward looking economic indicates are all -- most all are positive while most

are knocking their knees about recession or global weakness or this or that you have the talk this morning about china, actually the last time china did this in a pmi was spring of 2017 you know what happened after that china looked for some negatives and that is a sign of excess negative sentiment which is a sign of where positiveness should follow. >> we have seen some signs in forward looking indicators like the regional, manufacturing indices. manufacturing is sort of a leader, isn't it >> that is one of the things that we're watching like housing. and auto sales which seem to be showing some signs of recovery but again the consumer numbers look great holiday thumbs were tnumbers we in six years so we'll see in the unemployment rate report. >> all right we certainly will. barbara and ken, thank you very

much up next, tobias levkovich will tell us whether there is a bullish sign and tesla facing more trouble after missing delivery estimates. 'lwel debate whether tesla can turn it around place, the xfinity xfi gateway.

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stocks with a big comeback and there could be more volatility ahead in the new year dom chu breaks it down >> and there are general themes. let's put some dates on them later this week we have a big jobs report and jay powell making public remarks. later next week, we have trade talks possibly starting with china and then the week after that, january 14th, it is the fourth quarter reporting season starting and at the end of the month, a big fed meeting.

and all fed meetings have press conferences. and let's fast forward to march, the beginning of march will show that trade deadline with china and the trade and tariff discussion march 1, a big day to watch there. and then march 19 through 20, another big fed meeting with the associated press conference. so overall, a lot of dates to keep an eye on back over to you citigroup's model has officially dipped in to panic territory. so is it a buying opportunity? tobias levkovich at citi joining us to really excited to have you on today after reading your cal where you lowered your call. >> and we did it really to line up for the beginning of the year and happy new year to you and

mike and your viewers actually. we held it off a couple days obviously the volatility in late december made it a little hard to gaining exactly whgauge exact do this. but unlikely that the market would bounce back 25%. but one of the 13 factors that we used actually still kept you there. the rest didn't. hence we pulled it back to 2850.still 14% up from where we have currently it does tell us that 97% probability that are markets will be up a year from now >> so that is the kind of sentiment and positioning piece. i guess the question is, the trajectory of earnings, right? the market certainly looks modestly valued if it is in the zone where consensus sees it right now. how do you see it playing out? >> we've been saying earnings will be up 6% this year. we haven't changed that

forecast the problem really was back in september when that same panic euphoria model was in euphoria territory. one of the big problems was earnings estimates up 12% for 2019 and in that context that number has come down to just under 8% we still think that it will edge lower and get in to that 6% range at which point markets can kind of finish with the reset if you like and start to have numbers that they can meet or beat again i suspect, i don't know for certain, that management teams will be a little bit reticent that they will really try to overpromise and underdeliver i think the reverse is likely. they will rather guide down during the earnings season >> does it worry you that most wall street strategists expect the s&p 500 to rise this year on a pretty simple view which is we're not entering recession and

stocks have overdone it here >> i think again that it was more that we were overdone to the up side back in september time frames and investors got a little too excited and now they have kind of gone reverse. if you were thinking recession for instance, let's go down that path for a moment, typically in a normal recession, not the kind of global financial crisis environment of 2008/2009, but a typical recession would be down 20%, 25% on earning and similarly in the markets and you've put half of that behind you already so from that perspective, we haven't priced in recession, but we've priced in a higher probability of recession the lack of likelihood of one is pretty significant if you look at a variety of indicator models including just simply the cni standard survey, that typically leads the economy by nine months and it showed further easing when it was reported in november so investors are certainly

worried about a variety of factors and again, that is captured in the sentiment data and also in the multiples coming in and mike you mentioned the muld. we do something called the various ranges and we're in the 14-16 range right now. that is the second best if you want to call it performance indicate suggesting mid teen type returns so unless you really get the recession, the market does seem to be pricing in a lot of now up side opportunity as opposed to three, four months ago when it was pricing down side. >> so if the bet is no recession, where within the market will benefit the most is it the cyclical areas >> i think value stocks and cyclical stocks have been the most capitulated upon. investors have given up yesterday's news they are yesterday's trash

on the other hand, with technology, there is still debate is the stock something i should be buying on weakness or not. there is no e debate when it cos to banks or energy and that is why you get pops like you got this morning in energy >> tobias, thank you for joining us >> happy new year. we have breaking news here on nordstrom courtney >> yeah, nordstrom just filing an scc document with a statement saying it is wisadness that we announce the passing of blake nordstrom, he was one of the co-presidents of the company his brothers pete and eric will continue on as co-presidents you may remember that it was in early december that he was diagnosed with what he called at the time a treatable form of lymphoma so here blake unexpectedly passing away this morning in seattle. back over to you

>> very sad story. only 58 years old. thank you. up next, we'll break down the charts to explain why today's comeback could be or could be part of a make or break moment for this market and then later we'll have the latest on a government shutdown and discuss how much it is matri tinsts.tengo veor at u.s. bank, we believe one small change can echo throughout an entire community. that's why we proudly support, invest and volunteer in communities like yours. because the changes we make today... can you hear me? ...shape the possibilities of tomorrow. u.s. bank the power of possible. with expedia, i saved when i added a hotel to our flight. so even when she grows up, she'll never outgrow the memory of our adventure. unlock savings when you add select hotels to your existing trip.

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congressionals are leading

at the white house let's listen to kevin mccarthy >> i know the vice president had sat down with senator schumer, had worked to try to come to an agreement, find common ground. hopefully friday we'll get there. >> are democrats negotiating in good faith >> hopefully we can get there quickly. >> you said senator schumer interrupted. what did he say? >> i think that they wanted to go on without going through the briefing, they want the to go on with their bill that they were bringing up tomorrow.ed to go on with their bill that they were bringing up tomorrow the president was clear that it

is not a bill that he would support. >> isn't the pressure on you after tomorrow >> the president has also made it clear that his number one responsibility is to keep this country safe and secretary nielsen wanted to go over some very alarming numbers, things that are actually happening at the border and what happened last year. last year alone, there were more than 3700 known or suspected terrorists stopped from entering this country so there are a lot of bad things happening and the reason he wants to secure the border, the bill we passed in the house that was the start of the go negotiations was over $5.5 billion for the fiscal year. they haven't put the a counter e on the table president trump and vice president stayed here over the christmas holidays and there was no negotiation from the democratic side. so they are delaying >> was this a stunt? >> ai'm sorry? >> how will mexico pay for this

wall, what specific provisions will get the money and if that money is still -- why are you having a discussion with the american taxpayer? >> because we have a crisis on the border do you know in this caravan, one-third of all the women, some are being raped, some violently treated. we have chain with chhave childh challenges we have a real challenge here and i think that is why both sides can sit down, find a compromise that secures the border we had everybody in the room said they wanted to have a secure border. so maybe we work a combination to make it solved. that is why the president -- i watched him in there stay very calm throughout the entire discussion he wanted to -- >> do you have the latest -- >> we will be back friday and we want to make sure that the border is secure but more importantly, this government is open, that is why we moved legislation, that why the vice

president when the senate a couple weeks ago no counter offer came back there was not a counter offer today. hopefully friday there will be. >> so we're waiting the democrats where nancy pelosi and chuck 1450u78schumer are comingt republicans say talks continue friday let's listen >> is this a stunt >> please let us speak >> tomorrow we will bring to the floor legislation which will open up government it will be based on actions taken by the republican senate bills that have passed on the floor of the senate by over 90

votes or in committee unanimously. led by senator mitch mcconnell we will also present in a separate bill the bill that mr. mcconnell did for the continuing resolution for the homeland security bill until february 8 using his exact date we have given the republicans a chance to take yes for an answer we have taken their proposals unamended by any house bipartisan amendments, but just staying true to what the senate has already done our question to the president and to the republicans is why don't you accept what you have already done to open up government and that enables us to have 30 days to negotiate for border security. democrats have been committed to protecting our borders it is the oath of office we take to protect and defend. it has been very important to us

and we have committed resources to it when we were in the majority and we'll continue to do so. >> bottom line is simple we asked the president to support the bills that we support that will open up government we asked him to give us one good reason i asked him correctly, i said mr. president, give me one good reason why you should continue your shutdown of the eight cabinet departments white we're debating our differences on homeland security. he could not give a good answer. so we would hope that they would reconsider and would support the very bills that passed the senate, four of them 92-6, two of them unanimously in the

appropriations committee with mitch mcconnell's support. the only reason that they are shutting down the government is very simple. they want to try and leverage that shutdown into their proposals on border security we have -- we want strong border security we believe ours are better but to use the shutdown as hostage which they had no argument against is wrong. and we would urge them respectfully to reconsider and support these bills which are bipartisan, one of which mitch mcconnell proposed, open up the government as we continue to debate what is the best way to secure our borders >> do you see this lasting very long, the shutdown >> we hope it doesn't. and we hope that they will not use the -- >> we'll continue to monitor for

glue new, but basically no deal we have breaking news to tell you about on apple eric >> that's right, the stock has halted, but just released, the company is cutting their expectations going forward, their revenue numbers will now be $84 billion that is their revised guide aunts fguidance, operating expense evof 8.7 build and the stock isn't moving qqq done about 1.5%. and again this stock down 30& over the last few months we'll have more how the market reacts >> all right thank you very much. and we see a little reaction here >> oh, it is halted. and it wasn't up much today.

is this a very big guide down for revenue. the question of course here, stock down so much from its highs has the market kind of figured it out beforehand. >> typically the relatively conservative with their guidance in a formal way. so i don't think that it has happened all that often that they have had to come out on the fly on the first day of a new quarter. >> and i think the contest is important, this is right after a quarter that was very disappointing because apple said that it will not give us the number of shipments on iphones >> exactly >> that led to concerns. and so eric has more on the apple news >> and in the press release, they are saying that we did not anticipate the magnitude of the being a seg acceleration in greater china. so they point to china for the

cuts back to you guys >> all right thank you. let's bring in ben dunbar for some reaction. seems like a pretty big deal that they are blaming china. how do you take it >> the market has priced it in with the 30% move in apple and the cheap is a stock cheap and that is why apple needed to innovate and they haven't. so they need to start figuring out where the over revenue drivers will come from >> it always shows lack of visibility into their business can we infer anything, whether it was a soft boycott of the products in china or anything else that would feed into this >> people sell a lot of their phones in china. i think a lot of it is the price

point. apple has very expensive phones. the top tier do want to buy them, but they need to be able to sell a lot more phones and there are only so many people willing to pay the price compared to the u.s. >> and just to be clear, you guys don't own apple >> we sell on apple, it has been a holding for us for a long time and apple is a very cheap stock and the market has priced in a l slowdown in iphones, so we'll go from there >> all right ken dunbar, thank you. more color now from josh lipton. what you can tell us >> so first of all, just to reiterate some of the numbers that we saw, guidance for q1, lower than the original guidance we will be looking for the $84 billion previously apple had told us 89 to 93 gross margin still about 38% a few different reasons apple

has given for this, they talk about the different timing for the iphone launches. supply constraints specifically they call out the new apple watch and ipad blopro. and they call out the weakness in emerging markets. tim cook talked about that, but they say that it was significantly greater impact than they had forecasted or projected. they also say fewer iphone up grades than they had anticipated. but really itkocomes down to wretch new guid revenue guidance two reasons is the economic conditions that they are seeing in china and they also go into some color about how rising trade tensions in china are having a greater impact than they anticipated there are some positive results in their words for the quarter they talk about services

obviously a division that lot of investors pay attention to they said that hit a record in the quarter, $10.8 billion and they do he said withend wit position i spoke with tim cook about these results about the forecast and we'll bring you that sound as soon as i can >> all right and i think we have some of that sound just coming in which is incredible to have with the news release like this. let's listen >> if you look at our results, our shortfall is over 100% from iphone and it is primarily in greater china. and so as we look at what is going on in china, it is clear the economy began to slow there for the second half. and what i believe to be the case is the trade tensions

between the united states and china put additional pressure on their economy. so we saw as the quarter went on things like traffic in our retail stores, traffic in our channel partner stores, the reports of the smartphone industry contracting, particularly bad in november, i haven't seen a december number yet, but i'd get would not be good either. so that is what we've seen and there are a lot of things that we can do to turn our business around in terms of the china and generally across if you look at iphone more at a macro level, the story on iphone is in addition to the emerging market weakness, which is

primarily china, fx was a big challenge. as interest rate hikes started, there more than foreign capital coming in, that makes the dollar much stronger and the translation -- we knew that was going to be a factor and it affected us by about 200 basis points and then sort of in addition to those two things, would he have started a program worldwide where we dramatically lowered the battery replacement price. and so we have sort of a collection of items going on some that are macro nick aeconod some apple specific. we won't sit around to wait for the macro to change.

i hope that is it dot does but we will focus on the things that we can control. >> so interesting there to see tim cook wrap up the guidance here, these projections talking about china where he is saying listen, it is not just the economy, there are these trade tensions it is an important american company that is now affected more by the tensions than maybe he first forecast. interesting because when he talked about the trade tensions, he talk about ted with the impah economy. and i asked is it having on the ground in different ways, to you see evidence that maybe chinese consumers are just targeting apple products now because of the heated dispute cook telling me he thought there was simply a small part of it.

interesting though not just about china, but the developed markets too. iphone upgrades not as strong as they thought it would be and there were a number of reaso reasons including the u.s. dollar strength. >> mike, is the market going to give them the benefit of the dow blaming the china trade war? >> i don't think that the market will give the economy a long leash. but i think that the market, had they effectively steen theen ths coming no way that they could go down 30% and not really respond to any of these low valuation calls and all that and not have basically said there is a big problem in terms of smartphone growth, confirming a lot of what we know, but now the question is this a new run rate, is this now what the new base is for demand of smartphones in greater china and so you will see more

estimate cuts, really fascinating to see how the stock reacts to those estimate cuts coming down because it is at one of the lowest valuations that the stock has seen in forward earnings in ten years or so. >> much more from tim cook's conversation talking about the reason behind it primarily weakness unforeseen in the emerging are markets josh, thank you very much. we'll see you in a bit want to bring in jon fortt who has covered apple for a long time when was the last time apple warned on guidance >> good question i don't have that in front of me this is a big moment because tim cook sounded like he was an apple bear outlining all the things that people have been worried about. particularly on the upgrade issue. we have seen headlines in november/december about

potentially slow iphone xr sales,apple appearing to discounts. but the fact that after the holiday season has passed, we have the first trading day of the new year, and we get this 9% revenue miss from apple, tim cook saying that he is still optimistic, it really leaves the question of where does equilibrium here, how long will it take apple to get the handle on the demand picture on what really is underlying this issue. part of what is supposed to happen with apple, they have the sophisticated supply chain, retail stores where they have day by day indications on what traffic is unusual to see a company like that that has such a 360 degree view of both product and customer blindsided like this. so i think that that is the concern. we haven't seen modern apple with this kind of a miss that i can recall. >> it really is something.

jon, stay right there. let's bring in back ben dunbar we have'singhave are se-- we ara la larger market impact >> and apple makes such a great i phon iphone we can't just rely on emerging are markets. so hopefully service and accessories help bring up revenue for apple. but it is still a small piece of the pie. so apple needs to innovate and find new revenue drivers they can't rely strictly just on the iphone >> and 84 billion expected in the fiscal first quarter so a significant cut >> and so you are talking about annualized $25 billion in

revenue that isn't going to be there. not saying that tlg follit will following through every quarter, but i don't think that the street is going to look through these numbers. >> i think that was always a concern with apple, that they would be caught in the crosshairs of the u.s./china war. and i just covered a quarter that nike reported 30% growth in china. so i think that it is affecting u.s. companies in different ways and i know technology is sort of mixed up in the supply and demand side of the trade impact. >> and now you are in the unusual situation of doing exactly what you did, which is looking at other companies and what they say and trying to check out apple's story. apple has been a unique company for so long, in that it really controls its operating system, its chip design, so many pieces of the equation right through retail that used to not be the case in china. they used to rely on third parties a lot more there than they do now. but now this opens up the door

to a lot of other concerns that people might have about 2019, not the least of this is this legal situation with equal qualcomm where they say apple you had need to pay us apple was seen to havhave the ur hand but now when there is a question about the strength of the iphone in 2019, the upgrade cycle and whether upgrade even understands its own revenue cycles, maybe this is a headache they don't want to have but we'll continue to see the local battles play out >> and we're showing the qqq indicated to being down about 1.7% right now apple shares are halted, but the reaction is filtering throug some of these instruments where

apple has a large weighting. >> and it is sort of an ominous significant until that apple is having a advisability problem when it comes to the global economy and its sales numbers particularly in the emerging markets and in chooifchina. and i know tim cook talked a lot about this with you, josh. josh >> emerges markets was something they called out last quarter, but surprised by how much pressure there was also to mention there was a lot of new data, but remember there is a change in disclosure and we see that here. for example you won't get the number of iphones that they will be shipping in the dwauquarter. so if that is not the data point we should be looking at, what are the data points. and cook reiterating what he said last time on last conference call and now with me which is that he believes he is

trying to shift the narrative away from the understandits. and given the guidance, maybe investors will want more data points than that should we see new metrics when it comes to loyalty or enga engagement, some questions that traders will have. >> and in the context much how they received last quarter's news that there was no longer going to be a break down oug in te terms of ichlts knoiphone ships the china trade war and how much they are related >> when we see the pressure of the stock, it finished 2018 in the red. we saw the pressure that it was under, there were a couple

reasons. one was because there was worry about an iphone unit growth. they were not selling as well as maybe a lot of bullish investors hoped for. they were trying to read the tea leaves and disclosure was a big par that was a big surprising change i remember being on air, we covered the conference call. that stock dropped sharply on that disclosure. now you're getting this forecast from apple but you're also getting a forecast with less data we'll see how investors react to that, sarah. >> we're seeing the stock indicated lower between 148 and 149 is where the indications as it resumes it is a pretty big drop looking like about 6% but i would argue given the magnitude of this revenue missio revenue miss, clearly the market had priced in some of this weakness if not all. it could change here in terms of how this stock reacts from here. josh, it's all also coming at a time when there already were

questions before this bout of weakness with the pricing of iphone they were pushing the limits of how much they would pay out of pocket, obviously getting that effect from the down side. it seems to me you're going to get commentary of just how exactly apple went into the entire iphone cycle globally >> pricing is interesting, mike. the bull/bear case has been pretty laid out. bulls were saying maybe units won't be growing the way some had hoped. maybe they'll just be stable many bulls were hoping they would stay flat to slightly up they were counting on that higher pricing to drive that growth i think it was interesting i had a chance to talk with cook, too, you mentioned this, the number of new devices they did unveil here. i did ask him did you try to do a little bit too much. they were talking about the

supply or the watch, the ipad pro. he said, listen, they launched products when they're ready. i think maybe it does bring up other questions that folks had about the iphones, the number of iphones they launched. did it confuse consumers we'll see. >> a lot of questions out there. let's bring in one of the bulls you mentioned. the bulls were hanging on to that thesis. dan ives is with us especially the fact that all of the things are soft and the degree of softness that we're seeing in china is a bit of a jaw dropper. i think that's what's the focus here going forward in terms of what is the china demand story look like over the next few

quarters as josh eluded to, the lack of metrics. this is definitely a dark day for apple. >> what's going to happen to your price target? >> i view this as a sum of the parts situation. right now sum of the parts, 140, 150. you're basically getting the iphone franchise from one times. near term, numbers are going to come down across the board and the street but it comes down to are they going to cut prices is it 2 3/4, massive downtick that we start to see and better pricing in terms of 2019 in that case the install base and the iphone store continues to be there. this, in my opinion, for cook is going to be defining period how he and the company handles it specifically around metrics and china demand >> i think, mike, this is going

to be an even bigger deal for the entire market and the economy. when you hear jay powell, for instance, the fed chairman say it's not clear what the impact of the trade war is on the u.s. economy or u.s. consumers, i think we have a new case to point to, which is apple, the biggest company in the world lowering guidance having trouble seeing what's ahead specifically blaming a china trade war and some of the weakness seeing in their stores not just for the fed but for the president and all investors wondering about the global slowdown and how it's impacting u.s. companies and u.s. stocks. >> without a doubt apple is close to the center of all of this it's hard to wonder how much to extrapolate. there's no doubt it's going to have companies re-evaluating investment plans and just exactly how fast or whether the demand comes back from the china business at this point softened up so much. >> let's bring in another analyst in, chip chattery. how much was bearish china,

something like we got just this afternoon, part of your view are you surprised to see this? >> i don't think tim cook is telling the truth. i think the problem is not onl china. we have been doing our tests and checks in usa and i can tell you the next iphone is an iphone the slowed traffic in all six stores we visited was pathetic there is zero innovation, zero excitement a in apple tim cook needs to be fired and john reubenstein needs to get in because apple is on the brink of getting totally out of business because -- out of business i mean from an innovation point of view the customers are fatigued by the products and if you look at our report, we mention about six key issues apple is facing

the ecosystem is dead. the app stores are dead. app discovery is a problem i can't believe so many investors are euphoric on apple when they are missing the fundamental weakness in apple's business >> all right pretty insend did i ainsend air comments >> the nike business will -- >> hang on i'm going to play some more of josh lipton's exclusive interview with tim cook if consumers were retaliating. >> apple has not been targeted by thegovernment so let me sor of take away any kind of doubt of that right up top there are reports sort of sporadic reports about somebody

talking about not buying products because we're american, maybe a little bit on social media, maybe a guy standing in front of the store or something. my personal sense is that this is small keep in mind that china's not monolithic just like america is not monolithic you have people with different views and ideas. do i think anybody elected not to buy because of that i'm sure some people did, but my sense is the much larger issue is the slowing of the economy and then this -- the trade tension that's further pressured. >> john forde is still with us he's talking about demand slowdown, not economic based not the brand. this is a company that is still, whatever, 60, $70 billion in net income in the latest fiscal year we're not really writing the obituary here. >> we're not granted i covered apple a long

time i know tripp has been calling the death of apple since before the iphone came out. this is a very serious moment particularly though because of the data i mean, one of the things here is that apple had just said, don't pay attention to iphone units, you need to pay attention to other data points, like revenue. and then we get this huge revenue miss because of china. so it calls into question how well does apple really understand what the issue is in china if they didn't see this coming and how long lasting is it going to be i'm one of those people who thinks it's not clear yet what the services business relationship is to iphone unit sales. if the units slow down will the services lag that and slow down as well? that might well be the case. i don't think we really had a test of that yet but we could in 2019 we'll see. >> we've had differing views already on closing bell reacting to this news da

dan ives still bullish we had some bears on we heard from tripp chattery saying it feeds into apple's innovation days, the best days are behind them. the sales of the iphone are slowing. john, does this guidance cut actually reflect that at all >> you know, i'm not sure. it's one of the most up in the air moments that i can recall that we've had when apple in the iphone era i mean, there were questions in late 2012, 2013, into 2014, but that was really still the strength of apple's cycle around what was going to happen with competition, samsung, et cetera. this is not a time when other smartphone makers are doing so well and somebody has taken apple out. this is a question of what happens once enough of the high end of the market has a phone can apple continue growth in some other ways, can it maintain its strength and all of this different geography.

i just don't think that's clear. >> john, thank you for being here i think that's a big question for investors. how much is a macro economic problem around the trade war, china slowing, lack of visibility and how much reflects questions about innovation and the fact that the iphone was a -- >> maturing product and macro and no visibility. that's the combination >> that does it for the closing bell. >> a lot to talk about. "fast money" picks up our coverage on this apple news right now. >> guys, thanks so much. "fast money" does start right now. live from the nasdaq market site overlooking new york's times square i'm scott wapner in for melissa lee. tim seymour, gia dam my. moments ago apple warning on the first quarter results. the stock is falling sharply after hours. our josh lipton is at apple headquarters where he just sat