making money in strong parts of the country and you have to be in those parts of country. >> you will be rooting for virginia, won't you? i'm wearing my orange and blue tie. >> just for you. >> thank you. >> thank you for watching "power lunch. . >> "closing bell" starts right now. ♪ it is the final hour of trade. welcome. a move in bonds, shake in stocks, global slowdown fears spooking investors where to find buying opportunities. "closing bell" starts right now. ♪ welcome to the "closing bell." i'm wilfred frost alongside sara eisen. just under one hour left of trade. red across the screens over 1% of declining for the

s&p, russell, dow just underneath that level and still essentially a 1% decline the russell certainly bottom of the pile down 2.6 in large part of the weighting of banks in the index. here's the intraday chart. the low of the day around 1:00 p.m. and we have stabilize a little bit. >> down 450 or so on the - >> since lunchtime one hour left. still down over 1% on the s&p. >> weaker for the week as a whole, as well market expert wills tell you what today's move means for your portfolio. what to do next. just to name a few, all joining us with advice over the next two hours. we also have mike santoli and rick santelli and starting with them with the inverted yield curve that everybody talked about first time since the financial

crisis for more, rick at the cme. mike is here at post nine. rick, let's start with you. >> all right let's have a quick primer. first of all, let's look at textbook curves. look at inverted first an inverted yield curve with a complexion like that basically this is your maturities from three months out to 30-year full inversion these are yields as you go down into the maturity range to longer term yields go down they don't always have to be like that. they can have curves, little kinks in them. now to know what a normal curve is like, it is exactly the opposite as you go through time, one year, three year, five year, you see the yields go up so if you had a 30-year around 3%, 2%, no, ma'amal slope. not exactly like that. sometimes it can be curved now, speaking of curves, here's

the plot of the yield curve we have now starting with three montes, one year out way out to 30-year. here's time. here's yields. here's what the current yield curve looks like now, where's the inversion well, as you move through time, a normal yield curve should be higher that is not the case so short maturities are back ward dated and why is this important to viewers a couple of easy reasons an inverted curve and thinking of doing a mortgage, which one do you think you want to pick? anybody? anybody? i'll tell you which one not to pick don't pick an adjustable rate mortgage if rates are starting to move -- i'm sorry. if rates are starting to move down, you want to use an adjustable rate mortgage rates going up you don't but maybe the most important thing is the alarm clock for the federal reserve. it's going off potentially why? because the whole point to the inversion of the curve is that

many out there suspect traders see it first you know how we're constantly talking about when's going on with regard to the yield curve and long maturities? they're coming down. as they come down, the fed's late to the game so there's your inversion. if the fed's late to the game, they're gong to come in and push this down. and long end already pushed down so the alarm clock of the fed pay attention. mike, what did you think >> perfect, rick i mean, you know, obviously, the alarm clock aspect of it is what stock traders are focused on and the thing to keep in mind for context is how much of a lead in lag time with these things so, yes, we now have an inversion from three months out to ten years. various points along that curve. it is basically saying the fed is likely done hiking and the bond market's estimation and the nest move a cut perhaps before too long in the next year or two and what does that mean in terms of the economic outlook? doesn't necessarily mean the cycle is over but in this later

phase. >> i think you have to look back at history yes, the inverted yield curve is a scary prospect but before selling everything, go back-year-old curve inverted what early 2006 >> last time we initially got -- it was january of 2006 by the way, people did get nervous about it not ignored. i think there's more attention on it now. in fact, one of the things to be aware of is when people start to explain it away and say actually it's different this time, we probably don't have to worry about it at all, that might be a time to worry. there's technical reasons why the long yields are staying low and that was maybe a sign that we kind of ignored the signal. >> rick, i guess - >> one other thing i want to bring out real quickly, let me bring it out quickly nobody talks about it. an anomaly this week is the dollar index performed so well

overseas investors are pulling their hair out trying to procure dollars, overseas interest rates are moving more, dollars are expensive. normally in a cycle of inversions the fed's easing and the dollar's going down and the fly in the ointment. it's just going to make matters worse, keep long end rates down more because the emerging markets and those that are more sensitive to procure the expensive dollars the economy's affected more largely. >> here's what else happened in 2006 the federal reserve hiked interest rates four more times after the yield curve inverted if 2006. >> right did not stop until july of that year. >> the fed paused. there are different circumstances. it's a reliable indicator. it is in history - >> it's one indicator. with variable lags and it's not a light switch. it's not as soon as this happens

things all of a sudden seize up. >> right. >> rick, what's an inverted yield curve track record of predicting a recession where there's a big part of the curve a huge gap of international and domestic yields? >> i can't give you the exact time and so manies a pecks of this particular inversion, wilf, that defy looking back we're not mentioning the big elephant in the room, of course. that is all the tampering, central banks have done with maturities, distorting yield curves to begin with and also we need to bring to the whole notion of so many negative yields overseas there's other distortions created. i guess to answer your question more directly, the fed will have a real problem with this one because not only calibrate as you said if the curve's inverting, screaming to bring the fed back in an while doing that and thinking about that, they need to worry about insurance. should a recession hit, they need room to lower to bring that curve more normal. think about mario draghi and

europe what will they do? lower rates minus 100 basis points it almost defies a good comp of history. >> would you argue, very quickly, because this is different with the distortions of central bank policy, actually qe weighing on global yields that it is not as reliable as an indicator for recession? >> i wouldn't say that burr i would frame it more this way monitor what's going on with the inversions and not lose sight of the big story. weakness, weakness we don't need an inversion to understand things are slowing, affects investors. issuance debt especially short maturities. in a curve, that's flat or inverting, why extend and purchase anything? you do most of your investing on the short end. why surf the curve if they're not going to pay you >> thank you very much

mike and rick. treasury moves aren't the only data pressuring the stock market soft economic data out of europe and japan sparking fears, especially the german manufacturing numbers of this morning. joining us now to discuss is vice chairman at evercore. so many people hoping to see a stabilization in the global growth story global economist at goldman told us that yesterday. fred smith the ceo of fedex said he sees green sprouts s. that not the case given the data we got this morning >> the data still pretty mixed within weakness bias as far as i'm concerned. it's true. as the guys you mentioned reference, one or two better data points we can point to. but i think it's going to be sometime even in a benign scenario we don't go into a proper global downturn and sometime before the data confirms that. right now i think it's way too

soon to sound the all-clear and today's industrial data from europe in particular really showed that very clearly. >> that said, the comp data, the comp sit numbers and services numbers not that bad actually. when you consider the level of negative reaction including the other side of the atlantic, here today, do you think some of it's overdone >> so i think you certainly are right. you know the comp sit indicators showed in a more resilience in the services sector and so forth and the details were not all bad but certainly, we have had markets rally very briskly you know since the beginning of this year in anticipation of a stabilization in global growth and i think today's data just reminded us that even if that stabilization is going to come through we don't yet have anything definitive that that's actually what's yet in front of us here. now, you know, when we talk

about curves and yields and so on, you know, i'm much more struck by the level of that german bund yield now negative at ten years than i am about very mild curve inversion. that with a more negative jgb yield is telling you that investors are concerned about prospects x u.s. >> is the best place to be still the u.s. stock market? >> so, i certainly would not be panicking if i was an investor in u.s. equities right now we have to take seriously, of course, the signals out of the yield curve with the historic track record but i think it's not the case that going from being mildly positively sloped to being mildly negatively sloped is in and of itself a game changer in particular, if part of the reason why the curve is flattened is because you've got

a more dovish fed. right? a fed taking out extra rate hikes, market thought it would keep in, reinvesting not just at the front end, reinvest across the curve. the fed doesn't really know anything about the u.s. and global economy that you and i and our colleagues here in the markets don't know so it's good news not bad news that the fed is shifting more accommodative now, we still have to care about global growth. we still have to care about global bond yields we have to still care about global data. but remember, the part of the reason the curve is flattening because the fed is more stimulative. doing enough maybe not. maybe they are moving in that less hawkish direction and that should be good for risk. >> with that in mind, do you think that the banks selloff this week in the u.s. is overdone bank of america is off 8% week to date. >> i think it depends on the sort of horizon you're looking at right?

my own view is that the bank stocks time will come again. in the sense that if we track what still's my baseline and this is a 15, 16-type episode with a proposed, pronounced period of global weakness, mostly in the manufacturing and trade and industrial sectors and the global economy, gradually pulls back towards somewhat more vigorous rate of growth with easier policies around the world, if that's what we're tracking and then we move forward in time, you know, beyond this growth scare, then i think eventually we will see the curve steepen a bit more why? because i think that if the growth is vigorous enough people look and ask is the fed going to hike the fed in the process to shifting towards this new framework and trying to do some inflation averaging, trying to get inflation above 2% the next few years so the fed will sit on

the hands at the front end and eventually the curve will begin to steepen again now, lots of things have to go right before we get there. first of all, dodge global recession and then we need to be left with an economy that's vigorous enough to again start to generate, you know, those stronger, hotter conditions and there's a decent chance that plays out and then bank stocks have the day in the sun again. >> thanks very much for joining us >> thank you. still ahead, much more on the friday selloff we're told why she thinks the risk/reward to own u.s. equities is unfavorable. nike, last night's earnings, we'll discuss whether it's a buying opportunity or a sign of more pain to come. obvious.

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♪ welcome back to the "closing bell." we just taken another .2% move lower in the last ten minutes or so down 1.2% on the dow 312 points. the low of the session 451 an

still off that financials, materials suffering the most with energy the nasdaq down 2% and the russell small caps down 3% joining us to talk more about the market selloff is chief market strategist of kanter fitzgerald. you have been in the bearish camp a while here and the market's performing remarkably well and heading into today set for another up week and how do we know whether this is the trend or just a pullback >> right so when we made the low in december we actually did get a bit more bullish much more bullish and the target 2700 to 2800 an a rally and the idea for central banks to change communication to, frankly, exactly what they did. patient and flexible in december my view was they had far too intransigent with the pace of the balance sheet and now i think that catalyst is behind us and i think earnings

are starting to roll over and the thesis of a slowdown is more pronounced we saw the pmi data out from europe usda that wasn't awful but certainly second derivative is changing direction, slowing. a bad payrolls report a week and change ago and the narrative is gaining steam. >> so 2814 on the s&p at the moment what kind of level do you think is warranted pullback? >> yeah. so again, a 2800 we got more bearish. went against us for a touch. my target for the year end officially is 2400 which would be about flat on earnings year over year of a 15 multiple which i think is reasonable given the trajectory of earnings to see and seeing that rollover. >> so you expect to see bond yields go lower than the current levels. >> yeah. our call frankly since the presidential election in 2016 was for a curve inversion simply because our view wasn't that fiscal stimulus was going to be enough to cat liz a rise in long

yields i didn't think we'd get the inflation and calling for an inversion. did i expect three month to ten year to depress as low as quickly as it has over the past couple of days no, i didn't but we did expect inversion by the end of the year. >> clearly bearish on equities what u.s. exposure do you recommend to your clients? >> well, right now, you know, i don't really recommend any a few weeks ago i thought with oil a bit below fair value that energy was a good place to be. but i think that call is largely done and i think really this year's about being tactical. when you see value present itself and right now frankly, pretty much across the board, i'm not all that constructive. that said, the yield curve inversion as well as loan volumes have obviously been hard on the banks and now banks are likely a touch oversold we have small cap banks down 10% or more this week and probably a touch oversold. >> what about the argument that

q1 has a lot of funky factors including the government shutdown, the fact that global growth really did get hit and the rest of the year looks fairly better? especially if the u.s. and china move toward a trade deal we have the stimulus coming from central banks around the world, in from china, fiscal, too, with the tax cuts and things should be looking up. >> i sort of disagree with that. i'll tell you why. i don't think there's much china can do right now and central to my sort of bearish cautious thesis because what china is doing by cutting the rrr and by stimulating through aggregate finance activity is plugging holes. the detault rates increased in china significantly and not seeing responsive of gdp nor responsiveness from money supply and should lead gdp a little bit. >> what can make you spin and be bullish? if the data we saw for this month out of europe is the bottom and improves from here, is that enough to be bullish on

u.s. equities or something more domestic >> yeah. i think frankly it sees a more pronounced pivot from the fed and the ecb. i don't think the fed is going to cut this year fed funds futures are expecting not expecting but there's a 60% chance by fed fund futures to cut. they communicated they'll be patient, neutral if they were to cut quickly, i think that could change my view. i don't think they will. but in the absence of that, i don't think there's anything from the stand point of global growth to change my mind. >> the market will celebrate a fed cut? >> it is tricky. maybe bad news is bad news now. >> so that's a no. >> that's a no. >> thank you. we've got 38 minutes to go here before the close. taking a look at the dow worst of the session down 450. down 320 and heading south again. s&p down 1.4% right now. when's holding up?

defensive groups like utilities and staples. materials and financials are biggest losers, have been all day. russell 2000 small caps underperforming by double. still ahead, david rosenberg sounding the bell of a recession all year we'll ask him how the fed decision plays into that thesis. later the nasdaq underperforming today. danis ll wn lewieigh in on the pullback in tech measure up? a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see.

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34 minutes left of trade we are down 1.2% off the lows but just losing steam again as we approach the close. the nasdaq and the russell towards the bottom of the pile coming up, jim la camp says this market volatility presents a great buying opportunity for certain sectors. he'll tell us what he's buying. after the bell, crude is still up nearly 30% on the year. jpmorgan's head of oil market research will join us with his take on the energy outlook -i call it my comfortable future plan.

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♪ welcome back to "closing bell." market selloff, dow down 330 you tills and staples are working. tend to go up on selloff days and also seeing bond yields lower. big theme of today brutal selling in financials and energy technology not having a great day, either. nike falling today following the earnings report last night worst decliner on the dow despite a beat on the top an bottom lines and a jump of margins and chatter that north american sales and guidance light.

joining us now to discuss it is liz dunn from proforma the numbers, guidance numbers, read a lirtdttle bit about, if e worry is global growth, you didn't see a slowdown in nike. >> i think it was a solid quarter, high quality beat, and people are looking at where the stock run and obviously a lot of expectation heading into the print. but i thought it was a high quality quarter and we're sort of picking - >> you would buy this dip? >> yeah. i think it's a great long-term investment i think nike is clearly dominant globally adidas and under armour are trying to play catchup and for nike with its size and global footprint to have growth in the consistently in this sort of mid to high single digits on the top line is phenomenal in my mind. >> liz, to sara's sort of question and answer, none of the notes today pointed to a reason that could explain 6% downside and only really comes back to

the valuation and the way the shares run up coming into this. >> trading at the high end of the historic range 60% of the analysts covering it love it. there were high expectations heading into this print. >> i guess you could try to figure out where's the growth coming from next always a concern with a big, big company. but nike laid out on the call yesterday saying there's plenty of opportunity in the women's business an going after hard and digital and then china they said still an early stages. which of those to you represents the biggest opportunity of growth the. >> i think china but women's is certainly -- well, i would say china's the biggest opportunity, you know, weighted for what i believe. women's they've been trying for a long time and frustrating that they haven't i don't think cracked the code. >> why is that >> well, i think the things coming out over the last year of the culture at nike might have

played a part but i think starting to get there and they have abig, impressive women's business i shouldn't minimize that but based on where they wanted to be it's smaller than where they wanted to be so both women's and china are a huge opportunity and consumer direct strategy to focus on. >> how will they doing relative to the likes of under armour and adidas >> i think, you know, i think adidas is clearly making some strides in the u.s the easy business was small. now they're accelerating it. it's clearly been a real success for them and -- but at the same time, they're losing share elsewhere. so they have a focus problem you know they look over here and then something slips out the door over there where nike is really able to focus on multiple fronts and grow their business across geographies, categories. so while we might see a little bit of movement at the margin on the basketball business with nike versus adidas, i really

think nike is a long-term dominant player. under armour, i think that stock is expensive i think that investors are believing that they will expand their operating margin and just, you know, needs to grow into the valuation in my mind. >> liz, thank you. >> thank you. it is time for a cnbc news update sue has it for us. >> i do indeed, thank you. syria condemning president trump's declaration that the u.s. will recognize israel's sovereignty over the israeli occupied golan heights the ambassador called trump's statement irresponsible. >> we reaffirm that the united states administration has no right or mandate to decide the fate of the occupied syrian golan and that any recognition or any action that involves violation of the syrian arab republic sovereignty over its occupied territory is an act of

aggression provocation and illegal act. indonesia's flag carrier is seeking the cancelation of a multibillion dollar order for 49 boeing 737 max 8 jets citing a loss of confidence after two crashes in the past six months that order is worth almost $5 billion. and a latest numbers from the cdc show that all 44 states are all still reporting widespread flu activity, down from 46 states last week and the estimates range from 25 to 41,000 people who have died from flu related complications. that's a lot of people so it may be spring but the flu is still with us you are up to date that's the news update this hour >> sue, thank you very much for that see you next hour. oil stocks getting crushed today with the market and the s&p oil and gas buy. having the worst week since december

joining us now, head of oil market research and strategy at jpmorgan abishek, good afternoon. >> thank you. >> the balance apart from the past week, the balance between increasing supply in the u.s. and sort of withheld supply elsewhere has been positive for oil. >> no, absolutely. i mean, when's really helped is opec cuts from start of this year which they announce in december meeting has definitely helped rebalance the market and on top of that, the oil compliance has gone even further along the way in taking over the extra out of the market n. addition, despite the benign outlook for demand growth this year or next for that matter, what we are also seeing is some of the nonopec producers curtailing the production such as canada and on top of that, this is the view that we have been publishing is u.s. production growth in the first half of the year to slow down, especially given the slowdown in completions we are seeing the

end of last year, capital discipline in the u.s. as well as also the drop in oil price at the end of the last year to have the lag effect for first half to show slowing growth an second half no doubt to see increased growth and production. >> the 30% gain in the price of oil so far this year, you're pinning to supply, not some improved demand picture? >> totally supply driven market right now, oil markets, especially because of both the interaction of both opec plus taking away extra and adding further to the tightness. i would say from the u.s. angle basically lower growth which in a way is supportive. >> when you see data like this morning, german manufacturing, does that get you concerned about demand outlook for the rest of the year >> well, we are already taking a demand growth expectation of 1.1 million barrels this year which is low already compared to last year and last year 1.3 i think the problem with the

markets right now with the oil is if you look at the near term fundamentals for oil they're quite tight and supportive and i think the markets in general latched on to the macro news and anything negative has a roll-on affect and oil of course with it and we have seen that happen at least three to four times in the last 15 to 18 months and that's why this is something that we're living with and will have to live with in 2019, as well as soon as markets tend to focus away from macro news, especially for oil and commodities, you will start to notice that oil support is quite well supported by strong fundamentals in the very near term. >> what's the target for the end of the year? >> end of the year is different. first half of the year, middle of the year, oil towards 75 brent. purely because of the cutbacks of supply side are going to help end of the year -- >> second half >> yes by the end of the second year we go more towards lower 60s.

in the 60 range just because the slowdown and demand growth as well as the return of u.s. supply will start to weaken the balances and looking at more mid to high 60s rather than 70s handle by the end of the year. >> thank you for joining us. >> my pleasure. we have around about 23 minutes left to trade and we are selling off now as we approach the close of the last 15 minutes or so. we have increased selling of 380 points on the dow. the low of the day down 450 points nasdaq down 2.2% the russell down more than 3%. as far as the biggest weights, boeing shaving about 53 points off the bow biggest point decliner nike behind it taking another 35 and goldman sachs another 30 up next, liz ann sonders with her take on the selloff and why she thinks the treasury move does confirm a global slowdown is upon us alpha seems more elusive today.

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(vo) snap and sort your expenses to save over $4,600 at tax time. quickbooks. backing you. welcome back to the "closing bell." under 20 minutes left of trade we are down 1.6% on the dow. 412. the low 451. the selling increasing approaching the close. nike bottom of the pile despite decent results

down some 6% we also have dow dupont down there and jpmorgan, the banks suffering significantly. in terms of sectors, financials, energy, materials bottom of the pack utilities in sector performance on the s&p small caps suffering the most. >> looking at what's working, dividend payers. verizon, travelers, mcdonald's utility stocks and the reits joining us now by phone, liz ann sonders of charles schwab. thank you for joining us what is your take on what is driving this today is it as simple as global growth concerns >> well, it is as broad as global growth concerns and maybe today it's also as simple as the inversion of the 10-year 3-month yield curve and also a few days ago the reinversion of a newer yield curve that got the fed's attention less than a year ago,

the 6-quarter forward d-bill yield and other curves are in an inverted territory right now and seeing a swift move like this it makes you wonder whether the algorithms are tied to it and adds to the momentum on the downside. >> if you look at the catalyst of the tremendous performance of the stock market in 2019, that reversal of christmas eve, a major factor is easier monetary policy, the fed pivot. didn't that get even looser and even easier this week? >> sure. but at some point especially given that the fed signalled it's finished, recessions have come when the fed finished the fed doesn't continue to high into recessions. they signal they're done, the yield curve inverts -- >> so you're in recession camp >> there is nothing bombastic or

headline grabbing about that they happen at the end of the every cycle. >> when, though? >> the question is timing. >> yeah. when >> the runway between now and the next recession is two of the main factors coming into the year were trade and fed policy we got an answer on fed policy with the dovish tilt and other central banks moving back toward an easing mind-set and don't have a resolution on trade and now we have the inversion of the yield curve plus the fact that the stock market had a near bear market in the fourth quarter that's important because if you look at recessions and stock market performance once you're in recession historically, the stock market's done fairly well. look at beginning of enlds of recessions and the market it's up on average. the worst performance in the six months leading into. you know you have seen the rolling over since last september and the leading indicators, yes, stronger than expected this week i just think the indicators are stacking up to suggest that this is not a 2021 phenomenon

that we could actually see the possibility of a recession starting maybe later this year but i think the big needle mover leaving monetary policy aside is getting a trade deal the real hit to the economy has been on the soft data side, the competence side. the rolling over in small x spending intentions and draining of confidence in the business sector i don't think you get that back and kick in the next leg of the cycle here which would be cap x unless you see a true comprehensive trade deal and the jury's still out on that >> would that be transformational for equity markets with a resolution? >> not necessarily i think it depends on the r resolution a loose promise down the road by china and didn't tackle the practices of sintellectual property, i don't think the market love that is to a great degree, even getting some sort of hard line deal that doesn't

tackle some of those things and the secondary question of markets going to ask is, okay, but what's the monitoring mechanism? what's the enforcement mechanism. we have had the view that the rally was a function of hopes for a trade deal but that if we got one it really would depend on what the meat was on the bones as to whether you could see the rally persist beyond that point. >> we don't know if that's the case what do you tell people to do? sitting on the sidelines >> well, we in about three steps over the course of the last year and a half we reflected our more cautious outlook downgrading u.s. equities from overweight to neutral and then within that neutral to u.s. equities we went to a bias toward large cap at the expense of small cap so that's what we did specific to u.s. equity exposure we have had a slight underweight on emerging markets and then within u.s. equities aside from

the cap piece last august we downgraded our rating on technology and financials from outperform to neutral leaving only health care in the outperform category and communication services is a blend of former telecom and some of the names that came from both consumer discretionary and tech so that's basically in a step fashion how we reflected that greater caution and not a, you know, run for the hills dump everything we are gettinever get in or get folks but the message around the neutral is don't get out over your skis with exposure. pair back to no more than your normal long-term strategic allocation and then within u.s. equities, a bias of what we feel are the healthier more defensive large caps. >> liz ann, thank you very much. >> have a good day. 12 minutes left of trade

we are down 400 points or so on the dow. 1.5% nasdaq down more than that after the break, david rosenberg is warning of a recession all year we'll ask him how long it could last. dan niles here to weigh in on today's plunge in technology and what to do with plape ahead of monday's event. e business. and so if someone tries to breach your firewall in london & you start to panic... don't. because your cto says we've got allies on the outside... ...& security algorithms on the inside... ...& that way you can focus on expanding into eastern europe... ...& that makes the branch managers happy & yes, that's the branch managers happy. at&t provides edge-to-edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & when this happens you'll know how to quickly react...

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xfinity, the future of awesome. welcome back to the "closing bell." we are down 392 points on the dow. 1.5% here are the s&p 500 laggards includes quite a few of the financials brighthouse, svb financial regions all there in amongst them down 6% or 7% not just the small banks bank of america, for example, down a healthy 3% today. and is down some 8% for the week as a whole. big story out day has been the recession indicator flashing red on the inversion of the yield curve. let's bring in david rosenberg for his take when that happened, david, i guess you must have felt vindicated as one of the few calling for a recession and not

buying into the rally. >> well, i mean, sara, we already had several segments of the yield curve already inverting before, you know, today's move and the three-month 10-year relationship to like minus 1 basis point. today's move doesn't affect my forecast anymore than yesterday's rally in the stock market did but several segments of the curve already inverting aen the leading indicators for what we saw today were coming in to play several months ago so am i surprised? the answer's no, i'm not surprised and nothing happening today that alters my view. the bigger picture story for the stock market is the s&p 500 today lower than january of last year and the big story is that the peak in the s&p 500 notwithstanding the flashy rally, the peak is in and the peak in the s&p 500 led the peak in the economy in the past 100% of the time. that's all we have to know from

the economic standpoint looking ahead. >> a lot of the focus today obviously on the global picture, the international data and we know that's been bad and i guess it's showed that it could be worse still today. do people miss the point about how much that's affecting the u.s. economy or is the u.s. economy looking fairly down beat for its own reasons? >> well, it's a combination. you know, the u.s. economy is very much domestic demand economy but there is no economy in the world that actually lives in total isolation from its neighbors. but the bottom line and i sound like a broken record saying this for so long now, that the fed has raised interest rates nine times. no other central bank in the world has raised interest rates nine times and there are inherent and long and variable lags between what the fed does and then the impact it has on the economy 12 to 18 months down the road there's still work to do

everybody was excited over the fed pivot but the reality is that the lagged impact of the fed already done and it was a very aggressive tightening cycle not matched anywhere else in the world is going to have a lingering impact in the economy over 12 months if the fed starts to cut interest rates and stimulate interest rates, that will have a beneficial impact 12 to 18 months down the road people because of the world of social media and all the noise that we get they can't seem to see the forest past the trees. the lagged impact of the fed doing and the impact having on the credit sensitive sectors of the economy as i think the overriding impact of what happened to growth so far in the past few quarters and looking forward irrespective of a trade deal with china or not. >> so, david, i mean, you know that history tells us we get an inversion it doesn't necessarily mean we get a selloff. it means a recession and doesn't mean right away and still plenty of opportunity for risk assets like in 2006 when it happened we

saw another at least year and a half of a market rally so what does the market do now until we reach your recession target >> well, you know, people like to look at averages. when they say, oh well, it's a year and a half between the inversion and then the other nasty stuff happening, you know, the averages is like stick my feet in a bucket of ice and set my hair on fire and i feel the average. i don't think you can look at any one indicator. i think the yield curve is a bellwether take a look at the bond market there's been a monumental move in the 10-year note yield down from 2.7 and now close to 2.4. 85% of that down move in yields has not been the tips break evens. this is not an inflation expectation story and how could it be with oil around $60 a barrel 85% of the down move in treasury

yields has been in the real rate and the real rate core lates with expected real growth and this is exactly what was happening with the fed statement. one thing to be dovish, maybe another to be too dovish, the downgrade in the opening photograph of the statement, to the consumer, which was the glue that held everything together last year to me that was what was important. the fed didn't change the view on core inflation in the forecast at the margin downgraded the view on the economy. well, earnings happen to be part of the economy and the big risk for the market even as interest rate expectations come down is that this earnings recession is not going to be a one quarter wonder i think that's what the market glap grapples with. this is going to extend beyond the january to march period. >> david rosenberg, thank you. >> thank you. heading back toward the lows dow down 434

over to seema mody at headquarters with stocks in the sell-off. >> that's right. dissecting the notable losers in the trade. look at tapestry, newell brands and biogen it is down 34% in biogen hal halting a late stage alzheimer's trial drug down another 4% today. bio tech is an underperformer for today and the week best performing sector in 2018, worst performing sector in 2019. back the you. >> thank you. let's go to bertha coombs at the nasdaq with the big movers there. bertha >> that's right. it's a small cap drag today as people worry about potential slowdown and overall all of the major indices and nasdaq, nasdaq 100 as down. for the week the nasdaq 100 is holding on to a fractional gain

for the week which would make it its 12th week out of 13 it's positive if it holds on to that and we are accelerating into the close. today, syntax, revenue light and outlook light stoking the fears of a slowing economy for demand there. back over to you wilf >> bertha, thank you very much two minutes left of trade. we are touching the lows of the session. hoe's the s&p 500 intraday chart. we came off the lows about 1:00 p.m. an the last hour accelerating losses. the russell very much the underperformer, laggard. nasdaq doing pretty badly, as well dow near the session lows which was 451 points down 445 so a lot of red on the screens as we approach the close. industrials, technology, energy, financials, materials all down more than 2% today lets's switch focus and look at

the sectors for the week and a whole and not as bad as today shows. the s&p is only down 0.7%. and there are some sectors there in the red mainly defensive ones like the green -- sorry consumer discretionary and tech had a decent week. financials the big underperformer as a week. >> what we see is the banks. kre, down 10% on the week. those lower rates particularly at the short end really hurt the regional banks a lot of stuff down 10% to the kres and concentrate there secondly is we have some sectors hitting historic highs today real estate investment trust historic highs today utilities. the new high list is mostly with utilities and reits. also some defensive names that are also sitting at historic highs today so, for example, we're seeing kimberly clarke at a new high

general mills. procter & gamble. >> a fresh low down 455 points. down 1.8% on the dow russell down 3.6%. s&p down 1.9%. a bad end to the week this friday s&p down just less than 1% for the week sara, back to you. ♪ closing just at session lows i'm sa ra eisen. wilfred frost will rejoin me in a moment along with mike santoli, cnbc senior markets commentator. worst day for stocks since january 3rd. santoli reminding me, the day apple warned on the earnings because of china s&p 500 losing 1.9%, almost 2% decline for the major average.

only group to close higher is utilities. materials, financials, shellacked energy, too. technology hit hard. the nasdaq closing down 2.5% russell index 2000 underperforming all day long closing lower 3.6% wiping out the gains for the week as wilfred said. nothing drastic. we were higher going into today. decline for the s&p on the week. coming up, famed tech investor dan niles tells us whether he's buying on the dip or worrying about the market, particularly technology joining us today is jim lacamp from ubs nice to see you. welcome. >> good to see you. >> so, mike, you know, this is a pullback how serious of a decline and of how serious of a sell-off was it >> serious because it's been so calm lately i think is an issue. it felt a little bit more severe

than it probably was in the grand scheme less than 2% of a 5-month high and a couple of like posing thoughts in your head. one is rally in treasury bonds that's compression of yields definitely reinforcing the idea and maybe the fed late in getting -- >> yesterday that was the accommodative policy. >> you have to keep that in mind and the field position of the stock market was prepared for some kind of a little bit of a test and a gut check and we got it through these global concerns on a day when the bank stocks continued to get shellacked for obvious reasons regarding the treasury yields and you just didn't have the leadership of the big nasdaq stocks as you have for weeks now why? they were overextended, overheated 95% bullish reading yesterday for the nasdaq that shows you they were due to cool off so you can look at it basically like, yes, economic signals the market had to digest but also

you were due for a pullback and closed at 2800 on the s&p. so the market maybe needs to test to see if that's a breakout. >> jim sr, is there a shift in sentiment that central bank dovish rather than being preeffortive is necessary? >> i think there's a lot of people think it was necessary. the market reaction yesterday is a good example of that wall street finished, the markets finished yesterday at a level that was higher than every single wall street house had predicted for the year and we had run ahead of what anybody thought the market would do for this year. so the fed doesn't pivot like they did unless there's going to be concerns. i agree with what michael said and then you get validation of those concerns you get the european data which is terrible. the german bonds going back to negative yields and also entering the time frame of year that people need to be aware of. share buyback blackout period starts to ramp up on monday and

we are going to it have for a few weeks and buybacks have been a big part of what's driven this market higher. finally the inverted yield curve and not terribly worried about that yet because as the curve inverts, the market does pretty well for a while secondly the fed has some tools if their toolbox to address that they could use expiring maturities and buy the short end of the curve and keep it positively sloped if they so choose so, we think -- finally, we think the economy will start doing better in the second quarter than it is in the first and money supply starting to validate that so that i think we might back fill here but beyond that i think it's going to be an okay market if not a run away market. >> so if you're just joining us, big sell-off s&p 500 with a decline of almost 2% interestingly, mike, closing on 2800 to steal a british phrase, bang on 2800

significance of that >> i think the significance is, well, the significance in the interpretation of it is going to be look at that chart. was that just a little bit of a head fake to the upside? crossed above the level very difficult to break above for back to october of last year, seemed like we were in the clear. not so fast. was it a bull trap i guess you might call it? i don't know if that's great significance and the real level above that look you're up coming into today. 16% or something like that 14%. year to date you were due for something like this the question is, did the market get too confident that we're going to see a second half comeback in profit expectations? can the stocks getting us to this point, the big growth stocks and the defensive dividend yield stocks hold the tape together until and unless we get that corporate profit reassurance? >> i don't think it's a british phrase but a weird wilf phrase

i like that you -- >> he speaks for the empire. >> exactly anyway, mike just to the point of sectors to perform, clearly banks sold off sharply does that drag the market down or have they kind of been able to be weak on their own? >> restrains the market, obviously, on some level and reinforces the idea it's uneven and selective and not really been a bellwether group and had to be strong for the overall market to succeed. the question is how weak can they bomb without the market catching a cold and without something to tamake up the difference maybe this is a one-day hiccup in the stocks and definitely did not necessarily compensate today. >> i feel like we truth telling of the curve recession indicator. flashing red three-month treasury yield moves upon the 10-year treasury yield. not supposed to happen a signal of an economy that is turning, always correctly

predicted it the question is when. >> by did way, it has to be for at least a quarter i believe all the research studies saying this is a sure thing recession signal it can't just be a one day or a few days or a week. it is supposed to stay that way for a little while before you necessarily get something. >> if you see that headline at home, sell your stocks >> no. absolutely not because there is such a lead time and there's a lot of give and take of the meaning an relevance on a moment to moment basis. it is not predicting the next few months worth of economic activity it's saying in general the bond market is bracing for a much slower environment where the fed within the time horizon of a couple of years is likely to be cutting rates and therefore the yields going down and most of what it says it is a cautionary sign but not an alarm is the way to put it. >> jim, what are you using this weakness as an opportunity to buy? >> okay. so i think it's little early to

be too aggressive of buying. we had a one-day sell-off and use the volatility of now and three weeks to shape up the portfolio. technology is going to be a leader still coming to artificial intelligence we like software we like companies related to 5g. and we like health care, medical device type companies, as well i think what you do in an environment like this is watch how the stocks perform remember, we had a v-shaped bottom and little bit unusual and the russell 2000, the transports, never confirmed the move and a lot of people skeptical of this rally anyway but they have seen how the technology stocks particularly semiconductors have performed well and have really good numbers so use weakness to accumulate those names use strength to get as the market becomes more volatile, use strength to get rid of names you don't like and i think rough sledding for the financials moving forward we also like some of the emerging markets in here.

>> the technical analyst just said the real reason sell-off, nyse allowed jeans on the floor yesterday. >> probably closer to a low than a high. >> one day then did it >> yes. >> what was the following day? >> 50th anniversary of the gap. >> there we go >> 40th. president trump tweeting earlier, it is my pleasure to announce that stephen moore nominated to serve on the fed board and known him for a long time and have no doubt he will be an outstanding choice mike, clearly, we have got the fed pivot that the president wanted but he still showing a sign of wanting to move towards his vision of economic policy regardless. >> right and moore has very lately been a voice for a much easier policy look i think that people looked at this and said it's doing nothing to dissuade people from the view

that the president wants a compliant fed and one much easier and one that's going to serve what he believes is his purposes i mean, you know, steve moore is a partisan voice on economic policy has been for a long time and made his living at and i don't necessarily think that he can sway the entire fed. it is not that you are on the board get one vet. >> vote with the president i think, jim, i wonder if this is a market issue at all because, you know, the president has already filled many seats on the federal reserve but this is really the first time that he has picked someone who is such a strong partisan voice. yes, he is an economics guy, an economist and not an expert on monetary economics president trump is picking a president trump loyalist inside the fed s. that a risk at all for investors or is it a good thing? >> that's a great question i used to -- i know steve. i used to do larry's show with

steve all the time and i always liked his economic viewpoint now, this is a different thing an it's quite a different thing to be arguing for low rates and a strong dollar all the same time steve moore is a strong dollar guy and a juxtaposition there. i do like the idea that you're bringing somebody outside of academia on to the federal reserve board. there's a lot of phd an economics that are not necessarily real market guys that are more academia guys and we had a market guy in richard fischer mean and robert kaplan with the private sector background, as well. i like a different voice they had group think for quite sometime and everybody's been cut from the same cloth let's get desession. >> he wrote "trump-onomics."

they create policy essentially for the entire world because of the independence s. that a risk? >> i think it is a risk. i think it absolutely is a risk. i respect zoosteve moore. i do think it's dangerous for any president to pick somebody on the federal reserve board just because he agrees with him. we don't know that that's the only reason he picked him and i don't want to put words in anybody's mind -- mouth. but i do think it's a risk and i think the market is not going to really be terribly concerned about it in a short term but if there's another appointee that happens to be a donald trump ally, i think you start to get real concerns. >> jim, thank you so much for joining us. >> thank you good to see you. >> have a lovely weekend. the nasdaq is worst performer of the major averages today however the s&p tech sector the leader for the year as a whole

dan niles joins us now on the phone. thank you for joining us what do you make of the pullback and in light of a decent start to the year? >> yeah. i mean, i don't find it that troubling and look at it, wilfred, i mean, we tweeted about this before and we put something out on it right now under @daniel t. niles, go back and how you have to think about it, the s&p with the eighth worst start in history and that made no sense. one of the ones close to that when pearl harbor was bombed and then the great depression. things are bad, not that bad likewise, look at the recent rally and, you know, if you look at that graphic you hopefully have up on the screen what you will see is that there's only five bounces that are greater

than this in magnitude back to the 1930s and a bunch of these are when you had the oil embargo, great depression, et cetera so, this bounce also seems excessive an not coming off of events like that so for me, you give back a week's worth of gains as you talked about earlier not that big of a deal i think the bigger deal is the fundamentals, you know, guys like nike that came out and that's what should worry you a lot more if you're a fundamental investor. >> maybe the reaction for nike more than the fundamentals, dan. i'm just looking through technology which got wrecked today and obviously on a roll so far this year. are you finding more opportunities to go long or to go short within some of those high-flying tech names at the moment >> yeah, no. great question the nice thing is it's actually both because the sell-off, you know, through december 24th was so huge that we have lots of

buying opportunities we were about 80% net longs. take the longs minus the shorts. longest we have been in years. now, you know, we trimmed a lot of that back and so, today at the close we actually covered one of our shorts and we are looking at the names that we like here we then there's also stuff like you talked about semiconductor sector it was near an all-time record high as of yesterday and makes no sense because a lot of these stocks are still cutting numbers, massively. people are thinking that the bottom's put in which would make sense if the stocks are sitting near 52-week lows and the index near a 52-week high and the valuation or excessives in that space and, you know, we are short banks, we think this yield curve stuff is bad for them and we like gaming stocks, electronic arts and like some of the 5g plays like momentum and the nice thing is we have a lot

of longs, shorts we like and the market is right now not acting rationally which is terrific for fundamental investor because you can pick stocks in that kind of environment. >> dan, let's talk about apple because you played that well late last year being short it and i believe went long again at the start of the year. of course, it has a good start to the year and a decent week despite today. up 2% week to date what's your thinking on apple now? >> yeah. i mean, i think if you think about the smartphone industry in general the way we think about it is as follows last year was the first decline in smartphone units shipments in history. you're having replacement rates continuing to stretch out. so you know, it makes sense that all smartphone related stocks bounce at the beginning of the year obviously, you have had mobile world congress, you have an event on monday, and so, it

makes sense to get this optimism running into events and in general the fundamentals haven't changed. you have price points continuing to drop. the smartphone industry shrink this year and i think if you think bigger picture you go, well, wait a minute. we won't get 5g phones in earnest until 2020 and foldable foenls until 2020 from some of the bigger manufacturers so you need to figure out like which vendors have that and which ones don't. the ones that don't i think struggle versus bouncing because, hey, you know, things bounced to start the year. >> just more broadly in terms of the mega cap nasdaq stocks, they have really gained this status not just this year but there were signs this year, too, as being this new safety trade where they're considered to be sources in dominant platform companies. is that a fair assessment of the

market making or do you think that that can be overplayed? >> mike, i think that's a great observation because if you step back does the big internet stocks in the u.s., do they really care about tariffs? there's nothing to tariff. right? that's not an issue for them obviously the government's going after them for regulation and especially here in the u.s. where every time you turn around one of them, you know, being a punching bag by a politician is not good for them. we lived through microsoft with the issues with the government going after them for anti-trust. it was not a good period of time for the stock but you're absolutely correct these stocks are somewhat immune to this because don't forget most of the stocks are locked out of china they don't have any business in china. so it does make them a little bit more resist teant to what y are seeing and outperformed, out

performing on a relevant basis the other things like governments, et cetera, that's a separate topic. >> thank you for phoning in. >> thank you. up next, we'll discuss whether today's sell-off is a sign of things to come or a buying opportunity. will apple's expected entry in the video streaming business disrupt the industry or is it too late

worse day for stocks since january 3rd as global slowdown fears and the inverted yield curve spook investors. let's bring in barry knapp and katie stockton katie, just put this sell-off in perspective as far as how much technical damage is done. >> we need to keep it in perspective looking at the last two weeks of trading the market rebounded from a very shallow pullback and a very speedy short-term oversold condition and with that rebound we did see a lot of breakouts. so the breakout in particular in the s&p 500 is really still pending confirmation the s&p is now on proving ground

on the chart but i would say one day does not make a reversal and we need to judge next week's action to determine if the breakouts are real or if they were false >> barry, a big factor today has been the inverted yield curve. is that something that serves you? >> not particularly. i think there's false negatives. there is an overarching thesis which is since the mid-thousa20, did not persist from world war ii until that time and a lot less information content in the back end of the bond market. further more add that, you know, fading the fed worked beautifully in december. it was three days of a 6% equity market sell-off following the december fed meeting and then that was the dead lows i think the same thing is

occurring with bond yields this go around. there's a couple things going on with bond yields one is the very back end of the curve where the fed is less of a player is actually steepening. fives bonds or 5 30s is steepening and the more important thing that's going on is vol going up as rates go down this is the condition that persisted before the crisis when the fed really increased the size of the portfolio dramatically the thing that investors missed with what the fed announced on wednesday they didn't guarantee, didn't go back to forward guidance and didn't say they'd tighten but did say they want to get completely out of the mortgage portfolio they'll never make it but that would reintroduce the single biggest source of risk which is mortgage prepayment back to the

private sector to hedge it from the fed that doesn't and the seeds of a bond market sell-off, in fact, bank profitability as mortgage spreads widen out and by the way there's confirmation as head of the faha and lessen the role in the market an that's a big bank positive and for me selling treasuries here and buying bank stocks is the trade to think about out of this overreaction to the fed meeting. >> katie, what is your view in terms of what the charts tell you about the yield curve? >> well, when i look at 10-year treasury yields to me this move is corrective and persist into the 22 range and could happen quickly based on the current actions. so looking at it as counter trend and with that i'm looking at the financial stocks especially the banks and

regional banks as potentially being overdone on the downside a lot of them have pulled back as of today on their charts to the short term support levels which would be natural places if we are to see a higher low relative to that december low, a very natural place for the stocks to hold up so i'm looking at the levels short term on the bank stocks an hold them next week with the rebound in the s&p 500 that would certainly be a positive not only for the banks but also the broader market and another thing to see from the market is a spreading out or a broadening of the rally to the small and mid cap arena and looking at the russell 2000 just stymied below the 200-day moving average and seeing it break out as an example that to me would also be added confidence of the previous week. >> okay, guys. we have breaking news. barry, katie, thank you both very much. we have a news ahertz lert

pinterest. >> pinterest disclosing the s-1 filing moments ago saying it will have $100 million placeholder which will most likely change by the time it launches its ipo roadshow. its latest valuation about $12 billion privately so we could expect to see anywhere from a $1 billion to $2 billion offering size if that's what they choose. in terms of underwriters, filing with goldman sachs, jpmorgan and allen and company. on the nyse under the ticker symbol pins. pins taking a look at the financials here, revenue of $755.9 million. in 2018. eyeballing it about 40% or so year over year growth on that front and losses appear to be shrinking $62 million in losses in 2018. that's down from $130 million in

2017 guys, back over to you. >> leslie, thank you very much mike, any first impressions here as we dig through the s-1? >> just what leslie mentioned. obviously, the bottom line heading in the right direction you want to hear their guidance in terms of whether they're actually building the business model to get toward break even very soon. the top line revenue growth seems relatively brisk up to this point it's from 300 million in 2016 to 750 last year. >> yeah. net losses as leslie said, 2016 132 million, 92 million, 40 million. a trend that didn't apply to lyft where the losses widening. >> you will get attention on monthly active users a lot of things to consider. >> sure there's more of these coming thick and fast that one hitting moments ago. bonds flashing recession warning signs but up next we'll break down the charts to show why history says it could be

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welcome back treasury yield curve may be sending an early recession warning and what do the leading indicators tell? mike >> yes wilf, the yield curve, the difference of long and short-term treasury yields is a

component out leading economic index and accounted for here and also includes things of credit conditions, labor market indicators, ism manufacturing, new orders you can see this is a 60-year history. this eight recessions here that's the dark shaded areas every time you had a peak in the lei before the recession this is february's reading this is at a new record peak so it's not necessarily telling, yes, you did get a fading out and clearly there's been some loss of momentum but it is not really said, okay, it is now time to worry. we can zoom in on that next chart shows exactly how long after a peak reading in the lei you got to a recession when it's a flat line of 100% that means it is at a peak and not backed off at all and see it fall off the peak before the recessions and average of 7 to 20 months before you get to the

start of a recession that's when the lei peaked in the past so that right here we have been talking about the mid-2000s. that's the 20-month example light there talking about the first time it inverted close to that long before you got to a recession and one thing to consider it is in the mix it is not necessarily agreeing with a lot of things that peak before a recession. >> what are we penciling in? sometime in 2020 >> if this were to really roll over, yes, i think -- i mean, honestly that's relevant, sara, for the stock market a. year from now, beginning of 2020, stocks probably don't have a lot more to run later than that, they potentially could make up a lot more ground. >> it's not rolled over yet. >> exactly. >> thank you. time for a news update with sue herera >> president trump said he's ordering the withdrawal of recently announced sanctions against north korea impose bd i the treasury department. on thursday, the u.s.

blacklisted two chinese shipping companies that it said helped pyongyang evade sanctions over the nuclear weapons program but trump says he like north korean leader kim jong-un and doesn't think the sanctions are necessary. volunteers are teaming up with the military to protect the cooper nuclear station in cooper many volunteers from the plant filling sandbags 7:00 thursday morning from there they were loaded on to helicopters and dropped off at the plant as a backup in case the levee was to fail. >> we have a lot of soldiers that we found out in the operations in the last couple of weeks that have given up time in their home which is also being endangered to help out the fellow nebraskans. it is awesome to be part of the guard and organization to give so much for the people is incredible. and elon musk visiting a school in flint, for an assembly with hundreds of the areas middle schoolers talking to them about the love of building and

experimenting as a child and before he left, he gave every student there a laptop computer that's a feel-good story for you. that's the update this hour. >> thank you. >> i don't want to be critical look like big chunky laptops. >> dels. >> yeah. they look -- >> why isn't he focusing on production targets and building -- >> very gracious and generous. still to come, shaquille o'neal crashed the boards in the nba and now he's joining the board at papa johns. investors like that news details coming up. plus apple expected to unveil the new streaming video service on monday. find out if it can dominate the industry when we come back measure up? a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager

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apple is set to hold an event on monday and tech giant is expected to talk all about its move into streaming media. here to discuss whether apple can crack the market is jessica tunkle and roger mcname. jessica, bring us up to speed on

what we know and can expect for monday. >> so monday apple is finally going to be unveiling its video streaming service. they're going to talk about original shows they're going to talk about the tv subscription service so they have partners like starz or showtime and a new subscription offering to talk about, as well. >> will the driver of this, jessica, be original content or efficient, new way to bundle other people's services? >> i think the sexy part is original content but i think the real business is bundling of the subscription services and differentiate the offering from what else is out there. >> roger, does this come you think with new hardware, as well >> you know, i don't know. wilf, the key thing is that apple's tv product offering is actually already really good for people who want to buy or rent a movie or to capture subscriptions that they own other ways

through apps and so this is a natural extex of the current hardware strategy they have. i'm not confident that their original programming setting the world on fire. if it does, that's an upside surprise to me when's logical is that apple has an organic business in media content that and a home to put it on with the hardware platforms that they do want to move forward i'm not expecting it to set the world on fire but i think sovreign time you see just as with apple music to slowly but surely find a beachhead that works and make the streaming at least adequate for their services and given the price of the stock that should be enough. >> jessica, is apple music one way to think about this? will it be a preinstalled app on phones and ipads and just a way to access the third party content as well as apple stuff do we know that? >> i think that's the way to think about it

a video streaming service app. we are unclear how the original shows will be kind of worked in with the subscription services and i agree with roger it is unclear, like, what the original shows bring to it it's all going to be about the interface and how they package it. >> which competitor is watching this closest like a netflix competitor or more of the set top boxes? >> i think a competitor to amazon they have original shows and they have channels business so that's where i see the competition. i don't see this as a huge competitor to netflix. >> do you have the skepticism of the content and it can actually come up with must see tv >> i am equally skeptical on that i also don't know what exactly is available any time soon some of these shows have just started wrapping up. earlier to see shows is probably in the fall. and i don't know how many will see at that. >> what else about next week

rumors of songman there to talk about the new payment partnership. also possibly developments on apple news. >> yeah. so, wilf, apple pay is i think a completely brilliant product that's underappreciated in the marketplace. it has really wonderful privacy characteristics which make it like cash relative to you and the vendor you are dealing with. and so, i don't know exactly how the credit card is going to work in this mix. what i do know is that apple really has done in my mind a very good job on that. when i look at news, i think, again, one of the challenges around all of this is that historically apple's offered video, offered news as parts of a large bundle and they haven't really gotten a ton of revenue out of the news side and now they attempt a bigger subscription component into it. i think that's getting off to a slow start but again, i don't think it's going to matter. i think from -- you know, the

issue realtive to video to news and only available as an apple hardware customer to begin with and the experience if you're in the apple hardware universe is fantastic. and, you know, i don't see why it's not going to be successful in that universe and if they do come up with a hit it's going to be a really, really big deal in that universe. whether it's going to be enough to cause people to move over to apple i find that hard to believe in the short run the thing i'm looking for, wilf, hoping to come fairly soon is i want to see apple move their hardware business to subscriptions so that essentially you'll sign up for contracts where every year you'll get a new device and pay something monthly for a bundle of services and a bunch of tiers. i have no reason to believe they're doing this but from apple's perspective, this's a great way to gain market share they have an advantage on privacy and security they do have a very good suite

of content services available. i don't think they're particularly, you know, dramatically better than other people and weaker in some ways relative to netflix and that package if it's offered for 30, 40, $50 a month, i think would gain a done of share against android with a hard time responding. >> okay. we'll leave it there, guys thank you both very much. >> thanks. for nearly 30 years shaquille o'neal has towered over the nba first as a player. now as a broadcaster but starting today, taking the act to one of mamerica's most besieged company >> he's a little bit taller than you. >> bigger in every way check out the instagram do see. >> we'll have more details on filing to become public. to do the work we want to do. so we're digging out from all the work we don't want to do. ugh, getting rid of so much paperwork. oh, doug.

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as i think about all the stuff that went on, i worry about the 800 franchisees. they did nothing wrong they're your neighbors, my neighbors. we're regular people that do the right thing. they were affected we have 120,000 team members i want to help get everybody back on track. >> shaq also revealing to us a brand new menu item created for papa john's. >> we'll be introducing shaq-a-roni. pizza. big size sausage extra pepperoni. extra cheese. >> is that a breaking exclusive you gave us? >> first one. >> i like the sound of that. extra pepperoni, extra cheese. >> look at papa john's shares. popped 6% in a down market i think rose on the news but they jumped higher after this interview where he talked a lot about how to turn around a business you know, he has owned restaurant franchises before, a number of them five guys, auntie anne's

not new territory for him. he approached the ceo and the chairman. >> i think the idea -- >> been a fan since the '80s. >> the idea that he is going to be the face of it, the oprah with weight watchers thing not just the involvement on the management board level and first of all to set this chain apart for something else than what we are talking about. and it's a very crowded market all advertising driven. >> for papa john's, same store sales decloining a lot if not double digits. they haven't -- i asked the ceo when does that turn around they don't have visibility into that now trying to make changes and a way to -- besides financial assistance to the franchises and rebranding themselves and clearly need to do, they're also totally refreshing the board four women on the board now and shaq becomes the first african-american. >> and, mike, up 20% or so year to date s. there low-hanging fruit to seize given the

declines - >> if you can tilt the comp sales a little bit, i don't think there's much baked into the company. it's urn $2 billion market cap and not like they have to take over the pizza industry to really do okay in terms in the market. >> shaqeroni as well. >> extra large and with extra everything. yesterday's levi's ipo was a boost to companies preparing to go public. now another company is going into that pipeline pinterest will discuss how it might fare, next

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up next, pinterest just filing its paperwork to go public we'll bring you some of the details on some of the risk

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pinterest just filing its s-1 to go public leslie picker joins us with more. >> pinterest the latest of a slew of silicon valley companies to kick off an ipo process

today. the filing showing a slowing user growth in the u.s pinterest had about 265 million active users at the end of the fourth quarter but average revenue per user has been climbing where the company generated $3.16 per user among some of the interesting risk factors, pinterest stores, uses and shares data, some of which contains personal information which may be subject to evolving government regulation the company disclosing its largest shareholders today, although no specifics of how much they own at this time in addition to ben silbermann, fidelity is among the bigger owners of pinterest. class b shares will automatically convert to class a on the seven-year anniversary of the closing date of the ipo so a sunset provision embedded into

this filing. pinterest is not profitable, although its losses have shrunk about 50% year over year the proportion of ipos coming to market has 82% debuting without profits in 2018. it sounds like that trend is bound to continue with a slew of ipos in 2019. >> i had to explain to wilfred that unless you decorated a baby nursery or planning a wedding, you probably haven't been on it. >> don't cook that much either. >> he's not very domestic. let's bring in james to discuss this new wave of ipos. what we really wanting to know from you because you've done the analytics on some of these names is the quality of ipos whenever you have the most ipos since 2000, you start to wonder whether there's a bubble and whether something is going to go wrong. what are you seeing in terms of the quality? >> i don't think we know whether

there's a bubble but we're certainly headed to one if the volume of ipos that is slated actually happens this year certainly good for the early ones good for lyft to get out, levi's to get out with the exception of levi's, the others are not a high quality from a financial health perspective yet. because the financials were just released for pinterest we were able to rate it in the last few minutes and we rate them on a 100-point scale at a 48. 48 is medium risk, but it is really looking at what the short-term risk is for the company, whereas the core health for pinterest is rated as an 18, which means over the next two to three years it is absolutely in the heart of the zone of where companies have failed over the last 20 years. so without question -- and lyft is almost the same lyft is almost the same. 41 from a financial health perspective and it's an 18 from a core health perspective. >> so this core health perspective which is a lot lower

than the financial health rating, that's the forward-looking rating how could you be wrong there how could they be successful >> what the core health is really measuring is how efficiently a company is run and how successfully they're able to generate returns or be on a path to generate returns based on its equity size, its asset size, the kind of revenues it generates. they take the health score and what kid of liquidity does it have so lyft doesn't have much to default on debtwise and it's going to have a lot more cash. although it's got half the cash from a year ago it's still a decent amount. the chances of it failing in the next year are relatively small how are the companies using the money from an ipo to improve the operational efficiency and be on a path to viability. >> james, leslie, thank you very

much mike, final word, big sell-off but the week only down 1%. >> big sell-off, a little gut check. we're right back to the level that we broke out from so i think it's a little bit of a test we'll see if this treasury market signal lasts. >> you're not afraid of an inverted yield curve. >> not yet. >> thanks everyone for watching. have a great weekend. >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. coming up on "fast" the suspense is building ahead of apple's big product launch on monday we'll give you a sneak peek on what to expect. semi stocks taking it on the chin today but still on track for the best quarter in decades. one uft traders says the chip rip is just getting started. the dow sinking 460 points, closing at the lows of the session. the s&p and nasdaq both down 2% as all the major