with low interest rates p/es can be more like 17 or 18 here and that's pretty much where we are. >> exactly what we heard from warren buffett this morning as well derek scissors by the way said it doesn't have to be tariffs, it could be the enforcement tool, we could do sanctions, export controls. check that out >> thank you very much for watching "power lunch. >> "closing bell" starts right now. good afternoon it's the final hour of trade i'm wilfred frost. >> i'm sara eisen. big question, could we close positive after trade war fears and stocks sinking this morning? details on negotiations with china. >> blackrock's rick ryder will tell us whether -- >> and carson block will join to us discuss a new firm he is backing. "closing bell" starts right now. welcome to "the closing bell." just under an hour left to

trade. an intraday chart of the dow for you we are pretty much at session highs. the low was close to 500 points at the open. negative down 471. currently down just 56 points, or .2% if we snap into all three of the major indices, they're all in the red still but only just the russell does outperform, is only down -- is slightly higher in terms of the sector performance we now have two in the positive, energy and health care have had all ofthem negative for most of the session. >> there's really been a recovery throughout this session, especially after the overnight markets closed china got hit pretty hard. and we just got news from our kayla tauschi that there is going to be a meeting this week. the chinese are sending a delegation unclear how high level that's going to be. but that's a positive. >> and you're right to mention china. down over 5% for shanghai. shenzhen down even more. so relatively speaking to that even the open was better here. certainly the close looking like it's going to be a lot better. >> let's get to our reporters following all the market action. bob pisani has the biggest

movers on the nyse kate rogers is uptown at the nasdaq for us. kayla tauschi as mentioned in washington with the latest on trading. kayla, we'll kick it off with you and what wuf learned >> we've just reported in the last hour, sara that it does appear the chinese are committed to coming to washington for trade talks this week according two sources who have been briefed on the status of these talks and where things stand at this very moment in time there are a few key pieces of information we are still seeking. the first is the size of this delegation the chinese had been prepared to bring up to 100 officials with them this week to washington one source says that we should expect a smaller delegation because of the tensions that have erupted between these two countries in the last week and also whether this delegation will in fact be helmed by china's vice premier and special envoy leo hu senior administration officials have previously described liu he as the closer with the expectation he would be the one to negotiate a deal on behalf of china's president and that that

deal in principle could be reached as soon as this week if he were not the figurehead of this delegation, then i think the market would take that as a negative sign because it would signal there is no one senior enough that would be coming to the u.s. to make a deal in fact. now, china would still be committed to sending a delegation to continue talks if only to keep the conversation open so those two details are going to be important. we're also reached out to the white house, the treasury department, and the office of the u.s. trade representative. at this time we have not heard back on comment for whether those agencies or the president would entertain the chinese for these talks based on what has happened behind the scenes in the last week. so all of that is very important detail but the fact china remains committed to these talks could be seen as a positive if a cautious positive and we'll see what more details we can learn in the coming hours. >> kayla, you've been covering all of these trade talks with various different counterparties very closely is will anything to draw from

the negotiations with mexico and canada as to whether the president upped the rhetoric seemingly in a very worrying way only for a deal to be done soon after? >> i think there's some reluctance on behalf of the economic advisers at the white house and various agencies involved in them to have all of these trade funds open at once and all of these conflicts simmering, especially as certain dovish officials are trying to put out market fires going into the 2020 election season one reason why this week is so important for the china deal is because administration officials have previously been saying that they want to be able to put the china issue to bed at least for now so they can pivot to europe ahead of a may 18th deadline to potentially announce next steps on auto tariffs. that would be major news for not only negotiations with europe but also mexico and canada but wilfred, it's important to note that we still haven't seen the white house send the new nafta deal to congress that would start the 90-day clock. it hasn't started yet.

>> more on the major turnaround stocks have seen intraday. >> stock market part of the tenets of why we're at new highs is the market believes that not only china's bottomed but a trade deal is going to happen and that happened again today. just take a look at your typical examples cattar pilar standard. the low print right at the open 134. it's come off of that. you can see sitting right at the highs for today. all the major industrials behaved exactly the same way doesn't matter you can put in boeing. boeing was about 365 right at the open same situation it moved up 371, 372 or so a lot of concern here of course is that escalating trade wars would dramatically increase the input costs. and some stocks are down a little more than others. you look at stanley, black & decker, swk. off the lows the low print was right at the open but not moving that much because that's a real impact if there's a trade war the beneficiaries of trade wars, well, there's a whole bunch of them out filip think of archer

daniels midland. think of seeds, for example, how they would benefit if china suddenly decided to buy more soybeans or more corn or wheat there's a company that has a direct stake in this kind of thing, and you can see it too is low print for the beginning of the day. so a lot at stake down here in a trade war. back to you. >> bob, thank you. let's go to kate rogers at the nasdaq with some of the movers up there kate. >> right now the nasdaq is down just under about a half a percent. we were down as much as 1% and we had been pacing for the worst daily performance since march 20g9d when the index fell 2 1/2% but year to date we're still up nearly 22% so far and as you guys mentioned the russell 2000 also just recently turned positive in the last few minutes. a lot of movement today of course in the tech and semiconductor stocks on the news that president trump is increasing those tariffs on chinese goods come this friday apple today down about 1 1/2%. it was taking just under 15 points off the nasdaq 100. other tech names including amazon, microsoft, facebook and

netflix also weighing heavily on that index today some of the biggest laggards today percentagewise in the nasdaq 100, amd, applied materials, microchip, micron all down between 2% and 4% today. other names in the tech and chip spaces also taking a leg lower included intel, qualcomm, and nvidia all down under 3%. just an hour ahead of the close, guys we'll be back with more. back over to you >> great stuff thanks very much for that. meantime, some breaking news on the fed. let's get to steve liesman with that hi, steve. >> the federal reserve out with its new financial 125b89 repost report the fed saying asset valuations are high relative to historical ranges and investors are showing a high appetite for risk equity market prices somewhat elevated but real estate cap rates, that is the price, the rents relative to the price of the real estate at historically low levels borrowing by businesses historically high relative to gdp. the fed not too concerned with household borrowing saying it

remains modest relative to incomes. and the thing the fed is most worried-b the largest u.s. banks, the fed says they remain strongly capitalized along with broker dealer leverage substantially below precrisis levels funding in the financial system are low. european stresses pose some risk to the financial system. sara and wilf, this is kind of like a fed report on what risks are out there. i don't expect it amounts to any particular action by the fed certainly not monetary policy. perhaps, though, behind the scenes on a supervisory basis. sara >> all right, steve, thank you joining us, more to talk about the big reversal we've seen today on wall street and much more rick rieder, blackrock let's just pick up where steve left off big headline to me is there's another warning about the high business debt levels that exist in this economy. the fed says that credit standards for new leverage loans have deteriorated. is this a ticking time bomb? >> i don't think it's a ticking time bomb. by the way, i think people have to separate credit people have been concerned about the size of the investment grade credit market.

those companies, there's a lot of m&a done that creates synergies, big companies that delever. i'm not worried about at that time all are there parts of the leverage loan market, parts of the middle loan lending you get concerned about? for sure i think one of the keys for investors today and how you think about things, we're in a reasonable growth environment, not a great one. you've got to be thoughtful about credit don't stretch. some of the triple c names, triple c rated names have improved recently. i think credit is in good shape but you've got to be really credit about stretching. >> rick, do you think credit's going to be in good shape regardless of what happens with the trade talks? is the u.s. economy fundamentally strong regardless? >> so it's a question of how strong is strong listen, people have you seen all these ism reports that show an economy that's actually operating at a pretty good level. you saw a gdp report that was operating at a very good level i think people should consider we're not going to grow as fast as we did when you have this big tailwind of fiscal stimulus. but if you think potential growth in the u.s. which we do is around 2% you've got an

economy that's growing around potential and actually a bit higher than that are we slowing from those elevated levels? yes, we're slowing but you've still got an unemployment rate that keeps coming down. personal income levels that are still good spending levels that are still good and you've got a service-oriented economy that's still operating at a very, very solid level. so it's nothing -- i was looking at some of the earnings reports. you know, s&p 500 revenues, 58% of the companies reported up revenues that's a pretty good number. it's a good economy. is it really robust? no but it's pretty good >> what did the action in today's stock market, steep drop in overnight futures sunday night, drop at the open, recovery really almost to the flat line, what does that tell you about where this market stands and the risk of a trade war and the rising threat that president made in the pair of tweets this weekend? >> that's a great question you know, we talked about this morning we added some paper, we started to buy some equities this morning and then when it rallies people say it's an easy trade

it's never an easy trade there was some real volatility this morning but there's one thing that you have to hang your hat on there's not enough financial assets in the world. we've seen in fixed income that rates aren't going, the bank of japan's not moving rates forever. the ecb is not going to move rates for a long time. and the fed was very clear about they're going to be on hold for a long time. we're going to be in a moderate interest rate environment, an environment which quite frankly i've never seen before, the demand for income so profound and the demand for it because think about insurance companies, pension funds in an aging population, what happens is it draws people into financial assets the demand is tremendous you just have to buy when the volatility's high and just be careful about the types of risks you're taking. >> rick, interesting you kind of went down that live thinking because earlier this morning on cnbc with becky quick warren buffett kind of said equities are incredibly cheap provided yields stay low for longer if you've got long rates around 2 1/2% to 3%, then in a relative sense equities are attractive.

you think we're going to keep those very low rates for how long >> if we can invest for the next year or two life is good i think rates -- by the way, in europe and japan they're staying low for a very long time in the u.s. things can evolve. but in the next year or so rates are going to stay very moderate. the fed doesn't have to do anything inflation is going to stay tepid for a long period of time. technology is pressing on inflation levels i agree with the point if you think about what drives equities, are we going to see a drop in interest rates probably not are you going to see earnings growth of significant magnitude? probably not but can you get multiple expansion because we're in a moderate rate environment and you have some reasonable stability, particularly if you get a trade deal could i see some multiple expansion? yeah, i could. >> okay. rick, thanks very much great to see you as always rick rieder from blackrock now, stocks staging a major comeback intraday after president trump's new tariff threat sank the market early this morning but the trade conflict with china doesn't have berkshire

hathaway's charlie munger too concerned. >> if we end up with some trade settlement, tariffs on both sides, i don't get excited about it at all. i view it as part of normal life generally speaking i think a settlement is better than a world war. >> up next becky will join us with more trade talk with charlie munger warren buffett and bill gates >> still ahead, we'll tell you which companies have highlighted china tariffs as a potential issue during earnings this quarter. woman: my reputation was trashed online,

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trade return the topic of discussion all day long including in becky quick's interview with warren buffett, bill gates and charlie munger this morning becky joins us now from omaha with more. becky. >> hey, sara hey, wilf. it's great to see you guys as you mentioned, we sat down with the three of them this morning. all three of them have done business in china and have invest there'd all three of them know a thing or two when it comes down to negotiations and none of them think that a trade war with china is a good idea >> if we actually have a trade war, it will be bad for the whole world and could be very bad depending on the extent of the war. but there's times in negotiations when you talk tough. the one thing you can't do, though, is you can't shake your fist first and then shake your finger later on. that's not a technique that works well >> i think good trade relations are an incredible win-win for

both countries and it's dangerous that people think this is a zero sum game and so i'm hopeful that despite the latest announcement there is a trade agreement and the two countries can find ways to twor wor together it's the most important relationship in the world. both sides bring a lot of strengths. i understand why markets are a little bit worried that these tariffs are going to get higher and higher >> well, i don't think we want a full-scale tariff war that's just as high as both sides can make it. that would be massively stupid and if both of them are a little disappointed with negotiations and feel a little left up, that's what they should feel >> you want to conduct negotiations so it doesn't look like the other guy has caved or something like that. the ideal thing is to make a hero out of them and get the deal you want.

>> of course that will not be an easy task, particularly given the situation, how much rhetoric we've already seen on both sides coming up to this point and given the massive changes that the united states really wants to make in this trade relationship we did talk to bill gates about what he thinks the odds are in a situation like this and he says ultimately he still thinks logic will prevail and that both sides will ultimately come to the table and come up with a deal. but warren buffett, who's spent a lot of his time -- he said in this case the odds are a little too difficult for him to even try to make an attempt coming up with anything. very hard to know particularly when it's two people that have to make the decisions, the leaders of these two countries >> where do you think buffett is on kraft heinz they have this funky accounting

issue. the stock was at 90 in 2017. it's now trading in the low 30s. what does he do with this and what does it mean for his relationship with pg and everything else? >> i asked him that specifically this morning he did talk about it a lot over the weekend at the shareholders meeting where he said continually time and time again that they overpaid for kraft, that's something they realized in hindsight he does not think they overpaid for heinz. i asked him this morning what do you do with it now that you've realized that you maybe overpaid for this he said well, that's the tough situation, it's not the first time he's done, that probably won't be the last. i also skid him if kraft still has his support given all of these announcements that have come out including this announcement today about the investigation of what took place, and he said yes, the company still does have his support. >> becky, just broadly, what was his overall take on equity levels i heard the discussion based on where interest rates were. we next mentioned a trade war. is what the fed is doing and where rates are something that's more important to him?

>> yeah. he and actually gates and munger agree with this. we've had this conversation it seems like, the same conversation maybe four or five years in a row because they said the most important factor in trying to figure out whether the equity market is high or low is you have to compare it to interest rates. and right now he said if this relationship were to continue with interest rates so incredibly low, if that's the case, then buffett thinks that the equity market is incredibly undervalued. but that's a very big if statement. if you want to try to figure out if that's going to continue, none of them think this situation can continue endlessly. however, they've been saying that for a few years and none of them really know when or what will change that relationship, what will make interest rates go higher >> all right, becky, thank you good stuff as always becky quick in omaha under 40 minutes to go here before the close dow down 65. session highs are down in the 40s at in point but session lows were down a lot more than that

down about 471 points earlier today. so a pretty nice recovery. the russell 2000 index of small caps actually turning positive on the session up next we'll head to the floor with the top traders, see which stocks have been driving today's big comeback and president trump's trade tweet about china sent the markets into tailspin but with the soft news comeback we'll take a look at some buying opportunities that occur in the middle of the tough trade talk we're back in a moment 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

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welcome back we've got about half an hour left to trade and we are only down 0.2% on the dow near session highs let's get a trader's take. steve grasso joins us good to see you. trade is the topic of the day. what stands out for you? >> this morning when you came in everyone was sort of shooting first, asking questions later. you see one of those inflammatory headlines and everyone wants to run for the door the market has an incredible run. people have been thinking the market's due for a pullback, was looking for this to be the pullback they were pleasantly surprised when you see the market kind of turn on its heels. what turned it

china tech these big names that were sold first. they're the poster child for trade. if those names -- let's talk about alibaba. if alibaba, which is up 36% year to date, if that one can turn by the tune of $4 intraday, it gave the market sort of a signal as to the pulse of what trade is going forward, which is a lot more positive than the headlines would have inferred right from the opening. >> so as the sentiment has shifted today, what should people who are still looking to buy the dips be looking at because in fact tech here has been the worst-performing sector and other more defensive -- oil's having a rebound today should they chase oil or tech? >> you get a bid in oil with the chevron deal that's sort of supportive in the market but i don't think ultimately you want to be buying energy names because on a five-year basis energy has done nothing. you don't want to chase the laggards you want to be buying tech you want to be buying that group because that group got us here to all-time highs. so you don't want to chase financials you don't want to chase energy you do want to be buying tech.

and you have to be opportunistic on tech. >> which is quickly small caps in positive territory. outperforming again. >> small caps. that's the obvious bet on a day like today they have less of exposure to international, less of exposure to macro, global headlines, than you do see with the small cap names. those are the names that turn first. >> okay, steve, great to see you as always. sara, i'll send it back to you 33 minutes to trade and we're down only 45 points on the dow >> we'll take a look at how much of an impact these china trade headlines have been having with retail investors plus shark tank's daymond john joins us to talk about some of the challenges of doing business in china that's all coming up as we head to break and chex on the losers on the nasdaq 100 we're going to dive deeper into at dvi tseov wn wh'sringhe meshe we come back

welcome back to "the closing bell." we are experiencing a major reversal in stocks intraday as you can see, the dow down just a quarter of 1%. down 62. very close to the high of the

session down 46. the low nearly 500 two sectors now even in positive territory. but materials still down more than 1% at the bottom. >> energy and health cavre doing the best of the group. time for a cnbc news update with sue herera >> here's what's happening at this hour. authorities continue the search for a missing person following a devastating plant explosion. the blast occurred friday at the a.b. specialty silicones plant in waukegan, illinois. investigators have not yet determined the cause of that accident turkey's highest electoral board has decided that the recent istanbul mayoral election has to be rerun on june 23rd the ruling comes after the party of turkish president erdogan challenged the legitimacy of that vote, which saw a narrow win for the opposition candidate. a new study from the food and drug administration shedding some light on how much of the active ingredients in sunscreen are absorbed into our skin researchers found four active

ingredients in blood samples at levels higher than the amount considered safe enough to avoid further tests. and president donald trump says he's looking into offering a waiver that would allow service academy athletes to play professional sports immediately upon graduation. mr. trump made the announcement while presenting the commander in chief's trophy to the u.s. military academy football team during a rose garden ceremony. you're up to date. that's the news update, guys i'll see you in an hour. back to you. >> okay, sue, great stuff. thank you very much. joining us now to talk about today's market rebound is j.j. kinahan. ameritrade chief market strategist thanks for joining us. >> always happy to be here >> before we get on the review of what your clients were doing for the past month let's talk about today and the train day turnaround do your clients tend to get concerned about train day turnarounds and are you surprised to see them cast it aside today? >> everyone gets concerned but i also think you have to take something like this

and i think many people did with a grain of salt when it first hit. if you look at what the president's done in the past, he often comes out with a grandiose statement and then follows it up with something a little bit more practical. but the other part about it is you only have the futures really on sunday night and the overnight etfs so it's a limited world that you can trade. so because of that everyone is kind of rushing to the same place. often the pendulum will swing on news immediately i think that's what happened once people were able to say some of these individual stocks still look like nice bargains or whatever it may be based on that movement i believe that's one of the reasons you saw us gain the momentum in the morning. i would say i am a little surprised at how well we are -- you see the russell positive on the day right now. it's really impressive, actually some of it may be because of the china fears as female go to the more domestic companies that are contained within the russell >> how much of the sentiment shift that you detected and that we saw in the price action in the beginning of the year was built on the fact it was looking more likely we were going to get

a trade deal with china? >> well, especially the last couple of weeks everything we saw was positive and then you have this news. and i think that's the thing that took everybody by surprise. but you know, sara, you guys are nice enough to have me here every month and we talk about the fact that even though we've rallied a lot this year our clients have been a little bit tepid about their reaction compared to a year, year and a half ago when we rallied and they were much more of a i'm all in type situation. so i think that's been the biggest difference, is this overhang without it being settled has certainly made most investors very cautious. >> in terms of the underlying stocks, the one you pointed out to us, boeing, how are they trading that with all the headlines? >> it's so interesting if i look back at april and boeing, when this stock gets under like the 376, 377 level, our clients are coming in to buy it so you know, it's a little bit lower than that. it's got as low as 355 at the end. they've been buyers of boeing almost every week for the last four or five weeks because people still believe in a long-term story of what's happening there. you know, it's funny

if you talk about how our country needs infrastructure, i would actually say that planes are kind of infrastructure our world now. so at some point airlines are going to have to continue to buy planes, and there's a pretty limited place to go shopping for those. >> j.j., we're out of time thanks so much for joining us. >> thanks for having me. >> we have just 25 minutes left to trade as we've been saying, a fantastic intraday rally such that we're only down 0.2% now on the dow. a growing number of companies have been citing trade concerns. we've got the details on that coming up. plus we will talk to the credit suisse equity strategist about the sectors he would buy in these final minutes of today's big market bounce.

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welcome back to "the closing bell." here are the losers in the dow even though the blue chip index has made a big comeback today, some china exposed namds, nike and apple namely at the bottom of the list. industrials also get that global exposure caterpillar, 3m, boeing not doing too hot. i will note, though, the dow is only down 35 points. that is actually the session high at one point we were low as 471.

futures hammered even harder than that last night it has been sort of a swift and steady recovery into the close will we go positive? we've got 22 minutes to find out. >> russell's already there the big three indices not quite there yet. concerns over trade and tariffs have been hitting earnings over the last couple of weeks and dom chu is looking at what cops have said >> all the transcripts going all the way back to february 26th for s&p 500 earnings conference calls to see if there were specific mentions of certain keywords now, china was mentioned around 190 times so far now, china doesn't necessarily have to do with just trade or tariffs. it could be the issues with hogs and pigs out there right now or any other combination of business aspects but china mentioned 190 times. tariffs specifically mentioned 77 times and if you pair china and trade together, it was mentioned 25. it was not all negative.

it spanned a range check out this, for instance one company in particular, intel, says we see customers on the more negative side becoming more cautious in their buying pattern with the most acute deceleration happening in terms of one particular business in china. demand pressure particularly ebbing in our data center business that's one to watch. another one that's perhaps more positive is check out what happened with estee lauder while some of these risks materialized, particularlit soft yes, sir in the u.s. and uk markets, slower growth in china and travel retail did not happen so they saw china actually doing okay and then one other place to watch, most companies talking about the uncertainty around it. according to fedex and their cfo alan graf, "if you can tell me are we going to get a trade deal done with china and is brexit going to come out good, i could give you a better answer but we are now preparing for both ways. they just don't know what's going to happen. so it could be good. it could be bad. it could be uncertain.

but certainly the focus on china trade, tariffs, everything else, certainly focusing on what's happening with these earnings calls, guys. and that's just a sampling of what we found so far >> it seems like there's two big issues for u.s. companies as far as the risks in china when you get a headline like this it's straight up tariffs, right? those that are actually importing stuff that's manufactured in china or selling stuff to china and the economic slowdown. the fact that the chinese consumer and the chinese economy gets hit harder and that represents a big risk. so it's sort of a double whammy when it comes to u.s. exposure, dom. different companies. different ways >> exactly and especially with regard to what you were saying, sara and especially with something you know very well, that's consumer products companies. oftentimes it will be what resonates with the chinese consumers there. if they're willing to spend more on goods, that could be a sign for the most part. estee lauder was interesting only because they mentioned the fact that they thought they were going to see a slowdown in spending in china, but it didn't really happen that way

you look at some of these other consumer products companies as well certainly the under armour results with regard to strength in asia pacific,that's certainly something that's a little bit opposite of what you would expect given all the china-u.s. trade tensions so far, sara. >> dom, thank you very much for that i guess the other point to note is where are expectations on this topic relative to recently. yes, sunday night we get the tweets and it all sounds very bad. but snapshot compared to two months ago and net net people would probably say we've improved, we're getting closer even despite the most recent setback. and furthermore, the economy's improved in both china and the u.s. regardless of where we are on trade so again, it just allows a little bit of an offset which i think has played into the recovery intraday in markets >> but you have to think if you're a company as far as planning what do you do now if you don't know if the tariff rate is going to go up to -- retailers who are sort of making plans and then they put their plans on hold because it didn't look like it was going to get worse. they're the next group if trump were to go further and

escalate the tariff. >> for sure. clearing all this up would dentally be a big weight off it's just a question of whether they got much worse than where we were six months ago it's extending the uncertainty rather unnecessarily >> take a look at the dow. we're near session highs down 50 points we were down about 40 just a few seconds ago. up next we're going to look at the sectors to buy in these final moments of trade >> and later, shares of aig up around 19% so far this year. it reports earnings along with hertz after the close today. we'll preview that you should be mad that this is your daily commute. you should be mad at people who forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade,

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listen to your mom, knuckleheads. hand em over. hand what over? video games, whatever you got. let's go. you can watch videos of people playing video games in the morning. is that everything? i can see who's online. i'm gonna sweep the sofa fort. well, look what i found. take control of your wifi with xfinity xfi. let's roll! now that's simple, easy, awesome. xfinity xfi gives you the speed, coverage and control you need. manage your wifi network from anywhere when you download the xfi app today. welcome back 14 minutes to go in today's session. here is where we stand the dow only down 72 points. we've lost a bit of steam just in the last few moments or so. losses sort of doubling. nowhere near the declines we saw earlier in the session, down 471 at the low as far as the s&p 500, it's down a little less than half a percent. nothing extreme in terms of a sell-off only group that is positive right now is health care, materials, and industrials and

technology getting beat up the hardest. >> let's get a check in on what's happening in the fixed income market. rick santelli joins us from the cme in chicago rick >> hey, wilf you know, exactly the way you just framed the stock market, that it's losing a little bit of its steam as it made a race to try to get close to unchanged, the dow specifically interest rates have pretty much done the same thing. looking at an intraday of two-year, when the dow is at its best levels, not long ago, 15 minutes ago, we saw the two-year get up to 231, which is higher than it's been all day, higher yield, lower price but it's still a couple of basis points below 2.33. as you see on the two-day where it closed after the great non-farm data. if we open the 10-year up to april 1st you can clearly see we seem to like 2 1/2%. we've been dancing around it for many sessions. we're hovering right below it. we were right above it briefly and finally the dollar index

like the yen, like so many safe harbor trades, did get energized early but we are now basically unchanged on the dollar index. but as you can see on this chart, 97 1/2-ish isn't too bad but it is the lower level of the recent range and finally, sara and wilf, you said it best how could anybody get their gps with global trade upended the way it's been? acknowledging that, it's still one impressive day for the stock market given how it looked when we all walked in the door. sara, back to you. >> that's sort of what we're all talking about, rick. just quick question, quick follow last night we all watched the chinese currency had a very steep drop and the chinese stock market had a very steep drop is the rest of the world, specifically the u.s., getting sort of more immune to these types of moves there were times when the chinese currencies took a steep drop that would take the whole market with it >> i agree with you. but i also think that south korea's closed, the market did drop a bit, and the dollar is at

the best levels against the chinese currency since early february and i think you're right their weaker currency can help kick the export economy that drives china and i think that was exaggerated in thin markets last night but at the end of the day i think the globe just like u.s. investors believe that these issues will be resolved. i wouldn't be surprised that after they see our performance in the u.s. they look a little better when they open tonight. >> all right, rick, thank you. let's talk more about where investors should be putting money to work in this volatile environment. jonathan golub joins us from credit suisse and alicia levine from mellon investment management think we're going to have a little debate here, jonathan you're still very bullish on this market. not worried about the risk of a china trade war now that trump has escalated it with a few tweets >> first with the markets telling you today bit fact it rallied back the way it did is that this is not likely to happen, this is perhaps his opportunity to put himself at a

little bit of an advantage as he brings this thing to a close the market does not believe that we're going to have a tariff war. >> but john, before we get the pushback from alicia, you're bullish because you think people are focused too much on the simple valuation metric of price to earnings and you dive into some other metrics and it looks like there's more up side. >> i'm smiling because that means you read the note we put out this morning, which is cool. it's really interesting that over the last decade companies have gone with these capital business structures where they're more toward services and the like and therefore they have much greater free cash flow. we are all as investors, where kind of the convention is to use p/e but that's the wrong metric. price to cash flow looks really attractive p/e looks expensive. >> alicia, your own take that we had a grey run-up year to date -- >> she's going to tillis the market's expensive now >> time to pause >> i won't make it that simple let's get back to the trade talks for one second not to be simplistic about it, but as sun tzu said in the art of war when you surround an

enemy you should always leave an avenue of retreat. what i worry about the tweet about trade is even if we think trade talks will continue i think the expected date of may 10th is probably off the table because the chinese don't want to look like they're giving in to pressure. and in a sense we back them up into a corner by making this public so i think that the negotiations go on longer and with that the expectations of a rise in earnings for 2019 and perhaps raising the multiple goes with that so the longer you extend that the longer you bring -- you have that uncertainty as to whether they're expensive i will definitely say you can play here and there are definitely areas to play i just wouldn't push that hard we are ten years into this we have had great returns. and we just see returns going forward not the same as they have been. so you can play but i just wouldn't play hard >> as hard as jonathan so what sectors -- >> i still like what i call tech

plus that would be not only a tech name but the communications names, internet retailing names. health care of all of the sectors, it's the one that the fundamentals are totally out of sync with the market movement. fundamentals look really strong, and they've massively lagged that's another area i think will probably do well >> jonathan, just another point on the beginning everyone's always looked to p/e for a long time and in general it has worked. you can use historic moments when it goes out of a range and tends to lead to a pullback. why price the cash flow now versus in the past >> well, let's get back to why do people use p/e in the first place. investors know the right way to really value a company is to look at the discounting of its cash flow. the problem is it's difficult and it takes a lot of effort and like you said, over the long run p/e is a pretty good proxy but something has happened in the last decade and even the last few years which is companies right now are basically returning much, much more capital to shareholders because they've changed their business models, because tech is

a bigger part of the market, and therefore that rule of thumb, that easy solution is p/e, it may not be as useful going forward. to put it in perspective, the market is 20% cheap if you do it on a price to free cash flow compared to 10% to 15% expensive on p/e there's a really, really big gap in these metrics >> just wanted to know we're dashing toward the flat line again session highs down 41 points it was down 37 a moment ago. alicia, jonathan likes health care it is the best-performing sector right now. what about you >> i would agree with jonathan on health care just because the multiples have gotten so compressed it's hard to see that they go any lower from here. i'd separate health care, though i'd look more in the services and the hospitals. and i would leave behind pharma and biotech because those sectors are going to be a political football for the next two years if not more. and i worry about that not just in multiple compression but actually on the earnings side. i think health care is fine. on the services side i think

also you can play the high beta names. you can play large tech. you can play chinese internet stocks here. i do think there's a trade deal coming we believe in the green shoots globally so we think thosenames are fine >> okay. we'll leave it there jonathan, alicia, thank you very much for joining us. as sara mentioned, we just hit session highs, which was 37 points down on the dow currently 46, though we'll be back with the close just six minutes left to trade >> after the bell a cnbc exclusive. with mutty waters founder noted short seller carson block. he's investing in a new firm to take on fraud in china good day to auk to hitalk to hi. coming up on "closing bell." what do advisors look for in an etf? don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed

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don't get mad. get e*trade, dawg. under three minutes left of trade. we've seen a major comeback in stocks kate rogers with the movers. >> right now we're down just about half a percent as you said we really changed course in the last hour or so. the russell 2000 also now positive the biggest laggards in the nasdaq 100 ctrip, wynn, fastenal. apple also down about 1 1/2% that having the biggest impact on the nasdaq 100 today in terms of point now to the up side

the biggest gabers today two biotech names, biogen and rejenneron >> intraday chart of the dow you can see that fabulous recovery throughout the session. we opened right near the lows. down 471 points. the high was about ten minutes ago. it was down 37 we've just slipped a little down 66 as we approached the close. all the indices for you that story we've been talking in the russell just positive. domestic, small caps outperforming today because of the trade fears. but nonetheless steady improvement intraday for awful those indices. only down half a percent for the s&p and the nasdaq little snapshot of what happened around the rest of the world shanghai we pointed to terrible performance down 5% shenzhen was down even more. europe was down but in fact not that bad so we're outperforming here in the u.s., down half a percent on the s&p. germany down 1%. have a look at the sector performance. only really health care positive we did have energy and health

care positive as well. as you can see they're flat as we aproechtd close only materials down more than is-1%. earlier in the session we had six of those circuits down more than 1%. a sign of improvement intraday oil and dollars. bob pisani oil prices rebounding, hence energy's relative outperformance dollar not really doing much, which interesting on a day of trade is flat. >> i think the important thing is the low print of the day for all the trade-related stuff was the open 2898 on the s&p 500. the high print on the vix, it was at midnight when it opened it was 19 on the vix we're closing here at 15 near the lows for the day. if you look at semiconductors, everyone says let's sell semiconductors and industrials self conductors at the open were down 4% to 5%. the whole group of semis were down 4% to 5%. look what's happened they're still down but the losses are cut exactly in happen throughout the day the low print. every single one of these was at 931. >> intraday, what do you put it

down to, to people getting less concerned about trade? >> market still doesn't believe there's going to be a trade war that's imminent of any kind. if there really is, the market is way too high because they don't believe it >> bob pisani, thank you very much there goes the bell. and at the close we're well off those session lows not quite at the highs but far closer to the highs than the lows down just 70 points on the dow a quarter of one percent and half of 1% on the s&p. russell holds on to positive territory just about sara, back to you. >> welcome to "closing bell. i'm sara eisen wilfred frost rejoining me in just a moment, along with mike santoli, cnbc senior markets commentator. stocks making a major turnaround today. didn't quite close positive but only down 67 points. i say only at the lows we were down 471 points s&p 500 also staging a pretty incredible turnaround. or at least rebound.

closing down a little more than .4 of 1% at the lows it was down 1.6% health care the only sector to close positive energy was just about flat in terms of what got beat up the hardest, a lot of names with china exposure or commodity exposure materials, industrials, information technology the semis got slammed. they have been market leaders. although again, oft session lows that's really the story of the day. the nasdaq composite lower by half a percentage point. and the russell 2000 index of small caps actually managed to close positive here are the other stories on our radar for investors. warren buffett says stocks are cheap if interest rates stay low. wall street worried about the impact of new tariffs on the economy. and we are awaiting earnings from aig and hertz this hour we'll bring it all to you. joining us to talk about the market today, jim okam p portfolio manager at ubs nice to see you. >> good to see you, sara >> it is pretty surprising i read the tweets over the weekend. seethe action in futures last night, the escalation of

threats, higher tariff rates, just when we thought we might have a deal this week. to get a dow closing lower at 68 points what is that all about >> it's surprising the degree of the intraday comeback. i'm not surprised we actually did make a rally attempt because i think the muscle memory of this market is such that when you get a tweet-driven sell-off you probably want to try to look for a reason to be on the other side of it i think it tells you a couple of things one, that trade was not necessarily the essential swing factor yes, this is a negative if it basically scuttles all the talks. but assuming it's not new information and it's just going to be the same back and forth, the markets are not too sensitized to it the other thing is it could easily have served as a handy excuse for an overbought market at the highs when everybody seemed to be embracing the bull case on friday to sell off in a more lasting way it didn't do that. it showed you the tape remains, kind of rotating and resilient and people looking for an excuse to actually get in there once you have a little 1 1/2%

pullback all in all it just confirms the character of this market just when you thought the wall of worry was getting too short the trade thing comes in to add a few bricks to it right now i think it's impressive doesn't really tell you where we go from here >> jim, what's your take does this reassure you that the market's got plenty of room still to rally >> it does i mean, look, what we had was a tweet and we had the news now that the chinese delegation is still coming so it's not like what we saw with the negotiations at king's landing last night it's nothing real terrible at the moment and i think we have to focus on where this market has come to really be so -- to be impressed about how much we rally back today. we had a v bottom in december and a very sharp rally up until friday without much of a correction at all. v bottoms are unusual enough but a 20-plus percent rally without a correction, now we're in this sell in may and go away time frame and we get this news. it would be a perfect opportunity for trader types, for hedge funds to start selling

off stocks but what happened? they sold off stocks last night, sold them off a little bit less this morning and then they bottomed throughout the day. that tells you we are still in a risk on, economy is growing, interest rates are low, inflation is low mindset and that's a great scenario for stocks not to mention u.s. is really doing better economically than the rest of the world. so from an asset allocation standpoint it's still really a good place to have your money. >> let's unpack this a little bit. also kudos, jim, for the king's landing beheading reference. that was a bad scene what is the take -- >> i'm glad i watched that last night. last week -- >> you're vulnerable to spoilers >> i did this week >> i want to apologize >> or you can ignore the whole series as i did. >> what is the thinking on wall street as it relates to china? because this does put the chinese in a complicated position they're set to arrive for trade talks this week.

kayla reporting that's still happening but it might be a different size of delegation and we don't know if the chinese premier's going to be there. is it just that the deal will get done because trump can't rix a bad economy going into an election year or something else? >> something gets done the messaging up to this weekend was even if it involves something of a cosmetic deal, not the structural issues, there will be something on paper i think there's less certainty about that but i'm not sure that that matters tremendously right now even if it's just more of the same, i don't think wall street wants to see the tariffs remain in place but they can live with it because we've lived with it for a while. 9 reason i don't think trade has been the swing factor all along is we've been living with it for a couple of years. we've been kind of handicapping the implications unless it meant china is going to go into an economic tailspin. financial conditions around the world are going to get a lot worse. the dollar is going to roar ahead for the wrong reasons. those would be the things that

influence stocks, not the specific elements of any trade deal or when it might happen >> legendary investor warren buffett appeared on cnbc earlier today. he weighed in on the current economic environment and how long they can last >> as recently as ten years ago i would not have conceived of a world where you would have full employme employment, 5% budget deficits, with actually the probability of those rising from that level and at the same time had the 3%. i don't think we can continue to have these variables in this relationship now, if we can, then stocks are ridiculously cheap >> i mean, mike, i can't work out whether this is a bullish or a bearish statement. and it all depends on where you think yields are going to go i guess you can make it sound

bearish but you could have said the exact same thing three or four years ago and it's prolonged and equities have continued to soar. >> what it is is a consistent message. warren buffett has been on this exact point for quite a long time so i don't think that it's really a great statement of enthusiasm about stocks to say they look really good relative to an asset class i believe is tragically expensive, bonds. that to me is not necessarily the reason to be aggressive in stocks i do think over a very, very long-term time horizon sure, stocks are built to outperform bonds, but are they built to outperform bonds over ten years? i don't know it's very hard to say because we have been in periods before when they didn't do so for a decade >> jim, what about you what do you think? what's your forecast there on stocks versus bonds and which one's going to be more competitive? >> if you look at where wall street was in january, for example, the most bullish wall street firm had stocks going up about 10%. we're way ahead of that already.

everybody was wrong. and the reason they were wrong is that everybody was wrong about the equation because everybody was wrong about interest rates and inflation. we all were gaming in one or two rate hikes at least the fed had said that and now inflation is coming in much lower than anybody gamed in and interest rates are much lower than anybody gamed in. at the same time stocks are very -- they're getting a lot of pruvthdty out of their workers their earnings are very -- yeah, mid single digits is still higher than where the ten-year treasury sits at 2 1/2 less than 2 1/2 really so you have companies that are doing very well inside there they're buying their own stock back, they're buying other people's stock with mergers and acquisitions sought environment is really pretty good for stocks now, our target is only 2950 so that's pretty close to where we are now but with an upside scenario of a trade deal being done and the economy reaccelerating which we think happens late this year you could see 3100, 3125 on stocks

but i am going to caution i do think we see more volatility this summer because we've had a sharp rally without any volatility i think it's going to happen >> let's get to more on this trade fight. president trump says existing tariffs on china are partially responsible for the strong u.s. economy. steve liesman is here to look at whether that's true and how his new tariff threats could impact economic growth. >> it's a little unclear sarksa, what the president's talking about. perhaps he sees some positive impact on domestic investment from the tariffs hard to separate that from the tax cuts of course but economists generally believe tariffs hurt the u.s. economy and the threat avenue digsal tariffs on $200 billion of chinese goods threatens the u.s. economy with deeper and longer negative impacts from the tariffs. economists had estimated just a modest impact saying it would shave 20 points off gdp, 20 basis points that is it's a small amount but about half the estimated positive impact of the tax cuts

but they now may have to go back into the forecast and with 25% tariffs on tap bring those forecasts down because of trade. what's difficult to calculate is the negative impact on business confidence and global growth barclays estimates the tariffs could reduce chinese growth by 30 to 50 basis points of gdp if there's up side it only comes economists think after, several years after the tariffs are in place when and if u.s. companies can replace the more expensive foreign goods. other negative impacts can come from lower stock prices. a recent cnbc fed survey showed 77% of market respondents thinking there would be a u.s.-china trade deal this year. so guys, like with most wars, in a trade war economists think no one really ever wins sara >> steve, despite that, i mean, even if there is no scientific accuracy to the contents on the topic of tariffs in the president's tweets, is it fair to say he has more cover to up the ante today than he did at any point, say, in 2019? he's looking at the strength of

the chinese economy, the global economy, the u.s. economy, or the u.s. markets >> perhaps i will say the one caveat to that is that big growth number we got in the first quarter, 3.2%, was substantially influenced by inventories and trade and we don't know if some of that inventory and trade was the result of people taking actions before or after tariffs. so if you'd told me that was a real number, that that was domestic final sales of 3.2%, i would say yes. but right now i think there's a little uncertainty about how weak the economy is or just how strong it is and that's in part because of the noise created by the tariffs and the national accounts. >> is it fair to say that the trade fight so far, steve, hasn't hurt the economy as much as most economists expected? >> i don't think that's right, sara i think there are other things going on in the economy that have been positive it hasn't been decisive. but we keep polling this number and everybody keeps telling us they think it's worth about 20 basis points less than it otherwise would be because of tariffs. we can go down and go through

the list of ways that tariffs hurt the economy they raise prices. and they create a dead weight loss in the economy, sara. as you know. which means you have ceos and businesses saying you know what, i'm going to find a cheaper way to do this and that is time and money spent doing other things so for example, they may go to thailand or may go -- and some may actually bring it back to the u.s. but not many. so i think it's a little hard to make that comment because there's so much else going on in the u.s. economy they keep having negative numbers on trade and tariffs and nobody -- very few people have positive numbers and you watch, sara, the way the market reacts. more tariffs means lower stock prices so nobody is including higher profitability, higher economic growth in their forecast when they hear higher tariffs i think the economists are on pretty solid ground with the traders on this point. >> steve liesman steve, thank you >> pleasure. >> jim campo, so how as an investor do you think about the

fact that tariffs hurt economic growth, confidence from businesses, raise prices for consumers? i mean, relatively it could be less than expected or less than the chinese are feeling. but it's still -- i mean, most economists will tell you it hurts. >> it does if you have to look at what sherlock holmes used to say, which is first examine the facts. and the facts are that despite what we're worried about with these tariffs, and they're legitimate concerns, you cannot look at them in a silo you have to look at the economy as a mosaic. and as steve pointed out, there are other parts of the economy that are trumping -- i shouldn't use that word. but are outweighing the chinese tariffs and the global tariffs and that is that productivity is better corporate profits are really strong free cash flow's really strong and so -- and stock prices are moving higher. if stock prices were not moving higher, sara, i would have a completely different outlook than i do. but the russell 2000 is breaking out to new high ground

the breadth has been pretty good in the market. you can quibble with the number of new highs and some of the internal market metrics. but stocks are moving higher and mostly they're moving higher because of profitability and because you're getting higher earnings yield than you are getting out of interest rate comparatives i do think that one of the reasons that the president is doing this now and the reason this is happening now is because he knows that our economy can withstand it right now, we're on pretty solid footing also the chinese economy is benefiting right now from some tremendous stimulus going on in their credit market. so this is a good spot for him to maybe press on the gas a little bit and get these things done and maybe play a little bit of hardball because he knows we can withstand it bottom line is i think we're overcoming the tariffs and for now the stocks are telling us that we will continue to overcome the tariffs >> okay, jim, thanks for joining us great to see you as always

jim la cam frp ubs we just had earnings out from hertz and seema mody's got the earnings >> it's a better than expected report narrower than expected loss. loss of 99 cents versus the estimate of a loss of $1.33. it seems like it's come down to two specific things. stronger pricing and more effective fleet management although i would point out that international revenue did come in a bit lighter than what the street was expecting still a solid beat on the bottom line that's why you're seeing the stock move here in after hours trade. certainly an interesting lens into the rental car market given our broader focus on ride hailing with lyft expected to report soon and also uber's ipo expected on friday guys, back to you. >> seema, thank you very much for that still to come here on "the closing bell," stocks making a huge intraday comeback despite president trump's latest tariff threat to china. find out if that could put a trade deal in jeopardy plus, mike santoli breaking down the charts to see how the ter ev has historically traded

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aig earnings are out let's get to seema mody with those numbers. >> sara, aig shares popping 2% in extended trade. a huge beat on its bottom line notable rise in net interest income and an improvement in its combined ratio falling to 97.4 in the first quarter from 103.8 in the same quarter a year ago as i'm eminded the lower the ratio the better aig shares now up about 2% on a big beat on its bottom line. guys, back to you. >> seema, thanks for that one. now, stocks staging a major comeback intraday after the initial plunge following president trump's tweet. the tariffs on $200 billion worth of chinese goods could rise to 25% by friday. mike santoli looked at how previous trade threats have impacted the market and whether investors should be concerned. mike >> there's no absolute consistent pattern but today's action was not really unusual. if you look at these prior instances, when there was a

presidential tweet of a threatening nature toward china about trade, and see what the market did april 4th 2018 was an interesting one. the market opened a good deal lower, almost 1% lower this was one of the early aggressive threats out there, saying we have to do something to close the trade deficit with china and making those bold statements of what it would take the market was down 1% but then actually came back to close green similar to today that was pretty close to a trading low. we were already in correction mode for the overall market. so that was the low for months after we had that initial sell-off so that's one instance here you have september 9th. this was more of an incremental threat and it really didn't have much of a one-day impact but it came with the market near a high with that sense out there that the u.s. economy and the markets are doing well we had a few chips that we could cash in on that. that did not prove to be decisive this was tariff man. this was when the president

essentially amped up the idea there was not necessarily going to be an easy path to a negotiated agreement and that exacerbated an already panicky market and was basically the beginning of that december freefall although that had a lot more to do with the fed and the year-end liquidation and then of course you have today. >> i guess those latter two circles you've got do suggest gosh, this can be terrible for markets. but the fed is the most important factor to weigh in and it's much more supportive now happen it was then zplt context obviously matters and how much the market priced in either about trade or anything else ahead of time. i do think that there is still a little bit of a reflex reaction. that nerve still gets a little bit raw when you see these tweets but it doesn't necessarily create the inflection point >> it's a buying opportunity every time because the market just ran up to record highs. >> yeah, eventually. but you had to sustain a pretty fast 10% drop. and people thinking we were in a bear market before you had this historic comeback. >> mike, thank you joining us now to talk about what these china trade

developments might mean, ed mills, a policy analyst at raymond james, and course ni rosenberger, director of policy research at strategyus ed, what are you telling your clients about this latest development? >> what we're telling them is this is not trump coming out with a new negotiating tactic. that was our initial take here, trump leading up to the g20 meeting in buenos aires said there was a 100% chance that he was going in with a 25% tariff on $200 billion worth of goods only to come out of those meetings announcing a three-month pause, which brings us to these current negotiations but when we checked back with all of our trade experts out there, what we heard was the deal was really close and china balked and for some reason chinese president xi has reached into the negotiations and said it's not a deal and so trump is trying to get this back on track and he's doing everything he can to threaten china because right now it's not an issue with president trump, it's the chinese side

>> so ed, do you frame that therefore as a major or a minor blow to these negotiations overall? >> i think it is consistent with what we thought all along, which is that trump views these trade fights as good politics and that this trade fight is going to be with us throughout this year, throughout the 2020 election, and that ultimately we could get a positive headline with the deal but we're not quite sure if china is ever really going to follow through with it the second the ink is dry what you're going to see is china turn around and say well, actually, for us to go through with this we're going to need x, y, and z china has consistently been saying they would do these issues for decades now, and they consistently don't follow through. and so when you look at both sides here you realize that this is not up for an easy negotiation or resolution, it's something that will last for years to come. >> i mean, courtney, what do investors do there are so many mixed messages the treasury secretary and larry

kudlow, economic adviser, have been telling the markets for weeks now that there's been incredible progress and they're really in the final stages of a deal and then this. >> yeah, we would agree. we think we will still ultimately get a deal. but there's going to be negative headlines until that point last week after trump's call for the fed to cut it did look like maybe negotiations weren't going quite as well as policy makers wanted us to believe but ultimately we would see a deal still coming to fruition and weakness would be a buying opportunity to us. >> do you think -- would you change your tune on this, courtney, if we did see things physically escalate rather than just be a threat at this stage would that lower your hopes that a deal ever gets done? >> so in our view if you do see the president actually acting on enacting these tariffs that would lower our hopes. if you don't have the vice premier come to these negotiations thatter our hopes so we're still willing to change our tune on it but at this point it does look

like they're still trying to use a deal, trump is just using his typical trumpian negotiating skills we saw the same thing with him threatening to put on auto tariffs with canada when they are were doing the usamc negotiations so at this point we still think a deal gets done >> ed, how influenced do you think the president is by the strength of the u.s. economy and the strength of the u.s. stock market, and does that climb to recent highs giving cover to play harder with china >> it definitely -- oh, sorry. >> no, to quote trump, it would be huge. absolutely when you saw kind of the trump, you know, tweeting out he's tariff man in december and we had the 20% correction what we've seen since then, he's done everything he can to talk up this market, even when negotiations weren't really going all that well. and now once the stock market is hitting near all-time highs we got a great q1 gdp print, we've got a great jobs number, this is time now for trump where he feels as if he has room to run,

room to push back on china much more than if we were in correction territory but china's looking at that as well china says, well, if we can get any sort of correction in the u.s. markets maybe trump is a little bit more encouraged to go back to his january ways where he's encouraging a resolution rather than kind of punching back >> so courtney, what would you tell a retailer, for instance, they enter the picture if trump does escalate this and put more tariffs on another group of chinese imports. they're up next. how worried should they be >> it's a huge concern of u.s. imports -- of u.s. consumer good imports. what's left is about 73% of what we import from china it's definitely a concern. but the thing to keep in mind is these would be new tariffs they'd still have to be proposed officially by the usdr they'd still have to go through the hearing process. it would take a couple of

months so there's still some time for things to change and for negotiations to improve. >> all right ed mills, courtney rosenberger, thank you both very much >> thank you >> thank you >> still ahead short seller carson block tells us whether president trump's tariff threat against china is creating opportunities to bet against chinese companies. and later shank tank investor daymond john explains why the trade fight is impacting the retail industry. i've always been amazed by what's next.

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despite a dramatic rebound on the day the dow actually finished down on wall street but some notable names did break into the green tyson foods, one of the top performers on the s&p 500 after beating wall street's earnings estimates. bausch health also rallying after raising its full year guidance and pinterest shares surging after susquehanna began coverage of the stock with a neutral rating noting the company's user base should be attractive to advertisers. we've got a pair of after hours earnings movers to tell you about as well. hertz shares popping after beating wall street's profit estimates. and aig spiking after reporting a blowout earnings report. thanks to strong results in its general insurance and life and retirement units that stock up more than 5 1/2% after market >> time now for a cnbc news update with sue herera hi, sue. >> hello, everyone here's what's happening at this hour all the suspects in the sri lanka easter bombings are dead or have been arrested according to the police chief. two little-known islamist groups

have claimed responsibility for the attacks, which killed more than 250 people. the sultan of brunei today further delaying the implementation of a law that prohibits gay sex and makes it punishable with death by stoning. the law drew international outrage, led by celebrities including elton john and george clooney. a new record of measles cases in the u.s 764 cases. up 60 from last week according to new numbers today from the cdc measles now reported in 23 states with pennsylvania reporting its first case and on a happy note, a brand new royal baby meghan markle and prince harry welcoming in a baby boy earlier today. the baby is seventh in line for the thrown a very excited prince harry used the word "amazing" a few times when speaking to reporters he said he was over the moon understandably so. and we congratulate them and wish them all the best that is the news update this

hour, guys i'll send it back to you >> we certainly do, sue. we don't have a name yet but they've said they're going to pick something that cements the british and american special relationship sara i have to say has come up with the best suggestion i've seen so far. >> which is? what is it >> the closing bell. >> closing bell sussex i guess it would be. but i'm not sure it's high on the bookmaker favorites. but i like the thinking behind it >> we hope to have a name by wednesday. late in the afternoon uk time. so we'll see >> we will indeed. sue, thank you up next, short seller carson block weighs in on whether new concerns about a trade deal will continue to be a big red flag for stocks in china. >> plus hedge fund manager david einhorn making a big bet on planes, betting against the rails. details coming up.

welcome back despite today's early morning sell-off stocks made a comeback late in the day but our next guest says this is a critical time to be skeptical, which is why he launched wolfpack research, a firm focused on exposing fraud and corporate wrongdoing at public companies a cnbc exclusive, we're joined

now by dan david, founder of wolfpack research and short seller carson block, muddy waters founder and an initial investor in wolfpack a very good afternoon to you both carson, i'll start with you if i may. tell us exactly about what this venture's looking to find in companies. >> sure. so i've known dan for about six years. dan is also an activist short seller he cut his teeth in china as a short seller and yeah, we came to know each other professionally over the years and then became friends. and he's top-tier short activist, one of the people who really does things properly, very diligent, and he just finished a run for congress. obviously wasn't successful but is looking to launch his next venture. so we're thrilled to support him. >> dan, tell us about what you've got planned and how right now the landscape is to find short opportunities in china >> well, what i have planned is

what i've done for the last ten years, and it's to find corporate wrongdoing, malfeasance, generally by management, and the landscape has never been riper, actually markets at an all-time high. and coming back from my run, my desk was filled with reports that range anywhere from fraud to like right there next to fraud, that kind of corporate malfeasance. >> in china? >> no, not in china. but of course already many in china. but i'll be focusing on u.s. companies as well. >> as it relates to the china area, which is an area where you have made some of your track record >> yeah. >> is that just chinese companies that have listed in the u.s. that are trying to mislead u.s. investors or it's much more rife across domestically listed chinese companies? >> well, we generally don't play on the asia market because we can't really invest there. and it's a very dangerous place to try and short it certainly does play in hong

kong, where we have done some work we exposed tech pro some years ago, 91% drop in bankruptcy on the hong kong exchange and it does continue to permeate here in the united states mainly because it's not illegal in china for chinese citizens different from an american citizen. $12 trillion of market cap here and their ceos are not accountable. >> is there anything besides the fact that the market's at a high valuations, maybe a little bit aggressive, that says this is a good time to find these types of situations in other words, are there any themes going on when you have multiple years of earnings growth and you have the accumulation of loose accounting or whatever it might be? >> well, it's a good and it's a bad time so it's good fougrom the perspective of there's a huge number of egregious companies with market caps it's bad in that investors are inured to risk

it's really what investors will accept these days is kind of galling. the type of accounting that companies do in broad daylight where it's really misleading and all of this non-gaap presentation that the markets hang on. i think it ultimately ends in tears to some extent but i'm not sure where we are in the cycle. the one thing i feel is there are so many ceos who feel like it's their god-given right to be able to cash out 50 to 300 million dollars worth of stock in a few years and that's causing them to undertake some very aggressive behaviors. >> carson, what do you make about the recent set of ipos of companies that might be loss making but are commanding pretty big market capitalizations >> yeah, further to just -- we live in this strange time where i'm not sure that it takes a lot of skill to sell a dollar for 70 cents. i mean, maybe they are excellent at doing it and can do it better than i but we'll see. when you look at an uber or lyft, you really have to ask, well, what scale do you need to

achieve to actually cash flow and earn profits and i mean, especially with uber, which has not yet ipoed, but it's so ubiquitous right now, you really wonder how much more runway could they possibly require? >> what's your biggest short position right now >> well, the last thing that we shorted publicly was inogen. that's done reasonably well for us i wouldn't say -- i mean, right now we're running -- the way we work is as we get ready to go activist on something we'll ramp up the size a little bit so we don't have anything that's really massive in our book right now. but ino'gen is the most recent >> do you have a name sedan we should watch >> the next short report i put out. it should be in the coming weeks. we're very excited about it. it's got everything you want in a short report corporate malfeasance. you know, too much taking advantage of the corporate -- the debt market. which we have a bubble happening

here $9 trillion. if interest rates rise at all, it's going to be a big problem for everybody. which is why everybody's trying to keep them unreasonably low. >> all right dan david, carson block. we look forward i guess to be continued. up next, trading the turnaround markets on a wild ride in today's session, staging a major comeback this afternoon. how you can navigate all the noise, straight ahead. but first, big business takes center stage some of the largest names on wall street weighing in on the market at the stone conference there. best investment ideas when we come back. the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

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welcome back just moments ago cnbc cameras caught treasury secretary steven mnuchin walking into the u.s. trade representative's office. let's have a listen in >> secretary mnuchin, cnbc here. can you tell us anything about the status of talks? can we expect the chinese to arrive on the 10 snth. >> the ambassador and i will look forward to making some comments shortly >> so no comments at all pretty much there the interesting thing i guess you would say is that he has been of a more positive tone of late in the last couple of weeks compared to the president's more negative tone over the weekend and he didn't offset that negativity from the president ha we got most recently we will have more on those comments if we catch him on perhaps the way out again. but mike, nothing new to offset that tone from the president yesterday. >> he did say he had comments

from the ambassador later. i feel like it was just a rhetorical salvo i didn't notice him walking in there. it's hard to know. >> it's some of the biggest names in finance are giving their take on the market at the sohn conference today and some individual picks leslie picker joins us with all the highlights leslie >> hey, sara an important day to hear from these people and to kick off today's main stage presentations. a frequent guest of sohn, david einhorn. the greenlight capital head. reiterated his short position in tesla with a series of slides that he believes demonstrated elon musk's broken promises. different quotes of sorts. but the thrust of his presentation centered around le lessers -- he's bullish on airplane leasing companies with a long-held long in air cap and

bearish on rail car with a short in a company called gatx some of the biggest stock moves of the day came during a presentation from glenview's larry robbins. he said investors should short 3m over their potentially legal exposure related to a chemical called pfas. robbins believes lawsuits are accelerating against the two companies and they could be on the hook for billions of dollars related to this chemical pfas is a chemical that can be harmful when it leaks into the water supply chenmore and 3m fell on these comments today another big move reata pharmaceuticals. kormolon asset management pitched long in this stock thanks to its drug which treats chronic kidney disease reata jumped on that presentation and closed almost 6% higher today, guys. >> leslie, that 3m short idea i guess grabbing the most headlines i'd say over the course of the day. down a little. but not relative to its declines

of late. >> and chenmore certainly saw a bigger tick downward but it is a smaller company. you're right it was somewhat of a surprise to see him pitching shorts on these two companies, especially after he gave a presentation that largely centered around health care and the health care system. he said that investors should also short an index of pharmaceutical stocks, or an etf of pharmaceutical stocks and his portfolio was much more short biased than long biased when it kamz to pharmaceuticals. and that said, he was much more bullish about the long-term prospects for hospitals and hmos >> leslie, thank you very much for that leslie picker at the sohn conference up next, trade's big business impact "shark tank's" daymond john is here with the challenges his businesses have faced amid the uncertainty of trade talks with china. >> and coming up on "fast money" one top strategist says the market's getting mixed messages and that could actuay usllcae a major rally. he'll be there to explain. ntrol. ntrol. it's gotta let new data

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national small business. there is more business survey. 63% of small business owners rate the current state of the economy as excellent or good and 37% say it has improved over the past year. >> joining us with his take is damon john, founder and ceo of fubu and the shark group >> thank you for having me >> how would you gauge the mood right now small businesses >> small business is very, you know, it's an exciting time due to technology and things of that nature and manufacturing and improving and the whole idea to have day process in analytics it's a very good time. nothing like way more challenges

>> you're teaming up with chase to do advice to small businesses what is the simplest fix that you can give broader small businesses that they also seem to make? >> they usually overspend, you know in different areas. money often can highlight your weaknesses if you have a poor advertising campaign or the right community or you have poor manufacturing. you're going to spend the same poor stuff i think that right now building the community online and digital and social media conversion, you know that, is really important that's how you really find your community. i used to have a focus group now it's right here where your phone is so that's why i'm doing the live twitter chat with chase to small business wednesday at 7:00 p.m i'm giving more advice on that as well. >> what's the biggest complaint oregon challen or challenge right now you say banks are not that willing to lend. >> the challenge is finding young talent

>> you know employment and health care. so now people are really trying go virtual virtual assistants this and that the younger generation, they don't want to work for anybody, right? they know they have the power to employ themselves now. so finding young talent and young community and bridging the digital divide with the more mature talent that really knows actually what to do is the biggest challenge they have. >> so how much of your focus and your investments right now have to do with retail which is your background and that's how i think of you and how much you are expanding? >> the ones that are really exploding more than anybody don't sell directly to retail. they came on and doing $800,000 a year now i think they're going to do $100 million a year selling directly to the consumer. retail is really being compressed so you're either going to sell discount goods or open your own

retail store and sell luxury goods. >> we've been talking a lot today about the trade war with china. and small or medium size businesses that you invest in this >> it's going to hurt. tend of the date in my business, i can only speak about my business 20% net is what you're going to make if you increase 25% on the cost of goods, that's going to affect me anywhere from 8% to 10% that's a big challenge but, you know, personally, i don't want to bill more factories over here and honestly, i don't want to pollute this country the way you go to bay jik, it is horrible over there we're going to have the cost of gooz are going to be more over there. kids are going to be glowing i don't like the whole trade thing. i think we'll be forced to build manufacturing over here and have the hudson river that everybody dumped in and we were manufacturing here >> not to mention, it's more

expensive. >> wages cost more here. medical again and everything else i don't think this is a good idea >> what is working in retail right now? everything is trying to figure this out department stores can't get it right. some of the brands are kind of, you know, attaching themselves to influencers, i think that's bag story. >> anybody who has a retail presence, you know, in the stores and brick and mort ar-an on line presence nike can do both, service a mass crowd and one individual that wants one type of work. >> there are investmentsechlt now and you uncovered and the shiniest gems or -- >> no, think the analytics of social media are, you know, before when we used to sell, instagram wasn't out when shark tank started i don't know who purchased my shirt. and now because of the analytics and upsell the current customer.

so it's much, much easier now. because the data doesn't lie >> damon john, thank you for coming by. >> thank you. >> small business week >> up next, we'll look at the stocks making big news in after hours trading whethn we come bak - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

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let's take a look at how we finished up the day on wall street a lot better than it looked. dow better by 66 points. a little less than half. they business or sell and import a lot of goods after president bush talked about china. they ended the day positive. >> let's get a check in on the headlines making news after hours. aig shares surging after easily beating wall street's earnings estimates due to strong results in the general insurance and life and retirement units. that's up 6% shares also after reporting narrower than expected loss thanks to improving margins. up 1.4%. >> and mobile game publisher glu

mobile under pressure as better than expected revenue. that stock is down 5% after hours. what you are looking for tomorrow to see whether whether -- the recovery and really is remarkable even though the market was due for a pullback at record highs >> it was. this the is why it's kind of follow-through watch you know, one way or the other you can think of a different scenario where we're saying we got that great jobs number on friday if we didn't have this sort of input of trade tensions. i think you want to see if this seems like it really was just a passing scare. remember last thursday, there were people back to exactly 2900 it's been almost no time there today. just below that. also spent no time there so the buyers seem to want to act on a discount. we'll see if it continues. >> we'll get a good indication of the night if shanghai stays down having declined at the close by 5.6% this morning

then that's perhaps a sign that the bounce back today was overdone another point to look after, lyft earnings. >> interesting to see the presentation, exactly what they emphasize and, you know, what the market is planning for first for an ipo is always interesting. this one in particular >> people are joking on twitter last night that uber has to postponed the ipo because so volatile in the market. >> that will be coming tomorrow after the close. that does it today for closing bell >> "fast money" begins right now. >> "fast money" starts right now. i'm melissa lee. traders on the desk are tim, brian, dan, and guy. stocks making a major reversal one top strategist says despite the move, this market rally is still at risk. he'll explain why. >> plus, getting slammed today, down 2%. one top tick in addition says there are two names in the space. they start off with a stunning market tur