the rate shop topping your five at five on this wednesday morning. the bond market making more big moves in what could be a big warning sign for your money. ramping up the rhetoric china out with a warning for america today. the two sides no closer to a trade deal huawei speaking of taking new legal action against the u.s., and for the first time in a long time, you will hear directly from one of huawei's top executives relentless flooding in the midwest pushing commodity prices higher the tough scenes and the price reaction ahead. and what do you think about the trade fight? is the stock market reacting too much or not enough we asked you we've got the surprising answer

ahead. it is wednesday, may 29th as "worldwide exchange" begins right now. ♪ love is a battlefield good morning, good afternoon, or good evening, and welcome from wherever in the world that you may be watching i'm brian sullivan you're looking live there at beijing, china tensions rising as the trade fight shows no signs of letting up there are more tough words being flown on both sides. we will take you there live in moments, but first to your money this morning it could be another rough day for the market futures are down triple digits right now. 131 points on the dow. remember, in the last couple of weeks and months, the futures -- i'm not saying ignore them -- but the futures have tended to understate recent moves, if that's the case, that might not be a great sign for the market today. yesterday the nasdaq 100 and the transports considered a leading indicator saw a fourth straight

down session all the major indexes, all of them are below their pace for the worst month of 2019 with the dow, s&p, nasdaq on pace to break four-month win streaks bond yields may be a bigger story than stocks. the benchmark ten-year note continues to drop. it is now at 2.23% this morning, and maybe the chart to watch is this one it shows an inversion between the short-term, the three-month, and the longer term ten-year right here look at this the orange is the three-month t bill, which is now going to give you more money than a ten-year note now that is the most inverted. i know it's just a little bit, but it almost never happens. that is the most inverted that has been since 2007. now, historically an inverted yield curve signals a slowdown if not a recession is being predicted by the marketings b, remember this time is different because the trade fight could be

sending people temporarily into the perceived safety of u.s. government debt. let's talk about this, and welcome back in matt maley we're going to ask you, i guess, to be a bond market strategist in some case this morning because is this this rare inversion, a 12-year phenomena is that a massive warning sign or just a sign that people are kind of hiding in bonds right now? >> well, i think it's a combination of both, a little bit of a copout, but i do think we certainly have a situation where, first of all, that three-month to ten-year inversion is steeper than it was back in march, so that's a concern, but the two-year ten-year spread which is another one people look at, it hasn't inverted yet it's getting closer. you like to see basically the entire curve invert before it really shows that we're going to have a recession going forward, but it hasn't been a very good indicator, and the thing about this whole situation is we were already seeing some signs that the economy was starting to slow

a little bit, even before the breakdown in the trade talks took place, especially in groups like the semiconductor stocks, so it's just something where i think the markets were both the bond and the stock markets were planning for a lot of uncertainty in the second half, and we're certainly not getting that now. >> it's not maybe a red flag perhaps, matt if i'm hearing you right, but maybe a yellow flag, something to watch if that 2 and 10, which is about 15 bips, basis points from being inverted, if that inverts, then we got something >> exactly, and i hate to say it, but rarely -- and. n there may be one example, and there may not even be any, where the two year ten-year spread ge does invert. it's a big spread out there. >> when we look at everything else, it's probably the worst month, but overall, we're still

fairly higher for the year, double-digits for the nasdaq, double-digits for the s&p 500, how do we read this month? >> well, the one thing, you know, we hear a lot of people saying hey, jeez, the market's really holding up pretty well. the problem is we have new news. there's an old saying on wall street, when the facts change we need to change our opinions. the facts have definitely changed when it comes to the trade issue, and it doesn't look like that's going to be settled anytime soon therefore we have to reprice, and the problem is that historically when the market does top out and roll back over, the first three or four weeks the market always seems to hold up well because people just think, don't worry, it's not going to be a big deal things going to continue like they were. when you get a change in the facts, eventually they come around, and that looks like what's going to happen, see today with the futures down and we have a number of the s&p breaking below key support level as well as a couple other key indexes. it's not tuesday, it's the second day of the trading week,

we tend to get turn around tuesdays, if we don't get that today, we could be in for serious dips here. >> stay right there, i want to come back to you we have three new developments on the trade front. number one, the treasury department says it will not label china or any other major trading partner a currency manipulator. two, huawei, threatening new legal action over the u.s. on the equipment ban. we're going to have more on had that coming up in a few minutes, but three is maybe the biggest of those stories, china out with another major warning for the united states. let's get right now to eunice eun in beijing >> thanks so much, brian beijing is threatening to use its dominance in the rare earths industry as a weapon against the u.s. in the trade war. yesterday its top economic planner sent its veiled threat via state tv saying if anyone were to use products that are made with the rare earths that we export to curb the development of china, then the

chinese people would be unhappy. so president xi jinping visited a rare earth's facility last week that initially raised speculation that china could use the minerals as a counter measure in the trade war china produces about 80% in 2018 of these rare earth materials, which are used in a lot of different tech products, and the state media turned more explicit in the threat today. the global times argues that china can play the rare earths card and the authoritative communist party's people daily posted don't say we didn't warn you. and brian, chinese are seeing this last phrase as really serious because the last two times that the people's daily specifically used that phrase, the chinese went to war against the vietnamese in the 1970s and against the indians over a border dispute in the 1960s, so i think the question now is that we are definitely seeing a surge in nationalism, but how do you claw things back so that both

sides can start talking and then once you get to the negotiating table, how can you be constructive with this nationalism rising >> wow, they used that phrase ahead of those two battles, scary stuff, eunice yoon thank you very much. perhaps it was a slip of the tongue, the chinese i don't think tend to do that, but this rare earth fight, we've talked a lot about it on this program all the stuff if you want a battery for an electric car, you want something in your iphone, these are the minerals we never talk about they're being used really as a lever against the united states. maybe it's all they've got, but do you think it's going to work? >> well, it definitely shows that the chinese are pushing back in a much more forceful way than they did just a week ago, but through this whole kind of -- the last three weeks or last three and a half weeks when things really turned down,

china's been rel tatively calm with their rhetoric. that has all changed in the last few days, certainly in the last week or so that just shows this thing isn't going to be resolved anytime soon we've had this unbelievable run, 25% rally since december in the stock market 5% pullback, is that really going to be enough to reprice the change in the situation? i don't think so but the whole -- i think the real story is that this is not going to be resolved anytime soon, and china is pushing back much more forcefully than they originally had. >> using that word, the last time they used that phrase was in 1960 and 1970 when they actually went to war, not a trade war, a war matt maley, thank you very much. >> thank you. ceos around the world are beginning to chime in on the trade fight. food one of the biggest exports the united states has, and here's what mcdonald's ceo steve easterbrook recently told cnbc >> fair to say all the recent tension has not altered

mcdonald's strategic or tactical strategies in china. >> absolutely not. in the shorter term business has slowed down a little bit just as the economy has slowed down a little bit in china, but in terms of long-term interests it's a very important market for us, and i think will stay that way for as long as i can imagine. >> obviously there's a lot more to that. you can catch the full interview with the ceo at 9:00 a.m. eastern time today a busy hour still ahead here on "worldwide exchange." when we come back, maybe call this a real world "game of thrones," how an arrest at an unexpected death factor into what could be a mega merger, jeffrey sonnen feld will weigh in next. plus, reasons to buy stocks, reasons to sell stocks both side of the debate in this wild market with futures down 140 points, and we're back after this - anncr: as you grow older, your brain naturally begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain

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. welcome back here, it is 5:13 in the morning on the east coast here sun just rising. dow futures, they're not rising. they are down 140. we'll get more on the macro markets in a moment, but let's get a check on the individual stock stories you need to watch today. >> let's get started off with qualcomm, the chip maker is asking a federal judge to put an antitrust ruling on hold while the company files an appeal. the judge ordered the company to

renegotiate those contracts and make other changes that could really hurt its most lucrative generator of revenue and shares of workday are lower this morning despite reporting adjusted first quarter earnings and revenue that beat estimates, subscription revenue the biggest source of income rose by 34% as it signed up more customers for its cloud-based financial and human resources software and shares of heico up 8%. posting better than expected second quarter results the company also raising its profit and revenue guidance for the full year. those are your stocks to watch thank you very much. see you in a bit a sudden death and a sudden arrest paving the way for what could be one of the biggest auto deals in years fiat chrysler and french automaker renault want to attack up to create the third biggest car company. fiat coming to the table months after its long-time and well-respected ceo passed away unexpectedly, and renault coming

to the table months after its long-time ceo carlos gohone was arrested in japan. joining us, i'm going to ask you a tough question i don't want to go down the internet worm hole of conspiracy theories, but carlos gone himself has suggested this do you think that his arrest, while valid perhaps, has been overdone in some capacity to remove him from the picture to get this deal done >> i think you framed it just right. that is clearly what happened. by the way, congratulations. i think you must have slept there in the studio. i just turned you off at 5:00 p.m. last night, and now you're here at 5:00 a.m. 5:00 world, that must be your theme song that is exactly right.

ch carlos ghosn was set up for this you don't get imprisoned for this kind of a question. he was getting a salary considerably less than any of his peers were making, and there's just a lot of suspicion, of course, that this had something to do with japan inc., that he was going in to replace the ceo of nissan for some faltering performance after he pulled off a rescue. there are questions as to whether or not the board cleared, the nissan board had cleared a compensation plan for him that hadn't been revealed to shareholders yet he hasn't gotten a penny of this extra bonus compensation, so it was -- that was just crazy there was certainly something to do, resentment of the control that renault had in nissan 20 years ago carlos ghosn had pulled off a remarkable recovery for nissan by taking renault and buying into it, and they missed

that opportunity the production is twice as high as the production of renault so that's the frustration. furthermo furthermore, they've got, i don't know, about a 43% control. the french do of renault of nissan, there's a lot of resentment for that. >> it is a situation now where nissan may be left out in the cold as the two european giants. is there an element of i don't want to call it nationalism, but certainly what we're seeing is this populism that is not just here it's in europe as well you've got italy and france, yeah, they've had their differences but they are still members in europe maybe leaving out japan as well. i don't think this is just a ceo story. it almost feels like a national story in some ways >> it absolutely is a national story. that was the part of the carlos gone bit of course resentment of

the french control of nissan and certainly you're right, the italian link to fiat is of course at one point i think 7 out of 10 cars back in the 70s were fiats that were sold in italy and fiat, maserati, all these great brands that they have there that they're doing much better than they were previously and of course they lost their ceo, and that was a sad tragedy was part of the backdrop here, the human tragedy of having carlos gone wrongly imprisoned with these sequential charges and then marcioni having died by surprise and a huge blow to the company you also have the national link as you point out, the french ownership of 15% tied into the control of renault now, this will be diluted just like nissan's smaller stake, which is about 15% will be diluted back into renault. so yeah, you talk about, you know, people feeling some grief over the last episode of "game of thrones." you're absolutely right.

that's what's going on here. it's the personalities that drive this at least as much as the strategy. >> and i'm going to ask a question, i used to work for the japanese years ago, decades ago i worked for mitsubishi bank, wonderful people, but carlos gone was not japanese, and he would never be japanese, and i think you know where i'm going with this, do you believe that the fact that he was really brazilian, lebanese, french citizen, he really had three different nationalities that that background not doomed him with nissan and in japan, but certainly did not help him >> he has no communication he's put in a prison cell that he was put in solitary c confineme confinement. it's absurd, of course and people will talk about how you don't get out of it. it's like a roach motel of justice. you don't get out of a japanese prison cell unless you confess they have a 99% conviction rate. how about that, but still these conditions are way more onerous than we saw for tokyo electric

after the tsunami problem with the nuclear meltdown, the nuclear plant or takata air bags or other misconduct in japan we didn't see this kind of harsh treatment. yes, i do think there's a nationality thing going on and some sort of a backlash. part of this untold story is we don't have this kind of cultural clash when we're looking at both fiat chrysler, which is run by this guy john elkman who's as international as carlos gone was. he's born in the u.s he went to college as an engineer in italy. he went to study high school in france, and his primary school years are in england he speaks four or five languages fluently and a very elegant 43-year-old who is an agnelli family member. he's sort of trying to divest the family's sbrinterests. on the other hand you have the ceo of fiat, very elegant guy,

and that guy, too, he's in his probably mid-60s, but not a desire to leave, but they share a lot of common and cultural heritage and the fluent french conversations they have is the kind of thing, you didn't see the cultural comfort level with carlos gone. >> and when you were on that global game of ceos stage, those types of things, just being able to communicate in the same language matters a lot matters a lot. >> and they'd had fertive conversations before, but it was a little harder. he was a very tough negotiator, too. he served as sort of a mentor to this guy john elkman this john dominique, the ceo right now of fiat has a tremendous comfort level with

the government so he was able to share his concerns with macron this is likely to have a good deal of support from the french government both companies are calling this a friendly deal. this is likely to go through neither one of them has a big presence in china. they're not helping each other out that way, and nissan can be a little bit of a spoiler in terms of the intellectual property that nissan shares in electronics and electronic vehicles and power train systems with nissan shares that's going to be hard if they don't like, you know, why are they going to help a competitor out here basically so they can kind of sort of mess up the deal a little bit on that siede. >> all of that is just getting started. thank you for your insight, and thank you for the comments i call it ten the hard way, five and five, i'll do it again tonight. jeff sonnenfeld of yale, thank you. still on deck, devastating flooding in the midwest

impacting lives and impacting the crops that farmers need to live we'll show you the impact on commodity prices. and later, a recipe for reward, what one bull market skeptic says need to go right in order for him to say buy right now. ♪ ♪ ♪ ♪ ♪ ♪ ♪ applebee's new loaded fajitas. now that's eatin' good in the neighborhood.

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overflowing flooding towns and farms in iowa, oklahoma, missouri, nebraska, and arkansas severe weather is weighing in on commodities as well. corn futures popping more than 4% the floods delaying planting that worry also extending to wheat. wheat futures at their highest level since february look at that spike soybeans doing the same thing. extreme flooding could also impact oil and gas because rising water constraining some of the crude flow in the primary u.s. storage hub of cushing oklahoma maybe system of the worst of the flooding didn't impact cushing as much as some feared: facebook and twitter taking aim at iran, the war against misinformation and fake accounts. that full story next plus, just when will the boeing 737 max really get back in the air? one important group finally weighing in on what is arguably the most important stock in the world. creating the future.ies ae

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the rate shock hitting stocks, red arrows across the board right now as something just happened that has not happened in 12 years tensions rising, china out with another big warning for the u.s. today, and the last time they said this phrase, they went to war. it's not all bad, right now could be the perfect time to refi your home

we'll explain as "worldwide exchange" rolls on right now ♪ >> it kind of is a jungle out there in the markets anyway. thank you for being with us here on cnbc. i'm brian sullivan as always let's kick off the second half of your show with your executive recap frank is back with that. here's what's leading cnbc.com right now chinese state newspapers issuing a new threat in the escalating trade war with the u.s the people's daily newspaper issuing warning that china is ready to use rare earths to strike back at washington. the communist party paper using a very ominous phrase, quote, don't say we didn't warn you." rare earths are used in everything from high-tech consumer electronics to military equipment. shares of the biggest producers soaring in asia. facebook has removed more than 50 accounts, three dozen pages and several groups it says originated in iran and engaged

in coordinated inauthentic behavior facebook says the individuals behind those accounts were pretending to be from the u.s. and europe and misrepresented themselves as journalists or news organizations and the head of the airline industry's largest trade group says the boeing 737 max could be grounded for another two months or maybe even more the iata says the timing of the plane's return to service is up to regulators. the group says the impact of the grounding of those airlines is significant due to higher price and lower sales. >> as eunice yoon pointed out at the top of the hour, the last time china said don't say we didn't warn you, it went to war in vietnam and had a battle in india, not a trade battle, an actual battle. scary stuff there. >> very ominous, and it doesn't bode well for this trade war being resolved. let's get a check on this

morning's other top headlines. phillip mena is in new york now with those. >> good morning, we're tracking the fallout of yet another 24 hours of violent weather, and one of the largest tornados this nearly two-week long outbreak was spotted in lawrence, kansas. look at that, estimated to be about a mile wide. around 30 homes were destroyed and many others damaged as this fast-moving storm swept through pennsylvania, it brought with it powerful wind gusts, heavy rain, and got those sized hail in some areas. the gloves are coming off in the race for 2020. democratic front runner joe biden is hitting back at president trump for once again siding with north korean leader kim jong-un. this time for agreeing with the dictator that the former vice president is a quote, low iq individual joe biden's campaign called the attack beneath the dignity of the office. and residents in virginia beach are upset after ten tons of trash were left behind following a memorial day weekend event. video of the littered beach went

viral on social media causing an uproar in that community the city has since released a statement saying they were disappointed to see the condition the beach was left in. that mess was cleaned up early on monday morning by the city's sanitation crews brian, back to you. >> you know, we had a saying and i was a boy scout, don't judge me, i was a boy scout and there was a saying i think that came from some of the first native americans which was take nothing but photographs, leave nothing but memories or something. pick up your trash is the bottom line. >> if you think that's bad, brian, they should be considering what's inside the ocean at any given moment as well. >> whales and then a lot of trash. phillip mena thank you very much take your trash, people. all right, now to your money this morning it could be another rough day for the market futures down triple digits we're off 170 right now. as i noted earlier, the futures, they have tended to understate recent market moves. it doesn't mean disregarded. it means the market may actually accelerate that. we've seen things get worseor

on the upside get better in extreme from the futures market especially in the 5:00 a.m. hour yesterday the nasdaq 100 and transports had their fourth straight down session. all the major indexes, nasdaq, s&p, transports they're on pace for their worst month of the year a four-month win streak is at risk unless we get a massive turn around in may, that's exactly what's going to happen bond yields may be a bigger story than stocks because as people sell stocks, they keep buying bonds or vice versa, and the yield keeps coming down. we're at 2.23% on the benchmark ten-year note, and maybe the chart to watch is this one that shows an inversion between the short-term, the three-month, that's the orange line and the longer term ten-year debt, the white line that is, you can see on the far right bottom of your screen, the yield on the orange moving above the ten-year that is called an inversion, and that is the most inverted that

we have seen that debt level since 2007 now, historically an inverted yield curve signals a slowdown, if not a recession as being priced in by the market. remember, this time certainly is different because last time that we inverted, especially to this magnitude, we did not have a trade fight that was sending people temporarily perhaps into the safety of the bond market. by the way, the two-year and ten-year, they have not inverted yet, but that one, jay powell himself, the fed chair has said that's a chart you have to watch, so if he says it, we're going to show it to you, and there it is. all right, clearly a lot of risk out there. but should it be all fear or can even the most bearish among us find reasons to buy? joining us is charles schwab chief global investment strategist, jeffrey kleintop we're going to walk through reasons to buy, reasons to sell. i wants to start with the good news, if you had to make the bull case for equities anywhere in the world, the green light,

what would you say >> i'd have to say there's the possibility of fiscal stimulus, maybe tax cuts in europe, maybe even japan this year that was something that really made a difference for the u.s. last year, but this year even as the u.s. china trade war doesn't really touch europe, they are looking at an economic slowdown. germany has the capacity through a massive budget surplus cut corporate taxes. we're hearing this elsewhere, francis macron who suffered a big setback in the parliamentary elections may look to unveil tax cuts he's already talked about it the netherlands is discussing them japan is talking about hiking taxes later this year, so fiscal stimul stimulus, we don't have a lot of room for monetary stimulus. >> that would be, jeff, i know because we've talked in the past, that would be a reason to buy equities in europe, not equities here, correct >> yeah, that's correct.

i think that that would likely boost their economies and certainly would be also something that would help to lift their growth at a time where the other two world's largest super powers, the u.s. and china are kind of undermining each other >> all right, let's call it the yellow light, reason to pause, sometimes maybe not doing anything is the smartest move of all. if there was a reason to crust kind of tell your clients, hey, sit tight, don't take any drastic action don't buy, don't sell, wait this out. what would that be, jeff >> this is often the best advice i think it's the fact that central wabanks are aware of the yield curve you just mentioned jay powell told us to keep an eye on he's keeping an eye on it. other central bankers around the world are not continuing to tighten monetary policy into what's already a slowing global economy. we've seen leading indicators like the purchasing manager's index or leading indicators from the oecd continue to point downward, but central banks are acknowledging this and now in fact, there's some expectation that the fed may be cutting rates later this year.

that's a good sign that central bankers, probably the most effective policy makers are aware of the problem. >> obviously futures are down. the market's weak. we're still higher on the year it's been a weak may what's the red light what's the reason to get out of certain stocks in the united states, the reason to sell, jeff >> you know, one of them is yesterday's consumer confidence number it was good. the university of michigan number was very strong it's not the only one. there's one from the conference board, a few others. they're all really high right now, and that sound like a good thing. strong consumer means good growth for the economy and for profits, but usually these high levels of confidence precede periods of trouble we last saw these numbers in '07, the last time we saw the yield curve inverted as well, and back in 2000 these periods of high degrees of confidence by consumers tended to precede periods of trouble in the markets and for the economy as whole that's a bit of a red light for me, those strong, robust

consumer numbers we got yesterday. >> we showed our viewers just before this segment that inversion, now the big inversion, the big inversion of course is the two-year note and the ten-year note. those are the ones you say that predicted all the recessions, seven of the last seven, whatever it is we're showing the three-month and the ten-year, so not quite as severe, but are you worried about that chart right there, jeff >> i am. i think this is an important signal, not just because it's telling us maybe what the fed's expected to do or where inflation is headed but because it really is a good gauge of global financial conditions. this is something that's worked not only in the u.s. but internationally. it sniffed out peaks in the' fee index since 1969 when we get the inversion of the three-month and ten-year it's usually right around the peak, within a few months of the peak of the efee index as well, the yield conservative is something to watch both for the u.s. and the

rest of the world. >> all right, jeff kleintop, great stuff as always, we'll see you soon thanks very much >> thanks, brian, good to see you. all right, well, speaking of china and trade, chinese telecom giant huawei taking another step in its legal fight against the u.s. government. arjun kharpal. >> reporter: the latest move links to the lawsuit it filed against the u.s. government earlier this year in which it sued government over the national defense authorization act which prohibits government agencies from buying huawei equipment. the next step it's taken now is filing for what's called a motion of summary judgment asking the court to rule in its favor as a matter of law there's a dispute over the law right now, the ndaa and u.s. constitution, and huawei feels it can win if it does win and the court

rules in favor, this could speed up the whole process and get a full blown trial thrown out and avoid the need for it. there's a scheduled hearing in september, and that will be the next step in this case, but of course huawei facing more pressure from the u.s., it's now being put on this u.s. blacklist called the entity list, which restricts american companies from selling components, hardware, software, to huawei. i had a chance to catch up exclusively with doctor song luping and ask whether the company is pursuing legal challenges to this blacklist. >> the addition of huawei to the entity list is a dangerous move because they have disregarded facts and evidence it is speculation and political reasons. based on speculation and political reasons without facts and evidence, they have imposed most severe sanctions on a company. right now we're considering various remedies including what you mentioned just now, legal

actions. >> reporter: so dr. song's comments there for the first time the company saying that it would pursue potentially legal action against the u.s. in regards to this blacklist. company really going on the front foot here. now, i am at the headquarters of huawei, i want to give you a quick mood in the camp here. i was walking through the corridors of one of these buildings and on the tv screen was a picture of a world war ii bomber that had been shot to pieces, and it was on display with the message heros are born through hardship and challenges, and that's the message huawei's trying to give to its employees and to the outside world that it's dealing with this pressure from the u.s. and fighting back. of course many questions remain about what kind of damage being on this u.s. blacklist could do to the company in the long-term. brian, back to you >> wait a minute, arjun, earlier in the show eunice yoon told us when china issued the government, not huawei said don't say we didn't warn you talking about this rare earths mineral threat, that wording had only been used twice before, and

both times there was a fight vietnam and india an actual battle, not a trade balttle now you're saying huawei is showing pictures of downed world war ii aircraft? >> huawei is very, very militaristic in its internal languages. if you look to the founder, he was a former member of the people's liberation army in china and a lot of his messages to the company, to the employees, and to the outside world often evoke militaristic imagery. it's a way of potentially showing his power, showing the company's power in the face of this adversity that image of that downed world war ii bomber was something that he showed me in his interview with me back in april to describe his daughter, saying that his daughter despite being under this pressure and arrested over in canada will still remain strong and return home a hero. >> okay. really interesting stuff there from a business perspective and maybe more arjun, thank you. when we come become, arms,

refi, and helocs, oh, my, why now could be the perfect time to make some overdue changes to your property portfolio. plus, a first pitch that will go down as arguably the worst first pitch in the history of worst pitches this might even trump cts50en, unfortunate outing on the mound. we're going to show it to you right after this

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all right, welcome back, and good morning here. happy wednesday. thanks for joining us on cnbc. it may be a beautiful day outside perhaps in parts of the country, but inside themarkets it is not looking so hot right now. dow futures are down another 153 points at the moment, and as we noted earlier, futures lately, they've really seemed to understate the way this market goes, either to the upside or to the todownside all the major indexes, they are down this month. treasuries, maybe the bond market you know, the bond guys will tell you they're smarter than the stock market the bond market certainly has been a big story yield on the ten-year note continues to go down buyers coming into the bond market when you buy bonds, yields come off, so we're seeing this come down this is sending a warning sign around the world is this the sign of a global slowdown, but there's always an upside to a downside, right? the rate drop here could be good news if you are looking to refinance or buy a home. here's the reason.

okay the ten-year bond yield, it's not perfectly analogous to the way mortgage rates go, but it's not far off. this white line is actually the average mortgage rate in the united states according to mortgage news daily. the ten-year bond yield is the orange line. yeah, there may be some divergence, a little bit here and there, but overall they track very closely, so if you're in the market to buy a home or the market to refinance and you're optimistic about the economy, there is an upside to the downside of lower rates. i don't know if there's an upside to this next video, but we're going to show it to you anyway check out the first pitch of last night's royals white sox game here we go i'm just going to watch. here we go ready and ooh. >> if you're on the radio, there's a woman on the mound throwing the first pitch out, ceremonial first pitch the pitch goes basically 90

degrees to the left and hits the photographerer who is recording the moment directly if not in the face, then right in his camera she may owe him a new camera that's -- if that is not the worst first pitch of all time, let's watch it again here we go, the wind up, the pitch. i think you can say that that was nikon the money? no all right, on deck, i liked it is there a doctor in the house the one sector that is in serious need of a checkup. dom chu is here now. plus, what do you think about the trade fight? is the market reacting too much or maybe not enough? the surprising answer to what all of you said when we come back that's the beauty of your smile. bring out the best in it with crest 3d white. crest removes 95% of surface stains... in just three days.

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care we are just on the verge of that american society of clinical oncology conference. take a look at health care overall as a sector. the best performer last year currently the worst performing sector this year if you take a look at the overall year-to-date performance of some of these big funds, health care has actually staged a pretty good comeback over the course of the past couple of the weeks. take a look at some of the analysts' upside targets, and they vary. for large cap, bio pharma, gilead, 25% potential upside if analysts' targets are right. anthem, 24% upside cvs health when it comes to retailing and pharmacy benefits, possibly 32% upside and generic drugs have been hammered hard. if analysts revise their targets maybe these come down, but brian, if everything comes to fruition, the way current things stand, some of the biggest upside standouts could be some of these stocks in the health care sector. >> at this point people are

looking for any kind of an upside standout as well. awesome stuff as always, thank you. a little green on the screen with dom, but overall the markets, a lot of red out there. futures are pointing to a triple digit decline at the open. dow futures are down about 160 points all the major indexes on pace for two or three-week losiing streaks. the dow on pace for its first maybe five-week lose ing streak in eight years joining us is liz young. okay, it has been a little grim out there in the last couple of weeks. >> it has. >> but got to remember, we are still higher on the year the federal reserve may be in play what's the biggest bull case for equities right now >> the biggest bull case, and you're absolutely right. we're still higher on the year >> it's easy to forget that. >> it is easy to forget. i would argue we're actually still higher than anybody thought we would be. if you asked people in the first couple of weeks of january what

they expected for returns for all of 2019, you'd probably hear high single digits we're still above even those levels >> but if this continues, we're not going to be there. we're going to be -- that's true. >> we'll keep working our way back down the staircase. >> what you want to make sure you don't do as an investor is only watch the market. if you're watching the market every single day, every single minute, you're going to start reacting and what i like to caution clients about is that a correction or even a bear market without a recession is buying opportunity, and a lot of times when you see a correction or bear market without a recession, that tends to be in that 10, 15, 20% range, maybe even 25%, a bear market with a recession is closer to 35 or 40%. some of these, although they feel like big drawdowns, in the grand scheme of things, little corrections are healthy. they're ways to flush out some of the excess. >> that's the thing. i don't want to make too much of it all big things start small you don't start big. i think that's the fear when you

look at a bond yield of 2.23%, you look at the increased sort of rhetoric between china and the united states. it's easy to be fearful right now, liz. >> it is easy, but again, what you want to look at is not just market movements, not just technicals, not just what's happened over the last 30 days, look at things coupled with economic numbers when we think about when do we actually change our rhetoric, when do we actually tell people to start getting off -- get risk off the table, if you see leading economic indicators turn negative for two consecutive months, maybe three consecutive months and we haven't deescalated this trade and the market is still correcting, then maybe it's time to start taking some risk off the table. >> i asked you what's the biggest bull case, what's the biggest bear case. >> that would really be it. >> but we have not seen the leading economic, not yet, but they're starting it tick down. >> right we've seen one month here and there that have had a little bit of contraction but we haven't

seen con sec secutive months. some of the things in that index are manufacturing, unemployment, credit conditions, s&p prices are in there, housing is in there, so a lot of those different indicators that you should be watching for the health of an economy, if we see all of that contract and we have not deescalated this trade piece, then it's time to start thinking about pulling some of that back. >> it looks like it's being escalated. liz young, awesome stuff see you soon. time for your morning rbi. today it's what else, all about china trading the stock market we want to know what you think about how this all played out. we asked a very simple question on the twitter the stock market is a, overly worried or b, not worried enough about tariffs and the trade fight, kind of a surprising result, and one of the closest polls we've ever had 54% of you said the market is not worried enough, which means 46% of you said the market is overly worried a bit surprising would have guessed it might have been a little higher given the market turmoil a number of you have said you're fine with the market pain if it solves the china tech issue

long-term. interesting stuff the,er big day issue dow futures down 160 thanks for watching. see you tomorrow, "squawk box" is next.

good morning, rate shock treasury yields continue their slide. so much for china selling treasuries right we'll talk about yield curve inversions and why they could be red flags for your money. huawei's striking back pushing for a swift conclusion in its relegal battle with the u.s. and a new front in the trade war with china the next battleground could be scarce minerals, that global technology companies depend on we're talking about rare earth metals

it's wednesday, may 29th, 2019, and "squawk box" begins right now ♪ i just want to celebrate another day of living ♪ >> live from new york where business never sleeps, this is "squawk box. >> good morning, everybody, welcome to "squawk box" here on cn cnbc we are live from the nasdaq market site in tom square. i'm becky quit, the u.s. futures are under pressure once again this morning take a look and you're going to see that the dow futures are nbtnb indicated down by 145 points dow closed down by 237 points yesterday. s&p is down another 16 points after it fell by 23 points yesterday, and then the nasdaq is off by 51 points this morning after the nasdaq was down by about 29 points yesterday. major averages have been down for three out of the last four sessions and you're looking at the lowest closes for the dow since may 13th the s&p yesterday closed at its lowest level since march 25th,

and then the nasda