missed at the end of the night >> once you have that phone on, it's harder to fall back asleep, don't you think? >> no, it is >> i leave my phone on a whole different level. >> mine is in a charging dock most of the time thanks for watching "power lunch. "closing bell" starts right now. stay with us could be a busy hour always a busy hour welcome to "closing bell." i'm sara eisen >> i'm scott wapner in for wilfred frost. less than an hour to go. we'll tell you everything you need to know before this market closes >> it's two key factors driving the action today the rate scare and the trade war. the drop in bond yields sparking fears of a potential recession and china's people daily state-run newspaper coming out with an editorial saying, don't say i didn't warn you. also the s&p 500 broke a key technical level earlier today. >> experts ready to tell you what to do with your investments right now, including bond guru scott minerd, plus disney's ceo bob iger joins us for a first on

cnbc interview to tell us what he's seeing in the global economy. >> joining us for the hour, josh brown, ceo of ritholt wealth management >> hi, sara. >> how defensive are you in this market >> not particularly. so we're off about 6% from the highs. and as i have been pointing out recently, i think the two big changes between what we're going through now versus what we saw in the fourth quarter, for example, or early 2018, which were substantial corrections the big difference now is, this one is not happening from an all-time high. so you had those major reversals in early '18 and then late '18. but they took place almost right after the s&p, the dow and nasdaq all hit new highs this one is not happening from that level and i think that's what is disconcerting. the second major difference is now you have a downward sloping 247b 200-day moving average on the s&p. it's not the market crossing

above and below a moving average that's particularly important. that's how moving averages are formed we're in a down trend that's been a long time since we've been able to say that. those two facts are what's lending the recent volatility a little bit more gravitas >> 2776 the s&p 200-day. you see in the right-hand corner, we're about 6 points below that let's drill down on what's driving today's action seema mody, courtney reagan, phil lebeau tracking the transports let's begin with the market. the bond moved that's worrying wall street. >> the long lead from an inversion to the actual recession, if, in fact, we're going to have one is one to three years. so it tells me i've got to look at later cycle events. it tells me i need to be worried

about earnings >> no one is willing to say the bond mark set wrong. >> we look at the yield curve n don't ignore it. this is a later cycle economy but we don't treat it as a crystal ball >> the market is screaming right now to them, through the bond market not through the stock market through the bond market. that this is what they want to see. they want to see rate cuts, and if they don't, then this inversion is going to stick around for longer. >> yeah, according to dr. j, them is the fed. seema mody has been watching this all day >> the widely watched u.s. yield curve has generated an active discussion here on the trading floor. does it spell out deeper economic troubles, or is this simply a flight to quality one economically sensitive sector that's traded down consistently throughout the day is energy. down today and down on the month as oil prices continue to slide down another percent it coincides with data that shows u.s. stockpiles are climbing at their quickest pace since 2016 pull up a list of the biggest dow losers it's the energy producers.

chevron and exxonmobil down 1% to 2%. are lower yields helping the dividend-paying sectors? well, not today. they are -- those three sectors are lower as well. all of these factors have created a waeaker technical picture. art cashin says 2632 is the next level to watch back to you. >> seema, thank you. retail stocks among the hardest hit today. courtney reagan is covering the movers for us. >> so shares are coppery holdings down more than 9% on weak current quarter guidance, despite reaffirming the full-year view capri says it's going to be an investment year. shares are down almost 27% after a rare revenue for canada goose. they are building up inventory to get in front of the winter demand abercrombie shedding a quarter of its value a strong reaction to

disappointing current quarter forecasts, even though the full-year guidance was reaffirmed, assuming only current tariff levels, though. an important note. back to you. >> courtney reagan, thanks i thought the consumer was good, josh >> the consumer is great but not every story within consumer is monolithically good. and so, look, i think the example of goose is interesting. here is an example of where investors have to remember, there's the fundamentals but then also the expectations and so everyone understands the fundamentals have been strong. 25% growth, but if the expectations are for something closer to 30, you'll get a wreck when you have a very, very high valuation name that's an unproven name. it's only been public probably a year maybe a year and a half at most. that's what's happening there the jcpenney stuff is more disconcerting. it's in the graveyard. it's been for years. but that stock now at 80-some odd cents. people know what the next headline is going to be and now

they know it's coming closer so what are the knock-on effects for the other big box department stores it won't be a great day. when it happens, if it happens this week or next week, it's not going to be a fun day. so you have some people positioning away from that and you get that action. but i want to point out, the best retailers are also getting hit today. look at nike down. no company specific reason look at lulu off 7%. no reason for that other than the category of names it's in. today they spun the roulette wheel and it came up retailer. have fun >> that would affect a nike and lulu which is just starting to grow >> is that a new concern, though >> it's not a new concern but the rhetoric from china on a daily basis feels like it's ratcheting up. >> and it could get worse. 100% right but that concern has been with us for a long time sometimes you get these industry group rotations in or out. today's out. and you can see it's on every

name, the good and the bad >> another sector in the crosshairs, transports lower today sinking further into correction territory phil lebeau with more in chicago. >> look at the transport index we're showing you over the laugh month. look at the last couple of weeks. this is an index down 7% in the last couple of weeks let's look at sections within that index let's start with the rails a lot of concern about whether its auto shipments or commodity shipments you're saeg weakness there weighing on norfolk southern or union pacific. when you look at the airline stocks, they continue to be under pressure within the last month to six weeks even though when you look at the data for the summertime, guys, you are seeing strong demand and relatively decent pricing. not great price, but decent pricing. certainly the ceos would like to see that improve over the next couple of months guys, back to you. >> phil, thank you joining us to talk about today's sell-off, david zurvos is here from jeffreys.

welcome. so there's a lot of noise now about how the fed needs to cut rates to satisfy the bond market is that going to happen? >> well, one, i do hope so, but i don't want to get too excited about this upcoming june summit. i was a little more excited about it earlier i think that was tempered last week in powell's speech. i think it's the combination of the fed and china that i think is driving the market. it's definitely trade rhetoric stepping up, but the market is a little nervous that the fed might screw this up, if china and the u.s. go into a deeper battle and that's where the real jitters are. i think we have a put. we have a structure whereby the fed could come in and stoch a lot of the ugliness. >> i don't want to be scientific about it, but i think in the mid-2600s we're probably talking about a fed rate cut and another one every 4%, 5% from there for

a little while maybe even a little more and i think the story of the market is it's just nervous this fed after what it did to everybody last december might miss the ball again and miss what the market is telling it. the market is telling it, it could get ugly with trade. the fed has the power to stop that ugliness. but if they choose to be wushy washy. and some of their comments, the transitory comment from powell didn't sit well. >> what do you tell clients who say, david, we saw the three-month ten-year yield curve get to negative 12 basis points now. the worst since 2007 why should we ignore that? why should we blow that off? is it because the curve is flat or is there more to the story that the stock market is not processing yet >> i think it's like bob doll was saying inversions happen, and they're usually around 18 months early to predicting recessions that's quite a long way. and markets tend to go up before

that so we still haven't seen two 10s invert or five bonds invert. the one-month libor is a bit unusual. but i wouldn't get too worked up until i really see a 2s, 10s inversion. i also like looking at 5s bonds. that tells me the fed is behind. the fed is not behind. the fed is being kind of tested with the bond market and we want to see what they're going to say we want them not necessarily to even ease but just tell us, hey, if things get ugly, we will ease >> we know they will, right? they're data dependent >> are they just going to sit on their hands? >> i agree i think they will. but what jay did last december messed with the market's head. you have a little bit of psychology you're playing here you want to get some dovish fed speak. i think dovish fed speak stomps this out even without a rate cut

and maybe that even sends the ten-year note yield back up because people are pricing in more mistakes. >> if the fed does do the cut the market seems to indicate they believe is likely by the end of this year, is that a tacit admission that the hike they did this past fourth quarter was a false move >> i think they'll never admit that i think most people looking back at the discussion about the balance sheet on auto pilot would say, that was a silly idea that was something you should never have communicated. the hike itself if it was couched in a balance sheet that was going to stop and a more newtal stance probably never would have led to what we saw in december further if you take it back to october when he talked about being a long way from neutral. if he would have walked that back, we probably never would have had to go through december. this was communication more than 25 basis points. >> in the fed's defense, the first quarter gdp was 3.2% we're at a multi-decade low in

unemployment everyone is saying the consumer is just fine a lot of retailers we talk to. this wouldn't be an environment to be dovish in talking about rate cuts. >> they've missed their pc inflation target by over 70 basis points a year for the last seven years. they have been -- they have a dual mandate unemployment and inflation 3.6% unemployment rate 50-year low. and 1.55% is the pc inflation rate what are they fighting they are fighting a battle that doesn't make any sense on inflation. and the real risk is that we go into the next recession with a lot of disinflationary expectations built in, and they can't lower real rates fast enough to fight it that's what this summit is about in june. i hope the guys around the table like charlie evans who is the host in chicago and rich clarida and john williams who talked about price level targeting and these inflation misses are going to step up and go hey, we have a problem here our models don't work.

this inflation storyis just a bogus story. and we need to be thinking about things like insurance cuts sooner rather than later that's the story the market needs to hear. they don't even need to get the cut and we'd be back up at 2900 again. >> david, good to talk to you. david zervos >> he's going to cut his hair when the fed cuts. wall street firms drumming up recession concerns. does the economic data back up those fears? we'll take a deep dive into the numbers. >> plus, guggenheim's scott minerd joins us. how long he thinks the market downturn could last. and a live look at the s&p 500 sectors on a wild day on wall street. another down day dow down 330 points. every sector in the market is lower. we'll be right back. let me ask you something.

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let's send it over to mike santoli. >> we're going to start with some readings that suggest whether the market is oversold or not oversold enough to bounce we've got a couple of snapshots there. also look at the valuation of the market after this pullback

we've had. where does that leave us in the way of stocks relative to earnings and then the fear frontier trying to get a picture of whether, in fact, you've had enough welling up of fear. check out the vix. and then some signal that perhaps this yield move, this move lower in yields perhaps is ready to run its course. so first, are we oversold? the market has been toying with its 200-day moving average this is going back 18 months in the s&p and the purple line is the 200-day average every moment in time. this is what happens when the market crosses down below its 200-day average. sometimes it barely breaches it and then you bounce like we did in spring last year. sometimes it toys with it and then falls apart sometimes it just kisses it, bounces nicely as it did in march, and right now, we're back at it again. so, obviously, there's no script for what happens here. what it does tell you is the market's up trend is in danger

of rolling over. here's another reason why it may not have a lot of meaning is that the average itself is basically flat it's not really showing you that there's been a strong trending move we've had a sideways market for 18 months. we're trying to hold it here one more quick look at one way of considering the market oversold or not. this is the percentage of s&p 1500 stocks as of this morning that were above their 20-day average. how many are above their average for the past four weeks or so? you got down to this 20% mark. that's kind of the threshold for getting oversold maybe getting primed for a reflex bounce all things equal you got below it a couple times late last year and also in january, february of last year so maybe getting there but you can't say it's a clear sign just yet. >> we appreciate it. you look at things rsi trying to determine oversold situations and the like. what is this >> michael is wrong about one thing. there's something that happens when the market crosses below its 200-day. michael santoli is pushed out in

front of a green screen to do that segment but he is -- >> actually, he produces his own screens. >> but he is right about the big picture that he's right about is there is no playbook for what the market does next which is a point i tried to make earlier. you'll have these crossovers in a flat market. that's how the moving average gets formed. it's not an actual barrier like our beautiful wall with mexico it's an imaginary barrier. and it's not terribly meaningful this is what i want you to take away, though, i think, from market action. somewhat of a silver lining. the first is the defensive stocks have been carrying this they start to get hit. splv, look at the xlu. it's a good sign those are the last stocks hanging out, not getting hit that's actually what you want to see if we'll get at least a short-term reversal, a little capitulation when they hit the stocks holding up best this is really key and it was mentioned by david zervos.

you could have a scenario where that inversion becomes a tactical buying opportunity. you had a flat yield curve, not trending in either direction that led to one of the biggest buying opportunities an 18-month run in the summer of '98 after the russian ruble stuff and we ran straight into the spring of 2000 >> into a recession. >> that's fine but you made a lot of money look at what the nasdaq did. it went up 2,000 points in the interim. so possibly you could look at an inversion in a flat yield curve, coupled with in of the oversold readings santoli is talking about. okay, everyone is negative all of a sudden. this is my chance to go the other way. especially in great names you might have missed on the way up. >> major corporate executives have been weighing in on the state of the economy and the consumer here on cnbc as the china trade war has heated up. >> i think by and large, the consumer is in fairly decent place. >> my biggest worry about the

trade war as i think would be the case with everybody you would talk to is, does it trigger other things does it really trigger a more material slowdown in the broader global economy i haven't seen it yet. looking at our business in the u.s. and around the world. business is quite good >> the tariffs are absolutely having an impact slowing down the adoption by making the robots more expensive. so what could have been a spectacular growth has been moderated. >> so is the u.s. really heading for recession? our steve liesman joining us with the latest data steve, what does it say about the economy? >> as you know, the bond market acting as it it's certain of a sharp weakening in the economy and the stock market acting as if the bond market is right. look at the yield curve in one corner shorter term treasuries yield more than longer ones. that's the yield curve inversion. a sign bond investors think the economy will weaken and the fed

will ahave to cut rates and stimulate the economy. that's not obvious looking at the kaurcurrent data or economic forecast 3.6% unemployment rate inflation, it's not 2% but it's not that far off at 1.6% q1 gdp that will take out some of the trade distortion from the previous quarter the question is whether the escalating trade war makes it worse so the fed has to cut rates because of that. >> which you have to believe the trade war is having an impact and is going to continue, steve, to have an impact until there's some kind of deal. >> i think that's the -- that is definitely the case. and the question is, does the fed move that from a possibility to a fact on the ground? >> don't we already know, though, that it's a factor on the ground >> i'm not sure anybody is quite

ready to say it's a done deal but they have to be getting close to that. and the question is, do they preemptively cut rates because of the potential impact or wait and see? it's a strange possibility that it could be -- raised prices at the beginning and lower them through weaker growth on the back end >> the other question i have is whether the tariffs impact the broader economy or just the manufacturing sector so we've seen, you know, some of the parts of the manufacturing sector which is not the biggest part of our economy. we're a seefshs services econom. >> that's an excellent question. and i think there's two ways to answer that. one is, you know, imaccompliceit in your question is the smart analysis at services are a much bigger part of the economy the trouble with that is that manufacturing is where all the variablity is in pricing in manufactured goods. so services, inflation tends to be constant at a higher rate and

manufacturing commodity pricing going like this underneath it. when we have times of disinflation or deflation, it's when the price of goods and manufactured goods are falling, not generally because of services >> all right steve, thank you >> pleasure. coming up -- nasdaq down 7% in the last month. but one wall street firm just initiated a number of big tech names with some buy ratings. plus, disney gearing up to launch the new star wars theme park will the drop off in chinese tourism impact attendance? we'll ask ceo bob iger it's a first on cnbc interview looking forward to that. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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>> dr. francis is the best veterinarian he specializes in behavioral disorders. >> we start fires. >> "the secret life of pets 2" rated pg welcome back to "closing bell." time to get word on the street let's check in on some companies getting wall street's attention today. starting with pivotal research initiating three names -- amazon, facebook and twitter all as a buy citing an upbeat outlook for the second quarter advertising environment. also initiated pinterest and snap with holds. goldman down grading general mills to sell. and da davidson initiating slack technologies as neutral citing its valuation as well as rapid growth and secular tailwind. slack select listing is expected to happen later this year. josh brown is super bullish on this one >> i am.

and i thought that was a good note when i first saw the headline, initiating something neutral that's not even trading yet. i said it's sour grapes because it's direct listing. they'll not get their 10% for the underwriting when i read the note, i understood what they were saying all the tail winds are there it's got a million reasons to love it, but it ain't going to be cheap i get that i respect that i don't think that's a reason to take a view of neutral versus buy versus sell at this early stage in the game. so i ignore it >> ignore it, and buy? >> read the report there's a lot of good information in there >> they talk about secular tailwinds. it's more than just a messaging service. they make a strong case despite the valuation. >> people are slacking each other left and right where i come from. >> and slacking gifs, not emojis >> no, what is relevant about that is this is a company that is so completely transformed the

behavior of interoffice personnel all over the world 600,000 organizations using it almost 100,000 paying. and slack is now a verb. it's that ubiquitous we google something. we slack something i think you've got to pay attention when a company builds ubiquity to that degree, even before it's a public company i'm very excited about it coming out. i get that it will be expensive. it should be it deserves a premium valuation. >> you are cutting it some slack. >> you are cutting it some slack. time for a cnbc newsupdate with sue herera. >> hello, everyone here's what's happening. democratic presidential candidate kamala harris telling reporters before her town hall meeting in south carolina that she believes robert mueller would have indicted president trump if there wasn't a justice department policy against charging sitting presidents. >> but i will say that i think what is clear is that -- i think it's a fair inference from what

we heard in that press conference that bob mueller was essentially referring impeachment to the united states congress >> the tsa will soon make it easier for travelers to carry some forms of marijuana on planes it includes medical marijuana which meets regulations defined under the 2018 farm bill up until now, all forms of marijuana have been prohibited for both checked and carry-on bags and two russian cosmonauts conducting a space walk outside the international space station. it was planned to last more than six hours. and they paid tribute to cosmonaut alexi lenovov who turns 85 years old tomorrow. you're up to date. that's the news update this hour back downtown to you >> sue, thank you very much. half hour to go before the close. here are key things driving the action the dow down a little under 300 points we've come back a little the rate scare as the ten-year yield plunges to its lowest level since december 2017. all sorts of concerns about the fed cutting rates and what it

means for growth also china's people daily coming out with an editorial saying, don't say i didn't warn you about the trade war with the u.s. and the s&p 500 did break below a key technical level getting a lot of buzz today, scott >> over to mike santoli for a look at his second dashboard valuation. mike >> we have had a little downward reset in valuation from the highs if you go back to last september. so, obviously, the s&p itself is down about 6% from its highs you had the forward earnings estimates have come down as well so it's not as if the market looks outright cheap at around 16, a little more than 16 times forward earnings, you are right at the five-year average. some of your better buying opportunities after a gut check in the market came looking at late 2015, 2016. below the 16 mark. of course, december around 14. that is when the market looked cheap. the one thing also that maybe plays into this is bond yields have come a lot lower if you believe that stocks should be

valued relative to risk-free bonds on some -- in some form. then a 16 times multiple isn't so bad the other question is you have to apply more of a discount if we think we're getting toward the end of a cycle i don't think valuation is the reason you buy or sell the market here but you've had some moderation it's hard to say the market looks very expensive at these levels >> thank you see you in a bit under half an hour to go before the bell. dow is coming back a little bit down 284 >> trying to >> at the lows of the session, we were down a little more than 400 points s&p still down a percent communication services hardest hit. china's rare earth warning sparking the market. what impact would a ban have on u.s. companies we'll discuss that with scott mcnealy. >> and the ceo of major asian lender standard charters weighs in on the trade war impact on business in china.

st say that ten times

as one of the largest lenders to the asian market, standard charter attributes nearly half of its first quarter operating income to the greater china and north asia region. joining us to talk about how trade has impacted his business is standard charter group ceo bill winters good to see you. >> good to see you >> big impact? you probably have as good a read as anybody >> this is developing. the impact on our business so far has been muted there's not a lot has really changed. in the long run or medium term we can see all sorts of things changing some from our own perspective. some for the better, some for the worse. we're waiting to see how the trade war unfolds. china is central to the economic activity across the asia and middle east and african region, the markets where we operate we'll see how it unfolds >> is the economy in china weak? is it as weak as some say? what we know about the stimulus that's been happening? what's the state of the chinese economy? >> the chinese economy is fine

it's growing 6.5, 6.6% which, obviously, by any standard is on such a large economy is a lot of growth clearly there's stimulus both monetary and fiscal stimulus that's been a driver of the difference how much does that contribute? it may be a percent or maybe a percent and a half it's still healthy growth. but the pressures are downward and we know why. trade is under pressure. companies are investing less in china. chinese companies are moving supply chains out. and that has an impact >> can china do enough stimulus to off set the negative effects of the tariffs or trade issues happening? and can they keep it up? what's the duration of something like that? is anyone worried about that >> they were all very worried. china has a lot of ammunition left to go on the stimulus side on the monetary and fiscal side. you notice the currency has been relatively neutral it's weakened from a strong position earlier this year you still have currency inflows

coming into the country. foreign exchanges aren't being drawn down interest levels are perfectly reasonable still a lot of fiscal room and credit room. it can't go on forever >> with our yields collapsing, that means our treasuries are rising in value which is a back-door favor to the chinese pile of currency reserves. >> there's some of that. the favor goes the other way which is a very large budget deficit is being funded by china. >> what about the chinese credit market there's been moves in huawei bonds. do you see any cracks? >> china aggressively dealt with their shadow banking system last year and pretty much extinguished that nontransparent off balance sheet stuff that, obviously, plagued the u.s. and other markets ten years earlier. china was in much better position going into this latest round of credit stimulus there were some defaults it's very small scale in the overall scheme of things there's a lot of companies under pressure the banking system is feeling a

little pressure. the capital markets are feeling a bit. but it's not any kind of a crisis as yet. >> i want to switch topics, if i may in the time we have left your bank agreed to pay a billion dollars for violating the sanctions against iran i don't think you've commented publicly about that. what do you have to say about how your bank acted? >> yeah, well, these are violations that went back to 2010, '11, '12 all of them happened before 2012 when i joined the bank in 2015, my clear mission was to resolve that issue and we have. so we put astounding amounts of investment into having much better financial crime controls in the bank. that was recognized by the new york state regulators, federal regulators and uk regulators we had to settle up for the previous violations. we did we moved forward with a -- >> do you have any business there? >> in iran >> no. >> fully out >> fully out we've been fully out for close to ten years but what happened was some of our very junior

colleagues, two very junior colleagues allowed iranian companies operating through dubai, through the uae, to access the u.s. market through standard charter bank. we accept complete responsibility for that. we've remediated we're in great shape now it's one of our key advantages is we're really good as a front line of the fight against international crime. >> the regulator in london said they found serious and sustained shortcomings in your anti-money laundering controls. >> that's right. pre-2012 >> all on the level now? >> absolutely. and we're operating under our own power and making quite a big impact in terms of the fight against financial crime recognized by u.s. law enforcement and uk law enforcement. >> are you thinking about brexit >> yeah, brexit is a nightmare it's not a huge deal for standard charter bank. we have a subsidiary in frankfurt up and running and operating. the banking system is ready for any eventuality. the fact it's not resolved three years after the vote is dragging on the economy it's a shame >> what about all the market

volatility the unversion of the bond market and whether it suggest s impending doom or possible recession. >> you have a late stage recovery with totally independent of trade wars and other geopolitical issues. you have a little bit of pressure but it's being offset by some really good stuff in terms of consumer confidence and things of that nature but it's feeling a little tired. this long-term recovery. and then you have the volatility around the trade war which goes the full duration, and the full magnitude that we're speculating, it would be a really big impact on the global economy. the market knows that and is reacting as such >> bill winters, appreciate it ten-year treasury touching its lowest level since december of 2015. we'll discuss that with guggenhe guggenheim's scott minerd. >> off the lows. >> i've always wanted to say that >> we are off the lows >> the low of the session was down 409

we're down 200 opposite what we saw yesterday later, breaking down the tech trade and worries with former ceo of sun microsystems he'll tell us how much silicon valley relies on china for those rare earth minerals and for business overall that's coming up later on "closing bell.

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naent 15 minutes until the close. moving on a report it's received takeover interest and is exploring takeover options, including a potential sale the company does not comment on speculation. now trading up almost 12%. capri holdings, formerly

known as michael kors. lower revenue from the wholesale business that stock down 10%. it's been an underperformer and it's really the kors brand versus versace and jimmy choo. >> these names are so tough because you not only have to get the fundamentals right as you would with any sector but then figure out what tastes might be three months from now, six months from now. and we know fashion is so fickle so the people that trade these names are not generalists. they vary specifically, understand where in the cycle each one of these names is in terms of creativity. >> you have to get inventories and promotions right this company is leaning more on promotions which doesn't seem the right way to bring back sales. >> if you tell me what the price of oil is doing within a reasonable level of certainty, i can pretty much tell you what's going to be happening with the top 20 exploration and

production names >> if you tell me customs -- consumers have been flooding the malls again, i don't know that i can do that with the same level of certainty the top 20 retailers. definitely some idiosyncrasies kors has been having a tough time for years doesn't matter what they change the name to. they had a very big moment five years ago and they have been trying to rekindle it. >> no margin for error for retailers. >> stocks are making a comeback. let's send it to seema mody watching every move here >> two major factors in play here one is given the outside focus on the bond market, look at the movement in the ten-year yield 2.2% earlier this morning. and right now we've eased off, now at 2.26% the other thing is technicals. the s&p 500 earlier today breaking below its 200-day moving average of 2776 it's now attempting to close above that level take a look at the s&p sectors materials back in the green attempting to close in positive

territory. even some of the financials, the kbe index also attempting to close in the green we're seeing a bit of green here as we approach the close the dow still down 228 points. back to you. >> seema, thank you. pelosi still knowledge thins wants to do infrastructure >> he definitely would rather talk about doing infrastructure than anything else and he should. it might be his biggest area of expertise in the actual real world outside of his imagination. he has built things. so maybe the conversation will pivot. i don't buy that as a reason for fundamentally driven investors to afl sudden be changing their tone on stocks i do think there are a lot of algorithms written with the word infrastructure in it and when that word hits the tape, you see shorts closed out and maybe new long positions in the futures. i don't think we should make any more of it than that >> good. got it >> a few minutes before the close. up next, your last chance trade.

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last-chance trade for josh brown as we head into the close. >> i want to mention reits people ask me what's an area actually working vanguard's big reit etf up about 16% year to date versus ov the last year versus s&p only up about 4. i would not abandon reits just because they are down on a day like today where they start hitting all the defensive stuff. this is a sector that should continue to work the perfect characteristic of current yields plus inflation protection the companies in this index can raise their rents on tenants as inflation, if it ever really kicks in so i really like this as an investment, and i would stick with it. today is a tough day but i'm staying long >> reits after the bell, a first on cnbc interview with disney's ceo bob iger julia boorstin joins us to look ahead. >> sara, i am here inside star

wars galaxy edge this is the largest themed land in any of disney's parks and i'm about to sit down with disney's ceo ahead of the opening ceremony for this space tonight to talk about the company's $1 billion investment in this 14-acre land to understand what this will mean for disney's movie studio, as well as its upcoming streaming service with a "star wars" themed live action series that's going to be feature inside disney plus when it launches in november that first on cnbc interview when we talk about all this and more will be coming up in "closing bell. >> julia, looking forward to it. any time iger is on the record with us. up next, we're all over the market sell-off. not as bad as it was still the market looks to close cidly dedelower. we'll wrap up the action with our "closing bell" a-team. small things. big things. too hard to do alone things. day after day, you need to get it all done. and here to listen and help you through it all is bank of america.

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which isn't complicated. their app makes trading quick and simple so you can strike when the time is right. don't get mad, get e*trade and start trading today. four minutes to go before the close. heading south a bit again. dow down 221 let's break down the market sell-off michael santoli has his market dashboard. bertha coombs and seema mody let's trade this close with the managing director at webbush securities how does the sell-off feel to you at this point? is it overdone or not? >> so a few things that we're looking at going into the close really is, number one,

technicals we've seen the s&p 500 right around its 200-day moving average and testing. the stocks semiconductor index thanks to cyprus and market breadth has been stalling. not a lot of safe havens out there. we think this 5% retracement we've seen this month may get worse in the short term before it gets much better. >> we're actually above the 200-day on the s&p that has to be comforting to some who watch the technicals heading into the close let's send it over to mike santoli watching things as well for a look at volatility >> look at the vix over the last year or so it's going to show you peaks and valleys. and what's been relevant, been highlighting this. the vix has been reluctant to go to new highs, even though the s&p has gone to new lows here you see middle of this month we got above 20 for a while. it's been slow to rebuild. and matter of fact, below 18 right now, it suggests a lot of

hedging. already got done in the prior weeks since the sell-off started and maybe the option traders not willing to pay up for too much more protection. they seem they're hedged out and perhaps the volatility traders are suggesting, look, maybe we've seen the worst of this move. they're not always perfectly predictive but it's interesting the vix is not really quick to panic, at least at this moment maybe we have to break further levels for that to happen. we'll have to see how it's going to unfold. bertha >> i want to start with the outliers amran is one of the biggest movers priority review for the cholesterol drug also strength all day from chipmakers that have exposure to china like corvo and intel has been particularly strong we've seen the semiconductor index which has really been inching towards bear market today struggling to stay above the even mark and it looks like we'll close higher snatching a four-day losing streak but bioteches are the other thing we should be watching

here they are down substantially. near bear market as well and they are the technicals look not so good as both of their moving averages are both trending lower scott talked about that as something to worry about let's head over to seema >> hi, bertha. stocks started the day lower and then losses accelerated just around the european close, 11:30 a.m. eastern that's when you saw technicals become a bigger part of their trading discussion with the s&p 500 breaking below its 200-day moving average a key technical level though we're on pace to close above that currently trading at 2784 if you look at sectors, all 11 s&p sectors on pace to close lower. led by energy, technology, some of these economically sensitive sectors really paying attention to what's happening in the bond market, although we are off the lows when it pertains to the ten-year yield what did work today? the u.s. dollar approaching a two-year high. back above 98.

gold is getting some love at 1280 the s&p 500 down by 17 points. dow jones lower by 200 now time for the second hour of the "closing bell. [ closing bell ] welcome to "closing bell." i'm sara eisen >> i'm scott wapner in today for wilfred frost along with mike santoli. take a look at how we closed things up. dow closed down by about 225 points 25,123 big deal for the s&p closing above its moving average. just at the end of the day made the run into the close technicians will take that as a decent sign about how this day

ended even though there was some damage done. the nasdaq down 0.75%. the russell 2000 has been in correction territory it's down about 1% it was the weakest of the averages we're showing you right now. >> in just a few minutes, scott minerd joins us to analyze the market downturn. plus results from pbh and palo alto on deck we'll bring you the numbers as soon as we get them. joining us is josh brown still with us is courtney -- josh brown is still with us and also courtney gibson from loop capital. so, mike, you know, we did see all the sectors end lower. we do not see stocks end lower at the lows. we were down more than 400 points on the dow at one point what turned it around? >> the low in the ten-year treasury yield was just before noon also the low in the s&p. the yields closed at their highs for the day. but they were at the highs yesterday closed on the lows

a latest day sell-off. a little bounce today. i think you're just slightly more stretched to the down side in stocks. a little pick-up throughout the day. we started out 90% of all volume down we picked up throughout the day. so i don't know. it seems like the slowing, the selling maybe is getting slightly fatigued. i don't think the 200-day average is decisive but it's good he didn't blast below it. >> if you blast below it, you start talking at lower levels from here. if nothing else, that in and of itself can be comforting >> yeah, but in a flat market, it can be very noisy and if it were as simple as i buy when we're above, sell when we're below, you'd end up -- everyone would be rich that does not work and if you really try to trade that intraday, you could whipsaw yourself so much in one month that you negate all of the benefit from missing the next 20% drawdown it's a good sign post to be aware of but also important to say, bigger picture, what is the trend? as i pointed out, it's now flat

and it looks like if you look at monthly -- ten-month moving earning. you are probably -- you're close to your next tip being decisively downward sloping. and i do think that that changes the narrative and your bigger problem is not the s&p again, we're only 6% off the high here's your real problem semis had a decent day today slaughtered since the beginning of april home builders look terrible. small taps look ter inl. transports look worse than all of those if you are saying, i derive meaning from individual sectors and i project that into my view of the economy, well, the things you would say are economically sensitive from home landlordebu semis -- >> you've also been pointing to apple as an important stock to keep an eye on that stock is at 177 bucks >> you did not get a new high this spring as you did for the overall s&p. and you also didn't get that in

amazon either. google does not look great facebook is the best looking of the faangs. the biggest stocks the ones investors look to and it gives them confidence to go out and buy other stocks, i guess is the best way to think about those. they're not helping you right now and they haven't been for a long time. >> courtney, just to put it all in perspective coming off five down weeks in the market and two days into today's -- into this trading week down 1.5% how are you navigating through all of this? >> well, you know, it's interesting. my personal portfolio, i'm just kind of sitting there and i'm adding to positions that i already have and that i have conviction in. so like the facebooks, as josh and scott both know. i've been a holder of that for a long time. i've been adding to names that i can hold for the long term and at loop capital we cover institutional investors. many of which are long and hold but then some hedge fund clients as well, and it's interesting the dichotomy and how they're

responding we're seeing a tremendous amount of kind of selling on the close today from our larger index clients for some reason. leaning into what's been happening all day today. but then we're also seeing our fundamental managers not really doing much if they are, they're adding around the edges in positions they have a strong fundamental belief in right now. >> all right hang on, everybody we want to get to guggenheim's global cio scott minerd who joins us now on the phone. we turn to you on the bond market usually now we're seeing extreme moves in the short end of the curve. the ten-yee. the invrsion what is it signaling >> the bond market is sendingous a strong signal that there's something wrong. and i think the risk is that this stage is not so much in the treasury market, but it's in risk assets. and in particular, the place where i'm concerned are stocks and high yield bonds and

corporate credit in general because i think that we are in a pretty vulnerable position >> a vulnerable position what do you mean what your anticipating >> well, you know, when i look at the stock market and i just keep a close -- i see an immediate move to somewhere around 2730 on the s&p and probably 2635. but our indicators are pointing to a much more severe downturn for the -- our work shows that it probably will make a new low, undercutting the lows -- >> hey, scott. we're going to work on your line it's a little shaky. but i think he's sounding bear niche sayi ish. >> i think his phone line just inverted shout to scott so one thing i want to point out is that we had a somewhat

similar crash in bond yields in the u.s. in the summer of 2016 and it was equally inexplicable because the economic data wasn't bad. it was kind of tough to understand what is the bond market seeing the stock market isn't not that the stock market had a great first half of '16 but the bond market looked like it does now. and then on a dime, the brexit vote happened in late july the entire thing reversed. bonds had sold off yields started to rise the whole narrative changed within a month or two and then the election reinforced it and we flew even higher. small caps went crazy. transportation stocks. i'm not suggesting something like that is in the offing we have seen the bond market telegraph a recession that didn't come before and it wasn't that long ago. about three years ago. >> mike minerd who we're hoping to get back, talks about the credit market. it's not like the sirens are

blaring in the credit market that you have a problem. whether it's high yield or anywhere you look, i know there are concerns about leverage loans and high levels of debt, but the sirens are are not going off right now. >> the credit markets have softened up if you look at spreads and high yield or investment but not much not to the point you'd say they are leading the stock market lower. it's the reverse so, no, i don't think that's true really what's going on in credit is that they have not matched the treasury market going down tick for tick in yields. and that's why they've widened out. so i agree credit is not the reason to be outright more bearish today than you were a week ago. i think the market is -- the stock market is at a point where you had the ingredients where it should try to bounce here relatively soon based on what has happened to sentiment positioning, defensiveness and relative yield plays with dividends and earnings it should. let's see if it does because the problem with the forth quarter of last year was that all of these opportunities where it

should have bounced, it didn't >> scott minerd'ba er dlminerd n the phone. you were pointing out some key signals. so just tell us a little bit about that call. >> sure. we have a proprietary model, sara, that has given us a sell signal back in august of 2018. and as we went into the end of december, it told us we were likely to get a rebound. now that same model is signaling that we're going to make new lows before the end of the summer that is, we're going to be somewhere below the lows in december and one of the things i'm concerned about near term, that is over the next week or so, is complacency is so high when you look at the vix, you have hardly seen any increase in the volatility there when you look at credit spreads, even though they've widened

modestly, there's no sign at all of concern yet at the same time, the bond market or the u.s. treasury market is trading as if we're going into a recession so something is wrong. and either the treasury market is ahead of itself or the stock market and the credit markets are not pricing correctly the risk, and i think right now things are stretched and the stock market and credit markets will have to catch up to treasuries >> unless, scott, this is scott wapner again, unless the traditional story doesn't read the same because of everything going on around the world. yields are low everywhere. certain markets around the world don't look like they're going into a recession and maybe it's just different because of that environment that we have been living in for the last ten years and what all has changed central banks are low

everywhere or easy everywhere >> right i think you're absolutely right. when you look at the term structure, for instance, today it was announced the term structure reached a new low that it hasn't seen since 1961. so, you know, certainly things are different, but i think also the fact we have negative yields in germany now with levels that we haven't seen before we still have negative yields in japan. it's telling us the european economy has slowed and that there are concerns about the fragility of the system and now that we have, you know, virtually a full-scale trade war going with china and the chinese have indicated that they are digging in. xi jinping's comments of last week that this is the new long march, the headlines overnight where china has basically put us

on notice that you have been warned is telling me that the chinese are not backing away, and that the worst is yet to come in the trade war. and i don't think the market is discounting all this uncertainty in the credit markets. >> quickly, scott, last time you were on here end of april, you were talking about potential fed rate hike as the next move are you changing your mind on that do you think we'll see a cut as soon as this year potentially? >> i think, sara, it's foolish to not modify your view with new information. but on the other hand, a lot of the things i was expecting to happen in the economy are playing out the way that i thought. that is that with the tariff increase, the first order impact is an increase in prices that's going to make it very, very hard for the federal reserve to reduce interest rates. and in the wake of the powell pivot, they are very sensitive

that they are reacting to the market rather than reacting to fundamentals so if inflationary pressure continues to mount as a result of tariffs, you know, we and the economy remains in good shape, i think the fed could be still in the mode of raising rates this year but it's going to be a lot of -- i originally thought it would happen in december we're going to have a lot of information between here and there to digest. so i think for the moment, i would just go with the fact we're going to be on hold most of the year. >> scott minerd, thank you for phoning in >> thank you, sara and scott >> a big move in the bond market scott mine ard from guggenheim >> he sees new lows by late in the summer >> on the stock market >> in the stock market >> it will be very funny if

everyone got all bared up and we went back to flat on year which would be an 11% or 12 percentage point loss for the s&p and then a trade deal and a rate cut right after. it would be a great setup to once again prove that mr. market is here to frustrate us all. >> josh brown, thank you kourtney gibson as well. disney shares have soared 20% this year. investors are hoping the force will remain with the media giant after opening star wars land in california this week up next, ceo bob iger tells us what the opening is going to mean to the company's bottom owces r any conrnfoa sldown in chinese tourism. what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives.

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[ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters. puppalright, alright. ion. what's going on? my owner got a new puppy. my name is tiny. nobody cares. it's been a big week for disney following the release of its highly anticipated live action aladdin and the new star wars galaxy edge opening in disneyland julia boorstin joins us with disney ceo bob iger. >> sara, thank you and bob iger, thank you for joining us here today before your big opening ceremony for star wars galaxy's edge tonight. this is a huge investment for disney a billion dollars in this

14-acre land another similar one opening in orlando later this year. what does this mean for your parks division >> well, star wars is an immensely popular property and giving people who visit our parks, who have thought about visiting our parks a chance to immerse themselves in star wars on a grand scale in a much deeper way is a big deal, and it will be extremely positive for the division, for the company. and for "star wars," too it will lift the entire franchise. >> what does this mean for your star wars investment for disney plus streaming service one key part of disney plus is you have this live action star wars series. how are you going to use all of this and people's exposure to star wars here to drive people to disney plus will you be giving away free trial services to everyone who comes to the parks >> we don't think of star wars as any one thing it's star wars it's star wars at our parks, star wars in books and toys and children's clothing and star wars in movies and now star wars

in television. and so there are elements of all of those things in many ways that are here. people have not seen the mand delorean yet but when they do they'll discover there are things in this park that are from the man delorean. nor have they seen the next "star wars" movie but that's here, too. everything is carefully woven by us >> but do you see this as a marketing vehicle for the streaming service? >> not as, i think, specifically or as blatantly. of course, yes interest in "star wars" will be heightened because of this and that will heighten interest in star wars and variety of other forms, including on disney plus. and vice versa, yeah >> you mentioned the movie studio you have another big star wars movie coming out later this year your last "star wars" film "solo" failed to live up to

expectations that was because of star wars fatigue. how do you keep this from contributing to star wars fatigue? >> i don't know what the expectations remember for that film when we bought lucas film in 2012, we talked about making three what we called saga films. star wars 7, 8 and 9 starting with j.j. abrams first film and finishing with his next film which comes out this december. and then we'd try some stand-alone films. the six films that george made were all part of that same legacy story skywalker story. and these were new and we did one rogue one and then tried solo which was more kind of a character piece. and i would have liked it to have done better, sure but i think it was a well-made film and we decided after we do the ninth one, which comes out the end of the year we'lltake a breather as we reset and new ones coming out starting in 2022 in the intermediate a lot of

television activity. >> so with so much tv activity, with the films coming up and now all of this, do you ever worry about having too much riding on "star wars"? this is the most exposure star wars will ever have. >> i don't if you look at the profile of the company and collection of assets, we're still basking in the glory of avengers: endgame, a marvel property. this summer just in a few weeks "toy story" coming out and "lion king." there's so much going on in the company that people are interested in. yes, we have a lot riding on "star wars" but we have a diversity of characters and franchises and stories i donts think we're reliant too heavily on any one of them we just liked them all >> back to the parks business. you raised prices at california parks, raised priced recaller at parks in orlando have you seen any resistance to the higher pricing and what kind of bookings we'll see in the key summer season?

>> all of our pricing has gotten much more strategic and is designed to spread demand. we benefit greatly because the popularity of not only the parks experience but all the stories and franchises we have and that demand is very, very high for these properties. in peak times, it can get overly crowded and we have to turn a lot of people away we're trying to mac the off-peak times more affordable and raise the peak times in part to manage basically -- manage traffic flow and try to protect the guest experience so there are some things that are more expensive perhaps than the way they were before, but still a lot of accessibility there. a lot of different ways to see our parks today that weren't available before not that long ago was a one size fits all, one price fits all no matter what day of the week or time of the year that wasn't optimal for us nor for our guests >> when you look at the booking for the parks here, the reaction to this, advance bookings for both here in anaheim and in

orlando, and also how much money people are spending here, do you have a sense of how the american consumer is doing and whether there are any signs of recession based on that spending >> if you just look at the economy and the american consumer through the lens of our parks division you'd say everything is just great and that's a division that's doing extremely well continuing to deliver not only a better guest experience but growth to the bottom line. growth in terms of revenue there's a lot of demand for these products because they are -- they have just gotten so good and they are so well managed and i'm extremely proud of the team that runs them >> what about china tourism. we heard from hilton on cnbc earlier today saying they have seen a pullback in chinese tourists you must get a lot of chinese tourists at your parks your shanghai park how is the china trade war impacting things >> our visitation to our parks from china is relatively modest. other markets in the world the uk and canada and mexico other parts of europe much bigger than china. we've seen some nice growth.

i've read the articles about slowdown in chinese visitation to the united states i don't think we've seen anything that would be perceptible yet at our parks i was just in shanghai last week and i can tell you that the popularity of that park is still extremely high people are loving that experience as well and i did not detect any fallout whatsoever, at least there, in what's going on between our countries from a trade perspective. >> do those trade issues impact your approach to shanghai? will you build something like this in shanghai or does it make you more wary of putting that investment in there. >> we opened "toy story" land and i got to see all of that and it was quite busy. and we're building zootopia land, a seven-acre land. it was an incredibly popular film there and we have plans to continue to expand shanghai disneyland, and i believe we'll have ample opportunity to do that >> we look forward to going and exploring everything here. and we appreciate you giving us an inside look before you open

the doors tonight. bob iger, thank you for joining us sara, back to you. >> julia, thank you very much for bringing us that interview julia boorstin and disney's ceo bob iger disney is up 20% this year in that interview, the parks business is doing quite well their movie business is doing well i mentioned "aladdin" and, you know, investors are continuing to look forward to disney plus is that really what's moving the stock? >> it's what changed sentiment on the stock investors have been able to take strength in the parks for granted which wasn't always the case 2009, '10, people thought they were too sensitive to the economy. disney plus, these franchises that disney controls could be pumped through that venue and with some success. so i think it's interesting. also, iger never wants to betray an idea that he's doubting the momentum or reliability of any of these franchise sets so they'll just keep going hard

marvel, star wars, all of them >> it's what you've just talked about. it's about plus, it's about parks, it's about films, it's not about espn or what's happening there. they bought into it. >> it enabled them to make that shift. espn is a much smaller piece of the hole and it's about exclusive content and how to monetize is down the road >> whether it's still an issue or not, the street doesn't seem to be focused on it. ten-year treasury yield hitting the lowest level in two years. we'll break down the chart to see whether history says we could see yields bounce back

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we've got an earnings alert. >> pvh, an apparel maker, posting mixed results today. when it comes to earnings. pvh reporting $2.46ad justed versus the $2.45 it had been estimated. looking now to revenues, a slight miss here posting $2.36 billion versus $2.37 billion estimated. also looking a little closer at some of those brands tommy hilfiger and calvin klein missing sales estimates looking even a little deeper, a 4% drop in north american comps for

tommy hilfiger also we can see about 8.3% also pulling the stock down, weak q2 guidance the company reporting $1.85 to $1.90 versus the $2.42 that the street had been expecting. and the ceo talking about a particular softness across the u.s. and china retail landscape. that could be one reason we've been seeing the stock down and in the red pretty much all day today. back to you. >> calls the global retail environment, quote, challenging. and don't miss jim cramer's exclusive interview with pvh's ceo manny chirico on "mad money. >> the theme continues no margin for error, retail. an earnings alert on palo alto networks. >> cybersecurity company beating on the top and bottom lines but disappointing with guidance hitting the stocks in the after hours down more than 4%. adjusted eps at $1.31. that's 6 cents better than expected

revenue for the quarter also higher at $727 million better than the $704 million the straight anticipated q4 revenue guidance mostly above estimates but earnings guidance for q4 is light. and part of that includes the impact of tariffs which the company says will account for about 2% -- two cents per share. shares are down. the company well positioned as enterprise security positions set to grow this position. investors are really interested in how its cloud products are doing. we'll be listening for that. the company announcing it will acquire two security companies, twist lock for $410 million and pure sack for an undisclosed amount >> let's get back to mike santoli. appropriately it's yields. you'll call the bottom >> i'm going to give you some tools where we might be able to handicap the bottom. that's the big question. when will the bond market relax.

allow those yields to lift which is going to be a good indicator of when the stock market might be able to relax this is from frank capilari of instanet it's a chart back to 2007 of the ten-year treasury yield. these lines are previous instances when you've had as much of a rapid decline in the yields as we've seen recently. a downward rate of change over seven months of 30%. that's basically the bnchmark here you see right here i'm going to circle these areas where it intersects with the yield itself didn't necessarily tell you it was the low in yields but you definitely had a bounce in yields shortly thereafter. so you had one here, here. this one did not really help you. this is back in heavy q/e days here you got a bounce but it wasn't always the low it does suggest that this move in yields is getting a little far along. we should expect them to lift before too long just because of how one way they've been for a long time. but that doesn't necessarily

mean the bond market is ready to reverse in a major way, guys >> michael, thank you. time for a cnbc news update with sue herera. >> hello, everyone house judiciary chairman jerrold nadler says all options are on the table claiming robert mueller's statement this morning is confirmation that president trump has lied regarding the special counsel's investigation. >> as mueller again highlighted this morning, it falls to congress to respond to the crimes, lies and other wrongdoing of president trump. we will do so. make no mistake. no one, not even the president of the united states, is above the law. a national strike brought argentina's economy to a standstill some of the most powerful unions rallied against the president's economic policies. flights were canceled, schools shut down, banks closed and

thousands of businesses shuttered. and tiger woods partnering with peyton manning in the pro-am round at the memorial tournament for the second straight year. the memorial will be tiger's first tournament after missing the cut at the pga championship two weeks ago. best of luck to him this time around that's the news update this hour back downtown to you >> sue, thanks coming up, we'll discuss the potential trade war fallout for technology we're joined by scott mcnealy. plus your closing bell sector spotlight the top sectors we're watching after a day on wall street

time for our sector spotlight. meg terrell with a look at health care. rahel solomon standing by and seema mody with a look at financials meg, we'll start with you. >> health care stocks did a little worse than the broader market today health care's biggest company, johnson & johnson. that stock lost more than 4% largely on concerns about an opioid trial that started yesterday in oklahoma. that case initially also included teva and privately held purdue pharma. both of those companies settled

leaving j&j as the sole defend in what's expected to be a very public battle. also down today, allergan which has some exposure in coming opioid cases they suggest the concern is overblown. and on the flip side, one stock that closed higher was amarin on positive news from the fda >> meg, thank you. let's turn to industrials. rahel solomon has been watching that for us. >> one of the outperforming groups but still finished in the red, industrials are trading less than 1% from correction territory. deere one of the best performers in the s&p today despite lingering concerns that the global agricultural market is oversupplied and u.p.s. considered a realtime indicator of trade flows and the health of the global economy also up on the day as is fedex on the flip side, transports dragged the sector lower kansas city southern, american airlines and southwest among the biggest weak spots guys >> rahel, thank you. seema mody has more on that.

>> with today's losses, financials have fallen almost 6% just this month. vastly underperforming the s&p 500. analysts say the main driver is lower treasury yields. it's the gap between what the banks borrow at and what they pay depositors digging deeper you'll see that large cap banks have fared better than regional banks the big names have scale and, therefore, are better positioned to endure any slowdown in the broader economy. now two factors that could potentially help the banks next quarter, the rise in market volatility boosting trading revenue. and the slew of ipos should be a positive for capital markets although we won't know that full story until next earnings season >> rahel, thank you. trade's big tech impact. scott mcnealy is with us next with a look at how the u.s./china tariff battle is weighing on that industry. >> and we're breaking out the protection playbook. best ways to trade the market volatility straight ahd.ea the 's

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based on speculation and political reasons without facts and evidence, they have imposed most severe sanctions on a company. right now, we are considering various remedies, including what you mentioned just now, legal actions. >> huawei also warning that a ban could hit about 1200 u.s. suppliers with semiconductors having the biggest sales exposure to china. joining us is former sun microsystems ceo scott mcnealy good to talk to you today. >> great to be here, thanks. >> how concerned broadly do you think the tech industry is i'm sure you talked to many people who are in it >> yeah, we've been on this trade war for a long time. it just didn't matter when china was an ldc, developing economy now they're a big gorilla. we have a heavyweight battle going on between the planned economy, state sponsored chinese

businesses and the free market of the u.s the war has been going on for a long time. there's been blocking companies from china you don't find twitter and facebook there there's certainly been a lot more tariffs going into china than coming into the u.s certainly ip theft issues. and there's been a lot of forced jvs if you want to go do business there at this point now, the administration has said enough is enough. we're not going to just keep our hands tied behind our back this won't be an open market the chinese market is one of the most open markets in the world it just isn't. there's going to be a big battle and china's big now. they are now passed apple in terms of how phones are shipping and they predicted this year and next they'll pass samsung as the largest supplier of cell phones. zte and huawei have about 40% of the mobile equipment marketplace out there and they're growing

faster there's going to be a real challenge here for the u.s. and free market companies to compete for the rest of the world marketplace versus china who is competing for the rest of the world marketplace and all these key technologies and a lot of it is state sponsored. there's a made in china 2025 and 2030 program that's quite sweeping, quite aggressive and they want 70% of the major ten industry technologies that they're doing to be made in china. and that's going to close off a lot. that's not going to happen just through free market but through government intervention. >> which is why it sounds to me like you think what the president is doing is the right thing. if that leads to retaliation, is that worth it? >> i don't think we're doing enough they are playing the long game and they're going to say, all right. even if trump plays tough and hard, he might get thrown out of

office in a year or he will get thrown out in five years we have to get every politician, every voter and everybody in the united states to understand what the game is and we need, as businesses, and as citizens to basically win over the rest of the world if it's mankind versus china, i think mankind will win. if it's subsidized chinese businesses internationally, then it becomes very, very difficult. it's going to be a very interesting one to watch and interesting to see who -- i think it's hard politically sometimes for both sides to agree that we have a common issue here that we need to address. and it all can't be done at the government level it is incumbent upon businesses worldwide in the free market world to understand what's happening here >> just wanted to ask you,

scott, about one of the specific latest twists in this. and that is that china's threatening to cut off exports of rare earth minimals that are critical for u.s. technology and infrastructure how do you feel about the threat that poses >> it's a heavyweight battle and they have bought into major positions. i was talking to one senior exec who says batteries we want to put in all of these autonomous vehicles, the rare earth colors that go into that are pretty much locked up by the chinese. it's going to be a very, very interesting heavyweight battle so the question is, will they ever believe in open and free markets? we all know as economists, i studied economics, that free markets work better for everyone, but if it's only them taking advantage of free markets and not offering free markets,

it's an interesting mismatch it's going to be fun to watch. it will be interesting to see if we figure it out ahead of time they certainly have. >> scott mcnealy, thank you for weighing in. >> thank you up next -- we're helping you trade the turbulence rtliafr otr ldsition your pofoo teanhewi down day on wall street. client. 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 around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. the ai i want? well, insurance it's all about trust and speed. i need it to guide this analyst to customize flood coverage for this house. so that this team, can inform this couple, that their payment will arrive faster than this guy.

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the dow did close off the lows of the session, but still finished lower on the day, 221 points on trade fears and escalating trade tensions from china and macro economics joins us with more on today's sell-off and barry, you want to zero in

on now we're going on potentially six down weeks >> i'm not sure you want to protect yourself after six down weeks. in particular, we thought -- pardon me, once we got through earnings season the concerns about the trade war, we didn't actually envision that there would be -- the deal would fall apart. ultimately, i think there would be a deal and the recovery in global trade that absolutely collapsed late last year was going to be disappointing and that's been played out in the numbers. you've had no rebound in export activity in asia and the like and germany's deteriorating futher and they've become the sick child in europe and that would be the catalyst and for the u.s. we thought it was worth 5% to 7% and the u.s. would outperform those other markets so at this point i would be reloading on some of the cyclical sectors i would note that banks held up particularly well given the yield curve inversion hysteria that's gone on the industrial sector, tech sector >> the opposite.

oh, absolutely we would be putting money to work here and look, i think it will take a number of weeks before the cloud-related trade starts to improve and this say big political issue with president trump and he will move on to germany or some of the others so it's going to linker and the macroen viern little and there are two things in particular that would happen a fifth of the regional fed surveys with the forward capital spending panel eme spending plan element, and software and research development which has been driving the capex sort of boom, they didn't fall in may which is kind of you asurprising and tha better and the other piece i would add is that the conference board, jobs are hard to get

portion of the labor differential got to their best levels this entire business cycle and was better than it was at any point last cycle. >> so why does the right thing on the upper right-hand side and the ten-year, why does it keep going down >> i would argue the ben bernanke savings was that china was running a 10% surplus in the 2000s. the bis has done excellent work on this and i referenced it in my last report and this is all about central bank rate suppression and it's just starting to ease off, you know, germany's weak data today driving bund yields to new lows. additionally, we've had giant bank demand to the curve which has inverted that fed indicator piece so i think it is more technical than it is a real and by the way, the bond market and i've been on both sides and i worked at black rock as an equity strategist and the bond

market hasn't been a better leading indicator. >> this is the opposite of what scott maynard says of guggenheim, i asked him if the drop in yield it was a reflection and no this time it was different and globally it is weaker and he's looking for new lows into the summer >> i don't disagree that globally things are weaker, but i would disagree that things are weaker in the u.s. in particular, and so i thought that josh brown kind of nailed it when he talked about the 2016 episode when things were getting better there was this global macro concern and in this case it was brexit and in this case it's a trade policy and that was the low on treasurys and then it just ripped the other way and there are a couple of things going on in the treasury market that people have encited and one is vol is really spiking and the fed is getting a pickup and the refi portfolio is quickly

converting from mortgagees to treasurys to striblthctly strate and once the asset purchases they'll rebalance the treasury portfolio and their duration and they're going to short 10 and that will put more duration into the market and unless the department completely becomes unglued, there will be a curb steepener that takes place and i heard about the 530 part of the curve and that piece has been steepening all year and that's a better signal because it's beyond the controls. >> sounds like you're listening. >> i've been listening all day. >> coming up, the wall street lookhe a aadnd the key things to watch as we head into a new trading day and we'll do that when the bell comes back to a single defining moment...

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trade confirmed. and i have global access 24/7. meaning, i can do what i need to do. then i can focus on what i want to do. visit your online broker today, to learn more. time for a wall street look ahead. deirdre bossa has. >> the slowing revenue growth and lots of red ink and losses of a billion dollars or more and revenue representing 20% from a year ago less than 5% from the previous quarter and how ceo

ashahi and nelson chai performed on the earnings call so it is an uphill battle to convince investors of its long-term value. guys >> deirdre, thank you. now let's get to diana ahead of tomorrow's key housing data? >> they buy existing homes and that's people out shopping in april and signing deals and the expectation is a very small gain after a 4% gain in march mortgage rates did bump up in april and not enough to make a difference to buyers and this will be all about supply and prices back to you guys >> diane a thank you quickly, mike, as you look ahead to the markets and i know you're calling the bottom in treasurys. >> if you're looking for an outright flush and panicky purge, didn't get it we are only down 5.5% from the highs and i do think the market is telling you a lot of damage is done below the surface and if yields bounce here and some of

the parts of the market that should be looking ahead through this rough period have responded a little bit better and the vix did not hit a new high all that together says you have the makings for some kind of recovery attempt if you don't get it that's too conspicuous a signal. >> fast money begins right now have a good evening. >> fast money does start right now, live from new york i am brian sullivan your traders tonight are pete najarian, tim seymour, steve grasso and guy adami are your stock investments falling again in what has been a month to forget? nervous buyers, though, they've been barging into bonds as more and more warning signs crop up into the market, but we have you covered. the top technician mark newton on what to buy now and salima kroft, and that, m