where investors can find some sort of clarity to forecast where they should be building their supply chains, and where they can expect to enter markets. >> christopher smart, thank you very much. thanks for watching "power lunch." >> we'll see you tomorrow. "closing bell" starts right now. welcome to "closing bell." i'm wilfred frost here at the disney post. it opened lower, and it stayed lower, unlike the rest of the market, which has staged a dramatic 500-point intraday recovery the question is, as we enter the final hour of trade, will it hold >> and i'm sara eisen. this remarkable recovery in stocks, a global bond rout rout, yields collapse, the s&p just going positive pressure on the federal reserve as central banks around the

world cut rates. china weakening the currency again overnight. a perfect guest to discussion the swings in the market, former treasury secretary jack lew joining us that's coming up on "closing bell." first right to the market action, joining us for the hour is josh brown. what's turning things around here >> oh, my god, this is like what we live for, right >> it was pretty dire this morning. >> in the last five days, i have shift fred bearish back to bullish, then bearish, then super-bearish. i was lutheran for a minute -- >> now i know you're joking. >> i am personally highly susceptible. >> i know this about myself, and every investor should think about their own behaviors. i'm hidely susceptible to the

lines i see in front of me not that i will react to all of them, but if you're not going through that, maybe check your pulse, that is what markets are designed to do, and i think the people that radically shift their views based on price act are the people who end up paying the volatility tax what led the comeback, reits, and home builders exploding, and the ongoing rally in precious metals, but tech came back, health care came back, what still is lagging, the banking still look terrible. energy has looked terrible for most of my adult life, still today. those are your laggards, but i think it's notable this is not a market that from one minute to the next is pondering recession or not i think it's people saying am i

positioned right for this huge change in rates? >> a lot to discuss. let's drill down steve liesman has details. rick santelli is tracking the plunge in bond yeels bob pisani is here at the exchange but steve, let's begin with you. >> thanks, wilf. a signal heard around the world as they cut interest rates, that was part of what send bond yields careening downward, eventually taking stocks with them possibly a race to the bottom on rates leer in fact, president trump encouraged the fed to match rate cuts today they've been cutting rates and doing so since at least april and some even earlier than that. the fed knows it can't maintain a rate so far apart, but the

problem is if it cuts other central banks could cut even more >> steve liesman, thank you. ten-year bond yields falling to the lowest levels since 2016. 30-year yields closing in on record lows. rick santelli has more. >> if there's any sector or specific part of the markets that should get a fist bump today is this next chart ready to challenge the 210 all time, low close that was established in july of 2016, same month the ten-year notes had the double bottom at 136, but it was avoided we're close to 220 now, really took the pressure off. two-day tens the minutes went guns hot, meaning the low established the day before, it certainly went wild there's a lot of income iing wi

back to you. >> rick, has the u.s. moved more than others in the last week or so >> listen, the last week or so has a breathtaking move. i've seen a lot of breathtaking moves, i think especially when you look at just a few days ago under 295, you got paid off with 30-something basis points. yes, 135 double bottom from 2012 and 2016 in tens it could be a possibility if we get ten-year -- or 30-year bond yields anywhere under 209 to 10, maybe a three-tick slippage. >> rick, thank you very much for that turning to the broader market, a massive midday reversal after plunging nearly 600 points bob pisani has all of the intraday moves. >> the stock market is moving in lockstep with the bond market.

take a look at this chart. bottomed around 10:00 a.m. eastern time that's when the stock market market bottomed. the yield started moving aggressive, and then the stock market started coming offer the lows the rallies initially was largely defensive names. coca-cola, for example. lacking the rally here a few select technologies, apple, for example went positive. and it's about time, just about five or six trading days or so

now to mike santoli. >> sara, if there's one thing that unifies all four of these elements, it's part of the market that is sitting near off beleaguered banks, though. >> a look at the regional banks. the kre, this is the forward p.e., so this is basically regional banks getting progressively cheaper against the markets to the point right now where they traded about 630% of the market's forward multiple, clearly priced for bad things or no growth, or maybe a recession down the road. now look at this this is the same etf, but the

dividend yield relative to the s&p 500. obviously it's just the inverse of this, compounded by the fats that could banks are basically pushing a 3% dividend yield. look at how it's so dramatically increased. it's given you essential 140 or 150% of the s&p's yield right now. is it ever going to matter these guys would benefit, but also they sort of trade like they're a disrupted group, essential, you know, the growth is happening outside of the banks themselves at some point cheapbecomes too cheap. we'll see where that is, guys. >> mike, just to expand on that, just a bit, the sell-off, of course, sparked by trade ward fears. if we look at the bank's exposure to asia pacific, it's that -- the highest is 21%, the likes of wells fargo below even 1%, so the exposure not that high of course, thelinks to the

yield curve here is the net interest income is a percentage of revenue that paints a story. it moves the bond mark and there are the exposure the ones that stand out, of course, are the investment banks, only about 10% of their earnings -- of their revenue is net interest if you can be bullish that the rate cuts deliver more economic activity, they're the ones with less exposure. >> i wonder how much there is over at these banks about what's happening in europe, in japan, crushing those banks systems, because of those net incomes. >> if the u.s. were able to stay in positive territory, and the economy continues to grow, long term the suffering of the deutsche banks of this world probably has helped jpmorgan over the last decade, but again in the short term, the reaction, of course, is to tell she is things. >> mike hinted at something that i've been thinking about for a long time. he said they look like a

disruptive group, meaning they had a pretty good economy the last ten years with the handful of exceptions, most of the banks in this sector have not done well, relative to how they've done in prior economic expansions. some of that is technological. it's not a guarantee that a 20-year-old now opening their first bank account is going to do so at a branch in their local town with a marble lobby and columns out front. you've got intense amounts of disruption coming for this group from all sides from app-based to different type of lenders. i think that's showing up inned multiples. these stocks are selling at one time book value. the reason is nobody values the assets in that book value. it's more than just a rate story. today it's a rate story, but i think longer term, people are looking at this group the same way they started to look at

northerly companies, they're saying, is this really the future >> i'm a little surprised you put that spin on it. were your recent trades was jpmorgan, was it u.s. bank >> so i think you can hold two opposing ideas in your head at the same time. the first is what i said about technical disruption other areas have become extinct or disappeared i think it's reasonable to say that jpmorgan is spending more money on technology, probably goldman too than any of their peers and they are poised, i think, to capture a large part of that future consumer. let's look at the regionals, can they get into a technical arms race can you think of any bank with the financial wherewithal that they can actually compete? probably not it ain't going to be everybody let's continue the discussion with these market

moves, john miller ahead of municipals and mellon investment management, very good afternoon to both of you john, this massive move in yields, do you think it makes sense that the u.s. is following -- in terms of the moves when ted already cut rates last week. does that make sense >> well, i think the u.s. fundamental economic data is holding up much better, so it does -- it is confounding to see 3.7% unemployment rate, new hiring very steady with a big domestic base. i think we have the advantage in this trade war scenario. having said that, the federal reserve doesn't necessarily want to stay out of step with global central banks, because that can strengthen the dollar too much in addition, the inverted yield curve is a fairly good reliable forecasters of a recession, and

you have the five-year yield at about a 1.5. so that's inverted out to five years. so that's a little bit of a -- that is a bit of a concern clearly the rest of the u.s. treasure rip curve is anticipating that the fed is going to cut two, three more times this year. >> so currencies and bonds are in the driver's seat what do you tell equity investor toss do in that environment? >> what happened today, which i think is the rational thing, the s&p is still yielding. if i'm a rational investor and i don't think we're going to have a recession, the u.s. fundamental story is still holding up you want a different yield that's going to pay more than a bond and you have upside opportunity in stock if we're not heading to the toilet here, stocks makes a lot more sense. >> josh, are you drawn to any -- >> i agree with everything that liz just said. i'm in verizon i've got a couple reits i add to

ahmet time these are areas that really do not require the economy to be any better than it's been all this time. we're at 2% gdp growth i'm not looking at companies that need 3% or 4% growth. it's not happening think of verizon as an example of that, and when you look at some of the reits, invitation homes is single-family rent homes. that's what you said where 73 millennial are forming households and don't have the down payment to buy a $700,000 house, but they want to live that way it's run by some of the most experienced private equity executives who have ever been involved in real estate. that's a great, growing yield, i would add. that's the type of name that should work, historically, i know everyone thinking gold is this great inflation hedge, it turns out it's not

reits are the number one inflation hedge over time. you're not putting your money to sleep. you're not saying i'm going to accept 2% let's find businesses that can thrive. you it would make sense no not -- because it spelled recession or spelled collapse. >> two different ways to answer that the market watches the inversion at the three-month ten-year. that put fear into the market. the rye session indicator is the two-year ten year, which hasn't happened the market will be afraid if there's an inversion at all. what we got was a ten-years at about 136. we could get there again if we break through that and stay below it, then i think it's more of a negative signal. >> i'm watching the beyond meat

inversion. i would like to see birk shy outperform beyond for a couple days, as people calm down. >> two days? >> yeah. we'll keep an eye on that. >> i have a patent on that index. you can't use it without asking. thank you both for joining us still ahead a big interviews with former treasury secretary jack lew we'll talk about the decision to designate china as a currency manipula manipulator. and as we head to break, a check on our data tracker today. mortgage applications rising 5.3% last week, refinances up 12%. but industrial output sell by 1.5%, in june far more than expected, the decline economists are looking for? "closing bell" will be right back dow is down 83

let's go back to steve liesman. september 100% chance of a rate

cut, october 73%, and we apologized we had some bad wire data the last month, but this is the outlook for three cuts, better than 50%, therefore some chances or bets, wilf, for basic rate cuts, but these are the odds-on bets so far. energy sector getting slammed today, as oil prices slip seema mody has a closer look. >> oil prices star of the session, lower on the week industrial production data, losses and acsit rated around 10:30 a.m. now demand growth has already been a big concern over the heightened trade dispute, more central banks cutting rates. oil prices now down about 34% from the 52-week high. in response, chevron, bp among

other later energy producer are now trading down today, and now down about 7% 8%, unclear where we go from here. you would think that central banks cutting rates would reassure the market, but instead it's resurrecting the global fears. >> deeper into bear markets. seema, thanks. don't miss an interview tomorrow, an exclusive with carl icahn, joining the "halftime report" following a vote over the occidental deal. gold hitting the highest level since april 2013, and so far in year, gold outperforming the s&p 500. year to date up 18%, while the s&p 500 up just 14%. 18 to , relative performance. when we come back, cvs has been outperforming, even when the market was tanking we're going to speak with the company's ceo in an exclusive interview next. president trump making

comments today about increased tensions in the china trade war. >> china would like an anchor on us the people that allowed that to happen are a disgrace. ahead, we'll speak with jack lew, treasury secretary under president obama about the state of the trade war, and the decision to label china as a currency manipulator bu bu back in a couple minutes ♪ lower carbs. lower calories. higher expectations. ♪ the light beer you've been waiting for has arrived. corona premier.

i really want to give you pictures of how extreme the moves have been in bond-land we talked about their yield and buyers accepting it. s the long-term treasury etf, and how far above the 50-day averages right here, these are shown tore an overbought extreme, at least on a short-term basis finally

sentiment, daily sentiment index. this is a futures traders, a daily indication of whether they're bullish or not 100% yesterday now, this is very, very extreme, it shows they're very overbought, however, this has not been a great indicator of major bottoms in yields, but it has shown that the moves have moderated, and threat vulnerable >> you like technical analysis i mean, how would you describe this massive rush into bonds right now? and if someone asked you below usual keep buying with the tlt >> its i think it's a different kind of market than the one i grew up in, where people could pull the trigger really easily, people who are not sophisticated

traders or predominantly using etfs back in the day maybe you are buys futures, but now i think it's more of a retail phenomenon not that there's unless specifically wrong with that, i just wouldn't read too much into that activity tlt is ago going to have blowoff tops 30-year bonds, nobody is buying them as long-term investment, though they do appear in asset allocation these types of moving, these retail traders. >> back in the day of the original days. >> i go that far, if you can believe it. >> i know. >> you have self-ishly talking about that at the break, and i don't know what you're talking about. after the break, cvs's ceo

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welcome back to "closing bell." we did see dow touch positive. the key thing being we are some 600 points higher than the lows of the session in the first 20 minutes or so. >> quite a recovery. sue has the update. here's what's happening at this hour, everyone. puerto rico's supreme court has overturned the swearing in as the island's governor. this clears the way for the treasury secretary wanda vazquez to take over the post. a few tanker that overturned on a southern california freeway during the morning rush hour has forced an hours-long shutdown and massive backups. the load's driver was not

injured. forte is recalling nearly 20,000 2020 -- they may be missing the manual parks recover. the national library announcing plans to release the man uscripts, therapy in israel's custody after it won a battle for ownership of the jewish novelists literary estate i can't wait to see that. back downtown to you. >> sioux, thank you. cvs is one bright spot on this roll till market day, raising the full-year forecast as well. strong performance coming at competitor wall greens close it would close 200 of its stores as part of a cost-cutting plan larry merlo, welcome.

>> great to be here. >> i understand the two of you are celebrating your birthdays cvs to you. >> you just had a beat in raise amid a skepticism about the execution of your deal you feel vindicated here >> you know what it's been a good day back in june, you know, we outlined the strategy. we talked about the plan that brings that strategy to life you know, today is about the work that 300,000 of our colleagues are doing across communities across the country bringing that point to life. higher drug price inflation, talk about how you're seeing that affect the business it's a little counter-intuitive. one of the things that our pbm has been actively working on is

how do we deduce the net costs of the pharmaceuticals you know, we're seeing pharmacy inflation moderating we haven't seen a dramatic change from what we saw last year however we're seeing more clients adopt what we referred to as a standard form laformula. do you fear a big political rebuke, and do you feel like the political pressure is higher than ever at the moment? >> wilf, it's really not the higher drug prices that drove the results. it's the actions we have taken to lower drug prices and keep people more adherence to the medications that they're taking, and what we absolutely agree with the administration's goal of reducing health care costs, reducing drug prices, and

reducing the consumer's out of pocket, and we're working hard every day to execute against that strategy. >> also i noticed that sales at the front of the store outside of prescriptions did better, what is driving that spending? just a better consumer environment? >> it is a better consumer environment, but we have been investing in our extra-care loyalty program for several years now, and being able to deliver value to our customers in a very individual personalized way those strategies are taking hold, and we're see the benefits of that. tell us about the health hubs, and whether you plan to roll that out more widely. >> earlier this year, we put our first in the houston market, and what we have seen, the consumer feedback has been terrific, the net promoter scores are 900 points ahead of the chain average. what it's telling us is our beliefs and our strategy is exactly what the consumer is looking for. we're excited to be able to go

to three more metropolitan areas later this year. we announced the plan two months ago to have 1500 health hubs across the country by the end of 2021 you must have been relieved to see the administration pulled back from the rebate rule, which would have hurt your pbm business what are you expecting from president trump? kellyanne conway said today a major overall to be announced in september. >> there's a lot of proposals in both chambers of congress. you know, we have developed what we believe are policies that can in fact, you know, reduce the cost of drugs and, you know, the out-of-pocket expense for consumer we certainly advocate for those. i think it remains to be seen in terms of what is the next step in terms of what happens in washington. have the democratic debates scared you when you've watched though, with some of the proposals for the health care

industry >> i think the question you're asking, you're talking about medicare for all, what is medicare for all i think the important question is, what is the role of private sector in health care? we've been able to demonstrate time after time that private sector competition, innovation has been ability to be an important part of the solution medicare part d, that program was scored more than 12 years ago, and today it's costing the government about 40% of that original scoring when you look at beneficiary premiums, over the last ten years, they've grown by less than a dollar each year. so i think it does point to the fact that the private sector can bring meaningful solutions that's the work that we need to continue to do. >> i mentioned the walgreens -- you're slowing the pace of the expansion. are there just too many drug stores in this country what is driving that >> there was a dramatic, you

know, expansion of your corner drugstore for probably the better part of the last ten, 15 years. there's no question that that is beginning to slow. we have pulled back on our store openings i will say that our fleet of now 9900 cvs pharmacies is extremely productive, and it's something we look at, and we have about 500 stores that come up for lee renewal every year. >> how do you seize the amazon threat in your space >> as we think about competition, our challenge is how do we meet the unmet needs of consumers how do we make sure we're not leaving any white space. you've seen us take a number of actions in terms of additional ways for them, whether it's home delivery, delivery to the office, earlier this week we announced our care pass program,

which is a subscription service. it's been terrific. >> you paid down 2.5 billion in the most recent quarter and you're targeting three times leverage ratio by 2020 how much does that target change based on where rates are and when you see a dramatic fall that we have seen in the last couple days, does that make you think we can allow it higher >> no, wilf, we are very committed to the plan. we took our cash flow guidance up this morning, and we're very confident in the plan that we have to achieve that goal. >> we wanted to ask you about the opioid legislation obviously drug companies and distributors are at the center of this. you and some of your competitors are named as we head into what could be the biggest civil trial in history how much are you expecting to be liable here? >> you think about the role of pharmacies, you know, pharmacies

dispense a prescription in response to the prescription being written by a licensed prescriber, the physician, the dentist. you know we have made many investments in technology and analytics that support our pharmacists in terms of executing their professional role on what we call corresponding responsibility, ensuring, you know, that that prescription written by a licensed prescriber is in fact for a medical intent and not illegitimate use so we have done a noumber of things -- >> so you don't believe you're on the hook? >> we do not believe we're on the hook we'll defend the actions vigorously if we have to go through prescription by prescription one at a time, in fact we will do that. >> larry, thank you for coming by cvs health's ceo.

up next, what he's watching in the crazy day of the bond mark. and jack lew will join us to talk about everything from china to president trump's latt es tweets "closing bell" is back in just a couple minutes

welcome back to 17 minutes left of trade. we are just lower on the dow, s&p, and on the nasdaq, u.s. treasury yields hitting lows mark is here with us with rate strategies very good afternoon to you thanks for joining us. >> thanks for having me. >> what are the key levels you're watching on is the rates curve as to whether we're likely to see a significant break higher or lower from here? >> well, we've been breaching a lot of delevels. we broke last week after the risk hit with regard to china. we were down near 160 on the ten-year, and we subsequently backed up a bit. we've been through a number of key technical levels i think what the market is really reacting to are uncertainties with regard to trade, what it means for currency wars, and what the fed

is going to do in the face of uncertain uncertainty. i think the bias is to expect lower rates as oppose to do higher rates at least until some of these uncertainties are cleared up. >> pimco put out a note this weekend that we could expect negative rates in this country is that something you are contemplating there? >> it's certainly not our base case scenario, but i don't think it's a risk we can completely rule out. how the global back drop evolves, it's not crazy to think you could be looking at that type of environment. that's not our base case, but the fact we have seen rates fall as much as they have recently

suggests that that low-probability event is increasing even though the odds are still low, but increasing risk that the market i think will have a harder and harder time discounting in the spring of 2016 rates had put in a bottom. it was just an much negative and there is now, and all of a sudden things changed on a dime. to the point where last summer, the consensus was for three rate highs throughout the court of 0 2019, don't you great that a lot of 9 commentary is just a function of what's happening with prices, and the narrative

changes just as swiftly? isn't there a lot of that appearing today? >> and most of it stems from trade and trade policy here. >> if you -- let's say they're supposed to strike a deal, even if that's a status quo with think that rates would be higher 2% wee% reasonable and all the news flow seems to be suggesting trade could get worse. if that's the case, you're going to have more of what you say overnight. the lbnz cut more than expected. the rate to the bottom, so to

speak, then if that happens, interest rates keep moving lower. you can see long-end rates and the curve potentially to flatten in the u.s i hear what you're saying, maybe the market is a little overdone, but it needs something to help itself believe there would be an end to the uncertainly, and at least no longer a worsening, and hopefully a questioned that sounds more responsive i do think the fed and that powell did not sound as dovish, is fueling a bit of the curve flattening that we are seeing, and certainly the decline in break-evens. it sounds like the fed is not as responsive as some of the market had anticipated. >> thank you for joining us. i think there's a happy birthday in order michelle meyer just testified me it's your birthday, too, which i thought was a joke, but i guess it's not >> no. happy birthday to both of you.

>> and to you, mark. >> that's crazy. >> many happy returns. there we go. if charlie is watching, to him as well. a regular guest. 11 minutes left of trade of course, even though the dow is negative, well off the lows, down b589 y points down b589 y points up next, we've got your and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, last-chance trade, 11 minutes left on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.

. welcome back to "closing bell." eight minutes to the trade josh brown, what do you have for us >> you know i like these breakouts. i'm giving you one before it happens, but it looks pretty good itb, this is home construction index. it's not a huge etf, but it's got 55 holdings. this things is right on the cusp $40 is i think where the price action changes in favor of the bulls. it's been consulting below those levels when you look at rates, and you look at google searches for things like refinancing activity, mortgages, that type of activity bodes well for this group. the best name, if you want to

pick a name instead of an etf, dr shortening technically that one has already broken out. >> the whole question is the low rate play. is it just spurring a bunch of refinancing. >> home construction, remodeling this is what the stocks trade on, the affordability of buying homes, renovating. i've got other things inside of here you've got home renovation plays as well. were down 50 points or so, well off the session lows, up next we'll cover automatic angles. after is the bl,el earnings after is the bl,el earnings from the biggest movers. i wanted to help protect myself. my doctor recommended eliquis.

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and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today. four minutes left to go in today's session. time for the closing countdown herb morgan joins us herb, it did not look like we might have gotten a positive close earlier in the day when the dow is down as much as 589 points what does this tell you? >> it just tells me we had a

couple central banks cut, two bigger than expected last night. other than the initial telloff there's accumulation going on. the presidentance of the economic news is very strong we're thinking all equities are the place to be. and then on the foreign side, you have great valuations, a bit of a manufacturing issue, but with the dollar being up for u.s. investors, why not accumulate emerging markets at this level as well herb. >> thank you very much for

joining us. to mike for the third installment of the market dashboard. >> part of the story is some buffers in the form of valuation. let's look at the relative valuation. now yield more than the ten-year treasury yield that's the highest in memory obviously some yield support in this market, and then on a sentiment basis, a lot of put buying, a lot of hedging going on, you see the trend in put/call ratios, higher in december, but it seems like you have a bit of anxiety in there that's usually fuel for at least some support. a big wrap upin fixed income from rick santelli. >> a wild day indeed, mike the vix was close to 6 1/2 this morning, it could have been the highest volumetively level since

early 2017, intraday now at 223. unchanged on the day after trading down to 211. one takeaway from all-time lows. the ten-year yield is up a basis point. bertha what a rebound in the nasdaq. >> and apple was the beginning of the reversal here just to hard to figure you'll. we'll hear from sky works this afternoon. they are getting hit hard. the dow is now 589 points, this is the --

both of them moved at more than 3% range today. that's pretty unusual. pat, 3m generally did not participate. what a comeback here close just fractionally negative, down 21 points, s&p 500 positive on the day. welcome, everyone, to "closing bell. >> we're alongside mike santoli. let's check in on how the markets close. the dow did finish negative, but only by eight basis points or 22 points the low of the session, 589 in negative territory a massive comeback

s&p finished positive, russell was positive for most of that final half hour, as for the sectors again, real estate staples were the best performers, financials really didn't take much part, the yield story there, of course, very important. and the yield story on the s&p, real estate staple it is, utilities, all higher. you know, when you're getting super low on the ten-year, it becomes more and more appealing to buy these stocks, whether it's josh brown's reits or the consumer staples banks i guess are an exception there, because they get hit by the lower yield. some of the china specific sectors did fine >> oil had a big turnaround, it was down more than 5%, it finished down 2% the dollar staying pretty flat

it hasn't led to a dramatic weakening of the dollar, of course it's at 97.6. >> full team coverage today for you. >> plus we're on earnings watch. later, jack lew joins us on its impact on the economy, really interested to hear his up thoughts on that josh brown is still with us, but first, mike, your take on this massive swing closing positive on the s&p? >> i think you see both sides of the implications of an acceleration lowering in global yield. on the one hand investors say it's a little destabilizing. central banks don't have

control, or big growth stocks, does it make them look more attractive even at the lows this morning, we didn't get lower, and then certainly not as low as we were overnight into yesterday, and in the future it seems like the market showing a bit of stabilization here. it always is going to look like it's a bit touch-and-go when you have these recovery attempts it's whippy out there. i think you do have to keep in mind -- josh was saying this earlier. at the lows, yeah, it makes sense. and you see the recoveries, it says, i get it, right? that's the toggle suralways riding. >> in terms of -- we talked about the treasury yield cup what happens to credit and high-yield credit, especially high yield the yields are just not going to necessarily track tick for tick with treasury yields at these

very low levels while you have the volatility index but it's not blowing out it's not showing distress building in that market. >> what kind of feel are you getting? >> you know, my opinion, sara, i feel pretty strongly it's not a recession signal for the united states i think it is a signal that our short rates are too high we're probably the only country in the world or developed country in the world that has a positive real yield policy rate. and i think it's admirable the fed wanted to normalize rates, but the problem, of course, is that if the rest of the world has negative real rates, it's very difficult to chart your own path it risks financial instability i don't think it's a recession signal for the u.s by the same token, it does suggest you may need more fed easing unfortunately by the fed. >> josh, do you think it leads

to more fed easing does that alter your view on whether u.s. equities are attractive or not? >> i think it does lead to more fed easing, and, listen, stocks are -- if stocks are a function of future cash flows and long-term interest rates, you can -- you can support a much higher multiple at these rate levels >> yeah. i would just add to that, i think if you're having this internal dialogue with yourself, if there's another 25 basis points rate hike, i want to own stocks, and if there isn't i don't. you shouldn't be managing your own portfolio. >> the fed expectations do drive. >> fed expectations is a mood ring that's nonsense. as i mentioned in the last block, last year the 23 gabanks had a concession for three hikes

in 2019. we're not cutting. >> but almost 20% gains so far, until this recent lout of volume activity you have to say out there is fedex expectations for easing. >> i think it brings us back from the abyss it's a function of coming back from what had been inflicted so you're right to that point, but again, i think you have to focus on some of the things that replain in place, regardless of what the fed does. one of the things is buybacks. we're coming through the earnings period. you're going to see company that is have the flexibility in buyback authorizations announced and active, come in and buy some of their stocks. that is something that's continued quarter after quarter. we'll probably do a trillion in buybacks by the end of this year that is going to happen, regardless of the fed's next move what's not going to happen are the massive cap ex programs that probably should, so if you're

heavily invested that require faster global growth, that is not a portfolio that's been working for you, and probably not a portfolio that will work for you. the only area where people are making money in materials is gold that probably will not change either i think being realistic about where we are and understanding you have no control over what the fed does in september and december, and that it probably doesn't really matter after that much in terms of the outlook of global difference by portfolio >> more of the macro to discuss in just a moment let's briefly touch into the micro. lyft's quarterlies are out >> the first of the rideshare company toss report, and lyft seeing big beats across the -- the stock is surging in extended trade, adjusted loss per share of 68 cents, 1.74 was expected,

i.e. those rider discounts revenue significantly better than expected of 876 million v. the 809 million the street was expected that's an increase of more than 70%, active riders 21.8 million. nearly there 2 better than forecast guidance, which is likely fueling these huge gains in the after-hours, the street was expecting revenue of $841 million in q3. lyft is forecasting revenue between 915 million. raising revenue guidance and lowering adjusted ebitda losses, this is what the street wanted to here. just spoke with the kreismt fo brian roberts, who called this quarter a milestone and said they're actually seeing an accelerated pall to profitability. i will dig further into the report and have more in a bit. >> it looks like investors

agree, the stock surging, roku results out as well. eric hemmy chemy >> a beat on the top and the bottom line. the earnings per share -- actually a loss per share of only eight cents, the street was looking at 22. a much narrower loss user metrics also strong, the number the actification accounts were better than expected. theaverage revenue per using also better than expected, and the q3 guidance, full-year guidance both those numbers above what had been estimated. back to you. , eric, thanks very much for that. >> a big move in uber, by the way. it's a much bigger market cap. >> as to whether this is going

to be good for uber or bad. >> the immediate takeaway is more rational competition is happening in this market, at least by lyft's guidance >> which is true when you get better revenue per user, but that's not just where they beat expectations, sees active riders gain ahead of expectation as well, which might be at the expense of uber? it remains to be seen. >> i do think of to basically look at roku and lyft numbers and think maybe they're going to fall back in love with disruptive tech players, and everybody can win for alternates while. obviously, you know, these stocks, lyft and uber, have been under pressure so i think right now it's going to be a pleasant surprise. >> lyft is beating substantially lower expectations, because they blew it last time. if you look at a stock price, so today is fine if you're long, but if you've been long, you're

like, all right, that's great, because you really haven't gone anywhere. >> on the opposite side, if you've been long roku, you've been a big winner, the run up to earnings up 53%, and yet popping 5% on another big beat >> this is the streaming play, right? >> i don't want to get intoed bias area, but i think it's a great consumer product active accounts year or year, up to 30.5, and average revenue per users growing fast as well it is the way to play in ott services without having to pay for expensive content. >> if you think that the cord-cutting trend is just getting started, you don't want to short the cable companies

they pay huge different, this is a better way to go this is a company offering an alternative, and the consumer is clearly in love with it. >> i know you can't talk specific stocks, but in general the appetite right now for disruptive companies tech companies new ipos if they continue to prove themselves with public reports there haven't been that many of them >> it's very different to buy your traditional stocks, the economy is slowing, and you have so much macro uncertainty. so it's become cliche now, but what works are high-dividend paying stocks and very growthy stocks it seems like that's going likely the i wouldn't assistant

in front of any of these stocks yet. >> i bought a bit of uber shortly after it became public on the first drop. then there was a second drop that nobody told me about in advance. i'm not like wildly bullish on it it forces me to play close attention to it i think it's either an incredible growth story and have a lot more going on or we're all kidding ourselves and people will stop funding this business model and it would just sink, and ultimately you'll get google cars driving everyone around so from that perspective, i am paying close attention. >> what about roku >> for a small nobody on roku,

still a 10% short business there's still a feeling that maybe it's a bit of a transitional technology? i'm not saying that's what the results tell you, but there's a bit of a wall of worry around the stock. >> it's -- they used to say that about netflix, too, and then it became bigger than that. >> it still relies. at the moment. our country is doing incredibly well. china is not doing well, if you

look at the trade situation, china just thia mitted yes, sir they've been a currency manipulator. first time they've ever been called out coming up, former treasury secretary jack lew tells you whether labeling then as a currency manipulator was the right move, and why the obama administration never did it. and more on how investors should be trading amid this volatility

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volatile after-hours session here, shares of lyft and roku spiking after strong revenue growth up 8% apiece, it looks like. an earnings alert on interactive. julia boorstin has that. >> they're announcing they'll explore the possibility of splitting off the interests in match group and angi homeservices they did beat expectation, and

it follows match, sending shares up about 24% today, also lifting iat shares, right now you see iac shares of. back over to you, don't miss joey levin tomorrow "squawk box," 6:40 a.m stocks staged a make comback today. bob, let's start with you. >> we were down 589 points just before 10:00 a.m. eastern time we came back almost to flat. this is one of the best comebacks in years, certainly this year, but this month hag awful. generally a huge disparity between the nontrade-related names and trade-related names. just in the last five trading session this months, unrelated

names less economically sensitive, consumer staples, more trade-related names, energy, financials, technology, industrial names when you get a 9% sweep, that is an enormous move guys, back to you. >> bob, thanks the nasdaq outperforming bertha coombs has the details. >> apple was definitely the big catalyst it's still down for the week, the damage is done from what we saw on monday. chips were fairly strong as well today. microchip had a good outlook, but qualcomm is trading higher that's one of the high different failures here. we've got a few of them, most of them like kraft heinz, they're yielding quite a bit these days.

back over to you. >> bertha, thank you very much. orb next guest predicted a correction in stocks just a few weeks ago on this network, and he joins us now. tony, a very good afternoon to you. >> good afternoon, wilf, thanks for the invite. >> what did you make of the pullback, and to throw in, a congratulations, but b, a caveat are you surprised to get the support the last few days? >> the whole reason for the pullback wasn't fundamental. i love to see corrections only seem natural, normal and healthy until you actually get them people love to say i think it's going to correct and i'll buy that correction. by definition, when you begin to correct, it's because there were

too many buyers already. this was a market looking for an execution. ultimately i think they're still just excuses without an inversion of the 210 curve is extraordinarily stimulative. we agreed with the bears, the economy was going to slow, the whole bull story to get on our 3350 in 2020 as a reacceleration because of these lower rates. >> what is happening with earnings estimates, as all of this global volatility and escalation in the trade war continues? >> we do these myth buster pieces, we did one on the earnings revision mist buster. everybody is saying the estimate is too high. when it comes down, it's going to lead to a multiple compression. the street's at 184, and i'm looking for multiple expansion

that sounds insane then if you actually look at the data, the only two years this cycle where you've seen a multiple com pretty and a down performance has been when you had upward earnings provision. it's all about interest rates and what is not just happening at the fed level, but what's happening in the market rates. now that we have this shakeout, depending on the index, what are you looking for tactically to say, okay, it's run its course >> mike, as you know, you have four keep tactical indicators. one has to be to where 90% or below the ten-day moving average you can check that box the vix has to get above 20, check that box what you haven't checked is the weekly stochastic indicator. typically what you get is this feeling, wow, that was too fast, i'm not going to give up yet

some stability and a bit of a bounce, volatility as spiked, so mashed happen now in our view is maybe another up day or two, and then text that recent low on lower vix, so lower volatility, but you have this drift lower in stocks i think that will set the too edge for that next leg higher. again it comes down to relieves some of these interspeed terms overbought have we learned that rates cut doesn't help ownership gent we don't have enough yet >> it's a lag knecht the treasury yields have come down we made a generational call on how the fed perceives inflation, where it struck me, when he was doing the humphrey hawkins testimony, jerome poly, he said we want to avoid -- when he was asked, why are you you this are

thinking of actually cutting rates, when the economy is good and you're at full employment. he said because inflation expectations can drive down yields over the long term, and we have to avoid being japan and now europe basically what he said is we can't go to negative rates like they are in europe it wasn't just japan that brought in negative rates. they're going to get aggressive. back when he thought in december they were going to cut by the summertime, i believe the fed will be a lot more aggressive than the street thinking you have full employment, higher averages earnings, and inflation, and if you want 2%, you have to do something different, and i think that's what the treasury yields are telling you. >> tony, we'll leave it there. thank you very much for joining us. >> thanks for having me. have a great day. still ahead, don't miss the teiewi fmer treasury secretary jack lew

we're back in a couple minutes don't go anywhere.

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he said they're still making big investments in e-bikes and scooter. he said they're preparing also for the possibility that the california gig-economy bill passes, which would make it harder for them to classify drivers as contractors take a look at this, uber getting a bump on the back of lyft's result, up about 2%, so coming down as well back to you. >> lyft just turned negative dee, thank you. time to get a cnbc news update with sue herera. >> hell ox everyone. secretary of state mike pompeo says the trump administration will pursue a free trait agreement with britain as soon as possible if britain leaves the european union, this at a news conference with visiting secretary dominic robb

>> we support the united kingdom's sovereign choice, however brexit ultimately -- and we'll be on the doorstep pen in hand, to sign an agreement at the earlier possible time. police say they found two bodies they believe were charged with the killing of a college lecture you are they had been on the run for nearly three weeks autopsies will be needed to confirm the two. the fda says it's now received a total of 127 reports of users experiencing seizures after vaping over the last ten years the majority were young adults, and it launched that investigation back in april. you are up to date that's the news update back downtown to you. sue, thank you just watching the turnaround in lyft shares, what looked to be a pretty solid report send

the stock up 8%. it's not gone negative >> some attention on the lockup period for people who owned the stock might be coming due august 19th this may have been not been in the ipo prospectus -- >> sort of reminds you of the risk. up next former treasury secretary jack lew discusses the potential economic fallout from acontrade war, giving you reti to china being labeled a currency manipulator and more. a currency manipulator and more. we'll be right back. fun fact: 1 in 4 of us millennials have debt we might die with. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi.

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president trump taking aim at china again as a currency manipulator earlier today. china just admitted yesterday they've been a currency manipulator, first time they've ever been called out companies are moving out of china by the thousands our company is doing very well we'll see how it all works out somebody had to do this with

china. they were taking hundreds of billions out of the united states and somebody had to make a stands former u.s. treasury secretary jack lew joins us in a first on cnbc interview, as someone who could have made that call as a former treasury secretary, what was your immediate reaction when you saw this treasury secretary call china a currency manipulator. >> let's just take a step back we're after a dangerous moment where a trade war is escalating into currency responses,s the history is clear currency for many years was the hottest issue on the economic agenda when i was secretary for the first two years, it was the top of my list the last two years and since then, we addressed the problem for the last four years china has reversed itself, intervenin

to defend its currency i'm proud we succeeded by engaging, by bringing the international community together, and they changed their policy if you look at the last period of time, the facts don't support the claim of currency manipulation the designation isself, the power of it is weakened if you use it in a way that makes it not look serious >> but with all due respect, mr. secretary, your actions and conversations didn't make them change their policy. it's just the free-floating rate changed and they want to do maintain a stability chet meant they were propping it up. >> i think what happened is they made a series of decisions under constant pressure. the pressure was if you want to sit at the table as one of the leaders of the global system, you have to play by the rules. you can't set a level that's going to devalue your currency

they went first to raising the point they set, to changing the basket to being a global basket, to allow market forces to drive it more than setting of the rate they did intervene to defend, and i think we have to be clear, you know, that we have never criticized for them defending their occurrence is, which is to their disadvantage as a trade matter, but it prevents the valuation that could be destabilizing. i'm not sure what happened this week, and frankly neither is anyone else. it may have been removing the defense of the currency and allowing the market to drive it down the point is for the last number of years, even in the treasury's even report, they recognized they topped doing the things they criticized them for doing. it was hurting them to do it we kept telling them it's hurting them to do it. the fact they changed was really

important. we had a whole list of things we engaged with china on intellectual property is incredibly important opening markets is incredibly important, not subsidizing industries is incredibly important. we should be engaging on that. >> you started off by saying we're at a dangerous moment, now that this has escalated as to what nearly calling it a currency war, what do you mean >> when you're sitting with other finance minister and world leaders, and they're thinking about doing things that would talk down or devalue your curren currency, the united states used to have the strongest voice at the table saying don't do that if do you that, it doesn't usually end well, and hand ended well before.

i think -- what japan and europe going to do. now china's second day response was to say -- i think there's a moment where you can reset, but i think the war of words has to be toned down. >> they were adamant they didn't want to. >> i'm sure -- they are feeling

pressure, you know we're feeling it in the farm sector trade wars are not good for either side. that kimsz you engaged >> it's a complicated relationship it has to be rooted in an honest exchange. the context now, if you look at trade disputes, there does

seem to be a retritei think th global system has led to stability. going into a world where everyone is ute for their own without an eye on the whole is a dangerous move we have to pay attention to are the benefits of growth being shared are we dealing with domestic issues i think we all have in our

economies responsibility for do that, and are others playing fair i've been -- and like and unfair subsidies. i think it currency issue is an old issue that's been brought back, but it was happily resolved for a number of years. >> and yell there's bipartisan support. if you look atment democrats trace. where -- -- even joe biden said he wouldn't be on board with the version, so who is defending pro-growth free trade? >> one of the reasons i accepted your invitation is i think those of us who have devoted decades for thinking about these issues, have to be willing to stand up and say what we believe, even if it's not popular at the moment

there was ever reason in the world to battle china on currency when they were doing things were at best questionable, at worst over the line i think it's a mistake to take the current situation and look at it through that lens. i'm not giving them a clean bill of health for the past i'm saying going forward you have to engage on those issue, hopefully with the world community with you, not as a one on one, and i think we do better as a country when we lead the world, not disrupt the world. >> can someone celebrate being socialist and win the election >> i think the best appeal will be the appeal to the brought spectrum of views which great on so many issues, and in the democratic party, and across the country, about having an economy that works for people, not just for big corporations, but having a health care system that works.

i think the label of socialism being applied willy nilly to people, regardless of what they say. you have to look at what people are saying there are very few candidates who want to wear that label. >> are you saying joe biden has a better chance of beating president trump than elizabeth warning? >> i'm saying the label is being used by opponents of democrats more than it's being usedby democrats. >> jack lew, thank you very much for joining us. >> a pleasure to be with us. >> thank you, mr. secretary. the s&p 500 making its biggest comeback of the year today. up next we'll lee at the potential problem that it implies for markets. how do you gauge the greatness of an suv?

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i have a really good feeling about this. ♪ welcome back we have a market flash aditi roy has it. >> broadcom is reportedly near ago deal to purchase sit m symantec shares are up broadcom shares are relatively flat right now talks reportedly began last week, and our own david faber confirmed that this were in talk that later ended up breaking down it's reported to be near a deal back to you guys >> all right aditi, thanks lyft's shares are

pretty volume tiff beating sales expectation. the stock is way off its highing on, it's not just barely positive it was up like 8% on the initial earnings new ro can u and booking holdings both jumps after beating the top and bottom lines, and trip adviser and monster beverage is lower. to bes stake a major comeback leslie picket joins us with more. >> the markets have stabilized today, but one key technical risk is in store for the second half of the year, lockup -- for the hordes that debuted. usually about six months after a listing day. it also mean a massive amount of supply could come onto the market pressuring prices even further.

a cnbc analysis found that an estimated $215 billion worth of stock will become available for trading, based on the $38 billion worth of stock listed in the u.s. in the first half of the year representing about 15% float on average, on the average ipo. while not all insiders will sell into the lockup, the potentially for this rush of supply already has people nervous some analysts have said the limited float has helped support the stock for the first half of the years, but once it starts unfollowing, that summer/demand dynamic could shift. this could also be why ear shifting new ipos push up their timelines to september to beat the stock. >> quickly just specifically on one name on lyft, what was the news today that the market wasn't aware of. it's very unique

usually companies do abide by that six-month window. lyft had something in their s-1 that basically set if the lockup coincides with the blackout period, they actually can move the lockup expiration date forward expiration date forward instead of backward. usually you see companies delay the lockup expiration, because one the expiration happens you tend to see on average the stock price decline. now, lyft is saying we're actually going to give insiders a chance to cash out earlier rather than later. >> is that a bad sign, mike? >> it shows a little more urgency to let insiders get out. it is not great although it doesn't change the overall picture longer term, which is how much stock will be sold. >> presumably they knew it was going to happen. >> they could easily have known when the blackout period likely was to be. >> it is a bit sneaky one way or another. leslie, thank you very much. up next, we will break down the charts to find out whether disney investo sulbershod worried about the media giant's post-earnings sell-off today ♪

let's send it back to mike santoli, final dashboard of the day. mike. >> sara, this is what we call beauty versus beast, which can apply on so many levels right now. this is a look at disney and specifically how disney is valued relative to viacom cbs which is a big media company that will be coming together a dramatic line, which you usually don't see in a relative valuation chart. it is a forward pe of disney and the other two stocks compared to the s&p 500. hey, what happened here? a couple of things the fox merger closed, the acquisition of fox assets closed which was expensive and somewhat dilutive but increased the market cap also the analyst day, the

investor day in april where they laid out the direct-to-consumer video offering and almost immediately the market revalued the company and declared success probably down the road for disney's approach right here you are seeing exactly the opposite here when it comes to cbs/viacom, trading at less than half of the market valuation, people treating these companies as essentially orphaned or doomed in the new world. whether it is true or not, it is very interesting it is almost game over in the market's view as to disney versus the rest of the industry, guys. >> okay. mike, great stuff. thanks very much up next, we will have your preview of the trading day ahead.

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when come back to "closing bell". time for some final thoughts mike, in terms of the market turnaround, how important is it the last two days we have seen big intraday reversals in the middle of the session? >> it is better than the opposite it is betting than closing on the lows and good to see resilience i would look ahead and see what will drive the market besides technicals tomorrow but we have more to celebrate today. that's what we want to do right now, is actually commemorate today. you know, i think you guys know that baking is one of my passions. >> right. >> did you bake for us >> as you are aware. so i think we have something on the way. and so i know it is your -- this

is your dream job for both of you. >> yes. >> but we sort of did the hypothetical, like what if you had to have another job, what might be, you know, a proper post for you. >> oh, federal reserve, obviously. >> it is fed chair. >> that's true. >> so you guys can share the cake. >> i'm not sure sara would actually be bank of japan governor over federal reserve. >> i think i have to stick to my own country. fed chair is pretty good. >> that makes sense. we considered the imf thing as well. >> i like where you went >> all right >> very powerful job thank you. >> i only had time to bake one cake, sorry. >> i understand, mike. >> we do have something else that you -- >> happy birthday, sara. >> you might be pleased to see and happy birthday to you both. >> what have we got for me i'm nervous. >> it is a giant cake. ♪ >> oh, yes >> now, i want you to identify the figure whose face you might be on there. >> it is upside down which is a

little tricky. >> these are amazing >> yeah. >> amazing job. >> i think you might have gone for -- i mean it is impossible to guess i don't know who is it? >> i don't know. i have no idea. >> oh, okay. >> i mean i'm completely -- >> either way, this is my ultimate dream, no question. no question. >> i am simply here to just say happy birthday. >> thank you. >> it is great to be here every day with you. >> it is great for us. i can't believe we share everything, including a birthday. >> i know! >> though mine happened first. >> it did, just. >> we should note there's no cake for bill griffeth. >> love bill happy birthday, bill griffeth. >> it is the first day we have both been here, one of us usually takes it off happy birthday to you. >> happy birthday to you. >> we should be thankful that the market didn't continue to tank. >> so we could have a celebration. >> the cakes, there was a lot of anxiety about that throughout the day. >> now i get why our great

team -- thank you, team, for the cakes -- was wrapping the jack liu interview earlier. my apologies to jack. >> we have to have our priorities. >> a big market day. we had a big day, of course no doubt coming we're out of time. thank you very much for watching. >> that does it for us "fast money" begins right now. live from the nasdaq market site overlooking new york city's times square, this is "fast money" i'm melissa lee. your traders on the desk are pete najarian, tim seymour, karen finerman and guy adami a wild wednesday on wall street, stocks tumbling early in the session only to stage a monster comeback we will find out what drove the big turnaround we are keeping an eye on shares of lyft. it has been a bumpy ride after session. we have full team coverage standing by to break down the big headlines but we begin with the market's roller coaster ride at one point the dow was down 589 points, but then came the turnaround yields started coming off the lows and stocks staged