to negotiate right now and they want to wait until after the election two, we've seen mobilization in hong kong that's scary we've seen argentinian -- and an argentinian currency crisis happens once every two years, so it's not a huge thing. jim, thanks for your time. and a slap in the face right now is in form of the stock market down by 1.5% or so thanks for watching "power lunch. >> "closing bell" starts right now. stay with us you don't want to miss it. >> welcome to the "closing bell." i'm morgan brennan in for sara eisen at the goldman sachs post here on the floor of the new york stock exchange. that stock is down5% right now financials getting hit the hardest in today's session with the dow down 421 points. the s&p down 41. selling intensifying in just the last few moments key question, with 59 minutes to go, will the selling continue? >> i'm wilfred frost good afternoon to you. stocks selling off protests in hong kong rattle an already tense relationship between china and the u.s. bond yields continue to spiral

lower on concerns about the health of the u.s. economy and a number of new bearish notes from new wall street firms hurts the sentiment further. let's check in on the biggest losers in the dow, which as morgan just said, is down sharply, near session lows, which were 462 points. it's currently down 410 points, as you can see, pfizer down 4% goldman sachs down 2.7 cat down healthily 2.56. the 30-year just hit a year-to-date low of 2.117% t the. joining us for the full hour, victoria fernandez at cross mark global investment. thanks for joining us. >> my pleasure >> when you see yields slip like they have done, like they did last week, does it make you want to press the sell button for broader u.s. equities? >> we don't want to sell we have that longer term

outlook. we think there's a lot of volatility going on and that's going to continue to play out. we are looking at these treasury buys, not just from short coverings but outright buying as well but i think you stay invested at this point >> there we go confident long-term view from victoria let's focus in on the big stories we're watching today bob pisani has a wrap-up from what wall street has been saying about the economy. rick santelli has the huge moves in the bond market bertha coombs is at the nasdaq seema mody has the latest on the protests in hong kong. bob, let's start with you. >> stock market is moving in lockstep with the ten-year yield. we had a big move in the yields. the s&p against the ten year, this is as close a correlation as you're going to get so the big banks all weak. we're also seeing the regionals weak as well dow movers, in addition to the banks and the industrials, you would think, would be weak we're also seeing some of the

big consumer names a little bit on the weak side, so mcdonald's, walmart, and disney, great performer this year. keep an eye on that. that hasn't happened often at the same time. sectors are all trade-related. transports, retails, energy, and industrial wiffle mentioned some of the big strategists commenting citing a bigger hit from the trade war. morgan stanley says the bear is alive and kicking. ubs says new tariffs will slow growth bank of america says the trade war is hurting capital expenditures and margins they see a 1 in 3 chance of a recession in 2020. a little higher than they had last time. so a lot of little bearish sentiments floating around on the street guys welco guys, back to you. >> victoria, if you're concerned about the risk of recession rising, where should investors be putting their money >> we're noz at concerned with recession in the near-term we don't really have red flags that are waving.

one of the things we look in the labor department, the consumer is extremely strong. if you look at where unemployment is, take about a 5% hike from your lowest employment number, that's a good recession indicator. we're nowhere near doing that yet. also looking at some of the new entrants into the unemployment number when that starts to peak or roll over, again, another recession signal, we're not seeing any of that right now the consumer remains strong. we have some numbers on that this week. we'll see how that turns out, but for now, stay invested and stay strong on these equities. >> i was going to say, it sounds like the stakes are higher when it comes toyour comments, thes other more nearer real-time readings we'll get on the consumer >> it's been strong all year we've had those conversations about how the consumer has been leading it all this will be a good read this week with all the uncertainties that continue to grow, do we have that going for the rest of the year >> let's get a check on bonds with rick santelli at the cme. >> two-year note yields are down eight basis points tens right now, they're down 11

basis points and 30-year bonds, you see on the intraday chart are down 14 basis points last week on the 7th, we had intraday lows very similar to this the problem is, is that we're revisiting them so quickly after we bounced and had much better closes on august 7th and finally, tens minus 2s, it's traded as low as 5 1/2 spreads between ten-year yields and two-year note yields right now it's trading six many can argue, three-month to ten-year isn't as important to traders, but 2s to 10s is. the long end isn't responding to fundamentals global slowing yes, but central banks gone wild is the biggest reason wilf, back to you. >> today, hong kong and argentina also factors, do you think? >> i think they are factors, if we had four or five basis points moves. but i think this adds into the nervousness already established in the interest rate complex globally >> rick santelli, thank you very

much bertha coombs is at the nasdaq with what's moving next. >> we're seeing a broad-based decline across technology and biotech as well. health care is not immune from this software today is the worst performing sector, really hitting the lows here in the afternoon, the usual suspects are among the losers apple had actually been higher earlier, but right now, it's part of the big drag that is dragging us lower. one thing to be said, we're not seeing the kind of volume that we saw last week on the sell-off that said, some of the big losers today are down big. m mercadolibre is one of the biggest losers they operate in latin america and had actually reported a really great quarter recently, but today, they're getting hit hard on those concerns only a handful of stocks are up. amgen up, not on any particular news, and netflix among the f.a.a.n.g.s is the only one

bucking the trend. this is the kind of situation that wants to make you duck under the covers and netflix and chill a little bit >> yeah, "stranger things," my recommendation there bertha coombs, thank you the markets are under pressure as protests continue in hong kong seema mody has the latest on that situation seema? >> iconhong kong's internationa airport forced to cancel hundreds of flights, impacting a number of airlines from united to american. the grounding of flights follows a violent exchange between demonstrators and the police over the weekend, which beijing described as early signs of terrorism. meenlt, the chinese government's unofficial mouthpiece, the people's daily shows footage of chinese military gathering in shenzhen, a city near hong kong, raising concerns over a possible intervention now, experts say if china were to get involved, it would be a no-win situation, as it would further alienate the country from its global trading partners just today, canada's prime

minister justin trudeau calling on china to be very careful in how it deals with citizens of hong kong. so certainly, there are implications here if this does escalate guys, back to you. >> seema, thank you very much. one of the implications is how those protests are impacting the casino stocks with exposure, of course, to macau in the region, and contessa brewer has a look at that. >> hong kong is a major part of entry for macau. the airport shutdown, definitely a problem for visitation look at las vegas sands now down almost 3%. it's been down even more than that throughout the day. mgm resorts down 1.5%, 1.75% melco resorts off almost a percent. that's bauds sed in hong kong, y the way. wynn resorts ceo said in an earnings call that the hundreds of flight cancellations were definitely an issue in the near-term. and analysts are echoing that sentiment and watching for how big this impact will be on q3

results. wilf >> contessa, thank you very much white house trade adviser peter nah rvarro appeared on this shon friday saying there's more room to run in the bull market despite recent volatility. >> what really matters for the market over the next couple of months going into the holidays really is going to be how far the fed is going to lower interest rates and really, whether we get the united states/mexico/canada agreement we had some volatility related to the china issue earlier in the week and at the end of last week, but investors are seeing through that and this is a bull market and will continue to be so >> for more, let's bring in alicia levine, chief strategist at bny mellon investment management good afternoon to you. what do you think? do you think there's more room to go in this bull market? >> i would agree with victoria that we do see room to run however, tactically, in the short-term, it's going to get worse before it gets better. and specifically, there are too

many headlines out there through the fed meeting, september 18th, where you could get the market and in particular, i believe the administration does not have an incentive to make any kind of concession to china before that fed meeting. because the administration wants rate cuts and is more likely to get rate cuts if the trade issue remains alive, well, and hot >> if that is the motivation from the tough line from president trump on china, then if you can look past september and the next fed meeting, will you see a changing of the tone on china trade from the president? >> i think you will, but i think that it happens in 2020. but, you know, if you're running for president, you don't mind some market volatility in the year before the election but the year of the election, you would like markets to be moving higher. having said that, i think whatever deal is cut is going to be a skinny deal it's not going to be the large ip technology transfer deal that markets had hoped for. it is definitely further along in 2020.

the other thing that's happening, as you mentioned, in the beginning of the hour, is that all of the investment banks are cutting numbers and cutting growth and that is appropriate. and the question, this is happening today, mid-august, and not in early may, when the trade war actually ratcheted up and there was the expectation that it was going to be swept under the rug. the truth is, those fourth quarter numbers were high. and so they're coming down to a more realistic place now >> victoria, how bearish, though, are some of those notes? the goldman sachs onegrabbed a lot of headlines today is it a catch-up to where the market already was as opposed to predicting stuff that the market thought was coming around the corner >> well, i think you have a lot of different thoughts depending on what perspective you want to take for us, we do anticipate that the market will continue to move higher we're looking at about 3100 on the s&p. and as alicia said, there will be fits and starts to that, but growth numbers are coming down, both gdp numbers and the earnings estimates continually this year, we've

seen every quarter estimates from earnings per share come down now the fourth quarter that originally was at 900 basis point mover higher, we're down to around 400 basis points on that i think it's across the board, you're seeing all the expectations come down >> alicia, when i hear you talking about it possibly getting worse before it gets better, this idea of fits and starts, that sounds like it could potentially be buying opportunities. what would you be buying >> that's exactly right. this is the year that reminded investors that diversification is the name of the game. and when you're tempted to move out of one asset class, you probably shouldn't you made money on both sides here we think you can still buy duration here for precisely the global bond problem, which is that you have $15 trillion of negative yielding debt you have rallies in the u.s. bond market. when the s&p hit certain technical levels, i would be interested believe it or not in the cyclicals, because they're getting killed and getting killed more than the other sectors. very negative on biotech and pharma, until now. and it feels as if that trade is ready to happen so i would look

at cyclicals and biotech >> which of the sectors stand out for you? >> we're looking at staples. she's saying look at cyclicals, but we're trying to have that diversification there. we're looking at things with more upside than downside. we're looking at more of those staples than core names. but i want to say adding duration is really important the yield's coming down. you have a lot of mortgage holders out there. as though refis happen, those duration shortens for those holders. they're out there buying duration and that's pushing longer in yield further down >> alicia, you wrote today, you think the current market environment is similarish to 1998 why is that? >> in 1998, you had terrible large macro risks and headlines that brought the market down the fed stepped in and risk on, you know, took the name of the game and by the end of the year, it was a great year in risk assets. and i see, if not that kind of excitement in the market, at

least a stabilization and a move upwards. we don't think this is the end of the cycle, nor do we think this is the end of the bull market when you think about it, the markets only come in 5% or so on these terrible trade headlines so i'm telling you, there's a solid basis here the consumer is strong the labor market is very strong. these will continue, and to the extent they do, the services sector is still strong >> so just quickly then, does it seem like a red herring to you to see interest rates moving lower and stocks moving lower in tandem >> the interest rate complex is currently being affected by the global bond market and you cannot separate that from what's happening globally and in a sense, our market is the recipient of that. having said that, if we invert the 2s, 10s, there will be a trade-off. so wether or not it's an accurate signal of a coming recession in the next 12 to 18 months, the sell-off could happen anyway. and that's what you have to be

worried about, which is that the financial market's blowback on the real economy rather than the other wap arouy around >> alicia levine, thanks for joining us great to see you, as always. the broader markets have picked up a little bit, now down just 400 points on the low. coming up next on "closing bell," we'll dig into the names goldman sachs says to buy if the trade war continues. and we are all over this sell-off and how to protect your portfolio during what will be a busy week featuring retail earnings, more key reads othn e health of the consumer and the economy.

we've got 42 minutes left of trade in what's become really an ugly day for the market, with all the major averages down greater than 1% right now. let's send it over to dom chu at the telestrator for more dom? >> all right so, morgan, wilfried, you guys had a great conversation with regard to what's happening with the markets and the health of the consumer, places to look for investing. so we wanted to take a look at the retail sales picture, only because it has so much more runway this week given the earnings that are coming out, the economic data, and the folks over at widecharts.com put together a look about retail sales over the course of the

past six or so months and how strong they've been and they break it down into some of the components of them as you can see here with the orange line, the retail sales picture overall has been up about 2.8% meanwhile, you can see grocery stores and food and beverage store sales right up there with it that speaks to that consumer staples trade that's been out there. we know that valuations, perhaps, are a bit stretched there. however, the consumer staples side of thing, very strong when you take a look at the other parts of the retail sales picture, that green line down here is department store sales, down 5%. no secret there. the amazon effect, people going more towards online. but what else is curious about this is you take a look at the overall picture for electronic and appliance store sales, also down about 4.5%. it speaks to this bifurcation right now in the market with the consumer the one thing this is not modeling perfectly is the amazon effect much of the consumer staples picture, much of the consumer retail picture has been driven by the fact that amazon and other online retailers have

become a huge focus for investor however, wilfried, morgan, i would point out that strength in retail sales still says the consumer is healthy in america it's just about the shift of where they're spending more of that money and there's probably a reasonwhy, guys, consumer staple stocks are valued the way they are right now compared to the rest of the retail landscape. that chart says a lot about what's going on. >> dom, i guess the department store sales aspect you could have predicted a little bit more than the electricals and the appliances >> and that right now is not a place where amazon has made a huge amount of inroads a lot of people don't go out there and buy stuff online with regard to your washing machine or your dishwasher or your refrigerator you still like to go to appliance stores or a home depot or lowe's where you can actually see it

but the important here is that the retail sales picture overall is still trending the right away the issue will be whether that retail sales growth starts to plateau and then starts to level off and turn downward. at that point there, we don't want to see anything happen with regard to consumer staples, because if they turn, the entire retail sales picture can turn along with it, guys. >> dom chu, thank you for that chart. those grocery stores right there, $5 for celery in the new york metro area, i can understand why they continue to trend higher but what do you think of valuations here? are they stretched for you or does it matter >> they're a little bit stretched, but i think that's why you don't go into the sector as a whole you have to do that bottom-up fundamental research within the sector find the names that have pulled back a little bit. look at that and add those to your portfolio don't always just do a full sector and i think we'll see that this week as we have some more earnings come out. >> you're buying a lot of $5 celery >> no, i'm not because it's $5 and celery >> so you're saying you

understand why it goes up in dollar terms, but not volume terms. >> okay -- >> just getting my head around it i don't know if you just loved celery >> if you look at prices at the grocery store, this has been the case since the mexico tariff store, the prices seem to have gone up, at least at my -- >> celery shops. >> okay. we've got 38 minutes to go before the bell and the dow is off 303 points up next, advice before the sell-off >> and back to hong kong, the protest taking a new dramatic turn what it means for investors here around the u.s don't go anywhere. we've got under 40 minutes and down over 400 points on the dow. - stand up if you are first generation college student.

stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. i will tell you this, southern new hampshire university can change the whole trajectory of your life.

welcome back goldman sachs out with a note outlining its trade war battle plans, saying investors should own services and provide goods providing stocks amazon, google, and berkshire hathaway have less exposure to trade conflicts. victoria, what do you think? >> obviously, with all the trade issues going on, you want to reduce anything that has that exposure goods services, we've seen it in the hiring that has really

fallen off for services hiring that's stayed really strong. that's been supporting the labor market i think you want to look at names where you can reduce some of that exposure, wherever that may be >> let's bring in tony dwyer, as well given this market sell-off we've got all sectors lower, tony and it's clearly very interest rate-linked, because utilities and real estate are the best performers, albeit down themselves financials very much the worst performers how much further do you think this yield move has got to go? and is it fair that you're seeing this equity market sell off in light of it >> well, i think it's kind of continuing what we talked about last wednesday from our conference, where you just -- you didn't get -- you didn't relieve the overbought condition enough and i think there's a lot of excuses between the trade wars i mean, tragically, between the trade war, what's going on in hong kong and some other issues that are out there have driven the fear up, which makes the bond surrogate trade appear to make sense i think yields are pretty close to their low at this point

and,, you know -- think about this what really has hurt the market in the first half of -- or hurt the economy in the first half of this year, and it was the bull story all along, was the higher rates are for 2018 so once this correction plays out, and i think it's pretty close to it, the bull story for the second half of this year going into 2020, is you actually get stimulative growth from the lower rates that we're getting now. so until you really shut down the availability of money, these lower rates are highly stimulative. just so people didn't think there should be a slowdown since things were so good in 2018. i think the opposite is true today, which creates opportunity. >> so when you say stimulative, tony, are you referring to the boost it could give to the economy, to the consumer, to businesses or specifically to the effect it could have on markets and equities >> i think it's both but truly, it's ultimately stimulative to economic activity housing should be picking up pretty dramatically.

and again, all of this centers around, people can't imagine me ever being bearish, but we were back in 2018, because you had shut down the availability in money. as long as the availability in money is still open, which all indications are that it is, when you get a drought, just image, you've gone from a 3.75 ten year down to where we are around a 160, that's an extraordinary drop in interest rates that is cheap in debt both on the consumer household and business level. ultimately, if you provide money, we'll take it and we'll spend it >> victoria, you said earlier, you like the staples are there any of the cyclical sectors that you have exposure to, that you would be adding giving the pullbacks >> i'm not sure we would be adding to any of the cyclicals right now, but we're not coming out of these names we're keeping them in the portfolio for the long-term. we've seen financials get hit and some of the other names get hit, but we're not getting rid of those one thing i do want to touch on that tony mentioned that's having to do with the mortgages or the applications with the lower rates, we've seen that go

up the fed's senior loan officer survey came out last week and showed mortgages up over 50%, over the last quarter. and the banks are saying they're lending standards are still easy, except for subprime and autos where they're getting a little bit tighter so i think there's follow-through >> tony, you said at the top you didn't feel markets had really corrected enough last week and from the most recent highs what further percentage decline do you think you would have to allow more meaningful climb into the rest of the year >> wilf, we did a study, when the bears versus the bulls is minus 25 or worse, it's happened four times this cycle. what you get is an almost 3% decline from where you get that. that would equal about 2850ish on the market. so really not that far from here it's more on time than it is on price. typically when the vix spikes

like it did last week, that's kind of your real oomph to the downside and then what happens is, you kind of grind back down and even marginally touch the low, marginally break the low and then kind of rip it. so to dovetail with what we've been talking about, the one place that i would have -- i don't know if i would say totally avoid, but if you have a significant overweight in the bond surrogate trade, i might think about taking the -- reducing that extreme overweight i think that's fully priced in and again, sn, we'as you know, e looking for further rate cuts, but that should make the ten-year go back up, which will hurt that trade. >> tony dwyer, great to get your thoughts thanks again for joining us today. with the stocks selling off -- with the stocks selling off, let's look at what is driving the action right now protests in hong kong rattle an already tense relationship between china and the u.s. bond yields continue to spiral lower on concerns about the health of the u.s. economy and a

number of new bearish notes from major wall street firms. time for a cnbc news update with sue herrera >> hello, wilf hello, everyone. here's what's happening this hour people in charlottesville, virginia, are taking a moment to remember heather heyer, a protester who was killed while demonstrating against a white supremacy rally two years ago today. the makeshift memorial had flowers and signs. the u.s. budget deficit has reached $866 billion over the first ten months of the fiscal year already outpacing the level of debt for all of last year. the annual deficit is expected to pass $1 trillion by 2022. the prison where accused sex trafficker jeffrey epstein died over the weekend is coming under fire nbc news has learned several hours passed between guard checks, a gap that was supposed to be just 30 minutes. and nike adding to the growing list of companies offering a subscription service. its adventure club is targeting kids from 2 to 10 years old.

it costs between $20 and $50 depending on the plan. subscribers get a new pair of sneakers each month. you're up to date. that's the news update this hour guys, back to you. >> a new pair of sneakers every month! that is ridiculous >> kids go through sneakers -- >> kids go through sneakers like -- >> because their feet are growing or because they need more colors -- >> no, because their little feet grow and they also destroy them. >> and they're playing on the playground >> that's fine then. i take it back but they don't grow every month. >> i feel like we do >> sue thank you very much! >> you got it. we've got much more on the markets straight ahead, including whether the escalating tension on hong kong could continue to weigh on markets also ahead, we've got your last chance trade. wee t mo'vgoone re stock to look at before the close. i saved hundreds when i switched

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which helps keep people outside from accessing your passwords, credit cards and cameras. and people inside from accidentally visiting sites that aren't secure. and if someone trys we'll let you know. xfi advanced security. if it's connected, it's protected. call, click, or visit a store today. welcome back to the "closing bell." we are down about 400 points douon the dow as wall street sells off as trade fears rising and yields slipping let's get to bob pisani, who has joined us here at post 9 with a take on this big sell-off. >> and i think the important

thing is, stick with the theme we are moving in lockstep with the ten-year yield if you put the numbers up today, the ten-year yield versus the s&p, that's as close as you're going to get to a real correlation. it's not just today. this has been a pretty good indicator for the last several weeks. i think we can have it going back to august 1st, even and you're really stretching it if you try to put this too long. but as yields have moved down, the market has problems. when the yields move sideways, there it is since august 1st the yields move sideways, the markets start moving down. that's the leading indicator with that said, we're 5% off of the highs that we had. this is not even a garden variety correction yet it's only down 2% so far, i'm not too freaked out. what i'm a little concerned with, q3 is always a lousy quarter, and this is sort of playing out in a standard historic pattern, even with the

trade worries that we've got it's remarkable we're not down even more. i have watched the advanced decline line how many stocks are advancing versus declining every day that's the most important thing i watch. if that starts rolling over significantly, those are very good leading tells and it's been weak in the last week or so, but not long-term. we were at historic highs just a month ago. >> we're also in the dog days of august what's the volume been like? >> it's been light you can't really -- it's very difficult to extrapolate long-term what's going on. the macro trends are not good. and what i follow is the bottoms up analysts. last couple of weeks, they've started taking down elements for the other big international names out there. for some of the technology stocks that's what you want to watch. because those guys are the last ones to react and they're the ones that pull the rest of the street up or down with them. that's why i put out a note this morning saying watch some of these sectors. specialty retail, they've been pulling those numbers down on tariff concerns in the last two weeks. >> we're about to talk about

hong kong in more detail in just a moment how much of the traders you've been speaking to on the floor concerned about argentina? >> on the one hand, you've got a administration that is trying to bring more fiscal discipline this is an age-old problem, goes back 50 years to world war ii and the paronus, a major issue the opposition party may be coming in. but the global markets know this is a parental problem, argentina. i think hong kong is a much, much bigger issue overall for -- it's hard to figure out, where do you factor that into your stock's analysis i think it's definitely sitting in there and i think it's very important. >> the key vote coming in a couple of months' time, but whether or not this is a precursor, we'll see bob, thank you hong kong entering its 11th week of protests let's bring in leland miller who joins us here at post 9 as well.

leland, thanks for being here. how are you thinking about these hong kong protests, the fact that the tensions there continue to ratchet up. is this a bigger deal for the market arguably right now than even the u.s./china trade war and talks >> i would say it is and the chinese strategy on hong kong has been to slowly turn up the temperature. don't do anything rash, but to continue to make the costs for hong kong more and more obvious. you're seeing the shutdowns of businesses you're seeing the shutdown of the airport. you're seeing commuters to the being able to get from place to place. so the chinese goal is looking to see if they can outlast the protesters, make the pain significant, some time there's going to be a reckoning. >> they want to do that because they want the protesters to stop in their own right or they want an excuse to send in the pla >>, i think they're trying to avoid a tiananmen-square-like image. but at this point, you're going towards the chooinds going n the question is, how good are they at looking like they're not beating down people left and

right? they have to look like they have -- they're restrained they have to return hong kong to order. but it will be very important in the eyes of people across the world that the chinese do this in a way that looks like the police are doing it, restraint wise and not sending in the army and that little difference can be thedifference between markets tanking completely and just stabilizing a bit >> have they not already lost the pr battle on that and therefore what do you expect the response from the international community to be if the pla gets sent in? >> i think the biggest issue right now is that the u.s. congress is out for the month. and so until they return from their break, there's a little bit of a gap the white house is clearly not looking to step up the pressure on this. they have a little bit of a break. september is also when students go back to school. so they have a few weeks they're trying to make this to just turn up the temperature make it a little more painful. and then there's the question of whether they send troops in en

masse, increase their presence, and things start dying down subtly >> what about the market's reaction and the economic impact of this? is it plausible that the hong kong currency peg can break, sore is that an unlikely scenario >> it's pretty unlikely. the thing to keep in mind here is, one, that's not good for the chinese. for the chinese, what's good is to restore order in china, but they're not looking to break the hong kong dollar and the second thing is, since tiananmen square, the chinese have done nothing but train, train, train their armed police. and these guys are the best in the world at subduing rioters and protesters, they have had a plan for this for years and years and years, because they knew at some point it was coming and you'll start to see it put into effect over the coming days >> it will be a crucial scenario to watch leland miller, thank you for joining us today we've got just about 20 minutes before the bell. here's where we stand right now, markets are off lows of the session, but the dow is down

below that 26,000 level. up next, much more on how investors should be positioning their portfolios >> plus, we'll hear from one strategist who says the threat of weaponizing the dollar could encourage people to buy gold and capry, macy's and ralph lauren all falling to 52-week lows in today's session. here's a check of where they stand as we head to break.

welcome back we have got just under 15 minutes left of trade and we are down 397 points on the dow smir samana joins us now what's your take on today's latest pullback. where does it put us relative to the highs and what would be a trigger for you to advise people to stop buying it. >> we do think we're probably in the bottoming process. probably last week was the extent of it that's when markets got caught offside. now you're backing in and filling. it feels like the minimum requirements have been met we want investors to selectively start to step back in. we like financials, industrials, we like tech and consumer discretionary and energy so for investors who are thinking about the next 12 months, this is probably a pretty good spot >> samir, given some of the

comments you just made and some of the sectors you like, it sounds like you think the risk around u.s./china trade tensions is priced in here. is that the case and if so, why >> it's not so much we think the risk is priced in. if anything, we think a deal probably doesn't happen until some time next year. it's that rates have drift lower. last year, they were raising interest rates so for a lot of those reasons, we think that economic data in the second half cuddle surprise a little bit to the upside and a lot of that would probably set the stage for at least a little bit of a bounce back. >> victoria, given your points earlier about mortgages, are you attracted to the banks >> we like the banks as a core holding. it's not something we're going to come out of because we're seeing the two to ten go so low today. i think you have to be careful i wouldn't be adding money to the financials, but let them serve as a base for your portfolio. >> thank you for joining us,

sameer samana. let's take a quick look at how stocks are holding up amid the sell-off >> health care overall is about in line with the rest of the market, but you are seeing a spread between the drug names in the dow. pfizer is among the leading laggards in the index while merck and johnson and johnson are performing the best with j&j still in the green and biotech, which is often more volatile in the broader market view, you are seeing the biotech etf holding up fairly well that's helped by amgen, which got good news on a patent case it's trading up more than 5% wilf, back to you. >> meg, thank you very much for that victoria, what's your take on pharma at moment you got a couple of holdings there? >> we do have holdings there and i know johnson & johnson has the big issues coming up with some of their court cases. we don't hold johnson & johnson, but we do hold amgen, we hold pfizer, abbvie so we have some names in that space and we feel confident in those holdings long-term outlook, even though

there's a lot of potential political issues coming in the pharma space, evening they're a good oldin ingholding. >> we have just 12 minutes left. we are still down 400 points, 1.5% every sector is led lower by financials as yields slip once again. up next, we have your last chance trade >> and later, stephen roach weighs in on rising tensions on the market impact we're seeing in the u.s stay with us wants to hang out. 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.

welcome back to the "closing bell." we've got nine minutes left to go until the closing bell. the s&p 500 right now is down black below 2900 down about a percent and a quarter, i should say. every sector is in the red right now, led lower by financials, as yields move lower, as well materials and consumer discretionary also down 1.5% a piece. as i mentioned, we've got nine minutes left to go victoria, what is your last chance trade right now >> so what we're looking at, when you have all of this volatility in the market, find a way to take advantage of that. so through our covered call strategy, we find securities that have quite a lot of market

volatility, good option premiums associated with them and you can thuz those in your trade so even though we weren't using financials, we are doing it with our options strategy so we've got capital one, usb, and even micron are some of the names we're using there to take advantage of volatility. >> are these companies you want long-term exposure to or short-term play because of the captions value >> we'll hold them in our underlying basket of stocks until they get called away or until we decide to roll out an option on those. they could be long-term, but depending on the volatility, we could make them shorter, as well >> it is interesting to hear you talk about micron, given the fact that semis have been hit so hard and they are so cyclical. >> it's an opportunity to take advantage of that movement we're seeing in that stock and being able to my calls on that >> micron, usb, and capital one. we have seven and a half minutes left to go in today's session. time for the closing countdown let's trade the close with

senior equity strategist at td ameritrade kevin, great to have you join us once again talk to us about today's move and the volatility pickup. two and a half points or so on the vix. >> what we see today is one of those, we had news out of hong kong which led to the foreign markets, which led to our markets. and then the goldman sachs and the bank of america news really gave this market no oxygen to breathe today. a very light day in terms of economic data. that being said, from tuesday morning on, the economic data and the earnings really start to pick up some team. we should see a couple of reasons to start nibbling on this market. >> when you look at the calendar for the week in terms of data, what is the most important for you? >> if you're looking for the headlines stuff, obviously, cpi tomorrow morning and then retail sales on thursday. if you're a macro geek like i am, i love the nfib small

business and industrial production those four names over the next three days, those will give us a lot to chew on and a lot to look at for overall healthy of the small business, which as you know, such a big part of this economy. >> kevin, when do you think we start to see valuation support in equity markets as the discount rate declines >> great question, wilfried. and you know, what we see and what we look at, when you see a ten-year go to 164 like it is now, what you have right now, as we speak, 24 of the 30 dow industrial stocks now have a higher dividend yield than the ten-year that's the situation where you have to start, even if you're heavily influenced by bonds, you have to start looking at some of these industrials and the dow names that have these impressive dividend yields. this is what lower yields lead to they yield to stocks looking more attractive. >> did you must mention industrials. what specifically in industrials

do you like right now? and i guess, given that fact, what is your take on where these trade talks go, memory and long-term? >> i think the trade talks are something that every u.s. investor has to think of and more long-term i've been saying for months now, i didn't think it was going to be a short-term negotiation. i think it's going to be a very long-term play, especially as we get closer to the election that being said, i like names -- i mean, if you look at something like boeing that may be starting to work through some of their problems and then, look it, 24 of the 30 names have good dividend yields. so we're looking at all of those names. good companies with good earnings that have been taken down by this overall market. >> kevin, what have some of your clients been citing as concerns today? is it the simple factor of yields or some of the wild cards out there in the market like argentina and hong kong? >> i just think hong kong certainly was the headline

and they look at -- you know, when they wake up in the morning, wilfried, they look at, the futures are down the futures are down, because the foreign markets were all down and as this market kind of firmed up, down 1%, you saw news from goldman and bank of america mid-morning that just didn't give them a real opportunity for buying what you're looking for now is something to give yourself a reason, down 5% off the highs, to start nibbling on stocks. some good economic data tomorrow and the rest of the week, nah will be that impetus >> kevin hanks, thanks let's send it back over to dom chu for a look at the market into the close >> as we take a look at the advancers and decliners and how many stocks are moving higher and lower, you take a look at the volume story, so far, advancing volume, as you can see here, a hair under 481 million shares, versus almost 2.2 billion shares in terms of declining volume so decidedly moving to the downside in that momentum, certainly for the downside stocks when it comes to those

volume numbers as we take a look at the number of issues that we're talking about, as well, take a look at this, because advancer over decliners, on the new york stock exchange, more than a 2 to 1 option 900 shares or 900 stocks advancing. 2100 here that are declining unchanged at 106 i would also point out, if you take a look at the s&p 500 etf, the spider, it trades on the last ten days an average of 110 million shares not a huge volume surge. we'll keep an eye on that into the closing bell now over to chicago where rick santelli has the bond and rates picture. >> kevin from ameritrade said something very important he said the news out of hong kong took all the oxygen out of the markets. he's right, but they have been holding their breath much longer than recent headlines regarding hong kong. we have a guns hot situation on the yield curve, particularly 30-year bonds. look at two-year day charts, two-day note yields which are down seven basis points. look at the left and the right

side we're a little lower on the right, but go down the curve to a 30-year bond, it's a ski slope on the right side. they're down now 11 basis points -- excuse me, 13 basis points and the reason that's so important is it sits at 213. it's only three basis points away from all-time lows. finally, a ten-year going back to the 7th on august 7th, last wednesday, markets had similar intraday lows but bounced on the close. to revisit them so quickly, making traders a bit nervous now let's go to bertha where there's also red ink at the nasdaq >> pretty much all red ink here, rick what's interesting is watching apple. it had been higher earlier in the day, which had helped the nasdaq outperform a bit in the overall market, although we are going to close lower, we're off of the lows. and also above the 50-day moving average and above $200 a share that's a little bit of a hopeful sign there software today is definitely where we're seeing the biggest sell-off mercado libre, that's a sales

platform, feeling collateral damage on the situation in argentina. and the ipos today are really getting hit hard, as well. lyft today is now down 22% from its ipo. crowd strike actually hit a new high today, but it turned negative on the day, as well most of the others are still up from their ipos. bob, on over to you. by the way, if you're curious, beyond meat only up 537% from its piripo. >> and we have been moving in lockstep with the ten-year yields only one dow stock up on the day. as the ten-year slipped, naturally the banks have been weaker, goldman has been a little bit weaker. industrials like caterpillar, united technologies is weak. even some of the consumer names that have held up very well this year mcdonald's, disney, walmart is also on the weak side. a bunch of new 52-week lows out there. that's not a good sign with oil

stocks down like with oil on the upside finally, it's the s&p 500, just remember something, folks. it's a lousy month, a lousy quarter historically and we are only 5% off of the historic highs. the 200-day moving average, we're a long way from that one there's the closing bell the dow down 392 points. if you're just joining us, good afternoon welcome to the "closing bell". >> i'm wilfred frost >> and i'm morgan brennan. mike santoli is off today. the dow finishing down 1.5%, 25888 is your level there. 399 points lower, though off the lows of the session after being down as much as 462 points similar story for the s& finishing down 1.25%

the nasdaq down 1.2% the russell 2000 small caps also finishing the day down more than 1% >> we opened lower and had steady selling until about half an hour from the close down about 1.5% on the dow it makes the u.s. the worst-performer of the global major indices for all the fears around hong kong, hong kong was only down half a percent today shanghai was up 1.5% europe did close lower the u.s. really stands out all 11 sectors lower and yields play the big part in that utilities and real estate the best sectors, financials, the worst, and the 30-year did hit a year-to-date low today of 2.117% >> joining us to talk about the market day, we've got an all-star panel nancy tangler, chief investment strategist kevin hanks, senior equity strategist at td ameritrade. mark chandler of global forex

and victoria fernandez with cross market global investments. good afternoon to all of you one thing that did buck this down trend today was gold, which is up again. >> gold having a big move. we broke out a couple weeks ago at $1,400 and i think we're on our way to $1,700. we've got lower yields, geopolitics, what's going on in india, which looks what may be an unintended consequence of the u.s. withdrawing troops in afghanistan. i think when the chinese protestecall the protesters in hong kong terrorists >> is that fair that we see a 1.5% decline in the dow today? >> yeah, i mean, i think we can expect august to be pretty choppy from here, wilfried and continue to be very

sensitive to headlines and concerns the 210 is still positive, i think, last i looked and that's something that investors are going to be paying very close attention to as we try to figure out if recession is in the near-term cards. so we'll see >> victoria, in terms of the close today, down sharply, all the sectors lower, what's your take as to whether or not there's some things to be dipping in and buying? >> i think there's always places you can look for opportunity we talked a little bit earlier the top-down bottom up use that strategy. look in areas where stocks have come down, see if there's some upside potential there going forward and take advantage of that with all the sectors down today, it's a pretty wide scope of where you can look >> and to that point, the idea that maybe there's opportunity to nibble at some stocks today,

where would you be nibbling? especially the fact that the selling today was so broad-based. >> if you look at -- remember, as we get to mid-august, we're only halfway through earnings season, and so even some of the headlines names aren't really coming out, you still have good names this week to talk about, walmart, nvidia, john deere later in the week. advanced auto parts coming up here pretty soon so we have a lot of names that you can look at that can still -- remember, we talk about the macro a lot, but when these earnings reports come out, haas the micro trade where that individual name will have its own story. we like to look at the overall market and at individual names as they come out with earnings >> nancy, to what extent would another rate cut or two from the fed put these current concerns to bed or are they just not really the effective tool to fix some of the fears the market has >> i think -- when they're priced in -- i'm sorry, did you go to me, wilf i apologize. >> go ahead, nancy

>> i think what's happened is investors have priced in two more cuts this year. so if they don't get that, then we're going to see the volatile response that the algorithms will start in the morning, each -- all the way through. but i do think that that the short end, the inversion at the short end is telling us that the fed needs to cut, whether i think they do, or not. and so i think we have to watch and make sure that the -- we can't make sure, but make sure we don't see any fires of recession in the next ten months 18 months out is a different story. >> yields falling sharply in the bond markets rick santelli has all the details. >> if you look at an intraday of ten, we've bounced a few basis points off the 162 low, hovering down 11 at 164

two double bottoms right above 135. we're 30 basis points away from that the 30-year bonds are like three basis points away from that all-time low and that long end of the yield curve is boss finally, year-to-date, a ten minus twos it's a little higher than that and that's the widespread, many will become very much more nervous on should it invert. wilf, morgan, back to you. >> rick, thank you >> mark, i want to get your thoughts i'm looking at these notes that this big dollar rally is over or nearly so. that sounds very contrarian. >> my first book came out about ten years ago. and i called for this big secular rally in the dollar. and now i think it's over. i think what's happening is since last november, to me, that's like the hallmark of the last stage of the dollar's

rally. i would look for a year from now for the dollar to be 5 to 10% lowe lower. >> rick, i want to ask about the move we saw today. regardless of what the cause of that fall is, when you see such a big move in a currency, how much does that spook investors >> it spooks investors a great deal if you look at the forwards and the interest rate differentials and factor in where the dollar fits into the global financial structure, there's huge demand for dollars and they need to be satisfied to pay ongoing obligations. and mixed in with all of that are foreign central banks and currency moves like you've just described that are feeding on themselves everybody said the fed needs to match expectations with the market what the fed needs to do is break the expectation curve in the market and set some kind of boundary because the rates we're looking at do not reflect the fundamentals of the u.s. economy.

and our central bank should not buy into this seven, what's your take in terms of the volatility we've seen in rates and the dollar as well and how much that's affecting equity market sentiment? >> you know, i agree completely with what rick santelli is saying and make no mistake, if this market was in full manic on the downside, you wouldn't see vix at a 20.7. even though it's historically evaluated for this time of year, it's nowhere near what i'm old enough to note is a real panic level in the vix so i think at the end of the day, 60, 90 days from now, we'll see this as just a moderate correction in this market and nothing that these markets should get overcautious about, for sure >> yeah, victoria it, raise ascii question about what happens when you see these unprecedented levels of easing from central banks the world over and what that actually means to a yield curve and that

threat of inversion. would it play out the same way we've seen throughout history? >> we've already seen a few countries where we have the inverted yield curve, right? so when we look today, we got to such a low, i think we were five basis points at the top of the show, between 2s and 10s the long end of the curve is a little bit different i think that's where we're seeing the demand come in. it's not as much driven by the fed, as we're seeing by demand by everyone. a flight to quality exextending duration i would be surprised if we saw a full inversion here with that. i know there's a lot of talk, will we go negative rates here in the u.s i'm hoping the fed will stand still and see if the economy can stand on its own two feet for a little bit once these uncertainties go away. >> we saw the likes of morgan stanley down 3% or so today. it doesn't have that much net interest income. is that a buying opportunity >> yes, we initiated in morgan

stanley in the fourth aquarter and are looking for further opportunities to add to it last week we took some of our money out of industrials and added to things selectively like pepsi and a number of other of the consumer discretionary, but we're also overweight tech and health care. so i think the defensive trade is over. i think it's way too -- it's too difficult to get into bank stocks at this point so morgan stanley, goldman, those are places where we're parking some of our excess cash. >> it's too difficult to get into bank stocks >> they've underperformed for so long, the margins are shrinking. the valuations, i know people are pounding the table, on our work are not all that compelling, so we're market weight the sector and the industry, but we're not going overweight at this point >> mark, just to finish all of this out and go back to this debate about negative rates and whether we can actually see them in the u.s., where do you fall

on that, especially given the fact that you are establish on something like gold? >> i would agree with you with the chance of us going negative rates is pretty slim the federal reserve just met at the end of july and said there's nothing wrong with the domestic economies and it was the global issues i think any country that has negative yields is because the central bank put deposit rates below zero and i don't think the fed would do that. >> we'll leave it there, guys. thank you very much for joining us thank you very much, guys. up next here on the closing bell, former morgan stanley asia chairman stephen roach will react to the escalating tensions in hong kong and whether it could lead to further selling on wall street. and then we will discuss the trade war tech wreck with dan niles to find out whether he's finding any opportunities in the sector right now

welcome back

stocks falling sharply on wall street for a second straight day on escalating trade tensions and protests in hong kong. bob pisani is having a look at the big movers here at the stock exchange and bertha coombs doing the same >> we've noticed all day stocks moving in lockstep with the ten-year yield as they moved down and the markets moved down. the major movers really only one stock did anything on the upside, johnson & johnson. but with the yield moving down, we saw all the banks moving down, we saw international global and industrial names like united technologies weak but i would also note that consumer names that have done really well this year like disney and mcdonald's and walmart, for example, were also on the weak side i want to show you the dow jones industrial average on an intraday basis even though we were near the lo lows for the day, it sort of flatlined in the last 20 or 30 minutes. and making some calls and trying to figure out why that happened is a little bit unusual. we understand there may have been some issues with the consolidated tape in terms of

prints to that we're trying to get some idea of what's going on. if i get some more information in the next half hour, i'll come back to you. >> sounds, goo, bob, we'll be looking for it tech stocks dragging down the nasdaq bertha coombs has those details. >> relative to the rest of the market, it was fractionally actually better than the rest of the market in part because apple was up for much of the day until we saw that lag down midday as bonds moved lower. apple and the rest of the nasdaq holding up above last monday's low and we didn't see the sell-off this week on that kind of volume that was sort of panicky that we saw last week. among the stocks that were bucking the trend, amgen up for the third straight day after a patent win last week and beyond meat seems to be unsinkable, although it is down about 14% for the month of august back over to you >> those poor beyond meat shareholders, down 14% that must be tough to take >> only up 537% since the ipo.

they've given back so much >> tough to stomach! >> exactly moving on, the protests in hong kong and concerns about escalating trade tensions have been weighing on the broader markets particularly today and of late. joining us exclusively, stephen roach, he's yale university senior fellow and former chairman of morgan stanley good afternoon to you. thanks for joining us. >> thank you, wilf >> let's start on these tensions in hong kong what chances do you put of their being significant military intervention from china and how significant would that be if it happened >> well, it would be terrible. the risks are obviously rising, wilf but, look, hong kong is part of a frame work of one country, two systems. so it's not one country, one system that gives the hong kong government the flexibility to act in a way that really diffuses this worrisome buildup of tensions.

and so if they can address emphatically the extradition las that the demonstrators have about unnecessary police brutality, i think that would go a long way in diffusing these tensions but barring those outcomes, there's no telling where this will stop. and if it keeps escalating, clearly, beijing is sending some very worrisome signals right now. >> but if the hong kong government was going to do that and do that convincicale icalll eyes of the protesters, wouldn't it have happened already >> fair point. but what the protesters are telling you is that the need to do it is becoming more and more urgent it's very disappointing that the hong kong government has not responded to date, but it is not too late and i think they need to take

this latest escalate of tensions far more seriously than they have right now it seems to me that they're afraid of upsetting beijing, but again, that flies in the face of this one country, two systems framework. two systems gives them much more zbre discretion than they appear to be willing to use. >> and that seems to get at the heart of it, especially from an investor standpoint, that you have china walking this fine line if you see force, i guess, become more aggressive or become -- you see this real deteriorate in terms of the relationship between authorities and protesters, how would this play out here in the u.s.? i would imagine, even if the administration didn't, you know, vocalize about it, you would have lawmakers start to get much more aggressive here and that could really sideline trade twa talks between the two countries, right? >> well, morgan, trade talks are pretty much on ice right now, so i don't think you have to worry

too much about any further deterioration in that. the trump administration did put out sort of a noninvolvement statement this afternoon, but you're right to worry more about the congress than the white house in taking the initiative here but again, i don't think the u.s. will become aggressive in addressing this issue, unless there is direct intervention by the chinese military and hopefully, that can be avoided. >> what do you think about hong kong long-term, stephen? do you think that even if we get past these short-term concerns, that companies and workers will be looking to leave the city >> well, wilf, i'm personally very disturbed by this i've lived in hong iconic for a number of years. i'm extremely fond of the city it's a wonderful place, but this is dealing a very serious blow

to hong kong's long-term competitiveness as an international city, as a destination of choice for a foreign financial services firm and expats from around the world. so what's really needed here, again, just to hammer home this point that i made earlier, is that the two systems' model has to be much more sensitive to the pressures that are bearing down on hong kong a failure to do that could really do lasting damage to this great city and that would be a great tragedy. >> stephen, just wanted to switch focus for our final question we've seen a huge sell-off in the broader markets a of late, in particular of the bank stocks, in part because yields have slipped so much as i glance down, morgan stanley, your old shop, is trading at 0.9 times book on a 3.5% dividend yield. do you think the selling in bnkk

stocks in general has been overdone of late >> again, it's just a reflection of the state of the yield curve and the willingness of the federal reserve to really take what it believes to be a preemptive fashion to lead further inversion, which really underscores the profitability risks for financial services firm so i think, you know, hopefully, if the fed draws a line in the sand in its own willingness to invert the curve, those pressures will subside >> stephen roach, thanks for joining us >> thank you we have a news alert it's a ceo change at yum brands, where ceo greg creed is stepping down and ceo and president david gibbs, who's a 30-year veteran of the company, will take over as the new ceo yum, of course, is the parent company of kfc, pizza hut and

taco bell. creed will continue in his current position for the rest of this year and will remain on the company's board for the foreseeable future no move in the stock in after-hours trade. >> still ahead, famed tech investor dan niles tells us whether he thinks there's still more fallout ahead for the tech sector >> and gold isn't the only asset outperforming the nasdaq what other asset class has developed a better return for investors. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

time for a cnbc news update with the one and only sue herrera. hi, sue. >> hello, wilf thanks so much here's what's happening at this hour, everyone staff at a va hospital in chicago were told to shelter in place after reports that there may have been an active shooter inside police say one individual is in custody. luckily, there are no injuries the fda is warning consumers to stop buying or drinking a product being sold offline called miracle mineral solution. the agency says that solution which claims to be a health treatment that can even cure autism is making people sick puerto rico's new governor, wanda vazquez toured a local elementary school to kick off the start of the school year vazquez says education will be a major focus of her up in administration and it may still be summer, but the pumpkin spice wars are on dunkin' donuts is rolling out

its wildly popular and delicious pumpkin-flavored drinks and pastries starting next wednesday. starbucks, not to be outdone, reportedly will begin selling its lattes on the 27th just in time for the start of school that's the news -- >> it's a little late for halloween drinks >> late? >> it's early. it's early >> i know. >> let the summer last a littl longer >> yes, exactly. >> sue herrera, thank. >> you got it. see you tomorrow, guys let's send it over to dom chu for his final chart of the day here at post 9 >> my final chart of the day should be fisher's island lemonade, because it's my summer drink and i don't want to think about pump skin spice lattes or peppermint mochmochas >> let people to order what they want >> what's the chart? >> the chart of the day. the final one of the day is this idea that there are convergences and divergences happening in the

marketplace right now. one of the ways we're going to illustrate that is through just how many etfs and different categories are moving apart and moving closer together again what we have here is a chart provided by the folks over at wide charts.com. and what it shows you in the orange line is the stock market and how it's been performing no surprise here, record highs, and we've kind of pulled back from it there. with today's pullback, we're up about 15 or 16% from the s&p 500. meanwhile, take a look at this the green and the blue lines together, the blue line is an etf that tracks gold a green line here is the one that tracks the long-term treasury market. you can see here, they trade pretty closely together. no surprise here that they've shot up to the upside. to the point now where the gold etf and the long-term treasury etf are now 18% higher on a year-to-date basis, outpacing the s&p 500, but gold and that treasury etf are almost identical in terms of performance. now, that correlation or trading relationship may continue if these current trends stay in

place. meanwhile, i'll point this out, a broader measure of commodities overall, not performing nearly as well. this white line here shows the broader commodity complex moving down almost 10%. so guys, that chart of the day, the big convergences and divergences is certainly something to watch there >> and obviously, dom, in early june, you sold all your equities and put it all into gold and that's why you're such a great fund manager >> i didn't even pay attention to that big gap we saw in the middle of the year >> great to have you here. dom chu for us there >> go enjoy a lemonade >> yes, must have a lemonade does sound actually refreshing letes next, famed investor dan nis llus where he's finding opportunities amid the market volatility. don't go anywhere.

welcome back to "closing bell." big tech getting crushed in today's market sell-off. value investor dan niles joins us now on the phone. dan, thanks for joining us it wasn't that long ago, it was back in june that you were on "squawk alley," talking about the fact that you had renewed

interest, renewed love for the semiconductor stocks where do you stand on those now? >> yeah, i mean, i think -- if you look at what we talked about on or most recent interview with you, you know, back in early august, you know, our view was that this round of tariffs, et cetera, that we were looking and the slowdown in demand would be pretty negative for semiconductor stocks they've obviously had a great run for that period of time, but, you know, the epicenter of these tariffs affects hardware-related names and in particular with this last round of tariffs that go through on september 1st, that affects cell phones, pcs, laptops. those did not have tariffs before and that, obviously, has a lot of semi-conductor components going into that. so, i think, you know, for the semi-conductor space from here, it's great, everybody has optimism, that the space is going to bounce, but you also have to remember those stocks are up a lot year-to-date. they're up 25% year-to-date.

in fact. and that's up more than the s&p up 15. so i think that's one of the spaces you actually want to be very careful of from here going forward. >> dan, just talking about broader markets and the sell-off we've just seen again today. on august 8th last week, which i think was thursday, you tweeted, i expected a short-term bounce, but 3.3% in three days, wow. so do you think we had bounced late last week too much? and today's sell-off was worthy? how much more of a sell-off is due? >> yeah, i mean, you sort of left off the next sentence in that tweet, that says, seems too bobby mcfarren like, right the song is, "don't worry, be happy. and unfortunately, a lot of investors have taken that view of, well, the fed is going to save us and so don't worry about it and stocks are going up so we'll go up more and that's a really dangerous thing. so i think to your question, which is the right one, if you think about where we are today, you know, we've got tariffs

coming in potentially on september 1st, then china devalued the yuan. and then there was the u.s. government is not going to buy from huawei. and so things are not getting better they're escalating and on top of that, you've got protests in hong kong, obviously, going on. you've talked about the situation in italy i mean, there's a lot of things that are pretty negative but you look at the stock market and if you sort of come from a different planet, grow, wow, the nasdaq is up 1% for the year the s&p is up 15% for the year and the semiconductor index is up 25% things look great, but that's not what's going on fundamentally. the only thing that's good is the fed is cutting but as i said in a prior tweet, they're cutting for a reason and you need to be aware of that and it feels like investors have just gotten too complacent so i do worry there's a lot more downside from here >> so, then, dan, is it the big cap tech names, the software names that don't have as much exposure to china, for example, that continue to look the most

attractive that's a great insight, morgan yeah, that's exactly it. what you want to do is you want to avoid the names that are associated with china. and forget about the fact that the charts look good as you pointed out, if you look at a lot of the software names, they're not in china look at the big internet names, google and facebook, they're locked out of china. those are the areas you want to go to, when you're looking for things that make sense or look for names that are beaten up, but where fundamentals are starting to improve, like in some of the gaming stocks. those are the areas that we're more focused on right now in terms of looking for longs and adding to exposure >> facebook and google both down over a percent today have you added to your exposure today, will you be doing so tomorrow >> yeah, we didn't add any today, to be clear but during the sell-off, we were that happened a week ago and yeah, we are actually -- that's our next move is to try to find levels where we think, okay, we can add some more to them, because as morgan pointed

out, right, a lot of these stocks, they don't have exposure to china, so we're happy getting longer those names and then shorting more in the hardware space where, you know, you asked that first question on semiconductors you know, areas where we think there in the epicenter of the new tariffs coming in, so that's how we're trying to manage our risks at this point. and the hedge fund that we run is sitting on some cash right now, because we've beenworried about a sell-off, obviously, referring to the tweet i put out earlier. so we're trying to be very careful with how we buy stocks and at what prices we buy them >> so, whether it's a name like facebook or some of these other big tech names or the video game stocks, for example, regulatory risks, something for the market to shrug off here? >> well, i mean, you shouldn't be shrugging off you should be certainly paying attention to it. but as we saw, i mean, we've seen this before, right? it took a long time for microsoft to get through that. we're talking years before anything happens with facebook or google or amazon or with the

video game companies so the headline risk, in my opinion, is a short-term positive, because, you know, you can't wake up -- i mean, how many days is it before you have something negative that comes across on facebook or google, on privacy, or amazon on anti-monopoly or on ea or on some of these, you know, something bad happen and so it's video games' fault there's lots of negative headlines that go across for all of these names, which thankfully has kept the expectations pretty low. but if you look at google and facebook, business accelerated last quarter, despite all the headlines. so, you know, that's a good sign that despite all of this, the business continues to do pretty well, despite what the politicians are saying and so i would rather be in names like that than stuff that's overhyped because you look at some of the software names that have no earnings and that have sky-high valuations trading at 50 to 20 times sales, i want absolutely

no part of those names because if something goes wrong and the economy softens, which is obviously what the bond market is telling you, those stocks can go down and get cut in half and still be expensive and they have no earnings or cash flow. so, that's where you should be really scared. the charts look great, which is wonderful, but, you know, that's about the best thing right now, because from a risk/reward basis, there's a fair bit of risk where they're trading >> dan, great to speak with you, as always. thanks for joining us. >> thank you very much, wilfred. >> up next, more on is mtharket sell-off and whether the top analysts are buying into the selling.

welcome back just one winner on the dow today in the green the merck was up 0.2%. the losers, well, there were plenty of them, 29 companies out of the 30. goldman sachs was bottom of the list, down 2.6%. pfizer and united technologies down there as well we did decline 391 points on the dow. let's bring in jim paulison, chief investment strategist at the luther group and on the phone, david rosenberg david, if i start with you, this big sell-off -- well, buying of bonds, selling in the yields of bonds we've seen once again today. where do you see it going from here >> well, in terms of the stock mark

market, we are just at this point, having broken below the 50 and the 100-day trend lines, we're just 3% away now from 2793 that's the number that if you're bullish, you hope holds, because that's the 200-day moving average. and i talk about this, because this has largely been more of a technically driven market anyways as opposed to strictly fundamentals so pay attention to the technicals and again, if you believed that this bull market is ongoing, that 2018 trend line has actually completely flatlined right now. as for bonds, this is really the mother of all short covering rallies. you know, we went into the month expecting a short position on the board of trade of 363,000 net shorts and they're hurting right now. so this is probably going to continue, whether you believe the fundamentals or not, there's a very strong fund flow impact happening in the board of trade in terms of these massive levels of shorts being forced to cover right now. >> jim, what's your take on market action? we've seen the pullback in stocks in the past week, and

also just the rally, well, today, excluded. are you still as constructive as you were the last time we spoke where equity markets are concerned? >> i still am, morgan. i think, i look at this, i could be wrong, there's no doubt about that, but i look at it more as a correction along the way and david's right, we're playing some technical levels here with that correction. we've got some lows that maybe we need to retest. i don't know but i think if i look out over the next six months or year, i think there's good opportunities here what i believe is we're overplaying the negative impact of trade and underplaying how much stimulus we've dumped on this global economy. they were the last animal in the world to ease. we've expanded from late to over

3% now, with the deficit as a percent of gdp has gone up a full percentage point in the last year. we've got three-pronged stimulus that you normally only see when you're trying to get out of a recession. and year-to-date, we're growing at 2.6% on gdp, which is actually above average during this expansion i think with the lag effect on policy, which is, we're just starting to enter that appropriate lag time, somewhere around nine months or so, and i think that's going to work and economic growth is going to pick up here. you're already seeing the citigroup economic surprise indices in the united states pick up in the last four to six weeks. they picked up in the emerging markets, they picked up in japan. i think we're already starting to see a turn a little bit in momentum and if that happens, then i think the imminent recession fears fade and there's probably pretty good upside that will start from like a 160 ten-year, quite a bit of room, i think, when you look at average p\es against a very low base. so i would look at adding a

little exposure. my three favorites are emerging markets, technology here, i would stay with that it's one of the populars, and i'd stay with it, and i would look at financials because i think rates are going to go up over the course. >> david, you agree. you don't think the fed easing is going to deliver the type of stimulus that's needed at this stage of the cycle >> yeah, it's called pushing on a string and we've already got the template, because the bond market did so much heavy lifting as it was over the course of the past ten months with the ten-year note yield coming down, 150 basis points and the housing market in auto sales barely have a pulse. and that attests to the fact that the private sector in the united states is just choking on a level of debt and we're not going to see the big impact in demand and even if we do, the lag between what the fed does now is not going to be felt for 12 to 24 months down the road. the point i'm making about someone like jim can focus on the surprise indicators. that's fine. you can drive looking through the rearview mirror if that's what you want to do.

the leading indicator came out last week and it's decline 18 months in pa row and it's actually down to its lowest level since 2009. the u.s. leading indicator from the oecd, down 12 months in a row. that's driving through, looking through the front window and things are cooling off and are going to continue to cool off. and the bond market is telling you that i mean, we have three basis points the ten-year tip yield is three basis points what's that telling you about economic growth? if we're going to see a strong economy, we would be seeing inflationary pressures going up. instead, look at what the crb metals index did today it collapsed by more than 1% and look at the ten-year tips at 161. the fed is really behind the curve right now. that's the message from the bond markets. seriously behind the curve >> gents, we have to leave it there, but we thank you both for your opposing views and look forward to having you both back again soon jim and david. >> thank you thank you. still ahead, behind the retail route markets selling off this

afternoon and the shopping stocks were no exception the names being hit hardest and those bucking the trend, coming up - at southern new hampshire university, we believe in education built for all people. - [woman] snhu was the best experience of my life. - [man] without snhu, i wouldn't be the leader i am today. - [woman] i graduated high school 19 years ago. i still finished. - [man] in the military, you feel that sense of accomplishment. that's what snhu is. - you will march from this arena and say to the world.. i did it.

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welcome back retail's been rocked by talk of trump's tariffs on chinese goods but not all companies will get hit equally. and investors are starting to pick the winners from the losers courtney reagan is here with that story for us. hey, court >> hey, wilf so these knee-jerk reactions haven't kept all retail valuations depressed in fact, once the dust settles there's a realization than all retailers will be hit equally hard by tariffs. so for some stocks the worst may be behind us in early may the retail etf, the xrt, sold off sharply as

u.s.-china trade talks broke down leading tariffs to increase from 10% to 25%. the xrt then did begin to rebound in early june only to fall again sharply in early august when president trump tweeted there would be a 10% tariff on the final $300 billion worth of chinese-made goods september 1st. but a number of retailers are above their may 3rd levels that most recent near-term high, perhaps suggesting a near-term fluor. costco up around 12% from before trade talks fell apart dollar general up 8% target and ross stores 7%. ebay 6%. and walmart is 4% above the may 3rd high morgan >> courtney, thank you let's discuss the outlook for retail stocks even further with mark cohen, former ceo and now director of retail studies at columbia university here at post 9. thanks for joining us. >> nice to be here >> how do you see it with the trade war situation? i'm looking here at notes that say you believe that it's

unfolding before our very eyes throughout the retail industry starting this fall that economic catastrophe is what signs do you see that -- >> we're staring at at bis and we don't know whether we're look at a three-foot drop or a 300-foot drop because we don't know what trump is going to do in september had he makes good on his threat. clearly the chinese have demonstrated they have no intention to blink and the whole notion of a tariff-led trade war is foolishness from the get-go. you know, trade wars have never succeeded. i think trump has always felt that the country a tariff is imposed against is paying for the tariff that of course is categorically false. he keeps talking about it as if, you know, the chinese are paying for this, which they are not at the end of the day most of the pain has not been evident because most of the consumer goods haven't yet been hit but on september 1st that may change and then of course whereas 10%

may be finessable for some retailers, 25% is an entirely different kettle of fish >> did you predict that we were heading for the abyss before the first round of tariffs as well >> absolutely. because any conversation -- >> so could you be wrong again this time? >> i don't -- well, i could of course be wrong. i'm not an oracle. but at the end of the day i do know from my own experience, as anyone who's been in the business who's been around for a while knows, trade wars have no winners. everyone is a loser. the loser is the consumer. the consumer is always the one upon whose shoulders these things fall. right now the farmers are looking at billions of dollars of agricultural products that's rotting, that's not going to be shipped on september 1st to china. they've got millions of acreage of fields to plant, representing products which likely are not going to china >> is the bigger risk here the tariffs or the fact that you have potentially brand blowback? examples being just this weekend

coach, givenchy. you had versace as well. that are seeing some of their brand ambassadors in china jump ship because of t-shirts that may be labeled taiwan and hong kong not as parts of china is that type of anti- -- i don't want to say anti-american sentiment but the fact there are these rising tensions among consumers there, is that the bigger risk here >> i think that catches a headline but it doesn't really have any meaning i think at the end of the day chinese consumers very much value american brands. depending on how crisis-like this trade war becomes that may change. but i don't think that's the risk to the u.s. economy the ability of a coach to sell or tapestry to sell coach bags in china >> i meant the companies themselves >> yeah. i think there's disruption in the air everywhere you look. but i think the disruption which represents consumption by the chinese consumer is not the issue at hand. >> all right >> it's the pain that american consumers are going to feel

big-time and their reaction to it, which is always, almost always higher prices, lower demand lower demand, more stores close -- >> we have to leave it there because we're coming up towards the end of the show here but mark cohen, we appreciate it look forward to having you back to talk more about it. >> you bet >> up next your wall street look ahead. the key things you need to watch as we head into a new trading day. this is the couple who wanted to get away

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time now for our wall street look ahead rework, tilray and boeing. let's start with leslie and wework >> wework's much-anticipated filing could become public this week sources close to the company say that its parent, known as the we company, is looking to disclose its ipo prospectus which is currently on file with the s.e.c. confidentially as soon as this week. that would put wework on track for a september debut. wework sells short-term leases for office space, a model that some have questioned viability during an economic downturn by revealing its prospectus investors will learn more details about the company's financials, its business model as well as risk factors for investing. guys >> leslie, thank you tilray set to report results

tomorrow aditi roy has a preview. aditi. >> reporter: morgan, it's been a busy quarter for tilray. the company will likely touch upon domestic and international sales at home in canada. retail adult use sales were up more than 20% in april and 15% in may month over month. that could help drive topline growth its own international footprint tilray announced last week it has increased cultivation space in portugal and that could affect guidance back to you. >> aditi, thank you very much for that and the tilray ceo will be right here on "closing bell" tomorrow afternoon with instant reaction to those results you don't want to miss that. final preview for tomorrow, boeing's july records and deliveries will come out tomorrow and phil's got a preview phil >> wilf, the big question for investors, will july be another shutout month when it comes to the 737 max? if there are no firm orders, and we don't believe that there were any in the month of july, then what you're looking at are five straight months without any firm orders what did that do for the backlog? as you take a look at shares of

boeing, keep in mind right now the company is on pace to deliver the fewest number of 737s since 2012. and obviously the longer the grounding goes the fewer deliveries they make, we could see that go back to even lower levels guys, back to you. >> phil lebeau, thank you very much for that. reminder, we ended the day down 1.5% on the dow, but we're out of time. that does it for "closing bell." >> "fast money" begins right now. live from the nasdaq marketsite overlooking new york city's times square, this is tms tms. i'm melissa lee. tim seymour, brian kelly, and dan nathan coming up you'll hear from one long-term bull who says he is now the most bearish he has been in a very long time. also ahead a pulse check on the consumer, the three events coming down the pike that will tell us if the u.s. consumer is alive and well plus a call on bitcoin one wall street firm says the crypto currency is about to break out. the magic number they are putting on b