>> the dow down about 500 points at this hour 470. off the lows go join tyler and melissa for "power lunch" which begins right now. >> e see you in a moment "power lunch" starts now with a major market sell off. check out the carnage on wall street as the trade war takes a nasty turn china began today retaliating with new tariffs then president trump ramping up the rhetoric, ordering u.s. companies to leave china and it's the stock market paying the price is dow is down by 500 point. 1.8% s&p 500 down almost two full percentage points and the nasdaq down 2 p.5%. >> spoofed by a major es canlation in the trade war between the united states and china. eamon javers has the latest. seema looking at the stocks

getting hit. hi, eamon. >> yeah, as of this moment, the feel iing in the building is th they are still tracking and expecting some kind of response from the president to the chinese tariff escalation of this morning which happen nd the premarket hours. now aides are telling me they don't know what the president is going to do here they don't know when he's going to do it and they don't know what the format is going to be are we going to get a tweet from the president this afternoon see him behind a lectern here at the white house? a piece of paper from the press office no real planning for what that's going to look like but the expectation a is that the president is going to respond. we know the meeting with the president's team has wrapped up now and you can take a look at policy advisers who were in the room with the president as they talked about all this. mnuchin, larry kudlow then robert lighthizer and peter navarro on the trade team specifically all in the room with the president for a considerable amount of time earlier today.

as they work through what policy options are here so presumably, we'll hear something from the president, but been taking to twitter throughout the day today to make the point ultimately that he wants american companies to pull their supply chains out of china. in fact, he used the term order american companies to take their supply chains out of china he says i hereby, american xaeps are hereby ordered to start looking for an alternative to china and he's going to offer a response to those this afternoon. we're waiting for what that might be >> where does the power to order that process reside? >> i mean it doesn't right? there is no legal authority for the president to simply tweet that american companies have to do one thing or the other. i mean there are a couple really exotic options that the president could use. i mean in theory, he could try to move the tariffs to 100% on chinese goods and that could

remoove move the supply chains y default. that's an extremely unlikely thing. in world r war 2, there were nationalizations of american industries can't see that happening here in any realistic sscenario, so legally, he doesn't have this authority unless he goes to something exotic which is unlikely >> there are so many question marks as to what the president could do another tweet that sparks a speculation. he tweeted something to the effect of we have a strong dollar in this weak fed and he's going to deal brilliantly with both which raises the prospect of currency and intervention recognizes the fact the administration has changed its mind say on a number of different niche tiinitiatives. what's the latest on where it stands with any effort when it comes to the currency market >> just reading between lineses, my assessment is that mulling

over a variety of options. we don't know what was considered or what they're going to land on here. some kind of currency effort in the cards, who knows the president tweeted he didn't like a strong dollar which is up like anything we've seen other presidents say publicly before. larry kudlow last night here on the driveway told me no, no, it's not that the president wants a weaker dollar. it's that the president wants other countries to stop manipulating their currency, but the president did tweet he's not a fan of the strong doll already. are you are. the president wants american exporters to be able to export and a weaker dollar would help that is he prepared to take steps it's risky, but this president seems to be willing to roll the dice and sort of take a risk >> what is the likelihood at least speculatively, that the trade discussions that are slated for early september in washington will still take place? >> as of last night, i asked larry kudlow that also he said they expect the chy these delegation is coming here

in september, but did not give a date for that b and it's not clear the chinese have accepted that and are committed to sending a delegation kudlow saying there are news conversations back and forth at a lower level so therefore, they are continuing to expect the principles are going to be able to engage in september, but we don't know, we won't know that until we know. right. >> all right, thanks very much from the north lawn of the white house. >> markets now where the -- seema is taking a look at the stocks getting hit >> it's worth noting we are off the lows of session. the dow dropping more than 500 points after president trump ordered u.s. companies to look for alternatives to to china in response to unveiling a new round of tariffs president trump specifically telling shippers to look r for alternatives and that's weighing on shares of fedex multinationals with heavy china exposure

apple, caterpillar and deere remember, these take aim at a number of agricultural goods those is to bes weighing on dow and retailers like best buy which warned in may that more tariffs could cause them to raise prices also a number of -- hong kong, italy, to a hard brexit which suggests the fed is keeping a clees eye on these, but powell did stop short of given a clear signal that a rate cut is coming now we look to the two-day meeting on september 17th. tyler, right now, down 492 on the dow. back to you. >> thank you so much let's get now some more reaction to chairman powell's speech and mr. trump's comments on china and the fed an chair and what it means for your money michael farr is a cnbc cnbc contributor. jack is with crescent wealth and

ron, an analyst and senior adviser to schroeder's na. welcome to you ron, let me begin you. it has been a week where you kind of scratch your head and say what is going on here? we began with zdiscussions of purchasing greenland yes, we're doing to do that, maybe we won't now a trade fight. there seems to be a real messaging issue in the white house. zpling it goes way past messa messaging. there are no tactics this seems to be an entirely seat of the pants style. way of governance in which whatever strikes the president in any given moment, gep, the chinese suggest they'll retaliate. we don't know what he's going to come back with today the notion that you can order american companies to stop doing business inchina and kis ru disrupt a global supply charn

chain with a tweet ar argues the president doesn't understand the economic implications of what he's saying. those things taken together seem to indicate that policy is entirely unmoored. >> it is unusual to say the least, michael farr, for a u.s. president to describe a person as early described as his good friend, president xi, and the fed chairman of the united states as especially mys >> we've seen some remarkable comment frs this president i think from a markets point of view, we can get bogged down many the parsing of what he tweeted today and a lot of it leaves us really scratching our heads chlg i think as investor, we have to step back and say wait a minute, we have been seeing this since president trump really took office he has a unique style of governing and negotiating in

public whether you look at his comments that he was going to put a tariff on everything out of mexico or you fill in the blank from the last half dozen tweets. markets react quickly. they go down quickly then somehow over the next week or two, things getten outside and tends to go on we've seen a change here, right? we've seen a change in the trade gone from trade rhetoric to china to china let iting curraey drop to saying they're not going to buy anymore imports and this now has gone from the name calling stage in the playground of the sticks and stoeps stage in the playground. it's not a good thing, but going back to chairman powell, i thought he did a great job and the rest, boy, investors have to take a deep breath i think prozac sales must be surging. >> in interpretterms of the vol,

the rubber hits the road many september, typically, ceos make decisions about whether or not they're spending or how much with the backdrop of this volatility, do we run the risk that these ceos pull back? i want to remind people of the comment, we can talk ourselves into a recession at this point >> in fact, it's already happened if you look at last quarter's gdp, we lost one percentage point on annualized growth because business spending just didn't really happen and so any uncertainty is going to make business leaders you know hesitate from taking out their checkbooks >> you know, ron, before we get too deep into this let's remember, over the past week, the s&p is down 1% the dow is down a half a

percent. the nasdaq is down 1.5%. so through all of this, that's where we are we're about 6% off the highs in a month's time that's a correction. >> sure. but it feels -- speech, his behavi behavior, his tweets at some point there's going to be a straw that breaks this cam camel's back then he decides to put tariffs, japan and south korea, just pulled back its intelligence >> just remind us of the set up. >> in terms of we're ramping up for the trade tensions increa

increasingly a year in 1995, the fed raised rates for that, you had the peso crisis, the bankruptcy of orange county in a major market company that broke the buck. in the asian currency crisis, bo

both >> and what we worry about is, maybe not in this country, but the fact that we've been able to print roughly $13 trillion of paper globally and buy bonds without much could potentially -- >> i am curious as to what lowering for a business community that does seem to want to invest. that the impediment to investment the price o money

>> so i think you just answered your own question. the important hing, we'the consumer spenlding has sustained us that's been keeping this bull market going consumer sentiment has started to drop. if that consumer spends starts to trend lower, then you're going to see i think our economic future get even murkier. this is a difficult time and i'm

sorry, mr. president, your tweets aren't helping today. >> confidence is a fragile thing. >> retailers that are doing well, that comes at the end of a cycle and at the bottom. not when we're starting on the uptick so i think some people may be misinterpreting the strength of the earnings we've gotten from retailers like target an walmart and others who aren't on the high-end of the pricing spectrum >> all right have a good weekend. >> i think i'm here for a while. >> i think you're coming back. michael, thanks very much. you u didn't even mention joh johnson & johnson. jack, we appreciate it as well. >> doing great, doing great. i was going to ask you what to do with your money but i know the answer johnson & johnson. thanks, guys >> we've got a news alert on a small business reaction to the trade war. let's go to kate >> the group of small business councils, president and ceo out with a statement to b cnbc that reads in part the trade war with china was slowly chipping away at small business confidence and

these unprecedented actions tweeted by president trump will only accelerate the downturn in business investment and confidence it will then hurt consumer sentiment. she went on to say china continues to goose the president with the retaliatory actions an words an sometimes their bark is stronger than the bite a more sober response would show who's in charge. so small business group here saying this will take confidence down a leg lower if this continues. >> thank you coming up, meet sneaker stocks getting kicked while they're down today first foot locker missing on easte earnings we've got that story and all the moves covered for you. stay with us on piano.

welcome back the trade war hitting every pocket shares of foot locker are taking today after disappointing earnings they aren't the only smeeker company feeling the pain sketchers, under armour, nike, adidas all in the red. should investors steer clear of these names? joining us now is erin murphy. great to have you with us. >> thanks for having me on >> what's the reality of the exposure of these companies to

tariffs? >> i think it varies by company. from our perspective, the wups best protected are companies like a nike where when you look at what they're importing into the u.s., it's under 10% to china directly vietnam is a much bigger market for them from a sourcing perspective. so they kind of stand out as an out liar the companies that have more immediate impact foot locker has a decent private label business we believe a decent portion is sourced from china directly then as you look across outside of athletic footwear, it's companies like steve madden and g 3 which have f a disproportionate amount of production 63% in china >> let's talk foot locker. earnings were disappointing, but it's another leg lower based on the trade wars and i'm wondering how much of this is the terrible quarter. how much of this is the trade war and is this is this warranted? 17% decline in one day >> sure. so i do think the majority of their decline today is much more

on some of the structural challenges of their business when you look at what's happen ng the ath lletic market overal it's really healthy market just r more and more of the trend rs happening and the transactions are happening on dtc. so vendors like nike that have f really strong -- correct and so have strong online businesses i think at the core, that's what's driving the majority of the decline. also the teariffs don't help chi think that's 4% incremental risk numbers. >> you've got a hold on this cut the price target down to 33. now trading at 34.86 why not put a sell on it is. >> it's agood question the stock is really coming in quite a bit. i think we're waiting to see if they can have any momentum in the near term from a product perspective. on the conference call, they

were positive the third quarter, they maintained their guidance, up for the third quarter based on what they're seeing down the pipeline we're going to track to see how consumers are respond, but our longer term bias is cautious at this point >> in your model, your estimates for foot locker, do you take out, what is the impact of that private label business in china and if they have to pay tariffs and what happens to that >> sure. so we took the number for next year, which you'll see more of the impact for to 478. our perspective is that if we move to 10%, if they can't mitigate that, it's probably about 4% decline from earnings from there so that's still to come. the it's not in our estimates nor in their model >> your top stock? >> top stock, nike and via those are the two names we look

at for safety. zpl thanks for your time >> thank you so much stocks getting slammed on a major es calation in the trade war between the united states and china. the dow down 508 points caught in the middle are automakers targeted by china. what it could mean for those stocks it's not really positive coming up on "power lunch.

gm and ford in the danger zone as the trade war escalates again today. those stocks tumbling after china announced it would resume a tariff on autos in december. let's bring in bill and steve. u.s. automakers, concerns about where we are in the auto cycle and exposure to trade flows in general. how udoh you see the stock set up right now >> there's too much uncertainty around the auto sector to call any of these stocks a buy, but

let's look at gm now you have a trend line higher going back from august of 2015 and this could bring good value down to $32, but as well, there's an interesting way to look at it take a look at the etf rxi that gives you way the diversif without risk and ford and gm are 2% of the etf. that has a good support line coming in at u 11 112 as the chart woul show. so i think that's a good place to look to get some exposure in autos down at 112. >> it seems to point out that the auto sector is is not necessarily benefitting, at least the stocks are not benefitting from a very strong u.s. consumer and very low interest rates and the way you might expect from previous cycle, the stocks look cheap base ed on current earnings.

>> you've got to be effective, both housing and autos are doing less well than you would think given loan unemployment, strong wage growth and low rates. when you think about the tariff issue, the announcement isn't a big deal the bulling of the business was done in the united states. the bigger deal might be what comes this afternoon because they're implementing a lot of goods. steel, aluminum, it's the import tariffs that are really hurting this group >> of course we had the president extorting u.s. companies to kind of disengage from chind they're very much entrench there had so we have to see how that plays out thank you very much. for more trading nation, head to our website or follow us on twitter. kelly, back to you >> thanks. coming up, the carnage continues. take a look at the 11 s&p sectors all lower as stocks sell off amid trade escalation with china today. the tech sector is the day's

biggest laggard and it's led down by the chip stocks which are caught in the middle of this trade war. amd, nvidia, broad com sinking we're tracking that turmoil right here on "power lunch." stay with us

welcome back i'm sue herera here's your cnbc news update a victory for supporters of the keystone xl pipeline the nebraska supreme court affirming the arolle regulators approved the route almost two years ago but lawsuits over permits an environmental concerns have held up the project the world's first floating

nuclear power plant built by russia setting sail today in transit to the arctic coast pt it sits on a platform that carries two nuclear reactors it's coming under fire by environmentalists who say it is unsafe and they call it a floating cher nobonobyl. nasa images picking up a number of amazon rain forest fires. world leaders are expected to take up the issue and urge brazil to take aggressive step to fight the fires and long island residents surveying the damage of a long line of thunderstorms. wnbc is reporting thousands are still without power in suffolk county you are up to date the news update this hour. ty, back the to you. >> sue, thank you very much let's look at where we stand in the markets if you're brave enough the dow is down about 500 points on the nose as we wait for the president's announcement on the es

escalating trade spat with china, which he said he would make a statement or do something this afternoon oil market closed for the day. >> oil prices, take a look wti set to settle around 54-24 a barrel down 2% brent, not much better down .8, 59.44 so oil prices fell 3% after china announced it's slapping tariffs on $75 billion of u.s. goods. also weighing on prices today, a closely watched report from baker hughes said that u.s. energy firms this week caught the most oil breaks in about four months. that's considered and early indicator of future output and also the continued tensions in the middle east. you put all those together and what you get is a sense of what traders are really concerneded about. melissa, back to you

>> thank you the president's attacks overshadowing attacks on jay powell, tweeting earlier, who's our bigger enemy, jay powell or chairman xi? what did he say to get that response from the president? steve? the president is saying no comment on whether the president mistook the comment where he said the fed did nothing we don't know if the president thought this was a rate setting meeting. obviously, not no comment on the issue of the president labeling chair powell as an enemy and so what did powell say today in his formal raushs he said the federal reserve will act as appropriate to sustain the expansion and that risk management is is part of fed decision making. all this r sort of teeing up a b

possibility of a rate cut. he says the global outlook is deteriorating and trade policy is playing a role there. finally, he says monetary policy cannot provide a settled rulebook for international trade. maybe pushback there that the president can't fix all that's happening because of trade he said the fed can adjust policy for trade policy developments he does say that the u.s. economy or the economic outlook is favorable and he compares this to '95 and '98 when the fed did three rate cuts each time take a look at the feds fund futures here they have moved up, but much more in response this was some reaction in powell's speech. the bigger response here clearly from the back and forth between china. a 74% chance now of an october rate cut obviously the september rate cut

has been dialed in 53% chance above the 50% line now for december, so you can say the market is now making in 75 bases points of cut but a lot of that again in reaction to what happened with trade and the president's comments more so than the fed chairman's. the vice chairman will talk at 4:10 then mark carney at 5:30. >> have the chances of f a 50 basis point cut mooued up? >> glad you asked me that, melissa, because yes, it has i'm sorry i did not provide it when i last looked a few minutes ago, it was up from almost zero, in fact, yesterday, it was more of a chance the fed would be on hold in the 50 basis point cut that's not true today. we have a 20% chance of a rate cut, come september. i will also that goldman sachs in a report today again partially based op what powell said but because of trade

developments upped its chance to 80%. >> when you walk around the lodge out there this morning, steve, in light of the president's comments about chairman powell being an enemy, what's the reaction there? what are people saying >> it's a little early yet, tyler. during the time that tweet came out, the conference was in session so they were talking and detailed policy. i did however in outside of the conference room see a few stunned faces. pretty remarkable to see people's reactions on this you could just imagine that people, what people think about the fed chair being called by the president of the united states an enemy. >> i'm sure you'll ask vice

chair about that as well when you see him later today. >> exactly >> all right, steve >> that will be one of the questions. again, the 4:00 hour carney in the 5:00 hour. we have seen a ramp up of concern from the fed using words like uncertainty and risk this year our team put together a chart quantifying the amount of times those words were useded and you see we're at a record high after the minutes were released two days ago >> uncertainty vix or something like that. the fed just one piece of what's weighing on the markets. stocks are getting slammedment the dow was down as much as 550 points wiping out the week's gains. the president ordering u.s. companies to start looking for alternatives to china. let's bring in derek, an asia economist. along with our own john harwood to talk more about this. derek, first to you, what's the practical significance of what

president tweeted today? you can't order american companies to leave china, but there are a lot of indirect actions the president could take tariffs of course, he could also invoke the international emergency powers act and put a lot of pressure on tech companies especially to leave china. so the ordering is of shorthand for there is more pressure that could be coming at you to leave china even if i can't make you do it by a presidential decree >> couldn't he just continue to use tariffs as a tool? why do you think he changed his approach today i wonder again how the market reaction, the economic reaction is feeding into all this in terms of next moves. >> right i think the the president was very angry this morning. i don't know whether he expected a rate cut as you said, it wasn't a policy meeting. maybe expected different language from the federal reserve. he gets angry when china

retaliates because he thinks the basic situation of u.s. china trade is up fair so i think we got an i am going to do something without details on what that's going to be tariffs are still the most likely b possibility his go to move he could say hey, 10% on september 15st and 25% on october 1st. i want to point out there are other actions the president can take to discourage american companies from doing business in china. >> right, you've talk ed about that before. sanctions and other tools that wouldn't necessarily have the collateral damage. john, what kind of announcement might we expect if it's not tariff related or what other avenues could he pursue? he's talked about cracking down on fentanyl. but there's a strong response from the national retail fed kags saying hey, we can't just bring operations back to the u.s. and remain globally come pettive.

>> companies do not respond to dictates from president of the united states although as derek indicated, there are things he could do one of the things he could do is take some steps to try to drive down the value of the dollar and you know we've already seen the trade war get expanded into currency conflict. the remarkable thing is how counterproductive all of this. i've been talking to republican xhiks this morning they agree the trade war is hurting the united states and the president's rhetoric is also hurting in terms of dragging down jay powell, the chairman of the independent federal reserve, which of course the reputation of the fed is a huge asset to the country and i think everyone across the board agrees that suggesting jay powell is an enemy is an outrageous thing to say. i talked to one of the top economists who said from the beginning of the administration, i had been skeptical ha the president had it in him to be an effective steward of the

economy. now he is e lliminate ed all do there. doug holds worked in the previous administration, said the only person who needs to change their pe javibehavior is president who doesn't seem to understand he's not president xi he can't order companies to do something. he's levied a large tax on the united states economy through these tariffs and all of us are paying the price for that and the markets are taking it into account. >> when you look at the menu of possibiliti possibilities, i wonder what you're most concerned about? while the president may not be able the to order companies out of china, the chinese could make a very, very difficult for companies to operate in china and to even impair the operations of joint ventures of course so many u.s. companies enter china with a partner in china.

>> i think we should be taking action if we were to target chinese tech companies and say they're a threat, the chinese might very well attack american companies who are operating in china such as intel that would perhaps fulfill the president's mandate to get those companies out of china it would also be a serious escalation so we've heard ourselves with these tariffs. we can attack china directly, but as you said, that risk china ai attacking american companies directly, which they've talked about, but haven't done. >> so derek, and john, let me ask you this, is there any talk that the talks scheduled for early september might get scrubbed could that be one of the things that the president announces

later today? >> absolutely. we've seen that the president reacts impulsively when he believes that he has been shown up by somebody we saw that in the whole denmark fiasco this week when the danish leader called the idea of purchasing greenland absurd and that really set him off. goldman sachs put out a note a short while ago saying the chinese have interpreted the president's delay of the tariffs scheduled to take effect september 1st as a sign of weakness it's an asemitic war as derek indicateded. the chinese have more staying power. president xi is president for life doesn't face an election next year like president trump and if thepg the president is weak, they're not willing to make concessions, then you're likely to see the president be further discomforted by that as the economy weakens.

>> quick last word, derek? >> you know, the talks weren't going anywhere any way the talks in shanghai were brief and didn't go anywhere these talks coming up. no reason for them to go anywhere the key thing is to expend beyond tariffs they're a known quantity we move beyond tariffs we open up a huge can of worms some of the moves could be wise. >> it's all leading up to the announcement today when ever it comes. thank you both derek and john we are in session lows in the s&p 500 as well as the nasdaq the dow, down 557 points or 2.1%. despite the sell off, there are some under the radar stocks that are bright spots today each hitting a record high in

today's session. we'll tell you what they are when "power lunch" returns

welcome back stocks at the low of the session. trade tensions of the united states and china hit a fever pitch but an underrated group of stocks is a bright spot even today. each one of these names hitting record highs earlier today and these mystery stocks are -- drum roll please -- cell tower tocks. american tower crown castle international and sba communications all soaring on the accelerated rollout of 5g cellular networks. they have all at least doubled

the performance of the s&p 500 up a meager 14%. 35, 45%, 62% bring in jonathan akin from rbc. number one communications infrastructure analyst in the whole world! welcome. good to have you with us delighted to see you the question when you see these gains naturally is, have i missed the train or is there more track ahead >> i think the good news is what's been driving the performance here to diet is not 5g but more spectrum put to use. there's government spectrum that at&t took hold of and that's building out for public safety adding a new network nationally and then t-mobile bid successfully for spectrum owned by the broadcasters and building out. what people associate with 5g isn't going to come until 2021, 2022, 2023 so i think there is quite a lot of good news ahead in terms of

the leasing performance of these companies. >> take us think each of the three companies here american tower, crown castle and sba. point out the strongs that they have and the challenges that they have as they move it forward. >> i think what they all have in common is a core u.s. portfolio. sba is the most indexed towards u.s. cell towers followed by crown and american american is more diversified internationally in latin america, in africa, in india crown castle has a small cell business and fiber business playing on the need for data usage in dense urban areas core u.s. portfolio is what they all share. they don't compete because towers in the u.s. have the characteristics of a lot of barriers to competitive entry and they pretty much are seen favorable pricing trends and then very favorable demand trends given the need to deploy more spectrum.

>> you have outperform ratings on all of them is there one that you like even better than any of the others or comfortable owning all three >> owns a basket is prudent. american tower would be the slight preference. on the off chance that spirit/t-mobile don't merge. then american would benefit from the international diversification. in its international segment india in particular is a bright spot to see some acceleration next year. >> very interesting. thank you so much, john. appreciate it. >> thank you. >> appreciate it. a huge selloff on wall street today as the trade war escalates once again apple and intel are the biggest losers on the dow. they're only one dow stock higher it's boeing. we're going to have much more on the markets adheing into the final hour of this trading week. how do you gauge the greatness of an suv?

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we're closing in on the final hour of trading. stocks are selling off on wall street we are a couple points away from session lows on the s&p 500. down by 2.3% fast money trader steve grasso is tracking the action at the

new york stock exchange and bringing back ron. what key levels are you watching >> so you have to look at the 200-day moving average we did the chart work the other day. you were on with me, as well it was 2800 in the s&p cash. so that's the key level that you want to look at. seems to me it's overdone but it is a friday. and, melissa, didn't we just do a hit the other night that when trump says one thing then the next day it's a 180-day difference >> yeah. >> why are we focused at what he is looking today where we understand the exaggeration that he made. he didn't say it properly. he never does. at the end of the day markets usually rebound. don't they >> i guess you can say that. at the same time, we know he'll make a statement sometime today, steve. >> he didn't order companies -- not to step on you but i see you're burning time. he didn't order companies out of china but to look for

alternatives quite a bit of a difference. >> alternatives is still pretty disruptive to move a supply chain is disruptive anyway you slice it, steve. by the way, we are never burning time we have a lot of things to cover. >> no, no. i didn't mean that you have a little bit left >> ron what do you think into the close here >> i think it depends. if the president says something before the market closes and more serious then you sell off into the close on a friday afternoon, who wants to be long knowing that the chinese can say something over the weekend or do something like that if you want to be really long right now in a down 550, 580 market. >> we have richard coming upful after the close, granted. >> again -- i don't know that the fed -- >> every buy you have made off of any trade concern is a good buy. so i get it. we all want to focus on the moment. >> buy the 2% pullback

>> i said you should be a seller of the market. running into resistance. as we head lower this to me is overdone i think you should be a buyer of this, yes. >> this is not what i do i am concerned as i said earlier in the hour that with every movement forward in the trade war people with whistling past a graveyard. the eu will have problems with britain britain in october the president can fire off tariffs against europe and japan and hinted a the that lately. >> ron, you have been around long enough to know that china trade wasn't sustainable the way we had it. >> i'm not arguing that point at all. i agree. >> it will look ugly really ugly. >> did not have to go this way >> which way should we have gone we had president after

president. >> transpacific partnership would have been great. >> it's very simple, ron 25% on our cars. we charge 2.5% on theirs >> we have to leave it there. >> i have to squeeze it in. >> good discussion steve, ron our thanks to you. thank you for watching "power lunch. >> you don't want to miss the next hour. we call it "closing bell." this is going to be big. ♪ welcome to "closing bell." i'm mike santoli in for wilfred frost. the dow down close to 550. reescalation of tensions between the u.s. and china sara, back over to you. >> i'm sara eisen. welcome to the final hour of trade. the dow was down 580 we are down 544. we are -- let's tell you what's driving the action the president lashing out at china and fed chai