the united states has clearly been the world leader and has massivoutperformed everybody else in the next recession, we'll see the same pattern repeat where the u.s. ends up underperforming the rest of the world with the dollar weak pg i think for that reason, you look forward six or eight years long-term planning here. you should be allocating incrementally, gradualistically to nondollar investments and nonu.s. stock market >> we'll leave it with that thought. although i wanted to ask you whether you think jay powell will finish his term >> he will >> job is safe according to jeffrey gundlach that's jeffrey gundlach. that does it for us "the exchange" begins right now thank you, scott hi, everybody. 60 minutes to go the fed is set to make its call on interest rates on what could be called unprecedented pressure from the president, the market has the fed lost control of that situation? we will ask.

and fedex fumbles. those shares are having their worst day since the financial crisis our trade engines and a global slow down to blame or are these company-specific mishaps we'll dig into that. facebook supreme court ipo profits hit a 20-year low and appare apparently joke is considered a word we begin with the markets and dom chu with the state of play. >> markets are in a holding pattern. think of them as planes circling above the federal reserve bank in washington, d.c the dow industrials at the lows today were only down 92 points at the highs down about 21 so, pretty still waters. down about 0.25% for the dow the s&p back below that 3,000 mark and the nasdaq off 1.5% fedex share a big focus and that is causing transportation stocks to top out this 195 is an area of resistance or stalling out for

this particular etf. fedex shares dragging down to the tune of 2% and then if you want to look at a stock that has taken a big hit today. competitive pressures are weighing on roku it dropped around 10%. it dropped again today so, you can see that rollover here we are now down 12% on the day after comcast announced that it is going to put out its own competing set top box that streams all of these internet related streaming services that puts it in direct competition with roku and remember, comcast, of course, the parent company of this network roku shares up massively $26 stock near christmas eve back over to you. >> more on that on rapid fire. dom, thanks very much. in less than an hour the fed is expected to cut interest rates again. what the market is expecting from the meeting and steve liesman ining us from washington with a preview. steve? >> hey, kelly, thanks. as you mentioned at the top this rate announcement comes amid

unprecedented pressure on the central bank to cut turmoil in the feds own fund market pressure from other central banks like the ecb which eased just recently. pressure from the markets which they threaten to sell-off if you don't get the kind of cut you want and then pressure from the president of the united states the question today, do we get a hawkish cut suggesting future cuts are limited or dovish 25% cut which is more to come. the fed fund probability 82% and 52% of another cut in october. that same cut you don't see it there has a 66% chance of happening in december. and then to get a third cut from where we are march 2020 where there is a 53% probability and now there is a bit of a difference now that we might get clarified in the feds own forecast the fed as of the last time it forecast the outlook for rates in 2020 was looking for about 2.13% for the fund rate for 2020

where our recent fed survey puts that number more closely to 1.6% we'll see if that comes down from the fed finally, the fed with the second liquidity injection into the overnight lending. the $75 billion operation oversubscribes suggesting that perhaps the fed didn't do enough may have to do more tomorrow but the rate came in close to where the fed funds target is. came a day after that liquidity crunch we told you about overnight lones soars 7%. the fed could not hit its own target tuesday at 2.3% and outside the 2.25% range. we'll see where it prints tomorrow, kelly. >> pretty wild moves, steve. we haven't even gotten the decision yet thank you, sir any way the fed could deliver enough to satisfy markets and the president who last time reacted by announcing more china tariffs? here with me a full house to discuss this

jim bianco is president of bianco research and nisha and founder of macro policy perspectives great to have everyone here. first of all, on the repo issue. has the fed lost control at the short end? will they have to do more purchases and qe, will they announce something today to fix this plumbing issue? >> they have repo facility and they continue to use it. the question is how prepared and how much they want to surprise the markets at this meeting by announcing open market operations like growing their balance sheet or doing maybe a standard repo facility of some sort i'm just not sure they're ready for that yet they continue to do overmarket -- >> this is all basically sort of happening yesterday. they're in the middle of a meeting and no one expects them to be that nimble. if they have to make some

adjustments, jim, is now the time to do it? >> they want to have the market trade between 10% and 2% every day. then they better do something in an hour to do this some kind of liquidity injection. the repo market is 22% the size of the bond of the overall treasury market. that's a 40-year low it was 85% -- >> is it the flood of treasuries, especially short-term treasuries that is part of the problem here >> yes and no. that is what triggered it this week, but, no, it shouldn't have it shouldn't have. years of hqla and lsc luquicktied requirements what that means they shrunk this market down too small. this market is too small for the size of the financial markets we have now and this is going to be a reoccurring problem for a long time and it's been, we've been seeing it come we've been seeing little problems >> little signs of it,

absolutely >> they'll probably find a way to get into the system and how they announced it and what form it takes. >> sooner the better >> sooner the better, absolutely look, six weeks ago they came out with this pretty historic move to cut rates when there's not a recession is a pretty big thing to do. nobody was happy he's used the language mid-cycle adjustments and the fed freaked out and the president the next day raised tariffs on china. should we expect a similar kind of risk around this meeting if it's not, quote/unquote, dovish enough >> i think, unfortunately, the language will be a little vague because the fed is put in a tough spot economically here in the u.s. the data looks very strong recently inflation ticked up a little bit the sector looks to be very strong manufacturing we've seen a little bit of a slowfsety a verr kind of thing. they need to look at global implications and global pmis are

slowing down and what implication does that have the fed is put in a tough spot because while they focus on u.s. data, this doesn't warrant a rate cut in their eyes global uncertainties which they have intertwined in their language, this is really what's prompting it and that's not going away >> you can understand, julia, the sort of conundrum, if you will they are making it clear, the fed speak has been vocal i mean, we had people expressing very different points of view. ask the infamous bill dudley where he said you should let the president kind of intentionally create worse policy outcomes by the way, we just had jamie diamod diamon speaking, he think trades will be more important and those two are kind of linked and he also said too much fed speak these days and maybe doing more harm than good >> always been the case. structural too much fed speak. i take my cue to jay powell.

he was clear at jacksonhole they are engaged in a series of insurance rate cuts that they don't deliver what the market expects. >> which we saw last time. >> exactly he used phrase significant risk twice since the last meeting we see that in the statement or the press conference and that flags another rate cut beyond the one we're going to get today. he will err on the doving side and providing insurance is to get ahead of these risks >> let's talk about what that will look like we'll get projections. a couple different ways to communicate. in the statement itself, the language and they have the economic rejections and the dots and we kind of look at the movement there i mean, how are they going to, if it's possible, be as dovish as the market is demanding >> i think they need to give a forward lean to another rate cut. just open the door i think the median dot will show another rate cut beyond september. i think the median guy in our

forecast was rob kaplan and he's much more open minded now than he was in june he took a strong single from the yield curve inversion we have. we still get a lot of different views on this committee. it is a divided committee. but i think enough support for this insurance policy that it will be a clearer message than in july. >> take us to what that means for the markets, jim, what are the risks around this sort of either way in terms of positioning. >> well, what we've seen with the fed right now is the two biggest market moves we had since 1979 have been december presser and july presser it seems like we're all braced for another 500-point this afternoon because we already had two of them in the last eight months or so that's the immediate risk for the market right now i think going beyond that, he's going to have to satisfy the market that it has got a policy that it can agree with the market right now is still pricing at foreign rate cuts i don't know many economists

that think we will have four rate cuts. i know people like to try to discount that inverted yield curve. he has to try to make it, believe that the market is going to be happy with what he wants >> right >> i feel he'd be better off going 50 at this meeting and stopping than going 25 and then probably promising another one in october if necessary. >> you guys agree on that? >> the data as nisha pointed ou. with the exception of manufacturing, almost every data point in the last two months >> 160 on average. 1 on average when you take into account the benchmark provision. >> you still only need 100,000 to keep that unemployment rate >> should expect. >> it's enough of a slow down that you'll take notice of that when the risks are tilted to the

downside if the world is sunshine and happy flowers then we wouldn't worry about that but you have an accumulation of uncertainties right now. the global slow down keeps going and the latest chinese data was terrible and the trade risks that were real not just a threat. we actually have tariffs and disruptions in trade i don't think this is an environment where you take chances and push the data and wait by the time the payrolls go below 100 and the consumer, you're already in a recession. so, i think the whole idea is to get ahead of it. >> longer term, it's hard to discount where u.s. rates are relative to global rates they are considerably out of whack, if you will so, i think longer term, even with the u.s. economic strength, it will have to realign. and then it's another larger conversation on whether monetary policy alone is going to work. you know, we're seeing this in japan and we're seeing this in europe this alone is not going to work. so, the fed at some point to stop cutting rates because it's

not really going to do anything. >> probably don't believe that >> right >> the government, you know, again, fiscal side of thing really kind of come into play, again, before it's too late if you will and until we really drop rates to zero >> drop on its head and make the argument that the problem is there is not enough people entering the labor force right now. everything is too tight. this is all about a slow down and how severe that is even the manufacturing data showed a rebound and the housing start this number were pretty strong >> show the lower rates are having an effect >> we'll have the first positive contribution from housing in si or eight quarters. it does show it is not powerful and certainly isn't the cure all. but it does have an effect offsetting other headlines >> what do you do on the fixed income side? we talked a little bit about the stock market and the risks around there we saw rates go so unbelievably low in august and start to snap

back last week what do you think the risks are around the decision now? >> well, i don't think there is any direct implications to the market based on the decision because 25 basis points. rate fully priced in and i think what the variably will come on the communication side if fed chair powell talks about the potential for more cuts or if, you know, he doesn't characterize this as a mid-cycle adjustment, then there is a risk the market will start to extr extrapiate. >> will this be bullish or more of a knee jerk, okay, compress everything lower from here type of reaction? >> i think the initial kneejerk reaction there would be more for the curve to steepen that got out of hand because of the global qe talk and then the sn snapback in over a month the ten

year yields gone from 145 lows to close to 190. and about a month ago saying, you know, extraordinarily fair value and now at 180, 190. i would say there is lower yields from here on given the fact that you have uncertainties. saudi arabia, oil and all these uncertainties and any fed communication, if it turns out to be dovish like yule julia i expecting a little bit of a rally. >> we have 45 minutes to find out. dow is down 71 points right now. thank you, all, very much. we have a news alert on gm let's head to phil lebeau in chicago. phil, what is happening? >> kelly, this is not a surprise that general motors would issue temporary layoff notices for its plants up in canada because of the strike here in the u.s. that is happening at gm's plant in ontario where they build among other vehicles the pickup

trucks, the chevy silverado. because production is slowing down they are not getting any parts from facilities here in the united states. as a result, gm canada has issued temporary layoff notices to 1,300 employees at that plant. by the way, pickup production there has been effectively cut in half because they're not getting what they usually get from the gm plants here in the u.s. to issue production >> appreciate it very much. here is what else is ahead on "the exchange." coming up, fedex stock sinks as earnings disappoint and the ceo makes very strong comments on trade but is this really a global growth story or a mismanagement story? plus, the head of one very high-profile media company says streaming is gng to be a blood bath fora while. we'll explore why. and will the rotation into value hold or was it a short

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welcome back now to the other major fed story today. shares of fedex are down nearly 14% and on pace for their worst day since 2008 this after the company mised

earnings expectations and gave disappointing guidance frank holland is here to break it all down for us frank? >> ceo fred smith making his opposition of trade policy crystal clear and criticizing china, as well smith saying the policy are largely to blame for the company's 3% decline in revenue for its express air delivery as well as 3% decline in freight revenues >> a lot of whistling about the u.s. consumer and the united states economy versus what is going on globally. and most people don't think about the fact that when china slows down because of u.s. tariffs or uncertainty or for whatever reason as big a victim, if you want to call it that of the china slow down is europe. >> smith is especially worried about europe saying fedex expand

on the europe trade lane when it comes to e-commerce. globally it is the most valuable but the company is also pivoting to become more ground focused, especially in the u.s. as part of the earnings presentation, fedex forecasted domestic e-commerce growing by 93% over the past five years and the company's ability to address that to grow to a total of 59% overall fred smith said the company is more ground focused and they expect even more of e-commerce to involve short deliveries as companies fill their fulfillment centers. back over to you. >> thank you, sir, we appreciate it frank holland. i'm joined by a transportation expert. fedex shares are down 38% now and u.p.s. are up 2% call it roughly flat these seem like company specific missteps although in a difficult macro environment. >> had changes back in december

and that started this real kind of shift that we've seen and that's why the stronger stock moves. but more recently, i think we were just highlighting the top line top line is flat so, that's kind of the worst we've seen since the great recession. but that was kind of in line a lot of cost specific issues. >> why aren't they growing revenues >> revenues on the global economy is slowing we do have a survey every two weeks and it is kind of multi-year lows. we just bounced off of those multi-year lows and it is definitely a weak environment and we saw it with ism dropping below 50 i would say it a weak environment but that is expected within the numbers for why you're seeing a drastic move >> what is happening on the cost side what needs to be done for this company to be able to show investors, we're investable again? >> so, a couple things right, one is you lost some of the amazon business and when you lose incremental values and even if it was for costs when you brought them on board. other revenues have to step up

and take those costs you're losing highly profitable revenues off the top and some other issues they have going on with tnt still not fully integrated you have, you're still bringing on modernizing some of your hubs and automating the hubs and bringing on more aircrafts and they kept the expense at $5.9 billion for this year and next year and investors want to see that called in a bit if you're not producing the top line growth >> how much ground has fedex lost to competitors lately >> good question amazon started off over the last couple years, five years, where they launched more central hubs. they have taken a lot of volume from the post office and we're seeing u.p.s. continue to in 4% growth despite a massive increase on next day volumes so, i think you're seeing other continues to grow those volumes while fedex is struggling.

on the ground they did post 7.5% volume growth on the ground. you're seeing, as you mentioned, good ground growth >> and a pretty good sign for the economy. we know as well when it comes to europe you talked about the challenges there from slowing china. also this tnt business which i believe had a big cyberattack which may have derailed some of their hopes for that business, as well. is that looking more than a temporary setback and how do they fix that? >> yeah, you know, they got hit by a cyberattack and eliminated all knowledge of who your customers are and how to move the frigeight. i don't think they came clean how quickly and how badly they were damaged by that they are trying to make back the share that others like u.p.s. and dhl have taken that share in the interim. now you have to integrate. they still haven't finished integrating their network and you have to blend that and regain the share >> you're neutral on the share

still. 1 166 price target buy rating on u.p.s. >> yes >> ken, thanks very much now to sue herera for a cnbc news update. >> hello, kelly. hi, everyone the house climate crisis committee holding a joint hearing with the house foreign affairs subcommittee on climate change swedish activist greta thunberg among those reporting. >> i submit this as my testimony because i don't want you to listen to me i want you to listen to the scientists and i want you to put unite behind the science and then i want you to take real action >> a haze continuing to blanket malaysia's capital today covering the city with a layer of thick, toxic air. the towers are barely visible

through the fog. high clear castle in hampsure, england the now feature film "downton abbey" one night at the cost of $187. the lucky winner will be invited to share dinner in the state dining room followed by coffee in the library, of course. the catch, writing an essay to convince the owners that you are the most passionate fan. the movie opens in theaters on friday that's the news update this hour back to you, kelly. >> i've been there and i've never even seen that show. >> you haven't seen "downton abbey. >> in the basement is the whole collection of egyptian relics because the owner was really into that. >> absolutely. totally. >> wild. >> a whole thing on pbs. we'll talk >> okay. we'll talk after this. sue, thanks very much. here's what else is coming up on "the exchange.

>> brexit, hong kong protests and global slow down we'll talk to the ceo of booking holdings about the state of travel plus, it's the worst year for ipo profits since the tech bubble and facebook says it will implement what mark zuckerberg has called a supreme court for at aplatform th'sll coming up on "the exchange." er of your growing bu. from using feedback to innovate... to introducing products faster... to managing website inventory... and network bandwidth. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

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welcome back let's catch you up on a couple stories on your radar today. time for rapid fire and here to break down the headlines bill griffeth, leslie pick ered roku shares down, again. after comcast, our parent company announced it will give flex streaming box to people for free who only pay for internet this after chairman charlie ergen said streaming is going to be a bit of a blood bath as companies load up on contentan undercut distributersp. >> how many streaming services have been announced at this point? >> at least half a dozen. >> apple tv plus this is just within the last few weeks. >> overall >> over all.

>> at least half dozen >> my point, is any one person going to want -- >> what they're saying the average, the max will be around three, maybe 3.5 >> three or four so the consolidation of that number >> the economics are moving in the direction of what shareholders saw we saw with "big bang theory" and "seinfeld". >> shows 10, 15 years old are making this kind of -- >> they're good, bill. good tv! >> no young people are going to start watching ""seinfeld. you start with netflix at $12.99 and support would add services apple will be free when you have an apple device. going down in cost for consumers and going up in terms of their price for what it costs to get conten whoever holds their breath the longest will win here.

>> for everybody, the deals that are going to happen in this space as this consolidates to three or four could be -- >> it is going to be a blood bath >> moving right along. facebook is now going to have its own supreme court. that's what mark zuckerberg is calling it the company released plans f a new governing body to handle controversial content on its website. this will make binding decisns on content moderation. >> it's about time don't you think? shouldn't they have done something like this when they started the company? >> they should hire an editorial staff. people who used to work. that is effect ofly what they're acknowledging. you need human editors of the news process >> here you have a billion people creating content. this is a company that has always seen themselves on the cutting edge of technology and we talked about the partnership with luke and the idea of a couple years from now we'll see why. >> did anybody not grown at that

announcement >> yeah. are you excited? >> no. >> someone who wears glasses if i could get a pair of glasses to tell me the name of everyone i'm looking at i would never forget their name. that would be great. i would buy that >> but i think one of the biggest issues they're going to have is they said they want to make all these different conversations public in the spirit of transparency and making sure everyone is aware'. >> what could go wrong >> you have to couple that with user privacy and the fact that users will be raising complaints and may not want to draw attention to themselves. >> who would want to do this impossible job everyone is going to hate you. everyone is going to say you're doing a terrible job because no matter what you decide -- >> prestigious he is calling it the supreme court. such and such from the "journal" and "the times" and all these former journalists >> just another example of how

they lost control of their products >> fair enough. >> but will they wear robes? most importantly do they get the outfit to go with the title >> next up, this year's crop of ipos are officially the least profitable set of companies since 1999 kate rooney is here. >> look who's here >> so, we've talked a lot about some of the high-profile ones we've stumbled the ubers and the lyft but overall this is really now a banner year in a bad way >> it is of the companies going public this year, 24% are predicted to be profitable. so, the average over about two decades is usually like 50%. very low lowest level since 2000. and we talked about the uber and the lyfts of the world goldman sachs had the data out and said it's not uber lyft and the biotech companies that are the culprits of those guys going public, none are expected to be profitable

for the next three years which is huge. >> the performance, by the way, there is also an interesting disconnect just because you're unprofitable does not mean you'll be rewarded but business models get chucked out the window biotech companies, investors seem to be, they seem to give them a longer leash and say, okay, we understand why you're not profitable and maybe you have an exciting drug in the pipeline or something like that. as long as there is some idea that the core business model isn't broken >> completely different business model and people expect them to spend way more than a ride hailing company, for example so, that's a huge part of it but david who came out with this note this week said that year three is really the banner year. it's not the first year of profitability. investors will say you have a year, two years if you're not making money by year three, you're almost guaranteed to underperform they use the russell as a benchmark. >> the most anticipated ipo year since the dotcom year and it's

the most profitable one. what are we saying here? >> there's only been 70 ipos, as far as volume. way below the 400 a year for six years straight we saw in the dot com boom it goes back to the conversation of profitability investors are rethinking do we want to go for the companies that are really spending a lot and just getting users or should we think about maybe, okay, year three, look at this company and say is this a three-year problem or five years and you're still not making money that is probably a sign they'll underperform. >> how would you spell whoa. >> w-o-a-h >> kids today. >> is data plural or singular? >> it's -- >> plural. >> well now it's plural, but singular >> we'll let you go as we delve into this next point thank you very, very much.

here's why we bring it up. marrium webster is adding 500 new words to the dictionary. others don't really make sense i'm not kidding. they are adding vacay, sesh, dad joke >> what is a dad joke? do i want to know. >> why does a dad joke have its own -- great joke by nature. >> what about a mom joke >> these dictionaries have become, i think, such a joke that when we, so, the scrabble dinary being the worst offender so when we play at home, i said we need a better arbiter of what is really a word or not. so, we ordered a 1985 dictionary >> where did you find it >> on ebay >> my birth year >> is that before vacay became a real word. >> yes

this is what it has come to. i have to turn the clock back 30 plus years >> i'm with you, however, i studied linguistics in college and i'm -- i don't want to say a fan. i don't know how to characterize it, but i am aware of the evolution of language. it evolves and, you know, we don't speak old english any more or middle english. it continues to evolve yeah, exactly. >> but a classic -- >> it does drive me crazy when i see whoa spelled woah. >> by the way, a long standing kind of debate about how quickly we should evolve to include new words. goes back years and so forth this week in "wall street journal" a great article, if you haven't seen it yet about how the usage of woah is increasing because young people say that's how they want to spell it.

direct quote from the story about this sam nitkin a 19-year-old sophomore at the university of chicago says, quote, i use language the way i want to use it the dictionary should change to match me and not the other way around >> perfect that says it all >> i'm picturing term papers people are writing when i was on my summer vacay. >> if you spell it w-h-o-a, you're old that's the take away from that story. >> good sesh, guys >> that's such a dad joke. thank you, all coming up, weakness in europe brexit, the threat of short-term rental we'll talk to consumers and the state of travel with someone who has his finger on the pulse of the industry booking holdings joins us live when we come right back. here's a check on market before the fed decision out in 20 minutes time. dow down 73 and all the dow and s&p down about 0.25%

look at the nasdaq down 53 the dow hovering near session lows right now we're back in two. woman: my reputation was trashed online. i felt completely helpless. my entire career and business were in jeopardy. i called reputation defender. vo: take control of your online reputation. get your free reputation report card at reputationdefender.com. find out your online reputation today and let the experts help you repair it. woman: they were able to rre go. vo: visit reputationdefender.com or call 1-877-866-8555.

the travel industry is caught smack in the middle of america's trade wars and a recent drop in tourism to the u.s. plus, if you have a global economic slow down that many fear is spreading here, here to talk about what their business is seeing on the front lines of all this, seema moody is joining us with booking holding ceo glenn fogel. seema? >> glenn, thank you for joining us today >> thanks for having e >> we're 20 minutes away from a fed decision the world's largest online travel platform. tell us, what would you like to see from the fed today >> i'm not so sure i want to say what the fed should do but anything that helps growth is good for travel we're always in favor of that. one of the interesting things happening is there are places of

sluggishness around the world. europe is a little slow and we wrote about how the european central bank is talking about ways to make things dwr s grow one of the important things is the interest rate differential between different countries. we're global so truly controlled by changes in interest rates something that would happen and the u.s. dollar would get cheaper, that would stimulate more people coming to the u.s. which would be good for the u.s. travel industry. >> with all these external factors like slow down, brexit how would you say it is right now. >> i just got back from london last night and the airports are filled delta airlines had good occupancy rates last month some of the hotels have been showing some very good occupancy rates. i think the u.s. not bad right now, and all this concern about the future, it's other places that we have a little more concern and the european

sluggishness which is the biggest part of our business, we'd like to see some growth increase there >> another country we spent a lot of time talking abis china and despite the slow down we're seeing in that economy, you're doubling down on your investments there. $3 billion you put to work there in companies like dd among others why are you putting more money to work in a country at a time when a lot of companies are pulling out? >> look, china is by far the biggest opportunity for travel for the long run and one of the things we look at is the long rung short term effects that you might say, gee, i'm not sure how good over this year or next year if you want to be a long-term player in china, you can't go in and out. some great partners and we put money to work there so we can work together and really provide a great service to the chinese traveler and that's something that we have to do consistently. i think you're not a good friend of any country if you go in and then things get a little troublesome and you run away that's not the way to build a

long term relationship >> are you worried about the decline in international tourism to the u.s. that we've already seen >> i am disappointed on the fact that the trade war has impacted chinese outbound to the u.s. 2018 was the first year that we had fewer people coming from china to the u.s it was down 5.7% in 2019, the numbers i just saw going through july another drop. that's disappointing because it's not necessarily the chinese traveler is not going to travel, they're still going to travel, maybe a little bit less because of problems with the economy, but they're still traveling. but many times thinking i don't want to go to the u.s. right now. to me, as an american, sometimes disappointing to me. >> hong kong suffering its worst downturn in decades. what are you seeing on the ground there >> people are talking about the occupancy rates in the hotel get as bad as they were in 2003 when there was the terrible epidemic with the sars disease? it's bad here's the thing, all throughout the world, we're a global player always something bad happening

for travel somewhere the issue in hong kong civil unrest is always bad and we see it there and in paris and go back a couple years earlier in bangkok where people took over the airport. so, these things happen. but for us, we're global it's okay. >> all right glenn, we'll leave the conversation there thanks for joining us. kelly, back to you. >> thank you thanks to mr. fogel, as well. the market is shifting and a look at what the charts are telling us. less than 15 minutes away now from the fed's decision on interest rates from political pressure to disagreements within the fed, it's an environment unlike any we've seen before. what will they decide? fi o with cnbc to ndut fi o with cnbc to ndut we're back in two. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.

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there's been a remarkable reversal in the stock market last week. last week the biggest rotation out of momentum stocks and into cheaper value stocks since the 2008 financial crisis. what is the sudden shift signaling and will the reversal last let's bring in frank chief market technician. you've been all over this, frapg.

go good to have you here is it still happening? what do you see? >> thanks for having me. is it the start of something new? i have the answer. the answer is, nobody a situati like this, is there a trouble? no one knows there's a big move proceeding this to the up side. >> 54% momentum. that's something we haven't seen in at least 10 years >> that's a spread of -- performance spread that's huge. >> we knew that couldn't be sustained. if it did, what would it look like >> now we know as it comes back in, there's a channel that's been placed since 2016. >> we can show that as well? >> look at the very end of this on the right-hand side there's a big downward spike it doesn't break it down over this the momentum names are still going to work basically? >> we have to respect the long term changes

that's right now higher than less ten-year. >> yes, you have kind of the software names, big tech, for example, you also have consumer staples companies. you have things like the -- what am i trying to say you have companies like comcast that are not the usual suspects. what does that tell you? >> i think one of the reasons for that spike, you have bomb proxies. we had an extreme move now back down to the other side in terms of value now, the complete opposite. a big spike right back up to resistance there, because of that, i think you have to do the ten-year yield the biggest change is 1962 that can't be sustained, of course whether it can stabilize or not. >> we're back down to 175 with 8

or 9 minutes left to go until the fed decision i want to ask you about that, and the software names what are you looking for in. >> you look at high growth and leadership we're getting to a point where it's lost some of that third time really since the beginning of 17. previous two times, demand came in >> in a nutshell, if the value rotation continues, it could be a breakout, but for right now, it's put us back -- it's a course correction? >> i believe so. look at the bond market. >> i don't see it happening. the reaction to the news is more important. >> it's compelling stuff

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we're just minutes away from the federal reserve's decision on interest rates. a quarter point cut is expected. you have the dow down by 54 points and the s&p down by almost 9 the 10-year yield yielding 1.75%. we have u.s. investment strategist and jim karen with morgan stanley investment management. welcome to you all ahead of this decision you think the fed will cut by 25 basis points only david thinks they should not cut? >> the stock market closed irts all time high. you look at four doctor pi it registered it's year over year numbers since 008 that's the capacity of this economy.

there's nothing wrong with the economy, don't -- it's like giving a kid antibiotics it's bad medicine, we shouldn't be cutting rates right now >> look. powell has been consistent in three key messages he wants to keep this expansion going. he sees concerns abroad. not only slowdown in europe and china, but also u.s. china trade. tariffs are going to get higher and higher by year end and his third message has really been, he's looking at a mid cycle adjustment here. yes, in the past, in the '90s, that mid i cycle adjustment has been about 75 basis points one to two more cuts makes sense here i think he'll stick to that messaging. we need the insurance right now. >> i disagree a little bit with that statement but part of it is really i like to think about things outside of the u.s. so less domestically and more global

we have to think what the ecb is doing too. if you add up all the numbers, you add 20 a month that's $1.4 trillion worth of ue what if the fed doesn't do it? then essentially the dollar could become very expensive, and i think that could have a negative effect. the other way we have to look at it is in terms of insurance policies so clearly the oil shock is something we have to contend with the other is obviously the trade war between the u.s. and china i think all of these are factors that weigh-in on the fed where -- maybe domestically, they don't need to do it, so i'll agree with david on that. if i look more internationally, i'll see insurance as well >> there's a premium, it's not free you take out insurance, you have to pay something. >> i don't see any real

instability right here bond yields have come down that's been relatively stable. i wouldn't call either one an asset bubble at this point maybe some might i don't see this as an unstable situation. volatility is low. could it end poorly at some point in the future, if rates do go up? yes, that can happen but i think the fed would very much telegraph that in advance >> they are enabling a lot of bad decisions. they're enabling a budget deficit of a trillion. that enables that. it doesn't -- you have the wrong set of interest rates, art fishlg interest rates here bad actors and cheap actors can get money alike. a business has to payroll interest costs to borrow money that will sort out the jokers from the real businesses here, we lose that discipline when we keep interest rates at a low level. >> you also see the fact that

one the key stability factors in the u.s. has been the consumer thus far, what we're seeing right now is on october 15th, we'll get higher tariffs, december 15th, even higher tariffs. >> we're going to have you pause there. let's go to washington with the fed decision >> lower by 1/4 point. the fed lowering the fed funds rate to 2% down 25 basis points. the fed said uncertainties about the outlook remain the vote 7-3 with three defects, but for different reasons. the same two that dissented last time, they didn't want to cut at all. but one jim bullard wanted to cut by 50 basis points the last time we had three dissents was back in 2016 when there was