following. there's a lot of chaos right now. i think they will loosen them up >> thanks very much. that does it for us. power lunch begins right now thank you. we'll see you in a moment. here is what's new at 2:00 on power lunch. a slowdown shocker new manufacturering data hitting its lowest level shots fired in the free trade war. mark zuckerberg caught on tape railing elizabeth warren.

stocks are under pressure and i do mean under pressure down by more than 300 points on the dow on that weak manufacturing. what way to start the fourth quarter. the s&p and the nasdaq down a percent or more in each case take a look at what's leading us lower. that will be industrials materials, the suppliers to industrials and energy all of those sectors down 2% or more >> let's get down on the floor of the new york stock exchange bob. >> this is a big miss on the september manufacturing and i think this is a problem for the markets here the s&p moved in a 50-point range. almost 1.6% lower since the ism report came out at 10:00 a.m.

eastern time the s&p has moved more than 1% this reaction was probably just sheer size it was not just the big miss it was the lowest reading in ten years. the other reason for the outside reaction is despite the turmoil around global trade, the s&p is still only 3%. that leaves a lot of risk to the downside this dropped as you heard from tyler. i would pay very close attention to some key big stock out there like home depot and mcdonalds

that have big moves. back to you. >> thank you very much let's get more on what consumers and people in general think about impeachment and how it will impact them as well as the economy. >> thank you cnbc for the third quarter finds a narrow margin for impeachment. they asked if congress should hold impeachment hearings, 44% favor impeachment hearings and 47% oppose them. that's within the 3% margin of error. it's a lot closer than when the question was asked in december 2017 when 54% opposed impeachment and 41% favored them the gap has narrowed it shows a rise of percentage of

americans who are unsure it grew to 9% from 5%. there's concern among americans about the economic effects of impeachment. 45% think it could impact the stock market 40% think it would be negative but 23% say it could hurt their personal financial situation worse news for the president came in a decline in his overall and economic approval ratings. take a look here 37% approved of his job overall. that's the lowest of his presidency 53% oppose it. that's the highest and the gap between the two is highest as well take a look. this is very interesting 42% approve his handling of the economy. 50% disapproving that gap the largest of his presidency up wi one of the largest declines we have seen. it came through in a tweet this morning. he said as i predicted jay powell and the federal reserve have allowed the dollar to get

so strong that our manufacturing are being negatively affected. fed rate, too high they don't have a clue pathetic for the record, the fed does not target the dollar in making of its monetary policy though it does have an effect. interest rates are down compared to where they were last year and the president. the president has authority over the level of the tldollar he can lower it or strengthen it as he likes. most blame the trade war, not the fed. >> when was this survey done >> last week this is fresh data tuesday through friday the 24th >> the 24th would have been last monday >> look at us. we were in there four days we should be able to do this,

guys why do you ask, tyler? it was tuesday through saturday we were in field >> do they see a connection? >> almost all of the concerns -- the biggest concern about the economy comes from republicans they believe if there is impeachment, the economy and the stock market will suffer as a result of impeachment because president trump would lose his job in that process. republicans are twice as large to be concerned about the economy than the democrats are independents are right in the middle of that the big story is going to be independents when it comes to impeachment and all of these other issues

you would think more democrats would be on board if what we came up with our pollster jeprojects there my be more upside they do think public opinion is a key part of why this process will or won't go forward >> there's impeachment and there's conviction the idea he would be convicted by the republican senate is relatively low >> we asked -- >> at this point based on what we know now. >> we asked a very tough question you'll see some other polls out there. maybe a readers guide to this at home is look at the question that's asked our question asks should congress hold hearings on

impeachment that could lead to the removal of president trump not every question has that piece at the end we wanted it clear what we were talking about that could lead to the removal. there were other questions where support is higher that doesn't include that part of the ending. >> i fear to say this because i may be wrong but as i recall, president clinton was more popular after he was impeached than he was before >> that is accurate. i can tell you president trump's impeachment numbers where president clinton's were at the height of the scandal two years ago. he's below nixon but above clinton. >> thank you very much

we appreciate that we're off of lows for the session on the first day of the fourth quarter those impeachment worries. bad economic data. wiping out all gains from the third uarter how much more pain is ahead? tom, i want to start with you because my sparse notes suggest that you are, i may be putting words in your mouth. less worried about the prospect of impeachment and its effect on the market and more worried about the prospect of an elizabeth warren presidency and candidacy on stocks. have i got you right there >> you do.

i think she will have a pretty dramatic effect on the market but certain segments most people are pricing impeachment and not conviction that's a lot of noise. it doesn't directly impact the market >> grant, how do you factor all of this political curfuffle on impeachment into your invest l matrix >> not that people don't care about it but it's not as important as the fundamentals for the companies that we invest in yes, if you look at the extreme side of the democrats they had

impacts on areas of health care and banks in general i would say it's a little bit too early to tell that what the impacts would be on a larger basis for the companies to look at >> use the last election and its history as a guide not to jump to conclusions >> i think when you look at politics, a lot of people take their own personal opinions sbo play which may be hard to separate from the fundamentals at hand. >> tom, what's your outlook for the fourth quarter here we are the first trading day and we're down more than a percent. weak manufacturing data here as well as abroad what are you anticipating and does it feel like fourth quarter of last year when we saw that severe draw down >> i think it's a little early to classify last year. that was pretty dramatic even the volatility you're waiting for it to end. be careful what you wish for

the fear in the marketplace is pretty great exports are down when you think about it, that makes sense. >> we have tech companies lowering they guidance going into earning season. we have the highest number, 29 firms cutting since this data was tracked back in june of 2006 that's a pretty dramatic number for the biggest sector of the s&p 500. we've already got some disappointing earnings and we have data that looks like it's softening. are kwou wyou worried?

>> that's always our job we're trying to ascertain the difference between structural demand and cyclical. you have a point in time where there's cyclical companies you mentioned fedex that have mas acted like companies that are more resilient we expect uncertainty to be the name of the game >> thank you very much coming up, in the war of lower trading fees, commissions were slashed to zero leaked audio from a facebook meeting reveals mark zuckerberg sounding off on an elizabeth warren presidency.

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this is a real trade war that's gotten down to zero at this point you're going the pay nothing to trade stocks and etfs at schwab.

charles schwab took those stocks down to zero there's some caveats to this there's still fees associated with option contracts that are not commissions. you pay if you need help from a person on the phone. there's lots of stocks that require special handling other brokers have already been moving towards that zero cost model. robinhood allows free stock trading and has since 2013 fidelity offers index fees with zero management fees this is the latest for schwab. others will likely follow suit here

it's better in the competition we will remain competitive our light platform is finishing free for no activity fee as well this is the idea that everything is moving towards zero cost. >> they make money where and how. >> they make money for other things they run etf and collect fees on those. they send it out to somebody

else who execute and pay for that fee that's where they make money those are just handful pch. >> stay right here let's dive deeper into how this there affect the overall broker landscape. they are a lot less dependent on this commission business can you give us a sense of what percentage of revenues are commission for them. >> yeah for ameritrade it's about 25% of total revenues but as dominic pointed out, not all commission revenue is being impacted the impack t we think about 60 o 65% of that revenue will be impacted if they decide to meet

the pricing. >> if they meet the pricing that's zero. 60% of that 25% of revenues goes to zero? >> it could. you got to understand there are offsets. there's payment. they make money or interests >> how sticky are traders or customers on a ameritrade. do they have a will the of other services that they purchase or participate in on that platform first there's a god question they are sticky to the

platforms. they get used to that. they get revenue that i've explained and dominic explained that e trade is about 16%. again, like i point out, it's not 100% of that commission revenue will be impacted but more than half of what we estimate >> will customers leave other companies and go to schwab or interactive broker for these deals or will they continue being happy with their merrill lynch guy or whomever it happens to be? >> i think that's a good point

we expect they will meet the pricing on some fashion move in that direction you seen a whole broke of zero commission industry in the millennial generation. i'm not the most profitable of generating the revenue but they have brought on a lot of accounts schwab doesn't want to be behind that momentum and wants to catch up and have someone of a similar offering

>> this is a big deal because then it changes the the rias that's a huge deal >> yeah. that's an important business they have the most advisers. this free trading and the trade, the lower commission will be passed onto them as well they'll look at the channel and hopes to grow assets which is really the benefit add vieszevis trying to bring in assets.

we had a commission on trade war as well as a broad >> great to see you. thank you very much. >> great book publicity. he did this in conjunction with the new book he has coming out what a way to get his attention to it. >> billionaire book week got to get in on it. >> yeah. all right. the fall out from wework botched ipo could bleed deep we have those details. plus wework isn't the only start-up that could use some good news. the biggest ipos of the year are getting crushed. we have the details. take a look at some of the biggest losers amidst the dow. -driverless cars... -all ground personnel...

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ipo is getting crushed with the rest of the markets adding to their september pain. we have more from san francisco.

>> some of those performances leading many to question is the ipo process broken that's the topic of conversation today just a few blocks from here where they are getting together to warn them of the downside of the traditional ipo. bill who helped organize the event has been critical for some time about this process saying that top tier banks like goldman sachs and morgan stanley show the upside slack went the alternate route they did a direct lesting. some of the other high profile names to go public, slack shares have fallen. unlike uber and lyft, it's hard to say the better off doing a direct listing than a traditional ipo. i want did bypass the road show

and pay less in fees to bankers. that may lead others to consider a direct listing like air b and b. it's well capitalized and already well known back to you. >> thank you very much wework shelving its ipo for now. beyond wall street the company's problems could have a much bigger impact on the broader commercial real estate market. we have that story hi, robert >> we work with seven million square feet of space this tells the story of just how much to the broader market it's $70 million but there's a 78 million loan on the building so the debt now seems to

original purchase price. this comes as there are growing office space and supplied space in manhattan until now wework has been the renter of that space we spoke in the last hour with don people ls who mentis who mee risk of being so dependent >> without them in the market, the vacancy rate would be higher in manhattan and office rent would be even lower. the office market is relatively soft except in certain pockets i think it's a big significant risk to new york city. >> guys, wework has a lease on this building until 2031 that's the calculus that buyers will make is will wework survive and thrive until 2031. back to you. >> that's 12 years from now. thanks very much as wework deals with its fj issues the company has stopped leasing new spaces the wall street says no landlord will take on wework as a tenant

right now. this could be bad news how much of a blow is it to new york city? >> it is it doesn't occupy a big percentage of the entire market but it has been good growth. sg you reported they paid over market prices because they want tods grow so quickly >> exactly wework has been very aggressive. now they say they will keep leasing but it will doing it at a much lower level and landlords don't want to lease to them until this cloud of uncertainty has dissipated >> i think the people wonder what will happen if there's a

recession in new york city and how this would exacerbate the problem. talking about the financial stability in a downturn. we don't know bwhat the true impact would be. >> he was roiight in saying there's potential. a lot of landlords count on wework not just to grow but occupy wework starts walking sinto thoe offices saying we need to renegotiate our leases that's bad day for the landlords and their banks. >> what percentage of the buildings where wework is a prominent operator does wework own as oppose to lease and then release? >> great majority.

the amount of security that wework has put up against the leases isn't that great. >> what's the vacancy rate >> in the wework building? >> in the building >> they have the benefit of having themselves as the tenant so they can keep expanding to occupy the space >> you will fill the void? >> the economy isn't in a downturn right now it's doing okay. there's a lot of other co-working firms out there there's landlords who are developing this expertise themselves the landlords would say you're

out. we can take over we can run a co-working operation here too i don't think the risk is that great. >> great to see you. thanks so much ahead, we continue to monitor these markets. the dow down as more than 300 points leaked audio of mark zuckerberg. tensions continue to escalate in hong congrekong no two patients are the same. predicting the next step for them can be challenging. today we're using the ibm cloud to run new analytics tools that help us better predict and plan a patient's recovery.

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welcome back here is your cnbc news update at this hour. the justice department inspector general said in a report that the dea was slow to respond to the country's opioid crisis. the findings could bolster the claims of drug makers and distributors who had claimed the government should share the blame for the opioid crisis.

protesters are calling for a change of government because of its failure to approve services and create jobs. the first collaboration in the brewers 100 year history they are teaming up with hersheys for a limited edition chocolate porter it will be available on draft only in the 22 states where distributed. mattel is introducing uno for the blind. the first braille deck goes on sale today it worked with the national federation of the blind to make the game more widely accessible. you're up to date. that's the news update this hour back to you. >> thank you let's take a look at the markets. we're off the session lows the dow is down by more than one point but at our lows we have them down by as many as 340 points

s&p 500 about eight points off the nasdaq is down by 73 points. never can get enough of leaked audio there's leaked audio from an internal facebook meeting lifting the curtain on the brewing social media giant and one of the front runners for president. julia is all over it in l.a. >> reporter: that's right. facebook ceo mark zuckerberg candidly taking on critics in meetings leaked audio was published by the verge. he said he does not want a legal battle with the government over breaking up facebook but if it happens, he would fight it >> like elizabeth warren if she gets elected, but i would bet we would have a legal challenge and win the legal challenge.

yeah >> senator elizabeth warren tweeting in response, quote, what would really suck is if we don't fix a corrupt system that lets giant companies like facebook engage in illegal, practices and repeatedly fumble their responsibility to protect their democracy. i'm not afraid to hold big companies accountable. it's time to break up big tech he posted the link to that transcript of the leaked audio on his facebook page saying people should check it out if they want to see an unfiltered version of his thoughts. he also said in the leaked audio he's not going to be going to every hearing around the world we'll have to see if he's called and if he goes >> thank you the dow is down just about

300 points our market is setting up for the sell off to the end of the year. >> look at today very tough take. no doubt about it. it's not the way you wanted to kick off the fourth quarter. look at yesterday, it was a lot of window dressing yesterday you saw the s&p 500 up nearly 20 poin points i think we are seeing some troft ta -- profit taking and repositioning. i think it is of the july high >> you're not worried about the fundamentals in the market like the break down in small caps, the break down in transports and financials are weak. they are beholden to where

yields go. >> i'm with you. look at materials today. look at industrials. i think the market is still intact there's some testing going on here rock-tober i don't envision that. it's barely above 18 i think we're in a pretty good spot i know the manufacturing data comes out. this is not a news flash we all know that global growth has weakened i think that is on 2850. >> you still think it exists >> absolutely. >> it's enough to offset fwlglol weakness and weakness coming here >> what did the market ignore yesterday. the u.s. dollar index going above 99 president trump tweeted about that that really does weigh on u.s.

equity i think you continue to see criticism on the federal reserve we'll see a stagnant to weakening dollar that weakening dollar will help push the stock market higher we will have all time highs. i think we have a rock y road going forward. >> thank you the people's republic of china celebrates its 70th anniversary, a new surge of violence in hong kong. what it could mean for trade in t economy. general electric, u.p.s. and united r d rentals among the bis losers power lunch is back in two rner . 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.

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where's gate 87? don't get mad. get e*trade and start trading today. all right. welcome back foupower lunch. hong kong protests casting a shadow over the anniversary as demonstrators reach a new level of violence. a protester shot at close range by hong kong police. you see both sides of it now the u.s. and chinese preparing for another round of trade talks set to begin in a week and a half, week from today in washington david is founder and president

group. the u.s.-china trade war is getting considerably worse the two sides are digging in and it's gotten worse in the past weeks. do you see it that way >> i do. i think both sides are being intransigent i think china feels like they can wait this out. they are riding a wave of nationalism. i think that they are not willing to give up any of the big moves that the u.s. has been demanding in the past. >> do the president's domestic political troubles, if they have elevated to that level, does that make the chinese more confident? >> i don't think that impacts their confidences. i think they are already riding a wave of confidence celebrating the achievements

they had over the last 50 years. really puts them in a strong position from a nationalistic point of view and they are brimming with confidence already. >> some people were struck by chairman xi's quote there's no force that can shake the foundation of this great nation. no force can stop the chinese people and the chinese nation forging ahead. as i think back, those words, you could substitute the phrase yi united states and those words could have come out the mouths of multiple u.s. as well >> that's right. they have shown that over the last 15 or 20 years. really stepping away from the global war on terrorism and focusing on building their domestic capable as well as extending into the south china s sea. i think anyone who has been following china recognizes this is a continuation of a long

standing china first policy. >> you've been following china for a long time. when you hear people who are advocates of standing stuff on the u.s. side in the trade war, they say things like china's economy is weakening much more than the united states they are suffering more than we are. what do you say to them in what do you think they are missing because that seems to be the refrain they are paying the price, a deeper price than the u.s. is right now. it gives us the ammunition in this >> i believe they are feeling greater pain but they have more capacity to absorb that pain they don't have to worry about elections. they don't have to worry about people turning against the government as the economic pressures become stronger. they have a deep commitment to furthering china's growth and extending china's rise as we have seen in the last 50 years they don't have to worry about domestic politics. the very compliant citizenary, control of 70% of the domestic policy put them in a very frong

position to absorb that additional pain. >> what should the u.s. do >> the u.s. should get together with all of its allies around the world. talk to china about a longer term initiative to dampen the negative impact of china's inevitable rise, economically and politically, on those domestic economies we have to do this in a multi-lateral fashion. the u.s. taxing american consumers to try to change the behavior of a foreign country is simply not going to work >> is it your thought that -- excuse me for interrupting you, but is it your thought that the president may soften his trade stance, vis-a-vis europe, because he knows things are going to get really tougher with china? >> he may. and he may recognize the need to bring those allies back into a coordinated approach to china, in order to find some sort of resolution i don't think we can continue to

swing such a blunt stick around of all of our trading allies and partners around the world. i think we need to start being more strategic and thoughtful about how we're coraling our allies, in order to face the larger issue, which is china's inevitable rise, economically and politically. >> david riedel, thank you very much we appreciate your time today. >> thank you well, cracks spreading in the housing market we'll tell you why u.s. home buyers are getting squeezed and pas of the market that aren't quite so sunny. stay with us on "power lunch." i don't know what's going on.

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welcome back to "power lunch. let's get right to rick santelli with the bond report this afternoon. rick >> thanks, kelly a two-day of two-year, and i pick two-day, because two-years right now benchmarked against yesterday's close are still down 7 basis points, but when you go out farther down the curve, much less damage, look at a two-day of tens, they're only down four. 30s are only down one. which means tens minus twos, you see on the chart starting early september, is now hovering close to nine basis points one week ago, it was trading two. one word of caution, a steepening curve with all rates dropping is never anything good for the economy.

finally, the dollar index. here's an intra-day chart. looks terrible, right? match it up with yesterday's chart, you can see we're down a fifth of a cent, but all in all, still above 99 dollar index still holding most of the ground it's gained over the last couple of months. melissa lee, back to you >> rick santelli, thank you. the fall housing market is off to a stronger than expected start, but not for all homeowners diana olick joins us from washington to explain. diana? >> reporter: well, melissa, we're seeing an increasing divide among price points, which was clear t a at an open house atlanta. this renovated house was sold at $215,000, and it sold very quickly, but to an investor. for those buying houses to live in them, it's tough. >> i don't give false home, i don't give them -- there's not room for negotiations in these homes. they have to offer top dollar, usually no closing costs, and so it's -- it's no longer an area where they can negotiate and get a great deal, especially going up against these cash investors.

>> daniel raben wants more space for his growing family >> we're always looking for something in the competitive price point. low 200s is a competitive market if you're not there on the first day of listing or within the first few days, it's pretty common to see a house go under contract >> reporter: sales of homes priced over $500,000 are doing much better than last year, but that's not where most of the buyers are today they're in the lower price points tyler? >> all right, di, thank you very much diana olick. check, please! is next

one of the big stories today, schwab moving to eliminate trading commissions on stocks, etfs, as well as options. i'm taking a look on the impact on asset managers, as well this is the race to zero and it impacts everyone this puts further pressure on it we're seeing some pressure on t. rowe as well as franklin resources on these >> and the asset management businesses used to be incredibly profitable not to say they aren't anymore, they still are in many cases but the price compression has been remarkable. it's going to be very interesting to see how fidelity responds to what schwab did today. did you notice, i don't know if that was a national ad, but that was a schwab ad that just led us

back in and talked about 500 free commissions over two years. traffic, you might want to look at that ad and see if it's still up to date >> yeah, now it's unlimited. >> we're off the session highs right now. >> off the session lows. >> we're off the session highs, too. >> that, too "closing bell" will start in about five seconds, unless they pick it up right now welcome to the "closing bell." i'm morgan brennan in for sara eisen on what has become a scary day for stocks to start the month of october we're down nearly 300 points on the dow right now after starting the day in the green will he follow further into the close? that is the key question we've got 59 minutes to find out. >> and i'm wilfred frost let's take a look at what's driving the action new manufacturing data came in much weaker than expected and reunited fears of a recession. more ipo worries as new listings like uber, lyft, and chewie hit new all-time lows. and the bond volatility continues, the yields rising along with japan and then fallin