>> it is 5:00 a.m. and here is your five at 5:00. an october gut check stocks coming off the worst day since august as major averages wipe out the entire third quarter gains in two days of trading. tech stocks take it hard here. the nasdaq off 6.5% of recent highs. it is all about the economy. the latest reads on u.s. manufacturing data and private sectoring hiring missed wall street as investors want another

key. trade tensions, not healthy matters. president trump opening a new front slapping dozens of new terrifs on goods coming out of the european union and more road blocks for tesla a record number of deliveries was not enough to satisfied share holders. "worldwide exchange" begins right now. ♪ >> good morning and welcome. shares of tesla setting up for a rough morning despite posting a record number. tesla shares off by about 5% the stock has been struggling this year dpoun nearly 30% first, an october gut check for

stocks, the dow plunging more than 400 points on the second day of trading in the fourth quarter. over the past two days, the dow has she had 3.1% the s&p down 3% to start the month as well. this is the first time in its history, in its history the s&p kicked off the fourth quarter with back-to-back drops of a percent or more a piece. this morning, stock futures pointing to what could be a modest recovery at this stage. you see hear the dow especiallyiopening by just seven points. the u.s. treasury note 1.58% the two-year at 1.47 >> in japan, we are seeing some

moves there down about 2%. the hang seng in hong kong up .25%. in the german market, they are closed you can see the ftse 100 down .5% the mib up about half a percent there. issuing a new trade war listing goods that will be subject to tariffs. contessa brewer is here with those details. >> the trump administration plans to move quickly to impose tariffs on up to $7.5 billion of goods. scheduled to go into effect. world trade organization has ruled in favor of 100% levees

but washington is holding back now. heavily targeting france, britain, germany and spain new 10% tariffs but no tariffs on parts made in alabama or bibeauing. 25 pes penalties on irish and scotch whiskey cheese from nearly every country is tariffed. italian wine and olive oil will be spared. president trump hailed the wto ruling as a big win. the two sides have been fighting this case for 15 years the eu is expected to give the wto is expected to give the

green light to those to place tariffs on u.s. goods. >> another tat for tat >> in less than five hours, we'll get a key reading on the ism nonmanufacturing or services index covering the vast majority that accounts for more than 80% of employment in the united states >> bringing in the chief investment officer just overall, that ism manufacturing number is arguably what provided the real down side draft to markets how important is the services read going to be when it comes to counter or skars bait the move >> we can't separate the two a lot of services businesses have bhafrers as clients

>> in what way >> so the transportation companies, trucking, rail are considered services but they are shipping all of the goods manufacturers are making or take a restaurant that happens to have a location near a manufacturing facility if there are less people working there, less people are going to the restaurants. there is a connection. yes, manufacturing is only about 10% of growth but reflects a slow down the services side of the economy is not immune from >> has that services side over the last year shown signs we are due for a recession anytime soon >> if you look at ism and the market, their services have been mod rating there has been a cross over in the sense that manufacturing is now beginning to affect the services side. not just here in the u.s. but in

asia and europe has held in better look at germany. germany's economy is basically flat lying but their unemployment rate is the lowest and the consumer is still hanging in there you wonder how long can this be? they are beginning to cut hours and workers. these people are going to spend less money at retail and other services there are inter twined and services are not going to be immune >> there was a lot of die sepgs of that pmi manufacturing number this idea you could see different parts within that report show even dire circumstances ahead. more than what we saw with the headline number. are there places within the nonmanufacturing services where you see if there is any

nonvaluation >> that biggest amount was the exporting number where they got to 41. they'll report an export number but only some service companies have exports i'll still be watching that component. also new orders and back logs. that is a leading indicator of what is to come. >> do we have a recession coming in the next of to 12 months? >> i think there is obvious slowing. what tips it over is where the stock market goes. the consumer is holding us up. if the stock market starts to react to deterioration and earnings, then we see a decline, that could be what tips us over into a recession if we do get a recession, i'm only expecting a mild one. just as the expansion is mild, i

expect any recession to be mild as well. we are not going to be able to rely on the fed and rate cuts. they'll try but i think we are desensitized to a lower cost of capital since that is already so low. >> thank you very much appreciate it. when we come back, facebook facing an uphill battle as it struggles to keep the libra digital coin afloat. two unlikely faces teaming up in texas today. later on, thrill seekers listen up, we have a stock for you. a busy hour ahead when we return after this break so servicenow put your workflows in the cloud, huh?

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>> that's a live shot of capitol hill on capitol hill today, executives backing facebook's libra currency as they meet to look to keep that project on track. live in london with elizabeth. these are lawmakers. this is facebook it could get contentious, right? >> right members of libra organization are meeting in part of an effort the libra association.

uber, spotify and other member companies are meeting today and also october 14 in geneva where they are expected to vote on a board of directors on this libra association following reports of original members visa and master card reconsidering their involvement. they've debunked those reports saying they have no knowledge of those who want to participate and has worked through all of the issues we've heard facebook ceo has been planning to testify on this at some point. this is amid ongoing complaints

from regulators and issues related to money laundering and marketing power. all of the concerns we hear from politicians will delay the launch of the currency, which is planned for next year to now >> that is libra and what is happening in washington. there are two perhaps unlikely faces teaming up at an event in dallas, texas later on today what can you tell us about what is going on in texas >> it is google ceo and white house senior advisor ivanka trump teaming up and hosting a round table event in dallas focused on retraining the workforce. ivanka trump has headed the workforce training we've seen apple sign on

there is a little bit of irony that this is taking place in texas. we know in texas, they are leading an antitrust investigation into google. that was focused on google's dominance in sectors like on line advertising we are seeing how this debate between tech and government is playing out whether through partners or more adversarial initiatives. >> thank you still on deck, air bnb pushing ahead with plans to go public new details plus i just bought us some new sheets

from bed bath and beyond >> i hope you stayed away from the beyond section here are the coffee mugs ahead, why investors might want to stay away from bed bath and beyond stock more after this.

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goldman sach and morgan stanley as lead advisors the investment banks would be less lucrative because air bnb is leaning towards going public through a direct process >> getting a check on other big stock movers tesla delivered a record 97,000 cars in the third quarter but that missed analyst projections. about three quarters were the model 3 where model x dropped. exceeding deliveries and is entderring the fourth quarter with a backlog bed bath and beyond, sales fell more than 7% cutting the earnings out for the

year and is making progress in the search for a new permanent chief executive. shares of goproare tumbling. primarily due to production delays shares are off 16% in the extended trade still to come, the impeachment inquiry plot thickens today as one character is set to testify to congress behind closed doors. later on, facing the fall out as wall street looks to recover from one of the worst starts to the fourth quarter "worldwide exchange" is back after this

>> president trump is escalating his attacks on the impeachment proceedings accusing adam schiff of treeson tracie potts joins us live >> the president got pretty upset. used some colorful language. fair warning moving forward today there is going to be some key temperature about what was going on between the department and ukraine.

the former special envoy to ukraine testifies, he resigned after being named in the whistleblower complaint that sparked the impeachment inquiry. they warn and accuse the whistleblower of tresson >> this is a play tabai blatant >> exploding in anger. >> he's a low life >> she hands out subpoenas like they are cookies >> biden and his son are stone cold crooked and you know it >> the whistleblower tweeting this skpli tiff about the inquiry about whether he pressured ukraine. >> we have to do more than beat donald trump we have to beat him like a drum.

>> the washington post reports vice president pence was involved >> it seems the president engaged him. >> calling the story a grand n conspiracy from disgruntled former employees >> thank you very much let's get a check on other top headlines. phillip mena is live with the latest >> good morning. the president of russia is trolling america ahead of the 2020 election. putin joked about interfering in the white house race during an energy forum yesterday >> translator: i'll tell you in a secret i'll definitely intervene. it is a secret so everybody will laugh. but don't tell anyone, police.

>> putin said he would be fine with the white house releasing notes of his conversation with mr. trump during last year's meeting. >> at least seven killed there were 13 people on board. others injured including one on the ground the crew of the plane tried to make an emergency return to the busy airport witnesses saw smoke and heard the engine sputter would you pay over $1,000 a month for that they call it an apartment. a 200 square food space in san diego, california. the building does have plumbing and small kitchen but no parking. the previous tenant stayed two years and they were paying

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>> october gut check investors are facing the worst start to q 4 markets nothing quiet on the trade war front. trump administration firing at the european union targeting everything from jet liners to coffee at home, the latest read on the u.s. economy it is thursday, october 3, 2019. you are watching "worldwide exchange" here on cnbc

welcome back to the show i'm in this morning for brian the dow plunging over 400 points you can see here, the dow has shed some 838 points or 3.1% the first time in its history the s&p kicked off the fourth quarter with back-to-back drops of more than 1% a piece. this morning, a stock market pointing to slightly higher gains. the dow jones will open by about 11 points if these future gains would hold nasdaq up by about 8 to 9. the yield on 10-year market notes have drifted lower

the two-year yield lower 1.46% in japanese trading, they are down by 2% the hang seng in hong kong up by .25% as well. in german, markets are closed today. the france cac up by about half i percent, the ftse mib in italy up .28% and in spain up as well. willem marx is in brussels steve is at the nasdaq marketsite in times square willem, let's start with you on

the newest front in the trade war. >> a ruling that the u.s. is able to impose tariffs on around $7.5 billion of goods. something we expected. those tariffs seem to be something the u.s. is keen to move forward with quickly. that will happen likely mid-october. the u.s. trade rep's office saying they'll impose those tariffs. the uk commission has said they do not want to see tariffs imposed. they would much rather have a settlement the president of the european commission saying europe would have to respond and respond in kind in terms of when they'll respond, that is the question. they are waiting for the equivalent ruling from boeing and the united states. they may waitle this that moment as a chance.

this is an option very much on the table. they'll look at all wto rulings as a reason to impose those clearly on the context of much broader discussion of trade the tension is rising. there is a sense that perhaps they are in relief take us through the expectations where some are not as bad as maybe they thought >> the real question is where these tariffs will land. there will be a lot of smes in countries like italy and france. the wine and cheese makers will feel the pain. they are the ones strugglingto compete in the u.s. market

that's where you will get a lot of political anger with the u.s. if they don't find a settlement quickly. >> thank you back home, markets will be closely watching what happens with the ism services report to see if weakness is spilling over to services as well. senior economics reporter is with us. steve, manufacturing is tough. is this somehow going to save the day? >> it could. the weakness in the manufacturing sector so far not affecting the service sector expectations is that it will lead the case for now. indicating the sector is continuing to grow the second below 50 that sparked

this week's sell off in the decline there, not nearly as much. the service member could also show signs of the trade war. writing, quote, today's report will be the first since imposed the first big wave of tariffs on consumer goods the fear that has driven up spending at chain stores but that that could wear off in the fourth quarter together with the job's report giving us a much better read on the economy. representing just 10% of the economy and more of the volatility >> steve stick around with us.

bringing in another voice. dan, good to have you here what is your view here is the market reaction we've seen perhaps appropriate given the data we've seen? >> yes and no. part of it, yes because of the data and there is a lot of uncertainty when it comes to trade war and softness on most recent hard manufacturing data also, there is the goals from last year. there was a big drop people were looking at it and had a big year so far. they were worried about what would happen in q 4. >> steve, there is a case being made by some that perhaps the ism manufacturing number may have gotten this wrong

given the abhoration >> could it be that number really is not indicative >> i'll give you a little more ammunition, which is the separate market manufacturing report that did show strength in september. the negative as a whole. the reason i think they are telling a pretty good story. when i think about the stories you cover all the time the individual stock stories out there from the manufacturing sector, we know we have a problem with boeing. the level of manufacturing and exports, we make so much that it echos out through industries we know oil has had a tough time and they've had trouble because of the tariffs add to that, a lot of the farm

belt when i look at the individual sector data from the government, things like farm machinery was way down that kind of evidence backs up the idea that you do have a struggling manufacturing sector. if you look at the chart, we had a slow down. it did not cause a recession this manufacturing number has to get down to 43 to really signal a recession. >> let's talk about the way markets and traders are positioned given the current state of the economy and markets now. is there a way we could glean how investors are given position over the course of the last couple of days and the shift of

development year end >> that's right. one of the things we are trying to do in correlation those ten to belong with both equities and bonds we see there has been a drop. investors have been reducing and raising the exposures with the bonds. we are seeing this happen already in many cases. the investors are quite long in dollars and very unusual behavior usually, there is a lot of risk and uncertainty that goes up.

>> one of those things i've been made privy to. one of the ipos here had been polled one of the sources told me this was a brutal market, is that one more sign now that perhaps risk tolerance is not there in the markets overall? >> i see that as positively. i think this is a very healthy market considering case by case in different shading between the good and the bad this is a positive sign in my view >> what will you be watching for in the services number that comes out and will it be a predictor in terms of jobs tomorrow >> the top line number tends to lag. there is an employment index i

use that does a good job in being a curtain raiser in terms of where jobs are going. that number is still above 50 but a little weaker. the job market tomorrow, i'm interested in the wage number. looking to see if the manufacturing story is true. if it is, we should see some weakness in manufacturing employment thank you for your thoughts this morning. >> rouf and tumble this morning. nasdaq is down marking the worst start to the quarter since 2009. our next guest says maybe you should let the smoke clear a bit more first before jumping back into the action.

paul meeks, thank you for joining us this has been very, very difficult for some of the powering forces behind the recent leg of the stock market rally. what does it mean for the stock market sentiment >> i continue to worry about the tech sector. one of the things i would be hesitant to do is to add to the sector when we have fresh news in the wave of the quarterly earnings reports why would you in a total state of chaos we are in now act unless you have supreme confidence in a particular stock or super long-term horizon when you begin to get a fresh set of details? >> these companies have been dealing with arguably chaos the

past few years now in terms of the government and economy yet they've shaken it off. what is it now that makes it different? >> i'm particularly worried about the geopolitical uncertainty. when it comes to the u.s./chinese tariff battle that sector is in bed deep with both of those nations. the underpinning is growing from a probust rate much slower than it had been a lot of people don't realize that tech spending whether consumer enterprise is very sick cyclical talking about not only the past quarter but the quarter coming up and even to talk about 2020

as for what they are seeing for business around the world. >> we've talked about faang a lot because they have been leadership only really alphabet and facebook have outperformed the market are there stocks in particular that go on your shopping list if we do see a deeper pull back in these names? >> that's a great way to describe it. a shopping list. wait and see and try to buy them on bad days. i think among the faangs, even though i own them all. my favorite here is probably amazon some of the stocks i'm really intrigued with are some of the semiconductor and equipment stocks they've been beaten up they might be now grossly oversold, undervalued.

my favorite there might be micron and then broad come if we were catholics, we would say they've already been to the confessional they've already announced their earnings, which may make them okay to buy because we are not going ahead of a potentially negative announcement. >> thank you for this morning's thoughts we appreciate it coming up on the show, much more on the global sell off if you are hitting the drive through for break fast, you'll want to hear our trending segment. new numbers on those wait times. first, check out the dow transportation index now more than 13% low the recent high stay tuned we'll be right back.

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>> live shot in chicago, illinois still dark there only 4:53 central time there time for the executive recap

the headlines you need apple ceo tim cook says his company disagrees with president trump's decision to end daca that is the obama era program to protect so-called dreamers apple says it currently employees 443 of those dreamers. >> boeing got the faa to ease up on safety standards. arguing they required cockpit warnings could be impractical and cost more than $10 billion >> walmart is testing programs to cut health care costs and will host a service that will deal with things like billing and finding appointments >> futures indicating what could be a plot open for wall street

there, chris campbell what is it that is front and center for you? >> the market had a bad two days we are looking at seeing is this an indication of what is to come next year there are a lot of things look at the fundamentals the conversation with china is trending in the right direction.

it seem. being innocentivized to that place. there will be a multitude of conversations. does it lead to results? i think it does. i don't see where we are at today as an indication of where we were last year. >> let's talk about how markets are currently set up is it in your opinion a market overvalued or undervalued and i mean overall given risks and things you've just listed off? is. >> we hear equities are largely overpriced there is still not the significant correction going on. there is a lot of money out there. at the end of the day, i don't see any fundamentals changing.

feds are getting deployed to move again, we'll see the job numbers tomorrow we are largely a service-based economy. again, i think we are in a good spot overall, there will be a lot of impeachment noise and the market will respond there at the end of the day, worse case, if the president is impeached. he's not going to be removed from office. over the long haul, i don't see a change we'll see. >> there is a face being made that the fed may not be as effective these days with how they would handledown turns. is that worry some >> i worked closely with jay

powell he's a friend and i have a lot of respect for him under difficult times we've been able to insulate the u.s. economy. the fed has something to do with that at the end of the day, i think the fed has been productive and effective. could it be doing more it always could be we'll have to see. again, i think the fed is ready to poise and pounce when p it needs to >> all right, one more thing the one big thing you are looking at in the jobs numbers

>> i think it is the wage numbers. if we see an increase of wages, this is a great kator of where we need to go. >> thank you that does it for "worldwide exchange" this morning the market will look to rebound. "squawk box" picks up that coverage starting right now. good morning, the fourth quarter stocks off to a bad start. already wiping out all of the gains from q 3 trade war es ska lags, truescaln tesla reporting record deliveries but investors are not impressed. "squawk box" begins right now.

>> announcer: live from new york where business never sleeps. this is "squawk box. >> good morning. we are live at the nasdaq market at times square. the dow plunging almost 500 points bringing the october decline to 838 points. now down 3.1%. it remains up 11.8% for the year if you are looking over the last two sessions, the dow lot of about 85% of its gains s&p lost about 63% of its gains. people watching closely to figure out what next we'll hear. taking a look at futures at this point. all in the green but the dow futures up b