driving better cash flow growth and for facebook we're seeing what was 50% capex growth last year looking more like it will be only around 10% this year that comes down significantly as well >> thanks very much. that does it for the exchange. i'll join melissa right now. welcome to power lunch stocks selling off president trump brushed off today's drop calling it peanuts. with the deadline now back in play, the semis are getting hit hard a top analyst joins us to discuss this later apple is the biggest drag on the dow falling more than 2% as investors question whether it will be exempt yet again from the tariffs. let's dig in to trade and the

markets. we have the latest from d.c. bob is on the floor of the new york stock exchange with today's big movers we start with you. >> nato leaders have a long lis of item but president trump is talking trade. that's in response to france is taking share of tech giants revenue. the u.s. is considering new tariffs on french luxury, goods even though the two countries stuck a 90 hh-day truce in august that didn't happen it could be another work around and leaving the door open there. markets are focused on china with president trump now saying the deal could be shelved until next year. >> i have no deadline, no. in some ways i think it's better the wait until after the election, you want to know the truth. i think it's better to wait until after the election with china. >> reporter: that's the existing

53-day truce on shaky ground ahead of a new round of tariffs that would hit consumers the trump were to delay those without a deal or another development in talks, that would be the fourth time that he has done exactly that this year and it's not clear that he has the political will, the steel stomach to do this that time around considering the criticism that might follow from democrats who have been arguing the president is weak on china guys >> thanks very much. we appreciate that let's get over to bob on the floor of the new york stock exchange for a check on what's moving the markets the markets have rallied a bit in past couple howevers. bob. >> it's often the case that our lows are right after the open. that's going on today too. it's additional tariffs that's on two fronts. it's moving things very predictable reactions. transports normally move on trade. that's high pressuappening today

semi conductor is your classic trade mover. banks big move down in bond yield. very notable today they had a great year. retail getting hit and defensive names like utilities moving to the upside i do want to point out something today. even with oil up we are seeing new lows in a bunch of big energy stocks even some of the smaller ones like oasis keep an eye on this. even with oil up 20% on the year, oil stocks are not having a good year at all where exactly are we many this whole process. are we deescalating the trade wars or are we ramping things up what are we doing? that's what's the confusion is there's three possibilities about the tariffs. one is no new tariffs. we keep on the existing tariffs that are there i talk about these scenarios, he said that's what the market is dealing with now the market will be happy with

that no new tariffs to put on how about what the scenario is right now. additional tariffs of 10 to 15%. well, art feels it's modest. that's what we're dealing with now. if that does happen, modest sell off is not as bad because we have been dealing with itthe last few days. this is the worth case scenario. it's not 15% what happens if it's 50% art said you keep your helmet on because that's will be a sell off. markets are trying to figure out parts of probability of the deal what's maizing is how low the expectations keep going. back to you. >> stocks remain under pressure. wilbur ross reenforcing that the president will fnot rush into signing a trade deal >> the president's objective has

always been to get the right deal his objectives haven't changed if we don't have the deal he's perfectly happy to continue with the tariffs as he had. he feels we're in a pretty good position one way or the other. >> allen, great to have you with us he mentioned no deal until after the election which implies he doesn't believe a deal is necessary. he doesn't blooe there's elievem pass >> there hasn't been much of the tariff impact so far in fact, when we're talking about either consumer prices or about producer prices it's been absolutely minimal at very best.

there's no question there's been some uncertainty that's overcome the american corporate sector. one a spekts is these tariffs have been so off and on again i think that needlessly add to that uncertainty we're in a new era when it comes to u.s.-china trade policy i think that would allow manufacturers to make the necessary adjustment a lot more smoothly and quickly >> do you believe there won't be any effects? so far we haven't seen impacts do you think at that point we'll start feeling it

>> folks are saying there hasn't been much impact one reason we can be optimistic is price pressures overall have been so low. if economic growth doesn't pick up tremendously, they're likely to stay. >> the president, many people credit him for aiming for reciprocity and when you look at what is going on with china and what's going on now with france he just says if you're going to put tax on our technology companies and make no mistake it's mostly american companies that france is targeting here, we're going to hit back at you don't think we'll sit back the way we have in the past. doesn't he deserve some credit

and is he moving the needle toward a more resciprocal trade balance? >> i think he deserves tremendous credit especially on the china front because for all the economists that you hear them telling us they don't matter the fact is they are indispensable and i should say reducing them dramatically is indispensable for ensuring that u.s. growth remains healthy and gets healthier and becomes more sustainable. if we keep consuming much many rn we produce and major sign of that is these enormous trade deficits that we have been running, it's very difficult to see how growth continues as long as we would like it to we should have learned a big lesson from the last financial crisis that when the one out

strips the other, the ending is very bad >> great to speak with you let's get back to this market sell off and whether these trade worries will lead to another december daisisaster fo the markets. is there any way this december reminds you of last december >> i don't know. i don't see that same negativity out there. the markets are at all time highs up 26% year to date. there's been multiple expansion. there's been positive expectations biluilt into the market any negative news will not go over well right now.

if you look at a company like donaldson, dci is an industrial filtration manufacturer. this last quarter they saw minus 4% organic growth and guiding for the next 12 months at about flat organic growth. there's not a lot out there right now as far as real examples of optimism but the market is pricing in it. >> the market seems very much prone to wild swings depending on what the latest word is on a china trade deal it's likely, it's not likely it's an inch away, no it's a year away. over the long haul the markets have done nothing but move up with the exception of last fall between october and the first of january. >> i think you can draw a real difference between now and last

year last year was the u.s. and global economy were both slowing into the end of the year and the fed was determined to raise rates and it did do so the market was clearly sending a signal that was a mistake and worried the fed was going to really have an unforced era and drive us into a recession that's where you can be a little more optimistic about this year. maybe a lot more optimistic in the sense the fed is off the table. they're not going to do anything for the rest of the year they said they will be off the table for quite some time in terms of any sort of hikes i think in that sense you're not likely to get a signal from the market i agree on the other side that there is some optimism built in. there's a large downturn at the moment

>> smaller businesses may not have the wherewithal to force suppliers to pick up the increase in the tariffs. they may have less leverage just as walmart has leverage over its suppliers. small companies may not have that same leverage and have to pass the costs on. explain why small caps that have underperformed this year, why it's time for them >> you're right. if you have a commodity product and you're having inflation you're not going to be able to pass those costs along it's an ideal way to leverage low costs natural gas that we have abundance in the u.s. and

flairing they take that natural gas and bring it down to countries that are using energy, using e iningl and heavy oil. new fortress makes money the country saves money and at the i equivalent of planting millions of trees this company will go from making no money this year to $400 in operating profits over the next four quarters i don't care what trump says about a trade deal or what but this will be a fantastic growth story over the next four quarters the stock is where it was a year ago when it came public and there's a lot of opportunities like that that we're seeing. >> final question. does it trouble you at all that the markets up 25% when earnings are up about zero percent? >> you know it does but i think you do have to keep in mind that they don't always go in sync i think the market was moving ahead with the view that the

economy was in fact bottoming. o when you look at it from the actual data you probably have seen the bottom here >> thank you very much appreciate it. still ahead, stocks getting slammed today on trade uncertain uncertainty. with the smh down 2% is now the time to cash in your chips. the first verizon ceo joins us inntonc interview live from the reve cference in las vegas. power lunch will be right back each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk,

the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

the companies have reinvent conference in las vegas. hi, john >> the keynote part just ended lots of news having to do with the speed of the clouds in the 5g era also having to do with artificial intelligence. let's set the stage a little bit here big companies increasingly moving to the cloud and it's

increasingly defined this era. amazon in the lead you've got microsoft, google, ibm and others competing for logos, big names especially. if they can say we've got them in our camp. down the line profits will be important. a lot of that will depend on how good are the services that these clouds are delivering to people. how well are they able to run artificial intelligence. applications on top of these collud clouds how low is the latency where they need to get in data from sensors and get actionable information. great to have you with us. hans, give us a sense of the economic stakes. in three years, how much of your business revenue, say, is going to be cloud connected?

>> i think that we outline in the beginning of the year our strategy we launch already in 2018 and now the 5g mobile. bringing the process and power out of edge of the 5g network and today we announce to do that with the new application wavelength this is an enterprise solution but we see many new solutions. i think it's a big market. we're excited. >> wavelength is about taking amazon, aws compatible equipment, bringing it closer to the customer by putting it closer in your network next to your own equipment to reduce the

latency. are you going to have to do this kiechb kind of a deal with every single major cloud provider or will we end up with if i'm with aws, i'm with verizon >> we started 18 months ago with amazon this is very complicated we have virtualized our mobile network which is complicatcompl. of course amazon at the same time has developed the cloud service to be on edge. you need to do different types of things in order to open up but have a hybrid cloud. it can move the core cloud that we have together collaborated and actually delivered. we have capabilities in the 5g network in extreme low latency in order to do those together you need a partner the first partner we choose was amazon they were the most advanced and we're the most advanced.

i think the compatibility between our companies was great and our engineers have done terrific work in the last 18 months we already have this in preview. >> the global trade story is increasingly also intersecting with the 5g story. no u.s. equipment in it. you're an expert in this arena you're with ericsson before verizon. you have u.s. combatabpatible 5e here >> i hope not. you can bring your phone from which ever company and it works. that's been the most accessible technology

they share the innovation. in other words for so many people as possible on this earth to use the technology. some things combatting where education can be named hopefully not but there are other people dealing with that right now. we're happy with the technology we have and what we're deploying. >> hans, ceo of verizon. thanks for sitting down. back to you. >> all right john the dow is on pace for its worst day since october 2nd. are we poised for another december disaster? john will break down those numbers. the trade issues pushing the f fang stocks lower today. trading nation tackles that next power lunch will be right back dy falls into formation.

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stock? facebook, amazon and netflix all lower for the third day in a low while google, parent and alphabet are in the green. todd, four stocks. you can go pro or con. what's your pick >> the one i'm cautious of is netflix. it's been under performing its parent company is a top five holding. you can see it in norange in netflix in white you have a little bit of consolidation here and the ratio shows the exact same thing netflix i'm concerned about could be falling into a range as we head into next year i'm cautious on netflix. >> all right boris, what do you think you have one that looks right one way or the other >> i do.

it's a cash flow machine i'm very concerned because the company keeps posted lies on the platform while it's okay for political situation, there was a story out of australia where a whole bunch of people lost their life savings because they ran ads that showed false celebrity endorsements of products they asked the company to stop running the ads. this is class action lawyer's dream. if you're going to get any issues like that going forward, it can have a very serious liability threat it's not even a threat but from private markets. once you get one lawsuit standing, it can be a situation. it's not a short but it is a out of the money quick buy that's what they were doing with facebook i think it's a threat there. >> certainly a big target. see how it goes. thanks a lot todd and boris.

for more trading nation head to our website. tyler, back over to you. thank you very much. ahead, we will continue to monitor the sell off as trade fears shake the market the dow down more than 300 points about 100 points off its low with this rocky start to december, are we in for another christmas eve sell off remember that one last year. the answer may surprise you. semis are taking it on the chin today as trade tensions run high we'll be right back. - [spokesman] if you've tried college but never finished,

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welcome back here is your cnbc news update.

a developing story out of the presidential race. kamala harris is suspending her campaign she tweeted in part saying quote, i will keep fighting every day for what this campaign has been about justice for the people, all the people, end quote. hong kong chief executive criticized legislation signed by president trump aimed at supporting human rights in the territory. lam said the people enjoyed a high degree of freedom in many areas pfr,0 areas. thousands of supporters crowded the twoun square to thank the president for supporting the law. the associated press says u.s. authorities have seized more than 500,000 marijuana vape cartridges and arrested more than 120 people in the past two years. the fupush has been fueled by alarm over oo dea deadly illness starbucks on a lighter note is adding a new holiday drink to the line up. it's the irish cream cold brew

it's non-alcoholic and comes with irish cream flavored syrup over ice topped with a vanilla sweet cream foam and cocoa sprinkled on top yum. that is the news update this hour back to you guys >> all right sounds pretty good stocks off their session lows. the dow down about 1.3% and the nasdaq down about a percent right now. melissa. >> time for today's power mover. shares falling today after the company announced it would by soft deal worth $1.1 billion the come biep the company's ceo is coming up on the closing bell. up next, shares of roku jumping today. it's 40% upside from where the stock is trading roku comes on the heels of a 15% decline yesterday. finally another name bucking the down trend on wall street.

audentes, shares doubling today after the japanese firm agreed to buy them for $3 billion that's a 100% plus premium one of the biggest casualties in today's sell off are the chip makers having its worst day since october. should investors expect more pain ahead or is there light at the end of the tunnel? here with us is the managing director chris, great to have you with us >> thank you >> how should investors think about this there's some names that get more than 50% revenue direct exposure from china do you stay away fromnames lik that >> we're not looking at it like that one month we're good one month we're bad. we're not ignoring the risk but putting it aside because it's unpredictable. in terms of how semiconductors will react to this, i think it will be in line with the overall economy right now. if the trade issues impact gdp it will impact semis and

everything else that components go into. we started getting warmer on the group in the summer. not because of the trade issues but because we have already been started to dial in for over a year we started to see this slow down in my group well more than a year ago we're working through the system with some of the things that specifically would cause semiconductors to under perform such add inventory levels and getting the estimates down if the trade issues do get resoevered and even if they don't and we get the steady state there's still some drivers that move the group forward. >> if an apple suppliers supply shifts to the iphone or whatnot and apple subject to tariffs, they're probably not going to pay it they will squeeze the suppliers. which ones have the most power

>> apple, for example, they squeeze their suppliers every day. if you talk to someone in apple's purchasing department, they would be leaving money on the table. what i would worry about if tariffs came on and caused apple to raise the price of iphones and they've been non-committal about what would happen if tariffs did happen, we just lower and have it. >> chinese manufacturers moving away on american product >> to the extent they can. >> the replacements just aren't as good. if they could move to chinese source that was justas good an just as cheap, they would have done it regardless of trade situation. i think what they're doing now is out of necessity but i think

if this were to continue and that become permanent it would affect the quality of what they sell >> semiconductors are very cyclical you look at them of a barometer or forecaster of what's to come in the economy to the extent that tariffs could have a drag on the economy even if there's not a direct impact on your group, does that cause you to rethink eps estimates >> in terms of the leadi ining indicator, semis were the first to roll over they're having a bad day today they extend the semis have been beating the market and probably telling you that semiconductors have been looking past this. >> we're going to leave it there. thank you. >> thank you let's get to the bond market now. rick is tracking the action with the cme. rick >> yeah, big day

right now we're down 11 basis points look at a two-week chart, you can clearly see we really dropd out of the recent very low volatility range this does harken back to a session on may 29th, 2018. let's do the chart from may of 2018 see the far left side. that particular day we dropped from 293 to 278 minus 15 basis points we still have time in the session to challenge that but maybe the most sbraes intereint feature is how little bounce there is 16 169 is low back to you. >> thank you new court documents revealing purdue pharma down play how aiddictive oxycontin i.

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welcome back

we know that purdue pharma and its owners are at the center of hundreds of lawsuits over the company's rule and opioid crisis one company is yieldsing information to the public about the involvement of the chairman of purdue. the documents were unsealed after a lawsuit. it showed the benefit benefitted as early as flagged the abuse potential for the drug addiction may be a convenient way to just say no when the objection is obliterated they will fall back on the question of cost. that litigation for now is frozen as purdue is in

bankruptcy it's put a settlement offer on the table. half the states sued are not on board with this and negotiations are ongoing. what a long process. >> do we have any idea how much money they made from selling oxycontin? >> some suggest it may have been 12 to $13 billion over a long period of time various suits have sought more information from the family to try to figure out where the money from purdue have gone. right now all of that is frozen as the bankruptcy proceeds and the sides try to come together >> is it possible the court cases that the documents play a role in future cases >> it's possible if this gets resolved on the table now, the goal is for that to take care of all future litigation from the state, the city, the

department of justice. those are all contingencies upon accepting this some people are worried if it does get wrapped up that all this documentation will be lost. the public won't get to see it and what went into creating this >> is it possible to not be part of that global settlement and a way of settling all of this? >> it's possible don't know the exact thresholds that needs to be met in order for this to be accepted. the concern is reach some settlement but they are stuck in these other lawsuits so they probably won't want to do that thank you. so far it's the worst week for the markets and it's only tuesday. >> today's market is giving some traders what they have been waiting for. that's a pull back or a buying opportunity for half some key industry groups have fallen from

the recent highs down a point where they might start getting going on shopping lists. we're looking at tread line where is the average price of 50 or 200 days. the dow jones is fourth straight down day it's fallen below the 50-day average price that the levels here it's trying to bounce off the level of that 200-day average price. a rollover here in transportation stocks maybe not seen as a great sign take a look at home building stocks they have been momentum leaders as of late it's a four-day losing streak for this spider home builder down toward its 50-day average price. then let's top it off with emerging markets it attracts them trading below its 50-day average price looking for support around

its 200-day aver rage price. that's a 5% pull back since november 7th this is now shaping up to be a reduction of december. there's one key difference this time arnds that's trajectory of interest rates they were not that way over the could you rephrase the past two years before that where they were trending higher perhaps a difference this time around maybe not what we see >> that and the fed. it's interesting you bring up all these etfs you break down the builders with the retailers within that etf. it's really the retailers like the home depot that are getting hit the hardest. >> yes that's a good point here when it comes to those home builders, some of those guys are more heavily with the retailers. some will be exposed on december

15th what i didn't show you is what happens with the other retailers. a lot of retailers will feel the december 15th tariffs. a lot of textiles, baby goods. that will go on that thing as well retailers also a key focus i should point out that maybe retailers already have their stocks on the shelves this time around you might find it. >> am i correct in assuming today the sectors you might expect to hold up better are so i think so like utilities and real estate stock? >> they are. you see it happening up with other place that was notable over the course of the past couple of days is the small cap side of thing. this idea that companies with less overall exposure or those global economic factors, those are the ones that tend to out perform. you're seeing that play out. they are both down today make no mistake about it

small caps are out performing on a day like today >> thank you markets down and another round of tough trade talk from president trump. where the bond opportunities are. each day our planet awakens with signs of opportunity. but with opportunity comes risk. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances. cme group -

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welcome back to "power lunch. stocks selling off today, but we are off the lows the dow is now down about 340 points after trump said a trade deal could be pushed until after the 2020 election. cnbc "fast money" trader steve grasso has been trading all of today's action from the new york stock exchange hey, steve >> hey, melissa. >> you've been a steadfast believer that a trade deal will, in fact, get done. are you still in that camp, before the 2020 election, that is >> so, i do believe you'll see some sort of a deal get done, but the point is is that it still keeps the bears on their heels if the deal doesn't get done so even if you short this market, you've been run over umpteenth amount of times, and i would expect that would be the case if it happens yet again, if you lay those shorts out yet again, you game yourself to get steamrolled yet again with the

overall market >> that doesn't mean that you don't trim positions, though, because the risk/reward is to the downside >> sure. i mean, it depends on what your time horizon is, but just think about who has a vested interest in this market going forward it would be long/short hedge funds. if the market goes lower, their longs will underperform more than their shorts will outperform so for them to catch up, they need the market to move higher so i do believe we'll see a chase into year-end like we've seen in the last couple of weeks/months >> let's say we haven't hit peak tariffs and december 15th does go into effect what happens with the markets then, do you think >> we have a couple of moving averages so you have your 50-day moving averages, about 50 handles lower from here. your hundred-day moving average, about 80 to 90 handles lower around that 3,000 mark in the s&p. i would say that that one is in play, and if we get a little aggressive on the tariff side, then the 200 is in play.

that would be 7% lower from here i think we are looking at probably a move lower. 3%, 4%, max. because then powell comes back into play. >> in other words -- >> in other words, 3 or 4% lower if those 15% tariffs go into effect on december 15th? >> yeah, i think, easily, we could see 3,000 in the s&p, if those tariffs go into play but, you know, trump -- president trump also has the ability to look like a hero with all of this. and we haven't -- the odds of powell cutting rates in december are zero, right? so no one is factoring that in, but if we start to see the market slide, that has to be factored in yet again. and that's what sends the market even higher than people would have thought >> does anybody in the world of trading and traders care about impeachment? >> you know, it's funny you say that, tyler. this market, it's not as if they don't care about it. it's, they care about things that affect the market

and i know that's your point of the question so we've seen powell get brushed off to the side. we've seen china trade brushed off to the side. impeachment, from everyone i talk to, no one mentions a concern about it in the least. so to answer your question, all we care about is china and powell and the market has shrugged off both recently so i would say that knee-jerk reaction, the market could move lower, but when everyone thinks about this, we've seen this act before and it usually winds up in all-time highs for the marketplace. i think you still wind up setting up for about 3,200 year end. >> what's the one trade worst stock that you think is being thrown out with the bath water >> if you look at semis, people are starting to throw those out. and also you have to factor in the cyclicals, because if people think that the market is going to slide lower, cyclicals cannot gain any traction. talking about the chemical names. but if you're playing for a momo rush into year end, you've got

to get back into those semis and take this as a bargain basement price as of late >> you know, i've made the point a couple of times to the point i'm probably getting tiresome about it but with all the worry about trade this year, on any given day, the market seems very vulnerable to trade headlines. but it is still up 23, 25% so far this year in the face of all of that. my question isn't about the past year, but it's about next year what do you anticipate next year looks like, a more volatile year, a more modest returns, what >> so you would think, it's all about estimates and everyone thought we were going to have this earnings depression and slash recession and they came in and they beat expectations so if the bar is lifting for expectations going into q1, tyler. then we set ourselves up for failure. so i think you can see a more dramatic pullback q1, depending on where estimates lie and i think that's the way the market setting up right now. a rush into year-end, a pullback, q1 >> interesting >> yep

steve, thank you >> thanks. >> steve grasso with the new york stock exchange. messtho lir ng tdeve lia e check, next.

welcome back to "power lunch. let's get a look at a sector bucking the trend today. dom chu has that dom? >> if you're looking for that speck of green, melissa, a lot of red across the board in this market, but biotech stocks are not one of those red spots that's a notable bright one. that ticker, xbi, it's up about

1.5% so far today, pacing for its 11th day of gains in the last 12. that group of stocks is up nearly 12%, just over the course of the last month. among those names, you've got arrowhead, blue bird, surepta, and the ibb up about 23% just since october. back over to you guys. >> thank you very much, dom. and sticking with that as we go to check, please! it's always interesting to look at sectors, because even on a down day, there are sectors like the ones dom just pointed to. we mentioned earlier, utilities, which bob showed, i believe, or we showed those stocks were a little bit higher. i believe real estate stocks were a little bit higher so you look at, those would be interest rate-sensitive stocks and on this day, we're interest rates on the ten-year came down a lot. you would expect those stocks to do well and indeed, they did part of a risk off kind of day >> absolutely. and i would be watching the auto parts sectors in terms of sectors that could be hit by those december 15th tariffs.

we're talking about names like american axel, a lot of the supply chain is still in china even though gm may manufacture locally, these are going to get hit. and so we're watching some pretty steep declines across the board here >> all righty! >> should be an interesting session. >> should be >> next hour is coming up. >> thanks for watching "power. >> "closing bell" starts right now. don't go anywhere. >> it does, indeed welcome to the "closing bell," everyone i'm wilfred frost, here at the goldman sachs post today, down sharply, almost 4% over the last two sessions banks leading the sell-off yet again, a sell-off that puts us down 0.9% on the s&p 500 59 minutes left of trade >> and i'm morgan brennan in for sarahize pn. let's take a look at what's driving the action president trump signals a china trade deal could be delayed until after the 2020 election. france and the eu said they were read to retaliate if france imposed tariffs on french luxury goods like champagne and handbags major averages are down more