good afternoon welcome, everybody to "power lunch. what a day what a two days it has been. tech leading this two-day sell off. the nasdaq now down about 2% after yesterday's 5% plunge. that's the bright side here. the dow giving up an early rally sparked by the jobs report it now negative by about 300 plus points. it's off the lows. it's down 600 points now down about 300 s&p 500 and nasdaq set to snap a five-week winning streak however, even with the tour murl this week, the nasdaq is still

up 67% from its march low after what was a run the new high. you have sales force, you've got apple, microsoft some of the tech titans all under pressure >> thank you very much i like the fnew angle on the house. we have the market angles as well rick is looking at the bond market where it's rebounding bob, let's start with you. >> remember, we could go either way right now. remember yesterday look at the s&p. around 11:00 we bottomed what we have is a good example of of shooting the last eight trading sessions

for tesla, $400 eight days ago it goaes to $500 and back to $400 that's a complete round trip and overshoot on the downside as i mentioned before same thing with nvidia it was $500 five or six trading sessions ago goes to 580 and back down to $500 and below that. you can overshoot on the downside there's the s&p there. you tend to overshoot on the downside as for the megacaps, a little perspective of what's going on it's true that microsoft was down 7 to 8% this week it's up 33% for the year this is what i mean when i say had a little perspective of what's going on. it's up 54%. paypal is down 7%.

rally and cyclicals this week. bank stocks doing better today these boring old deep clem cals and deep industrial stocks the industrial international paper, caterpillar up 3% for the week there's rotation going on. it's not dramatic. there is some and some frothiness coming out of the stock with the biggest move in the last two weeks back to you. >> thank you very much let's get to the bond market where rick is tracking the action at the cme. interest rates are an important focal point to figure out what's going on here. >> absolutely. >> we can understand it might make you go down where the fundamentals are pretty good case in point treasury yields are on the upside.

yield goes up and the yield curve steepens if you want to look at the treasury complex as a simple sign where the economy is going better, that's exactly what you want to see. up a half a dozen basis points on the day still down a couple on the week. two years, three year and five year are all lower in price. higher on yields on the week that's a very interesting development. look at a two day of tens minus twos there's your bear steepening, curve steepening when rates are going up the euro versus the dollar you can see it's come up from its early drop what's fascinating here is the tl dollar index is still clinging onto gains for the week. tyler, kelly, back to you. >> all right thank you very much. let's talk more about this topsy

turvy market how much more pain could still be ahead let's bring in ryan, senior market strategist. we saw the death of a bull market i prefer to call it a lazarus market it was dead for a few days i don't know who plays the role of jesus in this scene but whatever has happened the market is up 60% in less than six months can it sustain this or should we suspect that this is the 10 or 15% correction that lots of people have been talking a about? >> right here, it's kind of two markets, like you said a lot of stocks are down the tech stocks that are stretched. you mentioned the 60% rally in the s&p. yes we pulled back a good amount the last two days. s&p is up five months in a row

you go back in history, that's happened 26 times since 1950 one year later the s&p is higher 25 times i know every time is different i know different things are happening. look at today. yields are going lhigher you look at chinese a shares, they are higher. we all know it's the tech and some of the health care names but the market what it's doing, we move from one side to the other. it's not just selling everything we think that's a positive sign. that will be a buyer of this dip. could the s&p go down as much as 10%, maybe we don't think much more than that the economy in our view is really improving here. >> if you were to buy into this market, you ought to buckle your seat belt, right >> you're exactly right. as every one said, september is

the worst month of the year. during an election year, october is the one you have to worry about. that's the worst one it's pre-jitters that's probably what it is looking back in history. we still stick with who got us here the communication names are the eras we like the emerging markets have seen more growth in the u.s stick with growth. stick with emerging market and use this pull back as an opportunity for continuation of the pull market. it's how we see it >> ron, you have been preaching caution for some weeks now you're particular cautious about the so called work at home stocks right now also about the role of robinhood in bringing maybe uninitiated investors into the marketplace why don't you bear down on your hypothesis as you look at this

market selling off >> we don't whether lazarus has much more time on earth. having said that, with respect to preaching caution, this is why you take profits this is why you rebalance and engage in disciplined behavior when it comes to investing traders don't save the market necessarily. with respect to robinhood, these are folks who are set is marginal price for a lot of these high flying stocks yesterday they suggested the sec was looking into robinhood's business model selling those trades to high frequency traders so they can keep from charging retail investors. if that business model changes and new traders start getting charged for trade, that could upset what has been a bull market and the big name stocks but some of the dogs and cats that have been running on wall

street with respect to what's going on today, i also am wondering whether or not a more rapid rebound in the economy, not my base case. if that were to take place, whether that would hurt further the stocks that are selling off in the nasdaq. they are, as josh brown likes to call them, work from anywhere stocks or anything that's done quite well and thrived during this period of sheltering in place might continue to correct and money would flow into other areas as ryan suggested. i do worry this market is still vulnerable i don't think we're out of the woods yet given the concentration of gains that we have seen andfully change in outlook could affect those stocks rather disproportiona disproportionately >> thanks so much. have a great long weekend.

where else do you get business news and biblical conversation in one segment nowhere else >> what else do you want to do on that one today? >> thank you >> thanks, guys. kelly. thank you very much. the chips are among those getting wrecked in this pull back just out this smh. it's a semiconductor index looking at its worst week since june nvidia among the names getting hit. qualcomm down more than 1% broadcomm did have a big earnings beat after the bill it's managing 3.5% gain now. talk about the valuations going into this correction did they concern you >> it's interesting. versus the market, however, they are trading at a discount.

5, 10%, whatever it is that's fairly normal on a relative basis what we have seen over the last decade it's not semis only that are elevated from a valuation standpoint it's kind of everything. they don't seem out of line. >> you do acknowledge they were trading a kind of the higher end of the valuation range i guess the question is now let's call these a roughly 10% reset that we have seen. where does that leave them in relation to where you think for a value is >> let's, i heard a little earlier people talking about gaining perspective. the stock is down whatever it is this week. we're back to where we were two weeks ago. i do want to have some of that and the stocks overall is up, i don't know, 15, 16, 17% year to date it's probably 50 or 60% off the march. things are going okay from that standpoint if you look at the industry as a whole, actually things have

proouen to be fairly resilient in the wake of a global pandemic it's some of the work from home and other dynamics there's some worries broadly that maybe some of the strong demand we're not seeing is true demand or inventory building in the face ofbroadcom from that sd

point. >> let's talk about nvidia which is up 120% year to date. looking for a deeper pull back >> i'll be honest, i don't know what's going to happen with any of these stocks over the next six months there's a lot of uncertainty around the pan dij ademic and t economy and the election i think investors want to own it if you're looking for secular stories that you'd want to own through this, there are no non- non-apocalyptic reasons why it should be out today. it should be higher. they're both going strongly. they have the gaming announcement it looks like it will be a monster this year. the worry about nvidia is it is

expensive. in tech, you never sell anything just because it's expensive. just like you never buy anything because it's cheap you have to wait for a nar tifr change i woun say the narrative on nvida is changing at all if anything it's getting stronger we like it here. >> thank you so much a pleasure >> thank you the chips are down today kelly, coming up, we'll have much more on this market sell off. financials and industrials are in the green while tech and consumer services lead the way lower and it has been a long time since technology has been at the bottom of that board. not even a strong jobs report could keep an early rally going. could a market sell off increase pressure for a stimulus deal when congress gets back to work. we'll talk to marc morial right after this break when the world gets complicated,

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unlimited or a mix of each. and switch anytime so you only pay for the data you need. switch and save $400 a year on your wireless bill. plus, get $400 off when you buy the new samsung galaxy note20 ultra 5g. welcome back stocks seeing yet another massive sell off despite positive results on the job numbers earlier today. the unemployment rate dropping more than expected 8.4% with 1.37 million jobs being added. if the markets continue to sell off, what will this mean for the

possibility of economic stimulus what will it mean for the recovery as well joining us now, our friend marc morial, the former mayor of new orleans. welcome. always great to have you here. >> good afternoon. good to be with you. >> good to see you the good news in this report is that the unemployment rate came down the momentum of rehiring persists more jobs added than expected. the bad news in this report is that the gains were not even >> i also think the other cautionary note is the jobs added were primarily people being called back to work and secondarily the addition of maybe some 238,000 temporary government jobs for the census that's the sec poinond point. we went from 4.8 million being added in june, 1.7 in july now

to 1.4 obviously, the effect of the stimulus has driven some of the additional jobs and as those unemployment, if you will, additional dollars, $600 a month expires and the stimulus begins to wear off, what does this hold for the future it speaks to the need for continued stimulus let's not forget that the government's significant addition of trillions of dollars to the economy has been an important element in people being called back to work and the increase in consumer spe spending which is gradually coming back. there ought to be cautionary note on this report because this portends some tough and difficult days ahead >> obviously, we still have many, many millions more americans unemployed than we did at the beginning of this year,

let alone at this time last year as we look back to see while there is progress in recovering from march and april, we're not back to where we were. let's drill down a bit on minority reemployment and unemployment because some of those jobs have not come back as quickly as others and may not come back as the hospitality sector where some of the minority jobs are concentrated and other areas maybe including health care where some of those jobs are concentrated have not bounced back as quickly. >> the black rate is at 13%. the real unemployment rate is at 14%. those in part-time jobs who want to work in full-time jobs and you add them in, i think the plaq

black unemployment rate may be closer to the high teen or 20. the white rate at 7.3% is still higher than it's been historically over the last several years. at 10% the hispanic latinx rate remains higher than the white rate but not as high as the black rate the hospitality sector, the service sector, the restaurant sector still lags behind and continuing concern that we have is as cooler months lie ahead, we cannot predict with the impact will be on covid-19 and whether the number of cases may spike. therefore causing further, if you will, reversals of some of the efforts to reopen the economy. witness what's happened with many colleges and universities many have tried to come back some have had to put the brakes on it rather quickly

congress, let's get a robust stimulus plan in place nothing small. we need something significant to continue the bounce back of this economy. >> we'll see when they get back to work after labor day. you have a great labor day weekend. >> you too be rested. >> you too thank you. kelly. still ahead, a couple of bright spots amid the market wreckage we have seen the last couple of days it continues into today. american express and jpmorgan are both higher today. that continues their trend from yesterday. the cruise lines mostly higher for the second day in a row as two carnival ships are ready to set sail we'll have the details right after this break

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welcome back after five months of no sailings, carnival is testing the waters this sunday with two cruises in italy a moment of truth for the industry if successful, it could open the doors to additional sailings, perhaps even here in the u.s if not, it could prove to be another set back for the cruise industry let's bring in the trading nation team and chat it out. great to see you both on this friday if carnival is able to demonstrate with its new protocols from social distancing on board to providing covid tests to guests before they get on the ship, if those protocols are able to keep covid off the ships, would you be a buyer of the stocks

shares are higher today but yesterday and today notable on a down day >> this will be an important test if they can prove that they can do this safely, i think that would be enormous for the cruise stocks there was a los angeles times report that showed that cruise bookings for 2021 are 40% higher than they were for 201 meaning the demand is there. you just have show it can be done safely. the cruise stocks have to survive and they have amassed a mountain of cash you look at carnival carnival has a cash burn rate of $650 million and they are sitting on $7.6 billion of liquidity. i think they can stay afloat they just have to prove this is possible >> they raise a lot of debt. on very high vest rates of around 10 to 12% depending on the cruise line. year to date stock would show you the stocks are the worst performing stocks in the s&p 500

with norweigan down 70%. what would you do? >> from their bottoms because they got shall lacked, carnival cruise is up. royal caribbean made a definitive higher low. that's very good now it's starting to rally back up if it can do that from 75.50 that will take it above its average which will be bullish. stock is getting over bought it might have to take a

breather >> a lot of hope being priced into the stocks especially when you think about how the no sail order here in the u.s. is still in place americans cannot sail. they hoping to get back to sea perhaps in october thanks for joining us to discuss this industry and for more on the cruises go to our website or follow us on twitter tyler and kelly. staill ahead, the tech wrec is continuing with the biggest names in tech shedding hundreds of billions of dollars what's causing the pain? why now and what's the best move for investors? our all star panel will discuss that, next before money, people traded goods.

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welcome back, everybody. here is your cnbc news update at this hour. a u.s. judge has approved the extradition of two americans to japan to face charges of smuggling former nissan chairman carlos ghosn out of that country while he was awaiting trial. the state department will make the final decision on that extradition case east of olympia, washington be evans canyon fire has burned 70,000 acres people in more than 900 homes have been told to evacuate labor day gas prices are on track to hit a 16-year low the national average will be 2.19 a gallon. you can go to cnbc.com to see how many of those travellers plan to take their work with

them that's a one month old sloth at the london zoo. the keepers will not know truffles sex until they do a dna analysis of the little one's hair all right. everybody say aww. tyler, back to you >> you got to love a little sloth. >> i know. >> little sloth in your life is just fine. there is the little sloth. there's nothing more the say. marks right now, let's look at where the dow is it's another rough day not as rough as it was when it was about 600 points down about 220 points. about three quarters of a percent. s&p 500 off more than one% as technology bruises that index. the nasdaq composite almost 2%

lower. ole market closing for the day as gas prices hit multiyear lows frank at the cnbc commodity desk >> ugly day with the oil market with both benchmarks down more than a. it's high r for the second week in three according to latest data from baker hughes back over to you let's talk about the tech led sell off and what's causing it that's what everybody wants to know one possible suspect is soft bank being described add the nasdaq whale as of june 30th the company held billions of dollars worth of tech giants.

the report is soft bank was large and constant buyer in recent weeks of call options on stocks like those. on big tech stocks it's fascinating because for that period, we have been observing massive volumes in the options market kind of indiscriminant buying of the big momentum tech stocks a lot of people have been splicing it up and saying there's been an unusual number of rather small orders a proxy for retail orders coming in it was assumed it was small traders speculating on continuing of this tech run. they do have a new fund and dealers are saying they do detect their activity there.

it says there was a collective one way bet that in the options buying acted as an accelerate on the up side. >> do theysee the big trades and think they must know something? >> there's definitely a way they grav state toward what's moving and what's moving fastest. a call option is just kind of a fraction of the cost and individual share.

there's no doubt about it that it was a multiple factors driving a lot of the speculation across here. the big question is, two days of short set back to essentially flush a lot of that activity out, to clean it up and over extended players may be already been clipped back. that's not clear just yet. today the action has calmed down a bit from this morning. >> how realtime are this data reported >> in terms of the holdings, you don't is ever really know. you're not really getting the real information it sort of fits with what we're seeing in the overall market

dynamic even if it's not name attached to it >> thank you very much now you have play-doh and the bible, ty. thank you very much. let's look at the market the dow is coming back a good bit. the dow now just down. about 145. that's far cry from where it was earlier today. it's really kind of a trampolining effect as it comes back we'll see what happens the next hour and a half could be very telling or hour and 20 minutes. back boabove that level now but earlier dipped below it.

for more let's bring in two of the best both of you welcome. both of you sort of divide the tech space into two. using different parameters i want to tease out that conversation gene, you look at some of the big names in tech and say these guys can continue to grow where as some of the others that have been the market leaders maybe sort of stalled for reasons you'll go into tell me how you are dividing technology into two and what it mee means for the stocks >> a fracturing of the market between the haves and the have notes. we think the category that's the haves will be the companies changing a large addressable market in the future what has worked in the past isn't necessarily going to work

here ultimately, we think about that division, we think about companies that are in the have category companies like apple, companies like google surprisingly and some of the things they are doing around other bets even amazon will still have dramatic impact in terms of new addressable markets. then we draw a line and underneath that we think about companies like facebook and advertising business our police chibelief is that nit innovative enough. i'm a huge fan and competed directly with mark love his views i think we may share a different view on how facebook plays in that ultimately, i think there is going to be this fraction of the market i put apple on the top half of that and companies like facebook on the bottom half

>> i want you, mark, to pick up on that thought. i know facebook is one of the stocks you have liked because you call it one of the recovery names. you sliver the technology market into the bigs and the littles. the bigs have done very well the littles haven't. maybe there's more material for gain in the littles. explain your take and how it might differ from gene's >> i'm a huge fan of gene's as well a will the of mutual respect there. facebook, i like facebook for a variety of reasons i think they are about to tap into one of most interesting trends we'll see this year which is social commerce we know well that covid has caused this acceleration in online retail. it also caused an acceleration on online social media usage and facebook sitting there at the middle of that so is instagram. i prefer facebook. we prefer facebook to google because of that reason there's something that gene is

tapping into which is role of artificial intelligence across these countries. i think we have seen an already in the processes of these companies, in their user experiences. they have becoming massively more personalized than a few years ago. the company with most data wins. that's unfortunate for small companies. near term where i'm looking for really dislocated plays, we had real covid winners if there's a recovery, hopefully positive vaccine news and we start coming out of our shells then i think you'll have a different set of stocks that can win. i really like uber as recovery play which is not really part of either one of these baskets.

it's a cyclical recovery play with a lot of controversy around it but a large market opportunity. >> mark, i was struck -- i don't know facebook and its business well i'm not on facebook. i haven't been for a variety of reasons. i gather that it has become a marketplace for selling all kinds of stuff which would suggest to me that maybe it's less dependent than it used to been on its advertising business is that part of your thesis because gene points out his concern is they've not really i know vated in advertising lately >> okay. tyler, it's about two billion other people ahead of you on facebook and instagram feel free to join. >> there i am again. >> it's popular. the services really have become much more personalized

the advantage facebook has and google has too is they have a lot of first party data. they don't need third party. they don't need to scrape third party sites. they don't need to follow you around the internet. you're on their site and they know who you are especially on facebook. they've got this unique element to it which is when you go buy and sell products on that site, you can see who the other people are. you can see their facebook profile. it lends an edge of responsibility trust and safety to the facebook marketplace that others don't we're way early stage in terms of monotizing facebook marketplace. watch that space

>> my next door neighbor bought a car on facebook. mr. nickname on cnbc is mr. behind the curve gene, why don't you tie it off addressing facebook or your over all thesis on technology and why you believe there's haves and have notes >> commerce massive opportunity. it's not game chapging it's been more marketplaces out there. mark is right in terms of the size and magnitude that doesn't garner the multiple you have to capture investors optimism about the markets apple has an opportunity to really reengineer health care as we know it around wearables, around air pods. what will happen with 5g and what they will do around ai. i think there's a strong case that apple can be a 200 there are stock. >> looks like we may have frozen

on gene. i'll close by saying it was delightful to have both of you on together. mark, gen. let's take a look at the dow now. it's lower by less than 100 points right now less than 100 points it was 600 points down earlier if you add that to yesterday's 800 point loss, you still got a big two day sell off one of the worst in months biggest culprit today is sales force. a new member the stock down more than 6% in its first week as a member of the dow. we have much more on the markets and big mauverovers, next.

welcome back the dow just turned positive on the session. it's been about a thousands

point swing for the blue chips we're up 275 points this morning after the stronger than expected jobs report. then we were down 400 points at the low. something in that range. now we're back up and struggling to hang onto those gains we're down almost what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪ we see companies protecting the bottom line by putting people first.

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welcome back h watch the big momentum names in the market today. they're giving you a sense whether this come back off the lows can continue. peloton, zoom and docusign moving to the upside i should say to the upside off the lows st docusign is still down 10%. these have been the hardest hit parts of the last couple days selloff that we've seen. they've had a immediate orric rise this year wayfair got downgraded by bank of america citi is downgrading lululemon. st what about peloton? j & p securities doubling down raise the price target to $109 is there rom om to run for peloton? ron, welcome so, listen, today is interesting

day to go for the street high price target even if $109 can be justified, i'd like to know how you think it, is but what happens if there is just momentum working against peloton's favor for right now? >> that's a great question thank you for having me on i appreciate it. there are a lot of positives going on within peloton that we think are lasting. so first and foremost, just a changing of consumer behavior that we think is permanent we've been talking about e- commerce for some time your prior guest talked about that frankly, i think as travel comes down and gym membership is lesson that it used to be, folks are staying home more often. when you think about working out and exercise, we find it hard to believe -- we have a hard time finding a better solution to what peloton is offering in addition to that, you know, you think about the content they offer, the community, the convenience and all wrapped up,

i think the down side is limited because of those three cs if you will can continue to drive this behavior >> you were at $59 now you're at $109 what it is about their financials that say to you that kind of move is justified? >> it's all about the books. we know they passed a million subscribers in it early may. we believe that based on our batta arou data around delivery time frames that are extended out for normal for peloton, based on our analysis of engagement, we think more are joining at faster pace. we think that turn is coming down its getting lower. all this with a company that is pulling back on marketing spend because of word of mouth is at such a level with over a million

subscribers that can power forward. we feel a lot better about how we value the subscription side of the business. that's where a majority of the value is with every subscriber, connected fitness describer, comes a bike or a treadmill and all of those are very strong positive that's can drive postability too. the change in price target has a lot to do with our underlying confident in just how strong the subscriber growth really is and their industry leading products. that content that, community, that convenience, things that others can't really do that network effect that makes peloton special in our view. >> a couple of questions here. number one as we look at the numbers, do we know how many people are buying the bikes and how many are subscribing. it's a beautiful business model. sell product, sell subscription. i have one it's been the only in home gym product i stuck with p that says a lot, believe me.

i look at those numbers of the people who are taking an -- it's 50,000 it's 80,000. we're taking individual classes. i go, that can't be right. what are the real numbers? and number who, what is the mote >> those are the great questions. we've had a bike for four years now and our engagement and usage of the bike has nothing but up which is wild. they ended with a little over 1.1 million paying subscribers we know they have over 2.6 million members. that's about three members versus paying on the past quarter. if you are over a million subscriptions, they're getting close to five million by 2024 and 2025 as you put that together, that's a lot of bikes and treadmills to

sell you have news today around a lower priced tread and a higher priced bike. you put that together. you think, huh, that's pretty interesting. and then once you have -- sure is there a mote, yes or no. >> yes >> it's the users and content and the convenience factor that no one else can match. >> the sense of community. all right. ron, thank you very much let's go to the news alert on microsoft. >> yeah, tyler microsoft is in line to get that massive $10 billion pentagon cloud computing contract they're saying the department of defense completed the comprehensive re-evaluation of the jedi cloud proposals and determined that microsoft's proposal continues to represent the best value to the government this is a blow to amazon web services and google is another

entity out there interested in potentially getting this contract there's been a lot of legal wrangling around this. there will continue to be legal wrangling around this. this is not necessarily set in stone. they believe that microsoft represents the best value. amazon explained this thing was unfairly exude by president trum h trump who was biassed against amazon because jeff bezos owns "the washington post." a big win here today for microsoft in this pentagon statement. back to you, tyler >> i'll take it. thank you, sir we're looking at shares of amazon let's bring in bob pisani. what is leaving us off the lows as the dow turned positive >> yeah, 110 point spring in the s&p 500. we're not having what we had had yesterday. because the bottom line here is tech is leading the rally back here we're going in the other direction right now. it is mostly tech stocks

apple moved into positive territory and tesla, what a run they've had up and down and aunl wait back. also i note, the cyclicals are doing very well this week. the deep industrial names. caterpillar is up for the week >> thank you, bob. thank you, ty. have fun with the peloton and thank you for watching "power lunch," everybody. "closing bell" starts now. have a great weekend >> you too welcome to "closing bell." a wild session on wall street following the markets' worst day in months yesterday. september has gone off to quite a rocky start. let's have a look at the action today. a surprise drop in the employment rate by 2%. down to 8.4% which pushed futures into the green before the open but then losses accelerated. dow fell as much