welcome to "power lunch," everybody. i'm kelly evans. frank holland will join me in a minute we're at session lows right now, down 213 points on the dow up 175 this morning it's the nasdaq leading the declines down 1.7% right now. plus, johnson & johnson is the fourth company to start phase 3 of us coronavirus vaccine trials how many americans are willing to take a vaccine once it's approved we have details with j&j shares up 1% today. despite this broader selloff, nike soaring on

earnings walmart going on a hiring spree. home buyers are rushing for mortgages. is the consumer stronger than you think? "power lunch" starts now and welcome to "power lunch," i'm frank holland in for tyler mathisen nike hitting an all-time high soaring 9% on a blowout earnings report johnson & johnson also higher on its vaccine progress for more on what's driving the action, let's get over to bob pisani hey, bob >> frank, we are sitting at the lows for the day, 3,280 on the s&p, about where we ended on friday and the problem is this seesaw in the mega-caps and work-from-home names take a look at mega-cap, this is a down day yesterday was an up day. monday was generally a down day. you get the idea hard time figuring out what the right values or prices this high same with the work-from-home stocks there's a theory out there that these will be beneficiaries of

worsening coronavirus cases in the united states, maybe, but they're starting to split. they're not always up on the stays when some start moving on the supsiupside zoom, slack, docusign up, salesforce down, paypal down splits here. disagreements on that. i'd keep an eye on energy. yes, i know it's tiny here these things keep going down every day. exxon is essentially down four months in a row right now. they're $4 from a new 52-week low right now. so keep an eye on this as this stuff keeps sinking into the west finally on nike, we said a lot about it today, very simple way to understand nike besides the fact they had great numbers and they guided higher in-store sales actually declined a bit year over year on line sales up 83% that's now remarkably 30% of their revenues that is an amazing number to hit 30% of revenues on liline direct channels of distribution are becoming very important want to sell to you, through a nike store and not in somebody else's store new high for nike.

guys, back to you. >> all right, thanks a lot, bob. as tech continues to underperform this month there's signs of strength somewhere else bob mentioned the strong nike earnings walmart announcing it's beefing up hiring ahead of the holiday season. also mortgage demand from home buyers jumping 25% from a year ago so could the consumer help drive the next leg of the rally, what should you buy dan is deputy chief investment officer at richard bernstein advisers dan, thanks so much for joining us so, what's your take on those nike earnings? can the consumer continue to drive this economy >> yeah, i think, bob, had a pretty good summary of what was happening. essentially, i view what happened with the nike earnings as more of a shift in consumption. as opposed to, you know, any big change in consumption trends i mean, if you look at it, you know, you saw 83%, you know, growth in digital, which is great, but as bob mentioned, you know, the brick and mortar business is actually slowing so what you just saw is an overall shift. i think total revenues for nike overall were down a little bit

yoi when you're talking about the retail space overall, it was more of a mixed message whereas for nike it was a positive because they're essentially cutting out the middleman. so, you know, there's some good and some bad, but overall for retail, i'd say it's more of a mixed takeaway. >> so speaking of that mixed takeaway, is this consumer strength something you see continuing throughout the holiday season and what sectors, besides retail, do you see benefiting from this big shift in e-commerce? >> yeah, frank, i think -- i think here it's a really tricky time for the consumer. clearly, you know, with benefit of hindsight you can look back at the last six months or so, it's obvious that consumer was a great way to play the recovery because that's where the stimulus was concentrated. i mean, if you go back to april, you know, household incomes back in frill were up 17% year over year but now the trouble going forward is, you know, clearly, you know, that stimulus slowed and as a result that income has slowed so going forward, especially as we get the next falloff on the unemployment benefits, the question is, is the consumer going to be able to remain as resilient going into

the holiday? i think that's really tough given the state of the feconomy and how fast incomes are going to fall from here. >> stocks near session lows. seeing a big selloff in tech what's your take on that >> yeah, i actually think conversely, if you think about what i was just describing, a selloff in tech relative to outperforming other parts of the economy is quite bullish you think about it, this is very similar to the typical growth value argument you want to buy growth when growth becomes scarce, when growth is slowing, but if you are going to have the sustainable recovery from here, then it's the -- what you want to buy is clearly the stuff that's levered to the recovery tech stocks have done phenomenally well this year. they actually saw a lot of those stocks actually accelerated during the pandemic. but if you think that this economy is -- this recovery is going to broaden out, which i think there's a lot of questions there, if it is going to broaden out, you know, then you probably want to own some of the stuff that's beaten down in leverage

of the recovery. we think there's a couple ways to play that stuff that's sort of beaten down, out of favor, yet, you know, will do very well in the recovery like, say, materials, but otherwise, if you want to own stuff that's, you know, a steady, more of a steady recovery story, i think shipping and transports companies think about the nike takeaway. you know, i think arguably this move to online is more bullish for fedex and u.p.s. than for nike, itself. >> so, dan, one more question, with all the uncertainty around stimulus, even, of course, the pandemic, itself, what other sectors besides retail, housing, things like that, transports as you mentioned, have a high risk/he risk risk/high reward proposition >> i think on the cyclical side of things i want to be exposed to things like, you know, in that sort of beaten down out of favor camp, i think energy, materials, you could even throw china in there although it's a bit of a different story their recovery is much more consistent then owning transports in there, you know, and i think that when you look at the u.s. stimulus

slowing, relative to the rest of the world, you know, i think that makes an argument for international small caps will be very levered to the global recovery story. i do think you want to sort of have a defensive barbell in the portfolio. so we still own, you know, heavyweights and things like health care, staples, and gold you know, as a balance against this rising uncertainty going forward. >> sharp rise in gold investments during this pandemic dan suzuki, thank you so much for your insight we appreciate it. >> thanks, frank. now, in the second day of testimony before congress on the fed's coronavirus response, fed chair powell saying, "we have done basically all the things that we can think of." he added the economy has made substantial progress but warned there is plenty left to do listen >> a full recovery is likely to come only when people are confident that it's safe to reengage in a broad range of activities the path forward will depend on keeping the virus under control, and on policy actions taken at all levels of government >> here to weigh in on that, and

the fed's next move, paul mccully, former chief economist at pimco and currently a senior fellow at cornell university paul, it's great to have you here we spoke with david zervos yesterday who was very disappointed in the fed's communication over the past week and basically said they're the reason for the market selloff ever since what would you say about their communication techniques and style including what we've heard from powell and some of the other fed members today? >> on the other side of that trade, i haven't been dis appoi appointed. and i don't look at the market reaction as a fair gauge of what the fed and chair powell is doing. i think they've been very clear in their communication that a sustained recovery that reaches further and further into our citizenry requires an all-of-government approach, and the fed is all-in, unambiguously all-in, but it simply can't do the job by itself and the fed

needs some help from the fiscal authority. so i don't think there's anything new in the message that jeh's been giving to congress. is congress, do your job. >> although, what's new is this average inflation targeting. where they're saying, you know, yes, inflation can run above 2% before we tighten policy and people want clarity on that, you know, how far above 2%, for how long that's what charlie evans gave some context to today saying it could be 2.5% and so forth do they need to lay out a more specific framework or at least say one is coming or kind of talk more in that direction so that people understand what those benchmarks will be because otherwise they're probably going to default, you know, similar to what we've already lived through which is, you know, maybe 2% or just the projections getting us there and we tighten, anyway >> i think wall street wants a formula and i think the fed is pushing back hard on the notion of getting out a formula and

wall street's just going to have to get used to that. i think what the fed has said, it has been very, very clear, is before they will get off of ze o zero, and that's the big issue that everyone wants to know, before they get off of zero, two things have to happen. in this order. number one, you have to get to maximum employment, which is not a particular unemployment rate but a holistic assessment. maximum employment is a necessary condition, and, two, you have to be at least to 2% on inflation. and right now, that is the effort is to get to maximum employment and get to 2% inflation. wall street wants to know what happens after that and it's very hard to describe what happens after that because it's all path dependent. so i think the bottom line that

you're getting from the fed right now is focus on those two conditions, maximum employment, that's number one, and 2% or higher on inflation, and then we will start thinking about, thinking about, increasing interest rates so the specificity that wall street wants, which has been accustom to, literally, for the last decaddecade, they're not g to get because the fed can't deliver specificity way out in the future what it can do is focus on right now. >> right. >> be very articulate about what it wants to achieve and be very strong in asking for help from congress to effectively spend fiscal red ink into reflationary monetary wine. >> people are worried the fed can't deliver, period, paul,

even on what it cants to accomplish here's the fed's rosengren earlier today, he said it would be a matter of luck for the central bank to reach their 2% inflation goal within 4 years. he added, this is kind of about your point to the need for fiscal, said quantitative easing on the fed side, rates are already low. again, that's the central can. the fed's own projections don't show them getting over 2% inflation in the window that goes, stretches out several years. >> and i think that's a fair critique they can't get there by themselves with any confidence whether or not it takes luck or not, i don't know. but the bottom line is the fed can't do this by itself. and that's not saying anything negative about the fed whatsoever it's just the mosaic of macro conditions that we have right now require congress to increase spending in order to maintain aggregate demand in the absence of that i think

it's quite reasonable to assume the fed won't hit its objectives policy, i think you have more than a sporting chance i think you have a damn good chance of get to those objectives but in the absence of fiscal policy, you can't get there and that's reality everyone's dancing around that, but the fed isn't, the fed is explicitly saying, essentially, we need help from the fiscal authority. >> well, i understand it when you say it, paul thank you so much for joining us today. >> my pleasure >> paul mcculley of pimco. frank? all right, coming up on "power lunch," johnson & johnson pushing ahead with its covid vaccine trial. once the vaccine is available, will americans line up to actually get that vaccine? we got the details. plus, as cities struggle to get back to business, los angeles is dealing with not only the covid fallout, the entertainment industry at a

standstill, but also record-breaking wildfires. we're going to talk to billionaire rick caruso about how he's handling his billionaire empire in the golden state. more "power lunch" after this. this is decision tech. find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

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efforts. meg? >> hey, kelly, this is a massive trial. j & j plans to enroll up to 60,000 people. across three different continents they're going to be testing this in people over the age of 18 and plan especially to ensure diversity in the enrollment and focus on people over the age of 60 now, what really differentiates this vaccine from others that have already started phase 3 is that it's going to be administered in this trial in just one dose. those from pfizer, moderna, astrazeneca, are being tested in phase 3 in two-dose regimens those trials began earlier pfizer and moderna beginning at the end of july, astrazeneca's began in august and remains paused in the united states after the safety issue, although it did begin again around the rest of the world. dr. fauci was asked this morning in congress how soon until we could potentially get data and maybe a vaccine. here's what he said. >> as these trials go on, we predict that some time by the

end of this year, let's say november or december, we will know whether or not these are safe and effective and as you mentioned, mr. chairman, right now doses of this vaccine are being produced so that they'll be ready to be distributed >> so, kelly, that's for the earliest vaccines, probably pfizer and moderna j & j says it all goes well, it could have doses ready for emergency use authorization early next year. >> all right meg, stay right there. >>. according to our poll, more people are getting concerned about taking it. kayla tausche with the latest. >> reporter: for six months likely voters have been polled in the battleground states that will decide this election. we found the receptiveness to take a vaccine steadily eroding since this summer. the share of swing-state voters who were willing to get a covid vaccine in our most recent poll dropping to 36%. fewer than half of democrats and just a quarter of republicans say they would get the vaccine when it's ready.

and a majority believe that president trump, who has suggested that a vaccine could be approved by the end of october and distributed just after that, is politicizing the vaccine effort to benefit his re-election. and as for the companies developing the vaccine who say that they will be guided by guidance, voters don't have much faith in those companies, either, with the approval rating for big pharma remaining at just 8% the skepticism hardly comes at a time when voters' concerns are easing and lives are returning to normal. 58% of respondents say it will be at least 6 months before life returns to normal. and, kelly, in the vaccine is the key to getting there, based on what we're seeing in some of these results, it could take even longer to get the public onboard. >> yeah. >> reporter: back to you. >> those are some pretty low numbers, kayla, also stay with us, if you would so, meg, obviously, the -- it gets easier if more people take the vaccine. we get to so-called herd immunity what if we're well below that threshold? >> that is a huge concern among

the public health community right now, that we are seeing these numbers that kayla just cited going ever lower as we get closer to the results of these phase 3 trials and, of course, as we get closer to the elect n election that time together of election day with getting a vaccine has rattled a number of people you know, i've been talking to people in the industry about this, and they note that there are going to be limited doses of this vaccine available immediately, anyway. and so there will be time for people to get more comfortable with the data and with the vaccine being available before we'll even, most of us, be able to get one of these shots. >> so, meg, one question, we're seeing the diversity in the johnson & johnson testing, age, also race and things like that how doest this translate to a child's vaccine? >> gosh, that's a great question, becky actually asked the chief scientific officer from j & j that question this morning. these trials are all being run in people over the age of 18 and that's typically how drug development works. you test on children later

you first make sure that it's safe in adults, but people thinking about trying to use this for going back to school are advocating that we need to know that it can work for children, too, and dr. stopples from j & j saying that would take place next year, mid next year it starts to become available to kids but won't be thevaccine. >> questions from parents about when it will be developed and if it's safe for their kids when it comes out. meg tirrell, kayla tausche, thanks so much. we're at session lows, tech stocks weigh on the market the dow down right now nasdaq dropping more than 2% good rx is soaring the red hot ipo market rages on despite all this volatility. we'lte y wl llouhat to expect next week. more "power lunch" coming up next

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welcome back to "power lunch. companies are rushing to go public in an ipo market that's starting to party like it's 1999 take a look at drug shopping company good rx surging double digits in its first day of trading. palonteer gets ready for next week a 42% jump from just last year here with more, cnbc.com's senior tech reporter thanks so much for joining us. really tremendous numbers here 42% growth in 2020 more than 30% growth in 2021 but is the size of the customer base, is that a big concern for investors? yeah, frank, thanks for having me on. good question. it really is a fundamental issue with this company.

how big is the current customer base currently 125. they talk about potentially 250 customers by 2023. when we think about software, though, particularly software at scales that everyone knows, you're talking about many thousands of customers and it's a fundamental question that investors have to ask themselves as they look at the prospects here is how -- how dramatically can this software scale into the market. >> so, a limited amount of customers and many of those customers are u.s. government based. the average customer spending about $5 million per year with this company how does that compare to most software companies when they go public >> yeah, typically, you'll see, you know, if you're seeing a software company with hundreds of millions of dollars in revenue, typically, at the far end they'll have a few million-dollar customers and at their sort of early stages they'll have companies that are testing the technology, maybe spending $10,000, $15,000, a year, so the median is somewhere

in the middle. with palantir, they want to get to that lower end. they want that lower price point to start to kick in but they're not there and so, you know, they have significant customer concentration really unlike any software company that investors have seen go public. >> you know, from your reporting i've seen palantir software is really immersive, workers spend a lot of times actually in the software, maybe all day using it, so is that a plus or a minus? because it also, again, because of your reporting it takes a lot of support, it takes a lot of consulting is that a plus or a minus? does that give it a competitive mote or cost prohibitive for companies kind of getting onboard with palantir? >> it's certainly a mote, once you install palantir and spread it throughout the organization, employees are using it, it's unlikely that you're going to uninstall it becomes acentr central aspect ow you do business on a daily basis. it's a much more challenging install that's a much more

expensive piece of software than something you use for collaboration or communication and so it's harder to install. it's more expensive to install once you're in, you're less likely to leave. so strong competitive mode but, again, a profile of a company that it looks more like the types of software companies we saw decades ago, how it gets installed and how it's used. >> looking like another big debut, ari levy, we appreciate it. still ahead on "power lunch," we're at the lows of the session with all 11 sectors in the red. energy and tech are leading those declines we'll have more on the big midday moves. plus cities on the brink will growing fears over a second covid wave draw more people away from places like new york and l.a. we'll sidot wn with real estate heavyweight, rick caruso, coming up that's what my dad does.

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welcome back, everybody. i'm sue herrera. here's your cnbc news update at this hour. a kentucky grand jury has indicted one police officer for shooting into the apartments neighboring brianeonna taylor's house but did not charge any of the three officers involved for a role in taylor's death the one officer has been charged with three counts of wanton

endangerment bail is set at $15,000 kentucky's attorney general cameron says that the officer's use of force was justified to protect themselves in california sales of new gasoline-powered cars and trucks will end by the year 2035. governor gavin newsom says the move will cut greenhouse gas emissions in that state by 35% at least 15 countries have made similar commitments but california is the first u.s. state to do so and around the world, wage income during the pandemic fell by 10% that's according to the international labor organization that group says 495 million full-time jobs were lost in the second quarter of this year. and another 345 million job losses are expected in the third quarter. you are up to date that's the news updatingupdatin, i'll send it back to you. we continue to drop lower here in the afternoon. the dow now down 380 points,

1.4% drop. remember, we were up 150 points earlier. only went negative around midday s&p's down 55 at 3,259. the nasdaq is the worst performer once again, down 25 points or 2.3%. the oil market is also closing up right now energy is the worst sector let's get to dom chu for more. >> energy is the worst-performing sector even though oil prices are holding up relatively well. as you can see here, u.s. benchmark crude prices are currently $39.94 about one-third to the upside. brent crude futures up $41.81. a real standout today is natural gas prices getting a huge bounce just in the last couple of sessions. it was near two-month lows so a confluence of factors there bidding up those natural gas prices in trading today.

we're going to watch that particular move play out. also you mentioned the energy stock, the sector overall, remember, the worst forming sector in the s&p 500. as you can see here, we've taken a decent move lower from a recent channel we've been in we'll see if that trend continues as well. energy down 3% on the day. the worst performing sector. if you're looking for individual names, guys, to watch, what's happening with apache, down 8% today. occidental petroleum, exploration companies down 5%. oil supplies and field services down 5% -- 4%. and exxonmobil, i just want to highlight this it's down 2% that, by the way, kelly, frank, makes that the best performing stock in the s&p 500 energy sector i will send things back over to you. >> ouch. dom, thank you very much. cities are struggling to get back in business this year and it's not just new york city. los angeles is seeing an exodus of residents as it deals with the covid fallout and entertainment industry essentially at a fault and record-breaking wildfires. it's not all doom and gloom,

though joining us is rick caruso, "forbes" called him the walt disney of retail he owns properties all over l.a. including the grove and palisades village. rick, it's great to have you here welcome. >> thanks for having me, kelly. >> are you here to make the case for l.a. or raise alarm about the future of l.a. >> well, i think it's a little bit of both. i'm a big fan of l.a i think l.a. is second to none in terms of one of the great cities in the united states. but at the same time, we got challenges in l.a. we got high unemployment we've got a very high rate of homelessness that has to be fixed. so we've got some real issues here and we got major budget issues that the leadership has talked about we're pre-covid budget issues and going to be worse obviously now. >> yeah. >> we need to demand our leadership to make some really smart moves and some bold moves to get the city back on track. otherwise, we will be in trouble. >> i want to ask you what those moves would be, but first i'm

curious, if you could tell us how you would compare the situation in a city like los angeles to its recent past, in other words, are you worried about the direction it's going but say, hey, it's still better than it was a decade or two or three ago or not i mean, just kind of give me some kind of broader, deeper, sense of the state of things >> you know, i think the difference is from decades ago i don't think it's as good as it was in the past, which is unfortunate, and that's why we need to change the trajectory. in the past we were attracting a lot more headquarters, creating more jobs. we had more building going on in the city there was really encouragement to grow your business in the city of los angeles. right now, we've got very high costs of being in the city of los angeles. you got crime rate going up, we got a lot of people who are leaving. we've got major corporations who have left the city and that just not the right direction for us to be it's correctable but it's got to get corrected soon i'm concerned but also

optimistic we can fix it. >> you remind me a little of don peebles who we spoke to about a similar situation in new york city he's worried it could take decades to recover if policies aren't corrected. >> right. >> so let's talk about those like you said, this is correctable. you want smart policy moves. what do those look like? >> well, first of all, you got to get a budget that's in place. you can't run a massive deficit. revenues are going to be way below what's expected. if you take a look at the trajectory over the next three or four years, there may be a billion-dollar deficit so the city has to get its house in order but you can't abandon services so let me just tell you an example of living in los angeles. we live in west l.a. we have a very large homeless encampment down the street which we need to take care of people it's wrong to have people living on the street and it's wrong for the community also to have to deal with that because it does have implications to the community. and it's unfair to the people on the street we have the city that has stopped cleaning the streets

throughout the city. we have city that that's abandoned taking care of landscaping. i have a median near my home, looing looks like we have a rain forest growing out there. maybe that's a good thing. global warming it sets the wrong tone i'm the big believer in the theory of broken windows right? i was when i was the police commissioner you can't allow these things to happen because they build on each other and it sets the tone that it's not a great place to be it sets the tone, this isn't where you want to raise the family it sets the tone, this isn't where you want to invest or build your business. and that's what needs to change. and so getting our finances in order is really important. making sure we have the right things that we're dealing with in crime, the right police reform, and, my god, we got to bill affordable housing and got to build housing for homeless so we get the homeless off the streets. it can all be done if there's the political backbone to actually make decisions that are

in the best interest of the city and the residents and not in the best interest of elected officials or some kind of theories that they may have. and i think that's what's happening in new york. i listen and i'm a big fan of tillman. i love listening to him. i love listening to don. what he talks about in new york. and i think it's happening in major cities across the country. >> rick, certainly some concerning trends in big cities. another big trend is e-commerce. we're hearing commentary from macy's today they believe their brick and mortar stores can be an advantage during the holidays. nike, explosive growth with their e-commerce business. how does this shift to e-commerce with a record holiday peak expected, at least, how does that impact some of your retail businesses? >> i think the shift in e-commerce is great. listen, years ago i said the best thing that's happened to brick and mortar retail is amazon amazon everybody's sigoing to be smart with how you engage the customer with all due respect, this isn't

breaking news that you may want to serve your customer the way your customer wants to be serve. and great retailers like nike have a very smart strategy for brick and mortar retail and they're exceptional with the experience they give in their brick and mortar retail. the nike store at the grove is an exceptional experience. their online is an exceptional experience great retailers should have both and that's been historical i mean, come on, let's go back to early times, sears had stores and sears had their store catalog. that was sort of the early version of online. right? now, what happened is sears lost their way. and so what you need to do is follow the customer. the customer's going to tell you how they want to be served how they want to pick up their product. how they want to buy it. whether they buy a product at nike at the grove or whether they buy it online, what i care about is i got the best in class retailer on my property. and that's what we focus on.

>> uh-huh. well, we do tillman tuesdays maybe rick wednesdays. >> i don't know if i can follow tillman. he's good. he's really good. >> we'll put you on monday then he has to follow you. >> okay. >> thank you so much for joining today. we really do appreciate it. >> thanks a lot. have a great day. >> rick caruso thanks >> i know how tough that is, i have to follow you. coming up in power movers, tesla doesn't get any juice from power day. a cannabis company gets burned and the strange story of why peloton is higher today. plus much more on the markets as the dow falls more than 350 points. ayitusst wh or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

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all right. time now for today's "power movers." starting with tesla falling for

the second straight day. battery day disappointed some investors. it didn't have the juice many people thought it would. the presentation was focused on longer-term goals. next up, peloton, stock rebounding from yesterday's losses when the stock took a hit r on reports from a much cheaper competitor in partnership with amazon today amazon saying it has nothing to do with the bike and changed the messaging until they change their wording. a huge loss, lower sales in coming quarters, saying it lost its position as the leader in the canadian recreational cannabis market. when we talked to ceo miguel martin earlier this month, he was optimistic about the company's future >> first and foremost, our business is grounded in canada and if you look at the margins, they're very healthy you know, clearly expectations about a global, you know, presentation of products being grown in canada around the world, maybe were misplaced but at the end of the day this is a business that can be profitable.

canada >> martin there with some high hopes but investors crushing the stock today. down 30% for its worst day in 5 years. >> tough start for him frank, thanks. let's get to the bond market now where yields are higher amid the selloff. rick santelli tracking the action for us. rick >> yes, kelly, indeed. we see that there's more buying that happened after that very solid five-year note auction you can look at a chart of intraday fives and see right at 1:00 eastern the way it moved up a bit. open the chart up to early august, this is important. the all-time low yield closed from early august is 19 basis points just under one-fifth of 1% today's auction a little over 27 base points, a little more than a quarter of 1% is the lowest at the auction. see there's only a small cushion. the psyche of investors, the closer you get to all-time lows, the more buying it takes in. a two-day of the dollar index has had a nice run here and really isn't dollar strength it's more euro weakness. if you open the chart up to the

third week in july, we're at two-month highs on the dollar index. two-month lows, the euro against the dollar and really much of the euro weakness, of course, is some of those covid hotspots and a bit of nervousness on how their economy is going to continue to rebound. frank, kelly, back to you. >> rick, if i may, i just want to point out markets are really sliding now just in the past hour or so the dow's down more than 400 points if you had to name the catalyst today, i mean, we talked about some of the powell headlines but that was 400, 500 points ago >> yeah, you know, to me, what we are seeing here is not only nervousness about the general economy from a kind of service sector non-manufacturing perspective but we're also looking at the divergence between some of the comments of central banks, of course, and some of the comments of those in charge from a political standpoint i would like to accentuate the fact that whether you looked at the manufacturing, services or the composite today, all were as expected on the market pmis, but

they were all a bit lower than our last look and that's important. >> yeah, so sort of as the day goes, the disquiet grows that's wha rick thank you very much, sir frank. y>> coming up, jamie diamonden says he's okay with -- stay with us we'll tell you more on "power lunch.

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and welcome back taking a live look at the big board. the dow down almost 430 points as the tech selloff continues. the nasdaq down about 2.5% as well. jp morgan chief executive

jamie dimon weighing in on the wealth debate telling cnbc that he's not against higher taxes for the rich but a wealth tax just might not be the way to do it. >> a wealth tax is almost impossible to do i'm not -- but i'm not against having higher taxing the wealthy but i think you should do that through their income as opposed to calculating wealth that becomes complicating, legalistic, bureaucratic, regulatory and people find a million ways around it. >> for more let's bring in cnbc.com banking reporter, thank you for joining us dimon saying he's not against taxing the rich and definitely seen as a thought leader did he put out other ideas >> yes, so, frank, hi. this is not something the first time jamie dimon is talking about this he on his soapbox often talks about some of the fundamental challenges of society. he's talked about the income inequality, opportunity inequality, our failing school systems. and he has said in the past

multimilliple times after this up at places like davos in switzerland, he talked about how if this money is going toward some of the fundamental problems we have in our society, he's okay with raising taxes on the wealthy. he's just -- we would just prefer that they don't raise money on -- they don't raise taxes on actually actually what people own, that they raise it on income. >> so hugh, speaking of jpmorgan, you had some reporting that the traders at the bank may be complaining about a lack of communication regarding covid-19 cases in the office. what are you hearing about that? >> right last week there were press reports people on the fifth floor, one person on the fifth floor who came town with covid as it turns out, most of the building at jpmorgan, which is in midtown learned about it from press reports and not internal communication. they only told people who were on the fifth floor or who had actual meetings with the person who was later found out to be

sick what this talks about is what is the fundamental disclosure jpmorgan has on the one hand jpmorgan said, look, we're telling the people directly exacted that is sufficient on the other hand the people i've talked to and the people who took part in a town hall meeting on thursday with the global head of trading basically feels if there's a code case anywhere in the building, they want to know about it. they obviously take common areas, elevators with everybody. there is some nonzero possibility of exposure to somebody with covid in the building >> finally, hugh, wells fargo ceo apologizing after making really controversial comments about diversity hiring, specifically saying there's a, quote, limited pool of black talent to recruit from what'sbeen the fallout from this so far? >> it was immediate, frank he spoke today, his comments, he apologized for them. he said they were an example of unconscious bias, which in all

places throughout society but especially banks specifically with banks, there's the chicken or egg problem is it that the talent pool for black candidates higher and higher in the business, are they scares, scarce or are bank not looking hard enoughand developing talents so there are candidates later on for higher places this is something that's uncomfortable but has to be talked about i think it's really good that charlie scharf is talking about this because of the feedback and results that happened. >> doesn't seem like he thought it was good. a number of people said to me, why doesn't he try the ocean do you think this will leave wells fargo and albanying in general to create a pipeline for diverse talent >> there's no other way to do it jpmorgan showed it's possible.

there's a black female head of the bank if you develop people years and year, it's something that can be done i think it's a process you have to start now because obviously we're way behind on this in finance. >> hugh son, great stuff as always great plant. i saw you more as a bookcase guys surprised. up next stocks tanking in the last hour. the dow had a 600 point intraday swing. we're going to dig into what's driving that delivering alpha is back for its tenth year september 30th. back with us, eva muchan, many, many more. visit delivering alpha.com and learn more and register. ♪ ♪ ♪

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welcome back we're checking on the market, the lows of the session. dow down 450 points. you can see on the screen there how deep that slide has been just in the past 9 0 minutes or

so nasdaq leading the way, down 2.6% if you look at the worst performers in the nasdaq, tesla down 10%, netflix down 4%, amazon and apple down just shy of that amount jim joining us managing director and cnbc contributor i just put this out on twitter as well, jim, saying give me your selloff theories. there's not a clear catalyst this afternoon what do you think is going on? >> i have a couple we have to remember the nasdaq, the five or six names that have been the leaders so long, have been working through market positions as of late anyway, yesterday on halftime, we talked about how big a deal the dollar is. the dollar breaking out of a range that had been established over a couple of weeks, breaking out to the upside, ramifications through a lot of markets today we see gold pounded, silver pounded when things start to move that way, things that have moved together for a long time, stocks included, start to get worried i think that was the beginning part of it

later in the day i think it accelerated when we started to worry about a potential round of social unrest. i spoke to very, very smart people and they think i'm crazy, which i don't understand why when the george floyd happened, monstrous unrest, so every time they start to surface we have to take it relatively seriously all those things together were pushing something that was moving in that direction anyway. i think the nasdaq goes down to 10,000 i thought that for the last couple of weeks. how it gets there might be interesting. >> 10,600 so 10,800, in that range. talking about the breonna taylor decision that came out there have been a number of factors as well. what do you make of margin calls, interactive brokers increase requirements lately and the number of leverage players that might be caught off-guard here the interesting thing, jim, today's selloff you have led by tech, which is the selloff we had for the earlier part of september. earlier this week it was the dow

leading the decline. so we're back to what we saw pre-fed decision, i guess. >> when i start hearing about margin calls and see moves in gold and silver and now in the nasdaq, too, i think it's a very real thing that's what i kind of mentioned before when you see -- markets move together, gold, silver, stocks they have all moved together the whole way up most predicated on the moment fed to the rescue. when all those positions built up, when any one of them or two of them start to move it has this dragging fblgt because of the margin call and people being on the same side of the boat. >> hey, jim. you said the support level for nasdaq was 10,500. we've just fallen below that where do you see this going next >> i think 10,000 is my level and i'm set up for that move again, i don't think this is the big one in any way i think this is a relatively normal correction that comes

from we had rallied so long based on one single fundamental theory, in my opinion, excess liquidity, not just from this country but around the world ending up in the u.s. stock market if we're having rotation from work from home to domestic, growth stocks, that's all well and good when we see the nasdaq start to break, the reverberation goes through and selling begets selling. we're seeing what i think is going to be a relatively normal correction, i think 10,000 on the downside that hasn't changed. talked about the, 10,900 breaks, we see 10,000 on the downside. that's still what i believe. >> 10,670 is the level we're watching right now. >> by the time we stop this bid, we're going to be down to 10,000, right? another two seconds it's going to be there already. >> in one word, jim, how much of this is fed speak? >> i think fed speak, dovish part was priced in

when evan said something minor that wasn't according to script, what the market thought, i thought it was a big deal. that's what pushed the dollar a little bit that's the match that kind of lit the fire. >> thank you, sir. jim, you are very much appreciated. frank holland, that you very much sorry about the market though. >> i don't think you have control over that. >> thank you for watching. "closing bell" picks it up now. >> thank you i'm sara eisen with wilfred frost. another choppy day for stocks. dow giving up 176 point gape, down sharply and on pace for the fourth time in the last session. let's look at what's driving action technology stocks pulling back, dragging market lower. amazon giving up a chunk of yesterday's gains, apple, alphabet, tesla in the red nike helping stem losses for the dow, though. surging to a record high on the