news for this monday, october 26th, 2020 i'm shepard smith. follow us on twitte twitter @thenewsoncnbc follow the fauci if we wear our masks, as manas so wear the mask ♪ it is 5:00 a.m. at cnbc global headquarters. your top five at 5 stocks trying for a turn around tuesday after monday's massive meltdown the dow closing down below the 28,000 mark for the first time since october 6th. on the campaign trail. it is one week to go until election day but the specter of rising covid cases and a stimulus stalemate in d.c. continue to loom large. bracing for the biggest ipo of all time as alibaba's ant group is forced to make drastic

changes ahead of its big hong kong listing. new controversy for one of wall street's most powerful investment banks this time over sexual misconduct allegations. and then ditching sin city, yes, ditching it, one of the biggest casino operators in the world on a plan that would focus the company entirely on mccaw and singapore. you're watching "worldwide exchange" right here on cnbc on tuesday, october 27th, 2020. ♪ viva las vegas good morning i'm dominic chu in for brian sullivan today. let's begin with stock futures right now showing relative stability after big losses yesterday. you can see here the s&p implied higher by just about seven points the dow implied higher by 37 and the nasdaq by 36 not large gains by any measure implied. however, after yesterday's

losses they could be viewed as somewhat stable. a closer look at the dow futures over the past 12 hours we're well off our session highs as you can see here and just a hair below the lows of the level we saw in the overnight session as you can see here, still, 32 points for the dow futures at this stage. the major averages are coming off their worst day in weeks. the dow shedding some 650 points for its big u.s. one-day drop since september 3rd. the move erasing all of its gains for the entire month of october. we're now below the 28,000 mark for the dow for the first time since october 6th. now, those sharp moves lower as well for the dow transportation index, the russell 2,000 small cap index, both seeing their worst days since late september. the broad-based selloff coming as u.s. covid-19 hospitalizations climb higher, and to their highest levels since august currently, there are 12 states reporting record levels of coronavirus patients, that is the highest since mid july

now we have team coverage se, i or overnight session for us. around the region, negative. the japanese market closing flat we did have the australia and new zealand off sharply. those two markets really spooked by the rising number of covid cases. but we did actually manage to see some gains coming through for the mainland china market, the shanghai composite ending the session up .1% hong kong is where all the action was today we of course had earnings out front and center from our banking giant hsbc the hang seng did close lower. we did see a big pullback in q3 net profit at hsbc down 36% but the number better than expected at $3.1 billion. the bank is considering

reinstating its dividend it sees low rates continuing for quite some time. elsewhere, economic numbers coming out of the south korea and this influenced trade in the south korean currency today. off by half of 1% but we had better than expected q3 gdp numbers. economic growth fastest rate of growth since 2010 that 1.9% number a quarter on quarter figure dom, back to you. >> matthew taylor, thank you very much. to the early trade in europe, karen cho in our london news room. good morning. >> good morning. we had another day of selling transpired in europe not expected because we had a steep selloff yesterday. so we were anticipating early on futures a slight recovery. earnings are helping minimize some of the damage, but you can still see across the board we're trading weaker

down .8 in the french market still concerns around the spike in covid infections. hsbc is leading the charge to the upside of some of these major markets. the spike of 6.1% travel around two-month high on the stock market as hsbc beaten third quarter forecast with the pre-text profit of $36 billion many $785 million and encouraged some here concerned about dividends and future switching net income the company dipped in the third quarter with the swiss pharma giant it is well placed to hit four-year target that stock grinding lower. this was one to watch this morning the bp it is still trading high, not quite the 3% that was anticipated before the start it beat forecasts with $100 million replacement cost profit in the third quarter

analysts predicted $120 million loss the british oil majors refining margins remained under pressure while warning fourth quarter production was likely to decline. so if you look at the numbers on the stock price, it's still down 56% for the year trading around 25-year lows. back to you, dom. >> energy and financial services in focus there very much so. karen cho, thank you back home, sticking with financial services, goldman sachs back in the headlines, facing serious allegations let's send it out to bertha coombs for more on that and other top corporate stories. good morning, bertha. >> good morning, dom the investment bank allegedly attempted to cover up allegations of workplace sexual misconduct by the bank's global head of litigation the lawsuit filed by marla crawford, former associate general counsel at goldman sachs claims an executive used his position of power to

romantically prey upon a much younger and female colleague crawford attempted to speak up about the alleged misconduct the lawsuit says and was subsequently fired after ten years of what she describes as, quote, exemplary performance sources tell cnbc meantime, ant group will close its hong kong institutional book building process one day earlier than expected due to strong demand for its record-breaking ipo. the alibaba backed fintech giant is chairing out dualing listing in shanghai and hong kong expected to raise a record breaking $34.5 billion and in washington, house speaker nancy pelosi says she's optimistic a stimulus deal can happen before the election after speaking with steven mnuchin for nearly an hour yesterday the two sides appear still divided, though, over virus testing and tracing plans. dom, where have we heard this

before that they're close to a deal >> i feel like it's deja vu all over again, right, yogi berra style. >> exactly. washington, d.c., one week out from the presidential election and more than 63 million, 63 million people have already submitted their ballots as of last night that's an increase of 4 million more early votes than were cast some four years ago. this as the senate confirms judge amy coney barrett to the highest court in the land. just in time to decide any possible election disputes that may arise one week from today. nbc's tracie potts joins us now from washington with all those story lines. tracie, good morning. >> reporter: dom, good morning let's repeat that. we are now one week away from this highly anticipated election and the candidates continue to cross battleground states today. we're going to see joe biden in georgia headed down south trying to pick up that red vote in both rural and urban communities.

this is one that president trump won by just 50% four years ago georgia in the past has had a much larger republican majority. so democrats are thinking they might be able to pick this one up and then we're going to see president trump today in the midwest, michigan and wisconsin. he's got a trio of events there trying to hold on to those long-time democratic strongholds that he won four years ago he's spending time out there meantime, we are watching the u.s. supreme court today to see the private ceremony that will officially swear in justice amy coney barrett as the next justice of the u.s. supreme court. the president said he wanted this done before the election. it is done there was an unofficial ceremony at the white house last night where the president talked about her credentials. justice barrett talked about being impartial. democrats fought this

unsuccessfully but picked up one republican vote. it's the narrowest vote we have seen in decades confirming a supreme court justice. and as you said, not only will she be there to decide any election issues and there are already some regarding balloting coming before the court, but she's also going to be there for a very important affordable care act case, healthcare case happening a week after the election. >> the stalling out of judge merrick garland's approval process probably played into that close vote there on partisan lines tracie, i'm wondering, if you look at the way that the beltway is shaping up right now, what exactly can we expect with regard to lawmakers with regard to positioning ahead of this election, just a week to go, what is going to be the push from lawmakers in washington, d.c. with their constituents what messages will we hear one week before the election >> well, they're probably going to be deeply partisan because that's what we're seeing in washington republicans trying to hold on to and build their stronghold

democrats trying to do the same. it's not clear how much of a middle there is, especially given the numbers that you shared earlier, these record-breaking early voting and absentee ballot numbers. this election is already well under way and a lot of people made their choices. >> tracie potts, one week to go before the elections thank you very much with the latest out of washington, d.c. when we come back on the show, much more on the markets and possible turn around tuesday with gina sanchez, where she is finding value in the rubble that we saw yesterday. plus, the good, the bad and the ugly when it comes to earnings. the stock not getting any love this morning in our mystery chart. we'll tell you what that is later on. then tracking zeta as the hurricane slams into mexico before turning to the u.s. gulf coast, yes, another storm bracing for impact here. a very busy hour still ahead when "worldwide exchange" returns after this

♪ i get chills every time i hear that music. stocks, good, bad and the ugly varonis systems is soaring today. the maker reporting third quarter reports that beat forecasts as subscription revenues nearly doubled. the company is guiding fourth quarter earnings well above analysts estimates those shares up 9% that's good. >> now shares of twilio are lower despite the company

reporting third quarter revenues that blew away wall street forecasts. they also reported a smaller than expected adjusted loss. the maker of communication software siting gains in healthcare and financial services twilio stock is already up 200% so far this year, it's down 1.5% right new. that's the ad. shares of chegg are in the red even as the online education and digital textbook quart reported third quarter results that beat analyst forecast even with the declines in the premarket the stock has more than doubled this year but it's off 5.5% so again, a little bit of interesting moves there. that's the ugly. turning back to the broader markets. stocks looking to bounce back following yesterday's steep selloff on rising covid case figure right now you can see that investors are grappling with the final week ahead of the election you can see the moves are moving around a little more mixed the stalled stimulus talks playing part of the story as

well as peak earning season here for more on how to navigate all the noise, i'm joined by cnbc contributor, gina, always great to have you. let's talk about whether or not we are seeing this heightened volatility regime just start in the week before the election can we expect more of the same >> yes, dom. i think this is going to continue this volatility that we're seeing is being fed by a push and pull obviously you have the push, which is the earnings actually for the tech stock which is are coming this week are expected to be quite good. we have already seen some very good numbers and will probably continue to see that we'll get a gdp print for q3 on thursday that's expected to be very solid, 34% annualized growth however, that doesn't tell the whole story. most of that recoup was in july and august and september were already slowing. and so while that number

probably can help push the market, what's pulling the market back is as you said rising covid cases and the continuing drama of the election >> gina, we have seen over the course of the past two or three weeks this trend higher in covid cases, the record numbers were anticipated, why is it now we're seeing the kind of downside move that we saw yesterday? yes, earnings play a story, covid plays a story, the election plays part of that story, but why yesterday and can we really kind of look at that as a blueprint for the next week and a half or so >> well, i think what's really pushing the markets and what's pushed and pulled the markets over the last week and a half, two weeks has really been the stalled stimulus talks i think that has really been the lynch pin that the markets need to see a stimulus plan of some sort the idea that congress may fail to do this before the election

the likelihood it actually gets passed during a lame duck session is very low. we're looking at a situation where we can see that the numbers are already starting to slow they've been slowing for the past two months and will probably continue to slow in the face of rising covid cases that get even worse we need a plan and we need it now. >> the idea here is that the markets are still kind of near these record high levels they're not that far away from it this pullback here has it gotten you excited about any part of the market is it here in the u.s. is it outside the u.s. is it a certain sector, certain stocks what has you stirring with regard to those animal spirits what do you want to buy? >> well, right now it's challenging because we've seen this continued support for value stocks and yet growth has continued to dominate for the most of the pandemic i think once we get past the election, i actually think

growth may re-emerge, particularly if we get a biden win, i think there's more sort of likelihood that the markets will take that as a positive over getting control over this virus sooner rather than later that means you can look forward and you can start to discount a recovery sooner rather than later. we are right now in a period during which some of these stocks may actually become reasonably -- we're not going to call them cheap but let's just say more affordable. >> is there something, gina, i know you're a macro person at heart, is there anything out there in the treasury or credit markets that has you at all worried? they seem to be relatively stable compared with other parts of the equity markets. are bonds telling us anything? >> well, you know, the bond markets i think if you look, for example, at the debt that corporations have taken on, i don't think that the credit

markets are properly priced with regard to the risk that's baked in there i think if you don't get continued stimulus and don't get continued support, there's actually more danger right now in the credit markets than there actually is some of these over big equity numbers that we've seen >> all right >> so i would actually still take equity over credit. >> equity over credits there gina sanchez, thank you very much always good to get your thoughts there. still on deck for the show here, we speak with the editor in chief of invest-o-pedia, sharing their portfolio perspectives ahead of the big presidential election. ♪ today's big number $25 billion. that's how big the u.s. sports betting market will grow to by 2030, according to research by alliance bernstein the firm's estimate assumes full

legalization will reach 80% of the u.s. population.

welcome back to "worldwide exchange." let's check on this morning's other top headlines. francis rivera in the new york news room with the latest. we start with tens of thousands of people in southern california who have been forced to flee their homes as fast-moving wild fires tear through orange county. the flames spurred on by santa ana wind gusts of almost 100

miles per hour the two fires that began yesterday morning have already claimed thousands of acres and caused two firefighters to suffer critical injuries wisconsin residents who vote by mail will have to get their ballot in by the time the polls close on election day if they want them to be counted. on monday, the supreme court issued a 5-3 ruling that the state cannot count mailed ballots that arrive well after the polls close. it comes after a district judge ordered the state to accept ballots that arrive up to six days after election day. voting rights groups and the state of national democratic suing to extend the deadline siting problems arising from the pandemic now to a new discovery on the moon nasa says it has found water in sun lit areas. before water had only been discovered in the darkest, coldest regions. well, it is still a very small amount this could become a resource that helps astronauts traveling deeper into outer space. when it comes to the ultimate social distancing, at least it helps to have a little few droplets of water here and

there, dom. >> i mean, so many questions if there's water there, there could be life. >> life. >> right. >> you got it. >> mars, moon, we have colonies soon who knows, francis i'm just saying. >> it's way out there. >> francis rivera, thank you very much for that we'll see you soon. as we head out to break, watching shares of j.m. smuker and b & g foods. smuker says it is selling its chris koe brand shortening remember that stuff to b & g to $550 million move in cash. exiting the baking category in favor of pet foods, coffee and snacks new jersey-based b & g is the owner of green giant, ortega cream of wheat and 50 other brands the deal is expected to close during the company's third quarter. both those shares up premarket "worldwide exchange" is back after this in a few moments, rackspace technology will enter a

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exchange" on cnbc. ♪ welcome back to the show, i'm dominic chu in for brian sullivan here is how stock futures are looking halfway through the 5:00 a.m. eastern time hour as you can see, we are relatively flat, slightly positive the dow jones implied higher by 15 points. the s&p implied higher by 5. and the nasdaq implied higher by 33 it may not seem like a lot, but it's still mildly in the green because the major averages are coming off their worst day yesterday in weeks the dow shedding some 650 points for its biggest one-day drop since september 3rd. the move also erasing, by the way, all of the gains for the month of october we are now below the 28,000 mark for the first time in the dow since october 6th. sharp moves lower as well for the dow transportation index and

russell 2,000 small caps, both of those indexes seeing their worst days since late september. now take a look at one of the other themes that's being developing over the course of 2020 that is the severe outperformance of growth stocks versus value stocks. these two etfs track growth and value, iwf for growth, wd for value. a lot of outperformance for growth back in the pandemic lows it was widen out a bit. look a couple months ago, one of the widest points we have seen over the course of 2020. it started to narrow of late, but we wonder if those trends will continue. growth could be one of those areas to watch if the pandemic really does return for the fall and winter now, take a look at the small caps versus large caps we mentioned those russell 2,000 stocks here we have seen a relatively stable bit of outperformance over the course of the past couple of months here. but now we are seeing a big move to the downside for both of them we wonder whether or not that

gap of outperformance for large caps continues that will be a trade to watch as well remember, early on in the year they were tracking pretty closely together. now take a look at what's happening here with the overall race in 2020, with one week to go until the election, president trump and former vice president joe biden are criss-crossing around the country in the final days stumping, speaking, trying to show and gather support while there's still seven days until the election, early voting figures suggest a massive turnout already. more than 60 million americans have already cast their ballots. 60 illion. either by mail or early in-person voting that is already 4 million more early votes than all of 2016 several factors are hanging really over that march into the election including theon going stimulus talks in washington, d.c house speaker nancy pelosi says she is optimistic a deal can happen before next tuesday after

speaking with treasury secretary steven mnuchin for nearly an hour yesterday the two sides appear still divided over virus testing, the plans and protocols there and tracing as well. those continuing talks come amid the surge in new coronavirus cases in this country. a dozen states have reported record levels of hospitalizations, pushing the average number of daily cases to their highest level since the outbreak began and president trump celebrating a preelection victory with the senate confirming judge amy coney barrett to the supreme court just yesterday evening that move cementing the conservative majority in the high court, six conservatives, 3 liberals caleb silver, editor in chief of investapedia clayton, let me start with you because i laid out the case in

washington, d.c. how important is this election going to be for the overall economy and markets? >> it's going to be crucial. you know, several of the things you mentioned are factors that will be influenced and impacted directly and very heavily by the election stimulus is probably top among them right now pelosi is saying she is optimistic a deal can be reached before the election. the simple fact of it is, even if you struck a deal right now, you wouldn't have time to get it done the senate has just left until november 9th that means that stimulus is a post-election event in basically any scenario the election is going to weigh on the political realities that dictate the contours of that deal and certainly a biden victory will have many effects on democrats and republicans who may choose to wait until 2021 and who may feel demotivated to cut a deal during lame duck, potentially delaying further. >> caleb, you've actually got some numbers because you and

your organization have gone out and polled investors and traders to ask a slew of questions about what exactly could be the big focal points what can you tell us is the election a big deal for investors according to your survey >> absolutely. thanks for having me, dom. we have been surveying our readers at investapedia to see how they're moving their money, what they're worried about, what portfolio changes they're making the last two surveys this starting in late august through november it's been the election, election, election they're concerned about the spread of the virus and another shutdown in the economy but they're really right now concerned about what happens next tuesday or what happens in the days following that. because of that they've been kind of holding their cards for the last two or three months anticipating a market downturn they saw it coming in august sure enough we had that little correction and we see it again we see the market falling over the next few months but the election is our number one concern and then they're concerned what happens after

that in terms of civil unrest and in terms of what happens if there's a contested vote so there's two main concerns overhanging their heads as they look at the next few weeks and have not been doing a lot of portfolio moves since then >> it seems to me interesting because there are so many experts, clayton, and maybe those in washington, d.c., who say that these elections are short-term events, they're short-term catalysts that might provide some trading volatility but that don't actually have any long-term lingering effects on the market regardless of who wins is it safe to say that investors this time are maybe a little more heightened, clayton, about the election outcome than they have been in years past? >> well, certainly and i do defer obviously to my colleague who has spoken a little bit more depth to a large number of investors. but the people that we're speaking to are saying this will have a long-term effect or a lasting effect on their

expectations for economic growth, their expectations for the impact of government policy and that's certainly driving decisions that people are making today. you know, that's everything from decisions related to factors as broad as the futures of u.s. fiscal policy and potential for massive changes there to sector specific decisions on energy, on trade, on tech, all of those things are investor's minds all of those things are going to be impacted for multiple years by the outcome of this election it's not simply a short-term event and we return to stay sis. it's something that will return people's outlook for a significant amount of time. >> caleb, the amount of interest right now and what's happening with the economy, the markets, everything happening in washington, d.c. has obviously driven a lot of people to become more conscientious about what's happening with their portfolios. have you noticed anything with regard to the people trafficking to your site, to your content, what exactly are they interested

in mostly? what are people trying to catch up on? what are they trying to learn more about >> sure. it's fascinating because we hav so many people coming to us via search they're putting something into google and coming to us over the last few weeks it's really been about the election and about the policies of the two knds we have a great piece on biden's economic plan and same with trump. people are pouring into those to see the actual differences of course they're looking up tax rates and what happens if we get tax hike for wealthy americans they've been looking at the policy stuff but also looking inside the markets because over the last few days if you hadn't notice wed had a lot of volatility they're looking at short selling, at covering, looking at a lot of options related content bauds they're not sure how this is going to play out and they're very concerned about volatility because that has been the theme over the last couple of weeks. they're looking up implied volatility looking up different ways where how to protect themselves if the

market does correct again. we have a lot of older investors who have been in this game a long time and a lot of them have been pulling money back off the table sticking in cash or sticking in dividend blue chip stocks where they feel safe. the younger investors have been going after airlines, going after oil stocks, looking at etfs wherever they can find an edge to trade the market, a lot are doing on the younger cohort, the older cohort saw how long it took to come back and pulling back into cash and blue chips where they feel comfortable. >> all right clayton, the last word to you here, just a couple second to go, do taxes matter for investors? >> taxes always matter to investors. i think you put it best, people are looking for the difference between biden's plan and trump's plan capital gains is certainly top of the heap. i would say that based on the people we talk to, second to that is what's going to happen to the corporate rate? how is that going to change? and most importantly, when is it going to change? people have real questions about timing and cadence of some of the first policy priorities in a

biden administration. >> see if they can get answers in a week or so. thank you guys both for your insights we appreciate it >> thank you, dominic. coming up on the show, the gulf coast bracing again for the another potential hurricane. the latest on where zeta may be heading coming up. first as we head out to break, some of your other top stories. eli lily announced it sending its previously paused u.s. clinical trial of antibody drug in hospitalized covid-19 patients the national institutes of health which sponsored the trial found while the treatment pose nod significant safety risks, it was unlikely to help with recovery the development comes as an english study shows the number of people with virus antibodies disappeared over time, suggesting immunity might actually wear off. meanwhile, the trump administration is set to announce a plan to cover out of pocket costs for coronavirus vaccines for medicare and medicaid recipients. that's according to a report in politico that plan could be announced as

early as today and charles schwab says it plans to lay off about 1,000 workers as it wraps up its merger with td ameritrade. the company says the move is aimed at reducing overlapping or redundant rolls over the two different firms. orwi ehae"s ck after this

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gulf of mexico right now the storm making landfall along the coast of the yucatan peninsula as you can see there and could reach the u.s. gulf coast in the coming days let's bring in nbc meteorologist bill karins for the very latest here bill, what can you tell us i feel like the gulf coast is just getting beaten up so badly. what's going to happen now >> dominic, this is one of the craziest forecasts i've given and what's coming to the east coast. let's focus on zeta made landfall in the yucatan overnight. now down to a tropical storm with the new update just in from the hurricane center now it's going to head over land for another couple hours and then over the open waters of gulf it is still warm enough it will regain its hurricane strength and now the hurricane center takes that center line just south of new orleans as we go throughout wednesday evening not a major hurricane. not as big of a lot of the other ones the fact that louisiana will get hit with its fifth-named storm this year alone is ridiculous,

just off the charts. the mississippi coastline will get this pretty good, too. it's not going to weaken much until it moves inland over southern mississippi and the storm races through the southeast all the way through areas of tennessee and north carolina watch out for flash flooding there. 50 mile-per-hour winds just south of cape cod will turn into a nor'easter type storm and bring snow to some areas as we go throughout thursday night and friday in new england. but let's talk about the landfall implications with a category 1 tomorrow we'll get power outages and downed trees notices, this is the max wind potential 70 to 80 miles per hour on the mississippi coastline will cause damage. notice new orleans 50 to 60. this isn't a huge storm. it's a small compact storm that's a little bit of saving grace. storm surge not likes some of the big ones like laura but 4 to 6 feet of water will cause issues and will cause some problems for mobile bay to

biloxi back down through southeast louisiana. then the legacy of this storm could be some flooding issues up to 12 inches possible. a huge flash flood risk with areas of alabama, north georgia and when you get in the mountains. how about the rainfall from the ohio valley all the way through the east coast this will be a big footprint and i mentioned the other crazy weather going on the ice storm right now from o objection to west texas, it's going to snow in el paso, texas, today. and as far as the snow and ice totals, this is just the ice alone. numerous power outages likely from oklahoma city all the way down to wichita falls. i'll end it with this, dominic, the fire danger is off the charts right now in california yesterday we had 60,000 people that had to evacuate today, 33 million people under red flag warnings. another dangerous, windy day on the west coast i mean, dominic, i don't know if i had an october forecast with more going on than this one. >> i'm trying to take notes right now because of everything that you just said it's tremendous the amount of headlines happening.

what exactly could be the implications of all that rain right now, just a few seconds left here for the gulf coast specifically it's still trying to recover how much of that rain damage is already going to be exacerbated by what's happening here now with zeta? >> i do not think this will be a billion dollar weather disaster like the other ones we had previously it's just not strong enough and it's small the footprint of the damage will be narrow. and i think that's going to help with this storm. but that doesn't help the people that are in that narrow area that could include new orleans we'll watch that tomorrow. >> nbc bill karins, thank you, we appreciate it. coming up next for the show, ditching the strip the casino operator that's saying so long to sin city plus, a value play for investors why one firm is shifting its focus away from u.s. stocks. and as a reminder, you can always watch or listen to us live on the cnbc app, live look at times square in manhattan right now. "worldwide exchange" is back right after this

♪ little kenny rogers for this tuesday for you here let's get a check on some of the other stocks on the move today las vegas sans without las vegas it's just sans at that point, right? shares of the casino operator on reports it is considering a sale of its las vegas properties for upwards of $6 billion. the company would only confirm its in early discussions sands owns venetian, pa lasso but only account for 10% of revenues ceo sheldene adelson is betting

on the companies properties in asia now look at f5 fourth quarter profits and revenues coming in above analyst estimates. f5 says they had a strong quarter in contrast with weakness at s.a.p. and a.i.g. is rallies after announcing it plans to set itself into two independent companies. a.i.g. will spin off its life insurance and retirement businesses the board is also naming new company ceo who takes over in march. back to the broader markets overall after yesterday's massive selloff, joining me now is cole sneed, president and portfolio manager over at sneed capital management and chad morganlander let's talk a little bit about what's happening here with all the different catalysts. chad morganlander, we'll start with you what exactly has caught your attention over the course of the selloff yesterday? was it justified

could we see more? >> you could see a potential little more, maybe 2 or 3% on the downside it was somewhat adjust fied because of the disappoint of not getting fiscal stimulus, overall the gap of coronavirus cases not only here in the united states but across the globe could dampen the outlook for global growth for 2020 second -- the last quarter of 2020 but overall, we're constructive on the financial markets we believe investors should start to overweight value companies and setting our buck up for a post coronavirus world where global growth will start to expand at a rapid rate with business investment as well as consumption being quite high >> all right cole, let's kind of put this in the context here for a lot of investors out there. should we be scared about what happened yesterday is this the beginning of more volatility to the downside to come and if so, what should we do about it >> yeah. thanks, dom.

we shouldn't be scared about what happened yesterday. we should be scared about what happened in august and early september. we broke a speculative just to give you a number, half a trillion numbers bullish small options bought in a four week time period. we peaked this market in september. i agree with chad the way to make money the next five to ten years will be playing the meaner version in the economic activity in the united states and globally as well the problem is that does nothing but takes u.s. markets low eer using the s&p 500. costco and names like that that are quality businesses that have been way overpaid for will only get punished on the back of people not working from home and living normally in the future. >> cole, let me follow up with that when you say meaner version, there's a meaner version for the economy as well. wouldn't that help things? we're still trying to recover from the pandemic lows right now. yes, things are getting better,

but they could be getting a lot better doesn't that help the markets longer term? >> well i agree. dom, this is the toughest concept for people to understand because the economy succeeding is wonderful there are businesses that benefit from that, for example, we own home builders like lanar, we own companies like u haul, we own the banks and own the energy businesses i agree with you there, but go look at the market cap that's represented as a portion of the s&p 500 in that and what you'll find is there is hardly any relative to the concentration in the index. so think about this, you look at a business like zoom, who has benefitted massively in this and us picking up and being in my office like i am right now, that doesn't help zoom at all, it crushes they market cap. so the high revenue to market cap stories, that is going to get crushed, dom the problem is the market is built completely on the back of that that's why we've made such highs with the economy sitting so low.

>> all right so chad, i wonder if it's the u.s. that's been in the leadership role for a long time now, through the pandemic. it's been bit up pretty well there's been a real lag in emerging markets, other developed markets outside the u.s. does that mean there's a meaner version towards those emerging markets as with el >> so we're broadening out our portfolio in particular on our tactical call. we do now have an overweight on en we were not involved in en over the last three years we believe that there's a sensible valuation there with the backdrop of an improved global growth dynamic in 2021 into 2022. emerging markets perform quite well historically from that perspective. so we're advising investors overall to start to broaden out their portfolios not be so concentrated in just growth stocks, the five or ten

growth stocks that have been outperforming, but looks towards large cap value companies, small cap companies and just start to become a little bit more just optimistic about the overall global economy in 2021. >> chad, how much is dollar weakness a part of that emerging market story versus other fundamental factors? >> well, it's absolutely going to be a tail wind. we do believe that the dollar can continue to weaken by 3 to 5% over the next 18 to 24 months due in part because of fiscal stimulus that we believe will be coming in 2021 that will be quite bold as well as monetary policy here in the united states that will continue to be quite unconventional for 2021, 2022. that is one of the reasonings behind it. but overall, the main reason is because emerging markets are cheap and as well they benefit from global growth, bounce back in the equity prices there do

quite well so we recommend buying the exchange traded fund on that side >> cole, we just got about 20, 30 seconds here left what's the stuff that we should be buying right now for the next 12 months? >> the most economically sensitive consumer oriented cyclicly oriented businesses for example, we have been building up our energy holdings in our portfolio continental resource has been one of the names we have been buying recently you have been hefty harold ham on a couple weeks ago. he laid out the case under a biden presidency, fracking on federal lands, their assets go way up in value. >> gotch ya. perfect. thank you for your picks we appreciate it that doeit fs or "worldwide exchange" this morning "squawk box" is coming up next ♪ you can go your own way

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♪ good morning, futures pointing to a bit of a bounceback, really more holding on to kind of -- it broke its slide late yesterday afternoon and we're kind of holding on to that at this point, but we'll see. starting off a rough week so far on wall street among the day's biggest stories a rise in covid cases. a flood of quarterly results from some of the world's biggest companies, business week of earnings season. a final campaign push with just one week left. you know what that means that means today is tuesday and elections are on tuesday, so it's next tuesday, one week. it's october 27th, 2020. "squawk box" begins right now. ♪ ♪ thunder, feel the thunder ♪ lightning and the thunder ♪ thunder, feel the thunder ♪ lightning and the thunder, thunder, thunder ♪ ♪ good morning, everybody.

welcome to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin and the u.s. equity futures at this hour a little different than what we were watching yesterday. things have stabilized a bit for now. you can see the dow futures up by 14 points the s&p futures up by 6. the nasdaq up by 36. but this comes after a very rough session yesterday. the dow at one point was down by almost 1,000 points yesterday. it's now coming off