>> very interesting. go into the weekend after a very busy -- thank you, by the way -- very busy week. fed meeting, lots of earnings reports that have been spotty. patchy i guess i would call them. and the jobs report today. >> indeed. i will see you at 6:00 p.m. we will have live coverage. looking for it. the market selloff. "closing bell" starts right now. >> welcome to "closing bell." on this friday,i am brian sullivan in for scott. the make or break hour. you've got a big selloff in stocks. new fears the american economy may, may be ableout to roll ovea bit. the weak july numbers, another down, putting the fed back into play. some on wall street loudly wond wondering did the the federal reserve make a mistake not cutting rates on wednesday?

joined by vice chair richard chair da, ask him that and about the economy coming up. concerning amazon quarter. consumer coming in weak. get this, intel is having its worst day since i was 3 years old and t"the brady bunch" was hit on television when they were still cute. an all-star analyst who says the stock is unownble right now and we'll talk about whether intel could maybe go out of business. not me. him. rough day for the money. here it is. here's how things look. an hour to go. looking for upside, and we always are, the dow is off its low, down 768 points, about 1.9%. s&p worse session in roughly two years, but off the lows. nasdaq now down more than 10% from its high. technically they called that a correction. small caps, you have regional banks taking big hits as well. all this as buyers flock into bonds, setting 10-year yield well under 4%.

and then this to me, this is the most interesting chart of the day. it is the so-called fear gauge cbo index, measure of bonds, or options. it is having one of its biggest moves ever as the market really completely re-prices pretty much everything. our talk of the tape, how aggressive the fed has to get, where do we go, a lot to discuss, so i'll shut up and jump into it. cameron dawson on set and truist keith learner joining us remotely. big day. need a steady voice. cameron, first to you, jobs number wasn't that horrible. it feels like. we brought this up in the noon show. a little bit of a market overreaction. >> 114,000 isn't that bad in the grand scheme of things. it depends on what you think the neutral number of jobs should be. if it's 115,000, 114 isn't bad. closer to 200 to 300,000, the

114 is pretty bad. we can't forget there's a lot of positioning happening here and that positioning unwind is why this move is so magnified. >> because -- i think cameron nailed it, keith, doing this a long time, you know that, and yeah, we missed slight miss on the jobs number and the market does what it's doing. that is not about the jobs number or the federal reserve. it's what cameron said, about positioning, hedge funds, the nasdaq carry trade unwinding. if i'm wrong, tell me. would you agree? >> first brian and cameron, great to be with you. my head spinning with the cross currents in the market right now. you know, i do think it is somewhat of an over reaction. you said you've been doing this a long time. i've been doing this a long time. the jobs report tends to be an overreaction and you have to look at the trend. the number is revised one, two, three times. if you look back over the last three months the average job growth is about 170,000.

that's close to the prepandemic trend, but also, you know, we have to realize we had a big first half in the market, cameron mentioned position was a bit stretched and even as you have the big first half, the second half you see gains, but hiccups with an average pullback of about 9%. i think we're in the corrective period. we think the bull market trend is intact. this is going to take a little bit to get through and choppy a period. >> you noted cameron to me, all these technical traders, they're all long. like 99.9%. that's almost all of them. 99.9%. this is fascinating, that the markets today sold off almost perfectly to their 50-day moving averages. >> depending on what index you're looking at. look at the russell 2000 to it 50s day, the semiconductors, to

its 200 day. the test next week how we react off the moving average. do we bounce off of that or drift lower, meaning that this correction is deeper and more protracted? we can't judge that until we start to see the bounce, but we would note the markets aren't technically oversold yet. maybe there is more churn to come. >> listen, it's a traditional day, and it sounds weird to say that. gold is over 2500. utilities are up. apple is up. people are looking for safe places. i won't say safe haven because that's redundant. safe places to put their money. do you expect that to then be unwound when we go back to, quote, normal at some point here, keith? >> i don't know if we're going back to normal. i don't know what normal is. i will say we've -- in our portfolio we added gold a few months ago and think it's going to be a good hedge because geopolitical risk is rising, uncertainty about the u.s.

dollar. made a new high. technically looks great. in moderation we think that makes sense. we're overweight utilities as well. i think this corrective period, two components, a price component and time component. both of those have a bit further to go. one thing we'd be watching for is following tech. tech let us down, and often, when a correction has -- you'll see the leadership or the bottom. we haven't seen that yet. what's notable, two weeks ago, everyone was talking about hey small caps has had the best, you know, five-day change we've seen in history. or one of the five. we're back at the a breakout point. i would be watching that over the next week as well seeing if it can find some support. ultimately, we do think the market will eventually recalibrate and move higher. in the near term it's hard to say what the catalyst is. we're moving past earnings season. the fed is in a pickle because the next meeting is not until september and we get into this kind of -- >> but keith, well said, i'm not

disagreeing but the federal reserve can cut any time they want. they don't have to do it at meetings. they've made intermeeting changes as well. so, a, do you think they screwed up not cutting this week, and b, they could next week say we're going to cut. they can do that. >> yeah. i'm not one to second-guess the fed. my question today, i've been asking around, did they have this report on tuesday or wednesday? i i've gotten mixed answers on that. cut intermeeting, the question becomes are they overly concerned the market may take it that way as opposed to being -- >> like a panic, sign of panic. >> exactly. i don't know that -- i don't know that they're going to do it. i don't know that the market reaction would be as positive as we think. >> we heard from austan goolsbee today like he read the hitchhiker's guide to the galaxy that says don't panic. he said this is just normalization and that we won't read into one data point, which just says this doesn't seem like

a fed going into this situation room trying to figure out how they can stall the bleeding. i don't think they're looking at the 114,000 saying this is something we need to panic about. if they did, it would probably be a bigger problem, 114 goes to 50 to zero and negative in payrolls a big problem for gdp and growth. >> we're showing all these stocks, cameron, i get amazon, they had weaker consumer numbers, intel, we'll do more on that in a couple minutes, but, you know, micron is down. they make d-ram. it's a commodity product. like people are going to buy computers, things with d-ram. micron is down 10%. prudential financial on the bond move down 10%. feels like everyone just kind of dumping everything and take the weekend reconsider what they want to rebuy. >> consider the starting point how overbought things were. the aspect the bigger they are the harder they fall. the more you were extended and

over bought the more room to correct. valuations were also very extended. but to your point is that the big question from here, do you see these moves translates into earnings revisions starting to trend lower. that's been the key thing under pinning this market, continuously rising earnings revisions. >> answer your own question. is this going to translate into revised earnings. >> i think 2025 numbers are too high and maybe this data is the spark to get people to start moving estimates lower. 2025 numbers have a huge amount of acceleration in the top line and massive margin expansion. if inflation is fading, neither of those two things happen, which is why we think 2025 estimates do need to come down, and it suggests as we move into next year, we're looking more at a sideways choppy market versus unplinching to the right. >> keith, bill gross is a friend of mine known as the original bond king, but now he can do whatever he wants. tweeted out something today, as

he wants to do, said, is any media figure willing to say bear, meaning a bear market, bear, bill, i'm in the media and said it, but he says very few bull stocks these days, pipelines, banks, financials in general, and this is -- i want you to comment comment on this, investors should stop talking about buying the dip and ask about selling recoveries. what do you think? >> interesting. i have to think about that a bit. at this point we are -- our baseline view is the bull market is still intact. we would be saying probably somewhat of a deeper pullback. still want to buy the dip. i think some of this kind of economically sensitive trade that we had up until this point is questionable in a cooling economy. like going back to the small cap trade. even though we're more neutral, in order for that to do well you need an economy to have momentum. what we're thinking ability we're looking actually with tech, we downgrades tech at the end of june.

we're looking for an opportunity later this year to reengage because we still think that's the secular story. to answer your question directly, we're still looking for buying the dip. not buying the dip yet. >> not yet. that word yet is always such an interesting word. yet. keith learner, cameron dawson, thank you very much. have a great weekend. >> thank you. >> in the meantime we talked about it a moment ago, intel on pace for its second worst day ever. in fact, in more than 50 years of a public company, intel only had one other day worse than this and that was in 1974. just gave away my age, but it's on the wiki thing anyway. after investors or intel saying it would suspend its dividend and lay off 15% of its workforce as part of its costly turnaround. jon fortt sat down with pat gelsinger and asked him about what is ahead. >> fundamentally, the four areas of our business we're not changing any of those. a foundry, our client nooetworkg

and data center business, but within each one, we're looking at the portfolio of things and which ones are getting good financial return and which don't have as good a market or financial opportunity in the future. >> all right. joining us is stacy rascon, senior analyst at bernstein research. stacy, you're a straight shooter. you put it in your note. you said in your note, i don't have it at the top of my head, something to the effect of, we may have to start having going concern comments -- >> no. not quite. >> no? can you clarify that? it's getting a lot of attention. >> what i said was, in some other like environment we would probably be having those conversations. like -- >> okay. not intel. want to be clear. it's gotten attention. >> so, what i wrote was in other circumstances we would be having those conversations. however f the one silver lining

in from -- i think intel will live through. i don't know what kind of a life they will live but they will live through it. here's why. things are going badly. cutting a lot of costs, in survival mode. if you add up the cost savings from a reduced capex from the reduced on equ-exand dividend a cash coming in from the government and partnerships they sold pieces of their -- some of their fabs to private equity and gotten cash in, add all that up, it's probably 40 billion of incremental cash that will be on the balance sheet by the end of 2025, versus had they done nothing. that will probably like keep them alive. they'll be okay. like i'm not worried about growing concerns given all of that. in another world if you didn't have the geopolitical subsidies and everything we would be having a different conversation. i don't know what life they live. >> if i have to sell my couch to

pay the mortgage, and then sell my car, they don't have to, i get what you're saying, they're trying to bolster the cash position on the balance sheet, but at some point you run of things to sell to private equity. >> yeah. again, it's -- hopefully they're at a point it's enough. they done a lot. sold half of the ireland fab to apollo, sold half to brookfield for $14 billion. that's almost $25 billion there. and given like i said the capex cuts and on-equities, -- op-ex. they're burning cash. margins are horrible. the revenue lower. it's not a good situation. >> so go more into that, stacy. when you say it's not good, how bad is their business? >> it's bad. so look i mean the quarter itself, the revenue you could

argue was okay. the margins were awful. right. they're ramping up their chips for ai pcs and the cost structure is bad. margins are bad. that gets worse as we go forward. next year margins don't look great. back half revenues are worse. some of that is inventory drain. there's too much inventory on pc chips in the channel. we've been highlighting that. i monitor that fairly religiously. we publish on it every quarter and convinced we're swimming in cpu inventory. they overship in q4 and q1. data center side losing share to amd, doesn't look so good. their other markets, mobileeye reported, we don't cover mobileeye, but they cut their guidance massively and that goes to their revenue. it's just not good in the context of the broader macro and the share situations. because the cost structure is getting worse, like on just the

cost of the parts, it's impacts the gross margins, they have a three handle on them. the last time that was happening -- it was 1986 in elementary school. >> now you're bragging you're younger than i am. >> i don't think i was. i was alive in 1974. i don't think so. >> my worry as a tv guy doing this a while about intel. intel, wish them all the success in the world, was one of the most iconic success stories in global history arguably, everybody knew intel. intel inside, the ding, ding logo they had. obviously, things have gone wrong. my worry is a lot of investors out there marginally interested investors, oh, it's intel. it's down 30% in two days. it must go back up because it's intel. >> that's hard. i've been having that discussion all day with clients. how do you value it. there's no real earnings.

there's no free cash flow. there may or may not be any terminal value. we don't know, right. so, you know, look, tangible book value rough live about 21 bucks a share, worth trading today. i'm having those kinds of discussions with people. again, i don't think there's any reason to own it. like people that owned it are selling it today. you've got probably a bunch of dividend funds. they don't pay one anymore. it's hard to own there. you know, it could go up. it's down a lot. like these get really volatile and start trading like options when the equity value gets low. i don't know what to do with it. feels like you don't need to be there like at all. i would be advocating avoidance at this point. easier ways to make money. >> and there's a really easy way to lose money if you owned it yesterday. we appreciate the candor and honesty. tough time for intel. people and investors. stacy, thank you. >> you bet. >> so jon fortt sat down, i

don't know if it was earlier today with pat gel sing he were. you saw clips out of it. the full interview will air next hour on "closing bell: overtime." i'm fascinating to watch and listen. i wonder if he says, you seem like a nice guy, you going to step down. tune in in the 4:00 hour. kate rooney, other big names that are moving into the close. lucky you, kate. >> exactly. a lot to talk about. clorox is going to be one of the few green charts you see on your screen. it's emerging as a flight to safety leading the s&p gains, avoiding the market selloff you've been talking about. investors are overlooking the weaker than expected revenue to focus on the firm's strong profit picture. the household cleaner giant raising its profit outlook and household essentials tend up to hold up better in an economic downturn. s&p's biggest laggards, shares of snap, parent company of snap

chat on disappointing guidance, slashing its outlook on soft demand from adtisz is tooers in consumer sectors. >> hard to believe snapchat was a $70 stock three years ago and now under 10. we are just getting started on "closing bell." up next, we're going to, obviously, all over today's market selloff. the major averages getting hit hard into the close and we have great guest for you. former vice fed chair richard clarida back with us. his reaction to the job number and whether economic data puts recession risk on the table. live from the new york stock exchange. "closing bell." we're back right after this.

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more on the street are beginning to ask the question, especially as markets selloff today. the fed's next move and where the american economy really stands right now with a perfect guest for it all richard clarida, he is former fed vice chair. he is the global economic adviser to pimco. good to talk to you again. >> yeah. >> up great respect for your former colleagues on the fed. great respect and friendship with jay powell. you're not going to dunk on anybody, i get it. but was it a -- personally. was it a policy mistake to not cut on wednesday? >> well, i don't think so. here's why. look, the fed is going to be data dependent. they've said that. the data has been soft for a while. it got very -- more than soft today. markets have already priced in rate cuts, so i think the important point the markets understand the fed's reaction function. i think it would be a mistake if they didn't cut in september and probably indicate more are on the way. i don't think you can micro

manage july versus september when the markets are doing some of the work for them. >> yeah. that's -- you nailed it as usual. the last point the markets are doing some of the work for them. we're all freaking out about the fed and what they may or may not do in september or november or december, whatever it might be. it looks like the -- you're on the other side, rich. the bond market has spoken. >> yes. you know, and sometimes the market gets it wrong. in january the market thoughts there would be six cuts this year don't think that's going to happen. then, of course, it got to one cut. there's been a big success here. the fed brought inflation from 7 to 2 point something and we avoided a downturn. the fed trying to stick the soft landing. to bar with an analogy of the olympics. that's where we are right now,

yeah. >> so does it matter what they do in september if the market has got like 100% chance of a rate cut? does it matter if they cut in september? for the economy, for the economy? number two, you probably -- you might have patched in late, you know, i was reminding the audience the fed can cut any time it won'ts. right. >> in fact, i was there in 2020. we did that -- >> i remember. >> we prefer to call it an unscheduled meeting not an emergency meeting. sure it can. i don't see that happening. there is a risk whenever the central bank adjusts, what do they know that we don't know. get back to your original question, a moment ago, yes, i think it would clearly be a mistake, given what we know now, if they didn't cut in september. the employment rate has moved up by about a point. the payroll gains today were very modest.

private sector payroll gains, especially excluding, you know, health care, which has a connection to the government, had been running weak all year. they have enough information, they will have enough information going into september. they will cut and how many cuts do they pencil in the rest of the year. they made it clear in the fomc statement two days ago that risks are balanced. they have a balanced approach. two mandates, employment and price stability and they're ready to adjust. >> there's so much noise out there in the data, though. you know, i get it. i don't want to get politics involved. the super strong economy, i've been on the tape saying i don't know how strong it is. preindividual, six million more jobs than precovid, divided by the number of months, average or below average job increasing. most of the job increasing is government or government funded which was health care. those are good jobs. no disrespect. i just wonder, can the private

sector stand on its own? people wildly estimate how much covid money and stimulus and low rates were out there. i wonder what actual stripped down, true american economy looks like right now? i have no idea. >> well, i think it's a very good point. i have a similar set of sentiments in that i think that -- i think this has been such an unusual shot. the pandemic was unusual. the policy response. we had the russia-ukraine. we lose count of not even to get involved in the political calendar, very unusual, but in particular, you know, indexes of underlying strength in the economy especially the lower half of the income distribution have been slowing and yes, i do think the economy is growing. i think it's growing at about trend. but the momentum is clearly downshifting. there is no doubt. >> yeah. and would a 25 or a 50 basis

points cut in the fed funds rate when the bond market to your point is doing it already, is that going to change things? i want into -- like a recreational vehicle dealer, boats, motorcycles, campers, fun stuff but nothing we need, right. i was therelast week in the midwest. rich, i was talking to some salesmen. i went into a car dealer. we're not selling anything. cars are marked down. one, two anecdotal thing. i don't know if a small cut in borrowing costs is going to reverse that. >> well, there are two points here. one is, the bond market is doing the fed's job for it because the bond market is pricing in more than one cut. so i think they will have to be in alignment. you know, my view has been and continues to be the baseline that the fed is thinking that it can downshift rates, you know, in tandem as inflation continues to fall.

that was a good model until the spring. closer to 2% inflation target, i think they've made it clear they're prepared to adjust rates as the labor market softens. we triggered the sahm rule as discussed and we're prepared to adjust rates even faster than inflation. >> why is everybody talking about the sahm rule? i heard of it for the first time three weeks ago. doing this 26 years. suddenly it's like this magical thing that's come out of the air. are you a believer of the sahm rule? >> i'm a big fan of her work. >> very lovely. >> yeah. the whole point was essentially to find a simple measure of when the economy is tending to move from recovery from expansion to a slowdown or even a recession and the sahm rule historically has done a good job of

identifying that inflection point. it might be wrong this time. you know we've had -- chris waller, for example, two years ago said we can get inflation down without a rise in the unemployment rate. a lot of folks said you're crazy this hasn't happened. the sahm rule does not indicate a recession. certainly i think there's enough there that it's going to get and is getting the fed's attention. >> great, great interview. i would expect nothing less. thank you very much. appreciate it. >> thank you. >> all right. very welcome. all right. getting news by the way out of the food and drug administration. breaking news from angelica pooebls. what's going on? >> that's right. we are seeing that all doses of eli lilly's mounjaro and zepbound glp-1 drugs for diabetes and obesity are now all available. remember, these drugs have been in shortage, not all of the doses, but some have been in shortage because there's so much demand they can't keep up with the supply. but now, fda is saying these are

available and we're going to keep an eye out to see what that means for lilly when they report earnings next week. brian. >> so it's a good news breaking news. >> good for eli lilly and for people looking for that drug. >> looking for that drug. >> two drugs. >> raising their output as we talk to the ceo in indianapolis a couple months ago and angelica, thank you very much. call it crude reality. even with the middle east on the razor's edge, oil down tayod. we're going to find out why, next.

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all right. let's talk oil and energy. first up, we have earnings out of exxonmobil and chevron out today. exxonmobil had one of its highest ever profits by pioneer resources. chevron is down a little bit more. chevron missing because of weaker margins in refinery and a bigger headline, chevron leaving california after 145 years, too high regulation, other issues as well. 2,000 people probably moving to houston. california losing another company. could be tough for the area. with oil, oil prices are down today, even though tension is rising in the middle east and the real threat of an attack by iran on israel this weekend, find out why we're not seeing more of a pop. bob mcnally. i'm guessing we're not seeing a

pop because we have talked about this many times, unfortunately, in the last couple years, there's always now some kind of a threat, and it feels like there's plenty of oil to counter anything. we don't need $100 oil. what's your take? >> right, brian. you know, the humans and machines that trade oil are forward looking. when they look forward they see macro calamity and risk. the employment miss being the recent example. they're attune to that and we saw crude sell off. when they look forward on the geopolitical side they don't see anything. what they hear is the village boy crying wolf. you get the sporadic escalations between israel and iran. you get a little bit of a pop like we got a few days ago. then it goes away. we're not disagreeing so much. i think the odds favor a sort of a bigger repeat of april that

iran will strike back, but rubble will bounce and israelis won't die. the risk of escalation is not zero or 5%. it's like 35%. brian, the village boy who cried wolf the story did not end well for the village or the boy. >> yeah. that's it. you actually -- that's how i phrased it today, a not zero percent chance and hope none of this happens, but i guess the idea, iran, not hezbollah, launches missiles at tel aviv, tel aviv defends them. some point if that happens again, israel says enough is enough, and if they start to lay waste to some of iran's money, pretty much all oil, what then with the price of oil? >> it will go up. the market will be shocked and it would go up. the houthis killed one israeli

in tel aviv with one drone. israel responded by torching the port in yemen blowing up a power plant and storage facilities. israel's in sort of a three eye for one eye mood right here. just as the protagonist 110 years ago in europe didn't want to enter a big war, a long costly war, president biden doesn't want it, but you can't always get what you want. we are in an escalatory dynamic and we're still climbing up those rungs. >> outside of that, pray it doesn't happen, fundamentals alone right now, looks like the trend is lower for prices. >> yeah. fundamental data coming in do not justify lower prices in my view. look at may. we got -- >> they don't? >> hard data for may. blockbuster strong in the united states. including for gasoline. the highest since 2019 in may.

we don't have a sign of a peak in collapse of demand there. china, still weak, but gasoline globally, jet globally, not weak. we're seeing stock draws too and curbing and other places. it's not super bullish but it doesn't call for a massive selloff in oil prices in my view. >> okay. good stuff. and we'll see what happens with opec december 1st in vienna j call it an apple a day keeps the bears away. one bright spot in the market, top apple analyst eric woodring here at post nine making the case for why there still m baye 20% upside in apple. boring. think about it. boring is the unsung catalyst for bold. what straps bold to a rocket and hurtles it into space? boring does. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady.

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all right. got about 18 minutes left until the close. not a good day. macro markets down. one stock that is higher, not a lot, but it's higher, is apple. now one analyst calling apple stock a, quote, good place to hide in today's market. that analyst was not eric woodring of morgan stanley, but eric woodring of morgan stanley is indeed here. it's your competitor. how much do you think there is -- today's move more of like put money in apple because they're a safe place to be? >> i think that's a fair explanation. what happened last night -- >> kind of a -- not a knock on apple. the opposite. >> we called it a flight to safety. in a world and market where there's a lot of concerns of what's going on macro and micro wise with the consumer, apple did better than we expected as a market. they have a story to tell about what to look forward to. in this environment that was

enough. >> what is that story? >> right. so again r iphone 16 launched mid-september. what becomes important is the ios launch in september as well but the incremental role of apple intelligence. first time you're integrating ai on to the iphone. new software, but we talked about what's important you can only run that on the iphone 15, plo, pro max, and iphone 16. >> i got two phones here and got a 15. that's -- it's not going to work on these, is it? >> only 70 million iphone 15 pro and pro maxes, 1.3 billion iphones active today. >> even if you're happy with your phone, pictures are find, holding up music fine, works fine, whatever. if i want that ai, i'm going to have to go upgrade. >> you need to upgrade. >> is it going to be compelling

enough that i will want ai? >> that's the magic question. >> you're the analyst. >> it's not out yet. we need to figure that out. what we know is developers have the first beta version of ios 18, few features for apple intelligence related to messaging, trianscription functionality. the early reviews are positive but a narrow set of features that developers have today. we need to wait and be patient for over time for that to roll out. our thesis is, fiscal '26 is the cycle. that's 14 months from now. we're just saying that there's an upgrade cycle that is coming. >> i don't give investment advice but i will give financial advice. sort of. every couple months i go a little crazy through the budget, the family budget and the credit cards and everything and realize, i'm sending massive amounts of money to apple every month. not talking about the phone. apple one plus, news and all this other stuff.

apple music. itunes match. okay. apps. roblox. whatever it might be. it's a lot. i would imagine i'm not alone. apple services business is one of the biggest standalone, if it was, one of the biggest revenue companies in the world. >> correct. >> it doesn't seem to get a lot of love or attention. >> it should. it's outperformed for eight quarters in a row. >> how much are they making off of the woodring, sullivan and millions of other families? i was shocked at the money that was just going to apple every month without them thinking about it. >> i'll tell you two things. first of all the power of the ecosystem. everybody thinks phone phone or ipad mac. $80 million business in services that should not go unnoticed. 74% growth margin that's important. second, what's almost more important is today, the average apple consumer across devices and services, spends about a dollar per day on the most important technology platform in

their -- >> on average a dollar a day. >> i'm well above that. >> 762 for a coffee per day in new york city. the amount of potential upside to spend per day that you could have for apple across the ecosystem is incredible. services is a key part. >> personal opinion not representative of morgan stanley's views, can they do something to make icloud mail not be so crappy. >> i would defer that question. >> i did not expect you to. it made me feel good to say it. i think everybody kind of knows gmail is far superior. they have to work on it a little bit. >> sure. >> still handing over -- >> we are. >> landing over that money. >> apple did what they needed to do to help investors to feel better about owning apple stock. >> that's it. a good place to hide also. eric woodring, morgan stanley, great combo. still ahead, trouble in tech. amazon's post-earnings drop dragging down the major averages. nasdaq on pace to close in correction from its record high in july. more than 10% drop.

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we are now in the "closing bell" market zone. the last one of the week. charles schwab's kevin gordon is here on what is a volatile day for stocks. leslie picker tracking the bank sector selloff. surprised they got that out. kate rooney on amazon's post-earnings drop. one of their worst days ever. a lot more to do and not a lot

of time. jump right in. kevin gordon of schwab thanks for being here. >> nice to talk to you. >> what is the biggest question you are get from clients right now? >> one being is this more of a shift from what's become the positioning argument. things got two one sided for the mega caps and shifting into are recession fears more justified because of this one jobs report. it is amazing to see so much focus on one report and the broader context things have been slowing in the labor market but i'm not sure we would have so much of a knee jerk-jerk reacti with the drop in risk assets. >> you are the expert i am not i am doing it a long time and not seen a market move like this because of a small miss in the job market or the federal reserve should cut, you know, two days ago, instead of two months from now. every guest we've had on is like this is positioning, technical stuff, carry trade, hedge funds.

this is not mom and pop selling. is it? >> i think you have to keep in mind where we were coming into this with the investor sentiment environment was incredibly frothy. got back up to kind of all-time highs if you were looking at a combo of behavioral measures of sentiment. the fact that you had this strong rally and sort of the snap back in the rubber band on the small cap side because of what happened with the june cpi report. i think that in conjunction with what had been from a positioning stand point, yeah, this trade moving into the mega cap world at the same time that you started to see this breakdown under the surface. in how we're kind of looking at it the index from a volatility standpoint catching down to what had been weakness sort of under the surface. you have to keep in mind up until this point the average max draw down for members in the s&p was approaching 20%, 16, 17%, the russell 2000 it was more than 30%. the max draw down at the index

level has not been that bad this year for the s&p, the nasdaq, the russell. you haven't gotten to outright correction territory. i think a lot of this is the index is catching back down to what has been the story under the surface. >> not the worst day of the year for the s&p. july theth. here's what does not worry me, it vexes me. which is that the rapidity of these moves now, the market has gotten faster every day for 20 years, but when small caps gain 11% in two weeks and nvidia down 25% off its high of a month and a half ago on no news, by the way, and we have two of the worst days of the year in the same two-week period it feels like everything is more violent these days. >> even for small caps. the other thing i think that's important to point out is a lot of the move you seen post cpi and the excitement around the fact that the fed was getting ready to start cutting rates, a lot of excitement was a delayed

reaction because the one unique aspect, probably the most unique aspect of this market cycle especially when you look at prior tightening cycles, prior bear markets, full bear market cycles for the s&p, the period of october 2022 to october 2023 the first year of the bull market for the russell it2000 w flat. broke through its low which never happened before. i think a lot of it has been a delayed reaction and kind of hopes that small caps get to start moving again. now that's being -- blunts it a little bit because of the growth scare that has crept back in. a lot, too, is the question now not whether the fed goes in september but the decision between 25 basis points and 50 basis points. that reintroduces some of the risks that it's a panic kind of cut and they have to catch down to the economy. >> if they did the rare intermeeting cut that would be the panic cut. don't go anywhere. a lot of stuff happening. leslie picker, i'm looking at my fact set screen of all my bank stocks, hundreds of them.

four financials and banks that are higher. the rest are lower. brutal day for the market. >> yeah. absolutely brutal, brian. you've got steep declines among banks helping drag down that financial sector to be the worst -- second worst s&p sector today. citi the laggard among the big six u.s. firms slumping more than 7% followed by wells fargo. it's a partial reversal in the strength that this cohort has seen in the year through july with each bank over that time frame, up at least 20%, except for morgan stanley up 11% during that time. august has been less friendly to the sector which has leveraged the help of the economy, cracks in the soft landing narrative would be a head wind from investment banking to consumer credit to wealth management. additionally a steeper magnitude of rate cuts could compress what banks are able to charge for loan making. on top of the macro issues, some

banks facing their own idiosyncratic headlines. morgan stanley downgraded to underweight by mike mayo over at wells fargo. berkshire hathaway sold more of its stake in bank of america and wells fargo appears to be the subject of a regulatory probe. it's kind of like bad news on top of the bad macro news just all kind of hitting this sector pretty hard today. >> can't wait for your conversation with mr. jamie dimon out there in some place called kansas city on wednesday. it's going to be great. >> good timing, yeah. >> perfect timing. thank you speaking of getting barbecued, amazon down about 9% today. kate rooney, what's going on with amazon? >> so brian, amazon as you can see on the screen, one of the biggest laggards, the biggest on the dow, if you look at just the dow today, it has to do with the jitters around the consumer and this choppy forecast we heard about for the third quarter. you step backwards amazon was seen as this hedge in mega cap

tech because it also had the consumer business. it wasn't just an ai play. that is working against the stock as investors worry about the broader economy. revenue guidance missed for amazon for the first time in almost two years. profit outlook came up short. online sales growth did slow. ceo andy jassy on the call with analysts called the consumer cautious. he noted that folks are now trading down to lower priced items. cloud growth, though, that aws side of the business, revenue up 19%, better than expected. amazon does plan to spend more this year after spending $30.5 million in the first half. the company now expects capital investments to be higher in the second half. they say the majority of that spending going to be for aws infrastructure and, of course, ai. back to you. >> of course. ai. got to say, ai every day. thank you. kevin gordon, final wrap. it's going to be a big weekend for schwab.com. your clients will be going there to read what you and liz ann are writing about. what kind of advice are you

giving people here out? >> i think as it pertains to the fed cycle and some of the sectors that we were just covering both of them, financials or amazon and consumer discretionary, what is become important i think is, the now shift may be in the narrative, whether it is -- now it's a potential shift. not a definitive shift. if the fed starts to go into an aggressive cutting cycle. there's a lot of variability when you look at prior fed cycles and market action. one that is more consistent is when the fed does get more aggressive, when you have more than five or six cuts within a 12 month time span it benefits the so-called defensive sectors like stapleses or utilities or health care at the expense of the rest of the market. >> utilities. >> everything -- >> they were up today. through the xlu up. that's going to be part of the discussion whether they're catching down to where the economic data and if they're being pushed around by the economic data or if they're able to still sort of take it at their own pace and really signal that things are relatively okay.

i think in the cycle trade broadly they can hang in there. >> you're more than okay. you're great. have a great weekend here. a lot of cheering for the hong kong dragon boat race festival. lot of smiling faces. not in the market but up there. i've enjoyed being with you. see you next week. let's go into overtime. >> a major selloff rocking investors today after soft jobs data over fears of the economy. tech dragged by a pullback from amazon and intel on earnings. that is the scorecard on wall street. winners stay late. welcome to "closing bell: overtime." i'm jon fortt with morgan brennan. >> we will be all over the market downturn throughout the hour with a lineup of guests to break down whether this is a buying opportunity or just the start of more selling. >> plus much more on intel's freefall including highlight