a busy day, thanks for watching "power lunch"p we appreciate it. >> see what the next hour or so brings. "closing bell" starts right now. guys thanks so much. welcome to "closing bell." i'm scott wapner live from post nine at the new york stock exchange. this make or break hour begins with the selloff in stocks today. it is a substantial one as fears about the economy take center stage. throw in turmoil in japanese markets and the scorecard today looks like this with 60 minutes to go in regulation. we have substantial declines of more than 3%. almost across the board. dow looks like it's heading in that direction as well. there's the nasdaq down by near 4% at this moment. the russell, well hit hard today as well. down about the same amount. stock only part of the story. bond yields getting a lot of attention they were lower as trading began, fears about the economy, but you see a bit of a reversal. there was some better than

expected economic data that did initially help stocks move off the lows as well. but as we said, as we begin this final stretch, it's a pretty ugly picture. tech, the destruction has been there, as you know. want to show you some of the mega cap names. apple down near 7%, have that news that berkshire hathaway selling half their stake in the stock and that's a big weight on the market. we'll ask our experts over the final stretch where the tech trade is heading in the days and weeks ahead. it does lead us to our talk of the tape, how far will the pullback go. dan greenhouse, solis management, stephanie link of high tower with and ron ensana, stef and ron are cnbc contributors. great to have everybody with us. steph, the first crack at this. trade unwind, recession fears, berkshire selling half of its apple, all of the above? what's the root of today? >> i think 80% is the carry

trade unwind. a lot of uncertainty. we've been talking about we thought volatility would increase because there are so many things unknown and it is the economy and the fed. are they behind the curve. it is the politics which we haven't really talked about recently, right. then the speed of the bond market yields. it's been -- the velocity has been extreme in my mind and definitely worrisome. now, put that all together and where are we on the economy? at the end of the day fundamentals are going to win. they may not win out today, may not win out in the next week or two or two months since we're seasonally in the weakest part of the year, but what i would say is, the economy is still growing above trend, 2, 2.5%, atlanta fed tracker is at 2.5%, we know that inflation is coming down and 2.5% around that's good. earnings growing 10%. in my mind i think is it a soft landing? maybe it's a bumpy landing. i don't know. but i'm looking at companies

that we are in the thick of reporting season and we're listening to what companies are talking about and fundamentals are good. >> i tend to think this is a draw down within a decent environment, talking about what steph is, as distinct from the start of something more serious and lasting what's your take on what we're witnessing today? >> the percentage cause whether it's the carry trade or whatever might be, to me this is a silly conversation. to inme it's the carry trade sty from japan. how many people have come on the network and overlay the chart of the qs and the yen over the last couple weeks. this should be a shock. is the fed behind the curve? maybe. solis, we're a hedge fund, we don't put out macro economic for examples. after this morning's conversation, convincingly we don't think there should be an intermeeting cut. to steph's point, the ism number

this morning was important and you knew that before hand. if this was weaker than expected it would corroborate some of the worst fears. service jobs, 85%, service sector a larger portion and the number was pretty good across the board. you have to take sol lis from tt important >> ron, you went on a tweet storm, arguing that the fed is behind the curve and that they need to act and act now. >> well, i think they should say something now. i don't think like jeremy siegel suggested, you need a 75 basis points intermeeting cut. the fed should provide reassurance to the market. the nikkei crashed, down 20%, gone from 161 to 142 in matter of a month and that has created this disruption in financial markets that type of which i would analogize to 1997, 1998 where there's a crisis of sorts going on within markets that fed should probably step out and assuage some fears and cut in

september because i do think they're behind the curve. >> didn't they do that this past wednesday? it's only monday. jay powell last wednesday basically set the table for cuts coming in september. called what's happening in the labor market a normalization. here we are saying they need to come out and say something again? >> i would say in the wake of what's transpired over the last 48 hours in financial markets what we don't know is who is blowing up and as sure as i'm sitting here when you see a carry trade like this blow up in size that may have started overseas and come to the united states, borrow money cheaply in japan and buy tech stocks, small caps whatever it is, when that type of event takes place, typically it's incumbent upon the fed to say they'll provide whatever liquidity is necessary. if this were to spin out of control to do something about it. we're in the middle of this right now and i don't think we know fully the extent to which some firm is in trouble and may provide further weakness down the road. >> we will speak, by the way, with a former dallas fed

president richard fisher, coming up in just a little bit. now, whether the fed needs to come out and say something, is, you know, one argument, ron's not the only one, though, nor is jeremy siegel suggesting that they need to say or do something. rick reader of blackrock points out on twitter, on x, excuse me, you know, within the last 20 minutes, that fed's far too restrictive given where the inflation picture has moved relative to where the fed funds rate is, that they need to act, quote, sooner rather than later. he's not saying they need to come out today and do anything, but making the point they risk being way behind the curve relative to where the fed funds rate is and inflation. >> and that's all fair and i think rick is right. to the point, the discussion just had, the fed said jay powell said effectively we're going to cut in september and the only pushback to run, austan goolsbee was on the network this morning and if someone at the fed of seniority wanted to say

something to the market it's not that hard to get in touch with austan goolsbee. >> august 23rd. >> sure. >> that's probably when he's going to say something. he's not going to come out beforehand. >> to dan's point go on cnbc today. e at was on that was going to be unwound over this weekend into this morning. i can assure that is the case. in that environment, the federal reserve, if it is taken by surprise by a market related event, does have some requirement to be at least vigilant and examine and explore what's going on to make sure it doesn't represent unknown risk that is just now presenting. >> the s&p down and change percentage, the equal weight down 2, 2.25. >> as it should be. >> and right now only two sectors under performing the index. tech and discretionary, tesla and amazon. so it's not as if there's this huge broad-based dislocation the

fed needs to step in to ameliorate. it's not great but largely concentrated in those names for people had gotten over bought and highly valued. >> the other reason i would argue the fed is behind the curve, inflation break evens they have collapsed. the five and ten year are below the fed's target. bond market is screaming for the fed to do something, whether i am or someone else is, is irrelevant. the bond market is sending a potent message across the spectrum it's time for the fed -- >> i would say that lower interests, lower commodity costs, you still have jobs out there, wage growth of 3.6%. all of that actually speaks very well for a consumer that's held in remarkably well, which is to your point, the majority of the economy, about 75% of the economy. and the ism services clearly consumers are still spending services. the new orders were strong. employment numbers were really strong. before we get in over our skis saying we're headed for a hard landing and negative growth,

we're nowhere near that right now. does that mean we're not going to slow further from here? we probably are. i don't want to get totally negative. there are opportunities presented. >> that's a good point then. so where are the opportunities today? >> okay. >> i haven't heard a lot of people want to step in today if these opportunities are created. >> everybody wants to buy the dip until the dip shows up. >> we're lucky we're in the heart of earnings season. we're learning what companies are doing, saying and how they're responding to a lot of these uncertainties. >> earnings season hadn't been gang busters. >> 10 to 11%, pretty good. >> guidance has not been great. >> that's fair. >> some sectors. i'll tell you what i bought or added to, eaton, their commentary was outstanding. orders grew 9%, organic growth grew 9%, aerospace 13%, electrification grew 13%. they're ending the year with $11 exiting the year in terms of

earnings and the stock is down 25%. in two weeks time. and lam research, that stock just got hammered in two days, it was down 20%. it's down 32% and the company beat, raised guidance and margins were very strong. 300 basis points in gross and operating margins and their commentary very encouraging about fab equipment spend, ai spend, we know. the stock has gone from 31 times earnings to 19 times in two and a half weeks time. to me that's an opportunity. am i going to catch the bottom? no. probably not. but i'll buy a little bit along the way on the way down. heat what that's what portfolio managers do. >> for every mcdonald's we have i would add chipotle and wing stop trading. i'm not making the case for these. mcdonald's not great commentary about the low end kconsumer as did any number of companies but there are plenty of companies that came out with particularly

encouraging conversations about the consumer and i just know it was not a great season, commentary has been worse than i've seen in a couple quarters for sure. >> how are we going to determine, do you look at what's happening with mega cap tech, it's been driving everything, obviously, how do we know whether, you know, the bulk of the selling is over? how do we know how far stretched valuations were, if, in fact, yu believe they were >> they might have been over invested. a correction long overdue. a vix that shoots to 60 in a matter of days and drop back down to 30, talking in technical terms, a momentum bottom that may well be followed by a price bottom talking in purely technical terms. i think what's interesting, scott, in light of what's going on in the middle east the fact that oil prices and energy across the board is down r when there are worries even being stated by secretary of state blinken, that iran could attack

israel within the hours, and yet energy prices collapse with this, you know there's a large amount of forced selling going on. this is the environment, 97, 98, couple weeks, maybe a couple months to catch that price bottom. but, obviously, opportunity sets arise when the vix spikes as high as it did today in an environment that's not like the great financial crisis when it hit 80. >> you want to address berkshire and apple since it's one of your largest positions you've been for the most part adding to. >> well. >> maybe trimming some. >> i was buying in the spring when the stock at 160, 170, everybody hated it and never a iphone refresh cycle and services couldn't be sustainable at 26% of total revenue and it was like every day we would get up and see a downgrade or numbers cut. i added and made it 9% position in my portfolio. 300 basis points higher than the benchmark average. before earnings i did trim that,

so i'm market weight, still big in the name because i believe in the iphone refresh cycle and i do think that services is sustainable and double dim it growth. and so i think ai is going to be a big deal for them. may not happen next year, it may take place in two years. i think it is going to be a big deal. meanwhile, they're buying back a ton of stock and the valuation has come down. not as much as i would like it to. if it comes down more i would add it back and be overweight again. i don't really know warren buffet why he's selling but weight important is it is still a very big position. >> sure. still large. >> the largest. >> timing is everything and for somebody as legendary as mr. buffet, to have been sitting on a mountain of cash for so long, and now making that mountain even higher, one, you know, makes the speculative leap to say, well, maybe he thought prices were too high before, to deploy that capital, and now looks at what's happened with mega cap tech stocks, apple had

a humongous run after wwdc, looks at the greater picture and says okay, maybe gotten a little bit crazy. one of the reasons i was trimming too. 31% since the springtime in the stock alone. i would argue he's had an enormous amount of cash for some time and at the peak, this year, the s&p 500 was at 19%. so, you know, you got to kind of take a step back and if he's raising cash he wants the options whoever takes over after him, they have the options to do whatever they want with the cash, i don't know. i know it is a large position and i also take the other side of bank of america and i will be buying that stock when i -- i'm restricted. i will be buying that stock at one times book at this point in time with the fabulous balance sheet, good management, cost cutting, i don't know his positioning on that one either but i will take the other side. >> they've been selling that stock. bank of america. thanks for bringing that up to make sure everybody is on the same page. you want to weigh in on this berkshire move and apple, what

you think it signifies. all speculation, of course. timing is not everything. >> not having spoken to mr. buffet directly. >> leads us to speculate. >> i mean, they made a boat road of money in it. he is prudently paired his positions and rebalanced his portfolio when appropriate. i would agree with stephanie, to the extent that there will be other people running this money, maybe he does want to give them flexibility and not be tied to positions that preexisted them. hard to speak on his behalf. you know, he hasn't e-mailed me as yet. it's happened in the past. watch your -- he might have your information. >> timing was -- timing was quite good insofar as building a cash position right before the market gets hit as hard as it has. >> a message in here about stocks in general the cohort of stocks, do they get way too extended? is this a mother of all buying

opportunities for an opportunity that people really believe in and that being ai? you saw what the capex numbers were, remarkable, year on year for all of these companies. in large part it was justified even though the market took issue with certain reports and the amount of money they're spending. >> listen, unlike ron, warren buffet did e-mail, and he enjoyed the movie this weekend. besides that did not tell me anything about apple. to broaden that part of the conversation, we don't know what he's holding and why et cetera. we know to steph's point the stocks have had a terrific run over the last couple months, they're all up at not nose bleed valuations but fairly expensive and there are broader concerns and maybe he just wanted to lighten up because they've had a terrific run. for the average investor watching the show if anything it's corroboration and we don't know why, but corroboration that the stocks haven't had a terrific run and the single best investor of all time has chosen

to lighten his load. >> what happened to the great rotation trade, money supposed to come out of the mega cap names and go into the eatons and all of these other stocks that are so sensitive to the economy, the ones that have dramatically under performance? some of these other cyclical names. nothing is working today as expected on a day like this. what about that trade? >> july was a very good month for that trade. in fact, i gained relative to my benchmark because a lot of people don't own the cyclicals and industrials and energy, financials and that sort of thing. friday totally reversed. everything that worked in july reversed on friday and it was a blood bath. i don't know. we'll probably set until here. we're going to see puts and takes. if we're in a 2% gdp world, which i kind of do, if i think that, i still think that these companies that are tied to certain themes, electrification, i mentioned, semiconductor build-out, semi manufacturing that's correct a big deal, all onshoring, reshoring, housing.

do you see where 30-year mortgage rate is today. 6.40. it was at 7.80 in october. probably have to get that below 6 to see real demand. there are stories here, themes here, at least some of these stocks that have gotten hammered. there are opportunities and it's all going to be cyclical. no. because i'm not even buying all cyclical. i'm buying technology. pick your spots. >> let me come back about the idea that fed jay powell needs to speak. do you think they need to act ahead of the next meeting in september? >> that to me sounds panicky. you know, i don't think they need to do that. they've not done it that way in the past except during the great financial crisis and pandemic. it has to be the type of thing for them to do something like that you have to see systemic risk, either in our financial system or overseas that requires a concerted move by central banks around the world to eliminate the possibility that

some bank is going to blow up. he doesn't need to speak. he could have a surrogate speak on his behalf. >> goolsbee. >> he hinted a little bit at it, but drew it back later. i don't believe an intermeeting move would be wise here. >> i find this conversation just mind boggling to me. like the stock -- the stock market is almost at a record high. just off of a record high. valuations excessive, sure. we're down a little bit, granted at the lows, the s&p down 10% or so, equal weight half that. the economy to steph's point doing okay. ism services came out and grew, new orders went up, employment went up, we talked about how important that is. why are we talking about an intermeeting cut. >> the only reason people are bringing it up the point that rick reader makes. they don't need to cut because of current economic conditions. they need to cut because they're too restrictive going to cause more harm than necessary because

they're going to be too late. >> if they are offsides on august 5th, then they were offsides on september -- i'm sorry four days ago whenever the meeting was. >> just take this into account. in 1997, they didn't raise rates because of the asian currency crisis. 1998 cut because of long-term capital. 2011, 2015, 2018. there were events that took place that kept them from doing something they planned to do or stopped raising rates an started cutting because an event occurred. >> sure. >> that threatened not just financial market stability but economic stability. if that were this there would be cause. >> thus far would you say what we're experiencing, whatever this is, we all agree someone, somewhere, is having some trouble, would you agree this is ltcm or the bot -- >> not a credit problem. >> orange county also included the mexican peso. >> and tequila prices. >> not yet. a lot we don't know because we haven't identified who the players are that have been

really engaged in that yen trade. >> we have to leave it there. >> thank you for having me. >> here on set. ron insana. you guys are going to hang around, right. we have more to talk about. send it to steve kovach for a look at the biggest names into the close. i don't know how you pick on day like today because there are many. >> yeah. let's talk about kellanova because they're safe from today's selloff after reports mars is in talks to buy the food manufacturer. shares up about 15% now. kellanova, of course, is the company behind products like cheese its, eggo waffles and pop tart, everything in my pantry basically. with today's move kellanova has a market cap of over $24 billion. mars, which makes m&m and's snickers a private company. to crypto because those crypto currencies falling hard through the weekend into today. following friday's disappointing jobs report. the biggest drop in japanese markets overnight since 1987,

bitcoin dropped below 50,000 for the first time since february and crypto related stocks like robinhood, coinbase, micro strategy and marathon digital are all falling in sympathy as well, scott. >> steve kovach, thank you. come back to you in a little bit for more stocks on the move. we're all over this selloff. recession fears, one of the culprits for the global market meltdown after friday's disappointing jobs report. let's bring in former dallas fed president richard fisher now. mr. fisher, good to have you on. thanks for being with us. >> thank you. good to see you. >> i'm sure you've heard some of the calls made on this network that the fed needs to do some emergency action. what's your reaction? >> it's a little bit -- started in japan off 12% in taipei, taiwan off over 8%. and when i say eerie, it reminds me of 1987, october 18th, is when things started selling off in hong kong and, of course, we had a dramatic move, 20% down on

october 19th, 87 here. now what did the fed do. >> alan greenspan on october 20th, day after the huge downward slope, came in and said, simply, the fed is ready to provide liquidity to support the economy and the financial system. did nothing else. and i think this business of asking the fed to react with a cut, i agree with ron insana who said maybe bve been friends po years be panicky and send the wrong signal. the fed will always act if somebody occurs that threatens the credit system or the economy. it's not clear that what's happened in the last few days, including today, with the dow off over 1,000, that it's going to impact the economy significantly or threaten the credit system. if it does they would move. the other thing i would say, scott, remember they have the --

>> i'm sorry. >> the jackson hole meeting in two weeks. that will be an interesting session to watch to see what signals are sent. i don't see any need to move intermeeting unless there's a threat to the credit system and we can't say we see that yet after just a couple days of market reaction. >> ron made the point, though, that the fed shouldn't do anything before september, but they should say something now along the lines of what you suggested greenspan did back then, that fed chair powell should come out and say we will provide liquidity. he said exactly what you say. should he do that? should the chair some out today and say in light of these global developments, the fed will be there to provide whatever liquidity is necessary if it is needed? >> i'm not sure he should say that today but have it in his back pocket. again, we have jackson hole, in literally two weeks from

tomorrow. so i think there's no such thing as the fed is instant analysis. one thing i disagree with ron on, which is rare, of course they were aware of the japanese carry trade. everybody is aware of it. the fed has been watching that carefully. but they have to be careful not to just have instant analysis and react like so many people appear to do today. their job is to think things through, be calm, and reassuring and make sure that it's not threatening the credit system. we did see a pop up in spreads today. triple cs and junk, and we saw it starting over the weekend. so maybe that's sending a signal. we'll have to see. we'll just have to see, scott. see whether or not that requires some statement from the fed. but i would have it in my back pocket just in case. that doesn't mean you cut necessarily. it does mean you could provide reassurance by a simple statement i can greenspan made in '87.

this isn't '87, 20% in one day. we have to see what happens. >> do you think they're already too late, though, to cut? the point that rick reader of blackrock makes today, they're already far too restrictive, given where inflation is rel e -- relative to target and where fed funds is already, that they're too restrictive now and they need to do something soorp rather than later if the economy is still in a relatively stable place, i'm quoting from his post on social media a short time ago. >> well rick is one of the giants of the business, enormous respect for him, but here i beg to differ. i don't think they need to cut right away. i think there is room for them to move in september. i'm not of the view they need at least as of now, to move 50 basis points or more. some of you have said 75 basis points. i think they've done a good job. inflation is coming down.

disinflating further. the economy still growing, although weakening, thus far, despite all the criticism that powell and the committee have faced they've done a pretty good job. we're still not landing and it's not clear we're going to have a harsh landing yet. we have to see. but why would you want to move before september if you have a chance to make a statement at jackson hole we have almost all the other good central bankers around you. see what you can come up with and reassuring. >> i guess i would only suggest that just because there aren't credit issues today, doesn't necessarily mean that there won't be any related credit issues over the coming days, if not weeks that would be well before -- two weeks is an eternity in anything. anything can happen between now and jackson hole. >> yeah. two weeks is an eternity, but we have to see. again, i have something in my back pocket. i'm sure they do. if they need to provide

reassurance to the market. the other thing, scott, to bear in mind, unlike 1987 where we had portfolio insurance and, you know, index ar bitrage, today we're much more trading intensive, algo driven, momentum driven, and want to make sure this isn't a reversal of what we've seen on the upside and isn't momentary. if it's not momentary, you need to think about -- >> reaon's first instinct given how long he's looked at markets suggests somebody somewhere is having a problem. and a large one at that. to what degree is the fed thinking about that? >> they're monitoring, scott, constantly. nobody has better data bases or monitoring mechanisms than the federal reserve. so -- especially given the fact that they let the horse out of

the barn, as i've said many times on this and other shows on cnbc, on inflation, they're watching things even more closely than they did before. so it may be they'll have a better sense, i'm sure they are talking nonstop to the big bankers and other credit allocators to see if there are problems and if they detect there are problems i expect them to make a statement at some point if not -- in we'll talk to you soon. >> i'm sorry. >> their job isn't just to satisfy market operators. their job is to make sure the economy is stable and the credit system is functioning properly. >> i hear you. good to have you. great insights and i apreprecia you shag them with our viewers. deirdre bosa is following all of those stocks today. d. >> hey, scott, brutal selloff. the bears have argued tech

valuations support the case for a rotation trade. multiples rich and getting richer in the able of generative ai. july 10th when the nasdaq hit a record high where the mag seven stood in terms of their forward price to earnings ratio. after more than a trillion dollars in market cap loss between them in one week, those valuations take a look they've come back down to earth somewhat. the latest earnings raise the questions over returns and monetization in gen ai. they're saying the more capex the better but investors are focused and worried about the impact on earnings, adding fuel to the worries and selloff is a report over the weekend that nvidia is delaying blackwell, its next ai chip. take a look at alphabet shares in the last 30 minutes. this ruling. they took another leg lower after losing the doj antitrust suit over search at the heart of the case google payments to apple default search engine on iphone a deal worth tens of billions one that regulators says lets google monopolize the

market for online search and advertising. the decision a victory for the doj and only the first in a wave of antitrust cases against big tech. we have to wait longer for the remedies. the initial finding about google's liability. we've reached out to google but haven't heard back yet. >> thank you. deirdrebosa. joining me now the so-called dean of valuation from the stern school of business, professor of finance, what do you make of what's happening related to mega caps and the growth trade? >> i think it's in a sense a correction we've been waiting for all year. people have been warning us about this. i think that, you know, some perspective is needed here. you look at the stocks, clearly the last week has been horrific look at them a month ago, horrific back to the start of the year, go easy. you added trillions in market cap and losing a trillion in market cap. from that perspective some of this cleaning up is long

overdue. i'm not surprised. i'm just surprised it happened so quickly and essentially in such a compressed time frame. >> the interesting thing of speaking with you, of course, is you're not only at a trusted observer, you're a shareholder in many of these companies. so take me inside your head today on how you're looking at the pullback, whether it's an opportunity you see or you're simply waiting because you think more is to come? >> all year i've been saying i would not buy these companies at prevailing market prices starting in march other than tesla which i added in earlier this year. at the same time, though, i would not be in a hurry to sell them because i think they remain, in spite of all the bad news you heard about them in the earnings report they continued to make money. relative to expectation my have under delivered but the revenue earnings numbers have come in surprisingly close to expectations outside of tesla, which i found their performance in earnings. i think the mood has shifted.

f good news two months ago is bad news. that's the nature of the markets. i'm letting it ride in my portfolio and there's pain in my portfolio, but again, with perspective i'm okay with that pain. >> when you heard about the berkshire move in apple your re reaction was what? >> berkshire is over invested in apple. any company that has 30% of a company in its portfolio that has always been a problem. i'm glad they got out of the problem before it was too late. i think they were dealing with a portfolio concentration problem and i don't think of it as a signal that they think apple is over valued. i think it's a signal having 30% of your portfolio in one company is never a good idea. >> well, i mean they certainly enjoyed the fruits of the run on the way up. >> yeah. but i think it is -- you don't want to risk an entire company on one stock, and i think that's always -- even when times are good it's never a good idea, so

the fact that they made money on it doesn't take away from the fact that strategically and tactically it was a bad idea to have that much in one stock. >> do you think there was a direct relationship and maybe as extreme a relationship as appears to have existed between the carry trade and the move in these tech stocks? >> you know what, any time you have a correction, we look for something to blame. the carry trade, central bankers, the truth is, nobody really knows what causes corrections. a collection of things coming together at a point in time and a mood shift. i think that there is no one thing that i would point to. the carry trade contributes. the fed not acting sooner contributes. none of them is decisive in explaining what happened. really if you look at the triggers it's been incredibly quick here. a week ago none of this was foreseen. today everybody claims to have seen this coming. so i think that the reality is

it's a collection of things coming together and a shifting of the mood that causes these big shifts. >> professor, appreciate your time as always. see you soon. nyu. >> thank you. >> back to steve kovach for the key stocks he continues to watch. tell us what you see. >> yeah. shares of tyson foods are not chickening out today, up 3% after delivering strong earnings reports. they beat eps estimates by 20 cents and had a slight beat on revenue. now let's go over to crowdstrike. one of the rare tech names that are in positive territory after over the weekend a lawyer for the cyber security firm responded to delta airlines' allegations it's libel for $500 million in damages related to the global i.t. outage that caused delta to cancel flights for several days in a row. the lawyer for crowdstrike said delta declined an offer to have on-site tech support and noted other airlines were able to recover days faster than delta did. scott? >> yeah.

notable. in a sea of red you have some stocks in the green. amd, of course, crowdstrike, among those. hard to find, but that's why you got to look. appreciate that. we're continuing to sell off in the last hour of trading here. we are off of session lows. not all that much. the dow is still down 1,000 points. the dow and s&p having their worst days since 2022. joining me is ed yardeni. it's good to have you. made the case multiple times on our program, fed doesn't need to cut. everything is good. look at the data and the economy. do you still feel that way today? >>, obviously, not, scott. clearly the issue here in my opinion is the carry trade and as we saw the bank of japan starting to raise interests and tighten something they were resisting doing, that unleashed this carry trade turmoil in my opinion. we've seen that clearly in the

strength of the yen and as the yen has strengthened a lot of the carry traders had to scramble to cover their shorts in the yen and when they did that, they had to cover a lot of the assets they owned. i kind of view this as very similar to 1987 where we had a tremendous selloff that was largely internally related to the market and i think a lot of what's going on now, is, in fact, related to these carry tr trades and i think once they wash out, quickly here, i think the market will stabilize and back to looking at the fundamentals of the economy and notwithstanding friday's numbers i think the economy is fine, labor market is fine, weather effects that depressed employment in july and i think we'll discover that in the next few weeks. >> so just to be clear, you don't think that the fed should do anything. >> no, no, no. you're asking me, you know -- that was my opinion before we

saw happened here in the credit markets. i think the fed is going to do something and the markets are expecting 50 basis points in september and that may very well be what happens if this calamity in the carry trade continues. i'm not of the opinion we're not going to have an interest rate cut. >> i understand that. i mean, do they need to do something now? did they need to say something or do something before september in light of the turmoil that you just spoke about? >> yeah. i think they absolutely will say something. i don't know if they'll do something. they may very well, obviously, try to verbally calm the situation down, perhaps they'll mention the economy is still doing well, but i think they will say what goolsbee said this morning that is, you know, they're ready help the economy if necessary and that may very

well be necessary coming up sooner rather than later. >> we'll see. ed, appreciate you. thank you. talk to you soon. joining us now on the cnbc newsline is blackrock's rick reader. good to talk to you. thank you so much for calling in. we have highlighted, rick, your post on social media within the last hour. you've heard a lot of the conversation, and i'm sure you've spoken with many people today about what the fed should do, if anything. you make the argument that it's time -- this is what you say, the need for the fed to move, the fed funds rate closer to 4%, to 4.5%, sooner rather than later, are you making the argument that the fed needs to move intermeeting? >> no, not necessarily. i mean by the way the markets are pricing in that they're moving through that over the next year and a half. i think the funds rate is priced wrong if you have inflation -- look at today, the inflation

break-even mark down to 175. it's back to 192. if you have inflation the market thinks about the inflation well below 2%. the three and six month moving average is right at two, just above two, and you have an economy moderating. 5.38 off 2% inflation is not the right number when you have clearly pressure on lower income. you see that in the earnings numbers. i think you got to move. do they have to panic and to intermeeting? no. i think some communication to the effect of the markets are, you know, the markets are pricing in, anticipating moving somewhat, i think involving that communication would be helpful. >> but if you suggest the fed is already way too restrictive, should they have move last week? are they already too late? >> listen, i think the fed has the ability -- i think the price is wrong in terms of where interest rates are. should they have moved last

week? were they set up to move for last week? they didn't set up communication wise to move in july. but should they set up the communications such that in a prac pragmatic way without panic interest rates should come down and respectful of the fact that the dual mandate is very much in play, ie employment, or floimt you're starting to see slack, slack building and inflation down to target and you've got to move the funds rate down. i think they can set up for it and have pragmatic communication they are respectful of a change of where we are in terms of the economy. i heard bits and pieces of what was on before me. i think the economy is in fine shape. i think it's slowing. and i think it's slowing and you're building slack and you clearly have a durable nature to inflation coming down, so the fed should move the rate to where it's appropriate. >> what are you seeing or hearing on your end from those you're talking to today or of

what you're looking at in terms of the unraveling here of this carry trade? >> so the first thing, we come in this morning watching japan move like it did, that is not a normal condition to see equities in japan. some of that i think is emblematic of a lot of crowded position, a lot of people piled in the same trades. japan being an example thereof. you're witnessing an certainly over the last week or so, a lot of these crowded positions almost on cue, the crowded positions have come under some pressure. some of it i think is just a natural un in the month of august, liquidity is not great, crowding, and so you're getting some rebalance relative to that. part of what makes this an interesting market is there's stuff to do. there's some things to trade because the markets are over shooting in a bunch of places. >> such as where, says the global cio of blackrock? >> i had a feeling you may ask that. the front end of the u.s. rate's

curve has moved to an extraordinary amount with a fed that hasn't chronicled their move close to that. that is signaling where that market is signaling recession. i think the inflation market has come down dramatically and i mean you look at the move today, you're talking about where do we go? you got almost 30 basis moving in inflation and we've rebounded. the front end of the yield curve, the move over 30 basis points today r and there are opportunities across these markets where, you know, seeing some extreme moves and we're taking advantage. by the way, to the same thingon equity market. some of the names that have reported good earnings and buying back their stock that are down mid to high single digits, opportunities in some of those as well . >> do you worry about what could be tomorrow so to speak. credit acting reasonably well in the face of all of this. do you worry about that changing? how are you thinking ate that? >> so there's a couple things.

first of all credit is in the best fundamental shape i've seen it probably in my career. cash flow coverage good. high yield market is not junk. it is in good shape in terms of credit quality, much more in the way of double bs, high yield moving up into investment grade. i think credit is holding up well. a part of what you described, we did tactical positioning in reducing some of the investment grade credit because he will get supply at lower rate, great credit, i don't think is interesting. the high yield credit market gets you yield with technicals that that are good and fundamentals superb. i don't think it's wrong that particularly the high yield market holds in well go the so-called rotation trade, as long as we're sitting here worried that the economy is slowing much faster than people thought and including the fed, is that trade done for right now, this rotation out of mega cap tech, for example, and into

these under performing more cyclical areas of the stock market? that trade can't work if we're sitting here obsessing over a recession. >> scott, i don't really understand, you know, the whole idea there had to be a fed easing so you go into a small caps or into value. i'm not sure i understand. the fed is moving from a very restrictive level. they haven't moved yet. moving from a restrictive level presumably to still restrictive level. the whole idea i've got to buy into asset classes that are if the economy slows, we'll be harder in terms of from a performance earnings that doesn't make sense to me. owning the defensive names not just in the economy, there's defensive names that throw off a lot of free cash in sectors that are pretty attractive. look at energy and opportunities in some of those places. where there are some, you know, we were looking today at the

health care spaces more defensive, that makes sense to me. just to go into small cap value because the fed is going from very restrictive to restrictive doesn't make sense to me. >> has your view on rate cuts evolved since last wednesday where you came away from chair powell's commentary said i think they're going to cut x number of times an given this turmoil say well, i think it's going to be different now? >> so i think you have to respect the payroll report was pretty -- not only is the payroll report, the claims data was a bit softer, you know, if you look at the jolts report, the actual hires versus openings, that was softer. i think at the margin you should assume that, gosh, the fed clearly the other side of the mandate away from inflation has shown real building of slang and can you move a bit more. i think so. we've talked about on your show a bunch of times to own the

five-year part of the yield curve where the fulcrum part of the yield curve, we have the fed could clearly bring down where rates are going to get to over the next couple years or so, that's still attractive. i've said it before, owning yield in that part of the curve and sitting on that makes sense. >> the belly of the curve, that's what you liked for an awfully long time. >> i will say we've made quite a move and lightened up a little bit. i still think it makes sense. >> rick, i'm going let you run. can't thank you enough for sharing your wisdom with our viewers. rick rieder. we're in the "closing bell" market zone now. cnbc's senior markets correspondent bob pisani is here with us along with dan greenhouse. stephanie link to break down the final moments of a rough trading day to say the least. phil lebeau is looking to lucid earnings in overtime, kate rooney the moves in amazon and the fin tech space as well. first, bob, thanks for making your way to post nine.

want to give us your opinion, thoughts on what you've seen from start to near finish. >> this was something at the open, there was a whoosh and signs of a selling climax at the open. i don't know if this is the bottom but it was amazing. you look at the industrials and the technology, the xlk, down 7% at the open. that was an amazing whoosh. the low prin there, we were down 7%. by 12:00, we were down 1.5%. that's an amazing number. what was interesting to see was, all the consumer staples were up to flat at the open, you look at a procter & gamble, for example, that was 170 at the open. there's the consumer staples. procter & gamble 170 and all those stocks were up and if the market turned around tech started doing better and selling off consumer staples. the tug of war, the recessionary play right there. they can't decide right now. if we're going into a recession you want procter & gamble. maybe we're not going into a

recession. tech starts coming back, sell procter & gamble buy tech. they're fighting this out and the answer is we don't know, the market doesn't know and people on both sides of this. that's why this is a fascinating day. >> sfteph, now in totality had the opportunity to hear what the yardeni, rick rieder have had to say, what are your thoughts now? >> i will say the russell 1,000 growth is losing to the russell 1,000 value to dan's point earlier about the market cap weighted s&p versus the equal weight. you are seeing a return to the laggards that we saw on friday. we'll see if that lasts. we have a lot of data to get through. we have a cpi print next week, a ppi print next week, jackson hole. and i think you're going to see volatility. i still say you use that volatility where there's good fundamentals, good cash flow, good management teams that have navigated themselves out of problems before.

really high quality blue chips on sale. not just technology. >> i don't know. you heard rick rieder. sounded like he didn't believe the hype to begin with, with the rotation trade, which was really predicated on the idea that the fed is going to cut rates and yields fall for the right reason, and that thus those are the stocks to be in. >> has to fall for the right reason, that's right. i have to be right. 2, 2.5%. the earnings need to come through. it's not just i'm blanketing owning cyclicals. we talked about themes. there are some very, very powerful themes that are happening that are decades long. including ai. but also we talked about onshoring, reshoring, et cetera. i think you want to be careful in terms of what cyclicals you own. i'm not in small caps. i'm in quality industrials, quality energy. if you like energy that's cyclical. i think also as i mentioned before, rates coming down, that's good for the consumer. that's good for corporations. commodities coming down. that's positive. >> unless it's too late for a

consumer tapped out as it begins. >> i don't buy that they are tapped out. i don't. they still have jobs. i know jolts was disappointing but 1.1 available for ununemployed person. >> starbucks, mcdonald's, a lot of. >> starbucks has issues. way over priced. mcdonald's -- >> the coffee or stock? >> both. they have issues. >> to steph's point the issue for the consumer is one of jobs. at the end of the day, reiterate a point steve liesman has been making, 114,000 jobs in any other environment is pretty good. less than we thought? yes. impacted by the hurricane more than the bls wanted to believe or convey to the market, ooipgs so the tune around 35 to 50,000 jobs. even though it's not as strong as it was, i think you still have to have a positive outlook on the consumer and meet your mcdonald's with chipotle. i will -- for your $400 billion

for deadpool this weekend. >> shake shack. >> well shake shack -- >> results were great. stock up a lot. >> also has some of its own issues. the consumer still doing okay. the credit cards have largely echoed that point. i think it's point to reiterate. >> you have to run. diamondback. >> yeah. >> earnings after the bell. >> yeah. it's done well this year. it's pulled back 10% from the highs but up 20% on the year. had a good year. you're going to continue to see them reducing costs. they cut rigs. they're cutting crew. we know their realized losses from the derivative and pricing. it's not going to be that surprising. the thing i want to listen to and ask questions about is endeavor. they're the number three player in the permian where you want to be. if it's down i'm a buyer. >> can't thank you enough. post nine. let you run you have to go. phil lebeau is watching lucid

after the bell too. phil? >> we're to the expecting a lot from lucid. the expectation is for a sizable loss yet again. the real question, three things you want to watch if you're a lucid investor, these are tough days, given where the stock is. what's going on with the cash burp in liquidity and in the first quarter with about $4.7 billion in liquidity, is that eroded, is it about the same? what's happened there. inventory levels were a little elevated at the end of first quarter and then what's the update when it comes to the next vehicle. the gravity suv. keep in mind their q2 deliveries they were a record high because they slashed their prices. some of the good news there. there's also the question of the restructuring that they announced in may. i think they cut 600 jobs as part of continuing to i sa we can -- to say we can do better. peter rollins comes up next hour on "closing bell" overtime. back to you. >> appreciate it.

phil lebeau to kate rooney on what's taking place with amazon. tell us. >> so the amazon story is partially what we've heard about with the big tech selloff. some blaming the carry trade and unwinding. some fears around the consumer. core e-commerce business is very much exposed to weaker spending. andy jassy reminded investors of that on the earnings call describing customers as cautious, and that lower revenue forecast not going to help in this uncertain environment as it's planning to bulk up spending to compete in ai. fin technology, one of the weakest. paypal, block, robinhood looking more like banks and they have credit cards, they have cash accounts an they make interest income more important exposed to weaker spending and lower interest rates. robinhood the biggest laggard, outages overnight thanks to a trading partner, schwab and fidelity saw down time today. all have been resolved. back to you. >> kate rooney thank you so much

for that. back to bob pisani. the great unknown here is on a couple fronts. number one, what's the ultimate fallout from the unwind of the carry trade? who may be hurt. and where? to what degree, if anybody, in fact, is? whether the de-leveraging is finished. >> we don't know the size of the end carry trade. people taking stabs at this, trillions we don't know. one thing for sure that nikkei down 12%, not a discussion about the gdp of the united states in 2% to 1% taking down global stock multiples. not 12%. that is the yen carry trade unwinding and that is a stark smack in the face of how big this is and nobody has paid attention to it. on the recession, if the assumption of the recession is wrong, earnings are not wildly over valued. 15% growth in 2025. maybe goes to 10%.

that's going to be fine. the s&p can handle 10% earnings growth. the important thing the market could be a buy if we settle the recession fear. i don't think we're going to be able to do that. >> went from last wednesday okay, the chair of the fed, set the table for rate cuts in september, dovish, undeniably so, the stock market liked it. monday after a jobs report that was, i don't know, concerning to some, we've decided, having a recession? >> that's right. >> that's where we are. >> we gamed this out today. talking about multiples of 19 on the s&p on friday, take it to a recession multiple, to 15 the lower end of a ry multiple and, you know, go to 5% earnings growth you could be at 3800. game out numbers between here and the high 3,000, depending on how you feel about earnings and tell me where the gdp is going to be six months from now, if you say it's 2%, six months from now, we're then arguably over

sold. we're going to be 0% six months from now you have issues. >> the fed chair himself spoke about the difficulty in reading gdp to try to decide the current health of the economy. it is the labor market that they are focused on right now more than anything else. this seems to be that there's a fear in the market that labor market is going to crater or is in the process of doing that, at a time when the chairman of the federal reserve says it's normalizing. >> paul samuelson has a saying the stock market has predicted the last recessions. it's all the time there, but it gets exposed in moments like this. the part about the labor market, i think most economists will tell you that employment rate while lagging is the single best all encompassing number for the labor market and what's going on. i would put forth jobless claims given its timely nature. an unemployment rate moving up 0.2 and increasing for not all

imeny gration reasons, there are people losing jobs here, should be more -- this is the argument should be more worrisome to the fed and the message a lot of people in the market hold. i don't think that's entirely accurate as of yet, but again that's what equity market does. >> wake up tomorrow morning and you are thinking about what more than anything else? you see the futures, who knows what they will look like a story you need to know most about. >> this part of the earnings season is a lot of consumer focused companies and want to hear what those guys have to say. if there's any weakness, we know that already, additional commentary on that front, not helpful. something going on here that the companies reported thus far haven't seen. >> do we need to hear from --. >> caterpillar and uber, two cross sections of the industrial and consumer stocks. >> the argument made today, the fed at minimum needs to say something that they're watching what's going on, they'll provide

any necessary liquidity should that be needed. richard fisher said on this program that powell, chair powell, should have the notes, something in his back pocket and may have to break it out. >> what i would like to hear. are they surprised by the magnitude of the move in the nikkei, reflective of what's going on with the yen carry trade? i don't think they -- i bet they were surprised. i was shocked. i bet they were shocked too. that to the extent that that caught them offsides. >> we've been doing this a long time. do you think the fed coming out today in 2024 saying we'll provide liquidity carries the same weight that it did in 1987. >> no. >> well why? i would argue we know that. >> yeah. well -- we already know, what, that it was -- >> that the fed would step in. we've got 30 years of them doing -- >> fed words are powerful. you no that. >> sure. >> as powerful as some people want it to be. >> we shall see what the next day brings.

look forward to being here with you. we're watching stocks here head towards the close about 15 seconds or so to do go. we'll be red across the board. looks like the dow down about a little more than 1,000 points. quite a day. we go into overtime. . >> that's the end of regulation. amt ringing the "closing bell" and mf international doing the hoppers at the nasdaq. red across the screen as a massive broad selloff rocks investors in the u.s. and around the world. that is the scorecard on wall street. the dow close down more than 1,000 points. let's get to the action, though. welcome to "closing bell." i'm morgan brennan. jon fortt off today. we will be all over the selloff throughout the hour with top market strategists from jpmorgan, wells fargo and morgan stanley, walkings th us throught could come next. we will talk to