♪ all right. welcome to "power lunch." an eventful afternoon so far alongside kelly evans, i'm dominic chu. stocks are, as you might imagine, falling today today as tensions heat up the middle east. we're off our worst level so far today but still just looking at things that you can see the dow doin down quarter%.

more than 1% at one point. the nasdaq was down in excess of 1.5%. yes, we are seeing downside. but i think there's a lot of folks on wall street who are trying to stay a little more measured right now, kelly, about what's going on right now. >> sure. the vix settled down somewhat as well. israel defense forces are saying iran launched those missiles into israel and israel is saying the attack was serious and will have consequences. by the way, they also are saying as far as they can tell the moment there were no casualties from the missile attacks. other incidents not just the missile attack, shooting, other things happening on the ground. >> and it wasn't -- i think the world was caught watching the live feeds from across tel aviv and perhaps just looking at all of these sparks and light floating around the sky and how many of those actually hit the ground and exploded. for that reason, there was the sense, at least, that given the shelter in place orders, given the air raid sirens that went

off relatively early compared to when the first missiles kind of crossed in and looked like they might be heading towards tel aviv, the casualty account was a little bit maybe hopefully on the lesser side of things. but it is certainly something where the markets played it out in realtime. never got to an extreme moment of panic and are now starting to be a little bit more measured about the way this is playing out right now. >> sure. let's bring in contessa brewer at the breaking news desk. she has the latest on the story. >> israeli citizens have been given the all clear. they can leave bomb shelters following that barrage of missile attacks aimed at the country. israel army radio said it was 200 missiles fired. at this point, as dom mentioned, it appears the injuries are limited. there may have been a couple shrapnel wounds near tel aviv. the israel security cabinet has convened. the military spokesperson there described this onslaught as serious and said there will be consequences.

iran has said its supreme leader ordered the attacks as retaliation for israel's killing of heads of hamas and hezbollah. iran is warning if israel responds or commits further violence, it will deliver a, quote unquote, crushing response. israeli air space has been closed while all of this unfolded. but we're told it will resume air traffic in this hour. lebanon, iraq, jordan also shut down their air space. u.s. embassy staff and other government employees had been ordered to shelter in place. and president biden has commanded the u.s. military to aid in israel's defense and shoot down missiles. he's been in a meeting with vice president kamala harris this afternoon and other senior security officials. and the u.s. earlier warned iran there would be consequences for any air strike against israel. we have not heard what the u.s. may intend in terms of consequences and israel is not being clear either except to say there will be some.

but we have also heard some chat from iraq's forces saying that if the u.s. acts, then it will act. so basically where we are is this standoff. the u.n. secretary general has just issued a statement on x saying i condemn the broadening of the middle east conflict with escalation after escalation, quote, this must stop. we absolutely need a cease-fire. as we get more developments, kelly, we'll bring them to you. >> contessa, thank you. for more on iran's attack on israel and the rising tensions the middle east, let's bring in michael ruben, senior fellow at the american enterprise institute and director of polipo policiage analysis at the middle east forearm. it's great to have you here. what are your thoughts this hour? >> thank you. first of all, i'm glad to see that the barrage is over and that casualties are minimal. but before we celebrate the fact that so many of these missiles were shot down or miss their target, remember, as in last

april, when iran sent its previous barrage. if only seven or eight missiles get through but those seven or eight have chemical biological or radiological warheads, then we're talking a whole different ball game. i'm afraid now that this has happened twice that israelis are going to be tempted to respond and respond hard. i think we're now in the last days of the islamic republic of iran. >> what would a hard response look like, something aimed at the oil facilities, at the nuclear ones? >> well, if israel were to strike at the nuclear facilities, their pilots aren't suicidal, so they might go in with surprise, but they're not going to be able to fly out with surprise. so first, they're going to need to take out command and control and anti-aircraft batteries. but i suspect they're going to do what the israelis did with ismeal. they'll go for the head of the octopus, hoping then that the tentacles with wither away. i believe that what they're going to do is go after supreme

leader khamini, and the top leaders of the revolutionary guard to leave a vacuum at the top. the woman life freedom movement protest that began just over two years ago showed that the regime has very little legitimacy among the iranian people. the challenge is going to be how do you take out the regime without antagonizing the iranian people? >> michael, it's dom. to that point, can you take us through what you hypothetically think would be the ripple effects or the next eare response from them? let's say they do go that route and they do start an active engagement, a war, if you will, between iran and israel. if you were to go about that path that you spoke of, do you then have to move troops in? is there anything that has to happen beyond that that could escalate or bring other parties from the middle east, other countries into that conflict as

well? >> dom, as you know, i used to teach as a civilian on navy ships. and when i would ask admirals to a man and woman what they would say, if you want the iranians to take american diplomacy seriously and understand the need to stand down, what you need to do is remove u.s. aircraft carriers from the persian gulf. that may sound counterintuitive, but if our aircraft carriers are 400 miles away in the northern indian ocean, the iranians and the islamic revolutionary guard corp. will know we can strike at them but they can't strike back at us. so, actually, no, there should not be american troops present. there should not be boots on the ground. this is not iraq. what kelly said before with regard to oil, remember, that most -- because iran's shore is very shallow and very rocky, most of iran's oil exports occur from offshore oil terminals. the question then becomes

whether the united states and our special forces as during the reagan administration, will go after those and target those more precisely. >> is there the possibility of a more modest israeli response here, michael? and what would that possibly look like? >> well, kelly, there is, of course, a more modest response that could be possible. and israel would have a range of targets. iranian ships that are supplying the houthis, for example. the islamic revolutionary guard corp. leadership, generals and so forth. there's a whole menu. look, from israel's point of view, in 1981, they took out the iraqi nuclear program. and in 2007, they took out the plutonium processing plant in syria. iran is a complicated set. it's six times the size of great britain, four times the size of iraq and the program -- the targets are far more december pir rat. the only good news is if israel or the united states wanted to

take out the underground nuclear facilities, they don't need to destroy thosefacilities that are buried under mountains. they only need to take out the entrances and the exits. >> and michael, this is all about what's happening in terms of the aerial strike between the two. nbc news, i would also point out, is reporting that at least six people were killed and nine injured in a shooting incident in tel aviv. that's according to two u.s. officials. the incident they say involved at least one shooter who got off a mass transit vehicle and started firing a semiautomatic rifle. those officials do say, again, it appears as though it's not just the air strikes coming from there but within the own borders of israel as well there could be terrorist-type activities. how consequential would that become if it's not just fighting from outside the walls but inside the walls as well? >> well, make no mistake, israel feels it faces an existential threat and israel is no stranger to having to deal with terrorism

within its mist. but what is different israelis feel they have a ticking clock to do what they need to do because they're afraid that a new administration, especially if it's a kamala harris administration, would try to restrain israeli response, counterterrorism, operations and so forth. right now the israelis feel they're going to be criticized no matter what they do, so it's a matter of in for a penny f for a pound. as long as they're criticized they might try to do their counterterrorism operations as completely as possible. but if they feel the united states might cut off support as some of the progressive wing in congress wants them to do, then that's actually increasing the incentive for israel to have these fights now, both internally with regard to counterterrorism as you asked, dom and externally with regard to lebanon and i expect we're going to see with regard to iran

and the houthis in yemen. >> where does this leave prospects for some sort of cease-fire or end to the conflict there? >> well, the question in gaza is -- there's two questions. number one, whether israel is spreading itself too thin. and the second question is whether or not israel is going to go for some negotiated settlement or whether they're going to go for complete victory. the way i see it is when you have a hornet's nest, you have two good options. one is to get rid of it. the other is to leave it alone. but the worst possible option is to come down the middle and stand underneath it, lightly tapping it with a stick. for the past 30 years of diplomacy, that has been the u.s. strategy. that is what the israeli prime minister netanyahu is saying is no longer tenable. and if the americans think the issue is just israeli prime minister netanyahu, make no mistake, there's broad consensus from left to right inside israel

with regard to counterterrorism policy. >> michael, thank you for joining us at this hour. we appreciate your time. >> thank you. >> michael ruben with aei. still to come on the show, this growing conflict in the middle east is not the only economic risk that could reverberate on a massive scale here in the u.s. a major port strike could derail recovery and rate cut efforts. we have more on the home front coming up next. >> announcer: crypto watch is sponsored by grayscale. ♪ power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless. and its customizable scans with social sentiment help you find and unlock opportunities in the market. e*trade from morgan stanley with powerful, easy-to-use tools, power e*trade makes complex trading easier.

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nearly 50,000 members of the long shoreman's association walked off the job at midnight as a deadline for a new labor deal passed without a new resolution. as a result, 36 sea ports are currently shut down from maine to texas. moody's estimates it could cost the u.s. economy $2 billion 00 year. thank you for being here, gentle gentlemen. let's start with you, adam. we have seen the estimates range widely. how did you come up with a number that you put on the economic impact of this port strike? >> sure. so there's a variety of ways to look at this, but what we're looking at primarily is the amount of cargo that's handled in the different ports that are affected by this strike. understanding there's some offset from some of the cargo being moved to other ports, company stockpiling inventories. but when all is said and done,

we think that number represents about the amount that is exposed and that is going to lead to economic losses in the near term. although it's worth keeping in mind that that number is not static. as we go, the longer this strike goes on, the more likely that that -- those daily losses are going to increase, even on a day-to-day basis. >> peter, we've spoken to and heard from a number of shipping and logistics-related analysts who talked about the idea that the first impact, the front line impact of this will be in things like fresh produce, perishable goods, harder, durable goods, may have been warehoused or have the ability to be warehoused, what does it mean for the u.s. consumer? how quickly will kelly and i and everyone else feel the real price impact at the stores that we shop at? >> within a few days you will probably see the impact from fewer perishable goods to choose from when you go shop groceries, right? those are the time sensitive imports. and those that you would

probably see fast moving. so there will definitely be fierce flash back to the ever given situation. some of you may have that pretty fresh in your memories from the march, 2021, when one giant containership was stuck in the suez conal. everything from, well, clothing to what you need in the toilet room perhaps. >> adam, do you agree with those who think that commodities could spike in price as a result of this? >> i think commodities could increase in prices. i think a spike is a little strong. i expect that if this strike continues for a number of weeks, that we are going to see some price increases as a result of the shortages in supply. but i don't think it's enough

that it's going to royal the consumer necessarily. what i worry about more is that we lose some of the progress that we have been making with respect to inflation and that the federal reserve maybe has to pause cutting interest rates. and that could have some broader economic ramifications. >> adam, could i just follow up really quickly on that one point. we talked about the goods side of things on this equation. the reason why these workers are striking are for better pay. we heard reports that it's a 50% pay bump on the table, scaled in over six years that was rejected. what exactly then does the long shoreman's personal finances and economics look like if that's the deal they just turned down. what is it that actually gets them to say yes to a potential labor deal? >> it looks like they're looking something closer to, i believe, 80%. i would imagine in terms of the numbers, they're very far apart. you ideally want to see the sides meet the middle. i'm a little more worried about

some of the demands around automation and trying to either eliminate or have guarantees around automation. that seems more intractable to me. that's sort of -- something that may be a little tougher to find a middle ground on. so, that's going to take some work. i would imagine in terms of the numbers, we probably see the sides meet somewhere the middle in the end, but it may take some pain to get there. >> peter, quick last word? >> i totally agree that the hardest nut to crack is that on automation because the u.s. ports are not as efficient ports in the 21st century should be. and when comparing the performance on the east coast and gulf coast to that in the world, they're really not doing well. but i think it's also relevant to point to the fact that a lot of customers point to benchmark -- i think we already

seen spot rates spike to some extent on the transatlantic trade lanes to some 20% right now. i think we can only see that trending upwards as the strike continues for, well, up to one week is how we see it. >> all right. gentlemen, for now, thanks, peter sand. adam, we appreciate your time. still to come, we've broken down these major economic risks. so let's take it all and figure out the best way to position yourself with the dow now way off session lows and trying to make a go to turn positive. it's down 30 points right now. "power lunch" is back after this.

♪ welcome back to "power lunch." the dow is well off the session lows. down only 43 points right now and the vix index is off of its highs. s&p for its part down .6, nasdaq down 1.2%. let's dive into some stocks and try to make sense of this uncertainty for what it means for investors in the u.s. a partner at the wall street alliance. great to see you again.

big picture, does today -- people are talking about maybe on the margin a little more inflationary pressure in the economy, even we heard in the port strike discussion, does it possibly even keep the fed from doing further rate cuts? are you concerned about anything like that? >> i don't think so. i think that short term it could cause a correction. and we feel that investors at this point in time should be hedging their portfolio and have exposure to gold and to energy. as a hedge. and also we spoke last time i was on the show we spoke about the concentration risk in the market. so, investors should increase the breadth in their portfolio. long-term we feel the market is still headed higher. >> i think it's interesting as well because when we talk about this notion of the overall economy, it's also one where geopolitics figures into the fed. we know this. but given what you've seen so far today. how frightened or how much importance should the fed put on the middle east conflicts in particular for its economic outlook in the coming say 6 to

12 months. >> i think the fed told us they're going to be watching this very closely. that's what we got from powell's comments. they will be accommodative as needed. i think that the fed basically their goal right now is to -- we're in sort of a sweet spot. they want to freeze things the way they are. so i think the fed is going to come in and they're going to accommodate as needed and keep a very close eye on these development. >> let's talk some of the specific stocks you like. that's a huge parts sort of the debate. home depot, caterpillar, walk me through names that you think are especially areas that people can kind of find some alpha and might be well positioned for everything going on in the world. >> sure. i think that with the recent accommodation by the fed, one of the things we're going to see is major economic collapse is off the table, right? so the affluent customers they continue with their spending

minor economic blips don't impact them. high end business cat catering to the high end consumers, american express, charges a high fee as well as a hire exchange rate, they will continue to benefit. i think with home depot return we like that the housing play. we got a glimpse from restoration hardware as to how those type of companies would respond to rate cuts. home depot is another great one and also pays a great dividend, a big thing for us. >> you know, we talk about -- at least we reported this last hour, about the number of defense stocks that are either making new ror highs or at least one-year highs or beyond. we mentioned names like rtx. we mentioned names like northrop grumman, lockheed martin, would you chase some of these defense gains into what you've seen today? and if so, is there a role for defense in your portfolio? and if so, which ones do you like? >> so, we definitely think we must have exposure to the

defense names in the portfolio because given the geopolitical tensions, whether the democrats -- whether or not the democrats or republicans win, there will be increased in defense spending. having defense stocks in the portfolio will be important. having gold in the portfolio makes a lot of sense. so we have spider gold, etf for our clients. that has done really well. we think it continues to do well because of the volatility. plus, with rate cuts, dollar becomes weaker, and gold is stronger. having oil in the portfolio as a hedge makes a lot of sense also, right? if you look at a company like exxonmobil, it's trading at relatively low valuations that break even on oil for them a very low and pays a very good dividend. these are the type of stocks that we would have in the portfolio to provide more of a balance and a hedge. >> and even home depot. do you do anything with the mag seven at this point?

>> so, i think those are core positions you must have them in the portfolio, but a big concern we have right now is the concentration risk in portfolios. we spoke about that last time. i think you're seeing that play out somehow. if you look at the nasdaq, since july 10th, it's negative. but there are other sectors that are going up. so i think breadth in the market should improve. >> breadth is good, i think. thank you very much. we appreciate you, sir. bond yields are falling along with stocks on the middle east conflict but also a weak reading on the manufacturing sector with the pmi coming in below analyst estimates. let's get out to rick santelli in chicago with more on that macro picture in the bond report. rick? >> yes, dom. if you look at a two-day chart of 2s and 10z on the same graph, it's quite illuminating. first thing i want to point out is that we made our low yields well before the missiles started to fly. granted it's been a yields down day. 2-year were made the low session

9.40. currently at 3.62. 10s made the low yield at 10:00 eastern 3.69 currently 3.74. that's one thing to notice. the other is that 10-year note yields are trading under yesterday's lows. 2-year note yields are not. short maturities are leading the way down, taking that steepness away and have been positive for three weeks now on the 2 to 10 spread. also news in europe about their inflation. and very similar to the u.s., many of the het ricks with their cpi were good news. they were lower. although year other year core just like in u.s. was sticky, much closer to 3%. but nonetheless, yields fell. and 10s minus boons were trading at the widest in two months at 170 bases points a difference and take it a step farther, if you look at boon yields very close to 2%. other than the first trading day of the year in january, they are at the low closing yield of the

year. now we're going to continue to follow all the dynamics in front of adp and jobs friday, there's no doubt geopolitical issues are having an effect. it just couldn't correlate specifically today with a flight to safety in treasuries. kelly, back to you. >> rick, thank you for that report. rick santelli. update now on the situation unfolding in israel. megan cassella in washington. megan? >> reporter: we're continuing to monitor the unfolding conflict the middle east after the israeli military fended off onslaught of missile attacks earlier today from iran. now we have been watching this footage all day of missiles lighting up the skies but israel's iron dome appears to intercepted at least some or mideast of the projectiles. there had been a few hits to the center and areas in the south of the country. but that it does believe the attack is over and that it is not aware of any casualties from the missiles. it did also warn its citizens to stay sheltered unless absolutely necessary. iran did defend its actions as what it calls legal, rational

and legitimate response. the attack had been anticipated especially by the u.s. after israel had launched widespread attacks in lebanon a few days earlier. israel saying this attack will have consequences, although we don't have further details yet on that. on the u.s. side, we know that president biden and vice president kamala harris did have two meetings with their national security team in the situation room earlier today. they've been receiving regular updates on this. biden says he did direct the u.s. military to aid israel's attacks against iran. and to shoot down missiles that targeted israel. one u.s. official and one jordanian official have also confirmed to nbc that jordan allowed the u.s. to fly and shoot down missiles within their air space. now up next, we know the white house briefing is just about to get going. the pentagon will be briefing within the next hour. guys, we'll continue to monitor all of these developments and we will bring more to you when we have it. guys? >> megan, thank you. megan cassella in washington. as we head to break, check on crude oil up around 3%. again, off session highs.

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welcome back to "power lunch." a quick check on the markets right now. you'll notice that the dow industrials are currently down about, call it 25 to 30 points. it's pretty much flat on the session. at the lows we were down 384 points, so we have gotten back roughly 350 points of that loss in the dow. the s&p is down by about two thirds of a percent, 5726. the tech heavier composite down 220 points or 1.25%. the underperformer of the day. oil spiking after iran fired missiles at israel. for more on where the futures market sees oil heading next, joining us now is the chief market strategist at blue line futures. phil, let's take us through the price action that you saw today in oil again and what the future's curve looks like and what you think is next for those

oil prices. >> yeah. looking at oil, i mean, it was the deteriorating geopolitical situation the middle east that really sparked those fears of the possibility of a major expansion in the hostilities that could disrupt some of these oil smies. so, what traders did is they scanned through the assets that could appreciate from this type of volatile situation. we saw gold futures pushing back up to 2,700. a spike in the volatility index. many people picking up s&p 500 put options as well. so the opportunity really is in that crude oil market because you look at the middle east effect, a shutdown of the strait of hormuz and broadening escalation that takes off about 20 million barrels of crude oil per day in petroleum products. also look at how managed money is positioned. just a week or two ago we were net short on these positions here. now we are starting to see those people unwind the managed money so crude oil prices are pushing back up.

the volatile range we saw today was a test of the 50-day moving average and we see an opportunity here to position for longer term tail wind with stimulus from china and also the u.s. about to cut interest rates aggressively several more times. >> phil, put the trade on for us. what are you trading and how are you doing it? >> so, what we're looking at is the december micro crude. we like the micro because of the the scaleability. $100 per every $1 move. buying back down to $68. the stock at 64 and target on a broadening escalation those july highs up at $08. so you're risking $400 to potentially reward 1200. >> what exactly what that beside the fundamental aspects you laid out there. you look t the price and the chart for crude, it's been not exactly a positive moment story and some would argue the path of least resistance is to the downside. crude is already off its best levels of the session. >> so it's the tail winds, it's

the china-related recovery. china is number two consumer of crude oil. they have done what it takes to get their gdp growth effort back in line. the property sector and the capital market. we do have the u.s. with their -- our interest rate cuts could provide that stimulus, could get this economy back humming again. you also do have an opec meeting tomorrow. current 26.6 million barrels, more clarity on the smie situation if you look at the month of september, they had a net decrease of 480,000 barrels per day and without libya, they have still been curving that production down 120,000. it appears that many of these different opec countries are looking to push crude oil prices back up and they'll do whatever it tabs. >> and one quick question to end on right now. oil leads us to energy stocks as a matter of course. do you think some are positioned

better than others? >> we like your producers and refiners in the transport section. there are different names that could gain exposure thing like exxonmobil one that stands out and marathon petroleum are two we really like. >> all right, phil, the trade on oil given everything that's going on today. thank you. we'll see you soon, kelly. "power lunch" will be right back after the break.

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from a company like humana just might be the answer. ♪ welcome back to "power lunch." stocks are well off session lows when the dow was down nearly 400 points and tracking with that, oil is moving off its highs as well. so we're seeing settling down in markets. let's bring in founding partner with again capital and pippa stephens here on set. great to have you both along. pippa, let's start with a retracing of what we know. what's happened with crude this hour and what are you hearing about further escalation now that iran has struck israel with missiles. >> so, we initially saw prices spike. we saw them get over that 5%

level. they have since come back. but i think before talking about today's move, we have to look at where crude has been. it was down 16% last quarter. so a lot of that is just simply reaction to how much we had fallen. also, crude positioning had gotten negative for the first time on record. that's going back to 2011. so the market was very short. and then both contracts tripped key levels wti on 70 and brent on 75. that's not to down play today's escalation. certainly important. but cibc wealth told me if the market thought we would see barrels coming off of the global economy we would have been up $10 versus the $3 we were up at the high. looking forward the all-important question is how does israel respond. so far we have not seen any energy infrastructure targeted even in iran's attack, they did give a heads up. this time around it was less advanced warning than we saw back in april. still we did get advanced warning and they didn't target any civilian infrastructure. they focussed on military

infrastructure. of which she says they point they don't want this to escalate. israel is the wild card and could determine the nice price for oil. >> john, if we talk about the ripple effects, pippa laid out the pirates action pretty well. there was a dramatic response, but wasn't a panic in any way, shape or form. what does it tell you about oil prices and their next leg if we couldn't even sustain the move on this given a direct attack by iran on israel? >> so good to see you guys. look, i think the big calculus change here is that iran is not necessarily the worry for this market that it has been or has represented i'm going to say for decade now. this is twice now where the iranians have lobbed a volley of missiles at israel and they've all been -- waiting to see on this last one, but seems like they have all been shot down again as well. and this is after iran has seen

several now of their top generals killed by israeli actions. and this is all they have. so, i think it speaks volumes to iran's lack of an appetite for any kind of region wide war. they also don't want to risk their nuclear ambitions, which we know that the israelis will go after probably one of the first things if there was any kind of meaningful attack on israel by iran. the geopolitical risk premium relates to iran, it's a fool's errand to get caught up in it and think that prices will sustain themselves or to even game out that there will be a sort of region wide conflict that ends up with israel against iran. i think those days are officially stamped behind us. >> pippa, i think as people also look at the oil action and what was happening going into this, i don't know if we say the market was oversupplied, but saudi just

indicated some willingness to increase barrels no matter if that -- if they -- they wanted to defend market shares, happy to take lower price. so if we were super tight right now, if there was a concern that supplies couldn't keep up, i think that would be a different story. if anything, it's been the opposite. >> we have seen some could come back in line. still with holding 6 million barrels per day. they will start easing the supply cuts starting in december. there is capacity at the ready. also as brian sullivan pointed out u.s. production is now 13.3 million barrels per day. we're a much larger portion of the market than we were in prior years where maybe there would be a price response. also to john's point, saudi arabia and iran normalized relations march of 2023. it's not in iran's interest to target to have a wider regional conflict or do something as extreme as closing the strait of hormuz, more than 80% of their exports come from petroleum product. in their best interest to keep

the petroleum throwing. they had to do something to save face but they don't want this to escalate. >> john, last word to you. >> look, beyond the situation the middle east, we were down overnight big. manufacturing pmis for europe is a basket case. i'm highly skeptical of the efforts of china to try to revief their economy. that's been a big problem for this market. we got big problems for this oil market on the demand side. i don't see them curing themselves any time soon. the path is lower. the speculative position is hugely to the short side. i'm starting to think for good reason other than just to swing trade. i think we're heading back lower. >> great point. >> john, pippa, thank you both very much. a quick check on the markets for you as we head out to break. you can see right there the dow is down 37 points. it was down 384 at one point. we're going to drill down on some key movers when "power lunch" returns after this break.

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welcome back to "power lunch." dow is only down 22 points as it's made up a lot of ground from session lows. s&p is down two-thirds of a

percent. the nasdaq and russell are the worst performing, down a little more than 1%. elsewhere, some stocks in the newses we're watching, apple is falling as barclay's says checks are falling toward weaker than expected global iphone demand. tesla lower, 1%, as wells fargo names the stock underweight on fourth quarter tactical ideas list. signet is giving up about 9%, down 12% year-to-date. look at an interday chart of boeing. the stock starting the day lower as the company will likely have to raise capital by selling stock, but turning higher along with defense stocks this afternoon. ba shares are up 1.5%. "power lunch" will be right back. power e*trade's easy-to-use tools, like dynamic charting and risk-reward analysis, help make trading feel effortless.

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welcome back to "power lunch." stocks well off their worst levels of the session following iran's missile attack on israel. pore more on the market attack, let's bring in the co-founder and ceo of defiance etfs. sylvia, maybe let's just start first with your take on what the market price action has been today and what it tells you about what investors think of the growing middle east conflict as we currently stand. >> hi, good afternoon. well, today's market action reminds me a lot of what we saw when we heard about the ukraine/russia war, right? for decades and decades it was pretty much smooth sailing. there's always things going on in the world but over the last couple of years these geopolitical threats have become reality. we see a lot of investors fire sale and reallocate to different sectors of the market.

today we saw just that. you saw the mag 7 fall. a lot of the ex-mag, the other stocks in the s&p 500, particularly those in the defense area start to gain some attention and action. you saw crypto fall, right? it days like this where we're reminded to stay diversified and market psychology, even though mag 7 are great, stable balance sheet companies, investor psychology tends to go to defense stocks, tends to go to things like uranium and spinning the wheels of where this will go if it escalates. >> do you also think it's interesting that it seems as though the volatility response to some of these types of events has gradually trended towards dampening and dampening over the last 10 or 15 years, the reaction gets a little less intense each time around? >> i think it gets less intense each time around. it's hard to comment on what's going on in the middle east because we don't -- the truth is we don't know the outcome, but a lot of times we get news that, you know, that the outcome could

be more stable than we think and in a lot of situations where we see these threats, you see stocks fall and investors kind of come back into the market and benefit from buying on the dips and diversify their portfolio and benefit from the ex-mag and oil and gas and uranium and the market chugs along, right? it's a little different, right? i think this is a big conflict in the middle east. we also have a presidential election. i do think there will be some investor panic. sitting back and watching to see what happens until, you know, we get more facts about the future. what that means for markets, if we take the politics outside of it, it probably just means diversification to ex-mag and defense. >> i wonder if there's a little opt tunism stock picking going on. when you see intel as one of the biggest movers off the lows and think people are kind of waiting for it to, as dom would say, enter deep value territory, is that a name you would also pounce on at these levels? apa had a big reversal.

it's up 5% now. >> i'm always -- i definitely talked with you guys about this, kelly. i'm a lover of buying on the dips, particularly when it comes to the a.i. names. we know intel has some u.s. government backing, some names like palantir that are the defense a.i. plays. those are names i'll definitely keep my eye on and try to bump into. if you look at other names like microstrategy, for example, broadcom, just the big a.i. stocks, they're going to pull back today as people kind of sell off. those are great buy on the dip opportunities. again, i would say, these are great days that remind us that broadening your portfolio allocation is smart because you feel the pullbacks a lot less. >> another big interday balance off the lows is boeing. buyer or seller? >> well, i think boeing has certainly, you know, had its dips. i think long term things will get sorted out at boeing.

today aerospace, defense play, it's probably a name i'll keep on my radar. i would have liked to have seen things further along in the company in terms of what their plan is to fix their issues. >> thank you very much. we appreciate the thoughts. we'll see you soon. thanks very much for watching "power lunch." markets are well off their lows right now, kelly. >> appreciate your time today. "closing bell" starts right now. welcome to "closing bell." scott wapner from live at post 9 at the new york stock exchange. this hour begins with high anxiety. the middle east once again a flashpoint. it was around midday, iranian missiles were launched into israel. oil moving sharply higher. same for the dollar. the vix also higher today. there's your picture. yields moving down. investors moving to safe havens as normally happens when something like this happens. let's show you the major averages, too. they've been in the red all day. very interesting activity within the last half hour. would you know the dow is only about 30 or so points away from anothe